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

[transpondster]

Lithium and Nickel are both up finally trending downward from 2022. Fortunately there are actually only a few KG of Li in a battery pack (despite the name, it's far from the major constituent).

Lithium - Price - Chart - Historical Data - News

Lithium increased 14,000 CNY/T or 14.51% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. Lithium - values, historical data, forecasts and news - updated on May of 2024.

tradingeconomics.com

Nickel - Price - Chart - Historical Data - News

Nickel increased 3,267 USD/MT or 19.95% since the beginning of 2024, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. Nickel - values, historical data, forecasts and news - updated on June of 2024.

tradingeconomics.com

These are spot prices, we know well from Tesla's own financial disclosures that they have bulk, long-term contracts that would be well below these prices.

Do note price is for Li2CO3, so only 19% Li.

 

[petit_bateau]

It's heartening to see that even someone who thought it was a lost cause, that Tesla had already blown their chances, can turn around and become, at least a little, more open-minded and not so doggedly sure it had already failed.

Don't get your hopes up too much - I am being polite. I think that for everything except utility scale storage the signal in the data is already clear.

And also, this is not just about the energy division. Again the real signal is what it tells us about corporate governance issues, something that goes right back to SolarWorld acquisition.

But I am always open to learning from new data.

 

[Usain]

lol wut? The most popular Tesla would not have qualified had Tesla not cut prices. The IRA was very anti Tesla before the price cuts.

There's a lot more to the IRA than just the EV incentives. Tesla benefits from numerous other provisions that give Tesla the opportunity to rake in billions. And even those EV incentives are a huge net positive for Tesla as it gives them pricing power over its "competitors".

Also, when the IRA was written, nobody (including lawmakers) knew how the SUV rule would be interpreted.

 

[Usain]

W-what's this? hell frozen over? CNBC is going to discuss (quote) "the falling stocks of legacy automakers in the light of yesterday's major announcement by Tesla" - gulp!!! Coming up some time in the next hour.

Finally, "The competition is coming" narrative rings true. But it's in reverse.

 

[Olle]

Interesting thought. If they did that analysis, I think they probably did it wrong. I base this on how few people actually understand how disruption works. And it's almost always better to just let failing companies fail because their talent can always be hired by new, more efficient companies. Preventing renewal from happening is much worse than the impacts from major players going bankrupt.

The real problem is the assumption built into that question, that there are only two acceptable paths, helping them now, or helping them later.

You are too logical. If an administration cares about long term prosperity, they will use your logic.

If you think an administration cares more about being reelected, consider this; A big fat business bailout means free votes from many of the bailed out workers and their indirectly bailed out sub contractors, possibly a few 100 thousand people for GM. And best of all, it costs nothing toward the campaign budget. The other side would not object. Who wants to take the blame for the bankruptcy of GM?

 

[Usain]

Could the $7500 be applied to capital gains tax on a sale of stock or to taxes owed when converting an IRA to a ROTH IRA?

I've heard of retirees doing the IRA conversion trick in order to qualify for the old EV tax credit. Disclaimer: I'm NOT a tax advisor.

 

[ZeApelido]

Thank you to @jw934 For finding this confirmation that Tesla gets all Battery Tax Credits and nothing for Panasonic. I tried to edit my earlier post but was timed out. See attachments above

And Joe just reviewed Panasonic's last earnings transcript in which bears were claiming Panasonic stated they would receive the credits.

Not so fast. They stated that about their Energy sector, not Automotive.

$3600 of credits to 2170 Model 3 and Model Y coming.

Suddenly, the price cuts seem minor.

https://twitter.com/x/status/1614044122280755201

 

[bkp_duke]

Do note price is for Li2CO3, so only 19% Li.

Doesn't matter. It's the trend that was the topic.

Plus, there really isn't that much Li in a typical battery pack. It's not the major constituent. Reported numbers put the amount in a Tesla pack between 5 and 12kg (pure Li by mass, not lithium carbonate).

Where Does Tesla Get its Lithium? (Updated 2024)

As the energy transition continues to unfold, US electric vehicle (EV) pioneer Tesla (NASDAQ:TSLA) has been making moves to secure supply of the raw materials it needs to meet its production targets.Lithium in particular has caught the attention of CEO Elon Musk. Back in 2020, the battery metal...

investingnews.com

 

[wipster]

So, perhaps this has already been mentioned on this momentus day, but how will these ~20% price drops affect the prices of used Teslas? For instance we have a Mitsubishi dealer who has about 16 used Teslas, mostly 3's that they're currently selling for the mid 40's to mid 50's, all a few years old, mileage averaging ~40k. Now that you can buy a brand new all wheel drive Model 3 for less than $37K, how much are dealers like this going to have to reduce prices? Many of these Teslas have been on the lot for more than 4 months anyway...

I just bring it up because this price cut is going to affect more than just OEM's. Time to grab some popcorn!

 

[M|S|M MYP]

So, perhaps this has already been mentioned on this momentus day, but how will these ~20% price drops affect the prices of used Teslas? For instance we have a Mitsubishi dealer who has about 16 used Teslas, mostly 3's that they're currently selling for the mid 40's to mid 50's, all a few years old, mileage averaging ~40k. Now that you can buy a brand new all wheel drive Model 3 for less than $37K, how much are dealers like this going to have to reduce prices? Many of these Teslas have been on the lot for more than 4 months anyway...

I just bring it up because this price cut is going to affect more than just OEM's. Time to grab some popcorn!

Accelerate the death of used car dealers

 

[Artful Dodger]

My MX Plaid, ordered August 2021, delivered December 2022, paid €137.270, current MRSP €161.570 (no MS/X discounts yet here)

So not "nothing", but it is a solid 15% discount. That's some real foldin' money right there!

Cheers!

 

[VT_EE]

So, perhaps this has already been mentioned on this momentus day, but how will these ~20% price drops affect the prices of used Teslas? For instance we have a Mitsubishi dealer who has about 16 used Teslas, mostly 3's that they're currently selling for the mid 40's to mid 50's, all a few years old, mileage averaging ~40k. Now that you can buy a brand new all wheel drive Model 3 for less than $37K, how much are dealers like this going to have to reduce prices? Many of these Teslas have been on the lot for more than 4 months anyway...

I just bring it up because this price cut is going to affect more than just OEM's. Time to grab some popcorn!

Those dealers willl be taking a bath.

 

[wipster]

Accelerate the death of used car dealers

You may be right. Here's a case in point. As I look at this dealer's inventory, they've got a real nice 2019 RWD 3, with 35k miles for which they were asking $48,998, today it's $34,998. Yet, a brand new 2023 AWD 3 can be had for $36,490 (after tax credit).

I know which one I would choose.

 

[navguy12]

Those dealers willl be taking a bath.

And those reduced priced used TM3s will sell whilst the similarly priced ICEs will suddenly not sell, so those used ICE cars will have to drop their prices by the same percentage as the used Tesla’s.

 

[madodel]

You may be right. Here's a case in point. As I look at this dealer's inventory, they've got a real nice 2019 RWD 3, with 35k miles for which they were asking $48,998, today it's $34,998. Yet, a brand new 2023 AWD 3 can be had for $36,490 (after tax credit).

I know which one I would choose.

Isn't there also a lesser tax credit for used EVs?

 

[wipster]

Isn't there also a lesser tax credit for used EVs?

Yes, but if I recall, it only applies to vehicles $25k or less (correct me someone if I'm wrong). That's not saying the prices might not be at that level in the very near future. I expect it would mostly work for used hybrids currently.

Edit (before i was interrupted): Here's IRS guidance on used electrics: Used Clean Vehicle Credit | Internal Revenue Service

So a tax credit of 30% of the sales price to a maximum of $4,000. Along with the price reduction that Tesla will cause, this could help move quite a few used electric vehicles off the lots. Dealers will take a bath, in the short term at least, but barring anymore outside interference, this will put more electrics in the hands of drivers that will hopefully upgrade to a better Tesla in the next few years. Plus drive prices down, helping with inflation.

 

[BornToFly]

People worrying about Gross Margins....

Vehicle prices are back to 2021 levels. Aluminum prices are back to May 2021 level. Steel cheaper than May 2021.

2022 had GM drag of two ramping, money burning factories, which are now profitable, and many Model Ys delivered in 2022 were ordered in 2021 (so buyers paid the lower price). 2022 still had Auto GM over 27%.

IRA gives Tesla almost $4k/battery pack in 2023.

I will be shocked if Auto GM in Q1 are below 25%, and not the least bit surprised if they are over 27%.

With increased Q1 deliveries and Energy growth, I bet 2023 Q1 EPS will be > than Q4 2022.

 

[AperiodicCoder]

I had a white MYLR scheduled for delivery this month. My wife and I had discussed red in the past and I saw a red inventory model with white interior and everything else we wanted.

Decided to pull the trigger and took delivery this past Saturday. Obviously my timing could’ve been better, but I’m quite confident my Tesla holdings will more than make up for this “hit” I took.

Also, the vehicle is fantastic — the only flaw being some paint swirls I noticed in the sun during delivery which will be corrected before ceramic coating next week. We drove it to a brewery about an hour away tonight and it’s a pleasure (we still have a 2018 Model 3 in the stable as well).

We actually traded in a Kia EV6 with all the goodies. It was a great car! The problem is the Tesla ecosystem is just too good, especially when you’ve lived with it for 4 years.

I’m excited for everyone that will be able to afford these amazing machines.

 

[Knightshade]

Yes, but if I recall, it only applies to vehicles $25k or less (correct me someone if I'm wrong). That's not saying the prices might not be at level in the very near future. I expect it would only work for used hybrids currently.

25k price cap, only 1 used EV credit every 3 years, max income $75,000 single and 150k married filing jointly. Also must be at least 2 model years old (so for 2023 it must be 2021 or older)

I expect there'd be plenty of used bolts and leafs at least that'd fit under the age and price cap limitations, even if no Teslas yet.


As to Hybrids- it must be a plug-in EV with a battery capacity of least 7 kilowatt hours.

 

[Mark Alset]

Just checked inventory MY in my area (Raleigh) and in DC area. There are NO MY under $55k in inventory in DC area and one in Raleigh. This was not the case this morning. All tax credit eligible cars appear to have been purchased. Insane.

Looks like Tesla may need to replace the induction wheels on the remaining inventory cars with the aero wheels, to get the cars that are just over the $55k cap under the cap.