Tesla Talk

this is very apparent in the fall in California sales which is material to the overall business - CA sales dwarf all other states by a factor of 5x (CA 350k, next is TX: 65k - and all other states are in the relative noise level. Some remote states have a few hundred sales total pa).

one thing that stands out from the financials is the auto margins - half what they were just 2 years ago, and let’s be honest there’s absolutely no chance of recovering, and will probably fall further.

This 14% seems to be the same or even a little lower than BMW, Porsche and Merc - while the likes of VW, BYD, Toyota and many others operate on 6-10% margins, but on far higher volumes obviously.

Overall tech is down a few points this week, stock market is down off the back of some expenditure coming on earning calls. OpenAI for example needing 5billion to just run their processing. Tesla is down 14 percent over 5 days which is way off market 4 times most drops.

But it could be down to miserable forecast results but also coupled with elons play for tech and AI running a poll this morning on X about tesla investing in xAI. The cost per openAI commentary would be scaring off retail and non retail. The future plays may be wearing thin on reality now.

just reading the Musk transcript from the earnings call. It’s actually mental stuff - this is not a person to be taken seriously 😂

• goes into detail about how FSD would work on other planets too, but also says there is a known issue with it not working on our own planet if you’re wearing sunglasses 😂
• Reckons the $25k humanoid robot business is worth $5tn in the “short to medium term”. I mean what the actual heck!

No wonder the institutions are selling and retail investors + musk are now almost 70% of the stock of a company with a $700bn marCap.

Retail and insiders trade on pure hope. This is why there’s no fundamental underpinnings to the SP.

There’s no other company that comes remotely close to such a lopsided share register.

Likely some of the 13% fall yesterday is disillusioned retail owners too - seeing falling sales, falling revenue, falling margins - and no real tangible replacement projects - it’s all hope and moon shots.

cybertruck has been a massive failure by all measures. falling values, non completed orders. court cases to allow for resale. And god knows that level of production investment was made. If Q3 goes the same way, And there doesnt seem to be anything realistically that will change that then hes toast in Tesla leadership. Is the Pivot to Trump in full form a play on making his vehicles more competitive or obtaining more large goverment subsidies. Hes not cosing up to him within the last month for no reason. There is something going on here he doesnt pivot like this without seeking large personal gain.

Tesla are an automaker, albeit one more tech oriented. They bend metal like other automakers and are limited in scale as a result like other automakers. They want you to believe that they are a different type of company and that they deserve to be valued like a tech company. But the truth is their margins are what other automakers achieve (<20%) and have similar automaker issues and cycles with their products.

Bulls will claim that their value isn't in how much they are currently selling, but how much they will sell in future. They point to their Full Self Driving as evidence of their AI potential.

This is tech that was promised years ago but still hasn't fully delivered. None of the breakthroughs in AI used in FSD have come through Tesla. Transformers came from Google. The acceleration in the AI hardware came from NVidia. CNN's were developed by one of the "Three grandfathers of AI" from Meta. Actually, there was a laughable argument between him and Elon on Twitter not so long ago where Elon showed how he didn't understand the tech that was used Teslas Autopilot; CNNs and Transformers.

https://www.forbes.com/sites/roberthart/2024/05/28/elon-musk-is-feuding-with-ai-godfather-yann-lecun-again-heres-why/ https://www.thinkautonomous.ai/blog/tesla-cnns-vs-transformers/

Lets say FSD and thus Robotaxis do deliver, what potential does it have? Elon said "you can think of Tesla [like] some combination of Airbnb and Uber"

Airbnb and Uber.

Two companies whos total valuation is around 200b. A fraction of the 600b that Tesla is currently valued at. Thats what they want to become?

Elon is a good salesperson, not so much a tech person. He has done good with Starlink and SpaceX. But Tesla is too hyped and overvalued for what it does.

Tesla cannot do FSD or robotaxi without radar / lidar. It's not possible at all. It's voodoo science.

At best with their current technology stack they can cover specific mapped and videoed cities and get licenses for that. But even that would be hard to do with camera and AI image examination. There's far too much emphasis and showmanship put on their capabilities when they aren't doing the basic right. Are they the best in image recognition at scale? Probably yes. Can FSD work on that alone. Not at all.

We don't talk about that enough because the bears seem to rule the information roost.

I read something recently that if you strip out the auto business from Tesla and look at all the other projects and things in isolation, all massively delayed or eventually canned - it’s a textbook ponzi - finding one project after another to keep giving people hope and prop up the price.

it’s worth remembering that this is a company that investors once valued at twice its current SP, and also that on a 3 years view is down over 30%, while something as generic as a global ETF is +55% in the past 3 years (SWRD for example).
you have to go back to the 2020 Covid rally (that rose all stocks), to find a true Tesla meme rally.

Retail is never patient, because they don’t trade on fundamentals, they trade on hope and the presumption that they know what they’re doing.

I gave the example before that if you bought Bank of Ireland at the bottom of the Covid crash in May 2020, it has outperformed Tesla since, and even paid a dividend in the past 3 years too

the answer is no, i work in the image tracking technology sector. Dirt, Rain , Darkness knocks out much of your processing capabilities. This alone means that cameras are not 'the sensor' they form only part of real FSD. These are factual things

”Fortune’s Christiaan Hetzner also reports that nearly half of the $1.89 billion Tesla earned before tax accrued from the sale of regulatory CO2 credits, could be on the chopping block should Former President Donald Trump be reelected. ”

I guess this might help explain the $45m/month Musk support for Trump - it’s buttons compared to his personal loss of wealth if those credits are binned.

It's voodoo science. Your saying fsd success is predicated on a window wiper.

It seems you don't have enough understanding of the limitations of image processing and environmental conditions including but not limited to rain, dirt , sunshine and obviously... darkness.

It's all show man razzmatazz to say they can create a robotaxi without addressing the fundamentals of additional basic sensors which allow the image processing to partner up and enhance its decisions.

At the very best Tesla can license their image processing to others they're great at it they've lots of data gathered But they simply cannot have that alone do fsd nor robotaxi. I hope your choosing your investments wisely...

Its interesting you mention the Tesla bears, because the focus is on the automotive, where increased EV competition, especially from China, was always going to impact their marketshare going forward. Combine this with a general slowdown in EV sales growth (not decline), then the it doesnt look good.

Although it is still dwarfed by Automotive, Tesla Energy is doing very well. Just google Tesla Megapack for news articles - they have big contracts globally including US, China, Canada, France, Australia

this is a business with a $700bn valuation lads - it’s going to take a lot more than energy, solar, roadster, robotics, cybertruck, semi, Ai, Optimus, FSD, robotaxis, affordable EV and so on. Have I forgotten anything?

(Edit, I forgot the 3 and Y!)

Musk promised 6 things last night on the call for ‘later in 2025’ 🙄🙄, and guess what - an actual car isn’t one of them, meaning core revenue will continue to fall, and that’s whats weighting on the SP this week too.

Even If you break out the energy business, the most bullish of musketeer bulls places a $36/share price on future value of the business, which means it may at some point be worth 15% of the business - that’s still a $125bn business in its own right btw!

Robotaxis (if possible, tesla/waymo whatever, I am talking about the core idea) will change the way the world buys or owns cars.

You don't need to buy a car if you can get one to come and pick you up as reliably and impersonal as only robots can do. You can also afford more car when your car can go and work as taxi when you are busy with life.

The way our towns, roads and even houses are designed could change as parking space doesn't have to be near anything.

Robotaxis could augment public transport - addressing public transport's 'last mile' problem.

It will be almost as significant as switching from horses to cars all those years ago.

It's indeed beyond our capabilities right now. But Telsa is betting on AI - similar to ChatGPT and generative AI, if you can harvest and come up with a model and algorithm that constantly learns and improves from driver actions around the world - ignoring the massive computing power required to do so - will ultimately result in an amazing AI solution.

Given nvidia / etc keeps pushing the technology, it's beyond the realm of possibility that we will get there eventually - may be in 2 years, may be in 20 years, but eventually we will / have to, right?

yes, but it only took 80 years from the point Wernher von Braun figured out how to make it go down with the pointy end to make it land on its tail!