Articles/megaposts by DaveT

[lolachampcar]

Just a couple of simple observations-

If you want to understand how closely the reveal M3 will resemble the production M3, simply look at how close the reveal MX turned out to look like the production MX. The differences were in technology tries (FW doors, fancy seats and the like) and technology misses (mirrors instead of cameras). Given the M3 must be limited on technological risk, I think it is a good bet that what you see this month will be nearly identical to what Tesla ships in three (that is two in Tesla time) years.

On the performance side, it is kind of a no-brainer. Tesla will likely use the small motors they already have or perhaps a gen II of that motor. First units will be high margin so likely AWD. The battery technology is proven so, even if you assume no improvement in two to three years, performance will be scaled down by the change in battery size and back up by the change in M3 mass/cross section-cd. Put simply, there is little to no cost to producing a car that is a stunner and all the reasons in the world to continue to follow the formula that has basically put Tesla on the map. Build a car that performs better than it's ICE counterpart can.

 

[JRP3]

If you want to understand how closely the reveal M3 will resemble the production M3, simply look at how close the reveal MX turned out to look like the production MX. The differences were in technology tries (FW doors, fancy seats and the like) and technology misses (mirrors instead of cameras). Given the M3 must be limited on technological risk, I think it is a good bet that what you see this month will be nearly identical to what Tesla ships in three (that is two in Tesla time) years.

Agree, though the nose of the production X was quite different than the prototype, and the "iPad stuck to the dash" look of the prototype also did not carry on to production, though some seemed to think it would.

 

[ITHON4]

DaveT, thank you for all your time and effort. I've learned a lot from your posts. Everyone is responsible for their own investment decisions. Your constructive criticism of Tesla's execution is spot on. I have no doubt that all the hard working Tesla employees are trying their best and Tesla appears to be learning. Hopefully the Model 3 reveal will be better. There will be a more manageable size crowd. I hope Elon keeps to the schedule.

 

[Lessmog]

I too agree, I consider myself a grownup responsible for my own decisions. I too lost a bundle on GTAT, but rarely weep over that now (bwaaah!) Some people lost heavily and I feel sorry for them. But there it goes. And besides, it's seriously off topic here.

Please carry on, Dave! I read your weekly email without fail.

 

[Chickenlittle]

Maybe you don't. It's ridiculous for you to try to associate me with GTAT somehow. That's just mind-blowing. If you knew as much as you claim, you'd know that I wasn't part of the GTAT-hype in any fashion or form.

I've always encouraged debate/discussion around anything I've said. I've also tried to provide a balanced and well-thought of perspective. I've never claimed to be always right. And I've never pressured people here by pumping a stock saying "you'll miss out if you don't buy", etc.

Chickenlittle, I'm getting tired of seeing this drag out here, so here's my proposal. Let's get on a Google hangout. We can discuss/debate anything you'd like. You can make your full argument and we can dialogue. Maybe we can clear some things up. We can record the hangout and it'll your choice if you want the recorded hangout posted or not.

I am done read the post I did not associate you with GTAT. It's not always about you. Read the post again.

 

[TSLAopt]

DaveT, thank you for all your time and effort. I've learned a lot from your posts. Everyone is responsible for their own investment decisions. Your constructive criticism of Tesla's execution is spot on. I have no doubt that all the hard working Tesla employees are trying their best and Tesla appears to be learning. Hopefully the Model 3 reveal will be better. There will be a more manageable size crowd. I hope Elon keeps to the schedule.

I agree with this.

DaveT has been instrumental to my confidence of TSLA in his analysis of TSLA over the years.

Some people seem to just go on and on typing whatever they're thinking as they think it (like I'm doing now) way too much and dilute the quality of analysis on these boards. For example, the short term thread used to be my go to spot for key updates on what's going on with TSLA, but now there is just so many long soliloquies about all kinds on tangents making it hard to follow for what's really important to most of us who read these boards. However, DaveT has very well constructed his arguments/analysis over the years.

I would like to thank him and give him partial credit for helping me get into the financial position I've gotten into as I would not have been as confident holding all the way up as I was if it was not for his instrumental analysis to help reassure my own instincts/decision.

 

[lolachampcar]

I too value Dave's input and am constantly amazed how some can take personal affront to another offering a well thought out position/analysis. Never once have I felt like Dave has "told" me to do anything nor does he strike me as someone that feels he is always right.

 

[austinEV]

I want to pile on and say that Dave has more than earned the right to write constructive criticism. I don't like this "Bear labelling" and am on record saying that we also participate in the opposite, lashing out at people who are too bullish too. Just evaluate contributions on there merits and keep it civil.

Back on topic, and I hesitate to even write this with feelings raw, but I actually think you (DaveT) are "too close" the the model X fiasco. Being a non-reservation holder, non-X buyer I won't care at all that the X was late, once it is safely in the rearview mirror. Yes, it was crummy for customers. Yes, it was crummy for shareholders and I totally buy the idea that we are currently at a lower level than we would be with a better X ramp. But pretty soon it will be immaterial. Already it seems that the X is now shipping in robust volumes.

I think the bad customer comms was due to fact that they didn't have anything good to say. If stuff is late it can be really hard to say anything about it. Details invite questions and speculation. I am sympathetic to TM and reservation holders; no one is winning with the product being late.

I also think this whole thing will play out again on the model 3. I REALLY hope it doesn't, but this is really the result of having a lot of reservation holders and unusually visible product ramps. The only solution is to totally sandbag the schedule from the start and run way ahead of schedule. Hopefully they did that.

Just for the sake of argument, if we do get a nice squeeze event in April/May you would have to say that the poor X ramp worked out to be, in hindsight, a Bear trap that encouraged too much short interest and fueled such a rise. *IF* that happens (not counting unhatched chickens here) then I will be very happy for the poor X ramp.

Again, just a ruthlessly heartless stockholders perspective.

 

[InTheShadows]

I am taking the opposite position about the same problems playing out with the Model 3. I think Tesla learned their lessons with the Model X. I am not expecting any radical engineering with the Model 3 that we haven't already seen. The only thing I am expecting is a much better autopilot system.

My largest concerns are the Supercharger network and I'm also concerned about keeping customer service quality high. With well designed systems, training programs, and people resources I think they can keep their customers delighted.

 

[chickensevil]

And I've never pressured people here by pumping a stock saying "you'll miss out if you don't buy", etc.

For what it's worth, while you have been pretty bullish long term, I don't think I have ever seen you advocate for someone to buy at any specific time. In fact you had always cautioned against buying regardless of the price. Again, from what I can recall in my mind. This in-spite of your high flying estimations self-building factories and your Tesla 2.0 / 3.0 ideas.

So I would say that not only haven't you tried to pressure people, but I have seen an abundance of caution from you back when you used to post more frequently. This was what I liked about the majority of your postings. While I also like the postings from some other members on this board, many of them post recommendations on when to buy or sell (Even I share when I am being cautious on the price and selling off some trading shares). But for the most part never noticed you doing this. So to get accused of trying to talk up or down a stock is laughable.

 

[Lump]

Dave, hoping to hear your thoughts on the reveal, reservation numbers & production ramp predictions.

 

[MikeC]

Dave, hoping to hear your thoughts on the reveal, reservation numbers & production ramp predictions.

I'm also looking forward to it when you get a chance, Dave.

 

[AlMc]

Yes. We need a Dave oust detailing how TM gets to 2.0/3.0 based on the reservations

 

[maoing]

+ 1

 

[neroden]

Just a couple of simple observations-

If you want to understand how closely the reveal M3 will resemble the production M3, simply look at how close the reveal MX turned out to look like the production MX. The differences were in technology tries (FW doors, fancy seats and the like) and technology misses (mirrors instead of cameras). Given the M3 must be limited on technological risk, I think it is a good bet that what you see this month will be nearly identical to what Tesla ships in three (that is two in Tesla time) years

The details of the interior decoration also changed. A lot. I expect the same will happen with M3. The rough layout is final, but the details are not. I guess interior details are always done last.

My biggest worry is that Tesla will fail to build out Service Centers to achieve geographic coverage. I think this is the most plausible screwup which would really hurt.

Second most plausible screwup which would hurt is failure to secure the cobalt supply.

 

[EldestOyster]

For Dave's initial reactions to the Model 3, listen to the latest Ride The Lightning podcast. Ryan caught up with him at the event, and it appears around 24 minutes in.

 

[austinEV]

The details of the interior decoration also changed. A lot. I expect the same will happen with M3. The rough layout is final, but the details are not. I guess interior details are always done last.

My biggest worry is that Tesla will fail to build out Service Centers to achieve geographic coverage. I think this is the most plausible screwup which would really hurt.

Second most plausible screwup which would hurt is failure to secure the cobalt supply.

I actually hope they don't build out the service centers too fast. They can sell out for many years just selling to areas that are already served by service centers. No point rushing to put one in Fargo before you can support Fargo with sales.

 

[wdolson]

They can probably get an idea of where the biggest need for service centers is by looking at patterns in the Model 3 reservations. They have enough of them they could do some statistical analysis and figure out which areas have the most reservations, but are not well served by service centers.

 

[neroden]

I actually hope they don't build out the service centers too fast. They can sell out for many years just selling to areas that are already served by service centers. No point rushing to put one in Fargo before you can support Fargo with sales.

I'm talking about places like central and western NY. Here there are frankly already enough Model S that they need to have a service center just to serve existing customers.

Word of mouth is starting to turn negative on buying Teslas in upstate NY *because of the service problem*, and for no other reason. We can't be the only region with this problem -- Arkansas, for example? I already know people in Montana considering buying Teslas are deciding not to because of the servicing problem. Sure, they're not huge markets, but the negative word of mouth is bad -- it persists even after the service center does get built. After developing a bad reputation in a local area, it can be very hard to move into that area later because there's now a reputation to *overcome*.

Even for people currently living near a service center, they may move house to somewhere else in the US without one. Or drive their car for a vacation to a family member's house without a nearby service center. They still want to be able to get service quickly if something goes wrong with the car. The lack of geographical coverage is a deterrent to buying the car. It's a piece of negative word-of-mouth which will persist for years even after they do build the service centers, so it's terribly important to nip this in the bud by building geographic coverage now.

Tesla's currently going into additional *countries* but they haven't managed to provide service centers near many of the metropolitan areas of the US. This is putting the cart before the horse, I think. The service center geographical expansion *must* cover most of the US as soon as possible in order to avoid creating a regional drag on Tesla's reputation.

They can probably get an idea of where the biggest need for service centers is by looking at patterns in the Model 3 reservations. They have enough of them they could do some statistical analysis and figure out which areas have the most reservations, but are not well served by service centers.

This would be a misleading and thoughtless thing to do, because lack of service centers causes people to not make reservations when they otherwise would make reservations. It would be much more effective to simply prioritize by population.

First, attempt to get a service center within 180 miles of every metropolitan area in the US (prioritizing largest to smallest). Second, get one within 120 miles of every metropolitan area (again, prioritizing largest to smallest). Then, with geographic coverage achieved, they can look at the reservation patterns.

The reservation patterns are more useful for determining how *large* the service centers will need to be. Some locations can have a "minimum size" service center (Montana?), while others will need enormous service centers (New Jersey?)

 

[wdolson]

I think looking at Model 3 reservation data would be a good start. It can tell them areas where there is enough demand for Teslas for people to plunk down $1000 on a Model 3, but I agree that it doesn't tell them areas where people might want a Model 3, but were discouraged due to a lack of Service Centers.

Some metro area probably need more service centers than they have. The Los Angeles metro area has 7 service centers and San Diego only has 1. Seattle has two that are not that far apart geographically, but both would be a long slog through a very slow traffic corridor to get to one from Tacoma. Portland, OR only has one in a southern subrub that makes any Tesla owner who lives on the north edge of the metro area (like me) to cross the entire metro area. There is also a gap of about 400 miles between Portland and Sacramento, CA where there are no service centers and none in any of the interior states between the I-5 corridor (Seattle to Portland on down into California) and Minneapolis, MN.

Upstate NY does need some attention. Tucson, AZ probably should get one. People in Wisconsin have to go to Minneapolis or the Chicago area. I think there is some hope for the Rochester area as Solar City's factory nears completion.

I still hope they build an SC in SW Washington. In Washington, if you buy a car in state, you pay the sales tax for the city where you bought it. Longview is a popular place to buy a car because they have the lowest tax rate in the state. There are a lot of car dealers there and it's one of the few industries in the town, though there used to be a number of paper mills. I think only one paper mill is left.

Longview for me would be about equal distance to the SC in Portland, but it would be a much easier drive, about 80% of the drive would be in the interstate through the countryside. Though I suspect a lot of other places will be getting SCs first.