TSLA - Tesla Motors

[DTEJD1997]

 

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.

 

He would know...It appears now that Tesla might have some production problems with the Model3. 

 

If I recall correctly, Tesla is only running one factory at this point, and they will be making 3 different vehicles?  If they are going to produce the model 3 in the numbers that they expect, I would presume they will need a dedicated factory for just that model?

 

Tesla is certainly an innovative company and is arguably well run...but I don't see how they can escape the laws of economics.  If they are going to sell 100,000+ of the model 3, they are going to have to invest BILLIONS in capital equipment for just that model. 

 

I presume a lot of their spending (up to now) has been on research, electric issues (batteries & charging), advertising, back office & so on.

 

We will see, but I think the stock price of TSLA is precariously high, even after it's huge sell off.

[Liberty]

If I recall correctly, Tesla is only running one factory at this point, and they will be making 3 different vehicles?  If they are going to produce the model 3 in the numbers that they expect, I would presume they will need a dedicated factory for just that model?

 

Not all factories are the same:

 

https://en.wikipedia.org/wiki/NUMMI

 

https://en.wikipedia.org/wiki/List_of_largest_buildings#Largest_footprint

 

In 2006, NUMMI made 428k vehicles on a production setup that was no doubt a lot less automated than what Tesla is going for.

[fareastwarriors]

Tesla and Elon Musk’s moment of truth with first mass-market car

 

https://www.ft.com/content/d9403324-6d33-11e7-bfeb-33fe0c5b7eaa

[Jurgis]

Tesla Model 3 new info:

 

Standard Battery:

Price: $35,000

Range: 220 miles (EPA estimated)

Supercharging rate: 130 miles in 30 minutes

Zero to 60 mph time: 5.6 seconds

 

Long Range Battery:

Price: $44,000

Range: 310 miles

Supercharging rate: 170 miles in 30 minutes (Same as Tesla’s Model S)

Zero to 60 mph time: 5.1 seconds

 

A $5,000 premium options package includes an all-glass roof, open-pore wood decor, premium sound, heated seats, and premium seat materials.

 

And of course this thing is autopilot-enabled. You'll just need to plunk down $5,000 for the Model 3 to get it to "match speed to traffic conditions, keep within a lane, automatically change lanes, transition from one freeway to another, exit the freeway and self-park at your destination," according to the company. The Model 3 can even offer "Full Self-Driving Capability" at some point "in the future" but it'll set you back $3,000 in addition to the five grand you dropped on the Enhanced Autopilot package.

 

so... top everything: $44+5+5+3 = 57K

basic + autopilot = 35+5+3=43K

basic + premium options + autopilot = 35+5+5+3 = 48K

 

And 4 wheel drive is probably gonna be another 5K when available (2018 sometime?). And custom color is 1K.

 

 

So... I'm probably gonna chicken out for now and not take delivery. Wait until I really need a new car. We'll see when they gonna start bugging me to commit.

 

OTOH, I think they probably gonna be losing money on this, so... don't expect prices to drop. They might go up instead - like it was with Model S.

 

Some info from https://www.engadget.com/2017/07/29/tesla-just-delivered-the-first-round-of-model-3s/

[boilermaker75]

I'm still leaning towards taking delivery on mine since my current car is a 2003 POS Passat. I will never ever own a VW again.

 

I would definitely go with the 310 mile range option.

[Jurgis]

One thing: if you can squeeze in before the $7.5K federal tax rebate ends, clearly the price math gets better.

 

I doubt that I'm there in the queue. Although it will depend on what options you want: long-range means you get moved closer to top of queue, being in CA means you get moved closer to top of queue, 4 wheel drive means that you most likely won't get rebate since it's only gonna be available sometime in 2018.

 

Here is the explanation how the rebate and rebate phaseout works: https://cleantechnica.com/2017/01/20/predicting-us-federal-ev-tax-credit-will-expire-tesla-buyers/ I am sure updated numbers will be available - please post if you find a website keeping up to date tally.

[Liberty]

https://www.bloomberg.com/news/articles/2017-07-29/tesla-s-model-3-arrives-with-a-surprise-310-mile-range

[CorpRaider]

Want.

[Liberty]

http://www.motortrend.com/cars/tesla/model-3/2018/exclusive-tesla-model-3-first-drive-review/

[jeffmori7]

I usually can't stand Taleb on Twitter, but he bought a Tesla and tweeted about it:

[Liberty]

https://www.bloomberg.com/news/articles/2017-07-31/driving-tesla-s-model-3-changes-everything

[Liberty]

Q2 letter:

 

http://files.shareholder.com/downloads/ABEA-4CW8X0/4921614970x0x952053/F302D22F-FC9B-41A3-9534-60D0032673CC/TSLA_Update_Letter_2017-2Q.pdf

 

Mr market liking it, stock up almost 9%.

[Peregrino]

It's been interesting to watch David Einhorn's short compared to the market movements.

 

I don't know how it will eventually play out.  From a pure fundamentals perspective it's a tough company not to want to short, or at the very least avoid.

 

I do think that if the company does manage to grow into its valuation that it will be a great example of how the market does not do a great job measuring the value of things like intangibles.  It's pretty evident from this thread and my own behavior that Elon has managed to build up tremendous amounts of economic goodwill and that those things are hard to put a value on.

 

For instance, I'm considering a new car purchase (driving around a 15-year old Jeep and the AC just stopped working on me which makes it pretty uncomfortable in the summer), I'm environmentally conscious, and my daily commute to/from a train station is ideal for an EV. 

 

If the Model 3 were out right now, I would buy one today.  I have looked at the Nissan Leaf, and the Chevy Volt a few times, can't bring myself to pull the trigger, even though those cars are cheaper than the Model 3 is and fit all of the criteria that I want in a new car.  Instead of buying one of those cars, I'm waiting.

 

My question for this thread is:  How much is that behavior worth to the market?  How do you even begin to think about quantifying it enough to know if today's price for TSLA can be justified?

[TwoCitiesCapital]

It's been interesting to watch David Einhorn's short compared to the market movements.

 

I don't know how it will eventually play out.  From a pure fundamentals perspective it's a tough company not to want to short, or at the very least avoid.

 

I do think that if the company does manage to grow into its valuation that it will be a great example of how the market does not do a great job measuring the value of things like intangibles.  It's pretty evident from this thread and my own behavior that Elon has managed to build up tremendous amounts of economic goodwill and that those things are hard to put a value on.

 

For instance, I'm considering a new car purchase (driving around a 15-year old Jeep and the AC just stopped working on me which makes it pretty uncomfortable in the summer), I'm environmentally conscious, and my daily commute to/from a train station is ideal for an EV. 

 

If the Model 3 were out right now, I would buy one today.  I have looked at the Nissan Leaf, and the Chevy Volt a few times, can't bring myself to pull the trigger, even though those cars are cheaper than the Model 3 is and fit all of the criteria that I want in a new car.  Instead of buying one of those cars, I'm waiting.

 

My question for this thread is:  How much is that behavior worth to the market?  How do you even begin to think about quantifying it enough to know if today's price for TSLA can be justified?

 

It's incredibly important. Brand loyalty is hard to come by and can allow for inoordinate profits.

 

That being said though, are people only loyal to Tesla because it's the only sexy EV manufacturer or for some other reason? I've been thinking for awhile that the likes of Mercedes and BMW were simply letting Tesla risk it all building out the industry and that they would follow with their own sexy, luxury EVs once proof of concept had been made by Tesla.

 

Maybe that's not the case, but I have a hard time believing that Tesla is the only company making desirable cars going forward...

Other companies will come out with desireable EVs too, and then this type of behavior can be discounted.

 

Even with the incredible brand loyalty, Tesla's current valuation is unfathomable to me.

 

 

[Dynamic]

For me, TSLA is in the too-hard to value pile at anything like the current price.

 

I agree that other manufacturers could make very attractive luxury EVs pretty soon, where so far nobody else has tried to compete. The introduction and sales of the Jaguar i Pace will be very interesting to observe.

 

What I really see as a huge draw towards Tesla at the moment is that they're the ONLY maker to offer supercharging (or equivalent) at present. I'd pay a sizeable amount more for that capability as it would enable a Tesla to be my only car, even for longer trips.

 

When that changes as it surely must at some point (either by other companies joining forces with Tesla or coming up with a competing level 3 charger) it will be interesting to see how other car-makers fare against Tesla. At the moment, they're not all-in and they're reluctant to provide something equivalent, which will put people off their brands, especially luxury models, unless they're willing to take a hit to be eco-friendly.

[rkbabang]

For me, TSLA is in the too-hard to value pile at anything like the current price.

 

I agree that other manufacturers could make very attractive luxury EVs pretty soon, where so far nobody else has tried to compete. The introduction and sales of the Jaguar i Pace will be very interesting to observe.

 

What I really see as a huge draw towards Tesla at the moment is that they're the ONLY maker to offer supercharging (or equivalent) at present. I'd pay a sizeable amount more for that capability as it would enable a Tesla to be my only car, even for longer trips.

 

When that changes as it surely must at some point (either by other companies joining forces with Tesla or coming up with a competing level 3 charger) it will be interesting to see how other car-makers fare against Tesla. At the moment, they're not all-in and they're reluctant to provide something equivalent, which will put people off their brands, especially luxury models, unless they're willing to take a hit to be eco-friendly.

 

I think the dealership sales model makes it difficult for the other automakers to move into electric cars in a big way.  Since the dealers make their money on service, a large move towards electric cars would seem like throwing their dealership network under the bus.  So far they want to treat the electric car as a niche product, making them ugly little expensive cars with no range for environmentalist hippy wackos, and the dealers don't try to sell them.  Big changes in how they do business would be required for them to choose to even begin to compete with Tesla on Tesla's own turf.  Just like Blockbuster could have started mailing or even streaming video, but it would have been disruptive to their existing business model, so they chose to bury their head in the sand and pretend that there was nothing to this new trend.  Until it was too late.  I have a feeling that existing automakers will do the same.  Some might make the transition, but most will not.  So, yes, existing automakers could compete with Tesla, but they won't.

 

 

[boilermaker75]

For me, TSLA is in the too-hard to value pile at anything like the current price.

 

I agree that other manufacturers could make very attractive luxury EVs pretty soon, where so far nobody else has tried to compete. The introduction and sales of the Jaguar i Pace will be very interesting to observe.

 

What I really see as a huge draw towards Tesla at the moment is that they're the ONLY maker to offer supercharging (or equivalent) at present. I'd pay a sizeable amount more for that capability as it would enable a Tesla to be my only car, even for longer trips.

 

When that changes as it surely must at some point (either by other companies joining forces with Tesla or coming up with a competing level 3 charger) it will be interesting to see how other car-makers fare against Tesla. At the moment, they're not all-in and they're reluctant to provide something equivalent, which will put people off their brands, especially luxury models, unless they're willing to take a hit to be eco-friendly.

 

I think the dealership sales model makes it difficult for the other automakers to move into electric cars in a big way.  Since the dealers make their money on service, a large move towards electric cars would seem like throwing their dealership network under the bus.  So far they want to treat the electric car as a niche product, making them ugly little expensive cars with no range for environmentalist hippy wackos, and the dealers don't try to sell them.  Big changes in how they do business would be required for them to choose to even begin to compete with Tesla on Tesla's own turf.  Just like Blockbuster could have started mailing or even streaming video, but it would have been disruptive to their existing business model, so they chose to bury their head in the sand and pretend that there was nothing to this new trend.  Until it was too late.  I have a feeling that existing automakers will do the same.  Some might make the transition, but most will not.  So, yes, existing automakers could compete with Tesla, but they won't.

 

Exactly and Tesla keeps getting further ahead in EV technology. All that expertise in ICEs, transmissions, exhaust systems, etc. will not help the automakers when they have to start competing with Tesla.

[TwoCitiesCapital]

For me, TSLA is in the too-hard to value pile at anything like the current price.

 

I agree that other manufacturers could make very attractive luxury EVs pretty soon, where so far nobody else has tried to compete. The introduction and sales of the Jaguar i Pace will be very interesting to observe.

 

What I really see as a huge draw towards Tesla at the moment is that they're the ONLY maker to offer supercharging (or equivalent) at present. I'd pay a sizeable amount more for that capability as it would enable a Tesla to be my only car, even for longer trips.

 

When that changes as it surely must at some point (either by other companies joining forces with Tesla or coming up with a competing level 3 charger) it will be interesting to see how other car-makers fare against Tesla. At the moment, they're not all-in and they're reluctant to provide something equivalent, which will put people off their brands, especially luxury models, unless they're willing to take a hit to be eco-friendly.

 

I think the dealership sales model makes it difficult for the other automakers to move into electric cars in a big way.  Since the dealers make their money on service, a large move towards electric cars would seem like throwing their dealership network under the bus.  So far they want to treat the electric car as a niche product, making them ugly little expensive cars with no range for environmentalist hippy wackos, and the dealers don't try to sell them.  Big changes in how they do business would be required for them to choose to even begin to compete with Tesla on Tesla's own turf.  Just like Blockbuster could have started mailing or even streaming video, but it would have been disruptive to their existing business model, so they chose to bury their head in the sand and pretend that there was nothing to this new trend.  Until it was too late.  I have a feeling that existing automakers will do the same.  Some might make the transition, but most will not.  So, yes, existing automakers could compete with Tesla, but they won't.

 

I'm kind of confused, if electric cars don't need maintencane and servicing, why does Tesla offer a service to give you a loaner car while your car is being maintenanced and serviced?

 

???

[boilermaker75]

For me, TSLA is in the too-hard to value pile at anything like the current price.

 

I agree that other manufacturers could make very attractive luxury EVs pretty soon, where so far nobody else has tried to compete. The introduction and sales of the Jaguar i Pace will be very interesting to observe.

 

What I really see as a huge draw towards Tesla at the moment is that they're the ONLY maker to offer supercharging (or equivalent) at present. I'd pay a sizeable amount more for that capability as it would enable a Tesla to be my only car, even for longer trips.

 

When that changes as it surely must at some point (either by other companies joining forces with Tesla or coming up with a competing level 3 charger) it will be interesting to see how other car-makers fare against Tesla. At the moment, they're not all-in and they're reluctant to provide something equivalent, which will put people off their brands, especially luxury models, unless they're willing to take a hit to be eco-friendly.

 

I think the dealership sales model makes it difficult for the other automakers to move into electric cars in a big way.  Since the dealers make their money on service, a large move towards electric cars would seem like throwing their dealership network under the bus.  So far they want to treat the electric car as a niche product, making them ugly little expensive cars with no range for environmentalist hippy wackos, and the dealers don't try to sell them.  Big changes in how they do business would be required for them to choose to even begin to compete with Tesla on Tesla's own turf.  Just like Blockbuster could have started mailing or even streaming video, but it would have been disruptive to their existing business model, so they chose to bury their head in the sand and pretend that there was nothing to this new trend.  Until it was too late.  I have a feeling that existing automakers will do the same.  Some might make the transition, but most will not.  So, yes, existing automakers could compete with Tesla, but they won't.

 

I'm kind of confused, if electric cars don't need maintencane and servicing, why does Tesla offer a service to give you a loaner car while your car is being maintenanced and serviced?

 

???

 

You certainly don't need to go in for an oil change  ;)

[TwoCitiesCapital]

For me, TSLA is in the too-hard to value pile at anything like the current price.

 

I agree that other manufacturers could make very attractive luxury EVs pretty soon, where so far nobody else has tried to compete. The introduction and sales of the Jaguar i Pace will be very interesting to observe.

 

What I really see as a huge draw towards Tesla at the moment is that they're the ONLY maker to offer supercharging (or equivalent) at present. I'd pay a sizeable amount more for that capability as it would enable a Tesla to be my only car, even for longer trips.

 

When that changes as it surely must at some point (either by other companies joining forces with Tesla or coming up with a competing level 3 charger) it will be interesting to see how other car-makers fare against Tesla. At the moment, they're not all-in and they're reluctant to provide something equivalent, which will put people off their brands, especially luxury models, unless they're willing to take a hit to be eco-friendly.

 

This is their main value to me as well. Realistically, it doesn't make sense for EVERY car maker to invest and develop its own proprietary charging systems and network.

 

Realistically, in the near future, Tesla could, and should, license that technology to other car companies and simply charge them a small royalty every time a non-Tesla uses they're charting network. Think anyone is going to complain to pay $1 every time they use a supercharging station if they aren't paying for gas?

 

That's the main value I see in Tesla at the moment - as an unregulated utility/monopoly who has built out the infrastructure for all other electric cars to use. Maybe something similar from their batter plant.

 

Ultimately, they may be better off leveraging those two and simply not building cars at all (since they're still losing money on every single one of them)....

[TwoCitiesCapital]

For me, TSLA is in the too-hard to value pile at anything like the current price.

 

I agree that other manufacturers could make very attractive luxury EVs pretty soon, where so far nobody else has tried to compete. The introduction and sales of the Jaguar i Pace will be very interesting to observe.

 

What I really see as a huge draw towards Tesla at the moment is that they're the ONLY maker to offer supercharging (or equivalent) at present. I'd pay a sizeable amount more for that capability as it would enable a Tesla to be my only car, even for longer trips.

 

When that changes as it surely must at some point (either by other companies joining forces with Tesla or coming up with a competing level 3 charger) it will be interesting to see how other car-makers fare against Tesla. At the moment, they're not all-in and they're reluctant to provide something equivalent, which will put people off their brands, especially luxury models, unless they're willing to take a hit to be eco-friendly.

 

I think the dealership sales model makes it difficult for the other automakers to move into electric cars in a big way.  Since the dealers make their money on service, a large move towards electric cars would seem like throwing their dealership network under the bus.  So far they want to treat the electric car as a niche product, making them ugly little expensive cars with no range for environmentalist hippy wackos, and the dealers don't try to sell them.  Big changes in how they do business would be required for them to choose to even begin to compete with Tesla on Tesla's own turf.  Just like Blockbuster could have started mailing or even streaming video, but it would have been disruptive to their existing business model, so they chose to bury their head in the sand and pretend that there was nothing to this new trend.  Until it was too late.  I have a feeling that existing automakers will do the same.  Some might make the transition, but most will not.  So, yes, existing automakers could compete with Tesla, but they won't.

 

I'm kind of confused, if electric cars don't need maintencane and servicing, why does Tesla offer a service to give you a loaner car while your car is being maintenanced and serviced?

 

???

 

You certainly don't need to go in for an oil change  ;)

 

How many people go to the dealership to do that? It's been 6 years since I owned a car, but I could do it myself in 10-15 minutes when I did OR I could pay like $20 at the local auto-shop without every having to step foot into a dealership.

[boilermaker75]

For me, TSLA is in the too-hard to value pile at anything like the current price.

 

I agree that other manufacturers could make very attractive luxury EVs pretty soon, where so far nobody else has tried to compete. The introduction and sales of the Jaguar i Pace will be very interesting to observe.

 

What I really see as a huge draw towards Tesla at the moment is that they're the ONLY maker to offer supercharging (or equivalent) at present. I'd pay a sizeable amount more for that capability as it would enable a Tesla to be my only car, even for longer trips.

 

When that changes as it surely must at some point (either by other companies joining forces with Tesla or coming up with a competing level 3 charger) it will be interesting to see how other car-makers fare against Tesla. At the moment, they're not all-in and they're reluctant to provide something equivalent, which will put people off their brands, especially luxury models, unless they're willing to take a hit to be eco-friendly.

 

I think the dealership sales model makes it difficult for the other automakers to move into electric cars in a big way.  Since the dealers make their money on service, a large move towards electric cars would seem like throwing their dealership network under the bus.  So far they want to treat the electric car as a niche product, making them ugly little expensive cars with no range for environmentalist hippy wackos, and the dealers don't try to sell them.  Big changes in how they do business would be required for them to choose to even begin to compete with Tesla on Tesla's own turf.  Just like Blockbuster could have started mailing or even streaming video, but it would have been disruptive to their existing business model, so they chose to bury their head in the sand and pretend that there was nothing to this new trend.  Until it was too late.  I have a feeling that existing automakers will do the same.  Some might make the transition, but most will not.  So, yes, existing automakers could compete with Tesla, but they won't.

 

I'm kind of confused, if electric cars don't need maintencane and servicing, why does Tesla offer a service to give you a loaner car while your car is being maintenanced and serviced?

 

???

 

You certainly don't need to go in for an oil change  ;)

 

How many people go to the dealership to do that? It's been 6 years since I owned a car, but I could do it myself in 10-15 minutes when I did OR I could pay like $20 at the local auto-shop without every having to step foot into a dealership.

 

You are better off going somewhere else for any service or repair, but people keep going to the dealers. Almost 50% of a dealership's profit comes from service.

[Dynamic]

I am keen to see whether Model 3 has a considerably lower rate of problems than the S and X. I'd hope its comparative simplicity, lessons already learned and the improved access to Tier 1 suppliers can all combine to give it Toyota/Honda levels of reliability and manufacturing control. At least it has no falcon wing doors packed with sensors or self presenting door handles.

[Peregrino]

 

Maybe that's not the case, but I have a hard time believing that Tesla is the only company making desirable cars going forward...

Other companies will come out with desireable EVs too, and then this type of behavior can be discounted.

 

Even with the incredible brand loyalty, Tesla's current valuation is unfathomable to me.

 

I think it has something to do with the way that TSLA created the sexy image.

 

Pretty much every automotive innovation in the past 70+ years has first been seen in the Mercedes S-class.  Anti-lock brakes, airbags, you name it, it always started at the high end of the food chain.

 

Seeing that, what did every car company trying to make an EV before TSLA do? 

 

The opposite.  They went low-cost, they went no-frills.  And they failed.

 

Sticking to that proven pattern of introducing features at the high end, to create demand at the mass-market level, and have that demand pull the product into the mainstream was genius. 

 

Intentional or not, it was genius.

 

I think other car companies are going to have trouble competing with that.  To me, Chevy means compromise.  It meant that before the advent of EVs anyway, but it especially does when it comes to electric vehicles.  The fact is, EVs have a lot of perceived limitations that psychologically are hard to get over (I suspect this remains the case until you own one).

 

If I was in the market for the kind of thing that gets dumped onto a rental car lot when the market softens, a Chevy or a Nissan would be just fine. 

 

But mentally, if I'm going to be "compromising" some functionality to purchase an EV, I want it to be the best g-d damn compromise I can find.

 

Meanwhile the BMW i3 looks like something out of an anime cartoon, and the Mercedes B Class is a German Fiat 500.  Somehow the other luxury players have missed the boat on trying to make electric luxury and gone for futuristic, or convenient.

 

[mrholty]

Peregrino put it more eloquently than I could have said and have tried to explain to others.

 

If I was Chevy I would have used the Bolt/Volt as an opportunity to rebadge their Buick line.  They have already tried to do that with stupid ads.  Give it a unique car and get people into the showrooms.  Or hell create a new badge or recycle the Oldsmobile badge for electric hybrids and 100% electrics.