Author Topic: Is Tesla a good investment?  (Read 410376 times)

MustacheAndaHalf

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Re: Is Tesla a good investment?
« Reply #2250 on: February 04, 2024, 10:09:44 AM »
Yes, the ruling has to do with violating rules about corporate governance, not the absolute amount of compensation. In theory the situation would be no different if his pay has been $100 - the problems involved not negotiating with a truly independent board and misleading stockholders.

That said I think Musk being gone would probably be good for Tesla at this point.

-W

The judge called the amount "unfathomable" in open court.  It looks like the amount and lack of an independent board were both factors the judge considered.

Quote
Speaking in court, Judge Kathaleen McCormick said the amount was “unfathomable” and blamed Tesla’s leadership for not properly informing shareholders about it.
Quote
Varallo [who filed the lawsuit] also said the board did not disclose that Musk had designed the pay package himself or how close Musk was to some of Tesla’s payment committee members, such as Antonio Gracias and Ira Ehrenpreis, who the CEO has had personal and business relationships with for several years.
https://www.aljazeera.com/news/2024/2/1/why-did-a-court-cancel-elon-musks-tesla-salary-package

waltworks

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Re: Is Tesla a good investment?
« Reply #2251 on: February 04, 2024, 01:24:20 PM »
Fair enough, it's both.

Regardless, IMO the best thing that could happen to Tesla at this point would be for Musk to ride off into the sunset and do something else, while someone who is actually decent at managing a near-mature company and can keep their trap shut takes over for a fraction of the pay.

-W

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #2252 on: February 04, 2024, 11:33:28 PM »
Tesla at Friday’s closing price is up 9X since the start date of this thread.

Is Tesla a good investment?

Yes

Everybody take the rest of the week off.

waltworks

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Re: Is Tesla a good investment?
« Reply #2253 on: February 05, 2024, 06:52:39 AM »
Was Tesla a good investment in 2018? Obviously yes.

Is it a good investment today? Maybe.

-W

bacchi

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Re: Is Tesla a good investment?
« Reply #2254 on: February 05, 2024, 07:21:46 AM »
Was Tesla a good investment in 2018? Obviously yes.

Is it a good investment today? Maybe.

-W

Would it have been a good idea to buy when it was added to the S&P 500? No.

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #2255 on: February 05, 2024, 10:23:29 AM »
Was Tesla a good investment in 2018? Obviously yes.

Is it a good investment today? Maybe.

-W

Would it have been a good idea to buy when it was added to the S&P 500? No.

That’s TBD.

bacchi

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Re: Is Tesla a good investment?
« Reply #2256 on: February 05, 2024, 11:31:26 AM »
Was Tesla a good investment in 2018? Obviously yes.

Is it a good investment today? Maybe.

-W

Would it have been a good idea to buy when it was added to the S&P 500? No.

That’s TBD.

Sorry, I wasn't clear.

Buying Tesla and holding it until today would've been a worse choice than buying the S&P 500 and holding it until today. That's demonstrably true.

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #2257 on: February 05, 2024, 01:18:59 PM »
Was Tesla a good investment in 2018? Obviously yes.

Is it a good investment today? Maybe.

-W

Would it have been a good idea to buy when it was added to the S&P 500? No.

That’s TBD.

Sorry, I wasn't clear.

Buying Tesla and holding it until today would've been a worse choice than buying the S&P 500 and holding it until today. That's demonstrably true.

OK, I guess. Seems a bit arbitrary to make that the defining start point. I also seem to recall there was a lot of front running on Tesla in the run up to its inclusions because WS and investors knew funds mirroring the S&P 500 were going to be forced to buy millions of Tesla shares following the announcement, which artificially inflated the price of TSLA prior to inclusion.

Regardless, long-term investors have faired well. Short-term holders who sold in under five years in the period between 2013 and 2019, or 2020 to present, more hit or miss.

Tesla gains:

5 years = ~800%
Start of the thread = ~900%
10 years = ~1500%
Since IPO = ~14,000%

Good thing Mustachians are investors and not traders/speculators. It is called the investor thread after all.


ChpBstrd

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Re: Is Tesla a good investment?
« Reply #2258 on: February 05, 2024, 03:45:33 PM »
"While companies do have to pay a franchise tax to register in Delaware, this is capped at $200,000 per year. If Tesla were to reincorporate in Texas, they would have to pay 0.75% of revenues per year in franchise taxes to the state, which comes to considerably more than $200,000 per year."

29:40
https://www.youtube.com/watch?v=QkuAXOMYwA4

On $96.773B in revenue over the past 12 months, that would be about $726 million, per year, in extra taxes paid by TSLA so that the captive board could compensate Musk with more of the regular shareholders' money. Reincorporating in Texas as Musk suggested would be a decision that could cost shareholders billions, and would only serve one man. That's not to say it won't happen.

mistymoney

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Re: Is Tesla a good investment?
« Reply #2259 on: February 05, 2024, 04:53:27 PM »
"While companies do have to pay a franchise tax to register in Delaware, this is capped at $200,000 per year. If Tesla were to reincorporate in Texas, they would have to pay 0.75% of revenues per year in franchise taxes to the state, which comes to considerably more than $200,000 per year."

29:40
https://www.youtube.com/watch?v=QkuAXOMYwA4

On $96.773B in revenue over the past 12 months, that would be about $726 million, per year, in extra taxes paid by TSLA so that the captive board could compensate Musk with more of the regular shareholders' money. Reincorporating in Texas as Musk suggested would be a decision that could cost shareholders billions, and would only serve one man. That's not to say it won't happen.

Thanks for this info. Musk said would hav shareholders vote, does that mean I will get a say? Or only big wheelers?

GuitarStv

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Re: Is Tesla a good investment?
« Reply #2260 on: February 05, 2024, 04:58:58 PM »
"While companies do have to pay a franchise tax to register in Delaware, this is capped at $200,000 per year. If Tesla were to reincorporate in Texas, they would have to pay 0.75% of revenues per year in franchise taxes to the state, which comes to considerably more than $200,000 per year."

29:40
https://www.youtube.com/watch?v=QkuAXOMYwA4

On $96.773B in revenue over the past 12 months, that would be about $726 million, per year, in extra taxes paid by TSLA so that the captive board could compensate Musk with more of the regular shareholders' money. Reincorporating in Texas as Musk suggested would be a decision that could cost shareholders billions, and would only serve one man. That's not to say it won't happen.

Thanks for this info. Musk said would hav shareholders vote, does that mean I will get a say? Or only big wheelers?

Based on past actions, probably will just be a poll on Twitter.  That he'll ignore if he doesn't like the results.

mistymoney

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Re: Is Tesla a good investment?
« Reply #2261 on: February 05, 2024, 06:07:52 PM »
"While companies do have to pay a franchise tax to register in Delaware, this is capped at $200,000 per year. If Tesla were to reincorporate in Texas, they would have to pay 0.75% of revenues per year in franchise taxes to the state, which comes to considerably more than $200,000 per year."

29:40
https://www.youtube.com/watch?v=QkuAXOMYwA4

On $96.773B in revenue over the past 12 months, that would be about $726 million, per year, in extra taxes paid by TSLA so that the captive board could compensate Musk with more of the regular shareholders' money. Reincorporating in Texas as Musk suggested would be a decision that could cost shareholders billions, and would only serve one man. That's not to say it won't happen.

Thanks for this info. Musk said would hav shareholders vote, does that mean I will get a say? Or only big wheelers?

Based on past actions, probably will just be a poll on Twitter.  That he'll ignore if he doesn't like the results.

:P

blue_green_sparks

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Re: Is Tesla a good investment?
« Reply #2262 on: February 05, 2024, 07:47:23 PM »
Fair enough, it's both.

Regardless, IMO the best thing that could happen to Tesla at this point would be for Musk to ride off into the sunset and do something else, while someone who is actually decent at managing a near-mature company and can keep their trap shut takes over for a fraction of the pay.

-W

I retired from a career in designing anti-collision and other safety avionics that all works together within an integrated system as the skies around major airports got very busy back in the mid 80s. The airborne computers communicate with each other and ground control to keep separation.  We don't have an integrated approach like that with ground transpo, so I will be impressed if Tesla does actually implement full self-driving with their equipment. His ridiculously optimistic schedule and robo-taxi claims didn't really inspire confidence.

It makes sense that fully self-driving cars should not be unleashed onto public roads until intense and comprehensive third-party testing is completed. I don't care about how many million miles are claimed by manufacturers. I also do not like this idea that you have to baby-sit the car and react within so-many seconds. I read a report that stated that Tesla drivers have the highest accident rate of any major car brand. Didn't give any root causes, but now they have this big safety recall as well. I started looking at getting a Tesla a few years ago; but frankly I no longer care too much for the gentleman. Not gonna complain about the contributions to my portfolio from Tesla soaring stock valuations over the years, but it is only indirect ownership now.

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #2263 on: February 05, 2024, 08:58:41 PM »
Fair enough, it's both.

Regardless, IMO the best thing that could happen to Tesla at this point would be for Musk to ride off into the sunset and do something else, while someone who is actually decent at managing a near-mature company and can keep their trap shut takes over for a fraction of the pay.

-W

I retired from a career in designing anti-collision and other safety avionics that all works together within an integrated system as the skies around major airports got very busy back in the mid 80s. The airborne computers communicate with each other and ground control to keep separation.  We don't have an integrated approach like that with ground transpo, so I will be impressed if Tesla does actually implement full self-driving with their equipment. His ridiculously optimistic schedule and robo-taxi claims didn't really inspire confidence.

It makes sense that fully self-driving cars should not be unleashed onto public roads until intense and comprehensive third-party testing is completed. I don't care about how many million miles are claimed by manufacturers. I also do not like this idea that you have to baby-sit the car and react within so-many seconds. I read a report that stated that Tesla drivers have the highest accident rate of any major car brand. Didn't give any root causes, but now they have this big safety recall as well. I started looking at getting a Tesla a few years ago; but frankly I no longer care too much for the gentleman. Not gonna complain about the contributions to my portfolio from Tesla soaring stock valuations over the years, but it is only indirect ownership now.

Do you know what the “big safety recall” was about? The “recall”had to with font size on some warning display symbols. There were no accidents attributed to the issue, which was corrected via over-the-air update before the “recall" was even issued to owners?  They really need to stop calling it a recall if owners don’t have to bring the cars in to be fixed. The study you cited about Tesla having the highest rate of accident did not disclose its methodology, which make it highly suspect.

As for FSD, time will tell. No one thought you could land a rocket vertically and reuse it until SpaceX did it. Musk has a way of making the impossible, possible, even it takes longer than promised.

FINate

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Re: Is Tesla a good investment?
« Reply #2264 on: February 05, 2024, 09:25:02 PM »
Fair enough, it's both.

Regardless, IMO the best thing that could happen to Tesla at this point would be for Musk to ride off into the sunset and do something else, while someone who is actually decent at managing a near-mature company and can keep their trap shut takes over for a fraction of the pay.

-W

I retired from a career in designing anti-collision and other safety avionics that all works together within an integrated system as the skies around major airports got very busy back in the mid 80s. The airborne computers communicate with each other and ground control to keep separation.  We don't have an integrated approach like that with ground transpo, so I will be impressed if Tesla does actually implement full self-driving with their equipment. His ridiculously optimistic schedule and robo-taxi claims didn't really inspire confidence.

It makes sense that fully self-driving cars should not be unleashed onto public roads until intense and comprehensive third-party testing is completed. I don't care about how many million miles are claimed by manufacturers. I also do not like this idea that you have to baby-sit the car and react within so-many seconds. I read a report that stated that Tesla drivers have the highest accident rate of any major car brand. Didn't give any root causes, but now they have this big safety recall as well. I started looking at getting a Tesla a few years ago; but frankly I no longer care too much for the gentleman. Not gonna complain about the contributions to my portfolio from Tesla soaring stock valuations over the years, but it is only indirect ownership now.

Do you know what the “big safety recall” was about? The “recall”had to with font size on some warning display symbols. There were no accidents attributed to the issue, which was corrected via over-the-air update before the “recall" was even issued to owners?  They really need to stop calling it a recall if owners don’t have to bring the cars in to be fixed. The study you cited about Tesla having the highest rate of accident did not disclose its methodology, which make it highly suspect.

As for FSD, time will tell. No one thought you could land a rocket vertically and reuse it until SpaceX did it. Musk has a way of making the impossible, possible, even it takes longer than promised.

I think bgs is referring to the earlier recall in December related to Autopilot: https://www.consumerreports.org/cars/car-recalls-defects/tesla-recalls-cars-due-to-autopilot-concerns-a6186663858/

Here's more about the report on Tesla's having the highest accident rate: https://www.forbes.com/sites/stevebanker/2023/12/18/tesla-has-the-highest-accident-rate-of-any-auto-brand/?sh=619130192894

Quote
This was not a causal study; the study did not analyze the reason for an incident. But it comes amid news that Tesla recently recalled more than 2 million Tesla vehicles over a safety issue related to its Autopilot software — specifically, a feature called Autosteer, which is part of the driver-assistance system. The recall affects nearly all the cars Tesla has sold in the United States.

I've wondered if the cause is very fast acceleration with a very heavy vehicle. This wouldn't be Tesla specific, will have to see as more studies are done.

MustacheAndaHalf

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Re: Is Tesla a good investment?
« Reply #2265 on: February 06, 2024, 12:19:20 AM »
The news media doesn't report evenly on all 6 million car crashes per year. Tesla doesn't cause most of those 6 million crashes, but Tesla crashes get the most news coverage.

Lending Tree reported the data on which that Forbes article is based:
"To determine the best and worst drivers by car brand, researchers calculated the number of driving incidents per 1,000 drivers by brand in every state."
https://www.lendingtree.com/insurance/brand-incidents-study/

They counted number of drivers, not the number of miles.  For auto insurance purposes, risky drivers are more important than how many miles they drive.  But when measuring safety, the number of miles needs to be considered.  Tesla compiled data using miles driven with and without Autopilot:

From https://www.tesla.com/VehicleSafetyReport data :


For those distrustful of Tesla, here is Insurance Institute for Highway Safety ratings on the Model 3 and Model Y.
https://www.iihs.org/ratings/vehicle/tesla/model-3-4-door-sedan/2024
https://www.iihs.org/ratings/top-safety-picks/2023/all/tesla#award-winners

blue_green_sparks

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Re: Is Tesla a good investment?
« Reply #2266 on: February 06, 2024, 06:15:47 AM »
I just read that Tesla recently won a case concerning autopilot and a fatal crash. Living in this smaller, pick-em-up-truck town; I wasn't totally aware that we are already Tesla beta-test "obstacles" while out driving on the public roads (as Tesla collects data.) For now, the human driver is supposed to immediately take over in case of any potential crash situation. I do hope all of these beta-test drivers with "FSD" subscriptions are paying attention and not getting complacent, especially as the system improves and matures.

Also, I see that Tesla offered to license their competitors to use their FSD technology.  Why in the world would they do that if it would ever come into its projected robo-taxi ability?

When you watch traffic patterns in a crazy-looking traffic-circle in places like Naples Italy it all appears to be so organic, like a school of fish. Constant communication using horns, hand gestures, head nods. It seems to be based on a few simple rules, but with full situational awareness. Of course; it only took one tourist like me to screw it all up. There is the rub with any integrated system.

maizefolk

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Re: Is Tesla a good investment?
« Reply #2267 on: February 06, 2024, 06:58:06 AM »
Geez. Imagine the insurance premiums. This is no doubt one of the reasons Hertz dropped them.

Also, I'm not seeing a pattern of improvement over 5 years. Wasn't the AI supposed to get smarter as it gathered more information? Isn't the new hardware supposedly faster? This is near drunk driving levels of bad.

The overall higher Tesla crash statistics are something I can attribute to their fast acceleration, and marketing appeal to people who drive like shit. But it does not appear we are on a path to FSD, unless Tesla is dialing back the carefulness of the system and maintaining an "acceptable" crash rate with fewer false positives (e.g. slams on brakes when a plastic bag blows across the road).

Are we looking at the same graph @ChpBstrd?

The one you quoted shows that both with and without autopilot, Telsa's drive many more miles between accidents either with or without autopilot engaged than the average for the rest of the US fleet.

Drunk drivers have many fewer miles between accidents than the average for the rest of the auto fleet since they crash into things more frequently.

Edit: Also it looks like the average number of miles driven between accidents while on autopilot rose from ~3 million in 2019 to ~6 million in 2023, cutting the frequency of accidents in half.
« Last Edit: February 06, 2024, 07:00:47 AM by maizefolk »

ChpBstrd

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Re: Is Tesla a good investment?
« Reply #2268 on: February 06, 2024, 07:05:30 AM »
Are we looking at the same graph @ChpBstrd?
No, I was thinking accidents per miles instead of miles per accident. Erased. Time to drink a coffee.

Retire-Canada

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Re: Is Tesla a good investment?
« Reply #2269 on: February 06, 2024, 08:57:40 AM »
I read an interview with an automotive safety expert that said EVs were involved in more accidents than ICE cars for a given amount of use. He didn't specify Teslas in particular. His reasons were:

- heavier and harder to slow down
- faster acceleration
- one pedal driving
- use of auto driving modes
- people had many decades of ICE experience and were just learning how to drive EVs in the more challenging situations

He did suggest that given enough time people would adapt and the differential in accidents between EVs and ICE vehicles would become smaller.

maizefolk

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Re: Is Tesla a good investment?
« Reply #2270 on: February 06, 2024, 09:00:27 AM »
@bacchi Are you really arguing with me pointing out that another poster was reading the units of a graph backwards? (And to be fair I've definitely made similar errors pre-coffee.)

bacchi

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Re: Is Tesla a good investment?
« Reply #2271 on: February 06, 2024, 09:04:29 AM »
@bacchi Are you really arguing with me pointing out that another poster was reading the units of a graph backwards? (And to be fair I've definitely made similar errors pre-coffee.)

No, I responded to the wrong poster.

bacchi

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Re: Is Tesla a good investment?
« Reply #2272 on: February 06, 2024, 09:05:22 AM »
The news media doesn't report evenly on all 6 million car crashes per year. Tesla doesn't cause most of those 6 million crashes, but Tesla crashes get the most news coverage.

Lending Tree reported the data on which that Forbes article is based:
"To determine the best and worst drivers by car brand, researchers calculated the number of driving incidents per 1,000 drivers by brand in every state."
https://www.lendingtree.com/insurance/brand-incidents-study/

They counted number of drivers, not the number of miles.  For auto insurance purposes, risky drivers are more important than how many miles they drive.  But when measuring safety, the number of miles needs to be considered.  Tesla compiled data using miles driven with and without Autopilot:

From https://www.tesla.com/VehicleSafetyReport data :
<snip?

For those distrustful of Tesla, here is Insurance Institute for Highway Safety ratings on the Model 3 and Model Y.
https://www.iihs.org/ratings/vehicle/tesla/model-3-4-door-sedan/2024
https://www.iihs.org/ratings/top-safety-picks/2023/all/tesla#award-winners


We should always be skeptical of any data a corporation puts out that shows its product are clearly superior.

There's no reason specified why a Tesla, without autopilot, should be so much more safer than other cars. Note that this isn't post-accident, either, where structural components and airbags and crumple zones matter; this is avoiding getting into an accident in the first place. What makes Tesla drivers and Tesla cars so much better? Is it the battery? The touch screen? Are Tesla owners just much better drivers?

To the last question, probably, at least compared to the average. When the US average includes teenagers driving an old Subaru wagon, like my neighbor, and an 80 year old driving an Escalade, when he really shouldn't be driving at all, the results look good for 45 year olds driving premium cars who are well educated.* Over 40% of US Tesla drivers are in California**, too, where ice isn't usually a problem.

tl;dr The Tesla Safety Report is marketing.



* https://hedgescompany.com/blog/2018/11/tesla-owner-demographics/
** https://www.forbes.com/sites/alanohnsman/2022/01/30/musk-left-california-but-it-still-loves-tesla-brand-has-75-share-of-states-ev-market/

maizefolk

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Re: Is Tesla a good investment?
« Reply #2273 on: February 06, 2024, 09:06:09 AM »
@bacchi Are you really arguing with me pointing out that another poster was reading the units of a graph backwards? (And to be fair I've definitely made similar errors pre-coffee.)

No, I responded to the wrong poster.

Okay, thank you.

MustacheAndaHalf

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Re: Is Tesla a good investment?
« Reply #2274 on: February 06, 2024, 09:49:52 AM »
bacchi - I get "permission denied" visiting the 2018 demographics link you provided.

Because I crammed too much into one post, I kept each comment short.  What I found interesting was the comparison with and without Autopilot.  Autopilot appears to cut accidents by a factor of four among Tesla's vehicles.  I also like seeing that in 2018-2019 there was only a factor of two separating them, which suggests real improvements.

If you look further down in the Lending Tree report, Tesla owners have the lowest rate of DUIs among all brands.  I suspect drunk Tesla drivers are more likely to use Autopilot, which makes it less likely police pull them over for a DUI (and reduces accidents).

According to Lending Tree, Mercedes-Benz ranks in the safest quartile.  Another website ranks "Mercedes-Benz G-Class" as the least driven car, in miles/year.  Driving a car less leads to fewer accidents.  Even if Teslas are safer each mile driven, if they are driven much more, they could wind up having more accidents. That would fit all of the data I've seen so far.
« Last Edit: February 06, 2024, 09:51:38 AM by MustacheAndaHalf »

bacchi

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Re: Is Tesla a good investment?
« Reply #2275 on: February 06, 2024, 10:16:29 AM »
bacchi - I get "permission denied" visiting the 2018 demographics link you provided.

Hmm, weird. I'm using Brave and maybe the blocking helps access it.

Quote
Because I crammed too much into one post, I kept each comment short.  What I found interesting was the comparison with and without Autopilot.  Autopilot appears to cut accidents by a factor of four among Tesla's vehicles.  I also like seeing that in 2018-2019 there was only a factor of two separating them, which suggests real improvements.

If you look further down in the Lending Tree report, Tesla owners have the lowest rate of DUIs among all brands.  I suspect drunk Tesla drivers are more likely to use Autopilot, which makes it less likely police pull them over for a DUI (and reduces accidents).

According to Lending Tree, Mercedes-Benz ranks in the safest quartile.  Another website ranks "Mercedes-Benz G-Class" as the least driven car, in miles/year.  Driving a car less leads to fewer accidents.  Even if Teslas are safer each mile driven, if they are driven much more, they could wind up having more accidents. That would fit all of the data I've seen so far.

I'm not surprised that Autopilot is safer for drivers. Awareness of other vehicles makes driving safer. What would be interesting is seeing Autopilot vs other assist programs. I suspect the difference wouldn't be as stark as between Autopilot vs non-Autopilot.

mistymoney

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Re: Is Tesla a good investment?
« Reply #2276 on: February 06, 2024, 06:25:16 PM »
The news media doesn't report evenly on all 6 million car crashes per year. Tesla doesn't cause most of those 6 million crashes, but Tesla crashes get the most news coverage.

Lending Tree reported the data on which that Forbes article is based:
"To determine the best and worst drivers by car brand, researchers calculated the number of driving incidents per 1,000 drivers by brand in every state."
https://www.lendingtree.com/insurance/brand-incidents-study/

They counted number of drivers, not the number of miles.  For auto insurance purposes, risky drivers are more important than how many miles they drive.  But when measuring safety, the number of miles needs to be considered.  Tesla compiled data using miles driven with and without Autopilot:

From https://www.tesla.com/VehicleSafetyReport data :
<snip?

For those distrustful of Tesla, here is Insurance Institute for Highway Safety ratings on the Model 3 and Model Y.
https://www.iihs.org/ratings/vehicle/tesla/model-3-4-door-sedan/2024
https://www.iihs.org/ratings/top-safety-picks/2023/all/tesla#award-winners


We should always be skeptical of any data a corporation puts out that shows its product are clearly superior.

There's no reason specified why a Tesla, without autopilot, should be so much more safer than other cars. Note that this isn't post-accident, either, where structural components and airbags and crumple zones matter; this is avoiding getting into an accident in the first place. What makes Tesla drivers and Tesla cars so much better? Is it the battery? The touch screen? Are Tesla owners just much better drivers?
 

so - from this staement I assume you've never been in one? either as driver or passenger....

bacchi

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Re: Is Tesla a good investment?
« Reply #2277 on: February 06, 2024, 09:13:32 PM »
The news media doesn't report evenly on all 6 million car crashes per year. Tesla doesn't cause most of those 6 million crashes, but Tesla crashes get the most news coverage.

Lending Tree reported the data on which that Forbes article is based:
"To determine the best and worst drivers by car brand, researchers calculated the number of driving incidents per 1,000 drivers by brand in every state."
https://www.lendingtree.com/insurance/brand-incidents-study/

They counted number of drivers, not the number of miles.  For auto insurance purposes, risky drivers are more important than how many miles they drive.  But when measuring safety, the number of miles needs to be considered.  Tesla compiled data using miles driven with and without Autopilot:

From https://www.tesla.com/VehicleSafetyReport data :
<snip?

For those distrustful of Tesla, here is Insurance Institute for Highway Safety ratings on the Model 3 and Model Y.
https://www.iihs.org/ratings/vehicle/tesla/model-3-4-door-sedan/2024
https://www.iihs.org/ratings/top-safety-picks/2023/all/tesla#award-winners


We should always be skeptical of any data a corporation puts out that shows its product are clearly superior.

There's no reason specified why a Tesla, without autopilot, should be so much more safer than other cars. Note that this isn't post-accident, either, where structural components and airbags and crumple zones matter; this is avoiding getting into an accident in the first place. What makes Tesla drivers and Tesla cars so much better? Is it the battery? The touch screen? Are Tesla owners just much better drivers?
 

so - from this staement I assume you've never been in one? either as driver or passenger....

That would be an incorrect assumption.

mistymoney

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Re: Is Tesla a good investment?
« Reply #2278 on: February 07, 2024, 09:32:18 AM »
The news media doesn't report evenly on all 6 million car crashes per year. Tesla doesn't cause most of those 6 million crashes, but Tesla crashes get the most news coverage.

Lending Tree reported the data on which that Forbes article is based:
"To determine the best and worst drivers by car brand, researchers calculated the number of driving incidents per 1,000 drivers by brand in every state."
https://www.lendingtree.com/insurance/brand-incidents-study/

They counted number of drivers, not the number of miles.  For auto insurance purposes, risky drivers are more important than how many miles they drive.  But when measuring safety, the number of miles needs to be considered.  Tesla compiled data using miles driven with and without Autopilot:

From https://www.tesla.com/VehicleSafetyReport data :
<snip?

For those distrustful of Tesla, here is Insurance Institute for Highway Safety ratings on the Model 3 and Model Y.
https://www.iihs.org/ratings/vehicle/tesla/model-3-4-door-sedan/2024
https://www.iihs.org/ratings/top-safety-picks/2023/all/tesla#award-winners


We should always be skeptical of any data a corporation puts out that shows its product are clearly superior.

There's no reason specified why a Tesla, without autopilot, should be so much more safer than other cars. Note that this isn't post-accident, either, where structural components and airbags and crumple zones matter; this is avoiding getting into an accident in the first place. What makes Tesla drivers and Tesla cars so much better? Is it the battery? The touch screen? Are Tesla owners just much better drivers?
 

so - from this staement I assume you've never been in one? either as driver or passenger....

That would be an incorrect assumption.

Then why would you sarcastically ask if a touch screen made the telsa drivers safer rather than the visibility provided by the camera system, the screen that shows 360 of objects/people surrounding the vehicle and the forward collision warning system?

Ignoring data that contradicts your POV doesn't inspire confidence in your conclusions.

bacchi

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Re: Is Tesla a good investment?
« Reply #2279 on: February 07, 2024, 09:44:22 AM »
We should always be skeptical of any data a corporation puts out that shows its product are clearly superior.

There's no reason specified why a Tesla, without autopilot, should be so much more safer than other cars. Note that this isn't post-accident, either, where structural components and airbags and crumple zones matter; this is avoiding getting into an accident in the first place. What makes Tesla drivers and Tesla cars so much better? Is it the battery? The touch screen? Are Tesla owners just much better drivers?
 

so - from this staement I assume you've never been in one? either as driver or passenger....

That would be an incorrect assumption.

Then why would you sarcastically ask if a touch screen made the telsa drivers safer rather than the visibility provided by the camera system, the screen that shows 360 of objects/people surrounding the vehicle and the forward collision warning system?

How do you turn those off or adjust the setting?


Quote
Ignoring data that contradicts your POV doesn't inspire confidence in your conclusions.

Cutting off the last part of my quote doesn't inspire confidence in your conclusions. I'll post it here and maybe you can address it.

To the last question, probably, at least compared to the average. When the US average includes teenagers driving an old Subaru wagon, like my neighbor, and an 80 year old driving an Escalade, when he really shouldn't be driving at all, the results look good for 45 year olds driving premium cars who are well educated.* Over 40% of US Tesla drivers are in California**, too, where ice isn't usually a problem.

mistymoney

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Re: Is Tesla a good investment?
« Reply #2280 on: February 07, 2024, 10:11:00 AM »
We should always be skeptical of any data a corporation puts out that shows its product are clearly superior.

There's no reason specified why a Tesla, without autopilot, should be so much more safer than other cars. Note that this isn't post-accident, either, where structural components and airbags and crumple zones matter; this is avoiding getting into an accident in the first place. What makes Tesla drivers and Tesla cars so much better? Is it the battery? The touch screen? Are Tesla owners just much better drivers?
 

so - from this staement I assume you've never been in one? either as driver or passenger....

That would be an incorrect assumption.

Then why would you sarcastically ask if a touch screen made the telsa drivers safer rather than the visibility provided by the camera system, the screen that shows 360 of objects/people surrounding the vehicle and the forward collision warning system?

How do you turn those off or adjust the setting?


Quote
Ignoring data that contradicts your POV doesn't inspire confidence in your conclusions.

Cutting off the last part of my quote doesn't inspire confidence in your conclusions. I'll post it here and maybe you can address it.

To the last question, probably, at least compared to the average. When the US average includes teenagers driving an old Subaru wagon, like my neighbor, and an 80 year old driving an Escalade, when he really shouldn't be driving at all, the results look good for 45 year olds driving premium cars who are well educated.* Over 40% of US Tesla drivers are in California**, too, where ice isn't usually a problem.

What are you really looking for here? What I am seeing is that when data makes tesla look bad - that is "real". When data makes tesla look good, we need to "contextualize" it away with supposition and speculation.

The US isn't the only country with tesla users. the nordid countries have a lot of snow and a lot of teslas. What is happening there? I don't know. I'm sure you can find some negative info to share, though.

bacchi

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Re: Is Tesla a good investment?
« Reply #2281 on: February 07, 2024, 10:50:03 AM »
What are you really looking for here? What I am seeing is that when data makes tesla look bad - that is "real". When data makes tesla look good, we need to "contextualize" it away with supposition and speculation.

Eh? What data makes Tesla look bad?

The Tesla Vehicle Safety Report doesn't mean what people want it to mean but that doesn't mean it's not true. It just means that this simple graph doesn't show it. I'm sure Tesla could display that data by narrowing its comparison -- it could remove drivers under 25 and over 70, for example, instead of using the average.

Quote
The US isn't the only country with tesla users. the nordid countries have a lot of snow and a lot of teslas. What is happening there? I don't know. I'm sure you can find some negative info to share, though

# of cars * VMT

FINate

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Re: Is Tesla a good investment?
« Reply #2282 on: April 02, 2024, 08:58:04 AM »
Q1 deliveries were reported today and it was a significant miss. The Tesla stans may accuse me of just picking on the stock on down days, but this is newsworthy and a material release of information. Next stop is Q1 earnings later this month.

TSLA currently down 6%, will see where it heads in the days ahead. Though I'm less interested in short-term stock movements, the real story here is YoY decline in deliveries. Can't be Chinese New Year, which happens every year. Can't be the fire in Germany or other supply chain issues because they produced more cars than delivered (i.e. demand constrained). As Tesla bull Dan Ives put it:

Quote
“While we were anticipating a bad first quarter, this was an unmitigated disaster that is hard to explain away,” he said in a note to clients. “We view this as a seminal moment in the Tesla story for Musk to either turn this around and reverse the black eye first quarter performance. Otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative.”

The most likely explanation is increasing competition from other carmakers, and perhaps damage to the Tesla brand. Both things predicted on this thread years ago. Will be interesting to see what the margins are when Q1 financials are reported. Seems that the EV market is, in fact, becoming a highly competitive low-margin business, which really calls into question TSLA's high valuation.
« Last Edit: April 02, 2024, 08:59:49 AM by FINate »

dividendman

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Re: Is Tesla a good investment?
« Reply #2283 on: April 02, 2024, 09:51:12 AM »

The most likely explanation is increasing competition from other carmakers, and perhaps damage to the Tesla brand. Both things predicted on this thread years ago. Will be interesting to see what the margins are when Q1 financials are reported. Seems that the EV market is, in fact, becoming a highly competitive low-margin business, which really calls into question TSLA's high valuation.

I think that the EV market is also pretty saturated on the demand side. Most people who wanted a new cool EV has got one. The prices are plunging for all sorts of EVs. Hybrids seem to be gaining in popularity. I'm sad about this as I'm holding out for a new (used) hybrid but the prices are still too high for my taste. The good news is my 2007 Prius is still humming along for now.

achvfi

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Re: Is Tesla a good investment?
« Reply #2284 on: April 02, 2024, 03:08:09 PM »
Tesla has been surprising market to the upside for so long and investors became sloppy and have been expecting miracles..
For anyone that is not emotionally invested in this stock, can see its weakness from a mile away. It is only matter of time for stock to comeback to earth.

  • A Toxic CEO that has been actively alienating its core customer base.
  • End of Free money and tightening financial conditions.
  • Tech Layoffs.
  • Mature competition in US and intense competition globally
  • Product line up that is becoming stale.

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #2285 on: April 02, 2024, 09:07:33 PM »
Tesla has been surprising market to the upside for so long and investors became sloppy and have been expecting miracles..
For anyone that is not emotionally invested in this stock, can see its weakness from a mile away. It is only matter of time for stock to comeback to earth.

  • A Toxic CEO that has been actively alienating its core customer base.
  • End of Free money and tightening financial conditions.
  • Tech Layoffs.
  • Mature competition in US and intense competition globally
  • Product line up that is becoming stale.

Best engineering talent in the business.
An energy storage and services business growing 50% YOY.
Tesla charging standard (NACS) is now the standard foe the entire North American car industry and will be a growing and ongoing source of revenue ($13/month/car).
Interest rate cuts on the horizon.
Tesla dominating legacy auto and their attempts failed to move towards EV.
Tesla Model Y is the best selling car on any kind in the world in 2023.
FSD is improving rapidly under Tesla’s new approach (vision + neural net). Other auto manufacturers will license FSD like they license the supercharger network.
Optimus robot will be working the factory floor before the end of the year. Huge potential.
Tesla Semi mass production in late 2024 or early 2025.
Cheaper Model 2 ($25k EV) in late 2025.
No real competition outside of China. BYD only other profitable EV maker in the world beside Tesla.
Tesla expanding into new markets, including hard to tap India.
Tesla has virtually no advertising budget and has several demand levers it can pull.


Mature competition in the US is especially misinformed. Ford lost $64k per EV they sold in 2023. Building prototypes is easy, none of the legacy autos are close to the scale that would enable profitability in their EV divisions.

https://www.newgeography.com/content/008083-ford-lost-47b-evs-last-year#:~:text=The%20company%20sold%2072%2C608%20EVs,EV%20it%20sold%20in%202023.




ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #2286 on: April 02, 2024, 09:15:43 PM »

The most likely explanation is increasing competition from other carmakers, and perhaps damage to the Tesla brand. Both things predicted on this thread years ago. Will be interesting to see what the margins are when Q1 financials are reported. Seems that the EV market is, in fact, becoming a highly competitive low-margin business, which really calls into question TSLA's high valuation.

I think that the EV market is also pretty saturated on the demand side. Most people who wanted a new cool EV has got one. The prices are plunging for all sorts of EVs. Hybrids seem to be gaining in popularity. I'm sad about this as I'm holding out for a new (used) hybrid but the prices are still too high for my taste. The good news is my 2007 Prius is still humming along for now.

I don’t know. I’ve been invested since 2013 and just purchased my first Tesla on March 20. There were several factors affecting production this quarter. Chinese NY, Berlin arson, new Model 3 ramp at Fremont, Suez Canal supply chain issues for Giga Berlin. Those production delays likely also pushed pack shipments, leading to more cars than usual in transport at the end of the quarter. EV sales are still increasing. What is true is that demand has softened across the entire car industry and Tesla has not been immune to it. Hybrids are the worst of both worlds. A car where either the EV drive train pulls around an engine or the engine pulls around a heavy battery and you have twice the amount of stuff that can fail or needs maintaining. Tesla has proven EVs can handle all use cases and the time where hybrids made sense has passed, with some pretty limited exceptions. You’d be surprised how many people have no idea about Tesla’s range, supercharger network, and lower pricing. New Tesla Model Y for less than $30k after federal tax credit. Under $25k for those of us in Colorado.

NorCal

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Re: Is Tesla a good investment?
« Reply #2287 on: April 02, 2024, 10:25:24 PM »
A 9% decline in deliveries for the quarter is a disaster for a company that's still priced like a growth stock.  My back-of-the envelope math is that's a $1.5B to $2.0B revenue hit when compared to Q1 of last year.

I'd still give Tesla a bit of a premium compared with traditional automakers, as their 17% margins are still much better than the Ford/GM 9%-10% margins.  But the growth story is done for.  Particularly since they just launched Cybertruck, but don't consider that a growth engine. 

These are rough numbers, but should be a reasonable guide.

GM trades at a P/E of 6 and Ford trades at a P/E of 15.

This gives Tesla a fair value of $71/share at a PE of 15 and $95/share at PE 20.  However, that's before this Q1 revenue decline, which means fair value is probably quite a bit lower.  This stock still has a long ways to fall before falling below fair value. 

There's a price that the shares will make sense again.  But we're not there yet. 

Paper Chaser

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Re: Is Tesla a good investment?
« Reply #2288 on: April 03, 2024, 04:39:38 AM »

The most likely explanation is increasing competition from other carmakers, and perhaps damage to the Tesla brand. Both things predicted on this thread years ago. Will be interesting to see what the margins are when Q1 financials are reported. Seems that the EV market is, in fact, becoming a highly competitive low-margin business, which really calls into question TSLA's high valuation.

I think that the EV market is also pretty saturated on the demand side. Most people who wanted a new cool EV has got one. The prices are plunging for all sorts of EVs. Hybrids seem to be gaining in popularity. I'm sad about this as I'm holding out for a new (used) hybrid but the prices are still too high for my taste. The good news is my 2007 Prius is still humming along for now.

What is true is that demand has softened across the entire car industry and Tesla has not been immune to it. Hybrids are the worst of both worlds. A car where either the EV drive train pulls around an engine or the engine pulls around a heavy battery and you have twice the amount of stuff that can fail or needs maintaining. Tesla has proven EVs can handle all use cases and the time where hybrids made sense has passed, with some pretty limited exceptions.

US sales volumes were actually up almost 5% for Q1:

https://www.marketwatch.com/story/u-s-auto-sales-grow-nearly-5-in-q1-despite-high-interest-rates-but-ev-growth-slows-further-dffd825b

Toyota/Lexus (maker of 27 hybrid/plug in models in NA) saw Q1 sales jump 20% in North America, with over 36% of sales being "electrified" vehicles (Standard hybrid, PHEV, and BEV):

https://pressroom.toyota.com/toyota-motor-north-america-reports-march-first-quarter-2024-u-s-sales/

The Prius, Venza, Sienna, new Camry, and new Land Cruiser are all hybrid only, while other popular models (Corolla, Rav 4, Highlander, Tacoma, Tundra) have hybrid trims available.
The hybrid batteries are typically under 2kwh, and weigh about as much as a child. Looks like most Prius batteries are around 80lbs. That's not dragging around meaningful weight. Especially when the hybrid systems result in simpler transmissions, and removal of other hardware like traditional starters which further offsets the weight of the battery.
Toyota sold over 206k "electrified" vehicles in Q1 in North America alone. Tesla doesn't share regional sales data, but sold 387k BEVs globally during that time.

Tesla produced 433k vehicles in Q1, but only sold 387k of those (globally). That 46k vehicle surplus is way more than they've seen in the past, and likely signals softening demand.


There are certainly macro factors (high interest rates, etc) that are hurting Tesla's performance, but consumers now have far more options than they did in 2018 too. More BEVs. And the continued hybridization of typical ICEs makes them much more appealing alternatives as well.
« Last Edit: April 03, 2024, 04:45:20 AM by Paper Chaser »

ChpBstrd

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Re: Is Tesla a good investment?
« Reply #2289 on: April 03, 2024, 07:48:11 AM »
The most likely explanation is increasing competition from other carmakers, and perhaps damage to the Tesla brand. Both things predicted on this thread years ago. ... Seems that the EV market is, in fact, becoming a highly competitive low-margin business, which really calls into question TSLA's high valuation.
You mean like this?
Tesla's high car prices and their high stock price are a result of its high margins. Period.

Consumers are willing to pay these high margins because no other car manufacturers are mass producing products like Teslas (except for a few startups, whose products are not yet widely available).

To me, that's remarkably shaky ground. Most of the world's auto manufacturers are rolling out Tesla-like vehicles in the next couple of years. Tesla will eventually be forced to spend money on marketing, like their competitors are doing, and they will have to lower prices / margins to meet the competition. Meanwhile, Tesla's sales of regulatory credits will diminish.

https://www.fool.com/investing/2022/04/25/heres-the-secret-behind-teslas-industry-leading-ma/

So yes, the end of growth means the end of TSLA as a high margin growth stock. Here we are, a "couple of years" after 2022 when these concerns were being raised and we're watching Tesla suffer reduced sales growth at lower prices and at lower margins amid a wave of competition.

A 9% decline in deliveries for the quarter is a disaster for a company that's still priced like a growth stock.  My back-of-the envelope math is that's a $1.5B to $2.0B revenue hit when compared to Q1 of last year.

I'd still give Tesla a bit of a premium compared with traditional automakers, as their 17% margins are still much better than the Ford/GM 9%-10% margins.  But the growth story is done for.  Particularly since they just launched Cybertruck, but don't consider that a growth engine. 

These are rough numbers, but should be a reasonable guide.

GM trades at a P/E of 6 and Ford trades at a P/E of 15.

This gives Tesla a fair value of $71/share at a PE of 15 and $95/share at PE 20.  However, that's before this Q1 revenue decline, which means fair value is probably quite a bit lower.  This stock still has a long ways to fall before falling below fair value. 

There's a price that the shares will make sense again.  But we're not there yet. 
IDK if Tesla will fall to a PE of 20 simply because their lead in self-driving tech offers some hope for future revenue growth and propped-up margins. But a PE of 25-35 is not out of the realm of possibilities. They're currently at a PE of 38.75.

The new wildcard IMO is this new political environment of protectionism and national champion manufacturers. Tesla's substantial investment in China is suddenly at risk because Tesla can never become one of China's national champion car companies like BYD or Nio. They could easily be forced out of the country with little bureaucratic nudges like several American financial institutions recently were, or face outright asset confiscation, the way BP was pushed out of Russia. Since Elon poured Tesla's resources into China, the country's policy changes and real estate collapse have left the country uninvestable in the opinion of many American investors and companies. Yet Tesla is stuck there, enjoying 0.2% sales growth and less than a third of BYD's market share.

An invasion of Taiwan would cut TSLA in half.

In terms of brand destruction by Musk, it's only gotten worse. Antisemitic, anti-black, and anti-Native-American tweets and a lawsuit against the Center for Countering Digital Hate have occurred at the exact timeframe when Tesla's core customer base became inundated with alternatives to Tesla products. Having a Tesla is suddenly less about green cred and is becoming an embarrassment through association with right-wing activist Elon Musk.

Meanwhile, the Cybertruck appears to be a product which will never gain mass appeal with the mainstream US truck market. It was apparently a CEO-designed vanity project, which makes it a wasted opportunity. Tesla will have to stop wasting opportunities and start delivering new products every 4-5 years like everybody else.

I expect to see the first Tesla advertisements in late 2024.

I think Salesforce at a PE of 72.3 has more growth potential than a half-Chinese heavy manufacturer at a PE of 38.75.

Paper Chaser

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Re: Is Tesla a good investment?
« Reply #2290 on: April 03, 2024, 08:29:47 AM »
I expect to see the first Tesla advertisements in late 2024.

They've been increasing ads for awhile now.

https://cleantechnica.com/2024/04/02/tesla-marketing-campaign-takes-a-slightly-traditional-turn/

AdrianC

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Re: Is Tesla a good investment?
« Reply #2291 on: April 03, 2024, 09:06:45 AM »
You’d be surprised how many people have no idea about Tesla’s range, supercharger network, and lower pricing. New Tesla Model Y for less than $30k after federal tax credit.

I was surprised at your claim of Tesla's lower pricing...I know you're a True Believer, but why that?

Cheapest Model Y:
Rear-Wheel Drive
Your Model Y $46,630
After Federal Tax Credit $39,130

maizefolk

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Re: Is Tesla a good investment?
« Reply #2292 on: April 03, 2024, 09:38:37 AM »
Perhaps we're seeing differentiated pricing across the country? And/or the stacked effect of state AND federal tax credits.

The cheapest model Y the Tesla website is showing me is $34,790 after federal tax credit. But if I was in Colorado I'd qualify for another $5,000 tax credit from the state and (assuming prices otherwise stay the same), I could get an entry level Model Y for $29,790.


ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #2293 on: April 03, 2024, 09:52:22 AM »
A 9% decline in deliveries for the quarter is a disaster for a company that's still priced like a growth stock.  My back-of-the envelope math is that's a $1.5B to $2.0B revenue hit when compared to Q1 of last year.

I'd still give Tesla a bit of a premium compared with traditional automakers, as their 17% margins are still much better than the Ford/GM 9%-10% margins.  But the growth story is done for.  Particularly since they just launched Cybertruck, but don't consider that a growth engine. 

These are rough numbers, but should be a reasonable guide.

GM trades at a P/E of 6 and Ford trades at a P/E of 15.

This gives Tesla a fair value of $71/share at a PE of 15 and $95/share at PE 20.  However, that's before this Q1 revenue decline, which means fair value is probably quite a bit lower.  This stock still has a long ways to fall before falling below fair value. 

There's a price that the shares will make sense again.  But we're not there yet.

PE is a useless metric for this comparison. Ford lost $67k per EV they made in 2023. Tesla had a 17% margin on pure EV sales. Ford, GM, and Stellantis, after going all in on EVs and announcing ambitious plans just a few years ago, have drastically scaled back their EV plans to stop the cash hemorrhaging. Problem there is they are only delaying the pain. The only way to get to profitability on EVs is to rapidly increase scale. But they can’t rapidly increase scale because they have a vast and complex supply chain with little to no interest in EVs and they failed to secure an adequate battery supply to support profitable mass production. So, their solution is to try and convince consumers what they really want and need is a hybrid. I don’t see this strategy working either. They’re basically screwed.

The only way an investment in Ford, GM or Stellantis (or Honda, Toyota, etc.) makes any sense is if you think EVs are going away and aren’t the future. Reduced deliveries and production isn’t good news for Tesla, but this slowdown in Q1 was industry wide and not a Tesla phenom.

Your post also ignores the fact that Tesla is not just a car company. It ignores energy storage YOY growth of 50% and increasing margins and profitability for energy storage. This side of the business will exceed the car business in coming years. It ignores the AI development, computing capabilities (DOJO), and the massive revenue potential of FSD and/or Optimus. It ignores the fact that Tesla has cornered the supercharging market in NA and has secured a high margin and steadily growing subscription based service revenue stream. You also miss that Apple has given up on making EVs or autonomous car software. GM canceled their Blue Cruise program. Only Waymo remains as a competitor. I predict other car companies will soon be licensing Tesla’s FSD software the same way they were forced to latch on to Tesla’s supercharger network after failing to create their own charging networks.

Perhaps most importantly, your reliance on PE, misses the advantage Tesla has in engineering prowess. It is a highly desirable destination for the best engineering talent in the world. At the end of the day it’s the people that make the company. The pace of innovation at Tesla is staggering and Tesla is not stuck in an outdated ICE culture trying to serve two incompatible purposes at once (maintain profitable for now ICE sales AND grow EV business). Not to mention union labor and pension obligations...

Tesla is also expanding into new markets, most recently Malaysia, that can bring in new demand. A deal is nearing completion with India that will provide Tesla access to sell cars with reduced on no import tariffs in exchange for building a gigafactory in India.

Focusing on one quarter of results and PE ratios is a poor way to evaluate the company’s performance IMO. The lost production time at Fremont, Berlin, and Shanghai did affect deliveries. It takes weeks to ship cars by cargo ship, which means cars not produced mid-quarter didn’t make on ships in time for delivery in Q1. There was a story yesterday about thousands of Tesla vehicles parked at the Shanghai dock waiting to be loaded onto ships. This doesn’t account for the entire drop in deliveries, but can account for a significant portion. The remainder is from poor car sales in a slumping Chinese economy that affected all car sales in China (see BYD QOQ numbers in China) and lower than expected car sales for all makes and models in the US. These conditions are not specific to Tesla or EVs, but Tesla faired as good or better than any other EV maker under these macro conditions.

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #2294 on: April 03, 2024, 09:58:03 AM »

The most likely explanation is increasing competition from other carmakers, and perhaps damage to the Tesla brand. Both things predicted on this thread years ago. Will be interesting to see what the margins are when Q1 financials are reported. Seems that the EV market is, in fact, becoming a highly competitive low-margin business, which really calls into question TSLA's high valuation.

I think that the EV market is also pretty saturated on the demand side. Most people who wanted a new cool EV has got one. The prices are plunging for all sorts of EVs. Hybrids seem to be gaining in popularity. I'm sad about this as I'm holding out for a new (used) hybrid but the prices are still too high for my taste. The good news is my 2007 Prius is still humming along for now.

What is true is that demand has softened across the entire car industry and Tesla has not been immune to it. Hybrids are the worst of both worlds. A car where either the EV drive train pulls around an engine or the engine pulls around a heavy battery and you have twice the amount of stuff that can fail or needs maintaining. Tesla has proven EVs can handle all use cases and the time where hybrids made sense has passed, with some pretty limited exceptions.

US sales volumes were actually up almost 5% for Q1:

https://www.marketwatch.com/story/u-s-auto-sales-grow-nearly-5-in-q1-despite-high-interest-rates-but-ev-growth-slows-further-dffd825b

Toyota/Lexus (maker of 27 hybrid/plug in models in NA) saw Q1 sales jump 20% in North America, with over 36% of sales being "electrified" vehicles (Standard hybrid, PHEV, and BEV):

https://pressroom.toyota.com/toyota-motor-north-america-reports-march-first-quarter-2024-u-s-sales/

The Prius, Venza, Sienna, new Camry, and new Land Cruiser are all hybrid only, while other popular models (Corolla, Rav 4, Highlander, Tacoma, Tundra) have hybrid trims available.
The hybrid batteries are typically under 2kwh, and weigh about as much as a child. Looks like most Prius batteries are around 80lbs. That's not dragging around meaningful weight. Especially when the hybrid systems result in simpler transmissions, and removal of other hardware like traditional starters which further offsets the weight of the battery.
Toyota sold over 206k "electrified" vehicles in Q1 in North America alone. Tesla doesn't share regional sales data, but sold 387k BEVs globally during that time.

Tesla produced 433k vehicles in Q1, but only sold 387k of those (globally). That 46k vehicle surplus is way more than they've seen in the past, and likely signals softening demand.


There are certainly macro factors (high interest rates, etc) that are hurting Tesla's performance, but consumers now have far more options than they did in 2018 too. More BEVs. And the continued hybridization of typical ICEs makes them much more appealing alternatives as well.

Ignoring the anti-EV tone of the first article you cite, it buries the lead mid article:

With inventory on dealer lots growing toward pre-pandemic levels, auto companies were forced to reduce prices. J.D. Power said the average sales price in March was $44,186, down 3.6% from a year ago and the largest recorded decline for the month of March.

Legacy auto counts a car as sold when it delivers that car to the dealer even though there is not a buyer lined up for that car. So, inventory on dealer lots is approaching pre-pandemic levels with many brands having record number of days of inventory sitting on lots. This despite these same dealers lowering prices by 3.6% from a year ago. So, these deliveries aren’t deliveries at all and I maintain the slowdown was across the board.

Edited to add link:

https://www.coxautoinc.com/market-insights/new-vehicle-inventory-january-2024/

So, 2.61 million vehicles sitting in inventory as of late Feb, a 50% jump YOY, but these vehicles are all considered “deliveries” once they hit the dealer lot. By comparison, Tesla doesn’t count a car as delivered until it reaches the buyer who in most cases has already bought and paid for the car, so Tesla inventory numbers are actually exaggerated and delivery number underestimated using legacy metrics.
« Last Edit: April 03, 2024, 10:15:32 AM by ColoradoTribe »

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #2295 on: April 03, 2024, 10:06:39 AM »
Perhaps we're seeing differentiated pricing across the country? And/or the stacked effect of state AND federal tax credits.

The cheapest model Y the Tesla website is showing me is $34,790 after federal tax credit. But if I was in Colorado I'd qualify for another $5,000 tax credit from the state and (assuming prices otherwise stay the same), I could get an entry level Model Y for $29,790.



Are you looking at inventory vehicles (see tab on Tesla.com homepage). Inventory vehicles are those delivered to distribution centers that weren’t custom orders. Still new vehicles, but typically offered at discounts of $3k - $5k, which I believe is the difference in what you are seeing and what I posted above.

NorCal

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Re: Is Tesla a good investment?
« Reply #2296 on: April 03, 2024, 10:09:07 AM »
The most likely explanation is increasing competition from other carmakers, and perhaps damage to the Tesla brand. Both things predicted on this thread years ago. ... Seems that the EV market is, in fact, becoming a highly competitive low-margin business, which really calls into question TSLA's high valuation.
You mean like this?
Tesla's high car prices and their high stock price are a result of its high margins. Period.

Consumers are willing to pay these high margins because no other car manufacturers are mass producing products like Teslas (except for a few startups, whose products are not yet widely available).

To me, that's remarkably shaky ground. Most of the world's auto manufacturers are rolling out Tesla-like vehicles in the next couple of years. Tesla will eventually be forced to spend money on marketing, like their competitors are doing, and they will have to lower prices / margins to meet the competition. Meanwhile, Tesla's sales of regulatory credits will diminish.

https://www.fool.com/investing/2022/04/25/heres-the-secret-behind-teslas-industry-leading-ma/

So yes, the end of growth means the end of TSLA as a high margin growth stock. Here we are, a "couple of years" after 2022 when these concerns were being raised and we're watching Tesla suffer reduced sales growth at lower prices and at lower margins amid a wave of competition.

A 9% decline in deliveries for the quarter is a disaster for a company that's still priced like a growth stock.  My back-of-the envelope math is that's a $1.5B to $2.0B revenue hit when compared to Q1 of last year.

I'd still give Tesla a bit of a premium compared with traditional automakers, as their 17% margins are still much better than the Ford/GM 9%-10% margins.  But the growth story is done for.  Particularly since they just launched Cybertruck, but don't consider that a growth engine. 

These are rough numbers, but should be a reasonable guide.

GM trades at a P/E of 6 and Ford trades at a P/E of 15.

This gives Tesla a fair value of $71/share at a PE of 15 and $95/share at PE 20.  However, that's before this Q1 revenue decline, which means fair value is probably quite a bit lower.  This stock still has a long ways to fall before falling below fair value. 

There's a price that the shares will make sense again.  But we're not there yet. 
IDK if Tesla will fall to a PE of 20 simply because their lead in self-driving tech offers some hope for future revenue growth and propped-up margins. But a PE of 25-35 is not out of the realm of possibilities. They're currently at a PE of 38.75.

The new wildcard IMO is this new political environment of protectionism and national champion manufacturers. Tesla's substantial investment in China is suddenly at risk because Tesla can never become one of China's national champion car companies like BYD or Nio. They could easily be forced out of the country with little bureaucratic nudges like several American financial institutions recently were, or face outright asset confiscation, the way BP was pushed out of Russia. Since Elon poured Tesla's resources into China, the country's policy changes and real estate collapse have left the country uninvestable in the opinion of many American investors and companies. Yet Tesla is stuck there, enjoying 0.2% sales growth and less than a third of BYD's market share.

An invasion of Taiwan would cut TSLA in half.

In terms of brand destruction by Musk, it's only gotten worse. Antisemitic, anti-black, and anti-Native-American tweets and a lawsuit against the Center for Countering Digital Hate have occurred at the exact timeframe when Tesla's core customer base became inundated with alternatives to Tesla products. Having a Tesla is suddenly less about green cred and is becoming an embarrassment through association with right-wing activist Elon Musk.

Meanwhile, the Cybertruck appears to be a product which will never gain mass appeal with the mainstream US truck market. It was apparently a CEO-designed vanity project, which makes it a wasted opportunity. Tesla will have to stop wasting opportunities and start delivering new products every 4-5 years like everybody else.

I expect to see the first Tesla advertisements in late 2024.

I think Salesforce at a PE of 72.3 has more growth potential than a half-Chinese heavy manufacturer at a PE of 38.75.

A lot of good points. 

I don't know what a true "good" PE is, but I think anything in the 15-25x range is defensible.  But you also have to apply that to the assumption of lower earnings that are coming up on lower deliveries.  Also, when growth stocks correct, they tend to move well below fair value before reverting to something reasonable.  I wouldn't be surprised to see the stock fall another 50-75% before recovering. 

I don't see FSD as being some savior for revenue or valuation.  I'm sure they can improve uptake a bit with better marketing and trials.  But $200/mo is a steep price that isn't going to move the needle on their $100B in revenue.  Selling 10,000 new subscriptions would equate to a ~2% revenue bump.  It's not nothing, but it's not going to be the dominant story of the company.  I tried it in my Tesla the other day with the mandated free trial.  It was better than I expected, but I don't see anyone other than diehard super commuters spending $200/mo on it. 

Most of the commentary on business conditions reflects on the US.  Which is all true.  Some of it is macro, and some of it is Musk douchebaggery. 

China is a huge ignored part of the story.  I don't pretend to understand the China market well, but it does sound like Chinese nationalism is playing a role.  Competition from the likes of BYD and NIO seems to be fierce as well.  China is a cutthroat market for EV's, and Tesla's competitive advantage there seems to have eroded pretty bad.  Tesla still has the advantage of a growing market, but likely lower market share and lower margins on increased competition.   

The EV market as a whole has hit the "trough of disillusionment" here in the US.  Other markets seems to have avoided that.  I think the next 2-3 years are going to determine which EV companies will come out the other side stronger.  Tesla will be one of those companies, but that doesn't make the stock a good buy at these prices. 

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #2297 on: April 03, 2024, 10:12:49 AM »
You’d be surprised how many people have no idea about Tesla’s range, supercharger network, and lower pricing. New Tesla Model Y for less than $30k after federal tax credit.

I was surprised at your claim of Tesla's lower pricing...I know you're a True Believer, but why that?

Cheapest Model Y:
Rear-Wheel Drive
Your Model Y $46,630
After Federal Tax Credit $39,130

As of this posting, I just went to Tesla.com. The cheapest RWD Tesla Model Y in my area is offered at $39,470. That’s before $12,500 in state and federal EV tax credits, which puts the price at $26,970 before taxes, but also before factoring gas and maintenance savings.

So, no need to ascribe religious “true believer” blind faith to what can be proven with 30 seconds of internet sleuthing and a dedication to understanding ones investments inside and out.

NorCal

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Re: Is Tesla a good investment?
« Reply #2298 on: April 03, 2024, 10:43:01 AM »
A 9% decline in deliveries for the quarter is a disaster for a company that's still priced like a growth stock.  My back-of-the envelope math is that's a $1.5B to $2.0B revenue hit when compared to Q1 of last year.

I'd still give Tesla a bit of a premium compared with traditional automakers, as their 17% margins are still much better than the Ford/GM 9%-10% margins.  But the growth story is done for.  Particularly since they just launched Cybertruck, but don't consider that a growth engine. 

These are rough numbers, but should be a reasonable guide.

GM trades at a P/E of 6 and Ford trades at a P/E of 15.

This gives Tesla a fair value of $71/share at a PE of 15 and $95/share at PE 20.  However, that's before this Q1 revenue decline, which means fair value is probably quite a bit lower.  This stock still has a long ways to fall before falling below fair value. 

There's a price that the shares will make sense again.  But we're not there yet.

PE is a useless metric for this comparison. Ford lost $67k per EV they made in 2023. Tesla had a 17% margin on pure EV sales. Ford, GM, and Stellantis, after going all in on EVs and announcing ambitious plans just a few years ago, have drastically scaled back their EV plans to stop the cash hemorrhaging. Problem there is they are only delaying the pain. The only way to get to profitability on EVs is to rapidly increase scale. But they can’t rapidly increase scale because they have a vast and complex supply chain with little to no interest in EVs and they failed to secure an adequate battery supply to support profitable mass production. So, their solution is to try and convince consumers what they really want and need is a hybrid. I don’t see this strategy working either. They’re basically screwed.

The only way an investment in Ford, GM or Stellantis (or Honda, Toyota, etc.) makes any sense is if you think EVs are going away and aren’t the future. Reduced deliveries and production isn’t good news for Tesla, but this slowdown in Q1 was industry wide and not a Tesla phenom.

Your post also ignores the fact that Tesla is not just a car company. It ignores energy storage YOY growth of 50% and increasing margins and profitability for energy storage. This side of the business will exceed the car business in coming years. It ignores the AI development, computing capabilities (DOJO), and the massive revenue potential of FSD and/or Optimus. It ignores the fact that Tesla has cornered the supercharging market in NA and has secured a high margin and steadily growing subscription based service revenue stream. You also miss that Apple has given up on making EVs or autonomous car software. GM canceled their Blue Cruise program. Only Waymo remains as a competitor. I predict other car companies will soon be licensing Tesla’s FSD software the same way they were forced to latch on to Tesla’s supercharger network after failing to create their own charging networks.

Perhaps most importantly, your reliance on PE, misses the advantage Tesla has in engineering prowess. It is a highly desirable destination for the best engineering talent in the world. At the end of the day it’s the people that make the company. The pace of innovation at Tesla is staggering and Tesla is not stuck in an outdated ICE culture trying to serve two incompatible purposes at once (maintain profitable for now ICE sales AND grow EV business). Not to mention union labor and pension obligations...

Tesla is also expanding into new markets, most recently Malaysia, that can bring in new demand. A deal is nearing completion with India that will provide Tesla access to sell cars with reduced on no import tariffs in exchange for building a gigafactory in India.

Focusing on one quarter of results and PE ratios is a poor way to evaluate the company’s performance IMO. The lost production time at Fremont, Berlin, and Shanghai did affect deliveries. It takes weeks to ship cars by cargo ship, which means cars not produced mid-quarter didn’t make on ships in time for delivery in Q1. There was a story yesterday about thousands of Tesla vehicles parked at the Shanghai dock waiting to be loaded onto ships. This doesn’t account for the entire drop in deliveries, but can account for a significant portion. The remainder is from poor car sales in a slumping Chinese economy that affected all car sales in China (see BYD QOQ numbers in China) and lower than expected car sales for all makes and models in the US. These conditions are not specific to Tesla or EVs, but Tesla faired as good or better than any other EV maker under these macro conditions.

There's plenty of room to criticize PE, or any non-DCF valuation method. 

What valuation method to you prefer, and where does that put fair value for the stock in your mind?

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #2299 on: April 03, 2024, 11:27:38 AM »
A 9% decline in deliveries for the quarter is a disaster for a company that's still priced like a growth stock.  My back-of-the envelope math is that's a $1.5B to $2.0B revenue hit when compared to Q1 of last year.

I'd still give Tesla a bit of a premium compared with traditional automakers, as their 17% margins are still much better than the Ford/GM 9%-10% margins.  But the growth story is done for.  Particularly since they just launched Cybertruck, but don't consider that a growth engine. 

These are rough numbers, but should be a reasonable guide.

GM trades at a P/E of 6 and Ford trades at a P/E of 15.

This gives Tesla a fair value of $71/share at a PE of 15 and $95/share at PE 20.  However, that's before this Q1 revenue decline, which means fair value is probably quite a bit lower.  This stock still has a long ways to fall before falling below fair value. 

There's a price that the shares will make sense again.  But we're not there yet.

PE is a useless metric for this comparison. Ford lost $67k per EV they made in 2023. Tesla had a 17% margin on pure EV sales. Ford, GM, and Stellantis, after going all in on EVs and announcing ambitious plans just a few years ago, have drastically scaled back their EV plans to stop the cash hemorrhaging. Problem there is they are only delaying the pain. The only way to get to profitability on EVs is to rapidly increase scale. But they can’t rapidly increase scale because they have a vast and complex supply chain with little to no interest in EVs and they failed to secure an adequate battery supply to support profitable mass production. So, their solution is to try and convince consumers what they really want and need is a hybrid. I don’t see this strategy working either. They’re basically screwed.

The only way an investment in Ford, GM or Stellantis (or Honda, Toyota, etc.) makes any sense is if you think EVs are going away and aren’t the future. Reduced deliveries and production isn’t good news for Tesla, but this slowdown in Q1 was industry wide and not a Tesla phenom.

Your post also ignores the fact that Tesla is not just a car company. It ignores energy storage YOY growth of 50% and increasing margins and profitability for energy storage. This side of the business will exceed the car business in coming years. It ignores the AI development, computing capabilities (DOJO), and the massive revenue potential of FSD and/or Optimus. It ignores the fact that Tesla has cornered the supercharging market in NA and has secured a high margin and steadily growing subscription based service revenue stream. You also miss that Apple has given up on making EVs or autonomous car software. GM canceled their Blue Cruise program. Only Waymo remains as a competitor. I predict other car companies will soon be licensing Tesla’s FSD software the same way they were forced to latch on to Tesla’s supercharger network after failing to create their own charging networks.

Perhaps most importantly, your reliance on PE, misses the advantage Tesla has in engineering prowess. It is a highly desirable destination for the best engineering talent in the world. At the end of the day it’s the people that make the company. The pace of innovation at Tesla is staggering and Tesla is not stuck in an outdated ICE culture trying to serve two incompatible purposes at once (maintain profitable for now ICE sales AND grow EV business). Not to mention union labor and pension obligations...

Tesla is also expanding into new markets, most recently Malaysia, that can bring in new demand. A deal is nearing completion with India that will provide Tesla access to sell cars with reduced on no import tariffs in exchange for building a gigafactory in India.

Focusing on one quarter of results and PE ratios is a poor way to evaluate the company’s performance IMO. The lost production time at Fremont, Berlin, and Shanghai did affect deliveries. It takes weeks to ship cars by cargo ship, which means cars not produced mid-quarter didn’t make on ships in time for delivery in Q1. There was a story yesterday about thousands of Tesla vehicles parked at the Shanghai dock waiting to be loaded onto ships. This doesn’t account for the entire drop in deliveries, but can account for a significant portion. The remainder is from poor car sales in a slumping Chinese economy that affected all car sales in China (see BYD QOQ numbers in China) and lower than expected car sales for all makes and models in the US. These conditions are not specific to Tesla or EVs, but Tesla faired as good or better than any other EV maker under these macro conditions.

There's plenty of room to criticize PE, or any non-DCF valuation method. 

What valuation method to you prefer, and where does that put fair value for the stock in your mind?

Wall Street, supposedly the best minds in the investing world, totally missed on Tesla despite their spreadsheets and complex valuation models. It’s a fool's errand, especially for a retail investor. I make it my business to know every bit of publicly available information about the company and track progress or lack thereof on a daily basis. What I don’t do is treat every quarterly result like it’s life or death. In reality quarterly results have little to no bearing on the company’s long-term prospects. I’ve had the same investment thesis since 2013.

Are EVs, renewable energy and energy storage the future? Is Tesla the leader in EVs and energy storage?

I’ll stay long for as long as the answer to both questions is ‘yes'. Notice this does not include supercharger, service, dojo, FSD or Optimus as growing/potential revenue streams. If I had listened to every expert with a valuation spreadsheet I would have missed out on 20X gains and sold long ago. I’d be willing to look at your non-PE based valuation model for Tesla, since you seem to be into valuations.

In the broadest terms, I have a sense for when the SP is outpacing performance/progress and when the SP is behind performance/progress with respect to the company’s mission and guidance. The last run up was overheated for sure. The stock is currently undervalued now IMO.