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

[Artful Dodger]

Assuming the 1 million/MW cost, the global 63TW plant would require $63 quadrillion (63*1015) US dollars to be built.

No, 63 terawatts (trillion watts) of solar at $1 per watt is $63 trillion dollars.

Pocket change vs 260 meters of sea level rise... (expected value over the millenium). But even 3 meters floods trillions of dollars of coastal city real estate (esp. Wall St.)

Cheers!

 

[Paul_SF]

Wonder if this is related:

https://twitter.com/x/status/1425780165955698695

Elon met them all there for sure. JCal mentioned he’s going to the museum in the last pod, he definitely was there with Elon. Good for Elon getting some time off!

 

[Curt Renz]

Teslarati - 18 minutes ago: Tesla critic abandons bet against TSLA, with no plans to revive it

Excerpt:

Tesla (NASDAQ:TSLA) has a lot of critics, and some of them tend to be aggressive at times. One of these is Carson Block, which The New York Times describes as a “volatile and sometimes venomous short-seller” who runs Muddy Waters Capital. Block had taken a position against Tesla in the past, but in a shareholder letter, the short-seller admitted that his bets against the Elon Musk-led EV company had been abandoned.

Block’s letter to shareholders is pretty rare on its own, being the first of its kind since he started a hedge fund in 2015. Block’s letter reportedly stated that Elon Musk’s “narcissism” was a cause for his disdain, and it encouraged his beliefs that Tesla’s business would crater. He admitted, however, that he underestimated the Tesla CEO’s ability to raise capital and captivate shareholders.

 

[Artful Dodger]

Reverse engineering the MM algo's. Nice!

Lol, I was a talented reverse engineer in the Nineties... I speak 3 flavors of assembler, and my go-to tool was Turbo Debugger for the x86.

Cheers!

 

[mickle]

I can give people some firsthand info on the chip shortage.

Just before Covid I designed a small product that only uses 6 chips. When I pick chips for a design, I always check the stock at distributors to make sure it is a commonly used part and there is plenty available at a number of warehouses. Now we are going into production, and finding 2 chips is becoming difficult. One is a current-sensing chip, another an ethernet network interface chip. The network chip is normally about $4. All US distributors of both chips are out of stock, and the manufacturer (Microchip) won't be making more for 6-9 months!

Luckily, we have found some old inventory in China to get us started, but those distributors are now asking about $12 for the $4 chip. And we don't know if they will run out before new chips are made.

Both of these chips talk to a microcontroller and involve software, so redesigning the product and retesting would involve a lot of work and take months, and for our low volume it just wouldn't be worth the effort.

 

[SunCatcher]

Wonder if this is related:

https://twitter.com/x/status/1425780165955698695

Hmm, no All In Podcast for 2 weeks? Besties are too busy having fun? I assumed that it was no coincidence that Elon was going to Italy at the same time that 3 out of 4 of the All In team were there. I guess I was wrong. Not sure how Elon could have worked that (Podcast interview) in in such a short time in the country. Oh well.

Edit; Just saw the post above. @Paul_SF Glad they could at least meet up and hang out a bit.

 

[StealthP3D]

I find it interesting he named the suppliers causing most bottleneck/whose chips are in short supply.

This adds a little strength to my theory there may bad actors (probably ICE competitors) trying to capitalize on the chip shortage by taking steps to limit Tesla's access to them. This probably costs them a bit of money and I bet Tesla has, in most instances, neutralized the threat by being on top of the situation. Pure speculation, but based on how the world works.

 

[M|S|M MYP]

Amazing....during an SEC investigation?.

 

[Chunky Jr.]

Block’s letter reportedly stated that Elon Musk’s “narcissism” was a cause for his disdain, and it encouraged his beliefs that Tesla’s business would crater

This further confirms my belief that all short sellers of Tesla are doing so solely because they don't like Elon and nothing at all to do with an objective view of Tesla's business.

 

[Nocturnal]

It doesn't seem weird to me at all. Say they have ordered ~900k/year worth of parts for delivery this year and the supplier says that's great, but I can only supply you with ~800k/year. But Tesla has already placed orders for ~2M/year worth of parts for next year, so maybe they will get an allocation of ~1.75M/year.

It could also be that the suppliers are temporarily limited on production capacity and that the problems will be resolved next year and they will be able to produce at full volume. (Or a combination of both.)

Squeaky wheel and all. Bosch and Rener investors might wonder why they can't handle demand...Elon has a large bully pulpit after all.

This further confirms my belief that all short sellers of Tesla are doing so solely because they don't like Elon and nothing at all to do with an objective view of Tesla's business.

I think it's also that they don't understand him. They see him and think "he is a maniac, no way that business will work". Of course they completely miss that he is winning because of said "mania". Those guys want boring CEOs.

 

[MP3Mike]

I wouldn't be surprised at all if Tesla is engineering the functionality of the Renesas & Bosch chips into an existing chip or a new one. By calling them out by name, I think he is hinting that is what they are doing and if Renesas & Bosch want their business, they better figure out a way to deliver Tesla more chips ASAP or they will lose them as a customer permanently.

I don't think it is chips they are getting from Bosch & Renesas, I suspect it is modules. For example, didn't Elon say that the airbag module, which I think is Bosch, was one of the parts that they were having problems getting enough of?

Yep on the Q2 call:

Elon Musk: (15:38)
Yeah. I just want to reemphasize the extraordinary difficulty of ramping production of large manufactured items. At risk of being repetitive, it’s actually easy to make prototypes or sort of handle small volume production, but anything produced at high volume, which is really what’s relevant here, it’s going to move as fast as the slowest of the, say rough order of magnitude, 10,000 unique parts and processes. And so you can have 9,999, where just one is missing. We were missing, for example, a big struggle this quarter was the module that controls the airbags and the seatbelts. And obviously you cannot strip a car without those. And that limited our production severely worldwide, in Shanghai and in Fremont. So it wouldn’t have mattered if we had 17 different car models, because they all need the airbag module. It’s just irrelevant.

So maybe they will work on designing their own safety restraint, airbag/seatbelt, module. It seemed like they were already putting their own software on it, so it would just be one more thing they bring in-house.

 

[Rarity]

The Short Seller, Carson Block of Muddy Waters apparently stated in his fund's letter that he was wrong and Shorts have been wrong not only on Tesla's ability to scale production but their ability to scale capital.

While I find Block's thinking to be muddled in the extreme, he touches on one of the pillars of my thesis on Tesla. For several years, money has been free, to the point that almost all companies don't know what to do with all of the cash. The best financial minds have mostly just borrowed money to give fat dividends. Uninspiring.

But Musk has known what to do with every incremental dollar in his grasp. As a capital allocator, he is the undisputed master. Bezos has fallen off in this respect. For several years, he hasn't known what to do with the AWS cash gusher.

Low interest rates do tie back to renewables because by definition renewables all are capital intensive. It would be helpful for interest rates to be low in order to hasten the transition.

 

[woodisgood]

The reliance on suppliers is a vulnerability, if not THE vulnerability Tesla has, like all auto manufacturers. The ability to raise capital is no longer what can hinder Tesla’s growth. Hence, the attack point for opponents has shifted. This is why I found Elon’s Q2 comments so puzzling - he was literally putting up a billboard that Tesla’s growth can be possibly limited by influencing the supply chain (“and there’s not much we can do about it...”). If you’re anyone with deep pockets, and a desire to slow Tesla down, why would you not pour your billions into screwing with the supply chain? I don’t see why the same folks that poured money into shorting TSLA to limit its ability to raise money would not alter their strategy to this...pretty much a no-brainer if you believe such opponents exist.

Tesla will need to reduce reliance on certain suppliers (especially those that are beholden to other interests). This cannot happen overnight but it must eventually be done if the growth targets that the mission requires are to be achieved. I would not underestimate Tesla engineering in this regard but at the same time remember that there is only so much talent and only so much time.

The pandemic provided cover for a lot of shady behavior IMHO.

 

[CorneliusXX]

Teslarati - 18 minutes ago: Tesla critic abandons bet against TSLA, with no plans to revive it

Excerpt:

Tesla (NASDAQ:TSLA) has a lot of critics, and some of them tend to be aggressive at times. One of these is Carson Block, which The New York Times describes as a “volatile and sometimes venomous short-seller” who runs Muddy Waters Capital. Block had taken a position against Tesla in the past, but in a shareholder letter, the short-seller admitted that his bets against the Elon Musk-led EV company had been abandoned.

Block’s letter to shareholders is pretty rare on its own, being the first of its kind since he started a hedge fund in 2015. Block’s letter reportedly stated that Elon Musk’s “narcissism” was a cause for his disdain, and it encouraged his beliefs that Tesla’s business would crater. He admitted, however, that he underestimated the Tesla CEO’s ability to raise capital and captivate shareholders.

What's funny is that Block is wrong about why he was wrong.

From the NYT article:

“The market cap, the luster, the élan of Elon, is still there,” Block wrote, in explaining why his bets against Tesla have gone away.
“Tesla shorts have focused on Tesla’s lack of scale to compete in EVs with GM, Ford, VW, etc.,” Block wrote. “They are correct in that lack of scale would have been the death of Tesla. But they were looking at the wrong scale. Tesla is here not because it has scale in terms of manufacturing base or unit sales. It has scale because of its capital base,” he said of Tesla’s $700 billion market cap. He added:

One could look at Tesla’s market cap and think it’s fragile — that reality will shatter it. However, Tesla should be able to raise many billions before its cap becomes sub-scale — and keep in mind that Tesla equity raises tend to push the stock higher. (Those “dumb money” investors actually knew that capital base scale is what mattered all along.)

As described in purple, he thinks the increased market cap drove competitiveness - which is still backwards - Tesla became competitive and profit making from scaling manufacturing of the 3 before the rally in the share price gave Elon the capital base.

This guy is so poor at looking into the future he can't even see it after it's already happened.

 

[StealthP3D]

I don't think you can shame anyone into producing more. No one likes to leave money on the table from a lack of supply. It's not like the supplier are all out playing golf not solving their supply issue.

The supplier controls WHO gets the chips. So it's not about getting them to produce more, probably about getting them to distribute them in an equitable and fair manner and to cause them to consider if the way they are currently doing it is really in their best interest.

 

[woodisgood]

The supplier controls WHO gets the chips. So it's not about getting them to produce more, probably about getting them to distribute them in an equitable and fair manner and to cause them to consider if the way they are currently doing it is really in their best interest.

Add to this that we know Tesla is willing to pay top dollar. It’s not like they’re negotiating cheaply.

 

[goinfraftw]

What's the opposite of a dopamine hit? I think that'd be TSLA in 2021 so far.

Magnifique!

 

[Curt Renz]

MarketWatch – headline – 10 minutes ago: Tesla stock price target raised to $725 from $660 at UBS

TipRanks confirms: UBS - Patrick Hummel

The UBS TSLA Hold rating is maintained.

 

[lafrisbee]

MarketWatch – headline – 10 minutes ago: Tesla stock price target raised to $725 from $660 at UBS

TipRanks confirms: UBS - Patrick Hummel

The UBS TSLA Hold rating is maintained.

Is UBS that damn big a gorilla? cuz the stock is humpin' it right now?
Then why?

 

[Chocochip]

This means no seam to create wind noise where the "windshield" meets the "roof".

That, but also (related, and possibly more important at high speeds) reduced drag. They might be able to calculate the curvature of the "crest" (windshield-to-roof joint) that minimises drag and use that specific profile for building a smooth, seamless, single-piece bent glass sheet that gets installed in one step on the GA line.
We will have to wait and see if that's the case, but... would it really shock anyone? Maybe I should start taking bets on Elon saying "the largest single piece of glass on a passenger vehicle EVER", "sculpted glass", etc. during the Cybertruck update/delivery event.