Will Tesla last?

[dsm363]

Domestically, I still expect Model S revenue per month to slow after they work through these initial reservations. I think most people likely to buy a Model S have heard of it by now. perhaps they should thank Romney for the free "advertising"?

Actually, that would have been a great official response from Tesla:
"We're repaying the government loan on schedule with 5% interest, and we thank Governor Romney for making millions of Americans aware of us. We feel that we manufacture the best cars on the planet, and our biggest challenge has been to get a chance to show people. Once people consider our cars we have an extremely high rate of reservations, and we're looking forward to being considered by many who just heard of us recently."

...
I do feel better that Tesla's battery technology is in use by many "mainstream" car companies.

I don't know. None of the people I know at work (more than a few can afford it) would never have heard of Tesla if I wasn't driving one. Remember, to date Tesla hasn't placed a single ad or run a single television commercial that I know about at least.

Are you taking a risk buying a Tesla Model S? Sure but I think the risk is small. I know you're also considering an Audi which is an excellent car and also a safer bet but being part of something new and exciting like the Model S is kind of fun and something you can't really put a dollar amount on. Everyone I know who has seen the Model S so far and ridden in it are very impressed. I've already had one confirmed reservation from a test drive I gave so Tesla having their own mobile sales force is something else not taken into account by many.

 

[derekt75]

[...]
I've already had one confirmed reservation from a test drive I gave so Tesla having their own mobile sales force is something else not taken into account by many.

Ha, Tesla mobile sales force
Do owners get kickbacks for referrals?

 

[jstoneman]

"but we won't help ourselves wearing blinders."

Amen, this has been a really interesting thread. I've learned a lot! To oversimplify, I see cash management as the only thing that could sink the company at this point. Their reservations have been going up and up and up every day. Earlier this year it was less than 10 a day, and now it's up to 30 reservations a day. But if you can't get the car off the lot, you're sunk. Just wait until they get through that reservations backlog and you can get a game-changing car a couple of weeks after you order it. If they can get these supply chain issues worked out, and keep their ramp-up going north, there isn't anything that's going to stop this company. The product is getting rave reviews, and it's like they said, the more people that know about it, the more that put down a deposit. I feel that we are seeing a game-changing company just coming out of it's infancy and into (here's this for an analogy, sorry) puberty. :wink: Imagine though, having to re-tool a huge facility like that and being cash positive? But the factory is built. The product is designed and vetted. There are just phases of the business that aren't going to be as profitable as the next. Until we actually see a quarter with profitable results though, I'm going to be checking reservation totals every day, and looking at delivery numbers......I think the world needs this company. There are so many reasons why EV's need to overtake the ICE as the main form of transportation. This is the first company that has given the world a compelling EV product. I have yet to see a negative review. These next few months are going to be all-important as the ramp-up happens.

 

[ckessel]

In case it hasn't been mentioned, Tesla doesn't purely need Model S margins to meet the bills. They have a significant income as a supplier, such as the deals with Toyota and the large one with Mercedes.

 

[Zextraterrestrial]

Ha, Tesla mobile sales force
Do owners get kickbacks for referrals?

Just lost of smiles, OOOhs ahhhs and ooohh shhhiii$$$s

worth every penny!



@ RCC below
$30-35K is my limit for a new car!
this is a whole different beast - not just a car

 

[rcc]

@ RCC below
$30-35K is my limit for a new car!
this is a whole different beast - not just a car

Yes. My calculations are for the "non-enthusiasts". That is, people who want a car first and care about it being electric second, third or not at all as opposed to the enthusiasts who are lining up because they want an electric car.

The wonderful thing about the S is that the power and handling of the S will win over people who couldn't care less if the powertrain was gas, diesel, electric or anti-matter.

To them, the S is a powerful, great handling car with lots of room and the funny characteristic that you can drive about as far as you'd get on 1/2 to 2/3 a tank of gas and then you need to plug it into a wall somewhere for a bit.

 

[vfx]

while they won't last don't forget Tesla's sale of CARB credits.


What was it? Like $40,000 for every Model S car sold? Or was it $70K?

It was big!

 

[sublimaze1]

Yes. My calculations are for the "non-enthusiasts". That is, people who want a car first and care about it being electric second, third or not at all as opposed to the enthusiasts who are lining up because they want an electric car.

The wonderful thing about the S is that the power and handling of the S will win over people who couldn't care less if the powertrain was gas, diesel, electric or anti-matter.

To them, the S is a powerful, great handling car with lots of room and the funny characteristic that you can drive about as far as you'd get on 1/2 to 2/3 a tank of gas and then you need to plug it into a wall somewhere for a bit.

You know, this is really the meat of the matter. I don't think any of us on this forum bought this item (and I am going to call it an item for now) because we wanted a new car. We wanted an experience. I think many of us (if the same feelings are shared that I have) want an experience which parallels on a journey. This is sounding like some LSD trip the more I read what I write, but I am going to press on. When I get in and out of a Model S sedan, there is a sense of accomplishment for mankind that only I and very few others will ever experience and even fewer have invested in monetarily. I own this thing. People are intrigued by this thing. My 17 year old daughter, just this summer said "dad, I will never own an electric car." This, I find out now, is because she had been looking at converted fieros and Ford RangerEVs and then the Nissan Leaf and others that have no real "pizzazz" to them. When I did the test drive and showed her the video ... well ... she is now stunned and (not surprisingly) would be happy to have an electric car - "if it looks like yours, dad"

So, after that diatribe, - yes - Tesla Motors will succeed. They will last. And they were the first (to do it right).

 

[mitch672]

while they won't last don't forget Tesla's sale of CARB credits.


What was it? Like $40,000 for every Model S car sold? Or was it $70K?

It was big!

This article is from 2 years ago, it states Tesla was counting on about a $5K CARB credit for each Model S sold, accounting for about %25 of the gross margin.

CARB Credit Crash Threatens EV Startups | PluginCars.com

Another more recent article:
CARB-Mandates For ZEVs Creating Clean-Air Credit Market | Hybrid Cars

 

[vfx]

This article is from 2 years ago, it states Tesla was counting on about a $5K CARB credit for each Model S sold, accounting for about %25 of the gross margin.

CARB Credit Crash Threatens EV Startups | PluginCars.com

Thanks. I obviously thought it was bigger.

 

[Norbert]

Tesla is looking to sell 20,000 Model S in 2013. If the average selling price is $75k and they sell 20,000 units, that's $1.5b in revenue and $375m in gross profit for 2013.
Unfortunately, Tesla's operating expenses are $410m per year.

What I remember from recent reports is that a very large part of operating expenses will become (with start of regular production) mostly cost of revenues. That is, they will be paid (in so far as they continue to exist) from the $1.5 billion - $375 million = $1.125 billion.

The current cost per Model S is much higher because of initial higher supply costs, more manual work, more testing/QA, and distribution of the factory/salary costs on a small number of cars.

I'd expect that Tesla can easily be profitable from selling 20,000 Model S per year, alone.

 

[brianman]

Thanks. I obviously thought it was bigger.

It's ok, it happens to...

 

[Lloyd]

Another more recent article:
CARB-Mandates For ZEVs Creating Clean-Air Credit Market | Hybrid Cars

Big fail in this article..... The Volt owner put the HOV sticker on the FRONT bumper!

 

[Cattledog]

Sublimaze +1

This is sounding like some LSD trip the more I read what I write,

So, after that diatribe, - yes - Tesla Motors will succeed. They will last. And they were the first (to do it right)

Sort of like you bought the experience and they threw the car in for free.

 

[mdh]

what happens to TM's revenue if the federal tax break is removed? This is my big worry for the company.

 

[CroDriver]

what happens to TM's revenue if the federal tax break is removed? This is my big worry for the company.

Here in Croatia a very basic BMW 520i with no extra options costs 50.800 € ($65.000) and people still buy a lot of them.

The average monthly net salary is less than $1.000.

I don't think that a $7.500 price increase would have a big impact on the Model S sales. In Europe people will be willing to pay much more for this can in my opinion.

 

[jerry33]

what happens to TM's revenue if the federal tax break is removed? This is my big worry for the company.

The $7500 is less than sales tax in most places. If you can't afford sales tax on an $80K item, you likely aren't going to be purchasing it anyway.

 

[spatterso911]

The $7500 is less than sales tax in most places. If you can't afford sales tax on an $80K item, you likely aren't going to be purchasing it anyway.

Well, for those who can apply the credit, it helps to offset the sales tax, so helps push some to make the purchase anyways.

 

[ElSupreme]

The $7500 is less than sales tax in most places. If you can't afford sales tax on an $80K item, you likely aren't going to be purchasing it anyway.

Well I keep telling myself that the 7,500 and 5,000 state tax rebates are part of my decision, but honestly I have to finance the car without that money so really it doesn't matter. I just will get a better HVAC or Solar on my house next year.

 

[Norbert]

Since Tesla is can set their MSRP where they wish, it means that once the current large backlog of orders is eaten up, and once purchases depend also on the price, those $7,500 will be that much less profit for Tesla. Which means, it will take that much longer until they can invest in the Gen III mass production manufacturing facilities.