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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
This logic is faulty because it translates "most" into an unwarranted inference about probable product demand. "Averages" don't buy products. New car buyers at any price are above average income, on average, even entry level cars. Of course even my statement is true but irrelevant, For example take Honda Civic. Buyers are multi-modal for that vehicle. Very roughly ~25% are classic entry-level people stretching, another ~25% are financially secure but choose a modest car and another ~25% have that car for an additional car fro dependents to use and the remaining people fit another profile.
Frankly all vehicles are bought by people who fit some segment. In any evaluation of sales or increase/decrease of penetration it is inadvisable to describe anything in terms of averages because that will invariably produce bad pricing and positioning decisions. Q1 for Tesla was such a situation.
I don't want to be rude. I do think as Tesla investors we should be acutely aware of the factors that will most affect profitable demand. Reducing pricing will NOT be perforce a wise idea.
Just so you don’t bang your head too much, an investor’s forum is really not the place to find anecdotes representing most the population, nor any forum with predominantly Tesla owners.
Tesla dropping prices to fully absorb a production rate of 350k M3s a year basically says it all. At Tesla’s current production volumes, the market on the lower end of their demographics can barely afford the m3. EM says just that, and he has all the data.
Personally, I feel my purchase of the mx was a stretch, but I’m under no delusion that I represent the average American. Someone able to buy a Tesla means there’s nothing average about them.
However, climate change is hardly mitigated if only the top 10% swap out ICEs. It needs to be 50% or more. This requires Tesla to drive prices down so the average person can afford EVs. The mission is why EM will expand production to the limit every year instead of maximizing profits.
FSD is the wildcard that could mitigate climate change without selling as many EVs. Tesla is pushing hard for FSD because if autonomous FSD takes 7 years instead of 3, that’s 4 more years of CC that could have been reduced.
The point is that even the many people that are stretching are not anywhere near average Americans. Whether they do it for the mission, for love of cars, or rationalize one for the other is beyond me, but they are certainly on the higher end of the demographics.
For Tesla’s mission to succeed, it needs to be mainstream by continually increasing volume and decreasing prices.
Late 2016 and no. I’m aware that newer cars get even more stuff(including sentry mode that does more than scare people away), but I’m pretty happy with what I’ve gotten with this one.
In fairness, the $35,400 Model 3 is just a hair above the average new car price in the US. After federal tax credit, it’s below it.
To reach the average person, you just need a used car market for them. That’ll happen in a few years, but there’s not much Tesla can do to accelerate it. Few people that bought a car last month are looking to sell it now.
StealthP3D
Well-Known Member
You are making our case for us! People love to overspend on cars, particularly when they have the performance, driving dynamics and economy of a Model 3. Some people want the extra status of a Model S or even a Model X (not my cup of tea but, hey) so they will stretch their budget even farther. The good thing is Tesla buyers can get more than half the difference in price between a new gasoline powered car and a new Tesla back in the form of higher resale value when they sell it. And this effect will become more pronounced as the world moves to EV's because used gasoline cars will be even less desirable when they are viewed as being on their way out. Classic cars like older Mustangs and Corvettes will probably maintain their value somewhat but nobody who isn't "down on their luck" is going to want a used Honda Accord.
The one thing your comment makes clear is that people will often spend whatever takes for the car they really pine after, even if it stretches their finances. The good thing is the gas savings will help out there which is one more thing Tesla has going for them. People can justify this kind of "extravagance" with any number of reasonable excuses.
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OT Tl;dr; don't go to FL to see hopper
Either works for viewing, although I think Cocoa Beach is better. The causeway was packed when wife and I watched the Roadster FH launch. Tokyo King is super yummy.
The Florida Starship build is in Cocoa.
** Cocoa, not Cocoa Beach
(Everyone makes this mistake. I used to, too) Cocoa is also building Starships, although it's not sure yet what will be the future balance - either Boca Chica, Cocoa, or both.
Either works for viewing, although I think Cocoa Beach is better. The causeway was packed when wife and I watched the Roadster FH launch. Tokyo King is super yummy.
The Florida Starship build is in Cocoa.
StealthP3D
Well-Known Member
I don't think there's such a thing as the "average" American. And Tesla's market is not limited to America. Or to "average" Americans. The world is a big place and the unaddressed addressable market is HUGE.
I think you need to stop explaining to us how Tesla is going to have trouble selling more cars, more profitably.
Stars aligned
Member
This is spot on. People are willing to pay for performance and exclusivity. I bet they could sell thousands per quarter for 150k per copy with those features. A model 3 style interior would be a negative as lesser differentiation from the lower priced segment.
Sudre
Active Member
{weekend OT reply}
15% of Americans smoke. Talk about burning your money when you are poor. That habit is equal to a yearly grocery bill for some.
36% of Americans can't stop eating their fast food yet many live check to check.
86.4% of Americans (this one includes me) purchase alcohol. I guess we understand the instructions for getting piss out of the boot..... a complete waste of my money right?
15% of Americans are gamblers and that's not the upper 1%. They are usually the unhappy poor.
96%!!! of Americans own a cell phone. That includes the ones that don't get a paycheck at all. I cell phone is not a required life item. 82% of teenagers own an IPHONE! I guess mommy and daddy are all rich.
I am not condemning any of those people for making the choices they do to attain some sort of happiness out of life. I do think stretching the budget and cutting back on those things to purchase an EV is a far better things than blowing another $5K at the slot machine. Particularly since some of those people are spending at least $200 to $300 on gas a month which could be going towards that EV car payment. I believe this because most Tesla owners are still happy with their purchase unlike most smokers. drinkers. gamblers or cell phone owners.
And none of that has anything to do with Tesla and the price of the cars. THOSE Americans will always find something to throw their money away on. I have had friends borrowing money for rent then go out the next day and getting a $300 tattoo. I would argue it is a much better situation to spend that money on an EV payment than to spend it on other purchases of attempted happiness. You want to throw out numbers?
15% of Americans smoke. Talk about burning your money when you are poor. That habit is equal to a yearly grocery bill for some.
36% of Americans can't stop eating their fast food yet many live check to check.
86.4% of Americans (this one includes me) purchase alcohol. I guess we understand the instructions for getting piss out of the boot..... a complete waste of my money right?
15% of Americans are gamblers and that's not the upper 1%. They are usually the unhappy poor.
96%!!! of Americans own a cell phone. That includes the ones that don't get a paycheck at all. I cell phone is not a required life item. 82% of teenagers own an IPHONE! I guess mommy and daddy are all rich.
I am not condemning any of those people for making the choices they do to attain some sort of happiness out of life. I do think stretching the budget and cutting back on those things to purchase an EV is a far better things than blowing another $5K at the slot machine. Particularly since some of those people are spending at least $200 to $300 on gas a month which could be going towards that EV car payment. I believe this because most Tesla owners are still happy with their purchase unlike most smokers. drinkers. gamblers or cell phone owners.
Tesla has quite a few important milestones and announcements coming up in the next 6-8 months.
Milestones:
Traffic lights, stop signs and city driving autopilot rolled out to the fleet - 4Q19?
Model 3 GF3 first production - 4Q19?
Model 3 GF3 hits 3k per week - 2Q20?
Model Y pilot line - 2Q20?
Model Y hits 7k per week - 4Q20?
Timeline announcements:
Pickup pilot line - 1Q21?
2TWh battery cell production target date - 2026-28?
I haven't seen much discussion on when people are expecting Pickup to hit production, and exactly what year Elon's 2TWh battery manufacturing target will correspond to. Any thoughts?
Milestones:
Traffic lights, stop signs and city driving autopilot rolled out to the fleet - 4Q19?
Model 3 GF3 first production - 4Q19?
Model 3 GF3 hits 3k per week - 2Q20?
Model Y pilot line - 2Q20?
Model Y hits 7k per week - 4Q20?
Timeline announcements:
Pickup pilot line - 1Q21?
2TWh battery cell production target date - 2026-28?
I haven't seen much discussion on when people are expecting Pickup to hit production, and exactly what year Elon's 2TWh battery manufacturing target will correspond to. Any thoughts?
Mod: everyone seems to agree that anecdotes about affordability are off topic and irrelevant, so we can leave that discussion behind now, right? --ggr.
Bet TSLA
Active Member
Sorry, thought I was clear. Never loved driving. Never expected to. Got a Tesla and was hooked. Spent the money because I'm a gadget guy and found the concept of driving the future to be compelling. The idea that driving would become a pleasure was not even a possibility I considered.
Based on observed posts in this thread i have a suggestion for those of us who still believe in averages as useful tools.
Just review your own personal and household financial condition. Then review the national averages and see how you fit. Then think about how useful avrages might be as tools for analysis of marketing decisions.
Many moons ago I taught several marketing courses. In Marketing 101 I had my students do this exercise. In Market research (M101 was a required precedent as was Statistics 101) I had students design projects to evaluate what potential market segments might be. I was always surprised by how difficult that process was. People, regardless of background, invariably see the world in their own terms. That said, really understanding one's own behavior within a segment of like behaviors is enlightening and useful. To wit: In my own household we are seriously abnormal in most respects. Some years ago I was teaching a seminar devoted to "marketing to multi-cultural households". The thirty-odd participants were all. repeat ALL citizens of more than one country, including mine. These people all understood just how common the really rare people are, so the seminar became highly educational to all of us, who all came to understand that rare birds can be very numerous without even entering as factors in averages.
I keep harping on these issues because by definition Tesla owners are outliers in several respects. The very idea of buying an electric vehicle demonstrates that. There are major exceptions: residents of Norway, people who live in Atherton, California, people who have advanced degrees in electrical engineering and so on. Of course none of the people in those categories or others are reflective of any broader averages.
The mission of Tesla demands that eventually BEV and solar power will become mainstream and mass market. Until "eventually" happens Tesla owners and shareholders will continue to be abnormal. Abnormal people will do very well as TSLA shareholders precisely because they see the future more clearly than do average people.
StealthP3D
Well-Known Member
I'm not going to argue against your overall argument which I think is true and accurate but the statistic above is neither!
That is FAR from true worldwide and it's not even close to being true even if you only consider dumb American teenagers. A lot of kids choose Android phones over iPhones.
I expect the Pickup to start production about 18 months after the unveil. As for the 2TWh in battery capacity, nobody can tell when that's going to happen. I think this is just Elon 101: What sort of battery capacity would we need to make an impact? I expect him to lay out his strategy on how to get to this sort of capacity (including buying lithium mines if necessary) and talk about Maxwell technology, powertrains and a few other things.
RobStark
Well-Known Member
2 Seat Sports are fundamentally different from 4 door sedans.
Unique designs are fundamentally different from derivative designs.
911 and Bug are unique. Model S is derivative of Jaguar,Aston Martin, and Maserati. That is why it looked so good to us right away. It was comfortably familiar.
This forum is self selected for financially successful environmentalist or techi that did not and does not give a crap about luxury/sports ICEv. This forum is not very representative of the wider market for $40k plus vehicles or $80k plus vehicles.
Tesla is only self funding at the current pace of growth. If they really have a plan to get to terawatt hour cell production quickly they'll have to go back to market to fund it. Just buying the raw materials to produce at that scale would be multiple billions in working capital, the CapEx would also be enormous. That doesn't mean it's not worth doing, just that a cap raise should be expected. ARK expects Tesla to raise substantially more on their way to scale to accelerate growth.
If I'm allowed a flight of fancy, I think a great option would be to allow Tesla car owners to note their share ownership with the company, then if future capital raises are required they could push a purchase option through the cars and give the existing car owners an option to buy new shares at a discount.
That would circumvent wall street costs and send an incredibly powerful message to short sellers if they knew Tesla could raise capital directly from their customers.
Now that there are hundreds of thousands and soon to be millions of cars out there, the potential investment pool would be growing quickly.
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I don't agree. A quick search find many cars similar to the bug in the 40s
cars 1940s at DuckDuckGo
And a similar search from the 50s find many sharing similarites with the 911:
sports cars 1950s at DuckDuckGo
...perhaps especially the 1952 Allied Swallow? More that 10 years ahead of the 911:
https://i.pinimg.com/originals/d2/c0/b0/d2c0b0cc2f8eea8fa4fdd1083c61c6b2.jpg
I belive they got their icon status from sticking to their design since it worked so well. And did not get worse when the rest of the pack moved on.
I was about to ad my anecdote about cars until I saw ggr's admonition to stop it.
As usual the preternaturally wise jbcarioca captures above a useful summary of what is the essence of our individual fascinations. Let me discuss my evolution on the issue of energy.
As someone teaching about public policy, especially with international implications, my focus on energy started with the energy "crises" of the seventies. (I had previously worked for one year in Washington with the old US Atomic Energy Commission courtesy of a public administration fellowship which was more useful as a tutorial in bureaucracy than energy policy.) The next kick-up in interest about energy came later in the seventies when Ilya Prigogine was awarded the Nobel Prize in chemistry for inventing the mathematics to explain life. (Not explained in detail, but generally. If you want detailed knowledge it is 42.) My immediate reaction was horror! Here was proof Lenin's (and others') theory of imperialism is inevitable. Not only do we have to extract oil from others, but we dump waste products on weaker countries as demanded by the second law of thermodynamics. Deeper knowledge of Prigogine revealed his more subtle notion that evolutionary change in the ways we use energy can spring the entropy trap. Now it is abundantly clear we have a problem not on the supply of fossil fuels but their use.
I began investing in Tesla in 2010 based on the reported range of the Roadster's battery. A clear game changer.
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