Author Topic: TSLA - Tesla Motors  (Read 489996 times)

Liberty

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Re: TSLA - Tesla Motors
« Reply #1810 on: June 13, 2018, 01:23:52 PM »
BMW & co simply aren't pushing when it comes to EV production. BMW specifically has said it isn't viable cost wise to mass produce EVs until 2020.

If BMW wanted to compete purely on revenue, they would likely far outpace Tesla, imo.

You can argue there is a first mover advantage but I see very little of it in this space. Every year that passes, the gap closes more and more. Design is a small issue. Tesla has far bigger issues.

I can't wait for them to try. Pretty sure that people who bought Teslas since 2012 and are happy with them are likely to buy Teslas again in the future, and that experience making, selling, servicing, coding for, gathering data from the fleet, etc, for EVs matters for something and that not everything from making ICE cars translates over that easily. The longer they wait, the harder it'll be and the more of the premium vehicle segment will be ceded to Tesla.

But clearly their main reason for waiting is that they don't want to disrupt their own more profitable existing business. The thing about it not being viable cost wise is BS.. Pretty sure that if Tesla just made Model S and stuck to a premium EV niche and grew supply at a reasonable pace rather than 50%+/year it would be nicely profitable, and getting more so each year as battery costs fall rapidly. It's all the investment in creating tons of other models, building battery factories to supply mass-market cars, charger networks for mass-market cars, growing as fast as possible, building their own store network, rapid international expansion, etc, that are eating up all that cash.
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CorpRaider

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Re: TSLA - Tesla Motors
« Reply #1811 on: June 13, 2018, 01:33:02 PM »
Based on the tech and software in every German car I've had since like '95 they are likely to get their asses whooped if software "eats" that industry as well.

alpha

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Re: TSLA - Tesla Motors
« Reply #1812 on: June 13, 2018, 02:11:38 PM »

*quick look on morningstar shows BMW growing sales at 5.13% CAGR over 5 years and Tesla at 95% CAGR over 5 years.


That growth rate is driven by selling $100,000 luxury cars, eventually they will hit a ceiling as there are only so many customers who can afford a luxury car and an even smaller number of potential customers who are willing to try a Tesla. The only way to keep it growing at that rate is to sell more affordable cars while maintaining a high profit margin, something Tesla has shown they are not able to do with the Model 3.


Liberty

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Re: TSLA - Tesla Motors
« Reply #1813 on: June 14, 2018, 06:34:04 AM »

*quick look on morningstar shows BMW growing sales at 5.13% CAGR over 5 years and Tesla at 95% CAGR over 5 years.


That growth rate is driven by selling $100,000 luxury cars, eventually they will hit a ceiling as there are only so many customers who can afford a luxury car and an even smaller number of potential customers who are willing to try a Tesla. The only way to keep it growing at that rate is to sell more affordable cars while maintaining a high profit margin, something Tesla has shown they are not able to do with the Model 3.

Your argument should've been "this is from a low base". Saying that it's with $100k cars is actually something else in favor of Tesla, since that's much harder to do and shows how competitive they are with other premium vehicles. As for "shown they're not able to" with the Model 3, please, they just started making the thing and are ramping up at a pretty insane rate for a car startup that didn't exist a few years ago. Time will tell if they can or cannot.

Nobody is saying that they'll keep growing at that rate forever, I'm just showing that it's apples to oranges with BMW, and that by the time Tesla gets to 5% growth (if it survives), it'll be much bigger than it is now.
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tombgrt

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Re: TSLA - Tesla Motors
« Reply #1814 on: June 14, 2018, 08:57:45 AM »
Sorry, I disagree. You are the one comparing apples to oranges by comparing total BMW revenue to Tesla's revenue. As if its ICE sales growth is relevant when comparing the two. And in an edit, I actually made the low base argument. The main difference the market sees is that BMW is viewed as a laggard and Tesla as the amazing "start-up" that will change life as we know it. The main difference I see is that BMW has a safety net to fall back on where Tesla has no other options than hoping it all pans out. Perception and risk/reward wise there is something seriously wrong here IMO.

I'm with alpha when he says Tesla has especially shown how hard it is to maintain margins with lower priced cars. Musk has been backpeddling for years now and meanwhile making new wild promises of future growth without any shame. Stop overpromising dude... Market is giving this guy way too much credit and assuming competitors don't know wtf is going on in their business. Of course they have a legacy business to think of. No need to toss it all out at once just because some fella with big promises sees us all riding driverless cars in 2 years time. This isn't exactly a small handheld gadget...

I'm also not saying Tesla is going to fail. Simply priced way too optimistically and likewise ICE manufacturers are rather cheap because of pessimism. Fyi, Tesla was founded in 2003. How is that "a few years ago"?

Liberty

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Re: TSLA - Tesla Motors
« Reply #1815 on: June 14, 2018, 10:13:04 AM »
Sorry, I disagree. You are the one comparing apples to oranges by comparing total BMW revenue to Tesla's revenue. As if its ICE sales growth is relevant when comparing the two. And in an edit, I actually made the low base argument. The main difference the market sees is that BMW is viewed as a laggard and Tesla as the amazing "start-up" that will change life as we know it. The main difference I see is that BMW has a safety net to fall back on where Tesla has no other options than hoping it all pans out. Perception and risk/reward wise there is something seriously wrong here IMO.

Why is its ICE business not relevant when comparing market caps, which is what you were doing?

I've said that the risk profiles are obviously different, BMW does have its legacy business (which in the longer term is a melting ice cube, though), but that's still what it's business is and what the market will value it on, including its growth profile and however easy or hard it might be to transition all those legacy sales to electric sales at some point in the future after all its ICE expertise stops being relevant at some point in the future.

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I'm with alpha when he says Tesla has especially shown how hard it is to maintain margins with lower priced cars. Musk has been backpeddling for years now and meanwhile making new wild promises of future growth without any shame. Stop overpromising dude... Market is giving this guy way too much credit and assuming competitors don't know wtf is going on in their business. Of course they have a legacy business to think of. No need to toss it all out at once just because some fella with big promises sees us all riding driverless cars in 2 years time. This isn't exactly a small handheld gadget...

Musk is always late and always over-promises. But what he ends up delivering is still ahead of everybody else and comes out years before them. ¯\_(ツ)_/¯  Can't make everybody happy, I guess. If he wasn't that optimistic, he wouldn't have gotten into the car and rocket businesses, clearly.

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I'm also not saying Tesla is going to fail. Simply priced way too optimistically and likewise ICE manufacturers are rather cheap because of pessimism. Fyi, Tesla was founded in 2003. How is that "a few years ago"?

When was BMW founded? When was the last successful car startup founded in the US? Tesla appeared yesterday in term of car companies, and since their first car came out in 2008 but was only made by the few hundreds, and its first real car came out in 2012, that's not exactly eons ago when you look at the progress that has been made since.
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tombgrt

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Re: TSLA - Tesla Motors
« Reply #1816 on: June 14, 2018, 10:57:49 AM »
I'm not simply comparing market caps. I'm clearly stating that you have the same market caps on one hand, but entirely different assets at the other hand. While they have nearly equally large EV businesses, Tesla promises the moon and BMW (and others) have actual tangible assets that produce returns and provide a safety net. If you want to talk growth, you can't just drag in the legacy business and make it look like BMW isn't growing in the EV space. My entire point is that the market seems to think only Tesla is growing a future EV business.

We'll see whether Musk keeps delivering. I honestly don't know. I do know that business is brutal and that the market valuation is counting on future successes.

Sure, what he has done is impressive. But if you want an 8% CAGR over 10 years in this stock, you need 25%+ revenue growth per year and some insane margin improvement to 10%+. Leave aside stock options etc for simplicity. Not impossible if he can differentiate with technology (otherwise completely out of reach) but one hell of a bet considering the alternatives.

Liberty

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Re: TSLA - Tesla Motors
« Reply #1817 on: June 14, 2018, 11:13:07 AM »
I'm not simply comparing market caps. I'm clearly stating that you have the same market caps on one hand, but entirely different assets at the other hand. While they have nearly equally large EV businesses, Tesla promises the moon and BMW (and others) have actual tangible assets that produce returns and provide a safety net. If you want to talk growth, you can't just drag in the legacy business and make it look like BMW isn't growing in the EV space. My entire point is that the market seems to think only Tesla is growing a future EV business.

We'll see whether Musk keeps delivering. I honestly don't know. I do know that business is brutal and that the market valuation is counting on future successes.

Sure, what he has done is impressive. But if you want an 8% CAGR over 10 years in this stock, you need 25%+ revenue growth per year and some insane margin improvement to 10%+. Leave aside stock options etc for simplicity. Not impossible if he can differentiate with technology (otherwise completely out of reach) but one hell of a bet considering the alternatives.

I never said Tesla was a good investment, and I never invested in it. I'd certainly not short it either, for reasons I mentioned a while ago.

As for comparing the market caps of the two companies, we can agree to disagree and leave it at that.
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Investmentacct

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Re: TSLA - Tesla Motors
« Reply #1818 on: June 14, 2018, 11:07:54 PM »
Comparing BMW to Tesla is comparing Blackberry to Apple 10 years back. They are not same or similar products. Tesla is vertically integrated(own battery factories/research)  EV/IOT smart car manufacturer. None of legacy makers are not having any product with combination of EV/IOT category with vertical integration.

Tesla Model 3 at 5k a week / 20k a month, will be doing 4 times  BMW 3 and 4 series sales for comparable  month in North America. As, model 3 scales to 10 k a week, 40k a month, Tesla will be doing 1 year BMW 3 and 4 series sales in 2 months. BMW 3/4 series is toast in California currently, soon will be in USA. As, Tesla Model 3 scales up, margins which are questionable now, as supply trying to chase demand, eventually, margin will be far higher on Tesla model 3. Tesla model 3 will be doing Honda Civic volume and bmw margin in less than a year. Rear view mirror always clear than what’s coming.  Schedule your visit in California’s growing cities and see transformation. From sales standpoint, Snowball just started rolling down the snowy mountain. From market standpoint, there is huge ground to cover as it is new horizon.

https://www.cncda.org/wp-content/uploads/California-Covering-1Q-2018.pdf

It appears, Tesla is in competition with lots of auto manufacturers. Considering product innovation and differentiation, there is no direct competition in complete new product category. Where other EVs struggle to grow, and Tesla sales grows  leaps and bounds. That’s one of the point out of 7 , Peter Thiel mentions in Zero to One.

   
Eeeh, whatever.

Here is a fun comparison:

BMW: market cap 55B, produced +- 100.000 EV cars and is considered a technological leader in the field.

TSLA: 57B market cap, barely on a 120.000 EV production run rate and you can't argue their other businesses are worth anything near the rest of BMW's business.


Not to mention many other factors like debt, leadership, ...

Makes sense!
« Last Edit: June 14, 2018, 11:42:03 PM by Investmentacct »

tombgrt

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Re: TSLA - Tesla Motors
« Reply #1819 on: June 15, 2018, 03:55:08 AM »
It's not like the i3 is exactly a best-seller (the manufacturing is really impressive, but the design is as usually the case with legacy automakers -- they often make their EVs weird and niche on-purpose to avoid cannibalizing sales, and that holds them back when it comes to investing as much into EVs as they should).

Just to show how biased you are. Opinions vary:

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But for most other considerations, I have to give the edge to the I-Pace. Exterior styling is subjective, but as far as I'm concerned it's a stunner. The interior design and quality is so far beyond anything I've found in several Model Ses and a Model X that it's barely even the same sport, let alone the same ballpark. And it's far more engaging to drive than any Tesla we've driven, all of which are held back by highly restrictive traction and stability control that prevent you having any fun other than straight-line acceleration. And thanks to that partnership with Waymo, you'll be able to ride in a self-driving I-Pace long before Tesla gets its tech sorted.


https://arstechnica.com/cars/2018/06/forget-about-that-tesla-the-jaguar-i-pace-is-the-most-compelling-ev-yet/2/


Market is severly underestimating competition and risks in Tesla. I'm not saying Tesla is toast but some people need to get their head out of their ass.
« Last Edit: June 15, 2018, 04:05:05 AM by tombgrt »