Thoughts on TESLA

[NW-Bound]

Bloomberg has been estimating the production rate of Tesla by obtaining VIN numbers by various means. It said the production rate was estimated to be 1,000 cars/week, much less than the 2,500 goal they tried to reach.

A recent article said they have "production hell" because of early and over reliance on robots, including the final assembly phase which traditional car makers tried and failed.

See: Tesla: Robots are killing it - Business Insider

That jibes with an unconfirmed report earlier that they had to remove parts to undo many cars, causing further delay and ruining parts. The extensive use of robots is typical of Musk, hence the story is believable. He likes to take risks, and has been able to pull it off so far.

This is surely interesting to watch.

 

[ERD50]

Bloomberg has been estimating the production rate of Tesla by obtaining VIN numbers by various means. It said the production rate was estimated to be 1,000 cars/week, much less than the 2,500 goal they tried to reach. ...

This is surely interesting to watch.

I'd love to see a time-line of Musk's delivery promises versus reality. I know he's claimed this will improve several times now.

And I'm certainly willing to cut him some slack. It's quite a feat to take on established car makers. I think it's amazing that he has been able to deliver cars that people like, in these numbers.

But they aren't the numbers he promised, and it's sounding like not the numbers the company needs for cash flow. Is this the beginning of the end, or just a (large) bump in the road?

-ERD50

 

[bobandsherry]

Just a thought...

How sound would GM, Ford and Chrysler be if they paid back the bond holders that got stiffed? And anybody else that suffered from their 're-organization' a few years back?

The government certainly tilted the playing field in favor of the Big 3 in 2009.

Hey, help me understand what bond holders got stiffed by Ford? What bailouts did they get?

 

[Chuckanut]

Hey, help me understand what bond holders got stiffed by Ford? What bailouts did they get?

Here's what I read about Ford:

https://www.dailysignal.com/2009/04/07/bailout-fail-ford-drops-debt-while-gm-and-chrysler-flounder/

Bailout-free Ford announced yesterday that investors agreed to swap nearly $10 billion dollars in its debt for cash and stock, reducing its total debt burden by 28 percent. The price: about 38 cents on the dollar. After the late-afternoon announcement, Ford stock rallied, gaining 16 percent.

So, no bailout for Ford. My bad for including them with GM and Chrysler. But, if the above is correct bond holders took a huge haircut.



If this is wrong, please correct it. I don't follow this stuff so I may have missed some other news.

 

[meierlde]

Of course the other problem with Tesla is the location of service centers only near big cities leading to a chicken and egg problem in the more remote parts of the country. For example 1 service center in Co and 1 in Ut none in Mt or Id and 1 in Oregon in Portland and 2 in Wa in the Puget sound area. Of course this is in general the problem with non big 3 cars if your in the boonies find service for the vehicle. Smaller towns have a GM, Ford and Chrysler dealership only. Depending on the market penetration of the foreign brand local independent repair shops may or may not fix them. (For example it is quite a tow from Ontario Or to Portland.

 

[bobandsherry]

Here's what I read about Ford:

https://www.dailysignal.com/2009/04/07/bailout-fail-ford-drops-debt-while-gm-and-chrysler-flounder/


So, no bailout for Ford. My bad for including them with GM and Chrysler. But, if the above is correct bond holders took a huge haircut.

If this is wrong, please correct it. I don't follow this stuff so I may have missed some other news.

Let's face it, when the S&P dropped from over 1,500 to under 700 EVERYONE took a haircut, not just Ford investors. However GM and Chrysler took BK route that left stock holders with nothing. And bond holders end up with almost nothing. According to this article, $70K investment in GM bonds was worth $200 (basically worthless).

Bondholder furious over GM bankruptcy

Big difference between Ford and GM/Chrysler.

 

[Chuckanut]

L

Big difference between Ford and GM/Chrysler.

Very big.

My main point is that Tesla's financial problems are not unique to it. Obviously, the Big 3 had real issues a decade ago.

 

[aja8888]

Very big.

My main point is that Tesla's financial problems are not unique to it. Obviously, the Big 3 had real issues a decade ago.

Yeah, everyone stopped buying new cars at the same time and had no plans to buy one anytime soon.

 

[NW-Bound]

Businesses do not have the luxury that individuals have, to put aside cash to cover expenses for several years if no income comes in.

I currently have about 10 years worth of cash. And of course I can claim SS early too. Heh heh heh...

 

[jazz4cash]

My opinion of Musk overall is very unfavorable. Tesla could be a fabulous story if he would focus on getting the cars right but he's gone into so many dubious endeavors with questionable interaction between his public and private companies that he's lost my trust.

 

[braumeister]

Major recall on the Model S today.
https://www.theverge.com/2018/3/29/17177888/tesla-recall-model-s-size-power-steering

 

[bobandsherry]

Very big.

My main point is that Tesla's financial problems are not unique to it. Obviously, the Big 3 had real issues a decade ago.

The issues that GM, Chrysler and Ford encountered are MUCH different than what Tesla is encountering. The "Big 3" fell victim to economic downturn that had significant impact to many businesses. Tesla's issues are no where tied to the same type of circumstance. Time will tell if this is an instance where "pioneer's get arrows while the settler's get the land".

 

[bobandsherry]

Tesla Asks for Model 3 Factory Volunteers to Prove ‘Haters’ Wrong

 

[bobandsherry]

I'd love to see a time-line of Musk's delivery promises versus reality. I know he's claimed this will improve several times now.

And I'm certainly willing to cut him some slack. It's quite a feat to take on established car makers. I think it's amazing that he has been able to deliver cars that people like, in these numbers.

But they aren't the numbers he promised, and it's sounding like not the numbers the company needs for cash flow. Is this the beginning of the end, or just a (large) bump in the road?

-ERD50

Look at the bottom of this article, is this the type of info you were looking for?

Tesla Model 3 Tracker

 

[NW-Bound]

My opinion of Musk overall is very unfavorable. Tesla could be a fabulous story if he would focus on getting the cars right but he's gone into so many dubious endeavors with questionable interaction between his public and private companies that he's lost my trust.

+1

There's a lawsuit about his acquisition of SolarCity, a company founded by his cousin. Tesla took over $3B in debt carried by SolarCity. The cousin then bailed out, and started a new company. I wonder how much the cousin pocketed in this deal, before hitting Ctrl-Alt-Del.

Major recall on the Model S today.
https://www.theverge.com/2018/3/29/17177888/tesla-recall-model-s-size-power-steering

It's not a big deal though. Just some bolts/nuts that may get corroded.

Tesla Asks for Model 3 Factory Volunteers to Prove ‘Haters’ Wrong

Well, somebody has to work hard, in order for the company to prosper and Musk to get the stock incentive worth many billions that they just voted for him.

 

[jazz4cash]

+1



There's a lawsuit about his acquisition of SolarCity, a company founded by his cousin. Tesla took over $3B in debt carried by SolarCity. The cousin then bailed out, and started a new company. I wonder how much the cousin pocketed in this deal, before hitting Ctrl-Alt-Del.

.

Solar City was reported to be headed for BK and Musk bought shares at 17 shortly before pushing the TSLA board to buy all of SCTY at 25.

 

[jazz4cash]

I'm not too proficient with search but I've been meaning to look for the thread from the member that reported someone in his neighborhood (a Tesla employee, I guess) was getting sole roof tiles installed. That's a great idea that Dow already tried and quit.

 

[NW-Bound]

I never own Tesla shares, so follow the company mostly for the technical aspects of its cars, the battery technology, and then the problematic "autopilot".

So, I was not aware of all of Musk's antics, but it looks like the majority of the shareholders love him, in order for him to do the SolarCity acquisition and to get recent incentives worth billions of dollars. No CEO can do all that work by himself, so I wonder what incentives his employees get. From what I saw on the Web, key engineers as well as high-level employees have been leaving.

 

[bobandsherry]

So, I was not aware of all of Musk's antics, but it looks like the majority of the shareholders love him, in order for him to do the SolarCity acquisition and to get recent incentives worth billions of dollars. No CEO can do all that work by himself, so I wonder what incentives his employees get. From what I saw on the Web, key engineers as well as high-level employees have been leaving.

This gives an insiders look as employee - Click Me and Me Too

 

[jazz4cash]

I never own Tesla shares, so follow the company mostly for the technical aspects of its cars, the battery technology, and then the problematic "autopilot".

So, I was not aware of all of Musk's antics, but it looks like the majority of the shareholders love him, in order for him to do the SolarCity acquisition and to get recent incentives worth billions of dollars. No CEO can do all that work by himself, so I wonder what incentives his employees get. From what I saw on the Web, key engineers as well as high-level employees have been leaving.

Corporate governance is hardly the democratic process it is thought to be. Large shareholders typically give the board whatever they want. Elon has a cult-like following. I can't claim a good track record of voting every proxy I am entitled to. Then there are the large holdings in mutual funds. It's one of the drawbacks of owning funds. Lots of employee turnover there and I believe morale may be in decline. I follow the action on SeekingAlpha just for fun.

 

[Totoro]

Here's a question .. if Tesla tanks and goes towards bankruptcy, can Musk save it by using his own money and take it private again?

 

[meierlde]

Here's a question .. if Tesla tanks and goes towards bankruptcy, can Musk save it by using his own money and take it private again?

Since Musk has another money maker, it would make more sense to let the current company go bankrupt and Musk buy the factory and IP from the bankruptcy estate, not buying the solar city stuff. BTW all levelized cost of energy studies show rooftop solar to be far more expensive than utility scale solar, (even grid tied). Plus rooftop solar in the east also has to deal with lots of clouds while the corridor from West Texas north to the Dakotas has far more sunny days.

 

[aja8888]

Here's a question .. if Tesla tanks and goes towards bankruptcy, can Musk save it by using his own money and take it private again?

I think he would look to private equity to bail it out. Why use his money? As an example, look at a deal like Toys R US and Sears Holdings. Probably worked well for the bought out executives early on.

 

[jazz4cash]

Since Musk has another money maker, it would make more sense to let the current company go bankrupt and Musk buy the factory and IP from the bankruptcy estate, not buying the solar city stuff. BTW all levelized cost of energy studies show rooftop solar to be far more expensive than utility scale solar, (even grid tied). Plus rooftop solar in the east also has to deal with lots of clouds while the corridor from West Texas north to the Dakotas has far more sunny days.

What other money maker?

 

[meierlde]

What other money maker?

Spacex. (except for the futuristic stuff)