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

[T3slaOwner]

And destroy their core ICE business? Nope. Not happening "very shortly". Not even shortly. Aside from killing their own business, there is no battery capacity for that.

They aren't watch makers. They can see that ICE is on the way out. Do you not understand that Tesla has awakened a sleeping giant?

It's not like the car makers don't know this. That is part of why they aren't coming out with more models right now. GM is working with a supplier in Korea as they have been for years. It's not like they've never seen an EV before.

 

[T3slaOwner]

Yah. The only vehicle that's going to give the Model 3 a run for its money will be the Model Y. Or a new improved Model 3. The fact that others still can't catch up to what Tesla has had for many years really speaks volumes. Tesla has a technology lead of many years according to some analysts, are people expecting Tesla do just stop innovating and wait for others to leapfrog them?

Please tell me what the model 3 has that no one else can touch? What will make my friends who think my experience with Tesla is a bad one (having to drive to another city for service for example) makes the other choices so bad?

 

[KarenRei]

You mean the company that has the highest executive turnover anyone has seen?

As to your hyperbole, I don't know of any automaker who has talked of crushing Tesla up until now.

Don't feel bad - there's entire cultures of people who also live in caves.

 

[T3slaOwner]

You’re ridiculous too.

You are right. I should have said struggling and not even able to break even.

 

[Zero CO2]

You mean the company that has the highest executive turnover anyone has seen?

The facts are that while there can be new pardigms in the market, the big players always adjust. Literally this is a market where small competitors just don't have the muscle to continue to compete year after year.

As to your hyperbole, I don't know of any automaker who has talked of crushing Tesla up until now. What I am talking about is the future. The Big Iron companies are not incentivized to toss everything they are making, but in the face of the facts they will do so. They had to recreate themselves when the Japanese showed them how to build quality cars. They are already on the road to that now with EVs. 2022 they will have models out, by 2025 they will be swamping the market with them.

BTW, dieselgate was one company... not the industry. Meanwhile Musk has been in trouble with the SEC and again with labor laws. See, he is learning from the rest of the industry! Very well it seems. Maybe the student has surpassed the teachers in this regard. He still won't be selling tens of millions of Teslas by 2025... unless... maybe he can tender an offer to buy GM? I'm sure he can get "funding secured".

You clearly do not understand the "Innovators Dilemma" which all ICE manufacturers are dealing with right now ... most wont survive in the long run... Telsa will eventually have competition ... but not likely to be Ford, GM, VW , they are likely to be replaced by Chinese vehicle manufacturers coupled with Software companies...this is a serious disruption to the ICE business model that most folks on this thread understand...
Some might think a US recession will hurt Tesla... i think it is the opposite as in 2008/09 the US Auto (ICE manufacturers) were crushed... ICE sales will drop off a cliff and they will not be ready for prime time with EVs... consumers will be looking for cheaper TCO and some ICE manufacturers are likely to go bankrupt ... Telsa will have the right vehicle mix at the right price points... and if the Tesla pick up is a compelling vehicle ....look out for the the falling knives

 

[EVNow]

Sure, except they'll be starting with lower costs having taken on all the hard lessons of the M3 ramp, so better margins from the go - plus the MY has a similar cost to make, but is $5k higher purchase price.

All true.

But my main point is
- Tesla produces higher margin, high ASP trims first
- Then come the lower ASP, lower margin trims

So,
- We have blockbuster quarters at first
- Then come the down quarters

With Y it may not be as bad as the shift from Q4 '18 to Q1 '19 - but we'll get this see-saw. Tesla needs to manage the expectations.

There are some ways to address this
- Make all trims from beginning. I doubt Tesla will do that.
- Y high ASP, high margin cars are sold in seasonally bad quarters (Q1, Q2 '21 ?). This may happen if Y ramp up is slow.

 

[M3Rider]

That's not really fair. 27 million Soviets also died so YOU wouldn't be speaking German right now.

The claim was that no help was needed. I'm in no way negating the sacrifices, though many of them were unnecessary and caused by the same kind of leadership that is in place right now. It's just funny to see how trolls believe the propaganda they try to feed to others.

 

[KarenRei]

They aren't watch makers. They can see that ICE is on the way out. Do you not understand that Tesla has awakened a sleeping giant?

If by "sleeping" you mean "spending billions of dollars and getting their rear-ends handed to them by Tesla", absolutely.

Nissan, for example, spent $5,6 billion dollars on the Leaf... by 2011 alone. And its sales are a joke compared to the Model 3. Because its stats are a joke compared to it.

To you, "5,6 billion dollars by 2011 alone" is "not even trying". Well for crying out loud, if that's "not even trying" money, where on Earth are they supposed to find the sort of money that would count as actually trying?

 

[Prunesquallor]

So excuse my ignorance here, but with a Powerwall (or 2), could you load up enough at night with wind rates to power the home during the time you're awake to basically pay nothing for your power? And that's without solar panels or solar roof, correct? With the amount of miles you drive you'd only need the power to change the EV once or twice a week right?

Just curious...

In theory, I suppose so. During the summer, we can easily use 40 kWhr during the day. That’s 3 or 4 PowerWalls. (I remember looking into it for several days of backup power in case of hurricanes - just not practical). So, long payback time and subject to the whims of a particular power plan.

 

[Unpilot]

Here is a small sample of "Tesla Killer" articles...if you have a strong Stomach.

Will Tesla Be A Zero This Month? - Tesla, Inc. (NASDAQ:TSLA) | Seeking Alpha

Here Are The First 7 Out Of Audi's 12 Electric Cars - AUDI AG (OTCMKTS:AUDVF) | Seeking Alpha

Ok only Two...but T3sla...I mean Anton W has a ton more if you need a laugh

 

[EVMeister]

Just watching the latest video from Gali on Q3 2019 Deliveries. I love this quote, it's so true: "Companies don't miss estimates, analysts miss reality".

 

[Duffer]

That "games"? The auto makers give the people what they want same as every other manufacturer (by that I mean what sells). What you call "games" is how the dealers get people to buy cars. That won't change either since it sells cars too.

People have always had choices. In the 70s they chose Japanese cars because of their reliability even though they were not the lowest price. The fallout improved quality in every car made anywhere since with the exception perhaps of the Yugo. Tesla will have an impact on what EVs are made and how well they work, but the Big Iron automakers will show them a thing or two when it comes to giving the public what they want.

I drove a model S loaner the other day and realized it was still a great car even without the performance package or even the dual motors. 90% of the stuff people rave about with Teslas aren't going to be in most of the EVs ultimately sold. Why dual motors? Why the uber-fancy console?

All people want is a car that doesn't look like a reject from a SiFi movie from the 50s, enough range to drive 4 hours on the highway and enough power to get on the highway with three passengers. I'm pretty sure that's what GM, Ford Toyota and others will figure out how to do. The truly successful EV makers will be the ones that sell an EV Corolla at the same price as a gas Corolla. In the meantime, now that Tesla has shown them a $35,000 EV can be built, everyone will be doing it very shortly. After that the huge financial resources will allow Big Iron to out innovate Tesla. Without more venture capital how much can Tesla really continue to do? They are struggling to even break even.

Serious question(s)
For augments sake lets say what you just wrote is completely true.

1. How do the Big Iron OEMs keep themselves profitable while their new BEV vehicles gut their ICE sedan sales? Presuming of course that there will be costs for R&D, production line changes, and battery purchases.

2. How do they get the dealerships to give up the very lucrative ICE maintenance cash cow? That, if I am not mistaken, Big Iron OEMs are contractually obligated to have with the dealerships.

 

[brian45011]

Probably not in Tesla's case with GF3. (maybe?)
But, land can be depreciated if there are natural resources (ie. for farming, mining, sand, gravel, oil, etc.) that get depleted from it. Then the depletion method for depreciation is used.

Farming?? You are confusing a depletion deduction with depreciation-- entirely different--semantics maybe but once the valuable resource stops being extracted so does the depletion allowance. A depreciable asset can be reduced to its cost basis. Ever sell timber?

 

[Beltsbear]

I fully expect Model 3 sales to drop with the Model Y rampup (unless there's some sort of major market expansion at the same time, such as moving into a country like India or new tax credits in the US). But I simultaneously fully expect total volume to continue to climb. And Model Y to yield higher margins than Model 3 to boot.

Initially the margin will be premium cars as well. So maybe much higher margins.

 

[Prunesquallor]

You mean the company that has the highest executive turnover anyone has seen?

The facts are that while there can be new pardigms in the market, the big players always adjust. Literally this is a market where small competitors just don't have the muscle to continue to compete year after year.

As to your hyperbole, I don't know of any automaker who has talked of crushing Tesla up until now. What I am talking about is the future. The Big Iron companies are not incentivized to toss everything they are making, but in the face of the facts they will do so. They had to recreate themselves when the Japanese showed them how to build quality cars. They are already on the road to that now with EVs. 2022 they will have models out, by 2025 they will be swamping the market with them.

BTW, dieselgate was one company... not the industry. Meanwhile Musk has been in trouble with the SEC and again with labor laws. See, he is learning from the rest of the industry! Very well it seems. Maybe the student has surpassed the teachers in this regard. He still won't be selling tens of millions of Teslas by 2025... unless... maybe he can tender an offer to buy GM? I'm sure he can get "funding secured".

Seriously, do you guys get paid by the word? Do you get docked by “disagrees?” Does ANY kind of rating/reply give you an extra kopek? Is ignoring you the best way to deny you income? I’d really like to understand.

 

[EVNow]

consumers will be looking for cheaper TCO and some ICE manufacturers are likely to go bankrupt

But you forgot the next step. The auto companies will be rescued. VW, Toyota, Honda etc are not going to close down. Governments can't afford for those companies to fail.

 

[Artful Dodger]

The capital cost of every robot and piece of equipment now installed in GF3 has been this quarter and some small add'l portion during Q4.

I don't think so. Captial expense is amortized over the expected life of the production equipment purchased, typically 3-5 years for robots. Perhaps you're thinking of the effect on cash or debt?

Tesla's huge advantage with GF3/Shanghai is that the building and infrastructure which supports the factory is being build with local non-recourse debt (at super-low interest rates to boot). Because the facility itself is the collateral for these loans, the debt doesn't appear on Tesla's balance sheet.

Wanna bet Tesla builds 1 giga-phase per year in China while these terms are available?

 

[kyzhk]

They aren't watch makers. They can see that ICE is on the way out. Do you not understand that Tesla has awakened a sleeping giant?

It's not like the car makers don't know this. That is part of why they aren't coming out with more models right now. GM is working with a supplier in Korea as they have been for years. It's not like they've never seen an EV before.

Netflix: exists
Blockbuster: Do you not understand that you are waking me up, a sleeping giant?
Netflix: Okay.
And then, there's no "and then".

Amazon: exists
Lots of B&M only retailers: Do you not understand that you are waking us up, a lot of sleeping giants?
Amazon: Okay
And then, there's no "and then".

It should be noted that it's even more difficult for existing ICE car maker. EV is a different ball game -

1) Their expertise in ICE based power train do not apply.
2) A lot of their existing employee's expertise do not apply.
3) There are internal friction from all levels inside the company resisting change due to 1) and 2).
4) Their investments in ICE only infra needs to be sold off for a loss before they can be fully depreciated / written off.
5) C-levels need to convince shareholders in writing off their ICE assets, and making a transition to going full EV, while at the same time managing resistance from inside the company.
6) EV and ICE line up from the same company invites cannibalization. Makes too good of an EV? You kill your ICE business too fast before your EV line up can replace the existing ICE lineup in revenue and profit. Half ass effort of an EV? Why would consumer choose an inferior product to Teslas?
7) Most ICE car makers do not have the ability to vertically integrate as much like Tesla. Tesla has a serious cost advantage here.

Their best hope for survival is, believe or not, just pulling the money out, form a new company and start from scratch.

 

[Duffer]

But you forgot the next step. The auto companies will be rescued. VW, Toyota, Honda etc are not going to close down. Governments can't afford for those companies to fail.

Unfortunately you are correct. Governments aka politicians won't let their campaign contributions disappear when they have taxpayer's money available.

 

[wipster]

In theory, I suppose so. During the summer, we can easily use 40 kWhr during the day. That’s 3 or 4 PowerWalls. (I remember looking into it for several days of backup power in case of hurricanes - just not practical). So, long payback time and subject to the whims of a particular power plan.

Thanks for the info my friend... payback would definitely take a while. Kinda opposite here, I use a lot more power in winter than summer. Keep on charging on the cheap!