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

[wipster]

NFLX now slightly green, i will take any green tomorrow for TSLA

Tomorrow would be nice but Thursday is what counts. My bet is that the SP will go up massively or a little or it could take a dive or just go down a bit... or it could stay the same.

I'm hopeful it will be my favorite acronym day of the week: Sure Happy It's Thursday!

 

[JRP3]

When costs go up, so do profits? That’s not how capitalism is supposed to work, but that is the recent trend. For over a year now, consumers and businesses, both in the U.S. and worldwide, have struggled with stubborn inflation. But the soaring costs haven’t prevented corporations from raking in record profits.

Albert Edwards, a global strategist at the 159-year-old bank Société Générale, just released a blistering note on the phenomenon that has come to be called Greedflation.

Edwards added that he fears the “super-normal profit margins” of corporations in the U.S. and abroad could eventually “inflame social unrest” if consumers continue to struggle with inflation.

“The end of Greedflation must surely come. Otherwise, we may be looking at the end of capitalism,” he warned. “This is a big issue for policymakers that simply cannot be ignored any longer.”

Interesting take.

‘We may be looking at the end of capitalism’: One of the world’s oldest and largest investment banks warns ‘Greedflation’ has gone too far

Albert Edwards, an economist at the 159-year-old investment bank Société Générale, says corporate greed may call for the unthinkable: Price controls.

fortune.com

 

[lafrisbee]

Isn't he just saying "trust management"? He responds to all arguments (about possible benefits of advertising) with "but management should know" and that's it.

He was, but he had 3 other people that he was poking with a stick that had various opinions. It was great to see an argument without arguing.

 

[M|S|M MYP]

Tomorrow would be nice but Thursday is what counts. My bet is that the SP will go up massively or a little or it could take a dive or just go down a bit... or it could stay the same.

I'm hopeful it will be my favorite acronym day of the week: Sure Happy It's Thursday!

So you're saying it may go up a lot or a little or go down a lot or a little. Happy to have someone on the same page as myself!

 

[MartinAustin]

(spent about 30 seconds on this and the interviewer indicates Musk is only reinventing twitter ... Musk has reinvented money, rockets, cars, trucks , fueling, energy storage , etc... all disruption is reinvention... interviewer does not get it... waste of time ) ...

Musk needs to appoint a Twitter CEO ASAP ... wasting his valuable time on a company he was forced to buy .. thru a mistake he clearly made ... twitter feels like such a tar baby ....ugh.. dealing with all these marketing/advertising clowns .. i am in a bad mood before earnings...

that could be bullish

Don't forget, Tesla is run by a large group of experts. As explained in quite some detail at the Investor Day. They don't mind if Elon does whatever most of the time

 

[Gigapress]

Isn't he just saying "trust management"? He responds to all arguments (about possible benefits of advertising) with "but management should know" and that's it.

I haven't listened to Herbert's video but I agree that management should know. They would need to be incompetent not to know. Unless there's clear evidence of such incompetence I would give them the benefit of the doubt. Those of us outside the company are unlikely to be able to formulate a better strategy than Tesla employees in the Sales and Demand Planning departments who have far more information and who work full-time jobs to meticulously analyze this stuff.

The answers to Tesla's marketing questions (not just paid-for advertising) almost certainly can be found by analyzing the gigantic trove of data Tesla has, which goes far deeper than that of other less vertically integrated OEMs. The Tesla enterprise software machine is sucking in data from the website, app, vehicle fleet, galleries, service centers, social media accounts, used cars, trade-ins, and more. At some point we need to just let the professionals do their jobs, such as these ones:

https://www.tesla.com/careers/search/job/senior-manager-global-sales-operations-planning-177205
https://www.tesla.com/careers/search/job/sales-forecast-lead-151519
https://www.tesla.com/careers/searc...t-business-development-sales-delivery--187678
https://www.tesla.com/careers/search/job/senior-sales-and-delivery-analyst-186652
https://www.tesla.com/careers/search/job/global-sales-operations-planner-185620
https://www.tesla.com/careers/search/job/demand-planner-outbound-planning-175930

Tesla is doing deep cross-functional projects to develop supply-demand dashboards and optimize all of this. The following I pulled straight from some of the job posts:

• ...creating and aligning proposals for strategic supply-demand decisions, coordinating the global build plan, and managing our global supply-demand reporting and sales forecast.
• Work with partner teams in sales, production, supply chain, finance, logistics, and programs to assess the impact of different scenarios and create optimized proposals
• Oversee the high level (weekly + model + trim + region) global build plan based on capacity inputs from production, supply-demand outlook, and constraints from operating teams
• Oversee the global sales forecasting process and coordinate collection, alignment, and comparison of market forecasts
• Manage global supply-demand dashboards and data sets that are used to determine the build plan, delivery outlook, and pricing changes
• ...assist the Program Manager in developing program resources and systems to support key sales objectives and market growth
• Manage Tesla’s geographic allocation of vehicles to balance supply and demand while resolving outbound supply chain constraints
• ...developing and evaluating detailed statistical forecasts to cross-functional alignment on strategic supply-demand decisions across our vehicle models, sales markets, and factories. Ideal candidates will be able to analyze large amounts of data, accurately project sales trends, identify sales opportunities, and provide practical guidance to optimize sales strategies and increase market share.
• Analyze and interpret historical sales and market data to develop thorough, accurate, and supportable global sales/demand forecast for use in production requirements and financial planning
• Drive continuous improvement in forecasting process and methodology using statistical forecasting norms and business intelligence. Work with Operations, IT, Sales, and Finance to leverage capabilities of ERP [Enterprise Resource Planning] system and other planning tools.

To suggest that Tesla should begin paying for advertising is to imply either 1) that these analysts and forecasters are collectively failing to get the right answers or 2) that they are presenting compelling business cases in favor of paid advertising that are being rejected by top leadership for some reason. I think neither of these are likely.

 

[ZeApelido]

Wow. More price cuts.

https://twitter.com/x/status/1648530671227523074

 

[MrMoo]

Wow. More price cuts.

https://twitter.com/x/status/1648530671227523074

Didn't you hear Elon? There is an infinite demand for these cars. We'll sell infinity of them as the price trends towards $0.

 

[Zaddy Daddy]

Wow. More price cuts.

https://twitter.com/x/status/1648530671227523074

This, combined with the fact that Tesla is already hinting they will stop mentioning automotive gross margins in earnings means, they really, really don't want us to know how much they dropped in Q1 or in future quarters.

https://twitter.com/x/status/1648469184349896704

Our lone hope preventing the stock from going to a PE of 30 is Energy boosting operating margins. I feel bad its come to this but still hopeful.

 

[AMN]

Didn't you hear Elon? There is an infinite demand for these cars. We'll sell infinity of them as the price trends towards $0.

There are so many soiled undies right now in Germany, Japan, and Detroit.

 

[geometro]

Wow. More price cuts.

https://twitter.com/x/status/1648530671227523074

Yeah, this doesn’t seem good.
Why do it the night before earnings release?

Also, cutting prices this frequently may condition potential buyers to just wait for the next round of cuts.

Hope I’m wrong.

 

[Singuy]

Didn't you hear Elon? There is an infinite demand for these cars. We'll sell infinity of them as the price trends towards $0.

Demand is way way way higher than say 2020 when Tesla price dropped the Y to 49,999 just a few months after introduction. We now move what, like 10x more Ys today?

Tesla reduces Model Y prices, now starts below $50,000

Tesla has reduced the price of the Model Y starting price below $50,000, and it has updated the Performance version....

electrek.co

 

[Webeevdrivers]

No price cuts in Canada…yet.

 

[BioSehnsucht]

What does ex-RC mean?

 

[MrMoo]

Demand is way way way higher than say 2020 when Tesla price dropped the Y to 49,999 just a few months after introduction. We now move what, like 10x more Ys today?

Tesla reduces Model Y prices, now starts below $50,000

Tesla has reduced the price of the Model Y starting price below $50,000, and it has updated the Performance version....

electrek.co

Yes the price cuts show that the demand is through the roof. We better watch out if demand gets any higher we'll have to cut prices again.

 

[AMN]

What does ex-RC mean?

Regulatory credits

 

[AMN]

Yes the price cuts show that the demand is through the roof. We better watch out if demand gets any higher we'll have to cut prices again.

You are missing the point. Tesla is taking market share at an alarming pace. They can keep cutting prices and maintain positive free cash flow.
Toyota, GM, Ford, VW have so much debt to service and less margin than Tesla to keep playing these games. Tesla is bullying the incumbents.

 

[Singuy]

Yeah, this doesn’t seem good.
Why do it the night before earnings release?

Also, cutting prices this frequently may condition potential buyers to just wait for the next round of cuts.

Hope I’m wrong.

If they were going to price cut, do it right before earnings so investors can get some answers and their nerves calmed. What you don't want is a price cut 2 weeks after earnings because that will leave people 3 months to speculate in a negative way.

 

[heltok]

Why do it the night before earnings release?

Because Tesla doesn't care about the earnings report. They are on a mission to transition the planet to sustainable energy and do whatever is best to get there. They now care more about making money than looking like they make money. If wallstreet wants to give retail investors who understand the difference a discount, then that's not Tesla's problem.

Imo one question that is not asked regarding the MPP3 is "how did they find the best solution given all constraints they presented". Imo it likely was done with linear programming. Same with autobidder, use some machine learning to forecast, then find the optimal solution with linear programming. And imo they set prices using the same linear programming, adapting to new information as it comes. It will look a bit weird with Heaviside functions here and there, but they are following the optimal solution. And car dealerships are doing the same, just far less optimal and a lot less transparent.

 

[Hiline]

You are missing the point. Tesla is taking market share at an alarming pace. They can keep cutting prices and maintain positive free cash flow.

Sure they can. But why would they?

The only reasonable explanation is that their forecasted demand at the previous price levels is coming below their planned production volume.