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

[philw1776]

NICE VID

If I remember and interpretted correctly (and I have approximately ZERO background in this stuff, so I may be incorrect):

I believe the switch to FSD Version 12 gave them back some overhead on the chips.

I can't seem to find the reference, but I have a memory that Elon(?) said with FSD 12, the system was processing all 8 camera inputs and producing vehicle control outputs at the equivalent of 51 frames per second. To me, that sounds like, if they wanted to, they could process at ~25 frames per second on just one of the two inference chips in HW3....and 25fps seems like it ought to be fast enough to handle the driving task.

My interpretation (again, plausibly very wrong) was that Tesla always intended to be end-to-end neural networks...so that is what the hardware is designed and optimized for. It took lots of development and new techniques to get there...but now that they have cut out the 300,000 lines of C++ code, the hardware is now able to be used more efficiently and make the best use of its capabilities.

No first hand knowhow here, but realizing that a human professional athete's perception to reaction performance is approximately two tenths of a second lets say 5 "frames" per second, then 25 fps if these #s are true would be 5 times faster than the best, non-distracted, 100% FOCUSED very fast reacting humans.
Probably wrong but what the hell.

 

[unk45]

That's generally true now, but it depends on the terms negotiated with these third party leasing companies. Especially "residual value guarantees". Tesla used to devote many paragraphs to this in the 10-K (especially back in the day when they also offered RVGs to retail customers and got slapped for improper accounting). Musk dislikes lease accounting -- he wants to recognize the revenue rightnow, not over 3-5 years. So over time Tesla stopped doing RVGs so often. Then about 5 years ago they started accounting for many RVG deals as "sale with right of return" instead of leases. A bit aggressive, but not really material unless RVGs return to being a large percentage of sales.

The EOQ surge in Europe does have a "discounted fleet sale" feel to it. Have you heard anything specific?

The only direct hints I have seen have been from a couple large fleet buyers, but not publicly disclosed as far as I know. Certainly any version of residual value or buyback does generate, at a minimum contingent liability, but not necessarily expense recognition. That EOQ push does seem suggestive to me too.

 

[GatorMeat]

Demand was not nearly as soft in Q1 as some insinuated. That's the point. Those sales were realized in Q2. Secondly, auto sales are only 4.3% softer than Q2 2023.

Tesla set it up for a Q2 suprise, coinciding with Energy. Of course Lathrop will sustain higher numbers now. The factory is ramping to full capacity which, at equilibrium, amounts to 10GWh per Q (40Gwh per year full capacity). Sure it could be somewhat lumpy, but simple division shows 10Gwh should be average per Q.

So by your logic deduct the 46k overproduction in Q1 and subtract it from Q2 sales, which puts Q2 sales at 398,000.

 

[BioSehnsucht]

But it is closer to 5% off isn't it?

Well first you disregard 3% because that's within the expected error. Now you're at 2%, and since that's less than 3%, he's good. That's how stats work right? /s

 

[aubreymcfato]

Visualized is even better:

https://twitter.com/x/status/1808125815365718036

View attachment 1061529

We'll see in a month, but look at the margins for Energy...

 

[Musskiah]

So by your logic deduct the 46k overproduction in Q1 and subtract it from Q2 sales, which puts Q2 sales at 398,000.

That's not at all what I was saying, but thanks for putting words in my mouth.

My logic is: Tesla is going to be MASSIVELY profitable in Q2 because of the underproduction and excess sales above production in Q2. Watch and learn young padwan.

 

[Knightshade]

If I remember and interpretted correctly (and I have approximately ZERO background in this stuff, so I may be incorrect):

I believe the switch to FSD Version 12 gave them back some overhead on the chips.

The C code and the NNs run on different chips though. There's SOME shared resources, but not nearly as much as it sounds from throwing that 300k lines of code bit out there.

You're doing it all wrong.

Last quarter was bad because inventory built up, proving that demand was dead.

It wasn't dead- they still delivered 387k cars--- but it was factually lower than in the past, even for historically weak Q1.

This quarter is also bad because that inventory disappeared,

Only because the massively cut production YoY. By nearly 70,000 cars.

And STILL ended up with sales also down YoY for the quarter.

It's also good to write headlines like "Tesla's sales continue to drop!" even though Tesla's vehicle deliveries are up roughly 60,000 vehicles from last quarter.

Last quarter was terrible though.

This one is "only" down a little under 5% YoY (which is the more correct way to compare given the seasonal nature of car sales)

The actual meanings of words don't matter

They really do- and you're engaging in exactly the same misrepresentative hyperbole you appear to be mad at others for.

, and you can spend the article referencing the year-ago numbers to justify yourself.

Because again that's the most fair and accurate way to compare an industry that is seasonal in sales.

If you think QoQ is better then Q1 was really awful. Can't have it both ways.

It's also important to ignore all the nasty little facts like last quarter's Red Sea/Shipment delays, the Berlin factory being hobbled by the power pole attack, lumpy accumulation and shipping from ports, etc.

You SHOULD ignore them-- because Tesla clearly had tons of inventory cars available and none of those things hurt sales.

Lack of higher demand hurt sales.

As proven by THIS quarter where they had to cut production almost 70,000 cars YoY to manage to show inventory drawdown and still had lower sales YoY despite record low promo rates on financing.



Again if you want unmitigated great news- it's over there under Tesla Energy.

The best spin you can put on the car business right now is "not as bad as feared and Tesla is being increasingly nimble in mitigating the situation"

BTW someone else mentioned it earlier but seems worth calling out again--- S/X sales appear to have been terrible....

21,551 total deliveries for "other" and most seemed to be guessing CT was around 15k.... meaning only ~6500 S/X for the entire quarter? What's going on there?

I get it's a tiny part of the business anymore, but was historically a nice margin pad...

 

[GatorMeat]

That's not at all what I was saying, but thanks for putting words in my mouth

"Musskiah said:
Demand was not nearly as soft in Q1 as some insinuated. That's the point. Those sales were realized in Q2."

I just did the math for what you said. Accounting and maths are hard

 

[Musskiah]

"Musskiah said:
Demand was not nearly as soft in Q1 as some insinuated. That's the point. Those sales were realized in Q2."

I just did the math for what you said. Accounting and maths are hard

See above

 

[KMCC]

Eventually I want to navigate from street level to my garage space on the fourth floor.
Somehow I doubt Robotaxi will anytime soon be capable of dealing with large facilities that have entrances and exits in different place, on different floors. Uber and local taxis have large problems with such places. Honestly, I expect never to have the functionality.

"Never" really?

Thanks. I think your response is reasonable and fair.

I'm also realizing that the current state of FSD performance is vastly different based on location and conditions. I know many people see FSD struggling for their needs, and need to correct it or disengage frequently. Logically, my area is actually pretty simple, so it makes sense that I almost never have a "critical" disengagement. My entire 65 mile commute each way is relatively low traffic density, ranging from suburban-ish roads to lightly curvy mountain roads to desert highways with 1 or 2 lanes going each direction. My non-commute driving takes me on pretty calm multi-lane freeways with predictable interchanges. And, honestly, I never drive in crowded urban areas with lots of hectic traffic. So, I almost never have a "critical" intervention. I nudge the car here and there, when I want it to leave a stop sign quicker, or to adjust speed a bit, or stop doing something that might annoy other drivers, etc. My main disengagements are mostly because I just want to take a slightly different route, or park in my garage, or navigate myself through the entry gate when I get to work....and also because occasionally I want to make a quick maneuver around a driver that's annoying me .

So, in my area, I don't see that FSD needs huge performance gains to be intervention-free for me. But, I totally understand that others have a different experience, and that it will take quite a lot to get to a universal/everywhere robotaxi.

Interestingly, if my experience means anything -- FSD does the best in non-dense suburban and remote-ish areas, but I feel like that's probably not a lucrative location for a robotaxi business.

Anyone check on this lately?
View attachment 1061564
View attachment 1061565

That's Gordon Johnson wearing a disguise...

 

[Mengy]

My logic is: Tesla is going to be MASSIVELY profitable in Q2 because of the underproduction and excess sales above production in Q2. Watch and learn young padwan.

Yep, this is a good point for Q2 earnings. Looking very good everyone!

 

[MP3Mike]

Was Troy also TSLAQ when his delivery estimate was almost 6% too high in Q1?

I would say yes. It made for Tesla having a large "miss" from expectations, and set people up to think that he might be too high on his Q2 estimate as well. But what it really shows is that even with all of his VIN data and other sources, he still can't get the number right even on the last day of the month. (Or he isn't actually trying to get it right.)

 

[dl003]

That's not at all what I was saying, but thanks for putting words in my mouth.

My logic is: Tesla is going to be MASSIVELY profitable in Q2 because of the underproduction and excess sales above production in Q2. Watch and learn young padwan.

Accountant as a profession here. That's not how it works.
Simplified, gross profit = delivered units x (ASP - COGS).
Delivered units is known. 443k is a good number, but not a surprise anymore.
ASP and COGS have little room for surprise
So where's the massive profit is coming from?

 

[EQC_]

I can tell you, from watching the video myself, there are many specific, important details and ideas Gemini misses. I think the summary is far too much of a generalization. Perhaps ask for greater detail in the interpretation.

I normally like your contributions...but personally, if people are going to post video links, I'd prefer if they at least typed some key bullet points to summarize some of what we'll learn from the video.

A few bullets of the important stuff would provide actual quick info to everybody...and that could also be the intro that suitably interested folks need to then actually watch the video.

Without that, what we got was basically "Here's a link to a 45 minute video that is Tesla related and is good, trust me!" followed by an AI summary, and then a discussion about how that summary missed the important stuff, with the reply that AI can also be asked follow-up questions. But still, nobody told us the "important details" that were missed by the AI. It would have been much faster and more useful to just provide the basic bullets right next to the video link.

 

[ShareLofty]

Hopefully this means the trolls will go back to their bridges and leave us the **** alone.

Your comment adds nothing to this investment thread so it got a disagree. If you insist on a reply, TSLA being at 230 doesn’t change the fact that Elon should be spending more of his time at Tesla, laying off the entire SuperCharger team was a mistake, and Tesla is dropping the ball not announcing/breaking ground on more Gigafactories/Megafactories.

 

[sunwarriors]

The C code and the NNs run on different chips though. There's SOME shared resources, but not nearly as much as it sounds from throwing that 300k lines of code bit out there.




It wasn't dead- they still delivered 387k cars--- but it was factually lower than in the past, even for historically weak Q1.




Only because the massively cut production YoY. By nearly 70,000 cars.

And STILL ended up with sales also down YoY for the quarter.




Last quarter was terrible though.

This one is "only" down a little under 5% YoY (which is the more correct way to compare given the seasonal nature of car sales)




They really do- and you're engaging in exactly the same misrepresentative hyperbole you appear to be mad at others for.





Because again that's the most fair and accurate way to compare an industry that is seasonal in sales.

If you think QoQ is better then Q1 was really awful. Can't have it both ways.



You SHOULD ignore them-- because Tesla clearly had tons of inventory cars available and none of those things hurt sales.

Lack of higher demand hurt sales.

As proven by THIS quarter where they had to cut production almost 70,000 cars YoY to manage to show inventory drawdown and still had lower sales YoY despite record low promo rates on financing.



Again if you want unmitigated great news- it's over there under Tesla Energy.

The best spin you can put on the car business right now is "not as bad as feared and Tesla is being increasingly nimble in mitigating the situation"

BTW someone else mentioned it earlier but seems worth calling out again--- S/X sales appear to have been terrible....

21,551 total deliveries for "other" and most seemed to be guessing CT was around 15k.... meaning only ~6500 S/X for the entire quarter? What's going on there?

I get it's a tiny part of the business anymore, but was historically a nice margin pad...

Thank you for writing so I didn't have to. The stock price is all about expectations. Per pretty much every article, the numbers weren't as bad as nearly everyone expected. This leads the stock higher. Maybe some folks felt/knew going in that the numbers won't be bad, as the stock has rallied pretty bigly over the last few days. Returning to any semblance of huge EV sales growth, especially without incentives is a pretty big climb still since there has been incentives for a while now. This leads to people waiting for more incentives or not wanting to buy without them.

Next updates will be actual Q2 numbers (margins will be interesting here), and of course, 8/8 RT day.

Everything still seems to bank on RT/Robotics, which is pretty much what Elon said. Hard to know when they will actually make a lot of $$ from it or when the EV sales will go higher. Maybe lower cost models, but a bit doubtful as competition in China is pretty fierce in that segment. If something is "good enough", folks might be ok with a ok, but not best solution. All the China EV makers I've read had actual growth numbers YoY, even in the tougher environment.

 

[GatorMeat]

Yep, this is a good point for Q2 earnings. Looking very good everyone!

I hope the recent run rides us back to the 300s. I just got a VIN last night, and it makes parting with $108k much easier.

 

[Stretch2727]

That's not at all what I was saying, but thanks for putting words in my mouth.

My logic is: Tesla is going to be MASSIVELY profitable in Q2 because of the underproduction and excess sales above production in Q2. Watch and learn young padwan.

Sales > Production is good for cash flow, inventory. Profit is a function of sales so underproduction does not have a direct impact. In fact it could raise COGS due to the lower production rates > higher cost per unit.

 

[GatorMeat]

21,551 total deliveries for "other" and most seemed to be guessing CT was around 15k.... meaning only ~6500 S/X for the entire quarter? What's going on there?

I got VIN 21,7xx last night or the day before (no email, it just showed up in my app).
Don't know if someone can figure out the math.
Also there was a $2k price cut on the X/S sometime last month.

 

[uscbucsfan]

21,551 total deliveries for "other" and most seemed to be guessing CT was around 15k.... meaning only ~6500 S/X for the entire quarter? What's going on there?

I get it's a tiny part of the business anymore, but was historically a nice margin pad...

CT is under 15k total delivered (or was at the time of the June recall, they sent a ton out the door EOQ) So a higher number for S/X.