epirali
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Re: TSLA corporate outlook

Mon Aug 24, 2015 4:38 am

DaveinOlyWA wrote:there is a reason Tesla does not report sales or its finances the same way other car companies do and its because it would destroy their cash cow of promoting hype
In my opinion this in unfair. They are carefully balancing loans, investments and income to try to step from rock to rock, build production infrastructure, build charging infrastructure to support and promote the use of the car. Yes, like ANY public entity they do use hype to generate excitement, but to imply there is not a solid business plan is not right. Anyone can study and understand what they are trying to do.

Now whether they will succeed or stumble is another argument. But they have a plausible business case, and to be fair, have so far managed to hit every step as they had described (mostly), with the only exception being time slip. Which BTW is pretty much what you would expect when building from ground up. I mean SOFTWARE slips years, and this is building complex machines and production lines.

Only real issues I see is that:

a) They are over selling potentially the rate of growth and market size,

b) The slip has caused viable alternatives to appear on the horizon, but that would have happened eventually anyway, and

c) The concern that if the powerwall business really rockets and the gigafactory is online it may dwarf the potential for the cars and the company focus may drastically shift. But this one is a very big what if and musing.

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dgpcolorado
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Re: TSLA corporate outlook

Mon Aug 24, 2015 2:20 pm

epirali wrote:...Only real issues I see is that:

a) They are over selling potentially the rate of growth and market size,

b) The slip has caused viable alternatives to appear on the horizon, but that would have happened eventually anyway, and

c) The concern that if the powerwall business really rockets and the gigafactory is online it may dwarf the potential for the cars and the company focus may drastically shift. But this one is a very big what if and musing.
I'll suggest another:

d) Tesla hasn't yet solved service and quality control issues. Multiple "drive unit" replacements? That gets expensive and is a nuisance for customers. Even routine service is very expensive ($600 annual checkup, for what?) and much more than even high-end ICE cars. I thought EVs were supposed to be cheaper to maintain because they had fewer moving parts and reduced complexity. And the service centers are few and far between; unlike with conventional cars you can't just take the car to an independent shop either. This was supposed to be taken care of by the "ranger" program but they've cut way back on that and now charge a LOT for ranger service.

With these service and QC problems, how is Tesla going to cope with their planned 500k annual car production by 2020? It could get ugly...
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epirali
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Re: TSLA corporate outlook

Mon Aug 24, 2015 3:09 pm

dgpcolorado wrote:I'll suggest another:

d) Tesla hasn't yet solved service and quality control issues. Multiple "drive unit" replacements? That gets expensive and is a nuisance for customers. Even routine service is very expensive ($600 annual checkup, for what?) and much more than even high-end ICE cars. I thought EVs were supposed to be cheaper to maintain because they had fewer moving parts and reduced complexity. And the service centers are few and far between; unlike with conventional cars you can't just take the car to an independent shop either. This was supposed to be taken care of by the "ranger" program but they've cut way back on that and now charge a LOT for ranger service.

With these service and QC problems, how is Tesla going to cope with their planned 500k annual car production by 2020? It could get ugly...
Well imho the current Teslas are high end electric cars. If you are willing to spend for the performance and/or the range (or the name) you are signing up for a high cost car. You are not spending $80K minimum to save money on electricity. That is more Leaf etc.

And the QC problems are probably very much in line with learning, and from what I have seen they have covered the issues and not dumped them on the customer.

But you are right, the Model 3 is a different world and hopefully they are planning on a different dynamic.

DaveinOlyWA
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Re: TSLA corporate outlook

Tue Aug 25, 2015 10:15 am

epirali wrote:
DaveinOlyWA wrote:there is a reason Tesla does not report sales or its finances the same way other car companies do and its because it would destroy their cash cow of promoting hype
In my opinion this in unfair. They are carefully balancing loans, investments and income to try to step from rock to rock, build production infrastructure, build charging infrastructure to support and promote the use of the car. Yes, like ANY public entity they do use hype to generate excitement, but to imply there is not a solid business plan is not right. Anyone can study and understand what they are trying to do.

Now whether they will succeed or stumble is another argument. But they have a plausible business case, and to be fair, have so far managed to hit every step as they had described (mostly), with the only exception being time slip. Which BTW is pretty much what you would expect when building from ground up. I mean SOFTWARE slips years, and this is building complex machines and production lines.

Only real issues I see is that:

a) They are over selling potentially the rate of growth and market size,

b) The slip has caused viable alternatives to appear on the horizon, but that would have happened eventually anyway, and

c) The concern that if the powerwall business really rockets and the gigafactory is online it may dwarf the potential for the cars and the company focus may drastically shift. But this one is a very big what if and musing.
unfair?? we are talking about relying on the stock market to pay its day to day expenses. There are no rules that are fair or unfair because its all based on hype.

how many times have we seen a company that had a great product that did not translate to a successful business model?

what we are essentially doing is gambling on Tesla's business sense, not their technological chops. there is a HUGE difference here. HUGE and why anyone else cannot see that is beyond me.

now do I think Tesla will fail? no. they have a product that is good enough to succeed and their S sales against other cars in its class is proof enough that they will easily control the luxury market. but it may very well survive only as an entity of another company. either way, this discussion is a moot point.

right now we have successful companies losing billions in stock market value and we can not say that they will survive since 99% of them do not have a margin large enough to suffer a 10% loss and after seeing iconic US corporations fail, there are realistically less than a handful (if its the hand of a far-sighted butcher) of companies that are insured of survival and Tesla is not one of them
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Nubo
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Re: TSLA corporate outlook

Tue Aug 25, 2015 1:05 pm

dgpcolorado wrote:
epirali wrote:...Only real issues I see is that:

a) They are over selling potentially the rate of growth and market size,

b) The slip has caused viable alternatives to appear on the horizon, but that would have happened eventually anyway, and

c) The concern that if the powerwall business really rockets and the gigafactory is online it may dwarf the potential for the cars and the company focus may drastically shift. But this one is a very big what if and musing.
I'll suggest another:

d) Tesla hasn't yet solved service and quality control issues. Multiple "drive unit" replacements? That gets expensive and is a nuisance for customers. Even routine service is very expensive ($600 annual checkup, for what?) and much more than even high-end ICE cars. I thought EVs were supposed to be cheaper to maintain because they had fewer moving parts and reduced complexity. And the service centers are few and far between; unlike with conventional cars you can't just take the car to an independent shop either. This was supposed to be taken care of by the "ranger" program but they've cut way back on that and now charge a LOT for ranger service.

With these service and QC problems, how is Tesla going to cope with their planned 500k annual car production by 2020? It could get ugly...
I'll suggest one more:

e) Batteries get much better.

Tesla's head-start in serious EVs is largely a factor of daring to power a vehicle with a large pack using somewhat volatile Li battery chemistry. This gives them a great power density and enables outstanding range. It also required them to design a number of complex safeguards. In essence, they tamed a difficult beast. Could the established auto manufacturers have done this? Sure. But none of them were going to risk their deep pockets to go down the road Tesla did.

So, taming difficult cells is really a large part of Tesla's early-leader advantage. If cell capacity and safety go way up, that advantage evaporates. Tesla then has to compete as a manufacturer on a level playing field. They do have smarter and better ways of doing some things. Is that enough to sustain them when any manufacturer can bolt-in a 200kWh battery-pack that's inexpensive, very safe, requires no advanced management, and has 20 year service life? I hope to see that question answered. :)
I noticed you're still working with polymers.

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Re: TSLA corporate outlook

Wed Aug 26, 2015 8:28 am

I'm not exactly sure how Tesla's plans to accentuate the conspicuous consumption fashion appeal of the ~$100k Tesla S (and the even-more-expensive Tesla X, whenever it gets here) jibe with Tesla's avowed intention to bring BEVs to the mass market.
Tesla revamps retail stores, adds apparel, gear

...Luring new customers and keeping current ones loyal to the Tesla brand is crucial if Tesla CEO Elon Musk is to reach an avowed goal of selling 500,000 vehicles a year by 2020...

In many ways, Tesla locations are much like the so-called experience stores once favored by Sony and other purveyors of consumer electronics; the idea is less to sell a product on the spot than to let shoppers spend time with the brand.

...stores are typically located in luxury malls. At Santana Row in San Jose, the store shares a street with Gucci and Kate Spade; a steady stream of curious shoppers wander in and out.

The upscale locations are part of the company's plan to build a luxury lifestyle brand. Earlier this year, Tesla hired a former Burberry executive named Ganesh Srivats to extend its reputation for luxury to a global audience.

By pushing expensive clothing and accessories, Tesla boosts revenue and deepens its relationship with affluent customers.

Like BMW, Porsche and Ferrari before it, Tesla has its own fashion line -- the Tesla Design Collection, which includes a $300 tote bag, $100 sheepskin leather driving gloves and a $40 iPhone sleeve. Cycling jerseys will go on sale at most stores in October...

The bags, such as the "Moab Weekender," are named after specific Supercharger locations.

Tesla has found that customers typically buy a bag that matches the interior of their car.

Further echoing the fashion industry, Tesla plans twice-yearly, seasonal updates of the stores to generate buzz and attract shoppers while offering something new to existing drivers of the Model S sedan.

The current revamp, now rolling out to stores in North America, will last through two quarters; the next will arrive in the first quarter...
http://www.autonews.com/article/2015082 ... parel-gear
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Zythryn
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Re: TSLA corporate outlook

Wed Aug 26, 2015 10:06 am

edatoakrun wrote:I'm not exactly sure how Tesla's plans to accentuate the conspicuous consumption fashion appeal of the ~$100k Tesla S (and the even-more-expensive Tesla X, whenever it gets here) jibe with Tesla's avowed intention to bring BEVs to the mass market.
...
I don't see how you couldn't be aware.
Surely you have seen the plan before, haven't you?

Here is the answer for your question, just in case you really are not sure what their plan is...
http://www.teslamotors.com/blog/secret- ... you-and-me
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edatoakrun
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Re: TSLA corporate outlook

Wed Aug 26, 2015 10:35 am

Zythryn wrote:
edatoakrun wrote:I'm not exactly sure how Tesla's plans to accentuate the conspicuous consumption fashion appeal of the ~$100k Tesla S (and the even-more-expensive Tesla X, whenever it gets here) jibe with Tesla's avowed intention to bring BEVs to the mass market.
...
I don't see how you couldn't be aware.
Surely you have seen the plan before, haven't you?

Here is the answer for your question, just in case you really are not sure what their plan is...
http://www.teslamotors.com/blog/secret- ... you-and-me
From the source above:
Elon musk, 2006 ...the second model will be a sporty four door family car at roughly half the $89k price point of the Tesla Roadster and the third model will be even more affordable...
Since the second Tesla (model S) wound up costing, on average, considerably more than twice as much as Musk claimed it would, and the third Tesla (model X) will probably cost, on average, considerably more than the S, it is obvious the original plan, as Musk stated it, has been superseded...
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Zythryn
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Re: TSLA corporate outlook

Wed Aug 26, 2015 11:15 am

You really love using average sale price interchangeably with base price.

As I am sure you are aware, anytime any manufacturer announces a price point, they are talking about the base price..

Here is the outline of the plan, yes, some details have changed as Tesla learns and grows, but the basics remain the same...

Step 1. Build the low volume, high price Roadster. This is a proof of concept level and the money from it is used to grow the business so they can build the next step.

Step 2. Build a higher volume, lower priced luxury sedan. Use the funds garnered from that to help grow the business to the point where it can build the third step.

Both the S and X are part of step 2.

Step 3. Build a lower priced, smaller sedan in larger numbers.

Tesla knows it can't replace all the ICE cars out there with EVs. It needs help.
Their mere presence has been good for the industry, motivating other manufacturers to build EVs. The Volt owes its existence on the market to Tesla. I'm also guessing BMW would not be building the "i" series if it were not for Tesla.

Nissan is likely the only company that was moving this direction anyways.

Tesla has come a very long ways, and they are executing it well.
Yes, there has been some detours in the road, some unexpected twists. The learning curve for Tesla has been steep, yet they have learned, and changed to adapt far quicker and effectively than most companies.
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epirali
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Re: TSLA corporate outlook

Thu Aug 27, 2015 1:39 am

DaveinOlyWA wrote: unfair?? we are talking about relying on the stock market to pay its day to day expenses. There are no rules that are fair or unfair because its all based on hype.

how many times have we seen a company that had a great product that did not translate to a successful business model?

what we are essentially doing is gambling on Tesla's business sense, not their technological chops. there is a HUGE difference here. HUGE and why anyone else cannot see that is beyond me.
A lot of growth companies rely on stock market exactly for that: to pay for infrastructure growth and paying for "day to day" expenses WHILE growing the business. But whether that is based on pure hype is debatable. They have so far managed to make and sell a good number of cars. The real test is whether they can make the Model 3 at the price and quantities they claim, and whether pure BEVs have an inherent adoption ceiling.

I on the other hand disagree that it's a great product. It's ok, it's a novelty overpriced proof of concept.

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