Dear Board of Directors of Tesla,
Our thoughts and gratitude after the Q3-2022 results
Dear Board of Directors of Tesla, Inc.,
Dear Elon Musk, Robyn Denholm, Ira Ehrenpreis, Hiro Mizuno, James Murdoch, Kimbal Musk, Kathleen Wilson-Thompson and Joe Gebbia,
Thank you for serving on the Board of Directors of the most generational company. As you know, Tesla has a very unique and educated retail community, supporting with passion the company and its goals. 2022 has not been an easy year for retail shareholders, yet the recently published Q3 results and the earnings call have shown again how outstanding Tesla is performing.
We would like to congratulate you and the firm on the investment rating upgrade by S&P, long overdue and finally obtained at the beginning of October. While Tesla does not need cash, it is reassuring to know that any use of debt for financial engineering can now be set up at competitive market conditions and find interest by all market participants. This may now even be the moment to consider integrating auto financing by Tesla, rather than outsourcing it to third party providers.
You had certainly been considering share buybacks for some time already. And more recently have become aware of the suggestions by Leo KoGuan, Gary Black and Steven Mark Ryan. This co-authored article with “The Accountant” on Treasury Share Buybacks might serve Tesla well. We all appreciate very much your consideration and hope that share buybacks are still possible in 2022, to benefit greatly from a current low share price and a still favorable regulatory and fiscal environment, referring to this initial article on the matter.
Given the love and support retail investors prove to the company, we are tempted to draft an end-of-year wish list, one never knows what might happen. Some retail investors want to do a deeper analysis of Tesla. The below are some missing pieces of information that would be of great value to us:
In the past, as it pertains to sourcing or vertical integration, utilizing talent pool, or making other investment decisions, Elon and Zach have been very intentional about how Tesla makes a decision among various options at hand. Can we get more insight into the metric that Tesla considers to help evaluate the options in making such decisions? Metrics that come to mind: ROIC, Return On Invested Time, Likelihood of accelerating Tesla’s mission over a certain number of years… At what level does the company actively track these metrics regularly for their activities?
For the auto segment:
For our research we would appreciate a clean and thorough perspective of demand profiles across the globe. If this does not create a competitive disadvantage, being able to have more insight into which models are sold where would be highly appreciated.
In Q3/2022, the average selling price declined slightly. We would all - again of course only if this does not create a too detailed source of information to competitors - like to understand the evidence and scope of pricing power in the different markets.
And conscient that this may be asking a lot, but while we are at it, it would be highly beneficial to understand margin strength and the sources of it.
With the Inflation Reduction Act just around the corner, would it be possible for Tesla to communicate on the strategies which are going to be employed to benefit from the different measures?
Can you provide data on interventions and/or disengagements per mile to demonstrate the progression of FSD Beta?
For the energy segment:
Many of us are eager to understand how autobidder contributes to energy segment margins.
What steady state gross margin can be expected from the energy segment and how does this compare to the auto segment?
What is the plan of attack for regulated locations, or is an equipment supply partnership in these States the best solution Tesla can currently achieve?
May we please add three more personal matters:
As a former rating analyst, Alexandra is appalled with the current state of ESG ratings. And feels that Tesla is the victim of an organized smear campaign, for the sake of headlines and clicks. She has done an in-depth video on the matter, and would like to help in any possible way to expose these wrong doings.
The publication of Wall Street analysts’ earnings expectations does not serve Tesla well. Often these analysts are late, and more recently they have been outright wrong. Let investors figure out who they trust for guidance, there is no need to waste your team’s time and energy on this.
We would like to contribute to the improvement of the sound quality of the earning calls. The most innovative company in the world needs to be heard loud and clearly. Some prominent YouTubers have all the technical knowledge to help you fix it, please reach out and let’s get this done.
With all our gratitude to you and all the Tesla employees,
Alexandra and Mathias