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

[mongo]

2. Tesla doesn't have enough cells to keep the Semi factory from becoming a cash furnace.

My understanding is the Semi factory is quite different from previous vehicles due to the size of supplier sourced subassemblies. Much less tooling needed with correspondingly less depreciation/ fixed cost.
Also lends itself to production rate adjustment via labor scaling.

 

[unk45]

Is it a possibility the American stock market will be depressed on Monday because some investors will be selling stocks to pay tax bills? April 15th would be pretty much the last time to do that

It really is not a major factor at all. Nearly everyone with capital gains knows better how to handle finances than that. Those who do not don’t have enough shares to move a market. This is not a prediction. I am reticent to ever assume anything about short term markets. Even the best statisticians cannot really do that. Inside information, though, is another subject.

 

[unk45]

I don't personally think that the US military is currently craving the Cybertruck...

But a lot of the criticism here seems to assume that a "military vehicle" must be ready for an active battlefield.

The military needs many vehicles transporting humans and supplies in many areas far from active battle.

And, any vehicle can of course have armor added to it.

Relatively stock Jeeps were used in the military for various purposes...sometimes with the doors and/or roofs removed. Armor isn't needed for every military use.

Even a quick Google search on the bullet proof qualities of the original Hummer/HMMWV/Humvee (clearly designed and used for various military purposes) lead me to:

"A standard Humvee will not stop any kind of projectile. It is no different in that respect to a civilian SUV. An up-armored Humvee can stop essentially all pistol rounds, and most common rifle rounds..."

For supporting evidence check out Iraq War and Humvee. A close friend was injured seriously that that Humvee vulnerability.

 

[Skryll]

The last I heard they can collect data from vehicles equipped with the hardware and software even if they're not subscribers to FSD. Is that not true? Since hearing that I wonder how they evaluate the relevant cases for data use I have no idea. I don't remember where I understood that so I question my logic anyway on that point. I do recall they do use all drivers data in assessing accident risk for underwriting insurance where that is legal to do. e.g. NOT California.

I observe massive data upload only on days that I used FSD

 

[aubreymcfato]

Good Elon.
“As we reorganize Tesla it has come to my attention that some severance packages are incorrectly low,” Musk said in a short email sent to employees on Wednesday and seen by Bloomberg News. “My apologies for this mistake. It is being corrected immediately.”

Source: Musk Apologizes for ‘Incorrectly Low’ Tesla Severance Packages

 

[unk45]

Advertising:



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Keep in mind those are People who support the ones implicated in insurrection. If deemed political, this will be deleted. In fact this is a major factor in prevention of Brazil Tesla/SpaceX permitting, and threatened X and Starlink limits. We cannot avoid the direct consequences of such events on Tesla prospects.

 

[Ellec]

"Tesla SP is down so they don't have a plan and are doomed!!", mean while.

 

[aubreymcfato]

But the European manufacturers are building EVs today. So even with the so-called hate from their workforce and dealers, they are still doing it. And they are making the batteries that you're so confidently saying they have no experience manufacturing. Software over the air updates? My 2023 5-series updated itself just a month ago. So you've missed all these items. But what you're actually missing is that there's no hurry for them to transition over a short period of time. Their sales are increasing, while Tesla's are decreasing. If anything, it shows that what they're doing, still works. What's the hurry? 48V is not the game changer that Tesla presents it to be.

This is 2023 best selling models in Europe:

I've yet to see an updated chart with Q1 numbers, but "increasing vs decreasing" it's not very meaningful without knowing actual numbers. FWIW, Tesla allegedly gained market share in Q124.
2024 it's proving to be tough year, for sure, but for everybody. If you have current numbers for all brands I'd be happy to see them.

 

[unk45]

Hi, Mongo --

There may be a longer conversation about this, to me, really unimportant point. I don't know if I'll engage it in due to software limitations, e.g., lack of threading. What I mean by that is: I don't know how to track replies to a post. I'm responding to this at a particular point in time. This may well have 100% thrashed out by others before I got around to responding. But I'm here now and not going to wade through 10 or 20 or however many pages of to see if the topic is of interest to others. Also, note that this is unimportant pedantry that does not impact the bottom line.

There are two points here:

> The bulk of Tesla's fleet has been young

Tesla gives you fleet growth & service center growth in in their investor notes. Eyeballing those -- fleet growth is much > than SC growth -- supports the anecdotes about Tesla service being really, really busy. Look at P&S margins from dealers. I'd expect a busy service station to be profitable at a station level. I'd expect that those profits llwould roll up.

>and in warranty until recently.

This is in the direction of what I'm getting at by "flattering auto gross margins." The way I think things should work, is that warranty work should be accounted for as an intercompany transfer. Put it like this: Dinosaur OEM sells a car for $50k with a 1k warranty reserve. As warranty claims come through, they debit the warranty reserve at what the dealer charges them, including dealer margin. Tesla does the bulk (all?) of the warranty work in-house. I think Tesla is at least shifting "dealer margin" from services & other to auto cost of goods.

I'm not accusing Tesla of any wrongdoing. GAAP accounting requires management judgement. That means you can jigger things to make the investment case look better. In the early days, auto GM was probably the single most important metric, so let's flatter auto GM. Maybe things change so people are more interested in the annuity-like parts & service revenue stream. In that case, let's flatter service & other.

Note that I've done no real digging here, this is all just speculation on my part about why a segment that I speculate should be very profitable on a gross margin basis hasn't been.

Yours,
RP

Please, please study basic accounting prior to making such posts. Warranty reserves are credited with expected expenses for warranty service at the time of sale. Incurred warranty costs are debited to reserves. You assert in completely incorrect. As you say, ‘…no real digging”.
Speculation is unneeded when there are facts. Each searching in this thread gives detail that proves, not guesses, that Tesla has had very conservative warranty reserving since 2010. To assume ‘jiggering’ without evidence is FUD, and should be eschewed.

There are enough factual worries to be concerning without inventing false accusations. Please stop doing that.

 

[unk45]

Hi, Unk45 --

> You post n a subject about which you obviously know nothing, Accounting.

Thanks for setting me straight! I'm certainly not an accountant. What I'm hearing is that when trying to understand dealership finances, I shouldn't look at the "Cost of Goods" line? Is this revealed someplace else?

Yours,
RP

Seriously, the answers are not so simplistic as a single line item. There are far too many components to be assessed simplistically. The answers come from actually learning accounting. That cannot be done in this forum.

 

[alexxs88]

This is 2023 best selling models in Europe:
View attachment 1040649
I've yet to see an updated chart with Q1 numbers, but "increasing vs decreasing" it's not very meaningful without knowing actual numbers. FWIW, Tesla allegedly gained market share in Q124.
2024 it's proving to be tough year, for sure, but for everybody. If you have current numbers for all brands I'd be happy to see them.

Not sure how it relates to what I was saying. I'm not being disrespectful, but if you could be a bit more specific into the point you're making,I can maybe offer a reasonable counter-argument or concede that you're right.

 

[Knightshade]

Please, please study basic accounting prior to making such posts. Warranty reserves are credited with expected expenses for warranty service at the time of sale. Incurred warranty costs are debited to reserves. You assert in completely incorrect. As you say, ‘…no real digging”.
Speculation is unneeded when there are facts. Each searching in this thread gives detail that proves, not guesses, that Tesla has had very conservative warranty reserving since 2010. To assume ‘jiggering’ without evidence is FUD, and should be eschewed.

There are enough factual worries to be concerning without inventing false accusations. Please stop doing that.

I was surprised to see this discussion- it had been several years since I thought the "OMG ACCOUNTING FRAUD IN WARRANTY" thing had been laid to rest... it's done very nicely here:

Tesla [TSLA] Has A Warranty Accounting Mystery - CleanTechnica

Back in January, I explored the popular short seller thesis that Tesla is unfairly cooking its books by not accruing enough money for its warranty work. Digging into the problem, I found the site WarrantyWeek.com, an incredible resource for those interested in the world of warranties and how...

cleantechnica.com

and then in a follow up piece with even more info here:

Re: Tesla [TSLA] Has A Warranty Accounting Mystery — Exploring The Goodwill Theory - CleanTechnica

My recent article on "Tesla's Warranty Accounting Mystery" got a lot of comments, and to reply correctly, I feel as if I should share some further research. In this article, I'm going to specifically discuss the "goodwill" warranty claims that keep coming up, what I know about them, and what I...

cleantechnica.com

The much more recent OMG ACCOUNTING FRAUD narrative I've seen on the bird app is that Teslas ~29B in cash is fake, because they've got 28.7B in short term liabilities (including ~14B in accounts payable) so they only reason Tesla has any cash at all is they take longer to pay their bills than to "count" revenue from sales and it's all a ponzi scheme of some kind that collapses as sales stop growing rapidly.
(expect to hear a lot more of that if as some have suggested FCF turns negative for some quarter this year)

 

[nativewolf]

The robotaxis would have "basically nothing to do" in between morning and evening rush hour? Have you been to a major metro area recently? Have you looked at actual traffic data? You are greatly overstating the magnitude of daily demand fluctuation. In most cities, the nadir of midday demand is around 50-85% of the apex of evening rush hour demand. See graphs below for data from several cities from around the world. Also, Saturdays and Sundays exist as well, and they have much more even demand across the day.

Additionally, this data reflects the current reality for the transportation market in which vehicles move only when driven by a human. In a future of autonomous cars at low cost, the market will find productive uses for much the excess capacity, albeit probably at discounted off-peak prices. Economics has repeatedly shown that it's unwise to underestimate the creativity of free markets to find way to exploit resources. Most of those midday (and nighttime) uses will probably be for deliveries rather than passenger transportation.

By the way, 70-minute commutes like Everett to downtown are nowhere close to "about average" in the Seattle metro area. The average is 25-30 minutes, which is about the same as in most US big cities. A significant number of people are doing the reverse commute also, as I did last year. Also, I lived and worked in downtown Seattle for 2.5 years and I can assure you traffic did not drop to negligible levels at any point from 6am to 8pm.

Detroit, USA

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I have looked extensively at traffic patterns. Extensively, it fascinated me. The people driving to and from metro stations, the people dropping kids off at schools, the landscapers, etc. I actually spent days looking and then decided it didn't matter. Most people that drove to work, park, then they don't move the cars. Most commuters, most days. That's well documented. So, the people on the road in the middle of the day are usually not commuters. Some are going to meetings but they are people doing something (fedex, delivery XYZ, service XYZ, kids, tourists, etc). Again it does not matter. Take Seattle again. 350k workers downtown. 25% commute in single use cars trips. 80k or so cars moving in and then leaving once a day. I use Seattle because my own metro region is so F'd it makes the numbers look worse for RT.

The RT picks someone up in suburbs and takes them downtown. Between 8- 9am the RT, 80K of them, are not parked but sitting in the roads causing even worse congestion. Where do they go? There are not 80k riders needing to go somewhere in downtown Seattle at 9am. Uber handles that 9am traffic in Seattle with a couple of thousand cars. That is the market downtown for people that didn't want to go around in a rental or in their own car. So you have a gap of 78k or so cars. That's a lot of traffic. A lot. Where is the business? It isn't there at 8-9 am. Cars are moving but it isn't 78k worth of cars moving. They are also not commuting regularly. People are working from home and a certain amount of that never comes back. That might help the RT use case I am just not sure. It means you have to have a huge amount of vehicles stashed to handle surges on Tues-Thursday.

If the commuters cars are the RT fleet then there are 80k chasing 2k worth of work. Does everybodys car get to take 2 fares/week? I don't see how that is even worth signing up in the system (the intercity midday fares in Uber are very low, 2-4 miles 10-15 mins- this is all about parking and convenience). An uber driver may get 15 such rides between rush hours. The pofitiable rides for Uber are bar hopping rides starting at 5pm and ending at 11pm but it's really not a big number. From 8pm to 6am there isn't much traffic except for this work and occasional airport work.

The greatest societal good I see from working RT is that it brings new societal interactions to elderly, handicapped, and substance abusers. Can they use an app? I guess we can make sure they are accessible. will the rt be handicapped accessible? Maybe Uber drivers will still be needed to move wheelchairs or ? Anyhow, lots of good but I am not sure how much profit.

Do your own analysis. Figure out how to move the commuters and then how to move the other people. Carve out all the people with work related vehicles. Go stand at a street corner and just count each car at a corner. Easy RT replacement or not.

Then here is another issue. We need to park and charge a minimum of 75k cars.

Will Tesla invest in 75k cars to handle Seattle transport market? If they had invested in 2018 they'd have needed 100k cars but people are teleworking so the number decreased across the USA. What would they have done with the extra 25k cars?

I think Waymo is on the right track. Gut Uber and grab all the dense Urban traffic and as demand slowly increases take the profits and expand. If Waymo is first you'll have 50k vehicles making profit. Waymo could be serving the 5 big CA cities by end of 2025 and that would be 5/20 in the USA. Obviously they add Austin and Phoenix and then some others. We'll see. They are being very methodical.

Google can better leverage the ad dollar spend associated with a captive ride, they'll know if you buy pizzas or pho on the way home and can hit you with ads or just to extend trip (OR NOT). For this reason I've always thought Google was in a good position. Also that Ubers data has some value.

 

[nativewolf]

RT won't just replace Uber, it will replace most cars. Imagine every car on the road was you own private Uber with no driver and cheap. So Tesla gets the profit from the car sale and income from every mile the car does. That's why, if executed properly, we are talking tens of trillions in Market Cap, this doesn't account for Energy, other services, Tesla bot etc.

actual FSD? I would like a chauffeur too and I think that market is much larger than the TaaS market. I don't want anyone in my car, it is full of stuff and I'm not taking it in and out.

I think TaaS market is Uber+ Uber, Lyft etal have had 15 years to figure this out. I also think there are niche TaaS markets that Uber doesn't touch but that would be a societal good (handicapped, elderly, substance abusers). I am skeptical of TaaS being a huge instant market in North America.

 

[nativewolf]

I'm wondering how RT's will work in rural areas like here in the UK where there is zero option other than to owning a car. Those seem to be screaming out for affordable EV's. Have I missed something obvious (as well as mentioning how much people value having their own car parked outside).

I live in a rural area in the USA. Few people have Evs right now and if they do they are likely Teslas or Rivians. I can go to electrify america charging stations 30 mins west of me and there are always spots or 15 miles east (toward DC) and never ahve an open spot. Adoption is very slow. They will also commute 70-80 miles into DC from that area so ...range really matters. Wait times for charging stations are huge. Costs are high.

 

[replicant]

if you could be a bit more specific into the point you're making

You're saying "there's no hurry for them to transition over a short period of time. Their sales are increasing, while Tesla's are decreasing".

But who cares about a tiny increase of dinosaurs' EV sales when it's still insignificant – to their overall sales as to the global auto sales? EV sales are slowing down now, everywhere. Tesla is the most affected since they're the leader, but they may well also just be the first in the wave. And, as it's been repeated here, Tesla's EV market share could well be increasing despite the difficult times.

Now, either the transition won't happen and dinosaurs can take their times, or it will happen when the current downturn stops and EV sales resume.

Please, zoom out and watch the EV sales trend: look at Norway for a quick look at an early adopter and see what happens when EVs get past a critical point. When your neighbors, friends, family and coworkers are all praising their EVs, you have to try them out when looking at replacing your 15 year-old car.

So yes, Tesla sales are down today, probably due to high interest rates, China's slowdown and a slow ramp of Cybertruck and Semi. But watch out if and when sales start picking up again. ICE OEM are not rushing when they should. They probably won't have another chance.

Too bad! Or should I say, all the better.

 

[CitizenKane]

Trying to start buying back some stock at 140 and more if it continues down. Even with all the current questions around future and strategy, I am confident in the continued shift from ICE to EV and I don't see how Tesla would not play an important part of that. Add to that all potential additional income and I think the stock starts to look rather attractively priced. Wish me luck

 

[Usain]

I think Waymo is on the right track. Gut Uber and grab all the dense Urban traffic and as demand slowly increases take the profits and expand. If Waymo is first you'll have 50k vehicles making profit. Waymo could be serving the 5 big CA cities by end of 2025 and that would be 5/20 in the USA. Obviously they add Austin and Phoenix and then some others. We'll see. They are being very methodical.

Google can better leverage the ad dollar spend associated with a captive ride, they'll know if you buy pizzas or pho on the way home and can hit you with ads or just to extend trip (OR NOT). For this reason I've always thought Google was in a good position. Also that Ubers data has some value.

This sounds great. But Waymo still has to figure out how to operate profitably. As long as frequent human intervention and monitoring is required behind the scenes, Waymo can never be profitable.

The only way to cut out the expensive humans is for the "Waymo Driver" to make better decisions. This can not be achieved with heuristic code. So Waymo will need an end-to-end system like Tesla FSD. But Waymo doesn't have the data required for end-to-end.

Please explain how Waymo will solve this conundrum.

 

[FastEddieB]

Wish me luck

Good luck!

 

[growler23]

I was saying this earlier, but the data is their big prize. I don't mind helping out, but we are all guinea pigs, so drive carefully or rather, watch carefully.

In my case, FSD drove a little TOO carefully. I got rear ended this weekend, while waiting for FSD 12.3.4 to decide (in its hesitating, on again off again way) to make a right turn into traffic. The car behind me probably saw my car pull partially into traffic (which it did), then slow/stop (which it did) because of cars in the next lane (not the lane I was entering). My best guess is, the other driver likely looked left for incoming cars as they accelerated right into my back bumper, on the assumption that I was still in motion. Ouch. Will need a new liftgate and new plastic bumper - it's broken and I can see the big square looking metal pipe thing underneath that presumably actually absorbs the bigger shocks. (Low speed: no injuries at all thankfully).
FSD is really safe, but the over-abundance of caution is unnatural (to all but Driving School students) and can cause problems.
And before naysayers chime in: Yes, I am responsible for the behavior of the car during FSD, and I was paying attention and very on edge about its indecisive behavior. I had already goosed the accelerator once earlier on that drive, due to impatience in entering a clear lane that had partial view obstruction. And yes, the person behind me, by accelerating without looking, is responsible for rear-ending me. So in terms of actual responsibility, it lies with the humans. I want to also make the point, made to me very clearly this weekend, that indecision shown by FSD at times can also be unsafe.
I am not sure if the hit itself disengaged FSD, or if my likely reaction of hitting the brake disengaged it, but I can at least hope my chagrin (my beautiful Y is now no longer pristine) and hassle gave Tesla at least one useful data point.
Yes, still a fan of FSD, but I will choose much more carefully when I engage it. It had given me a great 10 mile drive on Friday, and I was feeling confident in it from that, but my Saturday was ... not so joyous. I'm hoping my beloved blue dragon will be healed soon.