Well, that makes my day. Thanks!
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Well, that makes my day. Thanks!
Why help one of the main future competitor in their direst need? Makes sense if Google/Apple can take a controlling stake or even acquire Tesla. But just a few billions does them no good at all. Either acquire your competitor or watch them burn.
Growth doesn't come easy, especially when you are so desperate you spend over $3 billion (Dr.Dre) for a mediocre headset maker. How is Project Titan going? How are Google's moonshot projects doing?
What I think is a good deal is Google/Apple investing, say $10 billion for 15% stake, valuing the company at around $66 billion. Compare that to Airbnb or Uber valuations, which barely have any moat.
You see glass half empty, I see half full. It is the same Tesla nevertheless, but our attitudes are different.
CALGARYARSENAL
Member
I just know the bears will be saying "yeah, they would never have become the worlds largest auto maker and solar provider if Apple/Google hadn't thrown them a lifeline." Tesla is too important to fail. Period.
CALGARYARSENAL
Member
We may be looking in the wrong direction........here is what Bill Gates thinks we should concentrate on accomplishing in the next decade......I quite like his #1 priority. Microsoft and Tesla. A beautiful combination.
- Provide everyone on earth with affordable energy without contributing to climate change.
- Develop a vaccine for HIV and a cure for neurodegenerative diseases.
- Protect the world from future health epidemics, which might be more infectious than Ebola and more deadly than Zika.
- Give every student and teacher new tools so all students get a world-class education.
TSLA is a little lower than $30B now.
Option 1: G/A invests $3B to get 10% of the company. Say TSLA eventually grows to $1T (which I believe), and takes half the relevant market cap. This investment ends up with a gain of $97B.
Option 2: G/A spends $40B to acquire TSLA. EM quits and focuses on SpaceX. Losing EM's aura and vision, TSLA's part only grows to $500B. This investment ends up with a gain of $460B.
Option 3: TSLA dies and G/A's own project eventually shapes out OKish, and got 10% of the relevant market cap. This decision gives them $2000B*10%=$200B.
Option 4: TSLA struggles at the brink of bankruptcy and the market cap falls to $3B. G/A descends down and take TSLA. Grows it to 30% of its previous potential, or $300B. This decision gives them $297B.
Best option would be 2. Worst option would be 1.
I always have a hard time understanding why people fantasize G/A making an investment in TSLA at this stage. The talk between Page and Musk several years ago makes sense, because it was an acquisition. An investment in an important competitor without having a controlling stake is bad for your own business.
Only problem I see is that Option 2 has limited upside and might only top out at $80B (much like how AAPL only doubled after they lost their vision). Option 3 & 4's upside could also be limited due to a lack of vision.
Good analysis. However, I don't see Tesla as competitor for G/A. It is strategic partnership to grow together. Many such deals have happened, for example, Intel made minority equity investment in Spredtrum, to cement partnership Intel Tries To Conquer Mobile Market By Investing In Chinese Chip Makers
Similar partnership is appropriate with Tesla. Tesla isn't going to die. It might grow a little slow due to vagaries of public equity market, but it will prevail. Can G/A afford to invest later when Tesla grows to say $200 billion market cap? Investing in Tesla while it is still small is prudent.
Yes there's certainly big uncertainty there. But EM himself said his major task with Tesla would be done when Model 3 ramps up. We're maybe more than half way through this, especially the vision and foundation of it. Rest is mainly execution, which actually may not be EM's strongest point.
Comparing Tesla to tech companies makes sense in a particular aspect, and it's not because they also make software.
Tesla is set to impart as transformational of a change on a number of gigantic industries as Netflix on broadcasting, Facebook on the way people interact socially, Google in the way the Web is organized, Amazon in how goods get sold.
What you're getting deceived by is that Tesla is working with a much, much more viscous medium then tech. Yes, it takes much more than just flipping bits to overhaul how we generate and consume energy or how we get around. But hey, Amazon went public in 1997 and they were back then a mostly tech company. Now they have warehouses, planes and a bunch of other "stuff" that makes their business work. It took almost 20 years to get there. Investors were very, very generously rewarded.
I think for Apple, Tesla is surely a main competitor if left unchecked. Apple really needs the next thing to grow. Google, maybe not that much, they are venturing in many directions. But in general, EV, especially paired with autonomous, is the next big thing for any industry.
Minor investment for partnerships works until they don't. And usually that's when the smaller company grows to a certain threshold starts threatening the bigger one. Google invested in Uber a few years ago, and broke their ways soon enough. I think Tesla has already grown way beyond the point of having this kind of partnership with anyone.
There is definitely a strong SW component that adds value. Tesla wouldn't be selling as many cars if they hadn't gone with the 17" screen in the Model S, and the app where you can track the car, unlock the car, park the car, set up charging, fiddle with the A/C, etc also definitively adds value. You also have a lot of SW that the user never notices. Everything in the car is networked, and can be tweaked remotely. Tesla can know the status of every component, allowing them to diagnose problems and occasionally fix them remotely.
The autopilot is probably the most important SW feature. And here, I would put most value on it's self-learning capabilities. Amassing data from hundreds of millions of miles of real world driving is immensely valuable for developing the autopilot, and that is probably also one of the biggest reasons why Tesla has the best system on the market. This will accelerate as the development of the autopilot progresses. Better processing of the data means newer data becomes more and more valuable. And pretty soon Tesla will come with the upgraded autopilot hardware, allowing new cars to provide a lot more sensor data. This is a self-amplifying iterative process, and the outcome will be level 5 autonomy. Can anyone else get to level 5 autonomy faster? Maybe - but I wouldn't bet on it.
The more I think about it, the more I come to the conclusion that level 5 autonomy is a gamechanger. Maybe not quite as much as the personal computer revolutionized society, but it's certainly up there. It will change society in a profound way. Driving as a profession will be gone (except in motor sports). Affordable and convenient personal transportation will change how we think about distance. With a self driving Tesla available within one minute with a single touch on an app, costing something like 20 cents/mile, going somewhere will almost be easier than thinking about going somewhere.
My understanding is that the factory has been shut down the previous week. My thinking is that they've probably upgraded the Model X production line to be able to build the RHD and five seat Model X. This increases the available market for the Model X sufficiently to discontinue the 60 kWh Model X.
All comparisons break down somewhere. Tesla is a unique company.
But I don't like the comparison with Apple. Apple is mostly a design and SW company. They design things and and make SW for it, and then they get someone to manufacture the product. They get something like 90% of their revenue from the iPhone.
Tesla on the other hand is a tech company *and* a manufacturing company. They are based on bottom-up hard-core engineering, where they rethink the product entirely, then they manufacture the product in sufficient quantities to lower cost and increase profit sufficiently. They are dealing with cars and soon we will see what they've come up with on the Tesla Energy side. Then they'll probably adress mass transit, then they'll probably find something else. They are constantly diversifying, grabbing every opportunity they see.
larmor
Active Member
Visited a data center for the first time today. Many many racks, many many UPSs and huge cooling units with under floor cooling. Center is of course on 24/7 and draws electricity. Solar energy and temp storage to time shift over high rate electricity times would be a huge cost savings for that company.
Cars are nice, solar cells and batteries are better-fewer moving parts, less service, large orders per site. Home use is miniscule compared to the industrial data center market. In my opinion only, i would not sneeze at this market, and some of you reading this may be able to pull a quick market research report on industrial solar and energy.
Cars are nice, solar cells and batteries are better-fewer moving parts, less service, large orders per site. Home use is miniscule compared to the industrial data center market. In my opinion only, i would not sneeze at this market, and some of you reading this may be able to pull a quick market research report on industrial solar and energy.
MitchJi
Trying to learn kindness, patience & forgiveness
Three questions, I'd appreciate some opinions.
What is the plant expansion for? It's clearly not for the early part of the M3 ramp. Any impact on the SP?
What will the SP be when Fremont is spitting out an M3 every 20-30 seconds and the Gigafactory is producing 25-50 gwh per year of TE products?
Will that be in 2017 or 2018?
Does the increase in the base price mean that an upgraded AP HW announcement is imminent?
Thanks!
What is the plant expansion for? It's clearly not for the early part of the M3 ramp. Any impact on the SP?
What will the SP be when Fremont is spitting out an M3 every 20-30 seconds and the Gigafactory is producing 25-50 gwh per year of TE products?
Will that be in 2017 or 2018?
Does the increase in the base price mean that an upgraded AP HW announcement is imminent?
Thanks!
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I think the Fremont expansion is to take the production capacity from 400-500k per year to closer to 900k. Tesla will need this capacity when they are going to start producing the Model Y, hopefully late 2018.
MitchJi
Trying to learn kindness, patience & forgiveness
I think they can get to close to 900k without the expansion. They are planning for that without the Model Y.
Model Y production makes sense for the expansion. I'll be shocked if Model Y production starts before 2019.
Thanks!
Why should I buy a car and pay to park it --> 96% of the time, insurance, parking fees, worry about theft, maintenance, fuel, taxes, inspections, car payments.
Could you use a raise of $1,000/month or more, by not having to spend it?
There are lots of articles and papers and novels detailing the future and a reduction in car use in cities and the change
this may be slitely OT, but it points to things accelerating, small german company build electric delivery vans (1,000 of them) and irritates VW execs {and is a positive for EV's and possibly Tesla}
"“I am annoyed beyond measure. I, of course, ask myself why Post did not talk to our VW Commercial vehicles division about doing something similar,” commented CEO Matthias Mueller. “Let’s see if we can still get a foot in the door there.”
Deutsche Post Builds Its Own Electric Delivery Van, Volkswagen Execs Are Angry
"“I am annoyed beyond measure. I, of course, ask myself why Post did not talk to our VW Commercial vehicles division about doing something similar,” commented CEO Matthias Mueller. “Let’s see if we can still get a foot in the door there.”
Deutsche Post Builds Its Own Electric Delivery Van, Volkswagen Execs Are Angry
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