Thoughts on TESLA

[ERD50]

This sounds like another challenge for Tesla. I think it is clear that most of the Tesla customers to date are 'fans' of the company or EVs in general, and are likely to be pretty tolerant of most problems. And unlikely to complain about some things (like range), because they knew what they were getting into before they plunked down the big bucks.

But as Telsa tries to expand into a broader market, and at a lower price point, those customers won't be so tolerant. Can Tesla meet/exceed expectations in service? And how much will it cost them to develop this support infrastructure?

Seems like some customers in Norway are not so thrilled, and Tesla is spending money on the problem. Maybe this is just to address the higher volume of Model 3s coming to Norway? But are these costs baked into the stock price, or will they put more strain on margins?

https://finance.yahoo.com/news/tesla-doubled-staff-norway-last-134124030.html

(Bloomberg) -- Tesla Inc. doubled service staff in Norway last year, seeking to address customer frustration at service delays in one of its top markets before delivering the new Model 3, a company spokesman confirmed on Saturday.


Tesla’s operations in Norway are closely watched, as the country has the world’s highest number of electric cars per inhabitant thanks to generous government incentives for low-emission vehicles. The Nordic country has become the California-based carmaker’s third-biggest market. But capacity shortages at the firm resulting in long service queues have frustrated customers.

-ERD50

 

[bobandsherry]

Guess Saudi's aren't expecting Tesla to rise, let alone hit $360 to cover convertibles coming due.

https://www.ft.com/content/d501c670-2307-11e9-b329-c7e6ceb5ffdf

Update - Seems original link was behind paywall.... here's another link with same story/details.
https://www.irishtimes.com/business/manufacturing/saudi-arabia-slashes-exposure-to-tesla-1.3773642

 

[ERD50]

Guess Saudi's aren't expecting Tesla to rise, let alone hit $360 to cover convertibles coming due.

https://www.ft.com/content/d501c670-2307-11e9-b329-c7e6ceb5ffdf

That was behind a paywall for me, but here is a report on the report:

https://www.thestreet.com/investing...ke-14847370?puc=yahoo&cm_ven=YAHOO&yptr=yahoo

The Kingdom of Saudi Arabia's Public Investment Fund is hedging most of its 4.9% stake in electric vehicle maker Tesla Inc. (TSLA - Get Report) , the Financial Times reported.

The Kingdom used JPMorgan Chase to help it hedge its bet on the company shortly after the market closed on Jan. 17, sources told the Financial Times.

The fund still holds the company's shares but now has insulated itself if the company's stock price falls. However, the fund also has capped its gains should Tesla rise, in essence freezing its $2.9 billion investment in the company.

-ERD50

 

[bobandsherry]

That was behind a paywall for me, but here is a report on the report:

-ERD50

I found another link and posted in my original message, seems this one is outside a paywall.

 

[Running_Man]

Today I was talking to a 30ish old engineer who is a real big Tesla fan and owns the stock, I recommended that if he was sure the company would be in business for five years he should buy the bonds, but his response was that Elon Musk has indicated he doesn't care if Tesla goes bankrupt or ever makes money so long as electric cars take over and as such he doesn't want the bonds he could see it going bankrupt but since Tesla was going to change the way of car driving he certainly wanted to own the stock. Because even if the company went bankrupt Elon Musk would just create something else even more valuable. He really and truly feels Tesla stock gives him a piece of all Elon Musk businesses in the future, I do not understand this level of fandom of a CEO that logic and reality can be suspended, it is worrisome.

 

[kgtest]

Today I was talking to a 30ish old engineer who is a real big Tesla fan and owns the stock, I recommended that if he was sure the company would be in business for five years he should buy the bonds, but his response was that Elon Musk has indicated he doesn't care if Tesla goes bankrupt or ever makes money so long as electric cars take over and as such he doesn't want the bonds he could see it going bankrupt but since Tesla was going to change the way of car driving he certainly wanted to own the stock. Because even if the company went bankrupt Elon Musk would just create something else even more valuable. He really and truly feels Tesla stock gives him a piece of all Elon Musk businesses in the future, I do not understand this level of fandom of a CEO that logic and reality can be suspended, it is worrisome.

I can only imagine how those long term employee fandoms get laid off and see there hard earned options become worthless. Sure it might not happen overnight but its not outside the very much realm of possibility. Musk caters to the fandoms thats what fuels his lifestyle. Wrecklessly deploying that roadster into the cosmos was when I wrote him off as a jackass.

 

[Chuckanut]

Musk caters to the fandoms thats what fuels his lifestyle. Wrecklessly deploying that roadster into the cosmos was when I wrote him off as a jackass.

Let me get this straight. Mr. Musk’s company builds and successfully launches the most powerful rocket in today’s world. Two of the booster cores are recovered in one piece after landing, a feat no other company comes close to accomplishing when sending a satellite into orbit. This rocket costs less than 1/2 the price of the next most powerful rocket. As part of this flight they also prove that the 2nd stage can coast in orbit for six hours and successfully restart (no small accomplishment in the harsh environment of space). And because instead of using the usual chunk of concrete as the payload in a test rocket he uses an old car, he is a jackass.

Abe Lincoln was right. You can’t make all of the people happy all of the time.

 

[oneill225]

+++
I love driving my 1999 Suburban Gas Guzzler. 7.4 big block, 7200lb. 130K miles. Makes a fine hauler for my 18' Kevlar kayak. In PA we have annual mondatory emission and safety inspections. I may put Classic Tags on it this year.
Do pass on any Tesla made overpriced video game.

Free country. Enjoy those gas bills.

 

[oneill225]

Peak ICE

Looks like the shift to EV from ICE is gaining momentum:

https://insideevs.com/death-gas-powered-cars/

Some of the highlights:

"Last May, a survey by AAA found that 20% of respondents said their next vehicle would be an EV, up from 15% in 2017"

"88 percent of plug-in car drivers said they would never go back to driving an ICE vehicle."

 

[ls99]

Free country. Enjoy those gas bills.

I can probably buy gas for my fleet for the rest of my life by not spending $70K on a Tesla.
Lessee, $3/gallon into $70000? or $5/gallon into $70000 when the greenies jack up the price?

 

[oneill225]

I can probably buy gas for my fleet for the rest of my life by not spending $70K on a Tesla.
Lessee, $3/gallon into $70000? or $5/gallon into $70000 when the greenies jack up the price?

Your call. My dad has driven the same car for the last 20 years, as well. It definitely saves on money to avoid buying a new car. Too bad you couldn't get an electric version of your Suburban. It would be saving you even more, now. Maybe someday, soon.

In the meantime, Tesla and the other EV sellers will continue to take over the market for cars and trucks.

 

[ERD50]

Looks like the shift to EV from ICE is gaining momentum:

https://insideevs.com/death-gas-powered-cars/

Some of the highlights:

"Last May, a survey by AAA found that 20% of respondents said their next vehicle would be an EV, up from 15% in 2017" ...

And of course, that can also be looked at after taking off the rose-colored glasses (which is what every investor should always be doing):

Turning it around to say the same thing from the other direction: "Last May, a survey by AAA found that 80% of respondents said their next vehicle would not be an EV."
​

Looks like people buy a new car on average of over every 5 years? So that seems to say it will take a long time for EVs to even hit 20% of sales of new cars, and with average life of ~ 14 years, even longer to reach 20% of the fleet.

I'm not worried that I'll ever have trouble finding a gas station in my lifetime.

While the trend is positive (15% going to 20%), one must also remember that over 2 years, more EV models at the lower end are coming on line (where's that $35,000 Tesla?), so they sure should be increasing. If that number stayed flat, it would be a concern for EV adoption.

.... "88 percent of plug-in car drivers said they would never go back to driving an ICE vehicle."

Hmmm, so we might lose up to 12% of current EV drivers to an ICE?

Now, 88% is an impressive number. But consider that these are early adopters, who likely did a lot of research and were prepared for everything an EV entails (good and not-so-good). As we dip into the deeper pool of drivers, we will see if those sorts of numbers hold up. Seems there is some dissatisfaction among the Norway Tesla owners, and there was push-back on Supercharger rate increases (see my earlier posts). I also suspect that even those who are happy with their EV, will keep an ICE/hybrid for long trips, towing etc.

At any rate - that's about EVs in general. How about Tesla (the subject of this thread)?

Since this is the stock picking thread, what are your expectations for tomorrow's Earnings report/call? Are you expecting the drop on 1/18 to recover to a mere dip, and provide you a chance to trade the shares you bought that AM?

-ERD50

 

[bobandsherry]

Looks like the shift to EV from ICE is gaining momentum:

https://insideevs.com/death-gas-powered-cars/

Some of the highlights:

"Last May, a survey by AAA found that 20% of respondents said their next vehicle would be an EV, up from 15% in 2017"

"88 percent of plug-in car drivers said they would never go back to driving an ICE vehicle."

First, I'd guess that a site named "InsideEVs would be tilted towards EV's.

But then let's evaluate their claims. According to that study, 15% of people in 2017 said their next vehicle would be an EV. However, what they say and what they do just don't even come close.

Based on this site, there were 17 million cars and light trucks (pickup and SUV's) sold in the US in 2018.

https://www.marklines.com/en/statistics/flash_sales/salesfig_usa_2018

So if 15% did actually follow through that would mean over 2.5 million EV cars (17 million x 15%) would have been sold. But that certainly isn't the case now is it?

The same "InsideEVs" site has stats that show there were 361,000 EV sales in 2018, far cry short of the 2.5 million - closer to 2% than 15%.

https://insideevs.com/monthly-plug-in-sales-scorecard/

So clearly people can say one thing and what they actually do is another.

 

[oneill225]

Looks like people buy a new car on average of over every 5 years? So that seems to say it will take a long time for EVs to even hit 20% of sales of new cars, and with average life of ~ 14 years, even longer to reach 20% of the fleet.
I'm not worried that I'll ever have trouble finding a gas station in my lifetime.
While the trend is positive (15% going to 20%), one must also remember that over 2 years, more EV models at the lower end are coming on line (where's that $35,000 Tesla?), so they sure should be increasing. If that number stayed flat, it would be a concern for EV adoption.

Yes, they should be increasing and they should continue to do so exponentially until no one is selling any ICE options and even the hybrids fade away. Tesla has truly brought this dormant tech to life.

Hmmm, so we might lose up to 12% of current EV drivers to an ICE? Now, 88% is an impressive number. But consider that these are early adopters, who likely did a lot of research and were prepared for everything an EV entails (good and not-so-good). As we dip into the deeper pool of drivers, we will see if those sorts of numbers hold up. Seems there is some dissatisfaction among the Norway Tesla owners, and there was push-back on Supercharger rate increases (see my earlier posts). I also suspect that even those who are happy with their EV, will keep an ICE/hybrid for long trips, towing etc.

I think you are letting your dislike of Musk affect your thinking. Those down on Tesla and Musk have repeatedly pointed out every flaw with Tesla's models from paint flaws to the lack of chargers and range, but 88% of buyers still would do it again. Pretty impressive and, I think you would agree, an indication that the percentage of happy buyers will continue to rise as the numerous flaws with past production and delivery are overcome. Remember this is a growing company with all the associated growing pains.

At any rate - that's about EVs in general. How about Tesla (the subject of this thread)? Since this is the stock picking thread, what are your expectations for tomorrow's Earnings report/call? Are you expecting the drop on 1/18 to recover to a mere dip, and provide you a chance to trade the shares you bought that AM?

My expectation is that the 4Q profit will be lower than 3Q and that 1Q could even be a loss. This is based on Musk's own comments and the shift of sales to Europe and China which will likely delay the sales of those cars due to the logistics involved. I do not anticipate a horrible 4Q and I sense that it could even be better than some of the Tesla short sellers and bears have predicted. I see a bounce up for the stock in the short term.

 

[ERD50]

First, I'd guess that a site named "InsideEVs would be tilted towards EV's.

But then let's evaluate their claims. According to that study, 15% of people in 2017 said their next vehicle would be an EV. However, what they say and what they do just don't even come close.

Based on this site, there were 17 million cars and light trucks (pickup and SUV's) sold in the US in 2018.

https://www.marklines.com/en/statistics/flash_sales/salesfig_usa_2018

So if 15% did actually follow through that would mean over 2.5 million EV cars (17 million x 15%) would have been sold. But that certainly isn't the case now is it?

The same "InsideEVs" site has stats that show there were 361,000 EV sales in 2018, far cry short of the 2.5 million - closer to 2% than 15%.

https://insideevs.com/monthly-plug-in-sales-scorecard/

So clearly people can say one thing and what they actually do is another.

But "next car" does not mean they are buying next year.

But say we figure an average of 5 years to the next new car purchase for this group (and I think that's a long time - if you respond to a survey like that, you are probably thinking more near term). That takes your number and divides by 5, but that's still 510,000 versus the reported 361,000.

And of course, though the survey didn't break this out, I would imagine that some of the 80% would consider and buy an EV, even if they didn't say definitively that their next car would be an EV.

That makes the 361,000 actual even more disappointing to the EV promoters.

-ERD50

 

[oneill225]

First, I'd guess that a site named "InsideEVs would be tilted towards EV's.
But then let's evaluate their claims. According to that study, 15% of people in 2017 said their next vehicle would be an EV. However, what they say and what they do just don't even come close.
Based on this site, there were 17 million cars and light trucks (pickup and SUV's) sold in the US in 2018.
https://www.marklines.com/en/statistics/flash_sales/salesfig_usa_2018
So if 15% did actually follow through that would mean over 2.5 million EV cars (17 million x 15%) would have been sold. But that certainly isn't the case now is it?
The same "InsideEVs" site has stats that show there were 361,000 EV sales in 2018, far cry short of the 2.5 million - closer to 2% than 15%.
https://insideevs.com/monthly-plug-in-sales-scorecard/
So clearly people can say one thing and what they actually do is another.

Flawed assumptions. They did not say when they would buy a new car only that the next one would be an EV.

 

[aja8888]

Yes, they should be increasing and they should continue to do so exponentially until no one is selling any ICE options and even the hybrids fade away. Tesla has truly brought this dormant tech to life.

Where do you get this "exponentially" stuff?

No manufacturer in the world, for batteries or cars, is geared up to do this. Plus, there is no where enough infrastructure or dealer services to maintain an exponential pace of odd ball cars.

And don't say it will happen in a "few years" as that is not logical.

 

[bobandsherry]

But "next car" does not mean they are buying next year.

But say we figure an average of 5 years to the next new car purchase for this group (and I think that's a long time - if you respond to a survey like that, you are probably thinking more near term). That takes your number and divides by 5, but that's still 510,000 versus the reported 361,000.

And of course, though the survey didn't break this out, I would imagine that some of the 80% would consider and buy an EV, even if they didn't say definitively that their next car would be an EV.

That makes the 361,000 actual even more disappointing to the EV promoters.

-ERD50

Regardless, someone the cars sold in 2018 was someone's "next car", so if 15-20% of the population were buying an EV then that still holds true to the sales in 2018. While not all of them would be buying a car next year, the proportion should still be the same if the sampling was representative.

 

[bobandsherry]

Flawed assumptions. They did not say when they would buy a new car only that the next one would be an EV.

If the sampling is truly representative, then the population that buys their next car would still represent the 15-20% of the car buyers. Nothing flawed.... except the survey.

 

[oneill225]

Where do you get this "exponentially" stuff?
No manufacturer in the world, for batteries or cars, is geared up to do this. Plus, there is no where enough infrastructure or dealer services to maintain an exponential pace of odd ball cars.
And don't say it will happen in a "few years" as that is not logical.

"Exponential" as in becoming more and more rapid.

Do you see the pace of EV preference fading or increasing year to year going forward?

 

[oneill225]

Charging Insight

Some good insight from someone in the charging business:

https://insideevs.com/ev-charging-free-observations/

 

[ERD50]

Yes, they should be increasing and they should continue to do so exponentially until no one is selling any ICE options and even the hybrids fade away. ...

"exponentially"? So the 2% in 2018 will be 4% this year, and 8% in 2020, and over 50% in 2023, and the full 100% before 2024.

If you want to be taken serious, use serious numbers. And if you really believe that, it won't take long to find out. And this was a US survey.

... I think you are letting your dislike of Musk affect your thinking. ...

Please stop telling me what I think and respond to what I write, and the numbers and facts that I present (if you can?).

Attacking me and my 'thoughts' is a personal attack, as is your earlier comments that I'm playing "personal gotcha games" (post #2109), when I clearly put facts and figures out there. So accusing me of playing games is also a personal attack.

The mods have already put out a warning to this thread (post #2155), please pay attention and stick to responding to the post rather than attacking the posters' supposed motivations.

... but 88% of buyers still would do it again. Pretty impressive and, I think you would agree, an indication that the percentage of happy buyers will continue to rise as the numerous flaws with past production and delivery are overcome. Remember this is a growing company with all the associated growing pains. ..

I did agree that 88% was an impressive number (quote: "Now, 88% is an impressive number.") . But I do not agree that the % of happy buyers will continue to rise. It might. But as I said, the next buyers may not be so forgiving, and may not be happy with the service delays that the Norwegians are complaining about. We will see.

And it will be very hard for any company to maintain quality while they experience "exponential" growth.

I see a bounce up for the stock in the short term.

Could you be any more vague? A bounce up above what, the days lows?

How about a bounce up over the 1/17/19 close? Do you see that anytime soon?

-ERD50

 

[NW-Bound]

Porsche just announced its new Taycan EV would get 60 miles of range from a 4-min charge. This is done by Porsche's own supercharger that can pump power at a stupendous rate of 350 kW, about 3x that of Tesla's superchargers. Filling up the battery to 80% would take 30 minutes. Range is 300 miles.

Where does one find these Porsche superchargers? They will be initially at Porsche dealers.

This Taycan will be available later in 2019. Price: $90K.

 

[aja8888]

"Exponential" as in becoming more and more rapid.

Do you see the pace of EV preference fading or increasing year to year going forward?

It took 100 years for the U.S. to get to 17+ MM sales of vehicles. And that included sales from several non-US manufacturers. It's a function of population growth, the ability to buy a vehicle, marketing, and not how fast you can produce cars.

Based on your ongoing comments, it's apparent, you have no background in business or manufacturing. Correct?

 

[ERD50]

Regardless, someone the cars sold in 2018 was someone's "next car", so if 15-20% of the population were buying an EV then that still holds true to the sales in 2018. While not all of them would be buying a car next year, the proportion should still be the same if the sampling was representative.

If the sampling is truly representative, then the population that buys their next car would still represent the 15-20% of the car buyers. Nothing flawed.... except the survey.

Ahh, you are correct. As you say, you need to think in terms of the entire population of people responding, so it is representative @15%~20%.

Thanks for straightening me out. So that does mean that either that survey is super-flawed, or what people say they will do does not match reality. 361,000 actual versus 2,500,000 per that survey is a huge gap.

I suppose you could temper that a bit. Maybe some people who expect to buy an EV as their 'next car', will wait a year or two longer to get one of the promised lower priced models? I pretty much did that waiting for some of the driver assistance features to drop to more mid-priced models. But that's still a biiiiiig gap.

-ERD50