2017 Investor Roundtable:General Discussion

[AlMc]

bad dumb question. do the back seats fold down flat? that is a deal killer for the wife, wom compares everything to the Prius interior. we have lots of "stuff" (finally got rid of piano!!)

Not folding flat is a shirker design move that hurts market share, utility and everyone else who works for the company. I don't see Elon letting that get by.

At the reveal people noted that the second row seats did fold flat and I am confident the production vehicles will.

**Note: I was also sure the initial production Xs would have that feature also as the prototypes/reveal showed that feature. Much to my chagrin the early production Xs did not**

 

[anticitizen13.7]

I don't think this will be the final interior of Model 3, but I'm curious about others' thinking around this.

I don't see why Tesla would need to equip these cars with final interior yet.

It's way too late in the game for release candidates to be undergoing final validation without the final interior.

I've watched Tesla for years and the automotive industry for decades. The chances of this not being final are close to zero.

 

[AlMc]

It's way too late in the game for release candidates to be undergoing final validation without the final interior.

I've watched Tesla for years and the automotive industry for decades. The chances of this not being final are close to zero.

Agreed. As the model 'matures' over the next few months we may see additional optional features appear but for not 'it is what it is'

 

[Reciprocity]

Insourcing and outsourcing both have positives and negatives. Both Apple's and Tesla's business models, on the hardware front, are similarly capital intensive when one considers the full supply chain.

Also, I don't subscribe to the Private Equity thinking that less capital intensity is necessarily better.

Capital intensive can be a benefit in that it can be a barrier to entry for competitors in both cost and time. It will take some time for even rich auto makes to put the capital to work in an attempt to catch-up.

 

[ValueAnalyst]

Capital intensive can be a benefit in that it can be a barrier to entry for competitors in both cost and time. It will take some time for even rich auto makes to put the capital to work in an attempt to catch-up.

Precisely.

 

[Italia81]

Precisely.

Hey, as long as you take into account the large negatives in terms of execution that's all good. Need to find a recent comp or case study for this. Apple and Amazon don't directly comp in terms of cash use. Amazon generated more internal cash flow and it wasn't tied to one product. Apple outsourced all manufacturing as we already touched upon.

TSLA will need to raise more $$ 100% to pay for all the growth modeled in. It won't come from internal cash flow. Key is how dilutive and at what $$ that new equity comes in at.

 

[Italia81]

Capital intensive can be a benefit in that it can be a barrier to entry for competitors in both cost and time. It will take some time for even rich auto makes to put the capital to work in an attempt to catch-up.

It's actually a small amount related to their balance sheets. But I would question their execution and vision more.

 

[ValueAnalyst]

Hey, as long as you take into account the large negatives in terms of execution that's all good. Need to find a recent comp or case study for this. Apple and Amazon don't directly comp in terms of cash use. Amazon generated more internal cash flow and it wasn't tied to one product. Apple outsourced all manufacturing as we already touched upon.

TSLA will need to raise more $$ 100% to pay for all the growth modeled in. It won't come from internal cash flow. Key is how dilutive and at what $$ that new equity comes in at.

I disagree with you on all of your points.

Moderator-deleted gratuitous remarks.

 

[ValueAnalyst]

Hyundai’s upcoming all-electric long-range SUV to reportedly start at ~$39,000

Seems like Hyundai's new all-electric SUV will be to Model Y what Bolt was to Model 3: no competition.

~200 mile range, ~40,000 price, end-2018... seriously?

Model Y will likely price lower with longer range by end-2019.

Very similar to Bolt vs. Model 3 game theory setup.

The following is my (publicly available) article from August 2016 where I laid out how Bolt vs. Model 3 would play out, and that's exactly what has transpired.

Tesla Competition: GM Edition - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha

I'd encourage you to read the hundreds of comments from bears as well... if you enjoy wasting your time.

 

[ValueAnalyst]

I disagree with you on all of your points.

Moderator-deleted gratuitous remarks.

TMC moderators teach me a new word almost daily.

 

[generalenthu]

The Trump administration is investigating emergency solar panel tariffs on imports. While I hate this, in the short-term it's a positive for Tesla.

U.S. may put emergency tariffs on solar imports

In the throes of bankruptcy, Suniva wants solar panel tariffs to shield manufacturing business

 

[TMSE]

Hey, as long as you take into account the large negatives in terms of execution that's all good. Need to find a recent comp or case study for this. Apple and Amazon don't directly comp in terms of cash use. Amazon generated more internal cash flow and it wasn't tied to one product. Apple outsourced all manufacturing as we already touched upon.

TSLA will need to raise more $$ 100% to pay for all the growth modeled in. It won't come from internal cash flow. Key is how dilutive and at what $$ that new equity comes in at.

You will not get a perfect comp precisely because Tesla is doing something never tried before, be it product or business model.

Apple might have outsourced manufacturing, but they are deeply involved, with significant capital commitments, unlike other outsourcers. They even own areas of factory space, equipments etc. You will understand it better if you had worked in any one of the companies in their supply chain.

 

[techmaven]

Hyundai’s upcoming all-electric long-range SUV to reportedly start at ~$39,000

Seems like Hyundai's new all-electric SUV will be to Model Y what Bolt was to Model 3: no competition.

~200 mile range, ~40,000 price, end-2018... seriously?

Model Y will likely price lower with longer range by end-2019.

With a 50 kWh battery and physically taller than an Ioniq...no way it is a 200 mile range BEV. An Ioniq, assuming the 28 kWh battery can be transformed into a 50 kWh battery with no additional weight gain would get 221 miles. With more frontal area and the weight gain from almost doubling the battery capacity (and even accounting for a step in battery chemistry) would make this more likely a 180 mile EPA BEV, which gives it a realistic long distance highway range around 160 miles, without counting in the effects of winter or bad weather driving. Given that the Ioniq Electric costs $30k with a 28 kWh battery, a bigger car with a much bigger battery for 40k in 1 year is going to be a challenge. If the rollout goes like the Ioniq, the initial availability will be very limited and likely restricted to CA.

Here's some spy shots of the 2018 Kona from Exclusive: New 2018 Hyundai Kona Captured Completely Undisguised
Note how small of a vehicle this is...

 

[GoTslaGo]

You will not get a perfect comp precisely because Tesla is doing something never tried before, be it product or business model.

Apple might have outsourced manufacturing, but they are deeply involved, with significant capital commitments, unlike other outsourcers. They even own areas of factory space, equipments etc. You will understand it better if you had worked in any one of the companies in their supply chain.

Also with Grohmann purchase, isn't Tesla positioning itself to grow and develop more product lines without needing to find future suppliers of automation? I assumed this is why they bought Grohmann... Thus less capital should be needed to grow and develop future production lines.

Tesla Grohmann Automation | Accelerating a Sustainable Energy Future

 

[Navin]

LOL. Read this job description. Lots of passion and energy. Chocolate, anyone?

HR Business Partner (m_w) | Tesla Grohmann Automation

 

[Italia81]

I disagree with you on all of your points.

Moderator-deleted gratuitous remarks.

Ok, How so on the AAPL AMNX and dilution.

 

[TMSE]

Also with Grohmann purchase, isn't Tesla positioning itself to grow and develop more product lines without needing to find future suppliers of automation? I assumed this is why they bought Grohmann... Thus less capital should be needed to grow and develop future production lines.

Tesla Grohmann Automation | Accelerating a Sustainable Energy Future

More automation means more fixed costs or capital commitments upfront, but it lets you reduce end unit costs significantly due to large scale production it enables.

Moreover, a fully automated plant has mostly knowledge workers as opposed unskilled/semiskilled labor. This alone is a good reason to automate.

 

[dmckinstry]

bad dumb question. do the back seats fold down flat? that is a deal killer for the wife, wom compares everything to the Prius interior. we have lots of "stuff" (finally got rid of piano!!)

Don't know, but as the M3 isn't a hatchback, I highly doubt it.

 

[Italia81]

Ok, so if your are saying Apple was running a similarly capital intensive business to Tesla, even though they outsourced actual production, that's a significant point. Would need to understand how because on the surface it doesn't make sense.

I do not have considerable supply chain experience so you might have point there if you do.

You will not get a perfect comp precisely because Tesla is doing something never tried before, be it product or business model.

Apple might have outsourced manufacturing, but they are deeply involved, with significant capital commitments, unlike other outsourcers. They even own areas of factory space, equipments etc. You will understand it better if you had worked in any one of the companies in their supply chain.

 

[Snerruc]

luxury

. As I said before, I really like the interior of the 3. I'm tired of all the garbage in most car interiors nowadays. People buy Audie's, BMWs and MB with small tablets stuck to the dash, so I don't think they will have any problem with the 3.