Long-Term Fundamentals of Tesla Motors (TSLA)

[DonPedro]

I was talking with a fellow EV enthusiast who was a Volt owner and I think his description of why he is adimant that he will never drive a non EV again should help with this discussion.

To frame this, this is a guy who has put something like 26000 mi on his volt with like 22000 of them being all electric miles. He says he doesn't have range anxiety, he has gasoline anxiety, because it pains him to have to put fuel in his car.

The reason he goes to such pains to stick to EV only mode? Because it is just an all around better driving experience. Even with the slower volt it still gives him that giddy feeling and there is still some of that pure torque and drive even in the volt.

I have talked to Leaf owners who have expressed similar comments. Tis counters to his very own conversation about owning a Prius. He hated it. Every minute of it. Drove it to save money, but that was the only reason. It wasn't a fun ride at all. And that is the problem with most straight hybrids. This experience is even more transcendent on pure EVs as opposed to the Plugins but I think it is there all the same. When Tesla pushes their 35k car it is not just going to be cheap to own, and also look fantastic, but it is going to be a blast to drive.

Why do people loath after and sink tons of money into big gas guzzling trucks or flashy sports cars? Because they are a blast to drive. So what if I told you you could have both? Of course you would instantly go for the EV every time. As long as Tesla refuses to make a golf cart EV, I don't see there ever being a demand problem for them.

I can only support this with my own experience. Me has one Leaf and one Tesla. I frequently travel for business and get nice rental cars (high end BMWs, Mercs and such). While I look forward to trying these "wonders of engineering", I always end up frustrated and disappointed. My Leaf is at least on par with those guys, and in some respects (gas pedal response) ahead. I will never ever buy a fossil car again.

 

[Gerasimental]

Registered just to give a shout out to my fellow Kölsche Jung.
Do you drive a Tesla in Cologne? Living in the UK now and I've not yet seen one in the times I've been back. Maybe I will this Christmas!

Re your post: Bought on Friday and think that even $223 was a good level to enter at. Long term fundamentals haven't changed as far as I'm concerned so this slump really is nothing more than a buying opportunity if you ask me.

 

[Auzie]

Registered just to give a shout out to my fellow Kölsche Jung.
Do you drive a Tesla in Cologne? Living in the UK now and I've not yet seen one in the times I've been back. Maybe I will this Christmas!

Re your post: Bought on Friday and think that even $223 was a good level to enter at. Long term fundamentals haven't changed as far as I'm concerned so this slump really is nothing more than a buying opportunity if you ask me.

Welcome Gerasimental, great to see new contributors and investors.
I agree with your stock evaluation and I added to my position by buying some leaps on a dip.

 

[Tasmanian Devil]

Hi Gerasimental. Thanks for the greetings, Jung. I also agree that it is a good time to enter long. Domet e bessje Jeld noh Kölle kütt... And no I don´t have a Tesla...yet.

 

[Johan]

Considern recent turns of events with regards to stock price and the such, I did some long-term musing and started formulating some long-term prognoses for personal use. Came across a couple of statistical images I feel like sharing. They paint a picture of exponential growth, which is an extremely strong pattern to see and very important to recognize early. Exponential growth is so powerful yet decieving, especially in the beginning when the absolute numbers are small. I say just believe what the data tells you.

Norway:

US (first image shows BEV+PHEV+EREV but the second shows clearly that it's the BEVs that make up the exponential growth while PHEVs grow in a linear fashion):

 

[Tasmanian Devil]

Great Stuff, Johan. I think this is good evidence that Hybrid is a dying species.
---
The oil crash seems to lead us into a very new terrain for TSLA: A bear market. I will hold on to my stocks but I am very curious how TSLA will respond to this totally different environmetal mind set. Today TSLA was up good pre market, as was a lot of other stuff but then everything turned red. There are some indicators mentioned elsewhere on this forum that TSLA is oversold. That´s what I think, too. At this Moment the stock is still in the red but I see some strength in a) bouncing back and b) not being pounded in this scenario. I think we have reason to believe that, should this really be the beginning of a bear market, people will go into TSLA if Tesla keeps on to deliver solidly.

Seamine scenario ! Seamine ? Neemiine !

KLONK !

Hot Fuzz (4/10) Movie CLIP - Sea Mine (2007) HD - YouTube

 

[ItsNotAboutTheMoney]

Considern recent turns of events with regards to stock price and the such, I did some long-term musing and started formulating some long-term prognoses for personal use. Came across a couple of statistical images I feel like sharing. They paint a picture of exponential growth, which is an extremely strong pattern to see and very important to recognize early. Exponential growth is so powerful yet decieving, especially in the beginning when the absolute numbers are small. I say just believe what the data tells you.
...
<US cumulative sales>

I hate the last graph and I'm pretty fed up of seeing it. Cumulative sales graphs are good for appreciating how current volume on the road has grown, but if you're looking for actual sales trends, a 12-month moving average is a much better way to do it.

Markers on the timeline indicating releases of some of the updates would also be useful. Leasing has been relatively common for plug-ins, due to the subsidy and financing so we'll see a fair few "sales" that are just cyclical upgrades.

I actually see that last graph as trending towards linear, which means growth is slowing rather than increasing exponentially.

 

[jhm]

https://www.google.com/url?sa=t&source=web&rct=j&ei=Wu-QVIq3AcLZsASswYLgBw&url=http://qz.com/313162/heres-how-electric-cars-could-be-cheaper-than-gas-guzzlers-within-a-decade/&ved=0CCQQqQIoADADOCg&usg=AFQjCNEeP1mZWy4LrPGGvnHjdFJynNqVeg&sig2=Xp10EGbE5XPKAB0kP3PrfQ
Nice projection that EV drivetrain will become cheaper than ICE drivetrain within ten years. I think Tesla is much closer than that, but it has to scale up and squeeze the cost out of the rest of the car.

Pardon me if this has been posted already. I've been on vacation (WDW) and am just now trying to catch up.

 

[FANGO]

Considering that the model s is superior in just about every way to any vehicle that competes with it on price, I think we've already reached the point where it's cheaper.

Heck, the first sentence of that article is so completely ridiculous as to poison the whole article. The internal combustion engine is a moving target? Really? You mean the thing which has taken the last decade to go from ~20mpg to ~24mpg fleet average? Yeah...moving real fast, that target....especially considering some of those gains are from electrification/hybridization of the fleet, which tend to pull averages up a lot since these cars have such high mpg.

Meanwhile the model s battery is 40% better than the roadster battery, the volt battery is like 150% better than the EV1 battery, the P85D is 50% more powerful and a second faster to 60 than the P85 which was already impressive when it came out just two years ago...so which one is the moving target?

 

[uselesslogin]

Considering that the model s is superior in just about every way to any vehicle that competes with it on price, I think we've already reached the point where it's cheaper.

I really am not sure what you mean by that. A high performance electric drivetrain is now cheaper than a high performance ICE drivetrain. That is true. However, the economy ICE drivetrain is still cheaper than an economy electric drivetrain. The DB numbers in there are quite good as well and they use $100/kwh battery costs in their model.

 

[ItsNotAboutTheMoney]

https://www.google.com/url?sa=t&source=web&rct=j&ei=Wu-QVIq3AcLZsASswYLgBw&url=http://qz.com/313162/heres-how-electric-cars-could-be-cheaper-than-gas-guzzlers-within-a-decade/&ved=0CCQQqQIoADADOCg&usg=AFQjCNEeP1mZWy4LrPGGvnHjdFJynNqVeg&sig2=Xp10EGbE5XPKAB0kP3PrfQ
Nice projection that EV drivetrain will become cheaper than ICE drivetrain within ten years. I think Tesla is much closer than that, but it has to scale up and squeeze the cost out of the rest of the car.

Pardon me if this has been posted already. I've been on vacation (WDW) and am just now trying to catch up.

It's suggesting $5.4k for the battery, which could maybe happen, but suggested that all you have to do is add in the motors for $700 and you have the entire drivetrain. Uh, I think they're missing a piece.

 

[Cattledog]

https://www.google.com/url?sa=t&sou...PGGvnHjdFJynNqVeg&sig2=Xp10EGbE5XPKAB0kP3PrfQ
Nice projection that EV drivetrain will become cheaper than ICE drivetrain within ten years. I think Tesla is much closer than that, but it has to scale up and squeeze the cost out of the rest of the car.

Pardon me if this has been posted already. I've been on vacation (WDW) and am just now trying to catch up.

Yes, my money (literally) is on Tesla's CEO, execs, and board to nail it. Exxon's will looking out the side window at $50 oil for the next while and this will zoom by.

 

[jhm]

I think the way to position Tesla and Tesla-grade EVs is as high performance. Performance never goes out of style and is worth paying for regardless the price of gas. Parity with low performance ICE is not a worthy objective. As ICE becomes obsolete on performance, ICE makers will increasingly be pushed into the low end of the market. As long as Tesla has less than 10% marketshare it may as well dominate the top 20% of the market.

 

[porc]

Is there anybody on this thread, who believes that Tesla needs to further increase range if it wants to replace the ICE?

Seems to me that many investors are sticking their head in the sand, when they want to believe that the current range is enough.

 

[Papafox]

I think the way to position Tesla and Tesla-grade EVs is as high performance. Performance never goes out of style and is worth paying for regardless the price of gas. Parity with low performance ICE is not a worthy objective. As ICE becomes obsolete on performance, ICE makers will increasingly be pushed into the low end of the market. As long as Tesla has less than 10% marketshare it may as well dominate the top 20% of the market.

jhm, you make an excellent point about the best positioning for EVs is as performance vehicles. It just doesn't cost that much more to place a higher-performance-capable motor in an EV vs. something similar in performance to an ICE vehicle. I love my Tesla for many reasons, but especially because it is both an economy vehicle and a rip-roaring acceleration demon for those moments when I really need to get moving quickly.

 

[NigelM]

Is there anybody on this thread, who believes that Tesla needs to further increase range if it wants to replace the ICE?

Seems to me that many investors are sticking their head in the sand, when they want to believe that the current range is enough.

The answer to your question is probably 'no" and there's ~70,000 happy Tesla owners out there who'll back that up. But I'm sure you know that.

I've been driving my Tesla for almost 4 years now, my wife has had her Model S for more than 2 years. Only once did we need to rent an ICE and that was before the Supercharger roll-out was in full swing. Apart from the personal example there's plenty of research out there showing average commute distances, average daily driving etc. The notion that current range is insufficient has been debunked so many times I'm not even going to bother looking up all the numbers again; although it seems to me that not researching this might mean you are the one sticking your head in the sand. ;-)

 

[Robert.Boston]

Is there anybody on this thread, who believes that Tesla needs to further increase range if it wants to replace the ICE?

The word "replace" is ambiguous. If you mean "displace completely," I'd note that the ICE has not replaced horse-drawn vehicles completely, even in New York City. I expect there will continue to be use cases where EVs aren't as good as ICE, so I don't expect to see gasoline disappear as a motor fuel in my lifetime.

From an investor's point of view, the relevant question is whether 200+ mile-range EVs can displace enough ICE vehicles to be successful. As @NigelM notes, the facts say 200+ miles is more than enough to achieve this level of penetration. Here's a simple example why: most U.S. households have two or more cars. Even if people really do like to road trip frequently (which is not true, based on observed behavior), does every car in the household need to be road-trip worthy? So, you've got a huge market for 'second cars' that can be electric -- a market now served by Nissan's Leaf and BMW's i3.

But Tesla is aiming higher, to be the preferred road-trip car. Yes, that requires stopping every 150 miles or so for a 20-minute break, but drivers should be doing that anyway for safety. And with free fuel, the case is pretty strong for many.

Sure, there'll always be some people who drive 500 miles a day and can't be bothered to stop, or for whom those stops really add up. As EVs begin to dominate the landscape, though, these ICE drivers will start worrying about where they'll find their next gas station.

 

[mejojo]

To frame this, this is a guy who has put something like 26000 mi on his volt with like 22000 of them being all electric miles. He says he doesn't have range anxiety, he has gasoline anxiety, because it pains him to have to put fuel in his car.

The reason he goes to such pains to stick to EV only mode? Because it is just an all around better driving experience. Even with the slower volt it still gives him that giddy feeling and there is still some of that pure torque and drive even in the volt.

I echo this verbatim.

I have 45,000 miles on my Volt and have purchased only 150 gallons of gasoline, so 300 miles per gallon of gas.

Every mile with the generator running is a scar on my soul, though! I went 100% electric for 4 months.

Can't wait for my S85D in February!

 

[Curt Renz]

Is there anybody on this thread, who believes that Tesla needs to further increase range if it wants to replace the ICE?

Seems to me that many investors are sticking their head in the sand, when they want to believe that the current range is enough.

Perhaps this article about the potential for Model S range extension in today's "Investor's Business Daily" will cheer you up: Could Tesla Model S Get A Boost In Range — And Sales Too? TSLA TM - Investors.com

Are there still no airplanes in Germany? For long distances, I fly. For those who prefer to drive, free Tesla Supercharger stations are located near restaurants. Meanwhile after a daily commute, being able to inexpensively and conveniently recharge in a home garage is greatly appreciated by electric car owners.

 

[AlMc]

Is there anybody on this thread, who believes that Tesla needs to further increase range if it wants to replace the ICE?

Seems to me that many investors are sticking their head in the sand, when they want to believe that the current range is enough.

I would echo what others (Nigel/Robert/Curt) have said but add that they will replace ICE completely (90%) if filling your battery takes 10-15 minutes. Personally, I believe TMs focus should be on shortening charging time vs bigger batteries.