Seeking Alpha Jan 4 Tesla analysis - very negative article

[calisnow]

Thought I'd post this so you don't have to bother registering for Seeking Alpha if you'd like to read the original piece.

Beware Teslas Model 3 Mess - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha - the article is free but you have to register your e-mail address to view it on their site. The full text is pasted below. NOTE: NONE of what follows this line is my writing - this is ALL the article. So don't shoot the messenger! I just thought it was an interesting piece, though clearly very bearish.

Title: "Beware Tesla's Model 3 Mess"

Summary

While Tesla has been astonishingly vague about how big its Gigafactory must be to support Model 3 production, it's clear that the pilot facility now under construction is inadequate.
Tesla is at least two years behind its own schedule for committing crucial suppliers and subcontractors to "partner" with it in the Gigafactory.
It is highly doubtful that the Model 3 will cost only $35,000. A base model price of $45,000 is more likely, and 500,000 Tesla vehicle sales in 2020 is unachievable.
Tesla's Model S and Model X have had the luxury EV market all to themselves. The Model 3, by contrast, will face formidable competition.
Tesla's reliance on Model 3 deposits as interest-free financing presents the company with serious disclosure obligations to a less financially-sophisticated class of buyers.

 

[SebastianR]

Well, there are many many people who explained that the Roadster wouldn't work, then there was the argument that "anybody can bolt together an EV in a garage, mass-producing an EV is the true challenge" and now we are simply down to "they won't be able to do it due to costs". It is laughable to think you can't create a car the "everything else" for less than 20k USD. There are millions of cars out there that show that you can build a whole car for 15k USD. It is also laughable to pretend that batteries will not get better over time when we are seeing improvements in battery capacity / chemistry even as we speak in the Model S. Sight - not sure why I spent the time reading the above. (but thanks for posting anyways)

 

[Johan]

Mostly drivel.

"The Model 3 Will Debut in an Increasingly Crowded EV Market."

Supported by what evidence, other than press releases? At least Tesla has bought 3 EV's to market, albeit slightly behind their very ambitious schedule, but on the other hand they have been extremely well recieved by the press and customers

Tesla's reliance on Model 3 deposits creates disclosure obligations.

Total non-issue. Tesla has nothing to hide.

The Model 3 Will Cost Much More Than $35,000.

Yes, the stripped down version will sell little and be less profitable than higher optioned versions. The savings with a BEV v.s. and ICE will go a very long way to persuade people to pay $10-20k more than they would have paid for an equivalent ICE. Model 3 will be production constrained, not demand constrained.

A Gigafactory Also Requires a Lithium Hydroxide Supply.

Non-issue. Lithium is abundant and as demand increases globally so will production, and prices will adjust.

The Model 3 Requires a Gigafactory, Which Requires Billions More in Capital.

So more investments will be needed. So what? Has Tesla had problems raising capital until now? This is what companies in aggressive growth mode do. The markets love it.

 

[Ames]

Seeking Alpha have posted nothing but negative articles about Tesla over the last few years. I have not clicked on anything they have published for at least 2 years.

 

[jordanthompson]

Seeking Alpha articles are written by people who have a stake in different stocks, NOT by experts. Their opinions are reflected by their desire for the stocks the own to do well or short to tank.

I actually have changed my Google search for Tesla to not include anything from Seeking Alpha because most of their articles about Tesla are from investors who are shorting it. They either actually believe what they write (which explains their position on the stock) or they write this crap actually thinking they will influence the market.

Either way, it's generally not worth reading.

 

[tstafford]

A bunch of speculative analysis from someone with a financial incentive in the determination.

However, I must admit that simple skepticism makes me doubt that there will be a ton of $35K Model 3s rolling around. Much like when I see an ad for a BMW 3-Series lease at $299/mth I doubt there are actually very many of those either.

As long as Tesla makes the Model 3 deposit either fully refundable or applicable to a MS I will be in the first line to lend them $20K or whatever to be on the sig list. Heck I've already lent them money twice before - they currently are holding my $500 for an undetermined amount of time while I (im)-patiently wait on my ludy upgrade.

 

[lolachampcar]

you gotta admit that the there is far more work requiring a dramatic increase in vendor participation with the 3....... I would tend to use the Model X as my guideline and that would lead me to believe the three will be very late to the party. The key for me is who is calling the shots on overall design. Tesla can not pull its "I want to do these seats or F'wing doors thing just to be cool" on the three as platform margins will not support it, you can not take that kind of design/warranty risk on such a high volume car and, most importantly, you can not delay the platform playing around with neat stuff.

I have a small long TSLA position.
I feel Tesla's biggest long term potential is in transforming the energy sector with well thought out storage capacity. In the end, they are an energy company that builds some cars.

 

[whitex]

I am always skeptical of Tesla timelines, but this article definitely seems to be picking their "facts" as to show Tesla in the most negative light. You gotta love how they can make a statement that Chevy Bolt with 200 mile range will roll out at $35K before incentives. How can Chevy, produce a 200mile BEV at $35K (it's a "fact" from the article) an yet Tesla, a company that has produced and sold many more EV's and will be producing their own batteries, will not be able to do the same a year later? I don't get it. Yes Tesla has challenges ahead of them, and yes there are always the risks, especially when the company is the new kid on the block, but this article seems to want to spread FUD.

 

[lolachampcar]

better yet, how can GM do it without a GF????
while paying their vendor's margins????

 

[artsci]

Seeking Alpha is a joke. The author is short Tesla. That's all one needs to know. Not worth a serious conversation.

 

[mdevp]

Seeking Alpha is clickbait garbage. There are dozens of short sellers angry about losing their shirt on Tesla writing articles every month hypothesizing the most ridiculous theories and misrepresenting them as facts. Read some Anton Wahlman and Paulo Santos articles and you're head will spin right off.

 

[JenniferQ]

I"m fairly certain he's wrong. Purely on aesthetics. I keep trying to convince my dd to try any of the other BEVs out there, or "coming soon," but they are all "sooo ugly," according to her. I've dangled Bolt, BMW i3, Leaf (even though it doesn't have the basic range she needs), and many others, incl hybrids, but am loathe to go back to anything to do with ICE. Nothing excites her other than a Tesla. And frankly, with the CPO market so strong atm, I can get her into a very nice Tesla for not much more than one of these and it will have many more features and be the safest of them all to put her in. Would I prefer a cheaper Model 3? Most definitely. But she's going to "miss it by that much!" And yes, 1% comments and problems, but we are the early adopters.

 

[JeffS]

Seeking Alpha articles are written by people who have a stake in different stocks, NOT by experts. Their opinions are reflected by their desire for the stocks the own to do well or short to tank.

I actually have changed my Google search for Tesla to not include anything from Seeking Alpha because most of their articles about Tesla are from investors who are shorting it. They either actually believe what they write (which explains their position on the stock) or they write this crap actually thinking they will influence the market.

Either way, it's generally not worth reading.

This is the fact most-worth-understanding. Of everything discussed, this is important. Not just at seeking alpha, but in other outlets with tons of "contributors" that are really fund managers. This is a classic article written by a short, for the purpose of driving down the price.

 

[ToddRLockwood]

Speculation, speculation, speculation.

Seeking Alpha is a faux news site with minimal editorial oversight. Their revenue stream is based on traffic and clicks. Any web content with the word "Tesla" in it will show up on search engines and draw traffic.

 

[Vitold]

It's all speculation. Most of it is FUD but he does make few believable, and already known, points: Gigafactory will not be finished on time, Tesla will not produce 500k/yr cars by 2020 and average selling price will be higher than $35k.

Where he is likely to be wrong is battery size (50kW) and cost ($300 or $200/kWh). Also unlikely is that there will be EV competition limiting Model 3 sales.

 

[Zextraterrestrial]

better yet, how can GM do it without a GF????
while paying their vendor's margins????

Axion?
I hear Lead acid is ideal for EV's

the 1:35 and 1:50 splits make it a bargain now :wink:

 

[Krugerrand]

I would tend to use the Model X as my guideline and that would lead me to believe the three will be very late to the party. The key for me is who is calling the shots on overall design. Tesla can not pull its "I want to do these seats or F'wing doors thing just to be cool" on the three as platform margins will not support it, you can not take that kind of design/warranty risk on such a high volume car and, most importantly, you can not delay the platform playing around with neat stuff.

Won't happen. Just sayin'.

 

[calisnow]

Sorry all - I hadn't researched Seeking Alpha much and didn't realize it was one of those contributor type sites where the authors have explicit agendas.

 

[wdolson]

I've found Seeking Alpha to be a mixed bag. I thought this was a good technical analysis of what to expect for the Model 3:

http://seekingalpha.com/article/3258855-will-teslas-model-3-compete

 

[JER]

I've found Seeking Alpha to be a mixed bag. I thought this was a good technical analysis of what to expect for the Model 3:

http://seekingalpha.com/article/3258855-will-teslas-model-3-compete

Randy Carlson articles are also a mixed bag; the core hypothesis of the more recent "Game over, Tesla wins" article was definitely wrong.

They're much more interesting and detailed than typical Seeking Alpha articles, though.