It happened again. I got sucked back into a debate with Tesla curmudgeons. Today's
rant follows...
Your post is full of misinformation.
"
Yes they have a 35,000 vehicle but this has too problems. First it is a striped down model and does not have the features that people like."
* The $35,000 Tesla Model 3 is not "stripped down." Of course people always want more features - you get what you pay for.
Here's what you get for $35,000 Model 3:
- 220 miles of range for $100,000 less than the 201 mile range Porsche Taycan
- 0-60 in 5.6 seconds
- 5 star safety rating
- access to the Tesla Supercharger network
- free over the air software and firmware updates
- 8 year/100,000 mile warranty on the battery and drive unit.
- same quality interior as long-range Model 3. It's basically just software limited.
"
Up till now you could not buy one"
* The $35,000 Tesla Model 3 has been available for almost a year:
$35,000 Tesla Model 3 Available Now
"I know two people that have deposits on vehicles in the $40,000 ~ $45,000 range. one for 7 months Neither has received a VIN yet."
* This is extremely unusual and hard to believe. Wait times for all Tesla models in the US are typically 7-8 weeks. Wait times have increased to 10 weeks recently due to high demand. Someone who has waited over seven months has a problem with their order and should call customer service and have their case elevated to a supervisor.
"
Tesla has had made a profit recently and had a positive cash flow on a NON GAAP basis. All that really counts is what happens when GAAP rules are followed. The fact that they have yet to show and positive cash flow or profits so far and have accumulated 13.34 B of long term debt will be a real problem as some of the gloss wears off and they are judged like other companies"
*Tesla reported a GAAP profit in Q3 2019.
https://ir.tesla.com/static-files/47313d21-3cac-4f69-9497-d161bce15da4
"$143M GAAP net income; $342M non-GAAP net income ex-SBC" Tesla will report a Q4 2019 profit tomorrow. There is no doubt about it.
For many reasons which I have previously enumerated, Tesla will show a full year profit in 2020. All analysts polled by Yahoo finance (27/27) forecast Tesla to have net positive earnings of $2.9B for 2020. If you expect Tesla to post a loss for 2020, I'd like to know what your assumptions are.
Please do not fall into the bear trap of thinking "Tesla loses money on every car they make." Their automotive gross margins are over %20 and improving. They have scaled exponentially for years and that is capitol intensive.
Tesla will have no problem servicing their debt going forward with projected strong free cash flow and profitability. Moreover, almost $4B of their debt is convertible to stock at above ~ $400/share in 2021-2022. That's looking good right about now, and would be a small dilution of the stock.
Tesla is not being judged for its ample shine and pizzazz by the market, but by its clear and sustained technology leadership in EV and EV software and #1 share of the global EV market. Unlike your perception, the big OEMs have left the EV market
wide open for Tesla. Tesla is also moving towards generating high-margin revenue through optional software upgrades. Let me give you just one example.. Last December, Tesla offered an over-the-air software update to certain types of Model 3s that would cut the zero-60 time by 0.5 seconds for $2000. Many people immediately jumped at this offer. It may not sound like much, but to 'gear-heads' this is an incredible deal. People often invest a lot of time and maybe $5-6,000 in hardware to achieve the same level of performance boost in an ICE vehicle. Tesla can easily generate tens of millions of dollars at very high margins through this kind of software offering. But much bigger multiples are anticipated if/when Tesla achieves full self driving. Tesla will very likely release some level of FSD within weeks. What would that be worth to the average driver? Instead of stressing out during your daily rush-hour drives, you can sip a coffee while binge-watching Netflix streamed to the 17" screen in your car. Or send your car to pick up your kids from soccer practice. Or tell your car to go make money as a Taxi while you work. This is not decades away, it could be a few years away or even less. Tesla is inching up the cost of FSD as it comes closer to market. It's now a flat $7,000 option I think, but every vehicle has the hardware capability. Tesla could offer a FSD subscription service, letsw say for $100/month? It sounds more than fair - A million subscribers nets $1B per year. Tesla intends to deploy their own robo-taxi network, with full operating costs of just 18 cents per mile. This undercuts all other taxi/ride sharing, etc. companies. Uber ($67B market cap) and Lyft ($17B market cap) could be wiped out. and their revenue gobbled up by Tesla.
Tesla outlines plan for ‘Robotaxi’ ride-sharing service Tesla is also a leading energy storage provider -business is booming. Expect Tesla energy and Tesla solar to scale exponentially and add to the bottom line in the coming years. You may not agree with the above points, but you should at least recognize that there is more to Tesla's high valuation than "hype"
I know I broke my own request to settle down on the EV-Tesla-Windmill-Mild hybrid etc debate! I got sucked back in.
I promise I'll try to stoooop
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"I think you’re way off the mark in “mass appeal”. Tesla is a highly attractive brand and is outselling all other EV models. "
""
attractive" to whom?
The two Tesla garage in front of me where Dad appears to commute in his Lexus LX 450?"
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I know you love anecdotal evidence like this. But I fear your disdain for Tesla and Elon Musk is clouding your judgement on how Tesla is viewed by consumers.
Tesla was named "Most Loved Brand" of automobiles by Autotrader based on feedback by 60,000 car owners
Most Loved Brand 2019 – Tesla
Based on a Bloomberg survey, almost 99% of Tesla owners would recommend Tesla to new owners:
Nearly 99% of Model 3 Owners Recommend Tesla to New Customers, says Bloomberg Study
According to Consumer Reports, Tesla owners are more satisfied than any other car brand:
https://www.*.com/tesla-tops-consumer-reports-owner-satisfaction-list-2019-2
Consumers Love Tesla. It's not for everyone - obviously - but no brand is.
Cheers,
