Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[M|S|M MYP]

I feel like not enough people recognize you can get a model 3 Base for 400/month on a 36 month lease @10K miles. This is an absurd value! I have two paid off vehicles (one is model Y, the other a 2006 Tundra) that I am tempted to sell the tundra to lease the model 3 in preparation for the cyber truck. A 24 month lease is 405/month BTW. I honestly have no idea why Tesla isn't posting this all over twitter, or Elon pumping it. What other mid size EV with 272 miles or range and autopilot can you get for this money...tomorrrow? Let's hope this is a sales ploy before Highlander comes out.

Because if this was posted and Elon was pumping it, it would be deemed as a major 'demand problem' with all the recent price cuts Oh wait...it is already deemed that!

 

[oldTAVguy]

Starlink launch soon...

 

[gtrplyr1]

Hardly anyone NEEDS over 200 miles of range 96% of the time ... (96% ... yes I've done research) ....

Most of Europe and Asia do not want a car the size of the model 3

Most Americans drive with less than 4 people in the car 93% of the time .... ( more research on my part)

Putting out a new "variant" of the model3 and calling it a new product is a waste of everyones time ... Elon does not waste time.

Shift to EV's is here ... this is the time to put the dagger in.

Therefore:

Model 2

200 Mile range (give or take 20 miles)

No glass roof

Heated front seats only

Hatchback

No premium radio (regular is good enough)

Same touchscreen, completely autopilot capable .... ALL TESLA.

coming soon

Now ... we can move on to another subject ...

Cheers to the longs.

BTW... my "research" is me pulling numbers out of my ....

 

[EVMeister]

You inspired me to do some research and its VERY interesting.
In the UK, the bare basic model 3 is £42,990
basic hyundai ioniq 5: £43,150
basic VW ID 4: £40,275
basic MG 4: £26,995.

The VW and Hyundai are LAUGHABLY poor choices given the specs against the model 3. Nobody in their right mind in the UK would buy an ID 4 or Hyundai ioniq now. But the MG...
It almost seems like a pricing error how good that car is:

MG MG4 EV Long Range

All details and specs of the MG MG4 EV Long Range (2022). Compare price, lease, real-world range and consumption of every electric vehicle.

ev-database.org

This is the only car that I think is a 'threat' to tesla (for people who dont want the improved acceleration and charging speed).
My neighbor has one on order and I await his verdict with interest.

Other research: Here are the ranges (combined mild weather wltp) of the base models of the top 5 EVs (by sales) in the UK:
1 Model Y 245m
2 Model 3 275m
3 Kia Niro EV 275m
4 VW ID.3 250m
5 Nissan Leaf 170m
6 Mini 130m
7 Polestar 2 275m

Also Average hatchback cost - £21,964 (thats all cars, not EVs).

So...yeah. I think there is scope for a lower range smaller battery model 3. It could eat up the Nissan Lead and Mini market, which combined sell the same number of units in the UK as the model 3.

Apparently the MG4 is being sold at a profit by SAIC. It uses a cheap low performance battery, but maybe thats all people really need?

One of my friends recently got an MG 4 as a runaround car to go with his MY LR. I've spoken with him and it's certainly a great car for the price, amazing value and a real threat to something like the Renault ZOE. But it simply isn't as good as a "driving machine" as the Teslas. Not just acceleration, but handling is nowhere near as good. The interior is also very cheap in its feel - it makes Tesla interiors feel decidedly luxurious in comparison. And the software and infotainment is nowhere near as good, either. He much prefers driving the Tesla, but the MG4 is a nice economical EV which replaced his ICE Mini.

 

[TheGrimSweeper]

You inspired me to do some research and its VERY interesting.
In the UK, the bare basic model 3 is £42,990
basic hyundai ioniq 5: £43,150
basic VW ID 4: £40,275
basic MG 4: £26,995.

The VW and Hyundai are LAUGHABLY poor choices given the specs against the model 3. Nobody in their right mind in the UK would buy an ID 4 or Hyundai ioniq now. But the MG...
It almost seems like a pricing error how good that car is:

MG MG4 EV Long Range

All details and specs of the MG MG4 EV Long Range (2022). Compare price, lease, real-world range and consumption of every electric vehicle.

ev-database.org

This is the only car that I think is a 'threat' to tesla (for people who dont want the improved acceleration and charging speed).
My neighbor has one on order and I await his verdict with interest.

Other research: Here are the ranges (combined mild weather wltp) of the base models of the top 5 EVs (by sales) in the UK:
1 Model Y 245m
2 Model 3 275m
3 Kia Niro EV 275m
4 VW ID.3 250m
5 Nissan Leaf 170m
6 Mini 130m
7 Polestar 2 275m

Also Average hatchback cost - £21,964 (thats all cars, not EVs).

So...yeah. I think there is scope for a lower range smaller battery model 3. It could eat up the Nissan Lead and Mini market, which combined sell the same number of units in the UK as the model 3.

Apparently the MG4 is being sold at a profit by SAIC. It uses a cheap low performance battery, but maybe thats all people really need?

Many folks (in the western world) are turned off by 100% made in china cars though.
I assume the MG4 is totally made in China then shipped out?

 

[bkp_duke]

I would understand this for model Y but I thought 3 was lagging a bit at the moment.

One of the lines in Fremont for production of the 3 is down (upgrades - speculated to be project Highland, but we don't know for sure). This is per filings for construction approvals.

Tesla doesn't import the 3 from China to the USA, so there is no backfill on production there.

 

[JRP3]

Hmmm…..Mr Musk has all tranches of his pay package fulfilled. Brace yourselves for the screaming when he starts selling to pay the taxes, etc. why don’t some people do research when they buy a stock?

I don't remember any screaming when he sold for tax purposes. The etc. which no one could have researched on the other hand...

 

[Artful Dodger]

Maybe short life cell tooling?

Yeah, that was my initial reaction to news that Tesla is adding die shop. If they are denting the calendaring rollers in full-scale DBE production, why not invest the capital and bring the produciton of replacement rollers in-house, and on-site? It's only money, right?

Die Science: How many hits does it take to get to the end of a tool’s life? | thefabricator.com

Die Science: How many hits does it take to get to the end of a tool’s life?

Recently I was asked at a training session to state the average life of a stamping die. The person asking was from the costing department of a large automotive

www.thefabricator.com

 

[Hiline]

Why would you assume that Tesla plans to reduce prices of the Model 3 by using "slight tweaks or software limiters"? That makes no sense, Tesla is on a mission to reduce the cost of EV's in fundamental ways by making the cars easier to manufacture and with lower assembly costs and lower parts and raw materials costs. This requires optimizing the engineering of both the production lines and the car. The goal will be to have the same functionality, the same reliability and longevity, the same size, at a significantly lower cost, thus driving the adoption of EV's into ever larger market segments.

People over-estimate the savings available with a smaller model, making the car smaller on the outside and more cramped on the inside. Sure, raw materials can go down by 15% or so, but raw materials are a small fraction of the total cost to produce. You still have four wheels, and you still have to install, inflate and balance four tires and wheels. You still have four seats, carpeting, a brake and an accelerator, sun visors, door handles, air bags, parking brake, etc. etc. etc. Costs do not even come close to scaling with size. The Model 3 is at a sweet spot in so many ways even if a smaller car has some advantages in the middle of European cities. Making a small city car will happen, the question is whether now is the right time or not. The Model 3 is a greatly under-utilized asset of Tesla and it costs too much to build. Tesla is going to fix that, and it will dramatically expand the addressable market and the profits from Model 3.

Aerodynamically, it's difficult to beat the Model 3 by a lot as it already has a pretty small frontal area and the Cd of a smaller car will actually be considerably worse. People who understand aerodynamics get this (you have to multiply the frontal area by the Cd). The net effect is not a wash, but it's closer than you would think. So, to get the same range, you still need 90% of the battery. The battery of a city car will be more than 10% smaller, but mostly due to a shorter range and gains in efficiency from technological advancements, the gains in efficiency due to the smaller, lighter form factor of a city car over a re-vamped Model 3 will be relatively small. People over-estimate the actual efficiency gains from making an electric car smaller than the Model 3.

A revamped Model 3 will be lighter and just as aerodynamic as the current Model 3, without losing value by scaling it into an economy segment. The battery will be able to have fewer kWh because of that (and efficiency gains from motor/drivetrain optimizations). It can sell for a lot less than the current Model 3 and have better margins. That is simply not possible with a city car unless you start compromising on quality, longevity, efficiency,and, to some degree, safety. Tesla naturally doesn't want to go there until it's necessary to continue expanding market share.

I'm not saying Tesla will not announce a city car at the same time, but they need the Model 3 to be more compelling from a price perspective so the city car does not steal the show with lower margins. There is room for both, and the Model 3 is the ideal platform to be the next stage of increasing volumes worldwide. The reason for this has to do with the differences between gas and electric platforms. Gas cars have more compelling economic advantages when scaling smaller than electric cars do. I won't go into the physics and the exact economic reasons why, but the difference is significant enough that it will change the adoption rate of the different form factors to a slightly bigger car. There is still a place for a small city car, it's just not as compelling as with a gas platform and the adoption of EV's will benefit greatly with an affordable and desirable car like a cheaper Model 3. This will benefit Tesla.

People who think they know better than Elon Musk, generally don't.

While I generally agree with your points above, I think you may be underestimating the advantages of a smaller car in European and Asian cities. A lot of times it's not about aerodynamics or energy consumption; it's about convenience. When roads are narrow and parking spaces are restrictive, a smaller car is a much better daily driver. In a lot of cities I've been to, there are very few dedicated parking spots - cars often need to park right on the pavement. When space is such a premium, a smaller car is much needed to facilitate mass adoption.

There is still enough demand for the Model 3 right now for Tesla to keep producing this so-called compact car as the lowest cost option, but if Tesla really wants to replace gas cars completely, they need to produce a yet smaller car very soon. The Model 3 appeals to the population that favors performance and range, and to much of the world these are secondary priorities.

 

[Rashomon]

Why would you assume that Tesla plans to reduce prices of the Model 3 by using "slight tweaks or software limiters"? That makes no sense, Tesla is on a mission to reduce the cost of EV's in fundamental ways by making the cars easier to manufacture and with lower assembly costs and lower parts and raw materials costs. This requires optimizing the engineering of both the production lines and the car. The goal will be to have the same functionality, the same reliability and longevity, the same size, at a significantly lower cost, thus driving the adoption of EV's into ever larger market segments.

People over-estimate the savings available with a smaller model, making the car smaller on the outside and more cramped on the inside. Sure, raw materials can go down by 15% or so, but raw materials are a small fraction of the total cost to produce. You still have four wheels, and you still have to install, inflate and balance four tires and wheels. You still have four seats, carpeting, a brake and an accelerator, sun visors, door handles, air bags, parking brake, etc. etc. etc. Costs do not even come close to scaling with size. The Model 3 is at a sweet spot in so many ways even if a smaller car has some advantages in the middle of European cities. Making a small city car will happen, the question is whether now is the right time or not. The Model 3 is a greatly under-utilized asset of Tesla and it costs too much to build. Tesla is going to fix that, and it will dramatically expand the addressable market and the profits from Model 3.

Aerodynamically, it's difficult to beat the Model 3 by a lot as it already has a pretty small frontal area and the Cd of a smaller car will actually be considerably worse. People who understand aerodynamics get this (you have to multiply the frontal area by the Cd). The net effect is not a wash, but it's closer than you would think. So, to get the same range, you still need 90% of the battery. The battery of a city car will be more than 10% smaller, but mostly due to a shorter range and gains in efficiency from technological advancements, the gains in efficiency due to the smaller, lighter form factor of a city car over a re-vamped Model 3 will be relatively small. People over-estimate the actual efficiency gains from making an electric car smaller than the Model 3.

A revamped Model 3 will be lighter and just as aerodynamic as the current Model 3, without losing value by scaling it into an economy segment. The battery will be able to have fewer kWh because of that (and efficiency gains from motor/drivetrain optimizations). It can sell for a lot less than the current Model 3 and have better margins. That is simply not possible with a city car unless you start compromising on quality, longevity, efficiency,and, to some degree, safety. Tesla naturally doesn't want to go there until it's necessary to continue expanding market share.

I'm not saying Tesla will not announce a city car at the same time, but they need the Model 3 to be more compelling from a price perspective so the city car does not steal the show with lower margins. There is room for both, and the Model 3 is the ideal platform to be the next stage of increasing volumes worldwide. The reason for this has to do with the differences between gas and electric platforms. Gas cars have more compelling economic advantages when scaling smaller than electric cars do. I won't go into the physics and the exact economic reasons why, but the difference is significant enough that it will change the adoption rate of the different form factors to a slightly bigger car. There is still a plae for a small city car, it's just not as compelling as with a gas platform and the adoption of EV's will benefit greatly with an affordable and desirable car like a cheaper Model 3. This will benefit Tesla.

People who think they know better than Elon Musk, generally don't.

Americans who haven't spent a fair amount of time abroad don't understand how much smaller most vehicles are in the rest of the world compared to the ones we have here. In much of Europe, even a car the size of a 3/Y can be a pain on narrow streets and tight parking garages. A standard size vehicle is more on the order of a VW Golf, and an appreciable number are smaller A-class vehicles, Ford Fiestas or the like. A lot of people just don't want a big car, and by European/Taiwanese/Japanese/Chinese standards, a 3/Y is a big car. Achieving a low Cd is much harder on a small car, but overall aerodynamic resistance can be reduced by dropping A, frontal area, by making the car narrower and shorter -- overall drag is a product of CdA.

If Tesla wants to sell many more millions of cars worldwide, they need smaller, less expensive vehicles in their portfolio.

 

[chrsk]

Americans who haven't spent a fair amount of time abroad don't understand how much smaller most vehicles are in the rest of the world compared to the ones we have here. In much of Europe, even a car the size of a 3/Y can be a pain on narrow streets and tight parking garages. A standard size vehicle is more on the order of a VW Golf, and an appreciable number are smaller A-class vehicles, Ford Fiestas or the like. A lot of people just don't want a big car, and by European/Taiwanese/Japanese/Chinese standards, a 3/Y is a big car. Achieving a low Cd is much harder on a small car, but overall aerodynamic resistance can be reduced by dropping A, frontal area, by making the car narrower and shorter -- overall drag is a product of CdA.

If Tesla wants to sell many more millions of cars worldwide, they need smaller, less expensive vehicles in their portfolio.

Correct, they already have the cybertruck that won’t be allowed in Europe.

A smaller car is critical for them long term.

 

[thx1139]

I would understand this for model Y but I thought 3 was lagging a bit at the moment.

I see 328 Model 3 in inventory at Tesla United States Model 3 New inventory

158 Model Y

 

[Hiline]

Americans who haven't spent a fair amount of time abroad don't understand how much smaller most vehicles are in the rest of the world compared to the ones we have here. In much of Europe, even a car the size of a 3/Y can be a pain on narrow streets and tight parking garages. A standard size vehicle is more on the order of a VW Golf, and an appreciable number are smaller A-class vehicles, Ford Fiestas or the like. A lot of people just don't want a big car, and by European/Taiwanese/Japanese/Chinese standards, a 3/Y is a big car. Achieving a low Cd is much harder on a small car, but overall aerodynamic resistance can be reduced by dropping A, frontal area, by making the car narrower and shorter -- overall drag is a product of CdA.

If Tesla wants to sell many more millions of cars worldwide, they need smaller, less expensive vehicles in their portfolio.

Not to mention drag is a lesser concern in the rest of the world where travel distance is usually shorter and speed limit lower. The US car market is very non-representative of the global market.

 

[thx1139]

Correct, they already have the cybertruck that won’t be allowed in Europe.

A smaller car is critical for them long term.

I also think if the Model 3 was tweaked to be a hatchback it would have crazy sales. Honestly the only thing I wish for our Model 3. Dont say that is the Model Y. I dont like the SUV form factor in general.

 

[cliff harris]

People over-estimate the savings available with a smaller model, making the car smaller on the outside and more cramped on the inside.

I think the point being made is different. Here in the UK, small cars are a desirable thing because our roads are so narrow. We dont want a smaller car because we think that will save us money. We want a smaller car because a smaller car is WAY more practical than a bigger one.
I really think a lot of people in the US just do not realize how narrow UK and other European countries roads can be. We laid out all our cities in a time of horseback transport, and it shows.

I spent £73k on a fully loaded performance model Y. If there had been an option to shrink that same car by 10% in every direction, I'd have jumped at it. Even paid extra.

 

[jerry33]

People who think they know better than Elon Musk, generally don't.

Agreed. The Model 3 has one fatal flaw for me: No hatchback. The hatchback was one of the reasons I purchased a 2013 S. Hatchbacks are just so useful compared to trunks. The hatchback is likely the reason the Y outsells the 3.

 

[Ocelot]

For continued growth no doubt need a smaller car.
They hinted at one, coming out of China a while ago, then seemed to backtrack a bit likely due to battery constrained production.

I really hope, unlike the x, the 3, the cybertruck, the semi, which probably between them average 2 to 3 years late ( when supposed to be released vs when actually could buy one), that they just hold an event, and say available immediately.

 

[chrsk]

I also think if the Model 3 was tweaked to be a hatchback it would have crazy sales. Honestly the only thing I wish for our Model 3. Dont say that is the Model Y. I dont like the SUV form factor in general.

I love our Model X, but it would have been great to have a “VW Golf” size car as a car number two. We don’t need/want two big cars. It’s bad enough that the X won’t fit in our garage(from the 80s)

 

[wipster]

Starlink launch soon...

Thanks for posting this @oldTAVguy , made my morning! Just love watching those Stage 1 rockets land... and this was the 7th time for this one!

Another impossible thing made possible by the SpaceX team!

 

[AndrewZ]

Why would you assume that Tesla plans to reduce prices of the Model 3 by using "slight tweaks or software limiters"? That makes no sense, Tesla is on a mission to reduce the cost of EV's in fundamental ways by making the cars easier to manufacture and with lower assembly costs and lower parts and raw materials costs. This requires optimizing the engineering of both the production lines and the car. The goal will be to have the same functionality, the same reliability and longevity, the same size, at a significantly lower cost, thus driving the adoption of EV's into ever larger market segments.

People over-estimate the savings available with a smaller model, making the car smaller on the outside and more cramped on the inside. Sure, raw materials can go down by 15% or so, but raw materials are a small fraction of the total cost to produce. You still have four wheels, and you still have to install, inflate and balance four tires and wheels. You still have four seats, carpeting, a brake and an accelerator, sun visors, door handles, air bags, parking brake, etc. etc. etc. Costs do not even come close to scaling with size. The Model 3 is at a sweet spot in so many ways even if a smaller car has some advantages in the middle of European cities. Making a small city car will happen, the question is whether now is the right time or not. The Model 3 is a greatly under-utilized asset of Tesla and it costs too much to build. Tesla is going to fix that, and it will dramatically expand the addressable market and the profits from Model 3.

Aerodynamically, it's difficult to beat the Model 3 by a lot as it already has a pretty small frontal area and the Cd of a smaller car will actually be considerably worse. People who understand aerodynamics get this (you have to multiply the frontal area by the Cd). The net effect is not a wash, but it's closer than you would think. So, to get the same range, you still need 90% of the battery. The battery of a city car will be more than 10% smaller, but mostly due to a shorter range and gains in efficiency from technological advancements, the gains in efficiency due to the smaller, lighter form factor of a city car over a re-vamped Model 3 will be relatively small. People over-estimate the actual efficiency gains from making an electric car smaller than the Model 3.

A revamped Model 3 will be lighter and just as aerodynamic as the current Model 3, without losing value by scaling it into an economy segment. The battery will be able to have fewer kWh because of that (and efficiency gains from motor/drivetrain optimizations). It can sell for a lot less than the current Model 3 and have better margins. That is simply not possible with a city car unless you start compromising on quality, longevity, efficiency,and, to some degree, safety. Tesla naturally doesn't want to go there until it's necessary to continue expanding market share.

I'm not saying Tesla will not announce a city car at the same time, but they need the Model 3 to be more compelling from a price perspective so the city car does not steal the show with lower margins. There is room for both, and the Model 3 is the ideal platform to be the next stage of increasing volumes worldwide. The reason for this has to do with the differences between gas and electric platforms. Gas cars have more compelling economic advantages when scaling smaller than electric cars do. I won't go into the physics and the exact economic reasons why, but the difference is significant enough that it will change the adoption rate of the different form factors to a slightly bigger car. There is still a place for a small city car, it's just not as compelling as with a gas platform and the adoption of EV's will benefit greatly with an affordable and desirable car like a cheaper Model 3. This will benefit Tesla.

People who think they know better than Elon Musk, generally don't.

If the intent is to continue pumping out 3s and Ys to the tune of ~95% of 1.8-2m production this year and then 2.5-3m vehicles next year, I'm saying it risks creating downward pressure on values paid up to this point. And I think if you read between the lines in the Q4 call, you'll find the team dropped hints about that very risk and it could have further implications for the current new and used market.

How much that matters in the big picture, I don't know.