TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker and becoming a Supporting Member. For more info: Support TMC

Niche Luxury Car Maker According to Barclays

Discussion in 'TSLA Investor Discussions' started by gnuarm, May 30, 2019.

  1. gnuarm

    gnuarm Model X 100 with 72 kW chargers

    Joined:
    Aug 17, 2018
    Messages:
    1,266
    Location:
    Tennesse and Mid Atlantic
    Not a lot of rational in the report for this statement, it makes some sense. Tesla seems to be popular because of the unique styling and advanced features in the cars as much as the fact they are electric. While that gets the attention of some, I think the bigger market is for a car that simply gets you from A to B without a lot of fuss and fanfare.

    So when GM rolls out their 20 models by 2023 and the many other car companies also have become EV makers, and more importantly, when charging networks for the non-Tesla EVs have reached maturity, Tesla will only have their "tech" to make them stand out.

    By then Tesla expects to have four cars on the showroom floor (assuming they have showrooms) along with a semi truck and a pickup.

    Yeah, I can see Tesla fading from the limelight as middle America gets accustomed to the brave new world of EVs with the big iron companies. But it won't happen soon.
     
    • Funny x 2
  2. Tam

    Tam Well-Known Member

    Joined:
    Nov 25, 2012
    Messages:
    5,894
    Location:
    Visalia, CA
    "Niche luxury carmakers" do make money such as Lamborghini, million dollar car Bugatti...

    I myself didn't care about luxury cars but Tesla changed me and it was the first time that I was willing to pay much more money, more than 3 times of the most expensive car I ever bought in my life, to get a Tesla Model S in 2012.

    Current negative views are not new. Those views has been recycled years after years.

    It's true that for the past 16 years since the inception of Tesla, others have much more resources and they have been claiming they could beat Tesla at any time, years after years!

    Of course they could beat Tesla with a coast to coast EV race at any time when they'll saturate their fast chargers at any time, but still, they can't do that for the past 16 years.

    Boasting beating Tesla based on assumptions is easy but not so easy when it comes to reality.

    Tesla's deliveries go up and down so it's hard to say the demand has been dried up quarters after quarters for the past 16 years.

    Notice that Tesla has not advertised for the past 16 years. It's all informal words of mouth.

    So the fear of dried up demand with the absence of advertisement is unfounded.

    While Faraday Future and Lucid Motors still have a hard time to start building their factories but Tesla has almost finished building its Gigafactory 3 since January 2019!

    Again, just like the past 16 years, Tesla is still on the right path for a very bright future despite negative views.
     
    • Like x 2
    • Disagree x 1
  3. gnuarm

    gnuarm Model X 100 with 72 kW chargers

    Joined:
    Aug 17, 2018
    Messages:
    1,266
    Location:
    Tennesse and Mid Atlantic
    There is not a single person who knows what the future brings, especially you with your very rosy outlook, "Tesla has never needed to make a profit, so they didn't and it was ok, so it will continue to be ok no matter what".

    What many of us here wish to talk about are the practicalities of a company like Tesla ramping up and becoming a major factor in EVs. Yes, they are king of the hill at the moment. If you can't understand that it can and very well might change in just a couple more years, then you have to be ignoring virtually every practical aspect of Tesla's situation.

    If that's what you wish to do, fine. Just don't expect to be taken seriously.
     
    • Disagree x 3
    • Like x 2
  4. Tam

    Tam Well-Known Member

    Joined:
    Nov 25, 2012
    Messages:
    5,894
    Location:
    Visalia, CA
    No. It has never needed to make a profit but it has proven that it could discipline itself and made profits.

    Last year, the shorts repeatedly told Tesla that there's no way it could survive without another funding round for 2018.

    Elon Musk was so frustrated with them and said their questions were "boring, bonehead questions."

    To disprove the skeptics, Tesla did not raise another funding round in 2018 but it achieved 2 profitable quarterly profits back-to-back.

    Tesla is in a growth phase so it needs to spend money. Once its growth phase is done, that's the time to ask about profit.

    In the mean time, let's celebrate tomorrow Gigafactory 3's made-in-China Tesla Car order!
     
    • Like x 1
  5. gnuarm

    gnuarm Model X 100 with 72 kW chargers

    Joined:
    Aug 17, 2018
    Messages:
    1,266
    Location:
    Tennesse and Mid Atlantic
    You conveniently ignore the fact that the pundits were right and Tesla did seek another $2.7 billions. "Oh, that!", you say? Yes, that!


    This almost reads like you understand, but you fail to grasp that the company can't continue if it doesn't make a profit. So now they have enough capital to make it through 2019. They will continue to need money in 2020. It is completely not clear if they will continue to be profitable as they spend massive amounts to get the Shanghai factory up and running.

    The one thing Tesla has been consistent about is taking longer to achieve their objective than they expected. Now that they need to make profits this will be a problem because it means they have to spend more and they make less profit.
     
    • Disagree x 1
  6. Tam

    Tam Well-Known Member

    Joined:
    Nov 25, 2012
    Messages:
    5,894
    Location:
    Visalia, CA
    #6 Tam, May 30, 2019
    Last edited: May 30, 2019
    Shorts were wrong because Tesla didn't want to raise additional funding in 2018 as instructed by the shorts.

    It's true that while spending money to grow, Tesla needs funding but the shorts can only guess WHEN and can't tell Elon when!

    They instructed Elon Musk to do it in 2018 and Elon Musk messed up their timing!

    But timing is very important in trading:

    Vocal Tesla short seller has reversed course, driving shares higher – TechCrunch

    I think you are looking at the wrong stock and wrong company.

    Elon Musk has demonstrated 3 times in 16 years that by juggling the numbers around, profits has been achievable in Q3-2016, then 2 years later in Q-3 and 4 2018.

    It is not that Tesla cannot produce profits. It can at the expense of growth.

    So, it just doesn't want to do that for the sake of growth.

    If you ask for profits, look somewhere else.

    I quoted this before and as a broken record, I rep-quote it again:

    Form 8-K. August 7, 2013 Shareholder Letter:

    "While profits were still modest in absolute terms and not our primary mission, income increased by 70% from last quarter, driven by record Model S deliveries and a significant improvement in automotive gross margin."
     
    • Like x 1
  7. gnuarm

    gnuarm Model X 100 with 72 kW chargers

    Joined:
    Aug 17, 2018
    Messages:
    1,266
    Location:
    Tennesse and Mid Atlantic
    Yes, your post is a massive cry for help to actually understand how a company works. You pull isolated facts and try to support your conclusions. In particular, quoting Musk from six years ago is not terribly relevant.

    I don't see how you can't understand that at this point in the life of Tesla, they need to make annual profits on a regular basis. They can't continue to draw on bonds and sell stock. That's part of why the stock price has dropped over a third this past year. If they don't make profit, they won't be able to keep their doors open no matter what the company charter says. In fact, Musk himself said something like that recently. Why didn't you quote that?

    Talking about "the shorts" is a bit off target. The shorts don't tell anyone what to do. If anything they will tell the company to do what is bad for them so they go under making them the most profit. The stock analysts will give their opinions on what a conventional company would do to operate the company most profitably. The capital raise is a perfect example. They could have done that a year ago in much more favorable conditions. But Musk let his ego get in the way and didn't do what the analysts recommended. Ok, he pulled off another round of capital investment. I don't know how many more he can manage. Profits are the way of the future. What a novel idea!
     
  8. Tam

    Tam Well-Known Member

    Joined:
    Nov 25, 2012
    Messages:
    5,894
    Location:
    Visalia, CA
    There's a divergence in understanding here.

    To me, Tesla would die if it runs out of cash.

    But for the past 16 years, Tesla had many times that it was at the brink of running out of cash but cash infusion has always been replenished at crucial times.

    Cash infusion has happened in the past, it has happened just now, and I will expect it to happen in a foreseeable future.

    In summary, no: Tesla does not have to make profit in order to thrive.

    No they don't! They just evangelize negative falsehoods despite of positive facts.

    Such as: There are so many Model 3 on the parking lot. That is terrible! That means the demand has dried up!

    It might interesting to listen to Q1-2018 call:

    They kept pressuring Elon Musk to raise funding and wouldn't take no for an answer. They integrated him until he said:

    "Boring! Bonehead questions are not cool!...These questions are so dry. They're killing me..."

    Is it about running out of cash in 10 months? That's internal communications, not public materials.

    10 months is a long time to run out of cash for a growth company like Tesla by the way!

    Stock goes up and stock goes down.

    People who enjoy roller coaster has no problem with that, otherwise, please just find somewhere flat.

    Traditionally, company needs to produce profits to prove it is worth of its value.

    But nowadays, many investors prefer to see growth as the value and are willing to skip over profits.
     
    • Like x 1
  9. gnuarm

    gnuarm Model X 100 with 72 kW chargers

    Joined:
    Aug 17, 2018
    Messages:
    1,266
    Location:
    Tennesse and Mid Atlantic
    There we have it. Either a total denial of the facts or a total misunderstanding of the nature of Tesla. You don't seem to realize that at some point the "start up" has to mature into a butterfly.

    If Tesla doesn't need to make a profit, why do they seem to be so eager to announce that they will be returning to profitability this year? That is what every fiber of the company is straining to achieve.


    That's what the fresh capital is for, to allow them to float another year or so if they continue to make little or no profit.



    The trouble is a company like Tesla has to mature. If they wanted to remain in a high growth stage without making profits, they could have done that and planned for it. But their plan is now to make money selling cars and using those profits to continue to finance the growth of the company. That's why the profits are so important. No profits, no growth.
     
  10. TheTalkingMule

    TheTalkingMule Distributed Energy Enthusiast

    Joined:
    Oct 20, 2012
    Messages:
    2,734
    Location:
    Philadelphia, PA
    Wait....this guy can still post here?
     
    • Funny x 4
    • Like x 1
  11. ItsNotAboutTheMoney

    ItsNotAboutTheMoney Well-Known Member

    Joined:
    Jul 12, 2012
    Messages:
    8,296
    Location:
    Maine
    The idea that they're "niche" is very funny, because it's really a suggestion that EVs are niche, despite the growth and cost trends pointing to it being quite the opposite.

    Tesla is about as niche as BMW.
     
    • Like x 1
  12. gnuarm

    gnuarm Model X 100 with 72 kW chargers

    Joined:
    Aug 17, 2018
    Messages:
    1,266
    Location:
    Tennesse and Mid Atlantic
    Yeah, it's like that at the moment, but by the time the other automakers are rolling iron around lithium Tesla will be swamped by the sheer number of models buyers have to choose from.

    Ok, how many models of cars does BMW have? I counted 33. That's because Goldilocks wants what she wants. Car buyers won't be forced into what you sell if it isn't what they want and someone else sells it. In the foreseeable future Tesla will have a total of 7 models if you count the semi truck. What sets them apart by then will only be the tech. That is what makes them a niche car maker.

    Tesla can do well if they play their cards right and continue to make profits. But in a few years they won't be king of the hill any longer.
     
  13. Tam

    Tam Well-Known Member

    Joined:
    Nov 25, 2012
    Messages:
    5,894
    Location:
    Visalia, CA
    Very tiresome!

    That's a repeat of a broken record that's been singing the song "Tesla Killers" over and over again, years after years.
     
    • Like x 1
  14. Darren Donovan

    Joined:
    Mar 25, 2013
    Messages:
    476
    Location:
    Central CA
    I think this is the first time I've ever seen "made-in-China" getting celebrated! Lol.
    I prefer as much of my stuff as possible made in the USA, or Europe, or Japan, or South Korea, Taiwan.... Anywhere but in the PRC!
     
  15. S'toon

    S'toon Knows where his towel is

    Joined:
    Apr 23, 2015
    Messages:
    3,420
    Location:
    AB
  16. Darren Donovan

    Joined:
    Mar 25, 2013
    Messages:
    476
    Location:
    Central CA
    Tesla is a very innovative, important company, I'm all for supporting them. But, it's no Lamborghini or Bugatti, Lol.
     
  17. gnuarm

    gnuarm Model X 100 with 72 kW chargers

    Joined:
    Aug 17, 2018
    Messages:
    1,266
    Location:
    Tennesse and Mid Atlantic
    Actually, that is something I would disagree with. A Tesla may not have the prestige at this point, but I think it is a very unique car and will always have a certain something from that. Heck, I'm not sure a Lamborghini will beat a P100DL in an eighth mile. I seem to recall a race where some car like the Lambo lost.

    The thing that actually sets them apart from the really high end cars is that they are making the model 3. The 3 and the Y are the cars that will make Tesla a real presence. However, by the time the Y is being made in quantity there will be actual competition. We'll see how they do.
     
  18. Tam

    Tam Well-Known Member

    Joined:
    Nov 25, 2012
    Messages:
    5,894
    Location:
    Visalia, CA
    We, human, share the same global atmosphere.

    China was trying to catch up with the West and it was willing to sacrifice good air in exchange for making a few bucks.

    Remember, China population is about 1.386 billion while the USA population is about 0.3272 billion!

    So, it is refreshing that China will finally make a practical EV with decent range thanks to Tesla.
     
  19. gnuarm

    gnuarm Model X 100 with 72 kW chargers

    Joined:
    Aug 17, 2018
    Messages:
    1,266
    Location:
    Tennesse and Mid Atlantic
    NIO ES8 has a range of 311 miles and a battery swap option.
     
  20. anthonyj

    anthonyj Stonks

    Joined:
    May 16, 2018
    Messages:
    1,623
    Location:
    NJ
    Gnuarm, I enjoy some of your posting because you ask hard, important questions. This is just silly though. GM can make 23 new electric cars in 2023, and Motorola can make 23 new smartphones. Tesla can make 5 new cars in 2023, and Apple can make 5 new smartphones. You’re comparing kings and pawns
     
    • Like x 2

Share This Page

  • About Us

    Formed in 2006, Tesla Motors Club (TMC) was the first independent online Tesla community. Today it remains the largest and most dynamic community of Tesla enthusiasts. Learn more.
  • Do you value your experience at TMC? Consider becoming a Supporting Member of Tesla Motors Club. As a thank you for your contribution, you'll get nearly no ads in the Community and Groups sections. Additional perks are available depending on the level of contribution. Please visit the Account Upgrades page for more details.


    SUPPORT TMC