General Discussion: 2018 Investor Roundtable

[Remus]

VW's profits show they can easily afford to crush those cars and replace with BEV's to compete with Tesla...

Same argument has been made for Nokia and Ericsson crashing the smartphone business. Where are they now? It's far from only Nokia. Kodak, IBM, Notel, DEC, I can go on.

Most people laugh at Steve Balmer due to his iPhone moment. Few know that he is the one who insisted on investing sugar load of money on computing infrastructure and cloud computing. He had to fight tremendous pressure from big share holders to do that. Part of the reason he lost his job. Without him Microsoft would be dead 5 years ago. Now MSFT is the second on cloud computing.

Did any of the executive in VW show vision and leadership like that? Probably they can work on it while in jail.

You should listen to Steve Balmer's emotional speech in one of the Microsoft company meetings. The jist of it is that almost all powerful companies are one trick ponies. The only exception was Apple, and Microsoft was going to be the second exception.

It took both Apple and Microsoft near death experience to become two trick pony. Even if one of these big car makers pull a miracle and becomes a two trick pony, it has to go through the same near death experience and chase Tesla from behind.

Crushing those cars is far from enough, we are talking about the production lines and supply chains, knowhow and emotional attachment. Share holders will be against it, executives are against it. And this is even before the real investment towards scaling EVs production

 

[Boomer19]

Same argument has been made for Nokia and Ericsson crashing the smartphone business. Where are they now? It's far from only Nokia. Kodak, IBM, Notel, DEC, I can go on.

Most people laugh at Steve Balmer due to his iPhone moment. Few know that he is the one who insisted on investing sugar load of money on computing infrastructure and cloud computing. He had to fight tremendous pressure from big share holders to do that. Part of the reason he lost his job. Without him Microsoft would be dead 5 years ago. Now MSFT is the second on cloud computing.

Did any of the executive in VW show vision and leadership like that? Probably they can work on it while in jail.

You should listen to Steve Balmer's emotional speech in one of the Microsoft company meetings. The jist of it is that almost all powerful companies are one trick ponies. The only exception was Apple, and Microsoft was going to be the second exception.

It took both Apple and Microsoft near death experience to become two trick pony. Even if one of these big car makers pull a miracle and becomes a two trick pony, it has to go through the same near death experience and chase Tesla from behind.

Crushing those cars is far from enough, we are talking about the production lines and supply chains, knowhow and emotional attachment. Share holders will be against it, executives are against it. And this is even before the real investment towards scaling EVs production

two votes
informative and funny.

 

[ggr]

Same argument has been made for Nokia and Ericsson crashing the smartphone business. Where are they now? It's far from only Nokia. Kodak, IBM, Notel, DEC, I can go on.

Most people laugh at Steve Balmer due to his iPhone moment. Few know that he is the one who insisted on investing sugar load of money on computing infrastructure and cloud computing. He had to fight tremendous pressure from big share holders to do that. Part of the reason he lost his job. Without him Microsoft would be dead 5 years ago. Now MSFT is the second on cloud computing.

Did any of the executive in VW show vision and leadership like that? Probably they can work on it while in jail.

You should listen to Steve Balmer's emotional speech in one of the Microsoft company meetings. The jist of it is that almost all powerful companies are one trick ponies. The only exception was Apple, and Microsoft was going to be the second exception.

It took both Apple and Microsoft near death experience to become two trick pony. Even if one of these big car makers pull a miracle and becomes a two trick pony, it has to go through the same near death experience and chase Tesla from behind.

Crushing those cars is far from enough, we are talking about the production lines and supply chains, knowhow and emotional attachment. Share holders will be against it, executives are against it. And this is even before the real investment towards scaling EVs production

I agree, but you forgot IBM. The only surviving mainframe manufacturer.

Even then it's no guarantee of survival. Nokia reinvented itself multiple times before becoming a cellphone manufacturer. From wikipedia:

In 1967, the three companies - Nokia, Kaapelitehdas and Finnish Rubber Works - merged and created the new Nokia Corporation, a new restructured form divided into four major businesses: forestry, cable, rubber and electronics.

 

[anticitizen13.7]

two votes
informative and funny.

I added a funny vote!

 

[SteveG3]

1:30 clip of MKBHD trying the P Model 3, including “track mode”

Marques Brownlee on Instagram: “Taking @Tesla's brand new car to a track and getting some power slides in. Not a bad day.”

he does tend to be low key, lols

 

[Boomer19]

Plenty of battery production everywhere... Since GM, like most others successful automakers do not vertically integrate, they can choose the best battery tech at the best price..

yep, just like that. so easy!
when will automakers have this variety of choice?

you realize GF1 will produce more batteries in the 2nd half of 2018 than all other battery MF’ers combined globally. think about the implications of that for a second.

further, are you trolls all the same user with just different logins? bc you all sound exactly the same. i’m convinced your goal isn’t even market related, but rather just provoking tmc members (both longs and legit shorts)

 

[RobStark]

The most interesting piece of this to me is - maybe this is the beginning of dealership sell-offs as their business model is sunsetting

There has been consolidation of auto dealerships the last 20 years or so.

Very few independent mom'n pop one location dealerships.

And for every seller there is a buyer.

The question is price. The price for dealerships aren't falling. In fact they are rising.

So buyers and seller in the market don't think they are ****ed.

 

[elasalle]

Tesla tried looking for dealerships for some free space, but all were overbooked with inventory sitting in their lots

 

[RobStark]

So is no one going to discuss Tesla raised base prices for Gen II vehicles today?

Lots of premium package features now standard.

Base price Model S in USA is now $77k and Model X $83k.

Many have argued to cut base price and expand production over 100k units per year.

I argued raise prices and features and move Gen II up market.

On this one it seems Elon agrees with me. Not always the case.

BTW JP Morgan,Merrill Lynch et al are probably correct. When demand is softening you raise prices.

 

[Remus]

I agree, but you forgot IBM. The only surviving mainframe manufacturer.

Even then it's no guarantee of survival. Nokia reinvented itself multiple times before becoming a cellphone manufacturer. From wikipedia:

No I didn't. For me IBM is pretty much dead. From nobody got fired buying IBM" to mere existence? That is far from crushing anyone.

IBM is interesting in another sense that it too changed its business BEFORE IT BECAME DOMINANT. That's the key right there. Once companies become big and powerful with huge profit, tremendous forces exist to protect that business, reinvention becomes next to impossible. As I said both Apple and Microsoft went through near death to achieve that. Even with it executives in jail VW doesn't show any sign of reinvention.

So even if one of those big car makers does reinvent itself it has to go through a lot before they can chase Tesla from behind. As their key competitive advantage lies in design and making of engins and transmission. Entire car layout, drive control and safety system are designed around that. They have to abandon all that to embrace EV. That is a lot to ask from them.

Stupid shorts think EVs and ICE look alike, so building them should be similar too.

 

[NicoV]

Adding to Steve's list, I take those 2 or 3 good to great earnings announcements, and I expect to see addition to the S&P 500. This is my own speculation / guess - my thinking is that if you're the S&P 500 committee, what publicly traded company bigger than Tesla isn't already in the index? And which big companies in the world are growing faster than Tesla? In short, I'm thinking the S&P 500 committee will be looking for excuses to add Tesla as soon as possible.

Big and growing fast - if I were running an index, I'd want that in the list

I see the S&P 500 addition, whenever it happening, as being a big awareness shift of the sort @SteveG3 is talking about.

Addition to the S&P 500 will also create a lot of buyers (the funds that track the S&P 500). That alone may be the thing that triggers the ‘mother of all short squeezes’.
Question: can anybody quantify how much shares should be bought by the S&P 500 tracking funds and over what time period?

 

[schonelucht]

BTW JP Morgan,Merrill Lynch et al are probably correct. When demand is softening you raise prices.

Note also that many configurations got cheaper. I think these changes were carefully calibrated to have minimal impact on demand. With the goal rather being to take advantage of more streamlined production processes and increase gross margins.

 

[30seconds]

THIS THIS THIS

Behind The Wheel of the Tesla Model 3 Performance Vehicle

The first couple of minutes on driving before Dan really gets to some amazing gems on the business.

 

[sweter]

No I didn't. For me IBM is pretty much dead. From nobody got fired buying IBM" to mere existence? That is far from crushing anyone.

IBM is interesting in another sense that it too changed its business BEFORE IT BECAME DOMINANT. That's the key right there. Once companies become big and powerful with huge profit, tremendous forces exist to protect that business, reinvention becomes next to impossible. As I said both Apple and Microsoft went through near death to achieve that. Even with it executives in jail VW doesn't show any sign of reinvention.

So even if one of those big car makers does reinvent itself it has to go through a lot before they can chase Tesla from behind. As their key competitive advantage lies in design and making of engins and transmission. Entire car layout, drive control and safety system are designed around that. They have to abandon all that to embrace EV. That is a lot to ask from them.

Stupid shorts think EVs and ICE look alike, so building them should be similar too.

Both IBM and Nokia are doing quite well these days, tbh. They may be more behind the scenes and not consumer facing, but both power a lot of the world's infrastructure. Don't be so fast to dismiss them.

 

[Sancho]

THIS THIS THIS

Behind The Wheel of the Tesla Model 3 Performance Vehicle

.

Best Tesla interview ever. This guy is wicked smart, and has an amazing package of understanding of cars, the auto industry, innovation and global business. He’s not easily dismissed as a fanboy, and he writes and speaks eloquently.

Finally, finally, someone who can turn the tide of public opinion on Tesla. Dan is what Elon could be if only Elon had Dan’s personal communication skills. But hey, Elon has so many gifts it would be unfair to have that too.

Dan is going to get more airtime because he’s a terrific interviewee, and he’s offering a totally fresh take on what we here all know is one of the most important cars ever to be produced. Exciting times!

 

[scaesare]

Plenty of battery production everywhere... Since GM, like most others successful automakers do not vertically integrate, they can choose the best battery tech at the best price..GM: "At least" 20 New EVs To Debut In Next 5 Years, Two in Next 18 Months

From that article:

" We should note that GM currently has a massive push underway in China to conform to some pretty strict (and almost immediate) electric vehicle sales thresholds, so one should probably several of these coming 20+ all-electric vehicles will be offering in China only."

Bonus question: If I introduce 4 variations of a vehicle based on the same platform, and yet only collectively sell 10K units, how many vehicles have I introduced?

 

[Remus]

Both IBM and Nokia are doing quite well these days, tbh. They may be more behind the scenes and not consumer facing, but both power a lot of the world's infrastructure. Don't be so fast to dismiss them.

The topic comes up when someone claim VW's pocket change would allow them to crush Tesla. Well both Nokia and IBM had a sugar load of money and they are the ones got crushed.

Think about it, if you're a mid to high level manager in VW or Toyota, with more than ten years of expertise in building engines or transmissions, you're really good at what you do, promotion and bonus and the trust from your colleagues and managers make you really proud of yourself. and one day the company gives you a task to write a report evaluating the initial plan of EV development.

Knowing full well that this plan will render your experience, your expertise useless, with the fear of losing your job, your life and your dignity, what would you do?

How many mid level managers are like that?

 

[elasalle]

A Tsunami of money could be headed Tesla's way in the next year — and that’s bad news for the bears

Thousands of Tesla Model 3 cars are sitting in giant parking lots in California — here's why

 

[aubreymcfato]

The topic comes up when someone claim VW's pocket change would allow them to crush Tesla. Well both Nokia and IBM had a sugar load of money and they are the ones got crushed.

Think about it, if you're a mid to high level manager in VW or Toyota, with more than ten years of expertise in building engines or transmissions, you're really good at what you do, promotion and bonus and the trust from your colleagues and managers make you really proud of yourself. and one day the company gives you a task to write a report evaluating the initial plan of EV development.

Knowing full well that this plan will render your experience, your expertise useless, with the fear of losing your job, your life and your dignity, what would you do?

How many mid level managers are like that?

Don't know about VW, but IBM sold 2 bn of mainframes last quarter, apparently more than Google Cloud's revenue.

 

[Reciprocity]

[



Tesla doesn't own a battery factory. GM has said explicitly they designed the cell chemistry used in the Bolt.

What is true is that Tesla's supply chain is positioned to make hundreds of thousands of EVs. Most other manufacturers are only positioning to build tens of thousands of EVs.

Tesla does own a battery factory. Just because they have a partner doesn't mean they don't own anything.

You basically made my point. Chemistry is not a moat and even GM can design their own. But no one can supply enough cells at a cost to make it profitable.. hence the moat created by the scale of the gigafactory. Not the battery chemistry.

The battery chemistry is nice and will change over time, the moat for now is there factory (scale and automation).