2017 Investor Roundtable:General Discussion

[adiggs]

For joke of the day, I'd like to share with you this "insightful" analysis by a Tesla bear:

Enjoy.

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With quality analysis like that, you should encourage them to follow through and put their money where there mouth is. Maybe buy some puts so they can catch some value from Tesla's fall when they start sellign cars for $40k that cost them $110k to build (they'll make it up on volume! ).

Hard to argue with that

 

[neroden]

I was always unsure why Tesla had stores at all, given online ordering and a massive backlog, though I did visit the NY store to check out the seats in Model S before buying. They are really the least optimal use of Tesla's capital, though I guess having enough for test drives is important.

 

[erthquake]

I expect the base model to have ~55 kWh due to the smaller size of Model 3 and higher efficiency of newer powertrain.

Also see this: Tesla confirms base Model 3 will have less than 60 kWh battery pack option, cost is below $190/kWh and falling

I also expect the majority of Model 3/Y's to include the smallest batteries.

That came out before the Bolt announced a range of 238 miles. It think it's unlikely Tesla allows the base Model 3 to have less range than the Bolt. 60 kWh for the base might be more likely.

 

[neroden]

That came out before the Bolt announced a range of 238 miles. It think it's unlikely Tesla allows the base Model 3 to have less range than the Bolt. 60 kWh for the base might be more likely.

While I agree on range, it's possible that Tesla's obsessive aerodynamics work and aggressive "lightweighting" of the car will mean they can get more miles per kwh than the Bolt, which has poor aerodynamics and is kind of heavy.

 

[ValueAnalyst]

That came out before the Bolt announced a range of 238 miles. It think it's unlikely Tesla allows the base Model 3 to have less range than the Bolt. 60 kWh for the base might be more likely.

or - "more range with less battery"

Sounds more like Elon.

 

[larmor]

Historically the market has never been right in advance. Once TE will become an obvious and disproportional success that's when it'll be massively rewarded by the market.

Agreed.... Case study: apple and iphone. Netflix streaming and separate subscription for DVDs...

 

[graphix25]

That came out before the Bolt announced a range of 238 miles. It think it's unlikely Tesla allows the base Model 3 to have less range than the Bolt. 60 kWh for the base might be more likely.

The engineering drawings show during the revel back in April 2016 had 8 modules inside the pack. Assuming the modules are standardized for mass volume production and the largest battery pack is 75 kWH. Then each module is 9.375 kWH and with 6 of them mounted you would get 56.25 kWH for the base battery. Of course they could be using blank cells in each module then the small battery could be any size below 75 kWH.

We will find out in 21 days. Can't wait for the final reveal!!

 

[Bobfitz1]

In my opinion, Model S has probably hit a high point in terms of market share in the US, but that does not mean sales will not grow, because they will continue to get 40% of the market while existing customers come back to purchase their 2nd and 3rd cars. At some point they will hit a plateau for S, but its not this year or next or even the next one after that as the product is just now reaching maturity in the US and has a long ways to go world wide.

I respectfully disagree with this one point. I believe that as Model 3 ramps and all Tesla galleries have both a Model 3, Model S and MX,
plenty of new upscale customers are going to see, feel and consider MS and MX. They will be able to climb into an M3 and do the same with the larger, more luxurious and feature rich ones. I will probably stick with getting the M3 I've reserved, but from driving a loaner MS a few hundred miles, I know that for long trips MS is more of a long trip highway cruiser. Income and wealth are not the only differences between different sets of customers. Younger drivers like the nimbleness and handling of smaller, quicker cars. Older drivers frequently prefer roomier and more comfortable/luxurious ones. I think there is going to be more gain of MS and MX customers than loss due to availability of M3.

 

[Reciprocity]

I respectfully disagree with this one point. I believe that as Model 3 ramps and all Tesla galleries have both a Model 3, Model S and MX,
plenty of new upscale customers are going to see, feel and consider MS and MX. They will be able to climb into an M3 and do the same with the larger, more luxurious and feature rich ones. I will probably stick with getting the M3 I've reserved, but from driving a loaner MS a few hundred miles, I know that for long trips MS is more of a long trip highway cruiser. Income and wealth are not the only differences between different sets of customers. Younger drivers like the nimbleness and handling of smaller, quicker cars. Older drivers frequently prefer roomier and more comfortable/luxurious ones. I think there is going to be more gain of MS and MX customers than loss due to availability of M3.

I respectfully disagree with your disagreement! I think we are saying the same thing in a different way. The only reason I say that is because 40% market share means the competitors average 9% at most. Do you expect BMW, MB and Audi to go to 0% sometime soon? This wont happen because they will start discounting heavily before that happens. The reason S is so high is because they have dragged people up from lower levels and that will change with the 3. Some buyers went from a Prius or Camry to an S, and will go to a 3 in the future. Its not a knock on the S, its actually the opposite. Such an inspiring car that people take out a second mortgage or got forbid they skip the $7 lattes to get one.

 

[neroden]

The only reason I say that is because 40% market share means the competitors average 9% at most. Do you expect BMW, MB and Audi to go to 0% sometime soon?

Lexus does look like it's on a trajectory to 0. Maybe BMW, Merc, and Audi will aggressively chase the market share; not so sure about Lexus.

 

[ValueAnalyst]

Lexus does look like it's on a trajectory to 0. Maybe BMW, Merc, and Audi will aggressively chase the market share; not so sure about Lexus.

They can't aggressively chase market share. Their margins will shrink quickly as unit declines accelerate due to Model 3 (operating leverage cuts both ways) and their balance sheets are laden with debt.

 

[AlMc]

Seems that Tesla is cutting sales positions, transitioning some locations to pure service.

Effective immediately many Tesla stores will be permanently closed • r/teslamotors

It makes sense given that Tesla is going into a period where the vast majority of sales is pre-booked. They are cutting SG&A as a result.

I think we need to research this a bit more. Seems there are three schools of thought on this:

1. Trimming sales staff only. OR

2. Removing sales from some of the Service Centers that contain sales people. Or

3. Actually shutting down gallery/sales locations

Personally, I think they are doing #1 and #2

 

[MitchJi]

Elon & Team are already half way to my 4Q17 estimate of 200 MWh for powerpack deployments.

I told you .

 

[Crowded Mind]

I think we need to research this a bit more. Seems there are three schools of thought on this:

1. Trimming sales staff only. OR

2. Removing sales from some of the Service Centers that contain sales people. Or

3. Actually shutting down gallery/sales locations

Personally, I think they are doing #1 and #2

I would assume some mix of all three and would add a fourth

4. Opening new stores in new markets or locations that make more sense with the new product offering (3, solar, storage) at a greater rate than store closures.

 

[Fallenone]

I think we need to research this a bit more. Seems there are three schools of thought on this:

1. Trimming sales staff only. OR

2. Removing sales from some of the Service Centers that contain sales people. Or

3. Actually shutting down gallery/sales locations

Personally, I think they are doing #1 and #2

From my personal experience:

My impression on the currently sole Chicago Store is they should close it (and move it into a shopping mall closer to downtown) and make it service only. Nearby foot traffic is super low. I was the only pedestrian at 10:30 am and there weren't a lot of cars passing by.

To some extent the Santa Barbara store suffers from the same issues. And I know they have transferred some sales to their newly opened Hawaii store located in the biggest shopping mall there. The transferred employee said foot traffic is two orders of magnitude there.

OTOH, every store/gallery (10+) I visited that are located in malls are packed with people every time I went there.

 

[andrewt3000]

So they had 4,650 in transit at end of Q1 and 3,500 in transit at end of Q2. They produced 3000 more cars then delivered in Q2. Where did the 4,000 cars go? 4k of show models, test drive cars and loaners? that seems high.

Although I went to a Tesla store in Decatur GA about a month ago and the lot was full of Infiniti SUVs. They said they were all loaners. I guess they were leasing them. So maybe this is just the cost of not having dealerships... still seems high.

 

[Reciprocity]

So they had 4,650 in transit at end of Q1 and 3,500 in transit at end of Q2. They produced 3000 more cars then delivered in Q2. Where did the 4,000 cars go? 4k of show models, test drive cars and loaners? that seems high.

Although I went to a Tesla store in Decatur GA about a month ago and the lot was full of Infiniti SUVs. They said they were all loaners. I guess they were leasing them. So maybe this is just the cost of not having dealerships... still seems high.

I dont know, but my service center where I take my car got about 10 Model X's for test drives and loaners and showroom. They had none before 2-3 weeks ago. The one I drove was the new Drive Unit and its noticeably faster and more responsive. The guy told me they had to use pre-owned cars for loaners until they got this delivery.

 

[AlMc]

So they had 4,650 in transit at end of Q1 and 3,500 in transit at end of Q2. They produced 3000 more cars then delivered in Q2. Where did the 4,000 cars go? 4k of show models, test drive cars and loaners? that seems high.

Although I went to a Tesla store in Decatur GA about a month ago and the lot was full of Infiniti SUVs. They said they were all loaners. I guess they were leasing them. So maybe this is just the cost of not having dealerships... still seems high.

I was having this discussion with a couple TMCers 'offline' and we came to the conclusion that they were service loaners/test drive vehicles.
If the theory that is floating around is correct many might be 100bat vehicles that they will then discount a little in late August as 'used' and still have good GMs

 

[erthquake]

From my personal experience:

My impression on the currently sole Chicago Store is they should close it (and move it into a shopping mall closer to downtown) and make it service only. Nearby foot traffic is super low. I was the only pedestrian at 10:30 am and there weren't a lot of cars passing by.

To some extent the Santa Barbara store suffers from the same issues. And I know they have transferred some sales to their newly opened Hawaii store located in the biggest shopping mall there. The transferred employee said foot traffic is two orders of magnitude there.

OTOH, every store/gallery (10+) I visited that are located in malls are packed with people every time I went there.

But the Santa Barbara store is with a bunch of other dealerships and I'm sure they got that proper for a song as it had been empty for several years before Tesla snapped it up. Plus there's a lot of traffic coming off the 101 freeway and heading up Hitchcock, passing the Tesla store, on the way to upper State St. There were also hundreds of people lined up there for the Model 3 reservations, and there's a ton of money in the area.

 

[Fallenone]

But the Santa Barbara store is with a bunch of other dealerships and I'm sure they got that proper for a song as it had been empty for several years before Tesla snapped it up. Plus there's a lot of traffic coming off the 101 freeway and heading up Hitchcock, passing the Tesla store, on the way to upper State St. There were also hundreds of people lined up there for the Model 3 reservations, and there's a ton of money in the area.

Yes I was there in line on 3/31 last year. However based on the average traffic flowing, they might not need that many salespersons.