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

[alexxs88]

He has chosen to compete in perhaps the most difficult, competitive industries in the world: Money Exchange (PayPal), Auto & Energy (Tesla), Rocketry (SpaceX)

...and the result are some of the fastest growing, most profitable businesses (in absolute terms) that humanity has ever seen

Precisely! Which is why the OP could've said anything instead of "running profitable businesses". That was my only point. That Musk's strengths might not be running profitable businesses, but taking pie in the sky ideas then making them happen. Which arguably is 10x harder, but not what was said.

What do you mean by "most profitable businesses"? They're not. Not even in their respective fields, not to mention globally.

 

[ItsNotAboutTheMoney]

His TAAS forecasts were anchored on 2020 approval, which did happen, and complete takeover by 2030 with TAAS providing 95% of all passenger miles, the US car fleet down to 44m cars, etc.

Those two dates are in the "ReThinking Transportation" summary, so you don't even need to download the full report. He gives more forecasts in his talks. Here he shows a series of graphs. The TAAS forecasts for 2024:

• 15 cent/mile cost
• 1 trillion passenger miles
• US fleet down from ~250m to <200m vehicles
• Zero new US car sales to consumers

He goes on to call an oil demand peak in 2020 at 100m bpd and a permanent price collapse to $25/bbl by 2021-22.

His forecasts were anchored in having both approval and real, commercially viable autonomous taxis, not a small numbers of test vehicles run by large, expensive development teams.

His wrongness is because of his excessive belief in the advance of technology (both in cost and capability). But he's very interesting nonetheless for considering impact _if_ the technology is sufficiently developed.

 

[Southpasfan]

Yes and spacex still has 1 q of profit. 1. Since inceptions. They wouldn't have any without huge govt subsidies via silly $ that nasa spends. I love space exploration but Spacex is a business case in how to minimize constant and ongoing forever losses, not how to make profit.

Uber is a terrible business, it was a capital destroying pig that has only just started making slim profits and Waymo will gut them in the USA before Tesla gets there to do it. Though much of Waymos profit comes from outside the USA, Brazil for example. Where art though RT profits then? Will Tesla and Waymo go to 0 margins to win business. Economic theory says they will. Remember, profits are all in dense urban areas and it is not likely to change anytime soon. When Tesla can do RT, profitably, outside dense urban areas then and only then will it have a differentiation.

My skepticism on TaaS only grows. I believe the idea that RT will replace individual ownership is deeply flawed. When phones became mobile and then smart phones it didn't cause families to share phones...no, it led to everyone owning 1 or even 2 phones. I believe any deep dive into the modern movement of people in industrial and post industrial society will expose flaws in Tony Sebas musings. He predicted TaaS would be widely more successful by now than it has been. It's easy to see why he was wrong if you peel back Ubers business if you understand how and why people move.

I feel there is more info to be had as well. I have not seen a financial model which has TaaS lower than the cost of an actual car in the United States. I mean, other than a loss leader to drive out competition, the cost of the car is the basic price.

From what I have seen of Uber, even after a few years, I don't know that Uber has revolutionized travel and its had plenty of time to do so. That's probably because I live in Los Angeles and at $3 a mile for a cab or Uber after a certain point you might as well have your own car.

Anyway, it will be almost impossible to not make money off a a system which allows a car to drive itself and which has relatively small hardware costs. I just don't know if modelling robot taxis is the most profitable way. It would seem to me, as when it is perfected its software, the value is in licensing to other car manufacturers.

I also don't think that having the only software which can drive the car is some sort of US anti-trust violation, so I see no reason why Tesla would run into a problem there. It does not seem the software would be easy to reverse engineer.

The reason we are all posting is that we all know Elon is the type of guy who will make RT's just because he can.

 

[MD70]

Cmon Starlink is a satellite constellation while Superchargers are basically fancy electric outlets there is no comparison in terms of product complexity.

For starlink spacex have one set of regulators they have to satisfy.
Spacex staff directly make, test and deploy the satellites.

For super chargers Tesla has:
50 states each with different laws, regulations and processes to carry out building work.
Different contractors.
Different landowners.
Different power companies.

So the starlink analogy doesn’t work.

It is irresponsible to get rid of the entire team responsible for planning.
New staff are going to have learn what they already know.

 

[FEERSUMENDJIN]

One can read the below different ways of course, but sure reads like a cut in investment to me-- and indeed given the whole layoff thing was done in the context of reducing costs not sure how to credibly read it any OTHER way.

https://twitter.com/x/status/1785406795814510785

Tesla insurance is still only available in a minority of US states and has not expanded to new ones in years now. The last report we had on the unit itself it was losing money (discussed in here a couple months ago).

Maybe THAT is the group Elon should've fired?






A lot of folks have trouble understanding how free speech works.

It's the freedom to say things.

It's not the freedom to be immune to the consequences of saying them.

Nope, that statement is very specific to slowing down new locations. In the UK a lot of the work at the moment is upgrading the current "hot" sites which is ever so important for the opening up to other EVS. This is clearly where his focus is, and his frustration is evident from the very sudden changes in the open network seen since the firing.

 

[2daMoon]

I’m inclined to think robotaxi solves the biggest problem of public transportation as it takes you from where you are to where you want to go. You don’t have to go to/ from assembly points on foot. That definitely makes it likely to dominate private and public transportation in cities. However I just don’t see how that works in rural areas. Perhaps someone can enlighten me. I also don’t see how it gets me and a 20 ft boat to the lake or bay or me and 30 bags of mulch home from Lowe’s. It’s going to be interesting seeing how it deals with some of the situations I dealt with this last week.

There's a lot of money to be made off of the urban and sub-urbanites wanting a safe ride home from the bar, sending kids somewhere, or delivering groceries and goods, long before any of these towing, and distance revenue streams are even to be considered as a focus for RT.

It is still early days.

 

[Christine69420]

A tweet from @smdcapital00 on X mentions the history of this very forum thread as one of the origins of the TSLA and Tesla community:

https://twitter.com/x/status/1785430654290997300

Copied the text in here:

let me be transparent about why i post extreme takes related to charlatans & those who spread FUD.

the tesla investor community used to be a close-knit clan of insiders who posted high quality, first principles analyses on a forum called Tesla Motors Club > Investor Discussionsthis was the pre-2019 erasince then, the community has shifted tremendouslyafter TSLA famously went from $50bn to $1T, you had a whole host of new investors who unfortunately suffered 3 years of sideways/underperformance since ~2021.

more importantly, you've also had the rise of the social media influencer -- these are people who post daily content across platforms in order to get views/engagement for monetization purposes.and lastly, you've also had the weaponization of MSM against Elon & Co in recent years, particularly as Elon began his noble and righteous crusade against the radical left. not to mention, becoming a direct competitor after acquiring X

the combination of a weaponized MSM and incentivized social media influencers producing insane volume of daily controversial news & takes has completely altered what this community became all aboutit went from being high-quality, first principles driven, contrarian thinking badass MF's, to nervous, low-conviction, rebellious, will-turn-on-elon-in-an-instant peoplethe most notable example that demonstrated how pathetic the community has become was the Dec 2022 era.

you know what i'm talking about. that was the peak and showed the hands of everyone.that is why i am on the extreme opposite end of the spectrum: i want to take this ****ing community back to being what it used to be

 

[2daMoon]

Precisely! Which is why the OP could've said anything instead of "running profitable businesses". That was my only point. That Musk's strengths might not be running profitable businesses, but taking pie in the sky ideas then making them happen. Which arguably is 10x harder, but not what was said.

What do you mean by "most profitable businesses"? They're not. Not even in their respective fields, not to mention globally.

Yeah, so right, just compare Tesla's margin on cars to those who have been doing it for decades, right?

Oh, wait, never mind.

 

[unk45]

How many of the original supporters were only ok with supporting Elon so long as he spoke in agreement with their programmed political views? Critical thinking is nearly non-existent once politics are involved in the USA. Elon's views are based in logic and science, not loyalty to a political entity or emotions.

I don't know how to fix that. How to explain to people, in a way that they will consider it, that most of their views are filtered through a political lens that is not based on facts and truth.

In the real world of 2008-2015 many people actively interested in Tesla represented political views that were rarely discussed in TMC. Look at posts of the era, they were almost entirely about Tesla. In this thread at inception there was debate about many investment issues, risks, competition, Supercharge buildout, motors problems and on and on.

Politics, not much. So, nobody knew much about anybodies political views.
Then came COVID-19, and Fremont closed when some fairly odd exceptions were made to others. Then came permitting issues. By 2020 politics began coloring everything.

Honestly, it is entirely unfair and incorrect to suggest the politics came first. They did not!
Since roughly 2015 much of the world has been experiencing higher political divisions, driven by global warming effects on local and national issues as desertification and crop failures have driven massive migration of desperate people.

All of us should understand that the Tesla Mission anticipated all those consequences. Until recently though, there was not politically-centered. Now much of the world seems to reject science. Once escaped, does the genie return to the bottle?

 

[Matias]

A tweet from @smdcapital00 on X mentions the history of this very forum thread as one of the origins of the TSLA and Tesla community:

https://twitter.com/x/status/1785430654290997300

Copied the text in here:

let me be transparent about why i post extreme takes related to charlatans & those who spread FUD.

the tesla investor community used to be a close-knit clan of insiders who posted high quality, first principles analyses on a forum called Tesla Motors Club > Investor Discussionsthis was the pre-2019 erasince then, the community has shifted tremendouslyafter TSLA famously went from $50bn to $1T, you had a whole host of new investors who unfortunately suffered 3 years of sideways/underperformance since ~2021.

more importantly, you've also had the rise of the social media influencer -- these are people who post daily content across platforms in order to get views/engagement for monetization purposes.and lastly, you've also had the weaponization of MSM against Elon & Co in recent years, particularly as Elon began his noble and righteous crusade against the radical left. not to mention, becoming a direct competitor after acquiring X

the combination of a weaponized MSM and incentivized social media influencers producing insane volume of daily controversial news & takes has completely altered what this community became all aboutit went from being high-quality, first principles driven, contrarian thinking badass MF's, to nervous, low-conviction, rebellious, will-turn-on-elon-in-an-instant peoplethe most notable example that demonstrated how pathetic the community has become was the Dec 2022 era.

you know what i'm talking about. that was the peak and showed the hands of everyone.that is why i am on the extreme opposite end of the spectrum: i want to take this ****ing community back to being what it used to be

 

[ItsNotAboutTheMoney]

How many of the original supporters were only ok with supporting Elon so long as he spoke in agreement with their programmed political views? Critical thinking is nearly non-existent once politics are involved in the USA. Elon's views are based in logic and science, not loyalty to a political entity or emotions.

I don't know how to fix that. How to explain to people, in a way that they will consider it, that most of their views are filtered through a political lens that is not based on facts and truth.

Musk called somebody a violent criminal in public when there was no such evidence. Then he apologized. Then he _repeated_ the insult in public.
Based on logic?
He once tweeted that methane really isn't that bad for the climate.
Based on Science?
Musk got suckered into being part of a group that paid $42B for Twitter.
Based on logic or science?

I don't know how many times he has to act rashly on emotion or make ignorant statements for people to accept that he doesn't run on logic or science.

 

[2daMoon]

Musk called somebody a violent criminal in public when there was no such evidence. Then he apologized. Then he _repeated_ the insult in public.
Based on logic?

maybe not

He once tweeted that methane really isn't that bad for the climate.
Based on Science?

yes

Musk got suckered into being part of a group that paid $42B for Twitter.
Based on logic or science?

yes, both

 

[Matias]

yes, both

He tried to back down the deal, but court ordered him to honor the contract.

 

[Mengy]

I was outside mowing the grass this morning (on my EGO electric zero turn!) thinking about all the odd Tesla news we've seen the past few weeks, when a thought occurred to me which would be very relevant to TSLA investing IF its accurate:

What if Tesla is pivoting away hard from consumer EV development?

The plan stated by Tesla (regarding EV's) has been to grow Tesla auto production at around 50% CAGR hitting about 20,000,000 EV production in 2030. This includes vehicle and supporting functions like superchargers, insurance, etc.

But lately we've seen a lot of statements by Elon coupled with changes by Tesla which don't seem to support this plan:

- Pausing Giga Mexico and not announcing any other new Giga's, essentially pausing car production growth.
- Sidelining the $25K Tesla (and possibly redesigning it into low end 3 & Y) to instead focus on the robotaxi.
- Redistributing nearly all R&D spending away from auto growth and towards AI & autonomy.
- Laying off 10% of the company currently focused on auto production.
- Firing product development and public relations teams.
- Firing the supercharger team, a consumer EV support product (robotaxis might use a different charging infrastructure, possibly inductive).

Elon seems to be in what the Isaacson biography termed "demon mode", where Elon makes huge changes and shifts plans seemingly without regard for public optics or anyone else's opinions. Its very clear that Elon is changing Tesla's direction as of late. The plan to ramp consumer EV production to 20 million by 2030 does not seem to be on the table anymore, because at this point 20 million by 2030 is nigh impossible.

Note this probably doesn't mean Tesla will stop making consumer EV's, but what's available today might be it. Meaning the Model S, X, 3, Y, CT, and Semi, followed by some cheaper low end variants of the 3 & Y later this year by the sound of it. I think these could possibly be the only consumer EV's Tesla is planning now, and production of all combined might never exceed a couple million cars per year out of the current existing factories. So something like 3-4 million consumer EV's per year out of Fremont, Austin, Berlin, and Shanghai. New factories might be only for robotaxi / Megapack / Optimus production.

At this much slower EV production rate with minimal growth, a slower supercharging deployment schedule could be more prudent. Especially with OEM's also slowing their own EV production too. Like Elon said today, Tesla will continue to build and deploy new SC's, just at a slower pace. It doesn't sound like he's concerned about supporting 20,000,000 EV's per year by 2030 anymore.

So, why would Elon do this?

Well, in my own Tesla Excel model, I predict the company financials going all the way out to 2035. Now of course my model is wrong, nobody's model going out that far is accurate. But I do believe my model shows the trends of Tesla's businesses fairly well, and a few things stick out to me:

4) Even at 20 million EV's per year, Tesla's EV business will eventually be the smallest segment they have.
3) Tesla Energy will very likely make more money than Tesla EV's in time.
2) Tesla Robotaxis have enormous revenue potential, like several times more than EV sales, and I model it very conservatively!
1) Tesla Optimus will likely one day make more revenue than everything else Tesla does combined, and that includes RT's.

Now I believe most Tesla investors who really study the company thoroughly would agree with the rankings of Tesla's future businesses a decade from now. Sure the valuations of the sectors are subjective, but the order of their relative sizes is probably spot on.

Given that, and knowing that Elon sees this too, Maybe Elon is simply ending R&D of the smallest sector (consumer EVs) as it mostly is today? Maybe Elon has decided to move the company forward onto bigger things now instead of spending lots of time and money on a sector which relatively won't matter much ten years from now? Many people believe (I know Elon does) full fledged Robotaxis will eventually dwindle car ownership down over time anyway, is it possible Elon just doesn't want to spend any more time or money on a dwindling business? If auto ownership does decrease over time then anyone in the business of making consumer autos will be in for a world of hurt. Much like blacksmiths, or typewriter manufacturers, or film developers, or flip phone companies...


These are just Deep Thoughts I had on a very quiet tractor, none of us knows for certain, less of all myself of course. If accurate though it would explain Elon's statements and behavior as of late. And honestly it might be a great decision in the long run if this is what he's thinking.

Of course it hinges on FSD getting solved and Robotaxi services becoming a very big thing, which they aren't yet. But then Tesla could easily survive on the current EV business scaled up to around 4 million EV's per year too, so even if the bet failed Tesla would likely survive it just fine.

Anyway I thought it was an interesting theory.

 

[CorneliusXX]

Well... I'm not followed by Elon. What the heck did I do wrong?

Would you like a list?

 

[Artful Dodger]

Order is restored in the universe: Elon has bowed to pressure from Ligma and Johnson.

https://twitter.com/x/status/1785701523172864327

 

[2daMoon]

He tried to back down the deal, but court ordered him to honor the contract.

Sure, he would like to have gotten it for less. Who wouldn't have?

This didn't change the fact that his longer term plans* for X.com as an "everything app" would require a social media component.
*pre-dating both Tesla and SpaceX

 

[advocate8]

A tweet from @smdcapital00 on X mentions the history of this very forum thread as one of the origins of the TSLA and Tesla community:

https://twitter.com/x/status/1785430654290997300

Copied the text in here:

let me be transparent about why i post extreme takes related to charlatans & those who spread FUD.

the tesla investor community used to be a close-knit clan of insiders who posted high quality, first principles analyses on a forum called Tesla Motors Club > Investor Discussionsthis was the pre-2019 erasince then, the community has shifted tremendouslyafter TSLA famously went from $50bn to $1T, you had a whole host of new investors who unfortunately suffered 3 years of sideways/underperformance since ~2021.

more importantly, you've also had the rise of the social media influencer -- these are people who post daily content across platforms in order to get views/engagement for monetization purposes.and lastly, you've also had the weaponization of MSM against Elon & Co in recent years, particularly as Elon began his noble and righteous crusade against the radical left. not to mention, becoming a direct competitor after acquiring X

the combination of a weaponized MSM and incentivized social media influencers producing insane volume of daily controversial news & takes has completely altered what this community became all aboutit went from being high-quality, first principles driven, contrarian thinking badass MF's, to nervous, low-conviction, rebellious, will-turn-on-elon-in-an-instant peoplethe most notable example that demonstrated how pathetic the community has become was the Dec 2022 era.

you know what i'm talking about. that was the peak and showed the hands of everyone.that is why i am on the extreme opposite end of the spectrum: i want to take this ****ing community back to being what it used to be

Much garbage in here and no useful investment information. "Extreme takes"... great those are always helpful. And not nearly enough of them around.

 

[Southpasfan]

I was outside mowing the grass this morning (on my EGO electric zero turn!) thinking about all the odd Tesla news we've seen the past few weeks, when a thought occurred to me which would be very relevant to TSLA investing IF its accurate:

What if Tesla is pivoting away hard from consumer EV development?

The plan stated by Tesla (regarding EV's) has been to grow Tesla auto production at around 50% CAGR hitting about 20,000,000 EV production in 2030. This includes vehicle and supporting functions like superchargers, insurance, etc.

But lately we've seen a lot of statements by Elon coupled with changes by Tesla which don't seem to support this plan:

- Pausing Giga Mexico and not announcing any other new Giga's, essentially pausing car production growth.
- Sidelining the $25K Tesla (and possibly redesigning it into low end 3 & Y) to instead focus on the robotaxi.
- Redistributing nearly all R&D spending away from auto growth and towards AI & autonomy.
- Laying off 10% of the company currently focused on auto production.
- Firing product development and public relations teams.
- Firing the supercharger team, a consumer EV support product (robotaxis might use a different charging infrastructure, possibly inductive).

Elon seems to be in what the Isaacson biography termed "demon mode", where Elon makes huge changes and shifts plans seemingly without regard for public optics or anyone else's opinions. Its very clear that Elon is changing Tesla's direction as of late. The plan to ramp consumer EV production to 20 million by 2030 does not seem to be on the table anymore, because at this point 20 million by 2030 is nigh impossible.

Note this probably doesn't mean Tesla will stop making consumer EV's, but what's available today might be it. Meaning the Model S, X, 3, Y, CT, and Semi, followed by some cheaper low end variants of the 3 & Y later this year by the sound of it. I think these could possibly be the only consumer EV's Tesla is planning now, and production of all combined might never exceed a couple million cars per year out of the current existing factories. So something like 3-4 million consumer EV's per year out of Fremont, Austin, Berlin, and Shanghai. New factories might be only for robotaxi / Megapack / Optimus production.

At this much slower EV production rate with minimal growth, a slower supercharging deployment schedule could be more prudent. Especially with OEM's also slowing their own EV production too. Like Elon said today, Tesla will continue to build and deploy new SC's, just at a slower pace. It doesn't sound like he's concerned about supporting 20,000,000 EV's per year by 2030 anymore.

So, why would Elon do this?

Well, in my own Tesla Excel model, I predict the company financials going all the way out to 2035. Now of course my model is wrong, nobody's model going out that far is accurate. But I do believe my model shows the trends of Tesla's businesses fairly well, and a few things stick out to me:

4) Even at 20 million EV's per year, Tesla's EV business will eventually be the smallest segment they have.
3) Tesla Energy will very likely make more money than Tesla EV's in time.
2) Tesla Robotaxis have enormous revenue potential, like several times more than EV sales, and I model it very conservatively!
1) Tesla Optimus will likely one day make more revenue than everything else Tesla does combined, and that includes RT's.

Now I believe most Tesla investors who really study the company thoroughly would agree with the rankings of Tesla's future businesses a decade from now. Sure the valuations of the sectors are subjective, but the order of their relative sizes is probably spot on.

Given that, and knowing that Elon sees this too, Maybe Elon is simply ending R&D of the smallest sector (consumer EVs) as it mostly is today? Maybe Elon has decided to move the company forward onto bigger things now instead of spending lots of time and money on a sector which relatively won't matter much ten years from now? Many people believe (I know Elon does) full fledged Robotaxis will eventually dwindle car ownership down over time anyway, is it possible Elon just doesn't want to spend any more time or money on a dwindling business? If auto ownership does decrease over time then anyone in the business of making consumer autos will be in for a world of hurt. Much like blacksmiths, or typewriter manufacturers, or film developers, or flip phone companies...


These are just Deep Thoughts I had on a very quiet tractor, none of us knows for certain, less of all myself of course. If accurate though it would explain Elon's statements and behavior as of late. And honestly it might be a great decision in the long run if this is what he's thinking.

Of course it hinges on FSD getting solved and Robotaxi services becoming a very big thing, which they aren't yet. But then Tesla could easily survive on the current EV business scaled up to around 4 million EV's per year too, so even if the bet failed Tesla would likely survive it just fine.

Anyway I thought it was an interesting theory.

I'm sure almost all serious investors think that Tesla will survive just fine. But the concerns here I think can be boiled down as follows;

Tesla (and Tesla alone! No other automaker!) proved that EVs can be made, can be made well, and can be made at a profit. This is critical to help save the planet. Its also nice for the stock price, and this is the investor forum.

Tesla not only built the cars, they built the charging network! And the charging network is critical to support buying the car!

Finally, despite the fact that this is counter intuitive, it turns out the above two things are so difficult to do even in 2024 only a couple of Chinese companies are even trying to compete. Every other major manufacturer is making compliance cars, at best.

FSD is like the icing on an already unbelievable cake for me. But FSD on an ICE car is nothing. So f-ing what? That's the last thing we need, any other reason for anyone to buy an ICE vehicle ever again.

But to smell a pivot, at this point, which sort of smells like pivoting away from making cars and away from building out the SC network -- I just don't see other companies picking up that slack.

Ugh, a 25K Tesla would have put the entire rest of the auto world out of business overnight. Rivian can't even make money and their stuff is cool.

 

[advocate8]

Meanwhile, back in the world of useful information:
from https://www.nytimes.com/2024/05/01/business/china-electric-vehicles.html

"China is also moving ahead with the technology and regulations for self-driving cars. The authorities approved data security arrangements this week for more capable autonomous vehicles. They approved cars from Tesla, the American electric vehicle company that also builds and sells cars in China, as well as five Chinese manufacturers, including BYD, Tesla’s principal global rival, and Nio, a longtime player in China’s auto sector.

The approvals show the Chinese government’s eagerness to push the development of self-driving vehicles, which are widely seen as central to future competitiveness in the car industry. The technology is more compatible with battery electric cars than with plug-in hybrids or gasoline-powered cars, and Chinese companies are trying to catch up with Tesla, the leader in these systems."