JRP3
Hyperactive Member
When do electric-car tax credits expire? (further update)
So I read it as after the 200K number is reached there is another full quarter of full tax rebate, then it starts to ramp down.
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When do electric-car tax credits expire? (further update)
So I read it as after the 200K number is reached there is another full quarter of full tax rebate, then it starts to ramp down.
TSLA short interest is at an all time high and the stock has recovered from $140 to $218 in about a month. Reveal of the mass market car is a couple weeks away.
But sure, it's just some crazy bubble and you are totally going against the grain to grab some contrarian profit...by piling into an oversubscribed short in the face of major news. Yeah, have fun.
Great! Another in a long parade of briefly staying clueless short sellers comes to this forum to tell us about valuation models learned in college. Tesla is not "just another auto manufacturer". It is valued by the market based on its rapidly evolving potential to completely disrupt the long established automobile and energy industries. It is a technology company that innovatively produces highly desirable electric cars and electricity storage units for homes and businesses.
What you call burning cash is investing revenue in development of the scale you think is necessary. The evaluation models upon which you seem to rely are for established companies in stable industries. They can cause you to miss the opportunity of a lifetime, or cost you a bundle if you choose to sell the stock short. I strongly recommend that you cover your short position well before hordes of eager buyers plunk down reservation deposits for the mass market Model 3 on March 31.
Gerardf
Active Member
Southpaw, I suspect noone is going to quote your statements anymore so those who already put you on ignore do not have to see them.
You received a warm welcome here. In return you have already showed that you should switch to posting on the yahoo message board instead with your style of posting. Bye.
P.S. get out of your short position before your birthday. You might just be ahead of the crowd.
You received a warm welcome here. In return you have already showed that you should switch to posting on the yahoo message board instead with your style of posting. Bye.
P.S. get out of your short position before your birthday. You might just be ahead of the crowd.
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Yuri_G
Member
You mean a bubble like how Tesla sold zero cars beginning in 2012 and now have over 100k driving on roads today? I'd offer you good luck, but that wouldn't be sincere.
jhm
Well-Known Member
Permanent? I'm looking forward to the day when Tesla sheds these training wheels.
mejojo
Active Member
Someone had mentioned that their loaning interest rate was cut by the broker, suggesting that some covering has already occurred. Could be a broker-specific phenomenon though.
Maybe permanent is a bit of a stretch. Something like 10years with no per-manufacturer limits will do. It all depends on the make of congress and/or what the other party gets in return. With Hilary as president I see a strong likely hood that there will be some strong push to extend the ITC.
Welcome fresh meat.
Tesla is an auto manufacturer, but are you even sure what "just an auto manufacturer" even means these days, looking forward 5 or 10 years? You state these financials on a backward looking basis and that can be extremely misleading looking forward.
Further, what is a startup auto manufacturer supposed to look like at this stage of its growth? Should it look like GM? Something would be very wrong if an auto manufacturer, scaling from 0 production capacity, 0 car models, 0 sales in 2011 (hiatus between Roadster and Model S) to 500,000 in 2020 to have the financials of GM. Shouldn't it be spending a lot cash? After all, it has a blockbuster product with glowing reviews. The follow on product is late to market and has a slow ramp, but the only measure of demand that we have - customer deposits grew yet again in Q4 2015 after establishing record quarterly and annual sales.
So I am curious... if Tesla's business model is flawed, are you really saying that you believe that no startup company can scale up in auto manufacturing. Do you believe that Tesla should slow down their growth in order to make their financials look better, as opposed to ramping as fast as possible? Or that they should take the safer route of trying to accomplish less in R&D and therefore deliver less of a leap in products?
How about getting together during the Tesla Road Trip event in May?
TeslaRoadTrip.org | Traveling the country in your Tesla Vehicle
I was also thinking about having a Google Hangouts every month... is there interest in that?
chickensevil
Active Member
I'll bite... "They will not hit an inflection point where cap-ex scales down". True, but cap-ex as a percentage of revenue will certainly start to drop as some point because revenues will start to go way off the charts.
Just putting it simply, Revenues were 4.05B for 2015, CapEx was 1.63B for the same year. Assuming Tesla continues to grow revenues by 50% each year, I would expect about 6B in revenues this year, 9.1B in 2017, 13.7B in 2018, 20.5B in 2019, and 30.8B in 2020. If you honestly think that in 2020 they are going to be spending an equivalent 50% Y/Y growth which would be required to hold the same high percentage they currently sit at, then you are seeing them spending 12.3B in 2020, no? I mean, I would be extremely happy to see them still expanding that fast in 2020, but it seems a bit extreme...
To put that in perspective, 12.3B is enough CapEx for 2 full Gigafactories to be built in 2020 alone. Or more realistically, if it takes 5 years to build a Gigafactory, and let's just assume they spend the same amount each year on capex (1B a year for 5 years). That would be enough capital to be building 6 gigafactories at the same time with another 6B left over for whatever else they are doing. If you actually think Tesla is going to continue to be this aggressive with their spending, then it would be in preparation not just for "a couple million by 2025" as Elon stated, but to be essentially planning to take over as the top manufacturer of cars over Toyota, GM or VW!
So either you are expecting some serious growth that no bull is even expecting (which is greater growth than anyone is anticipating, and that type of spending in 2020 would theoretically grow revenues by much more than 50% at that point), or, more likely, their CapEx spending as a percentage of revenues would drop off in the coming years.
So, now that we have that established. GM as a percentage of revenue is expected to hold firm in the 20s, because even with the Model 3 they are expecting some pretty aggressive GMs which is likely to translate into even more aggressive GMs on the high end (major costs to be cut in the core cost components of the car like the motors and the battery pack will translate into savings across all platforms). This means that as CapEx falls and GM holds steady, you will get cash flows that will end up with, as Elon put it, more money than they know how to spend it fast enough.
At that point (previously stated by Elon as "by 2020") they will have no choice but to show GAAP profits and crazy positive cashflows because they just can't spend money fast enough. And that is also the basis for the AAPL comparison as AAPL essentially has the same issue. They have held super high GMs for so long that they are making money hand over fist that they just can't spend fast enough.
jhm
Well-Known Member
Yeah, I wouldn't put it past a Clinton or Sanders administration, but I'd like to think that it is not needed for the next 10 years. My hope is that by 2020 Tesla has battery costs low enough to give them an absolute costadvantage over ICE. When that happens, there is little economic rationale for further subsidization. Indeed the politics of subsidies could stall mass adoption as people avoid buying EVs purely as a political statement. OTOH, conservatives are pretty smart about taking tax breaks personally, even when they oppose they politics that created the tax breaks. So I may be overstating the case.
From a purely self interested shareholder perspective, we might not want to see tax credits extended past 2020 because the credit will do more to help competitors than Tesla. For example, a $7500 credit is about a 25% subsidy for a Leaf, but a 5% to 10% subsidy for a Model S. Extending the credit beyond 2020 could be more about economically proping up laggards in Detroit than really advancing sustainable transport. Is Tesla better off allowing laggards to go out of business leaving factories behind for pennies on the dollar? Perhaps.
Stuff to ponder.
LargeHamCollider
Battery cells != scalable
Those who view Tesla as ""just another auto manufacturer" don't have a clue what they are talking about. That's why those shorts are hopelessly trapped. They are wrong at the root.
Agreed, the mass psychology of the short thesis in spite of so many facts contradicting it is very concerning. I'm not sure if too many people shorting with poor information would technically be called a bubble, but it will certainly hurt like one.
Your statement above about inflection points is rubbish of course, as capex is already scaling down and the spending plan for the first few quarters this year is both public, and for less money than years past, particularly in the early quarters of this year. That inflection point that "won't happen" was a few weeks ago.
"as the business model is so flawed" he says without a hint of evidence or in fact, accuracy. Suffice it to say that myself and other people here that have been making great gains on TSLA both disagree, and have a much stronger understanding of their business model than someone comparing a growing car company to competitors with products already at market saturation leaving no real hope for growth. (Especially not when Tesla is taking such a large portion of their market share in the segment they compete in)
Tesla has a very strong return on capital actually, which is just one of the reasons this argument is similarly flawed. When compared to the costs of building new vehicles at any of the established car companies, the price to market for Tesla has been nothing short of phenomenal. Combine that with their near top of industry product margins and it's very clear that their return on capital is in another league altogether than the traditional car companies. You either just repeat things that you hear/read and haven't looked for yourself(seems pretty likely), can't do fairly simple math (seems unlikely), or are intentionally being misleading/unknowingly misleading yourself (both becoming much more likely with each poorly researched post). Either way I wish you the best of luck with your trades and do appreciate the fact that the statements you are making are the thought processes allowing me to make so much darn money on my TSLA trades.
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