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

[JusRelax]

I wonder what the share price will do when that parking lot starts filling up with Model 3's?

(That was a rhetorical question!)

The obvious, rhetorical response is 'Parking lots filling up with MIC Model 3's! No demand for MIC Model 3's!'

 

[Thekiwi]

The whole idea of Tesla hooking up with AAPL is more ludicrous than Ludicrous Mode! Speculating that this might happen just makes proponents of that look like they have no idea about what's going on.

Elon Musk is in a whole different realm vs. Tim Cook.

There is a huge difference between Tesla wanting to “hook up” with Apple, and Apple making a buyout offer.

We all here recognize that Tesla is an amazing company that is by far the best positioned For EV / autonomy / sustainable energy success.

I don’t get what is so “ludicrous” about suggesting that a company with immense financial resources that is looking to enter the EV / Autonomy space, and has previously tried to buy Tesla, would attempt to do so again.

Considering the above, I would suggest it would be less than optimal to not be prepared in some manner for the above to potentially happen (there is an obvious way to be very handsomely financially rewarded by this potential outcome, but if you are completely dismissive of the idea you are going to miss out - but its a free country, that’s your choice).

 

[dc_h]

I don't really get the objections to Tesla selling Powertrains, particularly if you support the Tesla Energy division.

Tesla could easily make as high gross profit per KWh selling Powertrains + Batteries to FCA as it makes on selling Megapacks.
Tesla quite clearly has huge scale battery plans to ensure batteries do not prevent Tesla ramping up its solution to global warming in the future.

Imagine if Tesla stripped out all of its other tech leads from its cars - 1) Autonomous features. 2) Safety 3) Durability, 4) Entertainment & OS, 5) Non EV Powertrain car innovation, 6) Agile development for continuous product improvement.

This would leave a Tesla car with equivalent specs to the FCA car built on the Tesla platform. But Tesla's car would still be significantly cheaper at the same time as making significantly higher gross profit due to 1) No EV Powertrain gross profit cost. 2) More vertical integration in the rest of the manufacturing process and 3) Online sales model, no marketing and vertical integration of the dealership network.

I agree on selling battery packs. If Tesla can retain anything close to 50% of the battery pack market (by KWh), it will give them market power over input pricing and allow them to drive down COGS faster than anyone. If it helps partners save billions and move forward on EV deployment, that's ok. It will make them better faster and increase the long term margin/pricing advantage of EV versus ICE.
It is likely Tesla will hit 30% margin on autos this quarter. Long term, continuing to double battery production in the fastest incremental amount of time, is the best thing to drive EV cost benefit over ICE. This could also help fund, or encourage partners to fund more mining and feedstock production.
I doubt margins on packs sold to PGA/FCA would be as high as autos, but if it helps increase margins on the cars they do sell, and the margins are sufficient to fund more cell and pack production, it will speed up the end of the ICE age.

 

[mongo]

Here's how ridiculously easy it is to swap a Model 3 rear drive unit (I imagine the front is similar in difficulty)

8 years from now there will be tons of salvage parts for anyone who doesn't want to buy new.

That's the entire rear cradle. A drive unit swap does not involve removing/ replacing the suspension (would save labor, but add a lot of part cost).
See https://static.nhtsa.gov/odi/tsbs/2019/MC-10162295-9999.pdf
for the process for the front drive unit for the clevis replacement on an S.

 

[Curt Renz]

Benzinga - 46 minutes ago: 'Forging Their Own Path': The Top Stocks Owned By Millennials

#3 Tesla

 

[VValleyEV]

Disagree
You can get your transmission replaced in a day, 3 on the outside (custom hose replacement).
Engine is also sub one week.
(having swapped four engines personally, and had 2 transmissions replaced professionally).

Can the ICE dealer service centers do things this promptly, including getting ahold of the new engine/transmission to install?

I am wondering whether the “you will wait for weeks for an engine/transmission replacement” has to do with dealer ordering replacements, whether warantee or not. I think I have heard horror stories of them searching the country for a part.

As a matter of fact, now I recall that my 2014 Jeep Wrangler needed a new major component that was causing to leak gas fumes, and they struggled mightily to “find one” around the country - I think it was only 3 or 4 days and they told me that I got very, very lucky. FYI: my wife recently tired of off-roading, and traded the Jeep in for a Tesla Model 3.

 

[RobStark]

Interesting, and I did point out my source was wikipedia (not very reliable). But I used it because I didn't see anything else. Could just be my search failed me. Do you have a source for the $43k base price?

[edit: found the $63k is estimated US price for the launch edition, but final prices have not been determined. The pricing seems more solid than the Taycan as they have taken pre-orders in some regions so less likely to increase, but it certainly could in the US. But that doesn't say anything about future pricing or a $43k version. Polestar reveals prices for its Polestar 2 electric car - electrive.com]

[edit2: here we go, but this is a really soft number. They "expect" prices to fall to £35,000 after 12 months (right now that is ~$45k US). Sounds like they are expecting to make it up in volume (reducing production cost) which I wouldn't count on. It will probably happen, but it might take longer than 12 months even if it does. Polestar 2 revealed: specs, price and on-sale date]

[edit3: that last site gave £54,900 for the performance version which is currently ~$71k, the non-performance was £49,900 which is currently ~$64.5k so the ~$63k base price would not be for the performance version.]

European prices usually include VAT.

US prices should be ~$43k-$70k plus sales tax, title,licence, destination and doc fees.

When you buy a "$35k Model 3" it is $35k plus sales tax, title, license, destination and doc fees.

Launch Edition includes everything but a "power pack" upgrade about $5k. This is like Founders Series.

 

[trailhound]

Looks like Gig 1 is getting a few more solar panels - they are different shape than previous ones.
Could they be solar tile groups?
Compare daily satellite images of Tesla production locations

 

[Alphacrux]

I haven't followed the message boards much today. Anything in particular to attribute today's slightly slower price action? Simple consolidation after the big rally?

 

[M3Rider]

People are getting single pedal driving and +5% power. Exciting! Hmmm and he's in Taiwan? Why don't I get it first?
Michael Hsu on Twitter

 

[mongo]

Can the ICE dealer service centers do things this promptly, including getting ahold of the new engine/transmission to install?

I am wondering whether the “you will wait for weeks for an engine/transmission replacement” has to do with dealer ordering replacements, whether warantee or not. I think I have heard horror stories of them searching the country for a part.

As a matter of fact, now I recall that my 2014 Jeep Wrangler needed a new major component that was causing to leak gas fumes, and they struggled mightily to “find one” around the country - I think it was only 3 or 4 days and they told me that I got very, very lucky. FYI: my wife recently tired of off-roading, and traded the Jeep in for a Tesla Model 3.

Yeah, *assuming the part exists*. GM dealership can get remanufactured transmissions in a day. So day 1, remove broken one and order new one. Day 2 install reman. Day 3 replace custom made hoses that were leaking (trans was common, but vehicle model was not). Maybe add day 0: evaluate car. Still under a week.

Coworker had his Honda trans removed, rebuilt, and reinstalled in two days at a repair shop.

Full engine rebuild takes longer than remove/ replace of course.

 

[Thekiwi]

Can anyone name a company that actually remains competitive in the field where they were disrupted? I don't know that Microsoft really counts: you could make the case that they were disrupted in the personal computing arena by the smartphone. They're mostly still around because Office has a stranglehold on the corporate environment and they leveraged their hardware expertise to build the Xbox.

I would suggest reading Clayton Christensens work - start with the Innovators dilemma.

For a company to successfully survive disruption, they first have to recognize its occurring. Innovations can either be sustaining or disruptive. Sustaining innovations can easily be embraced at little hassle by incumbents, whereas disruptive innovations are usually a whole bag of hurt for incumbents to adjust too.

Sustaining innovation is essentially business as usual, whereas the usual prescription for an incumbent facing disruption is:

- to acquire a disruptive competitor,
- or create a new independently run division that embraces the new disruptive innovation without any meddling from legacy management (usually easier said than done).

The big issue in the Automotive space is that incumbents (and many pundits/analysts) are treating EVs as sustaining innovations, and are only treating autonomy as potentially disruptive.

EVs, as in battery based powertrains, are seen as sustaining as they are seen simply as an “easy” substitution of a ICE engine that doesn’t change the core business model of building cars. This is at best only partially correct, but ignores the many flow on disruptive effects EVs have on other parts of the incumbents business:

- supply chain close to non-existent,
- the likely fatal nature of EVs to the dealer network business model,
- the unforeseen financial impact to the leasing business of rapidly declining ICE resale values
- the existing infrastructure contains a huge amount of stranded assets in the switch to EVs.
- charging network uncertainty for customers

in regards to autonomy, incumbents investing in new autonomy startups and partnering with other suppliers more capable than themselves in software etc is probably there only option, but even if they are successful in achieving autonomy, the effects of the EV transition are going to be brutal on them.

To really have a chance with EVs, an incumbent would need to essentially embrace the direct to customer model, foregoing it’s dealer networks, which would be easiest done with a new entity. I think this will increasingly happen, and all the states which currently ban direct sales by auto manufacturers will eventually reverse that ban, which will be very helpful for Tesla.

 

[ZeApelido]

CLOSING 3 TSLA 191101 310 PUTs @$0.10 Profit $960

Selling more otm PUTS around 290 level.

SOLD 5 TSLA 191129 290 PUTs @$4.80 (max profit $2400)

HOLD 901 TSLA shares @$284. Profit TBD
HOL
HO
H

 

[ZeApelido]

So it's November.

Where's da truck??

 

[Nocturnal]

To really have a chance with EVs, an incumbent would need to essentially embrace the direct to customer model, foregoing it’s dealer networks, which would be easiest done with a new entity. I think this will increasingly happen, and all the states which currently ban direct sales by auto manufacturers will eventually reverse that ban, which will be very helpful for Tesla.

The big auto companies have already survived far long than normal for companies of that size.

 

[kbM3]

The Short Shorts Historian on Twitter

View attachment 472041

I’ve come to find out that not only did Top Gear have the Model S in range mode, multiple rumors are swirling that they did the entire run with the Model S in 1st gear!

 

[Fact Checking]

Disagree
You can get your transmission replaced in a day, 3 on the outside (custom hose replacement).
Engine is also sub one week.
(having swapped four engines personally, and had 2 transmissions replaced professionally).

I disagree, because at least in Europe if you aren't living right next to a big parts distribution center, the chances that your random luxury or premium sedan or SUV will have a full engine or an automatic transmission right in stock at the dealership or service center are close to nil. They are high value units that cost several thousand euros at minimum, which dealerships normally don't carry in stock.

Getting it from the factory can easily take several days - plus on a busy week good luck trying to schedule such a major drive train service operation to be done immediately: for many faults they'll first take apart your car, determine the error, and that's usually next day that they'll tell you that you need a new engine or a new transmission. Then they'll order the parts and schedule the technician.

I.e. if your ICE engine or transmission breaks, your car can easily spend a week or more in service.

With an EV all of this is much easier and the parts are smaller as well. (It can take a long time for Tesla but that's a self-inflicted wound, an unforced error.)

With Dual Motor you can also have faults in the drive unit and still use the other drive unit, and apparently Tesla now also has drive unit fault prediction and can call in a car when it has not failed yet. This is possible, because the drive units are much simpler and there vibration and temperature ranges are much more controlled. With the overwhelming majority of ICE engines no such diagnostics exists - I only heard about such fault prediction techniques on jet engines.

 

[hobbes]

"I´m about 20 minutes into this, everybody who´s thinking about buying a Model 3, just go out and do it. (...) If you can´t afford it, sell your children." Not that it comes as a surprise to me, but sometimes nice to hear anyway .

 

[madodel]

I wonder what the share price will do when that parking lot starts filling up with Model 3's?

(That was a rhetorical question!)

Are the Chinese still creating an island in the South China Sea? Maybe they can use all these spanking new GF3 Model 3s to build it out more by dumping them there.

 

[KarenRei]

That's the entire rear cradle.

Yes, I'm not blind. But it defines the minimal amount of labour in a labour-vs-parts tradeoff. And since there will be scrappped cars, as old as 8 years old, clearly salvaged parts will not be unrealistically expensive.