2017 Investor Roundtable:General Discussion

[mongo]

What is really funny is that with the current rebate system, it is cheaper to buy a Tesla Semi than a Model X in Ontario!
Because for the Model X, the max rebate is $14,000 CAD, while for the Semi it is $75,000 CAD.

My understanding us that the rebate is 60% of price difference between EV and diesel versions. 75k would require a 125k price difference. So for the 180k LR version, a comparable diesel would need to be 55k (net cost pretax of 105k). For Founder's, comparable would need to be 75k or less. That would put cost of FE at 125k not including tax.

With tax on the sales price, most X's would be lower cost (but not have the towing and range)

 

[Starno]

I think FSD-exclusive features will be enough to gradually increase FSD uptake throughout 2018. No need for Level 4 FSD, yet, to boost demand.



Did you include EAP/FSD?

I personally expect FSD to be achieved in 2020.
Level 4 in 2020 available to every Tesla owners who have the FSD package.

I'm on the record.

 

[ValueAnalyst]

The combo of rebate level and max amount makes no sense... Loblaw’s order alone probably maxed it out... why not limit the rebate to $10k and have 5x to 10x more reservations???

Still better than nothing though. I wonder if California or the US will offer something similar. Tesla Semi is the quickest way to reduce CO2 emissions.

 

[Waiting4M3]

Reports of East Coast owners (non-employees) getting config emails

Tesla Pittsburgh on Twitter

 

[pz1975]

What is really funny is that with the current rebate system, it is cheaper to buy a Tesla Semi than a Model X in Ontario!
Because for the Model X, the max rebate is $14,000 CAD, while for the Semi it is $75,000 CAD.

Why wouldn't someone/some company buy as many Tesla semis as they can in Ontario, keep them for whatever the minimum time is to get the rebate, and then sell them at near full price in another province that doesn't have the rebate? Obviously Tesla would eventually stop selling them to this person/company, but that would be a massive return for a fairly short-term investment.

 

[myusername]

"Topping the charts in reservations, Loblaw has around 285 Semis on preorder, well above the 100 units ordered by United States-based PepsiCo earlier this week."

Wow, thats impressive. Quite a momentum.

The truck business may turn out to be a much more important part of the business than anticipated.

New record!

285 trucks... that's like 28 million dollars in 2020+ revenue. Tesla is a 60 billion dollar company. numbers of Tesla Semis that would be required to (realistically... not hype-istically) affect the share price would be 100x that. but it sure does sound pretty S3XY!... step functions... first principles... all really cool sounding stuff.

 

[Reciprocity]

285 trucks... that's like 28 million dollars in 2020+ revenue. Tesla is a 60 billion dollar company. numbers of Tesla Semis that would be required to (realistically... not hype-istically) affect the share price would be 100x that. but it sure does sound pretty S3XY!... step functions... first principles... all really cool sounding stuff.

Don't worry, it will be 100x that.

 

[SteveG3]

There are only about 4 or 5 companies that sell ~99% of the roughly 250,000 semis bought in North America each year.

The higher the number of large companies putting Tesla semis into test fleets in 2019-2020, the more likely Tesla may take 10% even 25% or more market share as early as 2023 or so (and quite possibly continue taking more market shares in the years following). That is, for these large players, a test fleet order now of 50 semis, may turn into an annual order 500 year after year to replace a diesel fleet. Of course, the economic advantage of a Tesla semi is substantially greater in Europe where diesel prices are far higher than the U.S., so, the demand for Tesla's semis may double or more when a European version is available. Then there is the money Tesla may make if they charge 7 cents per kWh at the MegaChargers but are able to produce the electricity for less.

I'm not putting any of this into my valuation yet... but, I did some back of the napkin math a week or two ago, and this business has the potential to be quite the needle mover, i.e., potentially adding on the scale of 2/3 to 4/5 of the current market cap from this program alone in the scenario I looked at c.2025 (and that's not factoring in potential profits from MegaChargers, which would, of course, grow as the years go by and the replacement cycle is worked through). Again, not putting anything like that into my valuation today, but, this is a very appealing program both on its potential impact on reducing carbon emissions and its potential to deliver needle moving levels of earnings.

 

[myusername]

Don't worry, it will be 100x that.

yeah, we've never heard this story before. never. not once. from Tesla, that some revolutionary product of the future was just "unveiled" and that in "12 to 18 months" everything will be different. never heard that one before.

 

[SteveG3]

ps

as to what's moving the needle today, anytime a bear throws out the "Tesla Killers coming" gibberish, ask him/her, "with your view that there's all this competition coming, all those "big boys" with "so much more resources" coming, what year do you predict Tesla will fall from the #1 spot in terms of number of long range (200 miles plus) EVs sold per year?"

either they

a) tell you a year after 2025, in which case they've just refuted themselves the gibberish they'd repeated,

or,

b) 99+% chance their call will prove incorrect.

 

[RobStark]

. Of course, the economic advantage of a Tesla semi is substantially greater in Europe where diesel prices are far higher than the U.S., so, the demand for Tesla's semis may double or more when a European version is available.

Aren't electricity prices much higher as well?

Can TE install the required solar farms in Europe to provide $.07 per kWh or close enough to it Megacharging?

 

[SteveG3]

Aren't electricity prices much higher as well?

Can TE install the required solar farms in Europe to provide $.07 per kWh or close enough to it Megacharging?

Sounds like you see some challenges to Tesla doing this. I'm wondering what you are looking at.

 

[myusername]

ps

as to what's moving the needle today, anytime a bear throws out the "Tesla Killers coming" gibberish, ask him/her, "with your view that there's all this competition coming, all those "big boys" with "so much more resources" coming, what year do you predict Tesla will fall from the #1 spot in terms of number of long range (200 miles plus) EVs sold per year?"

either they

a) tell you a year after 2025, in which case they've just refuted themselves the gibberish they'd repeated,

or,

b) 99+% chance their call will prove incorrect.

this whole time people have been comparing Tesla to Apple... what if Tesla is Blackberry... a new company... first in an exploratory market that hasn't yet figured out what the real mass product will be... Apple had been around for 20+ years... that's a "dinosaur" in computer technology time... their stock was garbage... etc... so let's visualize the year 2020... only 2 years away. in theory, Tesla should be building factories and exploding at the seams selling M3s out of Freemont... crushing the competition with their "moat".

remember how f'ing cool blackberries were for about 10 seconds? or make that about 3 to 5 years... remember how engrained they were in our workplace?... how big their "moat" was?... how long has Tesla been the coolest thing since sliced bread?... let's say 3 years.

so, i give it any time between now and 2020 that at a minimum one of the large auto manufacturers will put an end to this.

i think it's hilarious that the perception is that a $1T industry is sitting there with their thumbs up their ***es.

 

[RobStark]

Sounds like you see some challenges to Tesla doing this. I'm wondering what you are looking at.

I am just asking the questions.

When I bring up higher diesel/petrol cost in regards to Model S3X Europeans usually bring up higher electricity cost. Some Germans say without free Supercharging the savings aren't that great if at all.

There is greater population density in Europe so less cheap land along major highway corridors. And then there is the "not invented here problem- "non discriminatory" European regulations that regulate Tesla competitive advantages away.

 

[Zhelko Dimic]

this whole time people have been comparing Tesla to Apple... what if Tesla is Blackberry... a new company... first in an exploratory market that hasn't yet figured out what the real mass product will be... Apple had been around for 20+ years... that's a "dinosaur" in computer technology time... their stock was garbage... etc... so let's visualize the year 2020... only 2 years away. in theory, Tesla should be building factories and exploding at the seams selling M3s out of Freemont... crushing the competition with their "moat".

remember how f'ing cool blackberries were for about 10 seconds? or make that about 3 to 5 years... remember how engrained they were in our workplace?... how big their "moat" was?... how long has Tesla been the coolest thing since sliced bread?... let's say 3 years.

so, i give it any time between now and 2020 that at a minimum one of the large auto manufacturers will put an end to this.

i think it's hilarious that the perception is that a $1T industry is sitting there with their thumbs up their ***es.

BB shoot themselves in the foot by not innovating quickly enough and clinging to their strengths.Apple didn't kill them; without BB's blunders, Apple could have turned out to be very good second in the marketplace. But corporate cultures almost guaranteed result the way it played out.

It's quite a gambit you're playing if you bet Tesla will screw up similarly. If anything, their corporate culture is what guarantees they will end up #1. People that work there are driven by the mission. Same for the SpaceX. Otherwise, I'd actually criticize culture in Tesla as not repeatable enough, but it's the mission that ties them all together.

Company (and people) on the mission is a dangerous thing. For competitors.

But anyway, I doubt you want to understand this. You aren't a student of dynamic systems and growing companies, I follow your posts and I feel that you find comfort in stable state industries, standard fin. analysis. Let me guess: You're an engineer in a big, stable company or government where everything is done by the book?

And about 1T industry sitting there? Please read Innovator's Dilema.

 

[Reciprocity]

this whole time people have been comparing Tesla to Apple... what if Tesla is Blackberry... a new company... first in an exploratory market that hasn't yet figured out what the real mass product will be... Apple had been around for 20+ years... that's a "dinosaur" in computer technology time... their stock was garbage... etc... so let's visualize the year 2020... only 2 years away. in theory, Tesla should be building factories and exploding at the seams selling M3s out of Freemont... crushing the competition with their "moat".

remember how f'ing cool blackberries were for about 10 seconds? or make that about 3 to 5 years... remember how engrained they were in our workplace?... how big their "moat" was?... how long has Tesla been the coolest thing since sliced bread?... let's say 3 years.

so, i give it any time between now and 2020 that at a minimum one of the large auto manufacturers will put an end to this.

i think it's hilarious that the perception is that a $1T industry is sitting there with their thumbs up their ***es.

Black berries where never cool amongst cool people. Only stuffy business men. Tesla is Apple not because of anything related to cool, but related to staying up market where the margins are fat. In terms of cool, it's not even close. No one every asked to take a picture with my cellphone. I regularly get asked by people wanting to take a picture with me model x.

 

[Mike Smith]

https://www.facebook.com/video.php?v=1960542880864514

 

[ValueAnalyst]

https://www.facebook.com/video.php?v=1960542880864514

don't tell @myusername

 

[SteveG3]

I am just asking the questions.

When I bring up higher diesel/petrol cost in regards to Model S3X Europeans usually bring up higher electricity cost. Some Germans say without free Supercharging the savings aren't that great if at all.

There is greater population density in Europe so less cheap land along major highway corridors. And then there is the "not invented here problem- "non discriminatory" European regulations that regulate Tesla competitive advantages away.

As to consumer car owners feedback you've received, I would think most, if not all, S, 3, or X owners do not have access to electricity at the costs Tesla will incur installing their own solar/battery... even in the cases the consumer has a solar/battery setup (given the scale of the systems, home vs. MegaCharger, and Tesla not having to pay the markup over cost a consumer would when buying their panels/battery from a provider).

Yes, Tesla may run into some issues re "not invented here"... but, this might be the exception rather than the rule. Germany could well be a big exception, of course. Yes, greater population density may be an issue. That said, there may be discussions going on among various agencies in many other countries in Europe re programs to incentivize EV semis (look at what Ontario just did), and that may include helping make MegaCharger locations easier for Tesla to set up, even as perhaps Germany and a few others may make it more difficult.

 

[SteveG3]

(snip)

so, i give it any time between now and 2020 that at a minimum one of the large auto manufacturers will put an end to this.

i think it's hilarious that the perception is that a $1T industry is sitting there with their thumbs up their ***es.

okay, fine, this one I'll reply to ; )

So, then, we have you on record claiming by 2020 at a minimum at least one other automaker will sell more long range (200+ miles) EVs worldwide in the year than Tesla does?

I sure can picture a whole bunch of words other than "yes, that is what I am saying," coming back in response to this post, but, that's okay, such a bunch of words would be quite telling as to whether you actually believe in this "flood of Tesla killers coming" narrative.

ps @myusername, you'll note that I for one don't think the global incumbents "thumbs are up their ***es" as you put it. You'll see from my post number #33939 yesterday, that I explicitly stated I don't think they are being "stupid" and made my case as to why I don't think their response to Tesla/EVs is about them being "stupid" "having their heads in the sand" etc. However, I also explained why I find it very very probable, that the global auto incumbents will vastly undersupply the demand for long range EVs for many many years to come, forcing consumers to buy ICE instead, and leaving Tesla wide open growth amid a long range EV supply shortage into the 2030s. This is what I refer to as the "fractured tipping point moat" for Tesla... the tipping point for demand for long range EVs will be separated by the tipping point for supply by roughly a decade. That is a tremendous moat, a moat that I do not believe we've ever seen before in global markets.