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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
This is what you get on the SF peninsula. Look at this shitake. 1000 sq ft home in East Palo Alto. You know, Dangerous Minds place. The more I make on TSLA, I actually less want to buy a house here, and instead take it go buy something near the beach in San Diego.
Much nicer in SD IMHO...pacific beach would be ideal!This is what you get on the SF peninsula. Look at this shitake. 1000 sq ft home in East Palo Alto. You know, Dangerous Minds place. The more I make on TSLA, I actually less want to buy a house here, and instead take it go buy something near the beach in San Diego.
Bet TSLA
Active Member
Those house calls will have appeared 5 business days ago tomorrow for shorts playing close to the edge. That would be the day it jumped from 1009.35 to 1079.81. Since then it's been nothing but pain for them, getting worse every day.
So tomorrow there will certainly be some shorts who can no longer put off dealing with margin calls.
Maybe. On the other hand these house calls having to be met should make it harder to control every day. More forced buying and less money to do it with. Of course if their pockets are infinitely deep then there's no pressure at all. Could be the case.
Are you short?
I'm not sure what his height has to do with margin requirements...
...okay this post is totally unwarranted. I'll show myself out.
Due for a new factory announcement (or 2) at any time I think.
In my opinion the discount should be more like 25% a year. This is to cover macro risk (depression), execution risk and cost of money. So as 0.75^5 is 0.23 then fair price is something like $2,500.
A problem with this method is that in 5 years Tesla will still be growing rapidly. So if in year 6 Tesla has grown more than 5% (FactChecking) or 25% (my discount rate) then its fair value today will be higher.
Another problem is that "a 2 trillion dollars company in ~5 years" is only a guess. It might be 1 trillion dollars or less, or if Tesla Network takes off 5 trillion dollars.
There are other ways to value Tesla.
For instance, discounted free cash flow. But free cash flow is growing extremely rapidly (say 100% a year) so the sum of future years blows up to infinity (if the growth rate does not fall - it will fall eventually). To solve this the future growth rates and year at which the free cash flow increase falls below the discount rate needs to be estimated, which is extremely difficult to do objectively.
As a long, long I am not too worried about the current value as I have stopped accumulating. I look to the long term revenue potential of cars ($1-2T), mobility($1-5T) and energy($1-4T) and with 20% gross margins and a 10:1 multiplier get somewhere between $6T and $22T in 10 to 15 years time. The higher value assumes Tesla will dominate all three areas, which is unlikely. However even these might be underestimates as it assumes that Tesla will not enter new fields, there is already some indication that they will be active in construction, logistics, financial services (insurance and finance) and genomics (equipment).
I also look at current products (world-leading), product roadmap (good), execution (good even in the pandemic), demand (outstripping supply), competition (faltering), mission (the best and greenest of any large company) and build rate of new factories (doubling every 15 months?). Until these change for the worst I am content to be a strong long.
Knightshade
Well-Known Member
One thing I'm curious about as I've seen almost nobody bullish on tesla mention it.
Over the last couple years Tesla has saved a bunch of $ by vastly UNDER-spending on things like new service centers and expanding the supercharger network.... (there's been some increases each year, but way way way less than there should be proportional to fleet growth).
There's some folks in some areas who have to wait weeks for an SC appointment with a fleet of 1 million, and they're looking to add another 500k this year and maybe 750k next? And there's tons of complaints about lack of loaners at those SCs too. Likewise superchargers getting crowded many places....
Eventually they need to start reinvesting in this stuff, a lot more than they have been since the 3 rollout when the fleet began growing vastly faster than the service and charging networks supporting it.
But I can't recall ever seeing any discussion of those costs or the impact going forward. Are folks just figuring this will essentially be couch cushion money soon for the company? Or do they expect buyers will just keep not caring?
Over the last couple years Tesla has saved a bunch of $ by vastly UNDER-spending on things like new service centers and expanding the supercharger network.... (there's been some increases each year, but way way way less than there should be proportional to fleet growth).
There's some folks in some areas who have to wait weeks for an SC appointment with a fleet of 1 million, and they're looking to add another 500k this year and maybe 750k next? And there's tons of complaints about lack of loaners at those SCs too. Likewise superchargers getting crowded many places....
Eventually they need to start reinvesting in this stuff, a lot more than they have been since the 3 rollout when the fleet began growing vastly faster than the service and charging networks supporting it.
But I can't recall ever seeing any discussion of those costs or the impact going forward. Are folks just figuring this will essentially be couch cushion money soon for the company? Or do they expect buyers will just keep not caring?
If you make a calendar spread (near-term short call against a farther out long call), and they both go deep in the money, you’ll lose money on the short call faster than you make it on the long call.
No to mention mortgaging your wife and future ex-wives to raise capital!I'd be clicking on buy so fast.
Knightshade
Well-Known Member
...not sure what that is supposed to let me "see" as it confirms what I said in the first place- growth of service centers and superchargers isn't nearly keeping up with fleet growth. Not by a longshot.
The only fix for that is significant spending by Tesla that they've kept putting off for years now.
Or to show it even more broadly-
284,233 cars was the total Tesla fleet end of 2017. They had 330 service centers... or about 861 cars per service center.
End of 2018 Tesla was operating 378 service centers- they delivered 245,162 cars that year-essentially doubling the fleet while only increasing service centers about 15%- resulting in just over 1400 cars per service center.
End of 2019? 429 service centers- again a 15% bump- while delivering ANOTHER 367,000 cars. Now we're at almost 2100 cars per service center.
This year they expect to deliver over 500,000 MORE cars... If they only bump service centers by 15% (and I've seen nothing to suggest they will do better) you're talking over 2800 cars per service center... or 3.5 times more cars per service center than end of 2017.
And that keeps getting worse year over year for the foreseeable future at current service center growth rate.
Mobile fleet is growing a bit faster but that's not even close to a 1:1 substitute- a service center can handle multiple cars at a time (and ones that need a lift)- a ranger can't, and even THAT fleet is growing slower than the car fleet is.
Ditto superchargers growing slower than the fleet of Teslas is-
2017 their stated goal was to double from 5k to 10k superchargers... they ended the year a bit over 8000 instead.
2018 their stated goal was to get to 18k superchargers- they didn't quite make it to 12k.
2019 I'm unsure they even bothered stating a goal, but by end of it they'd not even hit the previous years goal, only getting to a bit over 16k by the end.
NONE of these issues are difficult to fix- they don't need to invent new tech to build a service center or write a bunch of new software to add supercharger locations.
They just need $ thrown at em... which Tesla has been very reluctant to do relative to growth of the fleet.
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https://twitter.com/elonmusk/status/1280597571459833863?s=21
In case you think Elon doesn’t care about share price:
“Long-term purpose of my Tesla stock is to help make life multiplanetary to ensure it’s continuance. The massive capital needs are in 10 to 20 years.”
Preach Brother. “Massive Capital”. I like the sound of that.
In case you think Elon doesn’t care about share price:
“Long-term purpose of my Tesla stock is to help make life multiplanetary to ensure it’s continuance. The massive capital needs are in 10 to 20 years.”
Preach Brother. “Massive Capital”. I like the sound of that.
In relation to Tesla Energy, in a market like Australia it is common for the Wholesale Price of electricity to go negative, so the retailer is paid to take electricity. The customer doesn't see that, but the Wholesale Price swings fairly erratically in both directions, because supply rarely matches demand perfectly, a traditional grid needs to balance supply and demand in real-time.
Something similar likely anywhere were Solar generation is mixed with Nuclear and/or Coal. Solar can be curtailed, but Nuclear can't generally ramp up or down, it's production is a flat line. Coal can ramp up and down between particular bounds but can't easily stop and start without effecting the operating life of the plant..
So when prices go negative Nuclear and Coal have little choice but to pay retailers to take their electrcity.
Via the Tesla VPP, Autobidder can instruct home batteries to store electricity when the prices are negative or low. So there is money to be made.
Autobidder and the VPP are software products that are developed and are in production use, as such the cost to Tesla for each additional deployment is close to zero, but the money that can be made from each deployment is significant..
Tesla has mentioned lighting once or twice, even with home lighting I can see a big opportunity.. One possibility is making the link from the light switch to the light via Bluetooth, The legacy light switch can be repurposed, as a wall light, mobile charging station, or home phone docking station, while retaining an upgraded version of it's legacy functionality.
In general there is plenty of scope for automation of home electricity usage, putting them under the control of Autobidder via the VPP and allowing smart additional functionality.
Who wouldn't want the home preheated or pre-cooled, before arrival, with the right set of lights switching on in the right sequence, as you walk into the house?
If the ageing coal generator picks up the tab for pre-cooling your house, and helps your home battery make money, that is a bonus.
Something similar likely anywhere were Solar generation is mixed with Nuclear and/or Coal. Solar can be curtailed, but Nuclear can't generally ramp up or down, it's production is a flat line. Coal can ramp up and down between particular bounds but can't easily stop and start without effecting the operating life of the plant..
So when prices go negative Nuclear and Coal have little choice but to pay retailers to take their electrcity.
Via the Tesla VPP, Autobidder can instruct home batteries to store electricity when the prices are negative or low. So there is money to be made.
Autobidder and the VPP are software products that are developed and are in production use, as such the cost to Tesla for each additional deployment is close to zero, but the money that can be made from each deployment is significant..
Tesla has mentioned lighting once or twice, even with home lighting I can see a big opportunity.. One possibility is making the link from the light switch to the light via Bluetooth, The legacy light switch can be repurposed, as a wall light, mobile charging station, or home phone docking station, while retaining an upgraded version of it's legacy functionality.
In general there is plenty of scope for automation of home electricity usage, putting them under the control of Autobidder via the VPP and allowing smart additional functionality.
Who wouldn't want the home preheated or pre-cooled, before arrival, with the right set of lights switching on in the right sequence, as you walk into the house?
If the ageing coal generator picks up the tab for pre-cooling your house, and helps your home battery make money, that is a bonus.
But the majority of service calls aren't handled by the service centers, they are handled by mobile service which they have been expanding signficantly. The last note I saw was for the end of 2019:
Also, some of the newer service centers are bigger with more staff, and multiple shifts, so you really can't compare an x number of cars per y service center metric and come to any valid conclusions.
Knightshade
Well-Known Member
Do you have a citation for most calls being handled by rangers?
Our own service center can handle at least 3-4 cars at a time indoors, and several outside if a lift isn't needed, all at the same time.
1, or even 2 (since there's about twice as many as service centers), rangers simply can't do nearly as much work in the same day- especially since they need to travel between customer locations for each call- and can't do work requiring a lift at all.
You realize that contradicts your "rangers can handle this!" narrative? If it's mostly rangers doing the work why do they need larger SCs?
But even if newer SCs are 2x the size of old ones, that's only 30% growth per year of service stalls- versus a significantly higher fleet growth. And even that math is only true if ALL the new SCs are twice as big.
Fleet growth 17->18 was almost 100%
18->19 was almost 70%
19->20 (assuming ~500-550k deliveries) will be another 55-60%
20->21 should be ANOTHER 50% with only 750k deliveries and that might well be more depending on CT factory plus China Y.
And there's no "ranger" equivalent making up for supercharger stalls missing targets every year and not keeping up with fleet growth either.
(Even worse- I've seen no recent news on those special "cybertruck with trailer" friendly supercharger locations they supposedly were gonna throw up all over.... nor the megachargers to support the semi (AFAIK they still just plug in a bunch of regular SC plugs to a sharing device to charge the prototype semis and even then there's no room in most spots to do that with a trailer on it)
Again- all of this is easy fixes, but cost $
Don TLR
Active Member
So you’re saying buy and hold is a good strategy
StealthP3D
Well-Known Member
Traditional auto makes a lot of money off service centers. They are the dealerships bread and butter. Tesla does not have this goal but there is little doubt that as the fleet grows and ages, there will be exponential growth in parts and service. Currently almost all Tesla are under warranty so they only get revenue for accident repairs, boo-boos and upgrades at the request of owners. But as the fleet ages and large numbers of cars fall off warranty, revenues will climb exponentially and likely pay for continued expansion.
When Elon was speaking with Third Row Tesla he mentioned one reason it's so difficult for a new auto manufacturer to compete with established players is that established players can subsidize their car sales with high-margin parts sales and this puts new entrants at a huge disadvantage (since parts sales are often a major portion of total profits of established players but new entrants don't have a fleet to support yet). Elon wants to keep Tesla ownership inexpensive but I have little doubt the service centers will eventually turn into profit centers.
Personally, I don't see a service problem here in my area (Western Washington), especially considering our Tesla's only need a shop a small fraction of the times our gas cars did. Both my wife and I scheduled our Model 3's to get the AP hardware 3.0 installed next week and were surprised to learn there is a new Tesla Service Center in Lynnwood, WA which is considerably closer than where we both took delivery in , Bellevue, WA. There is also one in Seattle proper. We are not far from the Canadian border so it's a 45 minute drive to Lynnwood and, while I would love to have a Tesla Service Center in Anacortes, Burlington/Mount Vernon or even Bellingham, it's not a big deal because we almost never have to take them in. My car has never been in in the last 2 years (except to pickup some new winter tires) and my wife's Model 3 has only been in one time in over 2 years (she had a driver restraint malfunction warning appear).
Here's the amazing thing about expanding delivery/service centers: It's a HUGE demand lever. That's why Elon hasn't pulled it yet, they don't need more demand! This is important for investors to understand and I assume the local situation is repeated all over the country. Specifically, there are a whole bunch of towns and small cities between Seattle and the Canadian border including the San Juan Islands, Anacortes, Oak Harbor, Bellingham and Mount Vernon/Burlington that don't have any Service or Delivery centers. There are none in Eastern Washington either. Consequentially Tesla ownership is much lower than the Seattle Metro area even though there are hundreds of thousands of residents to the north that would love to own a Tesla and have the income to afford new car purchases. A couple of new, strategically placed Service/Delivery centers would increase demand tremendously. The problem is, Tesla doesn't have the production capacity to meet that new demand quite yet.
Expect a bunch of new Delivery/Service centers to pop up outside major metro areas as GF4 in Germany starts meeting European demand. It's actually a good sign that Tesla was able to ramp local production in China without needing to make an emergency expansion of Delivery/Service centers in N.A. to stimulate local demand.
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