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  • Tim
    replied
    “Global sales of electric cars hit 6. 6 million in 2021, making up 8.6% of all new car sales, according to the International Energy Agency (IEA). That's more than double the market share from 2020, and up enormously from EVs' ”

    ”Tesla is a growth stock that's part everything --- manufacturing, energy, financial. ” Oh, a conglomerate. This is why business segment is required in financial statements. MDA focuses on this.
    Related to segments, where do the rank in vehicle sales?
    Where do the rank as a manufacturing company?
    Where do they rank as an energy company?
    Where do they rank as a financial company?

    A conglomerate strategy is really diversification.
    Vertical integration is efficiency. Which is it? Profit
    Margins by business segment and growth projections needed. Electric energy companies are historically regulated, low margin (utility stocks). Why is this different this time? New? I see no reason it will follow a path differently long term.

    What makes them different? They are way smaller volumes and spent a ton of money being first to market. If I recall correctly, they strategically decided against intellectual property.

    Oh, by the way, Tesla’s market share of the EV market dropped. All to Ford. (MachE).
    Big fish in a small pond.
    They will likely be a little fish in a big pond in 5 or 10 years. Actually, they still are in terms of total volume. Not one model cracked the top 10.
    Maybe, or maybe never.

    The hope is they will be the largest vehicle company? They could. Paying a high premium for a innovative story stock.
    Just an alternate view to consider.
    We have seen this movie before. Computers and microchips.

    From the volume scales, the approach is similar to the Wall Street approach. 1Q, 2Q this year/next year. The discussion of the “dealership” channel is so yesterday. The movie played before also. Dell and Gateway were the “innovators”. Customer direct sales vs buying from a brick and mortar store. No different. It is still manufactured and delivered. Circuit City and Sears no longer sell PC’s.

    Leave a comment:


  • Nysoz
    replied
    Comparing Tesla to other OEMs is a fallacy as they're different business models. In Q1, Tesla delivered 310k cars, operating income of $3.6B. Ford delivered 966k vehicles wholesale, operating income from making the cars $419M, $924M from Ford credit for a total of $1.34B.

    Tesla's operating income is around $11.6k per car, Ford's is $433 from the actual manufacturing per car, $1400 if you include the financing. Even if you take out the regulatory credits it's still over $10k per car made for Tesla.

    Ford https://s23.q4cdn.com/799033206/file...SE-Q1-2022.pdf

    Tesla https://tesla-cdn.thron.com/static/I...-Update.pdf%22

    Tesla should make around 12-15 eps this year from 1.4M cars as long as there's no more shanghai lockdowns and disruptions to their supply chain. With current stock price, that's a p/e ratio of 44-55.

    Where Tesla's valuation comes into play is future growth and assumptions. Tesla aims to grow 50% annually for the foreseeable future. As production and deliveries grow, sourcing parts/materials locally and not having to ship cars across continents with localized P/D, efficiency and profit goes up even more.

    2023 Tesla should deliver around 2.2M cars for around 20-25 eps or a forward p/e ratio of 26-33. As much as I love Costco, their P/E ratio now is 35.

    Where people get too excited is extrapolating this to 2025 and 2030 then discount back with various models and get crazy high valuations for the future and expected share price now. How much is the market willing to pay for this possible future growth and any optionality of their energy or AI possibilities is the billion/trillion dollar question.
    ---
    As for FSD, it's not perfect or ready by any means. It's been next year for the past many years as promised by Elon. Will he be right this time or not?

    https://teslanorth.com/2022/04/11/wa...keovers-video/

    There's a video of someone using FSD beta to go from LA to San Francisco. 400 miles, 6 hours of driving without disengagements except for him charging the car. It's definitely making progress. Not ready for all areas or situations by any means, but progress is being made.
    ---
    Also talking about competitors is fine. There's more than enough EV sales to go around as they eat into ICE sales. The reality is that every EV made is being sold with long wait lines. Ford stopped taking reservations for their Mach E and Lightning because the waits are too long. For the nearish future, competition is more about ability to scale production rather than the customer choosing a Ford or Mercedes over the Tesla.

    Leave a comment:


  • Panscan
    replied
    Originally posted by StarTrekDoc View Post


    Registrations* in the US - Q1 2022:
    • Tesla: 113,882 (up 59%) and 21.8% share
    • BMW: 80,482 (down 3%)
    • Lexus: 66,907 (down 17%)
    • Mercedes-Benz: 60,632 (down 21%)
    • Audi: 37,566 (down 37%)
    • Cadillac: 29,840 (down %)
    • Acura: 29,260 (down 26%)
    • Volvo: 23,513 (down 20%)
    • Lincoln: 19,977 (down 29%)
    • Land Rover: 15,581 (down 39%)
    • Porsche: 13,262 (down 24%)
    • Genesis: 12,549 (up 53%)
    • Infiniti: 11,740 (down 43%)
    • Alfa Romeo: 3,542 (down 32%)
    • Jaguar: 2,610 (down 36%)
    Specifically:
    Mercedes-Benz sold 2,091 all-electric EQS during the period, which is slightly more than the Porsche Taycan (1,925).

    Let’s check back in 3 months and see where the stock price is at. My point is there is realistic competitor in EV space now at all of their price points, which realistically didn’t exist a couple years ago.

    Leave a comment:


  • StarTrekDoc
    replied
    Originally posted by fatlittlepig View Post
    I wonder how many people paid for full self driving and if they will be okay with the fact that it’s never coming.
    Surprisingly a fair number still patiently awaiting -- myself among them. Brother got the beta and liking it pretty good -- still a few years away from prime time for sure.


    Dug up some Q1 sales figures: All in Top 4 and increase capture of segment market share. Tesla keeps eating each segment's lunch, irrespective of EV/ICE. There certainly is more competition on the horizon with VW and Kia, but they have a lot of distance to cover.

    US midsized car sales 2022-Q1
    Midsized segment 2022-Q1 2021-Q1 Change 2022 Share 2021 Share
    1 Toyota Camry 61.505 78.151 -21% 20,6% 22,4%
    2 Honda Accord 42.039 46.591 -10% 14,1% 13,4%
    3 Tesla Model 3 (est.) 40.200 23.110 74% 13,4% 6,6%

    Large car segment 2022-Q1 2021-Q1 Change 2022 Share 2021 Share
    1 Dodge Charger 15.439 19.740 -22% 28,3% 28,8%
    2 Tesla Model S (est.) 11.500 4.155 177% 21,0% 6,1%
    3 BMW 5-series 5.645 6.433 -12% 10,3% 9,4%
    4 Mercedes-Benz E-class 4.731 8.199 -42% 8,7% 12,0%
    5 Cadillac CT5 3.343 4.374 -24% 6,1% 6,4%
    6 Nissan Maxima 2.869 4.807 -40% 5,2% 7,0%
    7 Chrysler 300 2.745 5.394 -49% 5,0% 7,9%
    8 Toyota Avalon 2.155 5.136 -58% 3,9% 7,5%
    9 Porsche Taycan 1.925 2.008 -4% 386,5% 338,0%
    Compact SUV segment 2022-Q1 2021-Q1 Change 2022 Share 2021 Share
    1 Toyota RAV4 101.192 114.255 -11% 12,6% 12,4%
    2 Honda CR-V 58.579 93.766 -38% 7,3% 10,2%
    3 Chevrolet Equinox 56.036 63.218 -11% 7,0% 6,9%
    4 Tesla Model Y (est.) 55.000 33.629 64% 6,9% 3,7%

    Leave a comment:


  • fatlittlepig
    replied
    I wonder how many people paid for full self driving and if they will be okay with the fact that it’s never coming.

    Leave a comment:


  • StarTrekDoc
    replied
    Originally posted by Panscan View Post

    They will have little to no future growth relative to rest of EV space. There are only so many EV to go around and sooner or later fraud self driving is going to get the reckoning it deserves. Competing with chevy volts is a diff situation than taycan and eqs.

    It has no chance.

    Registrations* in the US - Q1 2022:
    • Tesla: 113,882 (up 59%) and 21.8% share
    • BMW: 80,482 (down 3%)
    • Lexus: 66,907 (down 17%)
    • Mercedes-Benz: 60,632 (down 21%)
    • Audi: 37,566 (down 37%)
    • Cadillac: 29,840 (down %)
    • Acura: 29,260 (down 26%)
    • Volvo: 23,513 (down 20%)
    • Lincoln: 19,977 (down 29%)
    • Land Rover: 15,581 (down 39%)
    • Porsche: 13,262 (down 24%)
    • Genesis: 12,549 (up 53%)
    • Infiniti: 11,740 (down 43%)
    • Alfa Romeo: 3,542 (down 32%)
    • Jaguar: 2,610 (down 36%)
    Specifically:
    Mercedes-Benz sold 2,091 all-electric EQS during the period, which is slightly more than the Porsche Taycan (1,925).


    Leave a comment:


  • Panscan
    replied
    Originally posted by StarTrekDoc View Post
    Tesla is a growth stock that's part everything --- manufacturing, energy, financial. Yes, PE high and betting on the future growth. It's max'd out on production with a waiting list despite two fully operational plants. third is ramping up and #4+5 at about to start. It's the ONLY player in the EV segment that's producing at volume AND profitable with each unit produced without incentives.
    #1 Model 3 Tesla, Inc. 500,713 814,000
    #2 Hong Guang MINI EV SAIC-GM-Wuling Motors 424,138 500,000
    #3 Model Y Tesla, Inc. 410,517 504,778
    #4 ID.4 Volkswagen Group 121,631 125,184
    VW is producing at significantly lower numbers and Tesla only going to widen this gap with 2.5 factories ramping up in 2022-23.

    Also Tesla not saddled with legacy dealerships. This is a huge drag and tesla has the modern internet era sales model setup nicely.

    So, I don't think TSLA is going to do poorly compared to the rest of the auto industry. Do I own it? Still haven't. Passed at the ground level and didn't get on the way up. Oh well.
    They will have little to no future growth relative to rest of EV space. There are only so many EV to go around and sooner or later fraud self driving is going to get the reckoning it deserves. Competing with chevy volts is a diff situation than taycan and eqs.

    It has no chance.

    Leave a comment:


  • Brains428
    replied
    Investing in international is essentially a bet on the US dollar. PE doesn't really matter. There are landmines in investing in international like different regulations, taxes, and political risk that weigh down ex-US.

    Ben Hunt had a good piece on MacGuffins (here is the wikipedia article on it https://en.wikipedia.org/wiki/MacGuffin). I sometimes think that the FSD is the MacGuffin. Or the robotaxi. Or the cybertruck. Or the electrified semi truck. Or or or... missed promises galore.

    But- people do love the product and their margins are good per unit. And it's one of the most traded names, so the volatility and liquidity make it fun for people (less so, now). So, if you want to start a position in a high flying name during a compressing cycle, fine. As with anything- know thyself.

    Leave a comment:


  • StarTrekDoc
    replied
    Tesla is a growth stock that's part everything --- manufacturing, energy, financial. Yes, PE high and betting on the future growth. It's max'd out on production with a waiting list despite two fully operational plants. third is ramping up and #4+5 at about to start. It's the ONLY player in the EV segment that's producing at volume AND profitable with each unit produced without incentives.
    #1 Model 3 Tesla, Inc. 500,713 814,000
    #2 Hong Guang MINI EV SAIC-GM-Wuling Motors 424,138 500,000
    #3 Model Y Tesla, Inc. 410,517 504,778
    #4 ID.4 Volkswagen Group 121,631 125,184
    VW is producing at significantly lower numbers and Tesla only going to widen this gap with 2.5 factories ramping up in 2022-23.

    Also Tesla not saddled with legacy dealerships. This is a huge drag and tesla has the modern internet era sales model setup nicely.

    So, I don't think TSLA is going to do poorly compared to the rest of the auto industry. Do I own it? Still haven't. Passed at the ground level and didn't get on the way up. Oh well.

    Leave a comment:


  • Turf Doc
    replied
    Originally posted by The White Coat Investor View Post
    The fact that this is the only thread on the forum discussing an individual stock tells you everything you need to know about the stock being discussed and whether you should invest in it. At the end of the day, you buy stocks for the earnings. Ford trades at a PE of 10. GM trades at a PE of 5. Toyota trades at a PE of 9. Tesla trades (after a 50% drop in value) at a PE of 91.

    There's an awful lot of growth priced in that may or may not happen. Are you really willing to pay 10 times as much for a dollar of Tesla earnings as a dollar of Toyota earnings? They both spend the same.
    People also compare the P/E of the US market to international and favor international but that hasn't seemed to work out recently. I believe CM is 100% international because he feels P/Es are too high. I agree I wouldn't buy Tesla in part cause of that but it seems like bogleheads are supposed to basically ignore P/E right?

    Leave a comment:


  • The White Coat Investor
    replied
    The fact that this is the only thread on the forum discussing an individual stock tells you everything you need to know about the stock being discussed and whether you should invest in it. At the end of the day, you buy stocks for the earnings. Ford trades at a PE of 10. GM trades at a PE of 5. Toyota trades at a PE of 9. Tesla trades (after a 50% drop in value) at a PE of 91.

    There's an awful lot of growth priced in that may or may not happen. Are you really willing to pay 10 times as much for a dollar of Tesla earnings as a dollar of Toyota earnings? They both spend the same.

    Leave a comment:


  • GIMD
    replied
    Originally posted by Random1 View Post
    How much revenue per sale of each car and how many cars do they have to sell per year to justify their valuation ?
    I think Tesla is going to be the Iphone of EVs so I'm going to use Apple valuation as a point of reference. Using the recent March earnings from Google Finance, quick calculation:

    Apple: 97B revenue (up 8% Y/Y), 25% profit margin (down 2% Y/Y), 57% mobile phone market share in US, current market cap/revenue = 23.4
    Tesla: 18.7 revenue (up 80% Y/Y), 17% profit margin (up 319% Y/Y), 2.5 % automobile market share in US, current market cap/revenue = 36.4

    Given Tesla's rapidly expanding revenues, profit margin from economy of scale, and tons of room for growth in the near future, I think the current valuation of 1.5x more than Apple per $ of revenue is more than reasonable.

    Leave a comment:


  • Random1
    replied
    How much revenue per sale of each car and how many cars do they have to sell per year to justify their valuation ?

    Leave a comment:


  • Tim
    replied
    Concentration and leverage work miracles going up. The math is the same on the way down.
    Diversification works the opposite.
    Story stocks don’t always have happy endings.

    Leave a comment:


  • Nysoz
    replied
    Holding TSLA has been frustrating for sure, but selling CC on it makes it hurt slightly less. I heard something the other day that resonated with me. Just basically forget where stock and index valuations have been for the past 2 years and reset your thinking about what companies are worth.

    TSLA and other companies/indexes are undergoing a revaluation and time will tell where that ends. For TSLA valuation it depends on how well they execute on their growth/margins and what the market will pay for that. Tesla is still growing and making a lot of money for their auto manufacturing. Any hint of a recession that causes them to sell fewer cars or lower margins will hurt that narrative for the short term. The other big parts of the company such as energy and AI are just essentially lotto tickets for 5-10 years in the future and shouldn't be relied on anytime soon.

    Definitely a high risk high reward company to hold and not for the faint of heart, especially if your time horizon isn't years.

    Leave a comment:

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