Tesla-the future

nursebee

nursebee

Background: I'm a growth stock investor with a long term interest in TSLA, made life changing money in it, now own zero shares. I owned it early at its first $35 price, sold pre model 3 at 165, bought back in later, pyramided a lot, and have scaled out over the past year or two. I did not capture the high but the meat in the middle tasted good and was very filling.

I am now soured on the relationship but looking for potential entry in the future. Here is what I am looking for, some of which might come to be directly known, other of which might be observed in price action before being more widely known.

1. 4680 cell information seems to be limited. Production of cells without waste needed, seems to be in Texas.
2. Semi production perhaps hindered by 4680, needs to drastically improve or actually have a realistic outlook.
3. Next model grumblings (China model and Mexico model) need to get real. I think they are aiming to do quite well with this car at a lower price/profit.
4. FSD and AI improvements need to translate to uptake. Retrospective analysis shows Musk to be unrealistic or a bull shitter. Its good, maybe great, but not the end all be all.

I find it currently tough to have hope for future earnings based upon the above in the near term future.
 
nursebee said:
Background: I'm a growth stock investor with a long term interest in TSLA, made life changing money in it, now own zero shares. I owned it early at its first $35 price, sold pre model 3 at 165, bought back in later, pyramided a lot, and have scaled out over the past year or two. I did not capture the high but the meat in the middle tasted good and was very filling.

I am now soured on the relationship but looking for potential entry in the future. Here is what I am looking for, some of which might come to be directly known, other of which might be observed in price action before being more widely known.

1. 4680 cell information seems to be limited. Production of cells without waste needed, seems to be in Texas.
2. Semi production perhaps hindered by 4680, needs to drastically improve or actually have a realistic outlook.
3. Next model grumblings (China model and Mexico model) need to get real. I think they are aiming to do quite well with this car at a lower price/profit.
4. FSD and AI improvements need to translate to uptake. Retrospective analysis shows Musk to be unrealistic or a bull shitter. Its good, maybe great, but not the end all be all.

I find it currently tough to have hope for future earnings based upon the above in the near term future.
More...


You are putting too much thought into it...all your answers are in the chart. Learn TA. However the problem Tesla is going to face, that no Tesla fan boys ever acknowledge is that they aren't the only game in town anymore.
 
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You are probably late by about 4 years.

The supply is probably >> demand.

China has been very cost-competitive. Even Elon agreed to that.

EV has been changed from :

specialized/difficult-to-make/high-end/high-profit margin/niche
to
common / easily made/low-profit margin

product.
 
TSLA had, repeat had, their margins growth phase.

Top line might continue to grow "to the moon", although that is kinda iffy lately, but their margins will continue to compress. Nowadays they make widgets. That is all, even with new tech they might add to their units. Competition is doing similarly.

But in the end profit margins are all that matter, especially looking long term.
 
Like I said previously ... they have comp now, who are coming on strong.

(Semafor)


BYD showcases sales dominance
3/27/24


Stella Qiu/Reuters
The Chinese electric-vehicle giant BYD reported profits surged 81% to a record high, spotlighting the growing risk posed to Western automakers from Chinese competitors. BYD’s aggressive sales tactics, offering an array of deeply discounted but high-quality vehicles, has helped it become the world’s biggest EV maker, and upended the strategies of historically dominant car manufacturers: The Japanese automaker Nissan said recently it would partner with domestic rival Honda to make EVs, while the European giants Stellantis, Volkswagen, and Renault are considering teaming up to do the same. The threat from China’s EV firms is intense and immediate: A new report suggested they could take a quarter of the European Union EV market as early as this year.
 
Congrats on your life-changing profits :) I wish I had bought Tesla in 2019 (got distracted with other matters)

IMHO, leaving aside the technical (as in hardware/software, not chartings) aspects, Tesla's margins are going down the drain, as SunTrader mentioned.

BYD and other Chinese carmakers are bound to be hit (hard) with tariffs pretty soon (which may or may not help Tesla).

Electric cars are really cool and are probably the future, but now that the second-hand car market squeeze is over, they're going to go through a bitter phase regarding shrinking value (due to battery degradation). Many people (myself included) were reluctant the last few years to buy gas cars due to concerns abour resale value in a few years, now my anecdotal evidence shows the opposite.

If I had to pick a long, I'd go with Toyota, since they (wisely in hindsight) bet on hybrids, not electrics (and *might* also have an ace up the sleeve in the long term regarding batteries).

Best trading to everyone.
 
Picaso said:
Congrats on your life-changing profits :) I wish I had bought Tesla in 2019 (got distracted with other matters)

IMHO, leaving aside the technical (as in hardware/software, not chartings) aspects, Tesla's margins are going down the drain, as SunTrader mentioned.

BYD and other Chinese carmakers are bound to be hit (hard) with tariffs pretty soon (which may or may not help Tesla).

Electric cars are really cool and are probably the future, but now that the second-hand car market squeeze is over, they're going to go through a bitter phase regarding shrinking value (due to battery degradation). Many people (myself included) were reluctant the last few years to buy gas cars due to concerns abour resale value in a few years, now my anecdotal evidence shows the opposite.

If I had to pick a long, I'd go with Toyota, since they (wisely in hindsight) bet on hybrids, not electrics (and *might* also have an ace up the sleeve in the long term regarding batteries).

Best trading to everyone.
More...

Gains in tesla are pennies compared to gains you could have made in bitcoin...TSLA, NVDA combined....probably the whole stock market combined.
 
Let's look at Tesla's various businesses..

Automobiles: Elon Musk's 50% YoY projected growth was greatly exaggerated yet it's a highly successful and a growing business. Model Y was the world best selling vehicle in 2023 and 2024 was projected to be a flat year.
The auto industry is not used to price reductions but lower costs of EV materials makes it possible and higher margins can be adjusted to stimulate demand or squeeze competition.
I wasn't a fan of that strategy because I believe that much remains to be done to shut down the ICE industry and traditional auto makers need breathing room. The goal isn't to shut them down, it is for them to transform, however slow they are doing it.
Also, squeezing your customers' vehicle resale value is an unintended consequence for which incentives to buy a new Tesla haven't been thoroughly developed.

The not yet named and delayed Model 2: The $25k car is already uncompetitive as BYD is out with a $10k urban vehicle. I think Musk has no intention of making such a vehicle and will instead take the base model 3 down to $25k.

The Cybertruck: An Elon Musk tonka toy ego project with an expiration date. Sure, Tesla may sell 100k of these but they will never recoup its cost of manufacturing. The waiting list will shrink as the thing loses its "look at me" appeal.

The Tesla Semi: Great opportunity for Tesla to shine there. Europe is its ideal market as the transition is dictated by policy. There will be competition from the likes of MB, Scania and others but I expect Tesla has a real chance to take 30-40% of the Euro market while it will dominate the US /Canada markets where state legislations mimic Europe's. Elsewhere, e-trucks will grow organically at a slow pace.

Tesla Energy: This is where we can expect notable growth to please investors and I expect Tesla to shine. The demand is huge, their solution is solid. My only concern is the low barrier to entry from the Chinese competition.

4680 batteries: Is no news good news? I'm not sure. Huge money is allocated to next gen battery solutions and every lab in the world is on the cusp of the next great thing. Musk likes to say that prototyping is easy, production is hard and that's proven true to batteries. But Tesla has invested enormous resources on the 4680 which has been a disappointment so far. I hope they become everything they were expected to be before someone else hits the new battery jackpot and makes the 4680 instantly obsolete.

The lithium processing plant: Time will tell if spreading so wide across the vertical was a wise move.

Dojo: with Nvidia as such a formidable competitor I'm concerned that Dojo may never match their prowess. But maybe they don't need to, if cost per chip is competitive. It's another of those verticals that seemed genius when it was announced but the development challenges are greater than expected and competitors aren't sitting still.

AI: Tesla's up there with the best in the field. Applied specifically to FSD, it is revolutionizing the speed and quality of the solution. FSD 12.3 is getting rave reviews and updates are said to be coming twice a month. The challenge will be to monetize autonomous driving and, again, I believe that Europe will be its primary marketplace once governments recognize its capabilities. The US will grow organically and states will adjust their legislations as demand grows for it.
FSD has the greater ambition to lead to self driving taxis but I don't see it for another decade at the earliest.

Tesla bots: In conjunction with AI, these bots are ... I don't know. I can't see these in manufacturing applications or for consumers. Waiting for an aha! moment to enlighten me.
 
Once the shine is off the golden {growth} apple it is all about current and near term growth for Wall Street.

So IMO with gross margins (gross not even net) dropping quarter by quarter since peak in March '22 the near future doesn't look so "magnificent" and is reflected in price action.

03/22 29.11%
06/22 25.00%
09/22 25.09%
12/22 23.76%
03/23 19.34%
06/23 18.19%
09/23 17.89%
12/23 17.63%
03/24 (?)%
 
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