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Firstly, "high income" is actually not nearly as much as Norway's high GDP suggests, while Norway's per capita GDP is high, so are levels of taxation.

Effective median disposable income levels are close to other European countries, Germany in particular:

Eurostat - Tables, Graphs and Maps Interface (TGM) table

Code:
Netherlands: €24,696
France:      €25,022
Austria:     €26,730
Germany:     €28,473
Norway:      €28,653
Switzerland: €29,540
(Note that this controls for different levels of income taxation, but doesn't control for different VAT levels, nor for car registration fees, incentives and annual taxation and various fees.)

So the spreading of EVs in Norway can almost exclusively be credited to the EV friendly tax incentives and other EV friendly regulation in Norway - not high income levels.

Secondly, an ICE car does around $50k damage to health and environment during its lifetime, so there's nothing "punitive" about taxing them much higher. In fact the equal treatment of ICE cars in many other countries is a hidden subsidy.

It is still high income even if that income goes to the government. The more your government spends on people's needs the less individuals need to spend on their own needs.

It is a punitive tax relative to the rest of Europe. If you want to call it removing extravagant subsidies for ICE fine. The rest of Europe and the world has much higher subsidies for ICE.

It is still a financial decision that is driving Norwegians to BEV.

Not that they are more enlightened or are less ignorant than Germans. Or French or Spaniards.

Or more comfortable with charging times.
 
So... I guess today could have been worse :Þ

I'm thinking tomorrow I'm going to sit things out, and at the end of the day, or if I think there's a local high, I'll transform some calls into spreads in order to pay for a 1-week protective put spread. I'm really worried about the market reaction if it looks like a new trade war maybe preparing to open up with Europe. And since it's unclear when the report will be coming out....

Unless of course it plunges tomorrow.... I don't expect that, though. But of course, one never knows.
 
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Reactions: humbaba
My point is that is all purely cost. People would not buy an EV if they couldn't charge it and use it, no matter the price. Charging ability and infrastructure build out has not held back the EV transition in Norway, people have rapidly learnt to adapt to an EV world, and I don't see why that wouldn't be the case elsewhere.

It is cost.

People are will to accept some inconvenience( long refueling times) if they save a lot of money. It BEV was unusable( it could not be refueled no matter what) then no one would buy no matter how much cheaper the BEV was.

People are also willing to sacrifice in some areas if they are compensated in others.

If I can get a high performance luxury BEV for the same price as a standard ICEv I may very well go for the BEV.

If I can get a high performance luxury BEV for 1/3 the price of a high performance luxury ICE then I may go for BEV. Even with less convenient refueling on longer trips.

But if the price is an ICEv is the same as a comparable equipped BEV with 2/3 the range of an ICE 40% don't chose BEV at this point.

The Netherlands has a charging infrastructure on par with Norway. PHEV plus BEV market share is 6.9% for January 2019.
 
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Reactions: Dreadnought
The Model 3 is an almost perfect taxi. Tesla have stripped out all necessary luxuries that a BMW buyer would pay handsomely for. You are left with the place that you want to be for a 20 minute journey somewhere - nothing more, nothing less. It's becoming unbeatable in this arena and all of the decisions around Tesla seem to stem from it.

Disagree. The Model 3 is a wonderful performance sedan. Performance is definitely not necessary in a taxi.

The Model 3 is basically new technology and new technology pricing tends to go down over time, not because of lack of demand but because of increased cost efficiencies. The 08 iphone was half the price of the 07 iphone, was that a demand problem? The Model T went from $850 in 1908 to $300 in 1925, demand problem?

If iPhone 7 had dropped its price twice in a 6 week period all while being production limited, then your analogy would work.
 
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Reactions: Pezpunk
I’ve not seen the $50k figure specifically quoted before. Would love to see that source and have it at my disposal for friendly convos if you could provide a link. Thanks.

Fair enough, let me back up this claim I made:

"Secondly, an ICE car does around $50k damage to health and environment during its lifetime, so there's nothing 'punitive' about taxing them much higher. In fact the equal treatment of ICE cars in many other countries is a hidden subsidy."​

I'm basing this figure on the following study from 2015:

If we only try to estimate the economic effect of 3.2 million premature deaths per year which are directly related to vehicle tailpipe emissions, the study comes up with a per gallon of gasoline damage figure:

"Illustrative calculations indicate environmental damages are $330-970 billion yr−1 for current US electricity generation (~14–34¢ per kWh for coal, ~4–18¢ for gas) and $3.80 (−1.80/+2.10) per gallon of gasoline ($4.80 (−3.10/+3.50) per gallon for diesel)."

"These results suggest that total atmosphere-related environmental damages plus generation costs are much greater for coal-fired power than other types of electricity generation, and that damages associated with gasoline vehicles substantially exceed those for electric vehicles."​

From $3.80-$4.80 per gallon damages figure we can estimate average per ICE vehicle lifetime damages:
But note that the figures in this 2015 study are conservative, in particular the $3.80-$4.80 per gallon of fuel health damage figure is based on a global average of health costs of:

"Climate-health calculations therefore use a Value of a Statistical Life (VSL) of $1.7 million (for 2010), which is the nominal US-based VSL of $7.5 million adjusted to account for carbonaceous aerosol exposure- and population-weighted country-specific income differences from prior analyses (UNEP 2011)."​

That's polite formulation for: "third world people are 4.4x cheaper for the ICE industry to kill."

If we correct for that factor and price the 'cost of life' in the U.S., we get 7.5/1.7*3.80 = $16.7 per gallon health damage caused by gasoline vehicles, and $21.1 for diesel vehicles, which correct the life time damage figures upwards significantly:
  • average estimated life time health damage caused by gasoline cars with U.S. pricing = ~$134,000
  • average life time health damage caused by diesel cars with U.S. pricing = ~$170,000
But it gets even worse for the ICE industry, the "premature deaths" related to air pollution do not include other ICE emissions related damage, such as:
  • The already ongoing damage and harm from global warming, such as the 200 billion dollars Hurricane Harvey, which hurricane and rainfall was very probably amplified by global warming into a catastrophic event:
    • Global Warming Tied to Hurricane Harvey [Scientific American]
    • The direct Hurricane Harvey damages alone would wipe out all ICE industry profits for the last 2 years. ('Triple damages' and RICO punitive damages due to being part of a criminal conspiracy such as the Dieselgate criminal conspiracy would probably wipe out the ICE profits for the last 10 years, for Hurricane Harvey alone.)
  • Nor does it include the economic damage caused by rising sea levels that are going to destroy, for example, a significant percentage of current Florida coastal real estate value over the next 30-50 years.
  • There's ongoing damage to real estate exposed to vehicle tailpipe emissions in urban environments, with very high depreciation and maintenance costs:
  • The 2015 study cites a global "3.2 million premature deaths per year" from pollution alone, which @ReflexFunds recently argued convincingly (with citations) is probably significantly higher in reality, and also in large part caused by ICE vehicles.
None of these costs are included in the estimates above.
That sounds like a nice round made up number. There is no factual way to qualify that number.
That's wrong (see the citations above), and my cautious $50k figure is probably on the lower end of the real costs.

TL;DR: the real per ICE vehicle life time health and environmental damage cost could be several times $50k if we include all these external costs. Most ICE cars do health and environmental damage that are literally several times the value of the car, and even the high ICE taxes in Norway probably don't cover those damages.
 
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I guess the argument is - since the government is funding the company, it should get some stake in the technology created. Like how universities get a share of the royalties they create in partnership with private companies.

But ofcourse with Tesla there are a ton of other public good, which we should make AOC aware of.
Working on it. @SenMarkey also needs to hear from us!
 
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Reactions: SW2Fiddler
I have to agree with this strongly. I think the cash generating power of the company was demonstrated and right now the macro events (tariffs particularly) are what drive this stock until the next earnings.

There are other potential stock moving events between now and next earnings -- HW3, advanced summon, Model Y reveal.
 
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There are other potential stock moving events between now and next earnings -- HW3, advanced summon, Model Y reveal.

... convertible bond repayment
... EU trade war news
... China trade war news
... "Border wall demands" news (new shutdown? state of emergency?)
... Brexit / EU market movement
... February/March InsideEVs numbers
... More data on EU / China sales
... Any potential Moodys upgrade after the bond repayment
... Slow drip of GF3 construction news
... Any changes to tax credits, particularly in the US.
 
... convertible bond repayment
... EU trade war news
... China trade war news
... "Border wall demands" news (new shutdown? state of emergency?)
... Brexit / EU market movement
... February/March InsideEVs numbers
... More data on EU / China sales
... Any potential Moodys upgrade after the bond repayment
... Slow drip of GF3 construction news
... Any changes to tax credits, particularly in the US.

He referenced macros in his post, so I was leaning towards Tesla-specific items. But yes, this is a great laundry list of catalysts.

I think you're right to hedge with some puts, by the way.
 
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I believe she is misinformed, but not so ignorant as to be unable to change her position when presented with facts, unlike some others in government. In the near term I can understand her concerns about return on investment from GF2.

Yes GF2 and New York subsidies. But there is a deal between Tesla and the State of New York. Not a Federal issue.
 
Fair enough, let me back up this claim I made:

"Secondly, an ICE car does around $50k damage to health and environment during its lifetime, so there's nothing 'punitive' about taxing them much higher. In fact the equal treatment of ICE cars in many other countries is a hidden subsidy."​

I'm basing this figure on the following study from 2015:

If we only try to estimate the economic effect of 3.2 million premature deaths per year which are directly related to vehicle tailpipe emissions, the study comes up with a per gallon of gasoline damage figure:

"Illustrative calculations indicate environmental damages are $330-970 billion yr−1 for current US electricity generation (~14–34¢ per kWh for coal, ~4–18¢ for gas) and $3.80 (−1.80/+2.10) per gallon of gasoline ($4.80 (−3.10/+3.50) per gallon for diesel)."

"These results suggest that total atmosphere-related environmental damages plus generation costs are much greater for coal-fired power than other types of electricity generation, and that damages associated with gasoline vehicles substantially exceed those for electric vehicles."​

From $3.80-$4.80 per gallon damages figure we can estimate average per ICE vehicle lifetime damages:
But note that the figures in this 2015 study are conservative, in particular the $3.80-$4.80 per gallon of fuel health damage figure is based on a global average of health costs of:

"Climate-health calculations therefore use a Value of a Statistical Life (VSL) of $1.7 million (for 2010), which is the nominal US-based VSL of $7.5 million adjusted to account for carbonaceous aerosol exposure- and population-weighted country-specific income differences from prior analyses (UNEP 2011)."​

That's polite formulation for: "third world people are 4.4x cheaper for the ICE industry to kill."

If we correct for that factor and price the 'cost of life' in the U.S., we get 7.5/1.7*3.80 = $16.7 per gallon health damage caused by gasoline vehicles, and $21.1 for diesel vehicles, which correct the life time damage figures upwards significantly:
  • average estimated life time health damage caused by gasoline cars with U.S. pricing = ~$134,000
  • average life time health damage caused by diesel cars with U.S. pricing = ~$170,000
But it gets even worse for the ICE industry, the "premature deaths" related to air pollution do not include other ICE emissions related damage, such as:
  • The already ongoing damage and harm from global warming, such as the 200 billion dollars Hurricane Harvey, which hurricane and rainfall was very probably amplified by global warming into a catastrophic event:
    • Global Warming Tied to Hurricane Harvey [Scientific American]
    • The direct Hurricane Harvey damages alone would wipe out all ICE industry profits for the last 2 years. ('Triple damages' and RICO punitive damages due to being part of a criminal conspiracy such as the Dieselgate criminal conspiracy would probably wipe out the ICE profits for the last 10 years, for Hurricane Harvey alone.)
  • Nor does it include the economic damage caused by rising sea levels that are going to destroy, for example, a significant percentage of current Florida coastal real estate value over the next 30-50 years.
  • There's ongoing damage to real estate exposed to vehicle tailpipe emissions in urban environments, with very high depreciation and maintenance costs:
  • The 2015 study cites a global "3.2 million premature deaths per year" from pollution alone, which @ReflexFunds recently argued convincingly (with citations) is probably significantly higher in reality, and also in large part caused by ICE vehicles.
None of these costs are included in the estimates above.

That's wrong (see the citations above), and my cautious $50k figure is probably on the lower end of the real costs.

TL;DR: the real per ICE vehicle life time health and environmental damage cost could be several times $50k if we include all these external costs. Most ICE cars do health and environmental damage that are literally several times the value of the car, and even the high ICE taxes in Norway probably don't cover those damages.

Great post, I would also add:

  • The US spends $80bn annually on military to protect oil supplies. Using a 270m US fleet size and 15 year vehicle lifespan, this adds c.$4.5k per vehicle in the US.
  • The current government models for estimating Global Warming damage are a joke (for many reasons) and have barely been updated for the past 20 years. However they do put a Social Cost of Carbon currently at C.$40 per ton. This massively underestimates global warming damage, but using your 8040 lifetime gallons per car and 8.9kg Co2 emissions per gallon this puts CO2 emissions cost at $2.9k per car.
  • The cost of reduced safety of ICE cars vs EVs is also extremely significant and would be valued in the $thousands. EVs benefit from front crumple zone, lower centre of gravity and lower combustion risk.
  • In many countries there are direct fuel subsidies, particularly in the Middle East, with fuel below the market price.
  • In many countries fuel sales tax or VAT is far below other consumer products, therefore effectively acting as a subsidy.
 
It's really hard to keep up with this thread from the horrible signal to noise ratio. So in order to do my part to keep this thread with higher S/N ratio, I've made a separate thread on my thoughts that Tesla may always stay undervalued due to systemic market irrationality. It may be helpful for people to curb their expectations on the medium term stock price of Tesla.

Tesla may always be undervalued