TSLA - Tesla Motors

[boilermaker75]

 

There's no reason why EVs can't be cost competitive with gasoline vehicles, and eventually cheaper. In fact, they are mechanically a lot simpler. An electric motor the size of a watermelon, a bunch of batteries that are getting better and cheaper every year, some power electronics and software to control it all... Compared to dozens and dozens of moving parts and fluids, explosions and toxic gases, 70-80% of the energy in the fuel being wasted as heat... Internal combustion engines are such a dirty hack, it's a wonder they even work at all. They were the best we had for a long time and we've done wonderful things to make them perform as well as they do now, but they're still uncompetitive with electric motors as soon as you have good enough batteries.

 

As with almost everything else in the modern world, electricity is simply a more elegant way to do things.. Just a question of time before it happens.

 

Plus there is the acceleration from an electric car. The one time I was in a Tesla I felt like I was in a rocket when the driver floored it.

[matthewd98]

There's no reason why EVs can't be cost competitive with gasoline vehicles, and eventually cheaper. In fact, they are mechanically a lot simpler. An electric motor the size of a watermelon, a bunch of batteries that are getting better and cheaper every year, some power electronics and software to control it all... Compared to dozens and dozens of moving parts and fluids, explosions and toxic gases, 70-80% of the energy in the fuel being wasted as heat... Internal combustion engines are such a dirty hack, it's a wonder they even work at all. They were the best we had for a long time and we've done wonderful things to make them perform as well as they do now, but they're still uncompetitive with electric motors as soon as you have good enough batteries.

 

As with almost everything else in the modern world, electricity is simply a more elegant way to do things.. Just a question of time before it happens.

 

Most people don't know that electric cars were actually more common than gasoline cars in the early 1900s. The most common car the at the time was the external combustion engine (aka steam engine) car, followed by the electric car and in last was the internal combustion engine (aka gasoline engine) car. The only reason the gasoline engine took off what was because of the large influx of capital that went into the oil industry due to technological advances which allowed for easy and less costly extraction of oil. Ultimately, the price of a technology depends on the amount of money invested in developing and improving it. Now that batteries are more commonly used than back then, the shift to electric cars will inevitably happen and it's only a matter of time till prices come down IMO.

 

Plus there is the acceleration from an electric car. The one time I was in a Tesla I felt like I was in a rocket when the driver floored it.

 

That's because electric motors have all their torque available at 0 rpm -- it's a characteristic of AC induction motor which is used in the Tesla. The trade-off is the car tops out around 250km/h and it accelerates slowly at high speeds.

[Liberty]

The trade-off is the car tops out around 250km/h and it accelerates slowly at high speeds.

 

At those speeds, it's more a question of going for a gearless design. Add a gear or two and top speed could be higher, but what's the point really? I also wouldn't say that it "accelerates slowly at high speeds", but I guess it always depends what you compare it to :)

[matthewd98]

At those speeds, it's more a question of going for a gearless design. Add a gear or two and top speed could be higher, but what's the point really? I also wouldn't say that it "accelerates slowly at high speeds", but I guess it always depends what you compare it to :)

 

Should of been more specific, I was comparing it to a car with similar specs (torque & hp). It's still quite fast to get to top speed compared to an average car. And you're right, there's really no point of going past 250km/h, let alone ~150km/h lol.

 

Not sure if a gearbox quite works on a car like that due to the ridiculous amount of torque. From what I understood, they had one with 2 gears on the Roadster, but it was always locked in second gear. They eventually dropped it because of "durability issues".

[Liberty]

At those speeds, it's more a question of going for a gearless design. Add a gear or two and top speed could be higher, but what's the point really? I also wouldn't say that it "accelerates slowly at high speeds", but I guess it always depends what you compare it to :)

 

Should of been more specific, I was comparing it to a car with similar specs (torque & hp). It's still quite fast to get to top speed compared to an average car. And you're right, there's really no point of going past 250km/h, let alone ~150km/h lol.

 

Not sure if a gearbox quite works on a car like that due to the ridiculous amount of torque. From what I understood, they had one with 2 gears on the Roadster, but it was always locked in second gear. They eventually dropped it because of "durability issues".

 

I think the problems with the original Roadster transmission was mostly because of their supplier. Tesla was a very small company at the time and the supplier didn't take them seriously and had the C-team to work on that part, and it just sucked.

 

Pretty sure in-house engineering Tesla team could make it work. It's not like there aren't very high-performance transmissions out there that have to handle a lot, and Tesla has very fine-grained control over the amount of torque that is being produced, so they could tune everything in software to make sure everything stays within the tolerances of a hypothetical transmission.

 

But in any case, I don't think they need one, so they'll probably stay 1-speed for the foreseeable future.

[matthewd98]

I think the problems with the original Roadster transmission was mostly because of their supplier. Tesla was a very small company at the time and the supplier didn't take them seriously and had the C-team to work on that part, and it just sucked.

 

Pretty sure in-house engineering Tesla team could make it work. It's not like there aren't very high-performance transmissions out there that have to handle a lot, and Tesla has very fine-grained control over the amount of torque that is being produced, so they could tune everything in software to make sure everything stays within the tolerances of a hypothetical transmission.

 

But in any case, I don't think they need one, so they'll probably stay 1-speed for the foreseeable future.

 

Interesting point! Could very well be, but I can't say for sure. I wish I knew more on the topic of gear boxes and transmissions overall, but my knowledge is limited in that area. I know a lot about electric motors though since I study electrical engineering.

[Liberty]

I think the problems with the original Roadster transmission was mostly because of their supplier. Tesla was a very small company at the time and the supplier didn't take them seriously and had the C-team to work on that part, and it just sucked.

 

Pretty sure in-house engineering Tesla team could make it work. It's not like there aren't very high-performance transmissions out there that have to handle a lot, and Tesla has very fine-grained control over the amount of torque that is being produced, so they could tune everything in software to make sure everything stays within the tolerances of a hypothetical transmission.

 

But in any case, I don't think they need one, so they'll probably stay 1-speed for the foreseeable future.

 

Interesting point! Could very well be, but I can't say for sure. I wish I knew more on the topic of gear boxes and transmissions overall, but my knowledge is limited in that area. I know a lot about electric motors though since I study electrical engineering.

 

The recent biography of Musk has good sections on this. Originally they thought things would be easy, just buy a Lotus platform and get suppliers to make the parts you need, put it all together, voilà!

 

In fact, suppliers sucked and caused delays, they had to do the work in-house on many things after all, and they had to modify something like 90% of the parts in the original Lotus platform, so they might as well have started from scratch..

[Liberty]

http://files.shareholder.com/downloads/ABEA-4CW8X0/523463770x0x843991/DCDCCFDA-0709-405B-931A-B2F48A224CE8/Tesla_Q2_2015_Shareholder_Letter.pdf

[Liberty]

Ha, they broke the Consumer Reports rating system  8)

 

http://www.consumerreports.org/cro/cars/tesla-model-s-p85d-breaks-consumer-reports-ratings-system

[ERICOPOLY]

https://www.youtube.com/watch?feature=em-subs_digest&utm_campaign=teslaweekly.com&utm_medium=email&utm_source=Tesla_Weekly_41&v=5nMcJxA3lto

 

Elon Musk and JB Straubel discuss their vision of the energy future.

 

Straubel says that they would be disappointed at Tesla if battery costs were not under $100 per kWh by the end of this decade.

 

So about $8,500 for the batteries in my Tesla.  So it won't be expensive to replace depleted batteries.

 

So their margins on new cars sold would be very high in that scenario, given today's margins with expensive batteries.

[Jurgis]

So their margins on new cars sold would be very high in that scenario, given today's margins with expensive batteries.

 

More likely new car prices will drop correspondingly.

[gary17]

I think the margin depends on if tesla will be making Porsches or Honda Civics of battery cars IMO

[no_free_lunch]

Yeah I would assume the margins will differ depending on the car.

 

However, as a crude comparison Honda has gross margins of 23-24%, which is about where tesla is at.  Harley Davidson is closer to 40%.  If tesla can stay ahead with design and features I see no reason their margins can't go up.

[Liberty]

It's the Apple model. If they can stay differentiated and desirable enough to a certain segment of the market, they can retain a lot of the value despite falling battery prices. But if they aren't much better/different than anything else, they'll have to compete on price and the margins won't rise much. It's harder to do with cars than with pocket computers, but it's doable.

 

If in 5 years a Model S is better than any $60,000-100,000 car on the market, they can charge 60-100k for it even if the battery costs them $8000 at that point rather than $30,000-40,000 now or whatever.

 

Commodities are priced on production costs.

 

Differentiated products are priced on the value they deliver and what the market will bear.

[ERICOPOLY]

 

Tesla will target Porsche’s gross profit margin of 50%, which the German automaker reported for the past few years prior to when it was acquired by Volskwagen.

 

http://insideevs.com/tesla-sets-gross-profit-margin-target-at-porsches-almost-unheard-of-50/

[ERICOPOLY]

Porsche all-electric car:

 

http://www.latimes.com/business/autos/la-fi-hy-porsche-electric-sports-car-20150914-story.html

 

The German sports car company has announced its all-electric Mission E sports car. The concept vehicle, which will be on sale within five years, boasts a 600 horsepower motor, a range of more than 300 miles, and a recharging time of under 15 minutes.

 

Using the auto industry's first 800-volt electrical system, the Mission be will be able to charge to 80% of total battery capacity in 15 minutes -- when, that is, a system of 800-volt charging stations are built.

 

It will also feature some dramatically futuristic electronics. An eye-tracking system, able to sense what part of the dashboard the driver is looking at, will hi

 

This part sounds childish though (oh yeah, this has nothing to do with Tesla... right):

"We don’t do a car because Telsa has done a Model S," he said. "We have our own plans. The time was not right before now to bring a pure battery car onto the market. But now the time is right."

[Picasso]

http://www.teslamotors.com/modelx

 

Live stream of Tesla handing out the first Model X signature models to customers.  In case anyone wanted to see what it's like.

[ERICOPOLY]

http://www.teslamotors.com/modelx

 

Live stream of Tesla handing out the first Model X signature models to customers.  In case anyone wanted to see what it's like.

 

0-60 in 3.2 seconds if you get the P90D version of the Model X.

 

I think that's relatively good for an SUV?  Does the Cayenne do that?

 

"The Model X is expected to get 5-star NHTSA crash safety ratings in all categories, Musk said, including rollover avoidance. It would be the first SUV or minivan to do so."

 

http://money.cnn.com/2015/09/29/autos/tesla-model-x/index.html?iid=hp-grid-dom

 

I think one of the nice things that Tesla is doing is dragging the rest of the sluggards across the finish line -- they won't be able to sit back and continue to make these death traps for much longer without working to improve their safety.

[Picasso]

Not even close from Porsche at 4.5 seconds 0-60 at the same price point.

 

I really like how they avoid using model year numbers from the traditional point of view.  My 2013 Tesla will be getting improved performance via a software update when v7 rolls out.  Really incredible what they are doing.

[Liberty]

Neat feature:

 

A medical grade HEPA filter strips outside air of pollen, bacteria, viruses and pollution before circulating it into the cabin. There are three modes: circulate with outside air, re-circulate inside air and a bioweapon defense mode that creates positive pressure inside the cabin to protect occupants.

 

And of course, the 17-speaker stereo goes to eleven. At least Musk is never boring  8)

[Phaceliacapital]

If I ever turn gay, it's for this guy.

[tombgrt]

Holy shit that launch event was sweet to watch. Most impressed with overall safety personally.

 

Musk was chuckling through the whole presentation. Hilarious.  ;D

[Picasso]

I know that investors point to the difference in valuation between Tesla and GM/Fiat/Ford but I think it misses the overall difference of the two "sub-sectors" if you will.  Tesla is not pursuing GAAP profits (nor will it ever as long as Musk runs the show), it's going to keep reinvesting massive amounts of cash flow back into making other cars look like antiquated pieces of metal.  And Tesla will pressure all the other auto companies to kill their profits to produce cars that are sustainable and fun to own.

 

You might not like the valuation on Tesla, but Musk is out to destroy the profits of the other auto makers.  Musk has the kind of employees that believe in that goal and will work longer/harder to make it happen even if it involves less pay.  It's a very unique situation that investors miss when they try and compare the valuation gap.  If Tesla is successful, you won't see anywhere near the level of profitability in other auto makers that you see today.

 

I only mention this because Pabrai mentioned in his last meeting how crazy the valuation is on Tesla versus GM or Fiat.  Well yeah, but you also have to understand that Musk is trying to destroy those other companies.  That's a real risk to shorting Tesla or owning other automakers for the long-term.  We've seen this before in another low margin, capital intensive industry (Amazon), and there is a decent chance we're seeing the same thing in the car industry.

 

Like Vance mentioned in his book, when you really sit back and look at what auto commercials try to do to make their products look amazing, they involved things like dancing hampsters or dogs in the car or anything other than how great the new innovation is.  It's an industry ripe for massive changes where the long storied giants are moving at a glacial pace.  Musk is able to put a biohazard or ludicrous/maximum plaid mode which would never happen at GM.

 

 

[Liberty]

I've never owned Tesla, I mostly follow it for the technology and products rather than for financial stuff, but I think that what the shorts are missing is the ambition gap between this company and the regular carmakers.

 

It's a bit like those who thought that Bezos just wanted to sell books online. His ambition was so much larger than that...

[jschembs]

I know that investors point to the difference in valuation between Tesla and GM/Fiat/Ford but I think it misses the overall difference of the two "sub-sectors" if you will.  Tesla is not pursuing GAAP profits (nor will it ever as long as Musk runs the show), it's going to keep reinvesting massive amounts of cash flow back into making other cars look like antiquated pieces of metal.  And Tesla will pressure all the other auto companies to kill their profits to produce cars that are sustainable and fun to own.

 

You might not like the valuation on Tesla, but Musk is out to destroy the profits of the other auto makers.  Musk has the kind of employees that believe in that goal and will work longer/harder to make it happen even if it involves less pay.  It's a very unique situation that investors miss when they try and compare the valuation gap.  If Tesla is successful, you won't see anywhere near the level of profitability in other auto makers that you see today.

 

I only mention this because Pabrai mentioned in his last meeting how crazy the valuation is on Tesla versus GM or Fiat.  Well yeah, but you also have to understand that Musk is trying to destroy those other companies.  That's a real risk to shorting Tesla or owning other automakers for the long-term.  We've seen this before in another low margin, capital intensive industry (Amazon), and there is a decent chance we're seeing the same thing in the car industry.

 

Like Vance mentioned in his book, when you really sit back and look at what auto commercials try to do to make their products look amazing, they involved things like dancing hampsters or dogs in the car or anything other than how great the new innovation is.  It's an industry ripe for massive changes where the long storied giants are moving at a glacial pace.  Musk is able to put a biohazard or ludicrous/maximum plaid mode which would never happen at GM.

 

As an on-and-off short, the only thing that scares me is the model 3 gaining traction in the market. And even then, your bolded statement above raises a point that should equally be considered by longs at this valuation.