-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Long-Term Fundamentals of Tesla Motors (TSLA)
- Thread starter Robert.Boston
- Start date
-
- Tags
- elon is an ass investing TSLA
Off-topic, but "imbecile", "moron", and "idiot" were originally different classifications for level of diminished intelligence before eventually becoming pejoratives. Recently, "mental retardation" has been replaced by "intellectual disability". Regardless, any of the above terms are accurate when describing someone who proposes that Tesla put an ICE in the Model S.
thanks TSLAopt... I'm actually "ValueHorizon" on seeking alpha. I'm a "contributor" there, so I can and have written articles. I'm reluctant to do so now 1) kind of seems like kicking people when they are down, 2) current crop of gibberish being put up on Seeking Alpha seems so transparent it does need to be refuted, 3) when people will say anything whether they believe it or not, what's the point discussing something with them. nonetheless, perhaps when JP puts another one up I'll put one up.
getting back to Cameron's question re retorting to valuation criticisms, I, of course don't put that lengthy discussion in comments to articles. Past few days, I've been getting at the spirit of the discussion by posing this question to those who say "bubble" "hype" "ridiculous valuation", etc.
"were there any specific tech bubble internet stocks you were thinking of that shared these characteristics with Tesla?
Over 3 year technological lead on the competition (in fact very likely over 5 years for Tesla)
Less than 0.1% penetration of addressable market (for Tesla one quarter of 0.1%)
Positive Cash Balance (net of debt)
Break even or positive EPS
500% or better year over year revenue growth
if you have some examples we can look at their Price/Sales ratio compared to Tesla’s as well as how they performed over 5 and 10 years."
at one point, I'd actually thought of writing a Seeking Alpha article offering a reward to the Tesla short with the most examples of companies that had these (and a couple other like 25% gross margins, $20 billion market cap, trailing revenue over $2 billion ) Tesla characteristics in the past, but underperformed the market for the following 5 years. the only catch to a short collecting the reward is that if longs collectively came up with more examples of such companies that outperformed the market the next 5 years no reward. I actually think it is quite possible there has never been a company in the past that shares these characteristics.
reward would be 5 shares of TSLA
Last edited:
thanks TSLAopt... I'm actually "ValueHorizon" on seeking alpha. I'm a "contributor" there, so I can and have written articles. I'm reluctant to do so now 1) kind of seems like kicking people when they are down, 2) current crop of gibberish being put up on Seeking Alpha seems so transparent it does need to be refuted. perhaps when JP puts another one up I'll put one up.
getting back to Cameron's question re retorting to valuation criticisms, I, of course don't put that lengthy discussion in comments to articles. Past few days, I've been getting at the spirit of the discussion by posing this question to those who say "bubble" "hype" "ridiculous valuation", etc.
"do you know of any tech bubble internet stocks were you thinking of that shared these characteristics with Tesla?
Over 3 year technological lead on the competition (in fact very likely over 5 years for Tesla)
Less than 0.1% penetration of addressable market (for Tesla one quarter of 0.1%)
Positive Cash Balance (net of debt)
Break even or positive EPS
500% or better year over year revenue growth
if you have some examples we can look at their Price/Sales ratio compared to Tesla’s as well as how they performed over 5 and 10 years."
at one point, I'd actually thought of writing a Seeking Alpha article offering a reward to the Tesla short with the most examples of companies that had these (and a couple other) Tesla characteristics in the past, but underperformed the market for the following 5 years. the only catch to a short collecting the reward is that if longs collectively came up with more examples of such companies that outperformed the market the next 5 years no reward. reward would be 5 shares of TSLA
Ha! That is a great idea! I vote that you do it, what a creative and attention-grabbing idea...perhaps title it something like "5 shares of TSLA award to any short who can riddle me this..." So it gets all of their attention...we can gather them all in one place (your article's comment section) then take them all out zombie-apocalypse style
maybe even better, write an SA article as an open letter to Brian Sullivan and the entire staff at CNBC to find more underperforming examples than over performing examples SA Tesla longs find. Sullivan is one of the guys who says over and over the pointless market cap per car sold stat. I would gladly donate $1,000 if CNBC staffers got to work on this and ended up running smack into Tesla's rare (perhaps unprecedented) and highly compelling strategic position. who knows, we might never have to hear the market cap per car sold gibberish again.
"were there any specific tech bubble internet stocks you were thinking of that shared these characteristics with Tesla?
Over 3 year technological lead on the competition (in fact very likely over 5 years for Tesla)
Less than 0.1% penetration of addressable market (for Tesla one quarter of 0.1%)
Positive Cash Balance (net of debt)
Break even or positive EPS
500% or better year over year revenue
if you have some examples we can look at their Price/Sales ratio compared to Tesla’s as well as how they performed over 5 and 10 years."
... I actually think it is quite possible there has never been a company in the past that shares these characteristics.
reward would be 5 shares of TSLA
I would put Apple in that category.
Apple might fit, Apple in what year are you thinking?
kenliles, one thing to bear in mind, in that paragraph where I'd wondered whether this set of "specs" was unprecedented, I'd added these Tesla characteristics I'd forgotten in the pasted in quick and dirty list,
"...a couple other like 25% gross margins [or higher], $20 billion market cap [or higher], trailing revenue over $2 billion"
and I'm now remembering another key "spec" (this concept of possibly unique Tesla metrics is something I'd thought about a month or two ago)
10 times or less Price to Sales ratio, based on prior years sales... Tesla is borderline pushing this stat up to 11.
and, I don't mean to discourage your suggestion of Apple, I'm glad you made it. this could be a fun and possibly informative game
perhaps I should move this to a separate thread, something like "are Tesla's financial metrics unprecedented?", cleanly list the set of "specs", and see if we can come up with any Tesla precedents. inflation adjustment for $ figures is fair.
Last edited:
Apple might fit, Apple in what year are you thinking?
kenliles, one thing to bear in mind, in that paragraph where I'd wondered whether this set of "specs" was unprecedented, I'd added these Tesla characteristics I'd forgotten in the pasted in quick and dirty list,
"...a couple other like 25% gross margins [or higher], $20 billion market cap [or higher], trailing revenue over $2 billion"
and I'm now remembering another key "spec"
10 times or less Price to Sales ratio, based on prior years sales... Tesla is borderline pushing this stat up to 11.
and, I don't mean to discourage your suggestion of Apple, I'm glad you made it. this could be a fun and possibly informative game
Yeah to your point I had to think hard! I was thinking of Apple from the time Jobs returned (with NeXT in tow). Then a few years on introduced the iPhone, but had existing cash flow from computing market. May not be exactly your criteria, but it's pretty damn close. But again to your point, that success story would be a terrific mentor to follow. I think Apple is close enough to your criteria to provide amplification of your point of value, long term investment and what it means.
They also fit Tesla's disruption of existing addressable market (phones, personal computing etc.) rather than a pure market creation scenario. This gives as you say a concurrent view of the size of addressable market against the technological 5 year lead over existing players. Exactly what Apple did. Apple turned out to be the largest company in the world (measured by Cap). Tesla's comparative challenge to that example is scaleability is harder to achieve, however Tesla's advantage is the same because the 5 year lead you mention in product technology extends to at least that in manufacturing scaleability relative to competitors, and probably permanent lead relative to sales scaleability (no dealers - direct sales). Not to mention the SC network of fuel supply in the same market space
That vertical integration is also exactly as Apple did by providing the hardware, software, operating system, services (iCloud/iTunes), direct sales, direct retail store service operation). The similarities are quite remarkable actually
Last edited:
kenliles, I must admit, it's hard for me to stomach the Steve Jobs/Elon comparisons... but your comparison of the companies, wow, vertical integration, direct sales, disrupting an existing market is big (barrier to entry for other newcomers for one thing, unlike say the probably dozens of start ups (on top of "big boys") going after something like 3D printing)... really strong similarities. I once saw Steve Wozniak talk about Apples first 5 years, some spooky & encouraging similarities.
as to the challenge of scalability. I understand that it looks that way, and I saw it that way until about a month or two ago. now I look at it as a disruption in slow motion.
that is, even though the incumbent car makers are bigger, when they eventually do go to EVs, it takes vast amounts of time and money to build Giga Factories. They may not call their factories Giga factories, but basically for every 500K vehicle worth of production capacity, you have to spend, billions. thus, if the global car market is 100 million per year units sold around 2020, I think it will be at least a trillion to put up battery, or successor to battery, factories (probably over decades). Retooling all those ICE plants might be another half trillion. So while Tesla can't just pony up $50 billon over night, no else can either. slow motion disruption.
Yep good point relative to the product and market. Agreed
re: Jobs/Musk similarities, has much more to do with goals, missions, and methods. As you infer, they're very different in style and character. I much prefer Elon's approach and dedication to engineering first principles etc. But have great respect for Jobs ability to operate outside the expected norms. In addition, in both cases they carry their relative skill to many disparate markets (Elon: SpaceX, PayPal), (Jobs: Pixar, Music). Anyway, great discussion and thanks for seeding it
Its not just about the batteries, or even the batteries and the superchargers. Remember that tesla is vertically and horizontally integrated and modern car companies are not. It will take the other companies years to be able to design a full carOS similar to tesla's. This alone is a huge cost advantage as all component subsystems in the model S route data and controls to a single virtual interface. This gives tesla a very unique ability around whole car telematics/ diagnostics and, of course, over the air upgrades. Again a massive cost advantage and a massive upgrade advantage over traditional car companies.
I think the level of disruption is more akin to Toyota in the 70s, 80s and 90s building a massive lead over the rest of the world in integrated design and quality. All the other car companies knew that they needed to change but it still took decades to turn their battleships. Not just the Americans but the Germans as well had to play catch up.
this is a company, not just a car, designed to take advantage of all sorts of cutting edge technologies - not just the electric drivetrain.
I think the level of disruption is more akin to Toyota in the 70s, 80s and 90s building a massive lead over the rest of the world in integrated design and quality. All the other car companies knew that they needed to change but it still took decades to turn their battleships. Not just the Americans but the Germans as well had to play catch up.
this is a company, not just a car, designed to take advantage of all sorts of cutting edge technologies - not just the electric drivetrain.
Good point. Also why Tesla would think far enough ahead to make a major hacker-hire where others are not even yet in this mode at all. Talk about long term thinking.
Tesla Hires To Boost Car Security - Car Tech - Popular Mechanics
These posts though should probably be moved to the long term thread
Speaking of intellectually absent
The Ohio Dealers at it again-
Elon and Tesla tweets
Auto dealers trying to pass a law to enforce their monopoly in Ohio & prevent consumer choice...
Auto dealers push legislation to keep Tesla Motors out of Ohio | cleveland.com
The Ohio Dealers at it again-
Elon and Tesla tweets
Auto dealers trying to pass a law to enforce their monopoly in Ohio & prevent consumer choice...
Auto dealers push legislation to keep Tesla Motors out of Ohio | cleveland.com
On the question raised earlier of shorts crying about valuation. There can be no such thing as valuation in the abstract except to look up the price on the NASDAQ. Every other valuation must have an comparison or features of a comparison assumed in a valuation model. In the case of shorts and Tesla that comparison is invariably a direct or assumed comparison with automotive technology businesses locked in for the most part by culture and capital expenditure on the production of a sunset technology that is rapidly going out of fashion ahead of an inevitable decline in sales.
Comparing Tesla's prospects like for like with GM's in 5~10 years time there is only one modeling assumption I would be prepared to set in stone. Tesla will be worth more than it is today. As for GM I would not like to guarantee that it is still in business 5~10 years out when even now it is only six years out of bankruptcy and failing to respond constructively to the same level of disruptive threat that GM itself posed to the horse and cart in a similar stage of its technology growth phase.
I would strongly suspect that Tesla and GM will converge on identical valuation prior to a 5 year time horizon and I would strongly suspect that the graph comparing both stocks will begin form a letter X commencing not much further out than 12 months from now.
- - - Updated - - -
I think another important point of note on valuation. Tesla is not just 3 to 5 years ahead of legacy automakers producing something equivalent to its 2012/2013 product. In 3~5 years it will have opened the gap to 5 ~ 7 years.
Tesla is actually accelerating much harder than the so called competition is following. For example Tesla is now gathering vehicle data and live customer and regulator experience everywhere the Model S is sold and driven in preparation for a hard launch of the Gen III. Musk is appointed to the UK government as an adviser on their EV adoption strategy. Belgium and Norway, Tesla has addressed grid anomalies that will trip up all who follow.
In less than 3 years time, ICE vehicle manufacturers will be beating down the doors of Chinese, Korean and Japanese battery suppliers in an escallating bidding war for battery supplies to compete with Tesla's ultra-attractive, low cost high performance vehicles. At that time Tesla will stand alone in control of the world's largest EV battery supply plant and it will have had years to lock down rawmat supply prices at contracted rates.
This is the nature of first mover advantage in a disruptive technology sea change.
One other thing. As a manufactured item, Gen III will not be a compromise on the Model S, it will be another technological leap forward. Given the character of Musk, the inherent nature of the technology and an an engineering team drawn from Aston to Apple we are going to see a vehicle that cannot be replicated for double the asking price of the base model and it is impossible to imagine a performance plus GIII not destroying the bragging rights of every sub $1Million sports car on the road.
Comparing Tesla's prospects like for like with GM's in 5~10 years time there is only one modeling assumption I would be prepared to set in stone. Tesla will be worth more than it is today. As for GM I would not like to guarantee that it is still in business 5~10 years out when even now it is only six years out of bankruptcy and failing to respond constructively to the same level of disruptive threat that GM itself posed to the horse and cart in a similar stage of its technology growth phase.
I would strongly suspect that Tesla and GM will converge on identical valuation prior to a 5 year time horizon and I would strongly suspect that the graph comparing both stocks will begin form a letter X commencing not much further out than 12 months from now.
- - - Updated - - -
I think another important point of note on valuation. Tesla is not just 3 to 5 years ahead of legacy automakers producing something equivalent to its 2012/2013 product. In 3~5 years it will have opened the gap to 5 ~ 7 years.
Tesla is actually accelerating much harder than the so called competition is following. For example Tesla is now gathering vehicle data and live customer and regulator experience everywhere the Model S is sold and driven in preparation for a hard launch of the Gen III. Musk is appointed to the UK government as an adviser on their EV adoption strategy. Belgium and Norway, Tesla has addressed grid anomalies that will trip up all who follow.
In less than 3 years time, ICE vehicle manufacturers will be beating down the doors of Chinese, Korean and Japanese battery suppliers in an escallating bidding war for battery supplies to compete with Tesla's ultra-attractive, low cost high performance vehicles. At that time Tesla will stand alone in control of the world's largest EV battery supply plant and it will have had years to lock down rawmat supply prices at contracted rates.
This is the nature of first mover advantage in a disruptive technology sea change.
One other thing. As a manufactured item, Gen III will not be a compromise on the Model S, it will be another technological leap forward. Given the character of Musk, the inherent nature of the technology and an an engineering team drawn from Aston to Apple we are going to see a vehicle that cannot be replicated for double the asking price of the base model and it is impossible to imagine a performance plus GIII not destroying the bragging rights of every sub $1Million sports car on the road.
You are so right. Did you all read the news today about Toyota recalling 1.9 million (!) Priuses for a 40 minute visit to their service stations as they need to perform a software update. That's almost 1.3 million work hours of a fix, not to mention the inconvenience to customers, their wait time, and the damage to the brand perception.
Talking about Tesla being years ahead, it's the equivalent of the competition using carrier pigeons in the age of the Internet. Same fix for Tesla? What fix?! You wake up and your car is ready to go with the latest firmware installed.
Talking about Tesla being years ahead, it's the equivalent of the competition using carrier pigeons in the age of the Internet. Same fix for Tesla? What fix?! You wake up and your car is ready to go with the latest firmware installed.
Bardlebee
Member
In Toyota's defense. If they did have over the air updates. They would have to contend with data usage of 1.9 million customers. Even if the customers weren't able to use that 3G/4G connection, the updates would be costly to send out from a bandwidth usage perspective. Though albeit more efficient.
Mario Kadastik
Active Member
I think the bandwidth costs far undercut the manpower costs involved in this recall. And the remote telemetry and diagnostics capability is also worth a ton. Might be the reason Tesla isn't still charging us anything
Similar threads
- Locked
