The Tesla Put

[Milton Kuo]

Re: The Tesla Put

Hmmmm....I wonder what impact this latest crash in energy prices will have on consumer sentiment.

How does the price of petrol falling $1+ a gallon impact the choice of weighing the purchase of an electric Tesla over a petrol Porsche?

For people truly wealthy enough to purchase those kinds of cars (i.e., not the monthly payment customer), the price of fuel just doesn't matter unless it reaches recession-inducing levels and maybe not even then. The comments I hear from Tesla owners and people who want to buy a Tesla has nothing to do with fuel costs: it's about owning a car of the future, today; and minimizing one's contribution to global pollution.

If Tesla dies, it will be because of things that have been discussed widely here: time required to refuel, lack of ubiquity of refueling stations, reduced range when driving in cold climate, and cost structure of their business.

[GRG55]

Re: The Tesla Put

For people truly wealthy enough to purchase those kinds of cars (i.e., not the monthly payment customer), the price of fuel just doesn't matter unless it reaches recession-inducing levels and maybe not even then. The comments I hear from Tesla owners and people who want to buy a Tesla has nothing to do with fuel costs: it's about owning a car of the future, today; and minimizing one's contribution to global pollution.

If Tesla dies, it will be because of things that have been discussed widely here: time required to refuel, lack of ubiquity of refueling stations, reduced range when driving in cold climate, and cost structure of their business.

The overwhelming majority of people who can afford to plunk down cash for a Model S don't actually give a damn about their contribution to global pollution. Examine how they live every other aspect of their lives if you doubt this. They are instead making a statement of a different kind.

Tesla could die because it runs out of buyers for the country-club ornament Model S before it can develop and deliver the lower cost, next generation vehicle they expect to expand their potential market. On the other hand, the two new AWD versions of the Model S may be enough to maintain buyer interest among those that must have the latest gadget, with current owners trading up.

[BK]

Re: The Tesla Put

Most Tesla buyers know nothing about cars. Tesla has a drive unit problem that required them to ship 1100 replacement motors to Norway. I think there will be many more drive failures.

The electric drive motor of the Tesla Model S is made by a company worth approximately $48 Million (US). see http://www.cens.com/cens/html/en/new...ner_47363.html

Consider the supplier that builds electric motor for Volt is publicly trade and worth approx $450 Million and is REMY International (USA based).

It sounds like the electric motor that drives the Tesla has a cost of $1,100 if this article is correct: http://www.chinapost.com.tw/taiwan-b...nese-motor.htm

Would you want to spend $70K-$100K on a car with a $1,100 electric motor from a Taiwanese manufacturer (that isn't a public company and private valuation is approx $48 Mill).

Please correct me if I have any of the facts wrong

[Milton Kuo]

Re: The Tesla Put

The overwhelming majority of people who can afford to plunk down cash for a Model S don't actually give a damn about their contribution to global pollution. Examine how they live every other aspect of their lives if you doubt this. They are instead making a statement of a different kind.

The kind of well-off people I meet are obviously of far lesser means than the kind of well-off people you meet.

[GRG55]

Re: The Tesla Put

The kind of well-off people I meet are obviously of far lesser means than the kind of well-off people you meet.

I seriously doubt it. Just as I seriously doubt that the Model S owners and aspirants you meet don't also have large homes, multiple homes and think nothing of hopping on a jet to take their family on a vacation, among other things.

I'd be delighted to hear from you if any significant number of them are living in tents, off the grid, growing their own vegetables.

[Milton Kuo]

Re: The Tesla Put

I seriously doubt it. Just as I seriously doubt that the Model S owners and aspirants you meet don't also have large homes, multiple homes and think nothing of hopping on a jet to take their family on a vacation, among other things.

I'd be delighted to hear from you if any significant number of them are living in tents, off the grid, growing their own vegetables.

OK. I'm not sure what the true, primary reason is that drove the Tesla owners I know to buy the car. They did say "car of the future," "non-polluting," and all of that other socially-responsible stuff but maybe secretly, the real reason is ego; kind of like being seen as a major benefactor of the "in" charity.

It's always been difficult for me to believe the real reasons why cars sell (it's been a very long time since I looked at them but I'm one of those kinds of people that really liked the smoothness and quiet--the boringness--of the Lexus LS400-series car's ride) so maybe that's why I didn't see the beyond the words.

[EJ]

Re: The Tesla Put

OK. I'm not sure what the true, primary reason is that drove the Tesla owners I know to buy the car. They did say "car of the future," "non-polluting," and all of that other socially-responsible stuff but maybe secretly, the real reason is ego; kind of like being seen as a major benefactor of the "in" charity.

It's always been difficult for me to believe the real reasons why cars sell (it's been a very long time since I looked at them but I'm one of those kinds of people that really liked the smoothness and quiet--the boringness--of the Lexus LS400-series car's ride) so maybe that's why I didn't see the beyond the words.

Saturday night I'm at a cocktail party in a friend's condo on Boylston Street in Boston, the front door less than a block from the Boston Marathon bombing.

My friend Paul, a man who has made his living as a trader, is asking me about Tesla. I haven't seen Paul since July 4 when I told him I thought TSLA was a short for 2016.

Like all good traders Paul has an obsessive's memory for detail.

He remembered exactly the January 2016 puts price that we'd discussed five months before when I'd originally made the argument.

He said he agreed with the premise but thought the puts were now too expensive.

Complicating the decision he'd recently driven a Tesla S because his wife Trisha had driven one and wanted one.

They live in Weston, an upscale Boston suburb. It's the only town locally where I've spotted multiple Tesla S cars.

Here we observe the Tesla S purchase decision in progress.

Paul tells me that the sales guy talked about how the car rarely needs maintenance because the electric drive train is so simple compared to gasoline cars. I explained that that is not in reality a benefit of electric vehicles¹.

Trisha tells me how powerfully and smoothly the car accelerates.

Paul tells me that the sales guy talks about hot swap batter stations, "Soon."

I explain that Better Place went out of business on CapEx trying to deliver hot swap batteries and that it'll never happen.

Trisha likes that the Tesla S runs on clean electricity versus dirty fossil fuels.

Long story short, they can easily afford the car, she wants it for emotional reasons, he doesn't want it for rational reasons.

If the former wins out over the other the latter the sale is made.

For some couples the husband/wife roles are reversed.

My final comment to Paul after he asked me when the Bubbles in Everything will finally collapse is to say I understand why it feels like a $100,000 luxury car that needs a six hour nap every 200 miles and will be obsolete in 2 years can possibly be viewed by a rational person as a good use of capital gains off seemingly perpetual asset price inflation. We are all living within the madcap contraption. Not by our choice. Within the logic of it Tesla makes perfect sense, mad as it is.

Trying to find a constructive position to satisfy both of my friends I recommended they try a number of cars in the same price range made by BMW, Mercedes, Toyota and so on, confident that they will be blown away by the lasting quality of engineering and value that goes into these cars.

1. My 2012 Zero S electric motorcycle is in the shop with a dead battery management system (BMS) board and a defective motor. Until 2013 these were effectively "commercialized prototypes" for early adopters. Today these machines are mature commercial products. The Tesla S in a tweener at best.

[jpatter666]

Re: The Tesla Put

OK. I'm not sure what the true, primary reason is that drove the Tesla owners I know to buy the car. They did say "car of the future," "non-polluting," and all of that other socially-responsible stuff but maybe secretly, the real reason is ego; kind of like being seen as a major benefactor of the "in" charity.

It's always been difficult for me to believe the real reasons why cars sell (it's been a very long time since I looked at them but I'm one of those kinds of people that really liked the smoothness and quiet--the boringness--of the Lexus LS400-series car's ride) so maybe that's why I didn't see the beyond the words.

That is *exactly* right. Many (not all) of these people don't give a damn about global warming. They give a damn about being SEEN to give a damn. It's all image.

That's the wonderful thing about the Tesla S. It allows you to parade your Global Warming credentials everywhere while swaddled in luxury.

[BK]

Re: The Tesla Put

EJ,
Zero and the Tesla. The torque that is felt when riding in or on a vehicle propelled by batteries is a direct result of a single speed transmission. Tesla shipped 1100 drive/trains to Norway and Norway has purchased a total of 5000 Model s (equals a 20 percent failure rate).

The manufacturer of the Drive train for Tesla is a company called Fukata - and if any of the articles I've read are accurate Fukata is worth $48 Mil as a company.

EV using a single speed transmission is a very primative design and likely to fail because of torque/heat.etc. I'd love for a real mechanical engineer to chime in on my theory.

Zero motorbike competitors are trying multi-speed transmission to give the feel of a real motorcycle and is it possible the over drive gear may take pressure off the drive train (reducing break downs)?

Regards.

[LazyBoy]

Re: The Tesla Put

The comments I hear from Tesla owners and people who want to buy a Tesla has nothing to do with fuel costs: it's about owning a car of the future, today; and minimizing one's contribution to global pollution.

I seriously doubt it. Just as I seriously doubt that the Model S owners and aspirants you meet don't also have large homes, multiple homes and think nothing of hopping on a jet to take their family on a vacation, among other things.

That is *exactly* right. Many (not all) of these people don't give a damn about global warming. They give a damn about being SEEN to give a damn. It's all image.

That's the wonderful thing about the Tesla S. It allows you to parade your Global Warming credentials everywhere while swaddled in luxury.

I like to think that some are clueless, not image seeking. It hasn't even occurred to them to think about the size of their houseS, their plane flights, where their electricity comes from or the pollution cost of creating a new car vs. keeping an existing car. But those dirty, dirty gasoline engines!

[ProdigyofZen]

Re: The Tesla Put

That is *exactly* right. Many (not all) of these people don't give a damn about global warming. They give a damn about being SEEN to give a damn. It's all image.

That's the wonderful thing about the Tesla S. It allows you to parade your Global Warming credentials everywhere while swaddled in luxury.

Exactly like the CEO of Starwood: Barry Sternlicht and his Hotel 1 Concept in Miami.

He says it is about "his generation" finally caring about global warming and eco-friendly products.

It is really about image and global warming credentials, as you say.

"1 is about Nature.
1 Celebrates the simple relationship between nature and people. It's a remarkable place forged from beautiful stone, textured woods, and organic ingredients that were harvested and selected in an eco-friendly manner. It's a unique place to be at one with yourself, with your family and with your surroundings."

[jpatter666]

Re: The Tesla Put

I like to think that some are clueless, not image seeking. It hasn't even occurred to them to think about the size of their houseS, their plane flights, where their electricity comes from or the pollution cost of creating a new car vs. keeping an existing car. But those dirty, dirty gasoline engines!

Always fun to read Crichton's on-the-mark comments of environmentalism as religion. Hard to believe this was 2003.

http://www.hawaiifreepress.com/Artic...-religion.aspx

[lektrode]

Re: The Tesla Put

Always fun to read Crichton's on-the-mark comments of environmentalism as religion. Hard to believe this was 2003....

not that hard and even funn(ie)r to read it as is, where is...

[vinoveri]

Re: The Tesla Put

My final comment to Paul after he asked me when the Bubbles in Everything will finally collapse is to say I understand why it feels like a $100,000 luxury car that needs a six hour nap every 200 miles and will be obsolete in 2 years can possibly be viewed by a rational person as a good use of capital gains off seemingly perpetual asset price inflation. We are all living within the madcap contraption. Not by our choice. Within the logic of it Tesla makes perfect sense, mad as it is.

Is the contraption run by madmen? I think not. It is run by smart folks who are constrained by their own self interest - and this is the root of the problem; we should never have and should not continute to relinquish control of our economy to a hand full of bankers (or any individuals for that matter). The decoupling of money from gold and creation of money via debt allows govs and the well connected to access unlimited amounts of capital to do as they please, e.g., fund wars, acquire wealth via leverage - and of course we saw what happened when this blew up 6 years ago - these well connected financiers were bailed out and are doing it again.

I will disagree that it is not our choice - we could demand accountability of the CB cartel via our elected reps - but we don't. We get what we deserve (and frankly what a lot of us want)
The "madcap contraption" concept is a very generous characterization unless by madcap you mean "self serving the banksters and power brokers"
What has been going on overtly for at least the past 5 years is IMO obvious to anyone who is paying attention -although those of better nature than me can be forgiven for giving the Cbanker cartel the benefit of the doubt in "trying to do the right thing for all of us", although anyoned who continues to subsribe to that view is willfully naive imo and those who supports in order to profit by current policy is an enabler and collaborator.

We always have choices;
The top 10% of wealth holders inlcuding the corporations (who by the way are all that matter to the politicos) are just fine with the current policy as their wealth increases. How many ivy league think tanks parrot anything but tweaks to current policy as a solution - they've all been educated and indoctrinated in the same schools after all. A choice between justice, rule of law, and equitable distribution of economic output AND losing the ability to acquire wealth via asset inflation and leverage? Will we be angels or devils? Perhaps neither in the era of loss of faith; we will justify our actions via "social darwinism"

[BK]

Re: The Tesla Put - Fukuta - Engine specs for Tesla - Taiwanese made

Here are the specs for what looks like Tesla's AC Induction electric motor which is built by Fukuta (a supplier valued at $50 Million).

Elon Musk has selected suppliers like he is building and selling a Smartphone. Doesn't the genius Musk understand the reliability factor for Autos is the major determinate in selecting suppliers.

Search for Tesla and you'll find Fukuta brags about their TSLA relationship.

http://www.nwtlimited.com/images/dow...rs_Catalog.pdf



Perhaps poor vendor selection is why Elon Musk is having problems in Norway?

http://insideevs.com/tesla-replace-d...odel-s-norway/