1x Tsla Discussion Threads

[hpcg] 16/4/2024 09:58

I'm not sure why both longs and shorts are just rehashing old arguments? Our job as investors is to assess the latest information and compare it with the price of the asset, and in conjunction with what other investors are doing. With respect to the latter, the chart tells us that existing investors are selling. That is unequivocal, even if there are bouts of recovery. If other investors are selling there better be good fundamental reasons to buy, so what are the fundamentals?

Revenue growth has slowed considerably, which means investors will not want to pay as much. A 100x multiple is fine with strong revenue growth and operational gearing. Talking of which, profits are actually down, so there appears to be negative operational gearing. We kind of know that to be the case with manufactured goods where gearing is apparent when production grows into a factory, but ceases once a factory reaches capacity. Irrespective, margins are down and dropping, so any price paid for the assets producing those revenue must drop also. Did Tesla's share price go up with similar fundamental patterns? No. Unlike the narrative it didn't go up because of, er, narratives like robo-taxis, it went up because revenue was growing very fast, and profits much faster. Nvidia didn't rise in the last year because of an AI narrative, it grew because revenue growth took off.

We can look at narratives though. Tesla now faces exceptional competition in China, who may export that to the world just as Japan did. FSD in its current incarnation doesn't work as anything other than driver assist, and the balance of evidence suggests it won't because that is what is what repeated failure after being on the cusp for years implies. Does Tesla have any growth engines? The truck will increase its product range, but it looks like an enthusiasts vehicle rather than a mass market product. Tesla appears to have dropped a small car offering, which limits its reach in China, India, Japan and Europe.

All in all this means investors will pay a lower multiple for sales and profits and it is as simple as that.

[hosede] 16/4/2024 09:39

However it is done the battery needs to contain enough energy to drive the car X number of miles and transferring that energy to the battery very quickly will be an inherently dangerous process

[blusteradjuster] 16/4/2024 09:26

I guess for the likes of Pierre, a 50% y-o-y cost reduction isn't fast enough.

CATL being the global market leader - not some university lab team.


:The world's largest maker of batteries for electric cars, China's CATL, claims it will slash the cost of its batteries by up to 50% this year, as a price war kicks off with the second largest maker in China, BYD subsidiary FinDreams."

[pierre oreilly] 16/4/2024 09:16

I think everyone realises that most technology will improve over time. What the informed people realise is that there are dreamers around who think battery development will be three orders of magnitude faster than it will actually be, which agrees with the previous rate of technological development.

Anyhow Busted, thanks for your bullish view on evs - I take it you own one and speak from experience of the pros and cons of them?

[careful] 16/4/2024 07:04

Smaller cleaner cars, max 1.2 ltr are optimal.
Luxury car market hates it, but that is the fact.
For decades to come the electricity needed to charge electric will be mostly dirty.

[che7win] 16/4/2024 06:44

Very few people want battery cars, they have a niche place on the roads, but most of us want to have option to keep ICE cars, perhaps hydrogen is the better alternative, both for the environment and for ease of use.

[blusteradjuster] 16/4/2024 06:30

If these supply-demand-price dynamics sound like solar panels, chips, mobile phones, flat-screen TVs etc that’s because the pathways to cheap mass-market commoditisation are similar.



Taken together, battery supply dynamics are now acting as a moderating factor for what happens on the demand side of the equation. When EV demand slows, battery prices fall, leading to lower prices and helping spur a recovery in demand.

There are several big implications here. The first is that prices will fall and margins will get squeezed. That’s already happening, with a 14% dip in average battery pack prices in 2023, and China’s CATL announcing that it expects to be able to sell battery cells at the equivalent of less than $60 per kWh this year.

[cfb2] 15/4/2024 22:14

careful: Google's Waymo have a couple of hundred Robotaxis operating in San Francisco at the moment. They also operate in Los Angeles and Austin but I've no idea how many.

Sorry to hear that real life has not met with your expectations. Drones, fixed wing deltas, reusable rocket ships, Sabre hypersonic rocket engines seem like pretty good technological progress to me. Unfortunately your flying cars will need a major breakthrough in something like room temperature superconductors, so I wouldn't hold your breath!

[1pencil] 15/4/2024 20:42

Tesla is the ultimate form over function statement, digital gauges, watches and such made their way in a while back ..this stuff can look very dated, very quickly.

Depreciation, closed loop repair making insurance costs higher than average.

There's a market but not sure its at this level, my thinking would be more at the other end budget city car, disposable (recyclable) rather than high end.

[careful] 15/4/2024 20:25

Hard to believe how reasonably intelligent people believe that autonomous driving or robo taxis will ever happen on a reasonable scale.
Cameras and sensors have so many limitation when applied to cars.

Once technology becomes mature, progress is negligible.
I remember seeing my first Jumbo Jet, a Boeing 747 at Heathrow in the early 1970's.
We all wondered what aircraft would look like in 50 years time. Crazy predictions, like the situation in Ridley Scotts Bladerunner film in the 1980's, predicting life about now.

Life has barely changed or progressed much in most fields and our predictions were way out.
Jumbo Jets look pretty much the same as 50 years ago, and we wait with excitement to see if Elon can go to the Moon as they did in July 1969.(yawn, yawn..55 years ago).

Pity really, in the original Bladerunner film you could purchase beautiful pleasure model such as the lovely Racheal, perfect in every way.
Roll on 2020...all we got was Covid.

[simon gordon] 15/4/2024 19:47

Believers gotta believe....


Bloomie - 8/4/24:

...the idea that Tesla will crack autonomous driving is the key to having its stock trade on a tech-like earnings multiple north of 50 times rather than closer to a Detroit-like 5 times. That is especially so when Tesla is doing distinctly Detroit-like things, such as offering discounts to clear a swelling backlog of inventory.

I have no doubt that something will be unveiled on August 8. As with Musk’s riposte to the original story on Friday, his after-market announcement lacked details. Perhaps, finally, despite all the false starts and missed deadlines, Tesla will reveal a car that can actually drive itself from Los Angeles to New York and then park itself (a vision Musk touted when Obama was still president). Perhaps not. Maybe it will be something else. Unveiling the physical design for a robotaxi — pending the actual roll-out of fully autonomous capabilities and regulatory approval, you understand — is also one potential outcome.

For the Tesla faithful, that could be enough. For everyone else, it might be worth remembering that Musk has been known, at a moment of stress on Tesla and himself, to tweet the odd grandiose, less-than-concrete claim. Robotaxis secured?

[cfb2] 15/4/2024 19:05

Tesla is being treated as a car company by some analysts. That's their mistake.

[blusteradjuster] 15/4/2024 18:07

Let’s hope so.

Cost-cutting is the zeitgeist, parity with ICE (and lower) is the goal.

Anything that hurries the ICE into museums.

[careful] 15/4/2024 18:02

Tesla are now just another car company as many predicted.
It will be a grind, ferocious competition.

[cfb2] 15/4/2024 17:52

Johnwise: The article you've posted is just garbage, it has confused Cybertruck with overall vehicles and misunderstood a production problem. There are mistakes in pretty much every paragraph, for example:

In Q1 2024, Tesla stated that it had only sold 386,000 Cybertruck units, despite producing over 430,000.

Cybertruck is just ramping up production, and Tesla are hoping to be producing 250k Cybertrucks by 2025. They have sufficient back orders (~2m) for the whole of 2024 and beyond.

There is always a difference between manufactured and delivery numbers as it takes time to deliver vehicles around the world.

Tesla overall car delivery numbers undershot analyst estimates of 425k with 386k. Sales in China have dropped off a cliff for all manufacturers (43% for BYD!) but only 20% for Tesla.

Production has stalled and slowed due to Tesla being unable to get parts due to problems transporting through Red Sea. Production at Gigafactory Berlin was down for almost a week due to sabotage of power to the plant.

[cfb2] 15/4/2024 17:27

I'm not sure a 10% lay-off should be seen as a bad thing by Tesla investors. This was announced a few months ago as a result of Tesla being between roll out waves and should be seen as an attempt to reduce costs and inefficiencies. Apparently a dead wood cull is a regular event there where teams need to fight to keep their people.

Andrej Karpathy talks about this at around 16:50 in this video:

[johnwise] 15/4/2024 17:19

Tesla lays off 10% of staff after falling Cybertruck sales

Tesla's Cybertruck sales fell short of expectations in the first quarter of 2024.

[juliemara] 15/4/2024 14:53

Amazing how many just can't see the wood for the trees!

[hpcg] 15/4/2024 12:43

They don't, which is why the plurality of analysts have Tesla as a hold, which of course means sell. Stockopedia data, which is from Refinitiv, has 4 strong sell, 7 sell, 22 hold, 11 buy and 5 strong buy. Their combined target comes out at $186, which is barely volatility above the price today. The consensus is gradually getting more negative.

[cfb2] 15/4/2024 11:08

Tesla are shortly (my guess is sometime in June/July 2024) going to start the approval process with NHTSA to get FSD software to level 4. This requires vast amount of data showing FSD safely driving over billions of miles. The more cars running the latest software the faster Tesla capture the evidence.

$99/month seems to be a sweet spot for people continuing with the FSD trial with around 25% of people prepared to pay this. I would guess the price reduction is to maximise the number of cars running the software rather than revenue.

Many analysts don't even include risk weighted revenue in their research for FSD software. Once Tesla have got to level 4 they will have to start modelling it as well as Robotaxis, unless they are incompetent.

[hpcg] 15/4/2024 08:59

Cost of FSD in the US has been halved. This presumably is a reaction to dropping demand, or possibly more likely, slow or negligible take up from new car buyers. I can't see the market liking that, though early doors there might be some buying of the spin. Analysts will have to get some red ink out, especially if they had factored in it only ever going up in price, per company announcements to this point.

[cfb2] 11/4/2024 16:18

Dominic is correct about the billions of captured miles from Tesla vehicles, which will be useful for getting approval from NHTSA and the various US states. Tesla seems to think 6 billion miles of safety data will be required to get approval.

For training their cars about 1 million multi-second clips of video data is required for basic operation but Tesla believe about 5 million clips are required for "god like" driving. Tesla carefully select and manicure their data before using it for training to enhance the required areas the previous version of software was lacking.

[cfb2] 11/4/2024 15:57

The compute hardware in a Tesla is not your standard microprocessor. Whilst it does have CPU cores it also has a GPU for running multiple processes simultaneously and a neural network that effectively computes dot products. Roughly speaking, the GPU runs an order of magnitude faster than the CPU and the neural network an order of magnitude faster than the GPU.

There are two complete units running in each car. This allows Tesla to run new versions of their software in "shadow mode" before they release it. Shadow mode runs on the second processor and allows them to see how their software performs compared to the current active version.