Yeah, it's negative now b/c of all the investing they are doing. But I'm wondering what kind of profit they make (%-wise) on the sale of a Model S. I was assuming a net profit of about 10% of sale price.
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Yeah, it's negative now b/c of all the investing they are doing. But I'm wondering what kind of profit they make (%-wise) on the sale of a Model S. I was assuming a net profit of about 10% of sale price.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
You can't take the investing of the equation. Well you can but then you get gross margin on every car sold which is around 25%
chickensevil
Active Member
Re: significance of GWh capacity.
If that number is right, they will need 20 Gigafactories by 2025 if they are going to hit those numbers. That is one thing that I think will slow things down. The cost of building these factories from nothing is going to be enormous. If we need to build 19 more at 5Bn a piece, you are talking 95Bn in capital. Only Apple has that kind of money right now, Lol. I know the business is ideally self sustaining such that they can keep building factories, but I don't think we will have that many ready by 2025.
The good news, if they sell more cars over stationary it should mean more cash. But if they are selling 4.5M cars by 2025 it is going to be interesting to watch the other companies tremble at that point for the unstoppable wave that is Tesla. Going to be a very interesting next 10 years!
Something else to chew on. If Fremont is the blueprint for other factories... And also needing the 19 additional Gigafactories... Consider how many jobs that is.
19 Gigafactories with 6500 jobs a piece is 125,000 good high paying jobs!
To hit 4.5M cars and I think they are employing about 7000 people at Fremont, with another 8 factories needed, that is 56,000 jobs. Tesla is about to raise their employment from ~13000 current to well over 200k by 2025 as well. That is an employee growth averaging around 40% each year. I wonder if the number of people available to fill those jobs are going to be there. We might run into a skilled worker shortage before we do a capital shortage... Hrmmm
If that number is right, they will need 20 Gigafactories by 2025 if they are going to hit those numbers. That is one thing that I think will slow things down. The cost of building these factories from nothing is going to be enormous. If we need to build 19 more at 5Bn a piece, you are talking 95Bn in capital. Only Apple has that kind of money right now, Lol. I know the business is ideally self sustaining such that they can keep building factories, but I don't think we will have that many ready by 2025.
The good news, if they sell more cars over stationary it should mean more cash. But if they are selling 4.5M cars by 2025 it is going to be interesting to watch the other companies tremble at that point for the unstoppable wave that is Tesla. Going to be a very interesting next 10 years!
Something else to chew on. If Fremont is the blueprint for other factories... And also needing the 19 additional Gigafactories... Consider how many jobs that is.
19 Gigafactories with 6500 jobs a piece is 125,000 good high paying jobs!
To hit 4.5M cars and I think they are employing about 7000 people at Fremont, with another 8 factories needed, that is 56,000 jobs. Tesla is about to raise their employment from ~13000 current to well over 200k by 2025 as well. That is an employee growth averaging around 40% each year. I wonder if the number of people available to fill those jobs are going to be there. We might run into a skilled worker shortage before we do a capital shortage... Hrmmm
adiggs
Well-Known Member
Or Tesla is going to get very good at acquiring auto plants and their workforce from other companies that are finding they lack demand to keep the plants and workers profitably employed, and get them incorporated into the Tesla culture and way of doing things.
I would be hesitant about taking ground-level ICE employees to come work at Tesla. I used to work with a bunch of former GM, Ford, Chrysler employees and they would tell me some of the stories about the culture in those plants. You have to remember, with the unions and whatnot, these employees were virtually untouchable. Coming into work drunk and high, getting doctors notes to skip weeks at a time, neglecting duties, etc. They had (and probably still have) a terrible management vs. employee culture.
I think the employees that work for Tesla now actually care about the success of the company. This is a valuable Tesla asset that won't show up on the books.
chickensevil
Active Member
Um, you do realize that most all of the factory employees at Fremont are former GM/Nissan employees, all of them with long time experience working at a Union based factory. And if I am not mistaken NUMMI was unionized. This was and continues to be listed as a risk in their filings.
ken830
Model S 85, Model 3 Performance, Model X LongRange
adiggs
Well-Known Member
Clearly, if Tesla is unable to integrate new employees into the Tesla culture, and they instead bring along the culture they are accustomed to, then that won't work (whatever the culture is). However, the people I'm thinking of also have experience and skills that are directly applicable to the manufacturing and assembly of automobiles (where me, for instance, have no skill or experience that is applicable to that work). That is valuable if you're looking at going from a few thousand to a few hundred thousand people doing that work. It saves an awful lot of in-house basic training - both the expense and the time, where the time is what's really valuable.
chickensevil
Active Member
I'm just saying I wouldn't be hiring them en mass and they would be put through a rigorous hiring process. I feel like GM, Ford used to work on the old referral system hiring someone cuz their dad worked there.
If I was Tesla, I would keep my standards very, very high. I think GM, F, Chrysler failed to do this.
If I was Tesla, I would keep my standards very, very high. I think GM, F, Chrysler failed to do this.
jhm,
I tried to create a graph in Excel to map your numbers to a line, that way I could reference what the BFPT would show for any given day, for each of the implied discounts that you showed. I don't really know what "implied discount" means though, so I just tried to make the graph match your numbers. Is this approximately what your model shows, or did I screw something up? It seems weird to me that the lines converge near the end, so maybe it's not correct.
Also, what are your formulas?
Thanks!
I tried to create a graph in Excel to map your numbers to a line, that way I could reference what the BFPT would show for any given day, for each of the implied discounts that you showed. I don't really know what "implied discount" means though, so I just tried to make the graph match your numbers. Is this approximately what your model shows, or did I screw something up? It seems weird to me that the lines converge near the end, so maybe it's not correct.
Also, what are your formulas?
Thanks!
Krugerrand
Meow
chickensevil
Active Member
How about the latest 10-Q? (It has been in the "risks" section for as long as I can remember...)
Also there is the famous conversation that Elon had with his workforce about what would make them want to Unionize and the concenses was terrible management... To which Elon replied that he has a strict no ***hole policy. He was having this conversation with these employees because many of them came from their former jobs as line workers either at NUMMI or other auto factories.
This is the right sort of idea. All the curves converge to the longterm price target, LTPT = $3740 @ T = 2025-12-31. So given discount D, then the corresponding BFPT at time t in days is
BFPT = LTPT * (1 + D)^((T - t)/365).
So this is an exponential curve that passes through the LTPT.
Now the way we get a representive distribution of discounts is to use recent historical prices and solve for D. This is the idea of implied discount, the level of dicount to the LTPT that the market price implies. Where P(t) is the closing price on trading day t, the implied discount is
ID(t) =(LTPT/P(t))^(365/(T - t)) - 1.
So it is helpful compute and plot ID(t) for recent history. I routinely look at 2 or more years. This charts the swings in sentiment. As implied discount goes down it is a bull run, and when implied discount increases it is a bear run. It is easy to compute percentiles of the historical distribution. I use quartiles to set representative levels. One thing to contemplate as you look at look at a chart of historical implied discounts is how this distrubtion might change over time. The average discount presently is about 29%. Will this drift over time? In what direction? Yes it wiil change and will likely shrink over time. But the premise of the BFPT method is that this change in distribution will be quite slow, so that projecting out over just a few years is reasonable guage of variabikity in sentiment. Moreover, if the general trend is declining, this implies a bullish direction. Thus, the bias in this method is conservative for shareholders, that is, the method will likely understate future price distributions. I should point out, however, that this drift is very slow and the volatilty due to shifts in sentiment is so overwhelming as to make drift ignorable.
I hope this helps you explore this approach and am delighted that you are taking such an interest in it.
Krugerrand
Meow
Except that none of that confirms your words. There's absolutely no evidence that 'most' (or even half) of the current employees were former NUMMI employees.
Approximately 4700 people were employed at NUMMI. It closed early 2010. Tesla bought the factory shortly after the closure but didn't start making cars for two years. I'd think in that time frame that many of the former NUMMI people found other jobs. There'd be several not (initially) qualified to work for Tesla given it's an electric car. Tesla also does a whole lot more R&D than NUMMI ever did, meaning way more engineers hired that wouldn't have ever worked for NUMMI. Tesla also appears to do more parts making than NUMMI ever did and that requires tradesmen not generally available in a state like California. We also know that Tesla has gotten hundreds of employees from the likes of Apple, as well none of the upper management has any NUMMI connections - meaning they'd be likely to pull from other known places.
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smorgasbord
Active Member
Back at the Oct 2012 Beta drive event at the factory, I got the chance to stroll through the factory, talk with workers, and I even video taped a short interview with Elon.
All the workers at that time were former NUMMI employees. The buzz was that Tesla was hiring only the best workers, since they only needed something like 1/10 the workforce due to heavy robotics. The fellow running the sheet metal line was particularly memorable. He had worked that line for over a decade at NUMMI, was thrilled to be doing it agin, and was hoping his stock options would let him buy a Tesla himself in a few years.
Obviously, I don't know the percentage of factory workers that were former NUMMI workers, but I know from meeting them personally that the first batch were almost all former NUMMI workers.
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chickensevil
Active Member
I think this is what I was remembering. So even if the current employees aren't a majority NUMMI workers, I am willing to bet that at least half the employees were former auto workers in general, which means they were all unionized previously, which still goes to my comments about them coming from that environment of which the OP was commenting about how terrible those employees tend to be. The point of my counter was that if they were all so bad then why is that what Tesla has hired a large amount of.
everman
Member
Thanks for this response. I also subscribe to the BFPT, and am interested in charting it. I am trying to work with the forumla you provided, but can't get it to do what I want. Could you provide the formula you use such that it could be plotted in excel? I am imagining rows with the date in it, and a formula that takes each date and inserts it into 't', with all other numbers in the calculation being provided as constants. Can you tell me what I'm doing wrong?
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