This is overblown and the stock price being low is probably short sightedness (again) on the east coast due to oil prices.
The Model X enabled Tesla to use the same core as the Model S while building and testing some new features during the construction of their giga-factory that will enable the Model 3. It also allows Tesla to stay in the press during that time (demonstrating new features, talking about the new car etc.).
While delivery is a little delayed they've already sold over sixteen thousand Model Xs - I don't agree that it was a mistake.
The person who sets the tone for the discussion about Tesla is Morgan Stanley analyst, Adam Jonas. You have to bank at Morgan Stanley to get his reports. All the news outlets requote his material. This is not "overblown" but it is old, second hand news and it is part of why the stock is down.
"On Monday, Morgan Stanley analyst Adam Jonas slashed his target price on Tesla stock to 333 from 450, reports noted, citing concerns about extra costs tied to the Model X launch delay."
Ehh... nobody can really set the tone. Most analysts don't know jack. What a lot of analysts do is look at comparables. What can you compare Tesla to? The answer is pretty much nothing. There's no company that does what it does. You can only bank on growth and expected growth - and earnings means nothing at this early stage in Tesla's development.
I would also not make any claim that Tesla's recent product rollout has failed - or use its stock price as a proxy for that decision. The near-term effect of $30 oil is quite impactful on many industries in many ways which we still have yet to fully comprehend. It could be that $30 oil is Tesla's undoing, simply because people don't need electric cars. We just don't know yet.
Stock price isn't low at all. TSLA is still considered a bigger company than Fiat / Chrysler... by a significant margin... at its current price.
East Coast guys are thinking "wtf? How can Fiat / Crysler / Dodge / Jeep / Ram / Ferrari COMBINED" be worth less than a company who currently only makes two cars?
Imagine if GM owned ExxonMobil. That's a better example of what Tesla is (an energy storage company that sells a product that uses their core product).
First of Tesla stock is down because Detroit Auto Show has put a steady stream of EVs and PHEVs. At least in the immediate future Tesla is not going to own the low-end market. They are still executing their high-end. On battery side, LGChem and Samsung are doing great job and Tesla battery chemistry is neither that different or superior to them, so there is absolutely no differentiation there.
Tesla stock is over priced, once the German Luxuries esp. BMW arm themselves with batteries there is going to be stupendous completion that would not justify their market value. On top of this, you have Apple getting into the think of things, at least rumors of it.
5-10 ? When it comes to infrastructure Tesla is no way ahead by 5 years. Auto-pilot perhaps they may have deployment advantage given that they have only 2 models and (pre 2014 models of S wont get auto-pilot too). Greatly exaggerated, TSLA is a wonderful company and vision but their market cap is way way off, for what they do.
GM will be rolling out with Bolt EV, primarily that would be any GM dealership. I really do not know about the count, but it is interesting place to start. The way forward would be to rope in utilities like NRG(which already has lot of charging stations) to provide the backbone for the system. As days go by it looks like the major car companies are in agreement with their plug standards. The other aspect is free charging is not promised by Tesla on Model 3. So cannot take into consideration for Bolt EV infrastructure.
Right. No existing infrastructure, just cobbled together dealership charging stations. No autopilot in the Bolt. No OTA software updates (in the US, at least), as it violates the franchise agreement with dealerships. No high-voltage DC charging such that a Supercharger can offer (just the designed-by-committee CHAdeMO junk).
Tesla started putting out super chargers in 2011, even in 2013 it was anemic and nothing outside of their traditional bastions, from mid 2013 is when they ramped things up and have currently put out there. So 2 years. On Auto-Pilot front Audi, Volvo and Mercedes(these guys have a truck on auto-pilot) are out there and they are not lagging in pure technical terms, as I said deployment wise they have to do the ground work. It does not matter CHAdeMO is supercharger a 20-30 minute fast charging is NOT ideal(too much wait and too much screwing the battery), and people should be looking for better solutions.
Of course, but Chademo isn't designed for a Model S, it's designed for more affordable cars with smaller capacity batteries. The market requirement for both a Leaf and Model S DC fast-charge is the same: charge to roughly 80% capacity in 30 minutes.
As I said elsewhere, the Chademo connector can support higher currents when there is a need. When there are Leafs (and Souls? I think think those are the only two in the US on Chademo) with 200mi range batteries, I'm sure we'll see the existing chargers upgraded to the higher current capability.
You sure about that? When the model s chademo adapter came out Teslas were breaking chademo stations left & right because they weren't engineered to handle 25min @ 45kw.
I'm not aware of and chademos above 60kw today while Tesla has a while infrastructure deployed right now.
Nissan has tried this with the Leaf and hit hasn't worked well. Dealerships aren't incentivized to provide charging and I don't see that changing.
Also there is no currently deployed charging standard that comes closer to SuperCharger. Chademo is 60kW spec but usually 40 or 50 depending on how downrated the charger has been. I've never seen less than 118kW on a Supercharger and had multiple Chademo's that have throttled down to 35kW in some cases.
It's going to take years to build out that infrastructure while Telsa continues to deploy SuperChargers and Destination Charging.
> Also there is no currently deployed charging standard that comes closer to SuperCharger. Chademo is 60kW spec but usually 40 or 50 depending on how downrated the charger has been. I've never seen less than 118kW on a Supercharger and had multiple Chademo's that have throttled down to 35kW in some cases.
Chademo deliberately selected 50kW as being optimal given the cars using the charger and the infrastructure available; the connector is designed for up to 200A (up from 125A at present) which would yield 100kW.[0] My understanding is that the CCS connector is being deployed at 200A now. I don't know what you're definition of "close to" is, but I would consider 100kW and 118kW to be close.
Business model for a dealership involves buying a lot of cheap land on the outskirts to provide space for a giant parking lot, a service station, room for all the trucks to load and unload, etc. Space around them is usually bought by other dealers, so it can be branded as an auto mall. In most cities you usually have to go out of your usual route to visit a dealership.
Tesla superchargers require less real estate footprint and are next to freeways and frequently next to Starbucks and some casual restaurants.
Autopilot hardware costs under $1K. Of course its getting the required cameras and ultrasound sensors. Even if you don't pay for the autopilot feature, it contributes to the 40 million/miles/month of Autopilot data Tesla is collecting.
I think people greatly exaggerate how easy it is to catch up to Tesla for an established player. GM, Ford, BMW, Mercedes might have 100 years of deep knowledge in ICE engine design an manufacture. But that knowledge is worth nothing with an electric car which is completely different. Tesla is the company with the longest experience here. Not only that but they changed the fundamentals about how you build a car. They make most stuff in house and have very quick turn over times. They can do tweaks in 5 minutes which the competitors require a month to change due to the reliance large number of external suppliers. The competition is weighted down by legacy requirements. They need to build common platforms which can be used for both their ICE and electric cars. Tesla has no such concerns to worry about.
Tesla has a simple streamlined operation: They do almost everything in house and they only have to focus on electric cars. No other distractions.
They also have a sort of hidden weapon in the form of SpaceX. They have higher expertise than any other car maker on working aluminum from reusing the knowledge gained from SpaceX. Elon Musk can trickle down a lot of know how from his SpaceX operation. Most car companies are not using synergies from spaceship companies :-D
Tesla CEO Elon Musk seemingly confirmed on Tuesday that the company is working on a strategy for getting into transportation services.
During Tesla’s third-quarter earnings conference call, Musk was asked if the company was planning to get into an Uber-like business. Musk tried to keep mum, but when pressed he hinted that the company was at least entertaining the idea.
“There is a right time to make announcements and this is not that time,” Musk said during the call.
He added that the strategy for such a service was not yet “fully-baked,” which implies the company does in fact have some semblance of a strategy.
Tesla will be consuming 2013's entire world production of lithium batteries in ~2 years. Please, enlighten me, where is BMW going to source cells from?
Where will you find these youth drivers who don't want autopilot, and prefer "the ultimate driving experience"?
BMW will get "youth drivers" exactly the same place it currently gets them: nowhere, because those people don't buy BMWs.
BMW's goal in EVs is to hold on to the segment of the market that they have. Tesla's goal is to capture a market that they don't currently have - and that's harder. It's much harder when they have many legitimate competitors, and it is starting to look like they will have much more competition very soon.
This isn't the most correct analysis, the cares are comparable in price but not in the actual category the Tesla is anything but a Luxury car as far as the internals go, it is currently a hip status symbol just like the iPhone was (and is) but it could just as much turn out to be an iWatch down the line.
Tesla doesn't publish very detailed sales figures and there isn't that market research into it (at least public one) yet, currently it seems that many people are buying a Tesla as a second (or even 3rd, 4th etc ;)) car as people who can afford to buy a 100,000$ car usually will have more than 1.
From anecdotal experience I've also noticed that quite a few of the people who buy through finance / lease a Tesla really can't afford one but like many people who end up buying a 800$ phone do - simply because it makes them feel better.
Tesla owners currently enjoy quite a bit of perks that traditional car owners do not, the insurance rates tend to be quite preferable (most likely partially subsidized by Tesla it self), the finance options are also one of the best in the market (In the UK I can pretty much get a 100% finance on a Tesla which costs about my yearly pre-tax income, considering the cost of living and the taxes I pay I would technically will not be able to afford it, I can't get any thing close to this for other cars which cost 100K GBP for example), this is not that dissimilar than how Apple pushed a very expensive handset at the time through their partnered carriers but phones aren't cars so it yet to be seen how it will work out.
Most Tesla owners haven't owned the car for longer than a year atm, the average life span of a car in the US is still about 10 years, there isn't enough data currently to know how the Tesla secondary market will work out (the current "secondary" market sells cars that are usually couple of months in use for almost the same price as a new one), what will the end TCO of a Tesla be after say 5 years to both the end consumer and the company.
Luxury cars in the US have a very well established secondary market with buy backs and dealerships that specialize in reselling cars that tend to hold the value quite well (this is especially true to the more boutique cars like Jags).
Some cars are have also very specific markets in the US (and any where else) e.g. while pretty much anyone will want to drive a BMW 5/7 series or a high end Audi not that many people will go for a Jag or a range rover these days.
Tesla has had a very good market penetration but it's really too early to tell what it means, and with a large part of it's costumers buying it because it's cool and because of it's environment impact (or lack there off) could also quite likely look at other EV options when some actually arrive on the market.
I urge you to price a similar car from a luxury brand (so Acura, Audi, BMW, Mercedes, Lexus, Nissan, Infiniti and maybe Cadillac) with similar feature set (specifically all safety packages, lane-tracking and self-parking packages where available) and see what you come up with.
Fully loaded versions are very expensive because luxury manufacturers feel they can charge whatever they want and get away with it. Those things cost a pretty penny - a navigation system add-on in BMW, for example, is just under $2k (as if you'd buy a luxury vehicle without navigation system in 2016). A backup camera from Mercedes is optional even in "luxury" edition of their vehicle, and is $770. Blind Spot Monitor is another $750.
And we excluded ultra-luxury sporty manufacturers like Maserati, Ferrari and Lamborghini, as they represent comparatively tiny segment of the luxury market. However, "performance" versions of Acura, Lexus, BMW, Mercedes and even Nissan (GT-R) and Chevrolet (Corvette), if that's what you're after, are priced above "performance" versions of Model S.
Then there're the maintenance costs, more or less mandatory at dealer prices if you ever want to sell your car for decent resale value. Then subscriptions for things like maps, navigation and XM real-time traffic. Then, of course, the cost of gas - even if you assume oil falls down to $0 (perhaps a free tank of gas with a purchase of a hot dog at the gas station, if current price trends persist), you're still getting pretty close on the TCO front for 4-5 years.
Samsung SDI is providing BMW with Battery. GM is getting it from LGChem. The whole myth of Tesla being the Apple of Car Battery supplies is just that myth.
It doesn't seem like a myth at all - tesla could be the Apple in that its vertically integrated w/ a tightly controlled supply chain and an ecosystem producing lock-in (superchargers), capturing the high end of the market and most of the profit in the industry.
GM and BWM would be the android device manufacturers - assembling 3rd party components, poorly differentiated, initially not competitive on quality but eventually catching up, while competition w/ each other prevents any of them from achieving profits comparable to Tesla.
Tesla buys its cells from Panasonic. Panasonic owns half the gigafactory (the Lithium Ion half). Tesla only buys Li-Ion cells from Panasonic and then assembles them into batteries. I can agree that there is some efficiency in this arrangement (cells and batteries made inside the same facility), but don't get ahead of yourself. Tesla is only assembling batteries.
Panasonic makes the 18650 cells.
GM and Ford build their own batteries too for their own fleet of vehicles, supplied from LG Chem. The benefits of scale seem to benefit the joint effort between GM + Ford + LG Chem, and the topology of Detroit (which has tons of railroads and shipyards that GM / Ford / LG Chem can leverage).
I bet you Bolt EV hits consumer market before TSLA Model 3.
But yeah, GM owns its own battery factory. Is it the same size as Tesla's?? No. But I think its a smarter move to build the factories after demand has proven itself.
Tesla expects the Model 3 to sell out. Anything less than "amazing" will make the Gigafactory not worth its billions-upon-billions of dollars of investment.
I don't disagree the Bolt gets here first. The Leaf got here first too. I don't see the Leaf selling out. I don't see the Bolt selling out either.
> Tesla expects the Model 3 to sell out. Anything less than "amazing" will make the Gigafactory not worth its billions-upon-billions of dollars of investment.
Even if the Model 3 doesn't sell out, there are utility customers clamoring for stationary storage, first to replace peaking plant capacity, and then down the value chain as more utility scale wind and solar come online.
Why the hell should we use Lithium Ion batteries for energy storage when Pumped Hydro is cheaper?
Do you even know what the energy storage market looks like in the US? You ain't gonna build a 30 GIGAWATT-hour plant on $3 Billion (1.6 Billion initially, another 1.5 billion in upgrades a few decades later) like the Bath County pumped storage station.
Because you can't drop pumped hydro onto a substation anywhere in the world in cargo containers. Batteries, you can (Hawaii is already doing so in tandem with utility scale solar).
Pumped hydro is restricted by geography. That's like arguing, "Why not build dams everywhere! Hydro power is so clean!". You need someplace to actually pump water around.
Okay, so TSLA can go ahead and capture the Hawaii and Alaska energy storage market.
Virtually everywhere else has dams they can take advantage of. The places that don't have abandoned mines for Compressed-Air energy storage. Continental US has a ton of natural resources at its disposal that can be built up to significantly cheaper solutions than Lithium Ion.
> Okay, so TSLA can go ahead and capture the Hawaii and Alaska energy storage market.
And Australia. And Europe. And anywhere that is placing a premium on renewable energy. Tesla's market for batteries increases each time they're able to lower their price as volume increases.
> Virtually everywhere else has dams they can take advantage of. The places that don't have abandoned mines for Compressed-Air energy storage. Continental US has a ton of natural resources at its disposal that can be built up to significantly cheaper solutions than Lithium Ion.
There is no point in us arguing further when you don't base your argument on reality. You can't put dams anywhere. You can't build salt caverns anywhere. You can put batteries anywhere.
Good luck competing against Redox Flow. Its a miracle that Elon Musk has been able to get so much done with Laptop-batteries (18650 Cells). But the new chemistries actually designed for grid-storage are coming, and they crush laptop-batteries in cost and capacity.
The Gigafactory is designed to make Electric car batteries, and the 26650 (successor to the 18650 laptop cells) aren't even being produced yet. How long before TSLA / Panasonic can tweak the gigafactory to make a cell optimized for grid energy-storage?
Your turn. Show me a 1MegaWatt-hr or larger TSLA installation. kw-installations (Power Wall) are small money, I don't care about that. I care about hundreds-of-million $$ installations.
The only things I see for TSLA are planned projects and/or demos.
Redox Flow is a bit newer technology than Lithium Ion, but small-scale installations already exist all over the world.
Yes. And TSLA doesn't have any utility scale projects except the hypothetical 1MW plant in Ireland until sometime later this year.
Small-scale deployments of Lithium Ion are not going to be as efficient as large-scale deployments of Redox Flow. Period. I don't think TSLA has bet on the right technology at the utility scale. Lithium Ion is great for cars, but better technologies simply exist in other niches.
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Look, Redox Flow batteries are ahead of TSLA. They exist right now at the "small scale" of 2.2MWhr.
These are the numbers for a utility-scale level company... currently mass producing Redox Flow batteries. TSLA power wall just doesn't compete. Not by a long shot.
The Bath County Hydro Station was built in 1970. I'm comparing TSLA technology to literally 40 year old technology here.
The 40-year old technology is cheaper, more well known, widely deployed, 100% green, non-toxic and extremely reliable. Its both a short-term and long-term solution.
TSLA batteries don't even beat the status-quo in the energy field, let alone the new technologies that are coming (Supercapacitors, Redox Flow, Compressed Air...)
Hydro is cheaper, but requires permits, construction, multi-year timeframes, contractors, etc. Battery packs require NONE of these.
Look, this is just like the PC revolution vs mainframes. Mainframes were cheaper and better on ANY axis relative to PC's in the 1980's.
However, a PC didn't require a multi-year allocation in the capital budget. A PC didn't require buy-in from multiple players. A PC was locally controlled.
So, PCs won. And the money expended on PCs eventually made them better than the mainframes they were displacing.
Okay. So why are PowerWalls going to beat the current state-of-the-art in battery technology?
Look, for areas with resources, Pumped Hydro / Compressed Air is straight up superior. For areas without resources, getting a shipping container for a Redox Flow battery is more efficient.
Hydroelectric dams are bad for the environment, and a huge risk in areas prone to earthquakes. They're also a big terrorism risk (ever watched "The Dambusters" about the WWII dam-busting operations?)
Plus, you are ignoring the biggest advantages of the PowerWall concept-- the decentralization and small-scale aspect. I don't think homeowners in my town are going to be building hydroelectric dams in their back yard, even if it weren't an earthquake zone (and it is...)
With regard to new battery chemistries... sure, there are probably things out there much better or stabler than lithium-ion. But posting some marketing copy about a not-yet-shipped new battery product proves nothing. I'm surprised you didn't latch on to the "ultracapacitor" hype since that is also a year away from taking the world by storm (and has been for the last 5 years, at least). As a layman, none of us have any idea whether these physics breakthroughs are 5 months away or 5 years, and none of the people who do know are going to talk about it.
If new battery chemistries do take the world by storm. I don't see why Tesla wouldn't just license them, much like they are licensing lithium-ion now. Tesla has the high-current charging network that a better battery would need anyway. Traditional car manufacturers have a spotty and low-wattage charging network that might not even benefit from a better battery chemistry.
You seem to be grasping at any possible reason to be negative about Tesla. I agree they're overvalued right now, but the idea of building a big factory for batteries, and focusing on a high-end electric car is smart, and the next few years will show that. There are strong network effects in building a charging network, and major economies of scale in building the gigafactory.
And it has nothing to do with "better". Lithium Ion has more energy per watt, but Redox Flow is just so much cheaper and also has a 20+ year life expectancy. It will be very hard for Tesla to compete when they're making car batteries and trying to apply it to utility scale.
Who cares about energy density when you're just going to bury the battery into the ground? The ground can support a lot more weight than the lighter Lithium Ion batteries. The Redox Flow's heavier weight is not a disadvantage in the utility space.
Tesla’s not the only company producing electric vehicles.
Globally, demand for Li-Ion cells and batteries is going to increase, even if Tesla will stop making cars.
Yes, but that only puts Panasonic in a good position.
Tesla Batteries can only be used inside of Tesla cars and Powerwalls right now. All the other companies build their own batteries (out of LG Chem cells or Samsung cells).
Tesla only assembles Panasonic cells into batteries. They are not poised to actually benefit from increased global demand of Lithium Ion.
Currently yes, only assembling Panasonic cells.
They’re building the factory to change that, by making their own cells.
Panasonic only owns about 35% of the factory, the rest is TSLA.
Panasonic invested $1.6B while the total project cost is about $5B.
E.g. here: http://mashable.com/2016/01/16/panasonic-tesla-gigafactory-i...
While 32% if significant share, it’s less then half.
I don’t see how the cells manufactured by a Tesla-branded factory, where TSLA owns more than 50% of the factory, aren’t Tesla’s own.
You've never been in an office building with more than two different companies inside?
I mean, serious question. In the office building I work in, my company only owns two floors. The next floor is another company, and the floor above that is yet another company. My company owns more than half the building (the bottom floors has more space for various reasons), but the stuff made upstairs isn't made by my company.
Different modes of co-ownership.
In the building you’re talking about, each company has/rents some distinctive piece of real estate.
Not the case with gigafactory.
E.g. read there: http://fortune.com/2015/11/03/tesla-grid-batteries-gigafacto... As you see, Tesla’s saying they will be producing cells, not Panasonic.
Tesla has their own battery technology. But the chemistry belongs to Panasonic, who creates cells.
You combine cells (like the 18650) together to create batteries. The Gigafactory is trying to make 26650 cells, which should be more efficient in cars than the 18650 cells (which were originally designed for laptops)
Tesla's use of 18650 was highly innovative. They "hacked" growth into their company by taking advantage of the scale and scope of laptop manufacturers. But now that TSLA is one of the largest users of Lithium Ion in the world, they need to come up with a more efficient, car-specific cell design now.
I don't believe that's true. Could you please paste the pertinent text from the 10-K? I was not able to find it.
As far as I know the cell chemistry in use was developed jointly and I believe Tesla holds patent although I'm not able to find a source at the moment.
> “Being selected by Tesla to provide cells for their current and next- generation EV battery pack is a tremendous validation of Panasonic’s nickel-based chemistry and the extensive investments Panasonic continues to make in lithium ion R&D and production,” said Naoto Noguchi, President of Panasonic Energy Company.
TSLA patents are in regards to batteries: collections of cells working together. But the Lithium needs to be turned into a cell... before collections of cells can turn into a battery.
The link you posted is from 2010--roadster days. The cells used in the roadster are not the same as those in the Model S. And Model 3 will be using new cells as well.
There's been immense R&D by both parties since 2010, and the latest supply agreement was finalized July 2014.
I'm hoping for something a little more formal than a PR blurb--like an SEC filing as grandparent alluded to.
But considering the $1.6 Billion investment from Panasonic, it looks like Panasonic owns at least half of the gigafactory. This suggests that Panasonic still owns the cell technology / chemistry.
18650 refers to the cell form factor--the size and shape--and has nothing to do with the chemistry inside. It's like saying two PC motherboards are the same because they're both ATX.
The cells in the original roadster were 3.7 V / 2100 mAh vs. 3.6 V / 3100 mAh for the latest. They're both 18650 cells--completely different chemistry.
More specifically, Tesla's shipping Panasonic NCR16850A cells with Panasonic's newish LiNiCoO2 chemistry - same as in a lot of more modern laptop batteries. The Roadster was presumably one of their older cells like the CGR18650.
> an energy storage company that sells a product that uses their core product
That's that TSLA wants you to think they have the potential of being because they havr to be known as something more than a car company to keep the stock price up.
ExxonMobil isn't quite an energy storage company. It is an energy retailer. Tesla's batteries are more similar to a gas tank, which GM already produces.
Not to mention Porsche is coming out with their own electric vehicle. And Porsche always delivers. The Macan is ridiculously good looking. I'd say the Tesla is going to find a ton of stiff competition
The Macan? Good looking? Maybe I'm missing something. Any Macan I've seen is ugly as hell. Maybe you mean the new Porsche E vehicle.
Also, depends on the like-for-like. I'd be surprised if Porsche release a car which competes with the model 3. They won't. They'll compete at the model S level and that's it (in terms of price, I mean).
Let's face it. This is a battle for Tesla to lose. If they get it right they'll sew it up. It's all in the execution from here out.
Fiat/Chrysler et al. own the final assembly piece, but a lot of the materials come from a network of automotive parts suppliers, like Delphi Automotive and what not.
Interesting part about Tesla is how much of the product they actually own, versus buying a part here and a part there.
Gm makes batteries. Ford makes batteries. Everyone makes batteries.
If you want to impress me, find me a car company that also males cells. All TSLA cells are from Panasonic. In fact, Panasonic owns a huge chunk of the gigafactory.
"As we all know, Tesla doesn’t report sales/deliveries by country. However, various outlets estimate Tesla sales using a variety of methods. EV Obsession estimated 26,566 Tesla Model S sales in the US in 2015. Rob notes that the lowest estimate was 24,200. In either case, the Model S outsold the Mercedes S-Class, the BMW 7-Series, the BMW 6-Series, the Audi A7, the Audi A8, the Porsche Panamera, and every other car in this class."
The point is that Tesla doesn't move anywhere near enough volume or generate anywhere near enough sales to justify its market cap. Its previous valuation was almost entirely a prediction of future revenues rather than a reflection of current ones.
And it's hard to say what class the Model S fits in. I don't think 7 or S is right, despite the price point. Those are both full-size luxury sedans, and while the Model S may be a full-size sedan, it's hardly luxury. Its interior is closer to a 3-series or E-class than the top-of-the range luxobarges. That's not a knock on build quality, just the reality of battery power currently being much more expensive than ICE. You've got to shave cost somewhere, and Tesla shaved it off luxury.
>The point is that Tesla doesn't move anywhere near enough volume or generate anywhere near enough sales to justify its market cap.
Buying TSLA right now is making a big bet on the Model 3. If Tesla comes out with a popular car (likely) and can make enough of them to turn a profit (little more skeptical on that one), it may end up justifying valuations. I wouldn't put my money on it, but I'm not surprised other people do.
I think that's a fair point. I suspect Tesla will end up being very much like Amazon: a company that ships physical goods but acts like a tech company. That is, they'll operate on razor-thin margins and dump every penny of profit into R&D in perpetuity. That will probably give them a leg up on companies that pay dividends, at least in the short-medium term. Ultimately, though, they run the "risk" of being Apple: a company that has to spend inordinate sums on R&D in order to gain a 1- or 2-year window of exclusivity before the competition commoditizes their product.
"Despite the problems, our data show that Tesla owner satisfaction is still very high: Ninety-seven percent of owners said they would definitely buy their car again. It appears that Tesla has been responsive to replacing faulty motors, differentials, brakes, and infotainment systems, all with a minimum of fuss to owners."
You keep making excuses while Tesla is executing, delays or no delays. Do you not see the problem with complaining about a company that's actually succeeding step by step?
So no. They aren't executing. They're a 13-year old company with negative profits across their entire life, and the hopes and dreams of a Gigafactory.
$230 Million lost last quarter. When will TSLA stop burning cash? It has NEVER, in its entire history, made a single profit. This is a 13-year old company, I expect better profits by now.
Instead, TSLA pivots into a space it wasn't designed for, to hope to increase demand to make its gigafactory investment worthwhile. Well, lets see. Lets see if enough people buy powerwalls and Model 3 cars to make it work.
But at a price of "Worth more than FCAU", the stock is horribly overpriced. I expect $20 billion companies to... make a profit. Just saying.
> But at a price of "Worth more than FCAU", the stock is horribly overpriced. I expect $20 billion companies to... make a profit. Just saying.
I don't. I expect them to deliver electrified mobility, which they're doing. Why would they turn a profit in a capital intensive industry so soon? I would expect them to burn cash for at least 10-20 years before they're profitable, when you're spending billions of dollars to tool up.
They don't even need to profit! They just need to break even (just like Amazon plows all of its cash into growth).
And I must ask: Why do you care if you don't own Tesla stock? As someone who holds tens of thousands of shares of Tesla stock, I'm willing to give them decades to be profitable. I don't even care if they're ever profitable! As long as they replaces as many internal combustion vehicles as possible.
Mostly because I don't have as much money as you, and thus have to be more selective in my stock purchases.
I congratulate you on your success, but I'm very far away from "investing for shits and giggles". Not everyone has millions of dollars they can give to a company just because they are morally aligned to them. If a company stock isn't going to be a good place for me to store money for the next 5 to 10 years, then I cannot purchase it.
I simply don't live in that kind of world financially.
I'm not sure why Autoblog is giving stock analysis. Tesla's stock will be determined by sales, revenue and global rollout. Autoblog's vehicle opinion is irrelevant.
> "Tesla, like most Silicon Valley companies, uses most of its revenue to finance research and development for new products. Rolling out new products with minimal required development is crucial to this strategy"
Those sentences just don't follow. They spend lots on R&D and they need to roll out new products with minimal R&D?
And I'm pretty sure the majority of their revenue is spent building the cars. They did around $3.2 billion in revenue and sold 35,000 cars. Unless they somehow have unheard of margins of 50-60%, that means Tesla spends the large majority of their revenue on building vehicles.
To me, this community blog post reads like they started with the contrarian clickbait title, and went from there.
It's clumsily worded, but I think what they were going for is something like "Tesla, like most Silicon Valley companies, uses most of its revenue to finance research and development for new products, so profitability depends on maximizing the returns on that R&D investment." The idea was that the R&D necessary for the Model S was intense, and the hope was to be able to extract more value from that investment with another vehicle that largely reused Model S's tech.
It's just not a software company and too many people don't get that.
They're building their brand and developing their technology and supply chain with elite vehicles developing the potential for profit explosions when they're ready to release a commodity vehicle to the masses.
Some decisions taken when designing the X might have been a mistake. But it would be too simple to blame all onto them. While initially, the X was planned as a minor bodywork modification of the Model S, the crazy success of the S gave Tesla the money and the time to make it a larger refinement of the S platform. In the meantime, the S also kept being updated.
So the X is rather still part of the S platform and the real cheaper car will still be the Model 3. In that sense the Tesla plans did not change much. While not many X were delivered in 2015, they seemed to have started mass production literally in the last weeks of the year. They should be building several hundred of them per week now.
That the X is even more expensive than the S is not a bad thing, considering that they have about 20k orders backlog. As long as they can sell any S or X they make, there is no hurry for the "cheap" model. Revenue per car is more important that total car number sold.
I think the reason they did the X was that when Model S was brand new they expected the market to 'max out' at ~20k vehicles a year (which wasn't unreasonable looking at other, similarly priced, niche premium brands).
So, they wanted a SUV to sell more cars. Now, as everyone (especially Tesla) knows, Model S has been selling very well. So in hindsight it was a big waste of time/resources. But I can see why the mistake was made.
In general, large/luxury SUV sales has been outpacing large/luxury sedan sales for a while. Perhaps this was an artefact of a distorted market rather than true preferences. Either way, platform engineering the model s in to the model x will pay off with increased sales once it gets underway.
It's the same strategy as 5 series/x5 that bmw has, and has been exceedingly successful at.
Except that there's apparently a lot of bespoke engineering in the X that isn't in the S. And the X5 was built on the 7 chassis, at least initially. I don't think it shares much with the 5.
> So, they wanted a SUV to sell more cars. Now, as everyone (especially Tesla) knows, Model S has been selling very well. So in hindsight it was a big waste of time/resources. But I can see why the mistake was made.
The funny thing is that the Model S has more cargo space than many small/medium SUVs. The Model X doesn't really allow a decent rooftop cargo carrier.
Why was it a waste of time/resources? From all we know, the X might even sell better than the S, the preorders are crazy. Which would make Tesla a much larger company than selling the S only.
Assuming a limited number of design and engineering resources I think the article makes a sensible argument (though, really poorly written) that it would have made more business sense to prioritize those resources on getting a more mass market offering out to consumers, capturing that revenue stream and cash before prioritizing the X.
Without knowing many of the details of Tesla this argument makes sense on it face. That being said there's a hefty amount of hindsight going into this analysis and I'd respect it more if the author made this call about 2-3 years ago.
I do think the X is making them way more money than the 3 could for quite some time, as the margins for the 3 are probably much less than those of the X. Only when they hit the 500k/year it might be the main moneymaker for Tesla.
The one thing that article totally misses is the Dual Motor drivetrain that was developed for the Model X was what enabled the 85D/P85D/P90DL which moved the Model S from "awesome" to "supercar" territory.
Also, there was many similar slow rollout/complexity issues with the Model S first shipped, I'm sure they'll be fine.
Over-engineering the Model X is in my view clearly a mistake. Not a huge mistake though.
The big problem for Tesla is scaling up. Producing the model 3 at scale at a 40k price tag is much harder than anything they have done so far. It has taken competing car companies decades to get to the point where cheap reliable cars just roll of the factory line. Just quality control alone is a huge problem at scale. Sourcing all materials at scale is enormously difficult. In manufacturing scale is everything.
In terms of interior design and finish Tesla is way behind BMW. They don't have the factories BMW does or any of the infrastructure and operational expertise. Tesla won't be able to compete in more the price sensitive "3" segment.
Perhaps Tesla would have been better if they only produced fast luxury cars. Too late for that now, though. The stock is priced based on promises of a mass adoption of the Model 3. A promise that they can't possibly deliver on. Unless Elon pulls another rabbit out of his hat. Wouldn't be the first time.
While I did not have the chance yet to compare an X to the BMW offerings, it is a notable fact, that Tesla in the meanwhile for both the X and the S is working with the same German companies which supply BMW and Audi. The interior of the X is made by a company usually doing Audis, and the suspension is made by Continental. They also have Bosch components, Harman audio etc. That should put them quite close in quality to the German brands.
I've heard many people express disappointment at the fit and finish of the model S (cheap components, water leakage, etc), but nothing quite as harsh as the review in BGR:
> The fit and finish of a Tesla, especially a $140,000 Tesla, is quite frankly embarrassing. Panels with gaps, cheap plastic components, a decade-old Mercedes shifter, and none of the high-end amenities of luxury cars. The doors are, quite frankly, crap. The leather is medium grade at best. The seats are terrible (disclosure: I have not sat in the brand new Model S seats, though they are still one piece with no power-adjustable lumbar, etc).
This may be my personal taste but does anyone else think that it's just ugly? I saw one in person the other day and it really looks like a big snail, especially compared to the sleek looking Porsche and BMW SUVs in the same price range.
Are you talking about the BMW X5 and Porsche Cayenne? I think those are rather hideous vehicles. The designers clearly tried to retain some of the sedan branding and looks in front, just much taller, and weren't sure what to do in the back. Heck, a Chevy Suburban looks better! At least it has a consistent design philosophy!
BMWs still suffer from Chris Bangle's legacy of flame surfacing.
Personally, I think the Macan is a much sharper interpretation than the Cayenne.
Tessa's design is blander and doesn't really have a brand specific cue other than that horrendous nose. That large piece of plastic over what would be traditionally the inlet just doesn't do it for me.
When I first saw the model S I thought it was nothing but but an overblown Mondeo. But it's grew on me quickly to the point that it's at the top of my list.
There's something understated and smooth about it. It makes sense.
I get the same feeling about the model X.
It's all a matter of taste, but the Cayenne and the Macan are hideous in my opinion. And I love Porsche.
I'm not sure what the author is getting at but I think the Model X is a mistake- mostly only because of the falcon doors.
1. It is too ostentatious for most people - especially in its biggest market- the bay area. You can hide a gold iphone or Rolex watch but you can't hide when you open the falcon door while dropping off your kids to school.
2. The door also drastically reduces the headroom for the 2nd row and it feels like a Nascar racing car with all kinds of bracing in the back. About making it easy to get into the 3rd row is not really true. It is no different than any 3 row SUVs. The tall fixed headrests also limit visibility in the back rows.
3. I think Elon is a pragmatist and if he decides to change the falcon doors to regular doors, I think the ModelX will trump Acura MDX and BMWX5 in Sales very easily. Everything else in the ModelX just blows everyone else out of the water.
>It is too ostentatious for most people - especially in its biggest market- the bay area. You can hide a gold iphone or Rolex watch but you can't hide when you open the falcon door while dropping off your kids to school.
For a lot of people the whole point of paying $130k for a car is that other people know you can pay $130k for a car.
Also, is the SF bay area really Tesla's biggest market? There aren't that many people in SF compared to, say, Los Angeles.
I think mistake is a strong word. It clearly wasn't part of the original plan, at least where it was, and did take (and continues to take) a lot of time and effort on the part of Tesla to get it to market already. However, Tesla was moving into SUVs eventually, they would have to, and the X if nothing else provides a ton of useful data and experience to them down the line.
Best idea? Probably not and maybe a little premature too, but the article makes it sound like Tesla's going out of business because of it and I don't think it's nearly that bad.
Couch infantry is at it again. Stock price doesn't mean a damn to a company unless it's about to issue more shares. It only has any meaning to people who own its stock. Model X is a good product, and one without peer in the luxury segment. Who gives a shit what some jerkwad analyst thinks about the stock?
Elon took a risk, it didn't pay off, and maybe hurt Tesla in the short term. They learned a lot of lessons from it and survived, so this should help them in the long term.
Not only that, why is he all of a sudden claiming this now, AFTER the stock has tanked? If he felt that way, he should have been talking about it when the stock was much higher. it's easy to say things after the fact.
Tesla in general looks like a big mistake to me. Whatever good things Tesla has seen so far is probably because Musk's own personality and PR rather than the actual performance of the car itself.
What kind of performance? Consumer Reports rated so highly they had to redo their test (it got over 100%). It's acceleration is near supercar territory or just "really fucking fast" with out ludicris. 98% of owners said they'd buy again. Compared to super cars and high end sports cars it's corning sucks. But, 1)remember S is a 4 door sedan not a sports car 2) like to see any electric car with more than 40mi range do better. And I think it's range is one of the top for production electric vehicles. S has met or beat sales and all Tesla models have large pre and back orders.
So, really, what performance are you referring to?
Why do you say that? I mean every single review I saw of the Model S was fairly deliberate about praising the performance of the car. What's the counter point to that?
This is just en eerie reminder of the same sort of dismissals against Steve Jobs: just a sales guy. Just good PR. Unfortunately for you this cheapo trick doesn't work with Elon Musk as it is very well known and documented how razor sharp he is when it comes to science and technology. He did most of the programming himself for his internet startup. He learned rocket science from the ground up without going to uni to get a degree. He impresses people with decades in the rocket industry with his insights and understanding of the subject. Elon Musk understand the technical details of his products exceptionally well. He knows the inside out of the Falcon 9 rocket. This isn't just some sales guy.
The Model X enabled Tesla to use the same core as the Model S while building and testing some new features during the construction of their giga-factory that will enable the Model 3. It also allows Tesla to stay in the press during that time (demonstrating new features, talking about the new car etc.).
While delivery is a little delayed they've already sold over sixteen thousand Model Xs - I don't agree that it was a mistake.