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

[2daMoon]

No, laws are more complex than that and that is not the only applicable statute so you cannot claim to know the answer that easily. Why don't you inform Elon of your discovery that they can sell the car while it is physically located in Texas?

Why do you keep claiming this? If the law allowed Tesla to sell the cars while they were physically located in Texas, don't you think Tesla would have already been taking advantage of that fact? Is your opinion based solely on that Wikipedia entry of an incomplete excerpt of the law? Laws need to be read in their entirety and it gets complicated in a hurry. That's why Tesla has lawyers to let Elon know where Tesla stands.

Be aware, I don't think this is a big deal as Texas is only a small portion of Tesla's total sales. Even Washington State has a higher per capita ownership of EV's and Tesla than Texas does. Texans might have to get in line behind everyone else unless this gets fixed with an executive order or Tesla keeps importing Fremont vehicles and/or starts re-importing cars already exported out of Texas. There are many solutions to get around this ridiculous law, but it might not be ideal from the perspective of a Texas resident wanting a Tesla quickly.

You are the one making a claim to have seen a statute that indicated to you the vehicles would need to be taken out of state.

I can't find it.

I have asked for anyone to show a reference to it.

??? Crickets

If such a statute exists, yes, there might be ways to get around it.

One example might be as simple as hiring a trucking company with an out of state address to deliver the cars. Still, the car may not have to physically leave the state, but the carrier that picked up the car might need to bill Tesla and dispatch trucks from a home base located out of state.

Have to read the statute, if it exists, to work from there how to get the job done.

If nothing else, delivering from the factory to customers who purchased online would certainly open the door for the Dealer's Association to file a lawsuit and get the matter before a court. That would be very interesting.

That is just two possible scenarios that could lead to progress made on this front.

I'm a possibility thinker. I don't tend to go looking for reasons why something won't work. Those are too easy to find.

 

[StealthP3D]

You are the one making a claim to have seen a statute that indicated to you the vehicles would need to be taken out of state.

I can't find it.

I have asked for anyone to show a reference to it.

???

That was over a year ago and I can't find it either.

But don't you think Tesla's lawyers have appraised Elon on this very issue? Why do you think Elon is wrong on this very specific point?

We know it's a requirement to be a licensed auto dealership to sell cars in Texas. You also need to pay an annual fee based on how many cars sold annually. Tesla apparently gets around this law by making the sale happen in another state and using a third party to deliver the car to Texas. Chances are this is actually illegal under a reasonable interpretation of state law, but it's allowed to avoid closer scrutiny of the legality of such laws under the Commerce Clause of the Constitution which gives the right to regulate interstate commerce to Congress. My reading of Texas law is that Tesla cannot even act as a dealer and service their vehicles or do warranty repairs on them. Yet Texas allows it to happen, again, probably to avoid closer scrutiny of their protectionist dealership laws.

In short, every article on this subject indicates Tesla would need to ship the cars out of state in order to sell them to Texans and Elon agrees with this interpretation. Basically, it's not an out-of-state sale if the vehicle is already located inside the state. Do you think his lawyers are reading the law wrong? Why do you keep insisting you know more than the man who runs the company?

 

[2daMoon]

That was over a year ago and I can't find it either.

But don't you think Tesla's lawyers have appraised Elon on this very issue? Why do you think Elon is wrong on this very specific point?

We know it's a requirement to be a licensed auto dealership to sell cars in Texas. You also need to pay an annual fee based on how many cars sold annually. Tesla apparently gets around this law by making the sale happen in another state and using a third party to deliver the car to Texas. Chances are this is actually illegal under a reasonable interpretation of state law, but it's allowed to avoid closer scrutiny of the legality of such laws under the Commerce Clause of the Constitution which gives the right to regulate interstate commerce to Congress. My reading of Texas law is that Tesla cannot even act as a dealer and service their vehicles or do warranty repairs on them. Yet Texas allows it to happen, again, probably to avoid closer scrutiny of their protectionist dealership laws.

In short, every article on this subject indicates Tesla would need to ship the cars out of state in order to sell them to Texans and Elon agrees with this interpretation. Do you think his lawyers are reading the law wrong? Why do you keep insisting you know more than the man who runs the company?

Has Elon said anything specific about having to ship cars out of state? Reference please.

I agree, some of the statutes I've read in the chapter on dealer licensing regarding service and warranty work support your conclusion that nobody is raising a fuss where they might be able to. It seems reasonable to surmise it is only to avoid the possibility of the statute being struck down in court, should it be brought as a cause by the Dealers.

Every article? Are you referring to news articles? From the media who routinely slants their output based upon who is greasing their skids?

The articles I've read have made statements to the effect that the cars must be shipped out of state, but, I have not found a single one that provides a reference in the statutes to support their claim. Rather, they reference other articles, hearsay, and "expert" opinions. These are not verifiable sources of information and I'm left with no warm fuzzies toward trusting them.

I have never insisted I know more than anyone. Only, that if such a thing exist, and can be read and evaluated that I would welcome the opportunity to do so. On my shelf are a Black's and a Bouvier's Law dictionary, and I have some experience with unraveling legalese by reading the definitions for any chapter of law looking for the weasel words and legal shenanigans there, before reading the statute.

Until I see it for myself there appears to be little reason for Tesla not to ship from the Texas factory for delivery to Texas customers.
Or, have the customers retrieve their cars from the factory parking lot using the phone app.

 

[dhanson865]

I'm fine with Texas made vehicles being sold to other states and Texas customers having to pay for an imported California car.

If California gets the west coast + Alaska, Hawaii, Arizona, Nevada, Utah, Idaho, and Texas.

That still leaves 41 other states for Texas to export to.

With vehicles ironically crossing past each other in New Mexico (California to Texas and Texas to New Mexico). You could avoid this by only sending California cars to New Mexico but me I'd make the cross and leak the first crossing to make a point.

 

[ZachF]

I'm fine with Texas made vehicles being sold to other states and Texas customers having to pay for an imported California car.

If California gets the west coast + Alaska, Hawaii, Arizona, Nevada, Utah, Idaho, and Texas.

That still leaves 41 other states for Texas to export to.

With vehicles ironically crossing past each other in New Mexico (California to Texas and Texas to New Mexico). You could avoid this by only sending California cars to New Mexico but me I'd make the cross and leak the first crossing to make a point.

Are there any native reservations in Texas?

 

[StealthP3D]

Has Elon said anything specific about having to ship cars out of state? Reference please.

Yes, it's already been presented right here. Elon saying he hoped Texas would change the law so they wouldn't have to ship the cars out of state to sell them. Look at Knightshade's post about 20 back.

I agree, some of the statutes I've read in the chapter on dealer licensing regarding service and warranty work support your conclusion that nobody is raising a fuss where they might be able to. It seems reasonable to surmise it is only to avoid the possibility of the statute being struck down in court, should it be brought as a cause by the Dealers.

Every article? Are you referring to news articles? From the media who routinely slants their output based upon who is greasing their skids?

The articles I've read have made statements to the effect that the cars must be shipped out of state, but, I have not found a single one that provides a reference in the statutes to support their claim. Rather they reference other articles, hearsay, and "expert" opinions. These are not verifiable sources of information and I'm left with no warm fuzzies toward trusting them.

The statute doesn't tell Tesla how to get around the ban on direct sales but the way Tesla does it is by selling Texans cars that are not within Texas at the time of the sale. That's what makes it an out-of-state sale. This is not that complicated. It's not an out-of-state sale if both the buyer and the car are in Texas.

I have never insisted I know more than anyone. Only, that if such a thing exist, and can be read and evaluated that I would welcome the opportunity to do so. On my shelf are a Black's and a Bouvier's Law dictionary, and I have some experience with unraveling legalese by reading the definitions for any chapter of law looking for the weasel words and legal shenanigans there, before reading the statute.

Until I see it for myself there appears to be little reason for Tesla not to ship from the Texas factory for delivery to Texas customers. Or, even have the customers retrieve their cars from the factory parking lot using the phone app.

Sigh. Please see Elon's tweet. You are claiming you know more than him and you are being very stubborn about this. You don't need to be a lawyer to understand it's not an out of state sale if both the buyer and the car being purchased are within the state. Ownership of the car must be transferred to the person in Texas while the car is still out of state. That's what makes it an out-of-state sale!

 

[dhanson865]

Are there any native reservations in Texas?

none are terribly close to the plant but all are big enough to have a distribution site put there on a blank lot if need be. And I'm fine with giving money to the tribes instead of to the state of Texas if Texas doesn't want Tesla to sell on Texas land.

 

[2daMoon]

Are there any native reservations in Texas?

Three. One near El Paso, one on the Mexican border, one near Louisiana.

 

[StealthP3D]

Are there any native reservations in Texas?

Yes, but not many and they are not conveniently located. It would be easier for Tesla to simply export the cars to another state that does not ban sales or to get the law changed. In the interim, Tesla has huge demand in states not named Texas and they can always continue to sell Fremont cars to Texans if there are any left over.

 

[2daMoon]

Yes, it's already been presented right here. Elon saying he hoped Texas would change the law so they wouldn't have to ship the cars out of state to sell them. Look at Knightshade's post about 20 back.

I put Knightshade on ignore some time back, so don't see their posts.

Also, I'm not a Twit subscriber, so don't see Elon's contributions there, unless someone I don't have on ignore re-posts them here.

This would explain the lack of knowledge on my part regarding this tidbit. Thanks for clearing that up.

Still, would love to better understand the legal underpinnings supporting this.

 

[StealthP3D]

I put Knightshade on ignore some time back, so don't see their posts.

Still, would love to better understand the legal underpinnings supporting this.

Here's the tweet and Elon's response:

https://twitter.com/x/status/1398029410289127424

 

[Singuy]

Honestly, how could this be more subjective?

View attachment 785284

I like that Doug points out various things, but he makes it look like his equation/methodology is objective.

me thinks he is paid by various interested parties for this content.

Doug score is borderline parody and not be taken seriously. Most of the categories are subjective in nature and was meant to be taken as such. You should take it as seriously as the "cool, not cool" wall from Top Gear.

 

[Discoducky]

Doug score is borderline parody and not be taken seriously. Most of the categories are subjective in nature and was meant to be taken as such. You should take it as seriously as the "cool, not cool" wall from Top Gear.

Yep, I was thinking that as well, it is way more entertainment than a functional or objective review.

 

[Chunky Jr.]

Someone gets it. Bullish AF…

https://twitter.com/x/status/1507209808453070851

 

[StarFoxisDown!]

Someone gets it. Bullish AF…

https://twitter.com/x/status/1507209808453070851

The information about US Jan and Feb sales combined with China’s increased production so far puts Q1 at around 340-350k from my estimates.

Depends on if those US sales data numbers were accurate

 

[Criscmt]

Would love your thoughts, especially those who were experienced dot-com period in stocks


I am trying to understand current situation, and here's what I see:
A lot of money was pumped into the system post covid breakout (in fact even before covid, at least since QE-1), both Monetary policy (Interest rates, QE), and Fiscal policy. At a time when production went down, demand went up due to this extraordinary money supply, causing inflation.

Housing was pumped with explosive combination of all-time low mortgage rates (thanks to incremental MBS purchases until a few weeks ago), and high asset prices (high stock valuations) which made down payments easy for large many.
Now there's runaway inflation. For example, if we take housing, house prices go up, people take cash out and invest in buying more homes. Why? because house price are going up. This lead to the vicious cycle.

Is it the case that, (1) this money supply pumped into the system still being around, and (2) tens of millions of new “traders” (stock and options) is likely stopping the collapse of the market? Because, there's a lot of money on the put side too, both retail and institutional?

Do you share the view that for controlling the inflation, money needs to be sucked out, asset valuations must be brought down?
2006-2008 likely is not a similar situation, we didn't have so much money pumped into the system at that time?

I wasn't in stock market during Dot com bubble.
Was there such high money supply during that time? I read the asset valuations were high, likely even higher than now (not nominal)

If we take housing, looks like we will have a step-up inflation that will not be reversed, offset but will have to live with?
Home prices went up ~40% from Jan2019, and mortgage rates today are same as in Jan-2019. Incomes didn't grow anywhere close to that. This means, Fed robbed the opportunity of housing from millions, and that too from those who are already at the bottom of wealth pyramid. The only way this can be corrected is by bringing down house prices, because interest rates can’t be brought down with the current inflation?

Do you see strong parallels to Dot com period, on the risk front (asset devaluation)?

@Artful Dodger @StealthP3D @FrankSG @The Accountant @generalenthu @ZeApelido @bxr140

 

[Prunesquallor]

My reading of Texas law is that Tesla cannot even act as a dealer and service their vehicles or do warranty repairs on them. Yet Texas allows it to happen, again, probably to avoid closer scrutiny of their protectionist dealership laws.

…

That’s not quite right. It gets into the legal definition of Texas "dealership" which does not include service/repairs. There was an attempt by the legislature to change that back in 2019 by slipping those words in, which many of us interpreted as an attempt to shut down the existing Tesla service centers. Texas Tesla owners raised holy hell and those changes were abandoned.

 

[StealthP3D]

Would love your thoughts, especially those who were experienced dot-com period in stocks


I am trying to understand current situation, and here's what I see:
A lot of money was pumped into the system post covid breakout (in fact even before covid, at least since QE-1), both Monetary policy (Interest rates, QE), and Fiscal policy. At a time when production went down, demand went up due to this extraordinary money supply, causing inflation.

Housing was pumped with explosive combination of all-time low mortgage rates (thanks to incremental MBS purchases until a few weeks ago), and high asset prices (high stock valuations) which made down payments easy for large many.
Now there's runaway inflation. For example, if we take housing, house prices go up, people take cash out and invest in buying more homes. Why? because house price are going up. This lead to the vicious cycle.

Is it the case that, (1) this money supply pumped into the system still being around, and (2) tens of millions of new “traders” (stock and options) is likely stopping the collapse of the market? Because, there's a lot of money on the put side too, both retail and institutional?

Do you share the view that for controlling the inflation, money needs to be sucked out, asset valuations must be brought down?
2006-2008 likely is not a similar situation, we didn't have so much money pumped into the system at that time?

I wasn't in stock market during Dot com bubble.
Was there such high money supply during that time? I read the asset valuations were high, likely even higher than now (not nominal)

If we take housing, looks like we will have a step-up inflation that will not be reversed, offset but will have to live with?
Home prices went up ~40% from Jan2019, and mortgage rates today are same as in Jan-2019. Incomes didn't grow anywhere close to that. This means, Fed robbed the opportunity of housing from millions, and that too from those who are already at the bottom of wealth pyramid. The only way this can be corrected is by bringing down house prices, because interest rates can’t be brought down with the current inflation?

Do you see strong parallels to Dot com period, on the risk front (asset devaluation)?

@Artful Dodger @StealthP3D @FrankSG @The Accountant @generalenthu @ZeApelido @bxr140

Valuations now are not comparable to the dotcom era. Not even close. Anything and everything with a .com was sky-high regardless of whether it had decent prospects to become a real company with real and growing profits. So, no, I don't see a lot of good parallels between then and now. The entire mood is different.

I do think real estate will decline over the next 3 years. Hard to say what the major stock indexes will do but it doesn't look scary to me, maybe the indexes will under-perform their typical average, maybe they will even be down over a two-three year period. I'm not predicting that as no one knows. Any concerns along those lines are just more reasons to hold a fast-growing company like TSLA. You want to hold companies doing the disrupting, not the ones being disrupted. If the major indexes are flat to down it will because a number of index components are being disrupted. New technologies, new business models, new consumer behaviors, etc. Those are not good reasons not to invest, they are reasons to be selective about where you put your money, as always. It seems like one should be able to time the market but right when things might seem the bleakest the market can take off like a bull on steroids. You really never know. All those financial prognosticators love to act like they know what they are talking about but the economy loves to prove them wrong.

I believe in reacting to new learnings and new perspectives that inform the future of business and profits, of winners and losers. I don't believe in reacting to the market or the economy (except as it impacts the above). Time in the market beats trying to time the market. Sell companies that are not the future, buy ones that are. Don't over diversify and stay the course. The markets have always rallied out of trouble and they have faced far more turbulent times than anything that is visible now. Don't try to second guess them, it only works until it doesn't.

 

[StealthP3D]

That’s not quite right. It gets into the legal definition of Texas "dealership" which does not include service/repairs. There was an attempt by the legislature to change that back in 2019 by slipping those words in, which many of us interpreted as an attempt to shut down the existing Tesla service centers. Texas Tesla owners raised holy hell and those changes were abandoned.

I think you are mis-reading the situation. The laws in Texas are already pretty strong against manufacturers being allowed to perform things like warranty repair of their vehicles. The attempt to slip those words in could have clarified or strengthened the language enough to give reason to stop Tesla from servicing their vehicles but that does not imply that existing language couldn't already be used to stop Tesla from servicing their vehicles. Tesla doesn't have to be found to be performing business reserved for dealerships to be declared illegal, they just need to be found to be performing services that manufacturers are prohibited from performing.

 

[JoRoMo]

I think you are mis-reading the situation. The laws in Texas are already pretty strong against manufacturers being allowed to perform things like warranty repair of their vehicles. The attempt to slip those words in could have clarified or strengthened the language enough to give reason to stop Tesla from servicing their vehicles but that does not imply that existing language couldn't already be used to stop Tesla from servicing their vehicles. Tesla doesn't have to be found to be performing business reserved for dealerships to be declared illegal, they just need to be found to be performing services that manufacturers are prohibited from performing.

On a global scale I am not sure this matters a lot, unless someone is able to point to legal texts perhaps the discussion is becoming a bit fruitless?

Not the largest contributor here, so maybe not for me to tell…

Re. Elon’s tweet, since they had not produced in Texas yet, he may have taken the tweet he answewd as factual, so his answer may be like «Oh. Then, I think, I would…». But now it is me adding to the discussion, sorry…