Joe is a friend of Elon and he and others helped to create the new business court in Texas. I still believe we need more details. I don't know if the board of Tesla will provide it.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
There has been a lot of reporting about how much China demand has softened (or completely collapsed depending on the source), and no doubt recent insured vehicle reported numbers have been less than ideal, particularly from an investor standpoint. I've seen so many declare that there is no demand, customers want more luxury, they don't see Tesla as premium, etc. But I've not actually seen any data that points to a consumer centric reasoning for the decline, just a bunch of broad platitudes.
As it so happens, I just spent the last two weeks in mainland China (Guangdong) as well as Hong Kong and it was amazing to see the amount of Tesla's driving around. Many had lots of customized wraps and modifications that created a lot of visual variation and creativity. Generally speaking, in China/Hong Kong you could lump all vehicles into three buckets: Chinese brands, German brands, and Tesla. I was looking forward to seeing some of the Chinese brand EVs in person, but Xpeng, Nio, and Wuling were few and far between. BYD was most prominent of any brand aside from Tesla, but not from a BEV standpoint. Many were older cars with the full "build your dreams" spelled out on the trunk, which just felt quite lame. Across all other new vehicles I observed, it's easy to see the design influence that Tesla has had across the market.
While taking an Uber in Hong Kong, my coworkers and I got to experience a new Model 3 Highland. One of my coworkers has a strong interest in EVs (although he does not own one currently) and has frequently chatted with me to discuss the market and more specifically, Tesla. We were both really excited to be in a Highland for the first time and my coworker took the opportunity to ask our driver about it. Our driver had previously owned an older Model 3, which he loved and thought was an amazing vehicle. Model 3 Highland, according to him, is the best vehicle. It's quieter, the suspension is better, the ride is smooth, and still no one comes close from a digital computing standpoint. The driver bemoaned the Hong Kong government for lack of charging infrastructure (his car park has chargers, but many do not) but says it is worth it regardless. Knowing that BYD is a hot brand topic in the USA, my coworker asked the driver what he thought of BYD and their vehicles. The driver responded by saying "BYD is not popular, no one wants to drive a BYD." He proclaimed that the Seal is their only "okay" car and that's just because "a German magazine gave it an okay review." He continued on, "the local brands are crazy, I don't trust it. I don't like the design. I don't like the car. Tesla. Tesla is the way. If people here want to buy a car, you buy a Tesla."
While this is the view of one person, I found the conversation to provide perspective that often isn't appreciated or considered with regards to the Asian consumer. I was afforded another unique local perspective later on my trip while in Guandong. I was being transported by the son of a factory owner, who had just spent the last 7 years in the USA for undergrad and graduated education. He only recently returned to China at the insistance of his father, and wanted to maintain as much "American lifestyle" as he could. This included three things: drinking Smartwater, buying steaks from Sam's Club, and driving. He drove some top tier trim level of a BMU SUV and asked me what I drove. When I responded that I drove a Tesla Model Y, he perked up and exclaimed how cool and highly regarded Tesla vehicles were. He asked me many questions questions about ownership, cost savings, the typical conversations we all have about our EVs.
While this is all anecdotal, in my personal experience, the claims that the Chinese consumer no longer values Tesla vehicles seem at a minimum, exaggerated, and perhaps false altogether. Meanwhile, the suggestion that BYD is highly regarded and could pose a threat to Tesla if allowed in the states, seems suspect. BYD is not a highly regarded brand in China, it is a budget brand. It's not coveted as premium vehicle, but seen as an option if you do not have much money to spend. Should BYD be allowed to sell in the USA, its hard to see how they would be able to shake this perception and actually compete model v. model against Tesla.
As it so happens, I just spent the last two weeks in mainland China (Guangdong) as well as Hong Kong and it was amazing to see the amount of Tesla's driving around. Many had lots of customized wraps and modifications that created a lot of visual variation and creativity. Generally speaking, in China/Hong Kong you could lump all vehicles into three buckets: Chinese brands, German brands, and Tesla. I was looking forward to seeing some of the Chinese brand EVs in person, but Xpeng, Nio, and Wuling were few and far between. BYD was most prominent of any brand aside from Tesla, but not from a BEV standpoint. Many were older cars with the full "build your dreams" spelled out on the trunk, which just felt quite lame. Across all other new vehicles I observed, it's easy to see the design influence that Tesla has had across the market.
While taking an Uber in Hong Kong, my coworkers and I got to experience a new Model 3 Highland. One of my coworkers has a strong interest in EVs (although he does not own one currently) and has frequently chatted with me to discuss the market and more specifically, Tesla. We were both really excited to be in a Highland for the first time and my coworker took the opportunity to ask our driver about it. Our driver had previously owned an older Model 3, which he loved and thought was an amazing vehicle. Model 3 Highland, according to him, is the best vehicle. It's quieter, the suspension is better, the ride is smooth, and still no one comes close from a digital computing standpoint. The driver bemoaned the Hong Kong government for lack of charging infrastructure (his car park has chargers, but many do not) but says it is worth it regardless. Knowing that BYD is a hot brand topic in the USA, my coworker asked the driver what he thought of BYD and their vehicles. The driver responded by saying "BYD is not popular, no one wants to drive a BYD." He proclaimed that the Seal is their only "okay" car and that's just because "a German magazine gave it an okay review." He continued on, "the local brands are crazy, I don't trust it. I don't like the design. I don't like the car. Tesla. Tesla is the way. If people here want to buy a car, you buy a Tesla."
While this is the view of one person, I found the conversation to provide perspective that often isn't appreciated or considered with regards to the Asian consumer. I was afforded another unique local perspective later on my trip while in Guandong. I was being transported by the son of a factory owner, who had just spent the last 7 years in the USA for undergrad and graduated education. He only recently returned to China at the insistance of his father, and wanted to maintain as much "American lifestyle" as he could. This included three things: drinking Smartwater, buying steaks from Sam's Club, and driving. He drove some top tier trim level of a BMU SUV and asked me what I drove. When I responded that I drove a Tesla Model Y, he perked up and exclaimed how cool and highly regarded Tesla vehicles were. He asked me many questions questions about ownership, cost savings, the typical conversations we all have about our EVs.
While this is all anecdotal, in my personal experience, the claims that the Chinese consumer no longer values Tesla vehicles seem at a minimum, exaggerated, and perhaps false altogether. Meanwhile, the suggestion that BYD is highly regarded and could pose a threat to Tesla if allowed in the states, seems suspect. BYD is not a highly regarded brand in China, it is a budget brand. It's not coveted as premium vehicle, but seen as an option if you do not have much money to spend. Should BYD be allowed to sell in the USA, its hard to see how they would be able to shake this perception and actually compete model v. model against Tesla.
Krugerrand
Meow
I suspect Elon has spoken to ‘people familiar with the matter’. Perhaps those who actually are involved. Maybe this is a question to be asked - Why Texas, Elon? Why should we support an incorporation in Texas as opposed to Nevada? You have to know there’s reasons. We just don’t know them right now.
Seemed strange Tesla would build a car company in Texas in the first place. Yet, here we are. SpaceX is a no brainer because of there being only so many ideal locations from which to launch.
But it is not --- not out there in the FUD world, which is (to a first order approximation) everywhere but here.
Folks I have talked to think of Tesla as either unsafe ("autopilot kills emergency workers", "battery fires", etc.) or too cutting edge ("let's see how they are in 2 more years").
The masses do not yet see Tesla as the safest cars on the road ... not at all ... unfortunately.
Thank you for that well fleshed out first-person narrative. Extremely helpful!
And to reiterate - BYD has publicly said they will not enter the US market anytime soon. They don't want to be here.
What are we paying him billions of dollars for then? They bet the farm on 4680 and had to scramble to Chinese batteries when the gamble didn't pay off. Why else do you think Drew is gone?
Ultium is a small, insignificant percent of GM sales.
EVs are 100% of Tesla sales.
Elon should be held accountable for this error and better have it rectified this year.
Krugerrand
Meow
As a comparison and to sell the higher margined product.
Customer: I’m interested in an LR AWD Model 3
Tesla: A good choice, however, perhaps you’d like to consider the new Performance Model 3? You get this, this, this, this and this for less than the LR AWD because of the IRA blah, blah, blah, blah
Customer: No thanks.
Knightshade
Well-Known Member
The Nevada gigafactory taught Tesla an important lesson on where to locate facilities that need a lot of smart engineers, computer people, etc--- and that lesson is don't put it kind of of in the middle of nowhere because the land is cheap.
Proximity to Austin lets them get a lot of nerdy smart folks willing to live and work at the factory there- just as being near silicon valley did in Fremont.
Even Vinfast understood this by putting their US factory near the research triangle park area in NC (this also lets them attract folks in a less directly-competing-with-tesla manner by being on the east coast)
But your state of incorporation (as having been so in Delaware up to now) isn't relevant to that---specialized business courts, business friendly laws and rulings, and low/simple taxes are what matter there... all things Nevada (and Delaware prior to the Elon compensation case) has a good solid history on, and Texas does not.... so reasons for incorporating are quite different from reasons to physically locate plants there.
The smart strategy is to go with what you know until a replacement is ready. Kind of like they shouldn't have deleted USS without vision ready to take over from day 1.
This isn't a small start up anymore. No more of this management by the seat of your pants
Krugerrand
Meow
This is your first ER call, huh? What can possibly not been known and revealed - because there’s never, ever been any surprises. Ever.
Like my prediction that CT is at least already at break even or maybe profitable!? That’d be a surprise.
with release of performance 3 cheaper than LR due to tax credit derangement seems like it will increase ASP and margins. Anyone do the back o napkin math? Especially if there's been pent up demand of perf 3 and or ramp inefficiency of LR highland that could make Q2 a rebound quarter
Krugerrand
Meow
No. That’s not what the problem was at Nevada. You know that. You also know there were other states involved in the bidding.
I’m well aware that incorporation is different than locating factories. Not the point I was making. And you k ow that as well.
I will not play your game.
I'm pretty sure the video release time is dictated by Tesla, and not based on completion by the creator
Knightshade
Well-Known Member
As a comparison and to sell the higher margined product.
Customer: I’m interested in an LR AWD Model 3
Tesla: A good choice, however, perhaps you’d like to consider the new Performance Model 3? You get this, this, this, this and this for less than the LR AWD because of the IRA blah, blah, blah, blah
Customer: No thanks.
There's a few problems with that.
1) It means (unless they remove it from the menu) Tesla is now selling a product it makes no sense for anyone to buy (the LR AWD that's net priced higher than the upper level trim)
2) Tesla does not have enough 2170s to replace all LR AWD sales with Ps. How do we know that? If they did they'd have already been putting them in LR AWDs which would then qualify for the $7500 as well.
So right now, yes, nearly any customer is going to pick the P over the LR AWD because of the broken pricing situation... but Tesla can't build nearly as many as they already sell of the LR AWD. Which you just removed any reason for anyone to buy.
So that'll put them in the weird spot of either starting to get REALLY long delivery times on the P and selling little to no AWDs... or needing to slash the price of the LR AWD to give anyone a reason to buy one.
Both of which you avoid if they'd have priced the P at say $57,990..... which would mean there's still a spot price-wise for the LR AWD without needing to cut any prices, plus they'd get 5k more for the P, plus the P would still be a fantastic buy at the price compared to the competition from other quick EVs all of which come in either a touch slower and STILL more expensive, or a touch quicker but WAY more expensive.
I can't see any math or sales outcome where 52.9k makes sense for the P given the current battery, IRA, and sales volume situations in the US- so Tesla doing that remains baffling.
I'd love to hear any theory that makes it make sense.... as long as it's more than just "Tesla must know what they're doing"
Joe F
Disruption is hard.
You're not a true investor in TSLA unless you still have 15 shares dated 12/23/2019 currently showing purchased at $28.046.
If you know, you know.
If you know, you know.
Drumheller
Active Member
Elon has said, on multiple earnings calls, that Tesla is going to continue buying as many batteries as possible from other suppliers going forward. He wanted to reassure them that more batteries are needed and Tesla's efforts into 4680 production are meant to compliment their supply not replace suppliers. This was also stated at battery day.
Drumheller
Active Member
The long range has more range, tires on smaller wheels that last longer and are less likely to be damaged and likely perform better in weather events. I would pick the performance but not everyone will.
I think you just answered your own question. SpaceX was already in Texas.
I've seen a lot of committees scout out new locations for a company headquarters. They consider all the economic factors and what is best for the business. Somehow, that almost always happens to be close to the place where the CEO wants to live.
Knightshade
Well-Known Member
On the contrary- that was exactly the problem at nevada.
This has been known since 2014
Study finds Nevada lacking in skilled workers for Tesla gigafactory
Acccording to a recent study, Nevada doesn’t have enough skilled workers to fill high-tech jobs, like the ones Tesla Motors will need for its gigafactory.…
www.kunr.org
Elon himself cites lack of local "stuff" as the reason they can't get people to move and live there-- lack of enough schools, roads, affordable housing, among others-
Musk plunges Tesla into Nevada’s housing crisis
Elon Musk says his latest vision for Tesla’s Nevada Gigafactory includes housing close enough for workers to walk to their jobs.
www.rgj.com
Panasonic says the same thing (largely blaming housing costs here as part of why they can't recruit skilled folks to move there)
Opinion: Gigafactory hiring hurt by housing shortage, says Panasonic official
As our team continues to expand, the lack of attainably priced housing is becoming an ever-larger issue.
www.rgj.com
That's Panasonics senior manager of talent acquisition for Panasonic Energy of North America
YOU should know that.
No, I don't know that, because your post read otherwise.
Do you mean the game of pointing out your arguments don't make sense and claim things that aren't true?
For the $2000 cheaper the P is you could sell the 20" wheels (P owners do it all the time) and buy even nicer 18s (which will also improve range- again P owners do it all the time on the outgoing one)
No- but the new vote to re-approve it might be able to avoid Delaware court scrutiny depending on the timing of moving incorporation.
(nor would moving out of Delaware absolve them of owing anything the court decides they owe the lawyers in the DE case)
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