Hogfighter
Professional Lurker
@elonmusk on Twitter today: 'Have recently come to appreciate the awesome, absurdist humor of Waiting for Godot. We so often wait, without knowing why, when or where.'
Guess I got my answer!
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@elonmusk on Twitter today: 'Have recently come to appreciate the awesome, absurdist humor of Waiting for Godot. We so often wait, without knowing why, when or where.'
Guess I got my answer!
Hogfighter
Professional Lurker
FredTMC
Model S VIN #4925
Wow. Oil is holding up well. TSLA backed off after initial surge. We have achieved a perfect INVERSE correlation to oil today. Ha
Progress!
Honestly, we're following NASDAQ for the most part. I feel like we're at some sort of inflection point. I think the next big data point for oil is U.S. inventories on Wednesday. Plus, the Kuwait strike situation is putting a floor under the price of oil, so the big fear is muted right now and the market bounced back. But I'm afraid it's a head fake with overall negative environment with a failed output freeze agreement... if the inventories come back high, then the market goes down. The expectations are that demand is increasing. Plus we are in earnings reporting season, which means volatility can be very high... be careful, good luck!
FredTMC
Model S VIN #4925
Thanks Mav,
I agree. nice summary.
Hopefully, we will have a little less uncertainty after NY caucus tomorrow. If Sanders doesn't do good, then Hillary is certain on the demo side. Republican side will still be a circus, but that's already assumed.
It's interesting to see the deep spikes down today on relatively low volume and no news, followed by recoveries. I typically associate such SP action as shorts selling in during the low volume times of the day. I feel confident we'll see over 30M shares short for mid April.
I suspect the shorts are trying to induce some fear of falling, but what they're doing in reality is pissing into the wind and giving buyers a mid-day discount on shares.
I suspect the shorts are trying to induce some fear of falling, but what they're doing in reality is pissing into the wind and giving buyers a mid-day discount on shares.
More evidence suggesting SolarCity or Tesla is going to buy certain parts of Sunedison's portfolio for pennies on the dollar.
Tesla hires SunEdison’s energy storage lead as the company is going bankrupt
Tesla hires SunEdison’s energy storage lead as the company is going bankrupt
jhm
Well-Known Member
The problem is that you have been repeating yourself and not taking in alternative views which I have posted. You are like a chess player who is so convinced that you have thought through all the angles that you overlook an obvious change in strategy.
You cannot look at dealers' attitude and behavior in the past and be sure that they cannot and will not change their strategy. When dealer's start losing scores loyal customers to Tesla because their OEMS fail to deliver compelling electric products and contemporary conveniences such as OTA, you can bet they are going to change their strategy.
Let me concede that traditional ICE makers will be basket cases in the face of disruption. This of course undermines any equity the dealer may have with those brands. So repairing cars from those makers will no longer be much of a business for them. So resistance to electrics on grounds that it undermines service center revenue breaks down.
Next under this scenario that ICE brands are failing, we should expect that this creates new opening for aspiring EV makers. It does not matter much where these come from, only they are not the incumbent automakers with franchise relationships with dealers. So how will auto dealers react to these new EV entrants? Will they reject them out of hand because they are so vested in their current franchisors who are sinking like the Titanic? Or will they gladly court these new entrants so that they can put compelling products on their lots? I think the will. Now these new entrants will have to decide if they want to be wed to dealers and their franchise laws or if they will follow Tesla's lead avoid them like the plague. If they go with dealer, that's no problem for the dealers. They sign new contracts, put up signs, and sell new product. On the other hand, if new EV entrants follow Tesla's distribution model, then the auto dealers will be in a pickle. The very franchise laws that protected them from the incumbents become laws that bind them to their fate. However, if disruption is intense enough, auto dealers could change their whole political strategy. They could actually rip up the dealer franchise laws to jump into electrics.
So the whole competitive landscape can change dramatically when electrics start displacing gasmobiles in large numbers. Once electrics lead growth in auto sales, you can bet dealers will want in on that. So they have to change. Or retire their business to those who embrace the new opportunities. I believe this will be the case whether incumbent OEMs die or somehow survive. And if they die, that makes it even more compelling for auto dealers to make a break from the past. Of course, I do expect many dealerships to fail, but that is because they are simply poorly run businesses that will find it hard to adapt to a changing market. Yet other entrepreneurs will seize the opportunity to sell electrics.
This may not be entirely relevant to short-term movements but I had to post it anyway. It is consistent with my TSLA investment thesis:
jhm
Well-Known Member
The incumbents can try to keep up or go out of business. It's their choice. I see Musk pressing them to choose, but not forcing anyone out of business.
jhm
Well-Known Member
Ah, thanks you for addressing my point. Now recognize that whatever profit dealer may capture this way will eventually come right off the selling price in the first place. That is, if all dealers capture $X profit from the manufacture then they compete with each other to sell cars. So negotiated prices with buyers are $X lower. Thus, consumers get better service at no incremental cost because there really is no incremental cost to the service.
doggusfluffy
Closed
Seems as if they are making their choice...
http://www.nytimes.com/2016/04/15/business/the-suv-arms-race-goes-upscale.html
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Jonathan Hewitt
Active Member
I decided to mark your post with a "laugh" because there was no "cry" option.
oh behave.
As I have pointed out I think ad-nauseum by now, Tesla will throw dealers a lure of taking profits on holding fleet inventory. They won't be able to bugger up the user experience because that will be none of their business. When it comes to getting rid of surplus ICE service personnel, Tesla will gladly take the cream of the crop off their hands and I'm sure Solar City would offer to re-educate the rest including the salesmen. Everyone happy except the automakers who are freakin' toast.
Anyway. Do you actually appreciate the brilliance and cultural significance of Mike Myers. Just awesome. Fembots - seriously!
Speaking of seriously - Of course you can't pull out money artificially that is not added to the customer at a middleman step and have that not damage a business between OEM and consumer. Your business becomes either less competitive or margin squeezed compared with an entity that does not suffer that middleman's demands.
There is simply no way that the dealer model can carry connected EVs for sale alongside the ICE model that is slim margins up front and back end loaded for service profits. Dealer's can't dump their service costs because they have to serve a 20 year backlog of ICE sales and probably 4 years minimum of warranty obligations up to 8 for luxury cars or even 10 years for bodywork perforation. So what ar they going to do! ?
Here sir we have an EV or an ICE. One makes us bushels of cash at 80% markup for a decade plus recalls and warranty work if we sell it to you at a 3 or 4% markup the other seriously doesn't unless we add the money we would have made over 10 years on the other one to the up front price of this one. Fancy a double priced EV with a 50% markup sir or would you prefer the 4% plus hidden 46% over 10 year profit model? Yes but that car cost you barely more than $17K. Why can't I just pay the same 4% markup because you don't need to do anything to earn the other 46%. Precisely sir but my hands are tied, boss says we have to make our money somehow - don't you want us to be here when you change your mind in future and buy an SUV and how are we supposed to pay for indoctrinating minors at little league matches unless you give us the profits on the little league ad we indoctrinated you with as a kid you stupid annoying customer. Don't you realise you are trying to break the law by arguing with my bosses right to take your money if you want the privelege of driving a car - jeez when is NADA going to pull its finger out and put customers like this behind bars for good.
Tesla just says here's a cheaper EV that is better than the ICE because it has no hidden dealer costs for work you won't need because it doesn't need it. The end. Cannot see the sense in debating this.
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I wouldn't bet on that. There are many forms of bankruptcy that do not involve asset sales for pennies on the dollar. In this case there is a solid underlying business, but overladen with debt. Usually the debt-holders will cram down the equity holders and take control of the debt, equity and operations. Their goal then becomes a one of maximum repayment. If they can sell the business for 70cents on the dollar they will. If they can't, but can operate it successfully by writing off some/most of the debt they will and benefit from a return of the equity value (see the Federal Government & the 2008 financial crisis). Sometimes a few stranded assets are sold to clarify the remaining business, but only in extreme cases are most assets sold at extreme discounts.
Yet electrics are already leading growth in auto sales, and the dealers' response has heretofore been to lobby for laws banning the sale of the cars which are leading growth. Yeah, they see it, and they're mad that they can't sell whatever the new Tesla model is for 20k over sticker (those sig Model S going for 140k+ resale really pissed off the dealers, that's their game, they don't want private citizens to be able to do that), but they've channeled that anger into hatred, into digging into their position, into convincing themselves of how "superior" their product is (go to any dealer and tell them you're considering an EV, and count how many words come out of their mouth before the phrase "range anxiety"), not into changing along with the market and the world.
Your estimation that "many dealers" will fail is undoubtedly a correct one. But you probably estimate that at a lower number than I would estimate it at. Dealerships are, by and large, very poorly run businesses. Nothing they have done has convinced me that they will adapt properly to a changing marketplace.
dc_h
Active Member
As a citizen, i prefer Tesla make their money from car sales and without consumer incentives, as a stockholder, more ZEV credits would be nice.
Sometimes I feel like X ramp up is a mirage. Every quarter it feels like this will be the blowout quarter - until it's not.
Production delay
Looks like X production didn't happen at all this quarter so far. I'm starting to feel that Q2 won't be as big of a blowout as we all hoped. Maybe we need to wait for Q3 and Q3 ER? Will that stretch the timeline too far out for Model 3 capital raise? I certainly hope they will show patience in delivering a blowout quarter before any equity based capital raise.
Production delay
Looks like X production didn't happen at all this quarter so far. I'm starting to feel that Q2 won't be as big of a blowout as we all hoped. Maybe we need to wait for Q3 and Q3 ER? Will that stretch the timeline too far out for Model 3 capital raise? I certainly hope they will show patience in delivering a blowout quarter before any equity based capital raise.
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