TSLA - Tesla Motors

[Dassets]

Thanks Dassets, interesting perspective. My back of the envelope calculations show them earning $12 a share next year. If I'm correct, at $100 a share they would be on a PE of 8. This would be for a debt free company growing at 50% per year. I've not allowed anything for their energy, humanoid robot or driving software.

I will tell you where I am coming from. First up the diluted number of shares is 1,157 m shares, accounting for the further 12% or so of vested and in the money options. BTW that is after 10% has already been vested and sold by the CEO, Chair, other directors and execs. That is right they have cashed out around $100b this year alone. I am looking beyond next year btw to the long term business but it doesn't make much difference because I think we will see the trends anyway and that will begin to be reflected in share price. The two big problems for me are 1. costs 2. the effect of competitor action. 1. is easy. 2. for me means the margin currently being enjoyed at about 150% above Toyota(one of the best) will inevitably revert to industry. Why? Because the industry is launching 45+ EVs this year(vs 0 for Tesla) and by doing that the industry will inject their margins into what has been a very limited and insulated market. Sales growth sorry I dont buy the forecasts with the competitor product available. Tesla is meant to sell 2.25M cars next year without a small budget offering or SUV(in the US vital). With 3 or 4 models is just isn't going to happen. There are only about 4-4.5 pax cars sold in the US- each year. BYD is killing Tesla in China. Tesla doesn't sell in Africa or South America. Tesla is a niche company with a high end niche product. Now it could launch a couple of models next year but the competitors eg F150 and GM, Range Rover is already playing in the sandpit. So I see peak production early for them and margins compressed. A simple formula. BTW I have seen almost all the analysts of a well covered company be wrong before. The classic was Telecom(now Spark) on the way the market looked at mobile. Everyone but one sole analyst had profits improving and big rev growth including fund managers like Capital Group who owned 10%. Telecom got near to $10 before dropping to near $2. That analyst worked out the rev forecasts were impossible unless the consumer cut back on food, housing or energy. People thought I was crazy until it started. I had some interesting discussions after that with Teresa.

Hey I could be wrong about Tesla but to me it doesn't pass a basic sniff test in terms of can this happen(world domination and maintenance of never seen before margins) .

[Joshuatree]

So you've topped up Walter,what's your average price now? I'm not int buying into a downtrend but will watch it.

[Walter]

So you've topped up Walter,what's your average price now? I'm not int buying into a downtrend but will watch it.

$383, hurt by buying a few months ago LOL.

[Walter]

Thanks Dassets
Their new factories seem very efficient. VW CEO Herbert Diess says Tesla can make a car three times faster than than VW can.
Don't forget the legacy makers outsource many things, leave margin for dealers and spend up big on advertising. Tesla also makes margin on software and is moving into insurance.

In addition I think it is the whole car market up for grabs, not just the BEV demand. Legacy is slow to ramp, the Koreans make great cars, but small numbers. The Chinese are ramping well and will undermine the low end in Europe given the chance. Tesla still outsells BYD in China in the pure BEV format, that might change this year. I'm confident they can get to five million annual sales, cynical they can get to twenty million.

[pedro.nz]

Great to have the opportunity for a short term trade today - up 7.43%
And up another 0.74% after hours
NASDAQ also up in similar fashion at 2.68%
Will be interesting to see where it heads tomorrow and whether the low of US$620.57 on the 24th May ends up being low point for now.

Screenshot 2022-05-27.jpg

[pedro.nz]

And up another 7.33% today plus another 0.7% after hours to $765.25

[Walter]

There is another hidden profit centre source for Tesla. Vehicles on three year leases are starting to be returned to Tesla and become available for resale . Because of the crazy used car market in USA the market value for these cars is much higher than their book value, there is speculation this will be worth $billions over the next few years. The story goes that Elon had thought they would have solved FSD by now and wanted the cars for robotaxis. Elon still thinks they will solve FSD this year, many think he is in lala land. Either way, it seems like a financial win.

[pedro.nz]

Looking forward to Q2 results and to find out how well the two new factories have been doing in ramping up production levels.

[Walter]

I would not get your hopes up Pedro, the ramp from both factories will be slow. Texas is having trouble with new battery production (they have a backup plan of using the same ones as Fremont). Berlin has been hampered by the Shanghai shutdown, as they currently get drivetrain and battery packs from there. Berlin has started a second shift - they are using the time to train workers.

[pedro.nz]

I would not get your hopes up Pedro, the ramp from both factories will be slow. Texas is having trouble with new battery production (they have a backup plan of using the same ones as Fremont). Berlin has been hampered by the Shanghai shutdown, as they currently get drivetrain and battery packs from there. Berlin has started a second shift - they are using the time to train workers.

Agree, I'm certainly not expecting huge numbers but hopefully they have got to the point that they are past the myriad of startup issues that must always be part of getting such large scale projects underway...