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

[woodisgood]

A point of curiosity - those that frequently mention FSD being licensed to other auto companies - what would you like to see as the arrangements of such a license? What do you think is reasonable for Tesla to be asking for?

 

[MC3OZ]

https://twitter.com/x/status/1769470759775195226

Q1 delivery estimates are plummeting.

If this is true, how are deliveries for the rest of the industry going?

One advantage Tesla has is that they detect demand issues early and cut prices early. In the traditional model. inventory piles up at dealerships often before the carmaker is aware of the problem,., It is then too late to cut prices, because dealer lots are full.

The switch to hybrids was explained as being because it now only costs a few thousand dollars more to make the hybrid. So the purchase price may only be a few thousand more, making hybrids more attractive..

The dealer now has to juggle a mix of ICE, Hybrid and EV inventory. I can now see hybrids replacing all ICE very quickly for this reason.

For daily commuting, a hybrid may be 90% driven on fuel, or 90% driven on electricity.

As an introduction to EVs, hybrids are not such a bad option, certainly better than ICE.

We may not need to worry about some of the competition, because they may not last long.

 

[Singuy]

A point of curiosity - those that frequently mention FSD being licensed to other auto companies - what would you like to see as the arrangements of such a license? What do you think is reasonable for Tesla to be asking for?

Mobile-eye charged Polestar 6k per unit for their Chauffeur product. This is the 3 x EyeQ6H version.

Mobileye Chauffeur™ | Bringing safe AVs to consumers around the globe

The future is here with our most advanced AV technology stack to date. Mobileye Chauffeur™ is a geographically scalable, cost-effective, and designed for rapid go-to-market, this cutting-edge solution allows automakers to customize the driving experience,

www.mobileye.com

 

[jabloomf1230]

Tesla is getting some serious Optimus competition from nVidia. The robotics part of their presentation starts here, but it's a bit long.

The relevant section and some discussion here:

https://twitter.com/x/status/1769860044324319658

Humanoid robots as a topic is just like AI before it. Every tech company wants to do it. Most will fail. Some will succeed.

 

[Linkmeup]

If this is true, how are deliveries for the rest of the industry going?

One advantage Tesla has is that they detect demand issues early and cut prices early. In the traditional model. inventory piles up at dealerships often before the carmaker is aware of the problem,., It is then too late to cut prices, because dealer lots are full.

The switch to hybrids was explained as being because it now only costs a few thousand dollars more to make the hybrid. So the purchase price may only be a few thousand more, making hybrids more attractive..

The dealer now has to juggle a mix of ICE, Hybrid and EV inventory. I can now see hybrids replacing all ICE very quickly for this reason.

For daily commuting, a hybrid may be 90% driven on fuel, or 90% driven on electricity.

As an introduction to EVs, hybrids are not such a bad option, certainly better than ICE.

We may not need to worry about some of the competition, because they may not last long.

With all the AI + Robotics + BCI going on, there's probably a non-zero chance now that we merge with robots and solve sustainability that way.


/mic drop

 

[Knightshade]

This doesn’t deserve that much discussion

And yet you're discussing it and prompting others to reply to it

But you think it’s an accurate sentence to say FSD, because it’s level 2 and requires constant monitoring it’s the same other companies offer?

I literally wrote the opposite of that in the post you quoted and are replying to. Perhaps you're right about how little discussion this deserves

Why would you need collision insurance? Once Tesla says no supervision required, they’re on the hook. Not you.

A number of folks, including in here and recently, don't believe Tesla taking responsibility for accidents once FSD is >L2 is a thing the company will be doing and instead everyone will have to insure their own robotaxis.

Its Yet Another Topic that's been discussed a number of times already in the FSD section.

If this is true, how are deliveries for the rest of the industry going?

The whole car industry in general? Currently on pace for about a 3% YoY increase 2023->2024.

February 2024 US auto sales to bounce mildly

S&P Global Mobility projects that February 2024 will realize a slight rebound from the slow January result, but new vehicle sales levels remain tepid.

www.spglobal.com

So if Tesla manages a 10% increase in vehicle sales this year (which at this point seems moderately optimistic) they'll still be growing faster than the industry as a whole, albeit vastly slower than "usual" which we were told to expect on the last earnings report and call..... Some folks in here thought that meant like 30% growth instead of the maybe 10% we are now hoping for though and perhaps Q1 PD will be a reality check for them.

 

[MC3OZ]

So if Tesla manages a 10% increase in vehicle sales this year (which at this point seems moderately optimistic) they'll still be growing faster than the industry as a whole, albeit vastly slower than "usual" which we were told to expect on the last earnings report and call....

Yes I expect something like that, my comments about dealer lots being full are not random, this is a specific example of a limited circumstance:-
,

Difficulties in obtaining finance tend to be skewed toward lower/middle income groups, not a majority of Tesla buyers in that bracket.

I expect a lot of variation based on income level, geographic location, access to finance, financial history, etc.

Similarly the comments on hybrids were based on an "Autoline Daily" video,.

 

[EQC_]

...

The switch to hybrids was explained as being because it now only costs a few thousand dollars more to make the hybrid. So the purchase price may only be a few thousand more, making hybrids more attractive..

The dealer now has to juggle a mix of ICE, Hybrid and EV inventory. I can now see hybrids replacing all ICE very quickly for this reason.

...

The most confusing thing about hybrids, to me, is that all the other manufacturers, INCLUDING TOYOTA, dragged their feet fo so darn long.

Costs for hybrid components really didn't take until now to come down. Comparing the cost of a Prius to a Camry, for example, the additional cost of the battery and electric motors (paired with an arguably simpler transmission) was pretty minimal over the past decade.

The 1st generation Prius came out in Japan in 1997, and North America in 2000. The Prius has been very much "a thing" for over 20 years, and Toyota offered hybrid versions of several other models for quite some time.

But, over 20 years after the hybrid mass-production began, in 2022, I think roughly 25% of the cars sold by Toyota were hybrids -- about 2.6 million Toyota hybrids sold that year. They upped it considerably for 2023 to 3.4 million hybrids. Good numbers...but why on earth didn't they hybrid EVERYTHING?

Some of Toyota's marketing points out that they can make ~90 hybrids, or 6 plug-in hybrids, for the same kWh capacity needed for one electric car. Sure, the battery chemistries are different, but a hybrid like the Prius really only needs 1-1.5 kWh of battery. So, it's pretty true and it SOUNDS like great marketing...but it doesn't explain why, 25+ years after their first production hybrid, Toyota was only making about 1.5 hybrids for every EV that Tesla made and sold. The implication is that Tesla was able to source 50x as much battery capacity as Toyota. Tesla didn't even EXIST when Toyota started with the Prius. Logic tells us that, if Toyota had wanted to, the definitely could have sourced enough batteries to make EVERY SINGLE CAR they sold a hybrid (or plug-in hybrid) for the last 10 years, easily. They just...didn't. To me, that's an incredible failure of their planning, marketing, suppliers/sourcing, and for the environment.

Toyota has finally starting to turn towards actually pushing their hybrids on a wide scale, and making more than just the Prius be 100% hybrid. I learned recently, for example, that the Toyota minivan - the Sienna - is only available as a hybrid starting with the 2021 model year. Amazing MPG and very simple AWD option makes it a stand-out among the ICE minivans of the world. I believe Toyota offers good hybrid options on the Toyota trucks now too, as well as the corolla and camry and Rav4...but still goes to the engineering effort to offer a bunch of non-hybrid/ICE-only versions too.

But, again, I really don't get why they really are dragging their feet. Toyota might approach 50% hybrids soon...but had they wanted to, they could have gone to 100% hybrid 10 years ago, I think. And all the other manufacturers that are pivoting to hybrids today will probably be at 10% hybrids in a few years. It's just embarrassing....it's a lack of effort, and a lack of caring to actually reduce the environmental impact....I'm glad they're "finally" doing it, but it feels too late now.

 

[aronth5]

So....is $TSLA up today because:

1. It's been oversold and value is coming back into play
2. Shortzes made enough and are covering
3. People realizing FSD is farther along than it should be
4. Report saying that Elon's use of prescription drugs is good for the company
5. Elon saying 'flying car' is possible in Don Lemon interview
6. MM's met again with Tesla IR and now have new delivery info

Anything else?

Michael Dell's "super impressive" X posting after using V12 got a lot of attention.

 

[FreqFlyer]

The most confusing thing about hybrids, to me, is that all the other manufacturers, INCLUDING TOYOTA, dragged their feet fo so darn long.

Costs for hybrid components really didn't take until now to come down. Comparing the cost of a Prius to a Camry, for example, the additional cost of the battery and electric motors (paired with an arguably simpler transmission) was pretty minimal over the past decade.

The 1st generation Prius came out in Japan in 1997, and North America in 2000. The Prius has been very much "a thing" for over 20 years, and Toyota offered hybrid versions of several other models for quite some time.

But, over 20 years after the hybrid mass-production began, in 2022, I think roughly 25% of the cars sold by Toyota were hybrids -- about 2.6 million Toyota hybrids sold that year. They upped it considerably for 2023 to 3.4 million hybrids. Good numbers...but why on earth didn't they hybrid EVERYTHING?

Some of Toyota's marketing points out that they can make ~90 hybrids, or 6 plug-in hybrids, for the same kWh capacity needed for one electric car. Sure, the battery chemistries are different, but a hybrid like the Prius really only needs 1-1.5 kWh of battery. So, it's pretty true and it SOUNDS like great marketing...but it doesn't explain why, 25+ years after their first production hybrid, Toyota was only making about 1.5 hybrids for every EV that Tesla made and sold. The implication is that Tesla was able to source 50x as much battery capacity as Toyota. Tesla didn't even EXIST when Toyota started with the Prius. Logic tells us that, if Toyota had wanted to, the definitely could have sourced enough batteries to make EVERY SINGLE CAR they sold a hybrid (or plug-in hybrid) for the last 10 years, easily. They just...didn't. To me, that's an incredible failure of their planning, marketing, suppliers/sourcing, and for the environment.

Toyota has finally starting to turn towards actually pushing their hybrids on a wide scale, and making more than just the Prius be 100% hybrid. I learned recently, for example, that the Toyota minivan - the Sienna - is only available as a hybrid starting with the 2021 model year. Amazing MPG and very simple AWD option makes it a stand-out among the ICE minivans of the world. I believe Toyota offers good hybrid options on the Toyota trucks now too, as well as the corolla and camry and Rav4...but still goes to the engineering effort to offer a bunch of non-hybrid/ICE-only versions too.

But, again, I really don't get why they really are dragging their feet. Toyota might approach 50% hybrids soon...but had they wanted to, they could have gone to 100% hybrid 10 years ago, I think. And all the other manufacturers that are pivoting to hybrids today will probably be at 10% hybrids in a few years. It's just embarrassing....it's a lack of effort, and a lack of caring to actually reduce the environmental impact....I'm glad they're "finally" doing it, but it feels too late now.

Why add the cost of a battery if you don't have to. A decade ago everyone knew the CAFE rules would dictate that most car sales would have to be hybrids by now to meet them. Even the Full-size truck market will have Plug-in options when the new gens debut in a couple of years for all the major makes. I believe Honda has the best-selling hybrid with the CRV Hybrid which has a take rate of over 50%, and the Accord is showing similar if not higher hybrid take rates. Honda is debuting the hybrid Civic in the US finally this summer.

As regards Toyota, yes, the Sienna is hybrid only, the new successful-selling Grand Highlander is hybrid only and the new Camry will be available in hybrid only.

GM and Ford broadcasting grand EV plans, IMO, was more about emotion and trying to ride this EV wave created by Tesla.

 

[MC3OZ]

Why add the cost of a battery if you don't have to.

Legacy auto are struggling to make money on EVs...

Hybrids qualify for EV credits and are treated generously by regulatory regimes for a while.

An addition the cost of the battery has dropped substantially, the profit of the sale of a hybrid probably equals that on the sale of an ICE. (This is a relatively recent development.)

Customers who are trying to decide between ICE or EV might buy a hybrid.

The next logical step is customers will want the ability to plug in their hybrid..

A lot of this can be done by squeezing the battery and motors for a hybrid into what is basically an ICE car design, (lower capex),.

As battery prices continue to fall, the next step is, it makes logical sense for all ICE cars to be plug in hybrids.

As I suggested above, this makes life easier for dealers, people who want to drive ICE will just never plug in the hybrid.

Finally it makes sense to just ditch the ICE part and run with a pure EV.

The last step is governments rethink subsidises and allowances for hybrids, reserving them for pure EVs, or perhaps all subsides and allowances are no longer needed.

 

[Thekiwi]

Anyone have thoughts on any impact Nvidia’s new GB200 product has on tesla? It’s 4x better at training, and 30x (!) better at inference than there current top of the line H100 solution.

The new product of course will be great for companies working on AI products (like Tesla) - but seems like it may be time for Tesla to give up on Dojo development maybe? Seems to be so far behind now that it’s a waste of R&D resources, especially when Tesla can just use GB200 on demand via cloud providers for its FSD training.

 

[Singuy]

Anyone have thoughts on any impact Nvidia’s new GB200 product has on tesla? It’s 4x better at training, and 30x (!) better at inference than there current top of the line H100 solution.

The new product of course will be great for companies working on AI products (like Tesla) - but seems like it may be time for Tesla to give up on Dojo development maybe? Seems to be so far behind now that it’s a waste of R&D resources, especially when Tesla can just use GB200 on demand via cloud providers for its FSD training.

LoL 30x better at FP4. I really wonder how low of a precision they can go before all you get is gibberish. I don't even know if anyone entertain FP4 as precision is very low. Tesla uses BF16 as their benchmark which is precision between FP8 and FP16

 

[Musskiah]

Yeah. IMO 30% operating margins are insane to assume. Gross margins last 2 quarters were like 18%. I think those could max out at 30%.

Remember the CEO specifically stating they were targeting gross margins around the same as auto (at the time, 25-30%). Which would make operating margins lower.

No reason to think Musk was underselling Megapack margins, nor does it make sense given the current trend in margins for the product.

Tesla Energy Margin in Q4 2024 is 21.8% up from 12.1% in Q4 2023. The "like 18%" you quoted is close to 18.9% TTM Gross Rev for Energy.


Think about this: 21.8% is from Lathrop at half mast (20GWh)...WITHOUT Tesla Energy Unregonized Revenue (Deferred Revenues + Unsatisfied Performance Obligations). This unrecognized revenue is 40% of their revenue in 2023 as Cern Basher shows on X; this is essentially pure profit when it is realized. For this reason, Energy Gross Margins are HUGELY underestimated. These will balloon as the Unrecognized Energy Revenue drops to the bottom line. I stand by 30-40% TE Gross Margins in 2025. #provemewrong

Tesla Energy Revenue, Margins, Storage And Solar Deployed | Fundamental Data And Statistics For Stocks

Explore Tesla energy statistics. Discover the sales revenue, gross margin, growth rates, and solar and energy storage deployment by quarter and by year.

stockdividendscreener.com

This is an awesome TE writeup worth a look

 

[Musskiah]

Michael Dell's "super impressive" X posting after using V12 got a lot of attention.

#ChatFSDMoment

 

[Zaddy Daddy]

One advantage Tesla has is that they detect demand issues early and cut prices early.

Except when they comically waited 3 months to do it in January 2023 when signs were there they needed to cut in like Sept - October 2022.

They delayed so much so that the price cuts were enormous.

People lost so much money in that time period because they mistakingly believed Tesla had no demand issues, primarily because they hadn't cut prices yet.

Meanwhile, @Troy and used car index were doing the real work exposing the truth, yet this thread (and I) ignored it.

So why didn't Tesla cut prices early as they should have? I would speculate it was Musk wanted to prop the share price up before his epic haphazard selling to fund Twitter.

Why did Tesla announce they are going to raise prices soon for the Model Y, vs. just actually raising the prices if order rate is coming in hot? They've never done that before.

The answer is likely - when viewed with Troy's analysis - that demand isn't great given all the incentives and they are trying push demand foward into Q1.

It will be interesting to see if they can sustain the higher list prices without adding a bunch of incentives. Price elasticity is weird here.

 

[Zaddy Daddy]

Tesla Energy Margin in Q4 2024 is 21.8% up from 12.1% in Q4 2023. The "like 18%" you quoted is close to 18.9% TTM Gross Rev for Energy.


Think about this: 21.8% is from Lathrop at half mast (20GWh)...WITHOUT Tesla Energy Unregonized Revenue (Deferred Revenues + Unsatisfied Performance Obligations). This unrecognized revenue is 40% of their revenue in 2023 as Cern Basher shows on X; this is essentially pure profit when it is realized. For this reason, Energy Gross Margins are HUGELY underestimated. These will balloon as the Unrecognized Energy Revenue drops to the bottom line. I stand by 30-40% TE Gross Margins in 2025. #provemewrong

Tesla Energy Revenue, Margins, Storage And Solar Deployed | Fundamental Data And Statistics For Stocks

Explore Tesla energy statistics. Discover the sales revenue, gross margin, growth rates, and solar and energy storage deployment by quarter and by year.

stockdividendscreener.com

This is an awesome TE writeup worth a look View attachment 1029507View attachment 1029506

I am not sure how gross margins are calculated in this case, I'm not sure the COGs are all recognized immediately even if part of the revenues are delayed. I'm not an accountant like @The Accountant .

We know with cars, if they are produced but not delivered, that doesn't mean the COGs get booked in one quarter and the revenue in the next, it is kept in sync.

 

[MC3OZ]

Except when they comically waited 3 months to do it in January 2023 when signs were there they needed to cut in like Sept - October 2022.

Production and deliveries;-

AUSTIN, Texas, January 2, 2023 – In the fourth quarter, we produced over 439,000 vehicles and delivered over 405,000 vehicles. In 2022,

AUSTIN, Texas, October 2, 2022 – In the third quarter, we produced over 365,000 vehicles and delivered over 343,000 vehicles.

Inventory grew slightly during Q3 / Q4 2022, but there was a phase called "unwinding the wave" which was in progress during that time.

When production is ramping, some lag in deliveries is also fairly natural.

We don't know if lower prices would have resulted in significantly more deliveries.

We also need to consider the timing of interest rate increases.

Sept 21, 2022

+75

3.00% to 3.25%

Dec 14, 2022

+50

4.25% to 4.50%

It is fair to say that a lot of the big interest rate increases happened before Jan 2023, whether or not there was some lag in those increases impacting on orders is hard to say.

IMO the data that Troy sees is a subset of what Tesla sees, and that is considerably delayed... With new cars coming constantly off the line, and with fairly substantial shipping delays Tesla can't afford a build up of unallocated inventory... They also can afford a mismatch between production and demand in particular markets the most obvious example of that is production for RHD markets,,,

And it also takes tome time to work though the backlog of existing orders...

So they might see a drop off in new orders while 2-3 months worth of existing orders at earlier prices are working their way though the system

I am not sure if Troy has data for Canada or RHD countries, or how important those markets are. .

 

[Musskiah]

Ummmm NVDA just upped the Humanoid game bigly

 

[2daMoon]

#ChatFSDMoment

Speaking of which, Sasha rips the AI Bandaid off of the S&P 500, telling it like it is. Which stock do you think his bet is placed on?

He's always entertaining and presents the facts with his unique wit and flourish. Enjoy!