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

[Krugerrand]

On the surface it may seem that way, but you can put whatever premium you like on a skateboard or battery pack.

Won’t happen. The premium price. Not the Elon way. Would go against the mission and would go against what he just tweeted about not wanting to crush other OEMs.

I have to think on it some more, but currently I can’t come up with a way for this to work.

 

[traxila]

how many here are spaceX investors as well as Tesla? (unfortunately i am not)

curious....
if one was lucky enough to get a crack at it, to what ratio would you reduce your overall TSLA position within your portfolio to attain SpaceX?

on a level of 1 to 3,
1 being, skip it and wish you had the money to put in spacex, prob kick yourself in the ass down the road, for not doing it


2 being, do whatever you have to do to try and maneuver your way into spacex

3 being sell the family and scorch everything on earth for spacex shares at any valuation and any fees

what would you do?

SpaceX fortunes based on current valuation (44 billion they are raising at?) very much about Starlink. They have to prove this business model to have any shot at following in Tesla’s footsteps to a valuation of hundreds of billions. Otherwise they are just the best space rocket company...which is cool but not very profitable.

I am betting that both Tesla and SpaceX will become trillion dollar companies, but I am much more confident in Tesla. If you must reduce your Tesla position to have a crack at SpaceX, I would keep TSLA selling to the bare minimum necessary. And don’t forget your SpaceX shares will be totally illiquid. Would probably take you six months to unload your shares, depending on the price points you are looking at.

Of course, to take investment advice from me....well, now you are making costly mistakes.

All the best!

 

[Artful Dodger]

Last year I said this would be a great outcome for Tesla and (IIRC) got buried in disagrees.

This is still far from confirmation of a 'great outcome' for Tesla. The risk is endless, counterproductive liability lawsuits and wasted effort talking to entrenched ICE makers who are negotiating in bad faith.

You may have heard the Elon is optimistic by nature? This is a great example.

Ask yourself why no other automaker has signed a cost sharing agreement for use of the SC network in the several years since Elon made the offer.

Automakers do not want EVs to succeed. They still think they're a fad and are hoping they go away so they can get back to business as unual, while the world slowly burns.

 

[traxila]

Reuters - early this morning: End game for oil? OPEC prepares for an age of dwindling demand

If the OPEC former research head is correct and we are at 110 million barrels per day in the 2040s it is game over for sure. Love how an article about end game for oil is about how we will only be burning 10 percent more oil per day than we are now 20 years in the future. Sigh...

 

[Mo City]

So, Tesla can make more money selling batteries than cars? That's what you believe?

That isn't what I said. They would make more money doing both. Is that really hard to understand?

Unfortunately, you are being deliberately obtuse (I think). Or maybe you just can't understand simple concepts.

1 Listen to Elon. 2 Then listen to TSLA pop like a firecracker when something like this is announced.

 

[traxila]

This is still far from confirmation of a 'great outcome' for Tesla. The risk is endless, counterproductive liability lawsuits and wasted effort talking to entrenched ICE makers who are negotiating in bad faith.

You may have heard the Elon is optimistic by nature? This is a great example.

Ask yourself why no other automaker has signed a cost sharing agreement for use of the SC network in the several years since Elon made the offer.

Automakers do not want EVs to succeed. They still think they're a fad and are hoping they go away so they can get back to business as unual, while the world slowly burns.

I agree. Tesla has offered to share technologies continuously throughout its existence to no avail.

I would go a step further and state that many automakers have finally come to the hard conclusion that EVs will break them if they succeed. I would not trust them to go quietly.

 

[Thekiwi]

You know if Tesla was thinking of moving the S/X to use the same cells as model 3/Y, it would leave the annual equivalent of 80k-100k units of the existing model s/x battery packs to be sold to other automakers of luxury EVs with room for a very large profit margin on the skateboard.

 

[Curt Renz]

Casgains Academy - yesterday:

 

[Mo City]

This is still far from confirmation of a 'great outcome' for Tesla. The risk is endless, counterproductive liability lawsuits and wasted effort talking to entrenched ICE makers who are negotiating in bad faith.

You may have heard the Elon is optimistic by nature? This is a great example.

Ask yourself why no other automaker has signed a cost sharing agreement for use of the SC network in the several years since Elon made the offer.

Automakers do not want EVs to succeed. They still think they're a fad and are hoping they go away so they can get back to business as unual, while the world slowly burns.

Obviously no legacy would do this until they fully realized EVs are NOT going away, "business as usual" is history and extinction is the only other option. Survival mode changes the way companies think and operate.

As @FrankSG said, we aren't there yet. We will be this decade.

 

[Thekiwi]

Obviously no legacy would do this until they fully realized EVs are NOT going away, "business as usual" is history and extinction is the only other option. Survival mode changes the way companies think and operate.

As @FrankSG said, we aren't there yet. We will be this decade.

I think the post below from earlier today by Jack paints the picture that we are already there, and now more than ever other automakers will be willing to take up an offer from Tesla to supply literally the best drivetrain they can get, by a wide margin. It’s been a long time since I have heard a competitor rubbish Tesla cars, and when it comes to dollars and cents I don’t see how they could look past an offer from Tesla if the price is right (ie cheaper than what anyone else can offer them from a price per mile perspective).

I am frustrated, aggravated, and down right pissed off about the valuation argument...

Ford plans $11 billion investment, 40 electrified vehicles by 2022

General Motors to spend $20 billion through 2025 on new electric, autonomous vehicles

VW Challenges Rivals With $66 Billion for Electric Car Era

Toyota unveils images of upcoming all-electric cars, accelerates EV plans by 5 years - Electrek


https://www.industryweek.com/techno...t-9-billion-in-china-in-race-for-ev-dominance

FCA to invest billions to electrify 30 models | Car News | Auto123

Volvo Follows Tesla's Lead on EVs by Building Its Own Batteries

Porsche boosts its investment in electric cars

Hyundai Motor tees up flying cars, electric vehicles with $52 billion investment - Roadshow

Daimler announces $11 billion investment in electric vehicles - Electrek

Do not call me Fanboy. If you must, just call me Captain Obvious. It is blatantly obvious to the most casual observer that Tesla has disrupted the entirety of the automotive and petroleum industries.

To utter the term overvalued in reference to Tesla is idiotic. In a clear, loud, and deliberate voice Tesla is undervalued.

The revolution is afoot. It is time to speak with the voice of a lion.

 

[kcveins]

FOMC meeting tomorrow is the big thing

My screen or maybe eyes was a little off...
I thought you said FOMO meeting was tomorrow

 

[Paul_SF]

I learned to take some time to process what Mr. Musk is saying and why. I think in a few weeks/months we will understand this tweet, better.

I vaguely remember that it was an article where a certain CEO was asking his BOD to just buy Tesla shares, as they have no way of catching up. And the board didn’t listen to the suggestion. Maybe they will listen now to this offer.

 

[TheTalkingMule]

Won’t happen. The premium price. Not the Elon way. Would go against the mission and would go against what he just tweeted about not wanting to crush other OEMs.

I have to think on it some more, but currently I can’t come up with a way for this to work.

A finished vehicle has a certain amount of profit potential based on the competition (Tesla). Nothing anti-mission about taking 60% of that profit potential as supplier of the skateboard. The OEM will then be forced to create lean operations for everything else and try to make money. (i.e. eliminate dealerships)

 

[Oveeus]

The Tesla licensing tweet is not all that interesting for automakers.

What’s interesting is for companies like apple, google or just about anyone with deep pocket eyeing the auto industry without a huge initial investment.

 

[FrankSG]

I think the post below from earlier today by Jack paints the picture that we are already there, and now more than ever other automakers will be willing to take up an offer from Tesla to supply literally the best drivetrain they can get, by a wide margin. It’s been a long time since I have heard a competitor rubbish Tesla cars, and when it comes to dollars and cents I don’t see how they could look past an offer from Tesla if the price is right (ie cheaper than what anyone else can offer them from a price per mile perspective).

Besides the fact that Tesla is still buying batteries from outside suppliers, and does not currently have excess capacity it could sell off, don't underestimate what @Artful Dodger mentioned regarding the current attitude of OEMs either.

Diess is a rare breed. I think @avoigt can attest that his superiors aren't too pleased with him, which of course is partly attributable to the ID.3 fiasco, but I also wouldn't be surprised if they're unhappy with how aggressive he is in his desire to transition to EVs, and how extreme his public comments are ("Tesla is king", "Tesla will be most valuable company, period", etc.).

I believe that most managers at OEMs are still very much in a state of "leave me the hell alone", "why are you doing this to me", and "please go away, so we can go back to the way things were". The incentives for OEMs to transition to EVs just aren't strong enough in the near term. Regulatory credits are starting to get there in some jurisdictions, but other than that most managers care more about their near term job security and their near term bonuses, than about the long term survivability of the company they currently work for, but might very well no longer work for when *sugar* hits the fan.

Besides, wanting to transition to EVs is just one thing. Once most employees within an OEM are actually on board with electrification, that's when the real challenges start. I outlined these challenges in a blog post in November of last year:

The Automotive Industry's Transition to AEVs: Which car manufacturers will survive the next decade?

1. Fast Charging
2. Regulations
3. Software
4. Workers & Unions
5. Lack of value add
6. Not incentivized to go all-in on EVs
7. Suppliers
8. Battery Technology
9. Dealerships
10. Wall Street & Finances
11. Battery Supply
12. Autonomy & MaaS

 

[MC3OZ]

Why would Tesla sell powertrains and batteries to a company, who must the turn around and make money on the car, when Tesla could just build the car and make ALL of the money? Selling batteries to other companies so THEY can make money is NOT a money maker for Tesla! It is helping the mission maybe, but NOT a money maker for Tesla. Unless of course, you are convinced that Tesla is demand constrained.

Tesla can make money while accelerating the mission.

They don't need to slow their own production ramp or vehicle program in any way, batteries for Tesla vehicles are always the priority, but after that they can sell excess production to other including new packs for existing Tesla cars.

The main criteria is that a business area is profitable and does not impinge on other more profitable areas.

EDIT:: And Tesla doesn't necessarily need to license their latest technology, just an agreed product spec for an agreed price.

 

[FrankSG]

The Tesla licensing tweet is not all that interesting for automakers.

What’s interesting is for companies like apple, google or just about anyone with deep pocket eyeing the auto industry without a huge initial investment.

Good point! I wouldn't be surprised if a lean internal Alphabet/Apple/Amazon startup could better leverage Tesla's platform than the incumbents with all of their overheads and inefficiencies.

Although at the same time, you can't underestimate how complex manufacturing is either. These large tech firms certainly have the reputation and funds to attract top talent though.

 

[Tes La Ferrari]

On the surface it may seem that way, but you can put whatever premium you like on a skateboard or battery pack.

Yes. The same power trains are sold at very different margin levels when sold as part of cars
of different brands.

LikeBentley has done with the W12 engine that it used for both the VW Phaeton and the Bentley Continental.

Or as Aston Martin does with the powertrains it buys from Mercedes for the Vantage (they are AMG powertrains found in the likes of the C63, & G63.

Or think of the common chasis that underpins the Porsche Cayenne, Bentley Bentayga, VW Touareg and the Lambo Urus. - but all at very different price points.

BMW 7 series and the Rolls Royce Ghost is yet another example at very different price points.

There are tons of examples of this in the current ICE age - makes sense to extrapolate it to the EV age.

For the Tesla it could be very profitable to sell skateboard with powertrains downtuned via their software to be 10% less power, for these lux auto makers to design the next Bentley or Lambo on. They could pay Tesla a healthy profit for each one or better yet they can build their own factories to build Tesla licensed powertrains and skateboards and pay Tesla a healthy royalty for the right to do so.

And because they are in the lux business, and could charge more for each of these anyway, and the excess amounts they pay are not going to impact sales for the lux legacy automaker.

They may also view this as cheaper than what they think is "reinventing the wheel"

Combine this with a royalty fee for supercharger access - and this becomes a profitable means to introduce yet another profit stream to monetize Tesla's R&D - AND advance the mission.

 

[Mo City]

Good point! I wouldn't be surprised if a lean internal Alphabet/Apple/Amazon startup could better leverage Tesla's platform than the incumbents with all of their overheads and inefficiencies.

Selling power trains to Alphabet, Apple and Amazon doesn't solve their hardest problem: mass production. So a partnership with Tesla is not all that IMO.

I also don't see Apple or (especially) Amazon ever capitulating to Elon. Larry Page has a good relationship with Elon but he no longer runs Alphabet.

On the other hand, EV power trains are the missing piece of the puzzle for legacies for long term survival. One or more of them will eventually surrender to Tesla.

 

[SoGA Fan Club]

I saw this article was promoted as great ammunition by the shorts and haters today. Upon reading it, I felt sure that these shorts and haters had not actually read the article.

Essentially, the author states that Tesla vehicles driven by people with AP engaged, who are not attentive, are about as safe as human driven cars. Hmmm. So, that tells me that he is admitting that the cars where AP is engaged and the driver IS paying attention are safer than human driven cars, which can only mean that AP is safer overall - so what's the argument?

But what I cannot understand for the life of me is this. If AP with an inattentive driver is about is safe as human drivers, and they want checks in place to ensure that drivers are paying attention in AP driven vehicles, why are they NOT calling for this same technology in human driven cars? After all, at this time, there's probably 10,000 human driven cars for every AP car on the road. If this technology of ensuring the driver is paying attention will save AP users from having accidents, how many accidents will it prevent in human driven cars (since it's already been decided that they're equally safe at this point)? Seems like if their intent is to prevent accidents and save lives, there's a whole lot more low hanging fruit in human driven cars. But then, I suspect this is not their objective at all.

Teslas Aren't Safer On Autopilot