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

[phantasms]

The after hours move has left a big gap up. Wonder if these are always filled or sometimes one is left alone.

Oh it’s going to fill alright.

I’m still long term bullish but still think we haven’t begun to see the hurt yet. That said I did add temporary long exposure in the 140s that I’m happy about.

 

[Knightshade]

Ride hailing is basically summon + navigate on autopilot. Maybe all the work on summon (eg navigating in a parking lot) has been in preparation for this.

On the car side, yeah... well-- those things at L4, which today they're not... (plus whatever they come up with for charging/cleaning)..... On the server side there's a lot of work to do on network optimization, having the right cars in the right places at the right time for expected demand, scheduling recharging breaks, minimizing deadheading, and so on.... Some of that they can get studying other ride hail companies, some of that they can't (esp. since they have no real data on how many owners will go on/off the network anywhere yet vs how many Tesla owned RTs they want/need in a given area) but those are at least things they can (and I expect have been) already working on without much (or any) dependency on getting FSD>L2 working car side.... and a chunk of it will end up being real world trial/error as various assumptions going into that planning turn out to be accurate or not in the real world.

 

[M|S|M MYP]

Feels good to see my portfolio up 3 FS CT's for the day, as opposed to being down close to 15 FS CT's for 2024

 

[NicoV]

Obviously investors and capex were the two most significant components. Intel is a really good example, although they were not really diversifying but simply advancing more quickly than competitors could do.

I hope your more optimistic view is correct. You often have better insight than do I.

I don’t claim to have better insights, but days like today remind me why I just hold. I won’t sell as long as Tesla’s long term future looks bright to me. And because I don’t know what to buy with the proceeds anyway.

 

[jschwefel]

I'm casting 7,432 votes against Elon's comp plan. Why?

1.) Tesla financials/market value no longer match the comp plan metrics.

2.) Elon is a part time CEO and both he and his bro have sold off stock in an amount almost equal to the comp plan.

3.) Elon has since steered TSLA to an over 60% dump since he sold off an amount equal to the comp plan.

3. Kimbal is up for re-election. Even if you believe that Kimbal is qualified, this isn't pono.

3.) 'Tesla AI Day" "Tesla Battery Day". Lot's of hype to get investors excited to buy more stock. And it worked. Yet most of the content in these talks that were to be achieved by now are still unknown when they will be achieved.
Robotaxis by end of 2020?
$30k profit/year per Tesla owned?
$200k npv per Tesla?
100 GWh of 4680/year?
Semis in 2020?

4.) The judge may have very well overstepped her bounds in rescinding the comp plan, but given a second chance, no way can a rational person decide the CEO deserves $56B. The BOD has cashed out billions, the CEO hyped the company leading up to his $40B cash out, and hasn't given one care to the over $700B shareholder.

5.) I'm not as skeptical and I am more suseptical to fantasical claims than I thought.

6.) I once had "ELON" on my license plate, but let it expire in 2021 bc Elon was showing that he wasn't the person I thought he was. I wish I would have also lost faith in the company and sold out at that time too.

Please recognize this compensation plan was created in 2018. At that time, Tesla wasn’t the established automaker they are today and they could have easily gone bankrupt. Elon and his team had a mountain of challenges to overcome in order for the compensation plan to pay out, and they overcame those challenges.

Tesla at the time had a market cap in the neighborhood of $50B. Today, even though we are down around 60% from the ATH of $400, Tesla's market cap is around $500B, or 10x what it was then.

Elon is different. He does things I don’t agree with and don’t understand. But he did what he was asked to, and we should uphold our end of the deal.

 

[sunwarriors]

Hardly an apples to apples comparison when you compare the most expensive with all the extras from before with the cheapest bare-bones today.

but as someone who paid 70k (with all the extras and including FSD and tax) in 2022, it sometimes irks me that I still owe about the same as the current retail price (though minus the FSD). But the two years I've had driving it so far are worth it.

The $68k I tend to quote wasn't the most expensive as it was something I've priced out before. This had no FSD nor all the features picked out since I've never needed those. Maybe 2022 was lower than 2021 (I'm sure it's on the price tracking thread). Another factor was back then, Tesla already lost the tax credit that's available now making it much more expensive. Downsides of overpaying is if you get in an accident/car totaled, you only get market rate so a lot of folks could be underwater.


My comment/point on having competition at all is that EV competition (from OEMs/anyone) is good for everyone and Tesla has tons of inventory right now like all the other car makers. From a chart I saw, Toyota, Lexus, Honda, etc still has low days of inventory relative to others. I also think it's obvious if the EVs (at that price point) isn't selling, then when 95% of your product is not an EV, you sell what people are buying when you have. It's hard to compete with free/low prices (Tesla).

GM had supposedly a very good quarter since again, not everyone is buying the EVs just yet for their own use case/reasons.

 

[Doggydogworld]

Next year- if they can get the cheaper model(s) on existing lines started by EOY 24- we could be back to significant 50% YoY growth in 2025.

50% is wildly optimistic for 2025 IMHO.

Are we certain that "new" models on existing lines means truly new body styles? If anybody has seen any analysis of this question today please share, TIA.

Great point. I expect to first see something like an "off-road" Model Y with the same sheet metal but different name. More rugged fascia, lifted, all-terrain tires, maybe plastic cladding a la Cybertruck wheel wells and options available for roof racks, brush guards, etc.

Late 2025 look for something with new sheet metal, like a shortened wheelbase 3 with a taller, boxier body and somewhat vertical hatch.

Why focusing on reducing the production cost of Robotaxi is so important? For a vehicle that will run 100's of thousand of miles, maybe over a million miles and bring revenues multiples of the cost it takes to build it, why going unboxed on it and not exclusively for the consumer one? This is the one low cost matters most no?

If a Robotaxi costs $50k or even $100k to build, with the projected revenues it will generate seems like a non issue

You're 100% correct. $10k extra upfront cost is a penny per mile spread over Elon's million mile life. There may come a day when a penny matters for Robotaxis, but not this decade. What matters this decade is driving reasonably without hitting things.

 

[Maarten]

Hey Knightshade. You are the options guy with bloomberg terminal? IF that's the case, there is money to be made in options of TSLA again. When knightshade is back, options game is back

Hey, Knightshade is not a troll, but that doesn’t mean you should feed him.

 

[Drax7]

Were it really a master class he'd have taken these steps almost a year ago when he himself began the warnings. He DID see these developments, but did not take action as soon was he might have, were he not distracted. OK, not an investor right now, but an interested party and now hoping for positive signs.

With hindsight we are all geniuses.
2023 fourth qtr was a record by all measures, followed
By a massive drop. That’s not possible to anticipate.

 

[Doggydogworld]

Downsides of overpaying is if you get in an accident/car totaled, you only get market rate so a lot of folks could be underwater.

I have to think all lenders require gap insurance.

 

[cliff harris]

This may provide insight into the changes in management and other job cuts of late. Some of these people may have been influences that resulted in a delay, simply because they didn't see things the way Elon can, yet persuaded him onto more conservative paths.

In the interest of understanding Elon better, I've been working my way through the Iain Banks "Culture" series. The book, Player of Games, was clearly an influence for Elon. He is most certainly a masterful player of games.

This book was also the source for the ship names "Just Read The Instructions" and "Of Course I Still Love You" which were used for SpaceX floating landing platforms. Reading it seems to have left a lasting impression on him.

I think elon is probably also influenced (in the iain m banks book excession) by the strategy of the culture ship 'sleeper service' that spends decades planning exactly how it can build and deploy a massive fleet of ships in mere hours.
The idea of super long term planning that suddenly unveils a massive fleet that overwhelms the competition is definitely applicable .

 

[nativewolf]

50% is wildly optimistic for 2025 IMHO.


Great point. I expect to first see something like an "off-road" Model Y with the same sheet metal but different name. More rugged fascia, lifted, all-terrain tires, maybe plastic cladding a la Cybertruck wheel wells and options available for roof racks, brush guards, etc.

Late 2025 look for something with new sheet metal, like a shortened wheelbase 3 with a taller, boxier body and somewhat vertical hatch.


You're 100% correct. $10k extra upfront cost is a penny per mile spread over Elon's million mile life. There may come a day when a penny matters for Robotaxis, but not this decade. What matters this decade is driving reasonably without hitting things.

Which is funny because in this same thread numerous people will say that Teslas advantage vs Waymo is the ability to build low costs RTs. I always dismissed this and I find it interesting to see that others are discounting that as well. I also don't think we need as many RTs as some claim. I've posted enough on that topic.

I still await some concrete plans from Tesla on how they plan to RTs. Not a mockup of an App that my son at 16 years old could have done. Honestly...I am surprised anyone cares about some app (costs basically nothing).

I liked how EM seemed focused on Tesla for the first time in 2 years. Where you been? If he really wanted to push the stock up he could sell some things and just devote himself to Tesla; just some advice Elon as I know you're hanging on my postings. Back to work...

 

[SOULPEDL]

Feels good to see my portfolio up 3 FS CT's for the day, as opposed to being down close to 15 FS CT's for 2024

On the month, they returned 1/2 of my losses yesterday. Half! And now they want Alimony?

 

[cab]

As a car enthusiast and seeing the latest news through that lens, it now makes sense.

1. Lars came from Honda, so it makes sense they chose the Civic to tear down. The Civic is based on Honda's Global Platform. All of Honda cars excluding the North American Pilot, Ridgeline, Odyssey, and Passport are built on this platform. The CRV, HRV, (North American and ROW), Civic, Accord, and other vehicles sold out of North America are built on this Global Platform. That is where R&D money goes into, the platform and components. Those volume nameplates share many components under the skin. All manufacturers do this, Toyota has its TNG platform with 4/5ths of its products built on it.

2. So Reuters was right, the NV whatever was cancelled, but Reuters was wrong in that Tesla was abandoning that segment. I bet Lars has been developing a smaller vehicle based on the Y platform for some time. It's the platform and components underneath the skin that are key. Just as you can shrink a platform, one can enlarge it too, as again, automakers are doing now. It keeps Capex down. The new vehicle does not have to look like the Y or 3 to share the same line. Other automakers do this all the time. I bet the autobiographer was not at this meeting to use the present platform.

3. These decisions were made a year or two ago. IMO, explains the Model Y delay. Lars had stated in an interview to do a 48V architecture, one had to start with a new platform. If Tesla updates their highest seller, the Y to 48V architecture, and tweaks the platform, that immediately makes the CT more profitable per unit because the 48V unit prices will drop significantly. Its been stated on the Munro show the Cyber Truck is using a heavily updated Y chassis and components. It also makes the new lower price Tesla and RT cheaper to make using 48V components.

4. And remember the pics of covered chassis seen in Austin and Fremont? We were wondering if it was a Model Y or not? No, were not looking at the RT new gen chassis, but it could have been the new cheaper Tesla in development. Which has been described as a smaller Y.

As a fellow car enthusiast I understand platform-sharing across vehicles. Indeed, a platform used to be just badge-engineered version of the same car, but has evolved to be something more fundamental with vehicles that are materially different form each other sharing a platform (see VW's MQB platform as an example). What I have not discovered, in some searching today is a case where two materially different vehicles are built on the same physical assembly line.

As an example, the Toyota Supra and BMW Z4 are built on the same shared assembly-line by Magna and have a lot of obvious differences (coupe vs. convertible being the biggest), but underneath the chassis and drivetrain are the same (tuned a bit differently). Does anyone have any examples of vehicles with materially different wheelbases and chassis being built on the same physical line (like a Honda Civic and Accord or CRV and HRV). At some point the differences can become so great it requires a separate line or at least requires some "splits" in a "single" line.

This all goes to economies of scale and efficiency. Let's say Tesla elects to make a smaller Model Y (like my Honda HRV vs CRV example). Even if you could do it on the same line, would enough of the big cost items (i.e. batteries, motors, etc.) be cheap enough on the smaller car to reduce costs enough? Obviously, Honda makes it work for the HRV (separate line though I think) so hopefully Tesla can too. However, continuing my Honda theme, they seem to take a cheap car (like a Honda Fit) and create an small SUV from it (i,e, HRV) - basically just putting a more upright body on it (I'm simplifying here) - and charge more for it. The 3 and Y are effectively cousins so we already have a car/SUV relationship established and NOT built on the same physical lines at Fremont or Shanghai.

In order to achieve a materially cheaper car, I suspect Tesla will NOT build it on the same lines with the Model Y and 3 as they indicated, but will instead, build them on NEW lines at the existing plants and simply build them using the techniques they use today for the 3 and Y (with a smattering of improvements just like they did when they went from the 3 to the Y and 3 to Highland 3, etc.). Some of these improvements will likely be learnings from the Cybertruck as well as the unboxed ideas. The challenge will be for them to not cannibalize their existing models too much (much less Osbourne them) and, of course, make them profitable. One "trick" automakers do with this is to de-content (or physically downsize) the "cheaper" model just enough to make a buyer strongly consider "upgrading" to the more expensive/bigger/nicer/whatever model. If they do offer niceties like leather and sunroofs on the "cheaper" model, the price premium becomes high enough that, again, the buyer considers just stepping up to the next model up. As an example there, a base BMW 5 series is $13,500 more than a base BMW 3 series (both with the same 2.0 liter engine). However, you can EASILY option up the 3 series to be well over the cost of a base 5 series...heck the base M340i (not to be confused with the M3) is the same price as a base 5 series...at that point, maybe you start saying "maybe I'll just do a 5 series".
Having said all this I sure hope Tesla isn't JUST NOW starting the pivot the creating a new model (using existing techniques) as that probably won't align with 2025. A more likely 2025 deliverable would seem to be cheaper, smaller battery versions of the 3 and Y, but it may be hard to shave a lot of cost out beyond what we see in the RWD trims now..

 

[M|S|M MYP]

MM's cant even give us 1 day without the infamous MMD

 

[Zaddy Daddy]

I'm still digesting the earnings transcript. Overall positive, but I think does not change earnings estimates for 2024 and 2025 too much in my first guess.

First question though, I keep seeing people making excuses that Q1 was down due to supply constraints.

The CFO literally said:

It's important to acknowledge what Elon said. From our auto business perspective, we did see a decline in revenues quarter over quarter, and these were primarily because of seasonality, uncertain macroeconomic environment, and other reasons, which Elon had mentioned earlier. Auto margins declined from 18.9% to 18.5%, excluding the impact of Cybertruck.

"Uncertain macroeconomic environment" is, IMO, a code word that consumers were skittish. Aka they weren't willing to spend a lot of money on EVs.

Not sure we've seen data that it is changing in Q2. Seasonality changes should improve demand so certainly deliveries will be higher than Q1, but not sure how much inventory drawdown they can do?

Certainly, if there is both high production / deliveries and inventory drawdown in Q2, then we can state Q1 truly had a lot of supply issues.

 

[Eugene Ash]

The app is the easy part. The back end is a little harder.

But the part I'm most interested in is the neural net. We don't know if Tesla has started teaching the car how to be a robotaxi with pickups and drop-offs. I'm hoping we learn more about that on 8/8.

It got better at parking near sidewalk, especially when there is dedicated entrance. Does it impressively well at my drives to my local pool.

 

[Ratanpara]

The A.I. hardware spend is a good move, even if it was part of driving free cash flow into the negative. A.I. is the new gold mine. Companies that don't go heavily into A.I., or fail with it, aren't looking at 2nd place... they're looking at being the next Kodak or Blockbuster. Elon is in the thick of A.I. development. He knows and sees this far better than I do, and it seems very obvious to me.

The inventory build up I do believe is related to softening demand. I believe that is a combination of an economy becoming a train wreck (I know many wealthy and retired don't believe me because they are insulated and believing the numbers put out by govt. Had a retired friend tell me with a straight face that inflation is only 3% a few days ago) and FUD having an effect on sales. I, too, have met several people that refuse to consider a Tesla because of the FUD they believe. Recently I saw a friend's neighbor had traded in his 1 year old Model 3 for a Chevy Bolt. I very nearly did a literal facepalm at that.

I agree with Tesla going hard at A.I., even if it means drawing down some of the cash store. I don't have a good answer for the FUD impact on demand and I don't know that I can much to improve the economy. I am arguing for better raises for my employees but being met by resistance on that.

Most people don't have analytic mind, indepedent thinking, they read and beilive what MSM writes. it is kind of unfortunate Tesla does not want to allocate resourses to rebuttal MSM garbage articles.

 

[Huskyf]

MM's cant even give us 1 day without the infamous MMD

seee all others they are all down Europeen market are down US market are down not the fault of TSLA

 

[2daMoon]

The CFO literally said:

"Uncertain macroeconomic environment" is, IMO, a code word that consumers were skittish. Aka they weren't willing to spend a lot of money on EVs Autos.

FTFY

Changed this to read "Autos" rather than "EVs" as an "uncertain macroeconomic environment" is unlikely to target a tiny portion of the auto industry (EVs) in exclusion of the rest of it.

Everybody gets their portion of that macroeconomic pie. Though how they digest it may differ slightly, the effect will still be seen by all who are being served that dish.