Thoughts on TESLA

[kcowan]

I wonder how many cancellations Tesla is getting from those that put down $1000? If the bubble of enthusiasm evaporates, how viable is the current model? I have to believe that their departed finance guys had real estimates?

 

[bobandsherry]

I get your point, but I don't think the market for these cars is static or shrinking. I think more buyers come into the market every day and those increasing buyers will offset the loss of those who will not buy without a discount. Remember that the tax credits phase out over time and that a number of states will continue to offer credits independent of the fed tax credit.

This chart would indicate that sales are shrinking.

Light vehicle retail sales in the United States from 1977 to 2017 (in 1,000 units)

 

[Texas Proud]

I think so. You would need to go online and price a BMW, Volvo, Mercedes, etc. at $35,000. The result is likely to be a very bare bones car. The comfort and mechanicals on a Tesla Model 3 have been reviewed as being on par with other luxury cars. Tesla also has vertical software integration that allows for automatic updates directly from the company and the ability to operate car functions from an app (among other things). Also, a comparable audio system will outperform due to the quiet EV interior. Of course these are all judgment calls.

For me that would not be the comparison... I would look at a high end Honda or Toyota or Hyundai... I can tell you that $35K will get you a LOT of luxury in those brands... and I think a larger car...


Have no idea of the driving experience... the S is supposed to be one of the best, but I do not read that about the 3...

 

[bobandsherry]

I wonder how many cancellations Tesla is getting from those that put down $1000? If the bubble of enthusiasm evaporates, how viable is the current model? I have to believe that their departed finance guys had real estimates?

24% of Tesla Model 3 orders have been canceled, analyst says

Tesla’s Model 3 Has More Refunds, Cancellations Than Deposits

 

[corn18]

TSLA latest 10Q shows they are carrying $942,129k of customer deposits on the books. That is up from $853,919k on 31 Dec 2017.

 

[bobandsherry]

I failed to mention performance. 0-60 mph in the low 5's is very high-end performance for any sedan.

Do you consider that really important? My current car (MKC) goes 0-60 in 6.5 sec. I don't think I'd really find a savings of one sec to be noticeable or even beneficial.

 

[Texas Proud]

The Leaf is *slightly* smaller width and length, taller, more luggage/cargo room (a *lot* more, somehow) - so really I'd put it in the same class size-wise, definitely not 'very small' in comparison...

In the auto world 6 inches is not *slightly*... it is a big difference...


Also, interior volume is meaningless between a sedan and hatchback...

 

[oneill225]

This chart would indicate that sales are shrinking.
Light vehicle retail sales in the United States from 1977 to 2017 (in 1,000 units)

Very true that there is a shift from light cars to SUV's and Trucks in the U.S. Also, younger Americans are not as likely to buy a car as their parents. That is the effect of Uber and it will be more pronounced if/when autonomous cars can freely operate. In that world, individual car ownership may give way to using cars, on demand. In other words, calling for an autonomous "Uber" to take you where you need to go versus having a car sitting in the carport. This will reduce the millions of cars being sold each year, but cars will not disappear, by any means.

So, which car manufacturers are leading the autonomous market? Tesla is currently number 1 with numerous patents.

There is a bigger world than the U.S., however. Cars and trucks will not disappear any time in my lifetime. If the shift to EV from ICE is inevitable and happening at a rapid pace, then Tesla should be squarely in the mix. By the way, Tesla will release a new smaller, cheaper, SUV, the Model Y, sometime next year.

 

[oneill225]

Do you consider that really important? My current car (MKC) goes 0-60 in 6.5 sec. I don't think I'd really find a savings of one sec to be noticeable or even beneficial.

Used for comparison purposes as to whether the Model 3 rises to the luxury market. It takes a nice big ICE to get that performance. Those are usually found in the "luxury" market.

 

[ERD50]

I don't know that it makes sense to compare spec by spec. Different specs mean different things to different potential buyers.

What is important to Tesla - is there any evidence that demand for the Model 3 will drop below their production plan? I don't see any evidence of that at this time.

The bigger question is - as subsidies are depleted through 2019, and we dip into the buyers who were interested in the base model, and EV competition grows (with many manufacturers still eligible for the full $7,500 credit), can Tesla still compete?

We will just have to see how that goes over the next year or two. And from what I can find, the Model Y (start 2020?) will be above the $35,000 price point. But there may still be plenty of demand for them in that segment.

-ERD50

 

[dixonge]

24% of Tesla Model 3 orders have been canceled, analyst says

Tesla’s Model 3 Has More Refunds, Cancellations Than Deposits

TSLA latest 10Q shows they are carrying $942,129k of customer deposits on the books. That is up from $853,919k on 31 Dec 2017.

'nuff said

 

[Chuckanut]

IMHO, people, especially in the USA, need to realize that the overseas market for EVs may not be the same as in the USA.

Most petrol is imported, and they often have very good public transit services. Fr those living out West, distances between cities are often much smaller.

Perhaps EVs make more sense that situation?

 

[oneill225]

IMHO, people, especially in the USA, need to realize that the overseas market for EVs may not be the same as in the USA.

Most petrol is imported, and they often have very good public transit services. Fr those living out West, distances between cities are often much smaller.

Perhaps EVs make more sense that situation?

Another battery market for Tesla?

https://electrek.co/2018/09/14/bombardier-battery-powered-train/

 

[dixonge]

In the auto world 6 inches is not *slightly*... it is a big difference...


Also, interior volume is meaningless between a sedan and hatchback...

Per Wikipedia:


Model 3 - Mid-size
Leaf - Compact
Bolt - Sub-compact

 

[bobandsherry]

TSLA latest 10Q shows they are carrying $942,129k of customer deposits on the books. That is up from $853,919k on 31 Dec 2017.

Well, in the March 10Q filing they had $984,823 in customer deposits, so there was a drop in 2Q from 1Q. But who knows how many were refunds or what were due to delivery. And as far as I can see there's no details on what deposits are for. Tesla is now taking deposits of $50K on their next gen Roadster, also on semi's and who knows what else. So one number doesn't tell ya much specific to Model 3.

Tesla Deposits Worth $850M Could Go Down Drain If Company Goes Bottoms Up

Other info specific to Model 3: Tesla faces accelerating rate of Model 3 refunds

 

[ERD50]

Another battery market for Tesla?

https://electrek.co/2018/09/14/bombardier-battery-powered-train/

I've often thought that the commuter trains in/out of Chicago should be electric (the Rapid Transit is electric - 3rd rail). Those train diesels are smelly, noisy, and nasty. The fumes and noise at the downtown station are terrible. The trains are already electromotive drive (pure series hybrid, diesel runs a generator to drive motors at the axles), so I would think it would be fairly easy to retrofit them. The motors are already there.

I envision an overhead line (like the old electric buses in Chicago and elsewhere), but only at the stations. Trains could recharge while loading passengers, and if they had a few hundred feet of overhead lines in/out of the stations, much of the energy for acceleration could come direct from the line, no draw from batteries for that time.

Advantages would be far more than a typical EV. These trains put on far more miles than a typical car. Plus they do a lot of start/stop, so regen braking would be used (they waste it as heat now, with huge power resistor banks). Diesel is dirtier than a more modern gas car/hybrid, and there are the opportunities for the direct charge connection I mentioned. Between station stops, and turn-around times at the station ends, charging might not be too challenging. More real opportunity for environmental improvement than EVs versus modern hybrids, I think.

-ERD50

 

[oneill225]

Well, in the March 10Q filing they had $984,823 in customer deposits, so there was a drop in 2Q from 1Q. But who knows how many were refunds or what were due to delivery. And as far as I can see there's no details on what deposits are for. Tesla is now taking deposits of $50K on their next gen Roadster, also on semi's and who knows what else. So one number doesn't tell ya much specific to Model 3.

Reading the tea leaves can be tricky. I think it comes down to whether or not you believe the shift to EVs is robust and growing at a significant pace. I do (as you may have noted ). Tesla is not just currently winning in the EV marketplace, it is winning in the overall U.S. auto marketplace for light cars despite being thousands more expensive. If the Model 3 price comes down, as intended, that position should continue to improve. Hard to read this news as foreboding impending doom:

https://cleantechnica.com/2018/09/09/tesla-model-3-becomes-1-best-selling-car-in-the-us/

 

[samclem]

Another battery market for Tesla?

https://electrek.co/2018/09/14/bombardier-battery-powered-train/

That's a strange one. Trains with electric motors that get their power from overhead lines or the tracks, but which have batteries for the sections of rail that aren't electrified. That would seem to be a very small niche market--adding power to a rail line just isn't a big deal if the railbed, tracks, switches, stations, etc are already in place.


Near my home the municipal mass transit system has some electric bus routes with overhead electrical power. They recently purchased some electric buses with batteries so they can get off the electrified portions for limited stretches. That seems like a pretty good way to enhance the flexibility of already existing electrified routes (adding new stops in large parking lots, bridging between electrified portions of existing lines, detouring to avoid road work/traffic accidents, etc).

 

[oneill225]

Excellent primer

For those interested, this is an excellent video comparing two of the most popular EV cars on the market today:

https://insideevs.com/tesla-model-3-versus-chevy-bolt/

 

[bobandsherry]

I've often thought that the commuter trains in/out of Chicago should be electric (the Rapid Transit is electric - 3rd rail). Those train diesels are smelly, noisy, and nasty. The fumes and noise at the downtown station are terrible. The trains are already electromotive drive (pure series hybrid, diesel runs a generator to drive motors at the axles), so I would think it would be fairly easy to retrofit them. The motors are already there.

FYI - as someone who rode those commuter trains for years, those tracks are leased by commuter rail. The tracks are owned by railroads (CSX, Norfolk Southern, Canadian Pacific, etc) and are used primarily to move freight. So not sure how feasible making them electric rails would be.

Chicago: Balancing Freight and Commuters at the World's Busiest Terminal

 

[bobandsherry]

Reading the tea leaves can be tricky. I think it comes down to whether or not you believe the shift to EVs is robust and growing at a significant pace. I do (as you may have noted ). Tesla is not just currently winning in the EV marketplace, it is winning in the overall U.S. auto marketplace for light cars despite being thousands more expensive. If the Model 3 price comes down, as intended, that position should continue to improve. Hard to read this news as foreboding impending doom:

https://cleantechnica.com/2018/09/09/tesla-model-3-becomes-1-best-selling-car-in-the-us/

FYI - Tesla posted a loss of $1.5 BILLION for first 6 months (717 million loss for 3 months). Rev of $7.4B contributed to a $1.1B gross profit, toss in operating expenses and boom, $1.2B loss. Then figure in interest expense and you are at $1.5B loss. So yep, continue to sell a load of cars and post a loss. I'd consider that pending doom.

Then consider that there's nearly a billion of convertible bonds coming due in Feb 2019, at current stock price that means Tesla needs to come up with nearly a billion in cash to redeem those bonds. Shiver me timbers....

 

[oneill225]

FYI - Tesla posted a loss of $1.5 BILLION for first 6 months. Rev of $7.4B, $1.1B gross profit, toss in operating expenses and boom, $1.2B loss. The figure in interest expense and you are at $1.5B loss. So yep, continue to sell a load of cars and post a loss. I'd consider that pending doom. Then consider that there's nearly a billion of convertible bonds coming due in Feb 2019, at current stock price that means Tesla needs to come up with nearly a billion in cash to redeem those bonds. Shiver me timbers....

Maybe this will buy them a little time:

https://www.marketwatch.com/story/tesla-has-no-credible-competition-analyst-says-2018-09-17

 

[samclem]

Maybe this will buy them a little time:

https://www.marketwatch.com/story/tesla-has-no-credible-competition-analyst-says-2018-09-17

The observation that Tesla has little competition in the small EV market is relevant to saving Tesla only if there is money to be made there. It wouldn't be hard to develop a coal powered car and you'd have zero competition, but making money would be something else. In other words, maybe there's a reason they are relatively alone in this market.

 

[oneill225]

The observation that Tesla has little competition in the small EV market is relevant to saving Tesla only if there is money to be made there. It wouldn't be hard to develop a coal powered car and you'd have zero competition, but making money would be something else. In other words, maybe there's a reason they are relatively alone in this market.

That is, of course, the nub of the issue. Are we at the beginning of a sustained and growing shift to EVs? If you believe the answer is "no" or "not yet", then I understand your position on Tesla. I read it differently and I am putting my money on the line to test that prediction.

 

[Texas Proud]

Do you consider that really important? My current car (MKC) goes 0-60 in 6.5 sec. I don't think I'd really find a savings of one sec to be noticeable or even beneficial.

Sorry, but a 1 sec diff to 60 is a noticeable difference...


Beneficial is in the eye of the beholder...