Long-Term Fundamentals of Tesla Motors (TSLA)

[Raffy.Roma]

Everyone should take the time to read through this extremely incisive analysis of Tesla's value relative to some important financial metrics vs. "everyone else:"

Risk Laboratory: Ophir Gottlieb: * Tesla (TSLA) - A Depth of Analysis Like Never Before & 10 Charts That Will Blow Your Mind

Cool!

 

[techmaven]

Everyone should take the time to read through this extremely incisive analysis of Tesla's value relative to some important financial metrics vs. "everyone else:"

Risk Laboratory: Ophir Gottlieb: * Tesla (TSLA) - A Depth of Analysis Like Never Before & 10 Charts That Will Blow Your Mind

Wow.. this is a terrific read. Thanks Flux!

The comparison given is against other auto makers. It would be interesting to see if it is possible to compare against a different industry since the major autos are not R&D intensive at the moment. Maybe go back in time and compare against early computer startups or the like.

 

[chickensevil]

Yeah overall fantastic post, but I think the one that should be highlighted over everything as techmaven mentioned is the R&D chart. I didn't realize how little everyone else was spending in R&D... that to me is a sign of a company (referencing the other big autos) that has no future.

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Even more surprising the closest other firms on spending 7267 (Honda) and 7269 (Suzuki) is very shocking to me... Also equally shocking is the total lack of R&D budget from the likes of GM and BMW how are they even funding the Volt and the i series cars?

 

[FluxCap]

Thanks, guys. I'm glad you like it. I thought the leveling-off SG&A expenditures as a % of operating expenditures was a particularly revealing chart as well:

 

[chickensevil]

At the very least the liquidity chart sorta shows why other companies can't put forth a lot of working capital toward coming out with something that attempts to break the mold... over half of them are below the 1.5 mark of being considered "healthy". That means that one wrong move and these companies are likely to go under... again...

 

[SBenson]

Also equally shocking is the total lack of R&D budget from the likes of GM and BMW how are they even funding the Volt and the i series cars?

I heard that funding comes from the Marketing department budget.

 

[chickensevil]

This is also driving home what has been said many times, in many different places, you cannot really compare Tesla to it's "peers"... I am sure if you took the same thing but did it with Tech stocks like Amazon and Netflix, you would also get very similar crazy charting... So I totally agree with the conclusion of TSLA being an Island on its own.

 

[ev-enthusiast]

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Even more surprising the closest other firms on spending 7267 (Honda) and 7269 (Suzuki) is very shocking to me... Also equally shocking is the total lack of R&D budget from the likes of GM and BMW how are they even funding the Volt and the i series cars?

A lot of R&D (e.g BMW) was pushed to the supplier side during the last years, might be difficult to make that visible.

 

[chickensevil]

I heard that funding comes from the Marketing department budget.

That just seems like a poor line of thinking... "our innovation and core research is only there to keep us alive"... That is entirely what that screams to me. I am going to spend 10 million here on some TV commercial advertising... and 10 million over here on product placement in entertainment... 10 million over here on sports branding and competition... oh yeah and we can also throw 10 million toward coming up with new designs cause that will help us get sales too right?

Such a terrible thought process... or am I looking at this wrong?

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A lot of R&D (e.g BMW) was pushed to the supplier side during the last years, might be difficult to make that visible.

But you still need someone, presumably at BMW, sitting there to put together the i3 and i8... designing the car's look, what it will be made out of, its overall target goals for how they want the car to be... etc... Unless, like GM, they outsourced that (which would actually explain why it feels like a different product that doesn't feel like a BMW... no offense, but it doesn't). But wouldn't that still be a line item under R&D, I am just going to throw X number of dollars to a third party company to come up with something for us.

And the reference to GM was regarding how they handled the EV1, at the least... I don't know what they did when it came to the Volt. All that was A1 if I am not mistaken... GM really didn't have anything to do with the EV1 other than funding.

 

[Wenche]

BMW used in 2013; € million 4,362 in Research and development expenses. I hope they used all of it for EV development



For those who are interested, here are BMW,s Financial statements 2013:

http://www.bmwgroup.com/e/0_0_www_b...nanzberichte/bmw-ag-jahresabschluss-2013.html
=> Download BMW AG Financial Statements 2013.

Page 5/32;

BMW AG


Income Statement
in € million
Notes 2013 2012
Revenues

14 60,474 58,805
Cost of sales
– 47,067 – 46,252
Gross profit 13,407 12,553
Selling expenses
– 3,528 – 3,684
Administrative expenses
– 2,141 – 1,701
Research and development expenses
– 4,362 – 3,573
Other operating income
15
and expenses
16 542 703
Result on investments
17 373 598
Financial result
18 – 328 – 99
Profit from ordinary activities 3,963 4,797
Income taxes
19 – 1,629 – 1,635
Other taxes
– 45 – 31
Net profit 2,289 3,131
Transfer to revenue reserves
20 – 582 – 1,491
Unappropriated profit available for distribution 1,707 1,640

 

[Maknyuzz]

Currently average distance between chargers in USA is 80 mile.
Average distance between gas station in USA is 6 mile.

If Tesla can get to 10 mile average distance between chargers, and increase charge rate to 200-300KwH, it's the end of "Range Anxiety"
In order to get to that point, Tesla needs to have 64x current charger station count. I think that instead of creating all 64x more charger station, Tesla could build 8x more charger station, but also multiply the number of stall by 8x. That way 8 x 175 current station count = 1400 station. Most station currently have between 4-6 stalls. Tesla needs to reach 16-20 stalls in each station (just like most big gas station)

End of 2014 = ~150 superchargers in USA, 300 Worldwide
End of 2015 = aim for 300 superchargers in USA, 700 Worldwide
End of 2016 = aim for 600 superchargers in USA, 1200 Worldwide
End of 2017 (gen 3) = aim for 1200-1400 superchargers in USA, 2500 Worldwide
2018 = double # of charging stall, install solar powered and stationary storage in 25% of superchargers
2019 = double # of charging stall again, 50% of stations solar and battery powered
2020 = double # of charging stall again, 75% of stations solar and battery powered

There is no more Range Anxiety. People who live in an apartment will also be served. That will be the electric revolution that we need.

Couple all that with ChaDeMo charger. Plus the appearance of Solar Canopy + electric charging in parking lot. That will be the ideal infrastructure for the electric revolution. No more excuse to not go electric.

The math is also very simple for gasoline savings too. Buy Model 3 for $35K to $40K. use it for 10 years, save $20-25K on gas, truly just buying $15K car. That's the entering the area of no competition. Not to mention if they introduce Gen 4. for $25-30K, with fuel savings $20-25K, it's essentially free car over 10 years.

Sell net-zero energy home package. Solar Panel + Stationary storage + Model 3 car for as low as $600/month for 72 months + extra charge for excessive usage.

This may read too over the top, but anyone who ever played Sim City knows that this is the future of energy. No more fossil fuel, all clean energy.

 

[FANGO]

That math is not correct, the map is two dimensional, so you would need to have roughly 64x as many chargers to result in an 8x decrease in average distance between them.

Regardless, it is irrelevant. EVs are charged at home and do not need to "fill up" at public stations as often or as quickly as gas (though the quicker the better, and the focus will remain on quick charging). Charging at home is preferable to having to go somewhere to charge. Thus we won't see as many Superchargers as gas station, nor will we need to. One thing I look forward to is society reclaiming wasted real estate used on gas stations and putting it to better use. Also, do note that even today, you are always closer to a plug than a gas station, even if that plug is only 120v.

The problem of apartment dwellers is real and there will have to be a solution (ca has passed laws regarding installing charging stations in apartment communities) but for those with dedicated parking, your theorized amount of charger penetration is unnecessary.

 

[Maknyuzz]

That math is not correct, the map is two dimensional, so you would need to have roughly 64x as many chargers to result in an 8x decrease in average distance between them.

ZOMG.. I'm an idiot. This is what happened when u r no longer at school..

 

[chickensevil]

Yeah, I see street parking getting chargers (maybe wireless?) and for garages you could just throw out a bunch of 14/50 plugs along the walls of the garage... or make it all wireless too... but by the time you need 100% charging (because we are 100% electric) I am sure that charging will be a whole new game.

 

[ItsNotAboutTheMoney]

Yeah, I see street parking getting chargers (maybe wireless?) and for garages you could just throw out a bunch of 14/50 plugs along the walls of the garage... or make it all wireless too... but by the time you need 100% charging (because we are 100% electric) I am sure that charging will be a whole new game.

I think there's enough off-street parking to grow the market enough that it can trigger a shift in view. I think it would be good to have a solution packaged that can make mass installation of charging in multi-unit dwelling easier.

 

[chickensevil]

I think there's enough off-street parking to grow the market enough that it can trigger a shift in view. I think it would be good to have a solution packaged that can make mass installation of charging in multi-unit dwelling easier.

Yeah, I'm sorry I was not trying to say that it needed to happen like... Tomorrow. We have time for all of that. I mean even getting your condo/apartment/whatever on board with putting in one or two chargers that should meet the demand for the time. The more tennents that want it, they can install more.

Really street parking would be my only real concern. But I get the feeling that auto driving will solve some of this as well.

Again there is plenty of 35k budgeted people who can get the car and have zero issue charging so it is just something that will need to be solved eventually.

 

[jhm]

The US Interstate Highway system extends 47,714 miles. 1000 SC stations should be more than adequate if well placed. Note placing stations near interchanges can serve multiple routes. So average distance between could be less than 45 miles. The interstate system does not cover all highway one would potentially want to cover, but I think it is a pretty good guage for covering loner distance travel. Unless Tesla also pursues metro residential SC strategy, which they seem to be trying in the UK but not the US, they may never need more than about 1200 stations in the US. Actually I think 600 would be more than adequate, but for convenience and to handle high volume use, as many as 1200 may be needed.

 

[hockeythug]

Is the gigafactory included in the R&D spending?

 

[chickensevil]

Is the gigafactory included in the R&D spending?

Probably more CapEx than R&D at this point.

 

[TD1]

what and when are the chances that TSLA will be added to the S&P500?