Tesla and EV cars - update and thoughts
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  1. #1
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    Default Tesla and EV cars - update and thoughts

    5/2018 the new Tesla Model 3 is more or less the most popular premium or starter-deluxe sedan in the US.
    Around 8-10-12.000 tsla Model3 cars/month by run-rate, and the limiting factor is they cannot yet make them fast enough.
    The best-selling premium sedans in the us are around 7000 / month.

    At some point, perhaps within 2 months or 3 months, tsla will be delivering about 5k/week or 20.000 /month of the Model 3 - and until around 2019 most/almost all will be in the USA.

    Essentially the new Tesla Model 3 will take away / has already grabbed a huge chunk of the market from all other manufacturers - the most profitable part of the market for audi, bmw, mb, lexus, infinity etc.

    It seems that 20-30% of the us premium-starter-car market already goes to tsla M3.
    If that is the case, then the other manufacturers will not be able to pay their bonds once tsla scales above == 20k-40k units per month globally.

    E.
    Audi makes most of the money from models 2-3-4.
    Audi needs == 1% year/year incremental sales to pay ongoing obligations and run the business.
    Audi is profitable, and has == 1 yr of *opex* aka operating expenses, not turnover, as cash in hand and also has major assets.
    But audi also has about 1 yr of turnover in liabilities - plus some extra long-term employee pension liabilities not yet on the books.
    Audi cannot fire the employees- impossible in germany or the EU without very heavy major costs of approx 1-2 years gross salaries per person.

    If audi sales in the most profitable 2-3-4 segment start to decrease meaningfully, 1-2% per month, and sequentially, the bond ratings agencies will downgrade audi debt.
    If the audi debt is downgraded they will need to post their existing cash as collateral, and once the decline continues the thing cascades into a fast market-driven BK.

    This is what I said == 2.5 years ago.
    Tsla (and BEVs) is about 9 months late .. but the Tsla m3 deliveries in qty are finally happening and scaling up.

    D:
    I may go for a Big Short on Big Auto via investors.

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    They have a long, long way to go. They sold 4600 cars in January. In comparison, Ford sold 58,000 F-150 pickups. GM sold about the same amount of 1500 pickups.

    There were 1.6 million cars sold in the US last month. So, 0.28% of those were a Tesla Model 3.

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    The thing that most interests me is what their reputation is in 5 years when these model 3's have some miles on them and the regular joe owners have to get them fixed. I'm an auto mechanic and the funniest part of all this to me is imagining what these cars will look like in 10-20 years. Tesla has been following suite with Apple on being aftermarket and service friendly (sarcasm alert)...

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    Quote Originally Posted by kustomizingkid View Post
    The thing that most interests me is what their reputation is in 5 years when these model 3's have some miles on them and the regular joe owners have to get them fixed. I'm an auto mechanic and the funniest part of all this to me is imagining what these cars will look like in 10-20 years. Tesla has been following suite with Apple on being aftermarket and service friendly (sarcasm alert)...
    While there are noted issues, electric cars are generally much lower maintenance. You seem to forget that Tesla has made over 300000 cars so far, going back 10 years, so there is no real mystery.

    They will have the same expensive electric windows and tail lights as every other expensive car

    they will not need oil changes or new mufflers

    shrug

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    Quote Originally Posted by gustafson View Post
    While there are noted issues, electric cars are generally much lower maintenance. You seem to forget that Tesla has made over 300000 cars so far, going back 10 years, so there is no real mystery.

    They will have the same expensive electric windows and tail lights as every other expensive car

    they will not need oil changes or new mufflers

    shrug
    Tesla has so far made a very low production sports car, and two expensive luxury cars. Like I said we will see what happens with the model 3 in the hands of a more average consumer... I could write a short novel on all the fun and interesting ways people ruin cars. Also the kind of people who buy $60k+ vehicles have a very different feeling about $1k+ repairs. I see people all the time with newish cars that lose their minds over repairs in the few hundred dollar range.

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    I too want to see what happens with Tesla long term. I live in the rust belt where cars come to die. I've been to San Fransisco and seen Teslas everywhere. But, you also see pristine old VWs and Land Rovers that would have long since melted away in this area.

    At those extremely low numbers, I doubt there will be much of an aftermarket. I wonder what kind of service info is available. The nice thing about cars is that the manufacturers are required by law to make service info available to everyone. I wish that was true for machine tools...

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    Quote Originally Posted by hanermo View Post
    5/2018 the new Tesla Model 3 is more or less the most popular premium or starter-deluxe sedan in the US.
    Around 8-10-12.000 tsla Model3 cars/month by run-rate, and the limiting factor is they cannot yet make them fast enough.
    The best-selling premium sedans in the us are around 7000 / month.

    At some point, perhaps within 2 months or 3 months, tsla will be delivering about 5k/week or 20.000 /month of the Model 3 - and until around 2019 most/almost all will be in the USA.

    Essentially the new Tesla Model 3 will take away / has already grabbed a huge chunk of the market from all other manufacturers - the most profitable part of the market for audi, bmw, mb, lexus, infinity etc.

    It seems that 20-30% of the us premium-starter-car market already goes to tsla M3.
    If that is the case, then the other manufacturers will not be able to pay their bonds once tsla scales above == 20k-40k units per month globally.

    E.
    Audi makes most of the money from models 2-3-4.
    Audi needs == 1% year/year incremental sales to pay ongoing obligations and run the business.
    Audi is profitable, and has == 1 yr of *opex* aka operating expenses, not turnover, as cash in hand and also has major assets.
    But audi also has about 1 yr of turnover in liabilities - plus some extra long-term employee pension liabilities not yet on the books.
    Audi cannot fire the employees- impossible in germany or the EU without very heavy major costs of approx 1-2 years gross salaries per person.

    If audi sales in the most profitable 2-3-4 segment start to decrease meaningfully, 1-2% per month, and sequentially, the bond ratings agencies will downgrade audi debt.
    If the audi debt is downgraded they will need to post their existing cash as collateral, and once the decline continues the thing cascades into a fast market-driven BK.

    This is what I said == 2.5 years ago.
    Tsla (and BEVs) is about 9 months late .. but the Tsla m3 deliveries in qty are finally happening and scaling up.

    D:
    I may go for a Big Short on Big Auto via investors.
    I don't know where you get your information.

    That 4000 cars per week was a peak, not real extended production. That is a very long ways from 10,000 per week for 12 months that they actually projected for the production rate.

    At the rate Tesla is bleeding cash, they will be very lucky if they are still around in 12 months unless they get there manufacturing problems solved.

    They are also going to be faced with the problem of the age of the current design. In another 12months, they will need to do a design face lift just like the competition does. More money and tooling.

    Elon has even some much as admitted that they have over automated. That is a very difficult and expensive problem to solve. It is very bad when a CEO has to come to grips that the ladder is leaning up against the wrong building.

    I think the smart money would be looking at shorting Tesla.

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    Quote Originally Posted by hanermo View Post
    5/2018 the new Tesla Model 3 is ...

    This is what I said == 2.5 years ago.

    .
    Ohh, Christ on a bicycle!


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    1.
    My info is a blended mix linked to actual official tsla 10ks, and 10qs and official filings plus crowd-sourced delivery/production numbers.

    The current output is 3000+ per week == or trending to 12.000 per month.
    No Q. they are 9 months late and it still fluctuates as they keep closing down and swapping equipment.
    So I suggested a 10k rate +/- for now .. which is probably pretty close to the short term 2-3 month reality.

    The given fact is that now, 10.5.2018., tsla is more or less the best selling premium sedan in the US.
    Weather they sell 8000 or 10000 or 15000 or 20.000 perhaps at some date in the future.
    2000/wk or 8000 / month makes tsla nr one.

    2.
    Why would one short tesla.
    They seem to get 30%+ or so of premium sedans at high margins -
    and have more demand by far than any other manufacturer on earth of premium cars.


    Quote Originally Posted by Ziggy2 View Post
    1.
    I don't know where you get your information.
    ...

    2.
    I think the smart money would be looking at shorting Tesla.

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    Quote Originally Posted by hanermo View Post
    Why would one short tesla.
    .
    That can't be a serious question. While there are also arguments on why you'd go long, and I'm not saying I'm short, but last year alone there were 2.2 billion reasons why you might short it. Then there's the 52 billion market cap.....

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    5/2018. California legislature is thinking about new building code that would require all new construction to have some amount of solar intalled. This actually make sense in most of the state. Of course details to be determined. No idea if hot water alone would meet the rules or it must be PV. For most people hot water makes better financial returns, especially where it never freezes.
    Bill D.

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    Many countries have requirements like that. I think in Israel every home has a solar water heater.

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    Default Tesla and EV cars - update and thoughts

    The sedan market in the US is shrinking, losing market share to SUV's, crossovers and light pickup trucks.

    So much so that Ford is giving up on building cars for the North American market. They will be a crossover, SUV, and truck company.

    With reliable, turbocharged, direct-injected, small displacement engines and 9-speed+ transmissions, the fuel economy advantage that cars and sedans have had over SUV's has pretty much disappeared.

    Tesla may do well building an upscale all-electric sedan, but they are behind-the-curve on where the American market for automobiles is going.

    The Big Three and the Japanese are letting Tesla blaze the electric trail, as they have developed and offered very few all-electric cars.

    If the market holds up for electrics, I imagine with all their money, supplier logistics, and institutional expertise, the big auto companies will leapfrog Tesla when they choose to do so.

    Tesla will always be a niche product, imo.

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    Quote Originally Posted by cnctoolcat View Post
    If the market holds up for electrics, I imagine with all their money, supplier logistics, and institutional expertise, the big auto companies will leapfrog Tesla when they choose to do so.
    I couldn't agree more. If Tesla ever becomes a viable threat to the established auto industry, the big guys will quickly jump into the game and push them back.

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    By market cap TSLA is bigger than most of the "big guys', no?

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    Hanermo,

    In thread after thread you come across as a shill for Tesla stock. This comment is definitely investment related.

    "I may go for a Big Short on Big Auto via investors."

    Further proof that your posts are investment related is your constant use of the ticker symbol instead of the company name.

    While you can buy and sell whatever stock you want I wish you would stop trying to talk the rest of us into buying Tesla stock. We're not as gullible as you seem to think.

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    Quote Originally Posted by cnctoolcat View Post
    The sedan market in the US is shrinking, losing market share to SUV's, crossovers and light pickup trucks.

    So much so that Ford is giving up on building cars for the North American market. They will be a crossover, SUV, and truck company.
    Seems to me they aren't a truck company either, at the moment. Hope they get it sorted soon.

    I just read an article predicting $100 bbl. oil within two years. Who knows if it will happen, but if it does and pushes gas and diesel over $4.00 / gal again, we will see the auto market landscape change yet again.

    Dennis

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    I don't know if Tesla is a hot stock or not but some of their cars have been getting way too hot lately.

    'Pray for the Families': Vigil Held for Teens Killed in Fort Lauderdale Tesla Crash - NBC 6 South Florida

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    Quote Originally Posted by jamscal View Post
    By market cap TSLA is bigger than most of the "big guys', no?
    I think you are correct but this also reflects some of the fallacy of stock share value.

    From my backwards thinking, a companies true value is the value of its hard assets less depreciation, cash in the bank, inventory, and maybe some residual for blue sky allowances. The companies projected annual profit also enters into this.

    Tesla which is really a technology company, to me is an aberration in that the market cap is much higher then the physical value of the assets.

    Why is the Ford stock so low in comparison to Tesla when Ford shows a profit and positive cash flow while Tesla has a market cap value 10X of Ford yet has not had a profitable quarter yet is continues to have record losses even though they have increasing production volume?

    I think that there is a huge amount of speculation and unrealistic expectations of Tesla. At best Tesla might become another Ford as far as total sales go.

    To me, Tesla has a lot of characteristics of Thernos. This is greed driven and everyone wants to be on the next great thing. The trouble is there are limits to how big something is going to be.

    Tesla has some good technology ideas. They also have zero experience coming out the chute on what it takes to actually produce an automobile on the scale that they need in an automated environment.

    The big boys have been making cars for years and have the advantage of integrating automation incrementally. The big boys also tend to do the same stuff because it is safe.

    Tesla is coming in to a market with fresh ideas, cutting edge ideas. The trouble is cutting edge usually means bleeding edge. The big question on Tesla's success will be if they can solve the production problems quick enough and become profitable before the glamour wears off to the investors.

    To me, Tesla stock is way over valued considering the probable outcomes even if they are good.

    I think the Space X and Boring stuff actually has a better chance then the car business.

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    I disagree.
    I might be wrong.

    Tsla took over the premium lux sedans with the Model S/X.
    Tsla has taken over the premium starter lux market in BMW3/Audi 2-3-4 series.

    There are zero global suppliers of batteries for audi/bmw/gm/etc to deliver meaningful numbers of cells, or batteries, or electrified cars, before about 2021.

    There is zero battery precursor materials availability, globally, for lots of bev cars ex-tsla.
    In qty 1M+ units at 100 kWh/car, that would need about 2-10x current global free capacity in cadmium, if vw and toyota actually started to make and deliver 10-20% bev cars.

    Tsla has the most liked car ever, by customer satisfaction.
    Tsla has the largest pre-order book ever for any product in the world == 450.000 M3 at == 42k each.
    Tsla has the fastest charge rate of any bev currently shipping by over 200% or more.

    Positives:
    Tsla has the smallest and cheapest 3-phase vfd on the model s/x - in the world.
    And the most efficient vfd - mass/cooling/longevity easily proves this.
    13 banks of 203x igbts serial/paralleled == 96% efficient.

    Negatives:
    Tsla has (had) multiple errors and challenges in their execution. Yes.
    And has had huge risks, tremendous risks, in how they have done things. Yes.
    And has seemingly done poor cavalier decisions/treatment on ex workers of all levels (legal).


    My opinion:
    The US Big three and VW/japanese are about to have an existential event.
    2 years ago I predicted that the Big Auto industry is disrupted in 2018 - +/- 1 year.
    My prediction stands.

    I acknowledge the event is perhaps one year later-2019.
    I think the disruption is mostly very negative short term - and very positive medium term.

    My projection:
    A huge nr of jobs may/will be lost in gas stations, auto service, gas and oil industries when demand reduces fast.
    A lot of stock market pain is inevitable.
    Most gas/oil companies are highly leveraged via debt and depend on endless growth == 1% y/y exponential.

    Most service stations will close, most pipeline jobs, most refinery jobs, most oil shipping jobs.
    A 5-8% BEV auto market will cause all above.


    ---
    cnctoolcat - your opinion ignores current global realities.
    In raw materials, in global production of same, in usage of same.

    Tsla uses about 60% of all advanced lion cells/materials in the world.
    There is zero possibility vw / gm / someone can do much more in the short term.

    In medium terms 3-8 years obviously gm/vw/anyone can make much more precursor materials. If they are willing to invest 1-5B$ in it.
    It seems obvious this will happen.
    Around 40 project globally are in-process reportedly.


    Quote Originally Posted by cnctoolcat View Post

    With reliable, turbocharged, direct-injected, small displacement engines and 9-speed+ transmissions, the fuel economy advantage that cars and sedans have had over SUV's has pretty much disappeared.

    Tesla may do well building an upscale all-electric sedan, but they are behind-the-curve on where the American market for automobiles is going.

    The Big Three and the Japanese are letting Tesla blaze the electric trail, as they have developed and offered very few all-electric cars.

    If the market holds up for electrics, I imagine with all their money, supplier logistics, and institutional expertise, the big auto companies will leapfrog Tesla when they choose to do so.

    Tesla will always be a niche product, imo.


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