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

[Doggydogworld]

What does it say about a country lagging in EV sales if the catalyst needed to break the habit of ICE is the collapse of the industry, rather than obvious benefits of making the change?

It just seems odd how the EU and China seem to be making the transition scale based upon logic at both the buyer's and legislator's levels while the US needs to see drama in order to come around.

It says to me China and Europe are both huge importers of oil and enacted EV mandates to reduce and eventually eliminate that dangerous dependency. As the world's largest oil producer the US is in a different economic and geopolitical boat.

 

[Cosmacelf]

This doesn't mean much without context. When the Model S came out EV was a novelty, so Tesla sold many units at high prices to the so-called 'innovators'. At this point, the novelty has worn off so it's much more difficult to sell a new EV at positive profit.

I disagree strongly. First, Tesla didn’t sell “many units” initially. The Roadster only sold a few thousand, and the initial run of the Model S was for 20,000 units a year. It wasn’t until Tesla figured out manufacturing efficiency that they were able to sell “many units” with the 3 and Y.

Unlike back then, there is plenty of demand for EVs now. And supposedly the large OEMs should know how to manufacture at scale.

We may yet see GM and Ford make money on their EVs. GM needed to get off the older battery tech in the Bolt, so we’ll see how they fare in 2024 with the Equinox. Ford hasn’t solved the cost issue yet as Lightning sales seem to be being impacted by high prices. Rivian has zero excuses for their crappy profitability as their prices are high and they are selling everything they can make (but their manufacturing ramp is going slow).

I just read that Porsche plans on selling lots of Taycans going forward now that they‘ve supposedly solved their high voltage heater supply issue which held them back. That seems to be a problem that the entire industry, except Tesla, has. Still supply chain.

All I see is one company that has navigated all the problems, while all the other competitors flounder bleeding cash. You can come up with excuses, but that’s the reality now.

 

[AndrewZ]

He's smart enough to know price "prediction" is useless, a lesson you'll never learn.

I predict that line will go up or down 5 days a week excluding stat holidays

 

[SO16]

I’ve accumulated a fair amount of Ford stock over the years. I was impressed by the fact that of the Big 3, they survived without needing a bailout. Plus, a roughly 5% dividend makes it a decent place to park money, even if the price just trades in a range.

They definitely timed their loan properly to avoid getting a “bailout”.

Ford took $6B government loan in 2009 — and debt still haunts company

Ford isn't alone in the struggle, but it entered 2020 reporting a much smaller-than-expected profit than its competitors.

www.freep.com

 

[Ogre]

This doesn't mean much without context. When the Model S came out EV was a novelty, so Tesla sold many units at high prices to the so-called 'innovators'. At this point, the novelty has worn off so it's much more difficult to sell a new EV at positive profit.

This is a revisionist version of history.

When the Roadster came out, batteries cost $1,000/ kWh. When the Model S came out, a little less but not a ton. Automakers today are looking at $100-$140/ kWh max. Motors and other critical components were scarce when Tesla launched the Roadster & Model S. They are common and reasonably priced now. It was by no means “Easier” to sell EVs at a profit now, it’s just a different problem.

Previously companies could charge a big premium for an EV and had to manage sky high costs. Now they can charge less, but batteries cost 1/8th as much. GM has been selling the Bolt for 7+ years now, Nissan has had the LEAF for a similar amount of time. VW had their Golf EV. These guys had a swing at it when it was “Easy” to make a profit and they failed then as well.

Tesla pushed out an appealing EV that was expensive. Legacy auto pushed out compliance cars which were only appealing due to incentives and barely profitable with the incentives.

 

[Silent Ludicrosy]

Structural pack is design to work with the added rigidity from front and rear castings. The 3 doesn't have those. This is not a 4680 pack.

My assumption was the new 3LR will have castings and that’s why it was unavailable for a while. Elon said they eventually want to do castings for the Model 3.

 

[Hock1]

I’ve accumulated a fair amount of Ford stock over the years. I was impressed by the fact that of the Big 3, they survived without needing a bailout. Plus, a roughly 5% dividend makes it a decent place to park money, even if the price just trades in a range.

That said, when we get home Thursday from our FL road trip, I’m going to seriously consider moving some of that money from F to TSLA. I still wish Ford well as a company, but starting to have serious doubts as to their current EV game plan.

Some?

 

[bkp_duke]

My assumption was the new 3LR will have castings and that’s why it was unavailable for a while. Elon said they eventually want to do castings for the Model 3.

Doubt it. We would have seen massive line work at Fremont to convert the 3 lines (one or more) over to cast setups. That just hasn't happened according to all the drone videos.

 

[JRP3]

I've assumed castings will wait until "Highland" comes out.

 

[Hiline]

I disagree strongly. First, Tesla didn’t sell “many units” initially. The Roadster only sold a few thousand, and the initial run of the Model S was for 20,000 units a year. It wasn’t until Tesla figured out manufacturing efficiency that they were able to sell “many units” with the 3 and Y.

Unlike back then, there is plenty of demand for EVs now. And supposedly the large OEMs should know how to manufacture at scale.

We may yet see GM and Ford make money on their EVs. GM needed to get off the older battery tech in the Bolt, so we’ll see how they fare in 2024 with the Equinox. Ford hasn’t solved the cost issue yet as Lightning sales seem to be being impacted by high prices. Rivian has zero excuses for their crappy profitability as their prices are high and they are selling everything they can make (but their manufacturing ramp is going slow).

I just read that Porsche plans on selling lots of Taycans going forward now that they‘ve supposedly solved their high voltage heater supply issue which held them back. That seems to be a problem that the entire industry, except Tesla, has. Still supply chain.

All I see is one company that has navigated all the problems, while all the other competitors flounder bleeding cash. You can come up with excuses, but that’s the reality now.

This is a revisionist version of history.

When the Roadster came out, batteries cost $1,000/ kWh. When the Model S came out, a little less but not a ton. Automakers today are looking at $100-$140/ kWh max. Motors and other critical components were scarce when Tesla launched the Roadster & Model S. They are common and reasonably priced now. It was by no means “Easier” to sell EVs at a profit now, it’s just a different problem.

Previously companies could charge a big premium for an EV and had to manage sky high costs. Now they can charge less, but batteries cost 1/8th as much. GM has been selling the Bolt for 7+ years now, Nissan has had the LEAF for a similar amount of time. VW had their Golf EV. These guys had a swing at it when it was “Easy” to make a profit and they failed then as well.

Tesla pushed out an appealing EV that was expensive. Legacy auto pushed out compliance cars which were only appealing due to incentives and barely profitable with the incentives.

I think my perspective is most effectively illustrated by the product adoption curve. There is no doubt in my mind that the first Model S is a superior product to the first Mach E, etc. However, I am quite biased as a Tesla driver and investor. When trying to remove my own biases, I acknowledge that both EV flagships have their pros and cons. The original Model S had many build quality issues but was amazing at acceleration. The first Tesla ride I got was unforgettable. However, Tesla also benefited from the so-called 'innovators' - or super early adopters. There were electric car enthusiasts that were willing to shell out 100k for the Model S because there was nothing like it in the market. Tesla was selling these in small numbers, as Cosmacelf noted. And in selling these in a market of 'innovators' without competition, Tesla was able to generate profit. I didn't even bring up the early days of federal credit for EV manufacturing along with other unique external advantages Tesla had back in the days.

All newer entrants have this huge incumbent in Tesla, and the EV market has run out of 'innovators', and probably close to running out of early adopters. They need to target the early majority, just like Tesla does. The fact that Ford is losing money on their Mach E right now speaks little of their potential for success. They have very few of the advantages that Tesla did 10 years ago, and the product adoption curve doesn't favor them. However, given sufficient scale, Ford, GM, and the likes can turn a profit. You can disagree with this conclusion by pointing out that Tesla is always going to be cheaper, etc., but saying that Ford has already lost the battle just because they're not making profit on their EVs while Tesla did 10 years ago is quite a naive view.

 

[EVNow]

Tesla pushed out an appealing EV that was expensive. Legacy auto pushed out compliance cars which were only appealing due to incentives and barely profitable with the incentives.

Leaf was not a compliance car.

 

[JRP3]

Leaf was not a compliance car.

Horrible styling, limited range, poorly engineered battery pack which lost range prematurely, not particularly efficient even with the poor styling, it certainly checked most of the boxes for compliance car even though it has improved quite a lot with newer versions.

 

[Featsbeyond50]

I was thinking that as well, and am waiting with bated breath for the SP to appreciate to where I can buy one without a negative impact upon my retirement.

Then, I'll be making people crazy by taking them for rides and providing first-hand examples.

I actually did this inadvertently. Driving Uber, I picked up a young girl at a Sheets with 30% charge. When her 20 mile destination popped up I said "I'm so sorry, I can't take you. I don't have enough charge. Wait, are there any chargers around here?" She said "yeah, right there". I asked if she minded waiting 10 minutes and she said no. While we watched ten minutes of The Diplomat the charge went from 30% to a little over 50 and we were on our way. That was more range than I expected.

 

[Speedr117]

My assumption was the new 3LR will have castings and that’s why it was unavailable for a while. Elon said they eventually want to do castings for the Model 3.

They just built the last Megapack at Nevada, thereby freeing up 2170's. The only problem with that is the tax credit, so it might just be a coincidence.

 

[EVNow]

Horrible styling, limited range, poorly engineered battery pack which lost range prematurely, not particularly efficient even with the poor styling, it certainly checked most of the boxes for compliance car even though it has improved quite a lot with newer versions.

Compliance cars were basically made in limited quantities and were retrofitted onto existing vehicles. Leaf was neither. The main problem - it turned out - was the battery. Interestingly Tesla took the more conservative approach of liquid cooling - which Nissan wanted to mass produce, so they didn't want the complexity of liquid cooling. This is one of those things where it was simpler than was needed ...

I've over 10,000 posts on the Leaf forum if you want to check out

 

[GhostSkater]

That isn't what the European Tesla owners report. They say that the difference is ~78kWh for an LG based pack vs. ~82kWh for a Panasonic based pack. (About 5% less energy storage. Which matches pretty close to the estimated range. (~350 down to ~325)

Interesting

You know how recent? Because for a while LG packs were indeed lower capacity than Panasonic ones, but that changed a while ago and they were supposed to both be around 82 kWh now

 

[Ogre]

The fact that Ford is losing money on their Mach E right now speaks little of their potential for success. They have very few of the advantages that Tesla did 10 years ago, and the product adoption curve doesn't favor them.

You are speaking endlessly about pricing and ignoring costs. Nobody disputes there was a bigger premium for EVs 10 years ago. But that premium was there because costs were vastly higher.

The batteries on that Model S set Tesla back $50,000 - $60,000 and they sold them for $65k - $110k. The Mach E batteries might cost $12k tops and they are selling them for $50k. Ford has plenty of room for profitability in there.


If you want to talk about “advantage”, Tesla’s advantage is the fact that it takes a huge amount of engineering and legwork to get this right and Tesla had 10+ years to spread that engineering and legwork across. Because they squandered that time, Ford has to figure out how to cram that same engineering, materials sourcing, and infrastructure build out in 3 years while they are selling the product of less than 1 year of engineering efforts.


I agree with your first point though, Ford might indeed turn their ship around. But this idea that Tesla had “advantages“ and “had it easy” are ridiculous. Tesla was entering an industry against a wall of entrenched competition with 100 years experience crushing startups. “EASY” LOL.

 

[Featsbeyond50]

Horrible styling, limited range, poorly engineered battery pack which lost range prematurely, not particularly efficient even with the poor styling, it certainly checked most of the boxes for compliance car even though it has improved quite a lot with newer versions.

My 2014 Leaf is listed as having an MPGe of 114 miles. That's very close to my MYLR at 120.

 

[MP3Mike]

Rivian has zero excuses for their crappy profitability as their prices are high and they are selling everything they can make (but their manufacturing ramp is going slow).

Are they really selling everything they can make? Inventory keeps growing, I think faster than the production ramp:

74 days of supply seems on the high side for "a company selling everything they make".

We will see in Q2 if their delivery numbers pickup and inventory comes down. Maybe they are having logistics issues? (I don't think they are exporting vehicles yet.)

 

[Optimeer]

Elon has said that the NCA Model 3 packs should be good for 300-500k miles before degradation is excessive. I haven't seen where Telsa has provided any guidance on the life of the LFP packs.

I recently found the great website Degradation which allows to estimate the degradation of different Tesla Model configurations. The degradation of the Model 3’s with LFP pack seems to be quite in line with other configurations.

We should move further discussions on battery degradation to the engineering thread.