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Hmmm.
Tl;dr -- "those silly German engineers. What do they know. When you factor in all of the money Tesla burns on stores, superchargers, automation, etc. they will still probably lose money."
#pravduh
OMG, what a stupid headline, had to throw in some negativity didn't we.....sigh.....
Which is a bit weird because that would be depreciation of only $500M on a yearly basis. Today their D&A non cash adjustements are in the order of $1.5B or so. Comparatively I would have expected the Model 3 D&A to even proportionally higher since it's (supposedly) manufactured less labor and more capital resource intensive than the S/X. I don't quite know how to square it all.
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shrspeedblade
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"No matter how good the news is, we can make it bad news!"
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As I noted above, Deepak's figure likely only includes machinery and tooling used directly in Model 3 production, while the $1.5B of D&A you noted includes other fixed assets. Deepak's figure is the most relevant metric for *contribution margin* analysis, which is the most applicable figure for forecasting future results in capital intensive industries, in which upfront investments comprise a large portion of total CapEx, while variable costs are relatively small. This is precisely why Tesla will turn profitable sooner than all analysts, all bears, and most bulls expected by this summer/fall.
I guess they're all forgetting about the 28% margins on the MS/X sales, plus the fact that the base M3 won't be available for around 6 months, even then, many will order options and higher spec cars too - there are all the overseas markets too who will want their share of M3P and AWD, so the margins will be much higher on average.
In any case, I'm pretty certain that the real cost is lower than has been speculated. Elon's attitude towards WS recently makes that pretty clear.
In any case, I'm pretty certain that the real cost is lower than has been speculated. Elon's attitude towards WS recently makes that pretty clear.
And I believe things like the hardware for EAP is already included in the $28k price, so anyone purchasing this option are paying for a software enabling which doesn't cost Tesla really anything more. I don't see this being mentioned. These trolls/shorts/bears/GoodOleBoys are in for a bit of a surprise.
And a feasible scenario that almost no analyst considers: $50K TM3 long range:
a) Attracts tons of customers that haven't spent more than $30K in any car historically
b) and also starts eating Mercedes/BMW ICEs market (already happening in California),
which would keep ASP high and margins ludicrous.
And they don't consider it because it hasn't happened before. So it doesn't fit their models (mental and mathematical). Too much work to factor it in as a possibility and having to refactor them.
thestreet.com has put out a positive piece on the German engineering analysis. Headline is self-explanatory.
New Teardown Shows That Tesla's Model 3 Could Have Huge Profit Margins
This caught my eye: “...the 2170 cells being produced by Panasonic at Tesla's Gigafactory in Nevada were designed by both firms and the intellectual property behind them is reportedly exclusive to Tesla.”
Anyone have more color or confirmation on this statement? I had always assumed that Panasonic owned the IP for the cells themselves. At the very least, I suppose it is reasonable that Tesla has exclusive access to the cell formulation, but the statement above goes further. Maybe it is a distinction without difference. Only Tesla can use the cell formulation and that’s that.
I think the Panasonic chairman said in his press conference at the beginning of the year that the 2170 cells were currently best in the world.
And the cell formulation is Tesla IP. The 18650 cell formulation used by Tesla is also their IP.
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Really? How do you know that? I’m not saying you’re wrong, it’s just surprising. Cell formulation is complex chemistry and physics. I know Tesla built a world class cell testing facility and have contracted with a world class cell testing professor (Jeffrey Dahn), but actually doing lab experiments on cell chemistry, that’s a different ball of wax. I find it very hard to believe Tesla had such a lab in 2011 when the Model S 18650 cell was being formulated.
I suppose it could be their IP in that they paid Panasonic to do the R&D work to formulate the cell, that would be possible...
Valid question. In fact I did read the same in different media over the last months and it makes sense to me although I don't have the prove you are asking for, just color.
Why should Tesla as the undisputed leader in Batterie R&D work with Panasonic and make them the main supplier without a contract that leaves the IP of it with Tesla?!
Its another moat and assuming they develop together a breakthrough like with the Cobalt Cathode that know-how could Panasonic just use for all other customers and makes money with what maybe Tesla invented. Elon does state that he does not believe in moats but what he really did say is "never ever stop inventing and you are safe". They disclose to the competition more than others would do anyway.
$28k and 2.8% are two figures the R&D departments of all Automakers are nightmare dreaming about now and will work towards as the new benchmark. Today they do not know how to go there and once they achieved it in a few years Tesla will disclose that they now work with 0% cobalt and an even lower number for material, production and labour.
I always do with him. He deserves it.
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