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

[GhostSkater]

No you don't because that causes undesirable side reactions which cause electrode plating. Again, this has been covered. Also Tesla themselves does not show faster charging speeds on their own presentations of the 4680.

Obviously they don’t

Imagine if they public told 4680 vehicle will charge faster with the limited supply of 4680s they have

And I suggest you take a good look on both papers again

They go in depth into lithium plating and that it will still be avoided with faster charging times due to the tables electrode

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[Hiline]

Good summary.
Camp 1 and 3 argue, but nobody changes their opinion.

The point of intellectual discussion isn't in changing others' opinion, it's in helping you form a more well-educated opinion. I started out believing in the 'product sells itself' argument, but after seeing the drastic price cuts in January, I switched to Camp 3 - I might have been one of the first to raise the opinion in this thread. I don't think Tesla needs to expand the TAM (Total Addressable Market); I think they need to touch and inform their already vast TAM.

I've also seen a lot more posts in favor of advertising so far this month. Maybe my arguments swayed them, or maybe the hit to the ASP convinced them, I don't know. I suspect many silent others will also be turning this side after another quarterly earnings report - if Tesla doesn't start advertising by then, the numbers are going to be ugly.

 

[Krugerrand]

Don't take it personally. Most people aren't interested in an intellectual discussion anyway. The bias towards contemporary positivity in this thread is very strong. Only a few people keep a cool head and try to stay in the middle.

There are 3 camps when it comes to the topic of advertising:

Camp 1: Never ads. People who believe Tesla should never advertise
Camp 2: Whatever Tesla does. People who believe in anything Tesla does at any given point; if Tesla is not advertising today, Tesla should not be advertising today, but if Tesla advertises tomorrow, then Tesla surely should be advertising tomorrow. They don't have, or don't share, independent thoughts
Camp 3: Try ads. People who believe Tesla should try, or probably will soon try, advertising and learn from the experience

I ignore anything coming out of Camp 2. For the sake of intellectual discourse and for my own learning, I'd like to hear arguments from people who actually have an argument to make. 'Have you ever started or run a billion-dollar company' does not count as an argument.

BS. Start by bringing something new and fresh to discussion. Advertising has been discussed to death for YEARS.

Supporting Tesla in their business decisions isn’t about not having an independent thought; it’s about having recognized that Tesla actually knows what it’s doing. You didn’t grow the business, the employees of Tesla grew it. (Shoutout of course to everyone who’s been a salesperson for Tesla) You want to help, you think you know more, then go apply for a job, convince upper management you know better, dazzle them with your intellect, and show everyone. Talk is cheap. Go do.

How convenient of you to have forgotten Elon said years ago that Tesla would likely get to a point when they would need to advertise. Like your thoughts on the matter are unique or independent. Such hubris from so many.

 

[InTheMiddle]

I know your issue; you want to travel to places that people congregate; I like to travel where nobody wants to be.

Thank you for sharing your experiences. Hopefully some of these destinations will think it’s worthwhile to add more L2 charging. I know I’d not hesitant to tell a hotel manager that my future business depends on being able to fuel my car and that I’d absolutely be ok paying a reasonable fee. On the other hand, it’s not practical to have a parking lot full of chargers - or is it? How about a solar canapy over parking and chargers?

I look forward to the only practical decision for a hotel to be putting a charger in all stalls, and in the southwest everyone one of those stalls should definitely be shaded by solar panels (virtually all parking lots in my school district now have solar panels, purely because it makes $ for the district for them to do so).

As for places where few want to be (not quite your nobody ), one of my first road trips in my Model X years ago was to a remote home rental (AirBnB or VBRO, don't recall which), and at the time there was no Supercharger near enough to it for me to charge at the nearest SC and round-trip to the rental house and back. After a few calls to the owner I was able to persuade him to have an electrician install an outdoor NEMA 14-50 plug before I arrived, so I could charge, and I would forward him the $ to fully cover the cost. It was 100% worth it.

 

[Olle]

This weekend I went to my local barber, a self-identified "petrol head". Likes loud engines and motorcycles because they go vroom.

He doesn't know I drive a Tesla (I don't share too much when I can avoid it), and we got talking about the topic of the transition to BEV's.

His opinion was that the transition will "never happen". I asked why he thought so and the reply was "the purchase price of BEV's is not coming down like they intended to, and will never come down enough." (reason: can't scale batteries, rare materials etc etc)

I don't argue against a blank wall so I didn't explain Tesla's next generation platform to him. I will do so in a few years when they are actually driving around and are available for purchase.

Some people cannot extrapolate at all. They are truly fixed upon what exists now and how things happen now. These are the same people that thought personal computers would never find their way into everybody's homes, that mobile phones were forever a toy for the rich, and that smartphones were useless because of touchscreen and because everyone has internet on their PC at home.

Just wanted to share this observation since on TMC we generally overestimate the knowledge of the general public regarding BEV's/the transition/the collapse of ICE sales/ etcetera.

As long as BEV's don't make up for 50% of new car sales, a large group of people will not accept the fact that we will in fact transition to BEV's, never to return. With gasoline versus diesel versus liquid natural gas there has been a push/pull transition in the last few decades depending on what fuel is cheaper in certain countries/states and the resale value this brings to said vehicles. Only in the last five years has the value of diesel cars truly plummetted since now gasoline is seen as "better for the environment" than diesel.

Don't forget this when making investing decisions. To most people Tesla is merely a blip on the radar right now. A small company with novelty cars they don't want because "never heard of them".

This will change rapidly but we're not as close as many here think we are.

So even if we leave FSD out of the picture, the Tesla brand still has lots of room to grow. Again I'm imagining the next generation platform to be the biggest driver in getting Tesla from being seen as a "niche" car maker to an established car maker (in the eyes of the masses), like how right now Toyota or Volkswagen is perceived.

I stay very bullish.

P.S.: even though FSD timelines are polarizing, the above is applicable to FSD also. Most people cannot extrapolate: "FSD is terrible now, so will never work." Only when FSD is recognized/allowed by some state government will these people start considering full autonomy exists and can possibly play a role in their daily lives. Looking at the (r)evolution of the internet since the 1990's until now, a mere thirty years, I cannot with a straight face support the claims that FSD is something that will (only) happen in the far future (+10years away).

My personal FSD timeline is it will be achieved within three years from now. (December 2025) Seems a long time compared to Elons predictions but in the grand scheme of things that is nothing.
Who will achieve autonomy first? "Oh Tesla's going to win level 5." - George Hotz. Jim Keller seems to agree.

And I'm equally optimistic regarding Optimus. Possibly even more so. This company can change the world. (and already has, actually)

TL;DR: #bullish

It may not be just his fault, the polarization of the media, especially social media, creates an ever more skewed cognition for most people who aren't super mindful of information sourcing and context.

For those who skip the media and absorb non processed, first hand information, this creates increasingly better investment opportunities, because you are in a minority who has a relatively true image of the world.

 

[replicant]

Supporting Tesla in their business decisions isn’t about not having an independent thought; it’s about having recognized that Tesla actually knows what it’s doing.

One can recognize what Tesla has done greatly and is doing perfectly well, and still think they could do better. I consider myself a supporter of the company because I support the mission (far more than I support management).

Also, I don't work at Tesla but regularly go talk to people who work in sales at Tesla. I don't know who you know at Tesla, but from my experience, they don't (all) blindly follow management, are open to discussion and some read TMC threads (they prefer to keep their opinions to themselves of course). The one I meet like to discuss and hear different point of views, fortunately.

 

[Artful Dodger]

My guess is the Silverado and maybe the Blazer is it.

My guess is that GM's Board of Director's read A.J.'s note about Tesla doing Detroit a "favor". I expect them to 'whistle past the graveyard' when in fact they're marching headlong toward it.

 

[JRP3]

Obviously they don’t

Imagine if they public told 4680 vehicle will charge faster with the limited supply of 4680s they have

And I suggest you take a good look on both papers again

They go in depth into lithium plating and that it will still be avoided with faster charging times due to the tables electrode

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Investor Engineering Discussions

While there may be less friction loss (none between the gears, but still whatever they rotate on, unless also magneticly supported) with magnetic gears, somehow I doubt there's a total absence of energy loss. Remember kids: 1) There is a game 2) You can't win 3) You can't break even 4) You...

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[adiggs]

Actually, the latest release mostly fixes that. But I agree with the sentiment. Btw, I now hover my foot near the accelerator and give it a nudge when appropriate when using urban FSD.

I've decided that kind of input is like 1 additional sensor (me), and input from that sensor about whether its clear to proceed in these stop sign / intersection turn situations.

I too hover my foot on the accelerator in those situations. The only time I just sit back and let it do its thing, in its own time, is when there I have nobody behind me or oncoming. The software is amazing, and I see it getting better with every release. Unlike stay-in-your-lane, don't-hit-the-person in front of me, it is not yet a tool that I rely on. The highway driving also wasn't a tool when I first started using it 7 years ago - today it is a tool, and I depend on it to make me an even safer driver. I look forward to the day that urban FSD is equally good.

 

[Krugerrand]

One can recognize what Tesla has done greatly and is doing perfectly well, and still think they could do better. I consider myself a supporter of the company because I support the mission (far more than I support management).

Also, I don't work at Tesla but regularly go talk to people who work in sales at Tesla. I don't know who you know at Tesla, but from my experience, they don't (all) blindly follow management, are open to discussion and some read TMC threads (they prefer to keep their opinions to themselves of course). The one I meet like to discuss and hear different point of views, fortunately.

I didn’t actually say otherwise.

 

[Artful Dodger]

There is a massive thread on 3/Y degradation. It's pretty common to see 8-10% drop in the first 18 months on those cars, and then it levels out to 0.5-1% per year after that.

Data point: -1.59 % after 11 mths after 11.5K km with my Model Y LR. Has only been SuperCharged 5 times (1,500km on 1st day I ownedit). All L2/L3 (7/50 KW) since. Garaged.

TL;dr My impression is that infrequent Supercharging contributes to flatter curve.

 

[Hock1]

Buyback is clearly the wrong thing to do in this macro environment. What would really kill the shorts is a fifty cent dividend. Shorts would have to pay that.

As I have mentioned on several occasions, what would REALLY kill the shorts would be the spinoff of a portion of the Company. For example, I think spinning off the charging network would do the trick. ( the shorts having to pay a cash dividend is not a big deal. If they have to come up with a new, different security----now, that would be a problem). In time, perhaps the BESS portion of the Company. In the long run, with all the technologies and industries Tesla will be developing and mastering, the Thermo Electron approach may be the way to go ( i.e., spinning off multiple companies.)

 

[ZeApelido]

How Expensive is it to Buy a Tesla Now vs Pre-Covid?

January 2020

Tesla AWD Model Y List Price: $52000

Interest Rates: ~ 3.5%

Monthly Payment ($10k down): $764

April 2023

Tesla AWD Model Y List Price: $50000

Interest Rates: ~ 6.5%

Monthly Payment ($10k down): $782


Ignoring other factors for now, Tesla's most sold car is still more expensive than it was over 3 years ago.


Other factors:

Supply / Demand Curves: All else equal, as volume increases, prices needed to sustain demand should decrease. Tesla has increased production rate by a factor of 4 in 3 years, yet the affordability of the car has not gone down.

Wage Inflation: Average wages were up ~4%,4%, and 6% the last 3 years. Assuming white collar jobs matched these, raw purchasing power should have went up ~ 15% and so higher monthly payments should be tolerated.

Total Inflation: However total inflation has been even higher the past 2 years, while lower in 2020. Inflation obviously increases costs of other expenses reducing purchasing power for cars. I'd say this washes out wage inflation for now.

Summary

The economic factors presented to Tesla in 2023 should mean that prices should even be lower than they currently are. Monthly payments are actually higher than 3 years ago while supporting a much larger base of potential customers.

Costs also inflated but should see some alleviation later this year, unfortunately those lag price cuts.

Price cuts effect on demand are not instantaneous, we may not see most effects until later this year.

Thus, this is the worst period of time for financials. Prices may need to be cut again. Q1 or Q2 should be the worst of it. Peak FUD is now through rest of Q2 and probably Q3.

Conclusion

Tesla does not have a demand problem, in fact, I would argue it is up. (I am surprised by this finding)

Tesla does not have an advertising problem.

Tesla has a "the economy sucks and there's nothing we can do about it but be patient" problem.

Investors need to suck it up and be patient too.

 

[AndrewZ]

Fact #1 - Elon said YEARS ago that someday Tesla would likely need to advertise. Yes, he did. Surprise. Your idea isn’t new.
Fact #2 - Elon said that that advertising was likely not to be considered conventional by definition.
Fact #3 - Not a single person here has a clue when that ‘should’ happen, unless Andrew you work at Tesla and you’ve been in on upper management meetings.
Fact #4 - If only everyone were half as clever as they think, the human race wouldn’t be in this self created mess we find ourselves.

Will this advertising cost some amount of conventional currency and likely positively impact to sales? Then it seems worth using our knowledge/experience to ponder where things might be headed, which I think adds a lot more value than spending time discussing daily stock price movements that may or may not have anything to do with reality or the underlying business and that are pretty much guaranteed to change the next day and the next day after that.

 

[Motor Mouth]

So is it more important for Tesla to surprise WS to goose the SP or simply to keep their heads down as they have over the last decade plus and drive the mission?

It seems for many people here it’s all a out the SP regardless of their refutations, otherwise they’d remember what was said on the ER just last week. Let me paraphrase for like the third time:

Tesla will continue to lower vehicle pricing and accept lower gross margins to drive the mission forward as fast as they can. Unless there’s a force majeure

I guess you missed 2 important points. 1. I mentioned that buybacks aren't my idea of a good thing, but 2. Tesla already said they were considering doing them. So, not really my choice, but if they do it I think the impact - at least WS perception - will be positive. Your quote is undisputed, but also marginally irrelevant to my point. I get that you may be against a buyback, but at that point you're arguing with Tesla, not me.

 

[Artful Dodger]

So, if or when the buybacks start, it could really reverse the relentlessly negative press.

Can we at least wait until JPow is done with the rate hikes? Tesla might *need* that cash. FI, they could backstop auto loans to offset the drag on sales due to higher Int. rates.

 

[2daMoon]

It pretty baffling to me how some can think there isn’t an educational/information issue around EV’s and Tesla’s in particular with the general mass population when you see inventory still rising as the base 3/Y starting prices are below the ASP of their ICE counterparts now. Yes I know production is still scaling rapidly. Still shouldn’t see inventory climbing like this given the price levels the entry 3/Y’s are currently at

There’s an issue. It’s easily fixable if Tesla would get it’s head out of the sand. There’s middle ground to be had where advertising can be informative and educational and not be wasteful and reach the % of the population that isn’t on Twitter, involved in tech, or renewable energy. Oh well

(I embrace all the forthcoming disagrees lol)

I think you give the "general mass population" too much credit for being able to recognize something that offers enough value to get them to give it adequate thought. (you can lead a horse to water...)

Probably cheaper and easier, and more effective just to give every member of the extended Kardashian family a Tesla and let them do the rest on social media.

 

[Rotte]

https://twitter.com/x/status/1650953467534659584

Looks like they beat estimates, I wonder what WS thinks?
Up 6%! Hope they bodes well for tomorrow.

 

[bkp_duke]

Data point: -1.59 % after 11 mths after 11.5K km with my Model Y LR. Has only been SuperCharged 5 times (1,500km on 1st day I ownedit). All L2/L3 (7/50 KW) since. Garaged.

TL;dr My impression is that infrequent Supercharging contributes to flatter curve.

It does, but the average is what I stated previously. I'm hoping the 4680s hold up better on degradation curve.

 

[Ogre]

Tesla AWD Model Y List Price: $50000

Interest Rates: ~ 6.5%

Monthly Payment ($10k down): $782

Excellent post!!

One interesting side-effect of the way IRA was structured is until Jan 2024, payments are unaffected by the tax rebate. Unless people have $7,500 they can lend themselves until tax time, they will need to qualify for the full amount and eventually get the credit on their taxes next year. Some people will think to change their withholdings, but most will just get a big gift at next years tax season.

Seems like a trivial amount, but increasing the payment by $150/ month has interesting knock on effects. If your car loan is considered high risk because it's too big a chunk of your income, your interest rate goes way up.

Even though that bonus is dangling out there, many people who might be able to stretch and get a $43k car may be put off or not qualify for $50k with a $7,500 tax incentive which they have to wait a year to get. Seems like this will be a bit of a tailwind into 2024 as the full impact of the rebate comes into play.