TSLA - Tesla Motors

[Liberty]

The problem with the Falcon wing doors is that you can't have a roof rack.  So no ski box on top, no kayak, no surfboard... no Christmas tree!

 

They can't easily just change to regular doors without giving up one of their main goals, which is to be able to have an opening wide enough to be able to step in to the third row seats.  You can't go with a door that swings on a hinge -- it would be too long to fit in tight spaces.  This leaves you with the sliding door (minivans) as the only option, and they wanted to give you the feeling that you aren't buying a minivan (stigma).

 

So they are stuck.

 

Someone asked that question to Elon either at Teslive or at the shareholder meeting, and he said (about roof racks for skis and such) that they were working on an innovative solution. I don't know what it'll be, but they're aware of the problem.

 

If they do switch the doors, maybe they could go to a half door in front of the third row that opens facing the front (seen from above, the doors would be \ \ / ) so you'd have 4 regular doors plus small suicide doors in the back. That's one option. That'd be a significant redesign, but better than having a whole model fail if nobody likes falcon doors..

[JBird]

Elon on BYD cars

 

[wescobrk]

Elon on BYD cars

 

 

Entertaining. I can see Downey modeling Tony Stark on Musk. Musk came across as Stark in that video.

[txlaw]

http://www.bloomberg.com/news/2013-08-21/tesla-ceo-studies-europe-asia-plants-for-mass-market-car.html

 

Here's hoping Elon issues more stock to do this.  I'm rooting pretty heavily for TSLA the company. 

[no_free_lunch]

txlaw,

 

What is interesting about the new plants is that they already have capacity for 500k cars at existing facilities.  So this is a signal that they plan to expand beyond 500k.

 

 

[JBird]

Here's hoping Elon issues more stock to do this.  I'm rooting pretty heavily for TSLA the company.

 

+1

[no_free_lunch]

Interesting stat: 

 

In 1908 ford produced 10k cars.  In 1913 they had ramped up to 168k.  In 1916 they were up to 735k cars per year.  So a 70-fold increase in 8 years. 

 

http://en.wikipedia.org/wiki/U.S._Automobile_Production_Figures

 

Is there any reason to believe that Tesla couldn't ramp up as fast as a company in the 1900's?  True, the cars are more complex now but the assembly is increasingly done by robots.  Wouldn't robots allow you to scale up more quickly than having to train workers?

 

If tesla grew 70-fold and margin stayed constant that would put gross margin at $28B.  There is currently $400M / year in SG&A, it is hard to know how much it would grow in this circumstance but let's assume 35-fold due to economies of scale.  That would leave roughly $14B EBITDA in 8 years.  Margins might be lower on the car models but I think you could still have $8-10B EBITDA once you get to 1.5M cars.  There would still be room for expansion at that point as well, coupled with the insane prior growth the market would assign a high multiple.  So in this very hypothetical, and poorly thought out scenario :) they would likely be valued at $150-250B.  In 8 years.  Or roughly 30-40% / year.

 

:)  Not exactly value investing but I think this thing has some up-side.

 

There is also the possibility for expansion into other markets, which would just be gravy.

[txlaw]

txlaw,

 

What is interesting about the new plants is that they already have capacity for 500k cars at existing facilities.  So this is a signal that they plan to expand beyond 500k.

 

Very, very interesting.

[txlaw]

:)  Not exactly value investing but I think this thing has some up-side.

 

Couldn't tell you on the upside with respect to the stock price.  But I do think TSLA is way overvalued by the market.  Which is why I want Elon to issue stock.  (I don't own any, btw.)

 

The fact of the matter is that if TSLA is successful in catalyzing the shift to electric vehicles, all the big car cos will accelerate their own EV offerings, while still selling combustion engine vehicles at a profit.  They will likely license TSLA powertrains too.  In fact, I think some of the big guys already do.

 

It simply makes no sense for TSLA to be valued at almost twice the value of FIATY.  I do think, however, that Elon could be building the Ferrari of the 21st Century.

[TwoCitiesCapital]

http://seekingalpha.com/article/1648342-5-reasons-why-im-short-tesla

 

Interest point on the leasing of the cars -

 

If cars are becoming more technological, and are more akin to high technology then cars, then won't the same deflationary pressures affect resale values (and thus the value of the car they accept back after the lease expires) be in affect once they really get rolling?

 

Will today's model S sell for any more than 20K in 4 years when you have other cars that have a much further range, removable batteries, and have a sexier design? Interesting conundrum.

[ERICOPOLY]

http://seekingalpha.com/article/1648342-5-reasons-why-im-short-tesla

 

Interest point on the leasing of the cars -

 

If cars are becoming more technological, and are more akin to high technology then cars, then won't the same deflationary pressures affect resale values (and thus the value of the car they accept back after the lease expires) be in affect once they really get rolling?

 

Will today's model S sell for any more than 20K in 4 years when you have other cars that have a much further range, removable batteries, and have a sexier design? Interesting conundrum.

 

What do you mean by removable batteries?  Isn't the 90 second battery swap an example of this?  Model S already has that.

[ERICOPOLY]

There is nothing preventing Tesla from offering you a trade in for a longer range battery in the future.  But realistically, it's better to just rent the longer range battery for the weekend.

 

Swapping the battery is a lot faster than pumping gas.

[TwoCitiesCapital]

http://seekingalpha.com/article/1648342-5-reasons-why-im-short-tesla

 

Interest point on the leasing of the cars -

 

If cars are becoming more technological, and are more akin to high technology then cars, then won't the same deflationary pressures affect resale values (and thus the value of the car they accept back after the lease expires) be in affect once they really get rolling?

 

Will today's model S sell for any more than 20K in 4 years when you have other cars that have a much further range, removable batteries, and have a sexier design? Interesting conundrum.

 

What do you mean by removable batteries?  Isn't the 90 second battery swap an example of this?  Model S already has that.

 

I was under the impression that only the low range models had the removable batteries and that the long-range Tesla had a battery that had to be charged and could not be removed due to its size and location? I may be wrong here but that doesn't change the point - if cars are becoming pieces of high technology, what prevents them from the same deflationary pressures as technology improves. Nobody will pay anywhere near the same price for a Tesla that's 3 years old when it's so far behind in all of the new technological advancements.

 

Maybe the technological innovation stops - but then doesn't that put a ticking clock on TSLAs lead as the only viable electric car company as others catch up? I'm not trying to paint a scenario where TSLA loses any which way - it just seems like there are tons of huge potential "ifs" that are negative that in are in way priced in to a market cap that would require them to sell more luxury cars globally then BMW to begin to justify.

 

It's a great company with an overhyped investor base IMO. Anyhow, I found the article interesting regardless of what side of the debate your on.

[ERICOPOLY]

Nobody will pay anywhere near the same price for a Tesla that's 3 years old when it's so far behind in all of the new technological advancements.

 

Well, people are still buying NEW Mercedes today and they are WAYYYYYYYYYY, WAYYYYYYYYYY, WAYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY behind Tesla today  ;)

[ERICOPOLY]

Click on 2015 on this page to see where resale value is headed:

 

http://www.teslamotors.com/supercharger

 

Here is what my Tesla dashboard looked like when plugged into the Atascadero supercharger:

 

That's right, charging at 248 Amps x 363 volts!  90,000 watts.  (and they will soon be upgraded to 120,000 watt charging per Tesla).

[Liberty]

I was under the impression that only the low range models had the removable batteries and that the long-range Tesla had a battery that had to be charged and could not be removed due to its size and location? 

 

That's incorrect.

 

More details here : http://www.teslamotors.com/batteryswap

[valueorama]

Interesting stat: 

 

In 1908 ford produced 10k cars.  In 1913 they had ramped up to 168k.  In 1916 they were up to 735k cars per year.  So a 70-fold increase in 8 years. 

 

http://en.wikipedia.org/wiki/U.S._Automobile_Production_Figures

 

Is there any reason to believe that Tesla couldn't ramp up as fast as a company in the 1900's?  True, the cars are more complex now but the assembly is increasingly done by robots.  Wouldn't robots allow you to scale up more quickly than having to train workers?

 

If tesla grew 70-fold and margin stayed constant that would put gross margin at $28B.  There is currently $400M / year in SG&A, it is hard to know how much it would grow in this circumstance but let's assume 35-fold due to economies of scale.  That would leave roughly $14B EBITDA in 8 years.  Margins might be lower on the car models but I think you could still have $8-10B EBITDA once you get to 1.5M cars.  There would still be room for expansion at that point as well, coupled with the insane prior growth the market would assign a high multiple.  So in this very hypothetical, and poorly thought out scenario :) they would likely be valued at $150-250B.  In 8 years.  Or roughly 30-40% / year.

 

:)  Not exactly value investing but I think this thing has some up-side.

 

There is also the possibility for expansion into other markets, which would just be gravy.

 

That is a great way to compare. But in my opinion it is apples to oranges. I could see myself comparing Model T to IPhone. Model T was competing with buggy whips.  Model T improved transportation in every conceivable way you could think of. Similar to an Iphone, a smart-phone gives an completely different experience and improves on the old system.

 

Where as an electric vehicle is not that different from a regular gasoline car. Infact for long trips a gasoline car is preferred. I dont think it is going to capture market share  as fast as Model T.

[ERICOPOLY]

Elon on BYD cars

 

 

She deserved to be laughed at.  That's like getting an interview with the head of BMW and then telling him that the (take your pick El Cheapo economy car manufacturer) is their competitor and should they be worried about it.

 

[no_free_lunch]

valueorama,

 

The comparison was just meant to show what type of growth rate is possible on the supply side.  The demand side is another issue.

Don't forget global auto production is over 60M cars, so we are not talking about tesla creating new demand, just eating a portion of existing.

 

[Liberty]

Where as an electric vehicle is not that different from a regular gasoline car. Infact for long trips a gasoline car is preferred. I dont think it is going to capture market share  as fast as Model T.

 

Not that different on paper (it gets you from A to B, has A/C and radio and such), but in practice, owners of the Model S seem to think that like the iPhone, it is a huge improvement on what came previously. Even Consumer Reports gave it 99/100 and said it was the best car they ever drove, you have owners forming clubs to discuss the car and showing actual love for the product and company in a way that very few companies ever see, etc. Not all electrics get that kind of love, but the Tesla certainly does.

[value-is-what-you-get]

Not all electrics get that kind of love, but the Tesla certainly does.

 

The only other all electric was the EV1 by GM and owners (leasees actually) held candlelight vigils when GM took them all back and crushed them.  That's some kind of love! 

 

Looking at that map from Tesla's website that ERICOPOLY posted, it looks like a blueprint for energy self-sufficiency in transportation. 

 

Save the oil for important things like defense, plastics and fertilizer production! 

[Palantir]

 

Not that different on paper (it gets you from A to B, has A/C and radio and such), but in practice, owners of the Model S seem to think that like the iPhone, it is a huge improvement on what came previously. Even Consumer Reports gave it 99/100 and said it was the best car they ever drove, you have owners forming clubs to discuss the car and showing actual love for the product and company in a way that very few companies ever see, etc. Not all electrics get that kind of love, but the Tesla certainly does.

 

I called it in the first post. "This is going to be like the next Apple or something". Just wait till certain pro-Apple posters find this thread.

[Guest valueInv]

 

Not that different on paper (it gets you from A to B, has A/C and radio and such), but in practice, owners of the Model S seem to think that like the iPhone, it is a huge improvement on what came previously. Even Consumer Reports gave it 99/100 and said it was the best car they ever drove, you have owners forming clubs to discuss the car and showing actual love for the product and company in a way that very few companies ever see, etc. Not all electrics get that kind of love, but the Tesla certainly does.

 

I called it in the first post. "This is going to be like the next Apple or something". Just wait till certain pro-Apple posters find this thread.

 

But....but... Cars are commoditized, competitors will catch up, Tesla has no competitive advantages and worst of all, Tesla has lost marketshare to Chrysler.

 

;D :D ;D ;D :D

[Investmentacct]

If anyone know answer to this question.

 

Super charging stations TSLA plans to build, which company/companies helping them do that? Or are they going to do themselves?

 

One company I am aware who are in similar space: AVAV

http://finance.yahoo.com/q/pr?s=AVAV

 

They have provided operational charging stations at Indstry metrolink station in Diamond bar,ca

 

Last year hardly single car was plugged. Now almost all stations are occupied with Nissan leafs.

 

 

 

 

 

 

 

 

 

[fareastwarriors]

http://www.bloomberg.com/news/2013-08-22/tesla-aiming-for-china-after-hundreds-of-hong-kong-orders.html

 

Tesla Aiming for China After Hundreds of Hong Kong Orders

 

...

Ho is among the 300-plus Hong Kong residents who have made refundable deposits of HK$39,000 to HK$330,000 ($5,000-$42,500) to reserve a Model S, even before the company has said how much the cars will cost. That’s more orders than Tesla has seen in the U.K., Japan or Australia, sales manager Kenneth Lui said.