odysseus2000 wrote:My general feeling is that you are reading way too much into 1 quarter and being too pessimistic in your analysis.
Well it's customary to look at results when they come out, they're a check in with reality, otherwise you're living in fairyland. I think I'm being pretty fair; maybe you are not reading enough into them?
odysseus2000 wrote:Tesla revenue is 97b (2023), pre tax profits was $10b for 2023, so almost a 10% increase in pre tax profits from these job cuts.
Which just matches sales going down by 9%, you're barely better off. Except one employee wants to be paid $56bn. If saving $1bn is going to help the shareprice go up, what effect will -$56bn have? You can't have it both ways, but last time I looked, $1bn was less than $56bn....
odysseus2000 wrote:Yes, the IEA do say sales of electric cars are rising, but a lot of this is in China and for small cars that Tesla currently has no competitor for. Musk said they would make a smaller car
Don't think you can dismiss it as just China.
UK car sales in Q1 were up 10.4% and UK BEVs were up 3.8% in 24Q1, but Tesla was down 11.9% whilst MG was up by the same amount, Nissan, Vauxhall and Mercedes were all up over 20%, Peugeot, Honda and BMW were all up over 40%. You can't just dismiss it as "a tough market" or "interest rates" - there is something going on here that is specific to Tesla.
And I think we know that Tesla's idea of a small/"cheap" car will be competing against the BMW X1 and Mini rather than the Dacia Sandero and Kia Picanto - I've not followed closely, presumably it will be lithium rather than sodium-based? But it does point to the opportunity cost of all that resource expended on the Cybertruck.
odysseus2000 wrote:The arson attack in Germany messed with deliveries causing Tesla to have to send cars to Europe to cover some of the lost production leading to cars on ships and an inventory build. I don’t think one can credibly blame Tesla preparations for the actions of terrorists!
That's why I wasn't giving them too hard a time about the inventory bulge. But still, $2.7bn of cars, assuming an average cost of $38k, is 70,000 cars. Last year they sold just over 350k cars in Europe, so 90k/quarter. Are you really saying there were 70 days of European sales stuck mid Atlantic? Come on.
odysseus2000 wrote:Average r&d means nothing. It is what Tesla create that matters and the less folk needed to do it, the better.
Yes - but R&D spend is a better indicator than you might think of how serious they are about it, and it gives one an idea of the timescales. I'm really not surprised that they've taken so long delivering Cybertruck or FSD, the talk was clearly way ahead of the resources being put into development. And I question their ability to grow in the way that the valuation requires, if they're cutting 20% of the people who would make that happen. Still, R&D of 7% is a start - perhaps they can now make auto wipers that actually work.
And here we have one example of how cutting the workforce forces them to cut their technological ambitions, they're giving up on the longstated plan to cast the underbody of the small platform in a single piece, and will now do it the existing way in three pieces. It also takes out a load of risk to the schedule, takes out a lot of upfront cost in optimising the casting, and reduces the long-term cost to insurers as minor dings mean you don't have to replace the entire underbody. It's almost like someone has taken Musk to one side and explained to him that after the pickup and the lorry, he now has to start delivering things on time even if they are not as technologically advanced as he would like.
https://www.reuters.com/business/autos- ... 024-05-01/odysseus2000 wrote:Legacy has always hated electric, that was why GM axed their EV1 and had all the cars forcibly collected and crushed.
Jeez, the EV1 was the last millennium, nobody is thinking about it. Move on.
odysseus2000 wrote:VW board did the same thing with Diess who was trying to lead them to electrics and now they have German politicians making electric car sales more difficult by cutting incentives whereas in the UK the benefit in kind tax reduction is still attractive.
BIK is all that's left, it's a long way from £5k for everyone. And they're losing a lot of their exemptions for Congestion Charge etc.
odysseus2000 wrote:there is nothing so vengeful as a person who eventually realises that he/she has been fed a bunch of lies and so I still believe there will be a rapid decline in ICE cars.
You may think that, but in the real world it's about money and the availability of vehicles with the right spec for what people need.
odysseus2000 wrote:Cyber truck has been a huge success, grabbing the attention of the celebrity crowd who once loved Range Rovers and producing massive free publicity for Tesla.
That may count as a huge success in your world of feelz and vibez, but it doesn't count for much on the bottom line.
odysseus2000 wrote:It is not designed to compete in its current form with the F150 for builders but it going after higher margin, but lower volume customers.
But that was
the original vision, "
We wanna get gasoline, diesel pickup trucks off the road".
And I think it would have worked better if they'd kept their original focus on solving Big Problems rather than indulging the boss on something he thought was "awesome" but "I actually don’t know if a lot of people will buy this pickup truck or not, but I don’t care."
You can get away with that attitude at a private company, but not when it's publicly owned, and you sense that's been part of the problem behind the scenes, that he's been encountering resistance to some of his more outlandish schemes.
Wow - proof if ever it was needed that even if you have a fancy model, garbage in means garbage out. I don't have time to fisk it all, but just to take some examples of the inputs it relies on to come to this central target of $2000 in 2027 with a 50% range between $1400 and $2500, they assume :
- Average gross margin of 28.5% (range 23-34%, currently it's 17.4%)
- 22% chance of Robotaxi commercialisation (not announcement) in 2023, giving 4 years of ramp up
- $3bn (ie <0.6%) of dilution from shares given to directors and employees
Do you seriously think any of these inputs are realistic. Just on the dilution front, p146 of the
2024 proxy statement says that as of 31 December 2023 there were 363m shares to be issued to the directors. Now 304m of those are Musk's infamous 2018 award, and I'm not sure if they all vest by 2027 but just the rest of them account for several times more dilution than Ark assume, never mind those given to employees.
And then we have the production forecasts, of 10.3m
in the bear case and 20.7m in the bull case, for 2027. Remember that TTM they produced (not sold) 1.839m vehicles and that at present they claim production capacity of "over" 2.35 million cars, although that includes 125k/year for the Cybertruck factory when they've only just managed 1000 in a week of production test.
Don't get me wrong, I think one of the most impressive things about Tesla is how they've assembled a global production system for a whole new technology from scratch. But in 12 years of inhouse production, they've got to production of 1.8m and claimed capacity of 2.35m. Do you seriously think they can be producing 15m cars as a central forecast, within 3 years? Having just sacked 20% of the workforce?
I could go on, but life's too short. You do yourself no favours quoting such numbers uncritically, you're smarter than that.
odysseus2000 wrote:In addition to the FSD aspects, the availability of having substantial compute in cars opens up the possibility of using them like the Amazon Web Services where when the car is not driving it can be part of a large compute engine. Similar is possibly true of dojo, but what the real situation is there is difficult to know. In principle dojo time could be sold for AI training but whether it is any good who knows.
Meanwhile we have the exciting possibilities of Optimus and what it can do and when it can become an income stream for which there is nothing as far as I can tell baked into the share price.
But people have been talking about profiting from distributed computing for decades, pretty much as soon as GIMPS and Seti@home were a thing back in the late 1990s. Again it just feels like Musk spitballing as a way to distract from what's actually happening in the here and now.
The markets usually look 18 months ahead. Let's say that's doubled for sexy tech companies. Can you see any of these things making a material contribution - 10%, even 1% to total revenues in 3 years time? So $10bn/year, even $1bn of cold hard cash?? If not, then they're not worth wasting brain time on.