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The Bank of Tesla?

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Buckminster

Well-Known Member
Aug 29, 2018
10,109
50,169
UK
If I had to guess: Tesla will obviously create a self-contained payment system decoupled from global payment systems for Tesla Network, and will integrate all their other customer facing order systems into it as well.

I.e. Tesla intends to become a global bank as well.

Elon wanted X.com to become a bank in essence (later renamed to Paypal), but was vetoed by the other executives who considered it too risky a move.

Even with Tesla Network farther away, Tesla might be close to laying the groundwork for all that.

This will matter most for the full Tesla Network: AI-taxi users will be making small payments, and Tesla will want to cut out the middlemen banks that are eating up a significant percentage of small transaction revenue.
Mind = blown. Never thought about this before, but yes this makes perfect sense. Grabtaxi/WeChat etc. all have their own payment systems as well, but none of them have the vision + execution that Elon has, nor the global customer base that Tesla Network could potentially have.

So all those shorts crying that TSLA is becoming like a Bitcoin bubble, might one day wake up to realise Tesla Payments has made Bitcoin, PayPal, and banks obsolete? Still a long shot, but I'd love to live to see this day.

brb, going to adjust my TSLA bull case 2050 price target from $100.000 to $250.000 :p
 
FSD+Bank = lots of opportunities:

1) Feature that passengers can turn on and get paid whilst being driven:

5 cents to watch a McDonalds advert 1 minute before turn-off to McDonalds
I don't expect Elon to do this - more for Waymo etc. What Elon might go for is any additional payment / reduced price that McDonalds will pay Tesla/passenger for selecting to go McDonalds (through the search feature).

2) Drive through - Tesla could pick up and automatically pay for shopping/food (with passenger onboard or even without)
 
I don't think Tesla itself will go into banking. That's a complex market in and of itself, when it's already having to deal with the complexities of FSD, improving autos, batteries, motors, etc. Tesla doesn't even finance their own car loans, it's sent out to third parties (from what I've been told regarding people who financed 'through' Tesla).

However, if Overlord Musk wants to go into that business, I can see him starting another company after handing off a nicely humming Tesla Motors to a like minded individual. When he said that about Paypal, that was his only company, and it already dealt with money transactions as it's primary purpose.

I don't think he will, since there are better things to do with his time, like develop interplanetary travel/sustaining living on another planet/figuring out how to reverse the carbon issue with our current planet.
 
Thoughts on the hiring of the Apple Pay chap. Don't forget, Elon likes to disrupt banks and had to sell PayPal before it had reached its full potential.

Tesla will create Tesla Pay. It will be accessible through the Tesla App, which as we know, only owners use at the moment but eventually anyone can install it to hail Robotaxi or buy Tesla stuff. This will be a challenge to Apple Pay and others - just as Tesla's automotive software infrastructure is an impenetrable wall for Apple/Android CarPlay.

This will be used to buy stuff for
owners sitting at Superchargers.
upgrade software on your car
order your new car or other tesla services e.g. solar roof
set up service
pay for services
anything else Tesla wants to sell - doesn't have to do with Tesla products
book services that are near Superchargers or Destination chargers you're planning to travel to
hotel-nights
movie tickets (sometimes there is a cinema near the charger)
spa
rock-climbing
(perhaps we need a map of super/desintation chargers built into the app)
ordering a to-go meal from a restaurant menu before you arrive... the order is placed as you approach the charger, so that it's ready to pick up when you walk in... it's like you're your own Uber Eats pickup driver!
etc.etc.​
people who don't own Teslas
ordering up a Robotaxi
ordering any Tesla product​
payment plans
Tesla automotive loans/leases or solar roof loans etc.
Tesla Insurance
enabling FSD on your car for limited periods, eg. one day at a time​
 
What if instead of "coins" We used a different unit of measure of value? Tons of Carbon collected and sequestered instead of "coins"
Could Blockchain technology be used to secure these units of value?

I realize this is way out there and I am really reaching with this theory, lol. But excess carbon IS a huge threat to civilization. Units of "good", as opposed to units that create a stored value of essentially wasted energy.
 
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Cryptocurrency transactions can be sped up by having a bank as an intermediary.

When you deposits coins in a bank, you temporarily transfer ownership to the bank, this transaction settles on the Blockchain,

When you do a daily transaction via the bank, the bank merely confirms your notional balance and deducts a number of coins as needed.

Later the transaction is settled via the Blockchain and some of your coins are transferred to the new owner, initially via their bank.

What is different to currency is the strength of the audit trail, you have an independent audit trail that confirms your bank balance.

While the bank has custody of your coins, they are responsible for ensuring they are not lost.

The is a strong audit train on the buy/sell transaction once it settles.

Provided people are prepared to trust banks, transactions can be sped up.

While it is antiquated a bank can allow you to withdraw cash form a ATM using your coin account, while travelling you can buy and sell in any country using your coin account (or a special sub-account) and don't need to carry a binary copy of your coins.

Depositing coins in a bank is optional, you can retain custody of the coins.

A secondary question is if the bank provides loans in coins and pays interest.

I previously saw no value is Tesla build a large balance sheet of Bitcoin (and eventually other Crypto) but if they are acting like a bank knowing the bank has a large coin balance makes customers more likely to trust the bank with their coins.

if they are going into Cryptobanking, it also makes sense of Tesla to work on optimizing the settlement side by speeding up Blockchain or just providing more process capacity.

If Tesla (or some other Musk company) is a bank it can obviously provide banking services on Earth and Mars.
Reliable communication between Earth and Mars would allow settlement of Crypto-transactions, no onw would expect interplanetary settlement to be fast.
 
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Many auto manufacturers that have a “bank” in their name actually have a larger well-known bank (or multiple banks) running what you believe to be the “manufacturer’s bank.”

The customer will never actually know which major bank is holding their loan from “Manufacturer Financing.”

It’s a complex relationship where the bank steps in and handles the entire financing program for the manufacturer under the manufacturer’s name, with favorable terms. The relationship has to be “just right” both operationally and in terms of the “special financing offers” that the manufacturer wants to promote.

An exception might be GM, which has been known as “a bank that just happens to sell cars.” No commercial bank is going to offer Zero Percent Financing.

I believe that Tesla had an “official bank” relationship with Alliant Credit Union, with Alliant still putting their name on the loans.

Alliant still finances Tesla customers but I believe, but I am not certain, that their relationship with Tesla has backed off and is now the same as any other bank, except for the fact that they are familiar with the Tesla purchasing process, which can be very helpful.
 
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Bank? No. Financial platform similar to BTC, I would have to say it sure looks likely.

And why wouldn't you? 5-10 years out Tesla should be central to tons of American lives, covering all of transport and energy. Seems the logical next step to put a value on the kWh coming off the roof so it can be easily aggregated and traded.

If you think about it, we might see a return to a tweaked version of the SolarCity model a few years from now. Instead of "leasing panels to homeowners and selling them electricity" it might be more palatable to "let homeowners sell [x kWh] of solar production to Tesla in advance". Same net effect, just a far leaner and more accurate version of the leasing model.

You would owe Tesla a certain amount of "Elons" each month, derived from electricity production, or you'd need to make up the difference in cash.
 
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At this point the one thing I am hoping is for Elon to not get any ideas to take over SVB and merge it with Twitter.


Haha, pretty sure FDIC, who is looking for stability right now to prevent contagion, is not going to sell it to Elon who has no idea how to run a bank by Monday.

No, not a chance. Elon has most of the skills but this is a harshly difficult situation that will take huge manpower and resources that make that implausible. The technical issue is that numerous equity investments have deposit relationships too and many fo those are threatened now. That makes this solution more analogous to, say, a venture capital investor with deposits attached than to a traditional bank. One needs to think 2008-style approaches, and those were not ever very public in detail despite huge headlines. This has much that character coupled with dicy real estate exposure in some horrible commercial markets.

I'm glad I'm retired!

It seems pretty clear that Musk wants to get into the banking business on his personal book. But it doesn't appear that he's set up to absorb SVB. Not that SVB would be a bad asset to have. Quite the contrary.

He can start with a much smaller bank and work his way up.

Nice to hope. Despite Elon's tweet he's not stupid enough to take this one on. Everything he wants to do in any financial service he does know how to do. Buying a 'not very good' operational base is useless for him, especially because his goals depend on having excellent operating controls, high efficiency and tight control. "ain't nothin' like that in any broken, high expense, PR driven, outfit like SVB'. The sales technique you're suggesting has caused more claims on delist insurance than you'd imagine. At its best commercial banking should look boring. If the parties are good the bank's not.

Elon has a long history, back to zip2, of being conservative financially. 'course he did total that million dollar McLaren. Otherwise he has has been consistently conservative financially., although he's bet the bank couple times in the early days. He'll not avid all the financial stuff but he'll continue learning step by step. From product financing to insurance to supplier support Tesla and SpaceX do make immense effort to avoid the risks they can, and mitigate the ones they cannot. In these fields they're conservative.

That's why they don't pay dividends or do buybacks, although they pretend to consider them to placate important parties. That is why Tesla is among the least leveraged large companies in existence. That is why a relentless insistence on efficiency keeps margins high and prices low.

So a longwinded way to say buying failed banks out of FDIC is a highly specialized business. Some are just enough to be liquidated soon after, and some should never have been acquired at all.

When in doubt, go LONG TSLA!

You make good points.

Just to play a little Devil's Advocate:

- Elon has maybe 150B? in unencumbered assets that have low debt themselves. He has the firepower to get this done.

- Govt needs a deal done before Monday.

- Govt could guarantee value of assets to get the deal done. Govt could also take 49% of shares through warrants to make it a fair deal for taxpayers.

- I won't speak for Elon but it may be that he thinks that he's been abused by bankers ... would love a little payback.

- What better place to innovate at than a bank that pushes innovation.

- Bankers have a lot of power. Elon needs power to play in the bigs ... and that's where he's playing.

- Tesla is an innovation machine. Being loosely connected to hundreds of early stage tech companies might uncover some tremendous synergies. (Hard to imagine Tesla needing more good ideas to pursue, but one of these businesses may have the next Trillion dollar idea that only Tesla can execute on.) How many next-gen battery startups are at least partly funded by SVB?

- It'll be terrible for the country if SVB gets absorbed by another big "boring" bank - even worse if the Govt runs them. (Remember that they bankrupted the Mustang Ranch!) They won't know what to do with the assets and many good ventures will get shut down.

Just to be clear, I don't expect it to happen but I like to think ahead on what could happen.

Another question if you have time: What are the chances of contagion on Monday (or Tuesday) ... with a market crash of say 20%? I put it at somewhere between unlikely and almost impossible but the odds are not zero. If rumors of Elon trying to get into this deal surface then won't the "Elon selling more shares" narrative start again? Long-term investor here so I view these events as possible opportunities. Not much cash sitting around for me right now but at the right (highly discounted) price I could find a little.