Long-Term Fundamentals of Tesla Motors (TSLA)

[brian45011]

Am I missing some arcane detail of asbestos remediation contract law which says that contractors can do work without authorization and bill for it? Because I haven't seen that in my review of general environmental remediation law.

I have not reviewed American Integrated Services' (AIS) petition, but quantum meruit is an equitable remedy which affords reimbursement for work performed. The prevailing party's recovery of attorneys' fees is generally easier in an action arising in contract rather than tort.

Did you review the Asbestos NESHAP? Possibly relevant excerpts include:

§61.145 Standard for demolition and renovation.
(a) Applicability. To determine which requirements of paragraphs (a), (b), and (c) of this section apply to the owner or operator of a demolition or renovation activity and prior to the commencement of the demolition or renovation, thoroughly inspect the affected facility or part of the facility where the demolition or renovation operation will occur for the presence of asbestos, including Category I and Category II nonfriable ACM. The requirements of paragraphs (b) and (c) of this section apply to each owner or operator of a demolition or renovation activity, including the removal of RACM as follows: ...

(4) In a facility being renovated, including any individual nonscheduled renovation operation, all the requirements of paragraphs (b) and (c) of this section apply if the combined amount of RACM to be stripped, removed, dislodged, cut, drilled, or similarly disturbed is

(i) At least 80 linear meters (260 linear feet) on pipes or at least 15 square meters (160 square feet) on other facility components, or

(ii) At least 1 cubic meter (35 cubic feet) off facility components where the length or area could not be measured previously.

(iii) To determine whether paragraph (a)(4) of this section applies to planned renovation operations involving individual nonscheduled operations, predict the combined additive amount of RACM to be removed or stripped during a calendar year of January 1 through December 31.

(iv) To determine whether paragraph (a)(4) of this section applies to emergency renovation operations, estimate the combined amount of RACM to be removed or stripped as a result of the sudden, unexpected event that necessitated the renovation."

eCFR — Code of Federal Regulations
​

AIS' remediation professionals probably understand what is required better than Tesla's contract administration personnel. Again, this is not the kind of dispute that should deteriorate into a lawsuit, especially for a company that has labor disputes with its hourly personnel in the same workplace environment where the remediation was performed.

 

[BornToFly]

I'd like to thank @tftf for participating in this thread. I don't agree with much of what he says, but he makes some valid points. Most of us are TSLA bulls and our best friend is somebody who helps us see in our blind spots.

tftf is a troll that keeps posting the same garbage OVER and OVER again. Points are valid until proven wrong, which his have for years.
Mod: There shall not be followups to these two postings. --ggr

 

[tftf]

I have posted detailed (with sources, links) information:

- Upcoming competition in long-range EVs
- Upcoming competition in storage and EV batteries

- Stress in Tesla's debt and balance sheet / balance sheet

That is very much info relevant to long-term fundamentals.

 

[BornToFly]

I have posted detailed (with sources, links) information:

- Upcoming competition in long-range EVs
- Upcoming competition in storage and EV batteries

- Stress in Tesla's debt and balance sheet / balance sheet

That is very much info relevant to long-term fundamentals.

This is exactly what I'm talking about. Car sales globally are almost 100 Million per year! There is NO real upcoming competition. Press releases don't count. Open your eyes. What, I-pace? A SUV smaller than a Model 3, at the price of an X, with no charging network, and plans for only limited production? That is supposed to take Tesla out of a 100 Million vehicle per year market? Stop trolling. You have been posting the same argument for FIVE YEARS.

 

[tftf]

.Open your eyes. What, I-pace? A SUV smaller than a Model 3, at the price of an X, with no charging network, and plans for only limited production?.

What’s your time horizon? 2018 only?

This is the long-term fundamentals thread.

Audi, Porsche Mercedes and others are already re-tooling their factories - this is not PR. For launches in 2018 and 2019.

I have been talking about 2017-2025:

VW Group is ordering billions in EV batteries.

New entrants ( CATL ... ) and others are expanding battery cell production.

Several high-speed charging networks at up to 350kW are coming online within just 2 years in key car markets.

100-150 long-range EV Models will come to market before 2025.

By 2020, almost all of these cars will be built on dedicated EV platforms (lower costs, high volume).

You probably didn’t follow any of my links - to Bloomberg and other sources.

If you follow these competitors - many of them public companies - you can see actual funds flowing into all of this.

 

[ggr]

Mod: repeating stuff that has been said before, and in some cases refuted before, will not be tolerated much longer. --ggr

 

[hcsharp]

rdalcanto, I'd like to hear what you think the large existing automakers will do if they start to see a rapid world-wide shift to a strong market for EVs. If you were running a large company that was at risk of going extinct, what would you do?

 

[EinSV]

rdalcanto, I'd like to hear what you think the large existing automakers will do if they start to see a rapid world-wide shift to a strong market for EVs. If you were running a large company that was at risk of going extinct, what would you do?

There is a great thread on this issue here:

The Fractured Tipping Point Moat

 

[BornToFly]

rdalcanto, I'd like to hear what you think the large existing automakers will do if they start to see a rapid world-wide shift to a strong market for EVs. If you were running a large company that was at risk of going extinct, what would you do?

There is no question that Tesla will not produce almost 100 Million vehicles per year and be the only auto manufacturer once ICE is dead. But for reasons that have been discussed a million times, the transitions by most automakers will be slow enough that some of them will go bankrupt, and Tesla will remain a major player (not to mention the success of Tesla's other divisions). Please refer to the thread linked by EinSV above.

 

[30seconds]

To me it seems that the near term EV competitors are unlikely to be significant competition for Tesla. So far the closest we have seen is the I-Pace which seems to be about equal to the Model S in cost, but smaller, slower and with no supercharging infrastructure. I suspect that it will do fine, but we won't see much (if any dip) to S or X sales. Same for the Porsche - smaller, slower & no supercharging infrastructure but I think it will sell fine.

However both the I-pace and the porsche may be significantly affected by a Model 3 performance variant which will have similar interior space and superior performance for a lower cost.

 

[gene]

Let's not forget that EV's are not competing with each other as much as EV's as a group, are competing with ICE cars.

 

[elasalle]

rdalcanto, I'd like to hear what you think the large existing automakers will do if they start to see a rapid world-wide shift to a strong market for EVs. If you were running a large company that was at risk of going extinct, what would you do?

Easy. They too will jump into the EV race, and in the process "cannibalize" their ICE setup - lots of internal disruption in terms of suppliers, production, employees, distribution, dealerships. The Manager that needs to make this decision might actually be the one who is gonna get disrupted - & hence not an easy task. ~ Cheers!!

 

[hcsharp]

There is no question that Tesla will not produce almost 100 Million vehicles per year and be the only auto manufacturer once ICE is dead. But for reasons that have been discussed a million times, the transitions by most automakers will be slow enough that some of them will go bankrupt, and Tesla will remain a major player (not to mention the success of Tesla's other divisions). Please refer to the thread linked by EinSV above.

I've read that thread. I mostly agree with you. However, I think the major automakers are not going to just roll over and play dead. I think they will have a much quicker response than you expect. Historically they have often been slow to adjust, but don't assume they are unable to allocate massive resources very quickly in the face of extreme danger to their core business.

 

[hcsharp]

Easy. They too will jump into the EV race, and in the process "cannibalize" their ICE setup - lots of internal disruption in terms of suppliers, production, employees, distribution, dealerships. The Manager that needs to make this decision might actually be the one who is gonna get disrupted - & hence not an easy task. ~ Cheers!!

Yes they will cannibalize their ICE products but how bad is that for them? EVs are not necessarily less profitable than their ICE offerings. They will try to take advantage of brand loyalty.

There will be lots of internal disruption but remember they are capable of allocating massive resources very quickly if their core business is threatened. They're already building EVs.

 

[elasalle]

Yes they will cannibalize their ICE products but how bad is that for them? EVs are not necessarily less profitable than their ICE offerings. They will try to take advantage of brand loyalty.

There will be lots of internal disruption but remember they are capable of allocating massive resources very quickly if their core business is threatened. They're already building EVs.

And hence they will co-exist.

 

[Model 3]

... but remember they are capable of allocating massive resources very quickly if their core business is threatened. They're already building EVs.

Yes, you are absolutely right in that they have massive resources they can allocate when/if they see the problem. But so far it looks to me like they still don't really understand the problem they are facing. From what they are saying they *still* looks like that they think that BEV's will be a sort of niche product in 2030! If they wait to 2025 to allocate this massive resources, it may be a bit late....

 

[Waiting4M3]

Yes they will cannibalize their ICE products but how bad is that for them? EVs are not necessarily less profitable than their ICE offerings. They will try to take advantage of brand loyalty.

There will be lots of internal disruption but remember they are capable of allocating massive resources very quickly if their core business is threatened. They're already building EVs.

If traditional automakers can kill of their ICE and transition to EV quickly and profitably, great for them and great for the planet, I would be ecstatic if that happens.

But some data points are not looking great so far:
BMW Pushes Back EV Mass Production Again, Says Not Profitable Enough Until 2020 | CleanTechnica

 

[wdolson]

EVs are still the small mammals running under the feet of the lumbering dinosaurs. The passenger car market is about 88 million, but the number of light trucks used as passenger cars increases the total sales of passenger vehicles closer to 100 million a year.

Everyone here is paying close attention to the EV market, but it's still a tiny part of the whole. Toyota was bragging about selling 1.4 million hybrids in 2016. It was more than that in 2017. The worldwide market for BEVs and PHEVs was 1.2 million. One car maker is selling more hybrids that don't plug in than the entire plug in market. When you factor out the PHEVs, the BEV market is still less than 1 million vehicles a year.

The traditional car makers look at the BEV market and see a niche because right now it is. There is a lot of government pressure around the world and the "green lobby" is also pushing for electric vehicles, but the traditional car makers point to mediocre sales when they put an EV on dealer's lots.

Toyota sold more than 1.5 million hybrids last year, but they only sold 20,000 Prius Prime PHEVs. The mainstream car makers put the PHEVs and BEVs out there to mollify the governments and eco buyers, but dealers don't want to sell them and they make most of them as unappealing as possible. Historically there have been lots of announcements of coming BEVs and PHEVs, but many of those cars get delayed or just quietly disappear.

Back in the 1980s my sister saw an article in the Oil and Gas Journal (she's a petroleum Geologist) that she shared with me. It was specifically about oil related companies, but I found it to be true of many different industries. The article said there were three phases of a company's existence: Start-up, engineering phase, bean counter phase.

Companies often fail in the start-up phase, but these companies are highly dynamic and very flexible. The founders run the company and often they have a lot of vision, but they aren't good managers. Other times start-ups fail because of better funded competition.

When a company moves into the engineering phase, it usually has a second or third generation CEO who usually came up through the ranks and knows the business intimately. Because it's someone who rose on their own merit, top management tends to be very competent. A company in the engineering phase isn't as nimble as a start-up, but it is still able to flex with market conditions.

The final phase of a company is when it is taken over by bean counters who usually have little imagination and are only concerned with short term profits. They will fight innovation because they are too lazy to surf their company through the disruption that would entail. When the market changes enough, these companies end up failing because they just couldn't make the transition, even if they saw it coming.

Tesla is in the engineering phase, though fairly early in that phase. Most of the rest of the car industry is in the bean counter phase. The bean counters are doing what they have to to meet government regulation and they make noise about innovating, but they really don't want ot go there because they would have to change the way they do business on a fairly fundamental way.

At this point the top management at car companies are focused on "looking green" to please the public and governments, but they still see EVs as a niche market that they hope will never take off. These companies all have forward looking people who see the future and are pushing for electric vehicles and how much traction they get varies from company to company, and in some cases day by day. A lot of companies have announced bold electrification initiatives only to back off. That is probably due to the internal fights between the visionaries and the dinosaurs. Large corporation politics can be like Game of Thrones.

The established car companies are moving towards more electrification because they legally have to. This is especially true in Europe and China where the government is mandating it more than anywhere else in the world. The companies headquartered in those places are doing more than in other places because they are being forced.

China also has a lot of young companies in the start-up and engineering phases that are quite happy to flex with the market. China's internal demand for cars will likely mean few exports for at least a decade. The Chinese only started dumping solar panels on the world market when their production started outstripping domestic demand. The Chinese car makers are putting their cars out on the world market in limited numbers to learn how to sell cars outside China, but they aren't ready for mass export yet.

I don't believe Tesla will have the world market to itself, just as Toyoda doesn't have any market to itself. However, I expect Tesla will be one of the biggest players in the world in 10 years. There will be more EVs available from more car makers and people will be able to cross shop Teslas with other cars with similar capabilities, but that hasn't killed off anybody in the ICE market. A Honda Accord and Toyota Camry have more in common than any Tesla car and a potential competitor, but both sell well. Neither company is at risk of being run into the ground by the other.

By the time a company makes it to the engineering phase, the company is usually too big and too well established to be run out of business by market forces alone. Start-ups can be starved in the crib by more aggressive competitors that are better established.

This is the mistake that a lot of the people who believe the FUD get wound up about. It is true Tesla is tiny compared to most of the competition and EVs are still a tiny niche, but they have built a strong enough foothold, competition alone is highly unlikely to run them into the ground. It would take a world financial crisis and/or a massive unforced error on the part of Tesla to kill them at this point.

 

[sundaymorning]

Yes they will cannibalize their ICE products but how bad is that for them? EVs are not necessarily less profitable than their ICE offerings. They will try to take advantage of brand loyalty.

There will be lots of internal disruption but remember they are capable of allocating massive resources very quickly if their core business is threatened. They're already building EVs.

Resources such as cash can be deployed quickly but you are missing one very imperative component of business, and that is TIME. It takes time for the massive supply chains of 2,000 parts/manufactures to ramp up the various parts that now are dependent on making specific components for EVs only (look how long it took for the GF to be built, throwing more money around won’t get it built any faster).

Think if it this way, current manufactures that cater towards ICE manufacturers require a different set of equipment and robotics. The assembly line for those manufactures will need to be redesigned, and not every manufacture will be properly equipped to steer its core business content in a timely manner. This could create a very insurmountable bottleneck for ICE manufactures as parts arrive late or defective. Things will get very interesting in 2020 as Tesla ramps from all cylinders while ICE manufacturers stand to have billions of dollars in unsold inventory and an obviously outdated product.

The Software question: software is something that ICE manufactures lack, they are behind by at least 5 years. Software writers will need to code massive amounts of data to match Tesla’s current superior user experience. These codes don’t write on their own. Look at how far SpaceX is ahead of the crowd. Buying more robotics won’t speed up the software writing process, it’ll literally take an army of engineers to achieve an interface capable of maintaining the car to perform at Tesla’s level. It isn’t until you own the car for 6 months that you’ll come to realize how the Tesla keeps getting smarter and smarter.

 

[Teslie]

However, I expect Tesla will be one of the biggest players in the world in 10 years.

Do you really believe what you are talking about ?

To become of the big players they have to produce 10 million vehicles. To build up and start that kind of car capacity Tesla would need 20 years and financially get over the rounds in the next years..