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tinm
2020 Model S LR+ Owner
I'm guessing Reyes has been gone for a while. He has not been quoted in any news reports in a good while, and his Twitter feed last had a Tesla-related mention about a month ago. Since then, random personal tweets.
I, too, wonder of what use was Reyes. Nothing communications-wise improved.
I am surprised it took this long. I still remember the local supercharging letter debacle. Seems to me that letter was sent to the wrong group (those rarely use local superchargers). Never heard of an explanation or apology. This round, why it's so hard to explain how the reservation works? Can a model S owner reserve late, but still get bumped ahead of those non-owners who camped outside the door? Is it 10 am local time? or 10 am pacific time for every store? The online ordering will open 3/31 evening instead of 4/1? The 3/31 online will only be open to the people attending the model 3 event? or open to all S owners? or open to everyone but S owners take priority in line? How many cars can each person reserve? How about those who have ordered X but still waiting for it, do they get priority? I thought these should be easier than the engineering issues, but apparently these are hard to answer.
I think the communication issues in regards to model 3 unveil stem primarily from the fact the Elon is probably wanting to be involved in a lot of the decisions, and Elon only has so much time to communicate what he wants to do with his staff. So they are stuck waiting for him to tell them so they can tell everyone else. And in reality, we can be patient and just wait for the information as it comes. Something I have become very used to with Tesla so not a problem for me.
Hogfighter
Professional Lurker
As a longtime shareholder, I unconditionally support Tesla on any decisions. It's great to let the employees reserve first. They deserve it. The issue there is the tax credit involved. Only a limited Model 3 buyers can get it. If Tesla manages to let certain people (model S owners) to get the tax credit, and deny "poor" people's fair chance, there could be lawsuits. I don't think Tesla will certainly win the case. The goal of the tax credit is to promote electric car development, not to reduce the cost for certain group of people.
Because articles similar to this stated that there would be no prototype: Group
Edit: adding link appears to be broken or named incorrectly due to TMC new forum... sigh. Link "Group" above works though.
I’ve finally finished Mohamed A. El-Erian’s, The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse. New York: Random House, 2016, just in time to hear Janet Yellen’s press conference.
This is more a recommendation than a review. There are some of you much more capable than I at a more formal review. In any case, I cannot recommend this highly enough.
Many of you may know of El-Erian as a commentator with a remarkably low key demeanor on PBS or Bloomberg. He has impeccable credentials for writing such a book from a first-rate educational background to vast experience with the IMF and Pimco where he was responsible for the idea of “the new normal.” He has not served, so far as I can tell, as a central banker. That is an advantage.
His thesis is we are approaching a decision point within two to three years where we either do not meet the challenge of our times, and suffer dreadful consequences for decades, or prepare for a profound shift in our approach if we want continued growth in the economy. Instead of the familiar bell curve we are in a bimodal distribution (like a graph shaped in the form of a two-hump camel).
He combines a wealth of research from a variety of sources and personal anecdote to buttress his case implicit in the title. He praises central bankers’ efforts to transition through the Great Recession, as some have called it, but they are hampered because they have limited means compared to other institutions. He doesn’t use these terms but I interpret him to mean we have dealt with the money economy and not the real economy. Central bankers have tried to improve the economy in some ways through untested means which he applauds but they are insufficient, inappropriate, and might contribute eventually to the collapse. Certainly, alone without fiscal stimulus investing appropriately for the future, and changes in structure which only governments can achieve, they are stymied.
He’s realistic about the changes we need and makes suggestions on overcoming bias in facing the challenges. A sheer focus on avoiding fiscal measures and structural changes to the personal, national, and international institutions because of their cost is not the thing to do. Among several direct experiences and lessons he shares with us include Pimco’s anticipation of the Lehman collapse through “scenario analysis.” They predicted there would be no collapse, but they also prepared for what they would have to do if it occurred and so quickly protected its customers. They were so successful many competitors thought Pimco had predicted what would happen.
He does not reference the work of Ilya Prigogine on complex adaptive systems far from equilibrium. To tease you: what the T intersection El-Erian talks about is what complex adaptive systems theorists label a bifurcation point. There’s some heavy-duty mathematics worthy of his Nobel Prize, but Prigogine easily admits as does El-Erian, predicting when it can occur is problematical.
He has many other examples, say, the importance of diversity by not only challenging ideas but tapping different peoples’ perspectives on the decision at hand. My example is we were tasked to hire a Middle East specialist in my department. We received an applicant whose entire resume referenced publications in Arabic. None of us could read it so we should have decided to have an outside group advise us which would be possible. But we didn’t and so the poor guy never had a chance.
You may not think his work applies to you, but he says it should because we as individuals, whether investors or not, should listen and change our behavior in the directions he recommends. The idea is to be liquid, adaptable, open to change, and ready for surprises, some of which may be better managed by preparing for them. (I’m reminded of Machiavelli’s admonitions on fortuna.)
I think you’ll enjoy the read. I know you will profit from heeding his advice concerning decision-making on the personal level or at a key position in any institution.
I'm going to post this on the Macro thread as well where it more properly belongs.
This is more a recommendation than a review. There are some of you much more capable than I at a more formal review. In any case, I cannot recommend this highly enough.
Many of you may know of El-Erian as a commentator with a remarkably low key demeanor on PBS or Bloomberg. He has impeccable credentials for writing such a book from a first-rate educational background to vast experience with the IMF and Pimco where he was responsible for the idea of “the new normal.” He has not served, so far as I can tell, as a central banker. That is an advantage.
His thesis is we are approaching a decision point within two to three years where we either do not meet the challenge of our times, and suffer dreadful consequences for decades, or prepare for a profound shift in our approach if we want continued growth in the economy. Instead of the familiar bell curve we are in a bimodal distribution (like a graph shaped in the form of a two-hump camel).
He combines a wealth of research from a variety of sources and personal anecdote to buttress his case implicit in the title. He praises central bankers’ efforts to transition through the Great Recession, as some have called it, but they are hampered because they have limited means compared to other institutions. He doesn’t use these terms but I interpret him to mean we have dealt with the money economy and not the real economy. Central bankers have tried to improve the economy in some ways through untested means which he applauds but they are insufficient, inappropriate, and might contribute eventually to the collapse. Certainly, alone without fiscal stimulus investing appropriately for the future, and changes in structure which only governments can achieve, they are stymied.
He’s realistic about the changes we need and makes suggestions on overcoming bias in facing the challenges. A sheer focus on avoiding fiscal measures and structural changes to the personal, national, and international institutions because of their cost is not the thing to do. Among several direct experiences and lessons he shares with us include Pimco’s anticipation of the Lehman collapse through “scenario analysis.” They predicted there would be no collapse, but they also prepared for what they would have to do if it occurred and so quickly protected its customers. They were so successful many competitors thought Pimco had predicted what would happen.
He does not reference the work of Ilya Prigogine on complex adaptive systems far from equilibrium. To tease you: what the T intersection El-Erian talks about is what complex adaptive systems theorists label a bifurcation point. There’s some heavy-duty mathematics worthy of his Nobel Prize, but Prigogine easily admits as does El-Erian, predicting when it can occur is problematical.
He has many other examples, say, the importance of diversity by not only challenging ideas but tapping different peoples’ perspectives on the decision at hand. My example is we were tasked to hire a Middle East specialist in my department. We received an applicant whose entire resume referenced publications in Arabic. None of us could read it so we should have decided to have an outside group advise us which would be possible. But we didn’t and so the poor guy never had a chance.
You may not think his work applies to you, but he says it should because we as individuals, whether investors or not, should listen and change our behavior in the directions he recommends. The idea is to be liquid, adaptable, open to change, and ready for surprises, some of which may be better managed by preparing for them. (I’m reminded of Machiavelli’s admonitions on fortuna.)
I think you’ll enjoy the read. I know you will profit from heeding his advice concerning decision-making on the personal level or at a key position in any institution.
I'm going to post this on the Macro thread as well where it more properly belongs.
You know, as a model S owner I have directly contributed about 50k in depreciation to the company. That is something.
Also, even if the first 3's go to model S/X owners, their S's will go to new buyers. The customer base expands no matter what.
As far as I know, Tesla has been advertising the Model 3 to be at $35,000 before incentives (i.e., tax credit of $7,500). Assuming that there's no finding that Tesla has advertised after incentives, lawsuits would be dismissed instantly if anybody tried to sue Tesla. There would be no grounds. Tesla has no control over the incentive issued by the federal government.
Link worked for me, on mobile (Android/Chrome) and on desktop computer (Windows 7/Chrome).
As a section 16 officer, Elon has to report all transactions involving the company's shares and options.
However, none of his shares have been or will be lent to short sellers because:
"Beginning in June 2011, banking institutions that are affiliated with certain underwriters of our completed public offerings of common stock and our convertible senior notes made extensions of credit to Elon Musk and the Elon Musk Revocable Trust dated July 22, 2003, or the Trust, a portion of which Mr. Musk used to purchase shares of common stock in our public offerings in May 2013 and August 2015 and private placements in June 2011 and June 2013. We are not a party to these loans, which are full recourse against Mr. Musk and the Trust and are secured by pledges of a portion of the Tesla common stock currently owned by Mr. Musk and the Trust and other shares of capital stock of unrelated entities owned by Mr. Musk and the Trust. If the price of our common stock declines, Mr. Musk may be forced by one or more of the banking institutions to provide additional collateral for the loans or to sell shares of Tesla common stock in order to remain within the margin limitations imposed under the terms of his loans. The loans between these banking institutions on the one hand, and Mr. Musk and the Trust on the other hand, prohibit the non-pledged shares currently owned by Mr. Musk and the Trust from being pledged to secure any other loans. These factors may limit Mr. Musk’s ability to either pledge additional shares of Tesla common stock or sell shares of Tesla common stock as a means to avoid or satisfy a margin call with respect to his pledged Tesla common stock in the event of a decline in our stock price that is large enough to trigger a margin call. Any sales of common stock following a margin call that is not satisfied may cause the price of our common stock to decline further."
dc_h
Active Member
I see the long game, but the short term result will be loyal employees and bleeding edge consumers getting the first 6 months of cars. That is the valley of death for Tesla and TSLA. Working out the pain with employee cars and getting a few thousand daily reports about quality issues and the greatest motivation ever to build a perfect car. For Tesla it would also mean a lot of Tesla EV's in the lot and not a bunch of rust bucket GM's and Toyota's. They'll also get to test the mobile snake charger that will juice up rows of cars from a single supercharger. And everyone will be able to go to AP mode and have their car park itself when they hit the parking lot, this will also be the largest test of smart cars in a single location.
Getting the first 5000 cars built could take 2-3 months or more. Focusing on employees for first deliveries could actually speed up the delivery cycle, by ramping up the pilot project higher than possible with external sales. I hope they also provide an employee discount, and they get the tax credit.
Regarding the 7500 tax credit, Tesla should hit 200,000 in early 2018 (March 2018 sounds right to me). Getting that credit will be limited to only about 25000 Model 3 buyers. It is not going to be relevant to the sales process.
I do see the long term benefit, I just think the short term gains are much more important.
jhm
Well-Known Member
Good, we're making progress. Often disagreement exposes different sets of assumptions and expectations.
The situation that concerns me the most are the years between product launches. For example, demand creation this year should be pretty easy because the Model X is so new. Truly the hang up this year, if there is any, will be on the production side. However, for the sake of argument suppose that the Model 3 launch gets pushed out to 2019. We could perhaps do 120k Model S/X in 2017, but pushing this out to 180k in 2018 may reach market saturation limits. If 2016 and 2017 had been exploited to draw in lots of new customers, then a portion of these can be tapped to buy a second car in 2019. So expanding the customer base created a base level of demand that can support growth even when no new product is being offered.
In fact, I am quite optimistic about the Model 3 coming out by the end of 2017, so I am not particularly concerned about the scenario above. But it illustrates a point. And indeed I believed we lived through this problem last year. The Model X was too late to give 2015 sales a real boost.
But there is a longer-term issue here about building a customer base. The companies that have to spend the most on loyalty are the established companies with substantial market share to lose. Currently, Tesla is on its path to gain its first 1% of market share. Indeed it is mostly supply constrained, so even if competitors were able to lure away most of its customers, it would still be able to sell every car it makes. The situation is different, when Tesla has say 5% market share and would like to grow that to 7.5% in one year. Gaining 2.5% market share in one year is really hard. Tesla will need a solid base of established customers buying their second, third or fourth Tesla, plus a massive infusion of new first-time buyers. And keep in mind that when Tesla has 5% market share, EVs will comprise maybe 25% of the new car market. So being the only EV maker with a compelling product is not going to cut it. There will be other compelling EVs on the market, or they simply will not command 25% of the new car market. So at this level, a well cultivated base of loyal customers is prerequisite to further growth.
So how does Tesla prepare itself for that reality only about 10 years away? Well, consider the early years of Amazom. They were all about building up a huge customer base, and that was absolutely critical to Amazon surviving and becoming the online retail market leader. In the 1990s it was relatively easy for Amazon to acquire customers. To do that in this decade is much more difficult. How many people have ever bought anything at jet.com? And yet practically everyone has bought something at Amazon. This is the sort of foundation I'd like to see Tesla lay in the next couple of years. The Model 3 is a huge opportunity to acquire new customers. We need to get those customers in 2017 so that that they can buy two more Teslas by 2025 and keep buying a new Tesla every four years thereafter. It's not going to get any easier to acquire these customers than it will be in 2017 when the Model 3 is the hottest thing on the market.
So I view the Model 3 as a customer acquisition event. It's not about making a single sale. It's about making a new customer for life. That is why we roll out the red carpet. These new customers should be shown the utmost respect because the longterm growth of Tesla depends on it. The reason why we should want 200k Model 3 reservation is not merely because that will convert into $10B in one-time sales, but because 200k new customers translates into more than $50B sales over the next 20 years. Or put another way a rate of $2.5B per year with 10% profit margin and a 20 P/E adds about $5B to Tesla's market cap. So acquiring an extra 200k customers via the Model 3 really ought to matter to use as shareholders.
So I absolutely love our existing loyal customers, but I do not want to delay new customer acquisition and incremental market cap on order of $5B by an extra year just to privilege them. There are many other ways to reward customers without delaying new customer acquisition.
+1
Conquest sales and fairness are essentially the same arguments made by those who complained about the model X 70's being last to deliver, even if the reservation holder had waited over 3 years. First and foremost, it's about profitability and PR, then it's about QC and ramping production. People who are new to the company are simply less likely (because they've never dealt with Tesla Customer Service before) to be tolerant of initial QC and ramp issues. The same argument for the model X can be made here. Tesla Motors needs to be profitable to be able to push the industry away from fossil fuels. Having them leave profit on the table or operate at a loss would sabotage that goal.
The war against fossil fuels is just barely beginning. It was only this year that the Koch brothers started to actively work against Tesla. This is the time to build that war-chest, not relish in the victories.
This line of thinking reminds of one other poster's claim that Tesla should reduce the price of the model 3 so that more people could afford it, even though demand already far exceeds expected production capabilities. Somehow that poster couldn't comprehend that Tesla would actually lose money, thinking that the increased demand would solve all the financial problems with that idea. It's good intentions like these that sinks a company.[/QUOTE]
jhm
Well-Known Member
Interesting point. I hadn't thought of the risk of a lawsuit. But if customers even hire a lawyer for such a case, Tesla will have already suffered reputational damage. We should keep in mind that customers frequently get upset during a product launch when they feel they have been unfairly pushed to the back of the line. So there is definitely such a reputational and even legal risk with the Model 3.
I don't see how delaying new customer acquisition in 2017 vs 2018 is going impact sales in 2025 as significantly as you think it does. And Tesla isn't after the whole market, they just need the market to transition to fossil fuels. If EV's reach 25% of the new car market, the market takes care of itself. Just look at Norway, they reached over 10% last year, and they're now on their way to 100% BEV's by 2025: Norway wants all new cars to be electric by 2025
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