Official Tesla Model S thread

[TomT]

Agreed. Batteries are one of the few electronic things that definitely do NOT follow Moore's law! They are much more than just a few years down the road.

Tesla will have very little competitive advantage once much higher density batteries come out in a few years.

Well, I hope you are correct that higher density batteries are just a few years down the road, but I, for one, have become quite skeptical of wonder battery announcements. Lab rats, yes, but real world usage?

 

[surfingslovak]

Yet they manage to out engineer reluctant manufacturers who'd rather focus on making ICE vehicles.

I believe that this is the key takeaway. How many large automakers are building compliance cars only? And how about hydrogen? When compared to one of the traditional manufacturers, Tesla has the advantage of much quicker decision making. Granted, there are disadvantages to being a startup, but agility is not one of them.

 

[coolfilmaker]

You don't think they are spending $100 million deploying the SuperCharger network nationwide (then on other continents as well) for just the 20-40K Model S's they'll manufacture per year, do you?

You can't just make up numbers and then use them as justification for your argument.

The way things look to me, Tesla's superchargers will be fully utilized by their planned production numbers and if they were planning on letting cars manufactured by other companies use them they would have put in a payment system.

 

[DaveinOlyWA]

You can argue there is no moat around their business today.

They do have a moat around their business today.

They bet that using higher density consumer batteries is the way to build large range cars. That meant they had to do complicated engineering around the issues of thermal stability of LiCo batteries - which is not simple. That not only takes time, but can be somewhat risky for large OEMs who have a lot to lose.

But once the automotive batteries catch up in terms of density, this unique technology Tesla has built will not be a moat.

Tesla is focused on engineering. They have really sharp people. They have a track record of out innovating, out thinking the competition. They are not burdened with years of having done it the way its always been done.

None of these stopped a large number of companies from going under. These are not moats.

Ofcourse, Tesla can continue to do well by being agile and become an important player in the automotive future - but they need to figure out new moats or ways to survive when they don't have a moat.

all that plus i think we need to really really really evaluate the savings Tesla is making by not catering to a dealer. The amount of markup on a car is staggering and its due to the dealerships, NOT THE MANUFACTURER. So if you are bitching about the price of a Chevy Volt, yell at your local dealer, not Chevy.

the manufacturer may set the MSRP but they have to cater to dealer demands otherwise the dealer wont sell them. Tesla is making bank by cutting that cost out of the equation

 

[TomT]

Porsche tried this decades ago and was crushed by the dealer networks and their political connections...

Tesla is making bank by cutting that cost out of the equation

 

[mitch672]

You don't think they are spending $100 million deploying the SuperCharger network nationwide (then on other continents as well) for just the 20-40K Model S's they'll manufacture per year, do you?

You can't just make up numbers and then use them as justification for your argument.

The way things look to me, Tesla's superchargers will be fully utilized by their planned production numbers and if they were planning on letting cars manufactured by other companies use them they would have put in a payment system.

Do you own a Model S? I do, and have since January. Guess what?
Not only have I never charged at a SuperCharger, I've never even seen one
Most people vastly overestimate how often Model S owners will use SuperChargers.
I can tell you, it's not that often...

And yes, Teslas plans are to deploy 100 SuperCharger locations by the end of this year, at a cost of $250K-$300K per site, that's $25-30 million, in 2014 another 100 are scheduled to be built out in the US, that's another $25-30 million. Now they've added the swappers into the mix on the West Coast I5 route and the Easy coast I95 route, each of those are another $500K each. Could be another $10 million. And finally, add in the European SuperCharger network, and $100 million starts to look a little low, actually. Not made up numbers, facts.
The guidance is 20K Model S's, but they are going to make more of them than that, Elon is low balling the numbers so there will be an earnings surprise. Not sure what you think is made up

Oh and BTW, when Tesla does license their technology, they are going to collect a fee per vehicle manufactured (estimated to be $1,500 per car), guess what? That fee will be to cover unlimited lifetime SuperCharger access, because that's a huge advantage for using and licensing the Tesla ecosystem. There won't be a charge to use it, the fee collected covers the buildout of additional SC and expansion, not only does it cover the expense, they'll be making money giving away free electricity.

 

[evnow]

Oh and BTW, when Tesla does license their technology, they are going to collect a fee per vehicle manufactured (estimated to be $1,500 per car), guess what? That fee will be to cover unlimited lifetime SuperCharger access, because that's a huge advantage for using and licensing the Tesla ecosystem. There won't be a charge to use it, the fee collected covers the buildout of additional SC and expansion, not only does it cover the expense, they'll be making money giving away free electricity.

I don't want to burst your bubble, but big OEMs are not going to be dependent on Tesla. The current low plugin sales numbers (less than 1%) means they can ignore the market - which is what most of them are doing.

Don't confuse stock price run up & actual market domination.

 

[evnow]

Agreed. Batteries are one of the few electronic things that definitely do NOT follow Moore's law! They are much more than just a few years down the road.

Strawman ! Nobody is talking about doubling the density in 18 months.

A straw man or straw person, also known in the UK as an Aunt Sally,[1][2] is a type of argument and is an informal fallacy based on misrepresentation of an opponent's position.[3] To "attack a straw man" is to create the illusion of having refuted a proposition by replacing it with a superficially similar yet unequivalent proposition (the "straw man"), and to refute it, without ever having actually refuted the original position

 

[mitch672]

I don't want to burst your bubble, but big OEMs are not going to be dependent on Tesla. The current low plugin sales numbers (less than 1%) means they can ignore the market - which is what most of them are doing.

Don't confuse stock price run up & actual market domination.

If you don't believe Teslas end game is licensing their technology to other OEMs, and getting a "per vehicle fee" for using the SuperCharger network, then I suggest you immedialtley sell your long position in your TSLA stock and short it (via PUTs if you like, you'll lose less money than actually shorting). The only way for Tesla to be a huge success and be worth their current valuation, and the multiples of it to come, is if they strike up licensing deals with other manufacture's. They'll never be able to build a meanigfuly signifigant number of EVs at their Fremont plant (estimate about 400K max) to make much of a dent towards the ICEs replacement.. Their entire plan is based on becoming the defacto EV standard and leading the industry down the path of long range EVs, that leads to the replacement of the ICE. If you don't belive in the mission, I suggest you sell your stock... Elon has consistently outthought, and outengineered everyone, and you don't think he's figured out a way to monatize the replacement of the ICE? your wrong, plain and simple. of course he has played this chessgame to its ultimate conclusion, and every move he makes is headed to 1 result: "checkmate".

BTW, wish I could take credit for this myself, but Randy Carlson came to this conclusion months ago:
http://seekingalpha.com/article/1300141-supercharging-tesla" onclick="window.open(this.href);return false;

 

[TomT]

I think you are finally losing it, EV...

Agreed. Batteries are one of the few electronic things that definitely do NOT follow Moore's law! They are much more than just a few years down the road.

Strawman ! Nobody is talking about doubling the density in 18 months.

 

[mitch672]

You've probably all heard by now that the North American Dealers Association (NADA) has been waging a state by state war against Tesla Motors, to prevent them from selling direct to the public.
Really its all about preventing a legitimate threat to their exisitng ICE dealers from gaining traction.
It didn't work when the ICE came along and put the "Horse & Buggy" out of business, and it won't work in this case either. The future is comming, all they can do is try to slow it down, it cannot be stopped.

There is now a petition which anyone can sign, its not worded all that well, but its what we have for now.
If you care about the Electrification of the Fleet, or want to buy a Gen 3 Tesla in the future, please take a few minutes to sign the petition. It needs 100,000 signatures by July 5th. Its a bit of a pain to sign it, you need to create an account, then you can sign it.

allow Tesla Motors to sell directly to consumers in all 50 states.

States should not be allowed to prevent Tesla Motors from selling cars directly to customers. The state legislators are trying to unfairly protect automobile dealers in their states from competition. Tesla is providing competition, which is good for consumers.

https://petitions.whitehouse.gov/petition/allow-tesla-motors-sell-directly-consumers-all-50-states/bFN7NHQR" onclick="window.open(this.href);return false;

Thankyou

 

[evnow]

If you don't believe Teslas end game is licensing their technology to other OEMs, and getting a "per vehicle fee" for using the SuperCharger network, then I suggest you immedialtley sell your long position in your TSLA stock and short it (via PUTs if you like, you'll lose less money than actually shorting).

I don't see the connection. I bought TSLA in the first place to show support for an EV company. That it is doing well is just the icing.

There are several ways to prosper, without licensing technology (like Apple does). They just need to keep expanding the market they sell to.

 

[evnow]

I think you are finally losing it, EV...

Agreed. Batteries are one of the few electronic things that definitely do NOT follow Moore's law! They are much more than just a few years down the road.

Strawman ! Nobody is talking about doubling the density in 18 months.

LOL. So you went from Strawman to Ad hominem ?!

 

[mitch672]

If you don't believe Teslas end game is licensing their technology to other OEMs, and getting a "per vehicle fee" for using the SuperCharger network, then I suggest you immedialtley sell your long position in your TSLA stock and short it (via PUTs if you like, you'll lose less money than actually shorting).

I don't see the connection. I bought TSLA in the first place to show support for an EV company. That it is doing well is just the icing.

There are several ways to prosper, without licensing technology (like Apple does). They just need to keep expanding the market they sell to.

Without licensing their technology, they can probably never grow large enough to justify their current valuation, never mind the multiples to come. If you don't believe they are going to grow via licensing, your holding onto an overvalued stock, that's the connection. I do believe that's how they intend to become a giant /leader of the blossoming EV industry. Tesla is valued on its future earnings, not what's happening at the moment.

 

[evnow]

Without licensing their technology, they can probably never grow large enough to justify their current valuation, never mind the multiples to come. If you don't believe they are going to grow via licensing, your holding onto an overvalued stock, that's the connection. I do believe that's how they intend to become a giant /leader of the blossoming EV industry. Tesla is valued on its future earnings, not what's happening at the moment.

You are assuming "they can probably never grow large enough". I don't see why not - after all their market cap is much less than Toyota's. Why could they not grow to be a Toyota.

BTW, I don't think the markets are rational at all - we see the proof of that all the time.

 

[mitch672]

Without licensing their technology, they can probably never grow large enough to justify their current valuation, never mind the multiples to come. If you don't believe they are going to grow via licensing, your holding onto an overvalued stock, that's the connection. I do believe that's how they intend to become a giant /leader of the blossoming EV industry. Tesla is valued on its future earnings, not what's happening at the moment.

You are assuming "they can probably never grow large enough". I don't see why not - after all their market cap is much less than Toyota's. Why could they not grow to be a Toyota.

BTW, I don't think the markets are rational at all - we see the proof of that all the time.

"Grow large enough" without severe dilution to current share holders... It takes tremendous CapEx to design another vehicle, they are hoping to finance the Gen 3 from sales of the Model S and the Model X.
They might or might not, but the vast sums of money they are pouring into their SuperCharger and now battery swapping, only points to one conclusion: Tesla plans to license their technology to other manufacturers, who will also use this deployed infrastructure. They will certainly need more of it, and doubling or quadrupling many of the sites, but it's a "chicken and egg" scenario currently.. Because there is not a nationwide DC fast charging network for a true ICE replacement EV. Tesla is building it now, once deployed it becomes compelling for other mfrs to just license their technology, on each licensed vehicle will be an emblem "Tesla Inside"

Ever heard if that before? Hint: powered by Intel

You seem to believe no one will license their technology, I contend, there won't be any other choice.

Sad state of affairs:
http://www.forbes.com/sites/steveblank/2013/06/24/strangling-innovation-tesla-vs-rent-seekers/" onclick="window.open(this.href);return false;

Tesla struck a deal with a nationwide mall owner as well, to deploy SuperChargers at some of their properties: http://www.businesswire.com/news/home/20130624005349/en/Tesla-Supercharging-Stations-CBL-Malls" onclick="window.open(this.href);return false;

 

[N952JL]

Without licensing their technology, they can probably never grow large enough to justify their current valuation, never mind the multiples to come. If you don't believe they are going to grow via licensing, your holding onto an overvalued stock, that's the connection. I do believe that's how they intend to become a giant /leader of the blossoming EV industry. Tesla is valued on its future earnings, not what's happening at the moment.

You are assuming "they can probably never grow large enough". I don't see why not - after all their market cap is much less than Toyota's. Why could they not grow to be a Toyota.

BTW, I don't think the markets are rational at all - we see the proof of that all the time.

I do not jump into these discussions too often, but I do have a comment about growing larger. The Tesla's CA plant was purchased for pennies on the dollar. We all know Toyota purchased a stake in Tesla, and just how much that action play a part in the plant's final price I have no idea. Now if Tesla is to grow larger, it will have to purchased/build more plants as that one small plant isn't going to be able to produce the volume of vehicles needed for Tesla even to become as large as the smallest ICE manuafactor.

As they are growning, a good portion of their business could very well be licensing their technology. That is one way to insure compatability. I think everyone agrees in order for the BEV to replace the ICE the BEV needs the ability to travel between 500 and 1000 miles in one driving day. Now I know, who needs to do 1000 miles in a single driving day. I use to do it, way back when but now there isn't really a need. But 500 to 600 miles in one driving day is rather common. On the interstates even 700 miles in 12 hrs is not uncommon. Now I know the Leaf is not designed for it. But the Leaf will never be a primary vehicale because of this limitation. If you want to replace the ICE, the replacements will have to be able to perform what they do. Even with the superchargers being able to put in 150 miles in 20 mins I get about 8.5 hrs to do 550 miles. Then stop for a 1.5 hr dinner followed by another 3 hrs of driving would get you about 750 miles in 13 hrs. OK that is close enough and with battery swapping, you could get 750 miles in 10 hrs with only battery swapping time. About as good as any ICE out there today.

But for all cars to switch over, all cars would have to share the same charging/swapping intrasturcure. Just like we do now for gas. This becomes even more important if you look at the three ways to increase the range of a BEV. 1. Recharging the batter, 2. Swapping the spent battery for a full charged one, and 3. Some sort of range extending generator that can be towed behind the vehicle for long trips. With batteries being so expensive people are currently working on Range Extender trailers but to increase the market (and lower the cost per unit) we need to be standarized so that the trailer could work for any BEV with the same hookups.

In the end I still Believe Tesla will produce the cars and licensing the technology.

 

[GeekEV]

Now if Tesla is to grow larger, it will have to purchased/build more plants as that one small plant isn't going to be able to produce the volume of vehicles needed for Tesla even to become as large as the smallest ICE manuafactor.

Perhaps not, but by the time that happens they'll be in good financial shape to do so. They are currently using < 1/4 of the old NUMMI plant and only one shift at that. They could produce over 8x as many vehicles at the current plant simply by using the rest of the facility and adding a second shift.

 

[smkettner]

I can't imagine any value in licensing the supercharger network. Tesla will soon build enough vehicles to max out the current system as planned.

 

[garymelora]

I visited the new Tesla store at the King of Prussia Mall yesterday, and was struck by the boldness of this type of marketing. Hundreds of people that otherwise would have never heard of Tesla will see these cars every day. Where else can you let your kids crawl all over a $100K car with no hassle from a salesman? These kids will grow up dreaming of the day when they can own one.