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

[mongo]

The China demand situation is wrecking the stock. Other
EVs are not experiencing a demand slowdown in China
this December, actually they are growing sales aggressively.

Any thoughts why this unexpected drop?

Thoughts? I have many, but they are probably incorrect so I'll try to reframe the question instead:

Data: Lower sales numbers in China
Narrative 1: Demand slowdown
Data: Stock is lower
Narrative 2: It's due to narrative 1
Data: Other EVs are up more over time period X
Narrative 3: Other EVs are not experiencing a demand slowdown

Influences:
Tesla splits production between China and exports. This makes it lumpy.
Tesla production is tied to its supply base which is also experiencing external headwinds.

Comparison: BYD
BYD has five manufacturing facilities spread across the country plus a parts plant. More resilience versus local issues, shorter transit times, mor part inventory on hand.
BYD exported 22k cars as of November. Higher percentage sakes in China, less vehicles in transit.
BYD has a larger spread of models. Gives advantage in addressable market, but clouds growth in same segment sales.

 

[thx1139]

2022 Sales for PHEVs included in IRA
Jeep Wrangler 4xe 46,176
Pacifica PHEV Minivan 14,392
Grand Cherokee 4xe 5,813
Audi Q5 TFSI e Quattro (PHEV) - Couldnt find any sales numbers for this car. Audi total BEV sales 16,177
BMW X5 xDrive45e - Cant find any break down of BMW sales
Ford Escape PHEV - Can only find sales for all Escapes and that was 128K.
Volvo S60 (PHEV) - Volvo plug ins sold 9,216.

 

[phantasms]

Ryan Reynolds is a neighbor and I just saw him get out of a Lucid. He used to have a Plaid Model S. That should be the last of the bad news so the bottom is in. Time to buy!

 

[betstarship]

Ryan Reynolds is a neighbor and I just saw him get out of a Lucid. He used to have a Plaid Model S. That should be the last of the bad news so the bottom is in. Time to buy!

View attachment 892635

...Ryan Reynolds is a neighbor?! Who the heck are you?!

Also, are you sure he replaced his Model S or just added a new EV these holidays?

 

[StealthP3D]

I stay out of the debate over energy storage, as I am not conversant about it.

But I wonder how many of the companies who got the chips to make their storage products also made over a million cars?

Good point. Tesla has said limited chip supply caused a conscious decision to ramp cars over storage. It's a near certainty no other stationary storage provider had the option of increasing car production or stationary storage. And

I like the fact you don't pretend to have inside Industry knowledge and expertise that gives you special insight into the future evolution of the market for stationary storage and who will ramp production most efficiently and at scale. I'm sure it's too soon in this nascent market to be calling the winners when we are at far less than 1% of the needed storage already installed. Using the same logic as those who claim Tesla has already missed out on this potentially lucrative market we should have expected- that the Nissan Leaf would have prevented Tesla from success in electric cars.

I think the scale that battery energy storage will likely reach in the next two decades is wildly under-estimated by some who are claiming inside insights into the market based on reasoning that is tenuous, at best. I will not write off the energy storage business unless Tesla management does.

 

[CHGolferJim]

What do we know about how long retirement plan buying lasts? Is it mostly confined to first half of January, or does it taper over months?

 

[Curt Renz]

Man who drove Tesla off cliff with family inside charged with attempted murder​

NBC - last night:

 

[jw934]

SCMP reported a source as saying China EV sale may fall in Q1 by 40% over Q4.

Business / China Business

Chinese electric car sales may fall by 600,000 units in the first-quarter as Covid-19 infections dent appetite for spending​

• EV makers will deliver 1.5 million vehicles in the first quarter as the pandemic strains supply chains and the labour force, says China International Capital
• That would represent a 40 per cent decline from the fourth quarter of 2022, when sales may top 2.1 million vehicles

The country’s 200 or so electric-car makers, from Tesla to General Motors’ venture with SAIC Motor and Wuling Motors, are expected to deliver a total of 1.5 million vehicles to customers between January and March as the pandemic strains supply chains and dents the labour force, according to a report by China International Capital Corporation (CICC) analyst Deng Xue on Tuesday.
The projected figure would represent a 40 per cent decline from the fourth quarter of 2022, when sales may top 2.1 million vehicles.
"

source: SCMP From Dec 28, 2022

- - - - - - - - - - - -
[EDIT]
Main causes, IMO: COVID in Jan/Feb, and phasing out of some Chinese government EV subsidies as of Dec 31 causing some sales to be carried backward from 23Q1 to 22Q4. EV buyers will still be exempt from a 5% purchase tax in 2023, the central government said in August.

But for all of 2023, sale should be up over 2022:
"
According to the China Passenger Car Association (CPCA), the mainland’s 200 or so electric-car makers are expected to deliver a total of 8.4 million vehicles in 2023, up about 30 per cent from [2022]’s 6.4 million units.
"
Source: SCMP Jan 2, 2023

 

[generalenthu]

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.

Will those be eligible for incentives though? The bill language requires them to be US entities. I suppose they are still US entities, even as they are Chinese owned.

 

[15Peter20]

Man who drove Tesla off cliff with family inside charged with attempted murder​

NBC - last night:

Surely it can only be attempted injury if you're in a Tesla.

 

[M|S|M MYP]

Auntie Cathie or Uncle Leo?

 

[jerry33]

BYD..(as one factor)..

BYD beats Tesla in 2022 EV sales, vindicating Warren Buffett’s bet

The lay-offs in China’s technology industry and the pandemic-ravaged economy are pushing buyers down market towards cheaper, locally made EVs, instead of imported models or foreign brands like Tesla.

www.scmp.com

China has much more EV competition (and competition that has readily available inventory) than the USA

Hardly vindicating. The important point is who gets the profits. Many, but not all, BYDs are very small cheap cars. And BYD also sells PHEV, which also count as "electric". Also there is plenty of room for both BYD and Tesla, it's not as if a sale by BYD equals one less sale for Tesla.

 

[petit_bateau]

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.

If you go back to my posts on this in the last couple of days you'll find my personal view as being that in the utility market (rephrased):
- Tesla mostly winning in USA;
- China winning entirely in China;
- scaredy-cat "won't buy China" customers elsewhere mostly buying Tesla (if "you never got sacked for buying IBM" fear is great enough), or buying China LFP assembled by Western integrators (if price a concern);
- China winning much (but not all) of the rest.

If you go back a year or two (I cannot recall which) in my end-year battery numbers I pointed out that at the time Tesla was winning some phenomenal number (I forget exactly what, something like 80%) of the utility market. Given the above that has clearly changed very markedly. An example is the 1.2 GW of completed utility storage in just the last few days in China alone. The implication is that in market % terms Tesla has lost ground, even if in absolute terms it has increased utility scale output.

That other product is also coming out of factories. A factory to build utility scale containers and stuff them with LFP is not exactly a high tech factory. Sheesh, even I had such a factory back in the day making containerised storage/etc. The hardest bit is getting a good supply of LFP going in the door, which these folks all clearly have.

(I struggle to understand what is going on in the New York factory such that Lathrop is necessary)

 

[Drumheller]

Auntie Cathie or Uncle Leo?

View attachment 892642

Tesla buyback?
Institution buying?

 

[generalenthu]

Auntie Cathie or Uncle Leo?

View attachment 892642

The options screens are also showing some weird activity. Looks more like someone traded big and the deltas were bought in some dark pool.

 

[Cosmacelf]

TSLA seems to be showing relative strength to the S&P and Nasdaq in the last hour or two.

 

[StealthP3D]

However, I do welcome good analysis, also when it is critical on Tesla.
Such information is in our own investment interest.
It will get incoming fire from many here, which is good and from there we can all choose our own point of view.

You state the obvious, good analysis is valuable regardless of whether it is favorable to Tesla or not.

But it's also apparent that some people set a much lower bar when it comes to what is considered good analysis. I am not easily swayed by an authoritative sounding presentation if the actual substance is wanting, i.e., the stated conclusions do not reasonably follow from the presented facts.

 

[petit_bateau]

I stay out of the debate over energy storage, as I am not conversant about it.

But I wonder how many of the companies who got the chips to make their storage products also made over a million cars?

I've not done the numbers for 2022 yet, but in the previous year BYD didn't do badly in the EV car numbers. AND ALSO BYD produced 32 GWh of cells, which was probably 32 GWh more than Tesla that year ! Plus BYD got all the chips it needed to go along with all of this. So I wouldn't be too sniffy about the capabilities of at least BYD .

 

[Sofie]

Tesla buyback?
Institution buying?

Would a buyback look like that though?

 

[Rarity]

You state the obvious, good analysis is valuable regardless of whether it is favorable to Tesla or not.

But it's also apparent that some people set a much lower bar when it comes to what is considered good analysis. I am not easily swayed by an authoritative sounding presentation if the actual substance is wanting, i.e., the stated conclusions do not reasonably follow from the presented facts.

I'm just happy to see some dialogue in this thread about long-term issues that may actually matter. Lately, in this thread, it has been thin gruel for us "real" investors.