EV Discussion thread

JKenH

Grumpy_chap said:

1961Nick said:

Another thing to remember is that at the beginning of 2022 Tesla were sold a long way forward & particularly the model Y. Orders placed in 2021 were therefore delivered at 2021 prices. It's only in the last few months of 2022 that the price rises have been realised.

That's a very good observation.  I wonder how many cars were actually ordered and paid at the highest price?

Possibly very few. Perhaps that’s why demand fell and the order backlog disappeared. 

Fans might say that was Tesla managing demand to meet production but they didn’t do it very well. A few months ago there was a few months backlog but demand fell in China and new factories opened in Germany and US. That backlog disappeared in almost as many months so for months Tesla must have known that demand was seriously failing to keep up with increased production yet they took no action to acknowledge or address the situation - until stockpiles of unsold cars built up and the world realised the emperor was wearing no clothes. 

It was almost as if they were just trying to get to the year end before admitting the bubble had burst. In business that is frowned upon and no doubt questions will be asked. 

1961Nick

JKenH said:

Grumpy_chap said:

1961Nick said:

Another thing to remember is that at the beginning of 2022 Tesla were sold a long way forward & particularly the model Y. Orders placed in 2021 were therefore delivered at 2021 prices. It's only in the last few months of 2022 that the price rises have been realised.

That's a very good observation.  I wonder how many cars were actually ordered and paid at the highest price?

Possibly very few. Perhaps that’s why demand fell and the order backlog disappeared. 

Fans might say that was Tesla managing demand to meet production but they didn’t do it very well. A few months ago there was a few months backlog but demand fell in China and new factories opened in Germany and US. That backlog disappeared in almost as many months so for months Tesla must have known that demand was seriously failing to keep up with increased production yet they took no action to acknowledge or address the situation - until stockpiles of unsold cars built up and the world realised the emperor was wearing no clothes. 

It was almost as if they were just trying to get to the year end before admitting the bubble had burst. In business that is frowned upon and no doubt questions will be asked. 

It was the perfect storm - lockdowns supressing China demand, IRA uncertainty in the US, the Twitter fiasco, higher selling prices etc etc. Despite that I think Tesla are in a good position. They can cut prices & still maintain a healthy margin, they don't have any debt, they can increase production by 50% with the existing factories & the Cybertruck is launching this year. The solar & storage business is also reputed to be making a contribution now that battery supply issues have eased. For shareholders, the announcement of a B segment vehicle would probably turn round most of 2022's decline in share price. The rumours about another giga factory in Shanghai or Mexico are interesting because that could be for a model 1 or 2 plant? I wouldn't want to be shorting the stock while Must has the Model 1/2 trump card up his sleeve - could be the biggest margin call in history!

Krakkkers

Worth a watch.
https://www.youtube.com/watch?v=rCywUzKJs30&t=1s

1961Nick

Krakkkers said:

Worth a watch.
https://www.youtube.com/watch?v=rCywUzKJs30&t=1s

I thought it was a very fair assessment of where we're at with the transition to EVs.  

JKenH

1961Nick said:

JKenH said:

Grumpy_chap said:

1961Nick said:

Another thing to remember is that at the beginning of 2022 Tesla were sold a long way forward & particularly the model Y. Orders placed in 2021 were therefore delivered at 2021 prices. It's only in the last few months of 2022 that the price rises have been realised.

That's a very good observation.  I wonder how many cars were actually ordered and paid at the highest price?

Possibly very few. Perhaps that’s why demand fell and the order backlog disappeared. 

Fans might say that was Tesla managing demand to meet production but they didn’t do it very well. A few months ago there was a few months backlog but demand fell in China and new factories opened in Germany and US. That backlog disappeared in almost as many months so for months Tesla must have known that demand was seriously failing to keep up with increased production yet they took no action to acknowledge or address the situation - until stockpiles of unsold cars built up and the world realised the emperor was wearing no clothes. 

It was almost as if they were just trying to get to the year end before admitting the bubble had burst. In business that is frowned upon and no doubt questions will be asked. 

It was the perfect storm - lockdowns supressing China demand, IRA uncertainty in the US, the Twitter fiasco, higher selling prices etc etc. Despite that I think Tesla are in a good position. They can cut prices & still maintain a healthy margin, they don't have any debt, they can increase production by 50% with the existing factories & the Cybertruck is launching this year. The solar & storage business is also reputed to be making a contribution now that battery supply issues have eased. For shareholders, the announcement of a B segment vehicle would probably turn round most of 2022's decline in share price. The rumours about another giga factory in Shanghai or Mexico are interesting because that could be for a model 1 or 2 plant? I wouldn't want to be shorting the stock while Must has the Model 1/2 trump card up his sleeve - could be the biggest margin call in history!

What no one seems to have picked up on is how rapidly the backlog of orders from last summer was cleared. There was speculation in September and October that Tesla might have a demand problem but Tesla fans and Bulls denied this as did Tesla themselves. The alarm bells were ringing but Tesla said there was no fire. A publicly quoted company needs to be more transparent. I would have expected a profits warning to be issued. 

If you look at the chart below it is apparent that Tesla production was rapidly eating into the backlog. On 27June the backlog was 476k,mwhich from the Troy Teslake calculation, would suggest 117 days of backlog. By 21 September the backlog was down to 317 units or 78 days production. Over a period of 56 days backlog was therefore reduced by 39 days. (Ok, calculating backlogs on the basis used may not be entirely scientific but it gives a pretty good indication that production was considerably in excess of demand.) Now there may be some regional variations of stocking levels but effectively by the end of  2022 that 317k backlog had completely disappeared. 

Using some very rough figures, if Tesla are building 4000 cars a day and in around 100 days they clear a 317k backlog then that means new demand over that 100 days is only around 83k or around 20% of production. These figures may be some way out but it would be hard to argue based on what we do know that there isn’t a major demand problem and it is going to take more than the 12-14% increase in demand that the Wedbush consultant Dan Ives foresees from the price cuts to sort this. 

This is a big, big problem. 

As I have said in previous  posts this is just my personal take and others will no doubt have alternative views to share. 

Edit: source link added for above table.

https://electrek.co/2022/10/13/tesla-demand-destruction-demand-triggers/

Grumpy_chap

Krakkkers said:

Worth a watch.
https://www.youtube.com/watch?v=rCywUzKJs30&t=1s

17 minutes long.
Really would prefer a 30 second summary.

Krakkkers

Its complicated and a fair assessment of where we are right now, opportunities and problems.
If you want a simple summary, buy a diesel.

1961Nick

JKenH said:

1961Nick said:

JKenH said:

Grumpy_chap said:

1961Nick said:

Another thing to remember is that at the beginning of 2022 Tesla were sold a long way forward & particularly the model Y. Orders placed in 2021 were therefore delivered at 2021 prices. It's only in the last few months of 2022 that the price rises have been realised.

That's a very good observation.  I wonder how many cars were actually ordered and paid at the highest price?

Possibly very few. Perhaps that’s why demand fell and the order backlog disappeared. 

Fans might say that was Tesla managing demand to meet production but they didn’t do it very well. A few months ago there was a few months backlog but demand fell in China and new factories opened in Germany and US. That backlog disappeared in almost as many months so for months Tesla must have known that demand was seriously failing to keep up with increased production yet they took no action to acknowledge or address the situation - until stockpiles of unsold cars built up and the world realised the emperor was wearing no clothes. 

It was almost as if they were just trying to get to the year end before admitting the bubble had burst. In business that is frowned upon and no doubt questions will be asked. 

It was the perfect storm - lockdowns supressing China demand, IRA uncertainty in the US, the Twitter fiasco, higher selling prices etc etc. Despite that I think Tesla are in a good position. They can cut prices & still maintain a healthy margin, they don't have any debt, they can increase production by 50% with the existing factories & the Cybertruck is launching this year. The solar & storage business is also reputed to be making a contribution now that battery supply issues have eased. For shareholders, the announcement of a B segment vehicle would probably turn round most of 2022's decline in share price. The rumours about another giga factory in Shanghai or Mexico are interesting because that could be for a model 1 or 2 plant? I wouldn't want to be shorting the stock while Must has the Model 1/2 trump card up his sleeve - could be the biggest margin call in history!

What no one seems to have picked up on is how rapidly the backlog of orders from last summer was cleared. There was speculation in September and October that Tesla might have a demand problem but Tesla fans and Bulls denied this as did Tesla themselves. The alarm bells were ringing but Tesla said there was no fire. A publicly quoted company needs to be more transparent. I would have expected a profits warning to be issued. 

If you look at the chart below it is apparent that Tesla production was rapidly eating into the backlog. On 27June the backlog was 476k,mwhich from the Troy Teslake calculation, would suggest 117 days of backlog. By 21 September the backlog was down to 317 units or 78 days production. Over a period of 56 days backlog was therefore reduced by 39 days. (Ok, calculating backlogs on the basis used may not be entirely scientific but it gives a pretty good indication that production was considerably in excess of demand.) Now there may be some regional variations of stocking levels but effectively by the end of  2022 that 317k backlog had completely disappeared. 

Using some very rough figures, if Tesla are building 4000 cars a day and in around 100 days they clear a 317k backlog then that means new demand over that 100 days is only around 83k or around 20% of production. These figures may be some way out but it would be hard to argue based on what we do know that there isn’t a major demand problem and it is going to take more than the 12-14% increase in demand that the Wedbush consultant Dan Ives foresees from the price cuts to sort this. 

This is a big, big problem. 

As I have said in previous  posts this is just my personal take and others will no doubt have alternative views to share. 

Edit: source link added for above table.

https://electrek.co/2022/10/13/tesla-demand-destruction-demand-triggers/

I guess we'll have to wait 10 days to see if a profit warning was necessary - even that might not be the whole story though because the 4th quarter will be made up of vehicles sold at the highest price/margin. As for demand, we'll know the answer to that one at the beginning of April. I'm hopeful that the price reduction & the tax credit in the US causes a significant uplift in demand.

Magnitio

Grumpy_chap said:

Krakkkers said:

Worth a watch.
https://www.youtube.com/watch?v=rCywUzKJs30&t=1s

17 minutes long.
Really would prefer a 30 second summary.

It's not worth watching. Harry (who produces the video) regularly comes up with odd comparisons and conclusions to back up his point of view. In this one he compares someone who regularly buys new EV's, trading in each year for a new one, with another person who buys a diesel and keeps it for many years. Given the raw materials and embedded c02 in a new EV, he draws the conclusion that the EV buyer is worse for the environment. He seems to assume that the EV is thrown away rather than used by someone else until eventually being recycled. It's not the first video where he has done this. He has also talked about how dirty the electricity is that charges EV's by taking an example of a particularly wind-free, sun-free day and extrapolating this for the whole year.

Other videos he does are actually quite interesting and he has invested in solar, mainly for financial reasons though.

Krakkkers

I found it very balanced and he has tested many electric cars and loved them.
He talked also about suspect sales figures and the need to sell EVs in order to be allowed to sell ICE cars.
Very interesting to those with a totally open mind.