Long-Term Fundamentals of Tesla Motors (TSLA)

[DragonWatch]

@ValueAnalyst you are much better at short and concise statements than I am ~ thank you.

I have been on the Tesla band wagon for several years, and as I recall there was a plane crash which crippled the company by two or three key executives (someone here knows better than me ~ I am sure). The world watched as Tesla/Elon recovered and moved us onto today. I have and will continue to hold my breath that Elon is a much wiser person than me and is building for the future instead of current ego.

My whole life has been about caring for those that worked for me or in my wife's case married to me. I always trained my soldiers or anyone that worked for me to take over in the event I was hit by a bus and for my wife that she could continue financially should I also get hit by a bus ahead of her. Thank goodness (IMHO), have not been hit by that bus yet.

At an annual meeting a couple of years back Elon was asked if he would stay with Tesla at least through the Model 3 and he said yes. Driving Tesla's adventure is like steering a ship, there is no turning on a dime and takes a lot of logistic trains to ensure success once they arrive at the desired destination. If Elon stepped off the helm to watch the ship sail on without him it would be years before anyone of us would notice a change in direction or a slowing of the ship. We probably would miss the tweets immediately

Anyone worth their salt and has been around Elon for awhile has had to have had good information rub off his enthusiasm, leadership and desire to move everything forward. Ford was in a similar situation a very long time ago. While they are still around and have made it through problems here and there, they have succeeded.

Apple is another example, but an odd one. When Steve had to leave us, some believe that Apple lost their innovation. No, what made them great was new innovative toys; but there are no new innovative toys that they have jumped on in recent time ~ yet they have maintained their market cap. I refer to what has happened to Apple is that they have been waiting for the iWind to pick back up. They just need to tweet about the direction, so that the iWind will pick back up.

Tesla has years to go before that happens to them. Cars since I have been buying them have come a long way. My first Volvo, bought in Europe came without a radio. I had to find the best radio, buy it and install it. It was the first Toyota or Volvo that had electric windows. So, there is lots of room to grow with new technologies. I no longer have to worry about drip pans, the price of gas going up and shortly the car will drive me anywhere I wish to go ~ safely.

There is a tipping point for everything both good and bad. While Elon is still valued and needed to continue Tesla on its path to changing the world; I think that that point is actually here and Tesla will succeed regardless. Someone will need to take over the tweet machine

Remember, he has been bring on top notch players all along and recently was being attacked by the bears trying to bring the price (stock) down and attack the company.

Also, the EPA just got kicked in the balls; but the fools doing the kicking are less than bright light bulbs on the nation's chandelier. California has had high emissions standards for as long as I can remember, and that is back to when we bought out first car together back in 1974. I then went back into the army, and continued buying cars ~ not always in California. However, I always insisted on California emission standards with every new car. At some point we started getting the comment that all cars now meet California standards.

What standards to you bring to the table?

 

[ValueAnalyst]

@ValueAnalyst you are much better at short and concise statements than I am ~ thank you.

I have been on the Tesla band wagon for several years, and as I recall there was a plane crash which crippled the company by two or three key executives (someone here knows better than me ~ I am sure). The world watched as Tesla/Elon recovered and moved us onto today. I have and will continue to hold my breath that Elon is a much wiser person than me and is building for the future instead of current ego.

My whole life has been about caring for those that worked for me or in my wife's case married to me. I always trained my soldiers or anyone that worked for me to take over in the event I was hit by a bus and for my wife that she could continue financially should I also get hit by a bus ahead of her. Thank goodness (IMHO), have not been hit by that bus yet.

At an annual meeting a couple of years back Elon was asked if he would stay with Tesla at least through the Model 3 and he said yes. Driving Tesla's adventure is like steering a ship, there is no turning on a dime and takes a lot of logistic trains to ensure success once they arrive at the desired destination. If Elon stepped off the helm to watch the ship sail on without him it would be years before anyone of us would notice a change in direction or a slowing of the ship. We probably would miss the tweets immediately

Anyone worth their salt and has been around Elon for awhile has had to have had good information rub off his enthusiasm, leadership and desire to move everything forward. Ford was in a similar situation a very long time ago. While they are still around and have made it through problems here and there, they have succeeded.

Apple is another example, but an odd one. When Steve had to leave us, some believe that Apple lost their innovation. No, what made them great was new innovative toys; but there are no new innovative toys that they have jumped on in recent time ~ yet they have maintained their market cap. I refer to what has happened to Apple is that they have been waiting for the iWind to pick back up. They just need to tweet about the direction, so that the iWind will pick back up.

Tesla has years to go before that happens to them. Cars since I have been buying them have come a long way. My first Volvo, bought in Europe came without a radio. I had to find the best radio, buy it and install it. It was the first Toyota or Volvo that had electric windows. So, there is lots of room to grow with new technologies. I no longer have to worry about drip pans, the price of gas going up and shortly the car will drive me anywhere I wish to go ~ safely.

There is a tipping point for everything both good and bad. While Elon is still valued and needed to continue Tesla on its path to changing the world; I think that that point is actually here and Tesla will succeed regardless. Someone will need to take over the tweet machine

Remember, he has been bring on top notch players all along and recently was being attacked by the bears trying to bring the price (stock) down and attack the company.

Also, the EPA just got kicked in the balls; but the fools doing the kicking are less than bright light bulbs on the nation's chandelier. California has had high emissions standards for as long as I can remember, and that is back to when we bought out first car together back in 1974. I then went back into the army, and continued buying cars ~ not always in California. However, I always insisted on California emission standards with every new car. At some point we started getting the comment that all cars now meet California standards.

What standards to you bring to the table?

Thank you for sharing your thoughts. I very much appreciate you taking the time to write them out and share with us.

I do agree that Tesla has a good chance at succeeding in their mission of transitioning the world to sustainable transport without Elon Musk at this point. I'm not sure if it's a certainty yet, but if the Model 3 is successful (defined as wide consumer adoption that S/X achieved and 20-25% gross margin to fund future Gigafactories) then this chance will have greatly increased.

Apple, without Steve Jobs, is still an incredibly profitable company, which is why they maintained their market cap. But maintaining market cap was not what made Steve Jobs great in the eyes of investors. It was the exponential growth, unlike anything ever seen before.

I believe Tesla, with Elon Musk, has that potential. Without Elon Musk, Tesla is still an incredible company and has the potential to accomplish its mission.

I will need to think about the standards I bring to the table.

Thank you again.

 

[kenliles]

Trump to seek changes in H-1B visa program to encourage hiring Americans

"
President Donald Trump on Tuesday will sign an executive order directing federal agencies to recommend changes to a temporary visa program used to bring foreign workers to the United States to fill high-skilled jobs.

Two senior Trump administration officials who briefed reporters at the White House said Trump will also use the "buy American and hire American" order to seek changes in government procurement practices to increase the purchase of American products in federal contracts.
"

 

[UrsS]

except that's not true at all... are you just adding to the hype?... there is no ban of 99.9% of the auto market.

For example:
Four major cities move to ban diesel vehicles by 2025 - BBC News

 

[neroden]

I note that I nearly always agree with your views on the demand side and further agree that you're probably being conservative.
The most thorough and articulate bears seem to focus on five issues:
1. Tesla execution risk, which has the advantage of being an easy play since Elon is perpetually optimistic;
2. They also note the analogy with photovoltaics and the cataclysmic (from maker perspective) drop in prices during the last few years, arguing the same thing will happen with li-ion;
3. They note the limited supply of lithium and nickel plus Chinese efforts to tie up (i.e. buy) major established producers;
4. Some say the improvements in batteries and charging are not adequate to support widespread BEV adoptions, and charging is too slow and inconvenient anyway;
5. The smart ones sometimes point to regulatory issues, ranging from:
5.1 reduction in subsidies;
5.2 specific BEV taxes being imposed;
5.3 opposition from powerful interests such as oil/gas producers, sellers and auto dealers.
All five are indeed issues, which are serious. The only one that stands up to scrutiny IMHO is (5) which is more US-oriented than elsewhere.

I actually don't think (5) is serious.

However, I do think (1) is serious -- go look at the complaints in the Model S forum about AC compressor failure, the really angry complaints about the failure to fix any of the media player bugs for 3 years and the introduction of new ones, and the general consensus that service centers have not been expanded fast enough. (Remember Musk said he'd double the number of service centers in 2016 -- which wasn't enough -- but he didn't come anywhere close to achieving that.)

They can make the cars. They can sell them. But can they service them? And can their software team manage to produce software which is as debugged as stuff I make *for free*?

I think this form of execution risk creates the strongest bear case. Oddly, I see that case made *very* rarely...

 

[wdolson]

They have been expanding existing service centers. The Portland SC has a lot more people working there and the last time I was to come in they moved my appointment up a few weeks due to more staff being on the job. They plan to move into a new facility sometime this year, which they need. The current facility is packed cheek to jowl.

They have also talked about opening up service to third parties (for out of warranty work which is not a big part of the picture right now) and they plan to expand the ranger program again. They found that 80-90% of what's done at a service center could be done in someone's driveway or at their workplace. It adds some costs in fuel for the trucks but it means they don't need as much building space for service.

There is a thread on this forum about the ongoing bugs with the USB player. It was improved a bit with 8.0, but it's still buggy. For fixing the non-critical software like the media player, I think Tesla should make the source available and allow fans to work on it. They would need to vet anything done before release to make sure someone didn't introduce some kind of virus that would screw up other things, but they would probably get a vastly improved media player. If users can opine on various ideas the programmers through out there (and the programmers listen), they might come up with an interface that is very useful and much better than we have today.

I develop software for a living, doing everything end to end, including hardware interfaces as well as UIs. If the source code was available, I probably won't have the time to look at it, but I have thought the user interface could be made much better. And a lot of the functional bugs that are biting users would probably be extinguished in a few weeks if new eyes got a chance to look at the code.

 

[GoTslaGo]

They have been expanding existing service centers. The Portland SC has a lot more people working there and the last time I was to come in they moved my appointment up a few weeks due to more staff being on the job. They plan to move into a new facility sometime this year, which they need. The current facility is packed cheek to jowl.

They have also talked about opening up service to third parties (for out of warranty work which is not a big part of the picture right now) and they plan to expand the ranger program again. They found that 80-90% of what's done at a service center could be done in someone's driveway or at their workplace. It adds some costs in fuel for the trucks but it means they don't need as much building space for service.

There is a thread on this forum about the ongoing bugs with the USB player. It was improved a bit with 8.0, but it's still buggy. For fixing the non-critical software like the media player, I think Tesla should make the source available and allow fans to work on it. They would need to vet anything done before release to make sure someone didn't introduce some kind of virus that would screw up other things, but they would probably get a vastly improved media player. If users can opine on various ideas the programmers through out there (and the programmers listen), they might come up with an interface that is very useful and much better than we have today.

I develop software for a living, doing everything end to end, including hardware interfaces as well as UIs. If the source code was available, I probably won't have the time to look at it, but I have thought the user interface could be made much better. And a lot of the functional bugs that are biting users would probably be extinguished in a few weeks if new eyes got a chance to look at the code.

I have to wonder if in the future, after Tesla gets the FSD down, if they will start to create a Tesla App ecosystem (like Apple).

 

[MitchJi]

Trump to seek changes in H-1B visa program to encourage hiring Americans

"
President Donald Trump on Tuesday will sign an executive order directing federal agencies to recommend changes to a temporary visa program used to bring foreign workers to the United States to fill high-skilled jobs.

Two senior Trump administration officials who briefed reporters at the White House said Trump will also use the "buy American and hire American" order to seek changes in government procurement practices to increase the purchase of American products in federal contracts.
"

He also said that he would require the keystone pipeline to use US Steel. Of course he reneged on that campaign pledge. . At least he's consistent, because he's used Chinese steel in his own projects.

 

[ValueAnalyst]

I think 2017 is the year investors will start focusing in on Tesla Energy.

Tesla Energy cannot be "I assumed no value for Tesla Energy" anymore.

Does anyone feel comfortable laying out their primary assumptions?

I'll start.

Tesla Energy includes storage and generation.

News flow points to tremendous demand from utilities. The solution Tesla provides seems to solve crucial problems, quicker than alternative solutions, and also cheaper.

It seems that further cost improvements in battery technology will only strengthen this advantage (i.e. moat will get wider). I do not expect anyone else to leapfrog ahead of Tesla in terms of cost leadership anytime soon. No one else will even have one Gigafactory by 2020, and Tesla will have five.

Musk has said "Long term, gross margin is expected to be similar to Automotive, but with a significantly higher revenue growth rate."

I take this to mean expected growth rate for the next five years to be 3x per year with gross margin ~25% since the car business will have achieved 2x per year on average from 2015 through 2020, assuming Tesla hits 1m cars in 2020 (I expect much higher).

I expect Tesla Energy to hit $1 billion run-rate revenue mark by the end of 2017. Therefore, assuming this business triples each year for the next five years, by the end of 2022, Tesla Energy has the potential to be generating more than $200 billion of run-rate revenue and $50 billion in run-rate gross profit.

Combined with my expectations for the car business, mobility-as-a-service, trucking, and any new business, Tesla has the potential to exceed $400B in annualized revenue and $100B in annualized gross profit by 2022. This would value the company at more than $1 trillion market cap.

 

[SwTslaGrl]

I think for storage and energy this is a great initiative: A Tesla Powerwall for your home
In every new home build, it's part of the total cost for the home.

 

[ValueAnalyst]

I think for storage and energy this is a great initiative: A Tesla Powerwall for your home
In every new home build, it's part of the total cost for the home.

I actually expect Solar Roof to go down this road as well. I'm surprised though that US homebuilders have not yet announced partnerships with Tesla. Maybe later this year following more developments and announcements around Solar Roof.

 

[ValueAnalyst]

It's also important to note that the Australia project alone may add $400M+ ("10 x 100MWh installs") to top-line likely in 2H17.

This would mean Tesla Energy will almost certainly exceed my target of $1B annualized quarterly revenue by 3Q17.

 

[GoTslaGo]

I actually expect Solar Roof to go down this road as well. I'm surprised though that US homebuilders have not yet announced partnerships with Tesla. Maybe later this year following more developments and announcements around Solar Roof.

Been doing our part. Been spamming new home builders (in the US) with:

"will you be including tesla solar roofs and power walls as an option for your new builds?"

Hey, plant the seed. The more people ask, the more they will look, and likely offer... our current newly built home came with installed EV charging. Made it much easier to choose a new build than buying a resale and adding it later.

 

[ValueAnalyst]

Been doing our part. Been spamming new home builders (in the US) with:

"will you be including tesla solar roofs and power walls as an option for your new builds?"

Hey, plant the seed. The more people ask, the more they will look, and likely offer... our current newly built home came with installed EV charging. Made it much easier to choose a new build than buying a resale and adding it later.

I'll ask one of the managements in the next few weeks and report back.

 

[Model 3]

No one else will even have one Gigafactory by 2020, and Tesla will have five.

Do not forget that GF-II as far as I know will not be producing batteries, just solar? I do not expect a/the first GF in Asia to be producing battery cells either, but gets the battery cells from Panasonic's existing factories there. So I do not think that Tesla will have five GF's producing battery cells in or near 2020. Probably up to three? And access to whatever Panasonic may produce at their Asian factories.

 

[neroden]

They have been expanding existing service centers.

Necessary but not sufficient. I've probably mentioned before that I am being served from a service center 223 miles away. The result is that something which should have taken 1 to 3 days in the shop will take two full weeks, due to transportation, communications, etc. And cost Tesla way, way more than it should: they're paying someone for about 16 hours to pick my car up and bring it back. There's already a dozen Teslas in Ithaca, and way more in Syracuse, Rochester, Buffalo, etc.

They need more geographic coverage. Period. It hasn't happened and it's a humungous weak point.

There is a thread on this forum about the ongoing bugs with the USB player. It was improved a bit with 8.0, but it's still buggy.

Actually, they broke it seriously with 8.0 -- it's unusable with large collections on 8.0 and later. Which worked under 7.x.

For fixing the non-critical software like the media player, I think Tesla should make the source available and allow fans to work on it. They would need to vet anything done before release to make sure someone didn't introduce some kind of virus that would screw up other things, but they would probably get a vastly improved media player.

Well, duh, yeah, they would.

If users can opine on various ideas the programmers through out there (and the programmers listen), they might come up with an interface that is very useful and much better than we have today.

Yeah, and I don't know why they don't. Bad attitude, I think. And I think this is one of the other weak points of Tesla -- they've developed a bad attitude with their software development. It hurts them.

 

[kenliles]

So interesting to see our leading Corporations (and some states) out-flanking our out-of-touch-with-reality Fed gov-

A long term goal of course- but stepping in makes a difference -
Forget coal- let's end all mining


"Just ahead of Earth Day, Apple has released its 2017 Environmental Responsibility Report[PDF] with a lofty new goal: ending mining. Apple says the company is working on a "closed-loop supply chain" that would allow it to stop mining the earth for rare minerals and metals."

Apple Pledges to End Mining and Use 100% Recycled Materials for Products
Environment



Finishing touches on Apple Park-
Drone footage showing massive roof solar array

 

[AudubonB]

Moderator Note:

I have created a platform for discussing Neuralink; at present it sits in the Off Topic sector. Presumably it will some day have its own "anchored" site. Please contribute your thoughts there: The Neuralink Master Thread

 

[MitchJi]

Impossible to make this up:

President Donald Trump is facing criticism after he claimed to be a "great friend" of Italian opera singer Luciano Pavarotti, who in fact died a decade ago and whose family has openly criticized Trump. On Thursday, Trump welcomed Italian Prime Minister Paolo Gentiloni to the White House and praised Italy’s contributions to world culture during a news conference.

President Donald Trump: "Through the ages, your country has been a beacon of artistic and scientific achievement. That continues today. From Venice to Florence, from Verdi to Pavarotti—friend of mine. Great friend of mine."

In fact, Pavarotti died in 2007. Last summer, Pavarotti’s widow and three daughters asked the Trump campaign to stop using Pavarotti’s music at campaign events, writing, "The values of brotherhood and solidarity that Luciano Pavarotti upheld throughout his artistic career are incompatible with the world vision of the candidate Donald Trump."

 

[kenliles]

Shameful
EPA website removes climate science site from public view after two decades

"
Several career EPA employees, who asked for anonymity out of fear of retribution, said they were not briefed in advance about the decision to alter the agency’s site.

“People are obviously unhappy,” one employee said. “It is, in my opinion, the best climate education website out there.”

David Doniger, director of the climate and clean air program for the advocacy group Natural Resources Defense Council, tweeted Friday, “Cleansing has begun. EPA website scrubbed of pages on “so-called” Clean Power Plan. Now only alternative facts.”
"