Is Tesla a good investment?

[reeshau]

FWIW, we can currently buy out options on TSLA expiring in January 2021 at the $50 strike price for about $6.88. In layman's terms, this is a wager that would yield a 627% return if TSLA goes bankrupt and shares go to zero and a 100% loss if that fails to happen.

Those are not bad odds considering that Elon's Twitter addiction might have just blocked the company's last remaining route to raise the $2B it needs to operate a little longer.

https://seekingalpha.com/article/4207331-tesla-may-now-locked-capital-markets

I'm way too risk averse to throw $100k at the idea, but damn it sure is a tempting fantasy play to retire in 6-12 months.

For example, Chpbstrd was concerned on shareholders’ behalf in 2018 that a Tesla bankruptcy was imminent with only one remaining route "to operate a little longer". To be fair, he didn’t define “a little longer”, so perhaps he/she meant 6 years? If his/her concern of the day back in 2018 managed to move an actual shareholder to sell, that shareholder would have missed out on 20X gains (selling at peak) or 10x gains based on today’s price.

This was no idle statement.  Tesla's brushes with bankruptcy, including during the Model 3 launch, are well documented.

https://www.mosaic.tech/post/tesla-from-brink-of-bankruptcy-twice-to-worlds-most-valuable-automaker

With great risk comes great reward.  If you were a shareholder then, and didn't understand that, then you are in large part, just lucky.

The investment thesis in 2018 was dramatically different than it was today. The company was truly on the verge of bankruptcy, and was priced as such. Rivian will be in a similar spot in a little more than a year. The entire history of automotive startups since the 1930’s would tell you to bet against ongoing survival in that situation.

The investment thesis today involves believing the following:
1. Tesla has a sustainable margin advantage that global competitors (US, EU, and Chinese) cannot erode.
2. Tesla will continue to grow sales faster than the rest of the market, while sustaining margins.
3. Tesla will actually deliver on their AI promises on self driving cars within a meaningful timeframe.


You should absolutely buy Tesla stock if you believe that.  You shouldn’t buy the stock if you don’t believe that story.

I agree.  The criticism was of a statement made in 2018, so I replied to bring context to 2018.

Tesla has a lot going for it.  There is a second tier of challenge as an automaker, though, which is to bring new generations of your vehicles to market.  There are a lot of one-hit-wonders that fizzled out after initial success.  As competitors catch up on technology, there will be pressure on styling and reliability.

That may lead Tesla into some trouble as a full-line automaker, or it could hasten its transformation into something else.  Or, they could prove adept at continuing to excite car buyers.

[Telecaster]

This was no idle statement.  Tesla's brushes with bankruptcy, including during the Model 3 launch, are well documented.

https://www.mosaic.tech/post/tesla-from-brink-of-bankruptcy-twice-to-worlds-most-valuable-automaker

With great risk comes great reward.  If you were a shareholder then, and didn't understand that, then you are in large part, just lucky.

Looks like @ChpBstrd was spot on.   TSLA share price was about $280 in January 2021.   

[ChpBstrd]

This was no idle statement.  Tesla's brushes with bankruptcy, including during the Model 3 launch, are well documented.

https://www.mosaic.tech/post/tesla-from-brink-of-bankruptcy-twice-to-worlds-most-valuable-automaker

With great risk comes great reward.  If you were a shareholder then, and didn't understand that, then you are in large part, just lucky.

Looks like @ChpBstrd was spot on.   TSLA share price was about $280 in January 2021.

$298 on the day of this post, according to the Wayback Machine.
http://web.archive.org/web/20180920143238/https://finance.yahoo.com/quote/TSLA/

That's what stood out the most to me at the time - smart people were paying about 14% of the strike price to hedge only some of the last $50 of their $298 investment for just four months. And other people were paying that to bet on bankruptcy or at least a major price collapse within the next 4 months.

2018 TSLA was a $50B market cap company that was rumored to not be paying its bills with mere weeks worth of cash on hand, and so it was extraordinary they didn't collapse. As an investment, it was like a long strangle options play. It could go way up but would probably go way down.

In terms of was this gamble "a good investment", I'm not sure if hindsight counts from anyone who also didn't buy into Fisker, Canoo, Lordstown, Electric Mile, Proterra, Nikola, Lucid, Faraday, Lion Electric, Polestar, Rivian, or VinFast because each of these companies was offering a similar value proposition in  circa 2021 or 2022 as Tesla was offering in 2018: Big product plans and running out of cash quickly.

The difference was luck. Tesla was lucky to have enthusiastic investors and customers, yet could still fail to earn a competitive return for common shareholders not named Elon Musk on all the money plowed into it over the years. As the plight of 2nd wave EV makers demonstrates, the market for EVs was not simply waiting for more charging stations or a change in social norms. Margins will eventually fall to the same levels as ICE vehicles, generous incentives will be necessary to make sales, fortunes will need to be spent on marketing from now on, and PE ratios will eventually come into alignment with other heavy manufacturers. Maybe not this year or next, but eventually.

In the meantime I won't be shorting TSLA. I didn't in 2018 either. We should all know better than to think valuation matters to the prices of stocks like these. Maybe for oil companies or consumer staple companies, but not TSLA.

[reeshau]

I nearly put this in my initial response:

“Choosing individual stocks without any idea of what you're looking for is like running through a dynamite factory with a burning match. You may live, but you're still an idiot.” -- Joel Greenblatt

[ColoradoTribe]

FWIW, we can currently buy out options on TSLA expiring in January 2021 at the $50 strike price for about $6.88. In layman's terms, this is a wager that would yield a 627% return if TSLA goes bankrupt and shares go to zero and a 100% loss if that fails to happen.

Those are not bad odds considering that Elon's Twitter addiction might have just blocked the company's last remaining route to raise the $2B it needs to operate a little longer.

https://seekingalpha.com/article/4207331-tesla-may-now-locked-capital-markets

I'm way too risk averse to throw $100k at the idea, but damn it sure is a tempting fantasy play to retire in 6-12 months.

For example, Chpbstrd was concerned on shareholders’ behalf in 2018 that a Tesla bankruptcy was imminent with only one remaining route "to operate a little longer". To be fair, he didn’t define “a little longer”, so perhaps he/she meant 6 years? If his/her concern of the day back in 2018 managed to move an actual shareholder to sell, that shareholder would have missed out on 20X gains (selling at peak) or 10x gains based on today’s price.

This was no idle statement.  Tesla's brushes with bankruptcy, including during the Model 3 launch, are well documented.

https://www.mosaic.tech/post/tesla-from-brink-of-bankruptcy-twice-to-worlds-most-valuable-automaker

With great risk comes great reward.  If you were a shareholder then, and didn't understand that, then you are in large part, just lucky.

The investment thesis in 2018 was dramatically different than it was today. The company was truly on the verge of bankruptcy, and was priced as such. Rivian will be in a similar spot in a little more than a year. The entire history of automotive startups since the 1930’s would tell you to bet against ongoing survival in that situation.

The investment thesis today involves believing the following:
1. Tesla has a sustainable margin advantage that global competitors (US, EU, and Chinese) cannot erode.
2. Tesla will continue to grow sales faster than the rest of the market, while sustaining margins.
3. Tesla will actually deliver on their AI promises on self driving cars within a meaningful timeframe.


You should absolutely buy Tesla stock if you believe that.  You shouldn’t buy the stock if you don’t believe that story.

I agree.  The criticism was of a statement made in 2018, so I replied to bring context to 2018.

Tesla has a lot going for it.  There is a second tier of challenge as an automaker, though, which is to bring new generations of your vehicles to market.  There are a lot of one-hit-wonders that fizzled out after initial success.  As competitors catch up on technology, there will be pressure on styling and reliability.

That may lead Tesla into some trouble as a full-line automaker, or it could hasten its transformation into something else.  Or, they could prove adept at continuing to excite car buyers.

Concerns over Tesla’s bankruptcy risk back in 2018 were wildly overblown. And Chpbstrd and others at the time pedaled in every doomsday scenario that garnered a headline without ever offering any unique perspective. They’ve had an axe to grind, have consistently been wrong in their prognostications on the stock and the company and continue to offer “advice” as if they have some proven track record of accuracy to stand behind.

Global EV sales continue to grow. Tesla is competing for a growing TAM of EV buyers. None of the legacy auto makers are any where close to producing EVs profitably. What does it matter if they produce tens of thousands of EVs at huge losses. They need to be ramping production into the hundreds of thousands (by model or platform) to get to profitability. Instead, they are scaling back EV plans and trying to convince consumers what they really want in a hybrid, so they gan keep making ICE engines and get federal tax credits for slapping a tiny battery onto the same ICE vehicles that they’ve been selling for decades.

BYD and potentially the Korean brands (Kia and Hyundai) are Tesla’s only near term competition and BYD is pretty much shut-out of the US market. Tesla will also continue to push into new markets in South America and elsewhere.

Tesla’s margins are stable now and will rise as interest rates start to drop and vehicle financing costs come down. Tesla will continue to reduce COGS as they have consistently done for the past several years. Tesla is rolling out new cheaper vehicles in 2025 using a hybrid approach combining elements of their new “unboxed” manufacturing process and their existing vehicle lines.  Cybertruck production is reaching volumes (~100,000/yr) where it will contribute meaningfully to Tesla’s bottom line. The CT production rate will hit the 250k/yr run rate in 2025. Order backlog is estimated to be over 2 million.

Tesla continue to ramp its in house battery cell production capabilities and will open a 2nd battery gigafactory in China in Q1 of 2025. Tesla has also broken ground on its semi truck production plant in Nevada. Walmart has taken delivery of some Tesla semis, in addition to Pepsi. A Tesla lithium refining plant (further vertical integration) is currently under construction in Texas and will begin operations by the end of 2024. None of this investment is contributing to Tesla’s bottom line yet, but its the groundwork being laid to fuel Tesla’s next wave of growth.

Tesla Energy now enjoys higher margins than Tesla automotive and is growing 50% YOY. The potential TAM here is almost limitless in the near future as the world moves to rapidly replace expensive NG peaker plants with cheaper, industrial scale battery storage facilities. Like with Tesla vehicles, Tesla’s software prowess and seamless integration across its storage products is Tesla’s competitive advantage.

Revenue from the supercharging network and SAAS will also only increase from here as every legacy auto is forced to adapt Tesla’s charging standards (NACS) and sign onto to use Tesla’s supercharging network to be competitive. Like with NACS, every legacy auto will also be forced into licensing Tesla’s FSD software to stay competitive. I’m sure that will garner plenty of scoffs, but we’re all going to get to see it play out in real time.

Tesla is a technology company and is investing the neccessary billions to create the computing power to drive the AI required for both the Optimus robot and robotaxi products. Only Tesla has the combination of the raw data (millions of miles driven by millions of vehicles on the road), compute power, and hardware equipped vehicles to achieve full autonomy. Success is not guaranteed, but Tesla is in the pole position. Same goes for Optimus. I predict Tesla will sell a production Optimus before they manufacture a production robotaxi. Markets for both products is in the trillions.

[ColoradoTribe]

This was no idle statement.  Tesla's brushes with bankruptcy, including during the Model 3 launch, are well documented.

https://www.mosaic.tech/post/tesla-from-brink-of-bankruptcy-twice-to-worlds-most-valuable-automaker

With great risk comes great reward.  If you were a shareholder then, and didn't understand that, then you are in large part, just lucky.

Looks like @ChpBstrd was spot on.   TSLA share price was about $280 in January 2021.

$298 on the day of this post, according to the Wayback Machine.
http://web.archive.org/web/20180920143238/https://finance.yahoo.com/quote/TSLA/

That's what stood out the most to me at the time - smart people were paying about 14% of the strike price to hedge only some of the last $50 of their $298 investment for just four months. And other people were paying that to bet on bankruptcy or at least a major price collapse within the next 4 months.

2018 TSLA was a $50B market cap company that was rumored to not be paying its bills with mere weeks worth of cash on hand, and so it was extraordinary they didn't collapse. As an investment, it was like a long strangle options play. It could go way up but would probably go way down.

In terms of was this gamble "a good investment", I'm not sure if hindsight counts from anyone who also didn't buy into Fisker, Canoo, Lordstown, Electric Mile, Proterra, Nikola, Lucid, Faraday, Lion Electric, Polestar, Rivian, or VinFast because each of these companies was offering a similar value proposition in  circa 2021 or 2022 as Tesla was offering in 2018: Big product plans and running out of cash quickly.

The difference was luck. Tesla was lucky to have enthusiastic investors and customers, yet could still fail to earn a competitive return for common shareholders not named Elon Musk on all the money plowed into it over the years. As the plight of 2nd wave EV makers demonstrates, the market for EVs was not simply waiting for more charging stations or a change in social norms. Margins will eventually fall to the same levels as ICE vehicles, generous incentives will be necessary to make sales, fortunes will need to be spent on marketing from now on, and PE ratios will eventually come into alignment with other heavy manufacturers. Maybe not this year or next, but eventually.

In the meantime I won't be shorting TSLA. I didn't in 2018 either. We should all know better than to think valuation matters to the prices of stocks like these. Maybe for oil companies or consumer staple companies, but not TSLA.

Your arrogance is boundless. You were wrong about this company and by extension its long-term stock prospects. Who cares? Move on. Instead you feel the need to come on here and explain how those who did their own due diligence and approachh to evaluating Tesla were just naive risk takers who just got “lucky” and somehow you’ve been right all along.

I didn’t get lucky. I had a negative net worth a few months out of college. I was fortunate to not have any student debt due to an athletic scholarship. I worked really hard, lived below my means, and saved. Despite having no advanced degree or high-paying tech job, I retired at age 40. Prior to Tesla, I never invested more than $5,000 in an individual stock and VTI was my largest holding. I had a diversified portfolio that included real estate holdings. My "aha moment" was in 2012 when I purchased a Nissan LEAF. It’s a far inferior product to a Tesla, but the advantages of EVs were obvious to me. I have spent at least an hour a day since 2013, when I purchased my first Tesla shares, researching the company and the market. I’m not a fanboy, though I support the mission of the company to accelerate the world’s transition to sustainable electric transportation.

I didn’t retire in 2017 based on my Tesla investment. The stock hadn’t taken off yet. Tesla could go to zero and I’d stay retired. You are not the gatekeeper who gets to decide for all FIRE folks what is or is not a worthy investment. I assume you enjoy your own measure of financial success and clearly have your own criteria and determinations you make before investing. I’m happy for you for any success you have achieved. Please consider the possibility that everyone who spotted the coming disruption Tesla has wrought wasn’t naive or lucky. Consider that you just didn’t see the opportunity before you. It’s okay, it doesn’t make you a bad investor or dumb. I didn’t see or get Facebook or Amazon or Apple. Let it go.

I’ll take my own advice. My purpose on this thread was not to taught my earnings or prove to everyone how smart I am. I had knowledge on the company and wanted to counter a lot of misinformation I was seeing posted. Anyone wanting my perspective going forward is welcome to PM me. I’m getting ready to realize a long term dream and move onto a piece of fertile farm land and build a house on it for my family. My time will be better spent there going forward.

Best of "luck" to all!

[MustacheAndaHalf]

The criticism was of a statement made in 2018, so I replied to bring context to 2018.

Concerns over Tesla’s bankruptcy risk back in 2018 were wildly overblown. And Chpbstrd and others at the time pedaled in every doomsday scenario that garnered a headline without ever offering any unique perspective. They’ve had an axe to grind, have consistently been wrong in their prognostications on the stock and the company and continue to offer “advice” as if they have some proven track record of accuracy to stand behind.

The biggest proponent of this "wildly overblown" bankruptcy theory was Tesla CEO Elon Musk:

(From Nov 2020)

In a Twitter conversation on Tuesday, Tesla CEO Elon Musk revealed that the carmaker was “about a month” from bankruptcy during the run-up in Model 3 production from mid-2017 to mid-2019.

https://www.cnbc.com/2020/11/03/musk-tesla-was-about-a-month-from-bankruptcy-during-model-3-ramp.html

[Niceday]

The criticism was of a statement made in 2018, so I replied to bring context to 2018.

Concerns over Tesla’s bankruptcy risk back in 2018 were wildly overblown. And Chpbstrd and others at the time pedaled in every doomsday scenario that garnered a headline without ever offering any unique perspective. They’ve had an axe to grind, have consistently been wrong in their prognostications on the stock and the company and continue to offer “advice” as if they have some proven track record of accuracy to stand behind.

The biggest proponent of this "wildly overblown" bankruptcy theory was Tesla CEO Elon Musk:

(From Nov 2020)

In a Twitter conversation on Tuesday, Tesla CEO Elon Musk revealed that the carmaker was “about a month” from bankruptcy during the run-up in Model 3 production from mid-2017 to mid-2019.

https://www.cnbc.com/2020/11/03/musk-tesla-was-about-a-month-from-bankruptcy-during-model-3-ramp.html

Getting close to bankruptcy doesn't mean it was going to go bankrupt. Tesla had(and has) leading EV techs and it would have been able to get financial assistance one way or another. A few companies would have been happy to get a piece of Tesla.

Tesla was a low-risk high-return investment back in 2016, 2017, 2018. Here we are in 2024, Tesla under $200 is a low-risk high-return investment again.

SpaceX landed its first reusable rocket in 2015. It's strange that a lot of people didn't think the Tesla team would be able to solve the Model 3 production issue.

All this negativity to justify their miss of a 10-bagger(or more) is a waste of energy. There is always the next multi-bagger.

[Niceday]

I nearly put this in my initial response:

“Choosing individual stocks without any idea of what you're looking for is like running through a dynamite factory with a burning match. You may live, but you're still an idiot.” -- Joel Greenblatt

Stock picking is not for everyone. It requires time, passion, and skill. If any part is lacking, it's better to stick with the index.  Just because you can't pick individual stocks on a consistently basis doesn't mean no one can.

[mistymoney]

This was no idle statement.  Tesla's brushes with bankruptcy, including during the Model 3 launch, are well documented.

https://www.mosaic.tech/post/tesla-from-brink-of-bankruptcy-twice-to-worlds-most-valuable-automaker

With great risk comes great reward.  If you were a shareholder then, and didn't understand that, then you are in large part, just lucky.

Looks like @ChpBstrd was spot on.   TSLA share price was about $280 in January 2021.

$298 on the day of this post, according to the Wayback Machine.
http://web.archive.org/web/20180920143238/https://finance.yahoo.com/quote/TSLA/

That's what stood out the most to me at the time - smart people were paying about 14% of the strike price to hedge only some of the last $50 of their $298 investment for just four months. And other people were paying that to bet on bankruptcy or at least a major price collapse within the next 4 months.

2018 TSLA was a $50B market cap company that was rumored to not be paying its bills with mere weeks worth of cash on hand, and so it was extraordinary they didn't collapse. As an investment, it was like a long strangle options play. It could go way up but would probably go way down.

In terms of was this gamble "a good investment", I'm not sure if hindsight counts from anyone who also didn't buy into Fisker, Canoo, Lordstown, Electric Mile, Proterra, Nikola, Lucid, Faraday, Lion Electric, Polestar, Rivian, or VinFast because each of these companies was offering a similar value proposition in  circa 2021 or 2022 as Tesla was offering in 2018: Big product plans and running out of cash quickly.

The difference was luck. Tesla was lucky to have enthusiastic investors and customers, yet could still fail to earn a competitive return for common shareholders not named Elon Musk on all the money plowed into it over the years. As the plight of 2nd wave EV makers demonstrates, the market for EVs was not simply waiting for more charging stations or a change in social norms. Margins will eventually fall to the same levels as ICE vehicles, generous incentives will be necessary to make sales, fortunes will need to be spent on marketing from now on, and PE ratios will eventually come into alignment with other heavy manufacturers. Maybe not this year or next, but eventually.

In the meantime I won't be shorting TSLA. I didn't in 2018 either. We should all know better than to think valuation matters to the prices of stocks like these. Maybe for oil companies or consumer staple companies, but not TSLA.

Your arrogance is boundless. You were wrong about this company and by extension its long-term stock prospects. Who cares? Move on. Instead you feel the need to come on here and explain how those who did their own due diligence and approachh to evaluating Tesla were just naive risk takers who just got “lucky” and somehow you’ve been right all along.

I didn’t get lucky. I had a negative net worth a few months out of college. I was fortunate to not have any student debt due to an athletic scholarship. I worked really hard, lived below my means, and saved. Despite having no advanced degree or high-paying tech job, I retired at age 40. Prior to Tesla, I never invested more than $5,000 in an individual stock and VTI was my largest holding. I had a diversified portfolio that included real estate holdings. My "aha moment" was in 2012 when I purchased a Nissan LEAF. It’s a far inferior product to a Tesla, but the advantages of EVs were obvious to me. I have spent at least an hour a day since 2013, when I purchased my first Tesla shares, researching the company and the market. I’m not a fanboy, though I support the mission of the company to accelerate the world’s transition to sustainable electric transportation.

I didn’t retire in 2017 based on my Tesla investment. The stock hadn’t taken off yet. Tesla could go to zero and I’d stay retired. You are not the gatekeeper who gets to decide for all FIRE folks what is or is not a worthy investment. I assume you enjoy your own measure of financial success and clearly have your own criteria and determinations you make before investing. I’m happy for you for any success you have achieved. Please consider the possibility that everyone who spotted the coming disruption Tesla has wrought wasn’t naive or lucky. Consider that you just didn’t see the opportunity before you. It’s okay, it doesn’t make you a bad investor or dumb. I didn’t see or get Facebook or Amazon or Apple. Let it go.

I’ll take my own advice. My purpose on this thread was not to taught my earnings or prove to everyone how smart I am. I had knowledge on the company and wanted to counter a lot of misinformation I was seeing posted. Anyone wanting my perspective going forward is welcome to PM me. I’m getting ready to realize a long term dream and move onto a piece of fertile farm land and build a house on it for my family. My time will be better spent there going forward.

Best of "luck" to all!

Thanks Coloradotribe. I for one have really appreciated your posts and your insights into tesla. I also truly beleive in the vision and direction of the company. I have a lot of issues with musk - and I do beleive his racist and antisemimetic twitter posts have affected the brand image and lost a lot of customers. I don't know where he is going with his support of right wing conspiracy theories, but it is worrying to me. I'm not sure what that means for me as a share holder. I did stop buying more, but haven't sold what I've bougght previously. Still pondering the moral angle of this for my own conscience.  But I do own sp500 stuff, and so I'll still technically own tesla and I'm sure there are a lot worse ceo and company offerings that I would cringe at being a part of.

I will certainly miss your insights if you stop posting on this thread! But I wish you well, and hope your new home works out wonderfully for your family!

I agree that this thread has become something of a....I'm actually not sure what to say it is really now that I try to name it, but it has become very strange and while I'm interested in outside (of shareholders) opinions, this thread doesn't seem to actually be one that is going to increase anyone's understanding of anything.

I have to say that I don't find the contrarian view to be very credible at all when it is so extreme that it doesn't allow for any positives about tesla at all. Tesla did not come out of nowhere and have the model y become the best selling car in the world in 2023 for nothing.

Additionally, a lot of the tesla product criticisms here appear to just be googled up in the moment to counter anything positive rather than knowledge that is known and verified. Tesla cars are not crap. I love mine. I've had it for 18 months and absolutely nothing is wrong, nothing is out of allignment, no mechanical or tech issues whatsoever. If I say tesla has super-comfy seats, and someone googles up "tesla seats uncomforable", that is a very unconvincing piece of info. You can find any garbage all over the internet right now and trolling or bot posts are making everything questionable as to if people really experienced such a thing or not.

I do have concerns about tesla, and my investment in them. Musk is a double edged sword, and I try not to minimize his visionary advantages while I cringe at his meanness of spirit. I also worry about him alienating customers and losing talent at tesla because of it. But tesla has done an almost unimaginable change in the auto industry. And it is exciting to me where they will go next in changing the world while also looking to be environmentally rigorous.

I also have concerns about the entire stock market! I am a worrying sort.....

[mistymoney]

In other news!!

I saw my first live cybertruck on the road yesterday!! It did look very impressive!

Since I have of course read up a lot about the cybertruck being a shareholder, the shape is normal to me now. When I first saw it I was really confused and found it unsightly! My sense is that everyone will get used to the new shape and it won't be seen as "weird" for very long. I'm a bit older so for youngers I'm sure they will acclimate to the new shape much more quickly.

One thing I had totally not anticipated is the cybertruck quickly becoming a status symbol in the rapper community. I think that will change the direction of the market for sure.

Kim kardashian has one, and her kids got a toy cybertruck from grandma.

[bacchi]

The criticism was of a statement made in 2018, so I replied to bring context to 2018.

Concerns over Tesla’s bankruptcy risk back in 2018 were wildly overblown. And Chpbstrd and others at the time pedaled in every doomsday scenario that garnered a headline without ever offering any unique perspective. They’ve had an axe to grind, have consistently been wrong in their prognostications on the stock and the company and continue to offer “advice” as if they have some proven track record of accuracy to stand behind.

The biggest proponent of this "wildly overblown" bankruptcy theory was Tesla CEO Elon Musk:

(From Nov 2020)

In a Twitter conversation on Tuesday, Tesla CEO Elon Musk revealed that the carmaker was “about a month” from bankruptcy during the run-up in Model 3 production from mid-2017 to mid-2019.

https://www.cnbc.com/2020/11/03/musk-tesla-was-about-a-month-from-bankruptcy-during-model-3-ramp.html

Getting close to bankruptcy doesn't mean it was going to go bankrupt. Tesla had(and has) leading EV techs and it would have been able to get financial assistance one way or another. A few companies would have been happy to get a piece of Tesla.

Tesla had a negative cash flow in 2017/2018 and was running through $7430/minute.* At the end of 2017, it had $3.4B in cash and $9.4B in debt. If we multiple $7430/minute out to a year, we get...

Given that, which companies would've liked a piece of Tesla in 2018? Ford? GM? BYD?

* https://www.bloomberg.com/graphics/2018-tesla-burns-cash/#methods

Tesla was a low-risk high-return investment back in 2016, 2017, 2018. Here we are in 2024, Tesla under $200 is a low-risk high-return investment again.

A company that has enough cash for only a year of operation, that has to convince 250,000 people to buy its BEVs, and that pays more debt interest than GM -- sure, that sounds low risk.

All this negativity to justify their miss of a 10-bagger(or more) is a waste of energy. There is always the next multi-bagger.

When I get together with Warren for our weekly bridge games, we always snicker about the "prescient" one-hit wonders.

[reeshau]

I nearly put this in my initial response:

“Choosing individual stocks without any idea of what you're looking for is like running through a dynamite factory with a burning match. You may live, but you're still an idiot.” -- Joel Greenblatt

Stock picking is not for everyone. It requires time, passion, and skill. If any part is lacking, it's better to stick with the index.  Just because you can't pick individual stocks on a consistently basis doesn't mean no one can.

I actually agree with your characterization; my own words are you need to 1) love it, 2) have enough time, and 3) have the discipline to follow your process and not panic.

[Niceday]

The criticism was of a statement made in 2018, so I replied to bring context to 2018.

Concerns over Tesla’s bankruptcy risk back in 2018 were wildly overblown. And Chpbstrd and others at the time pedaled in every doomsday scenario that garnered a headline without ever offering any unique perspective. They’ve had an axe to grind, have consistently been wrong in their prognostications on the stock and the company and continue to offer “advice” as if they have some proven track record of accuracy to stand behind.

The biggest proponent of this "wildly overblown" bankruptcy theory was Tesla CEO Elon Musk:

(From Nov 2020)

In a Twitter conversation on Tuesday, Tesla CEO Elon Musk revealed that the carmaker was “about a month” from bankruptcy during the run-up in Model 3 production from mid-2017 to mid-2019.

https://www.cnbc.com/2020/11/03/musk-tesla-was-about-a-month-from-bankruptcy-during-model-3-ramp.html

Getting close to bankruptcy doesn't mean it was going to go bankrupt. Tesla had(and has) leading EV techs and it would have been able to get financial assistance one way or another. A few companies would have been happy to get a piece of Tesla.

Tesla had a negative cash flow in 2017/2018 and was running through $7430/minute.* At the end of 2017, it had $3.4B in cash and $9.4B in debt. If we multiple $7430/minute out to a year, we get...

Given that, which companies would've liked a piece of Tesla in 2018? Ford? GM? BYD?

* https://www.bloomberg.com/graphics/2018-tesla-burns-cash/#methods

Tesla was a low-risk high-return investment back in 2016, 2017, 2018. Here we are in 2024, Tesla under $200 is a low-risk high-return investment again.

A company that has enough cash for only a year of operation, that has to convince 250,000 people to buy its BEVs, and that pays more debt interest than GM -- sure, that sounds low risk.

All this negativity to justify their miss of a 10-bagger(or more) is a waste of energy. There is always the next multi-bagger.

When I get together with Warren for our weekly bridge games, we always snicker about the "prescient" one-hit wonders.

Your misunderstanding and negativity is clouding your judgement and that's why you think it was a high-risk investment back then.  Bankruptcy was only one of the several possible outcomes. There were possible cash infusion in some form. You only listed 3 companies. How about you think more global? What about outside of the auto industry? Any potential private investors? What about Tesla actually solving the Model 3 production issues?

You seem to think that successful Tesla investors are one-hit wonders. What made you think of that? Some are gamblers buying options heavily for sure. But many are successful investors with a consistent track record. Btw, putting yourself together with Warren Buffet is disrespectful to Warren and many investors.

[bacchi]

The criticism was of a statement made in 2018, so I replied to bring context to 2018.

Concerns over Tesla’s bankruptcy risk back in 2018 were wildly overblown. And Chpbstrd and others at the time pedaled in every doomsday scenario that garnered a headline without ever offering any unique perspective. They’ve had an axe to grind, have consistently been wrong in their prognostications on the stock and the company and continue to offer “advice” as if they have some proven track record of accuracy to stand behind.

The biggest proponent of this "wildly overblown" bankruptcy theory was Tesla CEO Elon Musk:

(From Nov 2020)

In a Twitter conversation on Tuesday, Tesla CEO Elon Musk revealed that the carmaker was “about a month” from bankruptcy during the run-up in Model 3 production from mid-2017 to mid-2019.

https://www.cnbc.com/2020/11/03/musk-tesla-was-about-a-month-from-bankruptcy-during-model-3-ramp.html

Getting close to bankruptcy doesn't mean it was going to go bankrupt. Tesla had(and has) leading EV techs and it would have been able to get financial assistance one way or another. A few companies would have been happy to get a piece of Tesla.

Tesla had a negative cash flow in 2017/2018 and was running through $7430/minute.* At the end of 2017, it had $3.4B in cash and $9.4B in debt. If we multiple $7430/minute out to a year, we get...

Given that, which companies would've liked a piece of Tesla in 2018? Ford? GM? BYD?

* https://www.bloomberg.com/graphics/2018-tesla-burns-cash/#methods

Tesla was a low-risk high-return investment back in 2016, 2017, 2018. Here we are in 2024, Tesla under $200 is a low-risk high-return investment again.

A company that has enough cash for only a year of operation, that has to convince 250,000 people to buy its BEVs, and that pays more debt interest than GM -- sure, that sounds low risk.

All this negativity to justify their miss of a 10-bagger(or more) is a waste of energy. There is always the next multi-bagger.

When I get together with Warren for our weekly bridge games, we always snicker about the "prescient" one-hit wonders.

Your misunderstanding and negativity is clouding your judgement and that's why you think it was a high-risk investment back then.  Bankruptcy was only one of the several possible outcomes. There were possible cash infusion in some form. You only listed 3 companies. How about you think more global? What about outside of the auto industry? Any potential private investors?

Let's hear it then. Who was going to buy a piece of Tesla in 2017/8? What private investor(s)? Why did Musk, the CEO of Tesla, even mention a near-miss bankruptcy if that wasn't the case? Are you claiming he made it up?

You seem to think that successful Tesla investors are one-hit wonders. What made you think of that? Some are gamblers buying options heavily for sure. But many are successful investors with a consistent track record. Btw, putting yourself together with Warren Buffet is disrespectful to Warren and many investors.

Ohhh, sorry, I thought we were bragging about investment prowess. I was just throwing my hat in the ring. Mea culpa.

[reeshau]

In other news!!

I saw my first live cybertruck on the road yesterday!! It did look very impressive!

Since I have of course read up a lot about the cybertruck being a shareholder, the shape is normal to me now. When I first saw it I was really confused and found it unsightly! My sense is that everyone will get used to the new shape and it won't be seen as "weird" for very long. I'm a bit older so for youngers I'm sure they will acclimate to the new shape much more quickly.

One thing I had totally not anticipated is the cybertruck quickly becoming a status symbol in the rapper community. I think that will change the direction of the market for sure.

Kim kardashian has one, and her kids got a toy cybertruck from grandma.

I have seen several in north Houston and, surprisingly, ran across one in a small but affluent town in Northern Michigan.  (Northern Michigan is actually a pretty rich hunting ground for classic and unusual car spotting in the summer)

[mistymoney]

https://www.youtube.com/watch?v=8f4wD7aiTSI&t=257s

somewhat softball interview with Dan Ives, but not overly so. He thinks Tesla doubles in 12-18 months.

direct quote "could potentially double".

Want to record that here! Looking at you June 23, 2025!! or December 23, 2025!

Also noted in the vid - ferrari with an EV at 500k purchase price.

[joedad189]

Up about $80 per share since the last post

[firemane]

Seems like the past few years it runs up to bro valuations at the slightest good news, then shuts itself at the slightest bad new and then is forgotten for a while. Basically crypto lol

[dividendman]

Any recent prognostications? I have a buddy who has puts at $100 for 1/17/2025 and thinks it's a good investment. His rationale is that Tesla's margins are going down, sales growth is slowing, competition is getting better and Musk promises things that are outlandish and don't happen (like a Robotaxi on Aug. 8th).

[FINate]

Sure, I'll play.

In my view, TSLA is almost entirely a cult of personality at this point. It has long had this tendency, but it is now entirely detached from fundamentals. The dumb money is investing based on emotion and magical thinking, with a strong dose of sunk cost fallacy. Whereas the whales are riding waves of volatility to harvest easy money from said dumb money.

TSLA's Beta is 2.33, which means it is 2.33x more volatile than the overall market. In finance volatility == risk, so someone who bought in Dec 2020 for $200 has seen zero returns over 4ish years and zero compensation for the huge amount of risk.

Musk has irreparably damaged the Tesla brand and alienated his core demographic in the process. This is less of an issue in China and the EU, but these markets are where Tesla is facing the most intense competition. Demand in key US markets, e.g. California, is in decline and Tesla has tried to defend market share with price cuts and incentives resulting in declining margins.

Competitive pressure in the US will continue to increase as fleet fuel economy standards create a predictable path to EV production for the legacy auto makers. [I suspect this is why Musk endorsed Trump -- if Trump wins he'll decrease efficiency standards which would disincentive EV production at legacy firms lessening competitive pressure.] 

As margins and market share have declined, and as the fundamental realities of manufacturing vehicles on a large scale have caught up to Telsa, Musk has desperately tried to reposition the company as a Robotics and AI story. But this is a complete mess. Does anyone actually believe there will be 10 billion humanoid robots at $10s of thousands each? Musk is just pulling larger and larger numbers out of his ass to keep the dumb money from fleeing. AI is even more confusing. Will Musk build it in Tesla, or will he prioritize xAI... a clear conflict of interest.

The energy business, while growing, is a low-margin commoditized market and will never provide the profits necessary to support current multiples.

All this to say, TSLA will face a reckoning at some point in the coming years. I think the most likely outcome is a rather boring long-term stock decline with plenty of ups and downs along the way. But I think there's a non trivial chance it experiences a dramatic crash if demand drop accelerates and/or they hit cash flow problems, or any number of other negatives. TSLA is priced for perfection, and I don't see perfection on the horizon.

[ChpBstrd]

Any recent prognostications? I have a buddy who has puts at $100 for 1/17/2025 and thinks it's a good investment. His rationale is that Tesla's margins are going down, sales growth is slowing, competition is getting better and Musk promises things that are outlandish and don't happen (like a Robotaxi on Aug. 8th).

I have an unwritten Investment Policy Statement that says to avoid such gambles so I wouldn't do it. Your friend isn't wrong about any of these reasons, but could still be wrong about the direction of the stock.

Your friend may be looking at a repeat of October 2022 - January 2023 when TSLA fell from near today's price to about 110. That occurred in the context of a bear market. Such a bear market may occur again, as the vast majority of recession indicators are flashing red while stocks are at historically high-range valuations.

Those TSLA puts may be an indirect way to hedge exposure to the rest of the stock market. After all, it seems unlikely the maker of $100,000 non-truck fashion vehicles which are getting utterly panned in every review, plus a couple of other models which haven't been updated in several years, is going to sell many luxury vehicles in the face of a recession. Note that recessions are associated with falling gasoline prices, and so to the extent TSLA is a market alternative to gasoline, the incentives to buy a TSLA product could decrease if we near $2 / gallon again. A TSLA put therefore could be a way to hedge fossil fuel stocks, with an added bonus that the company (like the big 3 automakers) is poorly positioned for an economic downturn.

OTOH, a call on TSLA could be a hedge against rising gasoline prices, perhaps due to a widening Middle East conflict.

What's more likely? Why gamble?

[ChpBstrd]

Yesterday was the big day for Tesla and nobody seemed to care. Financial news sites placed their articles about the event on the 3rd tier.

Musk unveiled an allegedly $30k Robotaxi plus a surprise autonomous delivery van or bus. Meanwhile Tesla's humanoid robots served drinks and danced.

The day finally came and markets were unimpressed by the things Tesla bulls long predicted would impress them. Tesla shares are down over 8.3% this morning.

I wonder if Musk has become the boy who cried wolf. When people see these "new" products, they see a concept car version of something that might be sold 5 years later in underwhelming quantities, like the cybertruck. And the general honesty problems with Musk may have led many to wonder how many of these autonomous systems were actually running off of remote control for the demonstration.

Finally, and perhaps most importantly, the products themselves may have struck analysts as having more of the same design problems and form-over-function impracticality that made the cybertruck an expensive toy instead of a profitable mass-market vehicle. Tesla engineers put a lot of effort into the Robotaxi coupe's scissor-wing doors, but how exactly do those doors work in tight parking lots or if there is a post/parking meter nearby? The Robovan, meanwhile, had inaccessible tires, a low-rider body that couldn't handle speed bumps, non-functional headlights, and a white floor and seats. Have you ever been on a bus with a white floor? Ever been in a taxi with very expensive Lamborghini doors? There are reasons for these things.

Overall these vehicles seem to show a complete break with practicality in Tesla's design department, and perhaps more of the same overbearing influence from Musk that brought us the Cybertruck. We can excuse the zero-profile tires / giant hubcaps on the taxi if we call it a concept car - other car manufacturers have such gimmicks on their concept cars. But if it is a concept car that means we could be 5 years away from the next Tesla product! Can the stock run on hype for those 5 years while people keep buying the old model 3 design out of nostalgia for 2017?

Imagine the cost to insure the Robotaxi if a fender bender puts those scissor doors out of alignment. Imagine a fleet service trying to service the Robovan and having to put it on a lift to check the tire pressure. Musk seems to be selling a sci-fi aesthetic more than any market-ready product that could justify TSLA's PE ratio of 61. Concept cars are for gauging public reaction, but Tesla needs something new to sell next year.

Barrons' went further and noted "a lack of safety technical detail" and missing "discussion for Tesla executives". As they noted, "Most of what Musk said has been said before."

[bacchi]

Tesla engineers put a lot of effort into the Robotaxi coupe's scissor-wing doors, but how exactly do those doors work in tight parking lots or if there is a post/parking meter nearby?

The robotaxi charging also made no sense. These things are consumer items that require a giant, inefficient, charging pad in your garage? Even if the robotaxi becomes legit, and somehow beats Waymo* and Zoox to the market, you'd have to go out and clean the thing anyway; it would take all of 1 minute to plug it in before you use your shopvac to suck out the vomit from the late night taxi fare. It is a concept car, though, and maybe someone will convince Elon that pad charging is cool but not practical for the average home.

Barrons' went further and noted "a lack of safety technical detail" and missing "discussion for Tesla executives". As they noted, "Most of what Musk said has been said before."

The executives all quit. ;)


* Too late. Waymo has 100,000 fares per week.

[MustacheAndaHalf]

The analysis I heard on CNN reminded viewers that Musk claimed fully autonomous driving was two years away in 2016, then two years away in 2018, and so on.  Those repeated empty claims of fully autonomous driving have hurt his credibility.

I haven't verified it, but it was also claimed Amazon is already using Zoox on roads.  Waymo (by Google) is already self-driving (level 4) - I think with passengers in at least one city, but I am not exactly clear on the claim.  The idea being other companies are driving now, and the claim is Tesla isn't (I thought Tesla was using data from self-driving mode?).

Looking online, it seems like other companies are well ahead of Tesla.  Waymo and Cruise are both rated level 4 autonomous vehicles, which allows local taxi service.  Tesla is not:
"Tesla's Autopilot is classified as Level 2 under the SAE six levels" 
https://en.wikipedia.org/wiki/Tesla_Autopilot

[NorCal]

TSLA is a meme stock at this point. Whether it goes up or down has more to do with WSB short and long YOLO plays than any fundamentals. There’s no predicting it.

I’m a huge fan of electric vehicles, but I’m not seeing a ton of long term fundamental growth in their earnings.

Do I maybe believe the new taxi could operate in a few select cities after a lot of testing?  Sure. Waymo and others are doing it. But they’re doing it with human operators taking control from a call center environment when needed.  This isn’t a market where they’re going to sell millions of cars. This is a market where they might sell a couple thousand cars a year.  Maybe in the tens of thousands. As a low margin product.

I didn’t look that closely, but it didn’t look like it would work well as a cab. I didn’t see a lot of space for luggage or more than two people.

[FINate]

\Do I maybe believe the new taxi could operate in a few select cities after a lot of testing?  Sure. Waymo and others are doing it. But they’re doing it with human operators taking control from a call center environment when needed.  This isn’t a market where they’re going to sell millions of cars. This is a market where they might sell a couple thousand cars a year.  Maybe in the tens of thousands. As a low margin product.

Margins are lower in the ridesharing industry than for automakers. Replacing low pay drivers with expensive compute isn't going to improve the situation and may actually be worse. This certainly isn't going to get Tesla to a $5 trillion valuation, which IMO is the most shocking thing Musk said during the event.

I happened upon the livestream as it was getting a late start and watched it. Underwhelming is the best description. The robovan, while an interesting concept, isn't a new idea (e.g. Navya and others). The robots serving drinks were awkward and apparently controlled by human operators behind the scenes. The concept cabs were contained within a geofenced and highly controlled route. I've heard reports that Tesla was there a week or so before mapping everything out in detail. This really shows how far Tesla is behind Waymo, which is already doing 100,000 autonomous rides/week in real cities vs. a film set. Musk's demonstration of the "future" was a less capable version of what already exists.

[NorCal]

\Do I maybe believe the new taxi could operate in a few select cities after a lot of testing?  Sure. Waymo and others are doing it. But they’re doing it with human operators taking control from a call center environment when needed.  This isn’t a market where they’re going to sell millions of cars. This is a market where they might sell a couple thousand cars a year.  Maybe in the tens of thousands. As a low margin product.

Margins are lower in the ridesharing industry than for automakers. Replacing low pay drivers with expensive compute isn't going to improve the situation and may actually be worse. This certainly isn't going to get Tesla to a $5 trillion valuation, which IMO is the most shocking thing Musk said during the event.

I happened upon the livestream as it was getting a late start and watched it. Underwhelming is the best description. The robovan, while an interesting concept, isn't a new idea (e.g. Navya and others). The robots serving drinks were awkward and apparently controlled by human operators behind the scenes. The concept cabs were contained within a geofenced and highly controlled route. I've heard reports that Tesla was there a week or so before mapping everything out in detail. This really shows how far Tesla is behind Waymo, which is already doing 100,000 autonomous rides/week in real cities vs. a film set. Musk's demonstration of the "future" was a less capable version of what already exists.

I saw a data point from Waymo, although it may be dated at this point.

They apparently have 1.5 human operators per driverless car working in their call center type control center.

While there should be a path to improve that over time, it’s kinda hard today figure out how they’re gonna make money without some truly dramatic improvements.

[FINate]

\Do I maybe believe the new taxi could operate in a few select cities after a lot of testing?  Sure. Waymo and others are doing it. But they’re doing it with human operators taking control from a call center environment when needed.  This isn’t a market where they’re going to sell millions of cars. This is a market where they might sell a couple thousand cars a year.  Maybe in the tens of thousands. As a low margin product.

Margins are lower in the ridesharing industry than for automakers. Replacing low pay drivers with expensive compute isn't going to improve the situation and may actually be worse. This certainly isn't going to get Tesla to a $5 trillion valuation, which IMO is the most shocking thing Musk said during the event.

I happened upon the livestream as it was getting a late start and watched it. Underwhelming is the best description. The robovan, while an interesting concept, isn't a new idea (e.g. Navya and others). The robots serving drinks were awkward and apparently controlled by human operators behind the scenes. The concept cabs were contained within a geofenced and highly controlled route. I've heard reports that Tesla was there a week or so before mapping everything out in detail. This really shows how far Tesla is behind Waymo, which is already doing 100,000 autonomous rides/week in real cities vs. a film set. Musk's demonstration of the "future" was a less capable version of what already exists.

I saw a data point from Waymo, although it may be dated at this point.

They apparently have 1.5 human operators per driverless car working in their call center type control center.

While there should be a path to improve that over time, it’s kinda hard today figure out how they’re gonna make money without some truly dramatic improvements.

Yes, though not sure what the ratio is these days. My understanding is the remote operators don't drive the vehicles, but rather help the automation get unstuck. Because there's an infinite number of weird edge cases in the real world. Making cars and running a ride sharing service are capital intensive and involve lots of depreciating assets. In the past Musk has suggested robotaxi would be so profitable that they would be appreciating assets Tesla would refuse to sell. That he apparently changed his mind and said the robotaxi could be purchased signals that Tesla knows these will be depreciating assets that wouldn't be very profitable as a service.

[NorCal]

\Do I maybe believe the new taxi could operate in a few select cities after a lot of testing?  Sure. Waymo and others are doing it. But they’re doing it with human operators taking control from a call center environment when needed.  This isn’t a market where they’re going to sell millions of cars. This is a market where they might sell a couple thousand cars a year.  Maybe in the tens of thousands. As a low margin product.

Margins are lower in the ridesharing industry than for automakers. Replacing low pay drivers with expensive compute isn't going to improve the situation and may actually be worse. This certainly isn't going to get Tesla to a $5 trillion valuation, which IMO is the most shocking thing Musk said during the event.

I happened upon the livestream as it was getting a late start and watched it. Underwhelming is the best description. The robovan, while an interesting concept, isn't a new idea (e.g. Navya and others). The robots serving drinks were awkward and apparently controlled by human operators behind the scenes. The concept cabs were contained within a geofenced and highly controlled route. I've heard reports that Tesla was there a week or so before mapping everything out in detail. This really shows how far Tesla is behind Waymo, which is already doing 100,000 autonomous rides/week in real cities vs. a film set. Musk's demonstration of the "future" was a less capable version of what already exists.

I saw a data point from Waymo, although it may be dated at this point.

They apparently have 1.5 human operators per driverless car working in their call center type control center.

While there should be a path to improve that over time, it’s kinda hard today figure out how they’re gonna make money without some truly dramatic improvements.

Yes, though not sure what the ratio is these days. My understanding is the remote operators don't drive the vehicles, but rather help the automation get unstuck. Because there's an infinite number of weird edge cases in the real world. Making cars and running a ride sharing service are capital intensive and involve lots of depreciating assets. In the past Musk has suggested robotaxi would be so profitable that they would be appreciating assets Tesla would refuse to sell. That he apparently changed his mind and said the robotaxi could be purchased signals that Tesla knows these will be depreciating assets that wouldn't be very profitable as a service.

Regardless of ownership, this is a service Tesla will have to provide in a car with no steering wheel.

Is the model that they sell you the car for $30k and you have to pay them a service fee to be driven around in your own car?  Someone is going to be paying for real people to be monitoring the car, and it likely won’t be cheap.

I’m trying to keep an open mind here, but there are so many fundamental unanswered questions that it’s hard to see anything other than vaporware here.

[FINate]

\Do I maybe believe the new taxi could operate in a few select cities after a lot of testing?  Sure. Waymo and others are doing it. But they’re doing it with human operators taking control from a call center environment when needed.  This isn’t a market where they’re going to sell millions of cars. This is a market where they might sell a couple thousand cars a year.  Maybe in the tens of thousands. As a low margin product.

Margins are lower in the ridesharing industry than for automakers. Replacing low pay drivers with expensive compute isn't going to improve the situation and may actually be worse. This certainly isn't going to get Tesla to a $5 trillion valuation, which IMO is the most shocking thing Musk said during the event.

I happened upon the livestream as it was getting a late start and watched it. Underwhelming is the best description. The robovan, while an interesting concept, isn't a new idea (e.g. Navya and others). The robots serving drinks were awkward and apparently controlled by human operators behind the scenes. The concept cabs were contained within a geofenced and highly controlled route. I've heard reports that Tesla was there a week or so before mapping everything out in detail. This really shows how far Tesla is behind Waymo, which is already doing 100,000 autonomous rides/week in real cities vs. a film set. Musk's demonstration of the "future" was a less capable version of what already exists.

I saw a data point from Waymo, although it may be dated at this point.

They apparently have 1.5 human operators per driverless car working in their call center type control center.

While there should be a path to improve that over time, it’s kinda hard today figure out how they’re gonna make money without some truly dramatic improvements.

Yes, though not sure what the ratio is these days. My understanding is the remote operators don't drive the vehicles, but rather help the automation get unstuck. Because there's an infinite number of weird edge cases in the real world. Making cars and running a ride sharing service are capital intensive and involve lots of depreciating assets. In the past Musk has suggested robotaxi would be so profitable that they would be appreciating assets Tesla would refuse to sell. That he apparently changed his mind and said the robotaxi could be purchased signals that Tesla knows these will be depreciating assets that wouldn't be very profitable as a service.

Regardless of ownership, this is a service Tesla will have to provide in a car with no steering wheel.

Is the model that they sell you the car for $30k and you have to pay them a service fee to be driven around in your own car?  Someone is going to be paying for real people to be monitoring the car, and it likely won’t be cheap.

I’m trying to keep an open mind here, but there are so many fundamental unanswered questions that it’s hard to see anything other than vaporware here.

Great point.

[ChpBstrd]

https://gizmodo.com/elon-musks-beer-pouring-optimus-robots-are-not-autonomous-2000510899

Scoble can be heard in the video asking one of the robots, “Hey Optimus, how much of you is AI?”

The robot, or whoever was controlling it, seemed to scramble for an answer, saying “I can’t disclose just how much. That’s something you’ll have to find out later.”

[Herbert Derp]

Regardless of ownership, this is a service Tesla will have to provide in a car with no steering wheel.

Is the model that they sell you the car for $30k and you have to pay them a service fee to be driven around in your own car?  Someone is going to be paying for real people to be monitoring the car, and it likely won’t be cheap.

I’m trying to keep an open mind here, but there are so many fundamental unanswered questions that it’s hard to see anything other than vaporware here.

Agreed that as with Waymo, humans will have to monitor the cars.

Yes, Tesla will charge a subscription fee to use “full self driving”. They already do this for their other cars. The main difference is that since the robotaxi has no steering wheel, it won’t work at all without a full self driving subscription.

Although the robotaxi can be purchased by individuals, it actually makes no sense for them to do so. This is a product that is optimized for fleet operators, i.e someone who owns a fleet of tens, hundreds, or maybe thousands of robotaxis. The robotaxi has no steering wheel and no charging plug. It simply isn’t designed for the owner to be sitting in it. An owner would like the option to drive around without a FSD subscription. An owner would like the option to plug their car in for faster and more flexible charging.

In contrast, fleet operators won’t want to drive the cars around manually, and they won’t want to have to plug the cars in manually. Both of these mean you have to hire human employees, and the less employees a fleet operator needs to hire, the better.

Individual car owners will probably always want to buy a car with manual controls and a plug. So anyway, when you think of the robotaxi as a product designed solely for fleet operators, it makes sense. This is not a product intended to be purchased by individuals.

[FINate]

Although the robotaxi can be purchased by individuals, it actually makes no sense for them to do so. This is a product that is optimized for fleet operators, i.e someone who owns a fleet of tens, hundreds, or maybe thousands of robotaxis. The robotaxi has no steering wheel and no charging plug. It simply isn’t designed for the owner to be sitting in it. An owner would like the option to drive around without a FSD subscription. An owner would like the option to plug their car in for faster and more flexible charging.

In contrast, fleet operators won’t want to drive the cars around manually, and they won’t want to have to plug the cars in manually. Both of these mean you have to hire human employees, and the less employees a fleet operator needs to hire, the better.

One wonders what value-add a fleet operator provides in such a scenario. Tesla builds the vehicle, the app, the FSD. The fleet operator is really good at maintenance and/or cleaning the cabs? Or are they essentially just providing the financing?

[Herbert Derp]

One wonders what value-add a fleet operator provides in such a scenario. Tesla builds the vehicle, the app, the FSD. The fleet operator is really good at maintenance and/or cleaning the cabs? Or are they essentially just providing the financing?

Fleet operators will be people or companies who want to operate large fleets of vehicles. More vehicles, more profit. It’s like real estate investors who own large portfolios of property.

Fleet operators will have access to real estate to store the vehicles and operate the charging pads. They will handle cleaning of the cars and coordinate maintenance. They will also have the resources to finance all of the above.

Individual owners won’t be able to do that. Most of them won’t even want dirty and irresponsible strangers using their cars.

Individuals and fleet operators are two completely different use cases and it makes sense to design separate products for which are optimized for each use case.

Now, let us consider the value of third party fleet operators versus Tesla being their own fleet operator.

Imagine if Tesla wants to become a fleet operator. First, they will have to start securing real estate to house all of the robotaxis and charging mats, which is a slow and tedious process. They have to convince someone to sell real estate or give them access to it, and then they have to install the charging infrastructure. It’s a tedious and bespoke process every single time, requiring negotiations, permitting, and bureaucracy at every step. Then they need to handle cleaning and coordination of maintenance which is laborious and low margin.

By letting other people be fleet operators, Tesla can get around the real estate bottleneck and just focus on manufacturing as many vehicles as possible, and charging high-margin fees to operate the vehicles. Real estate is only a bottleneck that inhibits growth, and there is no value in cleaning and coordination of maintenance.

The main downside to this approach is that although letting other people be fleet operators will enable greater scale in the short term, in the longer term Tesla will end up with a bunch of wealthy and powerful fleet operators who will fight over the fees being charged to them, or accuse Tesla of unfair business practices if Tesla chooses to operate their own fleet and compete against them. Then politicians like Lina Khan and Elizabeth Warren will use this as an opportunity to accuse Tesla of monopolistic business practices.

Expect a bunch of hit piece media articles about how Tesla is exploiting their fleet operators with predatory fees. The same thing has happened to other large “platform companies” like Apple and Amazon. Amazon has tried to get around the fees conflict by shifting to in-house brands that they own completely. But this only led to more conflicts with third party sellers and politicians, who accused Amazon of “stealing business” from the third parties on Amazon’s platform.

It’s a really tricky situation, being a platform, because there is an unavoidable conflict of interest between platforms and their users, and platforms end up being targeted by politicians who exploit this tension. Platform owners and third party businesses on the platform both want to make as much money as possible, and it becomes an inevitable tug of war that turns political after a while.

Personally, I think the less politically risky approach would be for there to be no third party fleet operators and for Tesla to be the sole fleet operator for their own cars. Then, Tesla would be free to compete fairly with other companies like Waymo and nobody would accuse them of monopolistic business practices. But they have to balance the political risk against being able to scale faster by bringing in third party fleet operators.

Legacy automakers already have this problem with their dealerships. They can’t get rid of them or compete with them because of the entrenched political power of the dealerships.

[Telecaster]

The robotaxi was a bust.   It seems the minimum design criteria should be able to seat four adults with luggage.   I did some Googling and it appears the average Uber trip is between 1.5 and 1.75 passengers.   So the robotaxi can handle the majority of trips...but what about the rest?   It seems odd they would size it too small to handle a reasonable fraction of trips.   

Induction charging seems cool.  But do you want it?   Because now you need induction chargers in the ground in order to operate it. 

Over all, the hype seems misplaced.  All this was was a car with no driver controls, and oddly designed for the task.  This does not sound particularly innovative or noteworthy.     

[Herbert Derp]

The robotaxi was a bust.   It seems the minimum design criteria should be able to seat four adults with luggage.   I did some Googling and it appears the average Uber trip is between 1.5 and 1.75 passengers.   So the robotaxi can handle the majority of trips...but what about the rest?   It seems odd they would size it too small to handle a reasonable fraction of trips.

The robotaxi trunk has a huge amount of space for luggage. According to the chief designer, about 90% of all shared rides have two or less passengers, so designing a two seat robotaxi makes sense. For the other 10% of trips, people can just hire a larger car like a Model Y or get multiple robotaxis.

You know, it’s for two people, and that’s like 90% of all shared rides.

Source: https://youtu.be/3LFYM86BjU0?t=735

Induction charging seems cool.  But do you want it?   Because now you need induction chargers in the ground in order to operate it.

As a fleet operator, would you prefer to install normal chargers on your property and hire someone to stand around at all hours plugging and unplugging cars, or would you prefer to install induction chargers and not have to hire someone? I guess Tesla did the math and thinks the latter makes more sense.

Over all, the hype seems misplaced.  All this was was a car with no driver controls, and oddly designed for the task.  This does not sound particularly innovative or noteworthy.   

I wouldn’t say it is particularly innovative either. They just optimized for the robotaxi fleet use case.

[Herbert Derp]

The important questions on my mind are:

• How many taxis are on the road today versus personal vehicles?
• If robotaxis are cheap and available, how many people would switch from owning a personal vehicle to using robotaxis?

I suspect the answer to #1 is that the vast majority of vehicles on the road are personal vehicles, and I suspect that most of the people who own a personal vehicle do not want to get rid of it.

Personally, I like owning a vehicle and would not get rid of it so I could take robotaxis everywhere. Because I don’t think robotaxis can go everywhere, and when I go on trips I need a place to stow my stuff. I like that my car has my stuff in it, so that I have my stuff with me wherever I go.

So the market for a dedicated robotaxi may be smaller than Tesla thinks, and the market for a cheap car optimized for individual ownership with optional self driving capabilities may be larger than Tesla thinks. This will fall under the “Model 2.5” which Tesla says they’re working on, which is rumored to be a stripped-down version of the Model 3.

[FINate]

One wonders what value-add a fleet operator provides in such a scenario. Tesla builds the vehicle, the app, the FSD. The fleet operator is really good at maintenance and/or cleaning the cabs? Or are they essentially just providing the financing?

Fleet operators will be people or companies who want to operate large fleets of vehicles. More vehicles, more profit. It’s like real estate investors who own large portfolios of property.

Fleet operators will have access to real estate to store the vehicles and operate the charging pads. They will handle cleaning of the cars and coordinate maintenance. They will also have the resources to finance all of the above.

Individual owners won’t be able to do that. Most of them won’t even want dirty and irresponsible strangers using their cars.

Individuals and fleet operators are two completely different use cases and it makes sense to design separate products for which are optimized for each use case.

Now, let us consider the value of third party fleet operators versus Tesla being their own fleet operator.

Imagine if Tesla wants to become a fleet operator. First, they will have to start securing real estate to house all of the robotaxis and charging mats, which is a slow and tedious process. They have to convince someone to sell real estate or give them access to it, and then they have to install the charging infrastructure. It’s a tedious and bespoke process every single time, requiring negotiations, permitting, and bureaucracy at every step. Then they need to handle cleaning and coordination of maintenance which is laborious and low margin.

By letting other people be fleet operators, Tesla can get around the real estate bottleneck and just focus on manufacturing as many vehicles as possible, and charging high-margin fees to operate the vehicles. Real estate is only a bottleneck that inhibits growth, and there is no value in cleaning and coordination of maintenance.

The main downside to this approach is that although letting other people be fleet operators will enable greater scale in the short term, in the longer term Tesla will end up with a bunch of wealthy and powerful fleet operators who will fight over the fees being charged to them, or accuse Tesla of unfair business practices if Tesla chooses to operate their own fleet and compete against them. Then politicians like Lina Khan and Elizabeth Warren will use this as an opportunity to accuse Tesla of monopolistic business practices.

Expect a bunch of hit piece media articles about how Tesla is exploiting their fleet operators with predatory fees. The same thing has happened to other large “platform companies” like Apple and Amazon. Amazon has tried to get around the fees conflict by shifting to in-house brands that they own completely. But this only led to more conflicts with third party sellers and politicians, who accused Amazon of “stealing business” from the third parties on Amazon’s platform.

It’s a really tricky situation, being a platform, because there is an unavoidable conflict of interest between platforms and their users, and platforms end up being targeted by politicians who exploit this tension. Platform owners and third party businesses on the platform both want to make as much money as possible, and it becomes an inevitable tug of war that turns political after a while.

Personally, I think the less politically risky approach would be for there to be no third party fleet operators and for Tesla to be the sole fleet operator for their own cars. Then, Tesla would be free to compete fairly with other companies like Waymo and nobody would accuse them of monopolistic business practices. But they have to balance the political risk against being able to scale faster by bringing in third party fleet operators.

Legacy automakers already have this problem with their dealerships. They can’t get rid of them or compete with them because of the entrenched political power of the dealerships.

What you're describing w.r.t real estate holdings is the kind of thing I'm talking about. Tesla owns the app therefore they control dispatch, which means operators have no ability to brand or differentiate themselves by competing on price or service. A Tesla cab is a Tesla cab, regardless of operator. Really the only thing a fleet operator can do is drive down their costs -- mostly real estate and maintenance, neither is easy to control -- and hope they can defend some profitability as Tesla captures more of the profits over time and competition in the robotaxi market drives down margins. Fleet operators hold very capital intense parts of the business (buying the cars and real estate) with little up-side while being at the mercy of Tesla to ensure they're able to make ends meet. I can see why this would be attractive to Tesla, especially if the margins on operating a robotaxi aren't great, but it's likely a terrible business for a third party.

[FireLane]

What you're describing w.r.t real estate holdings is the kind of thing I'm talking about. Tesla owns the app therefore they control dispatch, which means operators have no ability to brand or differentiate themselves by competing on price or service. A Tesla cab is a Tesla cab, regardless of operator. Really the only thing a fleet operator can do is drive down their costs -- mostly real estate and maintenance, neither is easy to control -- and hope they can defend some profitability as Tesla captures more of the profits over time and competition in the robotaxi market drives down margins. Fleet operators hold very capital intense parts of the business (buying the cars and real estate) with little up-side while being at the mercy of Tesla to ensure they're able to make ends meet. I can see why this would be attractive to Tesla, especially if the margins on operating a robotaxi aren't great, but it's likely a terrible business for a third party.

This sounds a lot like the "chickenization" business model pioneered by poultry companies like Perdue, where the chickens are raised by farmers who are theoretically independent but in reality are a captive audience. The farmers take all the risk and are responsible for all the overhead expenses, while Perdue can force them to abide by any rules of its choosing and pay them whatever it pleases for the finished chickens.

[NorCal]

The more I read about possible business models and partnerships and capital partners and fleet operators, the more this thing screams vaporware.

There’s a lot of big lifting here that Tesla hasn’t even mentioned.

If Tesla were serious about this whole business model flip (or whatever it is), they’d be building out the structure for it TODAY with their existing vehicles. New products would be developed for the market as it’s proven out.

This isn’t the type of thing where you build a product and hope for a whole cooperating ecosystem of partners to just magically appear.

[reeshau]

Business model: get into government on a platform of waste elimination.

Mow down NHTSA when it brings up pesky trivialities like hitting pedestrians in low visibility conditions.  Even though solutions to that are available.  Call it, and anything from California "red tape."  Have a boss who will sign off on anything, as long as it's good for him.  Make sure the legislative and judicial checks and balances are kept in line.

Presto!  Innovation by 2026.

[Herbert Derp]

https://gizmodo.com/elon-musks-beer-pouring-optimus-robots-are-not-autonomous-2000510899

Scoble can be heard in the video asking one of the robots, “Hey Optimus, how much of you is AI?”

The robot, or whoever was controlling it, seemed to scramble for an answer, saying “I can’t disclose just how much. That’s something you’ll have to find out later.”

Tesla just released a video showing where Optimus is at:
https://x.com/Tesla_Optimus/status/1846797392521167223

Apparently it can walk around, map out its surroundings, and share this information to other Optimus bots for more efficient navigation. It can walk up stairs and dock itself at a charging station. It can pick up objects and hand them to people. It can wave back at you if you wave at it. The behavior of the robot is all controlled by AI and is not hardcoded like many earlier humanoid robots.

Unlike Figure, Optimus has no LLM integration for communication, planning, and logic. I think Figure is still ahead of Tesla here, but Tesla is in a better position to mass produce robots compared to Figure.

For those of you who are living under a rock, here is a seven month old video of Figure’s humanoid robot using an LMM for communication and planning of actions:
https://youtu.be/Sq1QZB5baNw

That said, I don’t think LLMs are much of a moat. Tesla could relatively easily integrate an LLM into Optimus and achieve similar results. In my opinion, the most important thing to watch for is how dexterous and agile the robots are, and how easily they can interact with their environment. And all behavior needs to be controlled by AI, or it doesn’t count.

[sonofsven]

https://gizmodo.com/elon-musks-beer-pouring-optimus-robots-are-not-autonomous-2000510899

Scoble can be heard in the video asking one of the robots, “Hey Optimus, how much of you is AI?”

The robot, or whoever was controlling it, seemed to scramble for an answer, saying “I can’t disclose just how much. That’s something you’ll have to find out later.”

Tesla just released a video showing where Optimus is at:
https://x.com/Tesla_Optimus/status/1846797392521167223

Apparently it can walk around, map out its surroundings, and share this information to other Optimus bots for more efficient navigation. It can walk up stairs and dock itself at a charging station. It can pick up objects and hand them to people. It can wave back at you if you wave at it. The behavior of the robot is all controlled by AI and is not hardcoded like many earlier humanoid robots.

Unlike Figure, Optimus has no LLM integration for communication, planning, and logic. I think Figure is still ahead of Tesla here, but Tesla is in a better position to mass produce robots compared to Figure.

For those of you who are living under a rock, here is a seven month old video of Figure’s humanoid robot using an LMM for communication and planning of actions:
https://youtu.be/Sq1QZB5baNw

That said, I don’t think LLMs are much of a moat. Tesla could relatively easily integrate an LLM into Optimus and achieve similar results. In my opinion, the most important thing to watch for is how dexterous and agile the robots are, and how easily they can interact with their environment. And all behavior needs to be controlled by AI, or it doesn’t count.

Can it open the pod bay door?

[ColoradoTribe]

Nobody wanted to discuss Tesla Q3 earnings?

https://www.youtube.com/watch?v=blZj-7nkwok

[dividendman]

Nobody wanted to discuss Tesla Q3 earnings?

https://www.youtube.com/watch?v=blZj-7nkwok

It seems pretty good! Margins went up somehow even with all the discounts

[ColoradoTribe]

Nobody wanted to discuss Tesla Q3 earnings?

https://www.youtube.com/watch?v=blZj-7nkwok

It seems pretty good! Margins went up somehow even with all the discounts

Tesla achieved significant reduction in COGS to offset lower ASP. Cybertruck was profitable and had been a drag on vehicle margins.

[waltworks]

Nobody cares about earnings for a meme stock.

At this point the big mover will be whether Trump gets elected or not, right?

-W

[mistymoney]

Lol, I think there would have been quite the hue and cry if tesla missed earnings.

But beat estimates handily?

crickets.

[waltworks]

Yep, hate Tesla or love Tesla but make sure to be irrational about it. Shrug.