firstly, fan of your posts. Got to disagree with this one though. Tesla has been manufacturing vehicles for a decade now...and fit and finish lags behind ...still. That will not change in a few years. Improve, yes..,best? , I highly doubt it...although would like to be wrong.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
firstly, fan of your posts. Got to disagree with this one though. Tesla has been manufacturing vehicles for a decade now...and fit and finish lags behind ...still. That will not change in a few years. Improve, yes..,best? , I highly doubt it...although would like to be wrong.
RobStark
Well-Known Member
Mike Smith
Active Member
At 36:20:
"Without a question of a doubt Tesla is the best energy company, new energy company on the planet. And they will dominate, I'm sure of it."
-Sandy Munro
Tesla has been mass manufacturing for 3 years. Pretty ridiculous to include the entirety of Tesla's existence as a barometer of Tesla's manufacturing capability/potential
RobStark
Well-Known Member
It is also possible that other automakers think the price and stipulations Tesla puts on that offer are too high.
We don't know the specifics.
Tesla's offer of "all our patents are belong to you " did not look like a give away once you read the fine print.
Indeed, any expressed concern about share dilution following a possible Tesla subsequent offering is a red herring. Any money raised would belong to all shareholders. Admittedly each current shareholder would own a smaller percentage slice of the pie, but the pie would be bigger. If the new money were just placed into a fixed income certificate, it would essentially be a wash. But if the money is soundly invested in company growth, the pie could swell to become hugely larger with ever widening slices.
Curt, I love your posts, but I believe this premise is incorrect and I have seen similar posts from you on the topic for years. Here’s a simple example of what you describe.
If I own 10% of a company with 100 shares priced at $1,000/share (I own ten shares valued at $10,000 total, company market cap is $100k) and the company expects to grow at 7% per year for 10 years, then in ten years, the market cap will be $200k and I will have ten shares worth $20,000 total.
If the company issues 20 new shares at $1,000/share but only expects a 2% return on a fixed income investment as you suggest, then I now only own 8.3% of the company. Because the additional capital didn’t impact the company’s original growth, in ten years that portion is still valued at $200k plus the returns on $20k at 2% for ten years. This ends up at $224k and change. With 120 shares outstanding, each share is $187 and my position ends up being $18,700 total. Yes, the pie is bigger, but my share is disproportionately smaller.
This is the premise you present as being a wash, and the disparity grows even more when the rates of return are spread further apart.
The only way a capital raise doesn’t negatively impact shareholders is if the return on that capital matches or exceeds the expected growth without it. It must allow the company to grow more quickly or to grow for a longer period of time (in some cases, this means surviving). If these conditions are not met, it’s not simply a wash.
This is a generic example, and of course raising capital is often beneficial. If Tesla’s management team thinks Tesla can achieve greater returns with additional capital, absolutely they should go for it.
RobStark
Well-Known Member
Elon knows what Tesla's battery cell situation is post Sept 22 Battery Day.
Terawatts? We don't know.
Herbert Diess was initially banished from VW inner circle for his pro EV views.
Post Dieselgate the Piech/Porsche families knew exactly Diess's views were regarding the future of BEVs vs ICEv.
The contexts i consider Tesla to be a leader in are;-
- Innovation
- Efficiency
- Continual improvement
Ultimately these mean a better product is built for a lower price, in less time, using less wastage.
Then they get the panel gaps right...
Plenty of cars especially for new models have panel gaps... if they don't those cars have a more conservative and rigorous build process that bakes in more consistent quality for a higher price.... Perfection always costs money..
In terms of mass manufacturing Tesla starting in 2017 with the Model 3, yes they have been on a big learning curve 2008-2020, but they are getting there.
Casting should lead to higher build quality IMO the larger cast piece is identical every time, that should be a good base to build on as less variability right from the start.
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firstly I take issue with your tone. It is “ridiculous”.
Secondly the model s was introduced in 2012. I followed it closely. I never owned a s but in those days you could read every post on the forum at the end of the day.
My apologies for rounding up to ten years from 8. Care to explain where you get 3 years from?
and the point is do you think Tesla will have better fit and finish than Mercedes or Porsche in the next few years?
While that is true an offsetting factor is how fast the company is growing.... Tesla is poised to grow very fast... it is also poised to probably generate all of the cash it needs to fund that growth..
But IMO the mission will be largely over in 5-7 years, Peak Opportunity is now, so if management is 50/50 on needing capital and a large chunk of capital can be raised for a good price now, that is worth considering.... especially if it maximises the opportunity to take the opportunity while it is there..
We will know the answer after Battery Day, but for example Tesla building another 5 new factories in the next 5 years would not surprise me at all, the only caveat being some are mostly battery factories with minimal vehicle assembly.
Tesla getting into mining and processing would not be a total surprise. However long term contracts with some money up front, or even a equity stake are other ways of achieving that. What new mining and processing mostly requires are long time supply contracts and finance..
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Wow, that is an incredibly accurate assessment I would say, colour me impressed!
And while I'm here, I also strongly recommend Starship Troopers - a great film, super-funny, ironic, huge insects, lots of shooting and gore, plus Denise Richards in her prime. But yeah, don't take it too seriously, it's pure satire.
The mining equipment comment doesn't surprise me. Elon appears to always tackle the hardest problems head on and he's clearly highlighted that nickel supply is considered a problem.
It would also have applications for the ultimate objective of colonising mars.
I agree with some of what you said. However I disagree that at minimum 65 vehicles produced per day is not mass manufacturing. When you exclude weekends and holidays and plant shutdowns.,,probably close to 100 per day in 2016. And as mentioned started production mid 2012.
Sunlight
Member
Despite reading this forum regularly, I may have missed this discussion.
When Sandy Munro was asking for 'interesting' cars to tear down (he ended up speculating about the Cybertruck), I was shouting for him to tear down a Chinese Model 3 to see if and how it is different to the his earlier Model 3 from Fremont. Especially the paint quality which seems to be a perpetual Tesla/Fremont issue.
For all I know, the MIC 3 may have the same cast aluminium rear end as the Y and so on......It seems that Fremont has inherent limitations on improving quality which I do not believe are applicable in China and certainly won't be in Berlin (and Texas?)
The quality out of Berlin may easily be on par with the other German manufacturers in under 2 years.
We'll wait and see and speculate in the meantime!
Some people are trying to argue pre-Model 3 doesn't count, because it wasn't 'mass' manufacturing.
Regardless, I don't think you can point at the first few thousand Model Ys having some fit and finish issues, and then say that Tesla can't be the best at manufacturing. If I'm not mistaken, plenty models have minor issues like this when they're first launched. If the one hundred thousandth Model Y rolls of the line in January 2021 and still has these kinds of issues, then your will point will be valid, but I think the Bloomberg survey showed that Tesla is quick to iron out issues like this.
Elon's been talking about mastering manufacturing for a few years now, and I think Shanghai is the first proof that it's bearing fruits. Berlin, Texas, and beyond will likely be next level, and likely blow traditional OEMs out of the water.
Last but not least, there are multiple ways to measure a company's skill at manufacturing, product quality is just one. Speed of building out capacity, capital efficiency, and cost efficiency are others. Model Y's been fantastic on these 3 other metrics. Even if these relatively minor fit and finish issues were to last (which I highly doubt), if those come along with unprecedented speed of production ramp, capital efficiency, and cost efficiency, then that may be a very worthwhile trade-off.
What are the odds that we see a Kolodny hit-piece on CNBS, but no mention of S&P credit upgrade...
Looks like a bit of protectionism ongoing in South Korea: South Korea launches safety probe into Tesla vehicles By Reuters
SEOUL (Reuters) - South Korea said it is investigating suspected safety issues with vehicles made by U.S. automaker Tesla Inc (O:TSLA), which is competing strongly with Hyundai Motor Co (KS:005380) in the South Korean electric vehicle market.
Looks like a bit of protectionism ongoing in South Korea: South Korea launches safety probe into Tesla vehicles By Reuters
SEOUL (Reuters) - South Korea said it is investigating suspected safety issues with vehicles made by U.S. automaker Tesla Inc (O:TSLA), which is competing strongly with Hyundai Motor Co (KS:005380) in the South Korean electric vehicle market.
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