Is Tesla TOAST ?

[DSpencer]

Re: Is Tesla TOAST ?

But one never knows what might be going on behind the scenes, and perhaps a surprise reveal of "the new Model S" will be front and center one day.

So far the pattern seems to be the opposite: building hype very early on to maximize the length of time that the news can buoy the stock price. However, maybe they fear that doing a reveal early would hurt sales of the existing model so you never know.

- Personally, I think Elon Musk shows some of the same genius for perfection that Steve Jobs did. The Model S, designed and refined during a more relaxed time in Tesla's (and Musk's) history was a beautiful and elegant piece of work when it was introduced. And just like Apple's products, I have the impression Musk's instincts and demanding nature to create something truly attractive played a big part in that. The Model X, on the other hand, looks like it was designed by a committee (those gull wing doors remind me of not only DeLorean, but also Bricklin). And the rather pug shaped Model 3, with its fat lip, looks like it came out of a GM beancounter efficiency contest for new graduates. $50k and up for a sedan that looks like that? The heat is on.

The X looks a bit too much like a bubble for my tastes. Personally, I like the look of the Model 3 (in pictures, never seen one in person). I think it looks like a slightly shorter of the S so I'm surprised you feel so different about it, but aesthetics are always subjective and minor details can have a big impact.

The new luxury EV competition doesn't have much incentive to squeeze Tesla's margins imo. They will benefit from those high margins themselves if they can retain them, knowing full well that in time Tesla will implode financially as it gradually loses both market share and (more) money.

Is there any information available on whether a competitor can offer a similar vehicle with the same or better margin as Tesla? Competitors are coming, but I've yet to see any evidence that they can be profitable in this space either.

[DSpencer]

Re: Is Tesla TOAST ?

This is a company, not a partisan debate. There is no one side or the other. The financials are the financials. The question is only how long investors will stay irrational. Just put aside all the engineering and production and whatnot for a moment, and look at the beancounter's ledger.

What do you mean there is no one side or the other? There's nobody who believes Tesla will succeed? There's nobody who is long their stock? Everyone has the same opinion about the company? It seems like you are disagreeing just for the sake of it.

[dcarrigg]

Re: Is Tesla TOAST ?

What do you mean there is no one side or the other? There's nobody who believes Tesla will succeed? There's nobody who is long their stock? Everyone has the same opinion about the company? It seems like you are disagreeing just for the sake of it.

I suppose what I'm trying to say is: Don't treat it like a dichotomy. It's not binary. Think of "success" like a continuum of outcomes. I think I pretty clearly posited some parameters within which Tesla can succeed. I also think I clearly put forth the idea that I believe the equity price is irrational, and I submitted a number of reasons why I believe the data bears that out. So people can be very long on Tesla stock. They may even be right for a while. You can put $10,000 on green and let the wheel spin. You might even win. Doesn't change the house odds.

Too often, especially the last few years, I find that conversations on the internet devolve into camps. "Are you pro-Tesla or anti-Tesla?" is the first question people want to know. It's an irrelevant question, though. So yes, I'm disagreeing. Not for the sake of it. But for the sake of moving the conversation to a more productive place. If you think I'm wrong about any of the specifics on the financials or how they'll play out, then why not address that? You may have some good information I don't know, and maybe I can update my understanding. But by insisting it to be some kind of partisan debate, we get nowhere.

There are, in this world, normative values--beliefs people hold about justice, freedom, fairness, etc.--that can and sometimes must be deeply partisan. But the health of a publicly traded corporation really should not be among them. There's a strict set of rules and institutions that govern how they operate. Describing them is a positive endeavor--there are facts upon which everyone, if approaching the right questions rationally, should be able to agree. Now the future is always uncertain. That's why throughout this conversation I've tried to express my thoughts about it in a range of probabilities rather than in absolutes. But, really, what is the point of insisting on breaking the situation down into two sides? Even if I were invested in the stock, and say I was short and you were long, there's still a lot of nuance in the magnitude and timing of our investments. And rarely do I come across an equity I'm forever short or long on. Positions can and should change over time. If you just call yourself pro-Tesla or anti-Tesla you're basically saying "I'm making an irrational commitment to a company and there is no price or changing conditions at which I believe it will switch from overvalued to undervalued or visa-versa." To me, that's insanity. It's way, way too much emotional attachment to a profit-making enterprise.

[GRG55]

Re: Is Tesla TOAST ?

...The X looks a bit too much like a bubble for my tastes. Personally, I like the look of the Model 3 (in pictures, never seen one in person). I think it looks like a slightly shorter of the S so I'm surprised you feel so different about it, but aesthetics are always subjective and minor details can have a big impact.





Is there any information available on whether a competitor can offer a similar vehicle with the same or better margin as Tesla? Competitors are coming, but I've yet to see any evidence that they can be profitable in this space either.

Cars tend to look better or worse from one angle or another. When it came out the "S" was a head turner. The Model 3 is not. "In the flesh" the Model 3 doesn't hold a candle to the looks of the "S", and from some angles it looks downright awkward to me. That is made worse by some colors. The white with black trim Model 3s look positively odd...but then beauty is in the eye of the beholder after all.

The EV manufacturers that figure out how to scale both sales and production are going to win this game.
One has to decide if Tesla will be one of those.
The only other viable strategy is to be a EV supercar maker in the model of Ferrari, which sells only 8000 to 8500 cars per year (and also moves a lot of $ of branded merchandise as well). That wouldn't appear to be an option open to Tesla any longer, at this stage.

[thriftyandboringinohio]

Re: Is Tesla TOAST ?

Driving last hour I found myself behind a Tesla model X, first one I've seen in person. I only noticed it because of this thread.
It struck me as a generic lump of midsize SUV.

[dcarrigg]

Re: Is Tesla TOAST ?

Driving last hour I found myself behind a Tesla model X, first one I've seen in person. I only noticed it because of this thread.
It struck me as a generic lump of midsize SUV.

How do you think it compares to my Buick Envision review here?

[vt]

Re: Is Tesla TOAST ?

DC you should have a TV series called "Stupid product or dervice of the week review". It would be a hit and public service.

[dcarrigg]

Re: Is Tesla TOAST ?

DC you should have a TV series called "Stupid product or dervice of the week review". It would be a hit and public service.

Lol, you're probably not wrong. I fear I am too negative. Those things I like I give shorter schrift to. But I don't mean to be a hater. Plenty of cars I like. If anything, your posts have caused me to pause and think more about positive things. As to why I spend less time and space writing about them, that's for others here to diagnose. There are plenty of things I love. My '97 civic, for example, has given me more than I ever could have asked from it. Ditto my 1996 Camry. And other cars since. I was plowing in 1997 with a 1973 Ford F-350. The floorboards were blank as Fred Flintstone's. And first gear was shot to hell. But that beat kept on churning.

[touchring]

Re: Is Tesla TOAST ?

Munro and Associates has completed their teardown and cost analysis of the Model 3 and it looks like there is a good chance that Musk will be able to trigger a short squeeze. In the video, Munro states that there is a 30% margin for the Model 3 his company took apart. Even for the $35,000 Model 3, Munro claimed that there were double digit margins.

I suspect the margins Munro is stating assume costs of labor that are perhaps lower than what is the reality for Tesla. I think Munro's estimates for cost of materials and parts is quite accurate so the only question is if Tesla can control labor and warranty costs. I'm not long or short Tesla stock but I'm seriously tempted to wait for a dip to buy some calls to speculate on a potential short squeeze. Long term, I still think that Tesla shareholders are going to get shellacked but maybe Tesla will be able to survive as a company

Can one of the trillion dollar companies like Apple or Google buy over Tesla? Tesla seems like an ideal company for Apple for their self-driving car initiative.

[GRG55]

Re: Is Tesla TOAST ?

Can one of the trillion dollar companies like Apple or Google buy over Tesla? Tesla seems like an ideal company for Apple for their self-driving car initiative.

Tesla's current major challenge seems to be a chronic inability to scale production. An Apple acquisition would bring money to the company. Is lack of money the reason, or one of the reasons for this? If something more than money is needed to solve this problem, does a tech company like Apple have the correct expertise and ability to bring to bear?

I think these are some of the questions that need to be considered for any potential "white knight".


What it comes down to for any potential acquirer is what would they actually be getting for the premium over the current astronomical valuation they would have to pay?

[dcarrigg]

Re: Is Tesla TOAST ?

Can one of the trillion dollar companies like Apple or Google buy over Tesla? Tesla seems like an ideal company for Apple for their self-driving car initiative.

I went to the apple store the other day. Better half had a screen die on a macbook that was under warranty (this shouldn't be happening so often). Even though they're the biggest company in the damn world or whatever now, there's still only the one store they put in 10 or 15 years ago, and it's a 45 minute drive away. We get there, and it's absolutely mobbed. The old "genius bar" is gone, now just a big white wall, behind which they stuff computers into boxes and mail them out to god knows where to get fixed instead of fixing them in house. But they could not get us "an appointment" for that day. We had to come back on the 4th.

When we did drive back out there again, we were told they were running 20 minutes behind, so we went and bought some socks at some other store and came back. They told us to have a seat in the waiting area. There were no chairs. Only crates, about 1.5 feet cubed, with balls in them. Being tall, I didn't feel like sitting on what was essentially a wooden milk crate, so I stood and waited. There were no magazines or anything. No music. Much worse than even a doctor's office. Everyone was so miserable. Children were crying. Just awful, awful reflective white space and waiting with nothing to do. If I had to design a movie-set version of purgatory, I would use this.

90 minutes or so later, some guy called our name and walked us over to a standing desk. He waved his hand in front of it and an electrical outlet popped up out of the desk (nice gimmick). Even though we had to fill out all our information to get the appointment, he had to take it again. Only on his iPad or whatever. So he had to type with his thumbs, and the whole process was much slower than if he just had a real keyboard. Then he finally looked at the issue for 2 seconds, and had to go in the back room to discuss with his manager whether they'd cover it. He came back out and said they would, after another 10 minutes or so. Then he had to take down a bunch more information on the stupid pad, and finally he took the computer and let us go.

I will give them this: They did cover it and ship and return the computer back quickly and free from there. So I have no complaints about the warranty coverage. But the customer service was about the worst I've ever encountered. The fact that their market cap is 100 times what it was when they opened that store, and they haven't opened any new ones, or hired more people, or used it to improve customer service to the point where they can handle an issue same-day without turning 30% of their retail space into a waiting area is galling as hell to me. We agreed the experience was awful and we won't be getting an apple product next time we need a new computer.

If they spent 10% of the money they blow screwing around with crap like self-driving-cars on customer service and product line development and rolling out new stores to keep up with demand, they could probably continue to expand market share in all sorts of tech gizmo spaces. Instead they're playing keep up with the jonses on the stupid self-driving-car thing, which I still think is more a play for ubiquitous surveillance and data collection (and getting someone else to pay for it) than really about cars at all. For a good number of years I was wowed by the gadgets and programs google and apple and their like would roll out. But for the last few years, the products seem to keep getting worse, and keep getting creepier. 20% time is gone. Don't be evil is a thing of the past. Expanding free storage to grow with you is gone. It distinctly feels like they already got all the data they need or can get from computer/phone users. They don't seem to really care about them as customers any more. They're really just a cash cow to milk to develop more intrusive surveillance methods and private space programs and other weird stuff.

[llanlad2]

Re: Is Tesla TOAST ?

It distinctly feels like they already got all the data they need or can get from computer/phone users.

Everything I read or see is about data these days. Everyone is collecting it. Everyone's data is so valuable. Am I being naive in not believing it is actually that valuable? Peak personal data value perhaps? Everyone I know has a second Email that is basically the "junk" Email address. These smart online marketing companies are always flashing adverts up for products that I've already bought, or show me hotel rooms in places I've just visited. ie wasting their money. It's almost like the data collection data companies are worth more than the companies who actually provide the services or products which seems backwards to me. I mean half the data that is sold must be worthless in a world where many have no disposable income.

As for your Apple experience. That crap experience doesn't show up in the data. And KPIs and the rest of it are often a complete waste of time because the managers aren't smart enough to recognise what is KEY and how to measure it. And I don't know if anyone has come up with an "observer effect" theory on data collection but the mere act of collecting and measuring must consume enormous amounts of resources.

In fact I just went on the website of the Office for National Statistics in the UK and found this gobsmacking info in the accounts....

eg. ONS income ( budget ) 2017-2018 of £250million in
2000-2001 £554 000 Yes, half a million pounds.

I mean that is UNREAL!!! And when you factor in that the ONS has grown that big because it is handling all the data that the other departments are collecting that they didn't use to collect before EXCEL then it just becomes mind-boggling. The observer effect creates incredible waste and results in a huge transfer of public sector funds to the private sector tech companies as well as an increase in bureaucracy and government size.

https://www.statisticsauthority.gov....eport-accounts

[llanlad2]

Re: Is Tesla TOAST ?

It distinctly feels like they already got all the data they need or can get from computer/phone users.

And that doesn't even take into account that a lot of data is massaged, unreliable, or collected to "prove a point" on a decision or opinion that has already been made!!!

[vt]

Re: Is Tesla TOAST ?

The reviews of the 3 are looking outstanding:

https://electrek.co/2018/07/21/tesla...ce-test-drive/

https://www.topgear.com/car-reviews/...odel-3/verdict

https://www.wsj.com/articles/first-e...vel-1532022533

https://www.edmunds.com/tesla/model-3/2018/review/

[jk]

Re: Is Tesla TOAST ?

What it comes down to for any potential acquirer is what would they actually be getting for the premium over the current astronomical valuation they would have to pay?

no, the "black" knight would put out a bid at a DISCOUNT and say it would stand for 2 years. THAT would make a statement.