Long-Term Fundamentals of Tesla Motors (TSLA)

[adiggs]

I can even put some numbers to the solar installation and car driving consumption, as I recently got a 3kWh solar installation put up at my house. Here in Oregon, and with the facing and shade we have available at my house, we're expecting to get around 3,000 kWh / year out of that system. I figure at 3 miles per kWh, that's about 9,000 miles / year worth of driving that solar installation will generate. Since I drive more like 6,000, I'll even get a bit extra.

That's a 12 foot by 18 foot rectangle worth of solar cells to generate about as much power as will be consumed driving an EV.

I like Doug's comment about solar cells on the garage rather than the car - seems much more effective

 

[Robert.Boston]

While this car cover may seem somewhat impractical, we have to remember that some of the world's greatest inventions began with silly ideas. In any case, such a product would only provide a small charge but may be the difference between making it home or getting home on a flat-bed.

Note that that car cover isn't portable. Anyway, we wander off-topic. The debate about car-top panels belongs over HERE.

 

[Curt Renz]

[FONT=&amp]Here's a response I received this week from Dick Durbin, the US senate assistant majority leader, regarding infrastructure for electric vehicles:
_____________________________

Dear Mr. Renz:[/FONT]

[FONT=&amp]Thank you for contacting me about the use of electric vehicles. I appreciate hearing from you. [/FONT]

[FONT=&amp]The federal government has taken an active role in promoting the use of energy-efficient vehicles and diversifying fuel sources, particularly with electric vehicles. These efforts further President Obama’s goal of reducing dependence on foreign oil and improving the quality of our environment. [/FONT]

[FONT=&amp]Electric vehicles decrease long-term costs compared to the traditional gasoline-powered vehicle, lower greenhouse gas emissions, and save taxpayers hundreds of thousands of dollars each year. As demand for electric vehicles increases, so too will there be a greater push for increased access to charging stations. [/FONT]

[FONT=&amp]Investing in infrastructure to support electric cars can considerably reduce emissions. This electricity can be generated from a number of sources, including clean coal, natural gas, and renewables such as biomass. Many charging stations in the U.S. today are on-street facilities provided by electric utility companies, and with technological advances, stations can also leverage electrical grids and home recharging.[/FONT]

[FONT=&amp]The potential for growth in the market, the creation of new jobs, and an increased access to electric vehicles is significant. I look forward to working in Congress to promote the development of alternative technology sources to power our vehicles and will keep your thoughts in mind should further legislation regarding these issues be debated in the Senate. [/FONT]

[FONT=&amp]Thank you again for your message. Please feel free to keep in touch.[/FONT]

[FONT=&amp]Sincerely,[/FONT]
[FONT=&amp]Richard J. Durbin[/FONT]
[FONT=&amp]United States Senator[/FONT]

[FONT=&amp]RJD/es[/FONT]

 

[Curt Renz]

Monday I received a postal letter from my congresswoman Jan Schakowsky in response to my concerns about electric cars and Tesla in particular. It was not a form letter. She represents my suburban Chicago district and is a member of the house committee on energy and commerce.

She wrote, “I am a strong proponent of electric car technology, and I have supported efforts to bring emerging technology to the state.” She goes on to describe her strong support for the federally funded project at Argonne National Laboratory in Illinois for the development of more powerful yet faster batteries. She believes that, “The progress made at the lab will encourage companies like Tesla to start in and even relocate in Illinois.” She added that, “The progress made by Tesla over the past few years is remarkable, and it is truly one of the world’s most innovative companies." Regarding the possibility of a new Tesla plant being built in Illinois, she wrote, “I will raise this idea with the governor.”

I know Jan from having campaigned with her last year while I ran unsuccessfully for state representative. I know Illinois Governor Quinn even better, since he was a regular guest on my Chicago financial news TV program during the nineties. A that time he was a private attorney and former state treasurer. He is fully supportive of alternative energy and the Argonne project. Of course the president who is from Illinois also backs the Argonne project and alternative energy programs. He delivered a highly supportive speech from there on Friday. And see my previous posting of a supportive letter from the US senate majority whip, Dick Durbin of Illinois. So Tesla has political friends in high places, and they are not all from California.

 

[Soflason]

Sit back, turn off Bloomberg and Yahoo Finance and enjoy life and those around you. The Tesla training wheels have just come off. This is a long term hold for 2016 horizon. Tesla is the future, and the future is coming whether we like it or not. I Believe!

Owner of Tesla iPhone App - Model X to follow[/QUOTE]

Great post... recent article yesterday calling Tesla one of the "10 Stocks to hold forever" makes some salient points on TSLA as a long-term hold:
Cyprus Trouble and 10 Forever Stocks Tesla Motors - Cabot Heritage Corporation

 

[Robert.Boston]

recent article yesterday calling Tesla one of the "10 Stocks to hold forever" makes some salient points on TSLA as a long-term hold:
Cyprus Trouble and 10 Forever Stocks Tesla Motors - Cabot Heritage Corporation

It always concerns me to see an analyst recommending TSLA who clearly hasn't done all his research and therefore makes some mistakes in print:

(Note: I’m not buying one until I can get two features I’ve grow accustomed to in my Audi: all-wheel drive and a back-up camera.)

the company is delaying the production of its lower-priced SUV (Model X), so it can manufacture more Model S sedans.

 

[Zzzz...]

...dire news for Tesla shorts...

 

[anticitizen13.7]

It always concerns me to see an analyst recommending TSLA who clearly hasn't done all his research and therefore makes some mistakes in print:

This is exactly why I tell people to do their own research before accepting a financial analysts' conclusions. I don't know what qualifications one needs to become an analyst, but I have read a startling amount of statements from analysts that were factually incorrect or poorly reasoned. Where technology products are concerned, many of these people seem to have no fundamental understanding of how these things work or are manufactured.

 

[Norbert]

It always concerns me to see an analyst recommending TSLA who clearly hasn't done all his research and therefore makes some mistakes in print:

I take comfort in that analysts who are *not* recommending TSLA seem to make much larger mistakes. :wink:

 

[mitch672]

An interesting analysis of TSLAs "real" business, licensing fees from other car manufacturers using their SuperCharger network, very detailed and it shows how the SuperCharger "revenue" (a $1500 licensing fee for each car built), could generate more profit in 10 years than Tesla could generate even building 120,000 cars/year.

From "Seeking Alpha's" Randy Carlson: SuperCharging Tesla - Seeking Alpha

 

[vfx]

.... could generate more profit in 10 years than Tesla could generate even building 120,000 cars/year.

From "Seeking Alpha's" Randy Carlson: SuperCharging Tesla - Seeking Alpha

Wow that was an eye opener. Supercharging on it's own can be a profitable business.

- - - Updated - - -

And another Apple comparison

http://www.fool.com/investing/general/2013/03/24/is-tesla-the-next-apple.aspx

 

[neroden]

Long term fundamentals?
(1) For some wholly inexplicable reason, none of the established car companies (except, possibly, Nissan) is willing to seriously invest in all-electric cars. Since all-electric cars are the future, this means Tesla effectively has the first-mover advantage. While Tesla is working out the bugs, other companies are not even trying. By the time they introduce their cars, Tesla will be the established brand name in electric cars, with a steady flow of customers. Tesla will also have an established charging network, which other companies will be striving to mimic, or trying to buy into. More and more companies will license Tesla's drivetrain. Etc.
(2) Risk factors I see: the customer flow could dry up surprisingly quickly if Tesla's current reputation for bad communications and unreliable delivery procedures holds up. Tesla's legal team seem to be pretty sloppy, and they could get outmaneuvered by a company with legal sharks on the board, who could buy them out cheaply or shut them down.
(3) Finally, always remember: Even a company with a great long-term outlook can be overpriced, so do your own estimates of what you think the long-term revenues and costs of Tesla will be, and what you think a long-run multiple will be.

 

[hcsharp]

Think about Tesla when the market is mature. Making cars is competitive with all the major players defending their turf. The nature of the business is not like Google, Microsoft or Apple. It takes an enormous investment in equipment and mfg plants. If Tesla is going to be a major player, they will have to do the same things Daimler, GM, Nissan, etc are doing in terms of major manufacturing investment. The only way they can do this is by raising a mountain of capital. You can't raise a mountain that big by selling 100,000 cars a year (won't be surprised if Gen 3 takes that many reservations the first week). So how are they going to raise all this money? Issuing stock. Their stock is going to get diluted. You're not going to see P/E ratios that far exceed Ford and VW when Tesla is competing with them. So I'm not entirely convinced that just because Tesla is enormously successful that we're all going to make a killing on the stock.

I could be wrong if Elon keeps thinking outside the box. He's never been too concerned with competition from the other major automakers. Maybe that's because he doesn't envision Tesla becoming the bohemouth that GM is. Toyota and Daimler partnered with Tesla because they both knew Tesla's knack at rapid development and innovation that they lost long ago. But will Tesla be able to retain that ability if/when it becomes a big company that can't afford to take the same risks?

 

[neroden]

Think about Tesla when the market is mature. Making cars is competitive with all the major players defending their turf. The nature of the business is not like Google, Microsoft or Apple. It takes an enormous investment in equipment and mfg plants. If Tesla is going to be a major player, they will have to do the same things Daimler, GM, Nissan, etc are doing in terms of major manufacturing investment. The only way they can do this is by raising a mountain of capital. You can't raise a mountain that big by selling 100,000 cars a year (won't be surprised if Gen 3 takes that many reservations the first week). So how are they going to raise all this money? Issuing stock.

That's why I'm figuring my estimates based on what they can do with the current production line. I assume that a new production line will dliute the stock roughly proportionally.

Their stock is going to get diluted. You're not going to see P/E ratios that far exceed Ford and VW when Tesla is competing with them.

I'm not sure Tesla *will* be competing with them, if they don't get their act together and start making electric cars!

So I'm not entirely convinced that just because Tesla is enormously successful that we're all going to make a killing on the stock.

I could be wrong if Elon keeps thinking outside the box. He's never been too concerned with competition from the other major automakers. Maybe that's because he doesn't envision Tesla becoming the bohemouth that GM is.

Well, the overall size of the car market, worldwide, is shrinking as people move to big cities and take trains. It's been suggested that younger people don't like to drive if they could instead be transported in a manner where they can text at the same time. I'm not sure how long it'll take for that trend to play out (decades?). But the shrinkage of the car market means that there may never be an electric car company with production as big as the old ICE manufacturers..

"This is not investment advice, I am not your investment advisor"

 

[hcsharp]

That's why I'm figuring my estimates based on what they can do with the current production line. I assume that a new production line will dliute the stock roughly proportionally.

But isn't the stock trading at 35x book? Heavily leveraged? So you can't really dilute proportionally to how it is now.

 

[JRP3]

Something to consider, if at some point batteries are good enough and cheap enough then it becomes easy to make a decent EV and everyone will be doing it. I assume Elon knows this and Tesla will probably remain a smaller volume luxury/performance brand and let the larger OEM's fight over the lower margin truly mass market cars. Another possibility is if some company gets exclusive rights to a game changing battery, locking out Tesla.

 

[Curt Renz]

Another possibility is if some company gets exclusive rights to a game changing battery, locking out Tesla.

The government funded JCESR project led by the Argonne National Laboratory has a mission to develop batteries that are five times more powerful and five times cheaper within five years.

Here's a link to video of the 2012 NOV 30 press conference that introduced the project: http://www.youtube.com/watch?v=6-95RqHCQmE

 

[NigelM]

The government funded JCESR project led by the Argonne National Laboratory has a mission to develop batteries that are five times more powerful and five times cheaper within five years.

Here's a link to video of the 2012 NOV 30 press conference that introduced the project: http://www.youtube.com/watch?v=6-95RqHCQmE

Curt, do you have a link/affiliation to Argonne? I'm just curious as you mention them quite often.

 

[Curt Renz]

Curt, do you have a link/affiliation to Argonne? I'm just curious as you mention them quite often.

Nigel, I have no personal connection. My only related comments have been in regard to the JCESR battery project. Both Argonne and my home are in Chicagoland. JCESR and Argonne get quick mention in the local media for which I am subscribed to bulletins. Our two US senators representing Illinois, along with our governor and Chicagoland congressmen are highly supportive, not to mention the president who is from Chicago. I should note that I recently ran unsuccessfully for state representative and previously hosted a Chicago TV financial news program. So I know many of those politicians quite well, and they frequently provide me with news. Argonne is operated by the University of Chicago. The JCESR project which is led my Argonne, but includes other national labs, is funded by the federal government with the support of several corporations.

 

[NigelM]

Interesting, thanks.