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MitchJi
Trying to learn kindness, patience & forgiveness
Look at how many western companies in various industries are struggling these days to compete with Chinese counterparts, and fail. They wouldn’t have been in such a situation if they weren’t smart enough to give away their core secrets by moving their operations to China to “save costs”. Yeah, they were happy for a few years, costs were down, and profits were up. But along the way they cultivated competitors by losing any competitive edge they used to have. No one can innovate faster than copying from within. Sad to see Telsa falls into the same trap. As what has happened to other companies in the past decades, Tesla will have good time for maybe 3-5 years. But they will be surprised by seeing local competitors suddenly come up that can do everything they can. Tesla’s technological advantage will vanish rather quickly. Whatever model you used to analyze TSLA’s potential terminal valuations for long term (10+ years), you need to change your model by factoring in 3-4 strong Chinese competitors who have 100% of the same technologies, with Tesla only have several months leading advantage of whatever they innovate.
This move, IMHO, will put a cap on TSLA’s eventual valuation, to maybe 1/3 if not less of its full potential otherwise. It’s a fundamental changing event. So just keep that in mind if you are in for a super long term. Otherwise, just enjoy the ride.
If a China Gigafactory is confirmed with a time line, seems the stock should go up a lot more than what is being discussed. My guess is $50.
Reciprocity
Active Member
Really, where are all the Chinese cars I can buy here because they have learned to make them better and cheaper? What about the Chinese Gaming Consoles or Iphones? I mean the iphone has always been made in China like forever. Iphone has 34% market share and 90-104% of the profits and I use a Chinese smart phone because I dont want to pay the Apple tax.
A Tesla is not a blender and the real technology is not the car, but the machine that makes the machine. Havnt you been listening to Elon?
Are there any NUMMI equivalents in Shanghai? It sure would be nice if they could get something up and running in short order.
Thanks for all the responses.
I once heard a prominent person say something like "Money becomes increasingly abstract with increasing order of magnitudes".
Somehow a 2 or 3K bet feels very expensive but a 1000 share purchase on margin somehow just becomes abstract and doesn't feel that bad. I have always been puzzled with myself on this.
In any case, when the China news came out on Bloomberg it was one of the top 10 most read news stories on the Terminal for the day (of all companies and everything). It was even marked with a special green-B token on the terminal. So the news is already "out" in my view.
In my view the share price increase tomorrow very much depends on the specifics of the deal than just announcement of the deal itself.
I do believe the details will be very favorable to Tesla and thus TSLA.
But I'm not placing any specific bets, largely owing to the whole money/abstract thing and unwillingness to go on margin again.
I once heard a prominent person say something like "Money becomes increasingly abstract with increasing order of magnitudes".
Somehow a 2 or 3K bet feels very expensive but a 1000 share purchase on margin somehow just becomes abstract and doesn't feel that bad. I have always been puzzled with myself on this.
In any case, when the China news came out on Bloomberg it was one of the top 10 most read news stories on the Terminal for the day (of all companies and everything). It was even marked with a special green-B token on the terminal. So the news is already "out" in my view.
In my view the share price increase tomorrow very much depends on the specifics of the deal than just announcement of the deal itself.
I do believe the details will be very favorable to Tesla and thus TSLA.
But I'm not placing any specific bets, largely owing to the whole money/abstract thing and unwillingness to go on margin again.
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MitchJi
Trying to learn kindness, patience & forgiveness
Maintaining a small amount of cash in your account for occasional small purchases of calls or puts (five or ten is about $2-$5k) is much different than adding $370k in shares, on margin.
Etna
Member
He certainly does, re. the leaked EM memo to the Tesla Grohmann employees. And for what benefit would he tease a 'one more thing' for the Semi unveil anyway? When Model 3 will be in a done deal, the hype train will just get started.
mmd
Active Member
Not that I think Tesla will make such profits in the near future (3 years). But you forgot the profit splitting between the joint venture partner and Tesla. The partner won't be putting up investments for nothing. The batteries still need to be imported, unless M3, MS and MX built in China will use China made LiFePO4 cells.
IMO, the China plan is hastened because of China curbing excess EV production. With current low volume of production for Tesla, there is very little benefit in setting up another factory in China. The factory cost has to be amortized over the low volume sales in China. Model 3 will face steep competition in China, where it will need to compete on value, not just status as in the case of Model S&X. I don't expect more than 2k per month M3 sales in China for many years.
China's New Rules: Tesla Must Stay Home, Used Car Factories Go Up In Price
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Purposely vague, or just gibberish?
Waiting4M3
Active Member
If copying technology is really that easy for the Chinese, maybe Tesla could have hired some of them to copy Mobileye or Grohmann's technology
Everyone everywhere always are coming after the leader, you only lose if you stand still. This is definitely not something I would worry about Tesla.
Bet TSLA
Active Member
Uh, er, I have no idea. Is there some useful way to say what my TSLA holdings might be? For example, I wrote a bunch of Jan '19 450 puts back in February, for which I got $201.55 per share ($20,155 per contract). The bid/ask midpoint is now $121.35, so I'm up $8,020 per contract. Perhaps what I'm up is irrelevant. How much do I have invested in TSLA by way of this position?
If the stock goes to zero I'm out $45,000 per contract, so that's nominally at risk, but my broker would close my position long before then due to my account going to zero. So really, is there a useful way to characterize the value of this position?
Me, I just look at the profit and think it's awesome.
dennis
Model S Plaid
It isn't clear how much additional capacity if any has been added with the third shift. Thus far it appears it is being used to drastically cut the overtime hours that were contributing to worker injuries.
Dynastar
Member
Although this is an investing thread, as a citizen of earth if there are 3-4 other "Teslas" in 2027 I'll be very happy.
ValueAnalyst
Closed
jhm
Well-Known Member
That basically means full production rate by mid-August. Seems overly optimistic, but who knows.
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