2017 Investor Roundtable:General Discussion

[JRP3]

That's what Elon said.....so You aren't disagreeing with me concerning his desire to have accessories run directly from the propulsion pack. I didn't say it.

Elon also said that the density of the propulsion batteries is increasing. However the range of the car isn't . He said he wanted ot use the extra density to power accessories at a non 12V level to get rid of that 12 V battery.

Call Elon. Tell that genius he doesn't make any sense. I didn't make these statements.

I understand the desire to run accessories directly off the main pack but I feel you must have misinterpreted what he said because from a technical aspect it doesn't make sense.

 

[mongo]

That's what Elon said.....so You aren't disagreeing with me concerning his desire to have accessories run directly from the propulsion pack. I didn't say it.

Elon also said that the density of the propulsion batteries is increasing. However the range of the car isn't . He said he wanted ot use the extra density to power accessories at a non 12V level to get rid of that 12 V battery.

Call Elon. Tell that genius he doesn't make any sense. I didn't make these statements.

At the risk of making it overly complex, the idea of the battery pack having integrated power conversion and distribution is interesting.
Already has heat management, the high voltage bus, and the footprint to provide short wiring runs.
With enough space, coI'll integrate

 

[mongo]

At the risk of making it overly complex, the idea of the battery pack having integrated power conversion and distribution is interesting.
Already has heat management, the high voltage bus, and the footprint to provide short wiring runs.
With enough space, coI'll integrate

Could integrate the high voltage junction block.
(Inadvertently hit post button)

 

[Reciprocity]

I look at it this way.

Elon/Tesla built the Model S.
Tons of hurdles - They got over all of them.
Financial Woes.
Worker Woes
Pushback and discouragement.

Now the X.
Same struggles.
Dreams.
Concepts.
Falcon Wing Doors? Insurmountable? We have overcome so much.....what in the world is the problem. We are pushing forward just like we did with everything else. More Money, More Time. We have to pass crash test like we did with the model S ( Actually the Model X didn't and hasn't to this day had to participate in a crash test - story for a different thread).

Hindsight? Falcon Wing Doors could have waited. <-- Quote from Elon

1 outright roadblock out of 9000 successes isn't bad. Just my opinion.

Agreed, 100%, Results matter. So far the impossible has become routine and people take it for granted.

 

[Garlan Garner]

I understand the desire to run accessories directly off the main pack but I feel you must have misinterpreted what he said because from a technical aspect it doesn't make sense.

He's always on twitter. Feel free to let him know he doesn't make sense.

 

[Garlan Garner]

Here is our favorite bear back at CNBC:

Tesla adj. loss ($1.33) vs. ($0.81) est.

That's really bad. I hope people aren't listening to him.

 

[Garlan Garner]

Anyone have any idea of the profit margin of the Model 3? Has anyone seen any numbers or projections?

I absolutely love Electrek, however this article might be stretching the truth a bit. 25% profit margin? That car must be totally empty with NO features. Actually come to think of it, software is almost absolutely free ( almost 80% profit margin to add a technical feature to the screen...... hmmmmm).

Tesla Model 3: Elon Musk sees the vehicle generating ~$20 billion in revenue with 25% gross margin (TSLA)

Lets see.....
no automatic door opener
no auto presenting door handles
no self smart air suspension
no lidar
no auto dimming mirrors
no power folding, heated side mirrors with memory
no Lighted door handles
no HEPA air filtration system
no autolift trunk/frunk

Well they might make it.

 

[Buddyroe]

And you continuously ignore the positive value of those same doors, such as the free advertising they provide every time they open in public. They actually draw people to the vehicle. Ignore that reality if you will but you can't make it go away. You also keep ignoring the huge expense and delay it would have cost to redesign the vehicle for conventional doors.

Well, I'm not ignoring it - I just consider it along with things I hear people say, like the poster did one page back, that they won't buy the X due to the doors. So, while curiosity and publicity may be good, if it doesn't translate to sales, it's worthless. And further, I've been intrigued by many products in the past - at least intrigued enough to check them out. That doesn't mean that I would buy them.

And finally, if you are indeed right that the doors get Tesla a lot of free publicity, then you have completely made my point. All this free publicity and sales are increasing at all - why?

 

[Fallenone]

I think from a guidance perspective, the letter and call were both great.

However, from a financial perspective, there is (and always has been) one glaring concern for me: SG&A costs. This quarter SG&A amounted to over 29.6% of revenues and almost totaled more than their gross profit after the deduction of just COGS. SG&A even totaled more than CapEx. These are recurring patterns. In the letter, it seems that they classify building out the service network under CapEx, so I'm unsure what can be so costly in this area.

Can somebody please explain to me the major components of their SG&A expense and how they can reduce them as a % of revenue????

SCTY burden. Already shown in Q4 last year but this Q it's manifested its full burden. Only way to reduce it as % of revenue is to increase the revenue from solar, which seems like a long way.

 

[Mike Smith]

Anyone have any idea of the profit margin of the Model 3? Has anyone seen any numbers or projections?

I can't believe nobody asked about this. Adam Jonas should hang his head in shame, asking those ridiculous questions. Last Elon said was 25% and I doubt he's lying. Of course the creature Speagol has his own ideas but I think he's spent entirely too long in that dank live/work apartment of his.

 

[Ugliest1]

I've always been long and will continue to be. But, the "we're on the verge of great things" story is really getting old.

I still stand by my assertion that Musk's single biggest mistake since starting Tesla was the X (the doors and other complexities).

YADA YADA YADA (snipped)

God I hate that damn X.

Yes you incessantly post this. In your words, your "story is really getting old".

Go back and listen to Elon humbling himself and saying things like the decisions on the X were "full of hubris", "overconfident" etc. He was VERY clear the X shouldn't have been done the way it was done.

So get off your train already, it's done and over, and the X is now a success. Or stay on it, but please don't post any more on how much you hate the X, we've all heard it and others have quite clearly asked the same I am in earlier posts over the past several months.

Posted with respect but some frustration.

 

[RobStark]

The reason that Tesla just passed up Ford and GM as the best company is because Tesla's profit margins are higher.....

If that was the case Ferrari would be the most valuable car company on Earth.

It is not.

Tesla is worth more because its projected total profits in the future discounted for risk are higher than GM or F.

 

[JRP3]

Well, I'm not ignoring it - I just consider it along with things I hear people say, like the poster did one page back, that they won't buy the X due to the doors. So, while curiosity and publicity may be good, if it doesn't translate to sales, it's worthless. And further, I've been intrigued by many products in the past - at least intrigued enough to check them out. That doesn't mean that I would buy them.

Yet some people have bought those intriguing products, including the X, and some people have clearly stated that they love the doors on the X.

And finally, if you are indeed right that the doors get Tesla a lot of free publicity, then you have completely made my point. All this free publicity and sales are increasing at all - why?

There is a limited market for vehicles in the price range of the X, and you assume it would have sold more with conventional doors, but again you ignore those people who purchased it because of those doors. Sales may have very well been worse with conventional doors, you just don't know.

 

[RobStark]

In other words as long as they have more than a 25K order backlog each quarter, they haven't reached saturation.

They don't have a 25k order backlog. That would be 16 weeks. They have a ~6 week backlog. They roughly make as many vehicles as they get new orders. That is what Elon just told us.

In order to increase that number Tesla would have to invest in increasing production capacity, which they don't want to do because they are focusing on Model 3, and they would need to offer a better value proposition to increase orders. Because Elon said he will not offer discounts,subsidized leases or do advertising to increase demand.

 

[Garlan Garner]

If that was the case Ferrari would be the most valuable car company on Earth.

It is not.

Tesla is worth more because its projected total profits in the future discounted for risk are higher than GM or F.

No.. No. Ferrari doesn't sell enough cars.

Actually the Mercedes Maybach and Bugatti lines would create the most valuable car companies.

 

[Garlan Garner]

They don't have a 25k order backlog. That would be 16 weeks. They have a ~6 week backlog. They roughly make as many vehicles as they get new orders. That is what Elon just told us.

In order to increase that number Tesla would have to invest in increasing production capacity, which they don't want to do because they are focusing on Model 3, and they would need to offer a better value proposition to increase orders. Because Elon said he will not offer discounts,subsidized leases or do advertising to increase demand.

My point was that Tesla hasn't reached saturation yet. They still have more orders than the number of cars they are making. Tesla doesn't have to increase production of the S/X. They don't wan to reach saturation on what's leading them in profits.

 

[Spidy]

My point was that Tesla hasn't reached saturation yet. They still have more orders than the number of cars they are making. Tesla doesn't have to increase production of the S/X. They don't wan to reach saturation on what's leading them in profits.

How do you come to this conclusion? Because looking at the e Model S Order and Delivery sheet I would say that if Tesla wouldn't build so many Inventory cars they would probably be at around a week for configuration to production start and even less over time.

 

[JRP3]

He's always on twitter. Feel free to let him know he doesn't make sense.

I'd like to read or hear exactly what he said before I try to question him. A link or reference to support your claim would be appreciated.

 

[RobStark]

No.. No. Ferrari doesn't sell enough cars.

Actually the Mercedes Maybach and Bugatti lines would create the most valuable car companies.

They sell less than Ferrari LOL.

Ferrari sells 7500 cars per year. Because that is how many they make.

Mercedes sells about 6500 cars per year,almost all in China.

Bugatti sells about 50 cars per year.


Mercedes and BMW sell rougly 1/4 of the cars that GM sells.

Yet, they have greater market cap.

Because they have greater total profits.

Profit margin x number of cars sold.

Valuing Tesla is based on projected profit per car times projected cars sold. The future is uncertain so there is risk and investors keep changing their mind.

 

[RobStark]

My point was that Tesla hasn't reached saturation yet. They still have more orders than the number of cars they are making.

My point is production is roughly balanced with incoming orders.

I don't know of many cars on the market that have reached a saturation point.

Any automaker can sell more if they make more and discount the price.