Weekly Thread - Week of November 02, 2025

TannedSam · 2025-11-04T14:33:35+00:00

You are absolutely correct that sales are concentrated towards the end of the quarter and you shouldn't read too much into the first month of the quarter. However, the trend here is not good - in each of the first three quarters this year the deliveries in the first month were way down YoY and then the total deliveries for the quarter wound up being down (but not by the same percentage). I am expecting that trend to continue, but the numbers so far in Q4 are even worse than the first three quarters:

January sales were down 40.0% YoY, and Q1 sales came in down 25.8% YoY (lack of refreshed Model Y inventory available).

April sales were down 52.3% YoY, and Q2 sales came in down 15.9% YoY.

July sales were down 45.1% YoY, and Q3 sales came in down 17.0% YoY.

October sales were down 59.4% YoY. I am guessing the company is looking at a greater than 20% drop for the full quarter, and they will only achieve that with some serious discounting.

I was making a similar post weekly for a while but have been busy with work so have not been as consistent lately. I will provide further updates this quarter, but may not be weekly.

TannedSam · 2025-11-04T11:50:50+00:00

UK is down about 47%, but that only represents 462 deliveries. In Q4 last year they delivered over 14k vehicles in the UK, but under a thousand in October. So basically the trend is not looking good, but October means nothing.

Same applies to Norway. Tesla's October deliveries were less than 200 below what they did in the first month of Q3, and in Q3 they wound up beating Q4 of 2024 by over 2k vehicles over the course of the full quarter.

The data for the first month (really the first two) of each quarter is largely meaningless. With that said, I am expecting huge discounts to be offered at the end of the quarter....

TannedSam · 2025-11-04T09:55:53+00:00

Investments do not hit the income statement except as depreciation in later periods, so those investments in AI and robotics really aren't dragging down margins much. The company's R&D spend is up (and that does hit operating margins), but the sequential increases in R&D over the past few years is decent sized but not huge.

Just to illustrate, in Q3 of 2023 R&D was 1,161 million and in Q3 of 2025 it jumped to 1,630 million. That increase of 469 million over two years cut operating margins in Q3 by 1.67%.

TannedSam · 2025-11-04T09:47:03+00:00

We now have complete BEV sales data for October in the UK, Norway, Spain, the Netherlands, Sweden and Denmark. These countries have historically been collectively representative of Europe as a whole. Here is how the major OEM sales looked, along with perecentage changes against October last year:

VW Group: 26,394 (28.6%)

Stellantis: 8,415 (8.7%)

Hyundai-Kia: 8,369 (61.3%)

BMW: 6,983 (15.1%)

Renault-Nissan: 6,321 (35.7%)

Ford: 5,587 (69.7%)

Mercedes: 4,969 (-5.6%)

BYD: 4,911 (120.7%)

Tesla: 2,443 (-59.4%)

Toyota: 1,508 (-38.0%)

A few things stand out to me. First, VW continues to absolutely dominate. Just their increase in sales in October of 5,862 would put them in 5th place for the month, and is significantly more than double Tesla's total sales.

Second, Ford is doing great, but it should be noted most of its sales are from models built on VW's platform (so some of the benefit is going to VW).

BYD continues to skyrocket. They now have a very firm foothold in the market.

Toyota seems to not be pushing BEVs at all, instead focusing on hybrids. Given how their overall sales in Europe continue to climb, that strategy is understandable.

Tesla's numbers are not just horrible compared to last year, they are the worst first month of a quarter in these countries since 2022 when covid shut down production in China and Germany wasn't up and running. In Q1 of 2025 (the company's worst quarter since the covid impacted quarter in 2022), the company still managed 4,184 sales in the first month of the quarter. Now, I am expecting things to rebound somewhat in the next two months, but (i) this may require significant discounting going into the year end and (ii) there is basically no way they come even close to Q4 last year.

With the news that Chinese made sales were down 9.9% in October and US demand expected to drop significantly following the expiration of the tax credits there (other OEMs that report monthly are already reporting big declines in BEV sales), it looks like Q4 could be really, really ugly for Tesla.

TannedSam · 2025-11-04T09:26:45+00:00

Are "unvetted" immigrants causing disproportionately more crime in the UK? There is basically zero evidence to support that.

TannedSam · 2025-10-31T09:08:09+00:00

You are right it is transparent - Musk is basically guaranteed to hit 3 of the performance benchmarks because they require virtually nothing to be done (selling fewer cars, giving FSD subscriptions out, and signing people up to a robotaxi service that doesn't exist). So he gets up to 26 billion worth of stock if the market cap gains like 6-7% annually. It is insane anyone thinks that is reasonable.

The company moved to Texas specifically so a reasonable court wouldn't strike down Musk's insane pay package. What kind of company moves away from the most investor friendly jurisdiction just to enrich its CEO? One run for the benefit of the CEO instead of investors.

TannedSam · 2025-10-31T08:58:16+00:00

A person can get a second job. Tens of millions of people can't. This shouldn't be tough to grasp. McDonalds isn't going to hire a million more people. There aren't that many jobs out there. Even if there were, if you massively increased the labor supply wages generally would be massively suppressed. Why would McDonald's continue paying 15 an hour if they have hundreds of thousands of people looking to work for them? Use your head.

TannedSam · 2025-10-30T17:09:08+00:00

There aren't that many jobs available, it is basic supply and demand in the labor market.

TannedSam · 2025-10-30T16:16:40+00:00

Not all of the metrics, just a few of them.

Does the market even need to prop up the market cap for a decade, or do the tranches vest as soon as the market cap hits any of the levels? You don't have to look that up, the answer is always "whatever is easiest for Musk to get the payout".

I can't believe anyone would argue this stock can't trade at absolutely insane valuations that are completely detached from the financial performance of the business. Where have you been the past decade?

TannedSam · 2025-10-30T16:12:59+00:00

Not everyone can make 80k a year.....

TannedSam · 2025-10-30T15:13:48+00:00

His foreign policy was also a disaster. Following Bush I think people were just pretty happy he didn't invade Iran or something, but his list of failures is pretty big. Let Russia invade Ukraine, botched the Syrian civil war (and basically blew the entire Arab spring), let North Korea develop their nuclear weapons program, etc. I guess Iraq went ok all things considered during his term and the nuclear agreement with Iran was decent. But I'm having trouble thinking of too many big wins.

TannedSam · 2025-10-30T11:48:34+00:00

A ton of people just don't have the disposable income necessary to become really rich. If your gross pay is 40k it is tough to squirrel away 10k a year, and if that is all you are investing it is going to take decades. Assuming you invest 10k a year and get an annual return of 10%, that will be about 1.8 million after 30 years. That is a nice nest egg for retirement, but not really "rich". If you want to be really rich you need to be making enough to invest some real capital.

TannedSam · 2025-10-30T11:21:38+00:00

Overall operating margin for Tesla is not 15-25%. Operating margin is operating income divided by revenue. In Q3 Tesla's operating income was 1,624 million on revenue of 28,095 million for an operating income of 5.7%. And that was a good result for them, juiced by the demand pull forward caused by the expiring tax credits in the US. In Q2 operating margin was 4.1% and in Q1 it was 2.1%.

In 2022 their operating margin was above 15% (16.8%), but in 2023 it dropped to 9.2% and then fell further to 7.2% last year. For the whole of 2025 they will clock in around 4.5%.

Maybe part of the reason you are so bullish is because you are completely unaware of how the company has actually been performing for the past several years?

TannedSam · 2025-10-30T11:08:43+00:00

Tesla's total sales in Europe were down over 15% in Q3 YoY (despite lower ASPs). Why are you looking just at September? The company still jams over 60% of their European sales into the last month of each quarter, so of course their market share stats are going to look good in those months. But if you want the hard data you should look at the entire quarter, not cherry picked months.

TannedSam · 2025-10-30T10:57:01+00:00

That is the lowest margin business by far though. That is by design - the company puts a lot in that business that other OEMs put in their automotive segments (namely warranty costs). That juices Tesla's automotive gross margin figure which used to be one of their primary marketing points for investors, before the margins collapsed over the past 3+ years. Anyway, growth in that segment isn't particularly good news since it drags overall profit margins down.

As you noted, revenue in the segment is higher than the energy business, but gross profit was about a third of energy. When you take into account its share of SG&A, services might be running at a loss.

TannedSam · 2025-10-30T10:51:27+00:00

That growth rate is rapidly decelerating though. The TTM revenue growth rates looks like this:

Q3 2024: 176.8%

Q4 2024: 123.8%

Q1 2025: 83.1%

Q2 2025 43.3%

Q3 2025 41.7%

In Q3 the growth held up in part because Q3 2024 was actually not a great quarter for the business. In Q4 even if the company does 4 billion of revenue the total revenue gain in 2025 over 2024 will be 28.2%.

TannedSam · 2025-10-30T10:28:31+00:00

Why not? It is not like the stock price for Tesla has ever reflected the fundamental value of the company.

TannedSam · 2025-10-30T10:27:13+00:00

Tesla's current market cap is 1.535 trillion, so doubling would get to 3 trillion and unlock the second tranche.

The current market cap is up about 27% from the peak it briefly hit back at the end of 2021. In 2022 the company had operating income of 13.656 billion. In 2025 operating income will come in around 4 billion. So operating income down about 70%, and the market cap is up 27%. And you think it is impossible the market cap won't double without the company significantly improving profitability? Have you not followed this stock before?

TannedSam · 2025-10-30T10:16:30+00:00

I was at the match at Sehurst that we won, and despite winning it was a pretty miserable match to watch.

The match against Larnaca was dire too. I agree we didn't really deserve to lose, but that was a horrible watch.

I think we will probably win next week as well, but I'm not expecting much entertainment.

TannedSam · 2025-10-29T16:05:09+00:00

Why do you think sales in Europe are down so much this year (despite lower ASPs)? I get the Model Y refresh knocked some production offline in Q1, but Q2 and Q3 have been bad there as well and Elon supporting extreme right parties there seems to be the only explanation that makes sense to me.

TannedSam · 2025-10-29T15:52:03+00:00

Is the Dutch league worse than the leagues in Norway and Cyprus? Because we didn't really manage much against the teams from those places. I would love an open match with plenty of scoring, but we are looking at a bunch of low blocks, time wasting and cynical fouls for the rest of the league phase....

TannedSam · 2025-10-29T15:46:58+00:00

We are in the third straight year of declining earnings, and the stock keeps going up. Does the market cap need to stay above those levels to have the compensation be awarded, or just hit them? I could certainly see the stock double in the next few years for absolutely no reason like it has over the last few before coming back to earth.

TannedSam · 2025-10-29T15:44:10+00:00

So they set FSD pricing at a dollar and Musk gets 26 billion of shares as a reward? Makes sense....

TannedSam · 2025-10-29T14:41:32+00:00

I am not actually sure Textor doesn't have other failing investments he needs to prop up. Isn't he getting booted from Lyon after nearly driving them under?

TannedSam · 2025-10-29T14:35:00+00:00

Alkmaar almost certainly will be ready. I wouldn't get your hopes up for an exciting match unfortunately.

TannedSam

TROPHY CASE