Tesla
- Thread starter Baseman
- Start date
Elon Musk is obviously brilliant but he’s so awkward with the weed and hobnobbing with celebs. He looked like a 12 year old smoking weed for the first time on Rogan.
DoogieMcDoogerson
Active poster
The secret about Tesla is the company is really not an automotive company. It's much more. And it's run by a visionary. Apple wasn't about music and media until it was...people who realized that profited. That said, the valuation is way too high.
I heard Kevin O’Leary say the same thing about Tesla. He said it’s a data technology company.
DoogieMcDoogerson
Active poster
Google is just a search engine.
Amazon is a bookstore.
Facebook is the new mySpace.
Microsoft is a software company.
Each of these companies had an underlying important vision behind what they were doing. Tesla is in the same boat. Batteries, energy storage, energy distribution...and even more than that.
doogie
New Fish
Jaguar, GM, Ford...
https://www.caranddriver.com/news/a33368022/ford-mustang-mach-e-1400-revealed/
https://www.caranddriver.com/news/a33368022/ford-mustang-mach-e-1400-revealed/
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Tesla as a car company is going to survive by building cars that the legal departments at the Big 3 and BMW, Merc, etc won't sign off on. Even then, they will be niche. Elon constantly walks the line that Tesla is not a car company, and that he hates building cars.
https://www.caranddriver.com/features/g36278968/best-selling-evs-of-2021/
Your google must not be working.
No one holds a candle to Tesla.
The #1 selling EV is Tesla model Y. 76,426 sold so far in 2021. Add up all the others on the list of top 12 not named Tesla you get 64,841.
Add up all the Teslas on the list you get 139,297.
Tesla is double all other EVs combined.
You're looking at the future dominant car manufacturer in the world. And yeah, they aren't even a car company.
Baseman
New Fish
Subtract the green credits and Tesla loses money. $620B market cap. They are destroying shareholder value. They have a negative spread (almost 10% between Return on Invested Capital and their weighted average cost of capital)
Volkswagen and other car makers are catching up quick.
You could buy Volkswagen and Adobe for $30 billion less than Tesla and have real growth in free cash flow in both vehicles and software.
Tesla is valued at a richer multiple than Cisco was in 2000 with 1/8 the net margin. Cisco, the market said at the time was not just about routers and switches. Lucrative high margin Software services and Maint contracts were promised to fuel future growth and justify the rich valuation. The internet. Things were different then.
Cisco 2000 Market Cap: $546 B. ($22 B. Revenue. $3.9 B. Net Income (17.7%)
Cisco 2021 Market Cap: $232 B. ($49 B. Revenue. $11.2 B Net Income (22.9%)
Tesla 2021 Market Cap $620 B. ($31.5 B Revenue $846 M. Net Income (2.2%) Tesla generated $1.6 Billion (almost zero cost) selling regulatory credits in 2020. Remove the credits and Tesla lost money)
Tesla's "Growth" in 2021 came through BitCoin trading and selling environmental credits.)
At 20x Sales and a 2% net margin, Tesla is going to have to sell a lot more cars and capitalize on growing their BitCoin trading to justify their standing. Selling more cars requires a lot more capital.
I'll be shocked if Tesla doesn't take a major haircut in the near future. Caveat emptor.
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Look forward, not backwards. Tesla does not have anything close to the manufacturing capacity required to become the #1 car producer. GM, Ford, Mercedes, BMW, Toyota...the list goes on and on...all are rolling out massive EV lineups over the next three model years. Tesla has no chance of competing over the long-run as anything more than a brand equivalent to Volvo.
Subtract green credits and Tesla loses money - True. Q1 operating profit 594m (101m from Bitcoin). Green/Regulatory credits were 518m. You could make the same argument that Tesla's energy generation and storage is keeping them profitable - 494m. Green/Regulatory credits are gong away, 518m in credits is pretty much nothing compared to 8.5B in car sales. The selling of regulatory credits was a much more valid argument two years ago.
"Tesla's "Growth" in 2021 came through BitCoin trading and selling environmental credits." - come on, you didn't need this false line, the bear case against Telsa is strong enough by just attacking the valuation.
I think the bear case keeps a lot of money away from investing in Tesla. I think it's safe to say you are not an investor. But is your belief in the bear case strong enough that you would bet against it?
I vividly remember Facebook going public - IPO was 40 bucks. I could not wrap my head around how this company could make money. It was totally ridiculous to me. So what's this have to do with the Tesla bull argument? Probably nothing, but I'm quick to not bet against a visionary. For the record, I fucking hate Zukerberg and FB - but I make a little $$ on FB options here and there.
@Baseman I know you are not invested in Tesla, not even on the downside - that's just not you. But I think you have to admit, demand for EVs in America would not be where it is today without Elon.
As far as my comment about Tesla being the biggest car manufacturer in the future, and the counter that they don't have the productions capability to overtake the big automakers - we'll see. Tesla pretty much has one productions facility, Freemont CA. 3 more are on the verge of opening 2021 - Austin, Berlin and Shanghai. Currently, demand for Teslas far outweighs supply. Cars will be rolling out of these new plants in a few months, fully ramping in 2022 - the other automakers will still be fiddling with their dicks trying to get their vehicles from prototypes to production while Elon will be spraying cars all around the world.
The car industry is changing - legacy automakers are gong to have a tough go of it. Every Tesla car sold is taking share from legacy auto. Every legacy auto EV sale is taking share from itself. Because of this, the market share argument does not compute for me. For example, the Ford Lightening (when it hits the market in a few years - lol) will cannibalize the F150.
Plus - car ownership will be a foreign concept for a lot of people in the not so distant future. ROBOTAXI. Telsa wins again.
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Yes, look forward, not backwards. Your giving Elon "three model years" of more runway to continues to outpace Legacy while Legacy sits idle. Within a few months Telsa will go from 1 to 4 production plants. How many more EV plants will Tesla have in three model years?
I don't see Legacy "crushing" Tesla, I just don't. I don't see Legacy building a better EV either, especially over the next 3-5 years, no way.
Baseman
New Fish
Facebook went public with 75% gross margins, 40% operating. With their network effect their Incremental revenue went straight to net.
Instead of growth, I should have been more specific: "profit growth" Backout the credits and bitcoin trades, Tesla is in the red. Facebook wasn't reliant on other revenue sources for profitability.
Tesla can certainly build more plants and sell more cars, they'll have to to justify the valuation. It's a capital intensive, low ROIC business, anyway you slice it.
Tesla is a great company, just like Cisco was in 2000. Both were richly valued, different disrupters. The market eventually revalued Cisco. Cisco's market eventually corrected.
I'd buy the car -- maybe -- but I'll pass on the stock and buy puts.
Ford builds more trucks in a year than Tesla can produce across all of its models. They are still tiny in the overall industry.
Have you sat in a Tesla before? Maybe you own one...the build quality is pretty lousy (as noted by experts, not my opinion) and the interiors are cheap and spartan (spartan by design, but most people will not accept that). Also, is anyone noticing that the Model S has not been re-designed for 12+ years? They can't get away with that forever. Model 3 is already four years old and still looks exactly the same.
I think Tesla builds a cool product and has carved out a loyal following. They aren't going away, but I have serious doubts that they'll ever be on par with Ford or GM. Ford is already selling the Mach-E and has the Lightning F-150 releasing in a few months (who in their right mind would buy a Cybertruck over that?). Jeep has its 4xE models which are apparently doing well. GM has the Bolt and will have its entire fleet electrified in the coming years, starting with the new Hummer lineup.