OT: What happened to your teslanewsfeed? I loved that.
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OT: What happened to your teslanewsfeed? I loved that.
Solarcity will contribute profits every quarter for this year (and probably growing profits), I think. But overall Tesla will have a loss... until Model 3 reaches a decent run rate in probably Q4... maybe Q3. Who knows. I think it's too much to expect profitability while Model 3 is just getting off the ground. But I'd love to be surprised. And I haven't dived into Q4 Tesla financials enough to really know what I'm talking about.
RobStark
Well-Known Member
Camry is the best selling car in the United States while Ford is the best selling vehicle in the United States.
The best selling car in the world is the Toyota Corolla at just over 1M units per year.
Camry sells about 725k units per year worldwide.
Toyota Corolla - pg.2
Toyota Camry - pg.9
mmd
Active Member
I see what you did there. You assumed a 500 cycle useful life for the 1.4 KWh pack. So, it saved 1.4 * 500/8 = ~87 gallons over the life of the battery.
But it is the same math for BEVs also (assuming same battery chemistry; same kind of cycling behavior).
For example, a 100 KWh Tesla will save 100* 500/8 = 6250 gallons over its life. Per 1.4 Kwh, it saves the same ~87 gallons (6250 * 1.4/100).
But here is what you missed. Since it is a tiny battery, it can be tucked in anywhere. It doesn't need to be very energy dense. Many design choices can be considered that aren't tightly coupled with the weight, size and cost of the battery pack. Typically, hybrid car batteries have been NiMH in the past, which are cheaper. This is a good primer on hybrid car batteries.
The Hybrid Car Battery: A Definitive Guide - HybridCars.com
But there are also LiFePO4, that have 10,000 cycle life at 100% depth of discharge, and still 71% capacity left, which can still be quite useful for a hybrid/phev, as there is not a whole lot of range concern.
Rechargeable battery - Wikipedia
There is also the secondary advantage, that the gas engine can be downsized, as electric motors can provide the power boost when needed. Or a different kind of gas engine (Atkinson engine) can be used that are more efficient in generating steady power.
It's interesting that mammoth vehicles such as the F150 sell in NA, but not well elsewhere. Derivatives of those like Suburban/Expedition/Escalade sell well in NA and have limited volumes as executive transports and armored vehicles elsewhere. The Camry and the later Avalon were designed as Neo-American sedans, although the Camry did have origins in Japan.
For Tesla in a global context, success will demand much smaller vehicles, but with high standards of function and luxury. Obviously that will require much higher energy density.
Most of us may tend to ignore the need for much smaller vehicles to have global success.
FWIW, the last huge car I owned before my P85D was a MB 300SEL 6.3. In both cases I hoped for smaller but accepted bigger to get the performance I wanted.
As an investor I'm quite concerned about this issue. Success in China, Japan, all of Europe can only come with more space-economical packaging.
My margin interest is under 5% annual. Do you not think Tesla is a good risk:reward when offset by 5% carry cost?
(ok you qualified with *most* people -- which is fair.. *most* people shouldn't even be picking stocks)
The proxy which will be filed in about 10 days will provide some details about inter-company transactions.
Sure, but God speed in unpacking the intricacies of SCTY's SPEs/VIEs and HLBV transactions. To me, they are like the sliced and diced tranches of credit default swaps of a decade ago. No one understood them. but their promoters assured the naive they were "can't lose" (aka "no brainer") investments.
SCTY/TSLA provides zero details about the underlying terms of the tax equity transactions. They eschew Brandeis' "sunlight [transparency/ openness] is the best disinfectant." If you want any affirmation of that, just look at Exhibit 10.25 to SCTY's 10k--the Riverbend deal with Panasonic. scty-ex1025_1256.htm. There are more asterisks (*) than virtually any other character. Why even go through the pretense of filing such a useless "disclosure"?
Far be it from me to curb your enthusiasm about the profits/benefits of the SCTY acquistion. I have not followed solar, but have the impression that competition was cut-throat recently, and many nationwide players either were insolvent or lost considerable sums. I just do not understand how large regional/nationwide solar sellers can compete with small, local independent contractors/installers. None of the big HVAC, electrical, or plumbing equipment manufacturers, or similar firms like Generac, have in-house sales and installation crews. They all work through regional distributors and local SBO sellers/installers. During slack periods they do not carry their crews on overhead, but furlough them and allow them to go hunting, fishing or return home south of the border until business picks up.
Regardless of what SCTY can lay off to SPEs/VIES, if the underlying leases/PPAs are unprofitable, it's just delaying the inevitable "come to Jesu" accounting. You yourself have observed (among other things):
"coming into 2016 solarcity was running a bloated operation. they had sized the business for about 30% more activity than they were able to achieve. the high cost overheads - particularly in sales/customer acquisition costs - basically exploded their cost per watt installed.
More significantly, our sales costs rose 80% as compared to Q4 2015 to $0.97 per Watt owing to a decline in MW Booked to 160 in the quarter. - scty q1 2016 shareholder letter
the other problem they were facing is that other large players had arrived into this solar financing and development business. the value per installed watt they were able to realize dropped meaningfully from 2015. with collapsing margins, a business model that needed constant cash infusion to keep going, and an industry that was seeing big bankruptcies like sunedison, solarcity's stock was taking a beating.
after q1 2016, they had already decided to do some restructuring to cut costs and make sales more efficient. they were going to shift their mix towards more 3rd party solar loans that would result in upfront revenue and gross profit vs delayed cash flow realization. the biggest problem they had was being stuck in a me-too commodity business. most of the financing and installation costs were going to be the same for everyone, so it was going to come down to the strongest would be those who could acquire customers most efficiently."
URL="2017 Investor Roundtable:General Discussion"]2017 Investor Roundtable:General Discussion[/URL]
Another issue is :
"Of the more than 300,000 solar power systems the company has installed, the majority are under leases and PPAs and are contracted to generate more than $8 billion in customer payments over the next 20 years, and up to $4.8 billion more with customer renewals after year 20."
So the cost per year to the lessees and PPA purchasers in years 20 to 30 is going to be 20% higher than in years 0-20? This only works if technology stands still and the price from legacy utilities for electrical service sky-rockets. If not, SCTY incurs the obligation after 20 years to remove obsolete systems from the properties.With respect to the VIEs, there may be an unrecognized liability exposure:
"The arrangements used are complex and the number of parties that have been willing to invest in tax equity has been limited. As a result, both the administrative costs (in terms of legal and accounting fees) and financing cost (in terms of rate of return required by tax equity investors) are high. As of this writing, tax equity investors require 7.5-9.5% for unleveraged projects. This is the after-tax return to the tax equity investor, net of its tax benefits. The cash return to the tax investor and cost of capital seen by the developer are lower."
"There are two major sub-types of the partnership flip. The so-called yield-based flip is the most popular. Tax Equity gets the vast majority of the tax benefits plus enough cash to get its required after-tax IRR at an expected target flip date. If the assets under-perform, the flip is delayed until Tax Equity gets its agreed return."
Tax Equity 101: Structures
Admittedly, those are generic comments about tax equity transactions and do not necessarily apply to SCTY. However, in the first half of 2016, SCTY was generally considered a basket case. Listen to the May 2016 CC, if you are skeptical. It's likely that Investors in the following transactions used SCTY's situation to maximize their returns:
"On May 2, 2016, the Company pooled and transferred its interests in certain financing funds into a special purpose entity, or SPE, and issued $121.7 million in aggregate principal of debt of the SPE (see Note 12, Indebtedness) and also issued $100.7 million of equity interests in the SPE, both to the same investor. Of the net proceeds from this transaction, $125.0 million was used to partially prepay the revolving aggregation credit facility due in December 2018, $25.7 million was used to partially prepay the term loan due in December 2016 and the remaining amount was retained by the Company to fund its operations.
On September 8, 2016, the Company pooled and transferred its interests in certain financing funds into a SPE and issued $210.0 million in aggregate principal of debt of the SPE (see Note 12) to a syndicate of banks and also issued $95.2 million of equity interests in the SPE to an investor. Of the net proceeds from this transaction, $192.3 million was used to partially prepay the revolving aggregation credit facility due in December 2018 and the remaining amount was retained by the Company to fund its operations.
On December 16, 2016, the Company pooled and transferred its interests in certain financing funds into a SPE and issued $170.0 million in aggregate principal of debt of the SPE (see Note 12) to a syndicate of banks and also issued $70.9 million of equity interests in the SPE to an investor. Of the net proceeds from this transaction, $131.0 million was used to partially prepay the revolving aggregation credit facility due in December 2018 and the remaining amount was retained by the Company to fund its operations."
scty-10k_20161231.htm
On September 8, 2016, the Company pooled and transferred its interests in certain financing funds into a SPE and issued $210.0 million in aggregate principal of debt of the SPE (see Note 12) to a syndicate of banks and also issued $95.2 million of equity interests in the SPE to an investor. Of the net proceeds from this transaction, $192.3 million was used to partially prepay the revolving aggregation credit facility due in December 2018 and the remaining amount was retained by the Company to fund its operations.
On December 16, 2016, the Company pooled and transferred its interests in certain financing funds into a SPE and issued $170.0 million in aggregate principal of debt of the SPE (see Note 12) to a syndicate of banks and also issued $70.9 million of equity interests in the SPE to an investor. Of the net proceeds from this transaction, $131.0 million was used to partially prepay the revolving aggregation credit facility due in December 2018 and the remaining amount was retained by the Company to fund its operations."
scty-10k_20161231.htm
Regardless, the SCTY component to the financial statements is largely a diversion. Although positive profits after NCIs may fool some of the people some of the time, the quintessential issue for the next year is whether the M3 can generate enough operating leverage to sustain consistent profits and pay off maturing debt.
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""As long as the shares are fully paid for, we would not loan the securities out.
If you were to go on a margin loan, then Schwab holds the right to loan them out.""
ie, if i keep even $0.01 positive balance
If you were to go on a margin loan, then Schwab holds the right to loan them out.""
ie, if i keep even $0.01 positive balance
dhrivnak
Active Member
I would never recommend anyone investing on borrowed money. I worked hard to become debt free and I want to keep it that way. As the old proverb says the turtle beats the hare.
2012?
Sorry, not helping much, am I? Back in the day I was considering investing, but got a bit burned by stocks before (well, a fund i invested in at my bank, actually...) and chickened out. By the time i made the call, we were at 118... So if you believe in the company and that we will eventually be at several times the current SP, I guess, just pull the trigger. Short term is unpredictable, though, as you know. Like Q1 ER... we may show a slight profit, which will be a big boost, or show a loss again due to M3 capex, in which case the stock market may punish TSLA... or it may just not care in case M3 is still on track. If anyone says they know for sure, they are lying.
EDIT: I kind of missed the part where you said "borrow". Man, I would not really dare to do that.
There are so many bad assumptions here my head is exploding
1) "1.4 Kwh, ...tiny battery, it can be tucked in anywhere. ". {next to the extraneous ICE}{why did Fisker fail}
of which about 0.8kWh is usable (~60%) so you can go --->3 miles on electric and 300 mile on gasoline
?why bother? seriously, WHY BOTHER?
go to the SanJose EAA folks and present your thesis, a range crippled PHEV, I wont even say charge crippled because, just because
--->Talk with folks who Know What They Are Talking About<--
meanwhile, i shall continue to DCA TSLA at least to $359/nov 2017
Jonathan Hewitt
Active Member
The problem with going on margin to invest all-in on Tesla is during a steep pull back you get margin calls that force you to sell when you should be buying more. You then end up losing a ton on the drop, miss out on the bounce rally, AND you owe interest for the pleasure of the experience. Some people can pull this off and still come out ahead but it's not for most people.
If one wants to leverage up it's much better to use options versus margin to achieve greater leverage (IMO) as your losses are fixed and you can do things to reduce risk like create spreads.
I also am not sure he was talking about margin. It sounds like he wanted to take out a loan (similar concepts but different in that a loan is going to have monthly payments he may or may not be able to afford.)
Let me say this: it really sucks to lose money but it sucks even more when you lose someone else's money that you have to pay back.
TrendTrader007
Active Member
Well stated dude! I agree Margin is not for most people. As of now I'm paying $150 a day margin interest and it hurts
RobStark
Well-Known Member
The Chinese and Koreans taste in cars aligns more with Americans than Europeans. That is one of the rationales of GM leaving Europe to concentrate on North America and China/Korea.
Success of smaller cars there is a result of cost and cost of fuel. When people move up in income they upsize their cars.
Canadians and Mexicans prefer compact sedans to midsize but prefer full size trucks to midsize. In Mexico fuel subsidies are being reduced while incomes are growing which tend to cancel each other out.
Same with Australia. About 3k Australians buy third party imported full size American pickups every year. A full size Tesla pickup with fueling/maintenance less than a midsize diesel truck would do extremely well their IMO.
India,Japan, and South East Asia definitely prefer smaller cars.
Africa and Latin America prefer smaller cars in so far as cost of fuel is a barrier to bigger vehicles IMO. The Middle Eastern countries with large oil reserves prefer larger cars while Middle Eastern Countries without large oil reserves prefer smaller cars. The have nots are very conscious of national energy independence and which countries the have nots are dependent on.
When you replace a big gas guzzling vehicle with a big high performance BEV you are really moving the needle in reduce oil use and CO2.
When you replace a subcompact ICEv propelled by a tiny highly fuel efficient ICE with a tiny low performance BEV with an electric powertrain you are not really displacing a lot of fossil fuels and CO2.
Reciprocity
Active Member
Thanks Rob Stark! If that is your real name... I have my suspicions.
For reference, my original post:
What I just realized is that it doesnt really matter if Tesla does some kind of special financing, though it would help keep the monthly payment down, the total cost of ownership for the life of the Model 3 could be so affordable that it makes it as cost effective as a Toyota Camry that costs $14,000 less. Even if you sell both after 5 years of ownership, the residual on the 3 should keep it competitive with the Camry. This stuff has to be scaring the crap out the GM and Fords of the world, much less the BMW and Diamlers of the world.
Reciprocity
Active Member
Tesla has already talked about providing bundled Insurance and do so in some places already. It could be through a partnership with an existing insurance company where they provide safety data and shops to do repairs and the the partner handles all the liability and compliance issues.
Sorry that I wasn't clear, I meant margin. At the moment, I'm paying $100/month for 24k margin and it's been good to me for the last few months. I can up that to 30k now, and then again to 50k a few months from now.
The dilemma is, if I up my shares and it dips, that would suck for all the reasons mentioned. On the other hand, if I don't think it's great to increase my margin, then it shouldn't be a good idea to keep my current margin levels, because there's nothing special about my current margin levels at all.
The dilemma is, if I up my shares and it dips, that would suck for all the reasons mentioned. On the other hand, if I don't think it's great to increase my margin, then it shouldn't be a good idea to keep my current margin levels, because there's nothing special about my current margin levels at all.
So what does the insurance "partner" do when their claims adjusters/lawyers decide the liability for the claim they paid really was the fault of the vehicle manufacturer?
good enough. do you remember the highest quarterly profit ever posted by tesla? i feel like it was q1 2013 but not 100% sure.
i'm almost done with my full earnings model will post out to the 2017q1 thread.
Reciprocity
Active Member
What are claims adjusters/lawyers going to do when Allstate (non-partner) pays the claim that really was the fault of the vehicle manufacturer. Tesla doesnt have to do anything with insurance if the insurance companies give them credit for the cars being much safer due to the FSD hardware keeping the driver out of trouble, even if they have not paid for FSD. All Tesla needs to do it build the safest cars on the planet and the rest will work itself out.. hopefully before they can manufacture 1 million+ cars per year.
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