Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates(bloomberg.com)
bloomberg.com
Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates
https://www.bloomberg.com/news/articles/2017-02-22/tesla-says-model-3-on-track-as-quarterly-loss-beats-estimates
266 comments
Shorting seems to often be about the short-term prospects of the stock.
Long term, Tesla looks like it will be a reasonable company. But will it justify its stock price?
Tesla is a $45B company right now. Toyota is $188B (4.1x more valuable), VW is $78B (1.7x), GM is $58B (1.3x), Ford is $51B (1.1x), Nissan is $42B (0.9x), Fiat Chrysler is $17B (0.4x), Honda is $58B (1.3x), BMW is $56B (1.2x), Daimler is $79B (1.8x), and Mazda is $9B (0.2x). Tesla, right now, is still risky. Toyota's profits are real. GM's profits are real. BMW's profits are real. Tesla's profits might be great in the future - and that risk means the potential profits are worth less than actual profits. So, given that there's a good amount of risk and it's going to be a while before those profits come rolling in, it seems like Tesla would have to be the next Toyota to justify a $45B price tag. Let's say that in 20 years it becomes the next VW or Daimler. Would that justify a $45B price tag today? Probably not. It wouldn't be a high return and the likelihood that Tesla is going to become the next VW or Daimler is low. That's not a dig at Tesla so much as realism. No matter how great you are, it's hard to become one of the top 3 companies in an industry.
You note Tesla's non-GAAP margins of 22.2%. "During the past 13 years, the highest Gross Margin of Honda Motor Co Ltd was 29.06%. The lowest was 22.39%. And the median was 25.58%." 22.2% isn't bad, but selling more vehicles will put downward pressure on that. Gross margin doesn't include things like R&D so spreading that over more sales won't impact gross margins. Can they drive down COGS? Maybe, but serving a less enthusiastic audience also bings costs and challenges. It's easy for Tesla to lean on the enthusiasm and good will of early-adopters right now.
But Tesla also faces existential threats. Musk has said that they should have full self-driving capabilities by the end of 2017. For some people, owning a car will still make sense, but for many getting on-demand transportation means not having to deal with car ownership. Car sharing rates are going to drop to the floor. A self-driving cab can easily handle the load of multiple people that might own cars today. Even if the self-driving cab has a margin of 40%, if you're only paying for 1/5th of the vehicle, well, 140% * 20% = 28%. Given that cars are a major expense for many people, being able to cut 70% off that expense will be attractive to many - and will mean that the demand for cars will become smaller.
Similarly, Tesla has opened up all its electric patents to competitors. Musk has said that making electric cars is easier than making internal combustion ones. So, if Musk shows that electric cars can be profitable, won't everyone else add a huge amount of competition? I mean, Tesla is really cool for opening up its patents to competitors, but that indicates to me that Tesla is more about pushing the human race forward than it is about making money.
Tesla is certainly a cool company. I love that they're pushing us forward - and in cool ways. I love that Teslas don't look ridiculous like a BMW i3. I love that the solar roof they announced is something my parents would be cool with because it looks normal. But I'm also kinda glad that they're doing this with money that isn't mine. Musk is on a mission and it's a cool one. Self-driving electric vehicles with solar power and all sorts of coolness. I think there's a decent chance Tesla will become profitable. But the bet at its current market valuation is that it will become the next Toyota. Nothing short of that would justify the valuation. Eventually, automobiles just don't have the economics or growth of software and the PE ratios are generally in the 6-10 range. I mean, if Tesla becomes as big as Toyota, it won't likely be able to become 10x as big as Toyota. I mean, Toyota sells around 10M automobiles annually. The top 15 auto makers sell around 73M. So, if Tesla becomes Toyota, there's not a lot of growth past that. And based on its current price, if it only becomes GM or Ford or BMW in the next decade, it will have seen basically no growth in its value.
What's the likelihood that Tesla is the next BMW? It's low. Not because Tesla isn't cool. Not because I don't want them to succeed. It's because it's hard to go from 100k niche cars per year to 2.3M. Even if you think the chance if 50% 10 years from now, that means you're saying there's a 50% chance that Tesla should be worth 20% more than it's worth now in 10 years time.
The world would be better if Tesla became the next BMW. We'd have a lot of lower-polluting vehicles on the road and other manufactures would follow Tesla. But I think it's very far from a sure thing and a lot of investors are pricing Tesla like it's a sure thing that Tesla will be the next Toyota. Tesla is so cool and they're pushing us toward a better world. They're making great strides. At the same time, looking at their current valuation, it's hard to see the upside. Maybe the vertical integration will be wonderful. Maybe people won't want self-driving cabs (though that seems unlikely). Maybe other manufacturers won't compete effectively with electrics. But that's a lot of "maybes" in the path of becoming one of the most valuable car companies out there. I hope they do it because I'll have a better world, but I wouldn't bet my money on it.
Long term, Tesla looks like it will be a reasonable company. But will it justify its stock price?
Tesla is a $45B company right now. Toyota is $188B (4.1x more valuable), VW is $78B (1.7x), GM is $58B (1.3x), Ford is $51B (1.1x), Nissan is $42B (0.9x), Fiat Chrysler is $17B (0.4x), Honda is $58B (1.3x), BMW is $56B (1.2x), Daimler is $79B (1.8x), and Mazda is $9B (0.2x). Tesla, right now, is still risky. Toyota's profits are real. GM's profits are real. BMW's profits are real. Tesla's profits might be great in the future - and that risk means the potential profits are worth less than actual profits. So, given that there's a good amount of risk and it's going to be a while before those profits come rolling in, it seems like Tesla would have to be the next Toyota to justify a $45B price tag. Let's say that in 20 years it becomes the next VW or Daimler. Would that justify a $45B price tag today? Probably not. It wouldn't be a high return and the likelihood that Tesla is going to become the next VW or Daimler is low. That's not a dig at Tesla so much as realism. No matter how great you are, it's hard to become one of the top 3 companies in an industry.
You note Tesla's non-GAAP margins of 22.2%. "During the past 13 years, the highest Gross Margin of Honda Motor Co Ltd was 29.06%. The lowest was 22.39%. And the median was 25.58%." 22.2% isn't bad, but selling more vehicles will put downward pressure on that. Gross margin doesn't include things like R&D so spreading that over more sales won't impact gross margins. Can they drive down COGS? Maybe, but serving a less enthusiastic audience also bings costs and challenges. It's easy for Tesla to lean on the enthusiasm and good will of early-adopters right now.
But Tesla also faces existential threats. Musk has said that they should have full self-driving capabilities by the end of 2017. For some people, owning a car will still make sense, but for many getting on-demand transportation means not having to deal with car ownership. Car sharing rates are going to drop to the floor. A self-driving cab can easily handle the load of multiple people that might own cars today. Even if the self-driving cab has a margin of 40%, if you're only paying for 1/5th of the vehicle, well, 140% * 20% = 28%. Given that cars are a major expense for many people, being able to cut 70% off that expense will be attractive to many - and will mean that the demand for cars will become smaller.
Similarly, Tesla has opened up all its electric patents to competitors. Musk has said that making electric cars is easier than making internal combustion ones. So, if Musk shows that electric cars can be profitable, won't everyone else add a huge amount of competition? I mean, Tesla is really cool for opening up its patents to competitors, but that indicates to me that Tesla is more about pushing the human race forward than it is about making money.
Tesla is certainly a cool company. I love that they're pushing us forward - and in cool ways. I love that Teslas don't look ridiculous like a BMW i3. I love that the solar roof they announced is something my parents would be cool with because it looks normal. But I'm also kinda glad that they're doing this with money that isn't mine. Musk is on a mission and it's a cool one. Self-driving electric vehicles with solar power and all sorts of coolness. I think there's a decent chance Tesla will become profitable. But the bet at its current market valuation is that it will become the next Toyota. Nothing short of that would justify the valuation. Eventually, automobiles just don't have the economics or growth of software and the PE ratios are generally in the 6-10 range. I mean, if Tesla becomes as big as Toyota, it won't likely be able to become 10x as big as Toyota. I mean, Toyota sells around 10M automobiles annually. The top 15 auto makers sell around 73M. So, if Tesla becomes Toyota, there's not a lot of growth past that. And based on its current price, if it only becomes GM or Ford or BMW in the next decade, it will have seen basically no growth in its value.
What's the likelihood that Tesla is the next BMW? It's low. Not because Tesla isn't cool. Not because I don't want them to succeed. It's because it's hard to go from 100k niche cars per year to 2.3M. Even if you think the chance if 50% 10 years from now, that means you're saying there's a 50% chance that Tesla should be worth 20% more than it's worth now in 10 years time.
The world would be better if Tesla became the next BMW. We'd have a lot of lower-polluting vehicles on the road and other manufactures would follow Tesla. But I think it's very far from a sure thing and a lot of investors are pricing Tesla like it's a sure thing that Tesla will be the next Toyota. Tesla is so cool and they're pushing us toward a better world. They're making great strides. At the same time, looking at their current valuation, it's hard to see the upside. Maybe the vertical integration will be wonderful. Maybe people won't want self-driving cabs (though that seems unlikely). Maybe other manufacturers won't compete effectively with electrics. But that's a lot of "maybes" in the path of becoming one of the most valuable car companies out there. I hope they do it because I'll have a better world, but I wouldn't bet my money on it.
> Toyota's profits are real. GM's profits are real. BMW's profits are real. Tesla's profits might be great in the future - and that risk means the potential profits are worth less than actual profits.
You have this exactly backwards. For instance, you could have made the exact same argument about Walmart versus Amazon. What you're missing is that the investments that Tesla is making, which hurt short-term profitability, literally create new lines of business that power future revenue streams. The fact that car manufacturers are hoarding profits and failing to invest in the future is precisely why they are overvalued.
You have this exactly backwards. For instance, you could have made the exact same argument about Walmart versus Amazon. What you're missing is that the investments that Tesla is making, which hurt short-term profitability, literally create new lines of business that power future revenue streams. The fact that car manufacturers are hoarding profits and failing to invest in the future is precisely why they are overvalued.
You're still making a bet that Tesla will become a top 3 car company in the world. At the moment people there are people who think the price to risk is worth it. Some do not think it's worth it.
I would say there are better ways to make money than a 50 percent chance to make 20 percent more.
Also these predictions are 10+ years in the future. How often have people actually predicted that far from the future? Almost none. The only ones I can think of are bets on fragility: more downsides than upsides as time progresses.
I would say there are better ways to make money than a 50 percent chance to make 20 percent more.
Also these predictions are 10+ years in the future. How often have people actually predicted that far from the future? Almost none. The only ones I can think of are bets on fragility: more downsides than upsides as time progresses.
Remember though that Tesla will no longer be just a car company. The battery market is huge and will only get bigger as utility scale projects boost demand (like the 80MW one in Southern California Tesla just installed), and if residential solar takes off, solar city stands to make a decent amount of money.
The larger the battery market becomes, the more competition it will attract. Tesla is certainly starting off with a nice lead, but it would be foolish to underestimate the capabilities of other players who might just not be interested enough in this market yet, and who'll -- for the moment -- happily have Tesla serve as a canary.
I'm not entirely sure if Tesla's battery tech is a sufficient differentiator.
Tesla is a slave to the Lithium Ion process of Panasonic. If a new chemistry breakthrough comes out tomorrow (ie: Redox Flow has huge potential in the utility space, even if it has little potential in the retail space)... Panasonic will be able to switch to the new chemistry but Tesla's battery tech is basically Lithium Ion only.
Tesla's battery technology is literally the battery electronics. Not the chemical cells. Tesla seems to employ chemical experts so that their battery-electronics can better predict the effects of the chemistry... but really... they're only putting together cells. Tesla doesn't make the 18650, Panasonic does. Tesla just puts a bunch of 18650 together, as well as have some sort of algorithm to make them charge / discharge at high efficiency.
Tesla is completely dependent on Panasonic's chemistry. The speed at which LG was able to build a "Silicon-Lithium Ion" battery pack of GM's Bolt only demonstrates how "easy" the battery-pack problem is.
Tesla is a slave to the Lithium Ion process of Panasonic. If a new chemistry breakthrough comes out tomorrow (ie: Redox Flow has huge potential in the utility space, even if it has little potential in the retail space)... Panasonic will be able to switch to the new chemistry but Tesla's battery tech is basically Lithium Ion only.
Tesla's battery technology is literally the battery electronics. Not the chemical cells. Tesla seems to employ chemical experts so that their battery-electronics can better predict the effects of the chemistry... but really... they're only putting together cells. Tesla doesn't make the 18650, Panasonic does. Tesla just puts a bunch of 18650 together, as well as have some sort of algorithm to make them charge / discharge at high efficiency.
Tesla is completely dependent on Panasonic's chemistry. The speed at which LG was able to build a "Silicon-Lithium Ion" battery pack of GM's Bolt only demonstrates how "easy" the battery-pack problem is.
And as solar gets cheaper and cheaper, there's only going to be more incentive to install batteries.
You're still making a bet that Tesla will become a top 3 car company in the world.
Or that they will sell/license batteries and technology to the top 3 car companies in the world.
Or that they will sell/license batteries and technology to the top 3 car companies in the world.
Do you actually know the scale at which car companies invest? Or do you just pretend to know that they "fail to invest" because that sounds fun in relation to Tesla?
The other aspect is that investing isn't the end of the story. Nearly all car companies have made investments in green energy--but which are likely to produce results and win the market?
Tesla is expected to execute better because it hasn't just set up a department to prototype EVs. Tesla is dedicated to EVs. The company is built on the technology. That results in a lack of legacy distractions, faster iteration cycles, effective vertical integration, and a wholly different culture and brand.
It's a classic startup disrupting incumbent story. It isn't a sure thing, but it's enough to make Tesla very valuable.
Tesla is expected to execute better because it hasn't just set up a department to prototype EVs. Tesla is dedicated to EVs. The company is built on the technology. That results in a lack of legacy distractions, faster iteration cycles, effective vertical integration, and a wholly different culture and brand.
It's a classic startup disrupting incumbent story. It isn't a sure thing, but it's enough to make Tesla very valuable.
If they have profits, by definition they are not investing enough.
>If they have profits, by definition they are not investing enough.
So nobody deserves a return on risked capital? That's insane.
So nobody deserves a return on risked capital? That's insane.
[deleted]
Exactly so.
> Tesla is a $45B company right now. ... BMW is $56B (1.2x) What's the likelihood that Tesla is the next BMW? It's low.
This here. BMW makes more in profit than Tesla is earning in revenue. BMW sells 2.5 million cars a year, 25 times as many as Tesla. And both companies are valued roughly the same? How? Totally overvalued. If Tesla catches up to BMW 25x output (and this is a big If) would it then be worth a trillion dollar? No this is already priced into the stock.
> Musk has said that making electric cars is easier than making internal combustion ones. So, if Musk shows that electric cars can be profitable, won't everyone else add a huge amount of competition?
CWhat is not easy to make is a self-driving car and Teslas battery-Gigafactory also an advantage. Still the statement that an electric car is simple is troubling for a luxury/premium brand. You generally don't want to be in a market where things are easy to make and there is disruption by a race-to-the-bottom. I think the big car makers are more at risk having their lunch eaten by upcoming cheap car makers in China or India than Tesla.
This here. BMW makes more in profit than Tesla is earning in revenue. BMW sells 2.5 million cars a year, 25 times as many as Tesla. And both companies are valued roughly the same? How? Totally overvalued. If Tesla catches up to BMW 25x output (and this is a big If) would it then be worth a trillion dollar? No this is already priced into the stock.
> Musk has said that making electric cars is easier than making internal combustion ones. So, if Musk shows that electric cars can be profitable, won't everyone else add a huge amount of competition?
CWhat is not easy to make is a self-driving car and Teslas battery-Gigafactory also an advantage. Still the statement that an electric car is simple is troubling for a luxury/premium brand. You generally don't want to be in a market where things are easy to make and there is disruption by a race-to-the-bottom. I think the big car makers are more at risk having their lunch eaten by upcoming cheap car makers in China or India than Tesla.
The car industry is about more than just the big car companies as suppliers are huge. Takata, BMW's airbag manufacture among other things is also worth 45B in part from a slice of those BMW sales.
Tesla is like BMW + some BMW suppliers. In that way Tesla is really 4 companies right now, a car company, a component supplier to Toyota and others, a battery company, and a solar company. Energizer is worth 3.3B and has 5,000 workers. Solar city is 'worth' ~$6 billion.
Thus, directly comparing Tesla to BMW is missing the boat.
Tesla is like BMW + some BMW suppliers. In that way Tesla is really 4 companies right now, a car company, a component supplier to Toyota and others, a battery company, and a solar company. Energizer is worth 3.3B and has 5,000 workers. Solar city is 'worth' ~$6 billion.
Thus, directly comparing Tesla to BMW is missing the boat.
>This here. BMW makes more in profit than Tesla is earning in revenue. BMW sells 2.5 million cars a year, 25 times as many as Tesla. And both companies are valued roughly the same? How? Totally overvalued.
Are you familiar with how companies are valued? You only seem to be factoring in present considerations. What might happen in the future is a major factor in determining these prices, especially in an industry with so much potential upheaval not too far away. (e.g. what if Tesla profits are 10x BMW's in 20 years? Then they are probably undervalued right now.) If you are confident in your assessment though, you can always put money behind it and make yourself rich.
Are you familiar with how companies are valued? You only seem to be factoring in present considerations. What might happen in the future is a major factor in determining these prices, especially in an industry with so much potential upheaval not too far away. (e.g. what if Tesla profits are 10x BMW's in 20 years? Then they are probably undervalued right now.) If you are confident in your assessment though, you can always put money behind it and make yourself rich.
One factor to consider is that BMW is heavily invested in current fossil-fuel powered vehicles.
If there is a big shift overall to electric then the capital expenditures that BMW has already made aren't so valuable.
Yes, they (BMW) are indeed making money now. But have they invested in the right direction? I don't know. Allegedly the market does (as reflected in the relative stock prices)... but the market is often stupid. It is often smart too, but it can sometimes be hard to tell.
If there is a big shift overall to electric then the capital expenditures that BMW has already made aren't so valuable.
Yes, they (BMW) are indeed making money now. But have they invested in the right direction? I don't know. Allegedly the market does (as reflected in the relative stock prices)... but the market is often stupid. It is often smart too, but it can sometimes be hard to tell.
> BMW is heavily invested in current fossil-fuel powered vehicles
isn't BMW behind the proposed european standard for electric vehicle charging?
isn't BMW behind the proposed european standard for electric vehicle charging?
The point I was trying to make though is that most of their infrastructure is currently dedicated to gasoline powered vehicles. That may, or may not turn out to have a good return on investment, and may be factored into their share price.
Disclaimer: I am a Tesla shareholder and an ardent supporter of Musk. Forgive the hyperbole below, if any.
But will it justify its stock price?
No amount of metrics can or will justify a company like Tesla's current stock price. At this juncture, you are mostly getting into a wild ride. I state this for the following reasons:
1. Tesla is not a car company. Not anymore. It's an energy company. So all comparisons to existing car companies are void. You need to make new comparisons with energy companies. But then, there is no energy company like Tesla. Exxon is probably a good comparison but heck by that measure, Tesla is super cheap.
2. Tesla is run by a Maverick CEO. Admittedly, none of the car or energy company CEOs fit that bill. Tillerson probably came close but he is not with Exxon anymore. What Musk can or will do, is hard to predict. Simply put, there isn't enough data to support such predictions. Tesla's past has been very volatile. So basically it's very hard to model Musk's future plans. He has started digging tunnels now.
One can just go wild imagining the possibilities for Tesla.
They could become a utility company. They could be the storage backbone of many utility companies.
The supercharger network in itself can be highly valuable. Imagine if all cars were to go electric and Musk strikes a deal with all the automakers to make their cars compatible with the supercharger network.
We are just getting started with Tesla and it's super difficult to put a future value on them. Even a 12 month projection is pretty hard.
So analysts are doing the best they can. Draw projections based on tangible raw numbers. Gigafactory growth and Model 3 growth. This growth will not be linear by any measure. So expect dips in the stock price accordingly.
But will it justify its stock price?
No amount of metrics can or will justify a company like Tesla's current stock price. At this juncture, you are mostly getting into a wild ride. I state this for the following reasons:
1. Tesla is not a car company. Not anymore. It's an energy company. So all comparisons to existing car companies are void. You need to make new comparisons with energy companies. But then, there is no energy company like Tesla. Exxon is probably a good comparison but heck by that measure, Tesla is super cheap.
2. Tesla is run by a Maverick CEO. Admittedly, none of the car or energy company CEOs fit that bill. Tillerson probably came close but he is not with Exxon anymore. What Musk can or will do, is hard to predict. Simply put, there isn't enough data to support such predictions. Tesla's past has been very volatile. So basically it's very hard to model Musk's future plans. He has started digging tunnels now.
One can just go wild imagining the possibilities for Tesla.
They could become a utility company. They could be the storage backbone of many utility companies.
The supercharger network in itself can be highly valuable. Imagine if all cars were to go electric and Musk strikes a deal with all the automakers to make their cars compatible with the supercharger network.
We are just getting started with Tesla and it's super difficult to put a future value on them. Even a 12 month projection is pretty hard.
So analysts are doing the best they can. Draw projections based on tangible raw numbers. Gigafactory growth and Model 3 growth. This growth will not be linear by any measure. So expect dips in the stock price accordingly.
He uses numbers, you use things like "not a car company" and "Maverick CEO". That's the difference between fans and investors.
Parent post is about why using numbers is not necessarily correct because those numbers are based on assumptions that are not valid in Tesla's case.
As an investor but not a fan of Tesla, I share his view. "Maverick CEO" just means that he's unpredictable and has made several major pivots before, so expecting Tesla to follow the trajectory of existing car manufacturers is quite imperceptive.
As an investor but not a fan of Tesla, I share his view. "Maverick CEO" just means that he's unpredictable and has made several major pivots before, so expecting Tesla to follow the trajectory of existing car manufacturers is quite imperceptive.
>Parent post is about why using numbers is not necessarily correct because those numbers are based on assumptions that are not valid in Tesla's case.
And my post is about how these things are just said, without any evidence. I thought this is a forum of critical thinkers? And yet we have people saying that "well, it's not really a car company" or "but Elon!" trumps actual data.
>so expecting Tesla to follow the trajectory of existing car manufacturers is quite imperceptive
This isn't about the path to get there. At the end of the day, cars are cars, and Tesla isn't the only one building EVs now. To think that they are going to, somehow, have margins in the multiples of existing companies in both the automobile, solar or battery business requires explanation. "Elon is unpredictable" isn't one.
And my post is about how these things are just said, without any evidence. I thought this is a forum of critical thinkers? And yet we have people saying that "well, it's not really a car company" or "but Elon!" trumps actual data.
>so expecting Tesla to follow the trajectory of existing car manufacturers is quite imperceptive
This isn't about the path to get there. At the end of the day, cars are cars, and Tesla isn't the only one building EVs now. To think that they are going to, somehow, have margins in the multiples of existing companies in both the automobile, solar or battery business requires explanation. "Elon is unpredictable" isn't one.
Tesla is not only a car company anymore.
The commenter above is right on this one and it is not a subjective statement. This is a fact.
The commenter above is right on this one and it is not a subjective statement. This is a fact.
Tesla is as much a car company as GM, BMW, Honda, and Toyota. >90% of Tesla's revenue is from selling cars. They certainly have aspirations to be more, but they aren't there yet.
You're not wrong; but you are not right either.
Of course, most of the revenue today is generated from selling cars. But we were talking about the value of the company. And this includes expected _future_ returns. And, obviously, Tesla has more than just aspirations. They have built a large part of the Gigafactory already.
Honda certainly is not a car company - but much more than this as well. This was not a good example for your case. Same with GM. I am not sure if your intention was to list companies that are much more than car companies? You were just making my case.
Of course, most of the revenue today is generated from selling cars. But we were talking about the value of the company. And this includes expected _future_ returns. And, obviously, Tesla has more than just aspirations. They have built a large part of the Gigafactory already.
Honda certainly is not a car company - but much more than this as well. This was not a good example for your case. Same with GM. I am not sure if your intention was to list companies that are much more than car companies? You were just making my case.
> Of course, most of the revenue today is generated from selling cars. But we were talking about the value of the company.
You were talking about what Tesla is. Despite its aspirations, Tesla is a car company right now.
> I am not sure if your intention was to list companies that are much more than car companies?
That was my intention. The discussion was about how we can't compare Tesla to GM or Honda because Tesla "isn't a car company". My point is that those other companies are not either, and so that is not an argument to reject the comparisons out-of-hand.
You were talking about what Tesla is. Despite its aspirations, Tesla is a car company right now.
> I am not sure if your intention was to list companies that are much more than car companies?
That was my intention. The discussion was about how we can't compare Tesla to GM or Honda because Tesla "isn't a car company". My point is that those other companies are not either, and so that is not an argument to reject the comparisons out-of-hand.
>Tesla is as much a car company as GM, BMW, Honda, and Toyota
It often feels like the people discussing Tesla have zero experience with some of these other companies.
It often feels like the people discussing Tesla have zero experience with some of these other companies.
You might have missed that the poster is completely self-aware, leading with:
> No amount of metrics can or will justify a company like Tesla's current stock price. At this juncture, you are mostly getting into a wild ride.
FWIW, as a "fan" I've made a great return on my investment in the wild ride.
> No amount of metrics can or will justify a company like Tesla's current stock price. At this juncture, you are mostly getting into a wild ride.
FWIW, as a "fan" I've made a great return on my investment in the wild ride.
>No amount of metrics can or will justify a company like Tesla's current stock price.
And this is incorrect. It's very easy to model things like "What if every person on the planet buys a Model S every year at X price and X margins.", and create a valuation model from there. Then make more reasonable projections.
This dismissal of numbers here is disturbing. Believe it or not, Tesla isn't the most original company ever to grace the earth; it has to do business in the business world like everyone else.
And here's the thing: TSLA is priced to become one of the biggest car companies on the planet. Anything short of that, from an investment standpoint, is a failure. If Tesla achieves that..your returns will be mediocre, even though the company has been wildly successful. What is the difficulty in understanding that?
And this is incorrect. It's very easy to model things like "What if every person on the planet buys a Model S every year at X price and X margins.", and create a valuation model from there. Then make more reasonable projections.
This dismissal of numbers here is disturbing. Believe it or not, Tesla isn't the most original company ever to grace the earth; it has to do business in the business world like everyone else.
And here's the thing: TSLA is priced to become one of the biggest car companies on the planet. Anything short of that, from an investment standpoint, is a failure. If Tesla achieves that..your returns will be mediocre, even though the company has been wildly successful. What is the difficulty in understanding that?
Scaling a car company is incredibly difficult. For example recalls and design issues are less of an issue for a low volume/high margin car like the Model S which, has been plagued with flaws leading to expensive fixes like titanium battery shields.
If I were a Tesla stockholder, I'd want Tesla to focus harder on manufacturing and scaling production of electric cars instead self-driving technology.
If I were a Tesla stockholder, I'd want Tesla to focus harder on manufacturing and scaling production of electric cars instead self-driving technology.
The conventional wisdom in the auto industry now is that in a few years any vehicle without good level 4 autonomous technology won't be salable. There's not much point in scaling production if your sales fall off a cliff in 10 years because GM or Daimler beat you on the technology side.
I would propose viewing Tesla as an energy storage company, not a car company (JB and Elon both think of Tesla this way). The car is a battery on wheels, and the battery is the product. They're not trying to be the next BMW, and attempts to value them through this lense will miss the mark.
When I worked at Intel there were some comments along the lines of 'Intel is a Fab House that designs Microprocessors on the side' One can apply that to Tesla as a battery manufacturer that also builds cars.
Strength I see for Tesla is unlike the other car companies they don't have capital tied up in the legacy car business. Granted legacy is 97% of the market right now, but it won't be in ten years.
Strength I see for Tesla is unlike the other car companies they don't have capital tied up in the legacy car business. Granted legacy is 97% of the market right now, but it won't be in ten years.
Musk has also started talking like the product is factory, not the car or the energy storage.
How high is their current valuation relative to other energy storage companies? (Honestly, I don't know)
Another way to look at it: how big is the global market for gas peaker plants? If current trends continue, solar PV + batteries will be cheaper at some point than any fossil fuel[1], so at that point Telsa energy will begin to consume large chunks of that market.
According to this link[2] gas peaker plans were 50% of energy installs in 2013, the best link I could find from a quick search.
[1] Interesting talk on this topic: https://www.youtube.com/watch?v=Kxryv2XrnqM
[2] http://www.eia.gov/todayinenergy/detail.php?id=15751
According to this link[2] gas peaker plans were 50% of energy installs in 2013, the best link I could find from a quick search.
[1] Interesting talk on this topic: https://www.youtube.com/watch?v=Kxryv2XrnqM
[2] http://www.eia.gov/todayinenergy/detail.php?id=15751
> I would propose viewing Tesla as an energy storage company
Yeah, I'd say it would not be unfair to compare future Tesla to a company like GE ($270B mkt cap).
Optimistic, but not irrational.
Yeah, I'd say it would not be unfair to compare future Tesla to a company like GE ($270B mkt cap).
Optimistic, but not irrational.
I beg to differ - GE is not an energy company, it's a multinational conglomorate heavily involved also in a dozen other fields like oil&gas, aviation, healthcare, home appliances, finance, research and transportation.
GE Healthcare alone employs >40 000 people and does >4x the revenue of Tesla today.
Maybe if Tesla merged with SpaceX and also with five-six other large companies you'd be about right.
GE Healthcare alone employs >40 000 people and does >4x the revenue of Tesla today.
Maybe if Tesla merged with SpaceX and also with five-six other large companies you'd be about right.
> GE is not an energy company
Fair enough (though I'd think the oil & gas you mention would count), but look at any energy company today and you'll see similar numbers. Another poster in this thread compares to Exxon; similarly favorable.
You may not think Tesla will make it there, and you might turn out to be right. But those that do are optimistic; not stupid.
Fair enough (though I'd think the oil & gas you mention would count), but look at any energy company today and you'll see similar numbers. Another poster in this thread compares to Exxon; similarly favorable.
You may not think Tesla will make it there, and you might turn out to be right. But those that do are optimistic; not stupid.
Why stop at Exxon? You can also compare Tesla with Saudi Aramco and that would justify a multi-trillion valuation!
Tesla is a $45B company right now.
Perhaps that sounds like a lot. But consider that Uber is valued at $68B.
Perhaps that sounds like a lot. But consider that Uber is valued at $68B.
Uber is probably overvalued.
But consider that future Tesla will probably be owning/running a service like Uber. Add to that grid storage, solar power installation (from which it makes interest on loans to the consumer), powerwalls, battery production for other industries (including possibly every other car manufacturer), and whatever else Tesla branches out into once those markets are established.
But consider that future Tesla will probably be owning/running a service like Uber. Add to that grid storage, solar power installation (from which it makes interest on loans to the consumer), powerwalls, battery production for other industries (including possibly every other car manufacturer), and whatever else Tesla branches out into once those markets are established.
Like Samsung, which has a fab all the way up to consumer facing phone business?
Excessive vertical integration is over-valued, unless you holds a monopoly position in at least one of the component of the vertical.
Excessive vertical integration is over-valued, unless you holds a monopoly position in at least one of the component of the vertical.
Is it unrealistic that the gigafactory will create a near-monopoly on batteries for self-driving cars?
They're going to own about half of the world's battery production capacity at ~30% reduction in cost per kwh over current production. Plus they're planning three more factories.
Selling core tech to other car companies seems like a lucrative long term move.
They're going to own about half of the world's battery production capacity at ~30% reduction in cost per kwh over current production. Plus they're planning three more factories.
Selling core tech to other car companies seems like a lucrative long term move.
> Is it unrealistic that the gigafactory will create a near-monopoly on batteries for self-driving cars?
How would it do that? And why are self-driving cars a separate category when it comes to battery suppliers?
> They're going to own about half of the world's battery production capacity
There should be about 200 GWh of worldwide production capacity by the time GF1 is fully ramped up. That means they'll have about 17% of it, not half. BYD alone will match that. So will Foxconn and Boston Power. Then there's LG Chem, Samsung SDI, SK Innovation, etc.
These names have committed over $20 billion to additional battery factories over the next 2-3 years, many of which have already broken ground. They're also largely ahead of Tesla's position in the battery business already, are better capitalized, and have no intention of dropping out of the market rather than expanding to meet the expected future demand.
It's easy to get roped in by Tesla's press releases and marketing materials, where they do things like compare the GF's expected production rate at the end of 2018 to worldwide production numbers from 2013. The rest of the market isn't standing still.
How would it do that? And why are self-driving cars a separate category when it comes to battery suppliers?
> They're going to own about half of the world's battery production capacity
There should be about 200 GWh of worldwide production capacity by the time GF1 is fully ramped up. That means they'll have about 17% of it, not half. BYD alone will match that. So will Foxconn and Boston Power. Then there's LG Chem, Samsung SDI, SK Innovation, etc.
These names have committed over $20 billion to additional battery factories over the next 2-3 years, many of which have already broken ground. They're also largely ahead of Tesla's position in the battery business already, are better capitalized, and have no intention of dropping out of the market rather than expanding to meet the expected future demand.
It's easy to get roped in by Tesla's press releases and marketing materials, where they do things like compare the GF's expected production rate at the end of 2018 to worldwide production numbers from 2013. The rest of the market isn't standing still.
Tesla should buy Uber and get that house in order. Also makes sense since the future is "mobility services" and neither alone can deliver on that promise.
Do you actuallly beleive what you are writing? From outside the SV bubble the future is cars. Electric, self driving, rentable and owned as well. Where I live there is reasonable public transport infrastructure. Self driving ridesharing mobility service from my point of view. I do not find it clean enough, I do not like the people I often have to share my ride. I prefer an own car. This won't change by "self driving uber", because people prefer privacy, and an own vechicle can give privacy and intimacy which a rended one will never provide.
I do believe that the future is mobility services. I don't think it's going to happen soon but I do believe it is going to happen. I believe that it will, within my lifetime, become illegal to drive your own vehicle on public roads.
I believe that it will, within my lifetime, become illegal to drive your own vehicle on public roads.
I don't think that's going to happen. It might happen on some roads, in order to reduce congestion or whatever, but there's no reason to ban human drivers in general.
That's because "autopilots" can run in passive/safety mode, ready to take over and prevent you doing anything really stupid. This is already starting to happen, in fact, with AEB to be installed in all new cars by 2022.
I don't think that's going to happen. It might happen on some roads, in order to reduce congestion or whatever, but there's no reason to ban human drivers in general.
That's because "autopilots" can run in passive/safety mode, ready to take over and prevent you doing anything really stupid. This is already starting to happen, in fact, with AEB to be installed in all new cars by 2022.
Doesn't your dislike of other people also make you dislike public transit, meaning your first point and your second point contradict each other?
I have no problem with the vast majority of other people. I have problems with some small minorities (based on behaviour, cleanliness, etc), and not being able to select who I share my ride with is the problem. The future mobility is either fancy name for taxis, without a driver who makes sure the car is clean, and works at a low utilization (1-2 people per car) as current cars, or small buses where I cannot choose who I travel with, which doesn't fit for everybody. So my point is: no big revolution is comin up, only incremental evolution.
Isn't part of the calculation that Tesla could be unlike any car company before? I'm sure that if you just calculated the probability-weighted value of them landing somewhere in the mix of the current auto players, they would be overvalued. But there's also a non-zero probability that they turn into something that transcends the auto industry. I suspect a lot of their current valuation comes from that.
Absolutely, the car industry is entering a period of major disruption, both through electricfication, self-driving and ride sharing. My guess is that the demand for the first level 5 self-driving vehicles is going to be insanely high. It wouldn't surprise me, if they could be sold with a profit margin of 100%+, or rolled into a ridesharing service alá uber, where Tesla owners can share their ride, while Tesla takes a nice piece of the pie.
I think the strategic direction of Tesla is going to create considerable value in the long term - not just in selling cars, but in the industry dominating direction they seem to be headed. For example, I think of the charger network alone as the future of the gas station, and could be a deciding factor when consumers are considering one brand of electric car vs. another. Self driving technology is another race where the first mover to truly succeed will have a head start in becoming the foundation for the next generation of transportation and shipping services. The potential of being the leader in that space is much bigger and likely more profitable than the car industry combined.
Yes, there is considerable risk and other players might get there faster than Tesla, but they are certainly in the running and their existing cars collecting real-world data could give them a leg up against the competition. I would also factor in the fact that car manufacturer's and their culture are not used to building and iterating on software services like this quickly. Think about how Microsoft tried to make phone operating systems for years before the iPhone or Android phones launched, and they are now completely side-lined in that space because they just couldn't innovate or copy fast enough before network effects kicked in and locked them out. Similarly, many of those same network effects can exist with cars.
I can see a world where consumer decide to purchase cars based on their technology and charger networks alone. This could even include an App store where a large number of apps available for the car become an important deciding factor.
Once you get out ahead, I think it will be really hard for others to catch up.
Note: I'm note an owner in Tesla, but I'm bullish on their ambitious long-term prospects.
Yes, there is considerable risk and other players might get there faster than Tesla, but they are certainly in the running and their existing cars collecting real-world data could give them a leg up against the competition. I would also factor in the fact that car manufacturer's and their culture are not used to building and iterating on software services like this quickly. Think about how Microsoft tried to make phone operating systems for years before the iPhone or Android phones launched, and they are now completely side-lined in that space because they just couldn't innovate or copy fast enough before network effects kicked in and locked them out. Similarly, many of those same network effects can exist with cars.
I can see a world where consumer decide to purchase cars based on their technology and charger networks alone. This could even include an App store where a large number of apps available for the car become an important deciding factor.
Once you get out ahead, I think it will be really hard for others to catch up.
Note: I'm note an owner in Tesla, but I'm bullish on their ambitious long-term prospects.
When self driving cars come, the industry will be as difficult to make money as the airplane industry.
> I can see a world where consumer decide to purchase cars based on their technology and charger networks alone
Once there's an autonomous driver it's really just about the cabin accoutrements.
Once there's an autonomous driver it's really just about the cabin accoutrements.
Safety? Reliability? Cost? Maintenance burden? Maybe some other stuff too.
Since batteries are the single most expensive component currently, knowledge and IP around batteries will be important in areas such as:
* using clever techniques to stretch the life of batteries
* keeping them in good condition in extreme weather
* keeping them cool
* keeping them safe in an accident
Telsa is figuring all this out much earlier and at bigger scale than most other manufacturers. They can sell their knowledge to other car companies once the Gigafactories start churning out large quantities of batteries.
* using clever techniques to stretch the life of batteries
* keeping them in good condition in extreme weather
* keeping them cool
* keeping them safe in an accident
Telsa is figuring all this out much earlier and at bigger scale than most other manufacturers. They can sell their knowledge to other car companies once the Gigafactories start churning out large quantities of batteries.
> The world would be better if Tesla became the next BMW.
BMW is the next BMW; they are fully capable of ramping up their EV line, it just does not make sense at the moment, since they generate more profit producing gas guzzlers. Tesla has done tremendous things related to the charging infrastructure, but their exclusivity regarding high-end EV vehicles itself is just imaginary.
BMW is the next BMW; they are fully capable of ramping up their EV line, it just does not make sense at the moment, since they generate more profit producing gas guzzlers. Tesla has done tremendous things related to the charging infrastructure, but their exclusivity regarding high-end EV vehicles itself is just imaginary.
Thanks for taking the time to write this. I was an investor for a while in tesla and had a good ride for sure but sold for many of the reasons you articulated. At this point the hype machine is totally out of control there is no way justify the realitive evaluations of tesla verse the other car companies.
> At this point the hype machine is totally out of control there is no way justify the relative evaluations of tesla
I have been hearing the same argument for the last 3 years now.
I have been hearing the same argument for the last 3 years now.
Great reply but you are mispricing Tesla stock by comparing it to other car manufacturers when it should be compared with tech stocks. If you read this article (http://www.businessinsider.com/tesla-driverless-ridesharing-...) you clearly see that Tesla will be competing for the same on-demand transport market of Uber and Lyft but with the big advantage of having a proprietary hardware platform.
I think the patent-sharing thing is an interesting point, because I agree that it suggests a certain amount of altruism, but at the same time I think it's still the right business choice for Tesla.
Instead of looking at the situation through the lens of "Tesla vs other car companies", let's take a step back and look at the battle of "electric vs gasoline". The better EVs do, the more charging infrastructure gets built, and the more receptive people are to buying EVs in general. These kinds of effects disproportionately help Tesla; their whole business is electric cars, whereas EVs are only a tiny slice of the pie for every other established car company.
Because there is so much room for growth in the EV market, we're also not necessarily dealing with a zero-sum game right now. Helping other companies sell more electric cars does not necessarily mean Tesla will suffer reduced demand; it may actually have the opposite effect. Even simple lack of awareness is still a big obstacle for EVs: https://electrek.co/2017/01/03/electric-vehicle-adoption-awa...
Instead of looking at the situation through the lens of "Tesla vs other car companies", let's take a step back and look at the battle of "electric vs gasoline". The better EVs do, the more charging infrastructure gets built, and the more receptive people are to buying EVs in general. These kinds of effects disproportionately help Tesla; their whole business is electric cars, whereas EVs are only a tiny slice of the pie for every other established car company.
Because there is so much room for growth in the EV market, we're also not necessarily dealing with a zero-sum game right now. Helping other companies sell more electric cars does not necessarily mean Tesla will suffer reduced demand; it may actually have the opposite effect. Even simple lack of awareness is still a big obstacle for EVs: https://electrek.co/2017/01/03/electric-vehicle-adoption-awa...
Upvoted for making a good argument that was worth my time reading it. That's what I come to HN for.
The difference is Tesla has a lot of room to grow, and VW and the others do not. Tesla is about to 5x and soon after 10x its annual sales.
And as others have said, this is just about the EV market. But there's also the extremely high growth potential battery storage market as well as the solar market.
And as others have said, this is just about the EV market. But there's also the extremely high growth potential battery storage market as well as the solar market.
This is a sound counter argument to the current mania of Tesla. You made the bet easy to understand: will Tesla be as big as Toyota in about 10 years? You get 20 percent of your money if you're right, otherwise you risk losing 50 percent of more.
the way tesla _could_ surpass toyota is branching out into adjacent industries. they are already showing a willingness to do that with battery-manufacture, powerwall, solar installations etc. this potential for increasing ambitiousness likely increases the multiple of TSLA stock.
capital formation, the structure of the relevant finances, are just as much part of the execution than the product or service.
Love your detailed and carefully thought out post, I learnt a lot from it (I didn't know that Mazda was just $9 billion). However I think it is wrong to compare Tesla with BMW. I am of the opinion that it is better to compare it with Apple i.e., >10 times what Tesla is valued today.
Yes one can always compare it with another company... But what do you think the chances are that Tesla will become as big as apple ?
I see your point, but any company that uses non-GAAP numbers is suspect. Even the gov't is trying to crack down on companies that do it since it invariably is done to make the company look like it's performing better than it is.
Gross margin ignores all the costs not directly associated with producing the vehicle (basically COGS). There are plenty of companies with positive gross margin (even under GAAP) that fail.
Gross margin ignores all the costs not directly associated with producing the vehicle (basically COGS). There are plenty of companies with positive gross margin (even under GAAP) that fail.
Investors are not fools; anyone reading these statements and reports is smart enough to understand the difference between GAAP and non-GAAP. Investors should make up their own minds as to which metrics are useful, just as you have made up yours that reporting the non-GAAP numbers is intrinsically suspect.
>Investors are not fools
I hope you're kidding, because the counter examples to this are endless.
I hope you're kidding, because the counter examples to this are endless.
To be more specific - investors often do not do their own homework, and assume that some other hardworking soul has. See e.g. Theranos for a glaring example of this.
Classic bystander effect, really.
Also the non-GAAP numbers can give a more accurate impression of how the company is doing if done sensibly.
As a whole? Non-GAAP numbers are suspect enough for the SEC to create regulations around. Not every company abuses them, but enough do.[1]
[1]https://www.troutmansanders.com/using-non-gaap-measures--obs...
[1]https://www.troutmansanders.com/using-non-gaap-measures--obs...
See the latest Berkshire letter for some examples http://berkshirehathaway.com/letters/2016ltr.pdf
That doesn't necessarily mean shorting a company just because it uses non-GAAP numbers is a good idea though.
As with anything, if you understand what the non-GAAP numbers represent, it's not a problem. If you don't..
As with anything, if you understand what the non-GAAP numbers represent, it's not a problem. If you don't..
That doesn't necessarily mean shorting a company just because it uses non-GAAP numbers is a good idea though.
That would be an interesting investing thesis to test. You are correct, non-GAAP numbers don't mean a company is hiding something, but it does make you ask why they felt the need to use non-standard accounting principles (the answer is it makes them look better).
That would be an interesting investing thesis to test. You are correct, non-GAAP numbers don't mean a company is hiding something, but it does make you ask why they felt the need to use non-standard accounting principles (the answer is it makes them look better).
By design, GAAP accounting principles are very conservative, to make it harder for deceptive actors to conceal losses. However, for making management decisions, GAAP accounting principles are so conservative and rigid that they can actually obscure the key drivers of a business. This is why management accounting is historically done differently than financial accounting. Financial accounting is optimized for revealing fraud, not for understanding or running businesses. Therefore, if someone chooses to use non-GAAP accounting, you're right it can mean they are hiding something, but it can just as easily mean they are trying to relay more useful and informative numbers.
In all cases, of course, it's important to understand what the numbers mean.
In all cases, of course, it's important to understand what the numbers mean.
In Tesla case, it's because the non-GAAP numbers represent how they view and make decisions about their business internally. It makes them look better in some dimensions and worse in others. They report on it because it gives insights into how they think about things.
Based on the analyses I've read, it looks like a big driver of the non-GAAP difference is Tesla completely ignoring the cost of acquiring SolarCity. Is that a fair analysis? It depends. Those non-GAAP numbers suggest the car manufacturing business is doing well, but hide how Tesla is doing overall (including cash flow) as a result of SolarCity.
> People who lose money shorting Tesla are losing their shirts
I don't follow. Tesla is down 1.4%. People who shorted Tesla made money today. Plus a lot of people made money shorting Amazon over Amazon's life.
Shorting a stock has less to do with a company's business plan/success and more to do with predicting the market itself and how they'll respond to various quarterly results (and the likelihood of such results).
Tesla is mostly just prop in the stock market "game."
I don't follow. Tesla is down 1.4%. People who shorted Tesla made money today. Plus a lot of people made money shorting Amazon over Amazon's life.
Shorting a stock has less to do with a company's business plan/success and more to do with predicting the market itself and how they'll respond to various quarterly results (and the likelihood of such results).
Tesla is mostly just prop in the stock market "game."
Yea I didn't follow the op's comment either. Shorting is not permanent or even a long term position. I mean..you could hold it for a longer term period I guess. In 2008-2009 there wasn't many other options to choose from. Short selling is basically selling a stock you don't own. You borrow against the stock when you think their is opportunity. Tesla was a pretty easy short honestly if done right. Personally I didn't short it, however I have enjoyed shorting Netflix, Google, Facebook and Amazon over the years. It sounds crazy to short Google right? But there were times when it was obvious there would be declines. Not permanent but short term. I personally never held someone all the way down, I'm in for a quick profit and out before the bounce. Sometimes I'll buy the stock after I short it so I can gain from the bounce as well.
All that said I feel Tesla is a good company but if I was focused on them I'd just as well look for shorting opportunities. If it's not evident, I'm a fan of short selling.
All that said I feel Tesla is a good company but if I was focused on them I'd just as well look for shorting opportunities. If it's not evident, I'm a fan of short selling.
Good to get a perspective from a short seller. Thanks for posting.
Personally I'm the opposite -- I only go long for the long term. But that's what I decided my risk tolerance was as a mid 30-year old. So far my long position in TSLA since late 2013 has been a pretty good result.
Personally I'm the opposite -- I only go long for the long term. But that's what I decided my risk tolerance was as a mid 30-year old. So far my long position in TSLA since late 2013 has been a pretty good result.
Thanks for the reply. My apologies for the delay. I'm used to places like reddit giving me notifications about replies so I just didn't really realize there was a reply. Risk tolerance is a very personal thing. It varies with individual and as a short seller I've grown to accept it a bit more.
For any investment, one simply can not know everything. I gave TSLA up for another area which as paid well. I use to own in Google after the IPO, even during my ownership I would short at times. The same is true with any stock I'm long. If there is an opportunity that I'm comfortable with then I take it.
I think too often people talk about short selling without any real experience doing it. So often it's realities get distorted with chatter. 2008 I learned to short basically during hands on learning as there just wasn't any great opportunity when things were going crazy. There were other great opportunities, my personal favorite was the government shut down under Obama and the predictable re-opening. That was some glorious profiteering right there...
For any investment, one simply can not know everything. I gave TSLA up for another area which as paid well. I use to own in Google after the IPO, even during my ownership I would short at times. The same is true with any stock I'm long. If there is an opportunity that I'm comfortable with then I take it.
I think too often people talk about short selling without any real experience doing it. So often it's realities get distorted with chatter. 2008 I learned to short basically during hands on learning as there just wasn't any great opportunity when things were going crazy. There were other great opportunities, my personal favorite was the government shut down under Obama and the predictable re-opening. That was some glorious profiteering right there...
Some of them will have, but not all. Shorting a stock gets expensive. Anyone making a bet that Tesla will run out of cash and wipe out its equity are probably still loosing.
"Short sellers who believe shares of are due for an imminent decline are paying a hefty price to place their bets, with some shelling out what amounts to an annualized cost of between 90% and 120%" http://blogs.wsj.com/moneybeat/2016/09/22/teslas-short-selle...
"Short sellers who believe shares of are due for an imminent decline are paying a hefty price to place their bets, with some shelling out what amounts to an annualized cost of between 90% and 120%" http://blogs.wsj.com/moneybeat/2016/09/22/teslas-short-selle...
It's currently up 1.65% in after hours trading.
The person above claimed that people "lost their shirts" shorting Tesla. Clearly if they were down within normal trading hours, some of those shorts would have paid out. That was what I was responding to.
The fact that Tesla rebounded after hours is neither here nor there. The shorts may have already paid out.
The fact that Tesla rebounded after hours is neither here nor there. The shorts may have already paid out.
If someone shorted TSLA going into earnings, they probably lost money. It's up 10% in a month, and it's up in after hours today. It doesn't matter if it dipped a little today (as stocks often do before earnings). It's practically at an all time high.
Unless they shorted it in the morning and closed out their position by the end of the day it's highly unlikely they made money on it.
Check out the run up in the last month. People shorting were shorting at under $220-230/share. It's now hovering at $280.
http://blogs.barrons.com/stockstowatchtoday/2017/02/07/tesla...
http://blogs.barrons.com/stockstowatchtoday/2017/02/07/tesla...
And now down 6% after the market opened... Shorts are having a great day.
Buy (or short) the rumor, sell (or close) the news. If you look at the past two months it's grown $75 a share, $25 a share in the past 30 days alone. After hours trading is up, but for the grey edge grinders it was time to profit harvest.
Who are the "grey edge grinders?"
Traders who get their 'edge'(alpha) from grey information.
White = information easily available to the public. Say, like SEC filings or press releases.
Grey = information between white and black. For example if you over heard a CEO mention something vague to a colleague at a bar and think you can act on it.
black = clearly material insider information
White = information easily available to the public. Say, like SEC filings or press releases.
Grey = information between white and black. For example if you over heard a CEO mention something vague to a colleague at a bar and think you can act on it.
black = clearly material insider information
It's up 2% after hours...
I think he meant when TSLA was at $190 to $200 at the time of the merge and the uncertainty of the model 3 production.
> People who shorted Tesla made money today
Unless they shorted a month ago or earlier.
Unless they shorted a month ago or earlier.
The stock is fascinating to watch because of how binary the perception of the company is. After doing some sophisticated psychoanalysis™, the sharpest distinction I've found between the two opposing viewpoints is design. People who don't understand Tesla tend to be the same people who didn't (and still don't) understand the iPhone. For these people, the Model S is just another car, in the same way that the iPhone would have seemed like "just another cell phone". The idea that "just another car" is going to beat companies that are already making cars (and have been doing so since forever) doesn't make sense.
Related to this is people getting stuck on the idea of an "EV market", which I don't think was ever really a thing. Tesla has been competing in the same car market that every other car company competes in. The electric drivetrain may be a major factor in enabling a superior design, but most people don't care. I think many short sellers are attributing Tesla's sales to "EV buyers" rather than to "people that buy cars that are better than other cars". These are two very different beliefs about what's going on.
The financial arguments are (in my opinion) largely after-the-fact rationalizations.
Related to this is people getting stuck on the idea of an "EV market", which I don't think was ever really a thing. Tesla has been competing in the same car market that every other car company competes in. The electric drivetrain may be a major factor in enabling a superior design, but most people don't care. I think many short sellers are attributing Tesla's sales to "EV buyers" rather than to "people that buy cars that are better than other cars". These are two very different beliefs about what's going on.
The financial arguments are (in my opinion) largely after-the-fact rationalizations.
You can't say that a Tesla car represents technology innovation to the same degree the iPhone did. Nothing in a Tesla is technologically groundbreaking, it is more of a product innovation (a high-powered electric car) with good execution.
Which is exactly what the iPhone was. Not the first smart phone. Not the first touch screen device. Just an innovation (iteration) with good execution and strong branding driven by a man with a strong vision for his product.
I don't know that Tesla is a good stock to own right now; I don't know if they'll be as wildly successful in the long run. But you can't just outright dismiss the previous poster's comparisons to the iPhone.
I don't know that Tesla is a good stock to own right now; I don't know if they'll be as wildly successful in the long run. But you can't just outright dismiss the previous poster's comparisons to the iPhone.
I think you're missing a very important point here - Elon Musk is a man on a mission. Some people are totally buying into that mission.
Personally i think the fundamental problem is that Tesla stock is mispriced, Tesla is being compared to other car manufacturers when it should be compared with tech stocks.
If you read this article
http://www.businessinsider.com/tesla-driverless-ridesharing-...
you clearly see that Tesla will be competing for the same on-demand transport market of Uber with the big advantage of having a proprietary hardware platform.
That's an interesting point, especially since Tesla is arguably in much better shape overall than Uber, at least from an outsiders perspective. Uber isn't profitable, their business is a mess, and there is no clear/easy path to profitability for them.
Tesla has a profitable revenue stream and much better cohesion overall it seems.
Tesla has a profitable revenue stream and much better cohesion overall it seems.
if you want to dominate the self-driving business you have to control the hardware, Uber doesn't have the cash, the brand or expertise to do it.
>This company is firing (no pun intended) on all cylinders
I ask this of all the bulls: at what price would you start selling TSLA rather than buying?
If you don't have an answer than I question your analysis.
I ask this of all the bulls: at what price would you start selling TSLA rather than buying?
If you don't have an answer than I question your analysis.
> Looking at the future, Tesla said it expects to deliver 47,000 to 50,000 Model S and Model X vehicles combined in the first half of 2017, representing vehicle delivery growth of 61% to 71% compared with the same period last year.
They fell short of their goal of 80,000 vehicles in 2016. You're talking about almost doubling their production in 2017... and then doubling it again in 2018! Ain't gonna happen.
They fell short of their goal of 80,000 vehicles in 2016. You're talking about almost doubling their production in 2017... and then doubling it again in 2018! Ain't gonna happen.
Tesla should be able to make about 400,000 vehicles a year with the Fremont plant. GM/Toyota did in that building, and with a lower headcount than Tesla. The question is how long it will take Tesla to get their new assembly line debugged. Tesla isn't breaking new ground here, despite the PR hype. Musk usually overpromises and delivers late.
Tesla will need about two assembly lines each running two shifts to reach their production goal. Once they get the first line running, balanced, and up to speed, they should be able to build about one car per minute, or 120,000 cars a year, with one shift. They're running about 2000 cars a week now, which is a bit slow, but not unreasonable for a medium volume luxury car.
Tesla will need about two assembly lines each running two shifts to reach their production goal. Once they get the first line running, balanced, and up to speed, they should be able to build about one car per minute, or 120,000 cars a year, with one shift. They're running about 2000 cars a week now, which is a bit slow, but not unreasonable for a medium volume luxury car.
Maybe but Amazon really is the only Amazon, while Tesla has at scale competitors. The Model 3 certainly looks good, but so does the Bolt, Leaf, i3, fiat 500e, kia soul ev, ford focus electric, etc.
The big difference is I can buy those cars today, and for almost all of that last the past couple years, while the Model 3 is still waiting release. I don't think most Tesla fans realize how behind Tesla is in delivering the sub $40,000 EV. We've had them in the market for quite some time. If anything, Tesla is the last major player in this space.
Amazon was the opposite of this. It had all the products and stores while its competitors had less, not more, available product. I have no idea if shorting them is wise right now, but the idea that they're in the same position as Amazon is a bit generous.
The big difference is I can buy those cars today, and for almost all of that last the past couple years, while the Model 3 is still waiting release. I don't think most Tesla fans realize how behind Tesla is in delivering the sub $40,000 EV. We've had them in the market for quite some time. If anything, Tesla is the last major player in this space.
Amazon was the opposite of this. It had all the products and stores while its competitors had less, not more, available product. I have no idea if shorting them is wise right now, but the idea that they're in the same position as Amazon is a bit generous.
Out of that list, only the Bolt is even close to being the same class and that's based on range alone. If they weren't EVs we wouldn't mention them in the same sentence.
We do not have the real world driving data of the Model 3 yet, yet you can go buy these other cars today and test them. I'm not suggesting Tesla is greatly exaggerating its capabilities, it might be, but right now its vaporware and comparing a future product to something on store shelves right now is always questionable. This is a bit like saying 'dont buy the current iphone, just wait.' You'll be waiting for eternity with that mentality.
Let's see what its real world range is and its real world price is when it actually gets in the hands of consumers, on top of how quickly the $7500 rebate ceiling gets hit for Tesla and what the real cost at the dealership will be for Joe Public.
I have high hopes, but like I wrote, there are many good EV's right now and they aren't selling like hotcakes. Gas is cheap, gas cars are cheap, and they don't have range anxiety. Comparing Tesla to Amazon is ridiculous, everything about Amazon was more convenient than brick and mortar stores. Everything about EV's is less convenient and more expensive than gas cars. Being bearish on Tesla stock is a perfectly rational move right now. The market for a Model 3 is probably much smaller than technophiles at HN think it is. I'm a techie too, but EV's don't fit a lot of my use cases and seem annoying to own. If guys like me aren't frothing at the mouth for this, I can't imagine what its like for Joe Public.
Let's see what its real world range is and its real world price is when it actually gets in the hands of consumers, on top of how quickly the $7500 rebate ceiling gets hit for Tesla and what the real cost at the dealership will be for Joe Public.
I have high hopes, but like I wrote, there are many good EV's right now and they aren't selling like hotcakes. Gas is cheap, gas cars are cheap, and they don't have range anxiety. Comparing Tesla to Amazon is ridiculous, everything about Amazon was more convenient than brick and mortar stores. Everything about EV's is less convenient and more expensive than gas cars. Being bearish on Tesla stock is a perfectly rational move right now. The market for a Model 3 is probably much smaller than technophiles at HN think it is. I'm a techie too, but EV's don't fit a lot of my use cases and seem annoying to own. If guys like me aren't frothing at the mouth for this, I can't imagine what its like for Joe Public.
[deleted]
[deleted]
> Tesla's car business is very profitable
No, it isn't. Gross margin isn't profit.
No, it isn't. Gross margin isn't profit.
I put 100% of my net worth in TSLA when it was trading at $180 a couple months ago http://www.marketwatch.com/story/elon-musk-to-the-guy-who-in....
I'm already up 40%, and I'm holding (though not adding to it as my net worth grows). Such an obvious, incredible company that Wall Street will undervalue until the end of time.
(For the record: I don't recommend doing this. I am in a unique situation where I can own the risk and earn out of it quickly if it goes to zero.)
I'm already up 40%, and I'm holding (though not adding to it as my net worth grows). Such an obvious, incredible company that Wall Street will undervalue until the end of time.
(For the record: I don't recommend doing this. I am in a unique situation where I can own the risk and earn out of it quickly if it goes to zero.)
If anyone reading this is new, please don't do this.
then you should leverage, if you are not afraid of losing it. buy/sell options, with some sane strategy you can even limit the down side.
Agreed, if you have high conviction and really want exposure to the name, better idea to buy call options that are a bit out of the money then put your life savings on the line. You can still get asymmetric upside without putting all your capital to work.
I've never been good at the timing on options. I always buy too far out of the money and get burned. Closer to the money you might as well hold shares after fees.
You can get deep in the money to leverage, no need to buy way out of money and gamble.
also you can try different strategies (search them online, and pick the one according to your risk taste).
also you can try different strategies (search them online, and pick the one according to your risk taste).
I followed suit. Thanks for the awesome advice. Got my full 213K in it now.
[deleted]
If you read this. Please please sell and diversity.
uhhhhh to anyone reading this: the above is a terrible idea
Definitely not something any sane money manager would recommend.
I accept the risk. I could go to zero and crawl my way back pretty quickly.
I accept the risk. I could go to zero and crawl my way back pretty quickly.
Err, how?
Maybe he is young and his net worth is very low compared to his anticipated future earnings??
If you can earn $150k a year, and your living expenses are $30k and you have no kids, you can squirrel away cash pretty fast.
Tesla is certainly a risk, but it's one of the few companies that actually has a plan which would lead to a trillion dollar market cap if successful. It's not insane to put the bulk of your net worth in an investment like that if you only care about potential upside, not the downside.
Tesla is certainly a risk, but it's one of the few companies that actually has a plan which would lead to a trillion dollar market cap if successful. It's not insane to put the bulk of your net worth in an investment like that if you only care about potential upside, not the downside.
My salary is less than that, and I'm married with a kid, but I earn about as much from side projects as my salary, so it makes for quick saving (after taxes)
By making a lot more now than I used to
Seems crazy, but is actually a smart move.
I own 3,000 Tesla shares. Purchased most shares at $30 after driving my model s from the factory. I have seen my net worth get cut in half when tsla went from $280 to $140, but never sold any.
LinkedIn, a crappy website, was recently purchased by Microsoft for $30 billion. That's about how much Tesla's market capitalization was 2 months ago.
Take a look at the all of the industries that will be impacted by the convergence of self driving cars, electric cars, and ride sharing.
The global parking industry alone, is a $100 billion dollar industry. Other impacted industries include oil, traditional auto, car insurance, auto repair/servicing/maintenance, auto dealers, etc.
Batteries are getting cheaper than anyone ever expected at this point. Solar recently became more competitive for electricity generation than fossil fuels.
The dam is about to burst.
I own 3,000 Tesla shares. Purchased most shares at $30 after driving my model s from the factory. I have seen my net worth get cut in half when tsla went from $280 to $140, but never sold any.
LinkedIn, a crappy website, was recently purchased by Microsoft for $30 billion. That's about how much Tesla's market capitalization was 2 months ago.
Take a look at the all of the industries that will be impacted by the convergence of self driving cars, electric cars, and ride sharing.
The global parking industry alone, is a $100 billion dollar industry. Other impacted industries include oil, traditional auto, car insurance, auto repair/servicing/maintenance, auto dealers, etc.
Batteries are getting cheaper than anyone ever expected at this point. Solar recently became more competitive for electricity generation than fossil fuels.
The dam is about to burst.
I hope your lending your shares to short sellers!
100% agreed
People get upset by the 'superhero' status of Elon Musk. Nerds everywhere worship the guy, buy his cars, watch his SpaceX launches.
But honestly, let him have it, I say. He's earning it. He's taking huge risks and succeeding where others weren't willing to try.
But honestly, let him have it, I say. He's earning it. He's taking huge risks and succeeding where others weren't willing to try.
I'm glad that people look up to someone like that.
What I am disappointed by is how his fans react to criticism. There's healthy respect and there's unhealthy worship. When you have a bunch of people who will get really upset due to any criticism that is on the worship side of the coin. Any community with voting arrows (HN/Reddit) suppresses anything negative said (no matter how supportable/well constructed the criticism may be).
Plus these same fans love to attack competition who are also doing really cool stuff instead of supporting them (e.g. Orbital ATK, Faraday Future, NIKOLA ONE, et al). Using arguments that are often double standards or ignore Tesla/SpaceX's own history to make them work.
What I am disappointed by is how his fans react to criticism. There's healthy respect and there's unhealthy worship. When you have a bunch of people who will get really upset due to any criticism that is on the worship side of the coin. Any community with voting arrows (HN/Reddit) suppresses anything negative said (no matter how supportable/well constructed the criticism may be).
Plus these same fans love to attack competition who are also doing really cool stuff instead of supporting them (e.g. Orbital ATK, Faraday Future, NIKOLA ONE, et al). Using arguments that are often double standards or ignore Tesla/SpaceX's own history to make them work.
Huge fan boy here. I'm not saying he does no wrong; he's ruined his first, second, and third marriages. He's probably not around at all for his five kids. Its assuredly soul crushing (workload/expectation-wise, not mission, which makes a huge difference) working for him.
But he's changing the world. So I give the guy wide latitude with my opinion. At least he's not yet another useless silicon valley billionaire. He is the least terrible billionaire industrialist IMHO.
But he's changing the world. So I give the guy wide latitude with my opinion. At least he's not yet another useless silicon valley billionaire. He is the least terrible billionaire industrialist IMHO.
>He is the least terrible billionaire industrialist IMHO
This is a great place to meet in the middle between the cynics and fanboys.
This is a great place to meet in the middle between the cynics and fanboys.
> He is the least terrible billionaire industrialist IMHO.
I'd say Bill gates still retains that title.
I'd say Bill gates still retains that title.
Only if you ignore his time at Microsoft.
Yes, he has done great things since he left. But he set the computer industry back decades with his predatory business tactics.
A big part of the reason why we have so many walled gardens now is because he started the trend. And we're lucky we have multiple walled gardens. If he had succeeded a little longer we'd still only have one big one.
Yes, he has done great things since he left. But he set the computer industry back decades with his predatory business tactics.
A big part of the reason why we have so many walled gardens now is because he started the trend. And we're lucky we have multiple walled gardens. If he had succeeded a little longer we'd still only have one big one.
[deleted]
Isn't Gates still heavily invested and active in Intellectual Ventures? And the Gates Foundation involved as well? My impression is Gates and Myhrvold are still a team, though like Microsoft itself, now focus their efforts on creating and monetizing intellectual property.
So one became a humanitarian statesman? And the other became king of the patent trolls, the most feared man in the Valley? Or perhaps soon, humanitarian statesman and inquisitive chef? Image management is mazing.
So one became a humanitarian statesman? And the other became king of the patent trolls, the most feared man in the Valley? Or perhaps soon, humanitarian statesman and inquisitive chef? Image management is mazing.
You must be young.
> You must be young.
This is condescending and not constructive. You should know better than to post like this on HN.
This is condescending and not constructive. You should know better than to post like this on HN.
Orbital and such are doing great things, but Faraday appears to be a bunch of scammers with no product. Maybe they'll prove me wrong, but until they demonstrate that they have something, I don't see what's wrong with criticizing them.
He's surfing a thin line these days. I'm not fond of the let's bore tunnels before going to mars games. But yeah, overall he bootstrapped many heavy innovations and drive all around, and inspired a lot of people. All that almost in a vacuum, and globally he's a trustworthy producer (he values value, his cars are tank secured for instance, not crass profit)
I'm of the view that boring a tunnel is part of his bootstrap plan for bringing the same tech to Mars. It's likely that we will have to dig living spaces underground on Mars and bootstrapping better digging tech by finding a good use for it here on earth first is a great bootstrapping strategy.
Quite plausible indeed. Very much Musk to cross pollinate ideas (solar panel, chargers, tiles, batteries, cars)
Tesla's mission is a prerequisite for SpaceX's— it's difficult to establish modern civilization on Mars, but establishing fossil fuel-powered civilization there is a non-starter.
[deleted]
his cars are tank secured for instance, not crass profit
What is "tank secured?"
What is "tank secured?"
Didn't Tesla forced crash tests to recalibrate their grading system because Tesla literally went up to 11 ?
I think you're mixing up two things.
Consumer Reports's testing which went off their scale[0], and the NHTSA crash testing which apparently broke the machine for the roof crush test[1]
[0] http://www.autonews.com/article/20150827/RETAIL03/150829910/...
[1] https://www.wired.com/2013/08/tesla-model-s-crash-test/
Consumer Reports's testing which went off their scale[0], and the NHTSA crash testing which apparently broke the machine for the roof crush test[1]
[0] http://www.autonews.com/article/20150827/RETAIL03/150829910/...
[1] https://www.wired.com/2013/08/tesla-model-s-crash-test/
This early jet airliner was "tank tested."
http://www.dh-aircraft.co.uk/aircraft/dh106/comet1/inquiry/
http://www.dh-aircraft.co.uk/aircraft/dh106/comet1/inquiry/
Especially with SpaceX. He's pushing his engineers hard to get some pretty cool stuff done, and hopefully humanity benefits from it in the long run.
It's technology. Once it exists, it will continue existing. Every generation must use it wisely and ethically.
Proof increases investor confidence, but that's hardly everything. Tesla contributes somewhat to open source, but ITAR and shrewdness means a ton of their tech is classified. If they folded, a great deal of that would be bureaucratically inaccessible, gone, or irrelevant. If we wanted to go to the moon again, we would basically have to start over from scratch. The Saturn V plans exist but the infrastructure, manufacturing techniques, and hardware are all gone.
Plans are 10% of actually building something, at that level. Materials aren't legos, each product needs to be qualified and have its idiosyncrasies addressed. Even at the consumer level, when you change manufacturers you often have to retool your process because while the specs are the same, you're delivered something different.
Keeping technology at the same level requires ongoing engineering. When that engineering is removed, the technology decays. It very quickly becomes a matter of reinvention rather than rebuilding.
Plans are 10% of actually building something, at that level. Materials aren't legos, each product needs to be qualified and have its idiosyncrasies addressed. Even at the consumer level, when you change manufacturers you often have to retool your process because while the specs are the same, you're delivered something different.
Keeping technology at the same level requires ongoing engineering. When that engineering is removed, the technology decays. It very quickly becomes a matter of reinvention rather than rebuilding.
Plans are 10% of actually building something, at that level. Materials aren't legos, each product needs to be qualified and have its idiosyncrasies addressed
Something often forgotten when companies offshore production.
Something often forgotten when companies offshore production.
Andy Grove wrote some great pieces about the loss of engineering muscle memory.
Not so sure about it. Look at Concorde.
Musk actually said that technology does not move forward if there is nobody (or no company or no government) to push it forward.
Musk actually said that technology does not move forward if there is nobody (or no company or no government) to push it forward.
The technology for Concorde is still around. What disappeared is the economic case for it. (One might argue that the economic case never existed, or disappeared before it even started flying.) If aliens showed up tomorrow and said they would enslave the human race unless we built a Concorde-level airliner, we'd have no major trouble getting it done.
> Not so sure about it. Look at Concorde.
The absence of a business case is not the same as the absence of technology.
Technology for supersonic aircraft has moved forward since the Concorde. Economically viable applications for that technology for commercial passenger transport have not, however, appeared. (Or, if they have, they haven't been recognized.)
The absence of a business case is not the same as the absence of technology.
Technology for supersonic aircraft has moved forward since the Concorde. Economically viable applications for that technology for commercial passenger transport have not, however, appeared. (Or, if they have, they haven't been recognized.)
Even if there is an economic case for supersonic civil aviation, considerable environmental problems must first be overcome.
Given their extreme noise, pollution, and ozone layer disruption it's certainly a good thing there aren't hundreds or thousands of Concorde-equivalents plying the skies today.
Given their extreme noise, pollution, and ozone layer disruption it's certainly a good thing there aren't hundreds or thousands of Concorde-equivalents plying the skies today.
Concorde may have failed but jet travel is far more common and affordable today than when it was rolled out.
Because technology is in service of individual and consumer needs. If there isn't a sustainable business model for supersonic passenger flight then it doesn't exist. And, frankly, it's not up to government to provide that.
Technology is both economics and engineering. Just because something can be done, doesn't mean it should be done if no one is willing to cover the costs.
Technology is both economics and engineering. Just because something can be done, doesn't mean it should be done if no one is willing to cover the costs.
There is another thesis that technology no longer disappears anymore. It will remain in some dormant form. Some crazy hobbyist group in the US, Europe, or Japan will lovingly curate it. Even now, I think you can charter the operation of a restored supersonic aircraft, if you have enough cash. Not sure if any have an extra seat for a passenger, though.
How were the pyramids built?
I think i get your point, but tech losses seem to be associated with cultural collapse or exhaustion of a special resource. Roman concrete, Greek fire, and vanadium steel might be more illustrative choices.
I don't think the Egyptians used magic, perhaps they knew a trick or two we don't know about, i don't think there's any writing left about the construction techniques.
I don't think the Egyptians used magic, perhaps they knew a trick or two we don't know about, i don't think there's any writing left about the construction techniques.
> I don't think the Egyptians used magic, perhaps they knew a trick or two we don't know about, i don't think there's any writing left about the construction techniques.
The Egyptians' "trick" was massive amounts of human labor over a long timespan. Nothing you couldn't do a lot faster today if you were willing to spend the money (and manage to get the permits).
The construction of the pyramids is not impressive from a technological point of view, but perhaps from a logistical point of view.
The Egyptians' "trick" was massive amounts of human labor over a long timespan. Nothing you couldn't do a lot faster today if you were willing to spend the money (and manage to get the permits).
The construction of the pyramids is not impressive from a technological point of view, but perhaps from a logistical point of view.
Or, more recently: I've read that we have collectively lost the knowledge and skill necessary to build a piano with a quality comparable to the best ever made. (Wish I had a citation…)
It really does not matter as we could build them today with a lot less effort.
It would cost something like $5 billion today and would take ~2,000 people ~5 years. Which is relatively speaking a lot less expensive. Put another way, Bill G could build ~17 of them in his lifetime and not be broke.
It would cost something like $5 billion today and would take ~2,000 people ~5 years. Which is relatively speaking a lot less expensive. Put another way, Bill G could build ~17 of them in his lifetime and not be broke.
But that's besides the point. We are thousands of years in the future from that point, with thousands of years of technological advancements. What would a civilization relatively recently after the loss of that knowledge do? Could they even do it?
The point is that technology can be lost. Sure, we may have re-learned the technology in the intervening millennia, but we wouldn't have to re-learn it if it wasn't lost in the first place.
The point is that technology can be lost. Sure, we may have re-learned the technology in the intervening millennia, but we wouldn't have to re-learn it if it wasn't lost in the first place.
You are assuming it was lost in the same time period. Instead, there was ever refined stone construction techniques through medieval Cathedral's. So, sure 4500 years ago making a giant stone hill was hard, but the 1311 Lincoln Cathedral @ 524 ft was actually significantly taller structure and far more difficult.
It's not a stone hill. It was completely smooth before the limestone casing was removed. Also I don't know how 524ft is _significantly_ taller than 481 feet.
If the pyramid was 524ft tall it would have taken at 29+% more stone which is kind of a large difference assuming they did not need to change the slope. Anyway, scaling buildings is a lot more complex as every extra foot get's harder than the last. In design you don't really build up, you keep adding layers under your existing structure that need to hold it up.
It was estimated they took 14 years to build.
It would cost something like $5 billion today and would take ~2,000 people ~5 years. Which is relatively speaking a lot less expensive. Put another way, Bill G could build ~17 of them in his lifetime and not be broke.
Awesome! What's at one time only the province of the greatest empire on the planet could become just one of many of a billionaire's projects. Let's scale this out from the present day with something of seemingly unattainable current value: How about The United States of America? Maybe several decades hence, a billionaire will have made himself the equivalent? Colonization of Mars, anyone?
Awesome! What's at one time only the province of the greatest empire on the planet could become just one of many of a billionaire's projects. Let's scale this out from the present day with something of seemingly unattainable current value: How about The United States of America? Maybe several decades hence, a billionaire will have made himself the equivalent? Colonization of Mars, anyone?
There's a certain (supposed) billionaire who wants a big wall. Not quite as inspiring to me personally, but, well, tastes vary, I guess.
Also, he's planning to spend your money on it, not his.
Also, he's planning to spend your money on it, not his.
Lots of technology is non obvious, even simple tech. The wheel wasn't widely known in the Americas. Large wheel wagons like you see in rickshaws were not widely known in the West.
By default, technology decays over time as knowledge is lost. It takes active effort to keep things where they are, let alone keep pushing them forward.
Creating an entirely new industry I'd say. He's at a Henry Ford or Edison level.
The superhero status has nothing to do with it.
Tesla is reaping the rewards for making a good EV and backing it with the right infrastructure, its not rocket science.
If the motor industry had actually not made a half bothered attempt at EVs and actually tried to innovate they would have had similar success.
Tesla is reaping the rewards for making a good EV and backing it with the right infrastructure, its not rocket science.
If the motor industry had actually not made a half bothered attempt at EVs and actually tried to innovate they would have had similar success.
exactly, people are reversing cause and effect here. first Tesla made desirable cars, then people started fanboying Musk. See this Google trends for Elon Musk searches:
https://trends.google.com/trends/explore?date=all&q=elon%20m...
Which only started picking up after the Model S was released and started getting great reviews.
The idea that Musk is a "master salesman" or whatever is pretty dumb if you watch any of his interviews. He's definitely good at business, but his fame has been fueled by his achievements alone.
https://trends.google.com/trends/explore?date=all&q=elon%20m...
Which only started picking up after the Model S was released and started getting great reviews.
The idea that Musk is a "master salesman" or whatever is pretty dumb if you watch any of his interviews. He's definitely good at business, but his fame has been fueled by his achievements alone.
> its not rocket science.
They have that too!
They have that too!
I guess that because he is painted as real life Iron Man. A sort of engineering genius, personally involved in the technical details of all his business ventures.
He is a brilliant business man with a vision that is refreshing compared to others. He deserves a superhero status for that. Genius engineer ? That's going a bit too far and I guess that rubs the people you mentioned the wrong way.
He is a brilliant business man with a vision that is refreshing compared to others. He deserves a superhero status for that. Genius engineer ? That's going a bit too far and I guess that rubs the people you mentioned the wrong way.
> succeeding where others weren't willing to try
Willing, or able.
Willing, or able.
Elon Musk's businesses have benefited from billions in federal and state government subsidies and low-interest loan programs over the years.
He's taking huge risks because other people are footing the bill.
He's taking huge risks because other people are footing the bill.
And the legacy energy companies are still raking billions in subsidies every year, even before you get to things that aren't counted that way. And the industrial farmers are still subsidized to grow various things.
And FedEx has a huge implicit subsidy via road maintenance. And Walmart, via various welfare policies. And insurance companies heavily benefit from various government policies.
I can think of these all day.
And FedEx has a huge implicit subsidy via road maintenance. And Walmart, via various welfare policies. And insurance companies heavily benefit from various government policies.
I can think of these all day.
Elon Musk's businesses have benefited from billions in federal and state government subsidies and low-interest loan programs over the years.
Billions in loans? Tesla received a $465M loan from the department of energy in 2010, which they paid back in full, with interest, by 2013.
As for subsidies (ZEV credits, EV incentives, state tax credits, etc)? Tesla receives absolutely nothing that isn't available to all US car manufacturers.
Billions in loans? Tesla received a $465M loan from the department of energy in 2010, which they paid back in full, with interest, by 2013.
As for subsidies (ZEV credits, EV incentives, state tax credits, etc)? Tesla receives absolutely nothing that isn't available to all US car manufacturers.
I'm not that familiar with Tesla, but what "federal and state government subsidies and low-interest loans" have SpaceX gotten? Unless you count NASA contracts as "subsidies and loans", of course, which is absurd.
The same could be said about all other businesses funded by VC money, hedge funds and IPOs. One might question whether governments should be involved in market investing, but it's not like Musk is some kind of outlier here.
Traditional car companies have benefitted from trillions in subsidies by being allowed to poison the population without paying for the costs.
I'd much rather have a car company take some of my money in taxes than take my health by polluting.
Remember leaded gasoline? That's only been fully banned in the US for about two decades. Entire generations were damaged, like Flint, MI on a national scale.
But ooh noo, Elon Musk takes some of our taxes, the horror.
I'd much rather have a car company take some of my money in taxes than take my health by polluting.
Remember leaded gasoline? That's only been fully banned in the US for about two decades. Entire generations were damaged, like Flint, MI on a national scale.
But ooh noo, Elon Musk takes some of our taxes, the horror.
So let them stop loaning him money. He's a businessman, he has a duty to exploit any loan from anybody, as long as it's legal. If the peyote really had a problem with it they would cause the government to stop offering loans to Tesla.
No superhero. Collaborates with Trump to get SpaceX contracts. F. him.
Is it just me reading too much financial news or does "beats estimates" sound like it was better than estimates?
Loss was 69 cents vs 53 cents expected.
Revenues beat estimates, though.
Loss was 69 cents vs 53 cents expected.
Revenues beat estimates, though.
They beat loss estimates because they spent $500m [0] on capex instead of $1000m [1].
Not sure if I buy "got better deals from suppliers" story, but it would be awesome if it was true. Most likely they've hit delays with suppliers.
[0] Q4 2016 update from shareholder letter on http://ir.tesla.com/
[1] http://www.businessinsider.com/tesla-capex-goal-means-1-bill...
Not sure if I buy "got better deals from suppliers" story, but it would be awesome if it was true. Most likely they've hit delays with suppliers.
[0] Q4 2016 update from shareholder letter on http://ir.tesla.com/
[1] http://www.businessinsider.com/tesla-capex-goal-means-1-bill...
Not sure if I buy "got better deals from suppliers" story
Or they just shifted capex spending so that it doesn't fall on this quarter.
I'm not knocking Tesla for doing this, all companies do this (shift costs and revenue around to meet earnings expectations).
Or they just shifted capex spending so that it doesn't fall on this quarter.
I'm not knocking Tesla for doing this, all companies do this (shift costs and revenue around to meet earnings expectations).
> Or they just shifted capex spending so that it doesn't fall on this quarter.
They state pretty clearly that is what happened in the letter.
> we continue to negotiate more favorable payment terms with our capital equipment suppliers, pushing some payments closer to the start of Model 3 production and some payments beyond the start of production
So, the "deals" are that they don't have to pay for certain things until later when they have more cash.
They state pretty clearly that is what happened in the letter.
> we continue to negotiate more favorable payment terms with our capital equipment suppliers, pushing some payments closer to the start of Model 3 production and some payments beyond the start of production
So, the "deals" are that they don't have to pay for certain things until later when they have more cash.
I don't understand why capital expenditure is viewed as a loss. You spend $1mil on infrastructure, afterwards you have $1mil of infrastructure (which now should start earning you money) instead of $1mil of cash. H ow is that a loss?
> How is that a loss?
It isn't. If you look at their 8-K, it shows that like 99% of publicly traded companies, cap-ex does not show up on the P&L statement.
It isn't. If you look at their 8-K, it shows that like 99% of publicly traded companies, cap-ex does not show up on the P&L statement.
Because profit and loss is measured in cash, not any other kind of asset.
>The fourth-quarter loss, excluding some items, was narrower than the $1.14 a share average estimate
Straight from the article.
Straight from the article.
So I was reading this from marketwatch:
"Adjusted loss of 69 cents a share, worse than expected."
"Analysts expect an adjusted fourth-quarter loss of 53 cents a share"
Now I don't know what to believe.
Edit: I guess it depends on who's doing the estimating. The linked article says "The fourth-quarter loss, excluding some items, was narrower than the $1.14 a share average estimate among analysts surveyed by Bloomberg."
"Adjusted loss of 69 cents a share, worse than expected."
"Analysts expect an adjusted fourth-quarter loss of 53 cents a share"
Now I don't know what to believe.
Edit: I guess it depends on who's doing the estimating. The linked article says "The fourth-quarter loss, excluding some items, was narrower than the $1.14 a share average estimate among analysts surveyed by Bloomberg."
"Loss" is the wrong word for this. We need better terminology.
A more accurate statement would be something like, "The tangible value of the company's assets, as far as anyone can reasonably ascertain with any degree of certainty, declined by 53 cents per share this quarter".
The question is whether the company is making good investments. If you believe its infrastructure investments will provide long-lived, strategic advantages which support the reduction of cost (increasing margins and free cash flow), decreased time to market (making more revenue accessible, more quickly), or other things, these "losses" are hardly bad things. [1]
[1] Of course, this assumes the company has access to continued financing on good terms, which seems to be the case.
A more accurate statement would be something like, "The tangible value of the company's assets, as far as anyone can reasonably ascertain with any degree of certainty, declined by 53 cents per share this quarter".
The question is whether the company is making good investments. If you believe its infrastructure investments will provide long-lived, strategic advantages which support the reduction of cost (increasing margins and free cash flow), decreased time to market (making more revenue accessible, more quickly), or other things, these "losses" are hardly bad things. [1]
[1] Of course, this assumes the company has access to continued financing on good terms, which seems to be the case.
Could be companies estimate their earnings each year. And then analysts do their own estimates. guided vs consensus
And the number of cars sold were down from the previous year. Doesn't sound like growth to me.
they did beat estimates ie. they did better than expected.
stock is up ±3% after market; all time high.
go tsla go.
It's fun to read Mark Spiegel's twitter feed. I've never seen someone so desperately try to force a theory. I wonder why some people want to see Tesla fail so badly.
I can sorta understand how he got there. Historically, making a car company is very, very hard. It's a tough industry to crack into. So when you see a startup car company with a hugely inflated stock that has a (based on historical data) very low chance of success, it makes a lot of sense to bet against it. But as it succeeds, you have to keep doubling down on the idea that it can't possibly deliver on it's promises and will fall on it's face eventually. At some point he slipped from making a reasonable bet to frothing at the mouth a bit.
The market can stay irrational longer than you can stay solvent. -Keynes
Ad someone who has been accused of that, you're flat out wrong.
There is a difference between Tesla, the car company (good) , and TSLA, the stock, which I belive is overpriced and has grey area accounting (bad). Sometimes they get confused.
There is a difference between Tesla, the car company (good) , and TSLA, the stock, which I belive is overpriced and has grey area accounting (bad). Sometimes they get confused.
It's possibly related to the fact his fund is bearish on the stock market, which as been a losing proposition for the past 8 years. Maybe he is short Tesla. Tesla as well as the bull market keeps defying the odds. Optimism pays.
Its politicization during Obama's first term (Solyndra et al) threw it into the conservative news grinder, and for many people it's still spinning in that context. This is probably where the whole "Tesla is only alive because of government life support. And look at SpaceX just SIPHON cash straight outta NASA's coffers!" stuff comes from.
Is it just Tesla? he seems to have a personal vendetta against Musk looking at some of his comments.
"I wonder why some people want to see Tesla fail so badly."
I think often people react really strongly to others liking something or wanting it to succeed. The more people like something, the more others react.
I think often people react really strongly to others liking something or wanting it to succeed. The more people like something, the more others react.
Might have shorted Tesla
i think so ..I think it's hubris ..I stopped listening to most 'experts' long ago..
> I wonder why some people want to see Tesla fail so badly.
A regressive mindset.
A regressive mindset.
The reason so many people think Tesla is expensive is because some are valuing the company relative to Ford and GM, but others are looking at Tesla Energy and valuing the company not just in automotive but in GE's business, and even in Exxon's business.
GM + GE + Exxon = $765 billion
Tesla at $45 billion is still just 6% of that market. There's a lot of uncertainty there, so only a small slice of that $765 billion is getting priced into Tesla's stock, but it's enough to make the people comparing to Ford wonder what the heck is going on.
GM + GE + Exxon = $765 billion
Tesla at $45 billion is still just 6% of that market. There's a lot of uncertainty there, so only a small slice of that $765 billion is getting priced into Tesla's stock, but it's enough to make the people comparing to Ford wonder what the heck is going on.
Why do you believe GE is relevant here? GE is a conglomerate that has major businesses like aviation and healthcare that are wholly unreleated to Tesla Energy. For 2016, those made up $9.2B of GE's $17.6B industrial segment profit, so over 50%.
Maybe because Ford and GM shouldn't be in Exxon's business, just like how Google shouldn't be in Exxon's business, and Bank of America should probably not be in Exxon's business?
Energy is an undifferentiated low-margin commodity. (Unless you're getting sweetheart resource extraction rates.) Especially when it comes to grid energy - there is zero synergy between being a producer of it, and selling products that consume it.
Energy is an undifferentiated low-margin commodity. (Unless you're getting sweetheart resource extraction rates.) Especially when it comes to grid energy - there is zero synergy between being a producer of it, and selling products that consume it.
From their letter (link to below if you want to read)
> Later this year, we expect to finalize locations for Gigafactories 3, 4 and possibly 5 (Gigafactory 2 is the Tesla solar plant in New York).
Should be an exciting conference call. (5:30pm EST)
http://files.shareholder.com/downloads/ABEA-4CW8X0/394401180...
> Later this year, we expect to finalize locations for Gigafactories 3, 4 and possibly 5 (Gigafactory 2 is the Tesla solar plant in New York).
Should be an exciting conference call. (5:30pm EST)
http://files.shareholder.com/downloads/ABEA-4CW8X0/394401180...
Gigafactory 3: Europe
Gigafactory 4: Asia
Gigafactory 5: Where? Another one in the US?
Gigafactory 4: Asia
Gigafactory 5: Where? Another one in the US?
Australia. Please.
We have the land, we have the lithium, we have the sunshine and we have a massive car market - 1.2 million cars sold in 2016.
We also have a good automotive manufacturing base... about to go into idle mode. Aussie federal and state governments have been very willing to support local manufacturing, and I'm sure they'd love to hear from Tesla.
We have the land, we have the lithium, we have the sunshine and we have a massive car market - 1.2 million cars sold in 2016.
We also have a good automotive manufacturing base... about to go into idle mode. Aussie federal and state governments have been very willing to support local manufacturing, and I'm sure they'd love to hear from Tesla.
I was going to suggest Australia as a possible contender for the 5th factory however while we have some supportive state governments we also have an incredibly unsupportive federal government that is hostile to electric vehicles and renewable energy and storage. And I think that's obvious to anyone looking on from outside. So while this current federal government is in power it's one more opportunity we're going to miss (and be left behind on).
We also have an absolute ton of solar power on very cheap land, and our power grid is in a death spiral to the point where going off-grid is going to be a clear financial win in the next 10 years. By the time a new factory is up and running, this is gonna be a really good market for battery storage.
Are the same people who tend to be hostile to electric vehicles and renewables friendly to mining? Parking a gigafactory near the nation's lithium might persuade a lot of people to take a chance on Tesla.
For a negative look at the results: http://www.zerohedge.com/news/2017-02-22/tesla-beats-it-burn...
It seems the financial side of a company have to make a guess at position they expect to be in when they report to the shareholders. So long as they beat the estimates then everyone is happy. The guess does have to be with enough forward movement to show the company is worth investing into. It's all a bit of a tightrope to get it right enough the money stays in play so the company can continue doing what they want to do.
I hope Model 3 can beat the Bolt in range. That would be a nice surprise. I wouldn't say it's necessary, but the Bolt has already gotten a lot of press, with some even saying it's what's making EVs "mainstream", even though they're only selling like hundreds of them at a time right now, and that probably won't change anytime soon considering GM loses $9,000 for each unit sold. Plus, I hear all the time how the dealerships try to dissuade people from buying a Bolt and turn them towards buying an ICE car instead.
I also hope Musk reconsiders his strategy of not making much cheaper EVs "because everyone will pay to be driven by an autonomous vehicle soon".
I think he's way overestimating how soon that will happen. I don't think most people, even in the U.S., where a "Tesla Network" may actually be viable, let alone in the rest of the world, will do that by 2025, if not 2030. That leaves a lot of wasted opportunities for Tesla to become a "market leader" in EVs - or rather to maintain its EV leadership in the market.
By 2025, there will definitely be EVs from Renault and others that cost less than $20,000 and have 200-mile ranges. At half the price of a Model 3, those cars are going to gain a lot of market share, fast, even if Tesla's numbers continue to grow as well.
I know Musk has already mentioned that Model Y will be cheaper, but we don't know just how much cheaper. Hopefully, it will be like $25,000. That would be a nice price-point for an EV by 2020. But I think Tesla needs to go down to $15,000 or at least 18,000 by 2025, as well, even if for that price point and by that moment in time, those cars can't be "Level 5" - although if Model 3 will have that hardware, I think so will the $15,000-18,000 car by 2025 (it will probably need to be more like 2023, and announced in 2021, though, as a lot of EVs will start to come out in 2021-2022).
I also hope Musk reconsiders his strategy of not making much cheaper EVs "because everyone will pay to be driven by an autonomous vehicle soon".
I think he's way overestimating how soon that will happen. I don't think most people, even in the U.S., where a "Tesla Network" may actually be viable, let alone in the rest of the world, will do that by 2025, if not 2030. That leaves a lot of wasted opportunities for Tesla to become a "market leader" in EVs - or rather to maintain its EV leadership in the market.
By 2025, there will definitely be EVs from Renault and others that cost less than $20,000 and have 200-mile ranges. At half the price of a Model 3, those cars are going to gain a lot of market share, fast, even if Tesla's numbers continue to grow as well.
I know Musk has already mentioned that Model Y will be cheaper, but we don't know just how much cheaper. Hopefully, it will be like $25,000. That would be a nice price-point for an EV by 2020. But I think Tesla needs to go down to $15,000 or at least 18,000 by 2025, as well, even if for that price point and by that moment in time, those cars can't be "Level 5" - although if Model 3 will have that hardware, I think so will the $15,000-18,000 car by 2025 (it will probably need to be more like 2023, and announced in 2021, though, as a lot of EVs will start to come out in 2021-2022).
"GM loses $9,000 for each unit sold."
I'd be careful with figures like this. It's possible they are investing with the idea to ramp up production and get to profitability with scale, or with predicted reductions in battery price. It's also possible that the way CAFE rules calculate an average over a manufacturers entire fleet mean that by taking a loss in one place they can earn or save money in another.
I'd be careful with figures like this. It's possible they are investing with the idea to ramp up production and get to profitability with scale, or with predicted reductions in battery price. It's also possible that the way CAFE rules calculate an average over a manufacturers entire fleet mean that by taking a loss in one place they can earn or save money in another.
Right, its important to calculate profit/loss differently from 'marginal profit' or the money made by each unit over cost of manufacture. Sell enough units, you can cover the fixed (development) costs. Sell too few, and you can claim "They lost money on every unit" which is sort-of correct.
I recall this sort of figure being thrown around for the Volt, and it was calculated by taking the full cost of R&D and allocating it equally to each unit sold so far, which is idiotic. But a lot of people hate alternative fuel cars and so it got a lot of traction.
>I hope Model 3 can beat the Bolt in range. That would be a nice surprise.
Why do you care whether Tesla has a good car or GM has a good car, rather than, overall, we have many good cars to choose from?
>I know Musk has already mentioned that Model Y will be cheaper, but we don't know just how much cheaper. Hopefully, it will be like $25,000.
We haven't even seen the M3, or heard the price. But we're already talking about the next, cheaper model?
Why do you care whether Tesla has a good car or GM has a good car, rather than, overall, we have many good cars to choose from?
>I know Musk has already mentioned that Model Y will be cheaper, but we don't know just how much cheaper. Hopefully, it will be like $25,000.
We haven't even seen the M3, or heard the price. But we're already talking about the next, cheaper model?
I care because the Model 3 is almost certainly going to be a much better car overall (better performance, far superior driver assistance technology, vastly better charging infrastructure) and it would be a shame if its success were hobbled due to one relatively small factor that gets blown out of proportion.
Of course I'd love to have many good cars to choose from, but there's no sign of that happening any time soon.
Of course I'd love to have many good cars to choose from, but there's no sign of that happening any time soon.
>I care because the Model 3 is almost certainly going to be a much better car overall
I'll bet that the cars from Tesla and GM within similar price range will have similar features and performance. Why would you think that Tesla, operating at a much smaller scale, will necessarily be able to do everything cheaper and better? That seems counterintuitive; GM has scale and a dialed in supply chain.
I'll bet that the cars from Tesla and GM within similar price range will have similar features and performance. Why would you think that Tesla, operating at a much smaller scale, will necessarily be able to do everything cheaper and better? That seems counterintuitive; GM has scale and a dialed in supply chain.
I stated three specific areas where the Model 3 will be better. These aren't speculation, they're facts. The base Model 3 will be faster 0-60, and it's confirmed that they'll have high-performance options. The Bolt's driver assistance technology is anemic, while we know that the Model 3's will be at least as good as what Tesla is shipping today on the S and X. The charging infrastructure for long distance travel in the Bolt is awful, and the Bolt can't charge very quickly even if that infrastructure were better, whereas the Model 3 will be able to use Tesla's extensive Supercharger network.
I couldn't tell you exactly why Tesla is able to do better than GM, despite GM having vastly more resources, but it's quite clear that they will.
I couldn't tell you exactly why Tesla is able to do better than GM, despite GM having vastly more resources, but it's quite clear that they will.
>These aren't speculation, they're facts. The base Model 3 will be faster 0-60,
You know for a fact that a car that doesn't exist yet is faster than one that does? That's interesting.
I, on the other hand, will wait until there's a comparable Bolt and Model 3 on the market, with a similar price, to determine what's better. A 3 series BMW is also "better" than Bolt, but that's irrelevant.
>"The charging infrastructure for long distance travel in the Bolt is awful"
You realize that there are far more regular chargers across the nation than superchargers, right?
You know for a fact that a car that doesn't exist yet is faster than one that does? That's interesting.
I, on the other hand, will wait until there's a comparable Bolt and Model 3 on the market, with a similar price, to determine what's better. A 3 series BMW is also "better" than Bolt, but that's irrelevant.
>"The charging infrastructure for long distance travel in the Bolt is awful"
You realize that there are far more regular chargers across the nation than superchargers, right?
Yes, Tesla said that the base Model 3 will be under 6 seconds for 0-60, and I'm perfectly confident in trusting them to deliver on that.
"You realize that there are far more regular chargers across the nation than superchargers, right?"
You realize that the vast majority of "regular chargers" are L2 units putting out 6-10kW and are therefore completely worthless for long distance travel? And that the CCS infrastructure is woefully incomplete in the US? And that even if CCS were ubiquitous, the Bolt maxes out at 180MPH charging, which is terrible?
Plan a drive from NYC to LA using the Supercharger network and "regular chargers" and compare how long the trips would take. And that's assuming that the CCS units, which are often installed in single units, aren't blocked or broken.
"You realize that there are far more regular chargers across the nation than superchargers, right?"
You realize that the vast majority of "regular chargers" are L2 units putting out 6-10kW and are therefore completely worthless for long distance travel? And that the CCS infrastructure is woefully incomplete in the US? And that even if CCS were ubiquitous, the Bolt maxes out at 180MPH charging, which is terrible?
Plan a drive from NYC to LA using the Supercharger network and "regular chargers" and compare how long the trips would take. And that's assuming that the CCS units, which are often installed in single units, aren't blocked or broken.
>Yes, Tesla said that the base Model 3 will be under 6 seconds for 0-60, and I'm perfectly confident in trusting them to deliver on that.
This is different from a "fact".
>Plan a drive from NYC to LA using the Supercharger network and "regular chargers" and compare how long the trips would take.
Plan a drive across Canada, where I live, and see how far you get with the Supercharger Network. I'll be stranded 300 miles from where I start.
But guess what? Charging infrastructure isn't rocket science. It can be ramped up quickly.
This is different from a "fact".
>Plan a drive from NYC to LA using the Supercharger network and "regular chargers" and compare how long the trips would take.
Plan a drive across Canada, where I live, and see how far you get with the Supercharger Network. I'll be stranded 300 miles from where I start.
But guess what? Charging infrastructure isn't rocket science. It can be ramped up quickly.
The moment someone actually ramps up non-Tesla fast charging infrastructure to make long-distance travel in non-Tesla EVs, I'll remove this as a "pro" on the Tesla side. Until and unless that happens, it remains an advantage.
I don't see why someone would buy Bolt over a Model 3 because of a few miles. If there really is so important then get a larger battery, but for most people the different style and features will probably be most important than 10% more range.
For the Model 3, the important thing is that the battery is big enough to get you from supercharger to supercharger for long trips.
The trade I'm interesting is simultaneously shorting Tesla and Daimler.
Sceptics emphasise the difference between Tesla's market cap (£40 bn) vs its current sales (75,000) and profits (close to -$1bn). I can imagine a state of the world where they grow dramatically and justify this price tag, but in that case I see serious problems for Daimler.
Similarly, if Daimler flatlines and doesn't see a crash in sales of Mercedez, I'm seriously pessimistic about Tesla.
Sceptics emphasise the difference between Tesla's market cap (£40 bn) vs its current sales (75,000) and profits (close to -$1bn). I can imagine a state of the world where they grow dramatically and justify this price tag, but in that case I see serious problems for Daimler.
Similarly, if Daimler flatlines and doesn't see a crash in sales of Mercedez, I'm seriously pessimistic about Tesla.
Looks like the stock is down 2.4% from yesterday. Folks are taking a closer look at the numbers.
One analyst specifically took aim at the fourth quarter results, calling out the beat as "phantom" given the exclusion of the SolarCity acquisition from consensus estimates.[1]
[1]http://www.zerohedge.com/news/2017-02-23/market-sours-teslas...
One analyst specifically took aim at the fourth quarter results, calling out the beat as "phantom" given the exclusion of the SolarCity acquisition from consensus estimates.[1]
[1]http://www.zerohedge.com/news/2017-02-23/market-sours-teslas...
[deleted]
[deleted]
Was about to buy near expiry put options for a very cheap price...I'll be staying away from TSLA and looking at macroeconomic trends instead.
Timing earnings without informational edge, it's gambling.
Timing earnings without informational edge, it's gambling.
Update: Seeing the TSLA tank yesterday, I decided I will never self doubt myself again and resume gambling.
Tesla's car business is very profitable:
Tesla also reported an automotive gross margin excluding SBC and ZEV credit (non-GAAP), of 22.2% in the quarter, up from 19.7% a year ago, but down from 25.0% in Q3...
huge growth:
Looking at the future, Tesla said it expects to deliver 47,000 to 50,000 Model S and Model X vehicles combined in the first half of 2017, representing vehicle delivery growth of 61% to 71% compared with the same period last year.
reinvesting operating profits into investments:
The company also expects to invest between $2 billion and $2.5 billion in capex ahead of the start of Model 3 production and continues "to focus on capital efficiency while also investing in battery cell, pack and energy storage production at Gigafactory 1. It also forecast that both Model 3 and solar roof launches are on track for the second half of the year.
This company is firing (no pun intended) on all cylinders