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

[Usain]

On utility scale I see no evidence that Tesla is building a stronger lead, and the balance of probability is that the lead they had is slipping.

Why do you believe this to be true? Why do you think Tesla's lead is slipping?

In my mind, Tesla has two advantages with its Megapack product:
1. Lanthrop and future factories. The factory is the product. With unlimited demand, the opportunity for profit is only limited by factory output. Is anyone outside of China building utility scale storage faster than Tesla?
2. Available batteries. Does anyone outside China have access to more cells at a lower cost?

So Tesla owns the market in the Western world and China owns the market in the Eastern world. This is a very good position to be in and it seems to me that it's the opposite of "slipping".

I'd love to know why I'm wrong.

 

[Big Time]

Jobs data…. The same data that was recently debunked by the actual number of new jobs being like 90% less than what was actually reported. This is circular logic

 

[AndrewZ]

That's it, I am selling TSLA to go full Ford.
These guys got it going on.

Ford stock gains after December U.S. sales rise 3.2%, with EV sales more than tripling

Shares of Ford Motor Co. gained 1.0% in premarket trading, after the automaker reported total U.S. December sales that rose 3.2% from a year ago to 179,279...

www.marketwatch.com

You never go full Ford


Also the current jobs situation strongly reminds me of this classic, just a bit less extreme

 

[JupiterMan]

Lol, I wonder what will cause less car sales, high interest or no jobs.

It's the fear of losing a job that is probably the biggest factor - If you are afraid your employer may lay off staff, you put off big purchases, if there are rolling lay offs many people can sit tight for a long time.

Once confidence and job security return, there is often pent up demand and things can rebound pretty quickly.

 

[tslagreen]

So market is unhappy more people did not lose jobs?

Definitely a weird dynamic going on in the economy right now. Every day there is news that big companies are laying off employees (or proposing to) including Meta, Goldman Sachs, Amazon.... In the real estate world, layoffs have started as well. Yet, in the "unskilled" labor market, there is still a shortage or workers - i.e. restaurants, service industries, etc..

 

[Nocturnal]

Definitely a weird dynamic going on in the economy right now. Every day there is news that big companies are laying off employees (or proposing to) including Meta, Goldman Sachs, Amazon.... In the real estate world, layoffs have started as well. Yet, in the "unskilled" labor market, there is still a shortage or workers - i.e. restaurants, service industries, etc..

People couldn't dine out for years, so still a massive pent up demand for that, holiday parties etc. Add on to that the seasonal jobs needed for Christmas sales. Lots of those unskilled workers left the job market too. White collar workers stayed at home in their underwear working during covid, no risk, no hustle.

The FED doesn't seem to care though. Fired from Twitter? Go get a job at Starbucks!

 

[traxila]

So market is unhappy more people did not lose jobs?

https://twitter.com/x/status/1611004646725767168

This is all about the Fed Speak.

You see Fed speakers lined up to speak the next day, short the market on the close the day before until further notice.

Figure we will recover a bit into the afternoon.

 

[elasalle]

Market is usually a joke but right now it is full on, hard, complete farce of a joke.

These numbers are meaningless and can easily be revised in the future to mean nothing or the opposite. The Philly Fed just made a million jobs disappear from Q2 2022 a couple of weeks ago.

Error - 404

www.philadelphiafed.org

The fact that the market would trade on this news is a sign of severe anxiety and mental disability. Market needs a vacation.

More inclined to believe that Fed Speak is the cause of the macro action here. At least this makes sense.

https://twitter.com/x/status/1610993360285622272

How much of the jobs is seasonal for ThanksGiving/Christmas?

Lot's of job cuts in tech sector, like AMZN -18K, salesforce, google etc. I was actually in lookout to make a job move and jobs are drying up a bit ...

 

[traxila]

How much of the jobs is seasonal for ThanksGiving/Christmas?

They claim they correct for that. ’Seasonal adjustments’ and all….

 

[JRP3]

what did you mean by "less damage"?

I assume safer less volatile chemistry was the meaning.

 

[joh01652]

Just bought 60 shares at 109 for my Roth. $6500 max for 2023 if you're under 50, $7500 if you're over 50.

 

[Singuy]

It's the fear of losing a job that is probably the biggest factor - If you are afraid your employer may lay off staff, you put off big purchases, if there are rolling lay offs many people can sit tight for a long time.

Once confidence and job security return, there is often pent up demand and things can rebound pretty quickly.

Fear of being laid off while they keep hiring sounds more and more like a narrative being pushed vs what is happening in reality.

 

[ItsNotAboutTheMoney]

A bunch of patents on LFP expired so anyone can manufacturer them now.
Why LFP batteries are poised to bring down entry-level EV prices

A number of Chinese cell manufacturers will be building new factories in the North America and Europe.

It's notable that the plethora of new, compact crossovers would likely be able to replace their standard-range packs with LFP without loss of capacity, even if they'd add a bit of weight.

 

[scaesare]

That's it, I am selling TSLA to go full Ford.
These guys got it going on.

Ford stock gains after December U.S. sales rise 3.2%, with EV sales more than tripling

Shares of Ford Motor Co. gained 1.0% in premarket trading, after the automaker reported total U.S. December sales that rose 3.2% from a year ago to 179,279...

www.marketwatch.com

 

[Gigapress]

While I wholeheartedly agree with this, there is another dynamic at play here.

A large percentage of the population simply can't afford a $60,000 vehicle. There are a lot of people who would love to buy a Tesla right now that simply cannot.

This is why I think the Gen 3 is so important. There are already huge numbers of people who lust after a Tesla and would buy one in a heartbeat if they were in reach. It opens up a massive wave of buyers.

I agree. The exponential growth within that price segment for 3/Y will taper off eventually and Gen 3 will be a gamechanger. I just think we're not there yet, considering the huge number of people who can afford it but still don't know much about the product.

Tesla's expansion in 2023 and 2024 will mainly be coming from Y and Cybertruck. It didn't necessarily have to be this way. Tesla could have, for example, made Giga Berlin to produce Ys and Giga Texas to produce Gen 3 alongside Cybertruck. The fact that both huge factories are mainly going to build Ys in the next couple years indicates that Tesla expects solid demand for all those extra Ys, and they have better data and understanding on the demand than we outsiders have. Nothing screams "We will be able to sell more Ys at strong margins!" louder than two simultaneous multibillion-dollar investments in building more Ys.

 

[Artful Dodger]

Here's some issues on Wall St. revenue recognition for FSD Beta:

• Tesla started the Full Self-Driving (FSD) beta program in the U.S. in Oct 2020,
• Nine (9) financial Quarters have passed since FSD Beta began (Q42020 - Q42022),
• Wall St. intends to "back-out" the approx $1B in revenue (~$0.30 on EPS) for the milestones now achieved by FSD Beta ('cuz it's one time, doncha kno?)
• Wall St. didn't give Tesla credit for that $1B in revenue because it was "deferred", and now (surprise) they won't recognize it because its "one-time" (WTF?)

Here's a proposal how Tesla can fix this Wall St. deferred valuation problem:

• restate Earnings for the past 4 qtrs (1 yr) to recognize FSD on a pro-rated basis
• important financial metrics used by Wall St. "Twelve-Trailing-Months" (or TTM) revenue and earnings are thereby boosted, perhaps by ~$250M/qtr or about $0.08 EPS,
• this Earnings boost IS NOT a "one-time" event, it will continue in the future as Tesla is able to recognize all FSD purchases as income going forward, and
• this permanent increase in revenue is likely to grow as adoption rates increase organically with future product improvements (higher growth <> higher PE multiple)

Paging @PlaidCPA @The Accountant @st_lopes

 

[Knightshade]

Here's a some issues with Wall St. on revenue recognition for FSD Beta:

• Tesla started the Full Self-Driving (FSD) beta program in October 2020 in the U.S.
• Eight (8) financial Quarters have passed since FSD Beta began (Q42020 - Q42022)
• Wall St. intends to "back-out" the approx $1B in revenue (~$0.30 on EPS) for the milestones now achieved by FSD Beta ('cuz it's one time, ya kno?)
• Wall St. never gave Tesla credit for any of that $1B in revenue because while it was deferred, and now they won't recognize it because its one-time (WTF?)

Here's a proposal for how Tesla can fix this problem with Wall St. deferred valuation:

• restate Earnings for the past 8 qtrs to recognize FSD on a pro-rated basis
• important financial metrics used by Wall St. "Twelve-Trailing-Months" (or TTM) revenue and earnings are all boosted, perhaps by ~$125M/qtr or about $0.04 EPS,
• this Earnings growth IS NOT a "one-time" event, and will continue into the future indefinately as Tesla is able to recognize all FSD purchases as income, and
• this permanent increase in revenue is likely to grow as adoption rates increase organically with future product improvements (higher growth <> higher PE multiple)

Paging @PlaidCPA @The Accountant

....none of this makes any sense.

Tesla recognized SOME of the FSD revenue the whole time- based on delivered features.... (I think the last time Zach commented it was ~60 percent though I expect that's just for the post March 2019 buyers as they're "owed" significant less vs the pre-3/19 ones)

They will recognize more based on delivering more (I'd expect 100% recognition for US/Canada buyers who bought after March 2019 either in Q4 or Q1 '23 for example-- but NOT for pre 3/19 buyers as they still owe them more than they have delivered... ditto for buyers outside those geos on any date as they're also still owed things)

Accounting rules say you literally can't recognize revenue for things you haven't actually delivered- so restating to include backdated recognition when they hadn't delivered is nonsensical.

And it's certainly one-time income because the same people aren't rebuying FSD for the same vehicle over and over again so no idea what you're on about there either. The fact you'll be able to recognize 100% from ENTIRELY NEW sales in the future is a different matter accounting-wise- it's certainly worth considering when making future quarter estimates, but doesn't change the fact recognizing the OLD revenue is a one-time thing for that quarter they do it. Same will happen if/when they get to recognize other deferred rev in other geos (or the pre 3/19 revenue).

FSD -subscriptions- are not one- time of course, but doesn't appear to be what you're talking about.

 

[ByeByeJohnny]

WuWa says GF Shanghai is back in production.

 

[JRP3]

Just bought 60 shares at 109 for my Roth. $6500 max for 2023 if you're under 50, $7500 if you're over 50.

Thanks for the reminder, just bought 50 myself.

 

[UncaNed]

Just bought 60 shares at 109 for my Roth. $6500 max for 2023 if you're under 50, $7500 if you're over 50.

Roth IRA's* (a U.S. thing) are GREAT! I'm converting my sad little Traditional IRA to tax-free Roth, now that the account value's down so the tax I pay will be minimal-to-nothing on the transition so I can keep buying more TSLA on the dip.

Mods- Some of the posts here involving taxes have been invaluable (i.e. "tax harvesting") in a very real way for myself and some investor friends of mine, even if they are region-specific; (I certainly don't mind the few Euro-specific posts, for example), I'd like it if you'd allow a little more of that sort of thing.

Also - blessed are the MODS! Thank you all for keeping things under control, making the hard decisions for better or worse.

*IRA means Individual Retirement Account in the U.S.
U.S. means United States (of America)
TSLA means Tesla stock
There. That should clear a things up.