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

[Ocelot]

No, I don’t believe they do. A person who feels a need to judge and criticize another, particularly publicly on the Internet, doesn’t truly appreciate the person, their uniqueness, or their achievements, otherwise they wouldn’t do it in the first place. It’s atrocious, unnecessary behavior

Yes, YOU would. Because it wouldn’t be the ‘right’ kind of advertising. It wouldn’t say what YOU wanted it to say. There’d be a cat in the ad instead of dog; an orange instead of an apple, a black Tesla instead of a blue one -

YOU can’t help yourself. YOU’d nitpick it to death and analyze how it’s wrong in every way until @Unpilot gouged his eyes out. Oh, wait -

 

[unk45]

Concerning advertising-seems like I read that GM alone spends somewhere on the order of $1500 per vehicle sold, just on marketing. Now, let me ask-if Tesla were to spend $1500 per vehicle, would you spend it there?

Or would you invest it in design/manufacturing improvements to reduce manufacturing costs and allow lower sales prices?

Or spend it to upgrade standard features that most cars in the price range of a 3/Y already have as standard. Things like vented seats, Homelink and a HUD (you could likely do all 3 for less than $1500).

Or maybe offer different paint or interior colors without jacking up the price?

Or build out the charging network even faster?


I think people already know about Teslas, and understand their technological advantages. But still question the price (you can still get a Rav-4, CRV or Equinox for a MSRP <$30k) and many that live outside of major metros still don't have DCFC anywhere near conveniently located. Until DCFCs are as common as gas pumps, that will be an issue for some buyers, and rightly so. The average user of this site likely has a far higher discretionary income than the average vehicle buyer-for a great many buyers, value is a major factor-what vehicle serves their needs for the lowest cost. They don't care about virtue signaling or climate change; they worry about basic transportation, putting food on the table and a roof over their heads. Advertising dollars don't change that. Now you can argue that there are a lot of people spending even more on high-end pickups and SUVs...but those aren't necessarily the same people buying compact CUVs and compact sedans.

Technical correct: the GM number IIRC is advertising not marketing. That is about the % I recall from adding all the levels. Dealer margins are IN addition!

 

[AndrewZ]

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. Oh well

(I embrace all the forthcoming disagrees lol)

I wear the disagrees with honor, have contemplated going back to the reaction history and tallying up all the disagrees on posts -- particularly from a select few -- where the content of that post ended up becoming reality.

Wouldn't be surprised to see Tesla start more conventional advertising later in the year and then suddenly the reception will flip

 

[gillfoto]

Are they going to crush them too?

deja vu EV1

 

[Singuy]

Instead of criticizing me, how about you explain why people are still buying Camrys, Accords, etc. and CR-Vs, RAV4s, Highlanders, etc. when Tesla has achieved price parity and is objectively better in terms of safety, Autopilot, technology, and so many other things? My point is that most people who are looking to buy a new car don’t know how affordable and how much superior a Tesla is. This problem needs to be solved. Cutting prices even after achieving price parity and objectively being better than other vehicles doesn’t make a whole lot of sense. The message needs to get out to the masses that Teslas are both affordable and objectively superior in almost every way.

How about you explain to me how Tesla's order books went from 4000/week to 40000/week without any advertisement?

 

[Ogre]

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

I've been trying to ignore most posts in this well trodden topic.

I would very much like to see a chart of inventory versus production over the past could years though. It would add a small amount of actual information to this topic which seems largely driven by sentiment on both sides.

Inventory coming up seems inevitable with production up so much. Just a question of which is outpacing which.

Been in and out of the forum the past week so forgive me if this has been illustrated.

 

[Moon Buggy]

You don't piss away money on advertising when you effectively have little inventory, and sell every car you produce. As production grows, it is normal and EXPECTED to have a little bit of inventory.


Plus, cutting prices increases your TAM, advertising does not. Elon has made it clear which direction Tesla is going to go. If you don't like it, I suggest cashing out your shares and finding a company that suits you better (good luck with that last part).

A little bit of inventory is expected but Tesla is now selling cars below the margins they told us they wanted to sell them at, so I believe there is clearly an issue right now.

I think there will be advertising hold outs until Elon changes his mind. There are good reasons not to advertise, but I am overwhelmingly in favor of advertising personally. IMO, advertising will result in more vehicles sold even though it will not increase TAM. IMO, the benefits of educating more consumers about the benefits of Tesla ownership will more than offset the costs of doing so and would be far more cost effective than more and more incremental price cuts from this point.

Advertising is effective even with products that are far more pervasive than Teslas (e.g., Coca Cola, McDonalds, Apple, other automakers etc.). There's a reason almost everyone else advertises and it's largely because they're trying to sell more products and return more value to their shareholders. What are we looking for here, if not those two things? Besides, everyone knows what a Big Mac is, but my nurse just yesterday told me she'd never heard of a Cybertruck. My dad is a Tesla owner and shareholder and he is completely clueless about the price drops.

To me, it is easy enough to experiment with advertising. It will either work or it won't, and the company should know relatively quickly. To me, it is absurd not to try it.

 

[StarFoxisDown!]

I've been trying to ignore most posts in this well trodden topic.

I would very much like to see a chart of inventory versus production over the past could years though. It would add a small amount of actual information to this topic which seems largely driven by sentiment on both sides.

Inventory coming up seems inevitable with production up so much. Just a question of which is outpacing which.

Been in and out of the forum the past week so forgive me if this has been illustrated.

There’s definitely a relation of inventory increase with significant production increase which has been happening for the past 2 quarters and still rising this quarter.

I expected this…it’s not surprising. But the degree that which Tesla has lowered their prices and especially the relation to their ICE counterpart should have created enough insatiable demand to counteract at least some of that inventory buildup. I simply think it’s an educational issue at this point. There’s a lot of friends and family I know that don’t read financial/stock news, aren’t on Twitter, etc…they aren’t even aware prices of Teslas have dropped 25% since the beginning of 2023

 

[Singuy]

I wear the disagrees with honor, have contemplated going back to the reaction history and tallying up all the disagrees on posts -- particularly from a select few -- where the content of that post ended up becoming reality.

Wouldn't be surprised to see Tesla start more conventional advertising later in the year and then suddenly the reception will flip

Advertisement is fine when management feel like it's a lever they need to pull. Everyone just want to see stonk goes up and feel they can back seat drive Tesla as if they are some kind of marketing genius with zero credentials under their name.

My frustration is that people crap on Tesla's management as they don't know what they are doing when in reality they outperformed better than anyone expected 3 years ago.

 

[unk45]

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)

You’re right of course, that Tesla inventory is Out if Cintrol, it’s almost a third of typical OEM dealer plus OEM. Appalling! The obviously has a crisis and needs to increase inventory /s
I did not disagree because I failed to realize Tesla needs to quit having such good performance!/s

good grief @StarFoxisDown! I thought you were paying attention!

 

[Singuy]

There’s definitely a relation of inventory increase with significant production increase which has been happening for the past 2 quarters and still rising this quarter.

I expected this…it’s not surprising. But the degree that which Tesla has lowered their prices and especially the relation to their ICE counterpart should have created enough insatiable demand to counteract at least some of that inventory buildup. I simply think it’s an educational issue at this point. There’s a lot of friends and family I know that don’t read financial/stock news, aren’t on Twitter, etc…they aren’t even aware prices of Teslas have dropped 25% since the beginning of 2023

Or how about let Tesla build some inventory before they open up the flood gate to advertising? No use advertising if there are no cars to buy.

Lets pretend they are at 40k orders a week right now and advertisement generates 70k new orders for that one week...Tesla's inventory will be gone in a week.

Also Musk said orders outpace production which means they are not yet ready. There are over 80k Teslas around the world as inventory so if they are at 45k orders/week at a 40k production run rate, you wouldn't see inventory draw downs(especially the way they display their inventory) for an entire quarter.

 

[GhostSkater]

Well, he mentioned BMS. I wanted to address that all Tesla's BMS's from the 2012 Model S onward have been fully programmable, and have seen mulitple FW revisions.


The 2170 vs. 18650 longevity . . . that's complicated. There have been at least 3 (4?) distinct chemistries on the 18650. At least 2 on the 2170s.

Add to that that when Supercharger V3 launched, Model 3 had a even better charging curve

It did 10-80% in 20~21 minutes, after a while Tesla dialed it down, probably due to accelerated degradation, makes you wonder for all the others that do 10-80% in 18 minutes, Ioniq 5 and 6, EV6, GV60 and Taycan

Even on new Model S that uses the newest chemistry from Panasonic that is said to have excellent fast charging performance, they are still quite conservative on anything above 40% SOC, vs other brands that leave it cranked

On another note, when you look at SOC vs Voltage on Tesla charging sessions, they are pretty much charging the vehicles as fast as they can, with the only way to improve that being lower resistance cells, so this is the moment we say hi to 4680s and tabless electrode

 

[unk45]

When I first laid my hands on TI-55, a programmable calculator, I was blown away !!

So was I.

 

[GOVA]

Yeah but production cost per car is the wrong metric to optimize. What matters is the total *lifetime* amortized cost per mile, which is strongly a function of battery longevity. And Tesla has been set on strategizing around robotaxi fleets since 2016 and probably sooner than that considering that it was probably planned in private long before Master Plan Part 2 was published. In that light, the mission plan directly demands making each car and its battery as durable as possible to maximize the number of years and miles it can remain in service. Even without robotaxis it still matters how long the cars last because every mile each car drives is another mile not being powered by petroleum. I would be very surprised to learn that Tesla had optimized for minor improvements in upfront cost at the expense the long term value to the mission.

I had every battery type in mind. Power Wall, Megapack, Tesla SEXY and future as well as Optimus and Starlink.

My reply had more to do with prioritizing BMS value for any given type/chemistry over chemistry alone which @JRP3 had indicated.

 

[Moon Buggy]

How about you explain to me how Tesla's order books went from 4000/week to 40000/week without any advertisement?

By being the best car for the dollar that there is. Through word of mouth. By reaching those who are most likely to learn about and purchase Teslas.

They've done a phenomenal job growing from a small to medium to large to very large company. But I believe they are reaching the limits of what word of mouth can achieve. If they truly want to be the biggest company in the world, if they want to keep growing 50% year on year from here, it's going to take a lot more. The scale is different now and even if they manage to go from 40000/week to 80000/week, if they don't do it fast enough, they are going to be punished in the markets, and rightfully so.

 

[Ogre]

Wouldn't be surprised to see Tesla start more conventional advertising later in the year and then suddenly the reception will flip

You don't seem to understand where this discussion is founded. Few people will change their perspective, you just don't grasp what the perspective of most of us is. Tesla's management is better informed than any of us here. They have a great track record of being extremely analytical about this sort of thing.

A couple pages back @Gigapress expressed my perspective and I suspect the perspective of most of us quite well.

However, this is still a decision that I’d defer to Tesla management on. They have surely been considering this question and have much, much more information than we do.

The team in charge of Tesla are fundamentally the same exceedingly competent people who got us here. Very little about this situation has changed that opinion. They have massive amounts of data we lack, like the exact state of inventories, where things are in transit, what the actual order volume looks like when a price change happens, etc etc.

"Reception Will Flip". Not a bit. I trust Tesla management today. If they decide to start advertising in 6 months, it won't reduce that trust.

 

[Krugerrand]

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)

Baffle away, but know that you can’t learn people who don’t want to learn. The student is as important as the teacher. Humans often are really bad students.

 

[Singuy]

By being the best car for the dollar that there is. Through word of mouth. By reaching those who are most likely to learn about and purchase Teslas.

They've done a phenomenal job growing from a small to medium to large to very large company. But I believe they are reaching the limits of what word of mouth can achieve. If they truly want to be the biggest company in the world, if they want to keep growing 50% year on year from here, it's going to take a lot more. The scale is different now and even if they manage to go from 40000/week to 80000/week, if they don't do it fast enough, they are going to be punished in the markets, and rightfully so.

So if 936k mouths generated 1.3M orders the next year, what will 930k+1.3M mouths generate for 2023?

 

[EVNow]

As for ‘taking a guess and trying it’, Tesla has followed the scientific method. Which does require using all available data to make ‘the least bad decision’ then refining. They have been doing that, are now doing that and will do that. People who say they cannot know because they have not tried it simply have not been following events very closely.

You are just making generic statements that amounts to "trust daddy". You have no idea what they are doing - just like you accuse all of us as having no idea. I've spent my entire career in producing data for executives to make decisions, BTW.

Infact I clearly remember one Elon Musk tweeted some months/years back that it is a good idea to do some infomercials to educate people. What do I know ?!

 

[Singuy]

Tesla living in the media rent free. Should we even need to pay for advertisement?

Tesla Drops Model Y Starting Price Below the Average US Vehicle

Elon Musk’s latest round of cuts has dropped his two best-sellers to uncharted territory.

www.bloomberg.com