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

[jerry33]

I'm honestly a bit surprised that they went the route of making Autopilot cheaper instead of introducing a subscription based model. Charging $40/month over the course of 10 years, Tesla would get $4,800. The customer will like it more because they don't necessarily pay for the entire length of the Autopilot. So say someone buys a 3 and owns it for 4 years paying monthly, they only paid for the time they actually used the system($1,440). Then the next owner of the car can decide if they want to pay monthly for it. It's win for customers and Tesla gets long term monthly revenue.

I'd hate that. When I pay for something, it's supposed to be mine. If I choose not to pay the upgrade fee for the next version, it should still work. Because you never know what life will throw at you, having a bunch of "only $40/month" payments or your car doesn't work the way it did the previous month is not the way to financial security.

 

[jerry33]

But any good tire place can give you an alignment. No need for a service center.

Any tire place would not be my recommendation. Junior staff (usually), perhaps poorly calibrated equipment.

 

[MarcusMaximus]

I'd hate that. When I pay for something, it's supposed to be mine. If I choose not to pay the upgrade fee for the next version, it should still work. Because you never know what life will throw at you, having a bunch of "only $40/month" payments or your car doesn't work the way it did the previous month is not the way to financial security.

Note that they’re already doing this for the data connection.

 

[Tenable]

Tesla makes changes to the cars all the time. When the S was ramping up, there were 30+ changes per week. Don't know what it is now, but they still make changes to the S. I wouldn't be at all surprised if the Model 3 has a similar change rate.

I very much agree, this is my belief as well. I’m just hopeful some thorough soul here at TMC might have a list of what’s changed with M3. Perhaps a long shot, but felt worth a try.

 

[AudubonB]

I'd hate that. When I pay for something, it's supposed to be mine. If I choose not to pay the upgrade fee for the next version, it should still work. Because you never know what life will throw at you, having a bunch of "only $40/month" payments or your car doesn't work the way it did the previous month is not the way to financial security.

I suppose you don't own a home then, do you, Jerry? Because if you did, even if you paid for it, you'd still have to keep paying....forever....that rental fee called a property tax...or you'll find soon enough you don't own it any more. The analogy is almost perfect.

 

[humbaba]

Note that they’re already doing this for the data connection.

Which I have no intention of paying for when my time runs out. However, IIRC, they have recurring costs with that so they need to recover them and a flat fee wouldn't be a good fit.

 

[carterm2]

Nissan Leaf Plus.

Giving them away for merely...$36,550 too $42,550

OK, I am compelled to ask... can they make a profit on it? Ugly costs extra.

The Nissan Leaf Plus starts at $36,550

 

[anthonyj]

My guess is once they get enough orders in to sell out Q1 inventory, they will release the date of Model Y unveil and start preorders. Would be nice to increase Tesla's cash reserves after bond payment

 

[jerry33]

I suppose you don't own a home then, do you, Jerry? Because if you did, even if you paid for it, you'd still have to keep paying....forever....that rental fee called a property tax...or you'll find soon enough you don't own it any more. The analogy is almost perfect.

I'm old enough so that at least the tax is frozen. Minimizing monthly payments is still a good objective. I'd suggest that far fewer would use AutoPilot if they knew they could turn it on whenever they wanted just by enabling it and paying a monthly fee. I'd further suggest that many would just leave it off.

I can come up with money for big purchases, but I really dislike paying monthly. I know some things there's no choice, but I'd probably be one of the people who never turned it on if the only way I could get it was to pay monthly.

 

[lascavarian]

Makes sense. No Tesla vehicles to date are designed to handle off-roading. I’m hopeful that the Y will at least partially address that.

I really would like a Tesla tow package option on the Y.

 

[myt-e-s-l-a]

EM regarding upgrading existing performance.

“We electronically limited the Model 3 Performance to 155mph so that was not a physical limit but an electronic limit. After a lot of testing we feel we can increase that limit.”

 

[humbaba]

I suppose you don't own a home then, do you, Jerry? Because if you did, even if you paid for it, you'd still have to keep paying....forever....that rental fee called a property tax...or you'll find soon enough you don't own it any more. The analogy is almost perfect.

I believe the original poster described in terms of the accumulation of $40/mo here, $10/mo there, never ending bleed you to death through a million cuts.

For example, Adobe used to sell their software, but then went to a subscription model because it makes them more money.

This is not the same as paying rent or property tax.

 

[Curt Renz]

CNBC - 11 minutes ago: Tesla's decision to shutter stores is right move long term, says Wedbush analyst

 

[lklundin]

We also need to take into account capacity constraints. To get to 7.5M by 2025, Tesla needs 15 factories the size of NUMMI. So, they should be building 3 such every year … I doubt it will be that many by 2025.

Well, now that the machine that makes the machine is well on its way, it's time to make the machine that makes the machine that makes the machine.

 

[Remus]

I think Amazon's situation was different. People were not sure how they will make a profit - also remember a bunch of internet companies were going under at that time because they couldn't figure out how to make money. Remember all those memes about how a crucial step before the profit step is missing ?

With Tesla, the main bear argument is that there is not enough demand for 400k cars a year. So, a few quarters of healthy sales numbers will negate that argument.

The bear argument already changed into low margin and bankwupcy. With Tesla constantly throw their operational profit into expansion, resulting occasional lost, people would have the same doubts about how they make money too. Tesla's many enemies would be happy to reinforce this.

 

[anthonyj]

New article from Ihor from S3

S3 Analytics: Tesla down 7% on Long Selling not Short Selling – Shortsight.com

 

[omarsultan]

You lost me at "$100K" -- even if your argument is correct (which I don't agree it is) the premise requires narrowing the scope to the high end of Tesla's offering. You can get a model S or X for appreciably less than $100k, and no M3 gets close, with the ASP likely to be less than half that.

While true, I would venture the ASP for the S and the X is closer to $100K. In that territory, buying experience carries more weight than it does down at $35K when expectations are minimal. It seems like Tesla could end up ceding the high end to the traditional manufacturers (MB, BMW, Audi, Porsche, etc) with this move. That is not a horrible thing if that is, in fact, the plan and would still be in alignment with the company mission statement.

But Tesla doesn't need those customers to sell all the cars it can make for some time to come. And their goal isn't to maximize profit, but to maximize unit volume (accelerate adoption) so pushing down to the $35k and getting a lot more sales is more important than picking up a few more at $100k.

To me, this is dangerous and arrogant thinking for a company. "Those buyers" still represent the vast majority of buying transactions happening. Early adopter buyers and early/later majority buyers are two different critters and it would be a mistake to assume what works for the former group will work for the later as they have different criterion and value different things. For example, Elon pointing out the speed of the buying transaction. So, a frictionless buying experience is great when I am ordering a pizza but maybe not not what I am looking for hen plopping down $35K.

 

[neroden]

Carsonight has reported that the SR pack is much faster and easier to assemble and handle, because it's half the size of the LR pack.

Tesla apparently radically redesigned the SR pack, for mass production and cost efficiency.

We were hearing about the radical redesign way back in the Q3 conference call. What hasn't been clear is how many of the trims will have said radical redesign; does the SR+ have it? Have they switched the MR to it?

 

[neroden]

I'm old enough so that at least the tax is frozen. Minimizing monthly payments is still a good objective. I'd suggest that far fewer would use AutoPilot if they knew they could turn it on whenever they wanted just by enabling it and paying a monthly fee. I'd further suggest that many would just leave it off.

I can come up with money for big purchases, but I really dislike paying monthly. I know some things there's no choice, but I'd probably be one of the people who never turned it on if the only way I could get it was to pay monthly.

Yeah, that's me too; I dislike recurring costs.

 

[Fact Checking]

Alpha Hat pointing to higher numbers, for January anyway. Tesla Delivered More Vehicles in January than Reports Suggest

Also note that Alphahat's methodology of using cellular data to detect customers picking up their cars is extremely accurate: no worse than 97% accurate prediction since 2017 and 99% accuracy in Q4 2018...

So when Alphahat estimated that there were 11.5k U.S. Model 3 deliveries in January 2019 alone, that's accurate to within about 100-200 units (!).

They are projecting 30k deliveries in Q1 for the U.S. alone, which will probably increase as the quarter progresses.