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

[mongo]

CPI Report is out Consumer Price Index Summary - 2023 M02 Results

CONSUMER PRICE INDEX - FEBRUARY 2023

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in February on a seasonally
adjusted basis, after increasing 0.5 percent in January, the U.S. Bureau of Labor Statistics reported
today. Over the last 12 months, the all items index increased 6.0 percent before seasonal adjustment.

The index for shelter was the largest contributor to the monthly all items increase, accounting for over
70 percent of the increase, with the indexes for food, recreation, and household furnishings and
operations also contributing. The food index increased 0.4 percent over the month with the food at home
index rising 0.3 percent. The energy index decreased 0.6 percent over the month as the natural gas and
fuel oil indexes both declined.

The index for all items less food and energy rose 0.5 percent in February, after rising 0.4 percent in
January. Categories which increased in February include shelter, recreation, household furnishings and
operations, and airline fares. The index for used cars and trucks and the index for medical care were
among those that decreased over the month.

The all items index increased 6.0 percent for the 12 months ending February; this was the smallest
12-month increase since the period ending September 2021. The all items less food and energy index rose
5.5 percent over the last 12 months, its smallest 12-month increase since December 2021. The energy
index increased 5.2 percent for the 12 months ending February, and the food index increased 9.5 percent
over the last year.

 

[scaesare]

Yes, it was. For some reason some mod decided that due to mentioning the bird company my post had to be deleted, regardless of relevance. But it's all there in that response, so I won't repost.

That's weird, didn't see anything in your reply that looked obejectionable...

In any case, the possibility that Tesla could have gone bankrupt around that time was exactly zero, because they could have raised lots of money easily. Elon would just possibly have had to give up some control.

So I go back to my original response: Well, there's a difference between "we were this close to running out of money" and being unable to raise money, right?

 

[Singuy]

Lol, I'm not fond of saying other car companies make their own cars. They do not, maybe their own emgines, and final assembly of parts they bought from Tier 1, 2, and 3 suppliers (to whom they forego profit). And then they sell to Dealers (who eat more profits), not end customers. Established Car companies are Banks that make cars, and sell replacement parts for obsolete cars. And those Banks are under duress right now. No fondess at all for this comparison.

Telsa on the other hand makes most of its own parts, all of its own software, and does no catalog engineering. If they do buy from 3rd parties, they have their own Tesla engineers embedded at the companies to ensure product compliance to Tesla's demanding specs.

Oh, and the Energy business (which no car maker has). And AI robots and Supercomputers. And sometime in the future, a ride-hailing network with driverless cars.

I'm a fan of all that.

Correct. As Tesla extracts more profits, they are becoming more and more of what a car company should have been while the rest becomes more and more bank like vs innovating them out of lower and lower margins. It's crazy to think of a sector being so capex intensive making such little return on their investments. With rates at 6%, it literally starts to beat out car companies in profit if one were to park their money in a CD vs making 4% operating profits...

 

[Artful Dodger]

CPI Report is out Consumer Price Index Summary - 2023 M02 Results

As the warrior/poet Ricky Martin would say: "SHE BANGS".



EDIT to add: U.S. Banks are tops of the Leader Board this morning

Components of the S&P 500​

#	Company	Symbol	Weight	Price	Chg	% Chg
486	First Republic Bank	FRC	0.017604	46.47	15.26	(+48.89%)
494	Zions Bancorporation N.A.	ZION	0.013955	36.45	6.48	(21.62%)
438	KeyCorp	KEY	0.03244	13.18	1.80	(15.82%)
96	Charles Schwab Corp	SCHW	0.244754	59.55	7.64	(14.72%)
326	Fifth Third Bancorp	FITB	0.055845	29.29	3.04	(11.58%)
167	Truist Financial Corporation	TFC	0.132563	35.50	3.26	(10.11%)
363	Huntington Bancshares Incorporated	HBAN	0.049267	12.21	1.09	(9.80%)
370	Citizens Financial Group Inc.	CFG	0.046556	33.39	2.74	(8.94%)
137	U.S. Bancorp	USB	0.152552	39.50	2.96	(8.10%)
503	Signature Bank	SBNY	0	69.62	5.02	(7.77%)

 

[Drax7]

Correct. As Tesla extracts more profits, they are becoming more and more of what a car company should have been while the rest becomes more and more bank like vs innovating them out of lower and lower margins. It's crazy to think of a sector being so capex intensive making such little return on their investments. With rates at 6%, it literally starts to beat out car companies in profit if one were to park their money in a CD vs making 4% operating profits...

CDs, lending money to a bank in this environment , I would not.
T bills would be preferable and way safer than legacy auto.

 

[scaesare]

For the sake of full disclosure, there are still a few notable exceptions to the above.

Brakes - they are full Brembo setups. Nothing special about them that indicates any Tesla Engineering is involved.
Airbags - they are sourced from traditional suppliers (Takada, etc.)

I don't see these two changing anytime soon.

The brake situation might be.

There's been some informed speculation that the CT may introduce electric, rather than boosted-hydraulic, braking. It just so happens that Brembo has such a system under development, and their test mule for it happens to be a Tesla Model 3. Given the relationship between the two companies, and the project being in the "electrical domain", I suspect there may be some cooperative engineering going on.

There's a decent discussion on this by one of the Tesla commentary youtube guys... found it, was Connecting the Dots: Cybertruck Diamond Steering. He says the braking system was at least broached by Tesla to Brembo.. suspect Tesla is at least providing input if not more than that...

 

[MP3Mike]

It's in Tesla's best interest to be open with these numbers - though it looks like they haven't posted fire data since 2021.

No, that is 2021 data that they released in 2022. They only update fire data once a year. The 2022 data will be released sometime this year.

in July 2019 we began voluntarily releasing annually updated data about vehicle fires as well.

Tesla is probably waiting for the National Fire Protection Association (NFPA) and U.S. Department of Transportation data for fires in 2022.

 

[bkp_duke]

Tesla switches from Brembo to Mando for rear brake calipers on Model Y Performance - Drive Tesla (2022-08-16)

"This isn’t the first time Mando has supplied brake calipers to Tesla as the rear brakes on both the Model S and Model X are equipped with Mando calipers."​

Interesting, but that still reinforces my main point: Tesla doesn't build their own brakes.

 

[mongo]

No, that is 2021 data that they released in 2022. They only update fire data once a year. The 2022 data will be released sometime this year.



Tesla is probably waiting for the National Fire Protection Association (NFPA) and U.S. Department of Transportation data for fires in 2022.

Indeed.
2021 data was released in May 9, 2022.
2020's release was April 18, 2021. (+0/-1 day)

 

[MP3Mike]

Brakes - they are full Brembo setups. Nothing special about them that indicates any Tesla Engineering is involved.

I seem to recall a story about how Tesla worked very hard on the caliper boot to help make sure the pads retracted to lower drag. So, while they didn't design the whole caliper, they worked with Brembo to customize them.

 

[scaesare]

No. He said bankruptcy within a few weeks, which was pure hyperbole. In any case, there was never any question that they would figure out something, just how long it would take. Would it be in time to avoid running out of money? Obviously not.

This whole sub-discussion came up because I wrote that Elon has demonstrated that he's not to be trusted when talking about his companies' finances. I'd say it's obvious at this point, with many tweets and such in evidence.

But I am inclined to trust what he says on earnings calls, as he's much more aware of a higher standard of accountability at those times.

Meh, if it was a situation that, if left uncorrected in a few weeks, would have either caused bankruptcy at that time, or led to needing to raise money to avoid bankruptcy in the near future, it's splitting hairs a bit. Either way it was a dire situation that needed corrective action immediately.

Much like Elon often discusses current "run rate" as opposed to "total production". He can say Tesla is on track to "make 1 million cars", when that's the # they'll make going forward at the current rate, however they'll only produce 900K at the end of the current year. You may call it disingenuous, whereas I feel it's a matter of Elon focusing forward on maturing capability, not looking back at where they were.

Does it require careful listening? Yes. Have there been mistakes or lack of specificity? Sure. But it certainly doesn't meet the bar of "Elon has demonstrated that he's not to be trusted when talking about his companies' finances.". If anything, Elon has more understanding of the financial status of his companies and implications of strategy than most CEO's, and he's certainly more brutally honest.

I, for one, would much rather have the unvarnished truth (off the cuff stilted delivery and all) than some polished mareketingdroid-speak.

 

[Artful Dodger]

Interesting, but that still reinforces my main point: Tesla doesn't build their own brakes.

Haha, not yet! Tires might be a better main point, but I think Robotaxi may even bring something on that too...

Cheers!

 

[unk45]

CDs, lending money to a bank in this environment , I would not.
T bills would be preferable and way safer than legacy auto.

Factually, FDIC, US Treausury, et al end out covering all depositors in insured banks, regardless. Last week people argued otherwise. The depositors still were 100% covered even now. Your argument assumes othErnie’s. Still, there are good Treasury options, including inflation adjusted ones. Safe choices abound.

Despite my oft repeated objection to retail investors dealing in options there are exceptions. Since early February short sellers of SVB among others, have had handsome returns. Such do require poring over excruciatingly boring financial reports.

Even US Treasuries require careful analysis. They come in bewildering variety. Then there are those that have 100% US Federal guarantee that have higher yields than do generic Treasuries. No investment, including Treasuries really is prudent without careful evaluation and regular monitoring.

Just as we know with TSLA there is no substitute for careful study and review.

In classical acronym: TANSTAAFL

 

[Drax7]

Factually, FDIC, US Treausury, et al end out covering all depositors in insured banks, regardless. Last week people argued otherwise. The depositors still were 100% covered even now. Your argument assumes othErnie’s. Still, there are good Treasury options, including inflation adjusted ones. Safe choices abound.

Despite my oft repeated objection to retail investors dealing in options there are exceptions. Since early February short sellers of SVB among others, have had handsome returns. Such do require poring over excruciatingly boring financial reports.

Even US Treasuries require careful analysis. They come in bewildering variety. Then there are those that have 100% US Federal guarantee that have higher yields than do generic Treasuries. No investment, including Treasuries really is prudent without careful evaluation and regular monitoring.

Just as we know with TSLA there is no substitute for careful study and review.

In classical acronym: TANSTAAFL

CDs require even more scrutiny.

 

[jerry33]

Haha, not yet! Tires might be a better main point, but I think Robotaxi may even bring something on that too...

Cheers!

I believe Tesla had input on the lined tires, so same as brakes.

 

[Cosmacelf]

you may have ignored that Elon also knows that that bankruptcy happens when liquidity dries up. Tesla, in his estimation at the time, faced that risk. Not hyperbole. If Tesla lost the faith of suppliers and financiers at that time, they would have failed. You think that was wrong.?
I do think that was a factual statement. Just because it did not happen does not invalidate the risk.

Quite right, for a recent example, look at, oh, SVB! They had a $2B hole in their balance sheet which they attempted to plug via an equity offering last week. They waited just a tad too long. By the time they put the offering out, no one wanted to buy it and the offering failed. That’s what started the bank run.

Would even we here on this forum have bought stock when the disclosure would have been “we have no path to profitability and our suppliers don’t want to sell to us”. As I keep harping, until they solved production, they didn’t have a viable business. The stock price was only not zero because of the hope that Elon would solve production. It wasn’t a given.

 

[FreqFlyer]

https://twitter.com/x/status/1634599443163914240

We need this color in the US ASAP! Maybe waiting on refresh, but man that is pretty.

 

[FEERSUMENDJIN]

Interesting, but that still reinforces my main point: Tesla doesn't build their own brakes.

But they have been working closely with Brembo on brake by wire, which all over hydraulic brakes in testing. Cannot wait to see them on CT !

 

[dl003]

New banking standards for small banks coming in 3...2...1...

SVB f**ked up by buying long term bonds with short term deposits. What did they expect to happen? You don't buy long term assets that can't easily be liquidated with short term deposits, unless you want to go insolvent when people start withdrawing.

But thats the mess the Fed left by keep interest too low for too long. It lead banks to chase yield wherever they could because how else would they keep the light on? People need to stop talking about SVB as if it's a fraud. If it was collapsing on some crypto, SPAC stocks or the good old MBS, I would say **** it. But this is US treasury. If depositors are told you're short of luck and SVB portfolio goes on a fire sale, guess how future auctions of treasuries is going to go? Bank runs are nice, but have you seen a bank run on the US government?

 

[bkp_duke]

But they have been working closely with Brembo on brake by wire, which shits all over hydraulic brakes in testing. Cannot wait to see them on CT !

Yes, we all know that, but that brake by wire will not be exclusive to Tesla. Tesla may be the proving ground, and have it for a few years (i.e. other OEMs let Tesla be the guinea pig), but the tech is Brembo tech, they can sell it to any other OEMs. It's not vertical integration.