Their whole inventory.
As far as I have read, no one has any idea of why a particular vehicle may of may not appear in CPO inventory online.
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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
Their whole inventory.
As far as I have read, no one has any idea of why a particular vehicle may of may not appear in CPO inventory online.
That's true, from reading the CPO thread it sounds like you need to contact your local CPO specialist if you are seriously looking.
andrewt3000
Member
I wrote an article about the 2 reasons I think Tesla will dominate.
The 2 reasons Tesla will be Number 1
The 2 reasons Tesla will be Number 1
JRP3
Hyperactive Member
You made an error here:
At the cell level they are around 250Wh/kg, (probably closer to 260Wh/kg with the new 90 cells), but at the pack level they are probably closer to 150-160Wh/kg.
So I don't know how many use valuation metrics other than p/e, but I think the Price to Book Value is much more relevant for long term-investing and generally deciding how over/under priced a company is. Tesla has usually had a very high p/b especially for a non internet company, at one point I think it was over 100 and for a while it seems to hover over 50. As of late it's been about 30 which is still pretty high. But with this capital raise as of yesterday, an interesting thing happened in which it over halved the P/B. Not bad for one day of work so to speak.
The major problem with price/book is that book value tends to get understated over time, due to a consistent (and understandable) bias in the accounting conventions. So for example, Tesla's book value currently values Tesla's brand, copyrights, patents, trademarks, trade secrets, designs, know-how, and so on at $0.
The minor problem with price/book is that book value can get *overstated* -- this happens when assets turn worthless, or turn into liabilities (as happened in the case of asbestos miners and manufacturers). So the book value of the coal mining companies is much higher than their actual value right now; their coal assets are listed on their books as being worth money, when they're actually a liability.
However, Tesla is a business with a large amount of tangible assets which *do* go onto the books at something roughly approximating their value: factories, machinery, service centers, etc. This means that book value is a lot more meaningful for Tesla than it is for (for instance) Microsoft.
The minor problem with price/book is that book value can get *overstated* -- this happens when assets turn worthless, or turn into liabilities (as happened in the case of asbestos miners and manufacturers). So the book value of the coal mining companies is much higher than their actual value right now; their coal assets are listed on their books as being worth money, when they're actually a liability.
However, Tesla is a business with a large amount of tangible assets which *do* go onto the books at something roughly approximating their value: factories, machinery, service centers, etc. This means that book value is a lot more meaningful for Tesla than it is for (for instance) Microsoft.
I continue to play around with long-term valuations for TSLA. I am not an accountant so I wanted to do a reality check against making a mistake guesstimating COGS, OpEx, CapEx, P/E, etc. So I decided to benchmark my analysis using some of the basic assumptions adopted by Goldman. They presumably know how to crunch numbers, and despite the recent upgrade traditionally have had a relatively lukewarm outlook on Tesla ("hold" with the occasional "buy").
In the summary below from 2014 (courtesy of @vgrinshpun's post in the short-term thread -- thank you!), Goldman lays out a number of scenarios for valuing Tesla, depending on how its business grows. (They seem to follow a similar approach in their most recent valuation but some of the details are obscured.)
Goldman refers to one set of assumptions as the "Elon as Henry Ford" scenario. In this scenario, they propose that Tesla will sell 3.3M vehicles in 2025 at a gross margin of 16%, with an implied share price of about $1835 in 2025.
This may sound ambitious, but Tesla's recent projections call for selling about 1,000,000 vehicles in 2020. This implies a greater than 80% growth rate (by unit) from 2015 to 2020. Projecting a substantially reduced 50% growth rate from 2020-2025 would result in sales of approximately 7.6M vehicles in 2025 -- far greater than the 3.3M units Goldman projects, which implies less than a 25% growth rate after 2020 if Tesla hits its 2020 target.
It is worth noting that selling 7.6M vehicles in 2025 is hardly "Henry Ford" territory. Tesla would still likely be only the fourth largest car manufacturer by unit, behind Toyota, Volkswagen and General Motors, all of whom are already producing more vehicles than that. Automotive industry - Wikipedia, the free encyclopedia.
For purposes of this calculation, I accept Goldman's assumptions regarding ASP, GM, PE, etc., but assume a different "base case" -- i.e., that Tesla meets its goal of 1,000,000 vehicles in 2020, plus achieves 50% growth (by unit) through 2025.
This implies a stock price of $4226 in 2025 -- $1835*(7.6M/3.3M).
It is important to note that this number attributes zero value to the Tesla Energy business, which some have predicted could be as valuable as the vehicle business. It also fails to account for the true "upside" to the "Elon Musk as Henry Ford" scenario, where growth continues at above 50% rates well past 2020.
Many people may discount the likelihood that Tesla will meet its goals. Presumably, they are in the majority or the stock price would be higher.
But I believe it is a reasonable assumption that Tesla will meet or exceed its stated goals. If it does, based on Goldman's analysis the stock should increase about 20X between now and 2025. More than 20X if Tesla exceeds its goals (or the TE business takes off), less than 20X if it doesn't.
In the summary below from 2014 (courtesy of @vgrinshpun's post in the short-term thread -- thank you!), Goldman lays out a number of scenarios for valuing Tesla, depending on how its business grows. (They seem to follow a similar approach in their most recent valuation but some of the details are obscured.)
Goldman refers to one set of assumptions as the "Elon as Henry Ford" scenario. In this scenario, they propose that Tesla will sell 3.3M vehicles in 2025 at a gross margin of 16%, with an implied share price of about $1835 in 2025.
This may sound ambitious, but Tesla's recent projections call for selling about 1,000,000 vehicles in 2020. This implies a greater than 80% growth rate (by unit) from 2015 to 2020. Projecting a substantially reduced 50% growth rate from 2020-2025 would result in sales of approximately 7.6M vehicles in 2025 -- far greater than the 3.3M units Goldman projects, which implies less than a 25% growth rate after 2020 if Tesla hits its 2020 target.
It is worth noting that selling 7.6M vehicles in 2025 is hardly "Henry Ford" territory. Tesla would still likely be only the fourth largest car manufacturer by unit, behind Toyota, Volkswagen and General Motors, all of whom are already producing more vehicles than that. Automotive industry - Wikipedia, the free encyclopedia.
For purposes of this calculation, I accept Goldman's assumptions regarding ASP, GM, PE, etc., but assume a different "base case" -- i.e., that Tesla meets its goal of 1,000,000 vehicles in 2020, plus achieves 50% growth (by unit) through 2025.
This implies a stock price of $4226 in 2025 -- $1835*(7.6M/3.3M).
It is important to note that this number attributes zero value to the Tesla Energy business, which some have predicted could be as valuable as the vehicle business. It also fails to account for the true "upside" to the "Elon Musk as Henry Ford" scenario, where growth continues at above 50% rates well past 2020.
Many people may discount the likelihood that Tesla will meet its goals. Presumably, they are in the majority or the stock price would be higher.
But I believe it is a reasonable assumption that Tesla will meet or exceed its stated goals. If it does, based on Goldman's analysis the stock should increase about 20X between now and 2025. More than 20X if Tesla exceeds its goals (or the TE business takes off), less than 20X if it doesn't.
EinSV, while I think no one should overlook TE, i like that you were attempting to be conservative. However, I generally think it is very unlikely that we arrive at our destination with the current share / debt structure. At some point we are more or less guaranteed to raise additional capital through bonds or another raise. My guess is likely a debt raise at a higher share price. Again these raises are necessary to fund growth, so they are a good thing, but the current number of shares can not be extrapolated into a share price in a simple way.
Disclaimer: Also, not an accountant. Things may in fact be easy to calculate, just not for me.
EinSV, while I think no one should overlook TE, i like that you were attempting to be conservative. However, I generally think it is very unlikely that we arrive at our destination with the current share / debt structure. At some point we are more or less guaranteed to raise additional capital through bonds or another raise. My guess is likely a debt raise at a higher share price. Again these raises are necessary to fund growth, so they are a good thing, but the current number of shares can not be extrapolated into a share price in a simple way.
Disclaimer: Also, not an accountant. Things may in fact be easy to calculate, just not for me.
Thanks for the input, Tenable.
I assume Goldman's models, which they present on a $ per share basis, factor in dilution since this is fairly standard. I do agree, however, that it would be reasonable to assume that additional capital or debt above and beyond what Goldman has built into its model would be required to grow 2.5 times faster than they project in their "Elon as Henry Ford" scenario. But I don't think this changes the overall analysis materially for at least two reasons.
First, any additional dilution and/or debt/interest payments should be more than made up for by the TE valuation that I discounted entirely to illustrate how undervalued I believe Tesla is at its current price point.
Second, if Tesla succeeds in launching the Model 3 anywhere near according to plan, the share price is likely to gap up between now and 2020. A higher share price allows a fixed amount of capital to be raised with less dilution on a per share basis. For example, if Tesla is priced at $430/share after a successful Model 3 launch, it can raise twice as much capital as it can at today's $215 price with the same dilution on a per share basis.
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RobStark
Well-Known Member
Finally. South Korea has the potential to replicate Hong Kong's success. Hyundai may pose some obstacles though.
I read somewhere that you can buy a Model 3 around $15k USD after all the incentives in Korea. Pretty crazy. Haven't taken the effort to verify it though.
Those are good points, which I should have included. I do think P/B is pretty useful if you can take those caveats into account though, another example like the coal companies is RIMM/Blackberry just after iPhone sales started taking off. One way to get a more useful number is to use tangible book value to cancel out IP and goodwill. But even then you still after be careful, particularly with tech companies where the leading product can become almost obsolete in a very short period of time.
Though Korean auto workers would rather have a Tesla than the cars they build:
Employees at Korean automakers pick Tesla over their own brand
The two errors in the Goldman analysis from 2014 are interesting:
(1) What the hell is up with their discount rates? The discount rate is supposed to be based more or less on what investors can get in an alternative investment. What alternative investments are routinely earning anywhere near 15% - 20%? I guess this is supposed to be a cost-of-equity rate assuming that Tesla will be engaging in very massive dilution, but it seems absurdly high compared to Tesla's historical cost of equity.
(2) They assume that BEVs will account for a miniscule percentage of all light vehicles in 2025, when they will account for the majority.
Apart from that, it's quite a good analysis.
As you say, I have no idea where you can find an alternative investment that will return 15-20% right now, particularly in a zero percent interest rate environment where almost all asset classes are highly valued (many would say overvalued). Having said that, although the discount rates Goldman uses are very high, from what I can tell they are not completely out of line with rates that are sometimes used for high-Beta stocks that are perceived to have a lot of risk.
Where I think Goldman's analysis goes awry is by combining the high discount rate with very pessimistic growth targets, which drives the valuation down dramatically.
For example, in the recent valuation, for their base case, Archambault/Goldman predicted global EV sales would be only 2M vehicles by 2025, which as you note is way too low. The summary table for the recent valuation (copied below) doesn't report a Tesla-specific sales volume prediction for 2025, but assuming Goldman estimates that Tesla captures 50% of the EV sales, that translates to only 1M Tesla sales by 2025. They attribute 45% of their valuation weighting to this very pessimistic scenario, and another 20% to an even more pessimistic scenario where worldwide EV sales total only 1.6M in 2025, and presumably Tesla sales are well under 1M.
So the current valuation (like their 2014 valuation) is heavily weighted (65%) to two scenarios where Tesla produces 1M vehicles or less in 2025, which I think is extremely pessimistic given Tesla's target of producing that many vehicles in 2020, five years earlier. Then, as you note, they apply a high discount rate to get to the $250 valuation. If you use what I believe are more realistic projections for 2025 (even well below the 7.6M figure I used), you get a much higher current valuation, even using Goldman's generous discount rate.
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anticitizen13.7
Not posting at TMC after 9/17/2018
At today's Tesla shareholder's meeting, Elon was asked about his thoughts on the revenue mix between cars and Tesla Energy products. He said it was highly uncertain at this point, but his best guess was 50/50 mix.
What would be the impact of Tesla evolving into a company that builds 500k vehicles/year, plus an equivalent revenue of stationary storage packs?
Very rough calculations:
100k Model S/X @ ASP of 100k/unit = 10B
400k Model 3 @ ASP of 42.5k/unit = 17B
27B in automotive revenue, + 27B in stationary storage = 54B in potential annual revenue from Fremont and Gigafactory 1. That's INSANE.
For context, Intel Corp. is in the 55-60B annual revenue range.
What would be the impact of Tesla evolving into a company that builds 500k vehicles/year, plus an equivalent revenue of stationary storage packs?
Very rough calculations:
100k Model S/X @ ASP of 100k/unit = 10B
400k Model 3 @ ASP of 42.5k/unit = 17B
27B in automotive revenue, + 27B in stationary storage = 54B in potential annual revenue from Fremont and Gigafactory 1. That's INSANE.
For context, Intel Corp. is in the 55-60B annual revenue range.
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Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Why? Mind you we're talking in the next say 5-7 years and not many years in to the future.
Because CPUs are an item with high cachet, brand value, unique intellectual material in every single design, etc.
And batteries, even particularly good designs of battery, are a commodity. They're much more comparable to RAM than to CPUs. The price competition in the market is much harsher; people will desert you if the competition is 10 cents cheaper. Tesla may well have the lowest production costs and best margins in the battery business, but it's not going to have the same character as the CPU business... or the luxury car business, for that matter.
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