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

[larmor]

Cramer spelled Lightning correctly this time... baby steps Jim.

It is always good business practice to spell the name of the product you are paid to promote correctly.

 

[Todd Burch]

Anyone thinking the Cybertruck will never have a 500-mile trim, just because it is launching with a 350-mile trim... is an idiot. This is simply a 4680 ramp-related issue and makes perfect sense - assuming it is even true (as it is only a rumor). They get to sell more Cybertrucks, and also at a lower retail price, which if you want the 500-mile trim, you will appreciate in the long term. Interest rates are going to come down. You don't want to be buying a top-trim Cybertruck with super-high interest rates

Having said all that, IMO the rumor is wrong, and Tesla will be debuting with a long-range trim. Works better for reviews and comparisons, which will all stay around for a long time so it's better for them to not be saying "not as much range as the Silverado EV" etc.

Don't we have a quote from Elon from a few weeks ago where he said something along the lines of the specs being better than what was announced in just about every way? Maybe it was at the annual shareholder meeting?

 

[larmor]

When is the long range Silverado EV even coming out? Is it the launch model?

The powerpoint version of the Silverado EV has a great range!

 

[Knightshade]

Tesla directors pay $735 mln to settle lawsuit over excess compensation

Tesla Inc's directors will return $735 million to the company to settle claims they grossly overpaid themselves in one of the largest shareholder settlements of its kind, according to a Monday filing in a Delaware court.

www.reuters.com

No further details I can find yet- but interesting in the context of Elon saying Tesla "will never surrender/settle an unjust case against us"

 

[AndrewZ]

Tesla directors pay $735 mln to settle lawsuit over excess compensation

Tesla Inc's directors will return $735 million to the company to settle claims they grossly overpaid themselves in one of the largest shareholder settlements of its kind, according to a Monday filing in a Delaware court.

www.reuters.com

No further details I can find yet- but interesting in the context of Elon saying Tesla "will never surrender/settle an unjust case against us"

I believe this is the case, initiated back in 2020 by a pension fund

The Police and Fire Retirement System of the City of Detroit v. Elon Musk, et al., C.A. No. 2020-0477-KSJM

The Police and Fire Retirement System of the City of Detroit v. Elon Musk, et al., C.A. No. 2020-0477-KSJM

law.justia.com

 

[MP3Mike]

Don't we have a quote from Elon from a few weeks ago where he said something along the lines of the specs being better than what was announced in just about every way? Maybe it was at the annual shareholder meeting?

I don't recall seeing that recently, but 350 miles of range would be better than the "300+" miles of range that was originally announced for the dual motor version.

 

[EQC_]

Why did you erase my post on Sen Warren's letter to the SEC? The article was on CNBC.

Here is the article again...

Elizabeth Warren urges SEC to investigate Tesla over Twitter ties, corporate governance

Sen. Elizabeth Warren, D-Mass., sent a nine-page letter urging the SEC to investigate Tesla and its board of directors.

www.cnbc.com

...

quote from the article:

"Among these, she wrote that at Twitter, Musk could “decide to run the company to maximize badly-needed revenue, even if that includes great deals for Tesla’s competitors and potential injury to Tesla.” Contrarily, she said Musk could opt to “run Twitter to benefit Tesla through favorable algorithms or free advertising.”

I definitely have no background or knowledge on these topics...but it seems like she's listing as "problematic" two things that are exact opposites, and actually sound (to my uneducated self) like they should both be reasonably legal.

That first point can be summarized as "Musk might run Twitter as a stand-alone business, and make fair deals available to all companies, including Tesla competitors, if it benefits Twitter." That sounds like how a business should be run, and not a "conflict of interest" at all. Shouldn't an owner and/or board member of two companies be allowed to run each in a way that best serves that company? The owner/board member shouldn't be required to be working for Company A (Tesla) while making decisions for Company B (Twitter) -- forcing that practice would be like forcing a conflict of interest.

The second point can be summarized as "Musk might use Twitter to help Tesla." So, this one seems like it should be legal and reasonable since Twitter is a private company. It's not the sort of conflict of interest Tesla/Tesla Shareholders should worry about, since it's beneficial to Tesla and adds value. Would there be a problem if Musk started up an entirely new private company that used zero of Tesla's resources but had the sole job of advertising for Tesla and giving out hundred dollar bills to every new Tesla owner? Should the Boring Company be prevented from buying/using Tesla cars? Twitter being a private company sounds like there should be fewer regulations and less legal requirement to "increase shareholder value," so I wouldn't think there's much room to complain from Twitter's perspective or to declare that the government needs to protect Twitter's owners.

 

[EQC_]

Tesla directors pay $735 mln to settle lawsuit over excess compensation

Tesla Inc's directors will return $735 million to the company to settle claims they grossly overpaid themselves in one of the largest shareholder settlements of its kind, according to a Monday filing in a Delaware court.

www.reuters.com

No further details I can find yet- but interesting in the context of Elon saying Tesla "will never surrender/settle an unjust case against us"

Interesting.

In a way, isn't the settlement here sortof a victory for Tesla? This suit wasn't exactly against Tesla, but against Tesla's directors, and by my reading the settlement is value to be returned back to Tesla the company.

So, as long as Elon's reference to "us" was meant to indicate Tesla as a whole company, then I don't think there's a question of Elon's statement being violated here.

In the end, it sounds like 3.1 million shares (or options to buy shares?) will go back to Tesla...leaving Tesla free to potentially sell those shares at full market value at some later date.

 

[strago13]

Perhaps "highest range" first, not highest trim...though plaid switch was a huge disappointment.

This is more what I was getting at. You said this in a better way than me.

 

[SOULPEDL]

Model 3

And then they boosted the range. Ours went from 310 to 325 mi single motor (minus my handicap for my acceleration needs).

They could do that again on CyberTruck - we always know the latest chemistry after the fact which gives them time to road test with live data. Then throttle up. Plus this helps the market compare apples to apples with other brands (that are actually here today).

Compare to Rivian (From Car and Driver):

"For 2023, the R1T is offered with three different battery packs. The Standard pack is said to be good for 270 miles per charge while the Large and Max battery packs boast driving ranges of up to 352 and 400 miles, respectively."

Price-wise, Rivian dual motor shows this:
Base/As Tested: $74,800/$92,850
Options: large battery pack, $6000;

Tesla's gonna kill it on price, it's what they do. But it it's a great choice for the many who can't see driving around in triangles.

 

[EQC_]

Agree. When is the last time Tesla launched a product with the lowest trim level first? Hint: Never. They always release the highest end trim first since it helps keep margins up while depreciating a *sugar* ton of expenditures for new equipment lines.

With all the folks pointing out that Model 3 production started with the RWD Long-Range version, perhaps this statement can be fixed up a bit:

"When is the last time Tesla launched a product with the lowest MARGIN trim level first? Hint: Never. They always release the highest end trim [that fits ease of manufacturing and marketing goals] first since it helps keep margins up while depreciating a *sugar* ton of expenditures for new equipment lines."

There's always detail to Tesla's plans/decisions. From a marketing perspective, it probably wouldn't make sense to start production of Tesla's first mass-market-intent vehicle with the dual-motor performance version -- more difficult to manufacture, and would empower the "toys for rich people" critics. Also, if I remember correctly, when the performance trim finally came out, I think Tesla said it used the same motors, but just tested for manufacturing variance that allowed higher performance. So, if that was indeed the case, Tesla couldn't have started off with 100% performance versions. Perhaps there were also initial issues with motor production, so the single motor version allowed more cars to be produced. So, if that's all true, it makes sense that they went with the bigger battery to increase price and margin a bit, and stuck with a single motor variant for simpler manufacturing.

With Cybertruck coming soon, there are certainly assorted other variables at play...but Tesla can still be expected to try to optimize for the best combination of margin, manufacturing ease, and component availability.

 

[gillfoto]

Curt Renz

Great musical learning interlude . . . was that a CyberBass in the background?

 

[Zero CO2]

no recognition of Cybertruck ...WTF... there are still many who think CT is going to be like the Hummer a novelty vehicle.... Hummer ICE lifetime US sales was around 219K units over 20 years of production ... CT will eclipse by year 3 possibly sooner... show

 

[AndrewZ]

Interesting.

In a way, isn't the settlement here sortof a victory for Tesla? This suit wasn't exactly against Tesla, but against Tesla's directors, and by my reading the settlement is value to be returned back to Tesla the company.

So, as long as Elon's reference to "us" was meant to indicate Tesla as a whole company, then I don't think there's a question of Elon's statement being violated here.

In the end, it sounds like 3.1 million shares (or options to buy shares?) will go back to Tesla...leaving Tesla free to potentially sell those shares at full market value at some later date.

At the very least you'd think it would reduce Tesla's future compensation burden or return cash to their coffers if those options were already awarded.

I'd doubt they can be turned around and sold on the open market, but it might lead to less dilution? Not really sure myself.

Potential negative flip side would be wondering what these directors do in response to losing all that compensation, how they would raise funds to pay back any shares owed, etc.

 

[RMan]

Great musical learning interlude . . . was that a CyberBass in the background?

Curt, is it time to warm up the band?

 

[Nocturnal]

no recognition of Cybertruck ...WTF... there are still many who think CT is going to be like the Hummer a novelty vehicle.... Hummer ICE lifetime US sales was around 219K units over 20 years of production ... CT will eclipse by year 3 possibly sooner... show

I don't think we will be too far off that in 2024.

 

[betstarship]

View attachment 956989

no recognition of Cybertruck ...WTF... there are still many who think CT is going to be like the Hummer a novelty vehicle.... Hummer ICE lifetime US sales was around 219K units over 20 years of production ... CT will eclipse by year 3 possibly sooner... show

Think of the resale value of the first 10,000 or 100,000 CT's even from the beginning while the initial queue is being completed.

 

[wipster]

With all the folks pointing out that Model 3 production started with the RWD Long-Range version, perhaps this statement can be fixed up a bit:

"When is the last time Tesla launched a product with the lowest MARGIN trim level first? Hint: Never. They always release the highest end trim [that fits ease of manufacturing and marketing goals] first since it helps keep margins up while depreciating a *sugar* ton of expenditures for new equipment lines."

There's always detail to Tesla's plans/decisions. From a marketing perspective, it probably wouldn't make sense to start production of Tesla's first mass-market-intent vehicle with the dual-motor performance version -- more difficult to manufacture, and would empower the "toys for rich people" critics. Also, if I remember correctly, when the performance trim finally came out, I think Tesla said it used the same motors, but just tested for manufacturing variance that allowed higher performance. So, if that was indeed the case, Tesla couldn't have started off with 100% performance versions. Perhaps there were also initial issues with motor production, so the single motor version allowed more cars to be produced. So, if that's all true, it makes sense that they went with the bigger battery to increase price and margin a bit, and stuck with a single motor variant for simpler manufacturing.

With Cybertruck coming soon, there are certainly assorted other variables at play...but Tesla can still be expected to try to optimize for the best combination of margin, manufacturing ease, and component availability.

While it may have been mentioned already, one of the main reasons Tesla brought out the higher range/priced versions of vehicles previously is cash generation. And since they're currently flush with cash, they really don't need to bring out the most expensive versions of new vehicles first ...

 

[2daMoon]

While it may have been mentioned already, one of the main reasons Tesla brought out the higher range/priced versions of vehicles previously is cash generation. And since they're currently flush with cash, they really don't need to bring out the most expensive versions of new vehicles first ...

... so, does this mean they may release the 350 mile $25,000 Cybertruck first?

Coolio

 

[wipster]

I've only been investing in TSLA for a decade so hoping someone can help me out on this. If margins start negative and then you significantly cut prices, how does that affect margins? Do they go positive? Asking for a friend.

Absolute value of margins should increase dramatically!