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

[Artful Dodger]

Whoopie doo. Another way for me to ignore crappy social meeja.

What, and miss Gary Black taking a victory lap on selling TSLA?! (down 60%). The only problem is, he used the proceeds to buy RIVN (down 95%).

 

[Quesder]

Someone checked the Tesla wait time and found that it becomes longer, I.e. demand increased

See how long this could last. Again, I still think that, maybe trying to cost down 3and Y even more is a better strategy than making Model 2.

 

[jschwefel]

https://twitter.com/x/status/1781889613155496131

https://twitter.com/x/status/1781893130843009131

THIS is what I’ve been waiting for! While $8k still seems a bit high for FSD (Supervised), $2k to upgrade from Enhanced Autopilot is definitely worth it.

Take rates will go up. How much? Only Tesla knows that, but most of this $ goes directly to the bottom line (Tesla still defers revenue until FSD is feature complete).

FSD is Tesla’s “Golden Goose”, and the supervised version, as impressive as it is, should be used to drive profits. I wouldn’t care if they priced it at $4k or even $3k, whatever’s needed to substantially increase take rates…and profits. Tesla can increase the price again when FSD (Unsupervised) is released.

Also, Tesla should break away from their current model of providing the “Unsupervised” version to anyone buying the “Supervised” version. FSD 12.x, once feature complete, is good enough to be a stand alone product. Then Tesla can offer the “Unsupervised” version as an upgrade to those buyers.

Anyway, I think Tesla is moving in the right direction. While I’d still like to see them market the Model Y to CRV and RAV4 buyers, I’m not going to argue with their product focus and cost reduction. The product essentially sells itself and FSD is getting too good to ignore. It’s just a matter of time.

 

[mongo]

Sold out for 2024 cannot be true. I sat on my invite since Jan 19th, configured on Mar 24th, and have an April-June delivery window. I don't believe Tesla sold out the last six months of 2024 production since Mar 24th

I'm guessing you ordered Foundation AWD?
Cyberbeast started with a mid-late 2024 delivery date.
I configured in Dec, shareholder acceleration, and have no estimate on delivery.

Given the crap margins on "Services and Other", I've always assumed that Tesla is shuffling some costs/revenues around to flatter auto gross margins. Note that I'm not accusing them of any wrongdoing! This is more like, "This could go here or here, it make more sense it for it go in the first here, but since it makes auto gross margins look better, let's put it in the second here."

The bulk of Tesla's fleet has been young and in warranty until recently. With minimal maintenance requirements, how would service have made a profit?

 

[rsm287]

IMO, Dillon from the Electrified youtube channel makes some convincing arguments as to why there is a possibility that the shareholder vote for Elon's previous comp package may not go the same as it did the first time.

Considering that there's even a slight possibility of that happening, I'd like to encourage everyone that owns shares to please make sure to vote this time around, regardless if you voted or not the first time!

Yes, extremely important that everyone who is able to vote takes the time to do so. Don't just take it for granted that this will automatically be a 'Yes' vote (there are many with a vested interest that would jump at the chance to thwart Elon and Tesla).

I would if I could.

Unfortunately my shares is held trough a local bank.Which hold shares trough an US bank.

And somewhere along this route the link is broken and I cannot vote.

I fear this is true for many shareholders outside the US.

Same, I can't vote as shares are held with my UK broker H&L in a mix of ISA, Pension and trading account.

I am in the same situation and it's extremely frustrating. Most of my shares are in a Hargreaves Lansdown SIPP (Self Invested Pension Plan) and it's not possible to vote my shares through them. I've looked into it and it seems the only broker that would allow me to vote from the UK is Interactive Brokers (U.K.). However, I cannot transfer my SIPP to them because they don't support them directly (only through a SIPP Administrator). I'm still trying to find a way to make this work and if anyone knows how this is possible I would really appreciate the heads up.

 

[raffiniert]

I am in the same situation and it's extremely frustrating. Most of my shares are in a Hargreaves Lansdown SIPP (Self Invested Pension Plan) and it's not possible to vote my shares through them. I've looked into it and it seems the only broker that would allow me to vote from the UK is Interactive Brokers (U.K.). However, I cannot transfer my SIPP to them because they don't support them directly (only through a SIPP Administrator). I'm still trying to find a way to make this work and if anyone knows how this is possible I would really appreciate the heads up.

Similar situation in Switzerland with Swissquote. I was never able to vote and don't know how to achieve it

 

[jschwefel]

The bulk of Tesla's fleet has been young and in warranty until recently. With minimal maintenance requirements, how would service have made a profit?

Yes. Service is a huge profit driver for legacy automotive given the tens or hundreds of millions of vehicles they have on the road. Tesla is just getting started with this, AND they have the ability to sell software upgrades, not just service.

Doing some quick math on this, Tesla has about five million cars on the road that are FSD capable. Estimating 10% of that fleet already has FSD leaves 4.5 million vehicles that could be upgraded to FSD. If Tesla sold FSD (Supervised) as a stand alone product once it’s “feature complete” for say…$4k (note it doesn’t automatically upgrade to “unsupervised” when it’s released) and the take rate was 50%, that would be $9B in profit. AND those 4.5 million cars could still pay to upgrade to the unsupervised version later down the road.

The sweet spot for price and take rate is TBD, but the potential here is massive and growing.

 

[unk45]

I don't see that in the numbers. Remember that Tesla gets the extra benefit of having no dealers. A dealer gets 10-15% margin on the retail price, margin that would be instead seen in Tesla's financials (minus the relatively small cost of operating a website and minimally staffed delivery centers in each country). In my country, Tesla operates the sales component with essentially 1% of the people of all the BMW dealers (excluding service components for both) while selling the same number of cars. That obviously shows conventional manufacturers where they could extract extra margin from, but also shows that Tesla's manufacturing is not such a marvel as some might think.

FWIW you’ve seriously understated the costs for dealer distribution. We probably could discuss the details elsewhere, but for typical EU OEM this runs around 20% or so and US higher around 25%, due mostly to finance margin and dealer-added equipment.

As for Tesla manufacturing efficiency, there is copious documentation, including professional accountant reporting. Recently though, manufacturing costs have been reducing from raw materials price reductions. Nearly all battery components, for example.

 

[unk45]

Hi, Alexss88 --

> A dealer gets 10-15% margin on the retail price,

Too lazy to double-check, but I believe dealer *gross* margins on new vehicle sales are in the 5%-6% range. You need to go the filings or earnings reports to see this, data service financial summaries don't provide enough detail. I suspect that the DTC model gives Tesla a small competitive advantage. Note that the dealership structure is used in tons of other industries, from boats to tractors to commercial laundry equipment, presumably there's some good reason for this.

Given the crap margins on "Services and Other", I've always assumed that Tesla is shuffling some costs/revenues around to flatter auto gross margins. Note that I'm not accusing them of any wrongdoing! This is more like, "This could go here or here, it make more sense it for it go in the first here, but since it makes auto gross margins look better, let's put it in the second here."

Yours,
RP

“Too lazy to double check” makes some gigantic errors. I won’t bother to give detail because you absolutely will not really learn without doing the work to understand yourself. As a hint: auto dealers in most countries, including the US, do not make the majority of their profits from the stated margin between ‘dealer cost’ and ‘MSRP’. In fact ‘dealer cost’ is seldom actual cost of a vehicle to a dealer.

This gets worse. You post n a subject about which you obviously know nothing, Accounting.

 

[DarkandStormy]

Re S & X Pricing. Drops of 30 % over last two years and still no RHD versions ?

https://twitter.com/x/status/1781534682448015389

They're basically dead at this point. Merely a rounding error.

 

[DarkandStormy]

https://twitter.com/x/status/1781883009869681112

They...cut prices and and volume was lower YoY in Q1.

Turns out Gary was actually right, and it's the influencers who, perhaps, don't understand what's going on.

 

[DarkandStormy]

Man, TSLA is beaten up royally - can't believe it's market cap is less than $500B on a $100B annualized revenue generating business.

You do realize if you're an investor, you should care about earnings, not revenue.

Your "share of the pie" (EPS) keeps declining.

 

[DarkandStormy]

https://twitter.com/x/status/1781889613155496131

https://twitter.com/x/status/1781893130843009131

Per Elon, FSD is not getting closer. Farther away, in fact. Unless, of course, the CEO misunderstood the economics of his own product.

I assume all the "iT's jUsT tHe sUbScRiPtIoN pRiCe" posts directed towards me last week will offer a mea culpa now that the upfront "purchase price" has also been reduced.

S/X prices reduced 20% in China.

Quite a fire sale going on at Tesla right now. And they're doing a good job of training prospective buyers to just wait for the next round of price cuts.

 

[Mengy]

Secondly, how are you so sure autonomy will be solved soon if nobody has done it yet? Arguably Waymo is the yardstick and their stack / car is 100k in cost, albeit has excellent miles/disengagement performance compared to similar competitors and about 70x Tesla's.

How can you say Waymo is the yardstick for autonomy? Their geo-fenced approach is completely different than the generalized solution Tesla is going for with FSD.

A better analogy would be Waymo is building a calculator while Tesla is building the Apple IIe computer. Would you call a calculator a "yardstick" for a computer?

 

[CHGolferJim]

We heard recently that Tesla CT is sold out for the 2024 model year. That likely means that unless you're willing to pony up for the Foundation Edition AND qualify to 'cue-hop' as a long-term TSLA shareholder, your number in the line is going to come up no sooner than 2025. If you do decide to pony up the extra $20K for the Foundation Edition, rest easy knowing that you helped bring CT to positive gross margins months or even quarters sooner.


Confucius say: "Don't feed the trolls".

Cheers!

I forgot to add that I put my deposit down in 2019. Aren’t I ahead of non-Foundation orders in the queue?

 

[nativewolf]

How can you say Waymo is the yardstick for autonomy? Their geo-fenced approach is completely different than the generalized solution Tesla is going for with FSD.

A better analogy would be Waymo is building a calculator while Tesla is building the Apple IIe computer. Would you call a calculator a "yardstick" for a computer?

I guess because they offer a level 4 system? They can do things today that Tesla can't. They have jumped through the regulatory hops that Tesla has not. They will offer service in all the top Uber markets before Tesla. The top Uber markets are all the profit.

The only question is when does Waymo take ownership of the purpose built fleet. 6000 or so Uber cars in San Fran in a given day, 100 Waymo at this time. So, it sort of shows you where you need to be to scale but also, realistically how many cars you need to supply the market. Maybe 60k Waymo cars or so to supply the top 10 markets in the USA. Just a guess but I expect that is close enough. That is $3.6 billion in vehicles plus say another billion in facilities, insurance, people. Maybe a billion in charging infrastructure? I have no idea. So $6billion should do it for Waymo to gut Uber and be there before Tesla. I expect Google can find $6 billion

 

[Artful Dodger]

I forgot to add that I put my deposit down in 2019. Aren’t I ahead of non-Foundation orders in the queue?

Just like with other recent products, Tesla is selling the high-end versions first. Once demand is satisfied at the highest pricing tiers, then Tesla will move down price ladder and begin delivering lower cost cyber trucks. I do expect that we will see a $60,000 cyber truck, but it'll take 2 to 3 years.

 

[MD70]

At the moment I don’t think Tesla is being proactive enough in reaching out to people who can charge at home.

Once that demographic is saturated then this is going to be the next hurdle.

If I was in charge I would do the planning and research now about installing chargers en mass at Street parking level and if it’s too expensive lobby local/ national government for funds.

https://twitter.com/x/status/1781745025732481119

 

[CorneliusXX]

I think that FSD alone cannot be the savior of Tesla. It is a very simple napkin calculation:
$100 a month for 5 years is only $6000, and the FSD take rate may be not that high, let's say 30%. Of the 6M cars already sold, many of them (HW2 or earlier) are not capable of activating V12.x, or cannot fully exploit the capability of FSD V12.
In short, not helping the revenue very much. Maybe help gross margin, but probably 0.3x or less. Unless, in the future every car sold by any car company has to be autonomous capable and TELSA makes a big money on licensing FSD. I don't think that happens in 15 years or 20.

So, what I really want to say is that Optimus is more likely to be the killer application, and FSD MUST be a helper to the dawn of Optimus. Optimus has way more applications than FSD.
The problem is, FSD is improving so fast because TESLA has so much driving training data., but I don't see TESLA having more data on training robots to do human work than other companies (most likely, industrial/factory works). Maybe it does, but I don't see an illustration.

If we cannot find the connection between "FSD success" to "Optimus training/development", as investors, we cannot bet on that Tesla will do better than other Robot projects of other companies. In that case, put the majority of your money on TSLA at current price is very risky.

The LT framework should be RoboTaxi business model rather than subscription revenue. Work out revenue and cost per mile and multiply by # miles driven.

Revenue: ~$1-$2 / mile (uber benchmark)
All in operational cost: $0.15-$0.30 / mile (depending on your assumptions around energy price, asset life, etc.)

Early years = Tesla charge $1/mile and pay $0.3 due to low scale until human operated taxis are outcompeted - say (1m vehicles * 200mi/day * 365 days/yr * $0.7 net margin) = $51b in sweet sweet moolah. No matter which way assumptions are stressed in the early years there is a lot left over for us shareholders.

Longer term, per mile costs tend towards all in operational cost while # miles driven goes way up.

 

[nativewolf]

Uh, you haven't done the math on Robotaxi's once FSD reaches Level 5, have you?

Hint: FSD can very much truly massively be the savior of Tesla, if FSD can get to L5.

Or maybe his math is much more conservative. WS has done the math and it's priced in I think.