Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Knightshade]

In another post I point out that at least one Tesla innovation resulted in a new SAE standard. Please look at the NACS standard before you blithely state that compliance with any SAE standard renders an innovation impossible. Therefore not necessarily "fundamentally wrong".

There's a pretty massive difference there.

Nothing in existing law cared about your charging port in terms of if it was legal to deploy it or not.

Self driving laws do

You're making an apples and hand grenades comparison there.

I make no comment on likelihood or not. I'm not qualified to do that. I can and do understand the SAE standards process and it's limitations. They are NOT regulations, even though some do become enshrined in regulations.

And they are. Enshrined in the self driving car laws of every state currently allowing self driving. Which is why they matter fundamentally to deploying such a vehicle.

Lack of an SAE standard on NACS never stopped Tesla from deploying superchargers though- because nobody made it illegal to deploy chargers that don't comply with an SAE standard. They DO make it illegal to deploy self driving cars that don't comply with one.

Please understand the difference. You're far too competent to not know this.

back at ya


Now- if your argument is instead Tesla could lobby to get the laws changed I'd say three things:


Sure- though that is not a process that is remotely fast.

And sure- just like they could to allow direct sales of cars to consumers- something they've worked at for a decade and yet is still illegal in a surprising number of US states.

And sure- but there'd still need to be a standard--- Look at the time lapse from NACS existing and being an SAE standard. It wasn't quick. And self driving standards are much more complex.

So sure that's "possible" in a years distant future you can get those things done.. It's just not possible TODAY.

And might just be easier for Tesla to actually get the missing pieces to reach J3016 L4 standards than get a whole new standard established AND get all the relevant states to switch to it in law.

 

[Mengy]

Maybe we should give Musk credit for realizing the Gen 3 car wouldn't be profitable, given slowing EV demand, competition, etc. He had no choice but to pivot, and sell the hell out of the robotaxi vision. Stopping the Gen 3 car will probably make a lot of sense in retrospect (whether or not robo works out).

I've thought about this notion a great deal over the last week.

Cancelling the $25K car to focus on RT could possibly be a brilliant move in hindsight years from now. My gut feeling is it would be a terrible choice, but seeing how competitive the auto and EV market has become, and seeing how efficient Chinese brands are getting at making affordable EV's, maybe Tesla is making a choice to give up on growing its auto market to instead focus on the new market no one else has the ability to compete in: TaaS (Transporation as a Service).

FSD when solved would be a huge tech breakthrough, one which no one else has nor can easily follow. It would enable Tesla to create a brand new market practically all to themselves with RT's.

Foregoing the super competitive auto market to focus and grow on a Tesla only RT market...well, its not a concept without a crazy degree of sound reasoning.

 

[ItsNotAboutTheMoney]

True, but bear with me in my dream scenario.
People get out at 5pm but know that in a 100m radius and a 10 minutes window there will be cars that pools people based on real-time data and an algorithm that maximize efficiency. Variable fares are established taking into account a lot of parameters: willing to pool with others, male/female, hour of the day, total distance covered, willing to swap cars (like changing a line in the tube...), last-time decision or booked trip, etc.
If everything goes well, you actually take thousands of cars out of the road, and it's more efficient than Taxi (people still go 1 by 1 in the same freaking places... because there is no incentive to pool). Tesla could have more than one type of vehicle (2-seat, 5-seat, 16-people both seated and standing), and the algorithm would be too difficult if especially people book their trips.

AV would make pooling _way_ better and it'd be necessary for good economics because you can't have it be cheap and have a fleet size based on current peak traffic.

Also, with cheap AV you could pretty much guarantee a lot of employers signing deals with AV companies and offering free rideshare commuting, which at the lower end of the economy would kill a lot of car sales.

 

[spacerfc]

https://twitter.com/x/status/1771050036807295427

Looking back, this should be the first hint that a pivot is happening. People wondering back then how the heck did Tesla suddenly manage to get so much compute, well now you know the answer.

I don't think Gen3 delay is due to Musk thinking it's not profitable (in the long run), it's delayed because Tesla is going all in on AI right now and needs the money to invest in AI compute. Timing is everything and now is the time to invest big on AI, note Microsoft and OpenAI is investing $100B in new AI compute, Tesla has to do this now or it'll be left behind in the AI race, and in this race once you're out there's no back in given how fast it is going.

 

[SOULPEDL]

Here's my take.

1. A $25K car is not cheap enough to complete in China like everyone expected, China has EVs under $15K now. Market and margins too small.
2. Making 2 vehicle designs (the backup plan) absolutely would have slowed the launch of RT, requiring more Capital and other resources.
3. The improvements in FSD gives me confidence this machine is accelerating.

Assuming not a trick and actually going after a $15K vehicle, the decision gives additional weight to FSD (internally and secretly). I think I may be the only one here who trusts Tesla's decision, but consider there are likely many other associate risks with continuing as planned. Possibly a good mission call eliminating wasteful $25k vehicles sitting parked all day.

This purchase today represents my support of their decision at this time. Not driving blind; I am a Technologist with very broad Factory and Equipment/Process experience.

The stakes are quite high and this is likely where we leave the scared "investors" behind.

Edit with photo to add clarity. Hey, isn't that the OK sign he's making?

 

[unk45]

People without $$ at stake are possibly less bias since they have no actual $$ to gain/lose. If someone has 10000 shares of Tesla, obviously they are bullish and anything they say is through an owner's mindset to practically will it higher because they have been making good $ the last 10 years.

It's also a concern to most everyone here that bulls here aren't that open to any other opinions or comments. When everyone in a discussion has only one thought, be cautious because everyone around you seems to only think the same way. It's almost like any social media channel/news outlet now. This is obviously a Tesla investment forum, but any other counter opinions here (from what I've noticed) is massively drowned or insulted out. Anyone and you can take my comments for whatever they are worth (it's free so near worthless as well), and like Twitter, we'll see what ultimately happens in a few years (5+ is fair) to Tesla stock and to all the real investors here, but if folks here only care about bullish comments and shutdown the rest, be cautious since it all looks like cheerleading ultimately.

We'll see where the stock is ultimately in a few years.

Personally I do not see it quite that way. There are many TSLA holding people who have quite hard headed views. There is a dramatic difference in outlook by people who invested in 2010's from those who invested in the 2020's. There is a dramatic difference between the outlook of investors and traders, although both are welcome here.

When we think of diversity of views based on core investment strategy much of the dismay probably will diminish. Many of those 'HOLDers' are nearly obsessive about knowing business details, risks and opportunities.

Many newer investors who haven't decades of exposure to high volatility also tend to be somewhat superficial in outlook. That does foment 'fanboy' though patterns as well as the counterpoint 'sky is falling' sentiment.

Without denigrating alternative views it's perhaps rather more productive to understand them. That, on occasion, is difficult to do. Still, we'll all benefit by better understanding of each other.

 

[Krugerrand]

Trimming dead weight would be expected to hit nearly all departments... it's common for big companies to lay off the lowest X% performers across the board.

One other correction- it was four executives who left on the same day... Amir Mirshahi, director of infrastructure at Tesla Gigafactory Texas and Anthony Thurston, Senior Manager of Cathode Materials & Manufacturing at Tesla, also left.

I love everything about this. Everything. This feels like the good ole days at Tesla. It has the feel of Elon sleeping on the factory floor and everyone having to explain their worth. Many here won’t get it or understand, but the whole shakeup going on is signature Elon on a mission. It’s quite literally the most bullish AF scarlet neon flashing sign.

People have been complaining about Elon being distracted and wanting Elon back. Well, this IS Elon back at full steam. I don’t want to hear one complaint from that group of people, because you just got your wish.

 

[Usain]

Since J3016 is a focus of debate every time it might be wise to clarify that SAE itself, the author of J3016 is not inherently regulatory. Those are standards, to be sure, but sometimes things with no status under SAE at all become practical standards and thus spawn seemingly 'retroactive' standards.
SAE International Announces Standard for NACS Connector, Charging PKI and Infrastructure Reliability
I quote this one because it is an example of a Tesla product creating a 'retroactive' SAE standard in order to facilitate adoption that had already happened.
Is it not possible that Tesla conceivably do something to permit classification inclusion in J3016 or even a new standard?

I am not arguing for or against some future version of FSD. It is a trifle facile, though, to credit non-compliance with an existing SAEstandard if the product involved is a 'better mousetrap'.

Yep.

I believe that on 8/8, Elon will announce that robotaxi testing is about to begin in one or more US cities.

@Knightshade, if Elon makes such an announcement will you believe him?

 

[Usain]

Many agree, including me. Still, that will be a major departure from present day FSD positioning.

Did Elon ever say that the robotaxi network would be rolled out all at once all over the country?

 

[nativewolf]

True, but bear with me in my dream scenario.
People get out at 5pm but know that in a 100m radius and a 10 minutes window there will be cars that pools people based on real-time data and an algorithm that maximize efficiency. Variable fares are established taking into account a lot of parameters: willing to pool with others, male/female, hour of the day, total distance covered, willing to swap cars (like changing a line in the tube...), last-time decision or booked trip, etc.
If everything goes well, you actually take thousands of cars out of the road, and it's more efficient than Taxi (people still go 1 by 1 in the same freaking places... because there is no incentive to pool). Tesla could have more than one type of vehicle (2-seat, 5-seat, 16-people both seated and standing), and the algorithm would be too difficult if especially people book their trips.

I would love to see RT deployed in such a manner. That would do great things for sustainability. I see lots of other RT uses which would do great things for humanity but not really push the mission forward.

 

[jerry33]

Interesting. I would have thought one wouldn't bother in a city but you feel the same way there too? Was it "instant love" or is it something you slowly get used to like? In your view, would one month's free subscription be enough to make you hooked?

Depends on how much you use it during the month and also what your streets are like. I use it in town a lot, but I also do a lot of disengagements due to the way-too-strong acceleration and braking at the last second. FSD really needs to look ahead farther than the end of its nose. It really shouldn't rocket off the line faster than the nearby cars.
V12 is far smoother than V11, but both versions use at least 50-70 more Wh/mi in town. (320 vs 250 2020 X LR+). Even though electricity is less expensive than gas, I still don't want to use more.

 

[Webeevdrivers]

It's an interesting concept, and it would be the logical way for Tesla to start the RT fleet. They could even hard focus AI training in the areas they want to "geofence" into in order to train the FSD to handle the area competently and without issue.

Tesla would have to build the RT production line first, and if the Gen3 consumer car is indeed scrapped then its probable the Gen3 line slated to go into Austin next year could now be solely an RT production line, even possibly starting RT production late next year in place of what would have been Gen3 consumer. So the earliest they could implement something like this is realistically early 2026, but likely later than that.

I wish 8/8 was closer than it is, lol.

So, an RT vehicle is still a vehicle…but without a steering wheel. Would there not be a market for an RT vehicle but with a steering wheel? Inexpensive, simple.

Assuming RT vehicles are destined to replace cabs in North America, I’m curious how many there is. How big of a market is there?

 

[Musskiah]

People have been complaining about Elon being distracted and wanting Elon back. Well, this IS Elon back at full steam. I don’t want to hear one complaint from that group of people, because you just got your wish.

 

[sunwarriors]

Tesla makes tens of billions in profit without FSD, they have $30 billion cash to invest and grow that profit, almost no debt. They are in incredible shape and about to be the first to full automated driving. Not buying up every share you can afford at these prices is missing a once in a generation cinch. Im hoping selfishly the price goes lower over the next few months/years while I load up. If you can't handle this then Tesla is not an investment for you, it's. long term investment, think 10-20 years minimum.

The job cuts were because growth/sales have slowed last quarter. 1st time since pandemic I believe where they had less deliveries year over year. Profit margins were north of 20% in the past I think and now, around 8% after all the price cuts? (Someone correct me if that's off). Tesla is in no trouble of collapsing or anything like that, but to wall street, no growth = death spiral usually unless it can be turned around.

Their profit margins of the past isn't what it is now and the reason for Elon full AI/Robotaxi mode and all the comments about the car company portion being worthless. It's only normal to do layoffs when sales growth doesn't match employee head count growth.

 

[Knightshade]

Yep.

I believe that on 8/8, Elon will announce that robotaxi testing is about to begin in one or more US cities.

In what US city do you believe it's legal to deploy a driverless car that doesn't meet the J3016 definition of L4?

@Knightshade, if Elon makes such an announcement will you believe him?

Define "robotaxi testing"

If you mean driverless- no, I won't. Because that's not legally possible unless there's some SUPER SECRET version containing multiple, fundamental, new abilities not in any public build of the software. Plus he already made that promise in 2019 and it didn't happen.

Remember he said they expect deployment of RT would begin by end of next year at autonomy day in 2019. It's ~5 years later and no deployments yet.

By the middle of next year, we’ll have over a million Tesla cars on the road with full self-driving hardware, feature complete, at a reliability level that we would consider that no one needs to pay attention.

It's ~5 years later and Tesla still considers the driver as needing to pay attention.

I don't think so. Did Elon ever say that robotaxi would be rolled out all at once all over the country?

Yes.

From our standpoint, if you fast forward a year, maybe a year and three months, but next year for sure, we’ll have over a million robotaxis on the road. The fleet wakes up with an over the air update; that’s all it takes.

OTA to over a million robotaxis. For sure.. Again it's ~5 years later and 0 robotaxis on the road.

Now, he certainly could've changed his mind on deployment strategy since 2019- but he did say the above.

 

[jerry33]

The other critical point, which I feel is ignored, is nobody has addressed the fact that nobody has demonstrated how FSD is actually improving the sustainability of transportation. Perhaps that's a topic for a different section but I don't see FSD being somehow magically helpful and in the short term will be clearly detrimental.

The way it drives, it certainly uses more energy on any given trip. Perhaps it's a wash if you count the accidents it saves and the impact of the replacement vehicles.

 

[Usain]

Define "robotaxi testing"

Testing with a human safety driver with the goal of going driverless by the end of next year.

Will you believe Elon if he announces that on 8/8?

 

[Mengy]

So, an RT vehicle is still a vehicle…but without a steering wheel. Would there not be a market for an RT vehicle but with a steering wheel? Inexpensive, simple.

Assuming RT vehicles are destined to replace cabs in North America, I’m curious how many there is. How big of a market is there?

You aren't thinking large enough!

The economics of TaaS makes it more financially appealing than actual car ownership. Meaning with an EV RT fleet, the costs per mile for consumers should be cheaper than owning and driving your own car.

This is why so many people are so bullish on TaaS. Historically new products which are more efficient financially for consumers always displaces old tech. It's happened over and over, again and again, with many tech breakthroughs. Given enough time, TaaS will very likely reduce the auto sales market to a mere fraction of what it is today.

What good will those cheap Chinese EV's be if no one is buying them ten years from now because almost everyone is now using TaaS?

This might be what Elon is considering, if the rumors of scrapping the $25K car turn out to be true.

 

[Musskiah]

Look here people: Tesla cut 9 percent of its workforce June 2018 AND ANOTHER 9 percent January 2019. And ANOTHER 10 percent in 2022.

https://www.google.com/amp/s/www.cnbc.com/amp/2019/03/07/tesla-lays-off-more-workers-and-cuts-costs-ahead-of-model-y-reveal.html

Guess what happened each and every time after the workforce cut? The company workforce grew to new highs!

 

[2daMoon]

This is where I think there is a serious disconnect. I don't care to use a RoboTaxi, I live in the burbs. I drive, I like to drive, and I love cranking my music. And I am not using my car I just spent two hours cleaning as an Uber. Many here think it's the future, I have my doubts, especially since no one here has answered the liability question yet, just wait till a Robotaxi T bones a school bus, we will find out soon enough.

We will have to wait till the earnings call, shareholders meeting, and 8/8 debut to see if the $25K car is truly dead or "postponed." If it is dead, then it will be the first time I have seen Tesla acknowledge they cannot compete. That sigh of relief you heard are the competing automakers.

If Tesla is serious about this pivot, and the execs leaving "may" show that they are, then more changes are coming down the pike. S/X cancellation? Roadster? LOL, Fremont shut down, why not?

Or this could be our imagination running wild and nothing has changed, despite some high profile execs leaving. And Elon is drinking his coffee this morning reading our posts laughing.

After giving this some thought here's one perspective.

If someone wants to add their personal car to the Robotaxi fleet they will agree to either:
A) assure it will be maintained and provided in a condition meeting minimum RT requirements, or
B) a fee will be assessed to include the personal vehicle in the standard RT Fleet processing for cleaning, charging, and maintenance. This might mean the private vehicle goes to an RT hub for inspection/cleaning/charging prior to being deployed.

As for liability, any car that is operating on the RT platform, providing rides for profit, will be covered by the RT network. A fee to cover this will be deducted from the profits of a private RT operating in the RT fleet.

The software will keep up with when it is and is not covered and the owner will provide their own coverage for private use, which may be purchased from Tesla Insurance, and may be deducted from their profits on that vehicle's operation in the fleet. Meaning, they will get free use of their personal Robotaxi if the profits of operating in the fleet exceed the costs of private use. Regardless, it will significantly reduce the cost of "ownership" when compared to not putting it in the fleet at all.

If Tesla has pivoted to bypass development of the $25K car, this in no way indicates they cannot compete. It strongly infers they are changing the rules of the game. If the other OEMs want to compete, they will have to join forces with Tesla and begin producing their own Tesla-enabled Robotaxis as well.

This in no way changes existing production, or even expansion of production numbers, new models, etc. Those are, and will continue to be profit centers. There will be a period of many, many years needed to produce enough Robotaxis to completely displace existing needs. Though, this transition will be accelerated by Tesla pivoting to focus on autonomy/Robotaxi, which, as mentioned above, will put pressure on other OEMs to do the same by becoming customers of Tesla for the vital components that allow them to maintain relevancy into the future.

Longer term, there will be fewer and fewer private owners if Robotaxi availability grows to the point that when it comes time to get rid of one's personal vehicle they simply do not replace it because Robotaxi meets their needs well enough that the hassles of ownership (costs, parking, etc.) is less advantageous by comparison.

To be clear, this is a time period that will span at least a decade or two before Robotaxi grow in usage enough to meet a majority of people's needs with TAAS.