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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Risk on stocks are pretty green today.Weird market today. A lot of stocks are green but many of the largest and best performing stocks are red. Is it Bizarro day?
This may have something to do with option gamble of the cpi report. Perhaps too many puts were bought for all those zero PE stocks and MM is screwing them today.
petit_bateau
Active Member
This is a rerun of last year when I analysed the 2020 and 2019 EV numbers, most of which was in this post although I also did some further battery analysis in another post. Anyway here is this year’s offering as an analysis of the 2021 numbers.
(for last year, see at Moderators' Choice: Posts of Particular Merit)
My methodology this year has been much the same. The sources are similar – the public versions of EV Sales, Adamas, plus lots of Google, etc. I now have about 80 line items I’m tracking, much more than in any single one of those public sources.
Accuracy is always debatable in exercises of this nature, if only because some manufacturers are remarkably reluctant to disclose their sales with Stellantis being the worst offender (who knew they made EVs ?) but Nissan/Renault/Mitsubishi and Porsche also being in the naughty corner. This clearly bedevils the efforts of EV Sales and Adamas as much as for my effort. Also be wary of any year-to-year comparisons regarding Stellantis (PSA+FCA) as my database switches abruptly from Peugot to Stellantis, undeservedly flattering their performance.
By way of accuracy comparison I calculate battery deployment of 270.8 GWh whereas Adamas calculates 286.2 GWh, so my total is 5.4% short of Adamas’ total. Similarly I calculate a total Tesla vehicle sales revenue of $46.0bn whereas Tesla reported a total sales revenue of $47.2bn, so my total is short by 2.6%. That seems a reasonable error bar for my purposes.
The per-model line items are crunched into three tables by manufacturer group. This is the one for BEV+PHEV and I have a similar table for BEV-only and PHEV-only.
The Covid-19 pandemic may have curtailed global light vehicle production, but it has not held back rapidly increasing electric vehicle manufacturing. In all BEV + PHEV are now 8% of world light vehicle production, with the growth rate at over 100% per year !
We should expect a post-Covid rebound in vehicle sales that will help ICE. But I think 2023/2024 may prove to be the highest that ICE will rebound to, and that by 2025 swinging cuts will take place in ICE sales. In retrospect peak-ICE was probably 2017 with 95m ICE out of 97m light vehicle sales.
Breaking this down into manageable chunks we get the following picture. The massive apparent growth in Stellantis is not real as it was represented by Peugot only in previous years.
The tier from 6-10 are BMW, Hyundai/Kia, Renault/Nissan/Mitsubishi, Mercedes, and Volvo.
Amazing as it may seem Tesla are very slightly slipping behind the general market growth. If one takes the information in these three tables :
And plots it into these three stacked column charts, then one can see that on each observable metric Tesla have slowly given ground. What these do not show of course is the profitability picture for the other manufacturers, which may be a different picture. Also we do not know what will happen in the years ahead.
The growth in BEV numbers is generally skewed towards the cheaper end of the market, whist the growth in PHEV numbers is generally skewed towards the more expensive end of the market. These stacked column charts tentatively suggest that PHEV may have reached a maximum share of the market in 2020.
Certainly the battery size in a typical BEV is growing as the mid-range offerings get filled in. With the 3/Y Tesla has moved into the upper end of the mid-market, and the lower-cost manufacturers are pushing upwards slightly from the bottom end. The more difficult task is for the legacy premium brands who are increasingly having to position their PHEV offerings against (primarily) Tesla’s BEV offering, and being squeezed by regulators forcing larger batteries onto them.
In the top 5 the legacy volume manufacturer who is making that transition successfully at present is VAG which is growing on par with Tesla. In the Chinese manufacturers the breadth of BYD’s offering is working, and the SAIC performance is driven largely by the Wuling HongGuang Mini EV that it would be unwise to sneer at. Stellantis are very coy with their numbers, indicating that things are not going as well as one might hope.
The mid tier of positions 6-10 (i.e. BMW, Hyundai/Kia, Renault/Nissan/Mitsubishi, Mercedes, and Volvo) are all making credible progress but are losing ground on those in the top five, and also when compared to the hordes in 11+ . The notable exception is Nissan/Renault/Mitsubishi who are not transitioning anywhere near as fast as is required. Last year VAG emptied the market of cells to the detriment of the bottom end (11+) who lost 3.5GWh of cells, but this year they have really taken those cells back, and some more, to the tune of 42 GWh that have pretty much all gone in BEVs rather than PHEVs. Does anyone make any attempt to compete with a cheap PHEV against the low-end BEVs – I think not ?
Toyota, Ford, GM, Honda are all showing very few signs of getting it, at least if one goes by the observable metrics.
Tesla remains in a class of its own when compared to the three closest competitors of VAG, SAIC, and BYD, however each is competing very strongly in its own way and in time all four will inevitably address the same segments. Tesla cannot afford to be complacent. BMW, Volvo, and Hyundai/Kia are all three seeking to be Tesla-equivalent brand positions, though personally I don’t think they have the scale to be profitable in that objective.
Now, let’s see how quickly Tesla can get Austin and Berlin ramping, and bring on those further lines in Shanghai. It would be nice if Tesla could become the pacesetter again.
PS. By the way, I also do a daily energy news cuttings post at Energy Sector News - all welcome.
(for last year, see at Moderators' Choice: Posts of Particular Merit)
My methodology this year has been much the same. The sources are similar – the public versions of EV Sales, Adamas, plus lots of Google, etc. I now have about 80 line items I’m tracking, much more than in any single one of those public sources.
Accuracy is always debatable in exercises of this nature, if only because some manufacturers are remarkably reluctant to disclose their sales with Stellantis being the worst offender (who knew they made EVs ?) but Nissan/Renault/Mitsubishi and Porsche also being in the naughty corner. This clearly bedevils the efforts of EV Sales and Adamas as much as for my effort. Also be wary of any year-to-year comparisons regarding Stellantis (PSA+FCA) as my database switches abruptly from Peugot to Stellantis, undeservedly flattering their performance.
By way of accuracy comparison I calculate battery deployment of 270.8 GWh whereas Adamas calculates 286.2 GWh, so my total is 5.4% short of Adamas’ total. Similarly I calculate a total Tesla vehicle sales revenue of $46.0bn whereas Tesla reported a total sales revenue of $47.2bn, so my total is short by 2.6%. That seems a reasonable error bar for my purposes.
The per-model line items are crunched into three tables by manufacturer group. This is the one for BEV+PHEV and I have a similar table for BEV-only and PHEV-only.
The Covid-19 pandemic may have curtailed global light vehicle production, but it has not held back rapidly increasing electric vehicle manufacturing. In all BEV + PHEV are now 8% of world light vehicle production, with the growth rate at over 100% per year !
We should expect a post-Covid rebound in vehicle sales that will help ICE. But I think 2023/2024 may prove to be the highest that ICE will rebound to, and that by 2025 swinging cuts will take place in ICE sales. In retrospect peak-ICE was probably 2017 with 95m ICE out of 97m light vehicle sales.
Breaking this down into manageable chunks we get the following picture. The massive apparent growth in Stellantis is not real as it was represented by Peugot only in previous years.
The tier from 6-10 are BMW, Hyundai/Kia, Renault/Nissan/Mitsubishi, Mercedes, and Volvo.
Amazing as it may seem Tesla are very slightly slipping behind the general market growth. If one takes the information in these three tables :
And plots it into these three stacked column charts, then one can see that on each observable metric Tesla have slowly given ground. What these do not show of course is the profitability picture for the other manufacturers, which may be a different picture. Also we do not know what will happen in the years ahead.
The growth in BEV numbers is generally skewed towards the cheaper end of the market, whist the growth in PHEV numbers is generally skewed towards the more expensive end of the market. These stacked column charts tentatively suggest that PHEV may have reached a maximum share of the market in 2020.
Certainly the battery size in a typical BEV is growing as the mid-range offerings get filled in. With the 3/Y Tesla has moved into the upper end of the mid-market, and the lower-cost manufacturers are pushing upwards slightly from the bottom end. The more difficult task is for the legacy premium brands who are increasingly having to position their PHEV offerings against (primarily) Tesla’s BEV offering, and being squeezed by regulators forcing larger batteries onto them.
In the top 5 the legacy volume manufacturer who is making that transition successfully at present is VAG which is growing on par with Tesla. In the Chinese manufacturers the breadth of BYD’s offering is working, and the SAIC performance is driven largely by the Wuling HongGuang Mini EV that it would be unwise to sneer at. Stellantis are very coy with their numbers, indicating that things are not going as well as one might hope.
The mid tier of positions 6-10 (i.e. BMW, Hyundai/Kia, Renault/Nissan/Mitsubishi, Mercedes, and Volvo) are all making credible progress but are losing ground on those in the top five, and also when compared to the hordes in 11+ . The notable exception is Nissan/Renault/Mitsubishi who are not transitioning anywhere near as fast as is required. Last year VAG emptied the market of cells to the detriment of the bottom end (11+) who lost 3.5GWh of cells, but this year they have really taken those cells back, and some more, to the tune of 42 GWh that have pretty much all gone in BEVs rather than PHEVs. Does anyone make any attempt to compete with a cheap PHEV against the low-end BEVs – I think not ?
Toyota, Ford, GM, Honda are all showing very few signs of getting it, at least if one goes by the observable metrics.
Tesla remains in a class of its own when compared to the three closest competitors of VAG, SAIC, and BYD, however each is competing very strongly in its own way and in time all four will inevitably address the same segments. Tesla cannot afford to be complacent. BMW, Volvo, and Hyundai/Kia are all three seeking to be Tesla-equivalent brand positions, though personally I don’t think they have the scale to be profitable in that objective.
Now, let’s see how quickly Tesla can get Austin and Berlin ramping, and bring on those further lines in Shanghai. It would be nice if Tesla could become the pacesetter again.
PS. By the way, I also do a daily energy news cuttings post at Energy Sector News - all welcome.
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OT, the SpaceX presentation was overflowing with confidence and redundancy. The Raptor V2 is more powerful than V1 and production is about 1/day. Interesting example of 1st principles -> Flanges to connect pipes containing as much as 12,000 psi is hard, so they welded the lines solid. Seems like that could save space and parts with improved performance.
TheTalkingMule
Distributed Energy Enthusiast
I'm just looking at the max pain chart. Still can't rationalize that MM's don't care about expiring put positions which are(were at least) sitting at $900. There's pretty much no call OI below $900 as of this morning, so why bother when you can shaft 5x as many put holders at $900 AND do a bit of covering/accumulating in the bargain?
Certainly there could be a larger plan afoot. I like to keep it simple......like Omar.
200 day moving average is 823 and going up on a daily basis. Considering a few trading days to drop the stock enough (unless there's a major sell off), lowest I see it going is 830.
I'm really curious and somewhat struggle with the notion of how the powers to be that have been pushing the stock down non-stop since Jan 5th, plan to play this. I try and think about this from a hedge fund and MM's point of view. Because here's the dynamics:
- The stock is only mere 6-7% from it's 200 day moving average. It's 2 year trend line puts it close to 870. Those are major levels of support
- The Forward P/E is 90 today, but in reality it's really 67. Because GAAP EPS in Q4 was distorted by a $.50 hit to one time items that 100% will not be on Q1's earnings. That was 25% hit to GAAP EPS in Q4 that was essentially artificial.
- Another $.45 of one time costs that could still be there in Q1 but odds are they won't since Tesla like to throw in a bunch of one time costs into their Q4's. See last years Q4 and then what happened in Q1.
- Tesla still has the Tax Allowance. The longer it goes without Tesla using it, the more likely it gets used the next quarter. I put the odds on it being during Q1 to be very high. Yes it will be backed out. Yes it still affects TTM P/E.
- Based on the anecdotal evidence I've seen, Tesla is on track for 340-350k deliveries in Q1. I think 360k is not out of the realm of possibility. S/X production seems to be going much better so far in Q1. That's 85-100% growth YoY. Jan China numbers on Monday will be key (remember to add about 5-6k that won't be counted due to sitting at port)
If Q1 plays out like I think it will in terms of Tesla's execution (350k deliveries) and at least half of the one-time cost due to warranty/expediting go away, the Forward P/E would drop to under 50 if TSLA was still at 900. For comparison:
Amazon's Forward P/E is 53
Apples is 29
Nvidia's is 79
Microsoft's is 33
Something has to give here.
Then also take into account that Tesla's TTM P/E, if the tax allowance is used, will drop below the psychological threshold of 100. Remember Q1 and Q2's GAAP EPS were extremely low. Meaning Tesla's TTM P/E will compress rapidly.
I have to believe that hedgies, MM's, are smart enough to not be caught off guard by this dynamic. They manipulate....they're not stupid. They can do this breakdown just as well as I can. So I'm a bit surprised they're not giving more room or "buffer" on how TSLA can trade. Because once Tesla's foward P/E gets to 50, the stock trading dynamics are going to change a lot.
So it really just comes down to I have to believe Wall St, including hedge funds and MM's, is positioning itself for a long ride higher. Which means an all out assault on trying to push the stock down as much as possible for the next 2 months. Essentially the game that was Tesla volatility and the Tesla options cash cow is about to come to a close. The only way I could see them continuing to really use Tesla as a heavy options play is they induce a sharp rally higher, up to something like 1300-1400 in the matter of months so that they can again start playing both the upside and the downside. Because if the only move is going to be the upside and a constant move to the upside since Tesla's earnings growth will force it, then that takes away a lot of the value/money when it comes to Tesla's options.
Well there's your problem - you're giving market participants way too much credit. I think it could just as easily be explained as: people are dumb.
ZachF
Active Member
Let's assume what you said is correct. Then why do you think they aren't letting it just run up now so they can play both sides without having to spend so much pushing it down?
Artful Dodger
"Neko no me"
We never receive information as to whether MMs have hedged a particular position. This makes Open Interest in general (and 'Max Pain' specifically), an imprecise indicator.
Haha nah.....2021 showed me that when Wall St wants something, they have their means. As in, Wall St wanted to see a massive compression TSLA's P/E and they got, despite Tesla beating earnings expectations by a mile every quarter in 2021.
TSLA's P/E compression in just a year and a half is going to match what it took Amazon's P/E compression for years to do. That's nuts
The issue now is they've compressed the P/E into such a tight number that if Tesla keeps executing and beating the way they have been, Wall St going to have to "chase" the stock quarter after quarter, non stop. Similar to Apple's trading. Wall St over the past few years has essentially said we value Apple on a forward p/e basis of around 25-30. Apple keeps growing their earnings, QoQ/YoY, which has forced the stock into a non-stop rally. Apple stock has become super predictable because of that dynamic.
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Disagree on timing, Tesla has a huge amount of operating loss carryover which allows them to continue posting zero taxable US profits.
From 10-K
More on timing:
Well first you have to remember, that in a time like this where there's an abundance of fear in the market + the nonstop FUD headlines, to hold TSLA down is much cheaper than it was 6 months ago.
Now they absolutely could flip the trading on TSLA and push it higher so that they can play both sides. But at this point, you're talking about a mega rally needing to happen for that. Essentially the P/E is being compressed so tight that they'll have to match Tesla's QoQ Earnings growth + adding buffer to upside to play the stock both down and up. That's asking a lot. If Tesla was trading at a 150-200 Forward P/E going into Q1 earnings, then sure. But that would mean TSLA needs to be back at 1100-1200 before Q1 earnings come out. Possible? Sure. Likely, I doubt it.
My own personal opinion is this is a last hail mary attempt to drive the stock down as much as possible before the incoming wave of earnings AT SCALE force the issue. Then combine with the fact that those earnings and Berlin/Austin ramping + Tesla paying off the last of it's debt in Q1 will give way to a investment grade rating by S&P/Moody's by Q2, Q3 at the latest. All of this will essentially lead to the end of TSLA being the king of options on Wall St and lead to much more natural trading which is going to be consistent to the upside for years straight.
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Buckminster
Well-Known Member
Did I miss the memo regarding P/E ratio compression being word of the day?
Well considering this an investor thread and one of the most important parts of the dynamic of how TSLA trades for the next year will be P/E ratio's and compression
I for one, find the upcoming dynamic to be pretty fascinating and have been essentially waiting a year to see what would happen in this exact set up when it became clear in 2021 that TSLA's P/E was going to be targeted.
It's also a important metric to be aware of in this environment to keep fear from taking over and making some investor do stupid things.
bkp_duke
Well-Known Member
Because their masters haven't accumulated all the shares they wanted to.
Artful Dodger
"Neko no me"
Moody's pre-empted any quick upgrade to Investment Grade credit rating just 2 days before Tesla's 2021 Q1 conference call by writing in their Jan 24, 2022 credit outlook note:
Moody's upgrades Tesla's corporate family rating to Ba1; outlook positive
"To date, Tesla's product offering remains narrowly reliant on primarily two models, however.
"FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
"The ratings could be upgraded if Tesla successfully expands its global footprint, maintains a strong competitive global presence as other automakers offer an increasing number of battery electric models, and improves its product breadth."
So you see, Moody's has pre-announced their excuses. They have no problem however ignoring the fact that increasing the number of models does exactly zero to the total number of cars sold, but reduces gross margin. But they predict margins to improve...
EDIT:
This is even more ironic since Moody's (a credit rating agency) feels qualified to comment on production estimates, product mix, and margins but they are completely oblivious to the fact that the FED has been pumping $90B/month into the largest corporations in America via bond purchases (except Tesla, who gets zero because, you know, they have a 'junk' credit rating). Boodies also ignores that the $90B handouts are coming to an end next month and that will affect the other companies but NOT Tesla (since, you know, 'junk').
Priceless.
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Some great posts on this forum today, thank you. It's like the old days.
Regarding the share price, it's in the doldrums and likely will be for some time. Nothing to worry about because we know this happens, we've been here before, and we know what happens when the wind eventually picks up
Regarding the share price, it's in the doldrums and likely will be for some time. Nothing to worry about because we know this happens, we've been here before, and we know what happens when the wind eventually picks up
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