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Long-Term Fundamentals of Tesla Motors (TSLA)
- Thread starter Robert.Boston
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- elon is an ass investing TSLA
I'm the first to dispute the Musk/Jobs comparisons, but geez, Jobs did more than "make toys".
Setting aside the Macintosh, just look at what he did with NeXT, Inc. The NeXT computer, and more importantly, the NeXTSTEP operating system, is still the basis for what Apple is today. MacOS X and iOS are basically the latest generation of NeXTSTEP.
iPads might be considered "toys", but tell that to the airline pilots who carry them with them now and use them in-flight. Or the doctors who use them to review medical records. Or the teachers who use them with their kids to learn stuff.
The "toy" argument could equally be lodged at the Tesla Model S.
Setting aside the Macintosh, just look at what he did with NeXT, Inc. The NeXT computer, and more importantly, the NeXTSTEP operating system, is still the basis for what Apple is today. MacOS X and iOS are basically the latest generation of NeXTSTEP.
iPads might be considered "toys", but tell that to the airline pilots who carry them with them now and use them in-flight. Or the doctors who use them to review medical records. Or the teachers who use them with their kids to learn stuff.
The "toy" argument could equally be lodged at the Tesla Model S.
ShortSlaver
Member
Exactly. And event at NeXT it wasn't just creating a BSD based OS "for the rest of us" but they pioneered new things in programming languages, compilers and object oriented programming in general. These things are amazing assets to the world today too and millions benefit because of them.
Having the vision for a computer people would use every day at home, realizing the value in a graphical user interface, hiring people like Jef Raskin to take the concept further and create accessibility, changing the way music is sold which has enabled may independent musicians the ability to distribute their work among all the other things is pretty amazing. iPads are reshaping the way humans learn and engage their world creating a more democratized world of education for more people. It's pretty amazing.
Apple and Steve Jobs are responsible for a whole lot more than "toys". What's great is many of these amazing tools are not only revolutionary to the world, but they're fun too. Musk is going the same thing with Tesla. Building machines that change the world for the better and are also damn fun to use.
SJ vs Elon
I'm not sure an attempt to elevate one above the other is worthy of either. They are very different people both with great achievements. Jobs changed and disrupted multiple industries with both technical ability and phenomenal marketing and communications skills, breaking the mold of corporate structures and focus etc.. Many of Jobs achievements, Elon has smartly used and built upon. Elon is a brilliant engineer/scientist and business/financier. Elon's path is strong, but has yet to accomplish even a fraction of Job's business accomplishments (I anticipate that will change, but it hasn't to date, just as we don't know what more Jobs could have accomplished if he lived longer). Both were aspirational to change the human race, but in different ways. Jobs built businesses that bridged technology to the humanities/emotional side (extremely difficult). Elon is building businesses that bridge technology to humanities greatest problems and aspirations. Arguing that one is above the other diminishes both. And the only reason they are compared at all is because of their business acumen. It's quite possible that measured by contribution to the human race, neither will ever hold a candle to Einstein or Mozart, both of whom were utter failures in the business community.
Instead, I propose we celebrate the massive accomplishments of Jobs and concurrently cheer Elon as he makes his own independent mark. I'm glad to exist in a world that benefits from the results of both, part of a species that produced them both, and living a life that celebrates them both.
I'm not sure an attempt to elevate one above the other is worthy of either. They are very different people both with great achievements. Jobs changed and disrupted multiple industries with both technical ability and phenomenal marketing and communications skills, breaking the mold of corporate structures and focus etc.. Many of Jobs achievements, Elon has smartly used and built upon. Elon is a brilliant engineer/scientist and business/financier. Elon's path is strong, but has yet to accomplish even a fraction of Job's business accomplishments (I anticipate that will change, but it hasn't to date, just as we don't know what more Jobs could have accomplished if he lived longer). Both were aspirational to change the human race, but in different ways. Jobs built businesses that bridged technology to the humanities/emotional side (extremely difficult). Elon is building businesses that bridge technology to humanities greatest problems and aspirations. Arguing that one is above the other diminishes both. And the only reason they are compared at all is because of their business acumen. It's quite possible that measured by contribution to the human race, neither will ever hold a candle to Einstein or Mozart, both of whom were utter failures in the business community.
Instead, I propose we celebrate the massive accomplishments of Jobs and concurrently cheer Elon as he makes his own independent mark. I'm glad to exist in a world that benefits from the results of both, part of a species that produced them both, and living a life that celebrates them both.
EarlyAdopter
Active Member
With all this noise in the media lately about TSLA trading without consideration for valuation, I'm a bit confused. Looking at a projection for 2017 earnings, there's a fairly easy estimation for future valuation.
Here are the long term numbers I modeled last year, and why I bought a boatload of TSLA:
2017
200,000 Gen 3 sales x $39,000 avg sales price x 0.17% gross margin
30,000 Model S&X x $80,000 ASP x 0.25% gross margin
That puts us right at $2B in profit. Subtract out $600M in operating expenses and you're left with $1.4B in earnings. With 116,000,000 shares outstanding, that puts us at $12 EPS. Applying a 15 P/E, a bit above Ford and GM but well less than other growth companies, you're at $180/share. It seems that a company with as solid a business model as Tesla and good chance of hitting its targets down the road is hardly overpriced at $100 now.
Am I missing something in my (admittedly) simple model? It would seem that if anything my numbers are a tad bit on the conservative side, with Elon recently suggesting that unit sales for X&S combined could top 40,000 and margins could "approach Porsche over time" - i.e. 50%. Gen3 sales numbers are a big wild card, but I think Tesla's longstanding estimate of 200k is quite doable considering how good of a car they've shown they can make and how much of a vacuum there is for a great sub $40k car that happens to be electric with real (200+ mi) range.
Here are the long term numbers I modeled last year, and why I bought a boatload of TSLA:
2017
200,000 Gen 3 sales x $39,000 avg sales price x 0.17% gross margin
30,000 Model S&X x $80,000 ASP x 0.25% gross margin
That puts us right at $2B in profit. Subtract out $600M in operating expenses and you're left with $1.4B in earnings. With 116,000,000 shares outstanding, that puts us at $12 EPS. Applying a 15 P/E, a bit above Ford and GM but well less than other growth companies, you're at $180/share. It seems that a company with as solid a business model as Tesla and good chance of hitting its targets down the road is hardly overpriced at $100 now.
Am I missing something in my (admittedly) simple model? It would seem that if anything my numbers are a tad bit on the conservative side, with Elon recently suggesting that unit sales for X&S combined could top 40,000 and margins could "approach Porsche over time" - i.e. 50%. Gen3 sales numbers are a big wild card, but I think Tesla's longstanding estimate of 200k is quite doable considering how good of a car they've shown they can make and how much of a vacuum there is for a great sub $40k car that happens to be electric with real (200+ mi) range.
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anticitizen13.7
Not posting at TMC after 9/17/2018
Intellectual Property licensing? My best guess.
Elon's stated goal is moving the automobile sector to entirely electric power trains. Tesla electric motors, control systems, batteries, and Supercharging technology will be extremely difficult for automakers to replicate, doubly so without running afoul of patents.
I think the real money and margins are in licensing. Think "Tesla Inside" like the old Intel slogan, except that other automakers would license the power train designs and build them at their own facilities. I believe that this could provide Tesla with future margins that considerably exceed the 17-25% that they are expected to achieve building their own vehicles.
Agreed, so many computers benefit from intel inside regardless of brand. Similar to how many different clothing and footwear companies use Gore-tex inside their products. With "Tesla inside" of Toyota and Mercedes EVs, I'm just hoping one of the big three does the same... what ever happened to that GM rumor?
Tesla Pops on GM Rumor (Update 1) - TheStreet
This would be big if it comes to fruition...
JRP3
Hyperactive Member
I think it was just a rumor. Frankly GM has such a large investment in their own technology I can't see them using Tesla's since they aren't targeting cutting edge performance vehicles. It's not that hard to build a reasonably good motor and inverter, and they have their own version of an actively managed battery pack which seems to be holding up well in the Volt. They could scale it up to EV size if they wanted to.
GM also has an even better drive unit in the Spark EV. The efficiency from battery DC power to mechanical power at the axles is very good, with a large sweet spot on the efficiency vs. torque and speed map.
GM also may have brought the A123 Spark battery design and manufacturing in-house during the A123 bankruptcy. However they need to catch up with Tesla's $/kWh advantage.
GSP
GM also may have brought the A123 Spark battery design and manufacturing in-house during the A123 bankruptcy. However they need to catch up with Tesla's $/kWh advantage.
GSP
anticitizen13.7
Not posting at TMC after 9/17/2018
I think that GM will run into problems if infrastructure standards go Tesla's way. There is nothing that can realistically compete with the 120 kW SC, and I don't see anything on the horizon either. Nobody will have a Supercharger network like Tesla's.
In a hypothetical situation where Toyota and Mercedes Benz get on board with Tesla's standard, I can see other automakers following. Nobody will want to be stuck with slower tech.
Toyota, Daimler, GM, and others need a 200+ mile car first. Once they have that, they can either join or copy Tesla's supercharger network, as Elon has pointed out.
They could stick with 100 kW versions of Frankenplug or CHAdeMo DC fast charging, but would have to settle for second-class status compared to Tesla's faster and sleeker 120 kW connector. I think we are most likely to see yet another DC connector standard, that can go to maybe 200 kW, or for Tesla's plug to eventually become the industry standard.
Tesla's technical leadership in range and charging speed will definitely contribute to the long term value of TSLA stock.
GSP
They could stick with 100 kW versions of Frankenplug or CHAdeMo DC fast charging, but would have to settle for second-class status compared to Tesla's faster and sleeker 120 kW connector. I think we are most likely to see yet another DC connector standard, that can go to maybe 200 kW, or for Tesla's plug to eventually become the industry standard.
Tesla's technical leadership in range and charging speed will definitely contribute to the long term value of TSLA stock.
GSP
JRP3
Hyperactive Member
One advantage GM has is by using high C rate cells such as the A123's in the Spark they can actually charge faster than a Tesla. If the Spark has say a 20kWh pack I think it could theoretically charge at 6C with a 120kW supercharger.
Yes, but we all know battery cost is a huge factor and was A123's big problem. High cost batteries are fine for compliance cars, but not for volume production. Their volume production plug-in is using LG Chem cells.
Unlike the other car manufacturers, Tesla has an approach to the technology which starts with one question: how do we replace all cars with electric cars? The rest of the strategy comes in logical steps.
A: make affordable cars people want.
Q: how?
A: make cheap batteries with large capacities.
- Provides ICE-beating performance, ride and handling.
- Covers the majority of miles with home charging
- Allows for rapid charging.
Q: What about long distance travel?
A: We'll build a network of chargers on the Interstates and major highways.
Q: Won't that cost a lot of money?
A: Not that much. We'll use up-front fees to pay for the network. We'll put the network on the Interstate and closed highways so people only use them on long trips (and charge at home for everyday use.) We'll eliminate financial management costs by making it free at the point of use. People will be using them at weekends so electricity will be relatively cheap but we can add solar and battery banks and offer grid management to offset costs further. It just has to pay for itself nationally so we can take advantage of different markets.
Q: But that's still going to be slower than gasoline, right? Some people won't like that.
A: Well, we'll keep trying to speed it up, but there are helpful factors. First, people love free. Second, you can walk away from the charger so you can plug in, go to the bathroom, get a drink or snack and your car is charging, so your perceived wait time isn't the whole time. But yes, time is an issue, especially if we get the high volumes I'm aiming for. That's part of the reason we'll make the packs swappable.
Q: swappable?
A: Yup, drive into the box, a machine removes your battery, installs a fully-charged battery and you drive off. We'll make it faster than gas.
Q: that'll be expensive!
A: Well, it won't be free, but we'll try to make it cheaper than gas, but that still gives us reasonable margin. The electricity required to do it will be relatively cheap. (You can move a car a mile on less than 0.4kWh!) But, we 'll have to come up with a simple, reliable way to move batteries in and out of an underground storage bank. Install/uninstall will be challenging, but we really want to do that for vehicle or battery assembly anyway. And if we're building battery banks for swapping and cost-management for charging we have to get the batteries in and out. Re-use makes stuff cheaper.
Q: Ok, so let's say you make it cheap, what about the fact that people won't know what pack they're getting.
A: Well, we'll keep their pack for the return trip if we can. Yeah, tricky on the logistics, including on Interstates with split rest-stops, but we'll work on it. Hopefully over time people will stop being wedded to their batteries. We'll let people keep better batteries, of course, for a fee. That'd provide a simple battery upgrade/exchange mechanism.
Q: OK, so let's say you can oull this all off. What about all of those people without a driveway or garage? Where are they going to charge?
A: Uh, where they park their car. Parking lot, street. Build something awesome and people will find a way to own it. People live in houses that were originally built a long time ago without electricity, central heating, running water, cable or telephone. Things change.
Q: Wow. Well, I think you're crazy, but I hope you can do it.
A/Q Thanks. Aren't you going to ask me anything else?
Q/A Huh?
A: Dude, I mentioned battery banks at least twice and all you can can think of is cars.
Q: OK... so what 's the deal with these battery banks?
A/Q: If we can build cheap, large batteries, put them together in banks then manage them well to maximize useful cycles we can do what?
A/Q ****! You can put them everywhere! Who'd use peak electricity? No more clock-resetting short outages or crappy wholesale rates on PV excess. You be selling them to renewable generators and to utilies to balance the grid. Maybe some people can get rid of their crappy gasoline generators. OK, now I understand your approach. Can you actually do it?
A: Maybe.
Q: I hate to say this, but I think you're giving me a slight man-crush. Do you get that often?
A: Actually, yes. I think JB gts jealous of it sometimes.
Q: Who's JB?
A: Exactly. I'm just a rich geek. He's a guy I man-crush on.
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JRP3
Hyperactive Member
I never understood why A123 cells were so expensive, other than that's what they could charge for the performance. They are just a variation of LiFePO4 chemistry, which is one of the less expensive lithium ion chemistries. I'm hoping that the Chinese who now own A123 will work their magic and drive the price down.
NigelM
Recovering Member
Mod Note: some posts went to snippiness.
Huh? You're entitled to your point of view, but it's not helping your argument to throw out statements such as this.
Huh? You're entitled to your point of view, but it's not helping your argument to throw out statements such as this.
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mitch672
Active Member
I've never seen a forum with such heavy handed moderation, it like the "thought police" are here 
(Gentlemen, place your bets, 3 minutes until this post is in snippines place your bets... )
(Gentlemen, place your bets, 3 minutes until this post is in snippines place your bets... )
deonb
Active Member
I've never seen a forum with such heavy handed moderation, it like the "thought police" are here
(Gentlemen, place your bets, 3 minutes until this post is in snippines place your bets... )
Agreed. Even my complaint about the moderation just ended in snippiness. I thought snippiness was for removal of personal attacks? I didn't even direct that at anybody.
http://www.teslamotorsclub.com/showthread.php/7777-snippiness/page27?p=371328#post371328
Citizen-T
Active Member
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