TSLA corporate outlook

[gcrouse]

You asked a pointless rhetorical question about whether Tesla bulls were worried.

No, I asked you if a 80% CAGR and a dropping market share would worry a bull, as in change their bullish outlook. The obvious answer is of course not. So someone like me must have other reasons. And this entire repartee was in response to your posting a drop in Tesla worldwide marketshare out of context as if it explained anything, or was in any way useful in estimating Tesla's future stock performance or valuation or earnings.

A clue for you: it does not

Enough. You are welcome to the last word here. I return you to the ignore bucket.

You asked, "do you think the Tesla bulls are worried?" with no such reference nor indication that you later placed on the idea of changing a position.

You started sharpshooting a guy on Tesla vs. Apple's earnings when he made the valid assessment that Tesla as a brand has become like Apple making a point about Tesla's growth. I pointed out that Tesla was losing market share.

Market share is among one of the most important metrics to evaluate a companies future success. If you don't know that - you should.

https://www.buxtonco.com/blog/market-share-the-most-important-metric-for-business-success

If acting like a petulant teenager is your MO, perhaps a Tesla forum may be more appropriate for you.

If you want a reason to be worried about Tesla - here's a bearish article: https://www.tme.net/blog/tesla-scandal/

 

[johnlocke]

Losing market share is almost inevitable. Doesn't mean that the company doesn't continue to grow. 70% of a billion dollar pie is still better than 100% of a hundred million dollar pie. In any market that's newly created, the creators start with the majority of the market then others join in as the market expands. Sometimes those early leaders fall to the wayside as others innovate. Other times the early leaders never falter and their competitors remain also rans. Tesla will open two new factories this year and effectively double their output. They are still likely going to be production constrained for the next couple of years. My guess is that Elon will open a factory in India next and one in England as well. VW will compete in Europe, GM and Ford in the US, and host of companies in Asia. Tesla will still sell all the cars they can produce even as they lose market share.

 

[WetEV]

Losing market share is almost inevitable. Doesn't mean that the company doesn't continue to grow. 70% of a billion dollar pie is still better than 100% of a hundred million dollar pie. In any market that's newly created, the creators start with the majority of the market then others join in as the market expands. Sometimes those early leaders fall to the wayside as others innovate. Other times the early leaders never falter and their competitors remain also rans. Tesla will open two new factories this year and effectively double their output. They are still likely going to be production constrained for the next couple of years. My guess is that Elon will open a factory in India next and one in England as well. VW will compete in Europe, GM and Ford in the US, and host of companies in Asia. Tesla will still sell all the cars they can produce even as they lose market share.

Profit isn't linear with market share.

100% market share means far higher margin than 30%.

The stock price makes sense... if the margin is going to be high.

Monopoly, one player gets rich. The rest go broke.

 

[dgpcolorado]

^ Monopoly isn't the goal and, unlike the game, in a typical market many players can be successful and make a profit.

Early on, a corporate goal for "Tesla Motors" was to show that EVs are better than ICE cars in many ways, and that they could be fun and practical, as opposed to just being short-range "weirdmobiles" acceptable only to a small number of enthusiasts. The idea was to encourage other car companies to join in, hence Tesla opening up patents for use by others without royalties. So far as I am aware, Tesla, the company, is still happy to have others join in and produce lots of good EVs, as seems to be (finally) happening.

The idea that Tesla can only be successful if it owns most, or all, of the EV market is not true. Quite the contrary — Tesla has been successful if EVs supplant ICE cars as the dominant vehicles, regardless of who makes them. That has been a longtime corporate goal.

Whether TSLA, the stock, is priced as if Tesla will dominate the market is another question entirely. By fundamental standards the stock price has long been pretty crazy, but that is typical of speculative momentum stocks. One advantage of the crazy stock price is that it has given the company easy access to capital and they have used that well to fund factories and expanded production.

What makes Tesla unique is that it is the first new American car company in a century to survive and thrive. Even that was a near thing as the company came close to running out of cash during the difficult Model 3 launch. I think that the success of the company should be celebrated, not denigrated. But, then, I am biased since I am one of those early-adopter EV enthusiasts and have been driving solar power fueled EVs for more than a decade.

 

[SageBrush]

The stock price makes sense... if the margin is going to be high.

Or if Tesla grows 200 - 300% in the next year or two.

Part of the Bull stance is that the growth story is likely
Another part is that as Tesla scales the marginal fixed costs will drop
The third part is Tesla energy

It is not a bad investing stance, but around 2/3rds of the growth is already priced into the stock, Tesla Energy and Tesla cars eat from the same battery pie, and Tesla stumbles will be TSLA tumbles. I think the TSLA story will be a good one for those who hold the stock 3 - 5 years but they better be comfortable with some roller coaster events.

 

[johnlocke]

Losing market share is almost inevitable. Doesn't mean that the company doesn't continue to grow. 70% of a billion dollar pie is still better than 100% of a hundred million dollar pie. In any market that's newly created, the creators start with the majority of the market then others join in as the market expands. Sometimes those early leaders fall to the wayside as others innovate. Other times the early leaders never falter and their competitors remain also rans. Tesla will open two new factories this year and effectively double their output. They are still likely going to be production constrained for the next couple of years. My guess is that Elon will open a factory in India next and one in England as well. VW will compete in Europe, GM and Ford in the US, and host of companies in Asia. Tesla will still sell all the cars they can produce even as they lose market share.

Profit isn't linear with market share.

100% market share means far higher margin than 30%.

The stock price makes sense... if the margin is going to be high.

Monopoly, one player gets rich. The rest go broke.

Market share is only really important in a saturated market like cereal or cigarettes. If you have to steal customers from another brand in order to increase your profits then market share is everything. EV's are different. It's a new market and the government is pushing customers out of ICE and into EV's or public transportation. The number of potential customers will continue to increase for years. This is horse and buggy vs automobile all over again. I guess you know who won that one.

100% market share indicates a niche market with high entry costs and limited potential growth. Otherwise you would have competition. Margin is hi8gh because there is little or no growth in the market.

Monopoly is a closed end system. Real markets are not. It is possible for everybody to win.

 

[DougWantsALeaf]

Tesla wants the same dynamic as Apple (or maybe Amazon). Expand the market, maybe only have 40% market share, but own 80% of the entire industry's profits...like Apple.

 

[SageBrush]

Tesla wants the same dynamic as Apple (or maybe Amazon). Expand the market, maybe only have 40% market share, but own 80% of the entire industry's profits...like Apple.

Was Elon over for dinner last night, or did he come to you in a vision ?

Of course, you *could* just read what he says. He is pushing for 3 TWh of battery production capacity and production of 20M EVs a year by 2030 (I think -- this is from memory.) If I'm not mistaken, Tesla approaches $10k EBITDA per car, but I expect that to drop over time as Tesla enters downstream markets, so perhaps $5k EBITDA. It follows that the rosiest scenario for Tesla is a 2030 EBITDA of 5E3*20*E6 = $1E11 dollars. That is about $100 per share, good for a share price of $2,000 as a mature company.

You can also play this game in terms of battery production: If Tesla EBITDA is $50 per kWh ($0.05 per Wh) then the rosiest scenario for 3 TWh per year production is 5E-2*3E12 = $1.5E11. And therein lies the TRUE financial strength of Tesla: dips in EV demand are soaked up by Tesla energy demand.

This has all been well known to TSLA investors for years. Other EV owners sit under their tin foil hats and snivel 'monopoly' after their confident and smug proclamations of Tesla bankruptcy turned out to be $tslaq style FUD and personal agendas. No surprise to me, the rational investors turned out to be TSLA investors, not the people with an axe to grind.

Every company on the face of the Earth wants to maximize profits. Tesla also wants to accelerate the transition to sustainable transport. When those two goals are in conflict, Tesla juggles or tries to advance each goal in a sub-optimal fashion.

 

[dgpcolorado]

Tesla Q4 2021 Vehicle Production & Deliveries
Business Wire
Jan 2, 2022

AUSTIN, Texas, January 2, 2022 – In the fourth quarter, we achieved production of more than 305,000 vehicles and deliveries of over 308,000 vehicles. In 2021, we delivered over 936,000 vehicles.

Thank you to all of our customers, employees, suppliers, shareholders and supporters who helped us achieve a great year.

Q4 2021
Production Deliveries Subject to operating lease accounting
Model S/X 13,109 11,750 17%
Model 3/Y 292,731 296,850 5%
Total 305,840 308,600 5%


2021
Production Deliveries
Model S/X 24,390 24,964
Model 3/Y 906,032 911,208
Total 930,422 936,172

https://ir.tesla.com/press-release/tesla-q4-2021-vehicle-production-deliveries

 

[WetEV]

Profit isn't linear with market share.
Monopoly, one player gets rich. The rest go broke.

Market share is only really important in a saturated market like cereal or cigarettes.

Look ahead. The EV market will saturate... not next year, as we are supply constrained, but a decade or so.

 

[SageBrush]

Profit isn't linear with market share.
Monopoly, one player gets rich. The rest go broke.

Market share is only really important in a saturated market like cereal or cigarettes.

Look ahead. The EV market will saturate... not next year, as we are supply constrained, but a decade or so.

Of course it will, when it displaces ICE. That is around 100 million vehicles a year. Tesla has just hit 1.2 million. They have a *lot* of growth ahead of them, minority marketshare and all. :lol:

 

[WetEV]

Other EV owners sit under their tin foil hats and snivel 'monopoly' after their confident and smug proclamations of Tesla bankruptcy turned out to be $tslaq style FUD and personal agendas. No surprise to me, the rational investors turned out to be TSLA investors, not the people with an axe to grind.

Oh? So where did I issue a "smug proclamation(s) of Tesla bankruptcy"? The TSLA Bears are gone, and I'm not a Bear. Or a Bull, for that matter.

I started as a fan, and I'm still mostly a fan. But I'm not happy with some ways that the future might play out.

Before you declare winners, remember that the game is still being played.

 

[johnlocke]

Profit isn't linear with market share.
Monopoly, one player gets rich. The rest go broke.

Market share is only really important in a saturated market like cereal or cigarettes.

Look ahead. The EV market will saturate... not next year, as we are supply constrained, but a decade or so.

Yes, sooner or later the EV market will be saturated. My best guess is in about 30 years ( two complete automotive replacement cycles of 12-15 years each). Might be longer if governments are slow to force removal of ICE from the mix. All those new ICE being built today aren't going to just disappear on their own. Cars built today have at least a12-15 year lifespan. It will take 10 years or more before 50% of all cars sold will be electric. Maybe 20 years for 90% of new cars to be electric models and there will still be cases where ICE will be more practical.

All of this ignores Tesla's energy business. Rooftop solar is interesting but the real money is in the Megapacks and grid stabilization. The Megapack is already making peaker plants unfeasible to build just based on cost. Add to that the fast response times and low maintenance costs and you have a disruptive business model. Wind and solar plus Megapacks for storage gives you a very low cost generation system. Given that you could distribute Megapacks to almost any substation at a low cost, distributed localized power becomes possible which reduces loads on high tension lines. And so on.

Just looking at Tesla's auto business doesn't come close getting a true sense of Tesla's business potential.

 

[danrjones]

All of this ignores Tesla's energy business. Rooftop solar is interesting but the real money is in the Megapacks and grid stabilization. The Megapack is already making peaker plants unfeasible to build just based on cost. Add to that the fast response times and low maintenance costs and you have a disruptive business model. Wind and solar plus Megapacks for storage gives you a very low cost generation system. Given that you could distribute Megapacks to almost any substation at a low cost, distributed localized power becomes possible which reduces loads on high tension lines. And so on.

Just looking at Tesla's auto business doesn't come close getting a true sense of Tesla's business potential.

That's basically what I have said to co workers asking about Tesla (stock).

Sadly, for me the home owner, $7500 (or more now?) is way too costly for me to add battery storage to pair with my solar.
For now.

I am really hoping LFP and time bring that cost way down. Because SCE just forced me into a new power plan where daytime power is the cheapest (when I'm putting solar IN) and 4 to 9 pm is the most expensive. You know, when we all get home and make dinner and such. A few power walls would solve that issue. But I honestly think a power wall should be about $2500. It is 13.5 kWh so that would be $185 per kWh which seems like it would be enough for LFP, other materials, and a tidy profit.

 

[WetEV]

Yes, sooner or later the EV market will be saturated. My best guess is in about 30 years ( two complete automotive replacement cycles of 12-15 years each). Might be longer if governments are slow to force removal of ICE from the mix.

That late?

Yet sooner or later all but the odd cases of ICE will be replaced. If, at that time, Tesla has the vast majority of the market, Tesla will have monopoly pricing power. Like AT&T once had. High margins for as far as the eye can see...

https://vimeo.com/355556831

All of this ignores Tesla's energy business. Rooftop solar is interesting but the real money is in the Megapacks and grid stabilization. The Megapack is already making peaker plants unfeasible to build just based on cost.

Rooftop solar isn't a business Tesla is doing that all that well at. Need lots of local contractors to install, eventually is mostly materials that other companies can already source cheaper.

Utility companies don't like to source products from monopolies. They know better.

Don't expect high margins out of these businesses.

 

[jlv]

But I honestly think a power wall should be about $2500. It is 13.5 kWh

If there was a widely available, practical way for a LEAF to V2G, I would have kept my 2013 LEAF instead of buying my 2 PowerWall system (which cost twice as much as I sold the car for).

 

[SageBrush]

But I honestly think a power wall should be about $2500. It is 13.5 kWh

If there was a widely available, practical way for a LEAF to V2G, I would have kept my 2013 LEAF instead of buying my 2 PowerWall system (which cost twice as much as I sold the car for).

I thought about this idea of keeping the car mostly for home backup but it sure is clunky, AND expensive. As it is for my area that historically has very good reliability, I'll either make do with a small dedicated storage battery or think about using our future main car for that purpose if support is available.

I'm also fortunate that my home PV inverter can set up an island for about 2 kW of PV generation to be used by the home when the sun is shining if the grid is down. One of the advantages of a SunnyBoy and ground mount (which does not require module level shutdown.)

 

[johnlocke]

All of this ignores Tesla's energy business. Rooftop solar is interesting but the real money is in the Megapacks and grid stabilization. The Megapack is already making peaker plants unfeasible to build just based on cost. Add to that the fast response times and low maintenance costs and you have a disruptive business model. Wind and solar plus Megapacks for storage gives you a very low cost generation system. Given that you could distribute Megapacks to almost any substation at a low cost, distributed localized power becomes possible which reduces loads on high tension lines. And so on.

Just looking at Tesla's auto business doesn't come close getting a true sense of Tesla's business potential.

That's basically what I have said to co workers asking about Tesla (stock).

Sadly, for me the home owner, $7500 (or more now?) is way too costly for me to add battery storage to pair with my solar.
For now.

I am really hoping LFP and time bring that cost way down. Because SCE just forced me into a new power plan where daytime power is the cheapest (when I'm putting solar IN) and 4 to 9 pm is the most expensive. You know, when we all get home and make dinner and such. A few power walls would solve that issue. But I honestly think a power wall should be about $2500. It is 13.5 kWh so that would be $185 per kWh which seems like it would be enough for LFP, other materials, and a tidy profit.

Home storage is overpriced for the value it brings to the table. I have a $60,000 battery system on order for my home but the utility and state are picking up the cost with grant money. Since the system will be almost zero cost to me, it's a no-brainer to do. Otherwise even with a 22% tax credit, it would still be not worth it. What the system will do is allow me to run my PV even when the grid is down and allow me to not run the 20KW propane backup generator except in the worst conditions. I use a lot of power (70-80KWH daily) and the battery system is sized for 24 hours of operation. I could have got away with half of that size but this way I should be able to operate several days without SDGE power and not rely on the generator at all. At $5/gal for propane I'd like to not have to run the generator at all. If SDGE implements it's "solar tax" for PV owners I may opt out of net metering altogether and not sell any power to SDGE. I would go to TOU metering and charge the batteries after midnight if necessary.

My cost is around $700/KWH for the system and that's with LFP batteries. You are underestimating the costs for the inverter. control logic, and case. Also the cost to install.

 

[danrjones]

All of this ignores Tesla's energy business. Rooftop solar is interesting but the real money is in the Megapacks and grid stabilization. The Megapack is already making peaker plants unfeasible to build just based on cost. Add to that the fast response times and low maintenance costs and you have a disruptive business model. Wind and solar plus Megapacks for storage gives you a very low cost generation system. Given that you could distribute Megapacks to almost any substation at a low cost, distributed localized power becomes possible which reduces loads on high tension lines. And so on.

Just looking at Tesla's auto business doesn't come close getting a true sense of Tesla's business potential.

That's basically what I have said to co workers asking about Tesla (stock).

Sadly, for me the home owner, $7500 (or more now?) is way too costly for me to add battery storage to pair with my solar.
For now.

I am really hoping LFP and time bring that cost way down. Because SCE just forced me into a new power plan where daytime power is the cheapest (when I'm putting solar IN) and 4 to 9 pm is the most expensive. You know, when we all get home and make dinner and such. A few power walls would solve that issue. But I honestly think a power wall should be about $2500. It is 13.5 kWh so that would be $185 per kWh which seems like it would be enough for LFP, other materials, and a tidy profit.

Home storage is overpriced for the value it brings to the table. I have a $60,000 battery system on order for my home but the utility and state are picking up the cost with grant money. Since the system will be almost zero cost to me, it's a no-brainer to do. Otherwise even with a 22% tax credit, it would still be not worth it. What the system will do is allow me to run my PV even when the grid is down and allow me to not run the 20KW propane backup generator except in the worst conditions. I use a lot of power (70-80KWH daily) and the battery system is sized for 24 hours of operation. I could have got away with half of that size but this way I should be able to operate several days without SDGE power and not rely on the generator at all. At $5/gal for propane I'd like to not have to run the generator at all. If SDGE implements it's "solar tax" for PV owners I may opt out of net metering altogether and not sell any power to SDGE. I would go to TOU metering and charge the batteries after midnight if necessary.

My cost is around $700/KWH for the system and that's with LFP batteries. You are underestimating the costs for the inverter. control logic, and case. Also the cost to install.

Maybe, but it shouldn't be 7500 each. Or its not worth it [to me] until the price drops. I can install it myself anyway, though I don't think Tesla allows that for their power wall. I installed my own solar, no issues at all. I've also installed my own main panel (upgraded from 100 amps to 200 amps) and more recently my own heat pump.

 

[johnlocke]

That's basically what I have said to co workers asking about Tesla (stock).

Sadly, for me the home owner, $7500 (or more now?) is way too costly for me to add battery storage to pair with my solar.
For now.

I am really hoping LFP and time bring that cost way down. Because SCE just forced me into a new power plan where daytime power is the cheapest (when I'm putting solar IN) and 4 to 9 pm is the most expensive. You know, when we all get home and make dinner and such. A few power walls would solve that issue. But I honestly think a power wall should be about $2500. It is 13.5 kWh so that would be $185 per kWh which seems like it would be enough for LFP, other materials, and a tidy profit.

Home storage is overpriced for the value it brings to the table. I have a $60,000 battery system on order for my home but the utility and state are picking up the cost with grant money. Since the system will be almost zero cost to me, it's a no-brainer to do. Otherwise even with a 22% tax credit, it would still be not worth it. What the system will do is allow me to run my PV even when the grid is down and allow me to not run the 20KW propane backup generator except in the worst conditions. I use a lot of power (70-80KWH daily) and the battery system is sized for 24 hours of operation. I could have got away with half of that size but this way I should be able to operate several days without SDGE power and not rely on the generator at all. At $5/gal for propane I'd like to not have to run the generator at all. If SDGE implements it's "solar tax" for PV owners I may opt out of net metering altogether and not sell any power to SDGE. I would go to TOU metering and charge the batteries after midnight if necessary.

My cost is around $700/KWH for the system and that's with LFP batteries. You are underestimating the costs for the inverter. control logic, and case. Also the cost to install.

Maybe, but it shouldn't be 7500 each. Or its not worth it [to me] until the price drops. I can install it myself anyway, though I don't think Tesla allows that for their power wall. I installed my own solar, no issues at all. I've also installed my own main panel (upgraded from 100 amps to 200 amps) and more recently my own heat pump.

You are going to have to wait a long time for costs to drop. Home backup power is a niche market. It's aimed at rural and suburban homeowners who are tired of being without power for hours at a time. Urban homeowners get their power back quickly in most cases. If you rent then you have no interest in this product at all. Until you can churn these things out like refrigerators and in those kind of quantities, cost will remain high. Even then, it won't be a large market. Not that many people need or want a UPS and for those that do, a small table top model is often adequate. Add to that the fact that the utilities don't like home ups any more than they like solar and it's an uphill battle. The utilities can't stop you from installing but they can (and will) make it a bureaucratic nightmare if possible. They will try and add fees for usage and maintenance costs just to discourage you from starting.