Author Topic: Is Tesla a good investment?  (Read 113773 times)

Telecaster

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Re: Is Tesla a good investment?
« Reply #300 on: January 14, 2020, 02:16:52 PM »
Growth stocks are always valued at future growth or else it wouldn't be investing.

Could Tesla fall short of expectations and future value, sure.

I don't buy the comparison to the dot-com bubble. While part of Tesla's valuation is based on software, they are first and foremost and manufacturing company for transportation, energy storage, and renewable energy products. There is intrinsic value to their manufacturing facilities, patents, inventory, supercharger network, etc. None of which you had with the insane dot-com bubble.

Where is the risk in a company that is selling every battery pack and vehicle it makes at a healthy margin with no competition in sight?

New ATH today, currently $544/share.

Making money while helping us transition to a sustainable energy economy and creating well-paid manufacturing jobs.  Has there ever been a better win-win-win?

All companies are valued on the prospect of future earnings, right?  Growth stocks typically enjoy a higher multiple because presumably they will grow faster.   At some point, Telsa will become a mature company, like say, GM or Ford and its growth rate will necessarily slow down.    However, it is already valued like GM and Ford combined, but with none of the profits.   That is one helluva headwind.   

I was careful to say "dot com survivors."   Many perfectly fine companies with solid business models got spun up in the bubble too.   Companies like Apple, Amazon, Ebay, Cisco Systems, Microsoft, etc.   Microsoft, for example, had a dominating lead in operating systems (still does) and other software, and made healthy profits.     Its stock price did not return to the dot com high until about 2015.   Similarly Cisco Systems.   Cisco invented the LAN, its products were ubiquitous, and had billions in revenue prior to the bust.     Cisco stock has still not returned to its dot com high.   

In short, a compelling, exciting company by itself doesn't justify a high stock valuation.   Tesla has a great story, but has yet to record an annual profit.  Companies with great stories and no profits are what defined the dot com bust. 

lemonlyman

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Re: Is Tesla a good investment?
« Reply #301 on: January 14, 2020, 03:09:48 PM »
I thought Tesla was risky until recently. Now I think it's as close to a cinch with a growth company as you can get.

1. Strong brand
2. Huge technology moat
3. Charging infrastructure moat
4. Strong US demand (4-11 weeks wait in the US right now)
5. Shanghai factory ramping in the largest auto market in the world
6. Germany factory in the works for 2021
7. Wrights Law applying to EV manufacturing leading to 25% margins by the end of 2020 (*Sam Korus)
8. Budding multiple income streams in insurance, premium internet, apps, skateboard licensing, energy credits
9. Tesla Energy in California where all new houses built have mandated solar or at least source solar.
10. OEM after OEM EV offerings have been less than adequate including future models not yet released. It makes it more likely Tesla holds market share as worldwide EV sales grow.
11. Hinted for battery investor day that they have a million mile battery and a path to produce a TWh of batteries.
...12. The pot of gold at the end of the rainbow: Tesla Network. Its income potential is so high that projections are ridiculous by default. Might as well write off that potential all together and focus on the core business.

2019 was a proving year for the company and they knocked it out of the park by the end.


All companies are valued on the prospect of future earnings, right?  Growth stocks typically enjoy a higher multiple because presumably they will grow faster.   At some point, Telsa will become a mature company, like say, GM or Ford and its growth rate will necessarily slow down.    However, it is already valued like GM and Ford combined, but with none of the profits.   That is one helluva headwind.   

I was careful to say "dot com survivors."   Many perfectly fine companies with solid business models got spun up in the bubble too.   Companies like Apple, Amazon, Ebay, Cisco Systems, Microsoft, etc.   Microsoft, for example, had a dominating lead in operating systems (still does) and other software, and made healthy profits.     Its stock price did not return to the dot com high until about 2015.   Similarly Cisco Systems.   Cisco invented the LAN, its products were ubiquitous, and had billions in revenue prior to the bust.     Cisco stock has still not returned to its dot com high.   

In short, a compelling, exciting company by itself doesn't justify a high stock valuation.   Tesla has a great story, but has yet to record an annual profit.  Companies with great stories and no profits are what defined the dot com bust. 


Tesla is riding a global EV demand curve up and a manufacturing cost curve down in a much more capital intensive industry than any dot com company. That creates moat. Cisco had a $300 billion market cap on $12 billion in revenue and $2 billion in profits in 2000 or 161x on earnings. I don't think just earnings defined that bubble. It's now a $200 billion market cap with $50 billion in revenue and $11 billion in earnings. Tesla has a path to $75 billion in revenue in 2022 with 25% margins just in their EV sales. Let's say 20% net with an 18x multiple (like Cisco) would be $270 billion market cap in 2022.

aspiringnomad

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Re: Is Tesla a good investment?
« Reply #302 on: January 14, 2020, 03:53:12 PM »
Companies with great stories and no profitspath to profitability are what defined the dot com bust.

FTFY. Stock prices should reflect the present value of expected future cash flows. If the market were concerned primarily with past profits, GE would still be the most valuable company in the world.

In my opinion, the dot com bubble is not instructive here, other than maybe AMZN dropping from $86 to $10 in the widespread panic, and the importance of keeping a long-term perspective. Tesla will continue to build its moats, reinvesting cash flow rather than booking maximum profit as it sees fit to do so. As a long-term investor, I still don't care about profits right now. I care about them building for the future. Speaking of moats, I'd add Musk himself as one. Setting aside the genius it takes to start a rocket company that lands boosters from scratch, his access to cutting edge technology via that rocket company can also be an asset to Tesla and one that other car companies can't really replicate. An example is Starship's cold-rolled stainless steel body inspiring the Cybertruck's exoskeleton.

ChpBstrd

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Re: Is Tesla a good investment?
« Reply #303 on: January 14, 2020, 09:53:01 PM »
Companies with great stories and no profitspath to profitability are what defined the dot com bust.

FTFY. Stock prices should reflect the present value of expected future cash flows. If the market were concerned primarily with past profits, GE would still be the most valuable company in the world.


I think what @Telecaster was saying is that it doesn't matter if a company has a path to profitability and spectacular growth, like Cisco did in 2000, if you buy it at a PE ratio so high that even if things go spectacularly well you'll lose, like investors in Cisco did.

I.e. As investors, we need our own path to profitability!

aspiringnomad

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Re: Is Tesla a good investment?
« Reply #304 on: January 14, 2020, 10:29:23 PM »
Companies with great stories and no profitspath to profitability are what defined the dot com bust.

FTFY. Stock prices should reflect the present value of expected future cash flows. If the market were concerned primarily with past profits, GE would still be the most valuable company in the world.


I think what @Telecaster was saying is that it doesn't matter if a company has a path to profitability and spectacular growth, like Cisco did in 2000, if you buy it at a PE ratio so high that even if things go spectacularly well you'll lose, like investors in Cisco did.

I.e. As investors, we need our own path to profitability!

Ha, I think I remember that Cisco was briefly the world's largest company by market cap. If that were the case here and now for Tesla I would have to sell and wait for the correction. But I'm far less concerned about Tesla having a higher market cap than the combined value of GE and Ford, two competitors that at this point are mostly just squeezing profits out of their legacy factories producing legacy technology. IMO, it's a far cry from thinking that a router maker would take over the world, but sure, I agree that Tesla will have to navigate plenty of execution risk to make good on its current valuation, let alone any further appreciation.

Telecaster

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Re: Is Tesla a good investment?
« Reply #305 on: January 15, 2020, 12:02:11 PM »
I think what @Telecaster was saying is that it doesn't matter if a company has a path to profitability and spectacular growth, like Cisco did in 2000, if you buy it at a PE ratio so high that even if things go spectacularly well you'll lose, like investors in Cisco did.

I.e. As investors, we need our own path to profitability!

Just so.  It is entirely possible for a great company to be a lousy investment.  The final returns are dependent upon the initial price. 

Let's do a thought experiment.  Let's assume that in 20 years TSLA will be a mature, profitable company that is a leader in its industry.  Similar to say, Microsoft.   Microsoft has a P/E of 30.  Great company.  Global leader, makes tons of money, just like we're hoping for TSLA.   Now, lets calculate how fast earnings per share need to grow over the next 20 years for TSLA to get to a P/E of 30.   I'll leave that exercise for the reader (it is simple enough to do, but make your own assumptions and see for yourself).   Suffice to say, earnings per share would have to grow at almost a literally unbelievable rate for 20 years, just to justify today's stock price. 

lemonlyman

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Re: Is Tesla a good investment?
« Reply #306 on: January 15, 2020, 03:05:17 PM »
Just so.  It is entirely possible for a great company to be a lousy investment.  The final returns are dependent upon the initial price. 

Let's do a thought experiment.  Let's assume that in 20 years TSLA will be a mature, profitable company that is a leader in its industry.  Similar to say, Microsoft.   Microsoft has a P/E of 30.  Great company.  Global leader, makes tons of money, just like we're hoping for TSLA.   Now, lets calculate how fast earnings per share need to grow over the next 20 years for TSLA to get to a P/E of 30.   I'll leave that exercise for the reader (it is simple enough to do, but make your own assumptions and see for yourself).   Suffice to say, earnings per share would have to grow at almost a literally unbelievable rate for 20 years, just to justify today's stock price.

$17.20 EPS or $3.2 billion in earnings. PE is not a good metric. It varies wildly even among companies in the same industry. Look at Amazon's. Regardless, I think it'll take way less than 20 years to achieve that. I wrote a path to above that in 2022.

aspiringnomad

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Re: Is Tesla a good investment?
« Reply #307 on: January 15, 2020, 07:46:14 PM »
I think what @Telecaster was saying is that it doesn't matter if a company has a path to profitability and spectacular growth, like Cisco did in 2000, if you buy it at a PE ratio so high that even if things go spectacularly well you'll lose, like investors in Cisco did.

I.e. As investors, we need our own path to profitability!

Just so.  It is entirely possible for a great company to be a lousy investment.  The final returns are dependent upon the initial price. 

Let's do a thought experiment.  Let's assume that in 20 years TSLA will be a mature, profitable company that is a leader in its industry.  Similar to say, Microsoft.   Microsoft has a P/E of 30.  Great company.  Global leader, makes tons of money, just like we're hoping for TSLA.   Now, lets calculate how fast earnings per share need to grow over the next 20 years for TSLA to get to a P/E of 30.   I'll leave that exercise for the reader (it is simple enough to do, but make your own assumptions and see for yourself).   Suffice to say, earnings per share would have to grow at almost a literally unbelievable rate for 20 years, just to justify today's stock price.

Yeah, I suppose it's different for me since I first invested in 2013. I'm up a significant amount including the additional shares I bought last year. It doesn't make sense for me to sell for tax purposes, and as I said, this is probably the most fun company to follow in my lifetime (maybe in the history of companies?) and owning a tiny slice of it gives me a decent excuse to follow it daily.

If you are interested in a detailed valuation model, ARK Invest posted theirs publicly to GitHub during last year's stock swoon. They're notable bulls, and I don't think their bull case at $6k/share has any shot in hell of coming to fruition by 2023. It's largely based on the fleet of robotaxis panning out starting in 2021, which I am...uh...not banking on. On the other hand, it seems very likely to me that Tesla will overshoot their bear case which values the company at $597/share in 2023 (certainly not a great CAGR if you're buying in now, but not the bankwuptcy! the shorts constantly claim is imminent). The bear case includes no revenue from autonomy and assumes Tesla's market share of EV sales slips to just 6%, in addition to other overly conservative assumptions. Strangely, neither valuation model seems to include Tesla's energy generation and storage business which Musk has said could eventually rival automotive in size.

theoverlook

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Re: Is Tesla a good investment?
« Reply #308 on: January 16, 2020, 02:35:29 PM »
   Suffice to say, earnings per share would have to grow at almost a literally unbelievable rate for 20 years, just to justify today's stock price.
Of course the growth rate would sound unbelievable, because going from zero to any positive value leads to unbelievable sounding growth rates. But they sold almost a half a million cars last year at what $50k - $70k average cost? $35bn in revenue doesn't take much of a cost cutting to result in large net profits. $3bn in profits doesn't seem even unlikely in the next few years.

Kroaler

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Re: Is Tesla a good investment?
« Reply #309 on: January 19, 2020, 12:14:26 PM »
I didn't read all the comments - But I'm pretty sure I'll end up regretting not taking the Tesla gigafactory job I was offered with a 40k Tesla stock equity in 2018.

Seems it's up pretty good even from that short time ago.

aspiringnomad

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Re: Is Tesla a good investment?
« Reply #310 on: January 19, 2020, 11:36:13 PM »
My 68-year-old dad just ordered a Model Y and is so excited about it he emailed everyone in the family the order specs. I don't remember him so much as telling anyone about a prior car purchase. Ipso facto, good investment :)

lemonlyman

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Re: Is Tesla a good investment?
« Reply #311 on: January 22, 2020, 06:24:26 AM »
I watched this Elon Musk interview yesterday. Most interesting from an investment standpoint was confirmation that the acquisition of Maxwell Technologies was very significant to battery advancement including dry electrode manufacturing and increased energy density. Also the advancement in batteries makes ultracapacitors completely unnecessary. He wouldn't say much because they're going to announce at Battery and Powertrain Investor Day in a "few months." Any significant advancement increases their competitive advantages in autos and energy storage.

https://www.youtube.com/watch?v=NxmO_QuD4Do
« Last Edit: January 22, 2020, 06:26:03 AM by lemonlyman »

DarkandStormy

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Re: Is Tesla a good investment?
« Reply #312 on: January 22, 2020, 01:00:04 PM »
No justification for this stock price.  An unprofitable company that's only "growing" because they're trying to expand geographically.  U.S. sales are slowing down.  Their Q4 18 production rate essentially matched FY19 - meaning they didn't grow in '19 (remember, '18 came with the caveats of "production hell" and "look at our Q4 production for our true production rate, yada yada).

Their market cap topped $100bn, passing VOW as the 2nd highest market cap for an automaker.  VOW delivered 10.8m vehicles last year.  TSLA delivered 367k.  This valuation is insane.

TomTX

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Re: Is Tesla a good investment?
« Reply #313 on: January 22, 2020, 03:55:05 PM »
No justification for this stock price.  An unprofitable company that's only "growing" because they're trying to expand geographically.  U.S. sales are slowing down.  Their Q4 18 production rate essentially matched FY19 - meaning they didn't grow in '19 (remember, '18 came with the caveats of "production hell" and "look at our Q4 production for our true production rate, yada yada).

Your analysis seems pretty bizarre. Tesla produced about 50% more cars in 2019 than they did in 2018. Virtually all of which were produced in Fremont. This is in the ballpark of their long-term average growth rate, starting in 2012 with the launch of the Model S.

DarkandStormy

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Re: Is Tesla a good investment?
« Reply #314 on: January 22, 2020, 05:08:41 PM »
No justification for this stock price.  An unprofitable company that's only "growing" because they're trying to expand geographically.  U.S. sales are slowing down.  Their Q4 18 production rate essentially matched FY19 - meaning they didn't grow in '19 (remember, '18 came with the caveats of "production hell" and "look at our Q4 production for our true production rate, yada yada).

Your analysis seems pretty bizarre. Tesla produced about 50% more cars in 2019 than they did in 2018. Virtually all of which were produced in Fremont. This is in the ballpark of their long-term average growth rate, starting in 2012 with the launch of the Model S.

They produced close to 90k vehicles in Q42018. Musk said to specifically look at Q4 because of production issues plauging them in '18. Annualized, that's basically what they produced in 2019.

TomTX

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Re: Is Tesla a good investment?
« Reply #315 on: January 22, 2020, 05:26:20 PM »
No justification for this stock price.  An unprofitable company that's only "growing" because they're trying to expand geographically.  U.S. sales are slowing down.  Their Q4 18 production rate essentially matched FY19 - meaning they didn't grow in '19 (remember, '18 came with the caveats of "production hell" and "look at our Q4 production for our true production rate, yada yada).

Your analysis seems pretty bizarre. Tesla produced about 50% more cars in 2019 than they did in 2018. Virtually all of which were produced in Fremont. This is in the ballpark of their long-term average growth rate, starting in 2012 with the launch of the Model S.

They produced close to 90k vehicles in Q42018. Musk said to specifically look at Q4 because of production issues plauging them in '18. Annualized, that's basically what they produced in 2019.

85,555 is "close to" 90k? That's the actual number produced in 2018Q4. 85,555. Not 90k.  If it were 89,xxx and you said "close to 90k" - sure.

If you want to do a Q on Q comparison, it's 85,555 -> 104,891, which is a 23% increase.

DarkandStormy

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Re: Is Tesla a good investment?
« Reply #316 on: January 22, 2020, 08:17:18 PM »
No justification for this stock price.  An unprofitable company that's only "growing" because they're trying to expand geographically.  U.S. sales are slowing down.  Their Q4 18 production rate essentially matched FY19 - meaning they didn't grow in '19 (remember, '18 came with the caveats of "production hell" and "look at our Q4 production for our true production rate, yada yada).

Your analysis seems pretty bizarre. Tesla produced about 50% more cars in 2019 than they did in 2018. Virtually all of which were produced in Fremont. This is in the ballpark of their long-term average growth rate, starting in 2012 with the launch of the Model S.

They produced close to 90k vehicles in Q42018. Musk said to specifically look at Q4 because of production issues plauging them in '18. Annualized, that's basically what they produced in 2019.

85,555 is "close to" 90k? That's the actual number produced in 2018Q4. 85,555. Not 90k.  If it were 89,xxx and you said "close to 90k" - sure.

If you want to do a Q on Q comparison, it's 85,555 -> 104,891, which is a 23% increase.

Very glad you're having a hard time reading.

FrugalSaver

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Re: Is Tesla a good investment?
« Reply #317 on: January 22, 2020, 08:56:15 PM »
No justification for this stock price.  An unprofitable company that's only "growing" because they're trying to expand geographically.  U.S. sales are slowing down.  Their Q4 18 production rate essentially matched FY19 - meaning they didn't grow in '19 (remember, '18 came with the caveats of "production hell" and "look at our Q4 production for our true production rate, yada yada).

Their market cap topped $100bn, passing VOW as the 2nd highest market cap for an automaker.  VOW delivered 10.8m vehicles last year.  TSLA delivered 367k.  This valuation is insane.

Somtrue. But thebtechnology?  Is it a car company or a technology company?

For a decade I looked at Amazon and said it made no sense what it was valued at and then it went to $1 trillion.

That said, not suggesting this in any way has that potential but I agree. Way overpriced here. Donít know why anyone would commit new money here at $570 / share

TomTX

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Re: Is Tesla a good investment?
« Reply #318 on: January 23, 2020, 10:16:15 AM »

[malicious taunting]

We can now see your motivations pretty well.

lemonlyman

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Re: Is Tesla a good investment?
« Reply #319 on: January 23, 2020, 11:10:21 AM »
No justification for this stock price.  An unprofitable company that's only "growing" because they're trying to expand geographically.  U.S. sales are slowing down.  Their Q4 18 production rate essentially matched FY19 - meaning they didn't grow in '19 (remember, '18 came with the caveats of "production hell" and "look at our Q4 production for our true production rate, yada yada).

Your analysis seems pretty bizarre. Tesla produced about 50% more cars in 2019 than they did in 2018. Virtually all of which were produced in Fremont. This is in the ballpark of their long-term average growth rate, starting in 2012 with the launch of the Model S.


They produced close to 90k vehicles in Q42018. Musk said to specifically look at Q4 because of production issues plauging them in '18. Annualized, that's basically what they produced in 2019.

Q4 2018 was a production hell specifically relating to the Model 3. In Q4 2018, they produced 61,394 Model 3's at breakneck pace to meet the sunset of the full federal tax credit. It wasn't designed to hold that rate at that time. Tesla specifically wrote in the Q4 2018 letter, they expect to have an annualized runrate of 7,000 Model 3s/week from Fremont by the end of 2019. In Q4 2019, they produced 86,958 Model 3s which is right in line with their guidance from January 2019.

Apparently, I'm also having a hard time reading.
« Last Edit: January 23, 2020, 01:59:21 PM by lemonlyman »

DarkandStormy

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Re: Is Tesla a good investment?
« Reply #320 on: January 24, 2020, 06:26:00 AM »
No justification for this stock price.  An unprofitable company that's only "growing" because they're trying to expand geographically.  U.S. sales are slowing down.  Their Q4 18 production rate essentially matched FY19 - meaning they didn't grow in '19 (remember, '18 came with the caveats of "production hell" and "look at our Q4 production for our true production rate, yada yada).

Your analysis seems pretty bizarre. Tesla produced about 50% more cars in 2019 than they did in 2018. Virtually all of which were produced in Fremont. This is in the ballpark of their long-term average growth rate, starting in 2012 with the launch of the Model S.


They produced close to 90k vehicles in Q42018. Musk said to specifically look at Q4 because of production issues plauging them in '18. Annualized, that's basically what they produced in 2019.

Q4 2018 was a production hell specifically relating to the Model 3. In Q4 2018, they produced 61,394 Model 3's at breakneck pace to meet the sunset of the full federal tax credit. It wasn't designed to hold that rate at that time. Tesla specifically wrote in the Q4 2018 letter, they expect to have an annualized runrate of 7,000 Model 3s/week from Fremont by the end of 2019. In Q4 2019, they produced 86,958 Model 3s which is right in line with their guidance from January 2019.

Apparently, I'm also having a hard time reading.

Thought I recalled them claiming 10k per week? Then again, with Tesla, their targets are constantly moving/changing.

Look, they've obviously cornered the EV market. They're at like 80% of the BEV market in the US.

The question is - and it's one Catherine Wood / ARK seem to avoid - is will they actually grow in terms of market share of the overall auto market. EVs as a whole have flatlined around 2% of all auto sales worldwide. Tesla, globally, makes up about 17% of that 2%.  If they can't convert more ICE owners over, their growth model is sunk.

I've got a friend who is in the Musk/Tesla cult, full on. His reasoning is that Tesla will just continue to double output every two years. That's simply something we haven't seen with them beyond getting through "production hell" with Model 3. And they're still building them in a tent lmao.  If the answer long term was just popping up tents for your assembly lines, every automaker would do it. What happened to the automated production (read: robots) Musk kept hyping 2-3 years ago?

Retire-Canada

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Re: Is Tesla a good investment?
« Reply #321 on: January 24, 2020, 06:40:33 AM »
If they can't convert more ICE owners over, their growth model is sunk.

I don't own Tesla beyond what's in VTI. Every person I know and myself is planning to buy an EV after our current ICE vehicles are used up. I have no specific plans, but if Tesla puts out a bullet proof cyber van with good range and Robo Cop looks at reasonable price point I won't be shocked if I bought one. They are the only EV option I am really aware of and I know they'll have been at the game longer than the other major players so I'll definitely give them a good shot at getting my money.

I'm not a Tesla fanboi so if Ford puts a better EV van product or offers the same product at a significantly better price I have no loyalty to Tesla.

I plan to drove my ICE vehicle another 10-15 years as do a bunch of people I know so there is a big wave of new EV owners coming, but it'll take a moment to build.

DarkandStormy

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Re: Is Tesla a good investment?
« Reply #322 on: January 24, 2020, 07:03:13 AM »
Anecdotes aren't data.

Davnasty

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Re: Is Tesla a good investment?
« Reply #323 on: January 24, 2020, 07:36:58 AM »
Anecdotes aren't data.

And do you have data which directly disputes Retire-Canada's prediction?

Sometimes in the absence of data the next best thing is a combination of anecdotes and a plausible theory.

Even without the anecdotes, I think it would be reasonable to expect many people who currently own ICE vehicles to wait until they've used them up, so to speak, before they buy into the electric market.

Personally, I would like an electric vehicle in the future and I don't have one now, so there's another anecdote.

In any case, I have no idea if Tesla's current valuation makes sense, but I do predict electric vehicle ownership to grow significantly over the next 10 years.

aspiringnomad

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Re: Is Tesla a good investment?
« Reply #324 on: January 24, 2020, 07:50:14 AM »
And they're still building them in a tent lmao.  If the answer long term was just popping up tents for your assembly lines, every automaker would do it.

Detractors have this weird obsession with the tent. What's wrong with the tent? It's a robust one and car build quality has not been an issue over the past year. SpaceX is also building parts of Starship in a tent. Who gives a shit? To me, it was a clever way for Tesla to address constraints and I'm guessing the faster-than-anticipated tooling for the Model Y means they still need the line in the tent to try to keep up with demand for the Model 3. For shorts, and I know you're not one, it's a pretty dumb way to dismiss the company's technological know-how.

What happened to the automated production (read: robots) Musk kept hyping 2-3 years ago?

For more advanced automation, check out the videos they put out of the China factory, which they built, tooled, and got up and running in less than a year. Does that sound like the tent is really an issue that should reflect poorly on their ability to build advanced production lines? Musk has admitted that the tech is not there yet for complete automation, but I'm wagering Tesla is still far ahead of the traditional OEMs in getting to that point. Check out their progress on the wiring harness, for example.

lemonlyman

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Re: Is Tesla a good investment?
« Reply #325 on: January 24, 2020, 08:21:30 AM »
Thought I recalled them claiming 10k per week? Then again, with Tesla, their targets are constantly moving/changing.

Look, they've obviously cornered the EV market. They're at like 80% of the BEV market in the US.

The question is - and it's one Catherine Wood / ARK seem to avoid - is will they actually grow in terms of market share of the overall auto market. EVs as a whole have flatlined around 2% of all auto sales worldwide. Tesla, globally, makes up about 17% of that 2%.  If they can't convert more ICE owners over, their growth model is sunk.

I've got a friend who is in the Musk/Tesla cult, full on. His reasoning is that Tesla will just continue to double output every two years. That's simply something we haven't seen with them beyond getting through "production hell" with Model 3. And they're still building them in a tent lmao.  If the answer long term was just popping up tents for your assembly lines, every automaker would do it. What happened to the automated production (read: robots) Musk kept hyping 2-3 years ago?

Elon Musk gives high targets. Obviously the comments of the CEO are relevant, but try reading the company's actual filings and not the headlines if you want to discuss it on investment terms. And Tesla admitted the robots were a bottleneck in the Model 3 production line and they had to retool. That was one of their biggest problems to scaling the Model 3 and why it took so long. If you're not current with facts, how can you make determination on the future potential of the company? I have an intuition that Uber is a bad investment so I leave it alone, but I haven't researched it enough to argue why it's a bad investment. If I were a short trader and not an investor, it would make sense to go do that. You seem to have followed Tesla to some extent, but you've been incorrect about production levels and context.

EV software, range, and reliability are only going to improve as they scale. Look at the state of the EVs 5 years ago. Do you honestly believe in 5 years from now, they won't be even more competitive to ICE cars than they are today? Tesla just opened a factory in the largest auto market in the world. My wild guess is market share will increase.
« Last Edit: January 24, 2020, 08:51:24 AM by lemonlyman »

lemonlyman

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Re: Is Tesla a good investment?
« Reply #326 on: January 24, 2020, 09:44:13 AM »
https://www.bloomberg.com/news/articles/2020-01-24/volkswagen-ceo-confident-he-can-catch-tesla-in-electric-car-race

VW clearly sees the writing on the wall. If EV sales were projected to stay at 2% worldwide market share, there'd no need to invest $66 billion to capture a portion of that. Even starting to build battery manufacturing plants totaling 150 GWh of capacity by 2025. Mercedes Benz cut their projected ECQ output by half yesterday because of a battery shortage from LG Chem. Battery supply is a major barrier to entry in the EV space because traditional OEMs haven't built the infrastructure for them nor have their own cell chemistry or pack designs.

robartsd

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Re: Is Tesla a good investment?
« Reply #327 on: January 24, 2020, 11:39:00 AM »
Speaking of batteries, one possible problem for Tesla is if long range BEV turn out not to be the best choice for the masses:
https://forum.mrmoneymustache.com/welcome-to-the-forum/i-bought-a-used-chevy-volt-and-you-probably-should-too!/

Of course there range extended hybrid electric vehicles aren't yet nearly as well developed as Tesla's long range BEVs currently are.

aspiringnomad

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Re: Is Tesla a good investment?
« Reply #328 on: January 24, 2020, 01:14:25 PM »
Speaking of production, I'm thinking that sometime in the next few months Tesla will announce a deal to place another gigafactory somewhere in the Southeastern part of the US, most likely in North Carolina, that will focus on producing the Cybertruck, the Semi, and the Model Y.

I'll further speculate that this is what Florida Man was talking about in his mostly nonsensical comments about Musk/Tesla the other day. I'm guessing he's not involved in the negotiations but has been clued into them, and since NC is a potential battleground state, he's getting ready to claim credit for an announcement. For the record, this is all wild speculation, a bit like my initial bet on Tesla :)

TomTX

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Re: Is Tesla a good investment?
« Reply #329 on: January 25, 2020, 09:47:28 AM »
I've got a friend who is in the Musk/Tesla cult, full on. His reasoning is that Tesla will just continue to double output every two years. That's simply something we haven't seen with them beyond getting through "production hell" with Model 3. And they're still building them in a tent lmao.

Lets go back in the wayback machine to 2013. Tesla produced/sold ~22,400 vehicles. Lets double that: 44,800 vehicles.

Real 2015 production: 51,095.

Well darn. That's way higher than your friend predicted. Lets try another and double it to 102,200

Real 2017 production:  101,027.

Totally failed that, Fell short of doubling by like 2%.  Lets double again to 202,000

Real 2019 production: 365,094.

Well, shoot. That's more than tripling in 2 years. Your friend is totally lowballing if you look at the average increase every 2 years.

Maybe it will look better if we go back further! How about 2011?

Real 2011 production: ~1000.

Well, shoot. That went up ~22x in 2 years to 2013.

So, in short - your friend is actually right, yet again your FUD is shown to be false. On average, Tesla is doubling production (if not more) every 2 years. 

Going forward, they just built an entire factory from mud field to cars coming off the line in less than a year, and have started on their 3rd major car production factory in Europe. Plus whatever they do in the USA this year for Y, Semi and Roadster.

You've conclusively proven you have an axe to grind and are just flinging out bad data. What's your motivation here?
« Last Edit: January 25, 2020, 09:48:59 AM by TomTX »

ChpBstrd

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Re: Is Tesla a good investment?
« Reply #330 on: January 26, 2020, 07:53:13 AM »
How much less would Tesla be worth the day after Elon Musk dropped dead from overwork, or perhaps announced he wanted to shift focus on his rocket business so that he could walk on the moon within his lifetime?

For most corporations, the answer would be not much less. Is that the case for TLSA?

TomTX

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Re: Is Tesla a good investment?
« Reply #331 on: January 26, 2020, 10:38:13 AM »
How much less would Tesla be worth the day after Elon Musk dropped dead from overwork, or perhaps announced he wanted to shift focus on his rocket business so that he could walk on the moon within his lifetime?

For most corporations, the answer would be not much less. Is that the case for TLSA?

Elon didn't want to be CEO of Tesla, but was forced into it eventually when they uncovered that Eberhard was blatantly lying to the board and investors about material items, and ordering other employees to lie to the board and investors.

He could drop dead, sure. I doubt he's giving up Tesla.

lemonlyman

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Re: Is Tesla a good investment?
« Reply #332 on: January 26, 2020, 01:51:01 PM »
There would definitely be a short term overreaction. I think the technology has reached an escape velocity and their competitive advantage is very difficult to catch up to. So long term, I don't see a big valuation difference. If he had died before the business model had matured, it would have killed the company tho.
« Last Edit: January 27, 2020, 09:07:15 AM by lemonlyman »

DarkandStormy

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Re: Is Tesla a good investment?
« Reply #333 on: January 27, 2020, 08:24:57 AM »
I've got a friend who is in the Musk/Tesla cult, full on. His reasoning is that Tesla will just continue to double output every two years. That's simply something we haven't seen with them beyond getting through "production hell" with Model 3. And they're still building them in a tent lmao.
You've conclusively proven you have an axe to grind and are just flinging out bad data. What's your motivation here?

They haven't been profitable in any year, but ok.

theoverlook

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Re: Is Tesla a good investment?
« Reply #334 on: January 27, 2020, 08:55:08 AM »
I've got a friend who is in the Musk/Tesla cult, full on. His reasoning is that Tesla will just continue to double output every two years. That's simply something we haven't seen with them beyond getting through "production hell" with Model 3. And they're still building them in a tent lmao.
You've conclusively proven you have an axe to grind and are just flinging out bad data. What's your motivation here?

They haven't been profitable in any year, but ok.
And that, my friends, is called "moving the goalposts."

DarkandStormy

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Re: Is Tesla a good investment?
« Reply #335 on: January 27, 2020, 11:53:44 AM »
I've got a friend who is in the Musk/Tesla cult, full on. His reasoning is that Tesla will just continue to double output every two years. That's simply something we haven't seen with them beyond getting through "production hell" with Model 3. And they're still building them in a tent lmao.
You've conclusively proven you have an axe to grind and are just flinging out bad data. What's your motivation here?

They haven't been profitable in any year, but ok.
And that, my friends, is called "moving the goalposts."

If you say so.  Sorry I didn't type up a full dissertation on why "doubling output every two years" isn't sustainable.  Companies can achieve a lot of great things if they just don't care about making an income for their investors.  This is why Tesla is a cult stock.

Look, I'll be happy to be wrong about this.  I'll be happy if they can hit 10m global output by 2030 or whatever the metric is.  ICE vehicles are relics and EVs are the future.  I just don't think Tesla is a "good investment" (title of this topic) as I don't believe any singular company is a "good investment" for one's portfolio - too risky to have that much in one company.

waltworks

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Re: Is Tesla a good investment?
« Reply #336 on: January 27, 2020, 04:25:39 PM »
If you say so.  Sorry I didn't type up a full dissertation on why "doubling output every two years" isn't sustainable.  Companies can achieve a lot of great things if they just don't care about making an income for their investors.  This is why Tesla is a cult stock.

You know, I don't have a dog in this fight. Outside of VTSAX holding some amount I'm too lazy to look up, I don't own any Tesla stock. I don't plan to own any. I barely own a car, and I have no plans to own another one in the near future, unless someone gives me a Tesla and I inexplicably don't immediately sell it. I don't give a crap about Tesla either way.

But when you respond to someone pointing out that, in fact, something you mocked (Tesla production doubling every couple of years) is TRUE by moving on to another critique, then it's hard to take you seriously.

It appears you have plenty of time to respond to this thread, too, so don't claim that you're being somehow misunderstood because of your brevity.

You could easily have said something like "wow, if they can keep doubling production that will be amazing - thanks for pointing that out. I was wrong. They still need to make consistent profits, though."  That way you sound like a reasonable person, not just someone who dislikes Tesla because other people like it.

-W

TomTX

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Re: Is Tesla a good investment?
« Reply #337 on: January 27, 2020, 05:37:52 PM »
I've got a friend who is in the Musk/Tesla cult, full on. His reasoning is that Tesla will just continue to double output every two years. That's simply something we haven't seen with them beyond getting through "production hell" with Model 3. And they're still building them in a tent lmao.
You've conclusively proven you have an axe to grind and are just flinging out bad data. What's your motivation here?

They haven't been profitable in any year, but ok.

Lets see, you were proven wrong on the revenue claims, then started yammering about your friend being ridiculous for saying Tesla doubled production every two years, got eviscerated thoroughly on that one...

And now another goalpost shift. One might get the impression you have an axe to grind here. Why is that?

aspiringnomad

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Re: Is Tesla a good investment?
« Reply #338 on: January 27, 2020, 06:43:19 PM »
How much less would Tesla be worth the day after Elon Musk dropped dead from overwork, or perhaps announced he wanted to shift focus on his rocket business so that he could walk on the moon within his lifetime?

For most corporations, the answer would be not much less. Is that the case for TLSA?

Elon didn't want to be CEO of Tesla, but was forced into it eventually when they uncovered that Eberhard was blatantly lying to the board and investors about material items, and ordering other employees to lie to the board and investors.

He could drop dead, sure. I doubt he's giving up Tesla.

I doubt he'll leave before his comp plan sunsets in 2028 or until Tesla hits every target in that plan by becoming a $650 billion company, whichever comes sooner. If the stock price stays about where it is for six months, the first of the 12 tranches will vest. Even if it looks linearly unlikely that he'll hit some of the more ambitious targets, I think he'll stick around in case those tranches vest from some nonlinear event, like Tesla being the first to FSD or developing a battery breakthrough that renders ICE vehicles obsolete.

I think he cares a lot about money to the extent that it's an enabler of his ambition to make us a multiplanetary species. It's a strange ambition, but it's also pretty cool, and hopefully it turns out to be lucrative for those of riding the coattails indirectly via TSLA.

TomTX

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Re: Is Tesla a good investment?
« Reply #339 on: January 28, 2020, 06:35:07 PM »
Good point on the comp plan.

I'll note that we're getting close on the first milestone for payment - market cap of $100B (trailing 6 month and 30 day average) and annual revenue of $20B or EBITDA of $1.5B. We should know for sure on the revenue/EBITDA after the investor call tomorrow.

I'll note that full vesting requires Tesla to be valued over $650B with some really massive revenue and EBITDA increases.
« Last Edit: January 28, 2020, 06:36:58 PM by TomTX »

DarkandStormy

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Re: Is Tesla a good investment?
« Reply #340 on: January 29, 2020, 02:26:18 PM »
If you say so.  Sorry I didn't type up a full dissertation on why "doubling output every two years" isn't sustainable.  Companies can achieve a lot of great things if they just don't care about making an income for their investors.  This is why Tesla is a cult stock.

You know, I don't have a dog in this fight. Outside of VTSAX holding some amount I'm too lazy to look up, I don't own any Tesla stock. I don't plan to own any. I barely own a car, and I have no plans to own another one in the near future, unless someone gives me a Tesla and I inexplicably don't immediately sell it. I don't give a crap about Tesla either way.

But when you respond to someone pointing out that, in fact, something you mocked (Tesla production doubling every couple of years) is TRUE by moving on to another critique, then it's hard to take you seriously.

It appears you have plenty of time to respond to this thread, too, so don't claim that you're being somehow misunderstood because of your brevity.

You could easily have said something like "wow, if they can keep doubling production that will be amazing - thanks for pointing that out. I was wrong. They still need to make consistent profits, though."  That way you sound like a reasonable person, not just someone who dislikes Tesla because other people like it.

-W

If you had actually read what I said and didn't have a dog in the fight, you'd note that I never said, "Tesla hasn't doubled production every 2 years like many claim."  I never disputed it.  Not sure why it's being brought up as a "gotcha."  All I said was that they had trouble - they like to refer it as "production hell" - when attempting to scale up Model 3 production.  If they had demonstrated that the autonomous production they've being hyping for years was actually viable, then I'd be much more likely to predict that they could keep scaling that quickly.

So, sure, if they can keep doubling production and actually make inroads in market share of the auto industry (and there are some signs pointing to them maxing out demand in the U.S.) then they will still need to make consistent profits - something they haven't yet done.  Is that better?

waltworks

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Re: Is Tesla a good investment?
« Reply #341 on: January 29, 2020, 02:42:38 PM »
I've got a friend who is in the Musk/Tesla cult, full on. His reasoning is that Tesla will just continue to double output every two years. That's simply something we haven't seen with them beyond getting through "production hell" with Model 3.

Ok, so can you explain what you meant by this? I read it as claiming they have not been doubling output every 2 years.

-W

aspiringnomad

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Re: Is Tesla a good investment?
« Reply #342 on: January 29, 2020, 02:58:12 PM »
Stock at $620650 after hours on earnings beat and confirmation of Model Y deliveries this quarter.

Edited: Ok, no more price updates from me, ya'll are aware of Yahoo finance.
« Last Edit: January 29, 2020, 03:21:01 PM by aspiringnomad »

lemonlyman

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Re: Is Tesla a good investment?
« Reply #343 on: January 29, 2020, 05:18:00 PM »
Some Q4 2019 Letter Highlights:
Cash balance up to $6.3 billion
Model Y deliveries starting Q1 2020 instead of fall 2020. Range increased from 280 to 315 which is a blow to competition
Semi production and deliveries 2020
Guidance for Deliveries to "comfortably exceed 500,000 units" in 2020
Beat estimates on Revenue and Earnings last quarter

 

TomTX

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Re: Is Tesla a good investment?
« Reply #344 on: January 29, 2020, 06:25:48 PM »

If you had actually read what I said and didn't have a dog in the fight, you'd note that I never said, "Tesla hasn't doubled production every 2 years like many claim."  I never disputed it.  Not sure why it's being brought up as a "gotcha."  All I said was that they had trouble - they like to refer it as "production hell" - when attempting to scale up Model 3 production.

Cool lets go into the wayback machine to earlier in this thread:

I've got a friend who is in the Musk/Tesla cult, full on. His reasoning is that Tesla will just continue to double output every two years. That's simply something we haven't seen with them beyond getting through "production hell" with Model 3. And they're still building them in a tent lmao.

Yeah, that's what you were claiming.



ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #345 on: February 03, 2020, 02:15:28 PM »
At what stock price does Tesla become a good investment?

Closed at $780 today. Continued short squeeze and institutional accumulation in anticipation of S&P 500 inclusion could drive the price over $1,000 in coming days to weeks (not advice). Congrats to the longs who didn't listen to the "experts" and FUD.  Congrats to us all on a cleaner energy and transportation future.

talltexan

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Re: Is Tesla a good investment?
« Reply #346 on: February 03, 2020, 02:31:42 PM »
Which of these sounds more true to those of you who've read this far into the thread?

  • If Tesla is a GOOD investment at $770, then it was a GREAT investment at $470
  • Tesla going up to $770 for reasons orthogonal to the fundamental value of its business do not mean it's a good investment.

Sometimes risky investments work out. Sometimes the market misprices things. It may be that the window to collect above-market returns has closed for Tesla because of this rapid increase.

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #347 on: February 03, 2020, 03:10:23 PM »
Which of these sounds more true to those of you who've read this far into the thread?

  • If Tesla is a GOOD investment at $770, then it was a GREAT investment at $470
  • Tesla going up to $770 for reasons orthogonal to the fundamental value of its business do not mean it's a good investment.

Sometimes risky investments work out. Sometimes the market misprices things. It may be that the window to collect above-market returns has closed for Tesla because of this rapid increase.

3) Tesla was a great investment for those who bought into the vision at sub $100/share when all the experts were talking about how no one will ever buy a compelling EV. You can't make an EV with enough range. You can make an EV with range for under $40,000. Tesla will be bankrupt in X months. Teslas catch fire and have poor build quality. Tesla sales are reliant solely on subsidies. They'll never be able to mass produce the Model 3. Etc...

The investment only seemed overly risky to those who bought into the FUD and misinformation and failed to see the disruption in the making.  Far riskier to invest into dying ICE manufacturers and oil companies at this point.

v8rx7guy

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Re: Is Tesla a good investment?
« Reply #348 on: February 03, 2020, 04:37:29 PM »
Phew!  Just checked, TSLA is in my most heavily invested 401K mutual fund VITSX.

Joe Schmo

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Re: Is Tesla a good investment?
« Reply #349 on: February 03, 2020, 05:55:03 PM »
Th brokest, least financially sound person I've ever met told me 6 months ago that TSLA would be down around $10 in a year....next time he gives me a "hot tip" I'll know what to do!!