Just double replying here in case you did read my other reply and just didn’t reply. I made a big oopsie with the energy profit by mixing up lines with service and other. The profit was 381 million, not almost a billion. My bad.

The energy business, primarily commercial, has actually been doing really well. It was stalled during covid in favor of vehicles, but it’s ramping now. They have done much more than just Australia, and they’ve actually been very successful. You just don’t hear about it the same as it’s less flashy than cars or AI. They also sell AI driven software to help optimize power grids power arbitrage, which is successful recurring recenue software tack on as well.

Their new facility that’s ramping right now will put out 40gwh a year which is more batteries than some legacy auto manufacturers are using, and they are building a second in China that’s going to start producing in 2024. That’s over a million cars worth of batteries being sold at commercial margins. As the business ramps its going to be as or more profitable than cars excluding a future where FSD is successful. (edit: just for reference, they deployed about 66,000 60kwh cars worth of batteries in Q3)

They’re also getting into the power business in Texas and I’d expect to see that to expand, and their virtual power plant product is also growing and will be a big thing in the future. I’m actually excited about VPP from any and all providers as it’s really going to add security to the power grid while helping out the home owners. A Vermont power company wants to get a home battery in 100% of their customers homes over the next few years.

So keep an eye on all this if it interests you at all, it’s going to be big, and as I said, people are going to start accounting for it. They made almost a billion profit on that on Q3 (edit: I’m an idiot and can’t line items up. It was 381 million profit at about 40% scaled. I mixed up a line with service and other. The point still stands though, you can’t ignore almost 400 million in profit with the rapid growth its showing)

As for the AI, analysts really weren’t accounting for it and they weren’t accounting for energy either. You can say they are all crazy for having given tesla those valuations without it if you want, but im just telling you what was really happening. A few like Cathie Woods were, but most weren’t.

And like my edit about car payments. I wouldn’t ever expect the same margins on the 3/y again, but do expect margins and prices to go up as interest rates come down. People buy cars based off the car payment, and those are the same today as when margins were higher and Tesla still sold around 1.8 million vehicles this year at those same payments. If payments become cheaper because interest rates come down, prices will go up somewhat at all manufacturers as there will be more demand for cheaper payments. Those other manufacturers are suffering more than Tesla due to the interest rates and they desperately need them to go down to help with their profitability. The longer this drags on, the worse they’re going to be as ICE restriction start coming into play in various countries.

Also, the competition is coming and teslas market share going down is old and tiring to hear. Tesla isn’t competing against other EV makers, their competing against ICE sales. Their total market share is increasing. The story is always going to be their EV market share is decreasing because if you are at 100% and someone sells 1 car, you’re decreasing. If their total market share is decreasing in a region, then that might be a real problem.

The real competition (edit: within the EV space) is going to be the Chinese EV makers. That I feel is legit. But Ford, GM, Stellantis, Toyota etc, it’s the same story and they’re still struggling and even cutting back plans. They talk a big talk, but the jury is still out on that one.

I don’t think Tesla AI is worthless without FSD either, but clearly dramatically less without. They do use AI for power as I mentioned, and they’ve diversified their FSD computer into the bot, which is a long shot, but it puts their eggs in 2 baskets instead of 1 which could prevent a complete disaster if FSD fails. The bot is easier to solve than FSD so it’s not out of the question.___

Common sense regulations like safety and such make sense, but isn’t that just part of the “race to the bottom”? I mean, if a regulation is well-written, it either affects all participants equally, or affects larger market participants more to enforce a balanced market with many competitors and healthy competition.

I could see it might be something other than described, or I might not be getting some implication here, but what is described here sounds like a “race to the bottom” with regard to profit margins, and that is how a market economy should work, at least according to my very basic econ studies.

The same exact product offering should have decreasing profit margins due to competition, which companies should compensate for with innovation, but what happens very often is that market distortions are introduced by either the government or big market players to heighten profit margins artificially.

I’m reading this sentence as “profits go down drastically as competition sets in”. That doesn’t preclude regulation.

Thanks for entertaining my questions, I am really trying to understand the point here.