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

[2daMoon]

With 5+% in interest off money market funds.. no one is dying to get back in
Cheers!!

...and when the Fed begins to drop rates as intended, what happens?

 

[replicant]

>it could be later on this year in 2024.

How? I'm lacking imagination and I've been waiting for self-driving taxis for many years. One has to make a case for FSD to affect the stock price by end of year, since Tesla has been selling FSD since 2020. For Tesla to earn revenues from FSD, they need far more than selling the FSD license and have a network of fleet managers, etc. v12.3 and end-to-end video training help a lot, but that does not translate to revenues before quote some time. Certainly not 2024 IMO (and I'm holding).

 

[elasalle]

...and when the Fed begins to drop rates as intended, what happens?

Yup, but that is a way to go ... rate cut expectations have been dialed back from like 6 to 3 and 1st one in June. Ample time for MM to play the game cheers

 

[unk45]

Toyota never intended to make the Prius. They had a problem in Japan in the 1980s where no one other than those over 50 and government would purchase a Toyota (similar to station wagons and mini vans in the U.S.). It was so bad that a 40% market share appeared to be an unobtainable goal. So they cut through the normal channels and brought their best engineers together to create technology for the 21st century. The goal was to have new tech that could be put into future cars and to show that Toyota was not just an old folk's car. The Prius was a kind of bonus. The launch of the Prius improved their reputation in Japan and once they got back to their previously normal market share, they went back to business as usual. After the 2004 Prius, they stopped any significant development on the Prius. They created a hybrid version of the Lexus but it's not much more efficient than the gas versions (or wasn't up to the time I stopped following Toyota). Of course, Toyota is now forced to do something because of worldwide pollution regulations, so they now have more hybrids.

I disagreed because this is a quite oversimplified and one-dimensional view.

Toyota had huge success with Lexus, introduced in the US and developed for the US primarily, launched in ~1987 almost instantly being best selling luxury vehicle in US, the going global. That followed the introduction of Camry, also designed for the center of the US sedan market.

Toyota through the 1970's and1980's grow rapidly in many global markets with a plethora of models.
As fro the Prius, it was not the product fo desperation but an exploration for the future, built in part from the ashes of the RAV4 EV California compliance car powered famously by Tesla and contributing to the Fremont factory. That was largely the product of the failure of the Joint venture with GM, rather than inherent Toyota problems.

From our perspective, conditioned by facts and, factually, bias, to see BEV as THE solution, back in the later 1990's that was definitely not a sure thing. Toyota has devoted itself to Deming's-style continuous improvement, as is copiously documented as "he Toyota Way". What hindsight tells us, especially those of us so enamored with Deming, is that such an approach fails miserably when technological change reorders objective reality. That, rather than short term market weakness in Japan dissuaded Toyota from greater innovation building on their initial lead.

In my opinion, versions of that drive for Demings-style continuous improvement, has inhibited the entire established auto industry, including Toyota. Further all of them, whether Japanese, Korean, German or US, have suffered from their explicit attempts to mimic the Toyota Way, itself heavily driven by relentless outsourcing. In short, the success pattern fo the 1980's proved the root cause of 2020's lagging innovation. Demings did not anticipate fundamental technological change.

I did not mention Stellantis and predecessors/components because they have more in common with things like 1960's German consolidation (e.g. NSU, Borgward, etc) and, horror!, British Motors Corporation.

Anybody can choose to disagree with this assessment but... it took an Elon Musk to start from his famous "First Principles" to revolutionize Space Flight and automotive technology. It really is bizarre that the pace of innovation speeds almost exponentially by completely discarding the Demings-style continuous improvement. Factually incrementalism is the enemy of progress.

As a onetime deep devotee of Deming's and as a consultant and executive I pushed to adopt mimics of 'The Toyota Way' to the extent of succeeding in fomenting both mergers and merger integration following those principles. I was WRONG!

The weakness of Toyota is dependent commitment to incrementalism. When incrementalism begins to fade, the impulse is to jump to 'the next big thing' such as hydrogen. The problem is that trained incrementalists really do not see the difference between fundamental principles and continuous improvement. That makes things such as Hydrogen seems like a good idea if one has never heard of the Bohr radius. Strangely there are many, many engineers who think they can beat that problem. Even Toyota.
That is the problem of incrementalism.

Bluntly, all that has little or nothing to do with Japanese auto market share.

 

[jschwefel]

Serious question…why are people still buying Rav4s and CRVs?

I’m happy to see the Model Y near the top, but I’m surprised the gap isn’t wider against the small SUVs. Safety, driving experience, total cost of ownership,…should widen the gap. If people only knew.

 

[Mengy]

View attachment 1029608
Serious question…why are people still buying Rav4s and CRVs?

I’m happy to see the Model Y near the top, but I’m surprised the gap isn’t wider against the small SUVs. Safety, driving experience, total cost of ownership,…should widen the gap. If people only knew.

There is a lot of brand loyalty out there, some people only look at certain brands when they go to buy a new car. I know many people who only drive RAV4's, like they literally won't even look or consider any other car. I only bought Subaru's for almost two decades, I still love the brand, but Tesla simply makes better cars IMHO.

I've given a few test rides to people who had no clue about Tesla's and they all came away surprised and impressed and re-thinking their auto brand loyalties. I think there are a lot of people out there yet who haven't been truly exposed to Tesla's or EVs, simply put they don't know any better.

I hate to say it but a little bit of effective marketing by Tesla could help alleviate this issue.

 

[Usain]

View attachment 1029608
Serious question…why are people still buying Rav4s and CRVs?

I’m happy to see the Model Y near the top, but I’m surprised the gap isn’t wider against the small SUVs. Safety, driving experience, total cost of ownership,…should widen the gap. If people only knew.

I'm impressed with how close the Model Y was to the Ford F-series in 2023. And I'm also wondering if Model Y can continue its momentum in 2024. Big question.

 

[2daMoon]

Yup, but that is a way to go ... rate cut expectations have been dialed back from like 6 to 3 and 1st one in June. Ample time for MM to play the game cheers

I interpreted the presentation as applying to a trend over a longer timeline.
I don't think either of the Toms are anticipating drastic changes in the coming three months. Though, the initial catalyst for the long term trend may very well begin later this year.

 

[SO16]

I'm impressed with how close the Model Y was to the Ford F-series in 2023. And I'm also wondering if Model Y can continue its momentum in 2024. Big question.

I think the model 3 highland will take enough sales away from the model Y to make model y lose its number 1 status in the world. And of course the media will have a field day. Never mind that Tesla will have sold more cars between the 3 and y combined.

 

[Musskiah]

Meet Kevin put out a very bearish vid on TSLA this morning, he says he is shorting TSLA:

In his analysis though he completely ignores Megapack sales ramping along an S curve right now, not sure why? I honestly agree with his bearish outlook on Tesla car production, they just aren't building out capacity fast enough right now to ramp it much faster IMHO, but Tesla is much more than just a car company! Particularly with FSD improving as fast as it is right now, man if I was short TSLA I wouldn't be able to sleep at night. Sure the next two years might be rocky for the stock but the future outlook for Tesla has never been brighter than it is right now IMHO.

Anyone else watch this video?

I did and I think it won't age well for precisely the reasons you state, Energy and FSD. Most concerning is that he is shorting at a time of max short interest. When it comes to TSLA, this counterintuitively marks the local minima Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

 

[cliff harris]

I'm impressed with how close the Model Y was to the Ford F-series in 2023. And I'm also wondering if Model Y can continue its momentum in 2024. Big question.

F150 is an expensive to run gas guzzler, which in a recession, or at least a near-recession, makes little sense unless you NEED a huge pickup truck. Model Y keeps getting better, and cheaper.
I think the direction of travel is pretty clear. I think if Tesla can deliver a fairly normal looking model 2 even cheaper than the model 3, then it will occupy the top spot as soon as production is ramped and stay there. It would be sweet if the model 2 is the car to take over from the model Y in top position .

 

[FreqFlyer]

There is a lot of brand loyalty out there, some people only look at certain brands when they go to buy a new car. I know many people who only drive RAV4's, like they literally won't even look or consider any other car. I only bought Subaru's for almost two decades, I still love the brand, but Tesla simply makes better cars IMHO.

I've given a few test rides to people who had no clue about Tesla's and they all came away surprised and impressed and re-thinking their auto brand loyalties. I think there are a lot of people out there yet who haven't been truly exposed to Tesla's or EVs, simply put they don't know any better.

I hate to say it but a little bit of effective marketing by Tesla could help alleviate this issue.

Agreed, I am a Honda guy, my wife is a Toyota (Lexus) person. Brand loyalty, built up over the years. Something Tesla has too, loyalists. It's the battle for the non loyalists that car makers spend big money on to sway.

 

[dhrivnak]

Why? What's your bullish timeline for FSD to contribute significantly to Tesla's profit in the next 3 years?

Based on Elon’s past 8 years of FSD promises, very little unfortunately.

 

[Musskiah]

On

>it could be later on this year in 2024.

How? I'm lacking imagination and I've been waiting for self-driving taxis for many years. One has to make a case for FSD to affect the stock price by end of year, since Tesla has been selling FSD since 2020. For Tesla to earn revenues from FSD, they need far more than selling the FSD license and have a network of fleet managers, etc. v12.3 and end-to-end video training help a lot, but that does not translate to revenues before quote some time. Certainly not 2024 IMO (and I'm holding).

In six weeks we will begin to have a better idea of where v12.3 < v12.4 < v12.5 is headed.

To answer your question "How?" When the product is compelling enough, every Tesla owner has the ability to start paying for the FSD subscription at the press of a button. Tesla can begin to offer 3 months free of FSD with all new purchases with the option to "opt out" at the end of the period. When it becomes obvious this is the way, auto manufacturers will have no choice but to partner with Tesla, MobileEye, or NVidia in order to stay relevant in the race to autonomy. I'm certain many OEMs partnered with NACS with much chagrin, but they did it in quick succession. This disruption will be violent and rapid once the spark ignites it. The spark will be in 2024, isn't that obvious now?

 

[2daMoon]

I did and I think it won't age well for precisely the reasons you state, Energy and FSD. Most concerning is that he is shorting at a time of max short interest. When it comes to TSLA, this counterintuitively marks the local minima Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

Knowing Kevin's addiction to click-bait videos, he may have shorted one contract and intends to write off the loss as an expense to increase views which actually make him ad revenue.

 

[Knightshade]

I think the model 3 highland will take enough sales away from the model Y to make model y lose its number 1 status in the world. And of course the media will have a field day. Never mind that Tesla will have sold more cars between the 3 and y combined.

Can't speak to overseas- but in the US the production ramp on Highland has been quite slow in Q1 (unclear why- and unclear when it will improve), plus they don't qualify for the $7500 tax credit the Y does-- so it's quite likely Model 3 sales will be down YoY in the US in 2024 despite the refresh- depends how quickly they resolve the ramp issues, how quickly they get a performance model to market (and how good it is) and if they have any fix for the lack of tax credit (none seems apparent though)

 

[scaesare]

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

I don't know what Tesla's cost for all the FSD hardware is... I suspect the cameras are relatively inexpensive... the custom FSD silicon is no doubt the big-ticket item. But I would be willing to bet the whole package is significantly less than $6K.

 

[SO16]

Can't speak to overseas- but in the US the production ramp on Highland has been quite slow in Q1 (unclear why- and unclear when it will improve), plus they don't qualify for the $7500 tax credit the Y does-- so it's quite likely Model 3 sales will be down YoY in the US in 2024 despite the refresh- depends how quickly they resolve the ramp issues, how quickly they get a performance model to market (and how good it is) and if they have any fix for the lack of tax credit (none seems apparent though)

Yeah… I’m talking world wide. China seems to be producing them okay.

I don’t picture 3/Y being number 1 in US for a few years yet (if ever). So much animosity towards EVs in this country. I hope I’m wrong.

 

[GSP]

Toyota never intended to make the Prius. They had a problem in Japan in the 1980s where no one other than those over 50 and government would purchase a Toyota (similar to station wagons and mini vans in the U.S.). It was so bad that a 40% market share appeared to be an unobtainable goal. So they cut through the normal channels and brought their best engineers together to create technology for the 21st century. The goal was to have new tech that could be put into future cars and to show that Toyota was not just an old folk's car. The Prius was a kind of bonus. The launch of the Prius improved their reputation in Japan and once they got back to their previously normal market share, they went back to business as usual. After the 2004 Prius, they stopped any significant development on the Prius. They created a hybrid version of the Lexus but it's not much more efficient than the gas versions (or wasn't up to the time I stopped following Toyota). Of course, Toyota is now forced to do something because of worldwide pollution regulations, so they now have more hybrids.

IMO, the #1 reason Toyota (and Honda) created their first hybrid vehicles (Prius and Insight) was the US DOE’s PNGV (partnership for next generation vehicles) program. The goal was an 80 mpg family sized sedan. Toyota wanted to join, but the DOE would only allow the domestic GM, Ford, and Chrysler in. All three developed 80 mpg hybrids with advanced small diesel engines. Not wanting to be left out, Toyota funded the R&D internally, with no US government support (not sure about Japan govmt). None of the big 3 OEMs thought the cost of the hybrid system provided enough value to customers, and stoped after delivering the prototypes required by their DOE grants. Toyota (and Honda) saw the value in high mpg, produced their hybrids, and continuously improved them over the years.

GSP

 

[jerry33]

IMO, the #1 reason Toyota (and Honda) created their first hybrid vehicles (Prius and Insight) was the US DOE’s PNGV (partnership for next generation vehicles) program. The goal was an 80 mpg family sized sedan. Toyota wanted to join, but the DOE would only allow the domestic GM, Ford, and Chrysler in. All three developed 80 mpg hybrids with advanced small diesel engines. Not wanting to be left out, Toyota funded the R&D internally, with no US government support (not sure about Japan govmt). None of the big 3 OEMs thought the cost of the hybrid system provided enough value to customers, and stoped after delivering the prototypes required by their DOE grants. Toyota (and Honda) saw the value in high mpg, produced their hybrids, and continuously improved them over the years.

GSP

What I wrote is from the book "The Prius that Shook the World", which was written during that time. Except the last part which was my interpretation of current events and what I saw after 2004.