Jun 26, 2013
Zaxxon Um.�
Jun 26, 2013
qwk Have you ever heard of TCO? Doesn't sound like it. Also BMW's electric offering is a clown car. If the price is anywhere near the Model S in Europe, only a fool would buy it.�
Jun 26, 2013
Realist 1 Million, obviously.�
Jun 26, 2013
ShortSlaver This is not an advantage. Might be eating too many of those white sausages.�
Jun 26, 2013
Realist The i3 will be at app. 50k.
i8 120k.�
Jun 26, 2013
deonb But there is a big difference between shorts having points rooted in facts vs. just trying to stir emotions. You can similarly take investment advise from Glen Beck and Michael Moore if you want. I wouldn't recommend it...
I would listen to someone who says:
"I've made some measurements and SuperChargers isn't financially viable to Tesla. They cost $100 per charge. Here is how..."
vs. what effectively boils down to:
"Elon is running a pyramid stock scheme and lying to investors about sales and the cost of SuperChargers. I have no proof, but you guys are all delusional if you think he's not."�
Jun 26, 2013
DaveT Agreed. I was going to reply to Realist but I decided not. It's obvious he hasn't done his homework.�
Jun 26, 2013
NigelM Basically a BMW version of the Volt. A little more reading on the German website enlightens me that the "range extender" is a generator; but I'm not convinced that the fact "you can fill up your car at every gas station" is an advantage. Unquestionably, the i3 is a city car and even BMW calls it that.
Read up on Superchargers and Battery Swapping. Whatever the restrictions I don't buy the argument that those options are inefficient compared to burning the world's limited supply of fossil fuels.
Not sure what you're looking at but one thing you can't accuse the Model S of and that is small seats.
Even with the tax incentives it's hugely expensive, but if everyone made their decisions solely on price we'd probably all be riding bicycles.
I see an expanded market as a good thing. The world doesn't have any choice but to make electric cars viable. Oil is a finite resource, that's an indisputable fact; now we can argue over how long it's going to last but sooner or later the entire world will need to switch away from the internal combustion engine.�
Jun 26, 2013
Realist I have always said that the Model S is too expensive to produce. Tesla is not making any real money at the moment despite their Model S exceeding sales targets.
Elon Musk very ambitious sales targets are visionary at best.�
Jun 26, 2013
rcc Yep, by car company standards, the market cap is insane. But Tesla's financials and market prospects look much more like a tech company than a car company and its stock price needs to be evaluated with that in mind.
Tesla is a small company in hypergrowth mode. They have done *zero* paid advertising other than their retail stores/galleries so there's lots of unexercised demand-generation. They seem to have a compelling product - as more people in an area learn about it (from new stores or new sales), sales in the area increase. They led large sedan sales last quarter in California. In Silicon Valley where people probably know more about the company than anyone else, the S is the hot car to have for those who can afford it.
On the technology side, I'm not going to go into details but they probably have a 3-7 year tech lead on everyone else in battery-pack/drivetrain/charging technology and they're the only company out there thinking of the entire thing as one integrated (but not completely closed, unlike Jobs) system.
I admit it's a risky stock: the company could still make a mistake that will put it out of business. But the upside potential assuming reasonably good execution is amazing. And Elon Musk has a great track record when it comes to execution. Given the risk of execution hiccups and the macro environment, I think the odds are reasonable that we'll see a dip below 91 at some point in the future. But not a lock by any means.
As for me, I've tripled my initial investments, pulled out 2/3 of it and am long on the rest. The stock has enough volatility that I might short it on peaks if I were trading and able to move in and out of positions cheaply. But I don't have the time or inclination to do that.
I think the stock is priced for perfection, even for a tech (like) stock. But I've seen lots of tech companies keep their stock pegged like that for years as they grew. Sure, the price was out of line with the long-term fundamentals but the stock stayed that way for years.
Anyway, it's your money. Do what you want with it. Given that I'm rooting for Tesla to succeed (even if I weren't an investor), I won't wish you luck though.
�
Jun 26, 2013
Norbert As long as Tesla backs them up with solar power, that's not too bad.
As long as he keeps exceeding them...�
Jun 26, 2013
deonb So you're saying that it's not feasible to make the Model S with a 25% gross margin. Again I must ask for proof?
Actually, as a general rule of thumb... before you post anything, ask yourself the question: "Can I back this post up with any kind of proof?". If so, then include it.
Otherwise, especially on this Forum, it only serves to rile up a bunch of people against you. Unless, of course, that's what you're going for...�
Jun 26, 2013
techmaven Internal resistance is not fixed - it varies dependent on temperature. Read Remmlinger, J�rgen, Michael Buchholz, Markus Meiler, Peter Bernreuter, and Klaus Dietmayer. "State-of-health Monitoring Of Lithium-ion Batteries In Electric Vehicles By On-board Internal Resistance Estimation." Journal of Power Sources 196.12 (2010): 5357-5363 and specifically, table 6. While the variance does end up becoming small above 40 degrees C, there is still a significant change going from 25 degrees C to 40 degrees C. Tesla doesn't charge below 0 degrees C for obvious reasons when you see table 6. It also changes a bit from SoC, but that is usually too small to be counted.
You also misinterpret the power equation. That equation does say that power increases by the square of the current, but nothing about what the battery does with the power. Obviously some of that is turned into heat, but heating also decreases the resistance.
Further, you make a comparison between at home charging on a 240V 16-32A AC circuit versus Supercharging which is DC to DC, ~400V at ~300 amps. The first case goes through an on-board charger (or two) and likely does not reconfigure the pack. Supercharging definitely reconfigures the pack. The system losses are different, as is the overall system's internal resistance and therefore the resulting charging losses. Obviously Tesla is not redefining physics, but your understanding of what is going on is what we are discussing. Again, the equation you pointed to does not model the actual heat generation or charging loss given higher current.�
Jun 26, 2013
JRP3 I'm aware of the physics. How about you put actual data in a post and quantify the efficiency losses with numbers? Frankly I'm not even sure of your point, so what if occasional supercharging is a little less efficient than normal charging, which is what most people will do 99% of the time?�
Jun 26, 2013
Johan Much of the discussion topics raised by Realist are just nonsense, such as charging inefficiencies, pricing, "inadequate range" and this issues relation to supercharging and swapping, how BMW or [insert any other car manufacturer in the world] will soon have better offerings.
On his part, and also to some extent on "our" part, to debate these issues is really just a pseudo-debate since we will never agree on any of this as much of it is subjective, and we have already made up our minds about the only real and important issues and this colors our opinion on these "pseudo-issues" extensively. The real and defining issues of course are:
- Are electric cars going to replace cars based on internal combustion engines as the main form of personal transport? [Yes]
- Is this transition going to take place faster than most would believe? [Yes] (This is a disruptive technology, make no mistake about it, and we as humans are not intuitively capable of seeing when we are at the beginning of an exponential growth curve pattern - it looks flat or linear at first and then it "explodes". It's not until we look back that we realize that we were in the early phase of an exponential growth situation. This is why almost no-one was able to predict how fast the internet would grow, how soon the number of people living in extreme poverty in the world would be cut in half, and so on and so on.)
- Is another technology, for example natural gas cars or hydrogen fuel-cell cars (with EV drive train) going to prove better and steal EV's thunder? [No]
- The above three questions answered gives you a definite answer to the third important question: Does Tesla have a growing market in the years to come [Yes]
- Is Tesla years ahead of all competition in this field [Yes] (I have yet to see proof of anything to contradict this)
- Does Tesla's track record show that they can keep up the pace and hence keep up their lead? [Yes - at least for years to come] (In the long run Tesla risks becoming a less agile, inflexible and stagnant giant, much like AAPL, GM, FORD etc. etc. but this is in a way inevitable and not really the issue here).
So I repeat: Alea iacta est. Place your bets.�
Jun 26, 2013
qwk You summed it up pretty nicely. Once you drive the car, you begin to see that the above makes even more sense.�
Jun 26, 2013
Babylonfive Real posters express opinions with verifiable facts behind them and are willing to share.
Trolls express either opinions or purposeful misinformation, but in all cases say "everyone knows this" and doesn't post facts. In this case, the troll actually doesn't understand the facts at all.
Too bad you picked a den of physicists, electrical engineers, etc. You lose.�
Jun 26, 2013
Doug_G Tesla cannot rewrite the laws of physics, but it helps to be able to read them correctly. The losses do not rise exponentially in relation to power. You left voltage out of the equation. Also that is a square law not an exponential law.
The losses rise geometrically in relation to current.
This is how long-distance transmission lines work. They boost the power to a higher voltage, so that the current is dramatically lowered and so are the losses.�
Jun 26, 2013
jeff_adams Did you get laid off from Audi, Realist? You seem a little bitter about Tesla.
All manufacturors underestimated Elon. He delivered the Roadsters. He delivered the Model S. He will deliver the Model X and Gen3.
You are welcome to your opinion about diminishing demand, but Tesla hasn't even BEGAN to hit mainstream consciousness. They are hiring at all levels. They are investing in massive charging infrastructure.�
Jun 26, 2013
Hasse There are no tax incentives worth mentioning in the EU. Why? Well obviously because EU car manufacturers have no volume production capabilities for electric cars yet and therefore have not lobbied for tax incentives. So, BMW electric cars could actually benefit Tesla sales in the EU if incentives are to follow...�
Jul 9, 2013
AudubonB Very nicely written, Jack R (#178). If I may suggest, perhaps you might consider re-posting a version of that in the "Long Term" investment thread.�
Jul 9, 2013
sleepyhead kenliles, can you please explain to me the reason for the significant EPS contraction? I understand that there will be some cheaper cars sold in q2 vs. q1, but that will not lead to significant EPS contraction in my opinion. Are there any other items this quarter that that weren't present in q1 that will lead to a bigger loss?�
Jul 9, 2013
ggr One such cause is that there are supposed to be a bunch of cars on a boat to Europe, which will not represent revenue in this quarter, since the revenue isn't booked until they are in the hands of the customers.�
Jul 9, 2013
sleepyhead I disagree with this reason: They guided for 4500 units in q1 and 4500 units in q2 (after subtracting 500 for Europe). Therefore, this is not a cause for lower EPS if you believe they will beat guidance in a similar manner in q2.
Next reason please.�
Jul 9, 2013
MikeC Fewer ZEV credits?�
Jul 9, 2013
clmason No benefit from renegotiated DOE loan agreement.�
Jul 9, 2013
sleepyhead This I can agree with, but does anyone know how much lower these credits will be in q2? It sounded like they would start declining significantly in the second half though. Any idea what the estimate is for q2? I think that margin expansion will easily cover the lower ZEV credits.
I will save you guys some time. One item for $11m will not show up anymore and that is the removal of warrants liability on the balance sheet. Tesla also had a favorable currency exchange of $6m and this might happen again since Yen continued weakening.
I am trying to find out where these additional costs are supposedly coming from that will lead to lower EPS in q2 vs. q1?
- - - Updated - - -
Not sure I am following you here. This is a balance sheet item, it does not affect P&L outside of interest expense which is immaterial, since the new debt is only $2m per quarter.
Is there supposed to be some additional R&D expenses this quarter? Higher SG&A? I am trying to figure out where the additional costs are coming from this quarter that were not there in Q1?�
Jul 9, 2013
Norse No boat heading for Europe still. However, the strength of the dollar and fixed prices might get Tesla to have worse margins in Q3 and Q4 in Europe and Asia. I say might cause I dont know how they have hedged.�
Jul 10, 2013
ppl How do you know no boat headed over? Do you watch the ports? Do you have inside info?�
Jul 10, 2013
maekuz
Higher R&D and SG&A, lower revenue due to a higher mix of 40kWh and 60kWh. See my best case scenario in the attached xls-sheet. View attachment 130710_Tesla_Fundamentals.xlsx
We will need a decent increase in gross margin to get profitable again and a significant increase to get a higher profit than Q1.
I have to admit the 500 cars for europe are a wildcard here.�
Jul 10, 2013
Realist Growth stories can drive up stocks to insane levels. This is true. But these stocks also tend to crash hard when this growth path shows signs of weakness. The current volume on TSLA is just as insane as its valuation. TSLA is one of the most watched stocks on Wall Street. Everyday almost 10% of the free float changes hands. I have rarely seen anything like that. Many people have made a lot of money in a very short period of time. In fact Elon Musk has blown up most of the Street guys as the short ratio was so high and yet the market cap already ambitious at 27$.
But many times this short sellers take revenge. In fact, they get victory most of the time. The real growth stories only rarely have high short ratios. Apple for example never saw short ratios higher than 3%.
For the moment the Model S is a fashion statement, it�s the car to have. People are trading in there Porsche Panameras and Audi R8s. The current production rate of the Model S is crazy. They are outselling the whole competition with further backlogs for Europe and Asia. The question is: Will it last?
The Model S is obviously a great car, but it�s an electric car. For most people this is still a problem, despite Tesla�s upcoming supercharger network and battery swap systems. Right now and for the foreseeable future this car cannot give you the same kind of freedom as a gasoline car. Just imagine going to the supercharger station being completely occupied by various Teslas.
Many people in this forum have accused my for being misinformed or having �no clue�. I am not a scientist and neither an engineer. But I try to know as much as possible on the stocks I trade. I will also not hold on to my short position forever if things get out of control, which is possible of course. Still I believe that there is some validation on the points I made.
Being a car nut I�ve been working on several projects in the car industry before I actually started trading for a living. Engineering, producing and selling a 100.000$ car is an incredible difficult job and doing so on a profitable basis even more. The industry is facing huge competitiveness alongside overcapacity and without sizeable economies of scale there�s no way you can come close to the margin levels of the big guys.
Companies like BMW achieve a 10% EBIT profit margin because they sell close to 2 million cars a year with many parts in common. The BMW 4 cycl. is essentially a PSA engine being used not only in a BMW but also in a MINI, Peugeot and Citroen.
Of course Tesla will use many common parts for the Model S and X, but on the GenIII which is supposed to be the main game changer a platform strategy with the bigger cars is unlikely. Tesla is indeed an open minded fresh thinking company and they have a very pragmatic approach (for example the battery swap which I thought to be impossible) but they also have very little experience. There are just so many things that can go wrong in a car. I bet that Tesla will have many recalls to come. They try to revolutionize the car industry out of nowhere.
Until now Tesla has not really seen much licensing for its technology. Daimler and Toyota are using some of the powerplants but nobody wants to take advantage of Tesla battery packaging. That is not really a surprise as companies like Toyota have been working on battery packaging for quite some time. Yet nobody really wanted to take the risk of producing a purely electric car the size of a Model S. And it is easy to see why.
There is one technical detail on the Model S that shows me that even Elon Musk and his fellows don�t have a magic trick in their hat. From the experience of the Roadster we know that there is some depletion of the battery pack. Nothing serious but present. Tesla claims the Model S� pack to last longer despite using more cells and dealing with higher power demand and wider ROC and more demanding charging levels. Obviously Tesla has implemented a much more sophisticated Thermal Management system, with the system heating or cooling even when stationary at idle. But the trade of is the so called �vampire load�.
According to this forum the Model S consumes app. 3.2 kwh/24h at idle. A standard 2 person household has app. 12 kwh consumption per day. Therefore the Model S increases that rate by 25% just for standing there and doing nothing.
I cannot imagine any big manufacturer coming up with a car which basically needs to be driven in order to make any environmental sense. What are you going to do if you want to drive your Model S only during the summer months? What if you want to go on holiday and park your car at the airport? I cannot see such a construction being pioneering or advanced. This is a major flaw and many customers will not accept that. It also shows me that things on battery management are indeed not as easy as some people think or believe to know. As long as Tesla cannot fix that problem bears have a reasonable point to make alongside other issues like the Model S poor track performance.
At the moment nobody knows if the electric car can succeed. There are too many question marks to be answered.
But if it does, Tesla will face powerful competition. All the big car manufacturers have much higher R&D budgets. They have more dealers, higher economies of scale and they constantly earn money.
I know many people here don�t take me serious and I have no problem with that. I don�t care about it. Still, I can only see Tesla loosing from here, just like you guys only see it winning. For the moment my trade account tells me I am wrong. But as I said, I stay in the game for the moment.
Yet I will not continue that much writing here. I might eventually post my trading position from time to time, but I really don�t want to offend or insult other people with my unqualified posts.
Thanks for reading.�
Jul 10, 2013
JRP3 As I posted on Seeking Alpha in response to a similar statement, it's funny how people see being tied to a monolithic fueling infrastructure with no other choices as "freedom". I promise you EV drivers gladly give up their "freedom" to use gas stations.
There certainly could be a pull back in price, but your constant misrepresentation of the technology involved does not support your thesis.
Yes, because such a car would cut into their existing product sales, which they've taken decades to develop.
Again you are grasping at straws. First of all the S was not designed as a track car, I'm not sure any 4500lb vehicle ever was. Second, and more importantly, the vampire drain is a temporary issue. Earlier software versions had much lower draw but apparently there were some issues with the car powering back up in some cases, so Tesla disabled the sleep feature temporarily. Some people did not install the newer software version and have had minimal drain. It will be fixed, no question about it, and no technical reason it shouldn't be. Again, this is you not understanding the technology and blowing a minor issue out of proportion.
All of us driving electric cars know they can succeed. More people find that out every day.
They also have higher costs across the board, and as I said earlier they have a huge legacy investment in their older technology. If they actually produced a good EV it would cut into their existing product. They are stuck in a trap and will have to chew their own arm off to get out.�
Jul 10, 2013
Zythryn Realist, you seem to take speculative 'what ifs' and consider them as facts that will happen. This, I think is coloring your trades and if you do it with other companies I would recommend you stop trading.
As for your comment about "From the experience of the Roadster...". We don't know about battery degradation due to that experience. We know about it because Tesla told us about it. Later, the experience of the Roadster showed that there was not as much battery degradation as earlier speculated.
As for people here seeing nothing but Tesla winning, I think that is incorrect.
Tesla has a lot of challenges in front of it and I don't think there is anyone here that sees nothing but success.
I do appreciate your viewpoint. And all opinions are welcome. But if you put forth faulty facts to support your opinion, don't be surprised when people correct them.�
Jul 10, 2013
Realist I know Tesla claims the power drain having nothing to do with thermal management. Fact is the issue is not fixed yet.
Regarding track perfomance: I hope do drive a Model S soon and I really cannot wait to see how it perfoms on the Autobahn at high speed.�
Jul 10, 2013
JRP3 Which will have almost zero significance for 99.99% of all potential owners.�
Jul 10, 2013
Norse Because Norway get em first and Norwegians got their vin number the last day in june.�
Jul 10, 2013
djplong My average consumption is from 28-50KWh per day. Scanning around the web, I find the EIA saying the average was 31/day in 2007, a 2004 California study said it's 32.8/day nationwide and 22/day in CA. According to a Wikipedia article breaking things down further, if you use electricity for heat and hot water, you're looking at 41/day JUST FOR THOSE.
So that 3.2KWH/24 might sound bad - but a little math shows it's the equivalent of leaving a 133-watt incandescent light bulb turned on. *If* that number is accurate. So, rather than being a 25% hike, as you state, it's more like a 10% hike - and that's assuming your vampire-drain number is correct. Now - my electric bill runs north or south of $150. My gasoline bill is around $200. Do you think I'll trade one over the other? In my case, I could probably break even if we managed to empty out the spare refrigerator/freezer we have in the basement and disconnect it.�
Jul 10, 2013
deonb The vampire draw is due to having the computer system always ready instead of it "booting up" for a few seconds when you get into the car. Has nothing to do with battery management.�
Jul 10, 2013
sleepyhead Thanks for posting your Excel Model.
I might not have made this clear, but lower Auto Revenues will not cause lower EPS in Q2. Auto Gross margins were so low in Q1 that gross profit in Q2 from Auto Sales will certainly be higher, no matter what the mix of 40/60/85 is. Only higher costs and/or lower ZEV credits can lead to lower EPS in Q2. I agree with what you said about the increase in R&D and SG&A.
But I actually found the answer to my question myself. The reason that Tesla is looking at negative EPS this quarter is due to the Revenue Recognition Principle associated with Lease Accounting. When you lease a Tesla, the company recognizes revenues over the period of the lease. So on a GAAP basis Tesla will not be profitable. That is why they are going to introduce "Adjusted" Earnings this quarter. Wall Street is not stupid and they understand the limitations of GAAP.
Which leads to my next question: What percentage of Teslas sold are under the "lease" arrangement?
If you buy a Tesla and finance it through one of Tesla's bank partners is it automatically considered a lease? Or do you have the option to finance an outright purchase through Tesla?�
Jul 10, 2013
jrickard As I said. I think there will be a build in stock price leading up to the Q2 numbers and a bit of a dip after the announcement. But if they ARE up to 550 per week, and show say 450 average across the quarter, they'll be over 5000 units. The dip will be driven by more fundamentalist shorts jumping in, and the tech guys are going to sit on it for the most part. THey're all about production numbers not EPS.
To a growth guy, EPS represents taxable income. It is not even a good thing in the early days when you hope to get in cheap. They will be all about execution and demand. They could care less about revenues and EPS. In some cases in Internet investing, they have been betting on companies with eyeball growth that don't even have a business model for monetizing it, or worse, a dubious one.
So I see a little dip after earnings from fundamentalists coming back hoping to make it back on the fall. And I think ultimately they'll get handed their head AGAIN. Second day after earnings will probably be a good day to be a buyer.
Jack Rickard�
Jul 10, 2013
maekuz How about starting a poll directed at forum members who bought (or leased) a Model S in April 2013 or later? That should give us at least a ballpark number.
I think the financing through Tesla's bank partners is considered a lease. True Cost of Ownership | Tesla Motors�
Jul 10, 2013
jrickard Same guy Coconut. I've moved to my original hometown of Cape Girardeau Missouri. Today I do something very like Boardwatch, but it is a weekly two hour video, and it is about converting cars to electric drive. It's a lot of fun. We are having a convention in August -6th to 11 with a couple hundred electric car guys and maybe 40 cars. And my Model S is windowed right now for July 22 to August 5. All part of God's plan. And the best part is Realist bought it for me.
I currently drive a 2008 Cadillac Escalade Ext with a 76 kWh battery pack - 8000 lbs. We converted it over the past couple of years on the show. EVTV Motor Verks | Electric Car Conversion Videos
You would think all of our viewers would be car guys. But a lot are the same computer geeks from the 1990s, a little PO'd about the gasoline thing. And 45% Europe where the gasoine is $8 already. I fear we are one camel sneeze from the same problem.
Jack RIckard�
Jul 10, 2013
deonb That's not accurate. Tesla has no true lease program with deferred revenue recognition like GM does. As far as Tesla accounting is concerned, the "lease" is a cash transaction. It's just something between the owner and the 2 supporting banks.
What they do have to account for is the buyback guarantee. We haven't seen the effect of that yet.�
Jul 10, 2013
vgrinshpun Tesla did indicate that lease accounting that they adopted for cars financed using the hybrid product will require special treatment. From the Q1 2013 letter:
"As mentioned above, we expect that our gross margin will continue to rise into the second half of the year to our target of 25%, assuming no contribution from ZEV credits. The lease accounting treatment for cars sold through our new financing plan will have no impact on our cash flows, and we expect to be roughly breakeven on cash flow from operations in Q2, despite launch costs in Europe and a huge increase in service centers, stores and Supercharger stations.
However, the deferred revenue recognition required by GAAP for lease accounting will lead to a net loss on paper in Q2. We plan to provide information so that investors can evaluate our results both with and without the impact of lease accounting, as we believe the actual effect on Tesla is positive."
During the Q1 call EM indicated that they expect about half of the cars financed using the hybrid product.�
Jul 10, 2013
sleepyhead
Sorry but you are wrong and the exact opposite of what you wrote is true:
GM recognizes revenue the moment they turn the car over to a dealership.
Tesla doesn't have dealerships so if they lease a $100,000 car they will not recognize $100,000 of revenue like GM would by simply delivering a car to a dealer (that hasn't even sold it yet).
The lack of dealerships means a lot tougher revenue recognition standards for Tesla.�
Jul 10, 2013
FredTMC Has anyone estimated yet what % of cars delivered in Q2 actually used the TM financing (i.e. "lease")? Maekuz asked this earlier as well...
Also, my understanding is that if third party leasing is used for a particular customer then TM gets to recognize the sale fully at time of delivery.�
Jul 10, 2013
jrickard Realist:
Frankly there is nothing wrong with your thinking process. The series of well over a dozen bankruptcies of electric car companies makes your point that getting into the car business is hard work. I recognized kind of early on that the shorts would not have the deep knowledge to be able to differentiate Tesla from Azure Dynamics, Brightspeed, Phoenix, Aptera, Think, et al.
You do get in a little trouble with your engineering. The average US Houshold uses just over 900 kWh per month. I understand that this must sound horrendous to you guys in California, but here in the hinterlands it is not unusual to run air conditioning 24x7 from late May to late September. It never shuts down. This much higher use is what gets us much lower rates - 8.2 cents per kWh instead of California's 27.5 cents. The trucks and wires are amortized over more kWh here.
That's more like 30 kWh per day. You will struggle to find your Tesla in your monthly bill at all. Here in Missouri it will take test instruments. The vampire load is not the problem you think just as the charging efficiencies of the fast charge were not.
The car is an astoundingly good car. The guys at Motor Trend and Consumer Reports are just not dummies. You don't have to devine a spider in the car. It's been gone through. It's now about demand and production and growth.
Technically, there IS a little bit of a problem long term. The cells they use in the car are ultimately designed for consumer use. Flashlights. Cameras. RC toys. Smoke alarms. Thermostats. There really is no impetus to make them long lasting vis a vis cycle life.
They WERE rated at about 800 cycles. With the advent of the automotive application, they have simply REMOVED cycle life from the data sheets. Vague references to longer cycle life. Mumble, mumble.
But if you check the SEC filings, Tesla has already copped to a little problem in the 5-7 year range.
This goes to the problem people really have with electric cars - childhood experiences with flashlights and batteries. And they know the batteries are expensive.
What does this do to resale? Let's see, a four year old Tesla, with a battery good for five years???? Hmm..... And Elon has "guaranteed" resale values - a depreciation feel good.
But it remains a problem. And I cannot believe they are going to take the hit on this one. I was SURE he woudl announce it with the battery swap demo and he walked away from it hard.
Basically, the way out, is to introduce the $1 shave club for men, but for Teslas. Let's say you pay $200 per month and join the club. Now you can swap your battery anytime you like. Never or a couple of times per day.
Almost immediately, the batteries become Teslas and are divorced from the car. A better Better Place actually. The batteries WILL get better, particularly with regards to energy density which there IS a huge motivator to increase by Panasonic et al.
The Model S batteries are ridiculously modular. They can pull those blades, dump the old 18650's and plug in new ones in a New York minute, and you are down to inspecting threads in the mounting bolts. No battery warranty worries.
If Tesla upgrades their cells, you automatically get better ones in the swap. End of depreciation concerns. End of battery life issue. And a recurring revenue stream from 99% of Tesla owners who opt in for the program.
Over several years inevitably more range from the SAME car.
I was astounded he didn't announce all this at the perfect moment when he was standing in front of the battery swap. I can only assume he is holding it in reserve as an ax to chop off the heads of the shorts AGAIN.
Now lets 'talk about your range issue and the "freedom" of your car that precludes success forever for electric vehicles.
FIRST. It's all in your head. We LIKE having a car we can drive to the moon. Nobody drives to the moon. A very small percentage actually use their cars cross country. And for MOST of us, it is a 20 mile per day gig. Let me tell you a little secret. I have about nine different electric cars and have been driving electric for four years. I don't charge every night. In fact I charge a car about twice a week. And there are more people drive cars like me than drive them 100 miles a day or drive to California four times a year.
Your use of your car is more than likely VERY different from what you think it is. 14500 miles per year is 40 miles per day. If you drive 100,000 miles per year, an electric car is just not for you at this point. Welcome to the 1% club.
Beyond that, inronically, just about the time the American public is acculturated to what they REALLY use a car for 99.999% of the time, it won't be a factor anyway. It's chicken and egg like all disruptive technologies. When enough people have crossed the border and done the electric car thing, the fast charge station deployment will be such that they really can drive anywhere JUST as freely as they do now.
The batteries have been able to charge in 20 minutes all along. It was the power to charge them that has been the problem. For a big car, it takes a quarter million watt station. If we need them, we can build them.
ANd here is where electric diverges from all the other alternative fuel concepts. The infrastructure buildout is trivial. To put a fast charge station every 50 MILES across our ENTIRE Interstate Highway system is about 1150 charge stations. If they each cost a million dollars, and at that price we are talking solar panels, huge reserve battery arrays, and upscale convenience stores for Ho'Ho's and Ding Dong's and the famous Bloomberg Big Gulp, it's 1.1 BILLION. Add up all the sour money at Enerdel, Think, Azure Dynamics, A123 and Fisker. They could have ALREADY DONE IT. For what they squandered like drunken ho's and sailors.
Ok, no Ho'Ho's for you Californians. Picture alfalfa sprout pita pockets and vitamin water. But you get the picture.
Point is, just about the time the American public gets OVER the need to "have the freedom to drive anywhere" they'll be able to drive anywhere. The Supercharger network is a demonstration of that, and a brilliant one.
Jack Rickard�
Jul 10, 2013
sleepyhead In the end it will not matter how many cars are actually financed as a "lease", because Wall Street will be focusing on "adjusted" earnings. You would have to look at adjusted earnings in order to have an apples to apples comparison between Tesla and other car manufatucters. If you continue using GAAP then you are comparing apples to oranges and Tesla's Income Statement will look really ugly.�
Jul 10, 2013
vgrinshpun Sorry, but this is totally wrong. The 800 cycles you were refering to is for non-managed application in consumer devices. The major factor in battery aging is temperature, particularly when battery charged/discharged. The Tesla MS batteries have state of the art software based proprietory temperature control and charging current control. The battery also is not discharged fully as with the consumer applications. Lower Depth of Discharge (DOD) for great majority of MS daily usage yields lower battery stress and improved longevity. Alltogether the battery in MS will exceed 2,000 to 3,000 cycles with less than 20% capacity degradation. Conservatively assuming 200 miles range this results in 400,000 to 600,000 miles. MS has essentially a lifetime battery.�
Jul 10, 2013
Curt Renz How much less? I would have thought that they couldn't care less. Could care less - YouTube�
Jul 10, 2013
AudubonB Jack Rickard just became my favorite contributor here (sorry, Curt).
However.....
WHAT am I supposed to make of this:? Divine? De-vein? In either case, huh?
Irrespective of that, I like a writer who thinks as I do -�
Jul 10, 2013
Bgarret Curt - How do you have time or recall to pull that together???
I don't know what investors/analysts could or couldn't care less about - regardless, I think Q2 earnings is a pivot point for TSLA (not Tesla) as I am closer to Sal Demir's estimates of $.98 for 2013 and $5.29 for 2014 (http://seekingalpha.com/article/1532842-tesla-motors-full-analysis-2-0) than to the existing analyst consensus estimates of $-.08 EPS in 2013 and $.86 estimates for 2014. If Tesla is making 6000 cars/quarter the last 2 quarters of 2013 at 20-25% margin/car non-ZEV, that is about $125 - 150 million/quarter - operating expenses = How do they lose $.08 this year?
If the Q2 numbers and guidance require analysts to reconsider their estimates - if you project the stock value on forward EPS and that EPS is anywhere near $4-5.00 for 2014 (with 25% margins and ZEV) - then the forward P/E is about 25 at $125/share. I think there are many individual and institutional investors that are more than willing to give them a 50-100 multiple going forward. I think Q2 earnings could be even more fun/volatile than Q1.�
Jul 10, 2013
c041v I'm reading it as Divine;
to discover or declare (something obscure or in the future) by divination; prophesy.
or
to perceive by intuition or insight; conjecture.
When paired with the spider, to mean that you don't need to look for something that the journalist haven't already discovered.
He could have meant de-vine a spider in the car, but that seems like an unnecessary thing to say. I rarely de-vine spiders in my car.
�
Jul 10, 2013
callmesam Could you please cite this fact. I've read it before but can't find anything from Tesla confirming 2-3000 cycles.�
Jul 10, 2013
ggr Over in the EU deliveries thread, there are people in Europe who've been told their cars are in transit.�
Jul 10, 2013
MikeC Looks like they're in transit as of today. I'm thinking the VIN sequence disruption (in the high 14xxx) was the EU cars being started and then being set aside and held for EU spec finalization. If they retooled the factory last week while the workers were off, maybe the first couple days of this week were spent on finishing them off and now they are starting to ship them out today.�
Jul 10, 2013
DaveT If they started on some EU cars in Q2 then that might add to Q2 expenses a bit and could impact earnings somewhat. Not sure though because there hasn't been any clear indication otherwise that EU cars were started on in Q2.�
Jul 10, 2013
MikeC If it's true that they're in transit already and that the factory wasn't in operation last week, they must have started on them in Q2 unless they're completing cars start to finish in 2 days (which I guess actually might be possible).�
Jul 10, 2013
NigelM Don't forget that Tesla has a speed-limiter on the demo cars.....
- - - Updated - - -
Different guy, different name. You were thinking of this one.
[/Off Topic]�
Jul 10, 2013
Discoducky I'm curious, of the shorters on the thread, if they have realized gains or losses based on the past 6 months or a given timeframe in TSLA? My assumption is that with key trades, due to volatility you could still make money even on the back of a prosperous stock like TSLA. I'd be willing to accept that a shorter could base their reasoning to short on volatility, but not on the merits of overall or even near future expectations of performance. If there is timely information to contrary I'd believe we'd all like to have that conversation. More of the same subjectiveness is of little interest due to the given track record of performance.�
Jul 10, 2013
JRP3 http://www.embedded-world.eu/fileadmin/user_upload/pdf/batterie2011/Sonnemann_Panasonic.pdf
Page 20 in this PDF from Panasonic in 2010 shows full cycling from 4.2V to 2.5V out to 2600 cycles with around 25% of capacity loss. Obviously cycles in the Model S would not be to such extreme SOC levels on either the top or bottom and would provide many more cycles with even less capacity loss.
Here is a shallow cycle graph showing around 15% capacity loss out to 3000 cycles: http://ma.ecsdl.org/content/MA2011-02/17/1282.full.pdf
I thinks it's safe to say Tesla does not have a battery durability issue.�
Jul 10, 2013
30seconds based on that curve we should see reports of 10% loss after 200 full cycles if Tesla's battery management provides no improvement over the raw cells. Since I doubt anyone is going through full cycles on a daily basis it may take a year or two, but at least gives a way to measure. Of course if this is the decay curve then it may take the vast majority of drivers a decade to see 20% loss.�
Jul 11, 2013
djplong That's a little more that the cost of adding ONE lane to each barrel of I-93, here in NH, from Salem to Manchester. One, comparatively small, highway construction project that costs the same as a complete rollout of electric charge stations. I just wanted to put that out there for a sense of scale.
Oh - and I still have a stack of Boardwatch magazines in my basement somewhere�
Jul 12, 2013
EarlyAdopter Jack, great post but one correction here:
The cells they use in the car are actually designed for automotive use. Tesla and Panasonic have jointly tweaked the chemistry for automotive applications. It's a proprietary formulation and why you won't find a data sheet on them. The only thing they share in common with the cells designed for consumer use is form factor and the machinery used by Panasonic to manufacture the cells.
Source:
Tesla Motors CTO talks future batteries and charging protocols
SAE International, 12-Mar-2013
�
Jul 12, 2013
VaG If I recall correctly, Tesla strongly recommends that you do not fully discharge the battery and then charge it fully up. They recommend you top it up in small amounts regularly. Passive battery management, I guess.�
Jul 13, 2013
stopcrazypp Actually as I said in the other thread, I think the optimizations will be in C-rate, not cycle life. The standard "consumer" NCR18650A are tested to 500 cycles (100%DOD, 0.5C charge, 1C discharge).
The Roadster uses a smaller 2%-95% SOC window, Models S will likely use something similar.
http://www.teslamotors.com/blog/bit-about-batteries
500 cycles in those conditions already good for 120k EPA miles for the 85kWh, 90k for the 60kWh (I'm factoring in ongoing degradation by using a trapezoid approximation of the area under the graph, plus factoring also the smaller SOC window). There's still 74.7% capacity at that point (based on 3000mAh full capacity, given it reaches that point in the first 5 cycles). If you extrapolate the degradation from the second part of the graph it works out to 860 cycles to 70% capacity. This is 190k EPA miles for 85kWh, 150k for 60kWh.
http://industrial.panasonic.com/www-data/pdf2/ACI4000/ACI4000CE25.pdf
Given real world conditions on the pack will be more mild (smaller SOC window, lower average charge rate, much lower average discharge rate) there is no need to optimize the cycle life as even the consumer cells will perform well in the application. Certainly much better than the "automotive" cells in Leaf is faring without temperature management.�
Jul 16, 2013
jrickard The document you cite shows the 80% capacity level as low as 600 cycles. 80% is the level customarily cited in life cycle testing. It is true it does flatten out a bit after that. But 70% is pretty much a substantial decrease in range.
The second reference is for an entirely different 400 mAh cell they are studying for EV battery packs. A white paper on what could be done.
Jack Rickard
- - - Updated - - -
So you are "correcting me" on this topic with a vague corporate party line bloat about secret sauce and their "joint" design with Panasonic. I've kind of drunk the koolaid myself but I'm not going for all of that....
Jack Rickard
- - - Updated - - -
You're sorry? Totally wrong?
I'm sorry. You're totally wrong.
Now that we have that out of the way, see the Tesla SEC filings earlier this year. They specifically contradict the koolaid you have apparently quaffed. Why are they talking about 65-70% capacity in five to seven years as being an identified risk factor?
Its ok to lie on press releases and in blogs. It's kind of dimly viewed in SEC filings.
Jack Rickard�
Jul 16, 2013
BriansTesla Please check this report that was presented at TESLIVE by Tom Saxton.
"Battery packs in Tesla Motors� Roadster electric cars will retain an average of 80- to 85-percent of capacity after 100,000 miles driven"�
Jul 16, 2013
Doug_G They are required in the "risks" section to be extraordinarily conservative.
The report by Tom Saxton of Plug-in America puts that one to bed. Even the older Roadster technology is lasting substantially longer than Tesla promised.�
Jul 16, 2013
JRP3 It's also true that 80% holds out to at least 1000 cycles on that chart, so picking the worst case point on the line doesn't really prove much. 70% doesn't show up until 2600 cycles, rather a bit different than you are implying.
The SEC filings are worst case scenario, as you know. Even using the 80% capacity at 600 cycles number, and using an average of 240 miles of range for the Model S 85, that's still 144,000 miles of range. How likely is it that anyone would be doing full discharge cycles like that to accumulate enough mileage to actually see the 65-70% capacity mentioned in the SEC filing? Bottom line, do you think, or do you have any evidence, that Tesla has a battery pack cycle life issue?�
Jul 17, 2013
techmaven There are several graphs. It would be helpful if you pointed out which one you are referencing. The first reference, the Panasonic D&E Forum 2011 has mostly 100% DOD charts. The NCR18650 cycle performance chart for example is a 100% DOD chart and has the roughly 80% capacity at 600 cycle data point. The cycle durability test in that one also shows roughly the same, but it does show that there is usable capacity at 25 degrees C out to 2000 cycles at roughly 75% capacity. That alone was huge, as it meant that one could have far higher life span if one was ok with roughly 25% capacity loss. Basically, the curve flattens out dramatically.
Until we found the 2nd reference, it was hard to quantify the gains given when one didn't cycle to 100% DOD. We had charts showing the effect of temperature on capacity loss in both cold and hot, we had high discharge, but we didn't really have charts showing limited DOD with high cycles and high charge/discharge rates. This second reference shows that. It uses the same cathode chemistry as what goes into the Model S and is tested with 18650 cylindrical cells. Not only does it show that limiting DOD dramatically limits the capacity loss (less than 20%) out through 3,000 cycles, it shows that it can have such capacity retention even with high charge and discharge rates. Now, a real world Model S will still have higher discharge rates, but lower charge rates and the vast majority of vehicles will have far less DOD. This second chart shows why Tesla can offer unlimited mileage warranty on the 85kWh battery pack.
3,000 cycles at a very conservative 100 miles per cycle is 300,000 miles. It still isn't' clear how many very small DOD cycles relates to a full charge cycle. Let's just say for a moment that worst case scenario is that every day is a full charge cycle. For 3,000 cycles, that 8.22 years. Obviously, it doesn't just drop off a cliff at 3,000 cycles. But let's just say it's a hard stop at 3,000 cycles. If you drive 150 miles a day each and every day of the year in a 85kWh Model S, you won't be at 100% DOD. That's 450,000 miles in 8.22 years or roughly 55,000 miles a year. What I don't know is if you drive 75 miles a day each and every day, if that also counts as the same kind of cycle every other day. In other words, just because you can drive 450,000 miles in 8 years doesn't mean it will achieve 450,000 miles of life in 16 years. We don't have good data on the absolute longevity in terms of decades.�
Jul 17, 2013
imherkimer @techmaven Very well said.�
Jul 17, 2013
sleepyhead I haven't read your discussion in detail, but here is a "real-world" study done by PlugInAmerica and the verdict is that Roadsters have 80%-85% battery life remaining after 100,000 miles. Model S battery packs are supposed to be more advanced:
Roadster batteries likely to perform better than Tesla predicted�
Jul 31, 2013
Realist Well guys, for the moment it is over. I closed my short yesterday at 134. Not the best trade I made.
I have not changed my opinion but there is no sense fighting market insanity.
Still, the collapse is certain. I will return to this stage.�
Jul 31, 2013
pfq1982 If the collapse certain, wouldn't the real insanity be covering your short?
Separately, does lower wait times imply lower order rates for the Model S? We are seeing times from finalize to delivery hit 3-4 weeks. Less a week for transport, less 5-7 days for production, leaves ~ 2 weeks of true "wait time". Once backlog orders (Europe + US stragglers) are produced, that "wait time" vs. production rate should be a good proxy for demand rate, right?
It will be interesting to see if US wait times increase as Tesla focuses on the 2-3k of Europe orders.�
Jul 31, 2013
sleepyhead See you next week when the stock crosses $200�
Jul 31, 2013
MikeC Even though you're on the other side, I have to say I respect you for posting here and being honest. I'm glad you got out before it got any worse for you.�
Jul 31, 2013
Blurry_Eyed This is speculation based on a post I saw here on the forum, I haven't tried to find the relevant post to link to though. If you are good with the search function here, I think you could find it.
From what I recall the poster indicated that the factory would be focusing on producing more European cars in the near future. When that switch over occurred, the U.S. wait times might push out to 3 to 5 months for a time as the European backlog is filled. I don't know if this is true, but it could be possible to see U.S. wait times start to push out significantly for a period coming up soon.�
Jul 31, 2013
Norse +1 what he said�
Jul 31, 2013
Vger I doubt that will happen to that great a degree. Remember that Tesla's production has increased by at least 25% (400 to 500/wk) over that last couple months. So even if demand held steady, wait time would go down (not counting the EU bulge). All other indications are that demand is going UP-- buzz is huge, many owners (myself included) report their referred friends recently placing orders, etc.�
Jul 31, 2013
austinEV If the stock crosses $200 I might become a short.... at a certain point a correction would be more likely that more run-up, if just a reverse-dead-cat bounce sort of technical move. I remain a long term long however.�
Jul 31, 2013
JRP3 Apparently you aren't certain that it's certain :wink: At least you had enough sense to bail out now.�
Jul 31, 2013
AudubonB Kudos to you, Realist, for having the fortitude not only to place your money where your analyses led you, but to come into this lions' den to argue on their behalf. Perhaps we'll be on the same side down the road with another name. Long or short, I enjoyed reading your posts.
Cheers!�
Aug 8, 2013
Realist Very happy to got out at 134 now.
Company has a negative cash flow of more than 20 mio every month. Stock is up 15%.
I still believe they will never make any money out of the Business.�
Aug 8, 2013
deonb Then put your money where you mouth is and short it again.
What could possibly go wrong by betting that Elon Musk is an outright liar? Obviously since we're halfway through Q3, Elon would have no possible way of knowing what's going on in Q3.
So when the s**t hits the fan at the end of Q3 and they're not achieving GM increases and profitability without ZEV credits, you stand to make a killing.�
Aug 8, 2013
Realist I believe he will come up with some sort of rights issue. At the current cash burn rate they survive another 12 months, so they will have to raise some new money.
The numbers are ridiculous, just like all numbers before. But Elon is a PR master he will feed the party as long as he can.
I will short the stock again but for the moment the party will last. So I wait.�
Aug 8, 2013
Zythryn Perhaps they will do this by doing something you don't expect, like... selling a few cars? Ignoring the ZEV credits they have a 12% margin and still see 25% in 4th quarter.
The numbers are the numbers. It is all laid out in black and white.
As for Elon being a PR master, I disagree.
He is a poor public speaker, and puts his foot in his mouth on occasion.
What he has going for him is his passion and the fact that he delivers, big time!
Glad you got out when you could. Sorry to here you are determined to short TSLA again. But I do apprectiate you helping with the next capital raise as the shorts did with the last.�
Aug 8, 2013
Realist They loose money.
Look at the cash flow. Also, look at cash levels - capital actions.
Without the stock and debt offerings they would already be out of business.�
Aug 8, 2013
Johan It's called growing as a company. You have to invest to do that.�
Aug 8, 2013
bonnie I see how this is going to go. The shorts keep shorting the stock. When they get called and pay out, the obvious conclusion (ego) is 'I wasn't wrong, just my timing was off'. So they short again. Wash, rinse, repeat.
The definition of insanity is doing the same thing and expecting different results.�
Aug 8, 2013
gregincal I did look at the cash flow. They increased inventory some, but had a real negative cash flow of 1 million dollars for the entire quarter.�
Aug 8, 2013
deonb But Greg! What are we to do??
Surely this means the company is going to run out of cash in 746 quarters. And there is absolutely nothing they can do about it!
Might as well just lock the doors now and throw away the key.�
Aug 8, 2013
mitch672 A negative cash flow of only $1 million is likely just 12-15 loaner cars at service centers, that means if they sold all of the loaner fleet of 100 cars or more, they would have had a really positive cash flow. Oh no, the sky is falling (chicken little)�
Aug 8, 2013
Zextraterrestrial ...and that is why I didn't get a loaner?
maybe I should have shorted instead of buying more stock?
I wonder when will Tesla have a demand problem. I don't think it is there quite yet. Once the SC networks are built then we will see it big time + insanity in the Stock price.�
Aug 8, 2013
Realist I see an inventory decrease from december til july.�
Aug 8, 2013
fjm9898 Maybe because they are selling that inventory.... funny how that works.�
Aug 8, 2013
Johan To add to the flood of catastrophic news: there are not nearly enough battery factories in the world to supply Tesla's demand. Might as well call it a day and apply for chapter 11 bankruptcy.�
Aug 8, 2013
gregincal Sorry, I misremembered. It was an increase in receivables that hurt the cash flow for the quarter. Basically their cash coming in from operations balanced their capital expenditures. It's in the investor letter:
Cash outflows from operations were $38 million in the quarter. However, this quarter was impacted by several significant one-time items, including the $11 million DoE early payment fee and a $67 million increase in receivables primarily from the timing of payments for ZEV credit sales. We have collected almost all of these receivables at this point. Excluding these one-time effects, we would have generated a significant level of cash from operations.
-38 million cash flow, if you discount the one time effects would have been -38+11+67 = 40 million. Capital expenditures was 40.5 million.�
Aug 8, 2013
Realist Well, the cash flow is - 78 for the quarter. Since Tesla does only provide "selected" cash flow info you cannot really see one Time effects there.
Anyway, they have a loss on a GAAP Basis. They even loose money on their NON-GAAP Nummer excluding stock compensation and DoE Repayment effect.
Also I still see no increase in warranty expenses or R&D. Still they want to sell up to 500k cars in a few years. Wired.�
Aug 8, 2013
smorgasbord Welcome to The Wrong Side of History.
On your left are the studio execs who turned down the script for Gone With The Wind saying "Who wants to see another Civil War movie?"
On your right are the people who dismissed Xerox as "Just a really expensive replacement for a cheap piece of carbon paper."
Further up, you'll pass by Mrs Lennon, who once told her son: "The guitar is a really nice instrument, John, but you'll never make a living playing it."
She's next to Lord Kelvin, who said: "Heavier-than-air flying machines are impossible."
He's BFF with Charles Duell, who one said: "Everything that can be invented has been invented."
Then there's Ken Olson, who said: "There is no reason anyone would want a computer in their home."
He shares a duplex with David Sarnoff: "The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?" (talking about the radio)
Unfortunately, due to the large number of Tesla shorts moving in, and their lack of financial liquidity, we're having to build a massive low-income project to house them all. Good thing you're arriving early.�
Aug 8, 2013
kilpatds That would seem to be assuming that their investments are required and not optional. After all, they have nearly a half-billion in the bank. Holding onto it would say that there is no investment in the business they can make that returns better ROI than the ~2% they'd get from keeping the money in the long term cash equivalent investments.
As a mature company trying to maintain a product line but not expecting rapid growth in products, perhaps that might be true. You're doing the normal R&D every year to replace the models you currently have, and you're expecting growth rates in the 5-10% range. But as a company trying to grow their product line (1 car -> 2 cars right now, 3 cars later), and looking for growth rates more in the 50-100% range, I would expect them to be spending money on R&D faster than it's coming in.
Another investment they're making is in the supercharger network. The number of superchargers they need is going to be a function of the number of cars the sell, and it looks like they're trying to get ahead of that curve right now... but perhaps if you worked at it you could make a case that the costs of the superchargers bring down the margin of the cars to an unsustainable level. That would be a more valid case to make than "They're investing the money they have to grow the business, and therefore they must not have a valid business", which is the case you're currently making.�
Aug 8, 2013
mkjayakumar Ken Olson, apparently also said, 'UNIX is nothing but snake oil'. I have a lot of respect for Mr. Olson and his company was pioneer and far ahead of its time in many ways, most notably the clustering concept, networking and OS partitioning, but the head in the sand attitude of his advisers and perhaps himself, saw the PC & UNIX train go by.�
Aug 8, 2013
DonPedro LOL. Realist's relentless stream of highly selective data points and beside-the-point considerations reminds me of a Tesla-skeptic who used to troll the Norwegian Tesla investor's thread. His last posts were from May 3rd (translated):
and
Has been very quiet since...
Tipping my hat to Realist for reporting taking losses. The guy behind the posts above was claiming to be making tons of money on his trading - until this post where he was asked to post his position up front...�
Aug 8, 2013
ggr You can't file for protection from creditors until you demonstrably can't pay them on time. That would be a hard argument to make given that they have cash in the bank and debt that's easy to service.�
Aug 8, 2013
augkuo 3 things needed to kill a cult stock
http://www.thestreet.com/story/12000288/1/cramer-3-things-needed-to-kill-a-cult.html
not likely that all 3 will happen soon - sorry shorties�
Aug 8, 2013
bhuwan Obviously sarcasm....!�
Aug 9, 2013
ggr Oops. Usually I can spot sarcasm; after all, I am Australian. But in this case I spaced.�
Aug 10, 2013
Discoducky So I wonder, are the TSLA shorts the other entrenched car makers longs? Or is this purely about the SEC filings?
Or is it technical in any way? Are there any shorts out there who believe that other car makers can catch up to TSLA electrically prior to Gen III as an example?
While the TSLA longs realize the inherent risks in starting a new electric car company it would seem that current short thinking is focusing on the somewhat minor tactical details (read back in this thread for instance) rather than the strategic master plan (is this still a secret?) which shows a trend/trajectory of success (stock price aside; cars are selling).
So what gives? I find that the most compelling short story I've heard so far is very speculative and subjective in nature. Now if you could point to something that has legs like reverse engineering of the 18650 pack design with a chassis that is stiffer, lighter and costs less from a startup backed by large private equity then we might have something to discuss. Since that is not happening and is most likely the most fundamental part of TM's lead then I ask the shorts: Why are you short TSLA?�
Aug 10, 2013
Causalien Realist is necessary so we aren't all floating in the clouds.
If you look at his arguments and read it pretending that the stocks are sliding down from 100 to 50. They will ring true. The only thing standing between Realist's argument sounding right and wrong is Elon's ability to execute... IMO�
Aug 10, 2013
NigelM Agree with most of your post but I'm not sure that Elon has real ability to execute; I find him a great visionary but he's also good at finding and motivating people to execute the ideas.�
Aug 10, 2013
ppl That is the execution on his level. You don't expect him to do more tan that.�
Aug 10, 2013
30seconds You have to be kidding. This is either his third or fourth company, all of which have been run away successes. Even if he is more on the visonary side his ability to execute is extraordinary. He has done this with all different teams after all.
The valley is full of visionary types and has more than a handful of people that can really execute. By pure results (this is execution after all) you have to put elon on top of both. Who else executes better?�
Aug 10, 2013
sleepyhead +1
Empowering other employees to take on a ton of responsibility is execution on Elon's part, as is making all of the tough decisions (and making them right).�
Aug 12, 2013
Realist Valuation.
Tesla is at 17$ Billion dollars. 500k cars each year at a 25% margin would seem reasonable for such a price. But that is impossible. You cannot achieve such a margin AND volume. Even Porsche is far away from that. There is too much overcapacity in that space.
I did get back into the short at 150,59 by the way. Unfortunately it's only a quarter of the former position.�
Aug 12, 2013
marvinat0rz What is your price target? Looks like you're having a great day with a 5% profit already.�
Aug 12, 2013
serkol
Since TSLA is in its growing stage, it deserves a much higher multiplier then the old car companies, so it needs much less then 500k cars to justify its current market cap.
Today's dip is probably due to people questioning the company's growth.
The good news is that the growth is supply constrained. As soon as Tesla solves the supply problems, the stock will move up rapidly. Your short position may lose again. I will bet on this.
Elon said that it will take up to 6 months to solve the supply problems. If there is any news about moving production of some pieces in-house, or making partnerships with suppliers or something like that, the stock will go up. This news may happen long before the promised 6 months end, maybe even this month.�
Aug 12, 2013
sleepyhead Yeah, watch out if Tesla announces a battery supply agreement with Samsung.�
Aug 12, 2013
NigelM Just to play devils advocate for a minute....
Tesla multiples are already much higher than most other car companies and if you look outside P/E and consider price-to-sales or price-to-book then it's already off the charts despite Elon repeatedly pointing out production constraints so investors should be seeing potential pushing further out. There are those who say that Tesla is over-valued right now, there are shorts who say that it's one move from collapse, and there are believers who see Tesla as one ramp-up away from massive profitability. I'm long, but I do feel that TSLA is somewhat over-priced right now which is why I expect TSLA to remain a volatile stock for some time as both longs and shorts see opportunities to make money; I also expect that in the medium term both will make money at different times.
(Before anyone jumps on me - I own two Tesla's and have a Sig deposit on a third, so I am long with my purchases as well as with my stock)�
Aug 12, 2013
serkol
Sure TSLA is very overpriced if you base your valuation on the current production. But it's a cult stock. So the current production does not matter. The only thing that matters is a shining growth image. If this image gets cloudy, the stock drops. If it shines, the stock keeps going up and it at least double from the current position. Just my speculations.�
Aug 12, 2013
Discoducky Is there any company ever in history to deserve a valuation like TSLA currently holds? And do you believe in multipliers?
�
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