2017 Investor Roundtable:General Discussion

[jbcarioca]

Some dealers discounting Chevy Bolt...

Automotive News this morning had an article about this which pointed out that some dealers had substantial discounts while others nearby sometimes had surcharges. The article, in a paywall, still has been quoted widely, often ignoring the lack of consistency among GM dealers. It also stated that GM disapproves of surcharges but can do nothing to prevent or discourage them, proving once again how much consumer benefit from the franchise system.
I think it is early days to evaluate Bolt market success other than pointing out that it will take creative F&I to compensate for the lack of service income and sales learning curve. In the meantime we can expect prepaid oil changes, engine tuneups and emissions testing from forward-thinking dealers.

 

[HG Wells]

GM's roll out of the bolt EV was not scheduled to reach North Carolina till September.

Just looked at the Rick Hendrix Chevrolet dealership in Cary North Carolina. They have three bolts on the lot. They could have bought them from dealers in California but perhaps GM is getting ahead of themselves.

If the Tesla model three did not exist I would buy a bolt. I was in line at 430 in the morning getting my reservation. Looking forward to a December delivery.

 

[AlMc]

To be fair: Ken and Bob add much more color when they post links.

I just learned recently how to 'cut and paste'. Thus, I am just using my new rudimentary skill set on TMC

 

[kenliles]

Best rebuttal to this article(without even trying, just using things like facts and data), from Electrek this morning:

Chevy Bolt EV is already being discounted by $5,000+ as deliveries are stalling

So in summary, Tesla is in trouble because GM is using profits to buy back stock rather than invest in batteries and electric cars and GM dealerships are in the best EV markets can't sell their existing inventory of Bolts without discounts 3 months after release because the Bolt is not compelling and dealerships are disincentivized from selling electric cars because of the lack of residual maintenance income. DeBord talks about a "mid-model refresh" for the Bolt if the Model III is late. Tough to refresh a concept that was DOA because its creators and those responsible for its sales have little interest in its success.

+1
and If they produce very many more- what they'll be buying back is the stock of their own cars, me thinks--
they should really use this as a teaching moment and stepping stone that quickly evolves to a better value proposition. It's not a bad first step- but the clock is moving quickly now. I really hope a handful of ICE-makers transition, but have never been very optimist

 

[kenliles]

To be fair: Ken and Bob add much more color when they post links.

I just learned recently how to 'cut and paste'. Thus, I am just using my new rudimentary skill set on TMC

is there a way around re-typing all these articles?
what is this thing you speak of, 'cut and paste'?

 

[techmaven]

You could compare the specs for powerwell 1 vs PW2 to get the actual weight/volume energy density improvements. I did this back of the napkin calculation a month or so ago and the gains were on the order of what JB and Elon have started, around 30%, but I'm no mathamatian.

I humbly submit that we do not know enough information to be able to derive meaningful information this way. We don't know the characteristics of the NMC cells that went into the PowerWall 1, nor do we know the characteristics of the NMC cells going into the PowerWall 2. Absent meaningful data on these cells, we can't isolate the energy density improvements for volumetric energy density. And in the end, not particularly useful for evaluating the situation with NCA+silicon/graphite cells on the automotive side.

 

[Cattledog]

Porsche pockets $17,250 profit on every vehicle

The Volkswagen AG brand (Porsche) delivered 238,000 vehicles last year and posted an operating profit of 3.9 billion euros ($4.1 billion), up 14 percent from 2015. Put those numbers together and it’s on pace to net about $17,250 a vehicle, up 9 percent.

Its Teutonic peers don’t have nearly as much profit punch. Daimler AG pocketed about $5,000 a vehicle last year, roughly the same margin BMW AG has been managing.

Porsche isn’t that precious anymore. In terms of product, by now it’s about one-tenth the size of BMW, and in the past three years has boosted its annual output by 47 percent.

Hitting dealerships in 2014, the Macan crossover now accounts for roughly 40 percent of Porsche sales.These days “the little tiger,” as they call the Macan around the shop, starts at a prosaic $47,500. But few people who spring for a Porsche settle for basic -- it’d be like going to a steakhouse and skipping the sides.

Porsche’s revenue breaks down to almost $99,000 per vehicle. One of the few options that’s still free: factory pickup. If you’re just joining the club, you might want to skip the espresso seats and buy a plane ticket instead.

For me, Porsche has always been the best (but not perfect) auto comparison. High performance, high design, high margin, low/moderate volume, etc. So as we move from 1/3 the size of Porsche to twice its size over 24 months things will be interesting. And it looks like a Model Y has a good precedent in the Macan (but it's gotta have at least one version with regular doors - we like our Falcons on our X, but it's a sales limiter mass market).

Now Porsche is not in energy storage, solar roofs, ridesharing as service, car as operating system, etc. - or at least not as far in as Tesla. So while it's a good comparison for auto, it isn't for the burgeoning part of the business. Which is why I (we here on the forum) are so bullish.

 

[techmaven]

Automotive News this morning had an article about this which pointed out that some dealers had substantial discounts while others nearby sometimes had surcharges. The article, in a paywall, still has been quoted widely, often ignoring the lack of consistency among GM dealers. It also stated that GM disapproves of surcharges but can do nothing to prevent or discourage them, proving once again how much consumer benefit from the franchise system.
I think it is early days to evaluate Bolt market success other than pointing out that it will take creative F&I to compensate for the lack of service income and sales learning curve. In the meantime we can expect prepaid oil changes, engine tuneups and emissions testing from forward-thinking dealers.

The rollout of the Bolt is quite strange. I suspect that GM expected significant uptake by EV enthusiasts in particular metro locations in CA and allocated inventory in that manner. I think they didn't realize how many of these consumers are content to wait for the Model 3. Meanwhile, there are plenty of other locations that are starved for product. It is also strange for GM to already be allocating inventory for overseas with such a low amount of inventory to fulfill demand in other regions in the U.S. This is likely to be a short term issue and points to GM's lack of confidence in the product IMHO.

Overall though, we need the percentage of EVs in the greater automotive market to grow. A Chevy Bolt that stumbles badly is not good for the movement overall. The Tesla naysayers would love to have it both ways... a Bolt that sells well obviously is a Tesla killer in their eyes, never mind that it really is taking away ICE marketshare and low range BEV/PHEV/hybrid marketshare. And a Bolt that doesn't sell well is doom for electric vehicles. In both cases, Tesla is doomed.

 

[Lump]

SA's Montana Skeptic opinion on the recent capital raise.

http://seekingalpha.com/article/4056349-tesla-raises-small-capital-large-questions

F. Goldman Sachs: "What, you want to pay $262 for stock we believe is worth $187? Be our guest."

The lead underwriter on the latest offering was Goldman Sachs.

At the time of the offering, Goldman Sachs had a TSLA price target of $187.

Reflect on that.

 

[dalalsid]

I just discovered from reading the electrek article that the Bolt is available in VA. I saw that Northern VA dealers have about 6 each but no discounts. If the 5k discounts hit here, I might look into leasing one. That should put leasing under 400$/month for a well equipped Bolt. I'm assuming I get my Model 3 in late 2018 just before I need to return my Leaf. So Bolt + Model 3 could be my cars and I can go all EV before 2020.

 

[techmaven]

SA's Montana Skeptic opinion on the recent capital raise.

http://seekingalpha.com/article/4056349-tesla-raises-small-capital-large-questions

F. Goldman Sachs: "What, you want to pay $262 for stock we believe is worth $187? Be our guest."

The lead underwriter on the latest offering was Goldman Sachs.

At the time of the offering, Goldman Sachs had a TSLA price target of $187.

Reflect on that.

Montana Skeptic seems afflicted with the conspiracy theorist's disease. He's gotta look past the obvious answers in search for some deeply hidden nuggets. Overall though, he seems disappointed in the small raise.

Personally, I think Tesla should have asked for $2 billion or $2.5 billion. It isn't like both bears and bulls weren't prepped for that kind of raise anyways. An extra $1 billion could come in handy.

 

[AudubonB]

Personally...An extra $1 billion could come in handy.

Yes, I've always found that to be the case.

 

[Xorbit]

SA's Montana Skeptic opinion on the recent capital raise.

http://seekingalpha.com/article/4056349-tesla-raises-small-capital-large-questions

F. Goldman Sachs: "What, you want to pay $262 for stock we believe is worth $187? Be our guest."

The lead underwriter on the latest offering was Goldman Sachs.

At the time of the offering, Goldman Sachs had a TSLA price target of $187.

Reflect on that.

There are one or two writers on seekingalpha who post interesting articles, but the main reason I go there is to get a gauge of sentiment. Lots of studies indicate that investing follows a power law distribution, most of the gains go to a minority of participants. So the majority may carry you to short-term momentum gains, but you definitely want to be investing against it. What is notable on seekingalpha is that the overwhelming majority of articles and comments are bearish on TSLA. The last time I witnessed something this extreme was in the late 90s dotcom mania, where the overwhelming majority was bullish.

A wise trader (can't remember who) once said "The market teaches, then it punishes" and I think this is really true. Well what have the Nasdaq crash of 2000 and the broader market crash of 2008/9 taught investors?: That the way to make money is by shorting bubbles. Do a word search on 'bubble' in the comments section of a seekingalpha article and you get an astonishing number of hits. Bottom line: lazy short thinking goes "the way to make money is by shorting bubbles and TSLA is clearly a bubble." This will end for them like the 2000 and 2008/09 crashes ended for longs.

 

[elasalle]

There are one or two writers on seekingalpha who post interesting articles, but the main reason I go there is to get a gauge of sentiment. Lot's of studies indicate that investing follows a power law distribution, most of the gains go to a minority of participants. So the majority may carry you to short-term momentum gains, but you definitely want to be investing against it. What is notable on seekingalpha is that the overwhelming majority of articles and comments are bearish on TSLA. The last time I witnessed something this extreme was in the late 90s dotcom mania, where the overwhelming majority was bullish.

A wise trader (can't remember who) once said "The market teaches, then it punishes" and I think this is really true. Well what have the Nasdaq crash of 2000 and the broader market crash of 2008/9 taught investors?: That the way to make money is by shorting bubbles. Do a word search on 'bubble' in the comments section of a seekingalpha article and you get an astonishing number of hits. Bottom line: lazy short thinking goes "the way to make money is by shorting bubbles and TSLA is clearly a bubble." This will end for them like the 2000 and 2008/09 crashes ended for longs.

Yes TSLA is bubbles .. bubbles of champagne.
The time to be Short TSLA might have been a year ago(model X hubris ..), or a year from now(say because others catch up). But at the very moment, just when Tesla is about to deliver it's mass market car .. it does not make sense to be short Tesla. What other pure Growth opportunities in the market now?

 

[luvb2b]

quick question, assuming a $100,000 retail price for a model s/x, and 25% gross margin implying $75,000 of cost of goods sold:

what's the breakdown in that $75,000 between materials and labor? and are there other broad categories that go into that cost-of-goods sold, like warranty reserves or something?

thanks in advance.

 

[winfield100]

.
In the meantime we can expect prepaid oil changes, engine tuneups and emissions testing from forward-thinking dealers.

.
im confused... why get those on an EV..... do i need more caffeine....?
(to be fair, I was required to get emissions check on a PHEV, almost a wave thru tho)

 

[FredTMC]

quick question, assuming a $100,000 retail price for a model s/x, and 25% gross margin implying $75,000 of cost of goods sold:

what's the breakdown in that $75,000 between materials and labor? and are there other broad categories that go into that cost-of-goods sold, like warranty reserves or something?

thanks in advance.

Sorry, I don't recall how much "Labor" hours per car... but certainly for clarity I think you want to exclude SG&A from Labor hours.

 

[Jonathan Hewitt]

.
im confused... why get those on an EV..... do i need more caffeine....?

That's why it's "prepaid." Make the customer pay for them upfront before they wisen up and learn all the benefits of EVs. Are people out there that ignorant? I'll let you be the judge.

 

[dw4ngg]

Anyone have some time to see which provider is leading this effort?

----quote----



Solar park planned for nearly 30 acres in Madison County
161 words
18 March 2017
11:55
Associated Press Newswires
APRS
English
(c) 2017. The Associated Press. All Rights Reserved.


ANDERSON, Ind. (AP) — Nearly 30 acres of land in Madison County has been declared an economic development revitalization area for a planned 8.2-megawatt solar park.

The (Anderson) Herald-Bulletin reports (http://bit.ly/2mUqELC ) that a resolution was approved by the Madison County Council. The facility will be located in Anderson and Madison County.

The newspaper reports that the Indiana Municipal Power Agency plans to invest up to $12 million for the installation of 30,000 solar panels. The electricity produced would be the equivalent of what's needed to power 1,200 homes.

Indiana Municipal Power Agency senior vice president of generation Jack Alvey says the solar park would take about four months to build.

The utility wants a 10-year tax abatement for the project from the county.

Alvey says the utility has 13 solar parks in operation.

 

[scaesare]

Increased energy density per module therefore is caused by:
- increased height of the cell

I will point out that this may be some point of confusion for some:

If the height of the cell, and thus module, increases at the same rate as the increase of energy, then you haven't increased energy density. You've simply increased the volume, and thus while the energy capacity is greater, the density is not.

Typically, when you hear Tesla/Elon/JB referring to increased energy density, it's referring to greater energy capacity for a given unit (either by volume or weight).

Now, that having been said there's some reason to believe that, although the cells/modules may be taller, they will still fit in to the overall pack enclosure reducing some dead space that's been noted. So even though the pack capacity may be greater (and you could even say "more dense"), that's not an energy density gain as it's typically understood at the cell/chemistry level.