Tesla

[Armybrat 41391]

Located just 6 miles north of my 25 acre patch.

Ok Elon, if you need to expand just gimme a call.

[FORTY NINE TO ZERO 2651]

How long until people start bitching about gentrification and cost of living increases? 

[MillerEP 30902]

Great news!

[The Dog 44854]

 

So we buying recruits with Cybertrucks instead of F-250s now?

[Wally Fairway 5674]

2 hours ago, Blotto said:

May be the tulip bubble of our time. 

Qtr ending Sept 2018 - revenue $6.8 billion, net income $254 million, cars shipped 83.5 K. Stock price at end of Sept 2018 ~$340 

Qtr ending June 2020 - revenue $ 6.0 billion, net income of $104 million, cars shipped 92 K. Stock price of ~$1650 and rising. 

TSLA makes money in quarters when they elect to sell regulatory credits to other auto manufacturers, and generally loses money if they don't recognize that revenue. They have never turned a quarterly profit without the regulatory credits or other accounting shenanigans. While they can continue to eek out economies of scale and presumably some day manufacture cars profitably, automobile manufacturing is a low margin business. Batteries cost money, steel costs money, leather seats cost money. TSLA isn't  going to change that.

By comparison, in 2019 Toyota had revenues of $250 billion, profits of $20 billion, and their market cap is half of TSLA. Don't know when the insanity ends, but it has to eventually. Or not, who the fuck knows.

Oh you are preaching to the choir, but momentum is a beast. Just ask the shorts who've been squeezed hard in the last 3 months.

[Wally Fairway 5674]

24 minutes ago, Xian said:

How long until people start bitching about gentrification and cost of living increases? 

Don't worry about that - Austin has a superhero coming to protect and restore the old Austin.

[Somnio 751]

2 hours ago, clapclapclap said:

So is this still the Texla site?

 

Edit:  Suck it, Ags:

 

I just read aggy is gonna boycott Tesla after seeing this photo.  I hope it doesn't hurt their earnings report next quarter.

[gmr548 16694]

I just read aggy is gonna boycott Tesla after seeing this photo.  I hope it doesn't hurt their earnings report next quarter.

The venn diagram of aggy and tesla drivers is two completely separate circles.

 

[Pato del Muerto 53462]

1 hour ago, gmr548 said:

The venn diagram of aggy and tesla drivers is two completely separate circles.

 

Almost accurate 

 

[AUS-97HORN 12050]

3 hours ago, Fudge Nuggets said:

Yes, long term strategy is very important because a good strategy should lead to more profits.  You can have all the greatest ideas in the world, solve baldness, develop the next greatest things in weiner pills, cure cancer / AIDS / COVID, develop the next bitcoin that actually gets used by the masses and all sorts of other cool shit.  But if you don't make money, you go out of business and if you go out of business then equity is worthless.

based on this response its obvious you dont fully understand the nuanced differece

They still report quarterly  earninigs, and they usually still report a YEARLY earnings expectation. 

When a company stops making quarterly projections, they arent stopping to make profits.   

But there is a ridiculous amount of pressure on Wall Street that if a company says they are making $1.14 a share, that they report that or more in that quarter.

But what wall street's "make money now" folks dont care about (even if its best for the company longterm ) is if that company reports that they only made $1.12 a share because they spent that extra  2 cents/share towards a project that is expected to return 4 cents per share  per quarter in 4 years and continue that for 6+ years,  you and I can see that (assuming the projection is right), that is a clear and obvious use of funds to help improve long term profits.

Wall St has a very strong tendancy right now to penalize the shit out of that company's stock in my example for the next 4 years.   And many times if that penalty keeps going on, it causes the companies bond rating to drop, which increases their finance costs, which reduces their earnings, which reduces their bond rating which increases their finance costs.... and it repeats.

 

The company in that example is still making profit, they are looking longterm, but if they dont find a way to make up that  2 cents a share before they report quarterly  earnings, they get penalized.

meanwhile, if that company announces they expect to make $4.56/share in the year and dont give a quarterly per share guidance and they hit the rest of their quarters,  they report a small miss $4.54 yearly earning vs $4.56 ... thats a much lower wall street "hit" for missing your estimated yearly earnings.     

all because the company gave a yearly profit guidance instead of a quarterly one.  

[CDAK 216]

Genuine question. Why do you think "Wall Street" doesn't understand that investments today may pay dividends later? Do the analysts and portfolio managers at investment banks not understand that? Do the algorithms used by high-frequency traders and quants not account for long-term strategy?

[Biff Tannen 46158]

5 hours ago, Fudge Nuggets said:

What the fuck are you supposed to value a company on instead, the color scheme of its logo?

 

I feel most people upthread have explained it, but I really wanted to use this gif. 

[Fudge Nuggets 19453]

8 hours ago, AUS-97HORN said:

based on this response its obvious you dont fully understand the nuanced differece

They still report quarterly  earninigs, and they usually still report a YEARLY earnings expectation. 

When a company stops making quarterly projections, they arent stopping to make profits.   

But there is a ridiculous amount of pressure on Wall Street that if a company says they are making $1.14 a share, that they report that or more in that quarter.

But what wall street's "make money now" folks dont care about (even if its best for the company longterm ) is if that company reports that they only made $1.12 a share because they spent that extra  2 cents/share towards a project that is expected to return 4 cents per share  per quarter in 4 years and continue that for 6+ years,  you and I can see that (assuming the projection is right), that is a clear and obvious use of funds to help improve long term profits.

Wall St has a very strong tendancy right now to penalize the shit out of that company's stock in my example for the next 4 years.   And many times if that penalty keeps going on, it causes the companies bond rating to drop, which increases their finance costs, which reduces their earnings, which reduces their bond rating which increases their finance costs.... and it repeats.

 

The company in that example is still making profit, they are looking longterm, but if they dont find a way to make up that  2 cents a share before they report quarterly  earnings, they get penalized.

meanwhile, if that company announces they expect to make $4.56/share in the year and dont give a quarterly per share guidance and they hit the rest of their quarters,  they report a small miss $4.54 yearly earning vs $4.56 ... thats a much lower wall street "hit" for missing your estimated yearly earnings.     

all because the company gave a yearly profit guidance instead of a quarterly one.  

My bad.  I agree yearly vs quarterly is a better way to look at things.  I got blinded by rage I guess and skipped over the qtrly part in the first post.

Edited July 23, 2020 by Fudge Nuggets

[TonyTexas 10747]

10 hours ago, gmr548 said:

The venn diagram of aggy and tesla drivers is two completely separate circles.

 

Idk. This is for a truck factory. 

[Somnio 751]

Okay Elon, Austin's new soccer stadium needs a name.  I'm just saying, Tesla Stadium has a nice ring to it!

[dingleberryswitzer 2724]

33 minutes ago, TonyTexas said:

Idk. This is for a truck factory. 

If you can get it in Maroon....

[Guest Lobo]

I thought they were gonna build that other compact model here as well?  

Plus an R&D Center?  

I look at Tesla's earnings.  And then I look around the country.  Millions of people with one child buying massive SUV's with a third row.  Millions of men driving full-size, crew-cab pickup trucks whose beds will never see anything more a few bags of mulch once a year.  And then I realize that yeah, it's gonna take awhile for an all-electric car company to gain some financial traction.  We do quite a bit of work in the oil business and I am ecstatic that Tesla is coming to Texas.  Tesla isn't the thing, but it could very well be the thing that gets us to the thing.    

[AUS-97HORN 12050]

7 hours ago, CDAK said:

Genuine question. Why do you think "Wall Street" doesn't understand that investments today may pay dividends later? Do the analysts and portfolio managers at investment banks not understand that? Do the algorithms used by high-frequency traders and quants not account for long-term strategy?

The super long term folks and maybe even some hedge fund managers do take that approach.  but the majority of traders are like a cat with a laser beam, whatever that beam shines on, they pounce on, could be a good pounce, could be a bad pounce, for the most part as long as the stock is moving up or down, either way traders are interested.

 

not trying to write a huge response but, another very common situation I didnt give in my above example is that for many mid- high level public companies, that all focusing push to hit the quarterly number takes over the entire mindset of the company the last 3 or 4 weeks of the quarter.  Ive worked for 2 such companies.

The all important quarter hit caused a LOT of legal, but questionable acts to take place. 

The most common was we "neglected" to mark a customer return as being received in our returns warehouse the last 2 weeks of a quarter.  instead those all got marked as being received the first day of the next quarter, since returns would require us to credit back the sales.

the example that shows complete short-sighted-ness that hurts the long-term profit of the company that BOTH of my public companies did is below.  BTW this example only works for customers who continuously repeat buy the same products over and over in a year.    This wouldnt hold as true for Ford or GM for example because they can legitimately can only sell 1 car a year to most families.

Assume all normal and extra discounts have already been applied in this example. 

My example company figures out about 3 weeks left in the quarter that they are on pace to miss the quarterly number.   

Company panics, tells the sales teams to DROP THEIR PANTS to get orders in.    Deals that are absolutely 100% going to happen but happen in 6-8 weeks are told to pull in

Customer is willing to pay $1M for the project if they are allowed to purchase on their own timeframe (at that price its a 17% profit margin) ,  but management insists that sales call the customer up and tell them we have a Crazy Eddie take it now deal at $850k .  customer either buys it right away, or customer doesnt buy it waits the 6 weeks and then demands that they get the $850k price anyway (happens all the time)

So that shortsided "get it now" instruction from management has taken HUNDREDS of deals that were $1M+ sitting at 15-20% gross profit that were absolutely booking in the next 8 weeks and reduced the gross profit to 2-5% to get it NOW.  Thats a HUGE hit to longterm profitability.    

If the company was on a yearly earnings guidance that mega push might still happen but only ONE time a year, not 4 times a year like happen currently.

I think we could agree that assuming all else is equal, letting $1B worth of sales happen 6 weeks down the road bringing in $150M in gross profit is  SOOOO much better than bringing in $850M in sales and only $40M in gross profit right NOW.  But wall street doesnt see it that way if that $40M in profit gives you the 2-3 cents per share needed to hit your quarterly number

 

 

[Tom 2960]

Sorry to change the subject, but I just saw my first Model Y in the wild.  I love Tesla and have next to no criticism of them as a company, but why are we calling the model Y an SUV?  At best this is a really cool hatchback or station wagon.  

SUV used to mean something, like being a vehicle built on a truck chassis. Then we had crossovers.  Now, it seems anything with a door that opens vertically in the back with open trunk space that is accessible inside the car is labelled a SUV.  This car couldn't go over a curb if its life depended on it.  I love the idea of the car, but don't call this hatchback a SUV.

Am I the only one around here who gives a shit about the rules?

Edited July 23, 2020 by Tom

[tokamak 6687]

29 minutes ago, Lobo said:

I thought they were gonna build that other compact model here as well?  

Plus an R&D Center?  

I look at Tesla's earnings.  And then I look around the country.  Millions of people with one child buying massive SUV's with a third row.  Millions of men driving full-size, crew-cab pickup trucks whose beds will never see anything more a few bags of mulch once a year.  And then I realize that yeah, it's gonna take awhile for an all-electric car company to gain some financial traction.  We do quite a bit of work in the oil business and I am ecstatic that Tesla is coming to Texas.  Tesla isn't the thing, but it could very well be the thing that gets us to the thing.    

I drive my cars til the wheels fall off before I get a new one. Current vehicle is a Toyota with 65k so I've got a ways to go. I honestly don't foresee myself ever buying another gas vehicle again after this one. No need, IMO. There's not a ton of choice right now but I'm expecting there will be in 5-6 years when I'm looking to buy again. Tesla, Ford, GM, and Rivian are all soon to have full size electric trucks. Full-size SUVs won't be far behind that.

9 minutes ago, AUS-97HORN said:

not trying to write a huge response but, <<huge response>>

My wife is in sales for a huge American company. End of damn near every quarter is a huge scramble for her because they're pushing them to bring in deals. It's always been mystifying to me. They create all this headache for themselves and the customers to push deals up to Q1 when they would have just closed early in Q2 anyway. So then they're right back in the same boat at the end of Q2. It's just robbing Peter to pay Paul.

[BabaYaga 15623]

22 minutes ago, AUS-97HORN said:

The super long term folks and maybe even some hedge fund managers do take that approach.  but the majority of traders are like a cat with a laser beam, whatever that beam shines on, they pounce on, could be a good pounce, could be a bad pounce, for the most part as long as the stock is moving up or down, either way traders are interested.

 

not trying to write a huge response but, another very common situation I didnt give in my above example is that for many mid- high level public companies, that all focusing push to hit the quarterly number takes over the entire mindset of the company the last 3 or 4 weeks of the quarter.  Ive worked for 2 such companies.

The all important quarter hit caused a LOT of legal, but questionable acts to take place. 

The most common was we "neglected" to mark a customer return as being received in our returns warehouse the last 2 weeks of a quarter.  instead those all got marked as being received the first day of the next quarter, since returns would require us to credit back the sales.

the example that shows complete short-sighted-ness that hurts the long-term profit of the company that BOTH of my public companies did is below.  BTW this example only works for customers who continuously repeat buy the same products over and over in a year.    This wouldnt hold as true for Ford or GM for example because they can legitimately can only sell 1 car a year to most families.

Assume all normal and extra discounts have already been applied in this example. 

My example company figures out about 3 weeks left in the quarter that they are on pace to miss the quarterly number.   

Company panics, tells the sales teams to DROP THEIR PANTS to get orders in.    Deals that are absolutely 100% going to happen but happen in 6-8 weeks are told to pull in

Customer is willing to pay $1M for the project if they are allowed to purchase on their own timeframe (at that price its a 17% profit margin) ,  but management insists that sales call the customer up and tell them we have a Crazy Eddie take it now deal at $850k .  customer either buys it right away, or customer doesnt buy it waits the 6 weeks and then demands that they get the $850k price anyway (happens all the time)

So that shortsided "get it now" instruction from management has taken HUNDREDS of deals that were $1M+ sitting at 15-20% gross profit that were absolutely booking in the next 8 weeks and reduced the gross profit to 2-5% to get it NOW.  Thats a HUGE hit to longterm profitability.    

If the company was on a yearly earnings guidance that mega push might still happen but only ONE time a year, not 4 times a year like happen currently.

I think we could agree that assuming all else is equal, letting $1B worth of sales happen 6 weeks down the road bringing in $150M in gross profit is  SOOOO much better than bringing in $850M in sales and only $40M in gross profit right NOW.  But wall street doesnt see it that way if that $40M in profit gives you the 2-3 cents per share needed to hit your quarterly number

 

 

Shorter translation as it related to the TSLA insanity:  "FOMO"

[Pato del Muerto 53462]

Quarter. 

-Wally Pryor 

[Cheeseweasel 26439]

22 minutes ago, AUS-97HORN said:

not trying to write a huge response but, another very common situation I didnt give in my above example is that for many mid- high level public companies, that all focusing push to hit the quarterly number takes over the entire mindset of the company the last 3 or 4 weeks of the quarter.  Ive worked for 2 such companies.

Can confirm. "Quarterly thinking" is horrible in publicly traded companies. Last company I worked at acted like they were liquidating the company at the end of each quarter. Pushing huge discounts to boost sales, stopping travel and expenses, slashing marketing spend. Then, we'd get bitched at in the next quarter because of all of the discounts we gave and why we weren't seeing sales increase without travel/marketing. Rinse. Repeat. That's why I got out. 

[BabaYaga 15623]

Tesla is just a completely untradeable stock, unless you want the casino experience without having to travel to Vegas.

Revenue has completely flatlined, even with all-time high regulatory credit sales, which should decrease as competitors meet emission standards and have less of a need to purchase them. Their core business of auto sales is unprofitable without them, and hugely so.

Elon has been saying Tesla Energy/Solar will be bigger than its automotive business someday, and yet their own quarterly filings show fewer and fewer MW installed. The Solar Roof was announced in 2016, at which point they had just over 200 MW installed, down from an all time high of over 250 MW in 2015. Per the Q2 2020 filing, they have 27 MW installed currently., down from 35 MW in Q1 2020 and 54 MW in Q4 2019. If anything, since they tout that their solar panels cost 33% that of the industry average, you'd think their deployed solar MW would be going through the roof.

Tesla is priced like the Amazon of today, but without the financials to justify it. Love him or hate him, Elon has captured the spotlight, and that's clearly reflected in their stock price. I'd love to see someone model out how Tesla is worth roughly the same market cap as Toyota. And GM. And Volkswagen. And Ford. Combined. I get that growth is the story, but the numbers just don't support that narrative.

[Cheeseweasel 26439]

7 minutes ago, BabaYaga said:

Tesla is just a completely untradeable stock, unless you want the casino experience without having to travel to Vegas.

They are setting themselves up as a utility. If their battery services plan works, it will completely disrupt the current utility market and make them work 100 fold of what they are worth now. This is not a buy and trade stock. This is Amazon at 4.30 a share. Buy it to replace some of the Bonds in your portfolio and let it sit for 5-8 years.

[BabaYaga 15623]

3 minutes ago, Cheeseweasel said:

They are setting themselves up as a utility. If their battery services plan works, it will completely disrupt the current utility market and make them work 100 fold of what they are worth now. This is not a buy and trade stock. This is Amazon at 4.30 a share. Buy it to replace some of the Bonds in your portfolio and let it sit for 5-8 years.

Maybe.  Or it's a bubble.  Many are comparing them to Amazon.  Elon comes out with some new presentation about neural links, or space cars, or whatever and it just hypes the stock up. The actual realization of all these "plans/ideas" have what kind of fruition chance? They got a like a $100m grant from the state of California to make a battery swap terminal. Where you just pull in with your car swap batteries then roll out. Had exactly 1 presentation and then no one ever saw it again.

Amazon doesn't do any of that type of stuff. They're monsters of developing their own capital and acquiring businesses that would accommodate whatever market they're trying to capture. It's apples and oranges comparing the two imo.

[Cheeseweasel 26439]

2 minutes ago, BabaYaga said:

Amazon doesn't do any of that type of stuff.

Ah. How soon we forget all the naysayers. Amazon doesn't make profit! Why would anyone buy online and wait 3 days for it when I can get it locally!

[Sandman 3430]

1 hour ago, Lobo said:

Millions of men driving full-size, crew-cab pickup trucks whose beds will never see anything more a few bags of mulch once a year. 

Jokes on you, I won't even do that. 

[VolenteHawk 495]

5 minutes ago, Cheeseweasel said:

Ah. How soon we forget all the naysayers. Amazon doesn't make profit! Why would anyone buy online and wait 3 days for it when I can get it locally!

It’s just an online bookstore! This valuation is crazy!

[Biff Tannen 46158]

43 minutes ago, Tom said:

Sorry to change the subject, but I just saw my first Model Y in the wild.  I love Tesla and have next to no criticism of them as a company, but why are we calling the model Y an SUV?  At best this is a really cool hatchback or station wagon.  

SUV used to mean something, like being a vehicle built on a truck chassis. Then we had crossovers.  Now, it seems anything with a door that opens vertically in the back with open trunk space that is accessible inside the car is labelled a SUV.  This car couldn't go over a curb if its life depended on it.  I love the idea of the car, but don't call this hatchback a SUV.

Am I the only one around here who gives a shit about the rules?

It's supposed to be more of a crossover.  I do think even that is pushing it a bit.

[BabaYaga 15623]

LOL, where are we today?

[BabaYaga 15623]

14 minutes ago, Sandman said:

Jokes on you, I won't even do that. 

Bro, they can tow, according to Elon, up to 300,000 POUNDS!  LOL  

[gmr548 16694]

Almost accurate 
 

God I hope that's staged.

[Dahobbs 18306]

49 minutes ago, BabaYaga said:

Tesla is just a completely untradeable stock, unless you want the casino experience without having to travel to Vegas.

Revenue has completely flatlined, even with all-time high regulatory credit sales, which should decrease as competitors meet emission standards and have less of a need to purchase them. Their core business of auto sales is unprofitable without them, and hugely so.

Elon has been saying Tesla Energy/Solar will be bigger than its automotive business someday, and yet their own quarterly filings show fewer and fewer MW installed. The Solar Roof was announced in 2016, at which point they had just over 200 MW installed, down from an all time high of over 250 MW in 2015. Per the Q2 2020 filing, they have 27 MW installed currently., down from 35 MW in Q1 2020 and 54 MW in Q4 2019. If anything, since they tout that their solar panels cost 33% that of the industry average, you'd think their deployed solar MW would be going through the roof.

Tesla is priced like the Amazon of today, but without the financials to justify it. Love him or hate him, Elon has captured the spotlight, and that's clearly reflected in their stock price. I'd love to see someone model out how Tesla is worth roughly the same market cap as Toyota. And GM. And Volkswagen. And Ford. Combined. I get that growth is the story, but the numbers just don't support that narrative.

I get what you're saying, and I'm totally wary of the stock at its current valuation (I sold my shares around $900, really just bought for the casino experience as I don't typically buy individual stocks). That said, a lot of what you said above seems wrong to me. 

(1) sales/revenue have flat lined recently due to Covid-19/supply problems (i.e., couldn't produce vehicles due to closed factories). However, given the environment and how other automakers fared, this should be a huge positive for the company.

(2) Tesla solar sales have been decreasing, but the solar roof in particular has been increasing. The roof was announced in 2016, but they are only just now getting to the point where real sales are happening. 

(3) Tesla battery sales have been increasing, with more large projects announced. 

(4) As soon as the China, Germany, and Texas factories get fully operational, Tesla will seeing a dramatic increase in the number of cars it can sell. Right now, they are very much supply constrained.

(5) Calling the core auto business "unprofitable" is misleading. I'm quite confident that they have very nice margins on their vehicles. Lack of profit mainly comes from expense of constant investment in new facilities to increase production+R&D (although R&D appears to be dropping off?).   

Now, do I think the current stock price is justified, even considering all of the above? Absolutely not. But, I also wouldn't be terribly surprised if in 20 years Tesla is the most profitable automaker in the world + the reincarnation of what GE used to be. 

[Biff Tannen 46158]

1 minute ago, Dahobbs said:

But, I also wouldn't be terribly surprised if in 20 years Tesla is the most profitable automaker in the world + the reincarnation of what GE used to be. 

This is very plausible.  In terms of battery technology and just tech overall, Tesla is literally years, if not almost a decade, ahead of the field. 

[Cheeseweasel 26439]

2 minutes ago, Biff Tannen said:

This is very plausible.  In terms of battery technology and just tech overall, Tesla is literally years, if not almost a decade, ahead of the field. 

Yup. The only thing that keeps me from jumping deep into this stock is that the competition will catch up eventually. Hell, China is probably stealing the technology as we speak. 

Telsa will need to "grow into" their current valuation. If that happens before the competition catches up or not will be the question as an investor.

[Dahobbs 18306]

1 minute ago, Cheeseweasel said:

Yup. The only thing that keeps me from jumping deep into this stock is that the competition will catch up eventually. Hell, China is probably stealing the technology as we speak. 

Telsa will need to "grow into" their current valuation. If that happens before the competition catches up or not will be the question as an investor.

Well, already happened. Also, check out the the Xpeng P7. 

[BabaYaga 15623]

1 minute ago, Cheeseweasel said:

Telsa will need to "grow into" their current valuation. If that happens before the competition catches up or not will be the question as an investor.

That's the crux of the whole discussion.  Can they?  Will they?  

The company is primarily an auto manufacturer today, but they've already begun electric operations in Australia and the UK and anticipate them moving into that more heavily in the US in short order. $1t market cap represents a 27-35% annual return over the course of 5 years.

I also agree that anyone that thinks the stock price should be valued as nothing more than a growth auto company is missing the goals of the company. Whether they'll ultimately achieve those goals is up for debate, but as it stand they have plenty of opportunity to raise funds and the pathway is certainly achievable. They're operating at a profit currently (even if they have to gain that profit off of regulatory requirements of other manufacturers), which means they've got way more time than was originally projected by short sellers.

No one is making a vehicle that compares on price and capability in the EV market right now, and none of the other auto manufacturers are expanding into other business sectors.
 

[Armybrat 41391]

2 hours ago, TonyTexas said:

Idk. This is for a truck factory. 

If the truck doesn’t rumble, aggy won’t buy it.

[BabaYaga 15623]

Just now, Armybrat said:

If the truck doesn’t rumble, aggy won’t buy it.

Do you even ecoboost, brat!

[Cheeseweasel 26439]

5 minutes ago, BabaYaga said:

That's the crux of the whole discussion.  Can they?  Will they?  

If I knew that, I'd be on Wall Street, not Bourbon Street.

[BabaYaga 15623]

4 minutes ago, Cheeseweasel said:

If I knew that, I'd be on Wall Street, not Bourbon Street.

Hence my initial assertion that this upward pressure on stock pricing is a whole lot of 'FOMO'.

I also have concerns about quality.  

Quality Issues?

Of course all manufacturer's occasionally have quality issues. But this has been persistent with Tesla and its b/c they're not focused on making a quality product (they know the fanboys will excuse anything), but, again, this is a fifteen plus year old manufacturing company. Ford, GM, et al, may have the occasional recall, but they don't experience the crap like you see in the article above (which, happened with the Model X, the Model 3, ...). And again, it's not b/c they couldn't get it right or don't know what they're doing. It's delivery stuffing to make numbers so they can show they're taking over the automotive world, so the stock price can stay afloat on hope.  

This philosophy/strategy would work with the Model S and Model X. Despite the price, the people buying those vehicles in 2014, 2015, etc. were fanboys. The name meant more than any quality issues. However, the model 3, and now the model Y too, was supposed to be the "every man" car and sell in the millions. Well, the "every man" by default, isn't a a fanboy and isn't going to accept or overlook the quality issues Tesla has just so it can make its quarterly delivery numbers dump; especially when paying $40,000+ for a car.

There's actually a viable business here with strong brand loyalty. But it's all the other issues with how this company operates that makes me nervous

[Armybrat 41391]

19 minutes ago, BabaYaga said:

Do you even ecoboost, brat!

What’s that, a direct sprout injector?

[BabaYaga 15623]

5 minutes ago, Armybrat said:

What’s that, a direct sprout injector?

Twin-turbo!  Ford's new (relatively) baby.  I have one in my Fx4.  Scat's like a scalded cat with an amazingly flat torque curve.  

[Biff Tannen 46158]

17 minutes ago, BabaYaga said:

Hence my initial assertion that this upward pressure on stock pricing is a whole lot of 'FOMO'.

I also have concerns about quality.  

Quality Issues?

Of course all manufacturer's occasionally have quality issues. But this has been persistent with Tesla and its b/c they're not focused on making a quality product (they know the fanboys will excuse anything), but, again, this is a fifteen plus year old manufacturing company. Ford, GM, et al, may have the occasional recall, but they don't experience the crap like you see in the article above (which, happened with the Model X, the Model 3, ...). And again, it's not b/c they couldn't get it right or don't know what they're doing. It's delivery stuffing to make numbers so they can show they're taking over the automotive world, so the stock price can stay afloat on hope.  

This philosophy/strategy would work with the Model S and Model X. Despite the price, the people buying those vehicles in 2014, 2015, etc. were fanboys. The name meant more than any quality issues. However, the model 3, and now the model Y too, was supposed to be the "every man" car and sell in the millions. Well, the "every man" by default, isn't a a fanboy and isn't going to accept or overlook the quality issues Tesla has just so it can make its quarterly delivery numbers dump; especially when paying $40,000+ for a car.

There's actually a viable business here with strong brand loyalty. But it's all the other issues with how this company operates that makes me nervous

This is actually really surprising, considering the Model Y is about 85% the same as the Model 3.  I would think they would have the kinks worked out already.  Not a good look, as the article says.

[BabaYaga 15623]

20 minutes ago, Biff Tannen said:

This is actually really surprising, considering the Model Y is about 85% the same as the Model 3.  I would think they would have the kinks worked out already.  Not a good look, as the article says.

It's deeper than that.  Let me preface this as conjecture, but I suspect they have quality issues because any employee who would flag them and delay getting the car out the door would be in trouble, and that mentality comes from the CEO.  Which in turn comes from the brand loyalty of the fan boys. Its why I said they could be a profitable company, but it would destroy the company's market cap; focus on quality, charge appropriate pricing (they'll buy them anyway) and live with the smaller marketshare. Instead, they exploit their fanboy love and rush out products knowing they'll excuse any flaws bc they have to maintain this image of unlimited growth. Even now, they're priced like the own the entire automotive market. How much more will Tesla be "worth" when they literally are pushing out a million cars? "Worth" more than Amazon? But eventually, they'll run out of folks who are fanboys. I assume the hope is that they'll have mastered self driving by then and potentially offer a real value proposition to the average buyer.

[tokamak 6687]

1 hour ago, Dahobbs said:

(4) As soon as the China, Germany, and Texas factories get fully operational, Tesla will seeing a dramatic increase in the number of cars it can sell. Right now, they are very much supply constrained.

(5) Calling the core auto business "unprofitable" is misleading. I'm quite confident that they have very nice margins on their vehicles. Lack of profit mainly comes from expense of constant investment in new facilities to increase production+R&D (although R&D appears to be dropping off?).  

4) Is there a lot of unfulfilled demand for Tesla vehicles right now? Like if I try to order one today do I have to wait a long time to get it?

5) I read somewhere that cars themselves have become relatively low margin items. Maybe just a couple hundred bucks per vehicle profit and they try to make it up with add-ons, service, etc. Maybe I'm confusing what dealers make vs manufacturers. In any case, seems like it's a business that does and will always require huge R&D investments, because they have to constantly refresh models, respond to new market trends, etc. Plenty of people out there saying that the Model S is starting to get long in the tooth and needs a refresh.

1 hour ago, Cheeseweasel said:

Yup. The only thing that keeps me from jumping deep into this stock is that the competition will catch up eventually. Hell, China is probably stealing the technology as we speak. 

Telsa will need to "grow into" their current valuation. If that happens before the competition catches up or not will be the question as an investor.

I'm financially illiterate, but doesn't the premise of any company "catching up" to its speculative valuation, whether it be Tesla or some Silicon Valley start-up, imply that the stock price has to eventually level off? In other words, the company has to enter a phase where revenue begins to grow quicker than stock price? That seems hard to do if the stock is on an exponential trajectory.

[Cheeseweasel 26439]

11 minutes ago, tokamak said:

I'm financially illiterate, but doesn't the premise of any company "catching up" to its speculative valuation, whether it be Tesla or some Silicon Valley start-up, imply that the stock price has to eventually level off? In other words, the company has to enter a phase where revenue begins to grow quicker than stock price? That seems hard to do if the stock is on an exponential trajectory.

Yes, but there's a measurements for that. PE & PEG ratios

Price to earnings & PE to Growth. Both are traditional measurements of how much "catching up' a stock has to do.

 

[Dahobbs 18306]

21 hours ago, tokamak said:

4) Is there a lot of unfulfilled demand for Tesla vehicles right now? Like if I try to order one today do I have to wait a long time to get it?

5) I read somewhere that cars themselves have become relatively low margin items. Maybe just a couple hundred bucks per vehicle profit and they try to make it up with add-ons, service, etc. Maybe I'm confusing what dealers make vs manufacturers. In any case, seems like it's a business that does and will always require huge R&D investments, because they have to constantly refresh models, respond to new market trends, etc. Plenty of people out there saying that the Model S is starting to get long in the tooth and needs a refresh.

I'm financially illiterate, but doesn't the premise of any company "catching up" to its speculative valuation, whether it be Tesla or some Silicon Valley start-up, imply that the stock price has to eventually level off? In other words, the company has to enter a phase where revenue begins to grow quicker than stock price? That seems hard to do if the stock is on an exponential trajectory.

4) Yes, there is. Unlike other manufacturers, Tesla doesn't have dealers with an extensive inventory of supply. Every car produced is basically destined for a customer. When I ordered mine earlier this year, it took about 2 months before I had the car. Tesla also had their European  sales dry up a bit last quarter because the factory that produced cars destined for Europe (Freemont) was shutdown due to Covid-19 (I don't like the way Elon handled that btw). 

5) Cars are low margin for dealers. Manufacturers, particularly luxury manufacturers, have pretty decent margins on their products. Being profitable for Tesla would, at this point, be as simple as slowing their rate of expansion. But it isn't interested in doing that for short term profit.

Edited July 24, 2020 by Dahobbs

[Biff Tannen 46158]

12 minutes ago, Dahobbs said:

5) Cars are low margin for dealers. Manufacturers, particularly luxury manufacturers, have pretty decent margins on their products. Being profitable for Tesla would, at this point, be as simple as slowing their rate of expansion. But it isn't interested in doing that for short term profit.

I recall the margin on the Model 3 was upwards of 20%, but don't quote me on that.