TSLA Market Action: 2018 Investor Roundtable

[SpaceCash]

Someone better with visual arts than I should make a venn diagram or something illustrating how there is no such thing as a Tesla killer, but simply a portion of untapped market share to be had. Tesla has no true "competitors" for the foreseeable future. They cannot and do not plan to sell 100% of the world's cars. If the general investing public could understand this simple concept that would be really helpful imo. It's a boring concept to rehash

 

[Fact Checking]

With the forthcoming competition in particular - would I be correct in saying absolutely none of these vehicles have Autonomous hardware sensors installed?

I believe the luxury ones generally have some of the sensors: the I-Pace has cameras, radar and autostreer hardware. Not sure about the Taycan and the E-Tron.

I don't think they have the required FSD computing hardware though, nor Lidars, which are required for all current AutoPilot competitors. So they are nowhere close to being shipped with turn-key FSD ready hardware like every post-2016 Tesla.

The Volkswagen I.D. has aggressive pricing so i guess it probably does not have even the surround cameras/sonars or autostreer, let alone radar which is expensive or Lidar which is very expensive.

So I think you are right.

 

[SOULPEDL]

My dad's bigger than your dad?

 

[Carl Raymond]

All these mentions of Tesla rivals.

one thing we can all agree on, is that eventually nearly all cars (99%) will be EVs at some point. There will be many brands, and a lot of the current ICE vendors will still be around making EVs at scale. The question isn’t whether Tesla will kill every other vendor, but rather what share of sales does it get? Its going to be at least a few percent (I think anyone but a short would agree), and if it got double digit share (10%+) while keeping margins high this company will be valued vastly higher than it is now,

With the forthcoming competition in particular - would I be correct in saying absolutely none of these vehicles have Autonomous hardware sensors installed? That seems like a major value add for Tesla cars at the moment - the fact that one day hopefully in the next few years you will be able to upgrade the software on your car and instantly have a autonomous car. To me at least thats a far bigger feature than quicbbling over the more technical specs like differences in charging voaltages and 0-60 times etc.

And do they even support OTA updates? Last time I looked dealers were refusing to support the idea because they, the dealer, were the only point of customer liaison and OTA updates were a threat to their control over that relationship.

 

[Zaxxon]

Very true. When sheer number of chargers is concerned, or when amount of kwh transferred on a daily basis is the metric, then no single charging provider comes close to what Tesla is doing.

This is another piece that isn't called out enough (in addition to the charging metric of mi/hr mattering much more than kW). Tesla charging is just worlds better than any of the other manufacturers' plans.

The Superchargers are the keystone of this, but they're not the only part. Destination chargers fill in so many gaps that they are in sum just as important. They have an additive effect that's easy to miss.

Last summer my family went on a 2,500-mile road trip from Denver through Wyoming into the Dakotas and back, with a side trip to Nebraska for kicks. We had exactly one stop that was a bit of a pain to charge, when we wound up parking the 3 at an RV park adjacent to our hotel. Aside from that moderately inconvenient stop, we spent a total of 20 minutes waiting for the car to charge, on a 2,500-mile trip. Let tell you that there is no non-Tesla EV making that trip today, and almost certainly none making it in 2020-2021. The networks going in between now and then will be hoping to fill out the interstate highway system, not the many state and US routes that are required to enable actual road tripping to places other than big cities.

I'm beginning to plan a similar trip next summer, this time though southwestern Colorado into southern Utah to visit various National Park Service sites: Bryce, Hovenweep, Capitol Reef, Natural Bridges, etc. These are off the beaten path. Yet there are--today--enough Superchargers to make the trip doable, and Destination Chargers sufficient to make it simple. I also took a 1,500-mile work trip to West Texas this past summer. Another trip that is not feasible in any other EV, nor will it be for years at the soonest. And I don't have to have half a dozen charge network accounts to make it happen. I put my destination in the car's nav, and I plug in when told to do so. I spend maybe 10 minutes when planning the trip to glance at the Destination Chargers in the locations I plan for us to stop for the evening, and I put those lodging options high on our list. That's the extent of the planning needed to take a Tesla virtually anywhere.

No other manufacturer is even planning to enable that level of convenience, much less delivering it today.

There are no Tesla killers. Only chasers.

 

[RobStark]

No autopilot so the Taycan is irrelevant. People buy Tesla for autopilot

Taycan will come standard with Otto Pilot. Almost the same thing.

 

[EVNow]

TSLA holders need to accept that other EVs will sell if priced low enough.

Till recently Leaf was the largest selling EV in the world. So, duh !

 

[SpaceCash]

No other manufacturer is even planning to enable that level of convenience, much less delivering it today.

There are no Tesla killers. Only chasers.

It's just a matter of time before every single auto manufacturer licenses out for use of Tesla's SC network, right? I see no other realistic outcome

 

[RobStark]

From what I’ve seen, Rivian’s problem will be ramping production. They’re basically Faraday Future, albeit with a more compelling product.

EDIT: this was meant as a light caveat, not to doom them to failure. I’m hoping they’re more Tesla in 2002 and less Faraday Future in 2016. Time will tell.

Faraday future has an old Pirelli factory last active in the 60s. They had machinery to build cars by hand since sold some to pay salaries. Most executives have fled, the ones remaining are not drawing salary, and blue collar works have taken a haircut. Apparently they have no or very little cash left.

Rivian purchased a Mitsubishi factory fully loaded capable of producing 240k ICEv per year that was active in 2015 and has $500M in the bank.

Rivian would be the only other EV company I would invest in. If it were publicly traded.

Edit: Just checked, Rivian didn't purchase equipment when they purchased the factory. Rivian did say they will be stamping parts for other OEMs out of Normal IL in 2019.

 

[Zaxxon]

It's just a matter of time before every single auto manufacturer licenses out for use of Tesla's SC network, right? I see no other realistic outcome

None of the big boys wants to be seen as riding Tesla's coattails. I was hoping to see upstarts like Rivian, Lucid, etc join up. Just seems like a no-brainer. But no one has. I'm sure in the long term other networks will arrive in sufficient numbers to be fine, but today it's Tesla or bust for serious long-distance travel freedom.

 

[Xpert]

Where will $tsla stock be if trump is able to pressure china into dropping the auto tarriff back to 15% or even lower?
US criticizes China's 'egregious' tariffs on American cars ahead of G-20 summit
US criticizes China's 'egregious' tariffs on American cars ahead of G-20 summit

 

[Fact Checking]

Rivian purchased a Mitsubishi factory fully loaded capable of producing 240k ICEv per year that was active in 2015 and has $500M in the bank.

The big question is, I think, is batteries: Rivian's $61k SUV entry price target looks aggressive to me for such a large car. If they use LG Chem they'll be at the mercy of a much larger player and sole supplier, and nobody else has the energy density I think. They'll also be second tier customers compared to ICE OEMs who are already fighting over LG Chen's limited supply of batteries.

 

[EVNow]

None of the big boys wants to be seen as riding Tesla's coattails. I was hoping to see upstarts like Rivian, Lucid, etc join up. Just seems like a no-brainer. But no one has. I'm sure in the long term other networks will arrive in sufficient numbers to be fine, but today it's Tesla or bust for serious long-distance travel freedom.

This is esp. true in US - where federal money is mainly spent on wars. In EU - probably there will be enough public sector investment on CCS chargers that SC is not the only game in town. In Japan (which is already quite small) there are so many CHAdeMO chargers everywhere - its not a problem. I guess in China too, public sector will take care of the charger network.

 

[RobStark]

The big question is, I think, is batteries: Rivian's $61k SUV entry price target looks aggressive to me for such a large car. If they use LG Chem they'll be at the mercy of a much larger player and sole supplier, and nobody else has the energy density I think. They'll also be second tier customers compared to ICE OEMs who are already fighting over LG Chen's limited supply of batteries.

In addition to a Saudi conglomerate that distributes Toyota,Lexus, and invest in several "green businesses" Sumitomo Corp of Japan is the other large investors.

I guess you would have to suppose Sumitomo is completely incompetent to invest in a BEV company that doesn't have guaranteed access to battery cells.

The ICEv makers have a lot of maybe,Ifs, depending on market conditions contracts with battery cell makers. Or so it seems.

Rivian is all in.

 

[22522]

Audi’s pure electric E-Tron GT is beautiful and fast

Not sure they are as good at architecting product for customers.

The car is not as useful as a 3.

 

[printf42]

I'd not be surprised if Tesla's R&D spending was 5-10 times more efficient than that of other carmakers, dollar for dollar, i.e. 1 billion dollars Tesla R&D expense is equivalent to 5-10 billion dollars of ICE OEM R&D expense. (!)

This is one of the less appreciated secrets of Tesla's business model: Elon perfected this style of vertical integration assisted innovation cycle at SpaceX, with truly spectacular results.

A lot of Tesla's R&D is extremely forward looking, fundamental research.

Could not agree more, Tesla took a short time to gain control of almost the whole software stack in a car. From autopilot, infotainment, to motor controller, to stability/traction control maybe even ABS, this is unheard of in any other OEM, or maybe even unthinkable.
This is the key to provide superior user experience, you can not innovate when there are hundreds of sub-system vendors drag you down in fear of their own obsoletion.

One of the core short thesis says Tesla has less asset than their liability thus can not justify current evaluation, but I seriously doubt the value of this software stack were properly evaluated, or whether there even exists an accounting method to show it's true value.
Combined with the deeply discounted brand value, Tesla probably is undervalued even ignoring it's growth potential.

 

[X Fan]

This is esp. true in US - where federal money is mainly spent on wars. In EU - probably there will be enough public sector investment on CCS chargers that SC is not the only game in town. In Japan (which is already quite small) there are so many CHAdeMO chargers everywhere - its not a problem. I guess in China too, public sector will take care of the charger network.

I absolutely appreciate your EV passion but some of the incessant political zealotry is grating.

FWIW: your statement on where federal money is spent is just not true.....about 60% of the Federal Spend is for Retirement & Social Programs, almost 3x Defense Spend.

Policy Basics: Where Do Our Federal Tax Dollars Go?
2017: Social Security (24%), Medicare, Medicaid, CHIP, and marketplace ACA subsidies (26%), Safety Net (9%, Earned Income Tax credit & child care credit) whereby defense was 16%.

From CBO 2017: The Federal Budget in 2017: An Infographic | Congressional Budget Office




Now, I'd like our Government to accelerate the build out of charging solutions in the U.S. so that EV products will be more acceptable to the buying public but I'd hate for GM, Ford and the others to get a free ride (as against Tesla & its shareholders who have bank rolled the SC network).

 

[Remus]

I'll take the other side of that bet.. the new Audi e-tron sedan is built on the Porsche Taycan platform. In a year or so when released, it will still come with about a 10% discount in north america (federal tax credits still in place for Audi) So, it'll take some of the Tesla S sales for sure and it won't be 1-3%,

Why is this even relevant?

last time I checked luxury car builders like Audi or BMW have lower cap than lower end car builders such as Toyota.

Tesla started from luxury cars but has no intention of staying within that market, it goes against their mission. They haven't updated the S &X for a reason. They have more important things to do.

By the time that thing comes out Tesla probably producing nearly 20000 model 3/Y per week, concentrating on ramping up the truck, if several dozen per week reduction in model S tank the stock price? There will be buyers.

 

[Zhelko Dimic]

You could say this w.r.t. all the people buying ICE as well, right ?

Because the assumption you are making is that a materially large group of people want to buy EVs and would have bought S, but for e-tron - and Tesla can't sell those Model S to someone else. I don't think the group will be big enough to materially matter.

Well, this E-tron is a first non-Tesla car that got my attention last few years, other than some of the older Porsches...

Counterpoint is, I'm not touching anything from Bavaria until they prove their batteries, I've had enough of a heartache with Porsche not standing behind their products, not going to give them chance again...

But it is funny that Germans are now unproven underdogs in this new world - for those that know. Now, majority doesn't do proper reaserch, they just go with common wisdom, and that will still favour existing luxury brands for a little while; common wisdom takes time to change, but with Tesla's sales on fire, I expect that process with get some momentum now. 2 or 3 years down the road, what we know here, is likely to be common wisdom of informed majority...

 

[Remus]

Not trying to peddle FUD here but from the people I know who have driven the Taycan they would probay disagree with you.

( and I only said probably to soften the blow)

I can see different people have different opinions. Why won't they.

But I happen to own an 2016 Audi Q7. Can't comment on the driving dynamic of Audi sedans, but the user interface of Audi sucks, at least for me and my wife. The track pad is pure sugar, who gave them the idea of a track pad without a pointer on the screen showing where you are pointing to would ever work?!

It takes god knows how many steps to just start Android auto. About radio, they have short cut keys to select your favorite stations, trouble is, the display won't show the station you just chose until half minute later.

The most frustrating thing is the start/stop button. When you stop your car, the engine will automatically turn off to save gas. Now if you put it in park and want to leave, you still must press the start button to 'turn it off'. The trouble is that the engine is off now, in gas saving mode, and half of the time pressing the button will turn the engine back on! You have to press that damn button again to turn it off!