TSLA corporate outlook

[cwerdna]

The $35k Tesla will never exist. If I'm wrong on that, my next guess is it exists, sells a very small number, and then Tesla pulls the plug claiming "lack of demand".

I gave up last year on the idea that we'd ever see large numbers of readily available $35k Teslas. The car has been in production now for fully 1.5 years and still these are "4-6 months" away per tesla.com.

Tesla got massive, free attention from the media on this. OMG a $35k Tesla? Sign me up. And literally I did sign up. I put $1k down in 2017 for it. They were supposed to have them rolling off the line Dec 17. Then a delay, then a delay, then some more delays. And now on their website the 4-6 months puts them mid-2019. Until they delay again, that is, or just cancel the standard range altogether.

On the first points, yes, it's looking more and more like that.

And yep, Tesla's all about hype instead of being honest. The Model 3 wouldn't have gotten as much attention and interest if Elon said, the price is $49K which was all the was available (at minimum) for ages.

Funny you mention "4 to 6 months". "Standard Battery available in 4-6 months" is what it says right now at https://3.tesla.com/model3/design#battery. Back when I posted in http://www.mynissanleaf.com/viewtopic.php?p=538599#p538599 on Oct 15, 2018, it said "3-6 months".

 

[LTLFTcomposite]

The mid range battery model is now $44k, still $9k beyond the much ballyhooed $35k. I wonder if they could get anywhere with software limiting the mid range model and offer an upgrade path or maybe even a recurring subscription model. Seems they did something like that for the 40kwh model S that never happened. Any idea how many of those cars ever got upgraded? That could be attractive for consumers who want a lower entry price point but are afraid of regretting getting the shorter range or difficulty at resale time.

 

[EatsShootsandLeafs]

Funny you mention "4 to 6 months". "Standard Battery available in 4-6 months" is what it says right now at https://3.tesla.com/model3/design#battery. Back when I posted in http://www.mynissanleaf.com/viewtopic.php?p=538599#p538599 on Oct 15, 2018, it said "3-6 months".

This is Musk's go-to on how long something will take.

At the start of 2018 he said it was "3-6 months away" re. coast-to-coast.

https://techcrunch.com/2018/02/07/elon-musk-expects-to-do-coast-to-coast-autonomous-tesla-drive-in-3-to-6-months/

His time frames are just complete nonsense. There is no adherence of them to reality at all.

 

[dgpcolorado]

The tax credit will stay at $3750 for six months and then drop to $1875 for another six months. As always, the tax credit is limited to the amount of federal income taxes owed or the tax credit amount, whichever is lower. Those of us with low incomes would get little or no credit.

This is true but of course the average Tesla buyer pays far more than $7500 in federal taxes. There are rare exceptions.

Not at all rare. There are plenty of retirees with modest incomes and reasonable savings, for example.

 

[GlennD]

Then there is me. I have minimal savings and I completely live off of SSN of 2166 and Calpiers of 2200. I actually have more money than the 76K i made when working. No deductions helps immensely. I have a couple of hundred more at months end.

I am satisfied with my B. If Tesla really comes out with a 35K car I will switch. If it never happens no big deal.. It would be nice to have more range but my B's range works for me.

 

[GRA]

Is that really the kind of society we want, where as long as you libel someone on the internet it's okay, but if you do it somewhere else it isn't? I sure don't.

False equivalency there GRA.

The standard isn't, and the defense isn't that it is on the internet so it is ok.

The same standard goes for in person, print, tweets, etc.
If it is name calling, it isn't libel. Now, I don't know if it was or wasn't, as you said, the argument continued and more was said than simply the slam "pedo". What I am saying, is the simple name calling, is not libel.
If it were, our President would be guilty on a few thousand counts of it

You have a problem with that? I don't view a minimum requirement of civility from our public leaders as a bad thing at all. We're not talking about a single instance, we're talking about a pattern, and not just during campaigning. I'm continually embarrassed that the U.S. is represented to the world by our current president. Granted, we've got a ways to go until we sink to former levels, e.g. https://www.senate.gov/artandhistory/history/minute/The_Caning_of_Senator_Charles_Sumner.htm

but considering the President's seeming delight in wrestling on camera, perhaps it's only a matter of time. In any case, we've wandered a bit from the subject, which is the possible effect of Musk's behavior and the lawsuit on Tesla's corporate future (which is why, as goldbrick noted, I linked info about a personal lawsuit involving Elon in this topic).

 

[cwerdna]

Look, I'm all for healthy skepticism. Up until a few months ago I thouth Tesla was an ignorant buy. Once you look at the global market, and Tesla's position in it, it becomes clear that they are still a solid investment. Most major investors are even coming around to this.

If you doubt that Tesla will build 500,000 cars per year within 6-12 months, you are ignoring reality.

500K vehicles per year rate within 6 months? Doubtful. Within a year? Maybe.
...
Let's revisit where they are on your claims at the 1 year mark from now ...

I would be happy to revisit this in the future, and I'm open to being wrong about all of these predictions. I'm not an expert. I'm just an investor.

Ok, your "Tesla will build 500,000 cars per year within 6-12 months, you are ignoring reality" was posted Jan 26, 2018 at http://www.mynissanleaf.com/viewtopic.php?p=517342#p517342. We're almost a month shy of the 1 year mark and Tesla just released their delivery and production numbers that include Q4 2018.

https://www.nbcnews.com/business/autos/tesla-shares-dive-after-revealing-fourth-quarter-model-3-production-n953761

Overall, total production rose 8 percent to 86,555 vehicles. The company produced 61,394 Model 3s, up from a total of 53,239 Model 3s in the third quarter, but showed no improvement on the 5,000 per week rate it finally achieved at the end of the third quarter.

86,555 / 13 = 6,658/week, on average

86555 * 4 = 346,220 annually if the rate is maintained

For data including Q3 2018 at https://www.cnbc.com/2018/10/02/tesla-third-quarter-auto-production.html

The company produced 80,142 total vehicles: 26,903 Model S and X vehicles combined, and 53,239 Model 3 sedans.

80,142 / 13 = 6,164/week
80,142 * 4 = 320,568/year

So, missed it by the 6 month time frame and seems to have missed it on the 12 month, unless we wait another quarter.

 

[EatsShootsandLeafs]

The tax credit will stay at $3750 for six months and then drop to $1875 for another six months. As always, the tax credit is limited to the amount of federal income taxes owed or the tax credit amount, whichever is lower. Those of us with low incomes would get little or no credit.

This is true but of course the average Tesla buyer pays far more than $7500 in federal taxes. There are rare exceptions.

Not at all rare. There are plenty of retirees with modest incomes and reasonable savings, for example.

My God. I actually looked this up and you're right. Apparently only 32 or 37% of model 3 reservation holders make over $100k/year. Moreover, this average model x household only has $143k household income and Model S right at about $150k. That's household. I know a lot of people are posers, but that's really over the top spending $80-90k on a car when you're only at that income level. That's almost your entire damn take home for the year on a car. :lol:

And no I do not believe most of these buyers are frugal retirees who long-since paid their house down and their only real bill is electricity and food.

As for Tesla's manufacturing capacity I have for over six months been of the belief that their demand is not as high as they pretend. In my opinion they have fully vindicated that belief on account of recently dropping the price. If you cannot create enough supply for the demand you do not drop prices. That is what they have done--to sweeten the pot. Whether it was or wasn't in reaction to the federal tax credit is immaterial. The lead time on the cars is also now mere weeks (according to Tesla). If they do end up creating the $35k Tesla (which I don't believe they will to any meaningful degree) that will likely be the only way they can continue with the demand, otherwise they will have to lower their manufacturing rate to match demand.

 

[dgpcolorado]

...As for Tesla's manufacturing capacity I have for over six months been of the belief that their demand is not as high as they pretend. In my opinion they have fully vindicated that belief on account of recently dropping the price. If you cannot create enough supply for the demand you do not drop prices. That is what they have done--to sweeten the pot. Whether it was or wasn't in reaction to the federal tax credit is immaterial. The lead time on the cars is also now mere weeks (according to Tesla). If they do end up creating the $35k Tesla (which I don't believe they will to any meaningful degree) that will likely be the only way they can continue with the demand, otherwise they will have to lower their manufacturing rate to match demand.

Tesla doesn't just sell to the USA and Canada. They are about to start shipping Model 3s to the EU and China. What demand will look like a year from now, when those reservation holders have their cars, remains to be seen. China has so many home-grown EV companies I don't know if Tesla can compete, even with GF3 in Shanghai to reduce costs. We shall see. The coming Model Y will also stir things up a bit. I would expect Model 3 sales to take a big hit when the Y hits the market. However, I was completely wrong about the effect of the 3 on the S/X — sales of those cars have remained strong, so my crystal ball is cloudy!

 

[RegGuheert]

InsideEVs: Elon Musk, Clayton Christensen, and the art of disruption:

To simplify for the layman, Dr. Christensen is an exponent of “low-end disruption,” whereas Tesla is an object lesson in “high-end disruption,” the concept that innovation can begin at the high end of a market and later trickle down to the mainstream. In December, Elon Musk tweeted, “Clayton is wrong. New tech is always expensive. Tech disruption occurs at *high end*, eg computers & cell phones. It takes many iterations & vast economies of scale to achieve mass market affordability.”

I agree with Elon Musk. I think those, like Christensen, arguing the opposite must have quite a bit of personal investment and cognitive dissonance in order to try to say that what Tesla is doing is not "high-end disruption".

 

[GRA]

IEVS:

Tesla To Close Order Books For Model S, X 75D Next Monday

https://insideevs.com/tesla-to-close-order-books-for-model-s-x-75-kwh-next-monday/

Thus widening the price gap between the Model 3 and its soon-to-be-more-expensive stablemates.

After this weekend you’ll no longer be able to order the cheapest current versions of the Tesla Model S and X. Last call for the 75-kWh battery versions. . . .

 

[cwerdna]

Tesla cuts 7% of its workforce to boost Model 3 production; Musk says 'very difficult' road ahead
https://www.cnbc.com/2019/01/18/tesla-to-cut-its-workforce-by-around-7-percent.html

 

[EatsShootsandLeafs]

Tesla cuts 7% of its workforce to boost Model 3 production; Musk says 'very difficult' road ahead
https://www.cnbc.com/2019/01/18/tesla-to-cut-its-workforce-by-around-7-percent.html

FUD. Once they release the Model 3, they will be profitable.

Kidding. I really don't get this stock's valuation. Either I'm totally off the deep end or TSLA is one of the best examples in recent memory of lemmings off a cliff, because it's been like this (over valued, IMO) for a long time.

Tesla has recently:
- increased the price of the Model S by over $20k (base model is now $94k and Federal subsidy has dropped by $3750 this month). How is this not going to massively crater demand?
- cancelled referral program--obviously just cannot afford it
- cut 7% of work force

For a company that "finally is making a profit!", why are they dropping 7% work force? And now Musk has just shown his hand: no profit for Q1. If Musk is saying with " great difficulty, effort and some luck, to target a tiny profit." they'll get a Q1 profit, safe to assume they won't. So back to the capital markets for more cash, right? As we were assured wouldn't happen?

Tesla has always benefited by the lethargic rate of its competitors getting to market, but there is no indication they've given up. They are slowly, but surely, bringing competitive vehicles online.

I'm extremely surprised that premarket trading is only down 6%. I think this stock is back under $300 awfully fast. I've seen enough posts on the tesla forums to know that some people will never sell this stock. They'll hold it even if it dumps down to $100 and just buy more of it. For them it is religion. Domestic demand for the model 3 is obviously tapped out, absent aggressively price drops, which they as yet haven't been able to achieve (yep, the $35k, unicorn). They lost $2k of margin per vehicle with the recent price cut they announced on each model 3 but, with fed tax credit gone, the price still went up $2k, so $3750 total lost to the transaction. Couldn't come at a worse time, I would guess.

 

[cwerdna]

https://www.tesla.com/blog/tesla-company-update is the letter that the press is linking to.

I still keep wondering when they'll finally offer that "$35K" Model 3... I mean, it's crazy that the only standard color now on the $44K MR is black. I don't buy black cars. The rest of the colors cost $1.5K to $2.5K more. Non-luxury car makers aren't that stingy colors w/no extra cost. The ones that are extra are usually only a few hundred $.

I pretty much ruled out the 3 after seeing Bolt prices, estimating Leaf e+ prices, and seeing GM's tax credit situation.

On the '19 Bolt, only 3 colors are extra cost. The extra cost for those 3 are $395.

On '19 Leaf SL, some colors are included, some are $395 extra and one is $695 extra.

To be fair, they didn't "raise" the price of the S and X. They dropped the 75 kWh versions, making the starting prices for both REALLY high now.

 

[LeftieBiker]

Would you be leasing a Bolt, or buying one? GMAC puts crazy high residuals on the cars, making them affordable to lease but definitely overpriced to buy off-lease. They essentially push the tax credit into the residual...

 

[jlv]

Tesla has recently:
- increased the price of the Model S by over $20k

While I agree with you on much that you said, this is a distortion of the facts.

 

[EatsShootsandLeafs]

Tesla has recently:
- increased the price of the Model S by over $20k

While I agree with you on much that you said, this is a distortion of the facts.

To be more precise I could have rephrased it as saying the cheapest Model S has increased by over $20k, if you prefer.

Would you be leasing a Bolt, or buying one? GMAC puts crazy high residuals on the cars, making them affordable to lease but definitely overpriced to buy off-lease. They essentially push the tax credit into the residual...

Nissan did (not sure it still does?) the same thing, it's nice for the leasee

 

[EatsShootsandLeafs]

Well this makes more sense. Stock down 11% now, a buck or two over $300. If it is under $359 on Mar 1 Tesla has to dump 1/3 of its available cash paying back debt.

https://www.cnbc.com/2019/01/18/tesla-has-920-million-in-debt-thats-coming-due-could-affect-cash.html

Model 3 was supposed to get them in the black. It's been in production 18 months, and they had a barely-profitable quarter in Q3, may or may not in Q4, and already won't in Q1 of this year. At some point doesn't it have to actually make money and not burn it?

 

[Durandal]

Well this makes more sense. Stock down 11% now, a buck or two over $300. If it is under $359 on Mar 1 Tesla has to dump 1/3 of its available cash paying back debt.

https://www.cnbc.com/2019/01/18/tesla-has-920-million-in-debt-thats-coming-due-could-affect-cash.html

Model 3 was supposed to get them in the black. It's been in production 18 months, and they had a barely-profitable quarter in Q3, may or may not in Q4, and already won't in Q1 of this year. At some point doesn't it have to actually make money and not burn it?

I expect some announcement in February to goose the price. I think the early announcement of layoffs was to allow the price to drop now so it may recover by March 1st. I'm expecting Model Y announcement and Supercharger v3 announcement. Will be used as demand lever for "long range" versions of the vehicles, while older and "standard range" vehicles will only be able to charge at v2 rate. I expect v3 to allow charging up to 80% SoC in 15-20 minutes. Emphasis will be on the "miles per hour" charge rate instead of the measured kW due to the higher efficiency of Tesla models say compared to the I-Pace, as and example.

This will lead current Model S & X owners to want to upgrade to the newest version when they can. It may also be limited to only S&X models, and maybe not available on Model 3 except for "Performance" versions... We'll have to see. I'm delaying the purchase of my Model 3 as long as my Leaf holds out, right now it's at 64% SOH. I know a number of people who are waiting for the Standard Range Model 3, but not necessarily the "$35,000" version, they want the premium upgrade package.

As long as they continue to barely make a profit or break even, I think that's good, they will be able to lean out operations, production, and the market is expanding. Few nay-sayers would have envisioned Tesla selling as many vehicles as they have already.

 

[lorenfb]

I think the early announcement of layoffs was to allow the price to drop now so it may recover by March 1st. .

You're joking, right? That's one of the most laughable posts on this forum!

I'm expecting Model Y announcement and Supercharger v3 announcement.

Right, so Elon can do another scam by taking reservations on the MY, as was done with the M3 to generate needed cash flow.
Maybe he'll announce a $25K MY, which like the M3 can potentially generate 400K reservations (@ $1k ea, - $400M).

As long as they continue to barely make a profit or break even, I think that's good, they will be able to lean out operations, production, and the market is expanding.

The naivete expressed on this forum in boundless. If/when the stock hits $10 per share, you'll still have lemmings making statements like above.