Tesla's Revolutionary Model 3

[NDohio]

Not Tesla, but in the same automotive category.

https://www.yahoo.com/tech/geelys-volvo-electric-models-2019-040305314--finance.html

STOCKHOLM (Reuters) - All Volvo car models launched after 2019 will be electric or hybrids, the Chinese-owned company said on Wednesday, making it the first major traditional automaker to set a date for phasing out vehicles powered solely by the internal combustion engine.

The Sweden-based company will continue to produce pure combustion-engine Volvos from models launched before that date, but its move signals the eventual end of nearly a century of Volvos powered solely that way.

While electric and hybrid vehicles are still only a small fraction of new cars sales, they are gaining ground at the premium end of the market, where Volvo operates and where Elon Musk's Tesla Motors has been a pure-play battery carmaker from day one. As technology improves and prices fall, many in the industry expect mass-market adoption to follow.

"This announcement marks the end of the solely combustion engine-powered car," Volvo Cars CEO Hakan Samuelsson said.

Tesla is ahead of the curve on this and I think Crusader's timeline is pretty good. The electric car market is gonna crazy the next three years.

 

[Legacy93]

Thanks Crusader for the reply. Tesla has been a very interesting company to follow, because on the one hand there seems to be so much momentum in the space and Tesla seems to be on the front end of that momentum, but on the other hand they seem to be falling short of expectations. I see a lot of downside protection with Tesla, but it just feels like a guess that Tesla ends up dominating its market and so I have doubts about the high-upside that others seem to see. Could Tesla get there? For sure, easily. But I could also easily see the competition limiting Tesla's growth. Particularly, Waymo seems to be legitimately challenging them on the autonomous vehicle front and traditional manufacturers are (or will be) challenging Tesla's hold on electric vehicles.
I guess we just see different probabilities for Tesla achieving the dominate position that gets the stock to $1000 (or whatever equivalent).

 

[Ndaccountant]

Let's see where the balance sheet comes in after Q2. There is some serious cash burn going on and Musk isn't one to tap the brakes.

There are also some serious issues in the auto industry that are going to show their ugly face. For example:

- Car loan duration hit an all time record in June, inching up to 69 months. This, to support an average balance of $30k.

- New cars loans in Q1 of 2017 saw a record 33% of loans that had negative trade in equity with an average balance over $5k.

- Off lease volumes are going to accelerate in the coming 18-24 months, reaching record highs. That will put a huge pressure on used car prices / trade in's which will only worsen growing negative equity trade in problem.

- If Tesla hits their sales target, the federal tax credit will begin to phase out next year, which has repeatedly shown to be a huge detriment to their business - See Georgia, Denmark, Hong Kong, ect. Tesla is very concerned about this, evidenced by their intense lobbying in the state of California and Phil Ting's latest proposal to rescue Tesla at the same point in time the federal credit is projected to decline.

- Growing competition from established players will create added pressures. The Tesla brand is no doubt healthy, but other premium players are going to make the market much more interesting.

The stock has done incredibly well and momentum plays can last a long time. However, there are some potential headwinds on the horizon that the largest bulls are ignoring.

 

[woolybug25]

Why hasn't Alpahbet or Amazon split at $950 - $1000?

All I was talking about was your $337 (and falling at the moment!) today will be worth $1000 in the near future.

Well, probably because those companies are in strong liquidity positions and don't need the increased demand of their stock. Companies like Amazon don't need increased liquidity, so they purposely keep it high to reduce trading volume. Tesla has not only a large amount of notes maturing through 2022, but a YUGE need for capital investment into the business. Hence;

The 10-k clearly states: “We may raise funds in the future, including through potential equity or debt offerings, subject to market conditions and recognizing that we cannot be certain that additional funds would be available to us on favorable terms or at all.” Secondly, Musk stated in the earnings call on February 23 that he planned to raise capital to reduce risk. That is exactly what they did. With the stock floating at very high levels, this was a great time to execute such a venture.

Does that sound like a company that will want to push their stock price high and reduce trading volume of their stock?

Just because some companies allow their stock price to get high, it doesn't mean that is the strategy of all companies. Certainly not a company with capital needs like Tesla.

 

[BobbyMac]

Thanks Crusader for the reply. Tesla has been a very interesting company to follow, because on the one hand there seems to be so much momentum in the space and Tesla seems to be on the front end of that momentum, but on the other hand they seem to be falling short of expectations. I see a lot of downside protection with Tesla, but it just feels like a guess that Tesla ends up dominating its market and so I have doubts about the high-upside that others seem to see. Could Tesla get there? For sure, easily. But I could also easily see the competition limiting Tesla's growth. Particularly, Waymo seems to be legitimately challenging them on the autonomous vehicle front and traditional manufacturers are (or will be) challenging Tesla's hold on electric vehicles.
I guess we just see different probabilities for Tesla achieving the dominate position that gets the stock to $1000 (or whatever equivalent).

Tesla doesn't have to have the dominant position to get to $1k. They just need to tap into the mainstream which I think is a lock. They will also control some % of the technology that will run the autonomous world of tomorrow.

 

[Legacy93]

Tesla doesn't have to have the dominant position to get to $1k. They just need to tap into the mainstream which I think is a lock. They will also control some % of the technology that will run the autonomous world of tomorrow.

I disagree in part with your first statement, mostly because of timing. I don't think the true value of Tesla is in the cars themselves, it is in the tech, which I believe you acknowledge is important. But I do believe that Tesla has to demonstrate control of that portion of the market in the near term. It needs to have the autonomous vehicle tech market cornered to hit $1k in two+ years. It could hit 1K beyond that without a dominant position though.

 

[BobbyMac]

I disagree in part with your first statement, mostly because of timing. I don't think the true value of Tesla is in the cars themselves, it is in the tech, which I believe you acknowledge is important. But I do believe that Tesla has to demonstrate control of that portion of the market in the near term. It needs to have the autonomous vehicle tech market cornered to hit $1k in two+ years. It could hit 1K beyond that without a dominant position though.

They won't control it, nor will Alphabet, Intel or NPX/Qualcomm. Everyone is going to have a slice. I'm in this space. I came out of automotive internet technology and am currently at the confluence of the GPS/mobile/security/automotive/automation streams.

 

[Ndaccountant]

https://www.bloomberg.com/news/arti...les-plateau-ahead-of-still-mysterious-model-3

just out today...

 

[Legacy93]

They won't control it, nor will Alphabet, Intel or NPX/Qualcomm. Everyone is going to have a slice. I'm in this space. I came out of automotive internet technology and am currently at the confluence of the GPS/mobile/security/automotive/automation streams.

I understand that each company will have a slice of the pie. It's my fault for using ambiguous language in my reply... by control I simply meant that they had demonstrated that Tesla solidified its slice. As a side note, I do appreciate the insight you have into the technologies and players in this space. I'm just trying to parse through and figure out what is going to drive Tesla's stock price. I, personally, don't see it coming through their cars alone, but you seem to see it coming through Tesla's entrance into the low-to-mid auto market with the model 3 and the trucks. I appreciate the dialogue, but just can't seem to avoid the headwinds coming from competition. Maybe you just see the depth/breadth of the market better than I.

 

[BobbyMac]

https://www.bloomberg.com/news/arti...les-plateau-ahead-of-still-mysterious-model-3

just out today...

Flat sales are easily explained and to me expected in the pre launch period of the Model 3 because many future Tesla owners who can afford the current offerings like myself would rather have the Model 3. If Tesla wanted to remain a boutiquey, premium brand I would buy a Model S. Being they are going to offer a utilitarian model, I'd rather have that and something classic, roofless and fun for the rest of the time.

I understand that each company will have a slice of the pie. It's my fault for using ambiguous language in my reply... by control I simply meant that they had demonstrated that Tesla solidified its slice. As a side note, I do appreciate the insight you have into the technologies and players in this space. I'm just trying to parse through and figure out what is going to drive Tesla's stock price. I, personally, don't see it coming through their cars alone, but you seem to see it coming through Tesla's entrance into the low-to-mid auto market with the model 3 and the trucks. I appreciate the dialogue, but just can't seem to avoid the headwinds coming from competition. Maybe you just see the depth/breadth of the market better than I.

Think you are underestimating what Tesla selling 500k, then 1M, then 2M, then...??? cars worldwide will allow them to do. We haven't even discussed the home energy production, storage and future of solar they are in. There will come a time soon when Elon has cash on hand that he can go buy technologies like Intel wisely did with Mobileye. AI is the next important cog that needs to be inserted and parsed so that the automated world runs properly. Elon will get his cut there too.

The autonomous revolution will be a lot like the cellular revolution in that it won't just be Apple or Samsung who makes all the money in phones. Even Qualcomm which lost out on the handset market, is still an $80B company. There is so much that makes up a tech market. Hopefully, one day soon I'm in the bay signing away my part of our baby.

 

[Ndaccountant]

Flat sales are easily explained and to me expected in the pre launch period of the Model 3 because many future Tesla owners who can afford the current offerings like myself would rather have the Model 3. If Tesla wanted to remain a boutiquey, premium brand I would buy a Model S. Being they are going to offer a utilitarian model, I'd rather have that and something classic, roofless and fun for the rest of the time.




Think you are underestimating what Tesla selling 500k, then 1M, then 2M, then...??? cars worldwide will allow them to do. We haven't even discussed the home energy production, storage and future of solar they are in. There will come a time soon when Elon has cash on hand that he can go buy technologies like Intel wisely did with Mobileye. AI is the next important cog that needs to be inserted and parsed so that the automated world runs properly. Elon will get his cut there too.

The autonomous revolution will be a lot like the cellular revolution in that it won't just be Apple or Samsung who makes all the money in phones. Even Qualcomm which lost out on the handset market, is still an $80B company. There is so much that makes up a tech market. Hopefully, one day soon I'm in the bay signing away my part of our baby.

It wasn't the sales so much as the production and general lack of information on the Model 3.

I think your right the endgame is so much more than just the cars, but there are some serious potential capital constraints right now that could legitimately stymie the rest of the business.

 

[BobbyMac]

It wasn't the sales so much as the production and general lack of information on the Model 3.

I think your right the endgame is so much more than just the cars, but there are some serious potential capital constraints right now that could legitimately stymie the rest of the business.

Good news for Elon is he's inherited the Cult of Steve. I think he'll get whatever he wants until he has his own cash flow from the ramped up auto industry play. Like anything else, I don't think it's foolproof but we are at a point in time where the world is going to change more so in the next 10-20 years than at anytime in human history. I went to school with the guy who is responsible for Siri and Viv. AI is absolutely going full SkyNet. The people in this world already own tomorrow.

 

[Legacy93]

Flat sales are easily explained and to me expected in the pre launch period of the Model 3 because many future Tesla owners who can afford the current offerings like myself would rather have the Model 3. If Tesla wanted to remain a boutiquey, premium brand I would buy a Model S. Being they are going to offer a utilitarian model, I'd rather have that and something classic, roofless and fun for the rest of the time.




Think you are underestimating what Tesla selling 500k, then 1M, then 2M, then...??? cars worldwide will allow them to do. We haven't even discussed the home energy production, storage and future of solar they are in. There will come a time soon when Elon has cash on hand that he can go buy technologies like Intel wisely did with Mobileye. AI is the next important cog that needs to be inserted and parsed so that the automated world runs properly. Elon will get his cut there too.

The autonomous revolution will be a lot like the cellular revolution in that it won't just be Apple or Samsung who makes all the money in phones. Even Qualcomm which lost out on the handset market, is still an $80B company. There is so much that makes up a tech market. Hopefully, one day soon I'm in the bay signing away my part of our baby.

So we agree that the cars aren't the ultimate value driver for the business, more of the enabler. I haven't been trying to downplay the potential of what Tesla is/can be/will become. It is enormous. However, as you point out in another comment, this change will be happening in the next 10-20 years. All of this brings me back full-circle to the original question I posed to you: "Why by 2020?". And correct me if I'm misunderstanding you... but it seems like what you are saying is that Tesla has a technology with broad-base potential that, if it can successfully introduce a fleet of cars that generates the cash required to allow Elon to make strategic acquisitions, can be leveraged to propel it beyond Apple/Samsung heights. ALSO, this will sorted out by 2020, making the probability of the broader application of Tesla's technology being realized greater.

 

[RDU Irish]

For Tesla to hit $1000 would be a $150 billion market cap - more likely $200 billion when accounting for the dilution damn near guaranteed over the next few years. Not so sure I agree with Wooly that they need to split the stock to get the price down and juice (even more) demand. The cult following of some of these names don't understand stock splits and may think they lost half or a third without realizing they split 2:1 or 3:1.

Much like Amazon, the cart is about six hundred miles ahead of the horse on this one. At least Amazon is not dependent on cash infusions multiple times per year to keep the party rolling. Don't get me started on Amazon buying Whole Foods (with debt b/c they don't have the cash on hand).

 

[woolybug25]

For Tesla to hit $1000 would be a $150 billion market cap - more likely $200 billion when accounting for the dilution damn near guaranteed over the next few years. Not so sure I agree with Wooly that they need to split the stock to get the price down and juice (even more) demand. The cult following of some of these names don't understand stock splits and may think they lost half or a third without realizing they split 2:1 or 3:1.

Much like Amazon, the cart is about six hundred miles ahead of the horse on this one. At least Amazon is not dependent on cash infusions multiple times per year to keep the party rolling. Don't get me started on Amazon buying Whole Foods (with debt b/c they don't have the cash on hand).

I guess I don't understand why you see these as mutually exclusive. What business dependent on annual cash infusions can you think of that has kept their stock price high? What advantage would depressing trading volume do for Tesla? It simply goes against traditional stock valuation methodology.

 

[RDU Irish]

I guess I don't understand why you see these as mutually exclusive. What business dependent on annual cash infusions can you think of that has kept their stock price high? What advantage would depressing trading volume do for Tesla? It simply goes against traditional stock valuation methodology.

Everything about Tesla goes against traditional stock valuation methodology, IMO. Pride and ego are bigger drivers than logical deal structuring. Thus why I think this is an exception to your valid point. Then again, TSLA trades over $2 billion worth of shares per day so I am not sure "liquidity" is anywhere on their radar of concerns. Order book (over or under subscribed) on their next equity offering is a better indicator to their concerns (which we should get a glimpse of in the next few months).

You would be hard pressed to find an example because a) most companies split to keep their stock under $100/share on average, b) most companies go through the "continuous cash raise cycle without any foreseeable future profit" phase before they are public. I suppose I could look back to the 1997-2002 bubble graveyard to find some examples if I were so inclined.

 

[BobbyMac]

Serial #1.

<iframe width="600" height="300" src="https://www.youtube.com/embed/w2_5-bJUEMY" frameborder="0" allowfullscreen></iframe>

 

[BleedBlueGold]

So I'm strongly considering the Model 3 for my next car. I drive about 120 miles round trip each day. Conveniently, there's a super charger station near where I work (ie. lunch break fill-ups). But I have one major concern and would like your thoughts:

I live in Indy and have friends and family in northern Indiana (about 140 miles from my home). I could get there with the 200+ range but then getting home is the issue. The nearest charger station to there house is way out of the way. Using their 110v outlet and throwing a $20 their way wouldn't work either because it would take so long to charge my car. So what's the answer here? Just accept it, drive out of my way to the charger station and deal with it? I know the infrastructure will continue to get better but this seems like a big drawback. Am I overreacting?

 

[BobbyMac]

From following this closely, it appears you can expect to get 30mi of charge per hour from 110v. If everything is exactly correct (which it never is) and assuming you intend to buy the 50 kW version... you would leave home with a full charge, drive to your family's house, charge for 3 hrs and then drive home and have 30 miles to spare. Use an outlet that has 20 amp service as they trip 15 amp breakers sometimes. Also be careful if you are plugging into a gfi outlet, if it's old and/or a 15 amp receptacle, it could trip also.

If you own your current house, get the appropriate charging system for your garage. If you live in an apartment, get one more Prius until the infrastructure is ready for primetime in 4-5 years.

 

[BleedBlueGold]

Here's a more specific breakdown of my situation:

Choice 1: Mazda CX-9, AWD

Choice 2: Standard Range Model 3, AWD

Choice 3: Long Range Model 3, AWD

*Obviously the SUV is the orange to these apples. But I've always owned tiny cars and I'm growing tired of it now that I have kids.

Own my house. Would be installing the recommended charger.

Home to work: 55 miles (charger station nearby my workplace)
Home to friends/family: 140 miles (charger station in nearby South Bend)
Home to lake cottage: 170 miles (charger station in nearby South Bend)

So I can "get by" with a standard range Model 3. I'd just have to deal with charger stations more often.

If I went with the long range, the cost is $9000 more, but wouldn't need the charger stations as much.

Break even analysis between the CX-9 and long range M3 is around 5 years with a roughly $25,000 up front cost difference for the latter.

I'm seriously torn on this. My current car will need to be replaced sooner rather than later and this decision is looming due to the wait list for Tesla if I go that route.

 

[BobbyMac]

Here's a more specific breakdown of my situation:

Choice 1: Mazda CX-9, AWD

Choice 2: Standard Range Model 3, AWD

Choice 3: Long Range Model 3, AWD

*Obviously the SUV is the orange to these apples. But I've always owned tiny cars and I'm growing tired of it now that I have kids.

Own my house. Would be installing the recommended charger.

Home to work: 55 miles (charger station nearby my workplace)
Home to friends/family: 140 miles (charger station in nearby South Bend)
Home to lake cottage: 170 miles (charger station in nearby South Bend)

So I can "get by" with a standard range Model 3. I'd just have to deal with charger stations more often.

If I went with the long range, the cost is $9000 more, but wouldn't need the charger stations as much.

Break even analysis between the CX-9 and long range M3 is around 5 years with a roughly $25,000 up front cost difference for the latter.

I'm seriously torn on this. My current car will need to be replaced sooner rather than later and this decision is looming due to the wait list for Tesla if I go that route.

My opinion:

You don't even need the out of the way charging stations but you mention them a lot. You have range anxiety. Get the Mazda. Your Tesla time will come. I'm passing on mine as things have changed since sign up. But we'll be first in line for 2 Model Y crossovers... and maybe we'll keep one of those.

We recently signed up for two CX-5 Diesels. Might keep one those (?) Mama has a '17 CX-5 through work and I love it. Best $30k loaded/OTD vehicle on the planet. Mazda makes some great SUV's. The CX-9's interior looks like somethng out of a Range Rover.

 

[zelezo vlk]

Crus will you be my life coach? I can pay you in intermittent beer shipments.

Sent from my SAMSUNG-SM-G900A using Tapatalk

 

[BleedBlueGold]

My opinion:

You don't even need the out of the way charging stations but you mention them a lot. You have range anxiety. Get the Mazda. Your Tesla time will come. I'm passing on mine as things have changed since sign up. But we'll be first in line for 2 Model Y crossovers... and maybe we'll keep one of those.

We recently signed up for two CX-5 Diesels. Might keep one those (?) Mama has a '17 CX-5 through work and I love it. Best $30k loaded/OTD vehicle on the planet. Mazda makes some great SUV's. The CX-9's interior looks like somethng out of a Range Rover.

You're absolutely right I have range anxiety. It stems from when I first bought my Jetta TDi and most of the gas stations on my route didn't sell diesel gas. It was so stressful constantly having to map out where I could get gas when I needed it. So I know my daily commute and even commuting to my friend's on a long-range battery won't require a charge. It's just that I keep it in the back of my head.

The CX-5s caught my eye in the beginning but if I'm going to up-size to a SUV, I want the bigger one. I absolutely love them.

Thanks for your input. I've loved Tesla since before the Model S was a concept. Pretty sure I've told my Tesla stock story on her a million times. Still pissed at myself for that. You're right, my time will come. I'll probably just wait until the prices come down a bit more. They're the future, no doubt.

 

[BobbyMac]

Crus will you be my life coach? I can pay you in intermittent beer shipments.

Sent from my SAMSUNG-SM-G900A using Tapatalk

Cool. Prepare to drive the coolest cars at the lowest possible prices, move every 2 years to the next flip (partner) and be divorced at least 7 times and remember... you'll always have social security if none of it works out.

Our sessions will begin when I receive your National Letter of Intent and one hundered 4 packs of KBS.

 

[zelezo vlk]

Cool. Prepare to drive the coolest cars at the lowest possible prices, move every 2 years to the next flip (partner) and be divorced at least 7 times and remember... you'll always have social security if none of it works out.

Our sessions will begin when I receive your National Letter of Intent and one hundered 4 packs of KBS.

The only deal breaker is the divorce, unless those come with annulments. Also I'm hand delivering those KBS packs so you gotta share.

Sent from my SAMSUNG-SM-G900A using Tapatalk

 

[BobbyMac]

The only deal breaker is the divorce, unless those come with annulments. Also I'm hand delivering those KBS packs so you gotta share.

Sent from my SAMSUNG-SM-G900A using Tapatalk

I got a guy.

and I have no problem sharing... bring 200.

 

[RDU Irish]

LOVE the mental gymnastics of trying to validate a Tesla and quickly evolving to the big SUV. Emotionally everyone wants a Tesla, logically not so much.

If you are not a two car household I don't really know how you can deal with the range constraints of those things. Car = freedom in America.

 

[BleedBlueGold]

LOVE the mental gymnastics of trying to validate a Tesla and quickly evolving to the big SUV. Emotionally everyone wants a Tesla, logically not so much.

If you are not a two car household I don't really know how you can deal with the range constraints of those things. Car = freedom in America.

I stated it's apples and oranges. I've always driven the cheaper, smaller cars and I've always loved the Tesla. But with a growing family, I can't fit kids and car seats and all their crap in my car so I started looking at SUVs as a "IF I do go this route, what would it be?"

We are a two car household and my wife always gets stuck running the kids around because my car can't swing it. It's a matter of me getting a SUV to help out, or me keeping with my tiny car routine but upgrading to one that requires no gas and little service over the course of my 40,000+ miles per year route.

Logically, Tesla makes a ton of sense if you keep your vehicles longer than most. Our family keeps cars typically 7-10 years. After year 6, the Tesla breaks even and I'm "in the money." Any other type of vehicle actually costs me more to drive it than a Tesla over the same time period.

 

[zelezo vlk]

I got a guy.

and I have no problem sharing... bring 200.

ayyyy bada bing

 

[RDU Irish]

I stated it's apples and oranges. I've always driven the cheaper, smaller cars and I've always loved the Tesla. But with a growing family, I can't fit kids and car seats and all their crap in my car so I started looking at SUVs as a "IF I do go this route, what would it be?"

We are a two car household and my wife always gets stuck running the kids around because my car can't swing it. It's a matter of me getting a SUV to help out, or me keeping with my tiny car routine but upgrading to one that requires no gas and little service over the course of my 40,000+ miles per year route.

Logically, Tesla makes a ton of sense if you keep your vehicles longer than most. Our family keeps cars typically 7-10 years. After year 6, the Tesla breaks even and I'm "in the money." Any other type of vehicle actually costs me more to drive it than a Tesla over the same time period.

Hey kids - lets hang out at this plug for a few hours. Completely impractical car IMO. I'd wait for the next go-round. I do see your point on a high mileage route like yours - 40,000 miles per year is a lot - you really keep cars for 400,000 miles?