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

[Ogre]

If this quarter's numbers were in the bag, I don't think they would try this hard to move a few thousand more cars. They must be trying to squeeze every car they can into the quarter.

With the SP in the cellar, Tesla management will want to post the best numbers they can regardless. If the results are bad, they want to put the best foot forward. If the numbers are good, Musk will want to send it long and put as much hurt into the shorts as humanly possible.

Don’t ever under-estimate Musk’s desire to cause pain to the shorts.

 

[Ogre]

I'm not sure if he lost his dad 10M or 10M of paper gains. Or a combination of both. I can't see how he actually lost his dad 10M.

I don’t know. The way he’s talking about it, I assumed it was not paper losses. I assumed it involved derivatives, but you might be right.

 

[thesmokingman]

Don’t ever under-estimate Musk’s desire to cause pain to the shorts.

A well timed buy back on top of great numbers should do the trick.

 

[TSLA Siempre]

Zach buying...

https://twitter.com/x/status/1608967613534855168

I was felt good about this initially but I don’t think we can necessarily infer a bullish signal from this.

 

[insaneoctane]

Been thinking about this IRA mess...
Tesla needs to decide how they want to achieve eligibility, as doing nothing is really NOT an option...
1. They can decide to lower MSRP to fit under $55K limit. Note that MY LR AWD was $50K for the second half of 2020. This choice would be an issue for performance MY.

2. They can decide to tweak the non-7-seater hardware to allow eligibility to $80K limit. Multiple choices here, increase GVWR with new springs or add air suspension to allow greater height as needed.

I think Tesla would have satisfactory margins with option 1, but not the 30% we've gotten accustomed to. Option 2 seems more likely, but higher prices for the hardware changes don't necessarily help with demand as Giga Austin ramps. Maybe Tesla straddles both options somehow. Offering the RWD LR would be a quick solution while they work the suspension options that allow $80K limit.

 

[MC3OZ]

Been thinking about this IRA mess...
Tesla needs to decide how they want to achieve eligibility, as doing nothing is really NOT an option...
1. They can decide to lower MSRP to fit under $55K limit. Note that MY LR AWD was $50K for the second half of 2020. This choice would be an issue for performance MY.

2. They can decide to tweak the non-7-seater hardware to allow eligibility to $80K limit. Multiple choices here, increase GVWR with new springs or add air suspension to allow greater height as needed.

I think Tesla would have satisfactory margins with option 1, but not the 30% we've gotten accustomed to. Option 2 seems more likely, but higher prices for the hardware changes don't necessarily help with demand as Giga Austin ramps. Maybe Tesla straddles both options somehow. Offering the RWD LR would be a quick solution while they work the suspension options that allow $80K limit.

They can do both, but option 1 is going to sell more cars.

The tax credit is the same regardless of selling price, the best deal for the customer is a lower price.

The 7 seater version can cost a bit more than $55K, they want a 5 seater for under $55K.

If a service center can fit the 2 extra seats, the factory can make mostly 5 seaters which are upgraded as needed.

If some options tip a 5 seater over $55K, then that should be a special production run of 7 seaters.

The 4680 packs stockpiled at Austin may be for a 5 seater for less than $55K.

All 2170 packs used for 7 seaters is one possibility.

 

[Chunky Jr.]

I was felt good about this initially but I don’t think we can necessarily infer a bullish signal from this.

How come? On the surface it seems bullish. Curious what your thoughts are and what I might be missing.

 

[FireMedic]

Is there a holiday update coming? I’m used to getting a little treat from Tesla this time of year.

Also; is V11 still a possibility for this year, I thought we were still on ‘maybe’ for that.

I don’t pay too much attention to the FSD updates since I’ve chosen to buy TSLA instead of FSD on our vehicles (assuming once it works I’ll be rich and then I can buy it, also autopilot is SO good).

 

[Chunky Jr.]

With the SP in the cellar, Tesla management will want to post the best numbers they can regardless. If the results are bad, they want to put the best foot forward. If the numbers are good, Musk will want to send it long and put as much hurt into the shorts as humanly possible.

Don’t ever under-estimate Musk’s desire to cause pain to the shorts.

I used to think that, but the last few months say otherwise

 

[jw934]

Inventory cars are being discounted in Canada ($10,000CAN = $7500USD for any new inventory S/ X plus 10,000 free km), and in Mexico the Y and the 3 are on discount for delivery by Dec 31.

 

[Ogre]

I used to think that, but the last few months say otherwise

Maybe I came across too optimistic.

Point wasn’t that they are going to crush the numbers, the point is just that there isn’t a ton of value in trying to read much from the push. Even if they were doing well, there is a lot of motivation to impress right now. The SP ensures that.

Regardless of how good or bad things are, Tesla management has something to prove.

 

[Chunky Jr.]

Is there a holiday update coming? I’m used to getting a little treat from Tesla this time of year.

the holiday update came a week or two ago. v2022.44.25.2 for the non FSD people (not sure if the same for FSD)

 

[phoggy123]

They can do both, but option 1 is going to sell more cars.

The tax credit is the same regardless of selling price, the best deal for the customer is a lower price.

The 7 seater version can cost a bit more than $55K, they want a 5 seater for under $55K.

If a service center can fit the 2 extra seats, the factory can make mostly 5 seaters which are upgraded as needed.

If some options tip a 5 seater over $55K, then that should be a special production run of 7 seaters.

The 4680 packs stockpiled at Austin may be for a 5 seater for less than $55K.

All 2170 packs used for 7 seaters is one possibility.

I honestly think Tesla is almost to the point of moving the business to steady state 25%+ margins through volume. So I am eager to see on Sunday where their cars are priced and if they happen to drop a RWD Model Y that incinerates everything in its path. They have massive plants adding 100's of cars of capacity a week while backlogs have seemingly shrunk. They raised prices ~10K/year on the best selling model knowing this day is likely. This additional margin added in the last 12 months likely smoothed the edges on the cash burn of under utilized new factories....but now its time to roll. They have proven what happens in the past 3 weeks what price does to immediate sales. They are going to decimate everyone right as the IRA hits.

There have been articles recently with the Big three discussing slowing of electrification, I am hoping they wake up Sunday morning understanding how deep of a hole they have dug with their balance sheets and how fast Tesla is going to take marketshare of their ICE sales.

 

[Todd Burch]

Seems like there is a little walking back on goals for Tesla here. Like retroactive “they didn’t say this year’s goal was 50% for _this_ specific year”. But they flat out did.

Q1 Earnings, Zach: “We continue to drive towards further strengthening of our financials in the second half of the year, and believe our 50% or above growth rate remains achievable for the year.”

Q2 (also Zach): “And finally, despite losing more builds in Q3 than expected, we're still pushing to reach 50% growth this year. This target has become more difficult but it remains possible with strong execution.”

Q3 (Zach): “As we look ahead, our plans show that we’re on track for the 50% annual growth in production this year, although we are tracking supply chain risks which are beyond our control.”


Tesla absolutely said 50% growth was on the table for the year. They said it at every single earnings call so far. I’m not sure why people are trying to walk this back. Missing an extremely ambitious goal during a particularly crappy macro environment isn’t the sort of problem I worry over, there is no need to try and walk back what they said.

If this was a failure in execution, I would be concerned, but it was just a monstrously tough macro environment. The big question is whether Tesla is in a good position to hit 50% in 2023 and onward. I believe they are. But trying to spackle over 2022 like they hit their targets just fine is very revisionist. It is like a giant corporate goal post move.



I will add an addendum to this. They haven’t missed it yet, and it may be that with the big surge in Tesla Energy they will actually hit it.

The macro environment had nothing to do with Tesla missing 50% this year, and everything to do with the COVID shutdown in Shanghai. Had that not happened, Tesla would have easily surpassed 50%.

Although obviously Tesla aims for 50% per year since that is what is needed to meet or exceed their goal, the *official* explicitly stated guidance is *annualized* 50% growth over a multi-year time horizon.

Regardless, the argument is really just pedantic, since it only matters over the short term.

 

[MC3OZ]

I honestly think Tesla is almost to the point of moving the business to steady state 25%+ margins through volume. So I am eager to see on Sunday where their cars are priced and if they happen to drop a RWD Model Y that incinerates everything in its path. They have massive plants adding 100's of cars of capacity a week while backlogs have seemingly shrunk. They raised prices ~10K/year on the best selling model knowing this day is likely. This additional margin added in the last 12 months likely smoothed the edges on the cash burn of under utilized new factories....but now its time to roll. They have proven what happens in the past 3 weeks what price does to immediate sales. They are going to decimate everyone right as the IRA hits.

There have been articles recently with the Big three discussing slowing of electrification, I am hoping they wake up Sunday morning understanding how deep of a hole they have dug with their balance sheets and how fast Tesla is going to take marketshare of their ICE sales.

This video from Farzad is relevant :-

I don't actually think a recession is that likely, but if the IRA accelerates the move to EVs and Tesla executes on slightly lower margins, a lot of ICE market share could be lost fairly quickly. With a knock on effect on used ICE prices, which might impact the sizeable finance operations of car companies.

Tesla might have more room to move of prices, with the 4680 ramp, Austin and Berlin, being ramped, and operating leverage with fixed costs spread over more vehicle sales. The we have the income streams from Tesla energy.

The Cybertruck is going to eat into very profitable US pickup sales.

If Tesla can reveal a lower price Model 3 highland variant which also qualifies for the tax rebate on an even lower price that is another blow.

The final blow being the lower priced compact cars which I hope start shipping sometime in 2024.

Recession or no recession, we know which car company is well placed, and which car companies are vulnerable.

 

[vikings123]

If this quarter's numbers were in the bag, I don't think they would try this hard to move a few thousand more cars. They must be trying to squeeze every car they can into the quarter.

Alternate view: I think 1-2K additional deliveries will hardly make any impact to the delivery numbers. I believe this is potentially HW4 related and clearing inventory makes a lot of sense from that perspective.

 

[Ogre]

The macro environment had nothing to do with Tesla missing 50% this year, and everything to do with the COVID shutdown in Shanghai. Had that not happened, Tesla would have easily surpassed 50%.

Although obviously Tesla aims for 50% per year since that is what is needed to meet or exceed their goal, the *official* explicitly stated guidance is *annualized* 50% growth over a multi-year time horizon.

Regardless, the argument is really just pedantic, since it only matters over the short term.

I agree!

Only reason I made that post is because it was suggested that Tesla hadn’t guided 50% growth this year.

I spoke poorly. I said “Macro Environment” but really was just talking about outside factors like COVID shutdowns.

 

[Artful Dodger]

What is more complex about the cybertruck suspension compared to whats on let's say the X? Of course its bigger and the air suspension makes it more adaptable to changing weight, but otherwise?

Cybertruck has 4 wheel steering, and can crabwalk: (some of the complexity comes in the software)

 

[TrendTrader007]

Very sobering tweet from Tesla Economist. He was one of the most bullish analysts out there. I’m not sure what he did to crash and burn his father’s retirement like this and I don’t want to speculate too much. Just wish him and his family well and hopefully we can all take a lesson away here.

Don’t get greedy. I know there seems to be a tentative optimism going into Q4 earnings season and it feels like we’re at the lowest of the low and ready for a “Face Ripping Rally”. Lets try to keep a little perspective here and manage our risk.

I still see people talking about engaging in risky leveraging with LEAPS… be careful out there.

https://twitter.com/x/status/1608693696714919936

Bullish as hell, but be aware that the market can be insane longer than you can remain solvent.

PS: Please be respectful.

I am truly sorry to hear that. I’m personally down several multiples of that amount on paper but have zero desire to sell anything.
I don’t care if Tesla stock goes down to $20
I’m not going to sell.
75% of my portfolio is in Tesla common stock and for that I don’t care if I have to hold for 20 years to break even. Nothing in the world will make me liquidate that position
25% is in January 2025 $150 calls. Now that could potentially go to zero if Tesla never goes above $150 over next 2 years. While unlikely, it’s certainly possible. And I’m totally prepared to lose it all
It’s a very bad idea to liquidate position when stock is down-65 to 70%
That is one of the worst investment mistakes, in my opinion
I’ve done that before and lost millions in profits
Worst feeling in the world is to sell right at bottom and then watch stock shoot up 10 to 20X over next few years. That’s the kiss of death for most investors
I’ve been super lucky. Back in September 2020 I’ve personally realized (not paper, actually sold and lost) over $20 million loss in a single day on Tesla stock. I was lucky enough to make it all back within a few months. Most are not.
So what’s the worst thing that can happen to Tesla stock? It can drop 97% off all time high to $12. Okay, so what? I’ll still be a millionaire
As long as company does not go bankrupt I’ll make back all my money.
Now, imagine if I panicked and liquidated my position last week and in 5 years stock is trading at $1000. Wow! I’d be a little disappointed
And goodluck buying back sold Tesla stock at a much higher price. That requires a certain trading mentality that 99% individuals lack
None of this is any kind of trading or investing or financial advice. Do whatever pleases you based on your own personal experiences and opinions

 

[30seconds]

Given all the incentives in last few weeks I think we will need a reasonable beat (430k+ deliveries) for a positive impact on share price.

Missing or meeting or even a small beat is going to perpetuate the demand limit / Elons lost it / competition is here narrative.

Looking forward to Q4 financials which are going to be spectacular.