merkhet Posted May 2, 2017 Share Posted May 2, 2017 Serious question: Would Tesla be losing money if it wasn't building the largest factory in the world at the same time as investing in a new EV that will be produced in an order of magnitude larger volume as their current ones (Model 3) at the same time as developing the Model Y (small electric SUV), an electric semi truck (unveiling next fall, probably), at the same time as doubling the number of supercharging stations worldwide this year (which went from zero to thousands in a few years), at the same time as developing an electric pickup truck, at the same time as developing self-driving software, at the same time as planning development for 2 to 4 new gigafactories, at the same time a continuously improving Model S and X rather than milking them for 4-6 years like other automakers do with their cars, at the same time as running a stationary battery storage energy firm, at the same time as developing modern glass solar roofs that look normal from street level, etc? I'm kind of amazed they're not burning more cash than they are with everything that they're working on. Google is spending a lot on its moonshots projects with a lot less to show for it.. Tesla will never be as good a business as Amazon (Musk's primary goal is to accelerate the production and consumption of clean energy, not to make the most money or reduce his risk -- it'd have been easier and safer to make money for him in other industries), but the principle of massive investments for the future hiding current economics is similar. It's blind to think that Amazon couldn't make more money if it decided to target 10% growth rather than 20-30%, and likewise for Tesla, that they couldn't earn a reasonable profit margins on their very nice cars that customers love and are ready to pay a premium for. It could still all blow up because Musk has a gigantic capacity for risk and is moving super fast. They could do everything much slower and get where they're going in 25 years rather than 10 and that'd be a much more conservative approach, but that wouldn't be coherent with the goal of moving the whole EV field along as fast as possible. Personally, I don't give a crap about his financials, I just hope he doesn't blow so he can keep making cool tech and hold the old company's feet to the fire, making them do things with a lot more urgency than they would otherwise. I think the issue is that because he is moving fast and aiming big that it's risky. It's possible to believe that Musk is doing great things and yet also believe that the big hairy audacious goals make this a poor investment choice. I haven't recommended it as an investment. But I think it's bad thinking to just say "they're not making profits, they're raising money, hence they're destroying value and are assured to fail". I'm fine with people not liking the stock, but I think many are using flawed thinking to get there, regardless of wether the shorts or longs end up making the most on this one. That's precisely what I'm saying though. You guys are often talking past one another. And I think "assured to fail" may be a bit of hyperbole though I don't follow this thread closely enough to say that with the utmost confidence. I will say that a company that doesn't make profits and is dependent on capital markets to get to a point to where it's making money runs a high risk of failure. Maybe Musk could be making more money if he moved more slowly, but that's not the strategy he's embarked on. Moreover, if he starts to run into trouble, can he pull back on that speed fast enough to save the company and/or support the value of the stock? Would he? Is that his personality? I think these are perfectly fine and useful things to think about and discuss. Link to comment Share on other sites More sharing options...
Liberty Posted May 2, 2017 Share Posted May 2, 2017 I agree merkhet. But I don't think many of the company's critics are looking at it like that. Link to comment Share on other sites More sharing options...
no_free_lunch Posted May 2, 2017 Share Posted May 2, 2017 At this point, with the company's valuation higher than GM I don't think pulling back is an option. The $50B market cap requires that he get up to the 500k+ cars and then keep growing from there. Link to comment Share on other sites More sharing options...
rkbabang Posted May 2, 2017 Share Posted May 2, 2017 At this point, with the company's valuation higher than GM I don't think pulling back is an option. The $50B market cap requires that he get up to the 500k+ cars and then keep growing from there. He needs to get to millions of cars with good margins + turn super charging stations, solar panels, solar roofs, powerwall, etc... all into large profitable businesses. That isn't a no brainer, but neither was getting this far with Tesla or SpaceX. He's either going to pull this all off or go out with a bang trying. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted May 2, 2017 Share Posted May 2, 2017 At this point, with the company's valuation higher than GM I don't think pulling back is an option. The $50B market cap requires that he get up to the 500k+ cars and then keep growing from there. He needs to get to millions of cars with good margins + turn super charging stations, solar panels, solar roofs, powerwall, etc... all into large profitable businesses. That isn't a no brainer, but neither was getting this far with Tesla or SpaceX. He's either going to pull this all off or go out with a bang trying. The problem with the latter is if any one fails, it has the ability to jeopardize the others. Tesla owns SolarCity. SolarCity is the largest purchases of bonds to fund SpaceX. If Tesla fails, that calls into question the viability of future SpaceX funding. If SpaceX fails, that could leave a large hole in Tesla's balance sheet at a point it can ill afford as it's already burning so much money just to fund its own operations. If either fails, it calls into question the stability of the parent ownership of SolarCity which was already in trouble. Musk himself is personally levered by borrowing against equity stakes in one company to continue purchasing equity stakes in the others and would be unlikely to step in and prevent the chain reaction. It's all just a bit scary - especially when you consider that it's priced to absolute perfection. What they have achieved is extraordinary, but the environment they did it in will not last forever and their competitors are very good at making cars AND at making money on them. As an investment, I'd rather go with the other OEMs. Still rooting for a Tesla success as a consumer, but I think it is more likely than not that investors will be disappointed by it. That being said, this is coming from the guy who doesn't understand Amazon's success before AWS and believed in Blackberry so maybe I'm just solidly wrong when it comes to the tech sector. Link to comment Share on other sites More sharing options...
awindenberger Posted May 2, 2017 Share Posted May 2, 2017 At this point, with the company's valuation higher than GM I don't think pulling back is an option. The $50B market cap requires that he get up to the 500k+ cars and then keep growing from there. He needs to get to millions of cars with good margins + turn super charging stations, solar panels, solar roofs, powerwall, etc... all into large profitable businesses. That isn't a no brainer, but neither was getting this far with Tesla or SpaceX. He's either going to pull this all off or go out with a bang trying. The problem with the latter is if any one fails, it has the ability to jeopardize the others. Tesla owns SolarCity. SolarCity is the largest purchases of bonds to fund SpaceX. If Tesla fails, that calls into question the viability of future SpaceX funding. If SpaceX fails, that could leave a large hole in Tesla's balance sheet at a point it can ill afford as it's already burning so much money just to fund its own operations. If either fails, it calls into question the stability of the parent ownership of SolarCity which was already in trouble. Musk himself is personally levered by borrowing against equity stakes in one company to continue purchasing equity stakes in the others and would be unlikely to step in and prevent the chain reaction. It's all just a bit scary - especially when you consider that it's priced to absolute perfection. What they have achieved is extraordinary, but the environment they did it in will not last forever and their competitors are very good at making cars AND at making money on them. As an investment, I'd rather go with the other OEMs. Still rooting for a Tesla success as a consumer, but I think it is more likely than not that investors will be disappointed by it. That being said, this is coming from the guy who doesn't understand Amazon's success before AWS and believed in Blackberry so maybe I'm just solidly wrong when it comes to the tech sector. SpaceX was actually helping fund SolarCity, not the other way around. And SolarCity has now repaid most of those SpaceX owned Solarbonds. Link to comment Share on other sites More sharing options...
rkbabang Posted May 2, 2017 Share Posted May 2, 2017 "The SEC has processed a new filing that suggests Tesla may be at work on yet another new initiative." https://techcrunch.com/2017/05/02/a-new-recycling-company-with-links-to-tesla-raises-funding/ Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted May 2, 2017 Share Posted May 2, 2017 At this point, with the company's valuation higher than GM I don't think pulling back is an option. The $50B market cap requires that he get up to the 500k+ cars and then keep growing from there. He needs to get to millions of cars with good margins + turn super charging stations, solar panels, solar roofs, powerwall, etc... all into large profitable businesses. That isn't a no brainer, but neither was getting this far with Tesla or SpaceX. He's either going to pull this all off or go out with a bang trying. The problem with the latter is if any one fails, it has the ability to jeopardize the others. Tesla owns SolarCity. SolarCity is the largest purchases of bonds to fund SpaceX. If Tesla fails, that calls into question the viability of future SpaceX funding. If SpaceX fails, that could leave a large hole in Tesla's balance sheet at a point it can ill afford as it's already burning so much money just to fund its own operations. If either fails, it calls into question the stability of the parent ownership of SolarCity which was already in trouble. Musk himself is personally levered by borrowing against equity stakes in one company to continue purchasing equity stakes in the others and would be unlikely to step in and prevent the chain reaction. It's all just a bit scary - especially when you consider that it's priced to absolute perfection. What they have achieved is extraordinary, but the environment they did it in will not last forever and their competitors are very good at making cars AND at making money on them. As an investment, I'd rather go with the other OEMs. Still rooting for a Tesla success as a consumer, but I think it is more likely than not that investors will be disappointed by it. That being said, this is coming from the guy who doesn't understand Amazon's success before AWS and believed in Blackberry so maybe I'm just solidly wrong when it comes to the tech sector. SpaceX was actually helping fund SolarCity, not the other way around. And SolarCity has now repaid most of those SpaceX owned Solarbonds. My apologies. I did get that backwards. Was not aware that bonds had been prepaying. Must be from Tesla cash after the merger because they were in no position to do so beforehand. Been a bit since I dug into the details though. Link to comment Share on other sites More sharing options...
Liberty Posted May 3, 2017 Share Posted May 3, 2017 This video gives a pretty good view of what the Tesla Model 3 release candidates look like: Link to comment Share on other sites More sharing options...
Jurgis Posted May 3, 2017 Share Posted May 3, 2017 Watched TED video. Super great. Maybe I should buy more TSLA to support Elon. Or just make another M3 deposit. 8) Stars My Destination! Link to comment Share on other sites More sharing options...
rkbabang Posted May 3, 2017 Share Posted May 3, 2017 Watched TED video. Super great. Maybe I should buy more TSLA to support Elon. Or just make another M3 deposit. 8) Stars My Destination! +1, that video was awesome. It sounds like you look at your investment in Tesla in a similar way that I do. I don't look at it as an investment in the traditional sense at all. I look at it in the same way I look at donations I've made to The Seasteading Institute or The Free State Project. It is an investment in the future of humanity. In some small way I hope it helps. Link to comment Share on other sites More sharing options...
Liberty Posted May 3, 2017 Share Posted May 3, 2017 Q1 letter: http://files.shareholder.com/downloads/ABEA-4CW8X0/4396881761x0x940721/8E9FC98F-343C-4D2E-8516-491DEFB9B69B/TSLA_Q1_2017_Update_Letter.pdf Link to comment Share on other sites More sharing options...
Cigarbutt Posted May 8, 2017 Share Posted May 8, 2017 I understand that some here are interested in the stock and/or the car. Here's what I thought was an interesting and +/- relevant video. So much for the productivity paradox. Productivity does not show up in the aggregate measures but some sectors such as automotive clearly stand out. I wonder though, even if the video is impressive, how the apparent productivity advantage is enduring vs competition. Link to comment Share on other sites More sharing options...
rkbabang Posted May 10, 2017 Share Posted May 10, 2017 Elon Musk: Tesla’s Solar Roofs Will Be Cheaper Than Regular Roofs & Have “Infinity Warranty” “Glass solar tiles are so durable they are warrantied for the lifetime of your house, or infinity, whichever comes first.” Link to comment Share on other sites More sharing options...
Jurgis Posted May 10, 2017 Share Posted May 10, 2017 Elon Musk: Tesla’s Solar Roofs Will Be Cheaper Than Regular Roofs & Have “Infinity Warranty” “Glass solar tiles are so durable they are warrantied for the lifetime of your house, or infinity, whichever comes first.” Da fin e print sez: Tile warranty Infinity, or the lifetime of your house, whichever comes first Power warranty 30 years Weatherization warranty 30 years From https://www.tesla.com/solarroof Perhaps buyers can play frisbee with the tiles after 30 years. Link to comment Share on other sites More sharing options...
snow pea Posted May 10, 2017 Share Posted May 10, 2017 Despite being about as far from an early adopter as one can be, I am very intrigued by these. Link to comment Share on other sites More sharing options...
Jurgis Posted May 11, 2017 Share Posted May 11, 2017 Despite being about as far from an early adopter as one can be, I am very intrigued by these. Unfortunately I redid the roof 5 years ago. So another ~20 years to wait for the Elon tech to mature. If it goes parabolic, I might reroof earlier... 8) Link to comment Share on other sites More sharing options...
fareastwarriors Posted May 26, 2017 Share Posted May 26, 2017 Tesla’s Model X Is Missing the American SUV Craze https://www.bloomberg.com/news/articles/2017-05-26/tesla-s-model-x-missing-out-on-america-s-voracious-suv-hunger Link to comment Share on other sites More sharing options...
Liberty Posted June 1, 2017 Share Posted June 1, 2017 Doesn't look like the Chevrolet Bolt is too much of a threat to Tesla so far: https://www.bloomberg.com/news/articles/2017-06-01/chevy-s-bolt-creeps-along-while-tesla-readies-for-a-sprint After six months on the market, only 6,529 Bolts have found their way out of dealerships and into the wild. That’s far less than sales of the all-electric Nissan Leaf and either of the existing Tesla models over the same period. Link to comment Share on other sites More sharing options...
fareastwarriors Posted June 7, 2017 Share Posted June 7, 2017 Tesla Takes Off in China http://fortune.com/2017/06/07/fortune-500-tesla-china/ Link to comment Share on other sites More sharing options...
DTEJD1997 Posted June 7, 2017 Share Posted June 7, 2017 Hey all: I had an interesting conversation with a mid level car executive the other day... He is an executive with the "Big 3", so you've got to consider where the information is coming from and take with a grain of salt... He thinks we are pretty far along in the economic cycle and are at/nearing the peak of vehicles sold for this cycle. He thinks there will be a blowup in the way cars are currently being sold. YUGE problems with underwriting leases. Way too many people are getting leases that should not. There is also a huge problem with subprime car loans. The higher ups are clearly aware of this and underwriting standards are going to tighten up somewhat. He definitely thinks that self driving cars are coming, but at this point it is largely "hype". He thinks you will see it first with special vehicles, mainly trucks on turnpikes, "sheltered environment type of thing." He also thought that a lot of analysts are making a mistake about the next downturn coming up...He thinks it is entirely likely that a lot of companies will simply make LESS money instead of losing it hand over fist, like what happened in 2008. Not every downturn is a calamity. He also thinks a lot of companies are in better shape NOW, then they were in 2008, 2009. He said Chrysler has done a good job with trucks & SUV's, but a poor job with autos. They have not invested enough in engineering for modern car platforms. I then managed to turn the conversation to Tesla & Elon Musk. This guy went bezerk...He started ranting and raving that Elon is the "Bernie Madhoff" of our times. That he has survived largely off government largesse. He also claims there are problems with the Tesla factory in CA (used to be the GM/Toyota NUMA factory). He claimed there were problems with the factory when it was GM/Toyota and that a lot of those problems have NOT been fixed...That there are labor problems, especially with subcontractors being brought in..bottleneck problems..and technical stuff that I am not sure I understood correctly... He very much doubts that Tesla is going to be able to significantly scale higher than it can WITHOUT investing a ton of $$$$ in capital equipment. Interesting to hear this guys perspective. He may just be talking trash about a competitor, but he is one who would know. Link to comment Share on other sites More sharing options...
rkbabang Posted June 7, 2017 Share Posted June 7, 2017 I have no way of knowing how right or wrong he is, but the management at the mainstream companies are not always the best people to see major innovations which shake up their industries coming. If you could have talked to a mid-level executive at Blockbuster about Netflix back in the day he would have laughed at you for even asking such a ridiculous question. Link to comment Share on other sites More sharing options...
awindenberger Posted June 8, 2017 Share Posted June 8, 2017 He very much doubts that Tesla is going to be able to significantly scale higher than it can WITHOUT investing a ton of $$$$ in capital equipment. Interesting to hear this guys perspective. He may just be talking trash about a competitor, but he is one who would know. What does he think Tesla is doing and has been doing? They've spent Billions on capital equipment. Link to comment Share on other sites More sharing options...
rkbabang Posted June 8, 2017 Share Posted June 8, 2017 He very much doubts that Tesla is going to be able to significantly scale higher than it can WITHOUT investing a ton of $$$$ in capital equipment. Interesting to hear this guys perspective. He may just be talking trash about a competitor, but he is one who would know. What does he think Tesla is doing and has been doing? They've spent Billions on capital equipment. Good point. With Tesla being given a valuation higher than GM it can get an enormous amount of money out of the capital markets to do almost whatever it wants. I'm actually surprised that it isn't taking advantage of this even more than it has. At this valuation Tesla should be issuing shares by the truckload. Link to comment Share on other sites More sharing options...
Liberty Posted July 10, 2017 Share Posted July 10, 2017 Model 3 video, serial #1: Link to comment Share on other sites More sharing options...
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