Let's put it this way... if the stock wasn't as high as it's been these last three years... the amount of dilution required to sustain operations would have been unbearable and they wouldn't have made it... and there is nothing to suggest they will be out of this situation within the next 12 to 18 months.
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I've been thinking about a market selloff the past couple of days (though I've been wondering about a 15-25% market selloff).
If it happens before Tesla gets a better feel for demand (i.e., after reveal, and actively selling rather than anti-selling), maybe they get somewhat more conservative about the timeline for GF 3, 4, 5. Once they can get a feel for demand, I think they'll want to go ahead as fast as they are currently planning, if not faster. That said, they may well be slowed some by a more challenging environment to raise capital. I say all this as I think demand is going to be big once they start promoting the 3 again and swell considerably as Tesla knocks out the last couple of points where ICE still compare favorably in a way that's material to many consumers, range and refuel time. The demand might be so far beyond supply that even with a very risk averse economic climate, Tesla may do just fine continuing to raise any capital they need- demand just that over the top compelling. Outside of the market in China, I doubt the rest of the auto industry will have even 500,000 M3 range/price competitors available in 2020, or 1 million in 2022. I think demand will be in the millions by 2020, likely tens of millions by 2022.
TSLA is another story. It might take until Tesla proves the Model 3 is in high quality high volume production and great demand (could take as far off as mid-2018) before TSLA would be appreciated on its own merits rather than being soldoff roughly at the same levels you are wondering about for the market. With this kind of risk that Tesla could be painted with broad brush of the general market being heavily sold off as long as 18 months, I've decided to take a more conservative stance with trading shares. I won't start buying any unless we are down to about $215, whereas I would have otherwise started in the high $230s.
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Waiting4M3
Active Member
Way OT but name one ex-president who isn't charging $100K+ per speaking appearance, and doing a lot of those for millions of $? Maybe Carter, he's busy working for Habitat for Humanity
Zhelko Dimic
Careful bull
I doubt the world where market loses 50% is the one when no new cars are sold.
And I doubt in this world, Tesla is the car-maker that can't sell cars (M3).
Which means Tesla is in control of their own destiny - if they scale semi-ok, they'll have no issues with cash for awhile, and they could decide to stop expanding and spending like a drunken sailor. They currently do it because we, here support them in doing that - they know market(us) will bear their cash burn. When that changes, they will change too.
Making assumption that Tesla's management team will drive them off the cliff is beyond silly. Rate at which Tesla expands (and burn cash) is a choice, not a necessity, and efficiency is currently not a priority. You can optimize for efficiency, you can optimize for speed of growth, you can balance somewhere in between (on either side), but you can't have it all. To stop cash burn, Tesla simply needs to stop hiring R&D, slow expansion of the centers, and P&L will catch up in a quarter or two.
You can argue valuation, which is a sentiment argument, but assumption that Tesla can't change is shortsighted, and it severely underestimates management team. This is 101 of Management (I'm VP of Engineering of a small company, and this wouldn't be hard for any mgmt. team I've seen, let alone all star team at Tesla)
larmor
Active Member
If tesla wanted to make boku $ they would stop innovating, stop everything, and just pump out MX/MS. But that pathway is time limited. And does not coincide with their mission statement. So they innovate to make production of cars simpler, pivot to provide energy.
M3 ASPs are expected to be in the $45k range... not $35k... if the market tanks... 401Ks drop the most... because *($#$ them... right?... then people start thinking about there money and spend less. that simple. $45k M3s won't be a priority for consumers under that circumstance.
@myusername ,
The market crash that you are expecting won't happen anytime soon precisely because there too many wet-blankets in the market keeping overall prices in check. I will get concerned when you turn bullish.
sundaymorning
Active Member
I rather Tesla spend every dime they make on GF 3,4,5 and beyond to keep ahead of every imaginable competition and smoke all competitors to the dust than sit on $100 billion.
I am totally OK if the ICE manufacturers (competition) catches up AND Tesla is valued at 100 billion. EVs for everyone and our SP would be roughly $600. I think that completes the Tesla and my mission statement nicely.
Zhelko Dimic
Careful bull
Hard to say but it is very unlikely this happens in the next 12 months. S&P has only seen three 40% declines in all of the post WWII era. Other reasons why it is unlikely is that republicans control house/senate/WH, so they will be proactive in fighting a bear market, especially with midterms in 2018. That isn't to say we couldn't see a 10-20% pullback.
LargeHamCollider
Battery cells != scalable
graphix25
-=electronboy=-
There's another round in the exchanges over Professor Goodenough's paper claiming to have found a new lithium ion battery technology that is safer and has several times the energy density of current lithium ion batteries.
Quick background, some weeks ago Goodenough's paper was published in a peer reviewed journal. A few days ago Quartz published an article where several battery researchers, including Jeff Dahn who works closely with Tesla, expressed fairly strong skepticism about the paper's claims.
Goodenough emailed some responses to the questions raised in the Quartz article. His comments are in a new article in Computerworld, linked below. Here's his response to what appears to be the main source of doubts,
"In this case, scientists wonder how it is possible to strip lithium from the anode and plate it on a cathode current collector to obtain a battery voltage since the voltage is the difference in the chemical potentials (Fermi energies) between the two metallic electrodes," Goodenough stated. "The answer is that if the lithium plated on the cathode current collector is thin enough for its reaction with the current collector to have its Fermi energy lowered to that of the current collector, the Fermi energy of the lithium anode is higher than that of the thin lithium plated on the cathode current collector."
Inventor of new lithium-ion battery responds to skepticism
Quick background, some weeks ago Goodenough's paper was published in a peer reviewed journal. A few days ago Quartz published an article where several battery researchers, including Jeff Dahn who works closely with Tesla, expressed fairly strong skepticism about the paper's claims.
Goodenough emailed some responses to the questions raised in the Quartz article. His comments are in a new article in Computerworld, linked below. Here's his response to what appears to be the main source of doubts,
"In this case, scientists wonder how it is possible to strip lithium from the anode and plate it on a cathode current collector to obtain a battery voltage since the voltage is the difference in the chemical potentials (Fermi energies) between the two metallic electrodes," Goodenough stated. "The answer is that if the lithium plated on the cathode current collector is thin enough for its reaction with the current collector to have its Fermi energy lowered to that of the current collector, the Fermi energy of the lithium anode is higher than that of the thin lithium plated on the cathode current collector."
Inventor of new lithium-ion battery responds to skepticism
DragonWatch
Small FootPrint
I interpreted Zhelko's 2008 BMW sales slip reference as a reply to @myusername who was saying people won't buy $45,000 M3's if there's a recession. Z was pointing out a very small sales slip at that time... so (my interpretation and belief) why would it be any different now -- M3 should still sell strongly.
I was looking at the National Geographic "Megafactory" documentary, shot during the very early days of the Model S production.It appears production of the first cars on the production line started just 2 months before the delivery date. Is that accurate?
Edit: the time link isnt working.. Go to about 18:51 into the video or put ncw4ISEU5ik?t=1131 after youtube.com/
Edit: the time link isnt working.. Go to about 18:51 into the video or put ncw4ISEU5ik?t=1131 after youtube.com/
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