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

[Singuy]

With this move I think Tesla is also going on the offense when factoring all the chatter of a “Tesla Killer” coming in 2019, 2020 or 2021. What will the consumer think when staring at a $45k price tag on an Audi vs. 37k Model 3?

Tesla is now attacking any “Tesla killer” chatter before anyone of them hits the market. There’s a term for this when dealing with livestock—it’s DOA, or “Dead On Arroval.”

Look no further than the Volt.

At the current pricing of the Model 3, the Bolt is on life support. The downward spiral begins. They keep losing money on the Bolt because they can't scale production up enough to utilize economy of scale due to poor sale figures, which will continue to make this car a money loser.

This goes for any new upcoming EVs. Tesla's advantage cannot be understated.

 

[mongo]

My WAG is that the battery packs contain the same number of cells, but the 220 mile version has cells that aren’t 100% to spec. There are manufacturing variances and during the cell testing process, they find cells that are lower spec. Tesla already does this for motors.

MR is an underpopulated LR. No reason SR can't be an underpopulated SR+.

 

[Antares Nebula]

The EV Future Just Got Closer
Loup Ventures

"This afternoon, Tesla announced that the long-promised $35k configuration of the Model 3 is available for order immediately. This is perhaps the most significant event for the US EV market since the announcement of the Model 3 in 2016. The mass adoption of EVs that has become a foregone conclusion would not occur without lower-cost vehicles, and the Model 3 base model sets a new precedent in the industry for quality and price. Shares are down based on the company guiding for a loss in Q1, but that near-term negative is immaterial compared to the long-term positive that was announced this evening.

To emphasize the significance of this announcement, it’s worth pointing out that this is the first time an electric vehicle is less expensive than its gasoline-powered counterparts. Before the tax credit and cost savings, the Model 3 is now cheaper than the Audi A4 ($37,500), the Mercedes C Class ($41,000), and the BMW 3 Series ($40,000)."

 

[EVNow]

Prediction : German automakers for the most part will only try to compete against S&X. With lower volumes, they may be able to do so with small losses. But they will have no answer to 3 for many years to come. Same for Y.

But the problem for the luxury car makers is that their ICE sales will fall as people shift to 3, as is already happening. So, then what will they do ?

 

[MartinAustin]

Very good question.

My guess is the 220 and 240 are both SR battery packs.

Yep. And eventually they will reveal that SR owners can upgrade their cars for $2,000 or whatever. Those owners will be hooked by then

 

[neroden]

I don't think the 35k$ option is being sold for a profit so I see the negative angle on this

I'm quite sure it is being sold for a marginal profit. I believe the "new pack line" is up and running, which was stated to be needed to sell the $35k model at a profit. I don't think the gross profit margin on the base model is anywhere near the 25% targeted at this point, though. If you have lower fixed costs (fewer salespeople) you can afford lower profit margins... though they're still not desirable.

 

[Singuy]

Apples to oranges: first tweet said 500k total vehicles: S+X+3.

CC guidance said 350k-500k Model 3's only, and if we combine that with 70k-100k S+X we get a guided range of 420k-600k for total vehicles. (With some fuzz for deliveries vs. production)

The middle of that range is 510k, so Elon's first tweet was in fact a bit lower than the middle point of the Cc-call guided range.

I think the beef is, Elon said 350-500k out of left field since the delivery guide is much much less. No one is expecting 400k of total deliveries but 500k production of the Model 3 and possible 600k production of all cars. . So based on the fact that Elon just say random things, tweet 1 is accurate because he also said the random thing in a prior call. Both random things may not be accurate and probably doesn't reflect actual guidance.

 

[neroden]

Interior Comparison

View attachment 381596

Huh. My tastes are cheap, I'd get "partial premium interior" (for the fog lights and the seats responding to driver profiles).

 

[Remus]

The EV Future Just Got Closer
Loup Ventures

"This afternoon, Tesla announced that the long-promised $35k configuration of the Model 3 is available for order immediately. This is perhaps the most significant event for the US EV market since the announcement of the Model 3 in 2016. The mass adoption of EVs that has become a foregone conclusion would not occur without lower-cost vehicles, and the Model 3 base model sets a new precedent in the industry for quality and price. Shares are down based on the company guiding for a loss in Q1, but that near-term negative is immaterial compared to the long-term positive that was announced this evening.

To emphasize the significance of this announcement, it’s worth pointing out that this is the first time an electric vehicle is less expensive than its gasoline-powered counterparts. Before the tax credit and cost savings, the Model 3 is now cheaper than the Audi A4 ($37,500), the Mercedes C Class ($41,000), and the BMW 3 Series ($40,000)."

"near-term negative is immaterial compared to the long-term positive that was announced this evening."

Well said. But I still expect buying opportunities near 300

 

[MarcusMaximus]

The rest of the auto industry is still stuck in the early 20th century with internal combustion engines and franchised dealerships with brick-and-mortar stores. As at first booksellers learned about Amazon.com, and then other retailers learned, the auto world is similarly being turned upside down by Tesla.

Consumers today have learned to appreciate the convenience of online shopping. Modern auto buyers know how to research online before buying. Some may first want to drive a friend’s Tesla, but that is not really necessary after doing research and then buying a car with a 7-day return policy. The old school franchised dealership model cannot deal with this. But the states are forcing the established automakers to keep their dealers. Tesla is now end-running them on this. With their dealership burden and dependence on internal combustion engines for what had been sure profits, most of those automakers may soon go the way of buggy whip makers.

Those with contrary vested or click-baiting interests may howl FUD about what Tesla did today. But I expect today’s new policies will insure Tesla’s continued dominance in the EV field, which may soon be the only automobile field.

Something interesting here: the auto dealers may have done themselves a disservice by blocking Tesla in some states. Because of that, Tesla figured out they could sell cars just fine without even having a store, and get around franchise laws. There’s nothing at all stopping any other manufacturer from doing the same.

 

[neroden]

- they're closing most of their stores, moving to an "online-only" model.
- no test drive needed -- you can return any Tesla within 7 days /1000 miles for a full refund.
- all vehicle prices lowered by about 6%
- moving to a "we come to you" instead of "you come to us" model of service.

I think they still haven't quite understood how often service requiring lifts happens. I've had it happen once a year so far. They do need local service centers (local..ish, as in, you can get there, have a hour's service, and get back in one day, without needing hotel rooms or rental cars). It isn't a large percentage of service, but it's common enough that you need the geographic coverage.

- "goal of same-day, if not same-hour service"
- firmware update adds 5% peak power to all Model 3 vehicles.

$35,000 Tesla Model 3 Available Now

 

[mongo]

Yep. And eventually they will reveal that SR owners can upgrade their cars for $2,000 or whatever. Those owners will be hooked by then

Perhaps, the SR and SR+ are listed at the same weight, but that could be due to dummy cells having nearly the same mass as live ones. If they are going for the most profit and cars now, then less cells would achieve that.

 

[dc_h]

Massively larger number of cars in transit than last quarter, basically. Due to international deliveries which take more than 18 days. A one-time hit to profit (the profit ends up in the next quarter) and cash flow (the revenue ends up in the next quarter). Demand will be fine, but *quarterly profit* won't be.

My immediate thought was that they will keep shipping overseas cars this quarter, no end of quarter USA rush. So they may have 500 million or even a billion in inventory on the water on March 31st. This is pushing through the next level and getting to 500,000 cars this year.
It’s a helluva roll of the dice. I may buy more the next couple of weeks, I have to think this no drive, but and return concept has been very popular.

 

[Krugerrand]

This does bring up a good point. How do people purchase inventory models if there are no local sales people and no local inventory?

Delivery centers?

 

[lascavarian]

My only worry about how Tesla might have done the math on killing sales is it doesn't necessarily account for the ability of a sales person to upsell a customer.

Tesla "sales" people are routinely rated as the very worst... as intended. I can attest it is true. They will be happy to take an order or answer a question but there is precious little up-selling.

Sandy Munro has said that the Model 3 is profitable. In China he is estimating 25% margins on the 35K model. Less in the US but I very much doubt they sell anything at a loss. My take would be that Q1 will have some expenses from a bit of restructuring and some delays from export delivery times but Q2 might be a different story depending on how the changes come together, the impact of diminishing incentives, faltering competition and Q3 and Q4 could be very interesting.

 

[UncaNed]

I'm curious if the bears would intentionally orchestrate a scene where they bought a lot of cars and returned them in an effort to destroy the company. I don't think unlimited returns on cars is a good idea when there are so many malicious actors out there.

Why buy or rent when you can borrow for free?

 

[Sudre]

With TSLA, the crazy stock that it is, ""near-term negative" could mean by noon time tomorrow! LOL

 

[humbaba]

OK, thoughts...

The Chevrolet Bolt is going to be CRUSHED. Will be interesting to see how Chevy reacts.

I am glad they moved Drive-On-Autopilot to the FSD package. I like the TACC+Autosteer for $3,000.

Surprised to see SIX different trims for Model 3. Obviously they don't mind the complexity that brings.

325 miles of range on Long Range Model 3... that's now only 10 miles lower than the Model S. There just has to be an update coming...

162mph top speed on Model 3Perf? (Cue a fresh new set of Youtube Quarter-Mile and drag-race videos...) That's the highest top speed for any Tesla ever, and the first Tesla faster than the "gentleman's agreement" top speed of 155mph that has been common on many luxury cars.

However a lot of luxury sedans add top-end speed when you buy the most-polluting versions: e.g. 200mph for CTS-V or 189mph for BMW M5 Competition. So I guess the Model 3 Perf is the first to break that mould, since it generates the same amount of pollution as the base model

So... for S+X there just has to be an update coming. Perhaps during the Supercharger V3 reveal... since charging times will be highlighted.

I agree about the new autopilot: if I was buying now that is what I would get -- those are IMO the best parts. Maybe the update will change my mind, but auto steer on nav did not work well enough and while the parallel parking worked a charm (a perfect parallel every time!) the head-in parking hardly ever triggered and usually bailed part way through.

I'm happy to have those features mind (and looking forward to the summon), but for $3k the autopilot is even more of a "just buy the feature already." If anyone buys a Tesla without that... big mistake. Tesla brought back my love of driving, but TACC+Autosteer is a godsend for workaday driving.

I have a mid range model 3 on order without AP. I’m pretty happy with the price drop, and you’re right, the extra 2k giving you an additional 20 miles with better seats and power makes a lot of difference. With the price of AP also dropping to $3k I’m actually considering it now

AP is something I could live without, but since it potentially can save one’s life as well as reducing driving fatigue, I think I have to have it now that the price reduction has taken place.

I can’t imagine other car companies being able to pull this off, by the time their version of AP1 comes out Tesla’s AP3 will be less expensive than any competitor.

Do yourself a favor and get the autopilot. Trust me, or get a test drive and discover for yourself.

 

[Curt Renz]

Something interesting here: the auto dealers may have done themselves a disservice by blocking Tesla in some states. Because of that, Tesla figured out they could sell cars just fine without even having a store, and get around franchise laws. There’s nothing at all stopping any other manufacturer from doing the same.

The dealers' first line of defense is the contracts they have with their manufacturers. Their second line of defense is the states requiring that the manufacturers do not compete with their own franchised dealers. I suspect that either of these defenses may also apply regarding online sales.

The more recent monkey wrench has been some states requiring an automaker that has never had franchised dealerships to get some anyway. As you imply, today Tesla may have melted that monkey wrench.

 

[Singuy]

As a shareholder of Carvana, online car shopping growth is over 130% YOY. People are sick and tired of "let me go ask my manager, and maybe get two managers to fight each other for this price below "invoice"...you know we are losing money on every car". Yeah..people are not stupid. You treat them like they are stupid, they'll take their business elsewhere.