Long-Term Fundamentals of Tesla Motors (TSLA)

[772]

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.

Most people probably connect to WiFi at home... they wouldn't have to pay for mobile data.

 

[InTheShadows]

...And the remote telemetry and diagnostics capability is also worth a ton. Might be the reason Tesla isn't still charging us anything

I don't think the data is costing Tesla that much. It wouldn't surprise me if they are only paying $5/month for it. With 25k connections they should be getting a huge discount.

 

[JRP3]

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.

I'd keep a close eye on Nissan. They've made a huge investment in the EV sector and rumors are that they may be approaching Tesla/Panasonic cell density with their NMC chemistry. If they add some active cooling and put it in an attractive vehicle they could possibly come up with something compelling.

 

[Robert.Boston]

I'd keep a close eye on Nissan. They've made a huge investment in the EV sector and rumors are that they may be approaching Tesla/Panasonic cell density with their NMC chemistry. If they add some active cooling and put it in an attractive vehicle they could possibly come up with something compelling.

I view competition from other car companies as a positive for Tesla. It's my view that the limiting factor on Tesla's growth is the public's willingness to accept EVs as mainstream and, with that, the build-out of charging infrastructure. As more EVs reach the market, EVs will seem more mainstream and have higher acceptability to more consumers.

 

[FluxCap]

I view competition from other car companies as a positive for Tesla. It's my view that the limiting factor on Tesla's growth is the public's willingness to accept EVs as mainstream and, with that, the build-out of charging infrastructure. As more EVs reach the market, EVs will seem more mainstream and have higher acceptability to more consumers.

Agreed. Not in every case, but in this case, I believe that "a rising tide lifts all boats." That's Elon's publicly-stated position, as well.

 

[StapleGun]

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

Lets say the cars entire OS needs to be updated, and it's a 100mb update (does anyone know the average size of the update download for a Model S?). That's 190TB of data to pay for, which runs about $15,500 on Amazon S3.

Compare that to 1.3 million hours at an average cost of maybe $20/hr? Thats $26 million.

The cost of distributing over-the-air updates is approximately 99.94% less than forcing customers to bring their car in to a service center.

 

[hcsharp]

I view competition from other car companies as a positive for Tesla. It's my view that the limiting factor on Tesla's growth is the public's willingness to accept EVs as mainstream and, with that, the build-out of charging infrastructure. As more EVs reach the market, EVs will seem more mainstream and have higher acceptability to more consumers.

I agree that competition is positive for Tesla and how that will contribute to more acceptance. Not sure I agree that the limiting factor on Tesla's growth is the public's willingness to accept EVs as mainstream. Acceptance is currently happening much faster than Tesla can expand. Tesla is not the least bit constrained by demand. IMO the limiting factor on Tesla's growth is the ability to expand fast enough, and that will be the case for several years. Even if they had more cash, it's hard to hire and train new employees fast enough, build out assembly lines, sales and service infrastructure, etc. Did I mention giga-factory? In the 3 yrs that I've been driving electric, and now my wife, at least half of our friends are now saying "we're buying as soon as there's an affordable 200 mi EV." Nobody can expand fast enough to do that. There's more than enough acceptance and demand already.

 

[Blip]

I'd keep a close eye on Nissan. They've made a huge investment in the EV sector and rumors are that they may be approaching Tesla/Panasonic cell density with their NMC chemistry. If they add some active cooling and put it in an attractive vehicle they could possibly come up with something compelling.

This is a good point. Audi/BMW is probably several years behind, but Nissan could potentially take the Leaf drive-tran, trow in a 3x Leaf battery and stuff it all inside a Qashqai +2 and suddenly they have a TMX-killer (reasonable priced cross-over).

 

[AudubonB]

Someone could have bought just a few 35 or 40 strike LEAPs over a year ago(which I know many people were dong with TSLA), then at the start of the short squeeze about a year ago converted them all to a lot of cheap 6-month out 75 call options and made a fortune just from those two option trades alone. I know someone who made about a 10,000% return on their 4k IRA acct from doing this trade-up, it's a gamble but can pay off. They also say they bought a bunch of Jan 2016 250 LEAPs for about $15 each in Nov.

Mmm hmm. Coulda-shoulda-woulda. Just as tftf is claiming dead-perfect peaking and valleying his shorts and longs. Which isn't, by-the-by, any less likely than laws of probability allow Brownian Motion to cause every molecule of air in this room to zoom off to the top left corner, leaving a perfect vacuum everywh....gaak, gasp.

 

[hockeythug]

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

Is this ever going to be challenged at the supreme court level to settle it once and for all?

 

[Curt Renz]

Is this ever going to be challenged at the supreme court level to settle it once and for all?

While Tesla Motors is production constrained, there is no great need to be aggressive on this dealership issue. The political fight adds to public awareness and further obviates the need for advertising.

I suspect that the federal courts will eventually invoke the Constitution’s interstate commerce clause in Tesla’s favor. The company may prefer that that takes a while, as they set up their company stores and service centers where they can, while delaying the day that the other automakers do the same thing.

 

[hockeythug]

While Tesla Motors is production constrained, there is no great need to be aggressive on this dealership issue. The political fight adds to public awareness and further obviates the need for advertising.

I suspect that the federal courts will eventually invoke the Constitution’s interstate commerce clause in Tesla’s favor. The company may prefer that that takes a while, as they set up their company stores and service centers where they can, while delaying the day that the other automakers do the same thing.

Thanks. That makes a lot of sense.

 

[EVNow]

I'd keep a close eye on Nissan. They've made a huge investment in the EV sector and rumors are that they may be approaching Tesla/Panasonic cell density with their NMC chemistry. If they add some active cooling and put it in an attractive vehicle they could possibly come up with something compelling.

Good point.

Infact I'd say Tesla & Nissan are approaching the market from either end. Nissan doesn't have a Model S competitor - nor does Tesla have a Leaf competitor.

But in 4 years, Tesla will have Model E - and Nissan will have Infiniti LE (or something similar). In a year or less, Nissan will have a 150 mile car that will undercut Model E.

I also think BMW will not just sit on the sidelines after spending Billions on the EV program. I won't be surprised if we see a Model E competitor from BMW in 5 years.

It is really a question of battery density & price. There, Tesla's advantages will not last forever.

 

[adiggs]

While Tesla Motors is production constrained, there is no great need to be aggressive on this dealership issue. The political fight adds to public awareness and further obviates the need for advertising.

I suspect that the federal courts will eventually invoke the Constitution’s interstate commerce clause in Tesla’s favor. The company may prefer that that takes a while, as they set up their company stores and service centers where they can, while delaying the day that the other automakers do the same thing.

I see it the same Curt. The investor in me is ok with how things are proceeding. It would be the height of amusement to me if a significant element in the downfall of the gasoline engine for personal transportation was due to the business model involving dealerships; as if they don't have enough to struggle against on outright merits, the business model also throws sand in the gears

To the extent the business model hangs on and hurts the sales process for gas cars, I'm good with it. To the extent that it delays meaningful competition and the conversion to electric personal transportation, that's a tragedy.

 

[Cobos]

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. Belgium and Norway, Tesla has addressed grid anomalies that will trip up all who follow.

Keep in mind that Nissan with the Leaf seems to have had minimal problems dealing with Norwegian "floating ground" power network in contrast to Tesla up until the latest 5.8 software. That implies that for some issues the Gen III launch will be greatly improved by the experience Tesla gathers from the Model S (and X), but to a certain degree the old-time car-makers do know their stuff. We the Tesla bulls should not overlook that the big automakers do have some advantages with their tried and tested methods. The service level from Tesla in Norway has ranged from excellent to abyssmal f.inst. which is not yet the way it should be.

Cobos

 

[Robert.Boston]

Moderator's Note: Some posts about investing and personal trades were moved to Short Term TSLA Investor Social Chat

 

[TSLA Siempre]

What do you all think are the intermediate term risks for tesla? To me, it is scaling manufacturing and about a successful design and launch of the model x. i am a little concerned about them pulling off the model x. with a significantly worse drag coefficient in the suv form factor, can they get the range they want with the 85 kWh pack? elon and jb have talked about the difficulty in designing the model x in oslo.

 

[kenliles]

What do you all think are the intermediate term risks for tesla? To me, it is scaling manufacturing and about a successful design and launch of the model x. i am a little concerned about them pulling off the model x. with a significantly worse drag coefficient in the suv form factor, can they get the range they want with the 85 kWh pack? elon and jb have talked about the difficulty in designing the model x in oslo.

Can't recall the source, but last I heard they had solved (in a breakthrough I believe he actually termed it) the 4 AWD efficiency hit is now essentially zero. The drag coefficient is the only remaining hit as you say. I'm willing to bet they improved this enough to make it manageable.

 

[TSLA Siempre]

yes. jb mentioned that in oslo. awd comes at no penalty (except price).

drag coefficient concerns me as that significantly impacts efficiency (enough that they want to get rid of side mirrors even). at higher speeds this is the biggest problem. they could do a bigger battery pack, but the website says it'll be offered at 60 and 85. so i'm not sure where they are going to get the range unless they think it will suffer.

 

[kenliles]

yes. jb mentioned that in oslo. awd comes at no penalty (except price).

drag coefficient concerns me as that significantly impacts efficiency (enough that they want to get rid of side mirrors even). at higher speeds this is the biggest problem. they could do a bigger battery pack, but the website says it'll be offered at 60 and 85. so i'm not sure where they are going to get the range unless they think it will suffer.

It's certainly a valid concern. And no doubt a challenge. Another method to combat it might include a gear-ratio shift that gives less performance at the higher speeds in exchange for smaller draw. that would be acceptable to most drivers of a SUV class vehicle, especially if the AWD gives some of that back when really needed. I think someone asked Elon the question about why would anyone buy an S over an X once it's introduced and he said (paraphrased) the S performance will be superior (likely both acceleration and handling given CG aspects), in exchange for people and and cargo space. That seems to be the trade-off rather than range, so I'm guessing it's largely solved. But I may be overly optimistic