Hi, I’m a short seller

[kbM3]

PHEVs are good in theory. In practice, you get the worst of both worlds. Low electric range, long recharge time, still have to fill gas, increased maintenance, poor performance, noise, pollution, etc.

Fully electric vehicles are the way to go. They are superior to gasoline, diesel, hybrids, plug-in hybrids, hydrogen, CNG, etc. And Tesla is the largest manufacturer of fully electric vehicles. They have a solid foundation on which to continue to build their business. Here's my view on the electric competition until 2020:

2018, Jaguar i-Pace, ~20k/year, Model Y competitor
2019, Audi e-tron, ~30k/year, Model X competitor
2019, Mercedes EQC, ~30k/year (?), Model Y competitor
2020, Audi e-tron Sportback, ~30k/year, Model S competitor
2020, (Volvo) Polestar 2, ~20k/year, Model 3 competitor
2020, BMW iX3, ~50k/year (?), Model Y competitor
2020, Porsche Taycan, ~20k/year, Model S competitor

This results in market shares for 2020:

Model S, 50k/year vs others, 50k/year: 50% market share
Model X, 50k/year vs others, 30k/year: 63.5% market share
Model 3, 480k/year vs others, 20k/year: 96% market share
Model Y, 250k/year (?) vs others, 100k/year: 71.4% market share

I would argue Taycan competes with Model 3 Performance. Closer in size and performance.

Model S is larger and not good on a track.

Ok - if I was a short, and I am certainly not, I would be looking at the strange VIN / delivery numbers that might point to a continued slow ramp of the 3.

What’s going to be total Model 3 production for Q2?

If i was a short, I would be nervous Tesla is changing VIN reporting to hide production for a Q2 announcement surprise.

As a long, I am nervous the VIN counting does indicate reduced production. Although @neroden convinced me that Canadians are less likely to report VINs #BlameCanada.

 

[Yggdrasill]

I would argue Taycan competes with Model 3 Performance. Closer in size and performance.

Model S is larger and not good on a track.

I think the size will actually be closer to Model S. The actual production version seems like it will be significantly bigger than the prototype. But there are still a lot of unknowns. You may be right.

 

[Reality]

I agree with @Reality that Tesla's margins are unlikely to be as good as Musk claims. But the shorts are going to be disappointed again when worse than anticipated margins don't suppress SP. A traders job is to figure how SP will move, not declare how it should move according to their rules.

agree this is definitely a fear

 

[Big Earl]

I think the size will actually be closer to Model S. The actual production version seems like it will be significantly bigger than the prototype. But there are still a lot of unknowns. You may be right.

It looks like it’s shaping up to be an electric Panamera, which, along with the Audi A7, is direct competition for the Model S.

 

[Pale Blue Dot]

Model S is larger and not good on a track.

Have you seen this? FIA approved all electric race car series based on P100D. Basically a bone stock P100D drivetrain with some safety requirements, suspension, and brake mods, and lightened interior. They haven't mentioned any other changes to cooling system. Electric GT's first race-spec Tesla Model S hits the track

 

[Reality]

It looks like it’s shaping up to be an electric Panamera, which, along with the Audi A7, is direct competition for the Model S.

i think it looks better than the panamera, but agree it is direct competition, any other take is beyond ridiculous

 

[Pale Blue Dot]

Have you seen this? FIA approved all electric race car series based on P100D. Basically a bone stock P100D drivetrain with some safety requirements, suspension, and brake mods, and lightened interior. They haven't mentioned any other changes to cooling system. Electric GT's first race-spec Tesla Model S hits the track

Sorry that was the prototype based on the 1st gen P85+. Here's the production version just delivered to the first team based on the P100D.

 

[kbM3]

Have you seen this? FIA approved all electric race car series based on P100D. Basically a bone stock P100D drivetrain with some safety requirements, suspension, and brake mods, and lightened interior. They haven't mentioned any other changes to cooling system. Electric GT's first race-spec Tesla Model S hits the track

A prepped Model 3 Performance would beat that on any track that did not have long straightaways. There's a reason the performance Porsche is the 911 and not the Panamera.

 

[Olle]

i think it looks better than the panamera, but agree it is direct competition, any other take is beyond ridiculous

When we bought our first Model S (as a family car) we looked at Panamera but it tuned out to be too small in luggage capacity. Luggage volume which was about half of Model S. When we years later bought our second Model S and spoiled by EV driving, the Panamera was of course obsolete (ICE) and completely out of the question.
The way I see many people use their Model Ss as family haulers it seems they could neither fit in a Panamera, nor a Taycan. There might be a tiny overlap, but most of all; Porsche enthusiasts might buy Taycan as a second car, then become so enamored by the electric drivetrain that they later add a Model S as a family car. Taycan will help sell Model S is the result.

 

[Pale Blue Dot]

Taycan will help sell Model S is the result.

I wrote about this very thing on SA. Take a look. It may not work as it says it's locked for PRO subscribers but some other members were able to access without an account. https://seekingalpha.com/article/4181342-tesla-short-thesis-competition-wrong

 

[Pale Blue Dot]

A prepped Model 3 Performance would beat that on any track that did not have long straightaways. There's a reason the performance Porsche is the 911 and not the Panamera.

They may run another class for the P3D if this series takes off.

 

[Olle]

I wrote about this very thing on SA. Take a look. It may not work as it says it's locked for PRO subscribers but some other members were able to access without an account. https://seekingalpha.com/article/4181342-tesla-short-thesis-competition-wrong

Cool. I could see the first 2 pages, looks like a good article! Not sure if you wrote this but it goes both ways, Tesla will help sell Taycan as well. Tesla drivers may want to add Taycan as a second car for sportier trips that don't require a lot of passengers and luggage. Like you wrote, 60% EV unawareness! 1% market share for EVs so far, they sky is really the limit. It will be a tsunami.

 

[beamthegreat]

Your math is wrong. At a 6% rate, you double your investment in ~12 years (assuming reinvesting all dividends). Quadrupling would require a little over 12% dividends (again reinvested).

You seem to have a very limited understanding of finance. That number is a function of the dividend, PE, and the ROE of the business. Assuming constant returns on equities, if the stock has a ROE of 16%, P/E of 6, and pays 0% (*zero percent*) in dividends, you'd double your money in roughly 5 years due to capital gains. In this particular case, your returns are pretty much constant irregardless of the payout ratio since ROE is very close to the stock's earnings yield. Daimler currently has a ROE of 16%.This calculation is best done on a spreadsheet.

(ETR: DAI) is at the same point it was in December 1996, but it is up from Feb 2008. BWM (ETR: BMW) is at the same price as September, 2013 (also up from 2008)... A drop will quickly wipe out any dividends you reinvested...

Again, this shows how little you know. DAI was pretty much a bubble in 1996 trading at astronomical PE ratios, similar to TSLA today. You seem to be very focused on the price rather than the fundamentals. As an value investor I care more about the intrinsic earnings power than the price of the stock. As long as the fundamentals still looks good, a drop in price means I get to reinvest at a discount.

 

[beamthegreat]

Correct your model to 100% electric by 2030 (maybe 2032)

lol, my sides.


In all seriousness all transitions usually take a lot of time. It took 50 years for 30% of people to switch from coal to oil. Take a look at this graph: https://pbs.twimg.com/media/DaRChUJUwAIDPH0.jpg:large

 

[Esme Es Mejor]

As long as the fundamentals still looks good, a drop in price means I get to reinvest at a discount.

That’s the thing. The fundamentals for Daimler and BMW look terrible; you just haven’t realized it yet. Twelve years from now, their 2018 bubble will be as obvious as their 2006 bubble is now.

 

[Esme Es Mejor]

lol, my sides.


In all seriousness all transitions usually take a lot of time. It took 50 years for 30% of people to switch from coal to oil. Take a look at this graph: https://pbs.twimg.com/media/DaRChUJUwAIDPH0.jpg:large

In all seriousness, the destruction of market cap happens a lot faster. From 2011-2016, coal production only dropped about 30%. The market cap dropped a bit more. Take a look at this graph:
https://www.instituteforenergyresea...ds/2016/06/combined-market-capitalization.png

That’s what’s going to happen to the market cap of automakers when their production falls 30%.

 

[beamthegreat]

Numbers are starting to trend against you my friend

No they're not. There's nothing preventing Daimler/BMW/other major auto players from switching to EV when the times come but there's simply not enough economic incentives to do it right now. Also, I'm not betting against electric cars. In the long run, EV will be as common as ICE and Tesla will just be another car company, assuming it doesn't bankrupt before then.

 

[beamthegreat]

Twelve years from now, their 2018 bubble will be as obvious as their 2006 bubble is now.

A stock bubble paying a dividend of 6.3% and trading at a P/E ratio of 6? Lol.

 

[beamthegreat]

In all seriousness, the destruction of market cap happens a lot faster. From 2011-2016, coal production only dropped about 30%. The market cap dropped a bit more. Take a look at this graph:
https://www.instituteforenergyresea...ds/2016/06/combined-market-capitalization.png

That’s what’s going to happen to the market cap of automakers when their production falls 30%.

I'm not betting against electric cars. In the long run, EV will be as common as ICE and Tesla will just be another car company, assuming it doesn't bankrupt before then.

 

[mongo]

You seem to have a very limited understanding of finance. That number is a function of the dividend, PE, and the ROE of the business. Assuming constant returns on equities, if the stock has a ROE of 16%, P/E of 6, and pays 0% (*zero percent*) in dividends, you'd double your money in roughly 5 years due to capital gains. In this particular case, your returns are pretty much constant irregardless of the payout ratio since ROE is very close to the stock's earnings yield. Daimler currently has a ROE of 16%.This calculation is best done on a spreadsheet.




Again, this shows how little you know. DAI was pretty much a bubble in 1996 trading at astronomical PE ratios, similar to TSLA today. You seem to be very focused on the price rather than the fundamentals. As an value investor I care more about the intrinsic earnings power than the price of the stock. As long as the fundamentals still looks good, a drop in price means I get to reinvest at a discount.

ROE does nothing directly for shareholders, either you are relying on dividends or stock price for your personal ROI. If dividends, 6% does not get you 4x in 12 years. If stock price, you might looks to other companies.

For reference, what was the car sales reduction in units during the 2008-09 recession? Oh, and in the last 2 years TSLA has gained 72%...