Tesla and Uber Unlikely to Survive (Vol. 2)
Discussion
Burwood said:
I looked that up because it sounds far too much. A survey of 1,500 people. Poor sample. 70% said they invested 'something' with 46% of those saying at least half. Reports range from 50b to 190b from stimulus money. It's a drop in the ocean. The market cap of the US stock market is almost $50T.
daily volume is around $250B
tapering isn't an issue nor has the new money done a whole lot. The market wasn't crazy before stimulus?
Of course. At the same time, those are going to be largely retail investors putting money into things they have heard of. Not much will be going into obscure construction support companies or whatever.. It's contributed to things like Gamestop out of all proportion to the attention they received.daily volume is around $250B
tapering isn't an issue nor has the new money done a whole lot. The market wasn't crazy before stimulus?
hyphen said:
TameBritishMuslim said:
How many other car companies have a gross margin of 29%...
They offer 2 models (of note) limited options, limited paint colors, online only, don't pay for advertising etc.Because they were a niche player and people who wanted a more expensive ev than a Nissan Leaf didn't have much choice. Plus all the self driving sci-fi future attracting the geeks.
Vag made $11bn for the last quarter selling a huge array of vehicles.
If Tesla want to maintain that 29% gross margin, they need to maintain leading spec cars. And that requires investment.
What's VAGs gross margin and debt in relation to Tesla?
Which of the two has the ability to dilute their stock a small fraction to raise billions if necessary?
Which of the two has multiple non 'traditional auto' revenue streams which have barely been tapped?
Which of the two has the burden of over 100 global factories specialising in ICE which is now clearly the past?
Oh and with respect to recent share prices, look at the options market for clues.
hyphen said:
TameBritishMuslim said:
Exactly.. and yet, demand far exceeds supply and will continue to do so for years to come....
Which depends on their cars staying better than the competitor at that price point.Will they?
TameBritishMuslim said:
IMHO, yes - with advancements in manufacturing (castings, structural battery packs etc.) and battery technology (4680 cells). I think it comes down to their margin per vehicle. I believe it will be higher than all other competitors. Then add on top of that, their other streams of revenue.
It really doesn't make much difference to the man on the street what manufacturing techniques they use, or to Tesla's success how big their margins are - neither of those things will stop people buying other cars, or stop the mainstream manufacturers from producing competitive vehicles. If you think 4680 cells are a significant advancement, I've got a bridge to sell you...Tesla's complete loss of forward momentum during the Model 3 roll out has meant that the Cybertruck has been beaten by Rivian, VW is now cranking out a dozen segmented versions of it's platform, and favourite brands like Mini are previewing their electric offerings. Just when Tesla needs to demonstrate it can continue to expand it's market reach, the companies that "could never catch up" are parking their (electric) tanks on Musk's lawn.
You're also wildly blind if you don't think the other manufacturers don't have other streams of revenue.
Tesla's p/e ratio is 293 (in other words it is valued at 293 x it's current earnings). VW is 5.5. Does anyone think Tesla is worth 53 times what VW is, or will do anything to justify that valuation? Or do we think VW will continue to launch EVs around the world and steal market share from Tesla. Is Tesla a good investment? Can it survive if it's share price normalises if it turns out it isn't better at selling cars than VW?
Tuna said:
If you think 4680 cells are a significant advancement, I've got a bridge to sell you...
Excellent, how much for the bridge? Actually, as an aside, was talking to an Arizonan friend the other day. While the whole London Bridge thing was weird, its actually generated a huge amount of money over the decades and is a real tourist attraction! Still, I digress...The 4680 cells thing is fascinating. It is sold as some sort of genius move, and it could be proven to be clever, but is relentlessly and ruthlessly ramped as being some sort of breakthrough. Yet another video popped up on YouTube the other day saying that it was here and that they were fitting it to cars.... utter BS and lies, but hey, generated revenue on YT!
There is more to the 4680 cell than just the headline figures and it could be a fundamental change in construction, integration and packaging that could, and I absolutely mean could, lead to cheaper EV's. But, Panasonic will be building these things and while Tesla has patented a couple parts of the chemistry and battery pack design, others will have access. Oh, and while touted as being 5 times more energy storage than the smaller 2170 - most people dont realize that its 5.5 times the size of the smaller one! The benefits are there, but on the messages that are 'sold' in the marketing.
The 4680 cell is interesting and could be another step towards more affordable power storage. Great, but its often wheeled out as some sort of magical Tesla thing that will 'smash' competitors and put them out of business. It wont. Where it will provide Tesla with benefits is in the less tangible and obvious areas - but they dont make interesting Tweets or meme's.... so dont get talked about. Lets see if Tesla actually get these things into a car (supposedly the have a test mule with them running now, but have admitted that its late 2022 before they can do anything with them).
All of this is bizarre though. Tesla is doing great. Selling cars, increasing shipments, making money. Great. Isnt that something to be celebrated? Or is it all about the next hyped product? And thats where it all comes crashing down for me. Jeez, it was just a year ago that Tesla made losses on everything they sold (factoring out carbon credits etc). Now they seem to be making money - please correct me if I am wrong. Thats great, isnt it? But its all about FSD, the Semi truck, Cybertruck, robotaxis and the new 'cheap' Tesla.... All of which arent here. What happened?
Tuna said:
TameBritishMuslim said:
IMHO, yes - with advancements in manufacturing (castings, structural battery packs etc.) and battery technology (4680 cells). I think it comes down to their margin per vehicle. I believe it will be higher than all other competitors. Then add on top of that, their other streams of revenue.
It really doesn't make much difference to the man on the street what manufacturing techniques they use, or to Tesla's success how big their margins are - neither of those things will stop people buying other cars, or stop the mainstream manufacturers from producing competitive vehicles. If you think 4680 cells are a significant advancement, I've got a bridge to sell you...Tesla's complete loss of forward momentum during the Model 3 roll out has meant that the Cybertruck has been beaten by Rivian, VW is now cranking out a dozen segmented versions of it's platform, and favourite brands like Mini are previewing their electric offerings. Just when Tesla needs to demonstrate it can continue to expand it's market reach, the companies that "could never catch up" are parking their (electric) tanks on Musk's lawn.
You're also wildly blind if you don't think the other manufacturers don't have other streams of revenue.
I have never stated that Tesla will be the only one producing electric vehicles. I believe that Tesla will make more margin per vehicle than any other manufacturer (except perhaps exotics >£150k); they will be producing millions of electric vehicles and will 'disrupt' the energy industry and take a leading role in automotive and general AI which is/will facilitate many further opportunities, thus leading to a multi-trillion dollar valuation over the next decade. I don't care if it tanks tomorrow, I am in for the long haul and I'll just keep dollar cost averaging as I am decades away from retirement.
The above is my position. Please state your position succinctly and lets review in a year or five.
Edited by TameBritishMuslim on Wednesday 3rd November 18:29
Edited by TameBritishMuslim on Wednesday 3rd November 20:07
Gixer968CS said:
Tesla's p/e ratio is 293 (in other words it is valued at 293 x it's current earnings). VW is 5.5. Does anyone think Tesla is worth 53 times what VW is, or will do anything to justify that valuation? Or do we think VW will continue to launch EVs around the world and steal market share from Tesla. Is Tesla a good investment? Can it survive if it's share price normalises if it turns out it isn't better at selling cars than VW?
Obviousl opportunity to take a short position aye .
RobDickinson said:
Gixer968CS said:
Tesla's p/e ratio is 293 (in other words it is valued at 293 x it's current earnings). VW is 5.5. Does anyone think Tesla is worth 53 times what VW is, or will do anything to justify that valuation? Or do we think VW will continue to launch EVs around the world and steal market share from Tesla. Is Tesla a good investment? Can it survive if it's share price normalises if it turns out it isn't better at selling cars than VW?
Obviousl opportunity to take a short position aye .
TameBritishMuslim said:
I have never stated that Tesla will be the only one producing electric vehicles. I believe that Tesla will make more margin per vehicle than any other manufacturer (except perhaps exotics); they will be producing millions of electric vehicles and will 'distrupt' the energy industry and take a leading role in automotive and general AI which is/will facilitate many further opportunities, thus leading to a multi-trillion dollar valuation over the next decade. I don't care if it tanks tomorrow, I am in for the long haul and I'll just keep dollar cost averaging as I am decades away from retirement.
The above is my position. Please state your position succinctly and lets review in a year or five.
My position three years ago was that FSD was not deliverable in the predicted timeframe, and I doubted we'd see full self driving on a generally available car (with regulatory approval) for years. The above is my position. Please state your position succinctly and lets review in a year or five.
I was right.
My position two years ago was that Robotaxis were economically illiterate, and would not be delivered.
Looks like I was right.
My position when the Model Y came out was it looked like the car they should have released first and it might take sales from the Model 3 - and in the US that appears to have been somewhat the case and may have led to the delayed release to Europe.
Not so far off the mark.
My position has never been that Tesla would fail, or to advocate short selling or any of that nonsense. Though if I had taken a short position at the peak early this year I could have walked away with a nice lump sum as a result of the ~40% drop we saw. However, as a smarter man that I once said, "The stock market can remain irrational longer than you can remain solvent."
I currently think Tesla have too few models, the Cybertruck is a missed opportunity playing to Silicon Valley tech bros, and that the company is over-valued as there is no level of market saturation at which they're making the returns the current valuation implies - regardless of gross margin. SolarCity appears to be a bit of a lame duck and they remain at risk of someone eventually developing a better battery technology.
My prediction for a year or five? They'll still be here, FSD remains very uncertain (and general regulation in that timeframe unlikely), stock price is likely to cool unless they can properly broaden their model range. The longer they're in their current position, the more they look like any other car company. Will I be upset if I'm wrong? Not remotely.
To repeat - those are just my opinions and why I wouldn't buy stock at the current valuation. They are not claims the company will fail, or that we should short them. They are not a personal attack, and I'm quite happy if you believe differently.
Burwood said:
RobDickinson said:
Gixer968CS said:
Tesla's p/e ratio is 293 (in other words it is valued at 293 x it's current earnings). VW is 5.5. Does anyone think Tesla is worth 53 times what VW is, or will do anything to justify that valuation? Or do we think VW will continue to launch EVs around the world and steal market share from Tesla. Is Tesla a good investment? Can it survive if it's share price normalises if it turns out it isn't better at selling cars than VW?
Obviousl opportunity to take a short position aye .
The far more likely scenario would be that any drop would take some years as the relative strength Vs VW etc is not going to be clear for at least another 5-10 years.
There is also the irrational side to it where individuals believing that a company is so special that no normal rules apply can keep the price high for a long time. There is always a practical lot to this and it is more sensitive to crashes as smaller investors are more likely to sell if things go bad (like they lose their hob and need to pay the mortgage). It also reduces the appeal to institutional investors long term as if you were not in at the start then there is no return and a lot of risk.
I would buy one of their cars now but I wouldn't buy their shares.
Tuna said:
TameBritishMuslim said:
I have never stated that Tesla will be the only one producing electric vehicles. I believe that Tesla will make more margin per vehicle than any other manufacturer (except perhaps exotics); they will be producing millions of electric vehicles and will 'distrupt' the energy industry and take a leading role in automotive and general AI which is/will facilitate many further opportunities, thus leading to a multi-trillion dollar valuation over the next decade. I don't care if it tanks tomorrow, I am in for the long haul and I'll just keep dollar cost averaging as I am decades away from retirement.
The above is my position. Please state your position succinctly and lets review in a year or five.
My position three years ago was that FSD was not deliverable in the predicted timeframe, and I doubted we'd see full self driving on a generally available car (with regulatory approval) for years. The above is my position. Please state your position succinctly and lets review in a year or five.
I was right.
My position two years ago was that Robotaxis were economically illiterate, and would not be delivered.
Looks like I was right.
My position when the Model Y came out was it looked like the car they should have released first and it might take sales from the Model 3 - and in the US that appears to have been somewhat the case and may have led to the delayed release to Europe.
Not so far off the mark.
My position has never been that Tesla would fail, or to advocate short selling or any of that nonsense. Though if I had taken a short position at the peak early this year I could have walked away with a nice lump sum as a result of the ~40% drop we saw. However, as a smarter man that I once said, "The stock market can remain irrational longer than you can remain solvent."
I currently think Tesla have too few models, the Cybertruck is a missed opportunity playing to Silicon Valley tech bros, and that the company is over-valued as there is no level of market saturation at which they're making the returns the current valuation implies - regardless of gross margin. SolarCity appears to be a bit of a lame duck and they remain at risk of someone eventually developing a better battery technology.
My prediction for a year or five? They'll still be here, FSD remains very uncertain (and general regulation in that timeframe unlikely), stock price is likely to cool unless they can properly broaden their model range. The longer they're in their current position, the more they look like any other car company. Will I be upset if I'm wrong? Not remotely.
To repeat - those are just my opinions and why I wouldn't buy stock at the current valuation. They are not claims the company will fail, or that we should short them. They are not a personal attack, and I'm quite happy if you believe differently.
RobDickinson said:
Tuna with his basically 'the competition is coming' post.
You rather missed the point there. The story not so long ago was that Tesla was going to wipe out all of the mainstream manufacturers, and they couldn't possibly produce equivalent models at the prices Tesla was achieving. We were told they were years ahead of the competition - but unfortunately, Musk has been delivering many of his promises in 'Musk time', and those claims haven't aged well.
Silly people like you seemed to think this was a "winner takes all" competition, that someone had to "win" and everyone else would "lose" - you still talk that way, which comes across as rather childish. Pointing out where the various manufacturers are is just about trying to understand the market, not take part in a playground fight.
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