What's your take on Tesla?
Discussion
modeller said:
TwigtheWonderkid said:
When investing, I couldn't give two hoots what kind of company there are, beyond profitable company / unprofitable company.
Lots of serious investors do care, hence the rise of ethical investment funds and pension funds deinvesting from fossil fuels. Simpo Two said:
I saw a NIO car in a Goodwood FoS video and realised that if they/the Chinese can hook it up (no pun intended) things could change a lot https://www.nio.io/
There will always be a place for the 'smug' brigade (I like the Apple analogy), but what will the mass market buy and where will the next investment lie? Currently I believe there's a year-plus wait for Teslas. It might work for Morgan but is it OK for Tesla?
If you'd been at the FoS, you could have come and said hello!! There will always be a place for the 'smug' brigade (I like the Apple analogy), but what will the mass market buy and where will the next investment lie? Currently I believe there's a year-plus wait for Teslas. It might work for Morgan but is it OK for Tesla?
Rob
Mr-B said:
Seems like a pretty desperate thing to request, is there any precedent for this?The stories about Tesla assembling Model 3s in tents do not instil confidence. If I were a Tesla investor I would be concerned about the quality, reliability and durability of these products, which have clearly been manufactured in conditions which are far from ideal.
If they prove to be ‘lemons’, and tarnish the brand, Tesla could implode under its own debt mountain with the brand sold to VW.
Is the Model 3 Tesla’s Alfasud?
If they prove to be ‘lemons’, and tarnish the brand, Tesla could implode under its own debt mountain with the brand sold to VW.
Is the Model 3 Tesla’s Alfasud?
modeller said:
TwigtheWonderkid said:
When investing, I couldn't give two hoots what kind of company there are, beyond profitable company / unprofitable company.
Lots of serious investors do care, hence the rise of ethical investment funds and pension funds deinvesting from fossil fuels. They still get their slice just like with regular funds, but selling to believers reduces the pressure to perform.
Simpo Two said:
'Twas but on Freeview I'm afriad! But if you can helo me in for 2019 I'll happily shake your paw and bring you a bottle of something 
That sounds like a plan!!Remind me nearer the time and I'll sort something. Can discuss EV's until you turn blue in the face, if you want, but I work better in the bar!!
Rob
Robscim said:
That sounds like a plan!!
Remind me nearer the time and I'll sort something.
Remind me nearer the time and I'll sort something.
indeed!Oddly enough I got that idea only today; a now-retired Head of IFAs had managed to find a client an extra ticket on the understanding he'd get there too - in the client's chartered helicopter! You see folks, all those 1%'s add up...
Teslas market cap is insane against the fundamentals so a hell of a lot of upside is already built into the price. It also has its fan base built into the price. Everything is built in.
As a stock, its down over the last 12 months and its underperformed against the nasdaq over the last few years. Its not some startup anymore or penny share, far from it. That doesn't seem a good backdrop for long term growth.
The question for a potential investor is essentially "does the future look healthier than the market thinks?". Tesla is a hard one to call - there are plenty of small investors who frankly don't understand anything about investing but like the brand. The Remington razer approach. They piled their money in when Tesla hit 5k M3s in a week in out of hours trading only to take a hiding when the price fell back - the "buy on the rumour, sell on the news" never being more true. So they're blind investors driving the price higher. But then you've the vast short positions held trying to drive it down.
I sense they're a channel tunnel or M6 toll road - even when they're operationally in a good place, their cash debt will be hanging over them. They also need to deliver on their plans to maintain their share price, it won't boost it, hitting the M3 targets didn't leap them forward as mentioned.
The Amazon comparison is a poor one - its a service company and not a product company. Apple is a nearer example but for many many many years even with a hard core non microsoft PC following brigaide they didn't do that well. Look at a chart from 1980 to 2004 and it did very little. It was a whole new category of product that kicked them on - Tesla would probably need to invent the flying car to have that big a market transformation.
So my take is as a long term investment its going to be a hard slog to make any real money. As an opportunity to trade on the volatility of the share price then their might be plenty of options if you're brave. The price has bounced between circa $300 and $350+ a few times this year already - its around $300 at the moment and could viably be at $350 in a months time when the shorts are made to buy to cover their positions or we have a month of Musk on holiday and not using his twitter account, only for it to fall back again later in the year. But just like the "buying in the dips" thread, the current $300 is only a dip if it goes back up.
As a stock, its down over the last 12 months and its underperformed against the nasdaq over the last few years. Its not some startup anymore or penny share, far from it. That doesn't seem a good backdrop for long term growth.
The question for a potential investor is essentially "does the future look healthier than the market thinks?". Tesla is a hard one to call - there are plenty of small investors who frankly don't understand anything about investing but like the brand. The Remington razer approach. They piled their money in when Tesla hit 5k M3s in a week in out of hours trading only to take a hiding when the price fell back - the "buy on the rumour, sell on the news" never being more true. So they're blind investors driving the price higher. But then you've the vast short positions held trying to drive it down.
I sense they're a channel tunnel or M6 toll road - even when they're operationally in a good place, their cash debt will be hanging over them. They also need to deliver on their plans to maintain their share price, it won't boost it, hitting the M3 targets didn't leap them forward as mentioned.
The Amazon comparison is a poor one - its a service company and not a product company. Apple is a nearer example but for many many many years even with a hard core non microsoft PC following brigaide they didn't do that well. Look at a chart from 1980 to 2004 and it did very little. It was a whole new category of product that kicked them on - Tesla would probably need to invent the flying car to have that big a market transformation.
So my take is as a long term investment its going to be a hard slog to make any real money. As an opportunity to trade on the volatility of the share price then their might be plenty of options if you're brave. The price has bounced between circa $300 and $350+ a few times this year already - its around $300 at the moment and could viably be at $350 in a months time when the shorts are made to buy to cover their positions or we have a month of Musk on holiday and not using his twitter account, only for it to fall back again later in the year. But just like the "buying in the dips" thread, the current $300 is only a dip if it goes back up.
Heres Johnny said:
V8 Fettler said:
Increased range (1000 miles?) + quick charge at the supermarket/energy station + leasing = the end of most petrol/diesel cars
You might as well add solving world hunger as well if you’re thinking any of your list will be mainstream in the next 5-10 years. Simpo Two said:
modeller said:
TwigtheWonderkid said:
When investing, I couldn't give two hoots what kind of company there are, beyond profitable company / unprofitable company.
Lots of serious investors do care, hence the rise of ethical investment funds and pension funds deinvesting from fossil fuels. modeller said:
yes, but the others are many years behind. The I-pace is nice .. but Tesla are making (currently) more M3's in a week than JLR will do in a year .. their advantage is scale , which means they'll either be more profitable or take market share. Investors are playing the long game (just like with Amazon).
I do think it’s important to look at some aspects clearly and honestly. The big manufacturers are not behind Tesla in anything. Arguably they are in front. But to understand this aspect you must look at the difference in business models. TSLA is a start-up, it is a disruptive and most importantly a market prover. That means it can raise and spend billions and billions to achieve its goal. It’s shareholders have not invested for dividend yield or slow, stable share price growth through prudent and calculated movement with 7 year economic and technological cycles.
Those who invest in TSLA have placed a dollar on the off chance of making thousand dollars at some point in the future. It is completely different money and bares absolutely no relation to the type of money that shareholders place in VW or Toyota etc. That money is for predicatable growth and stable dividends. Ergo, that type of enterprise will never be able to compete directly against a TSLA style business model. Nor would they be allowed to. Nor would they want to. And nor do they need to.
Those firms must compete, not by copying the TSLA business model but by bringing to bare their financial might in a different way. They must wait until the size of the market has grown sufficiently in size to support their business model. TSLA has barely just sold 200k globally in ten years. They should be getting to 100k units this year but that’s tiny. The mainstream manufacturers need to be selling that number a month, each in order for their business model to work.
So these firms are not remotely behind TSLA at all but at a different stage of their business model. TSLA desperately needs to ramp up production to 200k+ per year or it will die and the big firms desperately need to not build any EVs until the global consumer market for EVs is large enough to support their economic model.
What they are doing at the moment is keeping ahead of the game with R&D spend and rolling out a few gimmicks to test their own brand strengths for this new market, keep local politicians in their box and generally look cool and trendy and lovers of little fluffy kittens.
While they wait you can see the true might of the global car industry as they have secured global political deals for hybrid tech to be the de facto solution for the next twenty years, not pure EV. If you want to drive to cities, buy a new car or pay less taxes then for the next twenty years you need to be buying an ICE car that has a little electric motor and a small battery that ticks just enough regulatory boxes as to be classed as a hybrid.
And when the market for EVs is large enough then on the morning of day 1, every global manufacturer will go into the capital markets and borrow billions and billions in an instant for next to nothing, over lunch they will secure their robust battery supply deals using the size of their balance sheet and economic stability to secure guaranteed supply at super cheap pricing and by the afternoon millions of EVs will be rolling off the enormous and hyper efficient global production lines and be sitting in the shops the following morning being offered with finance deals so cheap that no start-up model could ever compete with.
The incumbent manufacturers are not behind TSLA in any way shape or form. It’s just a matter of understanding the difference between two disparate business models.
And when you look at the build quality and delays in manufacturer of the Tesla product you see that they are years behind the incumbents. When you look at how they have built their factory you realise that it’s going to take years to redress those issues. If you look at how TSLA have been finding it harder and harder to raise money from investors and instead are having to actually borrow from the capital markets and at high rates you realise that economically they are in the transition from start-up to growth but haven’t yet delivered the growth product, that puts them massively behind the incumbents who can just get whatever money they want at the lowest possible price whenever they want it. Then take a look at the position of the TSLa factory, how is that a logical position for the cheapest shipping to the most important global markets? And probably the biggest problem of all, they have no direct or forward raw material supply contracts for their battery business!! China can turn them off whenever they feel like it.
And that is the other little issue with EVs. China. China is the daddy. They control the global supply of the key raw materials for battery tech. They have the largest battery production facilities on the planet, they build the most EVs on the planet. And all of it is backed by one of the largest and fastest growing States on the planet with access to the cheapest money, cheapest labour, best technology, cheapest shipping.
China is already the global leader in battery production. The global leader in Li production, the global leader in EV manufacture.
The likes of VW and Toyota will barely be looking at some strange little firm in the middle of a hillbilly nation that is struggling to build a tiny number of cars each year and with a CEO who everyone is beginning to realise is just another Donald Trump. All global car manufacturers are looking at China. China is who is not ‘coming’ but is here and they are the big risk to the Western and Asian incumbents. China plans to take control of the global automotive industry via the total domination of the impending EV market. Which incidentally, they already dominate!
V8 Fettler said:
Increased range (1000 miles?) + quick charge at the supermarket/energy station + leasing = the end of most petrol/diesel cars
Very true. Also, the realisation that electricity is ubiquitous and the average car travels less than ten miles a day also means the ICE will disappear within a manufacturing cycle the moment the high density battery pack becomes cheap enough. Battery tech improvements are into increments now and arguably will remain so until completely new tech is discovered. Component efficiency of cars is also into incremental gains.
But there are two absolutely massive and dominating key elements that are loaded with absolutely enormous levels of fat to be carved out and that is firstly the consumers’ lack of comprehension as to how they actually use their own car currently and secondly the price of batteries. Those are the two areas where the EV market knows the fat is to be carved and very cheaply. The only expensive component being time. Hence why the incumbents are backing hybrid to infill this time period. By the time hybrid tech is revealed by governments to be hugely evil and essential to kill the EV will be commercially viable and it’s off we go.
But at the moment everyone thinks they need 1000 miles of range and such a vehicle has a battery pack that costs more than a house. Tick tock on both fronts.
travel is dangerous said:
but how far does this go? I wouldn't want to be invested in a company that's, say, raking in money by selling weapons to both sides in some civil war somewhere. You'd just be profiting from the pain of thousands of people.
It doesn’t bother the Church of England until they get found out and PR becomes the more valuable return to generate. The reality is that no one cares. They key is that you must ensure your logo and general catchprase states the opposite of what you are really doing and everyone is happy. Think BP’s pretty little green logo and messages about how they are saving the fluffy umbungo bird form extinction, while in the office they’re playing football with a sack full of kittens. Or Google saying ‘do no evil’ etc.
Ethical investing is just another unethical business aiming to make the biggest profit out of any consumer who will believe their message.
Obviously, I am being hyperbolic and sarcastic before anyone leaps at me but I’m just wanting to suggest that all this eco and ethical stuff is just PR b
ks no different from Comical Ali and his ‘I see no tanks’. DonkeyApple said:
And that is the other little issue with EVs. China. China is the daddy. They control the global supply of the key raw materials for battery tech. They have the largest battery production facilities on the planet, they build the most EVs on the planet. And all of it is backed by one of the largest and fastest growing States on the planet with access to the cheapest money, cheapest labour, best technology, cheapest shipping.
China is already the global leader in battery production. The global leader in Li production, the global leader in EV manufacture.
The likes of VW and Toyota will barely be looking at some strange little firm in the middle of a hillbilly nation that is struggling to build a tiny number of cars each year and with a CEO who everyone is beginning to realise is just another Donald Trump. All global car manufacturers are looking at China. China is who is not ‘coming’ but is here and they are the big risk to the Western and Asian incumbents. China plans to take control of the global automotive industry via the total domination of the impending EV market. Which incidentally, they already dominate!
Which is a great and professional expansion on my post re NIO. Cutting to the chase, if China has the world in a vice regarding Li battery production then it can charge others what it likes, or stop supplying. And Tesla will left high and dry, another DeLorean... But that is no bad thing. Sometimes it take a pioneer to cut the first sod but fail, then the second guy takes over and succeeds.China is already the global leader in battery production. The global leader in Li production, the global leader in EV manufacture.
The likes of VW and Toyota will barely be looking at some strange little firm in the middle of a hillbilly nation that is struggling to build a tiny number of cars each year and with a CEO who everyone is beginning to realise is just another Donald Trump. All global car manufacturers are looking at China. China is who is not ‘coming’ but is here and they are the big risk to the Western and Asian incumbents. China plans to take control of the global automotive industry via the total domination of the impending EV market. Which incidentally, they already dominate!
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