Devils advocating...from someone who shorted TSLA

[chickensevil]

That has to be the world's greatest timing for a short to turn around on a stock like this. I too hope you actually put money down on this, because I get the feeling that this is the start of a new wave (which could very well come crashing back down again, crazy, crazy stock!)

PS: Managed to steal some shares this morning at 138... my only regret, that I didn't throw my entire bank account at this thing haha!

 

[rtz]

06-25-2013

Tesla will not be able to sell close to 5000 cars a quarter.

"They announced today that they sold and delivered 6900 this last quarter, about 20% above previous guidance."

(In the comments): Registry of Custom Electric Vehicles - Wormhole and Stargate - EVTV Motor Verks

 

[Realist]

Of course I am in the stock with real money. I was also short with real money before. The timing was a bit lucky now I have to say.

The main reason to go long was the combination of solid demand for the Model S and the irrational high short quote. This led me to the conclusion that many people simply underestimate the company and its product. Just like me.
I have to talked to many people in the german car industry about the Model S. Most people are talking the car down. They take the car to the german Autobahn and show their bosses how badly it performs there and so on.
And then inevitably they make the same mistake I made. They don’t understand that many people do not really care about the bad seats, the inconsistent performance and other things like charging and range. They want to drive electric. They hate ICEs. They only WANT a Model S.

Currently there is only one german car company who understands this threat: BMW. They will come up with an i5 in 2015 and this will be the first car to challenge the Model S on range and speed.
Until then I see very few hurdles on Tesla’s road.

 

[sub]

Of course I am in the stock with real money. I was also short with real money before. The timing was a bit lucky now I have to say.

The main reason to go long was the combination of solid demand for the Model S and the irrational high short quote. This led me to the conclusion that many people simply underestimate the company and its product. Just like me.
I have to talked to many people in the german car industry about the Model S. Most people are talking the car down. They take the car to the german Autobahn and show their bosses how badly it performs there and so on.
And then inevitably they make the same mistake I made. They don’t understand that many people do not really care about the bad seats, the inconsistent performance and other things like charging and range. They want to drive electric. They hate ICEs. They only WANT a Model S.

Currently there is only one german car company who understands this threat: BMW. They will come up with an i5 in 2015 and this will be the first car to challenge the Model S on range and speed.
Until then I see very few hurdles on Tesla’s road.

You just summed up the one point that I feel shorts don't get. They want to break it down financially, claim the range is too short, the costs don't make sense, compare the stock to other auto companies, people can't afford a Model S and on and on. What they don't get, because they don't feel it personally and they can't see the forest through the trees, is that there is a shift in peoples thinking. I know this because I've gone through it myself. This is the same reason I'm invested in Solar and put an 8kw system on my roof 6 months ago.

 

[Robert.Boston]

Currently there is only one german car company who understands this threat: BMW. They will come up with an i5 in 2015 and this will be the first car to challenge the Model S on range and speed.
Until then I see very few hurdles on Tesla’s road.

I see the introduction of real competition (eventually) as having a very strong potential upside for Tesla:

1. Most people don't take EVs as credible car offerings; as more companies join Nissan in offering BEVs, that credibility gap is erased and Tesla's offerings will be considered by more people.
2. As more EVs hit the showrooms of more companies, the charging infrastructure will be built out, again easing a concern that keeps some people from buying an EV (and, ergo, from considering a Tesla).
3. At least a few of the major EV suppliers (whoever those turn out to be) will contract to use Tesla's Supercharger network rather than building their own. This will be an important source of incremental revenues for Tesla with huge % margins.

Elon has been clear that he welcomes competition and is surprised by the lack of anything meaningful to date. Let's hope that BMW, at least, gets its act together with something better than the i3.

 

[Electroman]

A very credible competition will actually help Tesla.

And when I hear arguments from naysayers as to how the initial higher cost of an EV can never be recuperated through gas savings unless gas price increases to $5 per gallon - I find that line of reasoning most idiotic. As if gas savings are a huge part in decision making on buying a Model S.

 

[chickensevil]

A very credible competition will actually help Tesla.

And when I hear arguments from naysayers as to how the initial higher cost of an EV can never be recuperated through gas savings unless gas price increases to $5 per gallon - I find that line of reasoning most idiotic. As if gas savings are a huge part in decision making on buying a Model S.

To some it is. At the very least it helps with justifying in my head spending as much as I am on the car. I mean eventually I wanted a high end car anyway, and now I can justify that at least in this respect I am not spending as much money as I think I am spending.

Also, not sure what price point they were trying to compare to, even comparing a 30MPG car at a 3.20 gas price (which is exactly my stats in my current situation) and driving my 12,000 miles a year, I will end up saving I think it was 700$ or something. While not a *huge* number, it is something. And for the other "dream cars" that I WOULD have ACTUALLY been competing my bottom line for, I would have ended up with a 20MPG (or less, because, gotta have fun gunning the gas now and then) car, AND having to stick premium fuel at 3.70$ that would have cost me an additional 1000$ a year in fuel alone. So 1700 over 5 years, means that I can spend an extra 8500 now and still break even (for the most part). Assuming prices remain the same, which is not likely.

 

[772]

I also agree that a strong competitive product to the Model S would be good news for Tesla, as it means EVs would gain more credibility and exposure. BMW may come out with an i5 in 2015, but at least here in the US, they will still have a challenge convincing their dealers who make most of their money on servicing ICE cars.

 

[vin5xxx]

The BMW i5 is not competition to the Tesla if it only has 100mile range like the i3.

 

[JRP3]

I think it's a safe assumption that it will be significantly better than the i3. It has to be or there is no point building it.

 

[TSLA Siempre]

Yes. Agree. In fact, it has to be better than even the ICE 3 series BMW. One thing that Tesla has shown is that it wants to build, and really must build, a car that is so compelling and superior to the existing competition, that people will desire it not just think it is ok. Tesla is succeeding in advancing electric vehicles (and its business) because you don't have to feel sorry for buying a Tesla (as you would some other EV's). As one journalist put it (can't remember who), we will be 'seduced' into the EV revolution not reluctantly pushed into it.

 

[vin5xxx]

I think it's a safe assumption that it will be significantly better than the i3. It has to be or there is no point building it.

I'm not sure what makes it a safe assumption that it will be significantly better than the i3. It's simply a bigger i3 just as the 5 series is bigger and more luxurious than the 3 series. In fact, BMW spent a billion dollars and years producing a car that can only go 100 miles on battery power. As slow as battery improvements occur I'd argue that it's a safe bet the i5 will NOT be significantly better than the i3.

 

[772]

If it comes out in 2015, I agree that it won't be significantly better than an i3. Maybe 2020-2022.

 

[Grendal]

The i5 will probably be better than the Leaf or the i3, but it won't be a strong competitor for the Model E.

My guess: 125 mile range, better look, will also have the option for a range extender (maybe), 0-60 in 7 seconds, around 180 HP, will also not be anywhere as cool looking as the Model S, BMW kidney grill, and that's about it.

 

[TSLA Siempre]

woops. thought you were talking about Model E vs. i3. who knows what an i5 would be like. Grendal's assessment seems about right, but i would guess 90 miles range. bigger than i5, but not necessarily better.

 

[Realist]

According to my sources BMW is closely working with Samsung on the next Generation battery for the i5. Range will be double to the i3 without REX but with the same drive unit. Therefore hp figures are unchanged. It's got the same carbon shell but longer with conventional doors. Price will be starting at app. 50k$.

An AWD Version with 2 drive units and Model S beating performance is also in the works. But it takes time.

 

[JRP3]

If the i5 is just a larger version of the i3 with a bit more range then it will be a fail. My assumption, possibly quite wrong, is that BMW would not do that. Sleeker packaging, and range in the 150 mile area with a $45-50K price tag is quite possible and would sell quite well in my opinion, especially if it came out before the E.

 

[chickensevil]

According to my sources BMW is closely working with Samsung on the next Generation battery for the i5. Range will be double to the i3 without REX but with the same drive unit. Therefore hp figures are unchanged. It's got the same carbon shell but longer with conventional doors. Price will be starting at app. 50k$.

An AWD Version with 2 drive units and Model S beating performance is also in the works. But it takes time.

Im cool with that, there is enough potential market share here for plenty of good competition to spring up and make a better product for everyone. I am just glad that Elon (and the other founders) were willing to take this huge leap, because it is finally propelling at least a couple companies forward to actually make a better product or risk getting kicked to the curb.

Right now, I only see three companies even really trying. Tesla, Nissan, and BMW. The others are not looking too good. I would love to see these three companies become the next "Big Three" haha!

 

[Robert.Boston]

Right now, I only see three companies even really trying. Tesla, Nissan, and BMW. The others are not looking too good. I would love to see these three companies become the next "Big Three" haha!

Daimler is introducing the B-series based on the Tesla drive train, though it's not clear to me yet whether this is anything more than a compliance car. I agree, though, that Daimler is not contending against Tesla, but rather working as a distributor for Tesla. Any predictions about when Tesla will buy Daimler?

 

[chickensevil]

Daimler is introducing the B-series based on the Tesla drive train, though it's not clear to me yet whether this is anything more than a compliance car. I agree, though, that Daimler is not contending against Tesla, but rather working as a distributor for Tesla. Any predictions about when Tesla will buy Daimler?

I would be more likely the other direction Daimler buy Tesla, which wouldn't happen anytime soon (like next 5 years), and beyond that is anyone's guess. Tesla just simply wouldn't have the capital to buy a company, and I don't think it would ever be in their best interest to buy out a whole company because then you have to go through and trim out all the fat from the company and it is just a nightmare... especially given how radical Tesla is being with the auto market in general... ie. Dealerships, Service Centers, Marketing, etc.

Tesla might purchase specific assets from a company going under (like they did with the NUMA plant), but I wouldn't expect them to buy out the entire company, it is just incompatible. Just my 2 cents. Feel free to poke holes in it!