TSLA - Tesla Motors

[rb]

All that said. I'd llve an electric Tundra with a ton of torque that can last 500mi and charge in 10 minutes.  They need to solve range, charging, and make batteries weigh less.  With a truck the payload is a really important factor, the heavier the batteries the less you can carry.  If they solve all of that and offer for $35k I'd pick one up for sure.

 

I feel the same way. But how often do you do long road trips?  I already have a commuting car (Hyundai Elantra 38mpg) and a much less used family car for vacations or when we need a larger vehicle (Toyota Sequoia).  I put about 30K miles per year on the Elantra and about 5K miles per year on the Sequoia.  If I ever buy a Tesla, it will replace the Elantra not the Sequoia.  I will drive it around town and for commuting to work, and I'll just use another vehicle when I go on a long road trip, but I'll put far more miles on the Tesla than the SUV.  There are plenty of families that have more than one car and could do this sort of thing too, I'm sure I am not unique.  I don't think the road trip charging situation will be a factor in electric car sales for a long time.  When the 2-car-families market is completely saturated and you are now trying to sell electric vehicles to the families with only 1 car, or a second electric car to the multi-car families who already have 1 electric car, then this will become an issue.

Nate, would you also get the rainbow pooping option on that unicorn you've just described?

 

Now, joking aside. Since the battery is the most expensive part of an EV range is a huge factor and plays a big part in determining the price of the car. I'm more in line with rk and diametrically opposed to what you're looking for. I live in an urban area and don't road trip quite so much. What I'd actually really like is an EV that has only 100 miles of range and is costs 25k. Why should I pay so much for for range that I'm only rarely going to use?

 

I think the natural solution here is that the EV market will be segmented by range. That way a cheap bastard like me can get his 25k city car and the big boys can get their super Sequoia for 130k.

[oddballstocks]

My wife drives our Sequoia around town, and that could be as an EV.

 

But I mostly drive long road trips.  I work from home.  We do a longer trip at least once if not twice a month, and the other weekends we'll drive an hour or two go to hike.

 

Liberty, to your point with kids.  It's what your expectations are.  We drive long periods with the kids, doing 4hr straight isn't an issue (I have four boys, 8, 6, 3, 1.5) and they do fine.  We drive longer to VA, FL and will make minimum stops. On longer 15h trips we pull into fuel, and have a little shift thing so we can get everyone in and out of the bathroom before we're done fueling. We rush them, and that's just what life is.  I'm sure I'm in some weird 1% group, eh, whatever.

 

Ultimately I think the best solution is probably the EV with a small gas engine. The drivetrain is all electric but a small gas engine powers the battery.  I mean if I had an EV truck I could always toss my Honda 2000eu generator in the bed, and run an extension cord.  It's the same concept.

 

I'd be curious to know how electric motors handle salt and rust belt conditions.  The rust here destroys vehicles. Mechanical engines can work even all rusted out, whereas I don't know if an electric motor can.

 

I'd be happy to switch if they were economical.  A Tesla that fits my family is $100k, the cost of a small house.  The gas savings math on that one comes out to near infinity, even with the 20k miles we put on my wife's car.

 

I like what Audi is doing with their electric SUV.  I know people have mocked that it looks like a suburban family vehicle. But the thing is, that's what suburban families want to buy.  Most people I know don't want to stand out, they just want to blend in.  They don't want a flashy car, or to be part of an EV club.  They want something affordable, reliable, that serves a purpose.

[ERICOPOLY]

I have bathroom anxiety when I travel long distances with kids so I take them in my Roadtrek Sprinter van.  I just pull over to the shoulder on the freeway for their quick whizzz, and then get back onto the road.

 

 

 

[rkbabang]

My wife drives our Sequoia around town, and that could be as an EV.

 

But I mostly drive long road trips.  I work from home.  We do a longer trip at least once if not twice a month, and the other weekends we'll drive an hour or two go to hike.

 

Liberty, to your point with kids.  It's what your expectations are.  We drive long periods with the kids, doing 4hr straight isn't an issue (I have four boys, 8, 6, 3, 1.5) and they do fine.  We drive longer to VA, FL and will make minimum stops. On longer 15h trips we pull into fuel, and have a little shift thing so we can get everyone in and out of the bathroom before we're done fueling. We rush them, and that's just what life is.  I'm sure I'm in some weird 1% group, eh, whatever.

 

Ultimately I think the best solution is probably the EV with a small gas engine. The drivetrain is all electric but a small gas engine powers the battery.  I mean if I had an EV truck I could always toss my Honda 2000eu generator in the bed, and run an extension cord.  It's the same concept.

 

I'd be curious to know how electric motors handle salt and rust belt conditions.  The rust here destroys vehicles. Mechanical engines can work even all rusted out, whereas I don't know if an electric motor can.

 

I'd be happy to switch if they were economical.  A Tesla that fits my family is $100k, the cost of a small house.  The gas savings math on that one comes out to near infinity, even with the 20k miles we put on my wife's car.

 

I like what Audi is doing with their electric SUV.  I know people have mocked that it looks like a suburban family vehicle. But the thing is, that's what suburban families want to buy.  Most people I know don't want to stand out, they just want to blend in.  They don't want a flashy car, or to be part of an EV club.  They want something affordable, reliable, that serves a purpose.

 

I don't think your driving patterns are typical.  Most people commute 10-30 miles and go on long road trips rarely (a few times per year at most).  Having the spouse who does the most daily driving use the EV daily and using the ICE vehicle for road trips and for the other spouse, would save a bunch of fuel over having 2 ICE vehicles.  And the road trips wouldn't be an issue because they are rare and they wouldn't use the EV.

 

[oddballstocks]

I have bathroom anxiety when I travel long distances with kids so I take them in my Roadtrek Sprinter van.  I just pull over to the shoulder on the freeway for their quick whizzz, and then get back onto the road.

 

This is my dream.  I've always said to my wife and friends, "If the money tree blooms I will buy a Sprinter RV van"  That's awesome you're doing this. 

 

I think trips to visit in-laws would be a lot better if the kids could relax on a couch.  I'd use it to drive down the night before a snow storm, sleep in a parking lot, then ski the next day.  It would be handy for impromptu parties after kids sporting events.

[rb]

Ultimately I think the best solution is probably the EV with a small gas engine. The drivetrain is all electric but a small gas engine powers the battery.  I mean if I had an EV truck I could always toss my Honda 2000eu generator in the bed, and run an extension cord.  It's the same concept.

 

I'd be curious to know how electric motors handle salt and rust belt conditions.  The rust here destroys vehicles. Mechanical engines can work even all rusted out, whereas I don't know if an electric motor can.

 

I'd be happy to switch if they were economical.  A Tesla that fits my family is $100k, the cost of a small house.  The gas savings math on that one comes out to near infinity, even with the 20k miles we put on my wife's car.

 

I like what Audi is doing with their electric SUV.  I know people have mocked that it looks like a suburban family vehicle. But the thing is, that's what suburban families want to buy.  Most people I know don't want to stand out, they just want to blend in.  They don't want a flashy car, or to be part of an EV club.  They want something affordable, reliable, that serves a purpose.

What you're describing there is a type of plug-in hybrid type vehicle. That's sort of what BMW did with the e models in their 3 and 5 series lines. Unfortunately with those vehicles you still get the nasty bits of having an ICE motor in your car: oil, cooling, maintenance, etc. Not having to worry about those is a cool part of EVs. For me the biggest appeal of an BMW e is that you can drive those in HOV lanes over here.

 

Winter salt and cold is not an issue for the motors. They're made of aluminium so they don't rust and I think they operate better at colder temps. The bigger problem is the effects of the cold on the battery since batteries don't like cold weather. But this has been taken care of by battery management systems. As far as I know (not 100% sure) what happens in the winter is that the battery uses some of its power to keep itself warm. This results in a somewhat lower range.

[Liberty]

My wife drives our Sequoia around town, and that could be as an EV.

 

But I mostly drive long road trips.  I work from home.  We do a longer trip at least once if not twice a month, and the other weekends we'll drive an hour or two go to hike.

 

Liberty, to your point with kids.  It's what your expectations are.  We drive long periods with the kids, doing 4hr straight isn't an issue (I have four boys, 8, 6, 3, 1.5) and they do fine.  We drive longer to VA, FL and will make minimum stops. On longer 15h trips we pull into fuel, and have a little shift thing so we can get everyone in and out of the bathroom before we're done fueling. We rush them, and that's just what life is.  I'm sure I'm in some weird 1% group, eh, whatever.

 

Ultimately I think the best solution is probably the EV with a small gas engine. The drivetrain is all electric but a small gas engine powers the battery.  I mean if I had an EV truck I could always toss my Honda 2000eu generator in the bed, and run an extension cord.  It's the same concept.

 

I'd be curious to know how electric motors handle salt and rust belt conditions.  The rust here destroys vehicles. Mechanical engines can work even all rusted out, whereas I don't know if an electric motor can.

 

I'd be happy to switch if they were economical.  A Tesla that fits my family is $100k, the cost of a small house.  The gas savings math on that one comes out to near infinity, even with the 20k miles we put on my wife's car.

 

I like what Audi is doing with their electric SUV.  I know people have mocked that it looks like a suburban family vehicle. But the thing is, that's what suburban families want to buy.  Most people I know don't want to stand out, they just want to blend in.  They don't want a flashy car, or to be part of an EV club.  They want something affordable, reliable, that serves a purpose.

 

I think you're in the 2% I was talking about.

 

Hybrid drivetrains are a transitional phase and will go away. It's very inelegant, because in EV mode you're lugging around the weight of an ICE, and in ICE mode, you have a small under-powered engine. On top of that, you have more mechanical complexity than either a pure EV or ICE. Even if you're taking long trips 10 times a year, you're lugging an ICE powertrain, using more electricity than otherwise needed, the remaining 345 days of the year.

 

The Chevy Volt is fine, but it's not the final destination of this technology. Batteries are getting better on power/weight, and costs are falling. Fast charging networks will be everywhere and their charge rates are going up... No reason to burn gasoline in passenger vehicles when the transition is complete.

[ERICOPOLY]

I went to the Rocklin service center today with questions on the battery packs.

 

Info collected

1). Battery packs will soon come down 30% in price

2). A refurbished Model S 85kwh replacement battery pack costs $17,000

3). A new Model S 85kwh replacement battery pack costs $25k now

4).  Originally, a new Model S battery pack was about $48,000

 

They are planning on soon making available 100kwh replacement packs as upgrades for cars with smaller packs.

 

He said the Gigafactory is responsible for the anticipated 30% upcoming price drop

 

 

[Spekulatius]

I went to the Rocklin service center today with questions on the battery packs.

 

Info collected

1). Battery packs will soon come down 30% in price

2). A refurbished Model S 85kwh replacement battery pack costs $17,000

3). A new Model S 85kwh replacement battery pack costs $25k now

4).  Originally, a new Model S battery pack was about $48,000

 

They are planning on soon making available 100kwh replacement packs as upgrades for cars with smaller packs.

 

He said the Gigafactory is responsible for the anticipated 30% upcoming price drop

Interesting numbers. With 15k miles/year, 30mpg and $3/gallon, my fuel cost is about $1500/year. So a 85kwh battery pack is equivalent to 11 years of fuel for a typical vehicle and mileage.

 

How much does it cost to install a 220V charger in the garage? $1000? Or do people just use the 110V, even if it takes a while?

[A Dhandho Investor]

Shorting this thing seems to require a much greater burden of proof than going long (as short positions usually do). 1) asymmetry is working against you as your downside is limitless and upside limited (even if buying puts, option premium is pretty high here); 2) cost of borrowing shares is expensive; 3) cash flush tech firm likely to take this whole thing out at $20-30B valuation creating a floor for stock price (consider the fact that a few years ago, FB bought WhatsApp--that's right, a messaging app--for $20B), 4) this is a "hot" stock driven a lot by underlying bullish speculation, leaving shorts vulnerable to potentially devastating losses.

 

The Model 3 has become the best selling luxury car in America and broken to the top 5 of all cars sold. Let that sink in. And thus far, it's been selling the high margin high ATP models and still beat out much cheaper equivalent sedans in sales. There is a lot more demand out there and most sales have only been to U.S. customers (yet a global market exists for the model). Don't know what shorts have to stand on when they point out that only $45K+ models have been selling thus far (that is bad as an indication for demand and profitability how?).

 

Through SpaceX and Tesla, Musk has significantly impacted the world in a positive way whether you like his behavior or not.

 

I agree that shorting requires a greater burden of proof, but I disagree that there is a floor on the stock price at a valuation of $20-30B. You should consider the following:

- Most assets are already pledged (either via asset-backed loans or like the Gigafactory that actually belongs to Panasonic)

- Tesla's brand equity is decreasing (lot's of M3 quality issues, delivery issues, 420 tweet lawsuits, lack of investment in service centers)

- Tesla is behind the competition with respect to Full Self Driving

- This remains a one man show. What if Musk leaves or is forced to leave?

- Bond markets are more sophisticated than equity markets. Tesla's debt is trading at CCC levels

- Competition is coming. I admit it is a small sample size, but here in Belgium there are a lot of leased cars and my company (Deloitte) has selected the iPace instead of a Tesla at the executive level. Anyways, sales of model S and Model X are flat year-over-year so the growth should come from the M3, which, as indicated, still has lot's of quality issues.

- Besides lack of intellectual property: if you believe that Tesla has some kind of manufacturing advantage, you should definitely read this article: https://www.cnbc.com/2018/10/19/tesla-ceo-elon-musk-extreme-micro-manager.html

- the article also touches upon further proof of accounting fraud (mechanics working at Fremont booking their time on "training" or "R&D")

 

So all in all, this could definitely be a 0 imo.

 

 

 

[ERICOPOLY]

Shorting this thing seems to require a much greater burden of proof than going long (as short positions usually do). 1) asymmetry is working against you as your downside is limitless and upside limited (even if buying puts, option premium is pretty high here); 2) cost of borrowing shares is expensive; 3) cash flush tech firm likely to take this whole thing out at $20-30B valuation creating a floor for stock price (consider the fact that a few years ago, FB bought WhatsApp--that's right, a messaging app--for $20B), 4) this is a "hot" stock driven a lot by underlying bullish speculation, leaving shorts vulnerable to potentially devastating losses.

 

The Model 3 has become the best selling luxury car in America and broken to the top 5 of all cars sold. Let that sink in. And thus far, it's been selling the high margin high ATP models and still beat out much cheaper equivalent sedans in sales. There is a lot more demand out there and most sales have only been to U.S. customers (yet a global market exists for the model). Don't know what shorts have to stand on when they point out that only $45K+ models have been selling thus far (that is bad as an indication for demand and profitability how?).

 

Through SpaceX and Tesla, Musk has significantly impacted the world in a positive way whether you like his behavior or not.

 

I agree that shorting requires a greater burden of proof, but I disagree that there is a floor on the stock price at a valuation of $20-30B. You should consider the following:

- Most assets are already pledged (either via asset-backed loans or like the Gigafactory that actually belongs to Panasonic)

- Tesla's brand equity is decreasing (lot's of M3 quality issues, delivery issues, 420 tweet lawsuits, lack of investment in service centers)

- Tesla is behind the competition with respect to Full Self Driving

- This remains a one man show. What if Musk leaves or is forced to leave?

- Bond markets are more sophisticated than equity markets. Tesla's debt is trading at CCC levels

- Competition is coming. I admit it is a small sample size, but here in Belgium there are a lot of leased cars and my company (Deloitte) has selected the iPace instead of a Tesla at the executive level. Anyways, sales of model S and Model X are flat year-over-year so the growth should come from the M3, which, as indicated, still has lot's of quality issues.

- Besides lack of intellectual property: if you believe that Tesla has some kind of manufacturing advantage, you should definitely read this article: https://www.cnbc.com/2018/10/19/tesla-ceo-elon-musk-extreme-micro-manager.html

- the article also touches upon further proof of accounting fraud (mechanics working at Fremont booking their time on "training" or "R&D")

 

So all in all, this could definitely be a 0 imo.

 

It's just odd to hear somebody say that the brand equity is decreasing when I see an invasion of Model 3 cars on the roads everyday.

[Investmentacct]

Shorting this thing seems to require a much greater burden of proof than going long (as short positions usually do). 1) asymmetry is working against you as your downside is limitless and upside limited (even if buying puts, option premium is pretty high here); 2) cost of borrowing shares is expensive; 3) cash flush tech firm likely to take this whole thing out at $20-30B valuation creating a floor for stock price (consider the fact that a few years ago, FB bought WhatsApp--that's right, a messaging app--for $20B), 4) this is a "hot" stock driven a lot by underlying bullish speculation, leaving shorts vulnerable to potentially devastating losses.

 

The Model 3 has become the best selling luxury car in America and broken to the top 5 of all cars sold. Let that sink in. And thus far, it's been selling the high margin high ATP models and still beat out much cheaper equivalent sedans in sales. There is a lot more demand out there and most sales have only been to U.S. customers (yet a global market exists for the model). Don't know what shorts have to stand on when they point out that only $45K+ models have been selling thus far (that is bad as an indication for demand and profitability how?).

 

Through SpaceX and Tesla, Musk has significantly impacted the world in a positive way whether you like his behavior or not.

 

I agree that shorting requires a greater burden of proof, but I disagree that there is a floor on the stock price at a valuation of $20-30B. You should consider the following:

- Most assets are already pledged (either via asset-backed loans or like the Gigafactory that actually belongs to Panasonic)

- Tesla's brand equity is decreasing (lot's of M3 quality issues, delivery issues, 420 tweet lawsuits, lack of investment in service centers)

- Tesla is behind the competition with respect to Full Self Driving

- This remains a one man show. What if Musk leaves or is forced to leave?

- Bond markets are more sophisticated than equity markets. Tesla's debt is trading at CCC levels

- Competition is coming. I admit it is a small sample size, but here in Belgium there are a lot of leased cars and my company (Deloitte) has selected the iPace instead of a Tesla at the executive level. Anyways, sales of model S and Model X are flat year-over-year so the growth should come from the M3, which, as indicated, still has lot's of quality issues.

- Besides lack of intellectual property: if you believe that Tesla has some kind of manufacturing advantage, you should definitely read this article: https://www.cnbc.com/2018/10/19/tesla-ceo-elon-musk-extreme-micro-manager.html

- the article also touches upon further proof of accounting fraud (mechanics working at Fremont booking their time on "training" or "R&D")

 

So all in all, this could definitely be a 0 imo.

 

It's just odd to hear somebody say that the brand equity is decreasing when I see an invasion of Model 3 cars on the roads everyday.

 

Guessing that somebody who lives in Belgium and haven't landed on West Coast anytime recently after Model 3 launch. People who are living in or closer to California, for them it is easy to see why Brand equity going way up as more and more people are owning and taking test rides first time in Tesla and  who sees quoted/stated Tesla model 3 issues do not exist. Hence; the quote: "Ships sail round the world; flat world society flourishes." --Just returned from 1500 mile road trip, 1450 of which driven by Tesla Autopilot and no fatigue from Journey. This is amazing as I recall same tiring road trip 5 years back.

[walt373]

Appreciate the discussion around long-term outlook for EVs. But Tesla has more pressing matters in the short run. Do the bulls have any theories on why they haven't raised equity yet? Or do they expect them to pay off maturing debts with cash flow?

 

If I were long, I'd be screaming for them to raise already. Not to mention they will need a lot of money for capex if the EV market is as huge an opportunity as longs believe - they should be raising ASAP to take advantage. Instead, they have been slashing their capex budget and laying off workers. Strange.

[ERICOPOLY]

It's a bit like assessing the brand value of panty hose without listening to women who actually wear them.  Peter Lynch spoke to his wife.

[Jurgis]

Appreciate the discussion around long-term outlook for EVs. But Tesla has more pressing matters in the short run. Do the bulls have any theories on why they haven't raised equity yet? Or do they expect them to pay off maturing debts with cash flow?

 

If I were long, I'd be screaming for them to raise already. Not to mention they will need a lot of money for capex if the EV market is as huge an opportunity as longs believe - they should be raising ASAP to take advantage. Instead, they have been slashing their capex budget and laying off workers. Strange.

 

Yes, IMO they should raise and should have raised already. Might be Elon's blind spot.  ::)

[Dalal.Holdings]

Lol on Tesla's "brand equity" falling...IMO this thing reminds me of Apple 15-20 years ago. Small (and growing) group of devoted followers (mostly young and tech savvy individuals in the U.S. and often on the West coast) and customers who loved their Apple products. Meanwhile all the "serious" analysts critical of the company's products as "toys" and no match for the "serious" competitors Microsoft, RIMM, etc... (of course the big dogs like Microsoft had all the capital anyone could dream of in the early 2000s and a massive R&D budget, yet could only match the iPod with the Zune...). I'm sure it took Deloitte a while to have its employees ditch their Blackberries for iPhones--it's individual consumers who purchase and popularize revolutionary new products, not institutions.

 

Tesla has some serious brand equity and it's only growing. Any tech firm would buy this out for $20-30B even with hidden liabilities in single digit $Billions than try to create it in house: Apple shelved its own car program and Waymo has to rely on Chrysler's Pacifica vans...that's right...Chrysler (of all brands...).

[A Dhandho Investor]

Guessing that somebody who lives in Belgium and haven't landed on West Coast anytime recently after Model 3 launch. People who are living in or closer to California, for them it is easy to see why Brand equity going way up as more and more people are owning and taking test rides first time in Tesla and  who sees quoted/stated Tesla model 3 issues do not exist. Hence; the quote: "Ships sail round the world; flat world society flourishes." --Just returned from 1500 mile road trip, 1450 of which driven by Tesla Autopilot and no fatigue from Journey. This is amazing as I recall same tiring road trip 5 years back.

 

Funny that you mention that M3 issues do not exist, because they are all over Twitter and the Teslamotorsclub forum. Even Elon himself stated that they went from production hell to delivery hell.

 

In terms of delivery issues I am not going to bother you with the countless examples of people rescheduling their holidays or selling their old cars just in time for thinking about getting their M3 (after having paid in full) just to hear from Tesla that their car was sold to someone else.

 

A couple of examples of quality issues:

- Model 3 + rain:

https://twitter.com/zomgapocalypse/status/1034564569488875523

- Bumper falling off:

https://jalopnik.com/bumper-falls-off-brand-new-tesla-model-3-after-30-minut-1828306917

- Mismatching body panels (in terms of colors). https://twitter.com/SeanCur47228352/status/1040384620859056128

- Broken undercarriage: https://twitter.com/djmastamynd/status/1051205096099393536

- Paint issues (caused by NOT painting car in paintshop but out in the open):

https://twitter.com/pitoneux/status/1040097692632866816

- Malfunctioning software

https://twitter.com/jamesvta/status/1053686623190142976

- Turn signal issues:

https://teslamotorsclub.com/tmc/threads/turn-signal-issues.129189/

 

Oh yes, I am also not going to bother you with the countless examples of aftersales issues these people then have with reaching Tesla support or having their car fixed again. I've read stories about people having to wait 3 weeks just to get their taillight fixed or over 1 month because of lack of parts, etc..

 

That's just the client point of view.

 

At the Tesla side, employee turnover is about 100% at the VP level, Tesla is sued by ex-employees that were forced to leave after whistleblowing, there are stories of engineers normally working on Autopilot that had to man the M3 line just to reach Elon's stated goal of 5k cars / week at the end of Q2. Similarly, these engineers and Solarcity employees as well have been employed to deliver cars in the last week of Q3 in the hope of reaching a profit..

 

But hey, I am already happy that your reply came further then "You clearly have not driven a Tesla yet, bro" (which seems more like Ericopoly's reply to my post).

 

In the land of the blind, the one-eyed man is king?

 

 

 

[A Dhandho Investor]

Lol on Tesla's "brand equity" falling...IMO this thing reminds me of Apple 15-20 years ago. Small (and growing) group of devoted followers (mostly young and tech savvy individuals in the U.S. and often on the West coast) and customers who loved their Apple products. Meanwhile all the "serious" analysts critical of the company's products as "toys" and no match for the "serious" competitors Microsoft, RIMM, etc... (of course the big dogs like Microsoft had all the capital anyone could dream of in the early 2000s and a massive R&D budget, yet could only match the iPod with the Zune...). I'm sure it took Deloitte a while to have its employees ditch their Blackberries for iPhones--it's individual consumers who purchase and popularize revolutionary new products, not institutions.

 

Tesla has some serious brand equity and it's only growing. Any tech firm would buy this out for $20-30B even with hidden liabilities in single digit $Billions than try to create it in house: Apple shelved its own car program and Waymo has to rely on Chrysler's Pacifica vans...that's right...Chrysler (of all brands...).

 

So could you walk me through what kind of proprietary technology Tesla has that is actually valuable to big tech? It clearly ain't technology with respect to FSD, because Tesla just dropped it from the menu.

 

These Tesla-Apple analogies are ridiculous btw. I hope you are not one of those guys that believes that Tesla will have 50% market share in 15 years. The entire US M3 high end backlog was gone after one quarter of increased production numbers. They had to scramble this week to announce the cheaper model just to be able to show some decent Q4 sales numbers. Once EU homologation is a go there is maybe room for another 50k of high end deliveries, but then the growth story collapses.

 

[walt373]

I feel like these "Tesla is the Apple/Amazon of cars" analogies are just totally backwards and inappropriate. It is not that simple. Given the tough economics of the car industry, why are so many willing to assume high profit margins - let alone domination of the industry - is even possible?

 

This is a value investing forum so we of all people should be looking to the numbers for evidence, not just making grand claims based on hypotheticals. When has Apple or Amazon ever had such ugly financials as Tesla? If Tesla is the Apple of cars, shouldn't they have huge margins? This is not some startup, they've been doing this for a long time, so what evidence have we seen that Tesla = Apple? Apple prints money despite having tons of competition. Tesla has done nothing but incinerate money despite having very little competition. What value is there to a brand when it does not translate to margins?

[Spekulatius]

To be fair, the economics in the smartphone industry are tough too, but Apple has been able to command a premium. that said, Apples iphone 1 was profitable from day one and Tesla is racking up higher losses, the more they produce. They also have structurally high costs due to manufacturing in one of the most expensive regions in the US (Fremont, CA) and it’s not clear to me that the quality of their produce is close to industry standards, much less for the premium segment they operate in.

 

I think it is funny to think that there is a floor to TESLA stock, because other tech companies may buy it (GOOG, Apple). While it is possible, it wouldn’t be smart, because they could buy the assets they want for pennies on the $, if TESLA goes in distress and gets reorganized. However, at this point, I suspect thet most employees would be gone (at least engineers and managers), but the Gigafactory may be worth something. I hear this all the time that investors hitch their Waggon on a buyout for accompany in distress, yetnit rstely happens, because companies in distress are such a mess usually, they no acquirer would touch them.

 

I hope they make it though and learn how to sell cars for a profit. it still doesn’t mean this works out as an investment, but the world is better off, if this company stays in business, IMO.

 

 

[walt373]

Nobody wants to buy the lawsuits and the SEC/DOJ investigations.

[Patmo]

Dem emotional investments

[A Dhandho Investor]

There is a new article out in the LA Times regarding Tesla's upcoming Q3 results.

 

Unfortunately I cannot read it as I am Europe based, but from the snippets I have seen it contains a reference to all the tools Tesla used to artificially boost Q3 cashflow.

 

There is also a section called "Vaporware" about Tesla's FSD and the fact that they charged customers 3k for a feature that does not exist.

 

All in all, seems another chapter of Tesla's continuing rise in brand equity!

[Dalal.Holdings]

When has Apple or Amazon ever had such ugly financials as Tesla?

Answer: late 1990s and even uglier (they needed $150M from Microsoft to get through it...) (https://en.wikipedia.org/wiki/Gil_Amelio#Apple_Computer)

 

Funny that complaints about delivery issues (it took me over a week to get my car!) all seem to end in "It's an amazing car" once the consumer gets delivery (literal quote from the LA Times article). But I guess Tesla has no "brand equity" because clearly what customers care about is not the product, but the drama at the company...

 

FSD a mistake, sure, but Tesla will get past it (and at least seems to be owning up to it).

 

Also, I can't believe Tesla is engaging in certain practices to enhance cash/working capital...I mean, delaying payments to suppliers--who ever heard of such a thing?? Tesla is clearly evil too--I mean, look at all the problems with their products. The old automakers though--a very clean 100 year record of superior, reliable products like the Ford Pinto and superior diesel technology in Europe with absolutely clean emissions.

 

And yeah, it's silly that a tech firm would buy Tesla. It's not like Google wasn't about to buy the company back in 2013 or people like Larry Page haven't been involved in investing in the company from the early days or anything...(https://www.theguardian.com/technology/2015/apr/21/google-almost-bought-tesla-elon-musk-larry-page) .

 

...

It would not be easy to scoop up all the valuable pieces (let alone the brand--which I guess some believe has no equity) in Chapter 11. Chapter 11 is also highly unlikely as someone WILL buy this thing before it gets to that point--whether at $20-30B as I estimate or not. I mean, you had a government that was at least discussing the possibility of taking Tesla private at much higher price tag ("funding secured"). It's not very easy to replicate assets like the NUMMI plant (which Tesla picked up at firesale prices shortly after GM's bankruptcy) or an already up and running auto business--after all, there haven't been too many new auto companies successfully launched in a long time for a reason. It's not easy to replicate all the agreements with many state governments across the U.S. that Tesla has to be the only automaker allowed to sell directly to consumers.

[SHDL]

On Apple’s history of losses in the 90s:  I was looking this up the other day and I was actually a bit surprised to find that they only had two years of losses back then (1996/7).  Plus, rarely did they get anywhere close to having net debt.  I was somehow under the impression that they were in far worse financial condition.

 

Sorry, nothing more to add re: Tesla...