Long-Term Fundamentals of Tesla Motors (TSLA)

[EldestOyster]

If it makes you feel any better, Elon has already said that the Model III is going to be designed with expediency in mind, as opposed to ultimate feature-ness. This is what you are asking for.

 

[speedracer]

Honestly, just making the Model X a compelling CUV vehicle would have been better for Tesla's long-term goals--mass electrification of transportation. Less capital spent + more money for developing Model 3, the only car that really matters for achieving Tesla's end goal.

The flashiness of the Model X is going to generate a ton of press, but most of the extra fluff isn't going to make a huge difference to probably 95%+ of consumers. Plus Tesla could have always iterated and added these features in after the fact, just like they do with the Model S.

It frustrates me too, but the deeper I think about it, logic about the brand, the product & Elon itself unfolds. If Elon or Tesla did not have this maniacal focus on features that are difficult to design & manufacture, I doubt they would have achieved what they have so far. Their breakthroughs in powertrains is a manifestation of this thought process. The side effect of it is, it may at times cause setbacks, delays. Hoping we cross this hump soon!

 

[mmd]

Speaking of falcon wing doors, here are some old time Mercedes cars with falcon wings
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[32no]

Speaking of falcon wing doors, here are some old time Mercedes cars with falcon wings
Bing Images

Those are gull wing doors, which have single hinges. The Model X falcon wings are totally invented by Tesla, no other car has dual hinged doors.

Also, interesting piece of news: Jeep has confirmed that it will soon release a Hellcat powered Grand Cherokee that goes 0-60 in 3.5 seconds. It's suppossed to be out next summer. I think Tesla can get a fair amount of press in the short term if they beat this 0-60 time and release it on time this quarter.

 

[vankie]

Completely agree with you. Steve Jobs was a maniac about the iPhone's design and manufacturing precision, and that frustrated many engineers. But there probably would have never been the iPhone if Jobs did not push everyone to achieve the impossible. Pretty sure what went on sale in June 2007 was still not 100% what Jobs wanted, but it was close enough to bring his vision to life and was at least one order of magnitude better than any existing phone at the time. Musk is the same time of product visionary and perfectionist. Granted, EV's core advantage is the powertrain -- that what helps the consumer MAKE SENSE of buying an EV. But a great passenger car needs to be more than that. It needs to be a complete package of great user experiences integrated seamlessly. Features like the falcon doors which will (as advertised, hopefully) make day-to-day activities such as putting the toddlers into the back seat a lot easier and enjoyable. That's the kind of design that makes the consumer LOVE the product. These things are by default very hard because we all want convenience and comfort so if it was easy to do it would've been done a long time ago.

It frustrates me too, but the deeper I think about it, logic about the brand, the product & Elon itself unfolds. If Elon or Tesla did not have this maniacal focus on features that are difficult to design & manufacture, I doubt they would have achieved what they have so far. Their breakthroughs in powertrains is a manifestation of this thought process. The side effect of it is, it may at times cause setbacks, delays. Hoping we cross this hump soon!

 

[Grendal]

Also, interesting piece of news: Jeep has confirmed that it will soon release a Hellcat powered Grand Cherokee that goes 0-60 in 3.5 seconds. It's suppossed to be out next summer.

I'm not interested in foreign cars or SUVs. I am also not interested in what an ICE can do anymore. It will be fun to see a bunch of videos of a Model X beating the JGC Hellcat in drag races.

The production Model X looks really good and should be as big a hit as the Model S is/was. Does anyone know if the Model X is capable of winning the MTCOTY? It's not a car so does that disqualify it? To bring it back around to the topic, if it is qualified and wins that award then we'll see a very nice pop in the stock price.

 

[anticitizen13.7]

I'm not interested in foreign cars or SUVs. I am also not interested in what an ICE can do anymore. It will be fun to see a bunch of videos of a Model X beating the JGC Hellcat in drag races.

I am of similar opinion.

I don't want to buy another gasoline automobile, unless my Honda Civic is wrecked before Model 3 becomes available.

 

[FredTMC]

"I really believe Tesla needs to stop trying to re-invent the car with every vehicle they design and build. It's ok to build a run of the mill, small car or truck that gets 225-250 miles per charge - just get it to market. With all the time and money that has gone into the X, it HAS to be a huge winner. It can't have any deficiencies. I'm not sure why Tesla wants to put themselves under that kind of pressure as such a young car manufacturer (for example, gull wing doors - why?)."



Elon is the chief product guy, his ego could be getting in the way. Whoever asked for falcon door, or sculptured back seats,
AWD and 90kwh are enhancements that have an impact, the rest along with the complexity it adds to manufacturing is nonsensical.

Some of his craziness might explain personnel departures and airplane wing walks.

elon has stated that model 3 will NOT have crazy design issues. It'll be a very compelling but simply to build car. Nothing crazy.

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Speaking of falcon wing doors, here are some old time Mercedes cars with falcon wings
Bing Images

Nope. Those a single hindged doors. Model x is double hindged.

 

[MikeC]

The production Model X looks really good and should be as big a hit as the Model S is/was. Does anyone know if the Model X is capable of winning the MTCOTY? It's not a car so does that disqualify it? To bring it back around to the topic, if it is qualified and wins that award then we'll see a very nice pop in the stock price.

I don't think it's eligible because it's an SUV, but I'm pretty sure it's a lock for MTSUVOTY.

 

[Krugerrand]

I'd argue just the fact that a SUV gets 4-5x the fuel economy (equivalent) of the next best SUV, and also will go 0-60 in under 4 seconds, is stunning enough.

It's not enough. The X has to blow people's minds, it has to draw attention like flies to honey. It has to talk for Tesla, who does not do any conventional advertising. When the X starts showing up in mall parking lots and at baseball/soccer/football fields, and people open those doors...there's going to be a serious increase of whiplash in the population. There will be lineups of strangers asking owners questions. Once their attention has been garnered, then they will learn about the fuel economy, the 0-60 times, the towing capacity, etc...

Anyways, I think the point I'm trying to make is that how they're handling the Model X doesn't bode well for the Model 3.

There is no connection between the two. The Model X was in part purposely delayed because things changed. I've stated a few times in the past, the Model 3 can not be delayed because it's directly tied to the Gigafactory and Tesla's partnership with Panasonic and others.

Mass market and incredible premium EV are two different beasts entirely.

The Model 3 isn't going to be in line with a Camry. It's still going to 'premium' compared to any other EV in that price range (ie. Bolt). But yes, Tesla is going to have to pump them out faster and last we heard publically was that they were going to go more conservatively with the Model 3 for version 1.0, so I'm not holding my breath for suicide doors.

 

[Drax7]

It's not enough. The X has to blow people's minds, it has to draw attention like flies to honey. It has to talk for Tesla, who does not do any conventional advertising. When the X starts showing up in mall parking lots and at baseball/soccer/football fields, and people open those doors...there's going to be a serious increase of whiplash in the population. There will be lineups of strangers asking owners questions. Once their attention has been garnered, then they will learn about the fuel economy, the 0-60 times, the towing capacity, etc...



There is no connection between the two. The Model X was in part purposely delayed because things changed. I've stated a few times in the past, the Model 3 can not be delayed because it's directly tied to the Gigafactory and Tesla's partnership with Panasonic and others.



The Model 3 isn't going to be in line with a Camry. It's still going to 'premium' compared to any other EV in that price range (ie. Bolt). But yes, Tesla is going to have to pump them out faster and last we heard publically was that they were going to go more conservatively with the Model 3 for version 1.0, so I'm not holding my breath for suicide doors.

All this his hype is your assertion , building the most difficult car in the world is likely a mistake .
Lets see what the ramp looks like.

 

[jhm]

The design challenge for the Model 3 should be how to make it easy to scale mass production. While the Model X may be the most challenging car to manufacture, it would be a triumph for the Model 3 to be the easiest car to manufacture. The easier it is for Tesla to scale the Model 3, the greater the opportunity to move fast as a company in many other directions. Musk should aspire to a lights off factory for the Model 3. That would truly be a marvel.

 

[Krugerrand]

All this his hype is your assertion , building the most difficult car in the world is likely a mistake .
Lets see what the ramp looks like.

Does not matter what the ramp looks like other than how it might temporarily affect the numbers at the end of Q4 and/or/maybe Q1. Otherwise it holds no significant meaning. Tesla will make Model X and fill their almost 30k order list and beyond. My hype assertion is that Model X is going to win every major award and steal sales from every SUV maker, and cause the biggest 'oh, ****!' ripple through the auto industry. I'm hoping the ripple is big enough to cause major panic and finally get them off their duffs in time to have an answer for Model 3...but I doubt it.

 

[eloder]

The Model 3 isn't going to be in line with a Camry. It's still going to 'premium' compared to any other EV in that price range (ie. Bolt). But yes, Tesla is going to have to pump them out faster and last we heard publically was that they were going to go more conservatively with the Model 3 for version 1.0, so I'm not holding my breath for suicide doors.

Model 3 price isn't too far off from a Leaf with quick charging.

 

[anticitizen13.7]

It's not enough. The X has to blow people's minds, it has to draw attention like flies to honey. It has to talk for Tesla, who does not do any conventional advertising. When the X starts showing up in mall parking lots and at baseball/soccer/football fields, and people open those doors...there's going to be a serious increase of whiplash in the population. There will be lineups of strangers asking owners questions. Once their attention has been garnered, then they will learn about the fuel economy, the 0-60 times, the towing capacity, etc...

There is no connection between the two. The Model X was in part purposely delayed because things changed.

I tend to agree that this is probably accurate. In the last Conference Call, we learned that Model X has only 30% components commonality with Model S. That 30% could easily be the batteries, motors, and electronics systems. Tesla basically had to design everything else from scratch to allow for features like towing.

I believe that Tesla's original plan was simply to make a taller Model S with AWD, but that this plan fell apart when the engineering team realized that the Model S body/frame/suspension wasn't up to the task. If the goal of Model X is to get people to switch from ICE SUVs to BEV SUVs, the BEV has to be better in most respects. That means towing capability. Also, in the long run, Tesla is going to want to use its own vehicles for delivery and other service. A Model X that can tow 10,000 lbs. (as rumored) would be able to tow a trailer loaded with another Tesla. Right now, Tesla uses ICE trucks for towing deliveries to customers. I see these driving around sometimes and I think it would be great if they could be replaced eventually with Model X.

All this his hype is your assertion , building the most difficult car in the world is likely a mistake .
Lets see what the ramp looks like.

I tend to agree with this as well. An electric car should be simpler to build than an ICE car. My guess here is that with Model S selling well, there was massive feature creep in the interior. Elon stated that second row seats were more troublesome than the Falcon-wing doors, which is ridiculous. Those seats better be :cursing: amazing, like more amazing than Honda's Magic Seats.

 

[anticitizen13.7]

If they delay the Model 3 for three years and wait to add crazy premium features in, this stock won't be doing too well.

If it makes you feel any better, Elon has already said that the Model III is going to be designed with expediency in mind, as opposed to ultimate feature-ness. This is what you are asking for.

I believe Elon stated specifically that Model 3 would be "less adventurous" than Model X.

The goal of Tesla is to bring a battery EV to mass market. If Tesla were to go the "crazy premium features" route, we'd probably see investors dumping shares, Gigafactory partners bailing, and enthusiasts rioting in Palo Alto. It would be a near abandonment of the "Secret Plan". I don't think that will happen.

 

[EldestOyster]

When the X starts showing up in mall parking lots and at baseball/soccer/football fields, and people open those doors...there's going to be a serious increase of whiplash in the population. There will be lineups of strangers asking owners questions. Once their attention has been garnered, then they will learn about the fuel economy, the 0-60 times, the towing capacity, etc...

This is kind of fun to think about. Because at some point, in the midst of answering all those questions, you get to say, "Well, you don't put gas in it, you just plug it in when you get home..."

 

[dmckinstry]

The flashiness of the Model X is going to generate a ton of press, but most of the extra fluff isn't going to make a huge difference to probably 95%+ of consumers. Plus Tesla could have always iterated and added these features in after the fact, just like they do with the Model S.

The Model X isn't targeting 95% of consumers. Even the Model 3 will probably be targeting much much less than 95%.

 

[stealthology]

I'd argue just the fact that a SUV gets 4-5x the fuel economy (equivalent) of the next best SUV, and also will go 0-60 in under 4 seconds, is stunning enough.

Anyways, I think the point I'm trying to make is that how they're handling the Model X doesn't bode well for the Model 3. Mass market and incredible premium EV are two different beasts entirely. I'm hoping Musk doesn't loose sight of the goal of the Model 3, and delays the vehicle for years over features that could easily be held for post-launch development or extra features. A 200 mile real world range EV with a Tesla drivetrain for $35k base with a Supercharger network is all that's needed to kick-start the EV revolution (just think of how many people buy $35k Leafs with 40-50 mile winter ranges and double digit 0-60 times), but more importantly to keep Tesla in a leadership role of the EV revolution.

Going back to the short term, any other delays to mass volume production will not bode well for the stock price, and could even put a damper on an Q1 2016 over continuing fears on meeting goals and maturing to a mass market audience.[/COLOR]

Spot on about the X differentiation. With Musk, delays are inevitable. A 6 month delay, compared to a 2 year delay makes a mountain of difference IMO.

I agree that the Model 3 doesn't need to be extremely complicated....just compelling. Model S and X, however, needed to be dramatically better than their ICE counterparts in order to be disruptive.

And regarding the Model X website, the release won't do much for the stock (unless it reveals unheard-of features, like smell-o-vision)....but any further delay of the release beyond August will have a short term negative effect on the price.

In my opinion, they will make Model 3 more than compelling..

If it makes you feel any better, Elon has already said that the Model III is going to be designed with expediency in mind, as opposed to ultimate feature-ness. This is what you are asking for.

Period.

 

[Krugerrand]

Model 3 price isn't too far off from a Leaf with quick charging.[/COLOR]

And Model 3 will be 'premium' compared to that Leaf.

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The GF is not dependent on the M3. Tesla could make a good return selling Powerpacks. At this point that is probably easier than making cars.

I didn't say that. I said the Model 3 is directly tied to the Gigafactory. That is different. I've also said (in another thread) that the production of Powerpack and Powerwall may relieve some of the partnership pressure. There's no way of knowing what gross margins are going to be for either the car or the stationary storage (we have some guesses by management), but it's likely the car will still have a higher margin. Yes, the car will be more involved to produce. Yes, it's possible that there may be enough business from stationary storage to make up for lower margins etc., etc., But there's even more things involved, like employees and milestones that have to be reached for Tesla to get all the tax incentives etc... from the state of Nevada. So I contend, again, that Model 3 will not be late in terms being talked about by some (as if it's the X all over again). It would only make business sense to include a window of some sort for issues/delays, but it's not some 2 year window. The fact that the Gigafactory is on time/a bit ahead of schedule speaks to the seriousness of the venture. Model 3 is a whole new ballgame and will be viewed by Tesla entirely differently than the X. This is what I believe. I could be wrong. I'm betting I'm not.