jlv
Well-known member
Perhaps we should change the title of that thread to include "Cybertruck".LeftieBiker said:
TSLA corporate outlook
- Thread starter edatoakrun
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EatsShootsandLeafs
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Musk is making much about the 200k reservations of the truck.
Of course these numbers don't mean much given the reservation is $100. The conversion rate on that will be paltry for sure.
I'm basically a perma bear on tesla now. I used not to be, so take my comments with a grain of salt, but I did not realize until today that tesla North American sales are actually down--a lot.
https://www.cnbc.com/2019/10/29/reuters-america-update-2-tesla-filing-shows-u-s-sales-tumbled-39-percent-in-third-quarter.html
You can find positive growth outside of the US, but this is its bread and butter and this should not instill confidence. The Y is going to hit US markets in a--finally!!--competitive environment. So their sales are tumbling in NA despite no good competition. 12-18 months from now you have the Mustang Mach-E which is a direct competitor with the Y from a 3000-dealership company. Even the Rav4 Prime will be on some people's comparison list with the Y.
Of course these numbers don't mean much given the reservation is $100. The conversion rate on that will be paltry for sure.
I'm basically a perma bear on tesla now. I used not to be, so take my comments with a grain of salt, but I did not realize until today that tesla North American sales are actually down--a lot.
https://www.cnbc.com/2019/10/29/reuters-america-update-2-tesla-filing-shows-u-s-sales-tumbled-39-percent-in-third-quarter.html
You can find positive growth outside of the US, but this is its bread and butter and this should not instill confidence. The Y is going to hit US markets in a--finally!!--competitive environment. So their sales are tumbling in NA despite no good competition. 12-18 months from now you have the Mustang Mach-E which is a direct competitor with the Y from a 3000-dealership company. Even the Rav4 Prime will be on some people's comparison list with the Y.
Durandal
Well-known member
EatsShootsandLeafs said:
You've been a hater of Tesla since I've been on this board, back when I first bought my Leaf in 2016. 3 years later your opinion of them hasn't changed, but their output has gone from 24,500 in Q3 2016 to 97,000 in Q3 2019, which 3.95x higher. The Model 3 US sales estimate for 2019 according to InsideEVs is 111,650, the second closest plugin, the Prius Prime only has 15,705 for the same period and the Nissan Leaf has 9,111.
After owning a Leaf, currently owning a Chevy Volt, and a Model 3, I would never consider consider any non-Tesla vehicle until the other automakers catch up in regards to specifications and ADAS, which won't happen any time in the next 3 years, likely not for 5 years. If Subaru or Honda had good BEVs, I might consider them, but nobody offers a BEV with comparable specs at a comparable price point that I can buy today.
In regards to your reservation conversion rate, I expect the conversion rate to be greater than half of the reservations, but something to keep in mind is that in 2019 very few of Model 3 sales were from reservation holders, and also in late 2018 that was the case too. There is plenty of organic growth demand for the vehicle, most people I give test rides to say they would "love" to buy a Tesla. Even the people I know who know of the Ford Mach-E, none of them are interested in purchasing it, and between the Model Y and the Mach-E, they would prefer the Tesla, although they admit the Mach-E is a good looking competitive vehicle.
When it comes to charging networks, none of the other automakers can compete, as few of the other vehicles offer charging over 150kW, most are 50kW-100kW, and Electrify America which is the largest charging network outside of Tesla's, charges way too much for their charging. It's 3x of what charging at a Supercharger would cost, eliminating any cost advantage for driving an electric vehicle over an ICE vehicle.
GRA
Well-known member
Durandal said:
They may love to buy a Tesla, but as the Ford will probably have a $7,500 price advantage and is otherwise comparable, they will be more likely able to buy it, which will override many of their other preferences. Always assuming that reviews of both of these currently vaporware products are roughly equal.
The "Mustang" is in the prototype stage, not vaporware.
EatsShootsandLeafs
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Wrong. I apologize I did not read past this due to your misrepresentation of me.Durandal said:
I placed a deposit on a Model 3 in 2017 and held it until summer of last year. Not consistent with behavior of a "hater". I am now. I was not then.
My view of tesla now is that musk is a genius who is also a charlatan and a cheat, and he has continued to deliver strong products while also at the same time lying. I just don't trust him, and I don't think his company is a good investment. He is a chronic liar and bullshitter. And we all know it. I just can't get behind a guy who lies to people constantly and when called on it doubles down with more lies.
GRA
Well-known member
LeftieBiker said:
Until something's actually for sale it's vaporware AFAIC. See Faraday Future, Envia et al. To be sure, the vapor's a bit thicker when a prototype has been produced, but it's still vapor.
Durandal
Well-known member
GRA said:
I agree with the sentiment on what constitutes as vaporware. Regarding price advantage, I'm not sure that Ford will have a price advantage even with the tax credits on the F150. I don't believe they can get costs as low as Tesla can without proper scale or having their gas trucks partially subsidize the electric ones. We shall see, though. So far none of the automakers have been able to match specs AND price with Tesla.
GRA
Well-known member
ABG:
This should have been settled and buried a long time ago. The trial's due to start Dec. 3rd.
Meanwhile, Tesla's claiming truck deposits are now up to 250k.
https://www.autoblog.com/2019/11/27/elon-musk-tesla-pedo-guy-trial/
This should have been settled and buried a long time ago. The trial's due to start Dec. 3rd.
Meanwhile, Tesla's claiming truck deposits are now up to 250k.
DaveinOlyWA
Well-known member
EatsShootsandLeafs said:
Any "promise to commit" two years in advance will have a paltry conversion rate without the slightest regard for product, quality or price. That is human nature. This is nothing more than a ploy VERY commonly used to gauge interest. It will be a tool used to leverage a better loan rate if needed.
Definitely better than paying $$ to a public survey company.
Nubo
Well-known member
DaveinOlyWA said:
Good free advertising too. Tesla is still an upstart, doing upstart things. But they ARE making EVs that challenge ICEVs, in quantities that were considered a pipe dream not long ago. I think they're on to something.
DaveinOlyWA
Well-known member
EatsShootsandLeafs said:
My take is a bit different. I don't think he lies purposely. Its more of an overpromise, underdeliver situation. The ability to predict the price of a something 2 years in advance is complicated by expected price drops that may or may not happen.
His only real failing is price prediction. Most of everything else has been on track more or less. If I had any beef with him, it might be using us for his R & D but then again, he has sucked in so many, it pays no dividends to take a stand on the issue.
GRA
Well-known member
GRA said:
IEVS:
https://insideevs.com/features/384689/recommended-consumer-reports-tesla-reliability/
IEVS talked with CR's head of vehicle testing to get answers to the questions they had.
EatsShootsandLeafs
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I'm convinced he is either a liar or delusional. The number of claims he makes to this day regarding FSD are outrageous. And consistently wrong, yet he keeps making them. You realize we're supposed to have a 1M robo fleet next year? Just 12 months from now a million teslas functioning as level 4 or 5 robo cars. It's pure fantasy. And then he says teslas will appreciate in value.DaveinOlyWA said:
Nobody believes this stuff, so either he doesn't also (lying) or he does in which case he's just delusional.
EVDRIVER
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Remember how many LEAFs Goshen said would be sold in a sort time? A laughable claim still more than 10 years later. Musk is an engineer not a marketing person and like so many companies he promises deadlines that are not met. However the products that come late over exceed the promises in almost all cases. I think he is overly optimistic about challenges often but he busts his ass to make things happen which few CEOs do. Sure better than the BS most tech based manufacturing companies promise. Too many people see Tesla as a car manufacturer only, Tesla is a much bigger threat which is why there is such a huge coordinated effort to drive the stock down on a daily basis.
WetEV
Well-known member
Tesla has almost the market capitalization of GM and Ford Motor. And tiny sales relative the GM/Ford.
So if Tesla was a good investment, it would need to grow sales to GM/Ford levels and maintain a high margin on sales.
The only way a large company can maintain a high margin is if it is a monopoly or nearly so.
So Tesla needs to maintain a high fraction of the market for electric cars. Tesla's market share is near 80% in the USA, but only about 20% of the world market.
Tesla needs to destroy any electric cars from BAIC, BYD, and Nissan. Oh, and JAC, Chery, VW, BMW, Toyota and so on. As well as GM, Ford, Fiat, and so on. At least if Tesla stock is going to be a good investment.
If Tesla is just another car company, Tesla stock would be valued at similar to any other car company's stock. Ford's PE has been in the range of 5 to 25. Ford's PS ratio is about 0.23. You do the math.
Tesla's other businesses have similar issues. Sales need to grow rapidly and margins need to be high.
So either Tesla stock is a bad investment, or Tesla will become a company everyone hates as they extract lots of money out of everyone's wallet with high prices to pay high margins to shareholders and high pay to management, and maintain a near monopoly with lock in due to infrastructure and other means to keep competition out of the electric car market.
Which one do you want to happen?
This doesn't mean that Tesla stock is a good short. Different topic.
So if Tesla was a good investment, it would need to grow sales to GM/Ford levels and maintain a high margin on sales.
The only way a large company can maintain a high margin is if it is a monopoly or nearly so.
So Tesla needs to maintain a high fraction of the market for electric cars. Tesla's market share is near 80% in the USA, but only about 20% of the world market.
Tesla needs to destroy any electric cars from BAIC, BYD, and Nissan. Oh, and JAC, Chery, VW, BMW, Toyota and so on. As well as GM, Ford, Fiat, and so on. At least if Tesla stock is going to be a good investment.
If Tesla is just another car company, Tesla stock would be valued at similar to any other car company's stock. Ford's PE has been in the range of 5 to 25. Ford's PS ratio is about 0.23. You do the math.
Tesla's other businesses have similar issues. Sales need to grow rapidly and margins need to be high.
So either Tesla stock is a bad investment, or Tesla will become a company everyone hates as they extract lots of money out of everyone's wallet with high prices to pay high margins to shareholders and high pay to management, and maintain a near monopoly with lock in due to infrastructure and other means to keep competition out of the electric car market.
Which one do you want to happen?
This doesn't mean that Tesla stock is a good short. Different topic.
iPlug
Well-known member
Disagree with the diagnosis and options presented here.WetEV said:
The Tesla situation resembles more closely that of Apple. Apple does not have a monopoly nor top sales position in smart phone sales. But they have the highest market cap because they sell "premium products" with the healthiest margins.
Apple continues to grow as a company into other sectors like services. There are other big players in the tech field with higher PE ratios that overlap with some of their portfolio.
It was Apple Computer in the beginning, now just Apple, and computers represent a small portion of their profits. Tesla is known almost exclusively for their vehicles at the moment, but they will continue to grow into an energy product company and likely include services in the future.
WetEV
Well-known member
iPlug said:
So rather you expect Tesla will replace BMW (and perhaps Audi, Mercedes, Cadillac , Porsche, etc)? Then you should expect that Tesla stock isn't a good investment now, as there isn't the volume for more expensive cars with higher margins needed for Tesla to maintain market cap like GM.
The premium products with the largest margins are a larger fraction of cell phones than of automobiles. Lower priced goods can have larger premium sub-markets than higher priced goods. Almost everyone can buy a premium pack of chewing gum, costing four time the regular stuff. Or a quart of ice cream. Cars are a larger fraction of spending, unlike gum, ice cream or cell phones. So both the fraction of the market that is premium and the excess margin will be smaller.
iPlug
Well-known member
This does not follow and is rather backwards.WetEV said:
That would be like asking if Apple would replace Nokia with the first iPhones. The smart phone industry was nascent then so Apple didn't have to replace anyone. There were no premium players then because smart phones were new. Nokia had to replace Apple. They did not, but slept while Apple grew and cultivated a loyal fan base, building a robust halo that has been hard for competitors to chip away at to this day.
And so Tesla is not replacing BMW et al.. BMW et al. are big premium ICE players but small premium EV players. Tesla continues to show that they are following the Apple model while the ICE players continue to look like Nokia and friends.
The potential earnings on premium vehicles are much greater here that suggested, look at earnings reports. All the big auto manufacturers depend heavily on the high profit margins of their premium (luxury) brands, which command thousands more per unit than their much more popular lower cost, high revenue/low profit margin models.WetEV said:
Years ago many analysts thought it laughable that any large number of people would fork over ~$1k for a smart phone, allowing the manufacturer to pocket hundreds on each unit. Analyst predictions proved quite inaccurate.
So if Tesla can sell 1/30th the number of Teslas as Apple sells iPhones at 30x the profit of each iPhone, we are looking at future Apple market cap territory. This of course does not consider potential profits from their future energy and AI hardware, software, and service businesses. Services often sell at multiples of the cost of the service to the service provider.
DougWantsALeaf
Well-known member
All, Tesla is not Apple...Tesla is Google.
They actually sell the cars at a price below what the market would bear, and monetize the data from the cars in the background. This is why they won’t let you use android auto or iPhone auto.
The data is valuable to all sorts of companies including retail, insurance, logistics companies, etc..
Apple doesn’t (or doesn’t claim to) sell your data. Tesla does, it’s why you can’t opt out of the data sharing like you can on the Leaf unless you pull the SIM card. It’s why they can also offer “free” upgrades. You pay for it in the data monetization.
They actually sell the cars at a price below what the market would bear, and monetize the data from the cars in the background. This is why they won’t let you use android auto or iPhone auto.
The data is valuable to all sorts of companies including retail, insurance, logistics companies, etc..
Apple doesn’t (or doesn’t claim to) sell your data. Tesla does, it’s why you can’t opt out of the data sharing like you can on the Leaf unless you pull the SIM card. It’s why they can also offer “free” upgrades. You pay for it in the data monetization.