To take or not to take delivery of Tesla 3

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matjen
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Re: To take or not to take delivery of Tesla 3

Post by matjen » Wed Jul 11, 2018 7:52 am

Sorry Thrifty but I enjoy this topic. It isn't my fault that within the last few months Tesla has decided to produce in a tent, have an infamous investor call, lay off 9% of its workforce, lose top level management, change its brake testing, require additional funds in its reservation system, bypass its reservation system (but require funds), delay the 35K Model 3, add new more $$ Model 3s, require additional nagging on its AP, etc. This is all news relative to the topic. I find it fascinating. It's not like we are discussing a Corolla and every few days I chime in about how I don't like the quality of the interior over and over. :-) There is always something exciting and new in Teslatown!

The two posts above me just take things Tesla says at face value as if a fact. The complete opposite position should be taken IMO. Otherwise we would have self driving Teslas by now, mass production of solar shingles, 20K plus a month Model 3 production, multiple factories in China, etc. So, for instance, the 5k figure that all of a sudden became "factory gated." TSLA claimed they always used it but people couldn't find it in any offical docs. Here is Charley Grant from the WSJ for instance.
Can someone point me to this term? Never seen it in a quarterly delivery announcement filed with the SEC (Tesla started reporting quarterly deliveries in 2015).
Regarding incentives:
I'm working from memory here but don't the incentives get cut in half each quarter or something like that after 200k? So they hit 200K in Q3. If the 35K model comes out in Q4 next year or later will there be any Federal incentives? That was the point I was trying to make. The incentives are a carrot to a lower price and the longer the 35K version is delayed the lower they go until zero or near zero.

We all know how accurate Musk has been with Model 3 production. The evidence on them being way late is on my side not yours.

For instance, 20k/month by Q42017. LOL.
https://mashable.com/2017/10/03/tesla-m ... _5Um2H2mqi
On Monday, Tesla reported it has produced just 260 Tesla Model 3 cars, its first mass-market all-electric sedan, in the last quarter. That’s approximately 120 cars a month, a number that would be less distressing if Musk himself hadn’t predicted producing as many as 20,000 Model 3 cars a month by December of this year.
There is a twitter account (skabooshka) that has been very accurate on Model 3 production. Local person who monitors the Freemont factory. He has Tesla at 2303 Model 3s through the first 9 days of July...

How about that China factory news yesterday or day before? Upthread someone else brought it up as exciting new news about to be annouced. Well that same story was told in 2015, 2016, 2017. There is no factory. IF this one is true it will be 4-5 years before active. That is how long it took Geely and they are a Chinese company. Of course Tesla says 2 years or something like that.

Tesla China 10/23/2015
Tesla may build cars in China within the next two years
https://www.engadget.com/2015/10/23/tes ... o-factory/

Tesla China 6/24/2016
Tesla signs $9 billion agreement to build factory in China, report says
https://mashable.com/2016/06/24/tesla-f ... qNmUcdmaqU

All of this is quite relevant to the viability of Tesla IMO. I could go down the quality path. The forums and twitter is littered with people complaining about the delivery of the car, it breaking within days, general quality problems, etc. I'm sure someone is thinking to themselves that car forums often have that. The difference is this is within days of delivery if not delivery day itself. I figured that would be too much though. Trying to be sensitive. :P

However I suggest prospective Model 3 buyers check out what is happening in Norway. An early adopter of EV and a big Tesla market relative to population. Tesla's third largest market actually which is amazing. They are having enormous repair and service issues. Musk acknowledged it and blamed the government. Well he lied.

https://www.reuters.com/article/us-tesl ... SKBN1JZ1L5
Tesla Chief Executive Elon Musk last week blamed a wait for government approval in Norway, its biggest market after the United States and China, for not being able to move faster in addressing growing complaints from consumers.

The Norwegian Consumer Council said on July 4 Tesla had climbed to fourth place in the first six months of 2018 in the list of companies Norwegians complain about the most, up from 24th in 2017.

Musk tweeted in response: “Norwegians are right to be upset with Tesla. We are having trouble expanding our service facilities in Oslo especially. Can solve quickly with Tesla mobile service vans, but awaiting govt permission to do so.”

But Norway’s public roads authority said it had not yet seen a formal application from the company.

Many things go into the decision to buy (not lease) an expensive car. Reliability and service are key issues IMO.
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BrandonBogle
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Re: To take or not to take delivery of Tesla 3

Post by BrandonBogle » Wed Jul 11, 2018 8:53 am

The Federal tax incentive runs at 100% for two quarters upon hitting 200k U.S. cars for that manufacturer, including the quarter 200k is reached. Then it is 50% for two more quarters and finally 25% for two more.

So if Tesla hits 200k anytime before Sept 1, the full $7,500 credit is available until 12/31/2018 and $3,750 is available until 6/30/2019, and $1,875 until 12/30/2019


Edit to add:
Also, the add’l funds to the reservation is the same process Tesla has used for the Model S prior to general release and again for the Model X. Once open to all to order directly vs. making a reservation, the process used on the Model 3 (taking an up front down payment that becomes non-refundable once the car is locked down for production) is again the same Tesla has used for the S and X. Nothing new here. But yeah. There are new things in Tesla-world, but many things are simply par for the course.

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Re: To take or not to take delivery of Tesla 3

Post by FoolStreet » Wed Jul 11, 2018 11:46 am

ThriftyPhD wrote:
Tue Jul 10, 2018 8:32 pm
matjen wrote:
Tue Jul 10, 2018 6:49 pm
Though I honestly, truly believe they aren't close to 5k a week. Their paint shop for Fremont is only licensed for 5K a week total. This is why we had the "factory-gated" nonsense. If they had 100k-200k of reservations of people interested in the more expensive vehicles they would not have needed to do this now. They could have waited a few months minimum. This is about Q3 cash IMO. Agree it makes sense to build the expensive cars but they are obviously super low on those in the queue. Their production in July has been horrid as well. It will not be 5k a week this month.
Just to try and reduce the hyperbole in this thread, do you really mean to claim that Tesla is lying to investors when they claim to hit 5k a week Model 3, 7k Models 3, S, and X in the last week of Q2? And that they're projecting an increase to 6k a week next month for Model 3 when you have proof their paint shop capacity is maxed out at 5k a week?

Would this be securities fraud to knowingly lie to investors?

If true, would the billions of dollars shorting TSLA be aware of this, and filing lawsuit for the fraud?
matjen wrote:
Tue Jul 10, 2018 2:44 pm
This is an indication of no demand for a 55k+ Model 3. Even if only 33% of the original 450k reservation holders wanted one that would be like 145k in the pipeline and they are only building a few thousand a month. 5k if you believe all of Tesla’s puffery.
I'm seeing $49k. Where do you get $55k? Are you adding a paint job and enhanced auto pilot? $49k gets you long range, stock wheels, black, standard autopilot, premium interior. The increase from $35k is the premium interior ($5k, they aren't offering standard yet) and extended range ($9k).

They produced 41k as of the end of Q2. At 5k/week, that's 20k/month. As a non reservation holder, I'm seeing 3-5 month wait if I order now. If 3 months, that means they will have produced another 120k cars before I would get mine, and that's without the expected ramp in production that is baked into the 3-5 month estimate. That's a total of 160k long range cars. 33% of 450 is... 148.5k.

So, no demand for the car, but months long wait to buy one.

I also find it interesting that people complained that you couldn't configure or get an estimate without a reservation. Now that they've opened it up to everyone, those same people complain. Do you know why people would complain about something, and then complain when their original complaint was addressed?
DanMahowny wrote:
Tue Jul 10, 2018 3:04 pm
I believed Musk in April 2016. I know better now.

The $35k model3 was a lie.
So you think they announced a $35k version knowing that they would never make it? Or did you incorrectly assume that the $35k version would be the first to roll off the assembly? Was your expectation that they would start with the lowest margin option first, and then only make the higher margin version last? Does any other company release products this way?

Between matjen and DanMahowny, this thread is starting to read like a Seeking Alpha post where all the shorters complain about everything Tesla does.

You've both made your positions on Tesla in general and the Model 3 in specific quite clear. For those of us actually interested in the vehicle and wanting to discuss the more practical aspects of timing/options, would you mind lightening up on the fear mongering?

I’m with you ThriftyPhD. You know what they say, Don’t feed the Trolls....

I am excited about Tesla, will buy one, just not sure whether to get the 3 or X or Y and in what order. I can’t wait for road trip season with one.

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Re: To take or not to take delivery of Tesla 3

Post by roflwaffle » Wed Jul 11, 2018 12:49 pm

Ditto on not feeding the trolls (the factory has two paint shops FWIW). Tesla's opening up orders to everyone for the Long Range + PUP versions because that's where margins are highest and odds are Tesla only has until the end of the year to deliver cars that can get the full federal tax credit. They're shooting for profitability from the 3 because it makes it easier to raise capital in the future and gives them more wiggle room with production/etc down the road.

Tesla has already submitted the base/standard range 3's parts content/origin to the NHTSA for 2018, so I'm guessing at least a few base/standard range 3s will be built this year. I'm hoping more than a few will be built so employees and line-waiters can have a shot at a base 3 with the full federal tax credit. :beer

https://www.nhtsa.gov/sites/nhtsa.dot.g ... 262018.pdf

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Re: To take or not to take delivery of Tesla 3

Post by Nate79 » Wed Jul 11, 2018 4:05 pm

matjen wrote:
Wed Jul 11, 2018 7:52 am
Sorry Thrifty but I enjoy this topic. It isn't my fault that within the last few months Tesla has decided to produce in a tent, have an infamous investor call, lay off 9% of its workforce, lose top level management, change its brake testing, require additional funds in its reservation system, bypass its reservation system (but require funds), delay the 35K Model 3, add new more $$ Model 3s, require additional nagging on its AP, etc. This is all news relative to the topic. I find it fascinating. It's not like we are discussing a Corolla and every few days I chime in about how I don't like the quality of the interior over and over. :-) There is always something exciting and new in Teslatown!

The two posts above me just take things Tesla says at face value as if a fact. The complete opposite position should be taken IMO. Otherwise we would have self driving Teslas by now, mass production of solar shingles, 20K plus a month Model 3 production, multiple factories in China, etc. So, for instance, the 5k figure that all of a sudden became "factory gated." TSLA claimed they always used it but people couldn't find it in any offical docs. Here is Charley Grant from the WSJ for instance.
Can someone point me to this term? Never seen it in a quarterly delivery announcement filed with the SEC (Tesla started reporting quarterly deliveries in 2015).
Regarding incentives:
I'm working from memory here but don't the incentives get cut in half each quarter or something like that after 200k? So they hit 200K in Q3. If the 35K model comes out in Q4 next year or later will there be any Federal incentives? That was the point I was trying to make. The incentives are a carrot to a lower price and the longer the 35K version is delayed the lower they go until zero or near zero.

We all know how accurate Musk has been with Model 3 production. The evidence on them being way late is on my side not yours.

For instance, 20k/month by Q42017. LOL.
https://mashable.com/2017/10/03/tesla-m ... _5Um2H2mqi
On Monday, Tesla reported it has produced just 260 Tesla Model 3 cars, its first mass-market all-electric sedan, in the last quarter. That’s approximately 120 cars a month, a number that would be less distressing if Musk himself hadn’t predicted producing as many as 20,000 Model 3 cars a month by December of this year.
There is a twitter account (skabooshka) that has been very accurate on Model 3 production. Local person who monitors the Freemont factory. He has Tesla at 2303 Model 3s through the first 9 days of July...

How about that China factory news yesterday or day before? Upthread someone else brought it up as exciting new news about to be annouced. Well that same story was told in 2015, 2016, 2017. There is no factory. IF this one is true it will be 4-5 years before active. That is how long it took Geely and they are a Chinese company. Of course Tesla says 2 years or something like that.

Tesla China 10/23/2015
Tesla may build cars in China within the next two years
https://www.engadget.com/2015/10/23/tes ... o-factory/

Tesla China 6/24/2016
Tesla signs $9 billion agreement to build factory in China, report says
https://mashable.com/2016/06/24/tesla-f ... qNmUcdmaqU

All of this is quite relevant to the viability of Tesla IMO. I could go down the quality path. The forums and twitter is littered with people complaining about the delivery of the car, it breaking within days, general quality problems, etc. I'm sure someone is thinking to themselves that car forums often have that. The difference is this is within days of delivery if not delivery day itself. I figured that would be too much though. Trying to be sensitive. :P

However I suggest prospective Model 3 buyers check out what is happening in Norway. An early adopter of EV and a big Tesla market relative to population. Tesla's third largest market actually which is amazing. They are having enormous repair and service issues. Musk acknowledged it and blamed the government. Well he lied.

https://www.reuters.com/article/us-tesl ... SKBN1JZ1L5
Tesla Chief Executive Elon Musk last week blamed a wait for government approval in Norway, its biggest market after the United States and China, for not being able to move faster in addressing growing complaints from consumers.

The Norwegian Consumer Council said on July 4 Tesla had climbed to fourth place in the first six months of 2018 in the list of companies Norwegians complain about the most, up from 24th in 2017.

Musk tweeted in response: “Norwegians are right to be upset with Tesla. We are having trouble expanding our service facilities in Oslo especially. Can solve quickly with Tesla mobile service vans, but awaiting govt permission to do so.”

But Norway’s public roads authority said it had not yet seen a formal application from the company.

Many things go into the decision to buy (not lease) an expensive car. Reliability and service are key issues IMO.
At this point you are just poking the fanboy trolls who can not believe for one instance that Tesla can do any wrong. They are not interested in accurate discussion on important details about issues at Tesla and instead gloss over these critical items. Only positive opinions are welcome in this thread as has been very clear with certain Tesla trolls.

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Re: To take or not to take delivery of Tesla 3

Post by LadyGeek » Wed Jul 11, 2018 4:21 pm

Nate79 wrote:
Wed Jul 11, 2018 4:05 pm
Only positive opinions are welcome in this thread as has been very clear with certain Tesla trolls.
No, please see this post: Re: To take or not to take delivery of Tesla 3

This thread is locked for a 24 hour cooling-off period.

Update: See below.
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Re: To take or not to take delivery of Tesla 3

Post by LadyGeek » Thu Jul 12, 2018 3:44 pm

This thread is now reopened to continue the discussion.
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Re: To take or not to take delivery of Tesla 3

Post by autolycus » Thu Jul 12, 2018 3:55 pm

Definite answer on when Tesla hit the magic 200k number and when the US credits expire:

https://www.tesla.com/support/incentives

Don’t want to click the link? They hit 200k in Q3, so $7500 through 12/31/18, $3750 from 1/1/19-6/30/19, $1875 from 7/1-12/31/19.

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Re: To take or not to take delivery of Tesla 3

Post by matjen » Thu Jul 12, 2018 4:09 pm

ThriftyPhD wrote:
Tue Jul 10, 2018 8:32 pm

Would this be securities fraud to knowingly lie to investors?

If true, would the billions of dollars shorting TSLA be aware of this, and filing lawsuit for the fraud?
Nice timing. Reminds me of a week or two ago. People claiming there was no evidence of corner cutting in the Tent assembly line. Then the news broke that they just stopped using their standard brake tests at 3 A.M. or something like that. Perfect!

Ex-Tesla worker makes it official and blows the whistle to SEC
https://techcrunch.com/2018/07/11/ex-te ... tleblower/
Tripp’s whistleblower tip, which was filed July 6, alleges that Tesla knowingly manufactured batteries with punctured holes possibly impacting hundreds of cars on the road; misled the investing public as to the numbers of Model 3s actually being produced each week by as much as 44 percent; and lowered vehicle specifications and systemically used scrap and waste material in vehicles, all so as to meet production quotas, according to a statement from Meissner Associates.
Paint Shop issues:
roflwaffle wrote:
Wed Jul 11, 2018 12:49 pm
(the factory has two paint shops FWIW).
Sure and it looks like only one Regenerative thermal oxidizer (RTO) which can only handle around 5K a week. I'm generally loathe to link to anything from ZeroHedge but they have a great roll up of a detailed tweetstorm on this.

Is Elon Musk Deceiving Investors and Creditors About Tesla’s True Production Capacity?
https://www.zerohedge.com/news/2018-06- ... n-capacity

I do agree with ThriftyPhd that this will get too much into the weeds. Just a point of view and paint shops are known to be a bottleneck for a variety of reasons. Will be interesting to see what the output is the coming months.

Tesla Lagging on Model 3 Production
https://www.reuters.com/article/us-tesl ... SKBN1JO2XI
“Paint can’t handle the load right now because they have the Model S and X that they normally do and now they have all these Model 3s,” the worker told Reuters. “The paint department just can’t keep up.”
I stopped by Tesla today and saw a bunch of customer cars in the lot. FWIW, they tell me that there should be cars available for test drives in August. I also just hit the Tesla site and it appears that all references to a 35K Model 3 are gone. Good for them IMO. When it is a near a reality advertise it all you want.
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Re: To take or not to take delivery of Tesla 3

Post by DanMahowny » Thu Jul 12, 2018 5:06 pm

matjen wrote:
Thu Jul 12, 2018 4:09 pm
I also just hit the Tesla site and it appears that all references to a 35K Model 3 are gone. Good for them IMO.
Someday, I will be called a liar for saying that Musk promised a $35k model3.

Actually, I have no real proof.
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Re: To take or not to take delivery of Tesla 3

Post by Nate79 » Thu Jul 12, 2018 6:03 pm

DanMahowny wrote:
Thu Jul 12, 2018 5:06 pm
matjen wrote:
Thu Jul 12, 2018 4:09 pm
I also just hit the Tesla site and it appears that all references to a 35K Model 3 are gone. Good for them IMO.
Someday, I will be called a liar for saying that Musk promised a $35k model3.

Actually, I have no real proof.
Not sure why you think there is no proof that Musk has promised a $35k model 3. He has tweeted it many times. Here is an article with an example tweet quite recent:
https://insideevs.com/musk-provides-tim ... a-model-3/

You can watch/listen and hear the $35k price from the horse's mouth in this video:
https://www.engadget.com/2016/03/31/tes ... 0-model-3/
Around the 17min mark.

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Re: To take or not to take delivery of Tesla 3

Post by harikaried » Thu Jul 12, 2018 6:53 pm

FoolStreet wrote:
Wed Jul 11, 2018 11:46 am
I am excited about Tesla, will buy one, just not sure whether to get the 3 or X or Y and in what order.
Now with the federal tax credit for Teslas going away at the end of 2019, it seems likely there will be no federal incentives for the Model Y, which would start production at earliest 2020. Similar to how we weren't interested in Model S, the Model X is too big, so a smaller SUV more like our Forester would be worth considering. If both 3 and Y were available today, we most likely would go with the SUV to replace our second car, a ~25 year-old Camry. Although once we get the Model 3 and seeing how we keep existing vehicles for a long time, it seems quite possible that we won't buy any more vehicles ever with the changing transportation/mobility industry.

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Re: To take or not to take delivery of Tesla 3

Post by matjen » Fri Jul 13, 2018 7:51 am

I-Pace too much $$ harikaried? That's my assumption. Otherwise a perfect fit.

I know DanMahoney is being sarcastic but I want to enshrine this in Bogleheads forever! If not for all this noise starting like 835 days ago :shock: , there would never be a 28 page thread. As the OP originally wrote...
wrongfunds wrote:
Wed Sep 06, 2017 11:02 am
I had reserved Tesla 3 when it was announced. I did it because $35K-$7.5K price was too attractive to NOT put my name on the list.
The typical Model 3 that has normal AP (traffic sensing cruise control) is 54K. A little over the typical Boglehead auto suggestion. To be clear, I'm not spiking the football. Assuming Tesla survives the next year or so I think they will bring back the 35K price in small numbers. I don't think there will be 300,000 35K Model 3s sold and produced anytime in the near future however.

Image
Last edited by matjen on Fri Jul 13, 2018 8:25 am, edited 1 time in total.
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Re: To take or not to take delivery of Tesla 3

Post by ThriftyPhD » Fri Jul 13, 2018 8:01 am

matjen wrote:
Fri Jul 13, 2018 7:51 am
The typical Model 3 that has normal AP (traffic sensing cruise control) is 54K. A little over the typical Boglehead auto suggestion.
Extended range, premium interior, normal Auto Pilot (AP) is $49k. Adding Enhanced Auto Pilot is $5k more, or $54k total. You somehow complain that they aren't offering the base model, then insist on adding every luxury feature when discussing the price.
matjen wrote:
Fri Jul 13, 2018 7:51 am
I-Pace too much $$ harikaried? That's my assumption. Otherwise a perfect fit.
$70k. Yet you're complaining about a $49k car :D

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Re: To take or not to take delivery of Tesla 3

Post by matjen » Fri Jul 13, 2018 8:12 am

The AP is is sort of one of the main features people talk about with the Tesla and the 54K Model 3 doesn't have the advanced AP. You need to spend 54K to have the mid-level AP with traffic sensing cruise control. This is a feature that I would absolutely demand on any car I bought and I assume others do as well. A mid-level Leaf at $32,500 has this capability for instance. A standard Toyota Corolla has this feature. It is kind of important to most and considered a standard feature on cheaper and cheaper cars.

https://www.toyota.com/corolla/corolla-features/

Atleast the I-Pace will have the full tax credit for the foreseeable future. ;-). But you are right, more $$ and that $70K (before incentives as Tesla would say) doesn't get you active cruise. :(
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Re: To take or not to take delivery of Tesla 3

Post by VaR » Fri Jul 13, 2018 8:45 am

Back on the original topic, I do think there's a risk of the company declaring Chapter 11, but I suspect that even if it does, it'll be brought out of bankruptcy due to the strength of the brand and the product. That said, I do think there is a good chance that they get close to their production targets and become wildly profitable. But the possibility of wild success is less helpful to the purchaser than if they had taken a less risky course and hadn't traded off stability for another moonshot.

And it looks like with the model Y, that they could be going for another moonshot so buyers may be in for continued vendor risk.

That said, if I was going to get a car it would be a model 3. Seems like owners think it's a fun drive and owning one sounds like a small adventure into the future. You only live once!

I would not stretch finances to buy one if you can't afford it, though.

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Re: To take or not to take delivery of Tesla 3

Post by DanMahowny » Fri Jul 13, 2018 9:14 am

I think it's irresponsible and careless to purchase a model3. Musk promises have proven to be lies, and he's still going. Good chance Tesla folds in a year or so.

In an alternate universe, Tesla only builds the Model S, and it's the finest vehicle on the road.
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Re: To take or not to take delivery of Tesla 3

Post by autolycus » Fri Jul 13, 2018 9:18 am

VaR wrote:
Fri Jul 13, 2018 8:45 am
And it looks like with the model Y, that they could be going for another moonshot so buyers may be in for continued vendor risk.
Musk's comments in this Bloomberg article suggest that he strongly believes the Model 3 was the last "bet the company" risk. The Model Y and other future models will be far more incremental than the production ramps they've gone through from Roadster to Model S and Model S to Model 3. They may have pains, but they won't pose the same type of existential risk to the company. I think that's probably a reasonable take from him.

EDIT TO ADD: Should have quoted the relevant section since it's a long interview.
(Interviewer) You like to borrow and spend. You raise capital and spend quite a bit to launch a new product, and then as soon as you're about to come up for air, you do the same for the next product. You say you're going to be profitable for the second half of this year. Are you just going to go back into the cycle?

(MUSK) There have been three situations where it was necessary to bet the company. Like it was unavoidable to bet the company. The creation of the Roadster. Obviously, we're a brand-new company, it's our only product. From the Model S, we went from like 600 cars a year to 20,000 cars a year and a much more sophisticated car. Obviously, that was a bet-the-company situation.

Model X was painful but not a bet-the-company situation. Model 3, we're going from, you know—like the S or the X program is 1,000 cars a week. Model 3, even to basically be healthy for the Model 3 system, it's 5,000 cars a week. So it's a half order of magnitude increase relative to the S or the X. That is necessarily a bet-the-company decision. You cannot have that much of a step change for a manufacturing company without this being a bet-the-company decision.

But I do not see us doing another thing where we go five times bigger. Once we break through to mass market cars, where mass market is on the order of a quarter million vehicles per year, I cannot see us doing a 1.2 million-vehicle program of one particular model.

Basically, I believe Model 3 is the last bet-the-company situation. It's not like a desire to bet the company. There is not a choice. If somebody knows how to do it without betting the company, I would love to talk to that person. But I do not foresee future bet-the-company situations.

To the best of my judgment, I do not think we have any future bet-the-company situations. We will still need to work hard and be vigilant and not be complacent because it is very difficult just to survive as a car company. But it will not be the same level of strain as getting to volume production of Model 3.
Last edited by autolycus on Fri Jul 13, 2018 10:01 am, edited 2 times in total.

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Re: To take or not to take delivery of Tesla 3

Post by emoore » Fri Jul 13, 2018 9:29 am

DanMahowny wrote:
Fri Jul 13, 2018 9:14 am
I think it's irresponsible and careless to purchase a model3. Musk promises have proven to be lies, and he's still going. Good chance Tesla folds in a year or so.

In an alternate universe, Tesla only builds the Model S, and it's the finest vehicle on the road.
Give it a rest already. How is it irresponsible? Will you update this post in a year if Tesla is still around?

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Re: To take or not to take delivery of Tesla 3

Post by VaR » Fri Jul 13, 2018 10:37 am

DanMahowny wrote:
Fri Jul 13, 2018 9:14 am
Good chance Tesla folds in a year or so.
The mid for a one-year CDS on Tesla (protection for Tesla debt) is 4.5% or so. The implied default probability at 40% recovery is 7%, according to my rough calculations.

So bank broker-dealers will sell you protection on Tesla defaulting on its debt in the next year for 6% upfront or a 9.5% probability of default. They'll buy protection from you for 3% upfront or a 5% probability of default.

I don't think 7% is a "good chance".

I'd be thrilled if anyone else has some better quantitative assessment of default probabilities for Tesla. Or even just a different assessment.

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DanMahowny
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Re: To take or not to take delivery of Tesla 3

Post by DanMahowny » Fri Jul 13, 2018 10:48 am

VaR wrote:
Fri Jul 13, 2018 10:37 am
The mid for a one-year CDS on Tesla (protection for Tesla debt) is 4.5% or so. The implied default probability at 40% recovery is 7%, according to my rough calculations.

So bank broker-dealers will sell you protection on Tesla defaulting on its debt in the next year for 6% upfront or a 9.5% probability of default. They'll buy protection from you for 3% upfront or a 5% probability of default.

I don't think 7% is a "good chance".

I'd be thrilled if anyone else has some better quantitative assessment of default probabilities for Tesla. Or even just a different assessment.
So you're telling me there's a chance. :sharebeer
Funding secured

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Re: To take or not to take delivery of Tesla 3

Post by Nate79 » Fri Jul 13, 2018 11:57 am

VaR wrote:
Fri Jul 13, 2018 10:37 am
DanMahowny wrote:
Fri Jul 13, 2018 9:14 am
Good chance Tesla folds in a year or so.
The mid for a one-year CDS on Tesla (protection for Tesla debt) is 4.5% or so. The implied default probability at 40% recovery is 7%, according to my rough calculations.

So bank broker-dealers will sell you protection on Tesla defaulting on its debt in the next year for 6% upfront or a 9.5% probability of default. They'll buy protection from you for 3% upfront or a 5% probability of default.

I don't think 7% is a "good chance".

I'd be thrilled if anyone else has some better quantitative assessment of default probabilities for Tesla. Or even just a different assessment.
It would be interesting for you to compare this to some other well known companies so that there is a comparison point. Hard to know what is or isn't a high/low chance without something to compare too. To me 7% actually sounds really high for a public company to default on their debt.

VaR
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Re: To take or not to take delivery of Tesla 3

Post by VaR » Fri Jul 13, 2018 12:22 pm

DanMahowny wrote:
Fri Jul 13, 2018 10:48 am
VaR wrote:
Fri Jul 13, 2018 10:37 am
The mid for a one-year CDS on Tesla (protection for Tesla debt) is 4.5% or so. The implied default probability at 40% recovery is 7%, according to my rough calculations.

So bank broker-dealers will sell you protection on Tesla defaulting on its debt in the next year for 6% upfront or a 9.5% probability of default. They'll buy protection from you for 3% upfront or a 5% probability of default.

I don't think 7% is a "good chance".

I'd be thrilled if anyone else has some better quantitative assessment of default probabilities for Tesla. Or even just a different assessment.
So you're telling me there's a chance. :sharebeer
Saying "there's a chance" is a vacuous statement. It's not actionable. There's always a chance.

Also, note that "defaulting on debt" does not equate to "going out of business". It can either work out agreements with its debtholders in Chapter 11 or get bought out in whole in a Chapter 11 filing.

NewPhoneWhoDis
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Re: To take or not to take delivery of Tesla 3

Post by NewPhoneWhoDis » Fri Jul 13, 2018 1:35 pm

I'm trying to ascertain but can't quite understand based on his many many many many posts in this thread: is it DanMahowny's position that one should NOT take delivery of a Tesla 3? Please help. Thank you.

neilpilot
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Re: To take or not to take delivery of Tesla 3

Post by neilpilot » Fri Jul 13, 2018 2:31 pm

NewPhoneWhoDis wrote:
Fri Jul 13, 2018 1:35 pm
I'm trying to ascertain but can't quite understand based on his many many many many posts in this thread: is it DanMahowny's position that one should NOT take delivery of a Tesla 3? Please help. Thank you.
I think old DM is trying to get as many of us as possible to cancel our reservations and orders so that he can move up the delivery of his personal M3.

roflwaffle
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Re: To take or not to take delivery of Tesla 3

Post by roflwaffle » Fri Jul 13, 2018 2:39 pm

matjen wrote:
Thu Jul 12, 2018 4:09 pm
Paint Shop issues:
roflwaffle wrote:
Wed Jul 11, 2018 12:49 pm
(the factory has two paint shops FWIW).
Sure and it looks like only one Regenerative thermal oxidizer (RTO) which can only handle around 5K a week. I'm generally loathe to link to anything from ZeroHedge but they have a great roll up of a detailed tweetstorm on this.

Is Elon Musk Deceiving Investors and Creditors About Tesla’s True Production Capacity?
https://www.zerohedge.com/news/2018-06- ... n-capacity

I do agree with ThriftyPhd that this will get too much into the weeds. Just a point of view and paint shops are known to be a bottleneck for a variety of reasons. Will be interesting to see what the output is the coming months.

Tesla Lagging on Model 3 Production
https://www.reuters.com/article/us-tesl ... SKBN1JO2XI
“Paint can’t handle the load right now because they have the Model S and X that they normally do and now they have all these Model 3s,” the worker told Reuters. “The paint department just can’t keep up.”
I stopped by Tesla today and saw a bunch of customer cars in the lot. FWIW, they tell me that there should be cars available for test drives in August. I also just hit the Tesla site and it appears that all references to a 35K Model 3 are gone. Good for them IMO. When it is a near a reality advertise it all you want.
Haha, whenever I see Neidermeyer being cited there's a > 50% chance of horse hockey! :mrgreen:

It's not anything new either, he's just very anti-EV, and will say pretty much anything talking trash about them. Here's an article from 2010 about the Volt. Naturally he moved onto Tesla because they're leading in EV production.

https://www.nytimes.com/2010/07/30/opin ... meyer.html

And here's his "Tesla Death Watch".

https://www.thetruthaboutcars.com/categ ... ath-watch/

Anyhow, I would continue loathing posting anything from zerohedge. Typing "baaqmd Tesla "south paint"" into the almighty search box produced a BAAQMD Major Facility Review Permit as the first link, which references no fewer than two regenerative thermal doohickeys, and two spray booths for base coat with a combined capacity of a little less than 600,000 gallons of paint per year.

http://www.baaqmd.gov/~/media/files/eng ... .pdf?la=en

:sharebeer

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Re: To take or not to take delivery of Tesla 3

Post by LadyGeek » Fri Jul 13, 2018 2:55 pm

This thread has run its course and is locked (derailed, contentious, rehashing the same points, rants on Elon Musk, no added value to continue). 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.
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