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

[Tenable]

A couple of things.

1. Teslas with shipping + import taxes end up being like 15k more than what it cost here. This compared to cheaper domestic made EVs, Teslas are actually very expensive.

2. Autopilot is pretty much useless in China and I don't believe the subscription rate will be very high. I am from Beijing, and from what I recall, road markers are almost nonexistent and off high way traffic is ridiculous. No one follows any traffic laws and it's almost common to have bikes and people just run into your car as you try to squeeze through. It's a freaken mess and I know I have a lot of problems driving in China.

3. You have to understand that most people are NOT living in single family homes. Those are extremely rare since condos are a common place. Tesla needs WAY more charging points in order to win over the Chinese public. But I understand they have a lot of level 2 220v chargers all over since the electricity is already 220v.

So perhaps this is a way to generate some orders for the Chinese new years or Tesla figured EAP is not very popular in China. I know I wouldn't get it if I was over since it's pretty much useless.

You've made some very fair points. However, none of that extra cost (tarrifs and import taxes) end up in Tesla's hands. Tesla needs cash right now, if they had sufficient demand for vehicles at full price I can not fathom why they would send them to China with free AP. Perhaps they think more M3s on the road will spur sales, or justify charger installation costs.. these ideas seem like a stretch. I also, can not wrap my head around a population of 1.4bn people without significant initial demand. Something is going on and I'm at a loss.

 

[Beltsbear]

When Elon said that the Roadster could do 600 miles without the need for any new technology, I wonder if he had the Maxwell technology on his mind when he said that.

The roadster could be built with model 3 2170 cells. A double stack would be needed. With maxwell tech it could be a single layer and much lighter.

 

[Tenable]

I was thinking about this move yesterday. I thought it is a great move, someone very smart is working on the pricing. In China (and many places), a good marketing strategy is to be viewed as the best and the more expensive product than your peers. Trying to show your products are cheaper than your competitors doesn't work well.

Instead of saying Tesla is offering autopilot for free, I view this as Tesla makes autopilot a standard feature in China, so automatically the starting price can go higher. It achieves both goals: the price is higher, the car is better (with autopilot standard).

Edit: another possibility is that autopilot take rate is not very high in China, this can help with gross margin.

I so want to believe this, but it feels like we are stretching. Arguably they are just giving away software, but I can't see why. Perhaps if they intend to hold strong on most of the current total cost to the consumer after they begin domestic manufacturing it would be seen as a better and more sustainable value proposition for the consumer and bring forward buyers that might otherwise wait until Q4 or Q120 locally made cars.

 

[Mark's Beagle]

Everything you need to know about Tesla's new Roadster

Man Linette Lopez is something else.

 

[abasile]

OT

Please don't. Every Yankee that comes to the south complains about how bad the north is, then proceeds to start trying to make the south just like the north.

Come to California or the Southwest instead! We have Tesla, more interesting natural areas, and better weather. And you won’t be called a “Yankee”.

However, if you move from California to another Western state, you might get called other names...

We Americans sure do like to move around.

 

[Electroman]

A couple of things.

1. Teslas with shipping + import taxes end up being like 15k more than what it cost here. This compared to cheaper domestic made EVs, Teslas are actually very expensive.

2. Autopilot is pretty much useless in China and I don't believe the subscription rate will be very high. I am from Beijing, and from what I recall, road markers are almost nonexistent and off high way traffic is ridiculous. No one follows any traffic laws and it's almost common to have bikes and people just run into your car as you try to squeeze through. It's a freaken mess and I know I have a lot of problems driving in China.

3. You have to understand that most people are NOT living in single family homes. Those are extremely rare since condos are a common place. Tesla needs WAY more charging points in order to win over the Chinese public. But I understand they have a lot of level 2 220v chargers all over since the electricity is already 220v.

So perhaps this is a way to generate some orders for the Chinese new years or Tesla figured EAP is not very popular in China. I know I wouldn't get it if I was over since it's pretty much useless.

Good points. Although every video I have seen of China, the highways are top notch with perfect lane markings.

But your point is valid, that if the general conditions do not favor AP usage, and the take rate is low, you might as well increase the price marginally and throw it in for 'free', as long as it doesn't cost you any extra money, which in this case it is only software anyway.

 

[anthonyj]

Removed inappropriate language - Right_Said_Fred

I was going to say something very similar but was afraid of the banhammer

 

[MarcusMaximus]

You've made some very fair points. However, none of that extra cost (tarrifs and import taxes) end up in Tesla's hands. Tesla needs cash right now, if they had sufficient demand for vehicles at full price I can not fathom why they would send them to China with free AP. Perhaps they think more M3s on the road will spur sales, or justify charger installation costs.. these ideas seem like a stretch. I also, can not wrap my head around a population of 1.4bn people without significant initial demand. Something is going on and I'm at a loss.

Keep in mind: the customer doesn’t care, at all, what it costs Tesla or how much they’re making. All that matters to them is how much they pay. And the tariffs raise the price. There may actually be a problem with demand at the prices they need to charge to still make money with the tariffs(if not, that would suggest they’re charging too little in the US/Canada). So, rather than lose money on each sale or decimate demand, they make the part that doesn’t cost them any extra free.

 

[Tenable]

Keep in mind: the customer doesn’t care, at all, what it costs Tesla or how much they’re making. All that matters to them is how much they pay. And the tariffs raise the price. There may actually be a problem with demand at the prices they need to charge to still make money with the tariffs(if not, that would suggest they’re charging too little in the US/Canada). So, rather than lose money on each sale or decimate demand, they make the part that doesn’t cost them any extra free.

Valid. I hope its just a temporary measure, but its really going to hurt margins on Chinese sold cars. I suppose in the shorter term some profit is better than no profit. Still feels like cause for concern when we have to bank on a flawless and very fast start to Chinese production. In any case I appreciate the discussion and everyone thats weighed in. This has been bothering me for a couple of days, I suppose all we can do is wait and see.

 

[tinm]

Meanwhile, in New Mexico, the most anti-Tesla state in the U.S.:

A breakthrough. Oh this is so beautiful. Head of the auto dealer association in this state has his “you can’t handle the truth” / “code red” moment and admits to a reporter what Tesla owners have known forever: the dealers here simply don’t want the competition. Thus whole dispute really is about keeping an old, outdated law on the books for purely protectionist purposes.

Tesla Owners Club of New Mexico on Twitter

 

[CyberDutchie]

Morgan Stanley found something new to raise concerns about. In a new note out this morning (EST) Adam Jonas writes:

“Tesla’s vehicle fleet has grown far faster than its physical store and service location network, raising investor concerns about strain on the system”

But he answers the question: “Is Tesla’s physical footprint a competitive advantage?” with a yes (calls it a significant strategic value).

Also, an interesting forecast:

“Longer term, we forecast Tesla’s supercharger network to expand to 15,000 stations (with 135k charging outlets) by 2030 to support a Tesla on-the-road fleet size approaching 13 million units.”

Price target or rating unchanged of course.

 

[Pezpunk]

Removed inappropriate language - Right_Said_Fred

no need for misogynist insults.

 

[tinm]

Explosive news if true: Tesla powertrain powering Ford’s upcoming F-150 EV?!?

Scoop: GM Working On Electric Pickup Truck With Tesla Powertrain | CleanTechnica

Edit: massive oops. GM not Ford. Not F-150.

My bad.

Still explosive news if true. About GM that is.

 

[Pezpunk]

Morgan Stanley found something new to raise concerns about. In a new note out this morning (EST) Adam Jonas writes:

“Tesla’s vehicle fleet has grown far faster than its physical store and service location network, raising investor concerns about strain on the system”

But he answers the question: “Is Tesla’s physical footprint a competitive advantage?” with a yes (calls it a significant strategic value).

Also, an interesting forecast:

“Longer term, we forecast Tesla’s supercharger network to expand to 15,000 stations (with 135k charging outlets) by 2030 to support a Tesla on-the-road fleet size approaching 13 million units.”

Price target or rating unchanged of course.

Morgan Stanley: We're downgrading TSLA because of weakening demand for the Model 3.
Also Morgan Stanley: We're downgrading TSLA because they're selling so many Model 3s, their support network can't possibly keep up.

 

[MP3Mike]

Explosive news if true: Tesla powertrain powering Ford’s upcoming F-150 EV?!?

Scoop: GM Working On Electric Pickup Truck With Tesla Powertrain | CleanTechnica

GM doesn't make the Ford F-150. GM makes the Chevy Silverado and the GMC Sierra.

 

[BLSmith2112]

From Jack Richard on HyperchangeTVs follow up video on Maxwell acquisition.

 

[Tim S]

Explosive news if true: Tesla powertrain powering Ford’s upcoming F-150 EV?!?

Scoop: GM Working On Electric Pickup Truck With Tesla Powertrain | CleanTechnica

The story/rumor is about GM, not Ford. Still exciting if true

 

[mrdoubleb]

Explosive news if true: Tesla powertrain powering Ford’s upcoming F-150 EV?!?

Scoop: GM Working On Electric Pickup Truck With Tesla Powertrain | CleanTechnica

Paging @KarenRei

 

[neroden]

I was going to say something very similar but was afraid of the banhammer

Just remember to make your slurs non-sexualized, and particularly avoid any indications of sexualized violence. If you don't, you will look like a bigoted twitterhead.

This is a general rule for anyone planning to write insults. Please remember it.

 

[neroden]

Have you seen this news that T Rowe cut it's stake from ~10% to half of that.

This is in Q4. I wouldn't be surprised if this continues in q1.

One of Tesla's largest institutional shareholders cut its stake in half during the 4th quarter

Ha. Called it. I said T Rowe was a short-termer for at least half its stock.

(Several years back I went through the major fund-company owners of TSLA and tried to peg them as long-termers vs. short-termers. I classed T Rowe as mostly short-term, though I think there are some long-termer fund managers mixed in there.)