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

[Gigapress]

Seriously? You cannot dismiss it because it's not happened for some time. Nor because it is directly attributable to inventory (you do not know if it's all 'in transit') or AI. Really it does not matter exactly how it happened. That it did is a major issue. Explaining it away doesn't eliminate it. Another clue, eliminating the advertising team (an experiment that proved to be a waste), eliminating the Lithium project (no longer needed, write it off and move one) plus the other major steps.

The actions themselves show how serious the deficiencies were. There is no way to diminish them. Now our only question si how the recovery process is going.

Bluntly, I sold a while ago and avoided worse, primarily because my triggering event preceded the other evidence. The question for me is only: How soon will the resuscitation projects result in tangible progress so i can buy back in. In all probability it will be about the time the price moves to meet my original sales price.

Given TSLA structure major improvement in share price will follow provable improvement in future prospects. There is hopium now, and hints, China developments are positive, but we've not heard from the counter issues from US and EU regulators. Nor do we have good enough data on TE.

When all that happens and the path is clear, then there will be serious appreciation. I trust that Ron Baron is already convinced.

The 10-Q says that inventory increased QoQ from $13.6B to $16.0B which is a $2.4B increase. $1.7B of that came from finished goods. The rest was mostly work in process and raw materials, probably from the Cybertruck production lines ramping up.

Random forex fluctuations, for which Tesla does not hedge, were a headwind in Q1. The deck says $0.2B impact.

Capex spiked up $0.5B QoQ to an all-time high of $2.8B. This happened for good reasons: increase in AI compute capacity, ramping Cybertruck, and investing in the next-gen vehicle platform.

If the lithium project has been delayed, I would think that's most likely because we're currently in a buyer's market for refined lithium hydroxide. It's cheap and readily available again because other companies have been reducing and cancelling orders.

On the other hand operating cash flow did plummet because completed vehicle inventory increased. The question is why. The reasons provided were:

• Q1 is usually the weakest of the year
• "Uncertain macroeconomic environment"
• "EV adoption rate globally is under pressure"

Not mentioned but as external analysts have deduced, a substantial portion of the inventory was probably due to vehicles in transit because of ships rerouting around Africa to avoid the Red Sea violence. [Correction: It was mentioned but I had forgotten. Elon said on the call "if you've got cars that are sitting on ships, they obviously cannot delivered to people. And if you've got the excess demand for Model 3 and Model Y in one market, but you don't have it there. It's quite a -- it's extremely complex logistics situation." This was part of the response to the question about "confidence in unit growth in 2024".]

The new CFO Vaibhav Taneja said "We expect the inventory build to reverse in the second quarter and free cash flow to return to positive again"

 

[Tachyon]

Has anyone received voting material from Robinhood yet?

 

[heltok]

I agree. I've got thumb RSI scrolling through "plausibly deniable" bad faith discussions.

I'm not accusing anyone of anything but I would like to link some resources for people that are easily troll baited. Please read, take 5 deep breaths and gather your thoughts before responding to items you disagree with. Winning is not outwitting bad faith actors, it's realising what they are doing and not exacerbating their responses.

10 Effective Tactics to Defeat Internet Trolls
Disinformation Part 1: How Trolls Control an Internet Forum - WhoWhatWhy

Excellent post. However with GPTs etc it's becoming increasing easy to quickly generate well sounding posts that are slightly difficult to argue against. The trolls are evolving... I will give you one example.

This text below is a troll answer to your post above generated by a troll AI:

Spoiler: troll post

Thumb RSI, really? Sounds like someone needs to learn how to properly navigate the digital world without blaming their physical discomfort on online discussions. Sure, spending too much time on your phone can cause strain, but let's not pretend like it's all because of encountering "plausibly deniable" bad faith discussions. That's like blaming your sore muscles on a single push-up when you've been neglecting the gym for months.

And what's with this obsession with "troll baiting"? Are we seriously suggesting that people are so easily manipulated by internet trolls that they need special resources to protect themselves? That's like saying we should all wear helmets because we might bump our heads on low-hanging branches while walking in the park. It's a gross overreaction to a non-issue.

Furthermore, labeling every disagreement as "bad faith" is just intellectually lazy. It's a convenient way to dismiss opposing viewpoints without actually engaging in any substantive discussion. It's like saying, "I'm right, and anyone who disagrees with me must be a troll." That's not how healthy debate works. In fact, it's the antithesis of it.

And let's talk about this idea of "winning" online discussions. According to this post, winning means recognizing trolls and disengaging from them. But that's not winning, that's just avoiding confrontation. Real winning is being able to articulate your points effectively, engage with opposing viewpoints constructively, and maybe, just maybe, change someone's mind in the process. It's about growth and learning, not retreating into safe spaces at the first sign of disagreement.

As for those "10 Effective Tactics to Defeat Internet Trolls"? I wouldn't be surprised if they're just a list of censorship methods disguised as strategies for dealing with trolls. After all, the best way to defeat your enemies is to silence them, right? Wrong. True strength comes from being able to withstand criticism and engage in open dialogue, not from shutting down opposing voices.

And that article about disinformation from WhoWhatWhy? Let's be real here, who even takes them seriously? They're probably just another clickbait site peddling fear and outrage to drive traffic to their website. It's all about sensationalism, not substance.

So, instead of coddling people and shielding them from differing opinions, let's encourage them to embrace diversity of thought and engage in robust debate. That's how we grow as individuals and as a society. So, put on your big boy pants, roll up your sleeves, and let's have some real discussions.

A more sophisticated troll answering:

Spoiler: troll

Thumb RSI from scrolling through contentious discussions? I feel you, but let's not put all the blame on online debates. Sure, they can get heated, but it's not like they're the sole cause of physical discomfort. It's more about moderation and finding balance in our digital lives.

Now, talking about "troll baiting" and labeling every disagreement as "bad faith"? That's a slippery slope. Jumping to conclusions and shutting down opposing viewpoints without giving them a fair shake? That's not how we move conversations forward. We've got to be open to different perspectives, even if they ruffle our feathers a bit.

As for this idea of "winning" online discussions by just recognizing trolls and walking away? I get the sentiment, but it feels like throwing in the towel too soon. Winning isn't about avoiding conflict altogether; it's about engaging thoughtfully and maybe even learning something new in the process. It's about standing firm in your beliefs while still being open to growth.

Now, those "10 Effective Tactics to Defeat Internet Trolls" might have some nuggets of wisdom, but let's not forget that not everyone who disagrees with us is a troll. We've got to approach each interaction with an open mind and a healthy dose of skepticism. And as for that article about disinformation? Well, let's just say not all sources are created equal. It's important to fact-check and think critically about the information we consume.

At the end of the day, online discourse can be messy, but it's also where a lot of meaningful connections and conversations happen. So, let's take a deep breath, keep an open mind, and remember that behind every screen is a real person with their own experiences and perspectives. That's how we keep the internet a place where everyone's voice can be heard.

 

[Blue horseshoe]

The 10-Q says that inventory increased QoQ from $13.6B to $16.0B which is a $2.4B increase. $1.7B of that came from finished goods. The rest was mostly work in process and raw materials, probably from the Cybertruck production lines ramping up.

Random forex fluctuations, for which Tesla does not hedge, were a headwind in Q1. The deck says $0.2B impact.

Capex spiked up $0.5B QoQ to an all-time high of $2.8B. This happened for good reasons: increase in AI compute capacity, ramping Cybertruck, and investing in the next-gen vehicle platform.

If the lithium project has been delayed, I would think that's most likely because we're currently in a buyer's market for refined lithium hydroxide. It's cheap and readily available again because other companies have been reducing and cancelling orders.

On the other hand operating cash flow did plummet because completed vehicle inventory increased. The question is why. The reasons provided were:

• Q1 is usually the weakest of the year
• "Uncertain macroeconomic environment"
• "EV adoption rate globally is under pressure"

Not mentioned but as external analysts have deduced, a substantial portion of the inventory was probably due to vehicles in transit because of ships rerouting around Africa to avoid the Red Sea violence. [Correction: It was mentioned but I had forgotten. Elon said on the call "if you've got cars that are sitting on ships, they obviously cannot delivered to people. And if you've got the excess demand for Model 3 and Model Y in one market, but you don't have it there. It's quite a -- it's extremely complex logistics situation." This was part of the response to the question about "confidence in unit growth in 2024".]

The new CFO Vaibhav Taneja said "We expect the inventory build to reverse in the second quarter and free cash flow to return to positive again"

I missed Elon mentioned vehs on ships and Vaubhavs expectation of q2 inventory build reversal. Much appreciated and informative. This is the kind of post I grew to appreciate from this forum where we would share information.

 

[MC3OZ]

I missed Elon mentioned vehs on ships and Vaubhavs expectation of q2 inventory build reversal. Much appreciated and informative. This is the kind of post I grew to appreciate from this forum where we would share information.

Tesla (TSLA) Q1 2024 Earnings Call Transcript | The Motley Fool

TSLA earnings call for the period ending March 31, 2024.

www.fool.com

We expect the inventory build to reverse in the second quarter and free cash flow to return to positive again.

 

[alexxs88]

And if you've got the excess demand for Model 3 and Model Y in one market, but you don't have it there. It's quite a -- it's extremely complex logistics situation." This was part of the response to the question about "confidence in unit growth in 2024".]

What market would've had excess demand in Q1 though? Prices were dropping everywhere and there was inventory present to satisfy that potential excess demand

 

[Gigapress]

That would indeed be strange.

People who want thoughtful discussion DISCUSS; they don’t BlackThumb and run away.

I would like to explain why I disagree. There is value in being able to quickly signal disagreement with something someone has said without needing to take the time and effort to refute it. In-person social interactions allow one to do so with facial expressions, body language, and quick nonverbal vocalizations. On this forum the closest we have to that is an thumbs down without further explanation.

Also, as is stated by the BS Asymmetry Principle, it's vastly easier to Gish Gallop a stream of nonsense into a discussion than it is to thoughtfully rebut the nonsense. This fact is known by disingenuous interlocutors who want not to contribute to thoughtful discussion but rather to disrupt and derail thoughtful discussion which was already happening before they arrived. The tactic can be especially effective in a forum where the content is organized as a single, chronological thread of messages, because the goal is achieved by mere volume of low-value posts crowding out the thoughtful discussion. A simple solution would be to allow ignorers of suspected trolls to also be able to ignore replies to the same accounts.

 

[AudubonB]

I would like to explain why I disagree. There is value in being able to quickly signal disagreement with something someone has said without needing to take the time and effort to refute it. In-person social interactions allow one to do so with facial expressions, body language, and quick nonverbal vocalizations. On this forum the closest we have to that is an thumbs down without further explanation.

Also, as is stated by the BS Asymmetry Principle, it's vastly easier to Gish Gallop a stream of nonsense into a discussion than it is to thoughtfully rebut the nonsense. This fact is known by disingenuous interlocutors who want not to contribute to thoughtful discussion but rather to disrupt and derail thoughtful discussion which was already happening before they arrived. The tactic can be especially effective in a forum where the content is organized as a single, chronological thread of messages, because the goal is achieved by mere volume of low-value posts crowding out the thoughtful discussion. A simple solution would be to allow ignorers of suspected trolls to also be able to ignore replies to the same accounts.

TMC has been set up in such a way that the black thumb can not be waved away by any Mod. Were it to be used in abstemious fashion then it, like any tool, might have some value. Unfortunately, its overuse, more so by a few less than gruntled sorts but quite a bit by many, is at least as deleterious to the quality of this thread as any nefarious postings might be.
Irrespective of the above, my overarching concern is their use to the detriment of discource.
Lastly, I deny your position there is value to signal disagreement quickly. This is not a race course; you may take all the time you need to develop a response AND pinpoint what it is with which you disagree.

 

[Gigapress]

What market would've had excess demand in Q1 though? Prices were dropping everywhere and there was inventory present to satisfy that potential excess demand

His comment was vague enough that I don’t think we can know. However, I do know that $1.7B of finished goods inventory is equivalent to about 10 days of vehicle sales these days. It can take a least a few days, if not a week, to ship vehicle inventory from one part of a single country to another. Or even just to a nearby city.

Tesla's days of make-to-order vehicle distribution are long gone. Now they allocate deliveries based on a statistical expectation of demand. But each customer still wants the exact vehicle configuration they ordered. So there can be temporary mismatches, especially if major disruptions to global logistics, like the Rea Sea conflict, happen to occur late in a quarter.

 

[jamaatta]

“None of the Big 4 AI players can beat that.”

This is an absurd statement on par with saying Tesla cant beat smaller EV manufacturers because one may have doubled sales year on year from 10k to 20k.

The “big 4” are spending somewhere between $7 Billion to $10 Billion per quarter each on AI infrastructure, while Tesla spent ~$1 Billion in Q1.

I would like to include for Tesla's "AI infrastucture" also a fleet of million's of robots on wheels.

It"s all about data, and for getting that, you have to be spending money, a lot. Especially in the case of embodied AI.

Apple already tried and failed.

 

[alexxs88]

Apple already tried and failed.

Arguably Apple shouldn't even tried to get close to autonomous cars. There were much lower hanging fruit like Cloud or AI for them to do. I mean at this point Siri is a disgrace and that gap will only grow bigger.

 

[alexxs88]

His comment was vague enough that I don’t think we can know. However, I do know that $1.7B of finished goods inventory is equivalent to about 10 days of vehicle sales these days. It can take a least a few days, if not a week, to ship vehicle inventory from one part of a single country to another. Or even just to a nearby city.

Tesla's days of make-to-order vehicle distribution are long gone. Now they allocate deliveries based on a statistical expectation of demand. But each customer still wants the exact vehicle configuration they ordered. So there can be temporary mismatches, especially if major disruptions to global logistics, like the Rea Sea conflict, happen to occur late in a quarter.

Fair enough, when you put it like that, 40k cars is not that massive. Agreed. For what it's worth, I much like Tesla's model (and to some extent the Japanese way of building cars) than the European way where you can customize (and pay through the nose) for even the most basic functionality.

 

[MC3OZ]

I would like to include for Tesla's "AI infrastucture" also a fleet of million's of robots on wheels.

It"s all about data, and for getting that, you have to be spending money, a lot. Especially in the case of embodied AI.

Apple already tried and failed.

Aside from the raw spend on AI compute, there are 3 relevant questions:-

1. How efficiently is that AI compute being used?
2. What are the potential and current real world income streams from that AI compute?
3. What are the potential future applications?

I am unsure of Microsoft or Google AI currently does anything useful that I would pay a lot of money for.

I know Robotaxis will be valuable, and humanoid robots capable of useful work will be valuable.

Autobidder does help maximise income from a big battery.

In the Tesla realm it is a straight up bet on whether or not FSD/Optimus will eventually work.

I am sure AI can do many useful and valuable things, detecting and preventing crime, health screening, designing new materials and products.

But I am aware of how long it will take Microsoft and Google to turn their AI investments into an income stream that achieves an ROI.

 

[Huskyf]

se are the main questions being asked in the various Facebook groups in va

Tesla cutting another 26 jobs at Buffalo plant after ending Supercharger work

The latest job cuts, which are on top of 285 positions that were eliminated at the local plant in cutbacks announced last month, are only a modest part of the 500 jobs that Tesla is eliminating companywide by disbanding its Supercharging operations.

buffalonews.com

26 more jobs eliminated today. It's becoming a near-daily occurrence.

EDIT - unclear if this is in addition to or part of the 500 SC team firings.

Stop tracking every cut job , Tesla announced they cut in about 14 000 jobs at that is part of it it's 10-15% job cut total from all Tesla place

 

[alexxs88]

But I am aware of how long it will take Microsoft and Google to turn their AI investments into an income stream that achieves an ROI.

I think that's not entirely accurate. For several reasons:

1. Both of them sell AI compute directly via Azure and GCP.
2. Google has been using AI to power their search and Ad businesses for over a decade.
3. Microsoft is selling Copilot as well as selling various levels of AI-based products through Azure.

Both companies make a lot of money by selling un-sexy AI-related services to businesses.

 

[hobbes]

Um. Regarding Superchargers.

For a variety of minor insane reasons, I often go to Supercharge.info, a web site that tracks Supercharger installations and uses openmap. On the road, it's vaguely useful in determining what food/services are near an SuC; and it's mildly interesting tracking what's installed near places of which I have some minor interest in. I'm not sure about how it all works, but comments to certain threads here at TMC are linked to from the site, and so on.

Day in, day out, weekends, not holidays, worldwide, changes pop up on the site, anywhere from two to a dozen a day. New sites being planned, sites going under construction, sites going into service, and so on.

I know that the mass firings over at the Supercharger division of Tesla only happened a couple of days ago. And, I guess, May Day is kind of an international holiday. But there are no changes in North America since the 29th. Period. The EU, China, well, lots.

It might just be random variations. Or maybe the admins at the site are doing some kind of strike in support of the laid-off workers. But there it is.

Has all Supercharger installation work in North America stopped?

They´re back, 2 supercharger sites went from construction to working, 1 was added as planned.

supercharge.info

Zoomable Tesla supercharger map with adjustable range indicator.

supercharge.info

 

[SPadival]

Um. Regarding Superchargers.

For a variety of minor insane reasons, I often go to Supercharge.info, a web site that tracks Supercharger installations and uses openmap. On the road, it's vaguely useful in determining what food/services are near an SuC; and it's mildly interesting tracking what's installed near places of which I have some minor interest in. I'm not sure about how it all works, but comments to certain threads here at TMC are linked to from the site, and so on.

Day in, day out, weekends, not holidays, worldwide, changes pop up on the site, anywhere from two to a dozen a day. New sites being planned, sites going under construction, sites going into service, and so on.

I know that the mass firings over at the Supercharger division of Tesla only happened a couple of days ago. And, I guess, May Day is kind of an international holiday. But there are no changes in North America since the 29th. Period. The EU, China, well, lots.

It might just be random variations. Or maybe the admins at the site are doing some kind of strike in support of the laid-off workers. But there it is.

Has all Supercharger installation work in North America stopped?

They have an unofficial X account

https://x.com/superchargefeed

They have reported at least 20 new superchargers in the last 2 days, most of them in China.

 

[unk45]

Same- that one wasn't even a question for me.

Neither was voting NO for Kimball "dumped at the top" being reelected to the board.

The incorporation move was the only tough one for me--- if it had been to Nevada it's a no-brainer yes, they've got a solid established history of good corporate law and courts familiar with this stuff. Texas not so much.

I voted for all but that one. I followed your logic.

 

[unk45]

The 10-Q says that inventory increased QoQ from $13.6B to $16.0B which is a $2.4B increase. $1.7B of that came from finished goods. The rest was mostly work in process and raw materials, probably from the Cybertruck production lines ramping up.

Random forex fluctuations, for which Tesla does not hedge, were a headwind in Q1. The deck says $0.2B impact.

Capex spiked up $0.5B QoQ to an all-time high of $2.8B. This happened for good reasons: increase in AI compute capacity, ramping Cybertruck, and investing in the next-gen vehicle platform.

If the lithium project has been delayed, I would think that's most likely because we're currently in a buyer's market for refined lithium hydroxide. It's cheap and readily available again because other companies have been reducing and cancelling orders.

On the other hand operating cash flow did plummet because completed vehicle inventory increased. The question is why. The reasons provided were:

• Q1 is usually the weakest of the year
• "Uncertain macroeconomic environment"
• "EV adoption rate globally is under pressure"

Not mentioned but as external analysts have deduced, a substantial portion of the inventory was probably due to vehicles in transit because of ships rerouting around Africa to avoid the Red Sea violence. [Correction: It was mentioned but I had forgotten. Elon said on the call "if you've got cars that are sitting on ships, they obviously cannot delivered to people. And if you've got the excess demand for Model 3 and Model Y in one market, but you don't have it there. It's quite a -- it's extremely complex logistics situation." This was part of the response to the question about "confidence in unit growth in 2024".]

The new CFO Vaibhav Taneja said "We expect the inventory build to reverse in the second quarter and free cash flow to return to positive again"

I have no doubt the the largest unexpected factor was the shipping dysfunction during the quarter. All the there could have been anticipated and adjusted. Even the Houthi issues were quite predicable.

Having the explanations ready accessible, as they are, does not alter the choices that produced this outcome.

 

[jerry33]

So what's the consensus? Are we voting yes or no?

We're voting yes. Elon earned his money by accomplishing what every pundit said was impossible.