Tesla Model 3 anyone?

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just frank
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Re: Tesla Model 3 anyone?

Post by just frank » Tue Apr 05, 2016 8:26 am

Valuethinker wrote: 2020 at a stretch you might see 1% of world sales be EV. 2030 it might be 10%. 2050 it might be nearly 100%.
Too conservative.

Actually, for **sedans** EVs were >1% of US vehicle sales in 2014. For all light vehicles (including SUVS and pickups, for which until recently there were no EV offerings), it was closer to 0.6%. IIRC, EV sales figures are even better in Europe as a fraction of total sales, at a comparable >1% of sedans in 2015. China is still a smaller car market, but has had EV sales surge last year to a larger volume than the US.

In the luxury sedan segment, the Model S has been stealing significant enough share that all the makers have seen their luxury sales drop ~10% over the last year. This is why all those makers are planning Model S lux EV clones....they fear going out of business in a few years if they don't!

Bottom line, in 2016 batteries are still relatively expensive....you would expect the most penetration in the lightest vehicles (which need the smallest batteries per range unit) AND in the lux segment, where battery cost is less of an issue (allowing a 200+ mile battery today). In both of those segments, sales and market penetration growth have been fantastic.

More importantly, the cost of batteries is expected to drop to the point that long-range EVs have lower **Initial** cost that all ICE car market segments in 2020. At that point, I would expect EV sales for all light vehicles to displace ICE cars in a way the Model S is now doing in the lux segment...soaring past 10% of sales within a couple years...like 2021 or 2022.

My wild guess would be we cross 50% of light vehicle sales before 2030.

Its not unlike the case with digital cameras....the first ones were expensive, and the pictures were inferior to quality film cameras. As soon as digital cameras had an equivalent picture quality to film and also cost less, in addition to being more fun and versatile, adoption surged in a few short years. Nowadays, there are still film photographers, but it is a hobby and pro niche, not a mass market.

As for Tesla's place: by claiming the lux end of this disruptive tech, they are making more profit on EVs (per sale) than any of the other EV makers, AND when the disruption comes, their brand will be associated with the longest history and quality in the market...to be the future 'Apple' brand of cars. IF they can hold it together. :wink:
Last edited by just frank on Tue Apr 05, 2016 8:33 am, edited 1 time in total.

Buysider
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Re: Tesla Model 3 anyone?

Post by Buysider » Tue Apr 05, 2016 8:33 am

My favorite piece from Bloomberg:

http://www.bloomberg.com/news/articles/ ... o-recovery

I think the tipping point is coming. I know for myself, I can't foresee ever buying a gas vehicle again. Infrastructure will have to change, but no different than getting gas station infrastructure up and running in the 1900s, away from oats and hay for the horses.

The stone age didn't end for lack of stones and the oil age won't end for lack of oil ...

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Re: Tesla Model 3 anyone?

Post by Dimitri » Tue Apr 05, 2016 9:03 am

Buysider wrote:My favorite piece from Bloomberg:

http://www.bloomberg.com/news/articles/ ... o-recovery

I think the tipping point is coming. I know for myself, I can't foresee ever buying a gas vehicle again. Infrastructure will have to change, but no different than getting gas station infrastructure up and running in the 1900s, away from oats and hay for the horses.

The stone age didn't end for lack of stones and the oil age won't end for lack of oil ...
Tom Randall writes from a perspective that may not be unbiased. After reading his opinion piece in Bloomberg a look at his Twitter feed might be informative to see where he is coming from - https://twitter.com/tsrandall?lang=en
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Re: Tesla Model 3 anyone?

Post by stoptothink » Tue Apr 05, 2016 9:10 am

just frank wrote:
Valuethinker wrote: As for Tesla's place: by claiming the lux end of this disruptive tech, they are making more profit on EVs (per sale) than any of the other EV makers, AND when the disruption comes, their brand will be associated with the longest history and quality in the market...to be the future 'Apple' brand of cars. IF they can hold it together. :wink:
All the reports say that Tesla is currently losing ~$4k per vehicle sold. Either you are saying that others are losing more or I am totally interpreting this wrong.

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Re: Tesla Model 3 anyone?

Post by letsgobobby » Tue Apr 05, 2016 9:33 am

//
Dimitri wrote:
Buysider wrote:My favorite piece from Bloomberg:

http://www.bloomberg.com/news/articles/ ... o-recovery

I think the tipping point is coming. I know for myself, I can't foresee ever buying a gas vehicle again. Infrastructure will have to change, but no different than getting gas station infrastructure up and running in the 1900s, away from oats and hay for the horses.

The stone age didn't end for lack of stones and the oil age won't end for lack of oil ...
Tom Randall writes from a perspective that may not be unbiased. After reading his opinion piece in Bloomberg a look at his Twitter feed might be informative to see where he is coming from - https://twitter.com/tsrandall?lang=en
I wouldn't go as far as Buysider - trucks, RVs, off-road vehicles, etc, still scream gas and diesel to me - but as for a daily driver, the soccer mom or dad vehicle, the commuter car, etc - the end seems in sight for traditional stand alone internal combustion engines. Whether through hybridization or straight eletrification, if not hydrogen fuel cells or some other alternative energy source, technology and infrastructure gains are rapidly bringing these 'alternative' vehicles to the masses in an affordable way. Our last vehicle was a Prius (hybrid); I have a down payment on a Tesla 3 and feel optimistic that even if I don't follow through, my next vehicle will be at least a hybrid if not a strictly electric vehicle. This for an 80 mile round trip commute, plus a lot of 10-25 minute one way drives here and there to shuttle kids back and forth to activities. Yet I can't remember the last time one of our total drives was more than 200 miles. And with charging stations all over the place (whether Tesla Superchargers or not), I could always juice up if needed. I'll probably keep my old RAV4 for off-roading, road trips to the mountains, snow skiing, etc., but I wouldn't want to rely forever on a then 12 year old car with nearly 200,000 miles. Alternatively, and - ha! - more likely, is that I will adopt my wife's Prius at 5 years and 125,000 miles, while she gets the new EV for all her around town trips. No more trips for her to the gas station - not at night, not in any sketchy part of town, not alone or with the kids - would make us both feel much better.

Most trips by most people are short, well within the 200 mile range of the new generation of electric vehicles (Tesla 3, Bolt). As prices continue to fall, the attractions of EVs (never going to the gas station, environmental benefits, putative national security implications) will appeal to more and more regular folk.

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Re: Tesla Model 3 anyone?

Post by just frank » Tue Apr 05, 2016 9:53 am

stoptothink wrote:
just frank wrote: As for Tesla's place: by claiming the lux end of this disruptive tech, they are making more profit on EVs (per sale) than any of the other EV makers, AND when the disruption comes, their brand will be associated with the longest history and quality in the market...to be the future 'Apple' brand of cars. IF they can hold it together. :wink:
All the reports say that Tesla is currently losing ~$4k per vehicle sold. Either you are saying that others are losing more or I am totally interpreting this wrong.
I am not going to be able to convince you. We can agree that tesla is poring revenue and capital resources into growth and infrastructure....is that successful amortization of earlier costs, or investment in future production....depends on the accounting model, discount rate AND future sales which are unknown.

I just know that even if Nissan cleared a profit on my 2013 LEAF, which is IMO unlikely, they are going to lose >$10k on the lease deal they gave me when I turn it in. Stated another way, they spent billions on just R&D 5-10 years ago, and have sold about 250k EV units to date.

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Re: Tesla Model 3 anyone?

Post by stoptothink » Tue Apr 05, 2016 10:11 am

just frank wrote:
stoptothink wrote:
just frank wrote: As for Tesla's place: by claiming the lux end of this disruptive tech, they are making more profit on EVs (per sale) than any of the other EV makers, AND when the disruption comes, their brand will be associated with the longest history and quality in the market...to be the future 'Apple' brand of cars. IF they can hold it together. :wink:
All the reports say that Tesla is currently losing ~$4k per vehicle sold. Either you are saying that others are losing more or I am totally interpreting this wrong.
I am not going to be able to convince you. We can agree that tesla is poring revenue and capital resources into growth and infrastructure....is that successful amortization of earlier costs, or investment in future production....depends on the accounting model, discount rate AND future sales which are unknown.

I just know that even if Nissan cleared a profit on my 2013 LEAF, which is IMO unlikely, they are going to lose >$10k on the lease deal they gave me when I turn it in. Stated another way, they spent billions on just R&D 5-10 years ago, and have sold about 250k EV units to date.
Still confused, EVERYBODY is losing money on EVs right now, Tesla included (no matter how you play with the numbers). Whether that will result in profit down the road, nobody knows and it isn't really relevant to what I was saying: I simply had no idea what "profit' was supposed to mean because they certainly have not yet made a profit.

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Re: Tesla Model 3 anyone?

Post by just frank » Tue Apr 05, 2016 11:03 am

stoptothink wrote: Still confused, EVERYBODY is losing money on EVs right now, Tesla included (no matter how you play with the numbers). Whether that will result in profit down the road, nobody knows and it isn't really relevant to what I was saying: I simply had no idea what "profit' was supposed to mean because they certainly have not yet made a profit.
I suppose I was thinking closer to 'gross margin' per vehicle, which I think is significantly positive on a 'marginal cost' basis, i.e. neglecting most plant costs.

Nissan makes a profit, but not on EVs. Similarly, I think Tesla is like amazon more concerned about growth than GAAP profit. They could charge $4k more per car (if that would satisfy you) and still sell very nearly as many cars. If Nissan tried to charge $10k more per vehicle to get close to break even their sales would **collapse** more than they already are (due to their current awkward position in the product development cycle).

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Re: Tesla Model 3 anyone?

Post by Valuethinker » Tue Apr 05, 2016 11:05 am

stoptothink wrote:
just frank wrote:
Valuethinker wrote: NOTE THIS QUOTE IS MISATTRIBUTED TO ME As for Tesla's place: by claiming the lux end of this disruptive tech, they are making more profit on EVs (per sale) than any of the other EV makers, AND when the disruption comes, their brand will be associated with the longest history and quality in the market...to be the future 'Apple' brand of cars. IF they can hold it together. :wink:
All the reports say that Tesla is currently losing ~$4k per vehicle sold. Either you are saying that others are losing more or I am totally interpreting this wrong.
I don't like EBITDA as a measure of corporate performance *but* the world is full of internet startups that made huge P&L losses (accounting earnings) but that was a product of massive investment in capital spending. Makes them hard to compare to industry incumbents.

What does Tesla look like at the EBITDA/ vehicle level?
Last edited by Valuethinker on Tue Apr 05, 2016 12:27 pm, edited 1 time in total.

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Re: Tesla Model 3 anyone?

Post by randomguy » Tue Apr 05, 2016 11:27 am

stoptothink wrote:
just frank wrote:
Valuethinker wrote: As for Tesla's place: by claiming the lux end of this disruptive tech, they are making more profit on EVs (per sale) than any of the other EV makers, AND when the disruption comes, their brand will be associated with the longest history and quality in the market...to be the future 'Apple' brand of cars. IF they can hold it together. :wink:
All the reports say that Tesla is currently losing ~$4k per vehicle sold. Either you are saying that others are losing more or I am totally interpreting this wrong.
You can do both. They are not remotely exclusive statements.

The first says something like Tesla can be building a model S for 50k and selling it for 100k and be making more money per car than any anyone else. Tesla can also be losing 4k/car given the other expenses (building a gigafactory, model x engineering,....) that they are spending money on. It is important to realize that Tesla loses don't go up as they sell more cars. They key in these types of business is getting the volume up (development costs of building 1 car or 1 million is the same, setting up the 2nd production line is cheaper than the 1st, volume discounts on parts,...) while maintaining the price.

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Re: Tesla Model 3 anyone?

Post by petiejoe » Tue Apr 05, 2016 11:35 am

stoptothink wrote: Still confused, EVERYBODY is losing money on EVs right now, Tesla included (no matter how you play with the numbers). Whether that will result in profit down the road, nobody knows and it isn't really relevant to what I was saying: I simply had no idea what "profit' was supposed to mean because they certainly have not yet made a profit.
There's a big difference between losing $4k per car sold (the headlines) and using profits from one part of the company to pay for expansion in other directions (the current state of Tesla). Tesla has not provided a complete breakdown, but at the time the $4k/car number was calculated, Tesla had 5 major initiatives:
* Assembling and Selling Model S's
* Building out the supercharger infrastructure
* Ramping up Model X production
* Building the GigaFactory for battery production
* Designing the Model 3

At that time, they made very little money per Model X (they were receiving reservation fees, but no cars were rolling off the production lines yet). They made no money from the GigaFactory. They made no money from the Model 3. Building out the supercharger infrastructure could be seen as costs for Model S (to fulfill promises for previous purchases). Considering the cost of ramping up a new production line and the cost of the GigaFactory, it's fairly safe to assume that each Model S sold made Tesla more money. I don't know that we can make as bold of a statement as saying they made more profit per sale than anybody else, but they clearly made a profit per car sold.

In the unveiling of the Model 3, Elon Musk pointed out very frankly that Model S and Model X owners were paying for the Model 3. Tesla is still very definitely in startup mode and it remains to be seen whether they can turn that into a profitable business, but they're upfront about the challenges they need to overcome and the Model 3 is key to their vision of bringing electric vehicles to the mainstream. I'm definitely buying a 3 when it first comes out, but I hope that as they ramp up battery production and with any luck make a few breakthroughs in that direction, they'll have a truly affordable option in another 5-8 years (right in line with when I'll be ready to purchase another new car).

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Re: Tesla Model 3 anyone?

Post by Valuethinker » Tue Apr 05, 2016 12:29 pm

just frank wrote:
stoptothink wrote:
just frank wrote: As for Tesla's place: by claiming the lux end of this disruptive tech, they are making more profit on EVs (per sale) than any of the other EV makers, AND when the disruption comes, their brand will be associated with the longest history and quality in the market...to be the future 'Apple' brand of cars. IF they can hold it together. :wink:
All the reports say that Tesla is currently losing ~$4k per vehicle sold. Either you are saying that others are losing more or I am totally interpreting this wrong.
I am not going to be able to convince you. We can agree that tesla is poring revenue and capital resources into growth and infrastructure....is that successful amortization of earlier costs, or investment in future production....depends on the accounting model, discount rate AND future sales which are unknown.

I just know that even if Nissan cleared a profit on my 2013 LEAF, which is IMO unlikely, they are going to lose >$10k on the lease deal they gave me when I turn it in. Stated another way, they spent billions on just R&D 5-10 years ago, and have sold about 250k EV units to date.
The P&L of Tesla looks like a high growth internet startup, rather than a car company.

They are investing their way towards volume production of a mass market car.

I never believed in them, never believed in the strategy- -I thought electric cars would be introduced by the major car OEMs and as second cars/ budget cars. But Musk, so far, has proven his doubters wrong.

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Re: Tesla Model 3 anyone?

Post by Valuethinker » Tue Apr 05, 2016 12:33 pm

just frank wrote:
Valuethinker wrote: 2020 at a stretch you might see 1% of world sales be EV. 2030 it might be 10%. 2050 it might be nearly 100%.
Too conservative.

Actually, for **sedans** EVs were >1% of US vehicle sales in 2014. For all light vehicles (including SUVS and pickups, for which until recently there were no EV offerings), it was closer to 0.6%. IIRC, EV sales figures are even better in Europe as a fraction of total sales, at a comparable >1% of sedans in 2015. China is still a smaller car market, but has had EV sales surge last year to a larger volume than the US.

In the luxury sedan segment, the Model S has been stealing significant enough share that all the makers have seen their luxury sales drop ~10% over the last year. This is why all those makers are planning Model S lux EV clones....they fear going out of business in a few years if they don't!

Bottom line, in 2016 batteries are still relatively expensive....you would expect the most penetration in the lightest vehicles (which need the smallest batteries per range unit) AND in the lux segment, where battery cost is less of an issue (allowing a 200+ mile battery today). In both of those segments, sales and market penetration growth have been fantastic.

More importantly, the cost of batteries is expected to drop to the point that long-range EVs have lower **Initial** cost that all ICE car market segments in 2020. At that point, I would expect EV sales for all light vehicles to displace ICE cars in a way the Model S is now doing in the lux segment...soaring past 10% of sales within a couple years...like 2021 or 2022.

My wild guess would be we cross 50% of light vehicle sales before 2030.

Its not unlike the case with digital cameras....the first ones were expensive, and the pictures were inferior to quality film cameras. As soon as digital cameras had an equivalent picture quality to film and also cost less, in addition to being more fun and versatile, adoption surged in a few short years. Nowadays, there are still film photographers, but it is a hobby and pro niche, not a mass market.

As for Tesla's place: by claiming the lux end of this disruptive tech, they are making more profit on EVs (per sale) than any of the other EV makers, AND when the disruption comes, their brand will be associated with the longest history and quality in the market...to be the future 'Apple' brand of cars. IF they can hold it together. :wink:
I agree very much that this is a disruptive entry- -Classic Clayton Christensen going on (see the wikipedia entry on same). Note that the New Yorker had a fairly trenchant critique of "disruptive innovation" and all the Silicon Valley startups claiming to "disrupt" industries. That said, it's hard to argue that Uber is anything but highly disruptive.

I hope your forecasts are more right than mine--the world needs this technology in mass use, and it needs it yesterday.

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Re: Tesla Model 3 anyone?

Post by Valuethinker » Tue Apr 05, 2016 12:38 pm

Kevin M wrote:
queso wrote:<snip> another existing owner talking about trading it in as soon as the warranty is up for a newer model.
That could be me you are talking about. To clarify, the main reason to trade in would be to trade up--i.e., to newer hardware technology, and possibly to larger battery and higher performance model. Another choice would be to buy the extended warranty, which would give me another four years under warranty, for a total of eight years. That would be an order of magnitude less expensive than trading up.
With fast changing technologies, it's usually better to defer upgrading? Because you suffer from a degree of obsolescence every time you make a purchase, so better to have a more obsolete car for a few more years, and then be back at bleeding edge?

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Re: Tesla Model 3 anyone?

Post by knpstr » Tue Apr 05, 2016 2:58 pm

stoptothink wrote: Still confused, EVERYBODY is losing money on EVs right now, Tesla included (no matter how you play with the numbers). Whether that will result in profit down the road, nobody knows and it isn't really relevant to what I was saying: I simply had no idea what "profit' was supposed to mean because they certainly have not yet made a profit.
The article didn't provide specifics but said this in passing: (businessinsider)
"Tesla has been very good at making electric cars sexy. It has been very good at getting people to spend a lot of money to buy its sexy electric cars (if not for massive reinvestment, Tesla would have double-digit profit margins)"

(emphasis mine)
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Re: Tesla Model 3 anyone?

Post by Kevin M » Tue Apr 05, 2016 5:29 pm

Valuethinker wrote: With fast changing technologies, it's usually better to defer upgrading? Because you suffer from a degree of obsolescence every time you make a purchase, so better to have a more obsolete car for a few more years, and then be back at bleeding edge?
As with any fast moving hardware technology, you're always going to be somewhat obsolete fairly soon, and there will always be something desirable in the next hardware version that you can only get by buying new. The question will be how big the change is and how important it is to you.

For example, AutoPilot was a huge leap forward, and if I hadn't had a car that had the hardware to support it, that probably would have been enough of an advance that I would have wanted to upgrade when my 4-year warranty had run out (if not sooner). I doubt that I would have bought my model S if it hadn't had AP--I think that was the feature that pushed me over the edge.

On the software side, there's still lots of room for additional features that can be downloaded to the existing Model S. When I bought the car, it could auto parallel park, but not perpendicular park. The latter feature was added in a software update a month or so ago, along with the summon feature, which allows the car to drive forward or backward 40 feet with no driver in the car. Anyone with a car built in late 2014 or later has the AP hardware (I believe first AP hardware rolled out September 2014, but not on all cars delivered in that month), and can pay to have it activated if they didn't buy it originally.

Currently the car in full AP won't stop at stop signs or traffic lights (unless there's a car in front of you that stops), nor will it drive according to the navigation route (e.g., make turns on its own). I believe the hardware to do these things is in the car, but legislation has to be passed to allow them, and then the software can be updated to do so. Could be wrong about the details, but there's certainly more autopilot features that can be added by software downloads.

What the current hardware doesn't support is full auto pilot with no driver intervention; i.e., achieving Elon's goal of the EV being able to drive from New York to San Francisco with no driver in the car. That will require redundancy in the hardware to provide backup in case of hardware failure (as Elon says, currently the driver is the backup). This is an example of a hardware upgrade that probably would motivate me to trade up sooner rather than later.

Bringing the discussion back to Model 3, I haven't heard of any features in the M3 yet that would motivate me to trade in my MS for one. Of course the M3 will have the latest generation of Tesla hardware available when they're built, but then so will the new MS or whatever replaces it.

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Re: Tesla Model 3 anyone?

Post by Kevin M » Tue Apr 05, 2016 5:47 pm

With respect the the profitability discussion, this might be of interest. Here is The Secret Tesla Motors Master Plan (just between you and me) that Elon shared in his August 2006 blog post:
Elon Musk wrote:So, in short, the master plan is:

Build sports car
Use that money to build an affordable car
Use that money to build an even more affordable car
While doing above, also provide zero emission electric power generation options
Don't tell anyone.
I guess the Model S is the "affordable car" (yikes!), and the Model 3 is the "even more affordable car". And I guess the Model X is just an additional, interim step inserted later.

From earlier in the blog post:
Elon Musk wrote:As you know, the initial product of Tesla Motors is a high performance electric sports car called the Tesla Roadster. However, some readers may not be aware of the fact that our long term plan is to build a wide range of models, including affordably priced family cars. This is because the overarching purpose of Tesla Motors (and the reason I am funding the company) is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution.
(highlight mine)

I have to sheepishly admit that I wasn't aware of this before I bought my T, and it didn't enter at all into my purchase decision, anymore than the status thing did (contrary to what some people insist on believing). I bought the car for the pure driving pleasure, and the environmental benefit was a nice side benefit. I had always thought spending $10K extra for a hybrid was silly--saving money on gas and reducing carbon emissions didn't enter into my quick mental calculation at all in deciding to buy the T. Of course as a Boglehead, a quick calculation of the purchase price of the T as a percent of my net worth was an important part of the calculation. ;-)

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Re: Tesla Model 3 anyone?

Post by Jozxyqk » Tue Apr 05, 2016 6:22 pm

HomerJ wrote:
All I'm asking is for Tesla believers to understand that it doesn't fit everyone yet.
Somehow I don't think anyone is actually saying this.

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Re: Tesla Model 3 anyone?

Post by harikaried » Tue Apr 05, 2016 6:33 pm

Kevin M wrote:
Elon Musk wrote:Build sports car
Use that money to build an affordable car
I guess the Model S is the "affordable car" (yikes!)
The base price for the sports car Roadster was $109,000. There initially was a 40 kWh Model S that started at $59,900, so that was relatively affordable, but it got discontinued because most people wanted more range/power/speed.

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Re: Tesla Model 3 anyone?

Post by matjen » Tue Apr 05, 2016 9:30 pm

With respect to the profitability discussion...a detailed bear case with dozens of links.

http://www.valuewalk.com/2016/04/the-te ... ion/?all=1
...in Q4 2015 the company averaged an $18,400 GAAP loss on every Model S it sold despite a starting price of $70,000 and an average price that ran much higher. So how does anyone with a brain in his head think this company can make money selling a car—even one 20% smaller—starting at $35,000?
And regarding real competition coming online soon and Tesla battery tech:
Perhaps the most interesting thing about the Bolt is that its 60kWh battery pack (made by LG) weighs just 960 pounds while the 60kWh Tesla pack (when it was offered) weighed 1125 pounds, a significant disadvantage for Tesla. Even if the Tesla pack’s housing was somewhat handicapped by needing to be large enough for the 85/90kWh models and thus as a 60kWh “pureplay” its weight might be closer to the Bolt’s, the Bolt’s energy density-per-pound at the pack level seems to show that the assembly, housing and cooling complications of Tesla’s method of wiring together many thousands of separate Panasonic cylindrical batteries vs. Chevrolet/LG’s much simpler use of just 288 prismatic cells makes Tesla’s first-to-market approach obsolete. As de facto proof of this, every manufacturer currently developing an EV has the option of using Tesla’s “thousands of cells” approach yet (as far as I know) none of them are; it thus seems clear that large-format prismatic batteries—not available with sufficient energy density at an attractive price when the Tesla Models S&X were designed—are now the superior approach and thus may render Tesla’s Gigafactory obsolete even before it opens.
And Model X
Meanwhile, Tesla’s rollout of its new Model X has been a disaster, with various enthusiast forums reporting myriad problems with its “falcon-wing” doors, seats and general build quality, as well as a very low confirmation rate for the refundable “orders” the company claims to have. And those orders that do exist are being delivered in ultra-slow motion as Tesla—which despite years of delays clearly did inadequate Model X testing—attempts to fix the vehicle’s problems (although of course its massive size problem is unfixable - Tesla Model X is 81.6 inches wide, which is wider than Hummer H2, Cadillac Escalade and Ford F-150. Do buyers want a car wider than those?).
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Re: Tesla Model 3 anyone?

Post by randomguy » Tue Apr 05, 2016 10:16 pm

matjen wrote:
And regarding real competition coming online soon and Tesla battery tech:
Perhaps the most interesting thing about the Bolt is that its 60kWh battery pack (made by LG) weighs just 960 pounds while the 60kWh Tesla pack (when it was offered) weighed 1125 pounds, a significant disadvantage for Tesla. Even if the Tesla pack’s housing was somewhat handicapped by needing to be large enough for the 85/90kWh models and thus as a 60kWh “pureplay” its weight might be closer to the Bolt’s, the Bolt’s energy density-per-pound at the pack level seems to show that the assembly, housing and cooling complications of Tesla’s method of wiring together many thousands of separate Panasonic cylindrical batteries vs. Chevrolet/LG’s much simpler use of just 288 prismatic cells makes Tesla’s first-to-market approach obsolete. As de facto proof of this, every manufacturer currently developing an EV has the option of using Tesla’s “thousands of cells” approach yet (as far as I know) none of them are; it thus seems clear that large-format prismatic batteries—not available with sufficient energy density at an attractive price when the Tesla Models S&X were designed—are now the superior approach and thus may render Tesla’s Gigafactory obsolete even before it opens.
The guy who wrote this quote is clueless or trying to encourage a lower stock price. Battery density increases steadily every year. A 2016 battery should weigh less than a 2012 one even if they used the same assembly technique. Supposedly the upgrade from the p85 to p90 was a result of this. Or look at the roadster upgrade of about 30% from 2008 technology if you want to see what long term gains look like. The question is how much will Teslas 2017 battery weigh (supposed energy density is up 10-20% over model S batteries but until it ships who knows) and cost (weighing 200lbs more to save 2k might be an ok tradeoff for a production car) compared to the alternatives

Building a battery factory is a huge risk. GM has offloaded that risk to LG and the other battery makers. If someone else comes out with something better they can switch and not be out 5 billion bucks. On the other hand if it lets them build 500k/yr cars while if GM is limited by LG production to 50k/yr then maybe it was the right bet. Time will tell. But this is why I don't buy individual stocks.:)

Dimitri
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Re: Tesla Model 3 anyone?

Post by Dimitri » Tue Apr 05, 2016 11:04 pm

randomguy wrote:
matjen wrote:
And regarding real competition coming online soon and Tesla battery tech:
Perhaps the most interesting thing about the Bolt is that its 60kWh battery pack (made by LG) weighs just 960 pounds while the 60kWh Tesla pack (when it was offered) weighed 1125 pounds, a significant disadvantage for Tesla. Even if the Tesla pack’s housing was somewhat handicapped by needing to be large enough for the 85/90kWh models and thus as a 60kWh “pureplay” its weight might be closer to the Bolt’s, the Bolt’s energy density-per-pound at the pack level seems to show that the assembly, housing and cooling complications of Tesla’s method of wiring together many thousands of separate Panasonic cylindrical batteries vs. Chevrolet/LG’s much simpler use of just 288 prismatic cells makes Tesla’s first-to-market approach obsolete. As de facto proof of this, every manufacturer currently developing an EV has the option of using Tesla’s “thousands of cells” approach yet (as far as I know) none of them are; it thus seems clear that large-format prismatic batteries—not available with sufficient energy density at an attractive price when the Tesla Models S&X were designed—are now the superior approach and thus may render Tesla’s Gigafactory obsolete even before it opens.
The guy who wrote this quote is clueless or trying to encourage a lower stock price. Battery density increases steadily every year. A 2016 battery should weigh less than a 2012 one even if they used the same assembly technique. Supposedly the upgrade from the p85 to p90 was a result of this. Or look at the roadster upgrade of about 30% from 2008 technology if you want to see what long term gains look like. The question is how much will Teslas 2017 battery weigh (supposed energy density is up 10-20% over model S batteries but until it ships who knows) and cost (weighing 200lbs more to save 2k might be an ok tradeoff for a production car) compared to the alternatives

Building a battery factory is a huge risk. GM has offloaded that risk to LG and the other battery makers. If someone else comes out with something better they can switch and not be out 5 billion bucks. On the other hand if it lets them build 500k/yr cars while if GM is limited by LG production to 50k/yr then maybe it was the right bet. Time will tell. But this is why I don't buy individual stocks.:)
GM may have outsourced the risk to LG and other battery makers. Elon Musk doesn't have to outsource because he has found someone to subsidize him. Taxpayers.

LA Times article - Elon Musk's growing empire is fueled by $4.9 billion in government subsidies - http://www.latimes.com/business/la-fi-h ... story.html
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Re: Tesla Model 3 anyone?

Post by randomguy » Tue Apr 05, 2016 11:30 pm

Dimitri wrote:
GM may have outsourced the risk to LG and other battery makers. Elon Musk doesn't have to outsource because he has found someone to subsidize him. Taxpayers.

LA Times article - Elon Musk's growing empire is fueled by $4.9 billion in government subsidies - http://www.latimes.com/business/la-fi-h ... story.html
GM has access to those same subsidies. Heck they got 2x the state subsidies of tesla last I checked. They would get even more if they would stop building factories in Mexico:). That is how large scale manufacturing works in the US. The states all bid crazy amounts of money in an attempt to get jobs. And we are ignoring those small subsidies that keep GM, Fiat-Chrysler and maybe ford in business. You know the one that cost us like 16 billion:).

But yeah publicize risk, privatize profits is a great business model if you can execute it.

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Re: Tesla Model 3 anyone?

Post by Valuethinker » Wed Apr 06, 2016 3:36 am

randomguy wrote:
Dimitri wrote:
GM may have outsourced the risk to LG and other battery makers. Elon Musk doesn't have to outsource because he has found someone to subsidize him. Taxpayers.

LA Times article - Elon Musk's growing empire is fueled by $4.9 billion in government subsidies - http://www.latimes.com/business/la-fi-h ... story.html
GM has access to those same subsidies. Heck they got 2x the state subsidies of tesla last I checked. They would get even more if they would stop building factories in Mexico:). That is how large scale manufacturing works in the US. The states all bid crazy amounts of money in an attempt to get jobs. And we are ignoring those small subsidies that keep GM, Fiat-Chrysler and maybe ford in business. You know the one that cost us like 16 billion:).

But yeah publicize risk, privatize profits is a great business model if you can execute it.
If you have high fixed costs and high barriers to entry, then that strategy makes economic sense-- once you have built up a global competitor, you can let it loose.

It's more or less what happened in, for example:

- civilian nuclear power
- semiconductors (Fairchild, Intel etc.)
-software (the influence of the SAGE super project to build a US-wide national air defence computer system; the creation of the internet)
- aerospace (military and space programme paying, eg, for the 747 development; Airbus in Europe)

Just to name 3 big US industries.

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Re: Tesla Model 3 anyone?

Post by knpstr » Wed Apr 06, 2016 7:24 am

Dimitri wrote:GM may have outsourced the risk to LG and other battery makers. Elon Musk doesn't have to outsource because he has found someone to subsidize him. Taxpayers.
Elon musk had to build a battery factory because he has a goal to produce 500,000 cars a year. That would require more batteries than all the world's current battery manufacturing on Earth...combined.

If he "outsourced" it there would be no lithium ion batteries left for anything/anyone else. I also believe that they are working on different battery chemistry options that may work better for vehicle use vs laptop use.

As for the subsidies that ~$5B is including all of his companies or companies he has ties to: Tesla, Solar City, SpaceX. It also included as subsidies the "environmental credits" he can sell to other businesses.
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Re: Tesla Model 3 anyone?

Post by ArmchairArchitect » Wed Apr 06, 2016 8:47 am

Tesla is smart. They can effectively use all the $1,000 Model 3 deposits as free financing (well, less the one-time credit card merchant fees). It will amount to over $300 million in free financing, given the # of deposits.

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Re: Tesla Model 3 anyone?

Post by randomguy » Wed Apr 06, 2016 10:34 am

Valuethinker wrote:
If you have high fixed costs and high barriers to entry, then that strategy makes economic sense-- once you have built up a global competitor, you can let it loose.

It's more or less what happened in, for example:

- civilian nuclear power
- semiconductors (Fairchild, Intel etc.)
-software (the influence of the SAGE super project to build a US-wide national air defence computer system; the creation of the internet)
- aerospace (military and space programme paying, eg, for the 747 development; Airbus in Europe)

Just to name 3 big US industries.
Sure but you also end up with A123, Fisker, Solynda's and 38 studios. The problem with the states doing it is that you build up an industry by subsidizing it and then another state comes along and "Steals" the winners by offering some big tax breaks. Effectively the states are willing to give up all sorts of corporate revenue in order to get some salaries. It is great for the companies. Not so great for all the companies in those states that have to pay more in taxes to make up for those shortfalls.

But as I said, you can't pick on Tesla for doing this. Every company does it if they are big enough. And you can't really pick on the US for doing it, since every other nation does the same thing.

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Re: Tesla Model 3 anyone?

Post by Valuethinker » Wed Apr 06, 2016 11:07 am

randomguy wrote:
Sure but you also end up with A123, Fisker, Solynda's and 38 studios. The problem with the states doing it is that you build up an industry by subsidizing it and then another state comes along and "Steals" the winners by offering some big tax breaks. Effectively the states are willing to give up all sorts of corporate revenue in order to get some salaries. It is great for the companies. Not so great for all the companies in those states that have to pay more in taxes to make up for those shortfalls.
If we are talking regional or municipal governments within the USA then I agree it's not going to increase economic efficiency and may destroy it.

In the case of sports stadiums, it very clearly is simply creating economic rent for the owners, players and their agents. The municipalities are net losers. The US both allows a violation of anti trust laws (fixed number of teams per league) *and* competitive bidding for those teams. European football, say, is quite different (teams cannot easily move locations- -Manchester United has to be near Manchester ).

It's when you get to the national level that it gets more complex.
But as I said, you can't pick on Tesla for doing this. Every company does it if they are big enough. And you can't really pick on the US for doing it, since every other nation does the same thing.
There are at least 2 issues:

- if there's a positive externality not captured by the company or its shareholders, then encouraging a company to do something has social value. Chinese subsidization of PV manufacturers has benefited everyone-- the world gets cheap solar panels. Civilian nuclear power followed a similar track (governments basically underwrote the original reactors and technology development).

http://sro.sussex.ac.uk/51638/

http://www.sussex.ac.uk/profiles/111262/publications

- if you are in an industry with economies of scale and learning effects (pharmaceuticals, semiconductors, aerospace, software are classic examples) then it matters whether you do it first, or get to maximum scale first. Canada vs. USA (Boeing actually started in Vancouver, CA I believe). This is the "new trade theory" (see Paul Krugman's Nobel Prize winning work, for example).

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matjen
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Re: Tesla Model 3 anyone?

Post by matjen » Wed Apr 06, 2016 11:35 am

Valuethinker wrote: In the case of sports stadiums, it very clearly is simply creating economic rent for the owners, players and their agents. The municipalities are net losers. The US both allows a violation of anti trust laws (fixed number of teams per league) *and* competitive bidding for those teams.
Amen on the sports stadium issue. In the past the owners would argue that the new stadium would bring all these people into the city/area and htey would spend money at the local establishments. This may have been true in the 1980s but almost every stadium built since has a dozen real food establishments, fancy bars, and gift stores. They own the fan from the moment they park their car until they leave for their suburban home in their huge Tahoe or minivan.

Which brings me to the Tesla X. That behemoth is 6 inches wider than a Honda Odyssey or a Toyota Sienna minivan. Then you have the wing doors instead of perfectly functional sliding doors. Who needs that?!?
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Re: Tesla Model 3 anyone?

Post by LadyGeek » Wed Apr 06, 2016 11:39 am

This thread has run its course and is locked (topic exhausted, now derailed on economic policy). See: Locked Topics
Moderators or site admins may lock a topic (set it so no more replies may be added) when a violation of posting policy has occurred. Occasionally, even if there are no overt violations of posting policy, a topic (or thread) will reach a point where the information content of the discussion has been essentially exhausted and further replies are much more likely to cause distress to the community than add anything of value.
I also removed an off-topic post.
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