Tesla and Uber Unlikely to Survive...
Discussion
Heres Johnny said:
RobDickinson said:
Us sales of the 3 will fall, they can't sell as many there and supply China and Europe.
But they can make 90k+ cars a quarter this year, and gf3 should start production end of the year.
First part - exactly and some will take great delight in the fall when it’s actually inevitable, some will take great pleasure in the Europe numbers and the arguments will continue unabated. Tesla saying US figures are a relative blip and steady state is only half, EU sales doing the same H1, ROW following same pattern 6-9 months later and a general 10% increase in overall sales would build a sustainable growth pattern supporting medium to long term production. blah blah.. would have been smart in my book. That’s what companies normally do when talking to analysts.But they can make 90k+ cars a quarter this year, and gf3 should start production end of the year.
The second part, all I’ll say is a year is a long time in the life of Tesla.
Burwood said:
I’m not sure who these delighted people are. It’s cvaluation is of a tech bubble stock. It’s just daft. Serious headwinds on many fronts. Stock is going below 200 within 120 days.
With all respect that’s as well argued as those saying it’s going above 400, and it’s been a lot closer to 400 than 200 this year. RobDickinson said:
They are doubling revenue and production annually why would the stock fall?
Coming up soon is supercharger v3, euro 3 sales, model y reveal and deposited, gf3, pickup towards the end of the year, semi production next year, roadster etc.
You’ve almost answered the question yourself, over extending themselves, already dealing with some legacy infrastructure (at least with respect to CCS on many SuC locations), spiralling warranty costs (getting on for 1 in 10 heaters seem to have failed in the UK, big screens getting a yellow boarder requiring a major refit etc), increasing competition etc.Coming up soon is supercharger v3, euro 3 sales, model y reveal and deposited, gf3, pickup towards the end of the year, semi production next year, roadster etc.
I can’t see revenue or production doubling this year, there’ll be an uptick but capacity is more or less at a max and has been since mid last year.
Referral scheme.. going to save a few quid but a recent UK poll suggested that a massive proportion of rewards still hadn’t been delivered, it would be interesting to know if that liability is all in the balance sheet. Those referrals can run to as much as a few thousand k per car (usd).
Are sales softening in more mature markets? Plenty would normally chop in their 2-3 year old car to buy a newer one, I know few who would today as it’s the same car less unlimited supercharging. And frankly, quite a few of the early adopters (3 years+ like me) are getting tired of the brand and the loss of some of the early ethos. The admittedly unsustainable days of free airport parking, no issues over loan cars, just about any non accident problem was fixed under warranty, etc. I can see me going Porsche or even back to (I’m about to swear) Petrol for a time
The plus side for Tesla is there are still of countries to get in the bandwagon. It’s only really us, no, nl, uk, volumes elsewhere are relatively small. China an obvious one, the rest of EU is a tough nut to crack.. but maybe they will. Germans.. well we know what they like, France, not big car lovers, Spain aren’t either, Italy.. can’t see them getting excited after all the drag races where lambos lost. Australia.. need the right hookers, where’s the affluent next tier of countries with a gov prepared to offer meaningful incentives? There will be some.
Edited by Heres Johnny on Thursday 24th January 22:34
RobDickinson said:
They are doubling revenue and production annually why would the stock fall?
Coming up soon is supercharger v3, euro 3 sales, model y reveal and deposited, gf3, pickup towards the end of the year, semi production next year, roadster etc.
The share price might fall, simply because the likely earnings don't correspond to anything like a normal multiple of the current price.Coming up soon is supercharger v3, euro 3 sales, model y reveal and deposited, gf3, pickup towards the end of the year, semi production next year, roadster etc.
I've said many times, I don't see Tesla failing, in terms of being a viable company. The problem for Tesla is "failing" for them is defined as not living up to the hype and expectation of investors, who for some reason think the company is going to be the next Google, when it isn't.
RobDickinson said:
They are doubling revenue and production annually why would the stock fall?
Because the share price is carrying a forward rating that expects much more than mere doubling from a very low base. The issue is that if demand steadies then that premium has to be revalued. Forget the headline of this article as it is designed to grab eyeballs but do read the second half of the article as it does a good job of giving a layman’s explanation as to how share prices work: https://www.forbes.com/sites/chuckjones/2019/01/23...
At the same time it’s worth noting that there aren’t just shareholders but also bond holders. It’s the bond holders who risk being Musk’s undoing as they have the ability under certain circumstances to eradicated the shareholders and take total ownership of the company. That’s the event that came within days of happening last year and nearly gave him a breakdown but the company has not moved all that far away and it remains the core risk to the shareholders.
The important thing that I don’t think you’ve ever fully understood about markets is that if you’ve told the market that you will triple revenues and the market has priced that in to your share price then only achieving a doubling is a huge failure.
Tesla’s risk this year is that China retail volumes won’t be online and as US demand is slowing they need to target the EU to keep volumes up. You can see the desperation just in the fact that they’ve flown cars in for PR ahead of Jan 30. If the EU doesn’t have huge demand then the company is going to have cash flow problems as they repay bonds and try to invest in China and that’s what investors fear will drive the share price down which is why it has been weak in recent weeks.
It wouldn’t surprise me if Larry Ellison stands behind their cash requirements in some form. I think he’s only going to increase his stake in Tesla. New issuance coming. Obv that dilutes.
If you look at what Panasonic are doing with other battery partners, it’s essentially aiding the scale of production which is needed to bring costs down. Of course it helps EV companies too.
If you look at what Panasonic are doing with other battery partners, it’s essentially aiding the scale of production which is needed to bring costs down. Of course it helps EV companies too.
Burwood said:
It wouldn’t surprise me if Larry Ellison stands behind their cash requirements in some form. I think he’s only going to increase his stake in Tesla. New issuance coming. Obv that dilutes.
If you look at what Panasonic are doing with other battery partners, it’s essentially aiding the scale of production which is needed to bring costs down. Of course it helps EV companies too.
LE does have a lot of skin in the game and at the same time concerns that model 3 volumes aren’t going to rise at the required rate it does seem feasible that Tesla will need to raise cash this year to fund the business. They’ve $3bn of cash, 1 of which probably goes out the door in March and that leaves 2 for China which isn’t enough. A weak share price makes an issue of new equity problematic and issueing a bond would be very costly. It makes you wonder if they would resort to a forced rights issue using the threat of the debt holders as the driver?If you look at what Panasonic are doing with other battery partners, it’s essentially aiding the scale of production which is needed to bring costs down. Of course it helps EV companies too.
I think as you said above, the EU market is only really the U.K., Norway and Netherlands and that looks like demand is suspiciously linked to tax incentives and we’ve just seen the reaction to the decline in US incentives. And I’m not sure we will see the $35 car before the likes of VW deliver theirs and take that market. Even if Tesla manage to get production costs down this year, which you’d expect, they are going to lose the rest of the US incentive off their gross margins. The fact that they published that spreadsheet trying to make out that the $ 55k car was the $35k car because of $20k of lifetime fuel savings by the consumer was a weird bit of crazy man maths for a firm to partake in.
I guess the Q4 data next week in all likelihood will set the general tone for this year?
DonkeyApple said:
Burwood said:
It wouldn’t surprise me if Larry Ellison stands behind their cash requirements in some form. I think he’s only going to increase his stake in Tesla. New issuance coming. Obv that dilutes.
If you look at what Panasonic are doing with other battery partners, it’s essentially aiding the scale of production which is needed to bring costs down. Of course it helps EV companies too.
LE does have a lot of skin in the game and at the same time concerns that model 3 volumes aren’t going to rise at the required rate it does seem feasible that Tesla will need to raise cash this year to fund the business. They’ve $3bn of cash, 1 of which probably goes out the door in March and that leaves 2 for China which isn’t enough. A weak share price makes an issue of new equity problematic and issueing a bond would be very costly. It makes you wonder if they would resort to a forced rights issue using the threat of the debt holders as the driver?If you look at what Panasonic are doing with other battery partners, it’s essentially aiding the scale of production which is needed to bring costs down. Of course it helps EV companies too.
I think as you said above, the EU market is only really the U.K., Norway and Netherlands and that looks like demand is suspiciously linked to tax incentives and we’ve just seen the reaction to the decline in US incentives. And I’m not sure we will see the $35 car before the likes of VW deliver theirs and take that market. Even if Tesla manage to get production costs down this year, which you’d expect, they are going to lose the rest of the US incentive off their gross margins. The fact that they published that spreadsheet trying to make out that the $ 55k car was the $35k car because of $20k of lifetime fuel savings by the consumer was a weird bit of crazy man maths for a firm to partake in.
I guess the Q4 data next week in all likelihood will set the general tone for this year?
I've said many times that Tesla aren't failing but you will see spikes and troughs in their earnings as they traverse what is a highly difficult industry (cars). All the while their share premium will be eroded, in my opinion.
Heres Johnny said:
Are sales softening in more mature markets? Plenty would normally chop in their 2-3 year old car to buy a newer one, I know few who would today as it’s the same car less unlimited supercharging. And frankly, quite a few of the early adopters (3 years+ like me) are getting tired of the brand and the loss of some of the early ethos. The admittedly unsustainable days of free airport parking, no issues over loan cars, just about any non accident problem was fixed under warranty, etc. I can see me going Porsche or even back to (I’m about to swear) Petrol for a time
I see not having to swap cars every 2/3 years as one of the best things about owning something like a Tesla. Our car does 100% of what we need it to do (expect for a handful of work trips in the year), and its been used/driven for non work miles far more than any other car I have owned. The reliability of the cars do seem to vary, the only issue I've had with ours all relate to things present at initial hand over - which 18K miles later is just about sorted. But I know some seem to have one problem after another. Overall our car has been fantastic as a family wagon, its so good I think Tesla is going to struggle to better it, not without asking for a whole heap more ££££££.
There is pretty much no reason I can see for us to swap ours for another Tesla or any other brand untill it becomes uneconomical to maintain. Having now had the chance to look through the official service manual it really isn't hard to maintain/repair, but you 100% need access to the Tesla software toolbox, as all the major jobs require dealer level software interface. Hopefully at some point someone will make the software toolbox opensource, much like the WINKFP stuff for BMW.
As for swapping because you want to swap, that's no different to any other car brand, if you have the means and want to try something different why not?? But why would you go to back to petrol unless you really needed the range??
The Audi eTron Quattros ability to charge at 150KW to 80% is mighty impressive, I still find it hard to believe what VAG did with emissions testing but they do appear to be delivering on tech. The eTron GT also looks great, and who knows Honda might surprise everyone one with a decent EV.
It will be interesting to see just how Tesla is going to deliver on the 600 miles EPA range for the Roadster 2.0, I suspect the Roadster 2.0 will have the first true 'next gen' battery tech, which should mean 150kWh packs will the new par. At that point our X will be approaching 100K, and I can probably find a reason to make it uneconomical to keep
. Edited by gangzoom on Friday 25th January 11:07
Burwood said:
On China. I'm quite certain that part of the deal is very low debt funding from various local Banks. If I read it correctly, the factory has a 9 month build which is staggering. I am convinced that VW will steal a huge part of the market with their ID/Neo platform. Perceived build quality, their enviable dealer network. I really don't think it matters to the majority if one car is more efficient or has a slightly better range. Dealerships have footfall which creates selling opportunity. I read yesterday VW have sold 800k Tiguans in 2018 alone.
I've said many times that Tesla aren't failing but you will see spikes and troughs in their earnings as they traverse what is a highly difficult industry (cars). All the while their share premium will be eroded, in my opinion.
And I suspect that is why the bulk of short positions exist. Not betting that the company will fail but betting that a big chunk of that premiumnis going to be eroded. I've said many times that Tesla aren't failing but you will see spikes and troughs in their earnings as they traverse what is a highly difficult industry (cars). All the while their share premium will be eroded, in my opinion.
skwdenyer said:
The S is S-class in size and price so that rather defines the comparators.
Surely not? The S-Class is between 50 and 250mm longer, depending on wheelbase. The Audi A7 is almost exactly the same length as the Model-S, and is closer in that they are both 5-door hatchbacks.Heres Johnny said:
gangzoom said:
I see not having to swap cars every 2/3 years as one of the best things about owning something like a Tesla.
Disastrous for Tesla though, They need people to flip their cars into the used market and buy new on a regular basis. Witchfinder said:
skwdenyer said:
The S is S-class in size and price so that rather defines the comparators.
Surely not? The S-Class is between 50 and 250mm longer, depending on wheelbase. The Audi A7 is almost exactly the same length as the Model-S, and is closer in that they are both 5-door hatchbacks.Witchfinder said:
skwdenyer said:
The S is S-class in size and price so that rather defines the comparators.
Surely not? The S-Class is between 50 and 250mm longer, depending on wheelbase. The Audi A7 is almost exactly the same length as the Model-S, and is closer in that they are both 5-door hatchbacks.Krikkit said:
That assumes there's room to put one in of course - fine in a huge pickup truck or SUV from Canada, but a bit difficult to fit to a modern Focus etc as the packaging is so tight.
No its not. Everyone has a preheat system on the engine that is plugged in to the mains at night. This keeps the engine coolant at close to normal running temperature for a quick start and fast heat up of the car when you get to it. I had it in a Subaru Impreza. https://www.subaru.ca/Content/7907/media/en-ca/dow...Gassing Station | EV and Alternative Fuels | Top of Page | What's New | My Stuff