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

[Mengy]

On point

https://twitter.com/x/status/1782436262881661053

I will admit, I've been seeing lots of Rivian ads on YouTube lately and they are really good. I kept thinking "why doesn't Tesla do this?".

Maybe cutting the marketing team was a great move, reset the team so to speak?

 

[NicoV]

Oh that's right... successful leaders NEVER change their approach/tactics as time marches on and the landscape changes... much better to dig your heels in and carry on regardless...

You mean like Toyota and hydrogen?

 

[durkie]

Bots, Vehicles, FSD, Dojo in terms of products/services that can directly be used on Mars to create a 1 million person self-sustaining civilization before Humans get there within their 2 decade timespan goal. i'm sure there's a lot of heat pump tech that could be used on Mars too for temperature control to mimic what its like on Earth. I'm sure there's a lot of tech they're building, and knowledge share, between SpaceX/Tesla employees that's charging both efforts.

Edit: Here's the SpaceX all-hands from a few weeks ago that talks about the logistical plan to go to Mars

Yes, I understand this in broad strokes, but it feels kind of like "well we should invest in computers because people are gonna be using a lot of those".

What is it about those technologies that's relevant to Tesla today, or Tesla in the next 1, 2, or 5 years? Are these technologies merely "good" or are they actually good investments? How do you model those?

And bad cases too: what if SpaceX updates their plan and says "Mars is too hard to get to right now, let's shoot for 40 years instead"? Or that once interplanetary travel is feasible, SpaceX gets nationalized for security concerns. Stuff like that.

I totally get that it's very exciting to think about going to Mars, it's just hard for me to work back to something actionable today or in the near future with Tesla.

 

[Blue horseshoe]

My ignore list is up to nine. Post it? We can talk about this openly right? (It's probably my French coming through.*)

Ya wanna know what I think is really going on? The Fudsters (maybe some general pessimists in the list, sorry) are trying to drive us away from this very Forum. Not just sell, but leave or shut up. We are THAT powerful so it seems. A front line of several similar battles I'm sure. Consider the selloff could be worse without some sanity and patience around here. It WOULD be pretty scary without (~50%) of you folks. Thanks y'all, and please stick around or they win.

Spoiler: * Background

Our family spent many weekends at a Nudist Colony (Sun Valley Gardens) up in Ontario Canada. I was about 5 at that time when we lived on this Fruit Farm near Niagara Falls. I remember it well. I highly recommend this for your own children. Gives us a new perspective on life when you're all naked - even the Emperor at times.

Those are rookie numbers

 

[DarkandStormy]

On point

https://twitter.com/x/status/1782436262881661053

Elon personally approved all job hirings in the last year so...

 

[DarkandStormy]

Not sure why he posted this except it may be a preview of tmw… (it’s a recap of Autonomy Day, 2019; 30mins long):

https://twitter.com/x/status/1782418703759315220

To remind everyone how poor his prognostications were five (yes, 5!) years ago?

 

[rentierparasit]

Only a slight few additional points. Poring over the fine print notes to financials for publicly held auto dealership groups will reveal, lo and behold!, warranty repair work is a major profit center. Look again and note that service income, where directly declared, is a high profit center too. That service income, BTW, when investigated closely turns out to be predominately service of in-warranty vehicles. Out fo warranty does have parts sales, but not so much service since most out of warranty service is normally done by independent dealers. Some such work is, BTW, done by independents for Tesla products too. Of course with electric vehicles it's nearly all repair rates than service, with the notable and lucrative exception of tires.

As usual I'm not giving sources for that. I've read many of these financial reports, but quoting them one by one is beyond my willingness.

Hi, Unk45 --

We're in general agreement. Circling back to where I *think* all this started:

1: I believe that Tesla's DTC model is a competitive advantage, but not a huge one. Some people think it decisive -- "How can legacy compete!?" -- but I wouldn't go that far. The dealers are out there doing something and adding value somehow, as is evidenced by the use of the dealership model across many, many different product categories.

2: An addendum is that it can be challenging to directly compare individual line items in Tesla's financial statements with other industry participants in the multiple industries that Tesla is engaged in.

Yours,
RP

 

[Drumheller]

OTOH, they've just eliminated the referral program if reports are correct. What will replace it? Such are among the directly quantifiable promotional benefits, lacking one an evaluation of how many incremental sales that program has made.

Elon has stated a new referral program is coming.

X is the place for news first and most accurately. Any investor not using X is at a disadvantage in information timeliness

 

[CHGolferJim]

Elon has stated a new referral program is coming.

X is the place for news first and most accurately. Any investor not using X is at a disadvantage in information timeliness

I wonder if there’s a setting to get Elon’s Tesla and SpaceX posts only

 

[2daMoon]

Why 2170s and not 4680s?

Because the Semi is built in Nevada where the 2170s are produced. They are also used for Fremont cars, nearby.

4680s are to be produced near to where Model Y and CT are made. Kansas, Austin, Berlin are sites for Tesla or Panasonic battery factories coming online.

 

[growler23]

Random question?
I'd guess because they have a higher energy density and are already in production with additional lines forthcoming, right there in Sparks?

My take as well. Looks from many reports like there will be massive 2170 supply starting basically now, for at least a couple of years.
This also decoupled the Semi launch from 4680 development, reducing at least one element of risk for the Semi project.

 

[JSML]

Elon personally approved all job hirings in the last year so...

All 13,400 hires in 2023?

Any links to your claim? I’ve seen old info on Tesla’s hiring practices, but nothing about 2023.

 

[unk45]

Hi, Unk45 --

We're in general agreement. Circling back to where I *think* all this started:

1: I believe that Tesla's DTC model is a competitive advantage, but not a huge one. Some people think it decisive -- "How can legacy compete!?" -- but I wouldn't go that far. The dealers are out there doing something and adding value somehow, as is evidenced by the use of the dealership model across many, many different product categories.

2: An addendum is that it can be challenging to directly compare individual line items in Tesla's financial statements with other industry participants in the multiple industries that Tesla is engaged in.

Yours,
RP

In fact the comparison is evident in several categories. The differences appear in every step that is done by dealers in others and done internally by Tesla. Among those are several items that are often treated in different accounting categories. Naming the items:
-warranty expense;
-advertising and promotions- dealer support can be and is found in several different accounts, not all of them disclosed;
- equipment and fixed assets- some dealer expenses and Capex are found in various accounts, sometimes disclosed in a finance subsidiary, sometimes in the parent, sometimes by distributors (eaters parent or independent), sometimes not at all.
- 'spiffs' and dealer incentives- There si an endless variety fo these items sometimes disclosed sometimes so disaggregated that it takes forensic accounting to find them.

With Tesla, by harmonious design, WYSIWYG. Tesla does not have tricks in financial reporting. Everything material is reported and some immaterial things are too. As always most of the nuggets (e.g. warranty reserves) are in notes to financial statements.

Much of the Tesla Free Cash Flow history is based on seriously superior inventory management, materials sourcing and fast finished goods delivery. Some is based on distinctly lower expenses for SG&A than most competitors. Some is based on vertical integration and ultra fast change management.

There is not simple way to assess all this.

Th problem for tomorrow is to see, perhaps, whether those unique characteristics can long continue to endure.
(Apologizes to A Lincoln on a momentous day long ago.

 

[Blue horseshoe]

I wonder if there’s a setting to get Elon’s Tesla and SpaceX posts only

You can just ask grok every day what has Elon said regarding tesla

 

[Bet TSLA]

One needs to be very careful on this subject. All too often people misunderstand the reality that Price does matter greatly, it’s part of Positionng. So, for example: LVMH products do sell partly in price, that is High price is part of the product.
In cars: Both Ferrari and Porsche have for decades been highly successful in part through supply restrictions helping support high prices.

Demand economics, as a subject, tends to have excellent insight in relation to commodities. Take Lithium, for example. Absent substations equally effective price rapidly rise as battery demand rises. Once substitutes are perfected and more efficient extraction and refining happens prices plummet.

Cars are not commodities. Although pricing is very important, lower pricing is not always wise, sometimes higher pricing is more effective, With Tesla today there is a serious problem with pricing because ignorant people have convinced Tesla management that price is the primary demand lever. Many of us have foolishly promoted that fiction.

The net is that well meaning fools are bent on turning Tesla vehicles into commodities. Bad, auful news.
Models S and X should have been positioned as Premium, not directly sold on low price but on Premium Value. Add special included features like Premium Connectivity, FSD, special Concierge-style services. All that would have been cheaper and more effective than this Procing idiocy.

Listening to securities analysts and/or Bloggers is nearly certain to be wrong. None of them know anything at all about business, they do know how to generate clicks.

Sad, very sad, to see all this happening. After years trying to help avoid this outcome, here we are watching as FUD is displacing First Principles. I really hope this is not portending Xerox or Kodak, both of which were not prepared for change. Bizarrely Tesla is on the verge of ignoring First Principles by itself. We should all beg for adult, diligent solutions.

Sorry, I'm confused by what you appear to be saying. First Principles? Of marketing? No such thing. There is no physics analog in any aspect of human behavior, and first principles refers strictly to laws of nature that cannot be violated, i.e. physics.

So what is it that you mean here by "First Principles"?

 

[scaesare]

The last time he publicly spoke, the CFO said they were reaching the natural limit of reducing the COGS/unit.

Guess we will get more info tomorrow.

Not "have reached".

As mentioned, the supplier reduction based on engineering simplification.

So, again, since you have stated that we should say RIP to margin but they clearly they are still reducing COGS... it sounds like you really don't know at all, right?

 

[nativewolf]

I live in Everett and drive to Seattle every day (that I work).
It's not like this:

Edward scissorhands leaving for work scene - Google Search

See I used Seattle because the commute from Everett to Seattle is one I've driven, it's not DC, and the public data is very available because you have good public data. Good on Washington!

Now the DC metro is a bastard. VA, MD, and DC. 2 bridges 1 north of city and 1 south. Otherwise you go through DC. It's really terrible. Seattle is a great place! I was surprised or not I guess that so many people in Seattle are working from home on Monday or Fridays. Seems to still be hurting the small business owners downtown. I am very curious what this means for RT services. I sort of think it makes it appealing on those stay at home days.

Another thing to remember is that NYC residents mostly own cars despite not needing to. They dont drive them but they own them.

 

[scaesare]

Elon personally approved all job hirings in the last year so...

And if a team doesn't perform as hoped/expected it's definitely not in an organization's best interests to let them go, right? I mean hanging on to duds is just good management!


So, I've largely avoided responding to your posts up until recently, but you've ramped up your negative rhetoric recently such that your agenda/slant/blind-spot/grudge/whatever has become so apparent, that you are clearly not posting in good faith. Your posts are obviously disingenuous at this point. If you had hoped to at least try and fly under the radar, you've shot yourself in the foot.

 

[nativewolf]

Why focus only on commuters? That's a major part of demand, but far from the only portion that matters. The transportation demand curves clearly show that. A work-related vehicle is not exactly a robotaxi but if it's getting high usage for a commercial or government application, then it's similar economically. Also not everyone is on the same shift time, especially in a market like Seattle. Rush hour is not just 8-9AM and 5-6PM. It's more like 6-10AM and 3-7PM, and the evening rush hour largely goes in all directions, not just away from downtown. Then there's lunchtime trips/deliveries, midday errands, picking up sick kids from daycare/school, stay at home parents, second-shift workers, medical appointments, and more. Also the robotaxi is most competitive not against private cars for suburbanites, but rather against trains and busses for city dwellers. Robovans would be a more efficient and effective version of traditional mass transit solutions. At perhaps 8-16 passengers worth of capacity, they can be big enough to get decent economies of scale, but small enough to offer reasonably fast service without too many stops. Busses don't have as good of a balance because the overhead costs of driver wages and engine maintenance favor a larger vehicle size.

Since the average Seattle commute time is about 30 min, that means taxis could squeeze in around 3 or 4 rush-hour commutes each morning and each evening, and that’s conservatively assuming most of those trips require a hour-long round trip to allow the robotaxi to return to the suburbs to pick up the next rider. In reality, a lot of people, especially in the urban core, are commuting not radially in and out of the downtown center but rather from one part of town to another.

Parking and charging is easily solvable. It just takes some infrastructure investment. Tesla could repurpose vacant lots of defunct suburban shopping mall lots, for example.

You said, "That is the market downtown for people that didn't want to go around in a rental or in their own car." Too much of this is static analysis. Robotaxi is not just an Uber or taxi without a driver. That's effectively all Waymo is accomplishing, but they're not capitalizing on the whole opportunity because their current technological capability does not allow for that and because they don't design and manufacture their own vehicles.

1) "The market" is a combination of supply and demand curves. Robotaxis represent an increase in the supply of transportation, meaning that high quantities can be delivered at lower prices. The new market equilibrium would have higher quantity demanded. Ubers at peak hours often cost $3/mile or more. As I write this, it's 7AM here, before the peak of morning rush hour, on a Monday. Right now the price of an Uber ride 17 miles from here to downtown is $48. After tip, that comes out to $3/mile. I wouldn't even consider it at that price. But for $10 I might.

2) As many people have already expressed on this forum, not having a driver is more than just a cost savings. It's also higher value. People want the privacy and lack of awkward silence or small talk expectations. People want to be able to listen to whatever music or entertainment they want

3) Dedicated robotaxis can exploit the economics of high efficiency usage to offer a more luxurious and premium experience. They will have the budget to do so because of the high utilization rate and long vehicle lifetime compared with the average ICE/hybrid Uber. I posted about this a couple weeks ago. There could be a big screen for entertainment, premium audio system, nicer seats, and so on. It can be more like a miniature living room or like a first-class cabin on a long-haul airplane.

4) Big wildcard: Boring co tunnels. If this works out, robotaxis will offer significantly higher speed than any Uber or taxi ever could.

Well we are going to see as I am sure this happens before I die (5 time cancer survivor now so..this is always an iffy blanket statement). I am speaking of a much shorter time frame than you, I love the idea of boring co tunnels working out. I don't see it short term (2-3) or even medium term (3-10) I am thinking in the next 10 years. There is lots of good data on Seattle, it's why I chose Everett to Seattle. You can look up and see exactly how long you need to leave to make sure you are there with a 95% confidence interval. The average commute time is how long it takes but there is obviously lots of variability even on a single trip. Everett to Seattle with a 95% is 75 mins If I recall from my reading last night.

WSDOT - Multimodal Mobility Dashboard Central Puget Sound Interstate 5 corridor - Commute times

Some days you'd still be late but 19/20 days you'll be on time.

I focus on commuters because so many people commute. If you want to replace ICE you have to solve this issue, either they need EVs or you have to have another model (EV Buses, etc). I don't personally care about RT or not, I care about EVs or not. That's the focus of time here (mostly). EVs, sustainability in transportation.

It's why I was concerned about the pace of the 4680 rollout. Remember. Was I wrong then? Nope...turns out I was spot on. Well here we are and I am telling you I don't see TaaS as being a big deal within the next 10 years. Not enough to shift to EVs. If you can't solve the commuter problem with TaaS than we still need EVs getting produced, as many models as possible.

 

[cliff harris]

Very interesting tweet, mostly because elon replied saying 'maybe'

https://twitter.com/x/status/1782323916720976131

Florida could be among the first US states where Tesla introduces unattended FSD at Level 4, as no regulatory hurdles or permits are required there.Given the rapid progress of FSD, an introduction of FSD at SAE L4 (with passenger in the driver's seat but unsupervised) is IMHO likely by the end of the year.

Unless I am mistaken this is the first time elon has ever directly responded in a positive way to any discussion of running a limited FSD robotaxi style trial?