FWIW I believe Tesla is doing some really great things. That is not my argument.

I am asking where the growth comes from in the next waves?

Which of these bullets do Tesla fans disagree with?

- The bigger you get, the higher your market share, the harder it becomes to maintain exponential or huge growth and at 20MM vehicles Tesla would be massive, therefore also maintaining a Industry leading P/E would be extremely tough

- If your goal is to be huge (market volume leader) then maintaining the top profit margins in the Industry becomes a massive challenge. If the competitors find they cannot compete with Tesla on 'Brand' then they will try to beat them with price by just taking way less margin to gain market share. Most buyers are not Brand loyalists and more are price shoppers. So how does Tesla get that Price Shopper to buy a Tesla instead of a less expensive Toyota EV? If Tesla is willing to compete on price then how do they also keep the best Margins?

- As other brands that have loyal customers (the 20 year Toyota buyer) start offering EV's what will be Tesla value prop that will break that loyalty and make them instead choose a Tesla? We know throughout history that no matter how much better built the Honda was you still had loyal Chrysler buyers sticking to that brand. Brand loyalty is a thing. So this massive Tesla share will require breaking that loyalty. What do you think Tesla can offer or do to break it amongst such huge numbers as would be needed to get to the Market Caps Tesla fans are suggesting?


In fairness to Tesla I could see them being the Porsche or better yet Mercedes or BMW of yesteryear in the Industry. Solid sales numbers and super high margins for a premium product and brand in the market. But also not the mass movers of vehicles that GM, Chrysler, FORD, Toyota or Honda was who sacrificed margins for volume sales to the masses.

Tesla owners seem to be arguing Tesla can have it both ways. Be the volume leader but with the margins of the Mass sellers and that seems to be a disconnect to me???

Yeah, we will not see 50-80%/y growth forever. But maybe 50% for the next decade and that will be plenty to justify today’s price. We will see if other products and service can keep this up another decade, I am doubtful, think it will be Apple level of growth after 2030. But Tesla are very innovative so we will see.

Is this true for Apple? Imo with complex products you get a lot of value at scale for integrating everything into a product.

People are willing to pay premium to get access to Tesla’s scale of supercharger network, FSD dataset and lot’s of other innovations like they are willing to pay premium for iPhone.

The last 5 years people said the same, still Tesla has been growing rapidly. And people said the same about Blackberry and Nokia. My model of the world has people willing to change brands to disruptors.

what? who?

can you pinpoint me to those numbers in one of their recent quarterly reports please, so i can update my numbers?

Number of superchargers are in the report. FSD check for example ai day 1.25.00 into https://youtu.be/j0z4FweCy4M

Add the the list, HW3, octovalve, gigacasting etc. Things that Tesla can do at scale that competition cannot do.

Also, I am out of this thread for now. Might check back to see the cracks bears are finding as Tesla keeps growing deliveries and operating margins.

88% of EV owners charge at home often or always, 54% of Tesla owners own a permanent Level 2 charger & the company has the ambition to open the supercharger market to everybody including recent pilot launch... But people are willing to pay a premium for the car to get access to this network?

no one is buying any of that stuff from them. and i don't see why anyone would.

the "gigacasting" machine is literally made by a company in italy and anyone can order one.

Heltok, I appreciate you debating with us even after all these years. I do believe that the debate has been respectable this go around with the most serious insult offenders being absent, so hopefully thats not the reason you are taking your ball.

You make some excellent points, and certainly know the ecosystem very well. I just think you also make some excellent points for the bears, that a lot of things that bulls see as exclusive Tesla competitive advantages are actually not Tesla's at all. There is definitely a disconnect between what Tesla actually does and what anyone thinks they do because it seems that no one can actually get it right.

Ok lets break this down for practicality then.

So 50% YoY growth for the next 10 years sees Tesla selling 29MM cars a year.

looking at the chart above that means the volume of the Top 3 plus #6 all consolidate to Tesla.

You will counter correctly that the market will grow and point as CHina as the main growth and Tesla is doing well there. BUt the question is not if Tesla can hit its absolute growth numbers but rather if they can continue to dominate EV sales in the percentages they have enjoyed currently and historically when we are only at the beginnings of all the Chinese EV makers and US makers flooding the zone with EV options.

If all the EV manufacturers (and not just Tesla) are gobbling the share as the market converts to EV the question is 'IS Tesla gobbling up so much more (growth) that they deserve a forward growth projection other manufacturers just can't compete with?

For me it is near impossible to see Tesla be the sole winner in that 'growth' or such a big winner all the others are just not really comparable. Again, I struggle to see what Tesla would offer my Mom (loyal Toyota buyer for 30 years) if Toyota also has a fleet of EV's and at better price points as they are willing to compete on margin (volume)? Especially if Tesla has to keep the high margins to ensure superior profits which their P/E currently considers.

I would love for you to try and answer that question. Once other brands have a fleet of EV's in every range at low margin price points what makes the average buyer switch to Tesla? What is the Tesla hook that makes them en masse abandon prior habits and switch?

OK so this is the 'Convergence' play again right?

The bet that not only will Tesla be the worlds most dominant car manufacturers by far but also they will be very dominant in multiple business areas, right?

That Tesla gets up to bat and does not just do the amazing feat of hitting one Grand Slam homerun (which dominating Auto's is) but you are betting Tesla will hit multiple Grand Slams in the same game.

I am not saying it cannot happen. I am just saying that is a big, long odds bet. And thus why it pays well.

If you were willing to bet at the start of any baseball game that in this game the winning team will get at least 3 Grand Slams you would get people who would take the other side of that bet and give you massive odds. Meaning if you win, your win would be immense. Just like Tesla's current P/E. If they do deliver the multiple grand slams they have earned that huge gamble people are now betting on.

And it is fine to make that type of bet as long as you are eyes wide open. You are taking a grand bet that has very little chance of being realized but if it does they deserve the pay out.

As long as the shareholders realize that is what they are betting and putting all their money out on, fair enough. My issue is only with those who seem to think this P/E would not require multiple Grand Slams.

Apple and Samsung hold pretty near a duopoly on the market and near 80%.

So if that is the basis of your belief than sure. If it comes to pass that almost all the other Auto manufacturers combined only have 20% and Tesla is plus 40% of all auto's sold with only one main competitor (A Chinese manufacturer??) then sure, I agree, Tesla would have BOTH the volume and also be able to maintain margins.

Is that what you think will happen? As I am sure not betting on that.

What i see is VW, Toyota, Honda, Hyundai, Kia, GM, Ford, Fiat Chrysler and multiple Chinese Manufacturers will ALL flood the zone with tons of EV options for consumers.

What I see is like Apple, Tesla will retain a fiercely loyal buyer group who wil buy Tesla no matter what which will allow them to keep high margins and make great profit when selling to that group.

But what I also see is that strategy struggling mightily to gain market share with everyone else who is not already a Tesla loyalist and might be loyal to those other brands.

My mom is not going to care that Tesla says we have the best technology and updates and a bunch of other things Tesla fanatics enjoy and buy them for. She will only care about price and that the car gets her from A to B each day without needing to be charged at inconvenient times.

IF Toyota achieves that and offers her a better price than Tesla she is not buying a Tesla. I think she represents the majority of the buying market.

So once again I ask how does Tesla win that person while trying to enjoy industry leading profit margins across their Company?



See above.

That is true for a small percent of the market. For most people a car is simply a way to get back and forth to work. That is all they see it as. they will not pay a big premium to get those things.

Next time you are out I want you to really pay attention to all the cars you pass on the road and see what percent you think are people paying for perks as opposed to driving basic commuters or used second and third hand junk cars to just get them from Point A to Point B.

If you really believe all those 'basic commuters' will see the light and dump their Junkers and daily commuters and all Pay Up just like iPhone buyers always pay up for the next shiny update then I think you are making a foolish bet.

You will get a smallish hardcore percent of the market that do that but the bulk of auto sales will not be that.

And do you think only Tesla will innovate in those areas? Porsche, Mercedes, BMW, Toyota, Honda, VW, Chinese Manufacturers won't also share in those innovation wins and pull a percent of those buyers too from Tesla?

Sure people who bet the EV market would not sustain and would collapse or top out were 100% wrong. Tesla has won that bet as have its shareholders.

And that meant Tesla got near 100% of the buyers who wanted an EV, for a period uncontested. So as the EV market grew Tesla was the main place for that share to go.

I don't disagree.

That is changing though. Look at the article I linked above. Tesla is ALREADY losing market share to the new entrants and those new entrants are only at the very beginnings of putting their first few cars into the market.

Those new entrants plan to flood the market with hundreds of more brands and choices at all price points and luxury or strip down versions.

You have to recognize that it is they (the combined OTHER Auto manufacturers) who are gong to enjoy the story of EV growth more than Tesla over the coming years right?

If VW, Toyota, Honda, GM, Chinese Cos' are all putting hundreds of models out and Tesla is on it 10th or 15th? model it will be near impossible for Tesla to dominant the market share grab as so many buyers but from the company they have dealt with for the last few decades.

I think you have a troublesome misunderstanding of the past.

Blackberry held a big niche lead but it was niche. I don't want to go back but i think they topped at about 20% of phones and due to their business Applications (security) they had a very an enormously loyal base who WOULD pay a premium.

They refused to go after the masses, and dilute their margins and products by making a broader consumer play and just assumed as other players came into the market they would still maintain and grow their share.

That is exactly where Tesla is now. They have a very loyal base willing to pay more for certain features who will remain loyal.

But what about the masses coming in who do not care that much about Blackberry better Technology (security) and can be attracted to a more mass appeal vehicle (Honda or VW at a lower price)?

Blackberry got killed specifically because they would not bend their model to chase, what at the time was the lower margin, mass market appeal.

You guys are arguing Tesla will chase it (be a volume leader) while somehow enjoying profit margins that no other manufacturer will compete with thus why Tesla will enjoy P/E's that the others cannot enjoy.

Who tf reads all of qp's posts, and if so who tf reads the whole thing. Such a deranged loner

Musk put out a Twitter poll asking if he should sell 10% and promises to abide by the results

I don't consider myself a Tesla bear per se, but I guess if you don't see Tesla as a global multi sector conqueror many would see you that way.

I think many of the Tesla bulls think of Tesla like Apple in a competition against Samsung (at a few others) for global supremacy. That just like Apple had many generations of phones that were basically indistinguishable from the top offerings of the competitors, Apple could still sell at a premium and enjoy massive margins while enjoying near 50% market share.

If Tesla can enact that Apple win in the Auto sector then they truly will deserve their P/E and even more forward value as that means they wiped out most of the auto comp, save maybe one competitor.

I just cannot see that happening. No one was truly loyal to a nokia or other phone prior to Apply. People today brag how their Grandpa drove a Ford, their dad only drove Ford and they will only ever drive Ford and they don't care that Honda tech and quality and resale has been better for decades.

Those are the buyers that Tesla has to win over in the next phase of growth to hit the astronomical numbers.

I think the path Tesla is on is one that more mirror Porsche in the current landscape. A loyal and dedicated buyer base that is a good percentage but no where near Industry leading as they just cannot compete in the no frills, I won't pay for extra's, mass commuter market. Instead they focus on maximizing margins to the upper most point their loyal base will pay.

That could see Tesla in the future still be worth as much or slightly more than say a Fiat/Chrysler who is dominating the mass market sales but at much lower price and margin point.

But I cannot see Tesla having their cake and eating it too.

I cannot see a path that Tesla dominates the Mass Commuter Auto market (the bulk of sales) where people just DGAF about bells and whistles and just want to get from A to B at the lowest cost point when other manufacturers will flood this zone, and Tesla is stuck requiring big Profit margins per vehicle or their P/E ratio will contract significantly.

I think Tesla will have to pick a lane in the coming EV wars and they will choose to not compete for the mass commuter vehicles. They will maintain one offering in that lower end, like the Model3, which will be good an option for the wealthier Commuter buyer, but they will have nothing competing with the cheapest, strip down, EV's that Fiat & Kia & Hyundai are going to flood their lots with as loss leaders, hoping one day you trade up with them to one of their better, more profitable models.

And without those daily commuter buyers I see no way for Tesla to dominate market share across all Auto.

And that is fine. But then Tesla shareholders have to understand that current values on their stock build in them being super dominant in both Market share and margin. So something has got to give.

LOL.

I hope the Mods see this.

In the Coronavirus thread with TS's immense long winded, false data posts nutella applauded that as what the thread was about while complaining that I never presented real data.

In this thread where people are literally saying it is now doing will because TS is not hear spamming nonsense and i am instead here providing the bulk of the data and arguments for Tesla longs to answer, he is complaining about the opposite. IT is too much.

So I hope the mods see what guys like nutella are all about. Their only issue is 'sides'. Nothing more and nothing less.

(and FWIW I don't think the vast, vast majority of Tesla longs ever think about their investment in long form. What each assumption REALLY means and would require to become reality and i don't think you can challenge them without spelling it out in great detail and asking them to point to what they don't agree with)

I just scrolled past what was likely a wall of genius and didn't notice any musk tweets. Forgive me if that was covered

This is likely to move the stock. You have to wonder if this is PR spin on his real motivations for selling at $1200

Also as some big auto manufacturers are very important part of their countries economies they are likely to receive subsidies in one form or another from the government from the central bank buying corporate bonds, governments coming up with programs/donations/tax breaks. If it's really bad for German (for example) auto makers we will see tariffs as well. It won't be a level playing field anywhere outside of US with so much at stake.

it is just smart.

Tesla longs may misunderstand and hate this but Musk, like all Founders of these giant corp's has tremendous concentration risk in their holdings.

"Risk" does not mean it is a bad holding but just points to the concentration in one Asset.

Tesla is far more risky than Amazon or FB, for instance whose models are proven Profit driving machines and that won't change any time soon

Tesla profitability, currently is tied to tax credits or gov't help. And the LONG bet is tied to so many Convergence Grand Slam homeruns that if other companies start getting those wins (Google, etc) confidence in Tesla and that future profit could diminish greatly.

So Elon should absolutely be taking 10% now, and another X% in X months/years all the way along as long as he can do so in a way that does not scare his Long investors that he is bailing out and they should too.

Yeah I mentioned this but ofc was lstt between walls of text

https://www.reuters.com/business/aut...ay-2021-11-07/

So a lot of well worded long posts basically saying competition is coming. Which is what I have read in this thread for the last 5 years. Still Tesla are growing and selling a lot.

When I bought my Model X I might have been a bit biased from my investment, but after owning it I am very glad I did not buy the competition. Many times have I seen people struggle with non Tesla chargers next to my supercharging Tesla which was just plug and play. And Autopilot is the best feature, once you are used to that getting it disable right before St Gotthard Tunnel was pure torture.

Tesla are selling their cars today(not last quarter before the price increases) at >30% margins, probably closer to 40%(if we count deferred revenue) while competition is selling at a loss. Once Tesla has ramped enough to meet their backlog they will lower prices and eat the competition.

Imo you need to have driven a Tesla and driven the competition at least for a day to fully understand how superior the product is.

Imo bears fail to see that Tesla have a superior product and that is why they outsell competition. They believe Teslas have low build quality, Tesla has no moats and customers are basically mostly zealots. Bull’s disagree. They believe that 2012 Model S was clearly superior and that compeition has not even caught up with it today, meanwhile Tesla has been improving a lot since then.

Clearly using words here is not changing the mind of anyone. Imo try the product, make predictions and update your mental model with backprop. That’s the only way to get closer to the truth.

Everyone has the Musk selling news wrong as usual. His fanboys (all stock holders) will endlessly support him by rushing in to buy Monday - they don't see him, his brother Kimbal or the two BOD selling nearly $1Billion last week as selling out. They see this as him earning his reward. Not like Musk would sell it all in one day...it would be dribs and drabs of the 2.3% he is selling (10% of his 23% total stake) over many months here and there. Stock will be up minimum 15% on Monday

On a sidenote I have cut out my Tesla friend....he was a former coworker so not that close or a loss but is a full on Tesla nut. Every single conversation turns to 1) Tesla 2) Solar Panels 3) The death of ICE in five years or less (he thinks GM and Ford will be bankrupt by 2030). I had enough....but it was interesting to see the madness overtake these people. He's made a fortune off stock and options not knowing a thing about either except for "buy more on dips". Literally the only financial asset he owns besides Tesla and a house.

I don't think there are many who doubt Tesla has a superior product. It's about being able to make enough money long term to justify the valuation. Most argument are on the form of "They will need to 3x bigger than all other auto makers combined to make enough" or "they will need to outcompete others in low end market" not "Look at the new Porsche - it's better than Tesla!" (it isn't).

Anyway, I consider myself very lucky I didn't have access to options last two years as I would have burnt a lot of money buying Tesla puts. I think shorting is just a stupid bet so I didn't do that either. I still think I mostly underestimated the hype/bandwagon factor not the company itself. I guess we will all know in 10 years or so.

I accept Tesla has a superior product.

I accept that Tesla may well retain that and be 'The Brand' for EV moving forward.

In the 60's nad 70's Honda and Toyota were econo box garbage compared to GM and Ford and even Chrysler and yet they sold tons of cheap entry level cars to people who just needed a basic commuter to get to work. Thru the 80's and onward they became far superior in quality and resale and yet many stuck to their Chrysler or Ford or GM.

Brand loyalty is a thing. Many will not even try a new brand. Price sensitivity is a thing. Many will only buy based on the cheapest price and not the better quality or features.

Those two segments actually make a huge part of the market. I can point to all sorts of people buying junkers today when a nicer Tesla, Honda or other is an option. WHY?????

Explain to me how Tesla gets that huge mass of buyers to 'Buy Up' while maintaining such huge profit margins? Currently demand for EV's is greater than supply and we know that allows for margins to soar. Explain how that is maintained when supply greatly outstrips demand (each Brand floods their lots) and those manufacturers are willing to sell for almost no margin, a strategy they often use now to just keep flipping inventory?

From another thread here is my quick take on Elon's share sale.


------

FWIW Musk was trapped between a coming rock and a hard place that was going to make it impossible not to pay significant Capital Gains taxes of ~$15B if he wanted to accept the massive new number of shares by purchasing his stock options.

I ran the quick numbers on this quasi arbitrage he is doing and it looks like this.

- If Musk follows thru he will be selling around 17MM shares at ~$1220/sh for Gross proceeds of about $20B. He has an option to execute 22.86 million stock options at $6.24 each, for Gross proceeds of $142MM, that expires next year. So he will more than replace the lost shares will banking a mass amount of cash. It will only take using the cash from 110,000 shares sold at $1220 to buy the entire 22MM new shares meaning he has 16.9MM shares as pure profit from this arbitrage like move to pay off the taxes. So his Net clear gain on this transaction is to increase his Tesla holdings by almost 22MM shares and his Net Wealth by $26B.

I bet this factored in significantly on his move from Cali to Texas as the timing could not be better for him to avoid State tax.

Explain what how Tesla grew 2008-2021?

Is the bear thesis Tesla and will soon run out of ”willing to change brand people” and then never see any more growth? Have you seen how these brand loyal people react when the sit in a Tesla? They call my Model X a spaceship when I drive them. When I tell them about the resale value and they realize that my X will have a lower TCO than their BMW/Volvo/VW they start clicking tesla.com and spec out their cars. I have seen it many times.

Why do you guys think delivery times are so long when Giga Shanghai are making >50k/month? Imo it’s because the more people own a Tesla, the more people get to ride in a Tesla, the more people decide to buy a Tesla. It’s that simple. The more car Tesla sell the more cars they will sell.

Sure some people are stubborn, my sister wants to get a porsche because everyone else in her street has a tesla. But everyone else in her street have ditched their porsches, volvos, etc. Most people are not loyal to brands, they just want to get the best car for the least amount of money.

These are not tough questions.

Tesla took a risk that a certain percent of people would want EV's if they were available and they built them. They got pretty near 100% of the market share of buyers.

History has an example. The Duryea Motor Wagon Company was American first automobile manufacturing company. Their big first selling car was the Oldsmobile. They enjoyed almost all of the market share of people who wanted a car and not just their horse and buggy. Then Ford and GM and others came along and COMPETED for the business and NATURALLY they also started to get market share.

That is how it works.

And again I have not said Tesla won't get more market share so take that strawman elsewhere. I have said the OTHER manufacturers will flood the zone and grab market share too.

When you speak about the 'awe' and 'wonder' of people sitting in a Tesla that is one of the first things that makes me think you are painfully naïve.

Go outside and look at most of the people buying basic eco box or used junker cars and what percent of them are on the road.

Do you think they are not buying Mercedes for the better experience and feel now just because they don't want to? NO. In most cases they are super price sensitive and just want a basic commuter and don't care and can't afford bells and whistles.

Then you have buyers like my mom who has bought Toyota's for 30 years and as soon as she is ready to trade her last one in, the mechanics at the Toyota shop she takes her car too for service always buy her low miler car and help her get in a new Toyota. She loves the brand and is loyal. If she is to buy an EV and Toyota has many on the lot at her price point she is not going to test drive a Tesla. Again so many buyers are like her. Brand loyal.

If Tesla has 15 models on the road in the next 10 years, the other Manufacturers combined will have 150 and at all price points.

Tesla simply cannot be the Volume seller and also the top profit Margin seller and will have to pick a lane. That lane with likely be the Premium segment. What Porsche or maybe Mercedes or BMW was to ICE vehicles. More exclusive buyers who are loyal and pay more. The other manufacturers will likely own the eco box and mid market and try to use those relationships to eventually upsell them to the luxury EV they will have on their lots that compare with Tesla.