Tesla becomes most valuable car company in the world

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srt7
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Re: Tesla becomes most valuable car company in the world

Post by srt7 »

TSLA will go places as long as it has Elon at the helm. The real question is what happens after Elon leaves (voluntarily or not)?
finite_difference
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Re: Tesla becomes most valuable car company in the world

Post by finite_difference »

almostretired1965 wrote: Wed Jul 01, 2020 3:57 pm So the way I would frame this question is whether there is a plausible scenario where Tesla will at some point, say five to ten years down the road, become the most profitable car company in the world on an ongoing basis. (I'm deliberately discounting the ancillary businesses they are in since it is not clear to me if they actually have much of a competitive advantage there.) So I think the answer to that is yes, whether one believes it is likely or not. For that to be true, however, two things need to occur:

1. Demand for electric (versus gasoline powered) cars accelerate and come to dominate the market.
2. Tesla maintains its current large lead in electric vehicle technology, possibly augmented by their development of autonomous driving.

If both of these happen, then I can clearly see a situation where, in hindsight, it turns out their current valuation is fully justified. As a corollary, one interpretation of its current valuation is that the market believes that the scenario I've sketched out is a probable outcome.

A
I’d love for that to happen since it would be great for the environment. Unfortunately, I think it’s wishful thinking.

In the Bogleheads Hedge Fund contest I’m shorting Tesla at $524 through the end of the year. It’s a hedge because I hope I’m wrong.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
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Cycle
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Re: Tesla becomes most valuable car company in the world

Post by Cycle »

cj2018 wrote: Wed Jul 01, 2020 1:40 pm You need to understand Tesla is an energy and tech company. Imagine a world where all Tesla cars are connected to Starlink (https://www.starlink.com/) and are 100% self-driving capable and could serve in the RoboTaxi fleet when the owner is not using it. Imagine the Tesla car gains flying-capaiblity (SpaceX booster anyone?) and solves traffic problem. Imagine Tesla's battery and solar technologies continue to improve and ultimately revolutionize the energy industry altogether.
For millennials and zoomers in big cities, we use shared scooters or ebikes or lyfts to get around. My bike share membership (niceride owned by Lyft) is $75 a year plus like $20 for ebike fees. The competition is so fierce in that space many players are already dropping out

Traffic problems are being solved today in Paris by micro-mobility (walking, bikes, scooter) and deprioritizing cars on the road (bus only lanes, protected bike lanes). Where does Tesla fit in in Paris in 10 years?

Maybe what is happening in Paris will not come to the US... But if u follow the strongtowns movement (Chuck mahron) there is a lot desire for US cities to get their budgets in order by shifting away from car dependency. This means increasing density and thereby their tax $$$ per infrastructure unit. https://www.theamericanconservative.com ... ly-zoning/

AND if cars do become self driving, why would i own one when i can just take a waymo or lyft. Those fleets are going to compete so hard on price, just like what we've seen in micromobility with Jump exiting some cities.

Certainly people would want their own, but unlike with cars today not everyone would NEED their own, and so people like myself would rather not pay for the parking space and just hire one

What IS awesome about Tesla is that Elon wants sustainability and if the tech he develops ends up making it so there are less cars on the road I think he'd say that's awesome. I live on a busy street and can't even hear when a Tesla goes by but for wind/tire noise, so already there is a positive impact in my environment from Tesla.
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Normchad
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Re: Tesla becomes most valuable car company in the world

Post by Normchad »

Cycle wrote: Fri Jul 03, 2020 9:31 pm
cj2018 wrote: Wed Jul 01, 2020 1:40 pm You need to understand Tesla is an energy and tech company. Imagine a world where all Tesla cars are connected to Starlink (https://www.starlink.com/) and are 100% self-driving capable and could serve in the RoboTaxi fleet when the owner is not using it. Imagine the Tesla car gains flying-capaiblity (SpaceX booster anyone?) and solves traffic problem. Imagine Tesla's battery and solar technologies continue to improve and ultimately revolutionize the energy industry altogether.
For millennials and zoomers in big cities, we use shared scooters or ebikes or lyfts to get around. My bike share membership (niceride owned by Lyft) is $75 a year plus like $20 for ebike fees. The competition is so fierce in that space many players are already dropping out

Traffic problems are being solved today in Paris by micro-mobility (walking, bikes, scooter) and deprioritizing cars on the road (bus only lanes, protected bike lanes). Where does Tesla fit in in Paris in 10 years?

Maybe what is happening in Paris will not come to the US... But if u follow the strongtowns movement (Chuck mahron) there is a lot desire for US cities to get their budgets in order by shifting away from car dependency. This means increasing density and thereby their tax $$$ per infrastructure unit. https://www.theamericanconservative.com ... ly-zoning/

AND if cars do become self driving, why would i own one when i can just take a waymo or lyft. Those fleets are going to compete so hard on price, just like what we've seen in micromobility with Jump exiting some cities.

Certainly people would want their own, but unlike with cars today not everyone would NEED their own, and so people like myself would rather not pay for the parking space and just hire one

What IS awesome about Tesla is that Elon wants sustainability and if the tech he develops ends up making it so there are less cars on the road I think he'd say that's awesome. I live on a busy street and can't even hear when a Tesla goes by but for wind/tire noise, so already there is a positive impact in my environment from Tesla.
This would be a fabulous future. I doubt I will see it in my lifetime, but I hope I do.

It is undeniably true though that most of America is built around the car. And most of us own them, and 95% of every day, they sit idle. A lot of sprawl is because of zoning for cars. I.e. if you build a restaurant, you need 200 parking spaces, etc. a whole lot of that could change for the better with a shift to ride sharing or autonomous fleets.
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Cycle
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Re: Tesla becomes most valuable car company in the world

Post by Cycle »

For people that actually think there will be fully autonomous self driving car fleets in dense cities, and not just for semis on the highway, watch this video of a car trying to turn left in Paris

https://twitter.com/EmmanuelSPV/status/ ... 24966?s=20

I have no doubt a computer can do tasks better than a human, but the driver is probably making eye contact and hand gestures and honking the horn, etc. It's a tough problem, probably a long ways out.

Long haul truckers tho may just be local truckers VERY soon.
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whodidntante
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Re: Tesla becomes most valuable car company in the world

Post by whodidntante »

Does anyone else miss Dan Mahowny? We need an update on the Owning Mahowny portfolio.
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Mountain Doc
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Re: Tesla becomes most valuable car company in the world

Post by Mountain Doc »

whodidntante wrote: Fri Jul 03, 2020 10:18 pm Does anyone else miss Dan Mahowny? We need an update on the Owning Mahowny portfolio.
Agreed. Sadly, people tend to disappear from the forum when their not-so-boglehead portfolios blow up.
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4nursebee
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Re: Tesla becomes most valuable car company in the world

Post by 4nursebee »

Dan used to subtly poke fun at a member that had a minimum $2000 price target (way before Cathy Woods started getting airplay). It would be intellectually honest for Dan to still be participating in such discussions. Since he left, I suspected he was more of a troll type character. I suspect there are always some seedy characters on BH with subtle product pitches or stock market ideas. The latest was the guy that said 1M pounds into gold and ZM but would not answer serious questions on his picks either publicly or privately.

I think I get and understand the bearish arguments and negative sentiments on Tesla and Musk. I disagree with them. When folks consider investments in Tesla, I wonder if they take the time to think about the future according to Musk, evaluate the possibilities.

BH seems to be composed of people interested in safe compounding absent large risk. Like, there are people who seem to advocate not earning too much money in retirement to avoid IRMAA. This is not a crew interested in following TSLA as an investment.

Those that are befuddled now might be more so in coming days. There is some chatter that if profitable this quarter that they might qualify for SP500 inclusion and spur >60B worth of share buying. I've done about an hour of research on joining an index. Early research suggested that index inclusion does little to change the price, I certainly recall this when RedHat joined. Everyone was all excited, price popped some but then moved back down after a month. It turns out, I might have been looking at the wrong thing. In discussing this online, someone pointed out that what needed to be looked at was the price movement after the earnings that qualified a company for inclusion. When I went back and looked at what happened to RedHat, there was a 50%ish jump in price. Same for a few other companies. One can look back at charts themselves https://en.wikipedia.org/wiki/List_of_S ... _companies

The best thing I've read, with regards to valuation, is the following quote "Drive a Tesla Model S with the dual-motor configuration and all the bells and whistles and you'll understand why the valuation is what it is."

Perhaps one also need to ignore the potentially biased media and seek out ones own answers. https://twitter.com/truth_tesla
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ClevrChico
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Re: Tesla becomes most valuable car company in the world

Post by ClevrChico »

Tesla's stock price seems like speculation to me.

Tesla has a big head start, but the market is only going to get more competitive. Volkswagen's ID.3 will be hitting some markets soon, and VW does fit and finish extremely well. (Something Tesla has had issues with.) Honda and GM are working together too.

On top of that, I'd have to think auto demand will go down in a post-Covid, remote work world.
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Re: Tesla becomes most valuable car company in the world

Post by Forester »

When Tesla staggers over the hurdle to get into the index, 0.8% of the S&P 500 will be an alleged Ponzi scheme worth $0 :!:
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Re: Tesla becomes most valuable car company in the world

Post by oragne lovre »

I am also glad that a Tesla thread is back on this forum where all commenters are now discussing with cool heads.

I initially got one TSLA share of $100 with my fun money since all the rest of my investing money was in index funds. I decided to get TSLA share because I liked the idea of someone making cars that do not make my garage smell oil and gas. I then read more about how a guy by the name EM, who kept going to achieve his ambitious goals, which may seem outrageous to many people, even though he ran into many failures. I also got to know that EM liked Aristotle's life philosophy, which I also loved. All of a sudden, I liked the guy and his resilience. I then put some more fun money into TSLA whenever its price dipped down drastically. I honestly did not know which way TSLA would go; I did it just because I wanted to ride with a guy whose thinking was like mine. Now TSLA has become what the market thinks it is worth or will be worth. I guess there are many people around the globe, just like I, are also interested in EM's thinking and decide to ride with him and support TSLA. It is impossible to quantify people's sentiment.

TSLA may become a 21st-century-tulip-bulb event or maybe market efficiency is at work; I still do not know. I am enjoying my current TSLA ride though; it's fun :D
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dkturner
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Re: Tesla becomes most valuable car company in the world

Post by dkturner »

oragne lovre wrote: Sat Jul 11, 2020 6:10 pm I am also glad that a Tesla thread is back on this forum where all commenters are now discussing with cool heads.

I initially got one TSLA share of $100 with my fun money since all the rest of my investing money was in index funds. I decided to get TSLA share because I liked the idea of someone making cars that do not make my garage smell oil and gas. I then read more about how a guy by the name EM, who kept going to achieve his ambitious goals, which may seem outrageous to many people, even though he ran into many failures. I also got to know that EM liked Aristotle's life philosophy, which I also loved. All of a sudden, I liked the guy and his resilience. I then put some more fun money into TSLA whenever its price dipped down drastically. I honestly did not know which way TSLA would go; I did it just because I wanted to ride with a guy whose thinking was like mine. Now TSLA has become what the market thinks it is worth or will be worth. I guess there are many people around the globe, just like I, are also interested in EM's thinking and decide to ride with him and support TSLA. It is impossible to quantify people's sentiment.

TSLA may become a 21st-century-tulip-bulb event or maybe market efficiency is at work; I still do not know. I am enjoying my current TSLA ride though; it's fun :D
There has been some recent speculation that Tesla will be added to the S&P 500 index, if it turns a profit for the Quarter just ended. Can you imagine the mayhem of all of the index funds and ETFs tied to the S&P 500 when they jump on board? Some of last weeks price appreciation may be front running in anticipation of Tesla being added. When Yahoo was added it’s stock price climbed more than 50%.
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Schlabba
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Re: Tesla becomes most valuable car company in the world

Post by Schlabba »

dkturner wrote: Sun Jul 12, 2020 6:44 am
oragne lovre wrote: Sat Jul 11, 2020 6:10 pm I am also glad that a Tesla thread is back on this forum where all commenters are now discussing with cool heads.

I initially got one TSLA share of $100 with my fun money since all the rest of my investing money was in index funds. I decided to get TSLA share because I liked the idea of someone making cars that do not make my garage smell oil and gas. I then read more about how a guy by the name EM, who kept going to achieve his ambitious goals, which may seem outrageous to many people, even though he ran into many failures. I also got to know that EM liked Aristotle's life philosophy, which I also loved. All of a sudden, I liked the guy and his resilience. I then put some more fun money into TSLA whenever its price dipped down drastically. I honestly did not know which way TSLA would go; I did it just because I wanted to ride with a guy whose thinking was like mine. Now TSLA has become what the market thinks it is worth or will be worth. I guess there are many people around the globe, just like I, are also interested in EM's thinking and decide to ride with him and support TSLA. It is impossible to quantify people's sentiment.

TSLA may become a 21st-century-tulip-bulb event or maybe market efficiency is at work; I still do not know. I am enjoying my current TSLA ride though; it's fun :D
There has been some recent speculation that Tesla will be added to the S&P 500 index, if it turns a profit for the Quarter just ended. Can you imagine the mayhem of all of the index funds and ETFs tied to the S&P 500 when they jump on board? Some of last weeks price appreciation may be front running in anticipation of Tesla being added. When Yahoo was added it’s stock price climbed more than 50%.
I find it hard to believe being added to the index causes the price to jump. If the price is set reasonably well according to the ‘efficient market’ based on its future profit expectations, how would being part of an index help? At most it would be a temporary effect.
dkturner
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Re: Tesla becomes most valuable car company in the world

Post by dkturner »

Schlabba wrote: Sun Jul 12, 2020 7:03 am
dkturner wrote: Sun Jul 12, 2020 6:44 am
oragne lovre wrote: Sat Jul 11, 2020 6:10 pm I am also glad that a Tesla thread is back on this forum where all commenters are now discussing with cool heads.

I initially got one TSLA share of $100 with my fun money since all the rest of my investing money was in index funds. I decided to get TSLA share because I liked the idea of someone making cars that do not make my garage smell oil and gas. I then read more about how a guy by the name EM, who kept going to achieve his ambitious goals, which may seem outrageous to many people, even though he ran into many failures. I also got to know that EM liked Aristotle's life philosophy, which I also loved. All of a sudden, I liked the guy and his resilience. I then put some more fun money into TSLA whenever its price dipped down drastically. I honestly did not know which way TSLA would go; I did it just because I wanted to ride with a guy whose thinking was like mine. Now TSLA has become what the market thinks it is worth or will be worth. I guess there are many people around the globe, just like I, are also interested in EM's thinking and decide to ride with him and support TSLA. It is impossible to quantify people's sentiment.

TSLA may become a 21st-century-tulip-bulb event or maybe market efficiency is at work; I still do not know. I am enjoying my current TSLA ride though; it's fun :D
There has been some recent speculation that Tesla will be added to the S&P 500 index, if it turns a profit for the Quarter just ended. Can you imagine the mayhem of all of the index funds and ETFs tied to the S&P 500 when they jump on board? Some of last weeks price appreciation may be front running in anticipation of Tesla being added. When Yahoo was added it’s stock price climbed more than 50%.
I find it hard to believe being added to the index causes the price to jump. If the price is set reasonably well according to the ‘efficient market’ based on its future profit expectations, how would being part of an index help? At most it would be a temporary effect.
Of course the effect is temporary! That’s the problem. The smart money front runs these situations and sells when the price moves up because of buying by passive managers, who get stuck with high cost shares that rapidly decline in market value. I’m glad my indexed domestic equities are invested in the total stock market index, which already owns a market weighted amount of Tesla shares.
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Re: Tesla becomes most valuable car company in the world

Post by guyinlaw »

There is much fluff and future expectations too high with this stock. Goalposts keep moving.

Positives
1. EVs are great to drive, more efficient, lot of fun
2. Elon Musk -Visionary, master at marketing.
3. American made
4. High average price, people still find it cool.
5. Charging network

Negatives
1. Elon Musk - too mercurial.
2. Self driving is still driving assist. My nephew who works at a big consulting firm did a serious analysis comparing all companies out there. Tesla is nowhere near the top, nowhere near autonomous. (likely close level 3)
3. Battery platform was the best 3 years ago. VW, Audi are zooming past.
4. Quality issues.
5. Poor finishing for luxury
6. Production expertise
7. Senior Management revolving door. No one to help keep Musk on track.

There are.many more positives and negatives.
Time is your friend; impulse is your enemy. - John C. Bogle
hilink73
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Re: Tesla becomes most valuable car company in the world

Post by hilink73 »

guyinlaw wrote: Sun Jul 12, 2020 11:30 am 2. Self driving is still driving assist. My nephew who works at a big consulting firm did a serious analysis comparing all companies out there. Tesla is nowhere near the top, nowhere near autonomous. (likely close level 3)
Just curious and not to deep into this topic.
I've read not too long ago (maybe even on this board), that Tesla is 4-5 years ahead of its competition, especially the big car manufacturers.
dkturner
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Re: Tesla becomes most valuable car company in the world

Post by dkturner »

hilink73 wrote: Sun Jul 12, 2020 4:47 pm
guyinlaw wrote: Sun Jul 12, 2020 11:30 am 2. Self driving is still driving assist. My nephew who works at a big consulting firm did a serious analysis comparing all companies out there. Tesla is nowhere near the top, nowhere near autonomous. (likely close level 3)
Just curious and not to deep into this topic.
I've read not too long ago (maybe even on this board), that Tesla is 4-5 years ahead of its competition, especially the big car manufacturers.
That seems to be the consensus with respect to other car companies. Self driving technology is currently dominated by several non-automotive technology companies. Much of Tesla’s advantages are related to its superior battery technology and Manufacturing capabilities.
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Re: Tesla becomes most valuable car company in the world

Post by Busdrvr »

I happen to work in the Bay Area and spend a fair amount of time in all large west coast cities as well as large cities throughout the conus. I am always amazed at the sheer number of Tesla’s on the road on the Bay peninsula. They are literally everywhere. I live in a Midwest metro area of approx 1M where Tesla’s on the road are few and far between, but appear more frequently now than even a few years ago. I believe that Tesla could be another Amazon like stock. As we help our kids get started with their retirement savings programs I am tempted to place a recurring side bet on Tesla for them. But go ahead and bet against Elon.:beer
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hagridshut
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Re: Tesla becomes most valuable car company in the world

Post by hagridshut »

guyinlaw wrote: Sun Jul 12, 2020 11:30 am There is much fluff and future expectations too high with this stock. Goalposts keep moving.

3. Battery platform was the best 3 years ago. VW, Audi are zooming past.
This is untrue. Tesla's battery platform is still the best. 2170 form factor cells can be manufactured easily, quickly, economically, and in massive volumes, compared to the prismatic cells used in VW/Audi products.

Audi's E-Tron crossover has an EPA range of 204 miles on 95 kWh battery, 150 kW battery charging, and starts at $75,000
Tesla's Model Y crossover has an EPA range of 316 miles on 75 kWh battery, 250 kW battery charging, and starts at $50,000

Volkswagen is being left in the dust, because Tesla's platform is more efficient and can be mass manufactured at a scale that VW cannot match.

6. Production expertise
Munro & Associates did a complete quality evaluation and teardown of the Model Y on their channel:

https://www.youtube.com/channel/UCj--iM ... GG_fpmP5XQ

They found very little to complain about. Almost all the design issues they found in the Model 3 back in 2018 have been eliminated. The Model Y also has substantial technological improvements (for example: thermal management and structural castings) compared to other vehicles.
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regularguy455
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Re: Tesla becomes most valuable car company in the world

Post by regularguy455 »

It’s my understanding that Tesla and SpaceX are financially intermingled. If Starlink is anything close to what Musk is pitching, Tesla is still massively undervalued.
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Re: Tesla becomes most valuable car company in the world

Post by cusetownusa »

hagridshut wrote: Mon Jul 13, 2020 7:00 am
guyinlaw wrote: Sun Jul 12, 2020 11:30 am There is much fluff and future expectations too high with this stock. Goalposts keep moving.

3. Battery platform was the best 3 years ago. VW, Audi are zooming past.
This is untrue. Tesla's battery platform is still the best. 2170 form factor cells can be manufactured easily, quickly, economically, and in massive volumes, compared to the prismatic cells used in VW/Audi products.

Audi's E-Tron crossover has an EPA range of 204 miles on 95 kWh battery, 150 kW battery charging, and starts at $75,000
Tesla's Model Y crossover has an EPA range of 316 miles on 75 kWh battery, 250 kW battery charging, and starts at $50,000

Volkswagen is being left in the dust, because Tesla's platform is more efficient and can be mass manufactured at a scale that VW cannot match.

6. Production expertise
Munro & Associates did a complete quality evaluation and teardown of the Model Y on their channel:

https://www.youtube.com/channel/UCj--iM ... GG_fpmP5XQ

They found very little to complain about. Almost all the design issues they found in the Model 3 back in 2018 have been eliminated. The Model Y also has substantial technological improvements (for example: thermal management and structural castings) compared to other vehicles.
Also, they just dropped the price of the Model Y LR AWD model by $3,000, making more affordable.

In addition, Tesla is having their “battery day” in September which people are speculating massive battery improvements and cost reductions.
guyinlaw
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Re: Tesla becomes most valuable car company in the world

Post by guyinlaw »

Tesla holders must have made lot of money -- good for you.

1. Shorting TSLA is crazy
2. In May 2019 TSLA was under $200.
3. Holding >5% of ones portfolio in single stock is risky..

TSLA current valuation is > $800,000 for every car it will deliver this year.
Time is your friend; impulse is your enemy. - John C. Bogle
dkturner
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Re: Tesla becomes most valuable car company in the world

Post by dkturner »

guyinlaw wrote: Mon Jul 13, 2020 10:35 am Tesla holders must have made lot of money -- good for you.

1. Shorting TSLA is crazy
2. In May 2019 TSLA was under $200.
3. Holding >5% of ones portfolio in single stock is risky..

TSLA current valuation is > $800,000 for every car it will deliver this year.
It’s a good thing that markets are efficient and investors are rationally valuing individual stocks. I would hate to see a situation where euphoria began to cause Tesla’s stock to rise to an “irrational“ level. :greedy
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Re: Tesla becomes most valuable car company in the world

Post by Normchad »

I bought 50 shares in November for about $20K. I sold 20 shares at $1K/share. So I have my original investment back, and still have 30 shares.

I half jokingly said I would sell them all when I could buy a (free) Model Y for my wife. Well, that day might be coming up soon. I only need to get about $1,800/share to pull it off. And it’s up strongly this morning.
finite_difference
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Re: Tesla becomes most valuable car company in the world

Post by finite_difference »

guyinlaw wrote: Sun Jul 12, 2020 11:30 am There is much fluff and future expectations too high with this stock. Goalposts keep moving.

Positives
1. EVs are great to drive, more efficient, lot of fun
2. Elon Musk -Visionary, master at marketing.
3. American made
4. High average price, people still find it cool.
5. Charging network

Negatives
1. Elon Musk - too mercurial.
2. Self driving is still driving assist. My nephew who works at a big consulting firm did a serious analysis comparing all companies out there. Tesla is nowhere near the top, nowhere near autonomous. (likely close level 3)
3. Battery platform was the best 3 years ago. VW, Audi are zooming past.
4. Quality issues.
5. Poor finishing for luxury
6. Production expertise
7. Senior Management revolving door. No one to help keep Musk on track.

There are many more positives and negatives.
Positives:
6. Best purchase model (no dealership, transparent, online prices)
7. Cars are the new PPE

Negatives:
8. EM does not believe in Lidar for self-driving
9. Difficult times ahead for all car manufacturers if the economy experiences a setback worse than the Great Recession
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
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hagridshut
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Re: Tesla becomes most valuable car company in the world

Post by hagridshut »

dkturner wrote: Mon Jul 13, 2020 10:46 am
guyinlaw wrote: Mon Jul 13, 2020 10:35 am Tesla holders must have made lot of money -- good for you.

1. Shorting TSLA is crazy
2. In May 2019 TSLA was under $200.
3. Holding >5% of ones portfolio in single stock is risky..

TSLA current valuation is > $800,000 for every car it will deliver this year.
It’s a good thing that markets are efficient and investors are rationally valuing individual stocks. I would hate to see a situation where euphoria began to cause Tesla’s stock to rise to an “irrational“ level. :greedy
I actually agree that Tesla's valuation is highly speculative, but one should consider their growth potential.

The company's factory in Shanghai, China, is currently undergoing expansion. The current facility can produce 200,000 vehicles/year, and the expansion appears to be about triple the size of what is operating at the site now.

Construction on a factory in Berlin began a month or two ago, with manufacturing operations expected to begin in 2021. Another factory in Austin, Texas is planned.

Assuming that the new factories will eventually have capacity of 600k+ vehicles/year, Tesla has a good chance of selling close to 2.3 million units/year by 2023 or so. Model 3 mopped the floor with its competitors in the compact luxury market. I think there's a good chance that Model Y will do the same in the hot Compact Crossover segment. The product pipeline has the Cybertruck, Semi truck, new Roadster, and a yet unnamed global small car in the works.

Tesla also sells solar roof products and battery storage. The industrial scale PowerPack and MegaPack can replace gas fired peaker plants used for grid balancing. Tesla has an AI software platform for buying and selling power. These products are game changers for utilities.

I don't make many predictions on self driving. Tesla has a very good team in place, and custom hardware that is much better suited to their algorithms than off-the-shelf solutions from outside companies.

With so much room to grow in a world that is shifting away from fossil fuels and towards electricity generated by non-combustion sources, I think it is possible, though not guaranteed, that Tesla grows from a 300B company today, into a 1.5+ Trillion company like Amazon or Apple.

Risky, sure. I'd even say extremely risky, but the technology that Tesla has developed is very real and delivers tangible benefits today.

Finally, I think the example of Tesla largely supports the Boglehead principle that it is hard to pick winners. Many if not most people derided Tesla as a losing investment for years. The people who own Total Stock Market Index funds have benefited from Tesla's gains, whereas such people might not have benefited if they were just picking individual stocks or allowing active managers (many of whom despised Tesla) to make picks for them.
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Re: Tesla becomes most valuable car company in the world

Post by Enzo IX »

hagridshut wrote: Mon Jul 13, 2020 1:07 pm With so much room to grow in a world that is shifting away from fossil fuels and towards electricity generated by non-combustion sources, I think it is possible, though not guaranteed, that Tesla grows from a 300B company today, into a 1.5+ Trillion company like Amazon or Apple.
If they can hit on all cylinders, and their comparative advantages are real, not unreasonable and more.
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Re: Tesla becomes most valuable car company in the world

Post by pcsrini »

“ Almost 40,000 Robinhood accounts added shares of the automaker during a single four-hour span on Monday, according to website Robintrack.net, which compiles data on the investing platform that’s much beloved by day trading millennials.”

https://finance.yahoo.com/news/ten-thou ... 47389.html
neverpanic
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Re: Tesla becomes most valuable car company in the world

Post by neverpanic »

pcsrini wrote: Tue Jul 14, 2020 2:08 am “ Almost 40,000 Robinhood accounts added shares of the automaker during a single four-hour span on Monday, according to website Robintrack.net, which compiles data on the investing platform that’s much beloved by day trading millennials.”

https://finance.yahoo.com/news/ten-thou ... 47389.html
I wonder how many of that 40,000 only purchased a fraction of a share?

It does have that feel of bubble territory, but I'm trying to hang on until next week.
I am not a financial professional or guru. I'm a schmuck who got lucky 10 times. Such is the life of the trader.
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Re: Tesla becomes most valuable car company in the world

Post by Valuethinker »

neverpanic wrote: Tue Jul 14, 2020 3:01 am
pcsrini wrote: Tue Jul 14, 2020 2:08 am “ Almost 40,000 Robinhood accounts added shares of the automaker during a single four-hour span on Monday, according to website Robintrack.net, which compiles data on the investing platform that’s much beloved by day trading millennials.”

https://finance.yahoo.com/news/ten-thou ... 47389.html
I wonder how many of that 40,000 only purchased a fraction of a share?

It does have that feel of bubble territory, but I'm trying to hang on until next week.
I thought Tesla was overvalued, and I still do. "Buy the car, not the stock".

So with that track record you can take my advice for what it is worth.

Having been a dot com millionaire, and having not sold when I could, I now realise that it's only money when it hits your bank account or is in equivalent low risk investments (CDs, short term bonds w no credit risk, etc)*. I think I lost something like 90% of the value I did have - I had good reasons for it, like paying a 40% tax rate on capital gains if I had sold, but, I did not sell.

Nobody ever died taking money off the table at the casino.

Depending on where you are, you could take off the book cost of your shares, and then the rest of the ride would be for free?

An alternative strategy I often suggest here is to take half off the table.

* if it is in fully diversified low cost index funds, then it is money of a sort. But you can lose 50% of it in a month.

I see people here talking about retiring early on the basis of their stock portfolios, and I think that their position may be quite different if we have one of those long, grinding bear markets. It's only when the money they have is converted into assured return investments like bonds, TIPS, ibonds, bank CDs (meaning that as long as very bad things don't happen, they guarantee a return of principal) and they have enough money in that form, that retirement really is in prospect**

** my father stayed fully invested most of his life. But he had an old fashioned Defined Benefit Final Salary scheme which is still supporting my mother, 30 years after he began to draw on it.
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Re: Tesla becomes most valuable car company in the world

Post by Valuethinker »

guyinlaw wrote: Sun Jul 12, 2020 11:30 am There is much fluff and future expectations too high with this stock. Goalposts keep moving.

Positives
1. EVs are great to drive, more efficient, lot of fun
2. Elon Musk -Visionary, master at marketing.
3. American made
4. High average price, people still find it cool.
5. Charging network

Negatives
1. Elon Musk - too mercurial.
2. Self driving is still driving assist. My nephew who works at a big consulting firm did a serious analysis comparing all companies out there. Tesla is nowhere near the top, nowhere near autonomous. (likely close level 3)
3. Battery platform was the best 3 years ago. VW, Audi are zooming past.
4. Quality issues.
5. Poor finishing for luxury
6. Production expertise
7. Senior Management revolving door. No one to help keep Musk on track.

There are.many more positives and negatives.
The other thing I would add is that EVs are still expensive. EDIT - sorry I didn't read properly your point 4.

In Europe, where gasoline prices are much higher, the Total Cost of Ownership is probably getting similar (for luxury cars of a similar class to Tesla).
On the other hand, the EV charger infrastructure is just not built - although the Green Recovery policies may accelerate that.

I accept that cars are not just bought for price & cost. People buy brands because they believe they more align with their values, project an image that they want, etc. That's particularly true in the sort of vehicles that Tesla is selling. And I have seen a few around on the streets (London).

But it does remain a significant obstacle to the takeup of EVs - even though in Europe government policy is surely driving towards 100% takeup of Zero Emission Vehicles.

(I managed at least 2 puns in the above, so quite proud of myself :wink: )
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Re: Tesla becomes most valuable car company in the world

Post by Jack FFR1846 »

4nursebee wrote: Sat Jul 04, 2020 4:29 am
The best thing I've read, with regards to valuation, is the following quote "Drive a Tesla Model S with the dual-motor configuration and all the bells and whistles and you'll understand why the valuation is what it is."
I did test drive one. I was underwhelmed and it became a check mark on my "not interested" list. Maybe it's worth it for the fanbois. I'm not a fanboi.
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Re: Tesla becomes most valuable car company in the world

Post by JonnyB »

4nursebee wrote: Sat Jul 04, 2020 4:29 am The best thing I've read, with regards to valuation, is the following quote "Drive a Tesla Model S with the dual-motor configuration and all the bells and whistles and you'll understand why the valuation is what it is."
If true, that would be very bad news. The Tesla Model S has decreased sales every year, going from 29,000 in 2016 to less than half, 14,000 in 2019.
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Re: Tesla becomes most valuable car company in the world

Post by FoolMeOnce »

Jack FFR1846 wrote: Tue Jul 14, 2020 11:14 am
4nursebee wrote: Sat Jul 04, 2020 4:29 am
The best thing I've read, with regards to valuation, is the following quote "Drive a Tesla Model S with the dual-motor configuration and all the bells and whistles and you'll understand why the valuation is what it is."
I did test drive one. I was underwhelmed and it became a check mark on my "not interested" list. Maybe it's worth it for the fanbois. I'm not a fanboi.
Why so disparaging? Because you didn't like it during one test drive, only irrational "fanbois" can enjoy it and think it's worth it? Didn't realize everybody needs to run their preference past you before making a decision.
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Re: Tesla becomes most valuable car company in the world

Post by whodidntante »

Tesla stock price is too high imo
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Re: Tesla becomes most valuable car company in the world

Post by garlandwhizzer »

Tesla's skyrocketing stock price is driven by hyper-optimistic sentiment about its future, plus massive short squeezes, plus MOM investors piling on. In Feb. 2020, Tesla was the most shorted stock in US history with 14.5 billion dollars of outstanding shorts. That's a lot of shares that must be purchased if and when its price rises which it did. That in turn increases upside price action and pulls in more MOM investors. It's in effect a self-reinforcing sentiment cycle.

https://markets.businessinsider.com/new ... 028823046#

This conjunction of forces driving the price up was very powerful but IMO likely temporary. The reason it was so heavily shorted in the first place was the wide gulf between its underlying financial fundamentals which were underwhelming, even scary, and its lofty stock price. That gulf has only widened as the investing herd has rushed in en masse to buy it. Tesla may well be a great company with a great product. Everyone I know who owns one loves it. Few products can say that. But it may not be a great stock going forward even if it has been in the past. Too much good news about its future is already baked into its current price IMO. Tesla is the poster child for excessive investor sentiment and its price action reminds me a bit of the late 1990s, Like AMZN, its price has inflated far, far beyond any rational analysis of its current fundamental profit numbers. With both, you're buying not the present but rather very optimistic future projections about their business models.

I am basically a fundamentals guy, so I see both as risky going term bets based on these excessive valuations. The future may play out as the optimists expect or it may not, but I refuse to hop onto the AMZN/TSLA train now. Having said that, I've been wrong about both for a long time. Both are IMO examples of the waves of irrationality and unpredictability that sometimes drive the market. Sometimes the market prefers the dream of a huge pie in the sky to the small serving on the dessert plate. At some point, however, sleepers wake up and dreams end. Time will tell.

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Re: Tesla becomes most valuable car company in the world

Post by columbia »

Is it a car company or is it really an energy storage (ie batteries) company?
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Re: Tesla becomes most valuable car company in the world

Post by dpm321 »

There’s a big difference between price and value or valuable.
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Re: Tesla becomes most valuable car company in the world

Post by iamlucky13 »

dkturner wrote: Sun Jul 12, 2020 6:32 pm That seems to be the consensus with respect to other car companies. Self driving technology is currently dominated by several non-automotive technology companies. Much of Tesla’s advantages are related to its superior battery technology and Manufacturing capabilities.
I haven't seen any details validating the perception that they have notably superior battery technology. What they do have is an overall feature set in the Model S that enables pricing to afford to cram 100 kWh worth of batteries into a car.

The most recent enthusiast Tesla battery pack teardowns I've seen have cell counts that work out to 3.4 Amp-hours per cell for an 18650-sized battery. Panasonic, Samsung, and LG have all been selling 3.5 Amp-hour cells for several years. A few of my flashlights use these (I have the Samsung version).

Their 21700 based packs have a similar match with off-the-shelf cells.

Tesla is also still struggling with manufacturing capabilities, 3 years after starting Model 3 production. They had a few rounds of quality issues, and are always having rate issues. They're still at about 2/3 of the 500,000 cars per year they told investors in 2016 they would be cranking out only 2 years later.

I probably sound like a pessimist, but I'm honestly impressed with what they've accomplished so far. It took an ambitious investment to create a production system capable of producing over 300,000 EV's per year with an uncertain market, and that starts them off in a good position to be competitive long term, even after the rest of the automotive industry decides to get serious about EV's. I'm also, however, tired of Musk's hubris and sometimes even dishonesty.
guyinlaw wrote: Sun Jul 12, 2020 11:30 am 2. Self driving is still driving assist. My nephew who works at a big consulting firm did a serious analysis comparing all companies out there. Tesla is nowhere near the top, nowhere near autonomous. (likely close level 3)
Coming from an aerospace background, it's fascinating to watch Tesla enable features for regular use without a clear certification process, and then market it with mixed messages.
Enzo IX wrote: Mon Jul 13, 2020 1:24 pm If they can hit on all cylinders, and their comparative advantages are real, not unreasonable and more.
But what if they literally can not hit on all cylinders because...well...no cylinders? 8-)
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Re: Tesla becomes most valuable car company in the world

Post by bubbly »

Cycle wrote: Fri Jul 03, 2020 9:31 pm
cj2018 wrote: Wed Jul 01, 2020 1:40 pm You need to understand Tesla is an energy and tech company. Imagine a world where all Tesla cars are connected to Starlink (https://www.starlink.com/) and are 100% self-driving capable and could serve in the RoboTaxi fleet when the owner is not using it. Imagine the Tesla car gains flying-capaiblity (SpaceX booster anyone?) and solves traffic problem. Imagine Tesla's battery and solar technologies continue to improve and ultimately revolutionize the energy industry altogether.
For millennials and zoomers in big cities, we use shared scooters or ebikes or lyfts to get around. My bike share membership (niceride owned by Lyft) is $75 a year plus like $20 for ebike fees. The competition is so fierce in that space many players are already dropping out

Traffic problems are being solved today in Paris by micro-mobility (walking, bikes, scooter) and deprioritizing cars on the road (bus only lanes, protected bike lanes). Where does Tesla fit in in Paris in 10 years?

Maybe what is happening in Paris will not come to the US... But if u follow the strongtowns movement (Chuck mahron) there is a lot desire for US cities to get their budgets in order by shifting away from car dependency. This means increasing density and thereby their tax $$$ per infrastructure unit. https://www.theamericanconservative.com ... ly-zoning/

AND if cars do become self driving, why would i own one when i can just take a waymo or lyft. Those fleets are going to compete so hard on price, just like what we've seen in micromobility with Jump exiting some cities.

Certainly people would want their own, but unlike with cars today not everyone would NEED their own, and so people like myself would rather not pay for the parking space and just hire one

What IS awesome about Tesla is that Elon wants sustainability and if the tech he develops ends up making it so there are less cars on the road I think he'd say that's awesome. I live on a busy street and can't even hear when a Tesla goes by but for wind/tire noise, so already there is a positive impact in my environment from Tesla.
The one problem with this scenario is that all the newer constructed cities or even new expansions in existing cities in the US are far more spread out and catered towards cars, with wide streets and metropolitan areas spread out so that it forces the inhabitants to use a vehicle. And in these newer expansions, personal car ownership is probably still going to be cheaper than rideshare for the foreseeable future. Examples of such cities that I've personally witnessed are Perth (Australia), Chicago Suburbs, Singapore (to some degree), Indianapolis suburbs (Carmel in particular), Fargo (ND), and Milwaukee. But your point still stands, and even if rideshare doesn't take off and fully replace personal ownership, the shift to electric cars still represent a lesser dependence on fossil fuels which is still a victory from an environmental standpoint.
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Re: Tesla becomes most valuable car company in the world

Post by InvestorP »

oragne lovre wrote: Sat Jul 11, 2020 6:10 pm I am also glad that a Tesla thread is back on this forum where all commenters are now discussing with cool heads.

I initially got one TSLA share of $100 with my fun money since all the rest of my investing money was in index funds. I decided to get TSLA share because I liked the idea of someone making cars that do not make my garage smell oil and gas. I then read more about how a guy by the name EM, who kept going to achieve his ambitious goals, which may seem outrageous to many people, even though he ran into many failures. I also got to know that EM liked Aristotle's life philosophy, which I also loved. All of a sudden, I liked the guy and his resilience. I then put some more fun money into TSLA whenever its price dipped down drastically. I honestly did not know which way TSLA would go; I did it just because I wanted to ride with a guy whose thinking was like mine. Now TSLA has become what the market thinks it is worth or will be worth. I guess there are many people around the globe, just like I, are also interested in EM's thinking and decide to ride with him and support TSLA. It is impossible to quantify people's sentiment.

TSLA may become a 21st-century-tulip-bulb event or maybe market efficiency is at work; I still do not know. I am enjoying my current TSLA ride though; it's fun :D
My reason for investing in Tesla is similar as well. I'll always root for the person/company who's trying to better the world. If I end up making some cash in the process it's just icing on the cake.
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Re: Tesla becomes most valuable car company in the world

Post by hagridshut »

JonnyB wrote: Tue Jul 14, 2020 11:24 am
4nursebee wrote: Sat Jul 04, 2020 4:29 am The best thing I've read, with regards to valuation, is the following quote "Drive a Tesla Model S with the dual-motor configuration and all the bells and whistles and you'll understand why the valuation is what it is."
If true, that would be very bad news. The Tesla Model S has decreased sales every year, going from 29,000 in 2016 to less than half, 14,000 in 2019.
Model S sales won't matter. Tesla's production line for 2nd Generation platforms (Model S and X) can only support production of about 90k vehicles/year.

3rd Generation platforms (Model 3 and Y) are where the vast majority of buyers are going to go. Installed production capacity is 600k/year for these cars. Once Shanghai and Berlin are complete, add 1 million/year production capacity for Model 3 and Y. Then add another 600k for Austin, Texas.

Mass market skews towards compact luxury sedans and crossovers. BMW sells far more 3-series sedans and X3 crossovers than it does 5-series sedans. The product mix for Tesla is likely to be similar going forward.
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Re: Tesla becomes most valuable car company in the world

Post by iamlucky13 »

hagridshut wrote: Wed Jul 15, 2020 6:39 am Model S sales won't matter. Tesla's production line for 2nd Generation platforms (Model S and X) can only support production of about 90k vehicles/year.

3rd Generation platforms (Model 3 and Y) are where the vast majority of buyers are going to go. Installed production capacity is 600k/year for these cars. Once Shanghai and Berlin are complete, add 1 million/year production capacity for Model 3 and Y. Then add another 600k for Austin, Texas.

Mass market skews towards compact luxury sedans and crossovers. BMW sells far more 3-series sedans and X3 crossovers than it does 5-series sedans. The product mix for Tesla is likely to be similar going forward.
Their latest investor presentation actually says their installed capacity is 690,000/year, but production capacity numbers don't really mean much. Their 4Q19 and 1Q20 annualized pace (their two best quarters to date, and roughly flat between them) was about 415,000 units.

Every now and then, I try to dig up information on their costs. I made my own rough estimates of how much of their overhead is attributable to the automotive segment and am supposing the X and S cost around 1.5x as much to build as the 3 and Y. From that, it looks like the 3 and Y likely cost somewhere around $48,000 to build, deliver, and support.

They are turning a profit (an ok profit as a percent of revenue, and a terrible profit as measured against stock price). However, at some point as production continues increasing, they'll reach market saturation for their current price point, so it's important for them to not only continue increasing production capacity, but also continue to reduce their production cost. Even neglecting overhead, they appear to have a ways to go before reaching their old goal of a $35,000 mainstream car (as of 2011, the goal was $30,000).

I think they're capable of accomplishing that, but it's not a given, and eventually, they will have meaningful direct competition. I have zero interest in speculating on their stock as a result.
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Re: Tesla becomes most valuable car company in the world

Post by 4nursebee »

Jack FFR1846 wrote: Tue Jul 14, 2020 11:14 am
4nursebee wrote: Sat Jul 04, 2020 4:29 am
The best thing I've read, with regards to valuation, is the following quote "Drive a Tesla Model S with the dual-motor configuration and all the bells and whistles and you'll understand why the valuation is what it is."
I did test drive one. I was underwhelmed and it became a check mark on my "not interested" list. Maybe it's worth it for the fanbois. I'm not a fanboi.
Lol!

Perhaps you should have punched the accelerator once, from a standstill. 0-60 in less than 3 sec.
Built in COVID cabin filter.
Auto adjustable air suspension.
Fsd/Ap.
Voice control for many things.

The acceleration alone has absolutely flippin overwhelmed EVERYONE that has been in my car including race car drivers, muscle car aficionados, airplane pilots, and children.

Some coworkers learned of my car yesterday, too a T everyone of them said it was the dream car their kids want.
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Re: Tesla becomes most valuable car company in the world

Post by hagridshut »

iamlucky13 wrote: Thu Jul 16, 2020 12:54 am
hagridshut wrote: Wed Jul 15, 2020 6:39 am Model S sales won't matter. Tesla's production line for 2nd Generation platforms (Model S and X) can only support production of about 90k vehicles/year.

3rd Generation platforms (Model 3 and Y) are where the vast majority of buyers are going to go. Installed production capacity is 600k/year for these cars. Once Shanghai and Berlin are complete, add 1 million/year production capacity for Model 3 and Y. Then add another 600k for Austin, Texas.

Mass market skews towards compact luxury sedans and crossovers. BMW sells far more 3-series sedans and X3 crossovers than it does 5-series sedans. The product mix for Tesla is likely to be similar going forward.
Their latest investor presentation actually says their installed capacity is 690,000/year, but production capacity numbers don't really mean much. Their 4Q19 and 1Q20 annualized pace (their two best quarters to date, and roughly flat between them) was about 415,000 units.
Extrapolating today's actual production capacity based on past Q4 '19 and Q1 '20 results doesn't make any sense, for the following reasons:

(1) 200,000 of that installed capacity is in Shanghai, which only began low rate production in November 2019. Deliveries of vehicles produced from Shanghai didn't begin until late December 2019, and that was only 15 cars: https://www.cnet.com/roadshow/news/tesl ... eliveries/. Shanghai's Q4 '19 production contribution was essentially negligible, and that is not the case today. It takes time to ramp up production in a new facility.

(2) In Q1 '20, the Shanghai plant was offline for nearly 2 weeks during a Coronavirus shutdown. Additionally, Tesla's Fremont California plant was shut down starting March 23, 2020 because of Covid-19, meaning that they weren't building any cars in their main factory for the last 9 days of Q1.

Today, both plants are running at capacity.

They are turning a profit (an ok profit as a percent of revenue, and a terrible profit as measured against stock price). However, at some point as production continues increasing, they'll reach market saturation for their current price point, so it's important for them to not only continue increasing production capacity, but also continue to reduce their production cost. Even neglecting overhead, they appear to have a ways to go before reaching their old goal of a $35,000 mainstream car (as of 2011, the goal was $30,000).
The Munro & Associates teardown on YouTube revealed that Model Y's production cost is lower than Model 3, and many of the techniques used to reduce cost in Model Y can eventually be backported to Model 3.

I think they're capable of accomplishing that, but it's not a given, and eventually, they will have meaningful direct competition. I have zero interest in speculating on their stock as a result.
People have been raising the competition issue since 2012. 8 years later, that argument hasn't played out well. Tesla's Model Y has much longer range and better performance than similarly sized crossovers like the Jaguar I-Pace and Audi E-Tron, and the Model Y costs substantially less than either. The I-Pace and E-Tron start at $70,000 and $75,000 respectively, while the Model Y starts at $50,000 and has 35% more range than the Jag and 50% more range than the Audi.

Tesla also isn't standing still as their competitors try to catch up. If anything, they are accelerating away from the competition.

I agree that most people should not speculate on the stock though. The stress level that TSLA induces in people is very high. Someone wrote earlier here at Bogleheads that they believed that stress related to TSLA shares may have contributed to the death of their spouse :(
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Re: Tesla becomes most valuable car company in the world

Post by Elysium »

Don't see it becoming a leader in sales until they produce a sub $30k car that functions well, something that can match the Camrys and Corollas of the world. I wouldn't buy a $50k car that is so small as Model 3 with so limited range. Too little value to me for the price. We are far far away from EVs becoming main stream. Not with Gasoline at these prices. I just filled premium for $2.30 at Costco in my large $55k SUV yesterday.

That said, I am all for EV, our other car is a plug-in Prius which we purchased close to $20k with all discounts in. I would buy a Model 3 or Y for sub $30k price if offered today, no more. There is a price to value ratio for the cost conscious car buyer, for those who simply wants to own a Tesla to get associated with a name brad perhaps it doesn't matter, but that will only make it a niche market.
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Re: Tesla becomes most valuable car company in the world

Post by TomatoTomahto »

hagridshut wrote: Thu Jul 16, 2020 6:53 am I agree that most people should not speculate on the stock though. The stress level that TSLA induces in people is very high. Someone wrote earlier here at Bogleheads that they believed that stress related to TSLA shares may have contributed to the death of their spouse :(
Oh no! I didn’t see that (can you point to the post?). I have often worried that Dan Mahoney, with whom I disagreed about Tesla but quite liked otherwise, got out of his Tesla short position relatively whole.

Not owning (or shorting) individual shares does have the benefit or reducing stress, although it does add to some amount of FOMO. As I mentioned elsewhere, when I bought my Tesla, the share price was at $193. :oops: If I had put the X’s purchase price into TSLA, it would be a 7 digit amount today. :moneybag
I get the FI part but not the RE part of FIRE.
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Re: Tesla becomes most valuable car company in the world

Post by hagridshut »

TomatoTomahto wrote: Thu Jul 16, 2020 7:55 am
hagridshut wrote: Thu Jul 16, 2020 6:53 am I agree that most people should not speculate on the stock though. The stress level that TSLA induces in people is very high. Someone wrote earlier here at Bogleheads that they believed that stress related to TSLA shares may have contributed to the death of their spouse :(
Oh no! I didn’t see that (can you point to the post?).
A really sad story. Was posted by forum member dodecahedron here:

viewtopic.php?f=1&t=319505#p5355533
My late husband generally stuck to passive index investing but he made a special exception for TSLA and bought a significant chunk at $38 in early 2013. He found it fascinating and exciting to watch it go up in the next few months and even bought some options in it, which he cashed out for a significant gain, and then died unexpectedly of a heart attack about 10 days later. (No idea if there was any causal connection, but the association between his profitable dabbling in TSLA and his death are very much linked in my mind.) Although he made money on the options position, he told me that he did not like the way it made him feel--he said about 10 days before his death that he could feel his heart racing. He said he would not be doing any more options trades but would hang onto the TSLA stock and consider selling when it hit $200. (I think it was close to $100 when he said this.) So he still had the TSLA stock in his Roth IRA when he died.

It took a few months for me to get access to all his accounts after his death. TSLA continued to rise during that time. But I found the whole position stressful. I can´t remember exactly what I sold it for, maybe around $140, about a tenth of its price today.

No regrets whatsoever!
Not owning (or shorting) individual shares does have the benefit or reducing stress, although it does add to some amount of FOMO. As I mentioned elsewhere, when I bought my Tesla, the share price was at $193. :oops: If I had put the X’s purchase price into TSLA, it would be a 7 digit amount today. :moneybag
That's pretty much what I tell people suffering from FOMO.

The gains on some individual stocks are incredible, but those gains don't come free.

The price can be chronic stress, lost sleep, or worse.
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Re: Tesla becomes most valuable car company in the world

Post by Valuethinker »

Elysium wrote: Thu Jul 16, 2020 7:15 am Don't see it becoming a leader in sales until they produce a sub $30k car that functions well, something that can match the Camrys and Corollas of the world. I wouldn't buy a $50k car that is so small as Model 3 with so limited range. Too little value to me for the price. We are far far away from EVs becoming main stream. Not with Gasoline at these prices. I just filled premium for $2.30 at Costco in my large $55k SUV yesterday.

That said, I am all for EV, our other car is a plug-in Prius which we purchased close to $20k with all discounts in. I would buy a Model 3 or Y for sub $30k price if offered today, no more. There is a price to value ratio for the cost conscious car buyer, for those who simply wants to own a Tesla to get associated with a name brad perhaps it doesn't matter, but that will only make it a niche market.
In the words of the James Bond villain "the world is not enough". There is a world outside the USA and in particular Europe & Japan where distances tend to be shorter and the environmental urgency is greater. In fact if Tesla were a Japanese car company I am sure the EV market would be much more developed there.

Gasoline is probably more expensive than in the USA in every developed country. Even in middle income & less developed countries, it is at least as much (with the exception of oil producing countries).

I agree re EVs & price point. But I have also been totally wrong so far. EVs (Tesla) have come in at the high end of price & performance, and ate the market. I expected EVs to come in at the low end performance/ price, and gradually take over the market from below.

The stock terrifies me. Both in its valuation, its financial fundamentals, the company's tendency to slip deadlines, and the retail enthusiasm for the company. Also in the short squeezes.

But the company has been very successful.
garlandwhizzer
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Re: Tesla becomes most valuable car company in the world

Post by garlandwhizzer »

Valuethinker wrote:

The stock terrifies me. Both in its valuation, its financial fundamentals, the company's tendency to slip deadlines, and the retail enthusiasm for the company. Also in the short squeezes.

But the company has been very successful.
1+

What I am concerned about is not so much the car/battery company itself which is a great company, but the herd of investors who have been driving its skyrocketing price. Mindless MOM investing, buying only because of the stock price graph, and add to that the euphoric expectations of many investors about TSLA's future. Usually at some unpredictable point, MOM price action reverses and euphoria hits reality. There are exceptions like AMZN which has been outrageously over-priced IMO for a decade and currently has a PE of 144. For every AMZN there are many innovative companies who promised to create a new future and wound up in the junk heap. MOM and sentiment can be extremely volatile and their price action works in both directions. We've certainly seen the upside. When will the downside hit? I certainly don't know but I strictly limit how much money I bet on sweet dreams.

Garland Whizzer
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