Author Topic: TSLA - Tesla Motors  (Read 725591 times)

ERICOPOLY

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Re: TSLA - Tesla Motors
« Reply #30 on: June 02, 2013, 12:15:46 AM »
What is the base rate probability for a new high performance automaker? Can anyone name a success story?

I really don't know ... but the ones that come to mind show that a lot of things can go wrong even without the need to build a charger network.

http://en.wikipedia.org/wiki/1948_Tucker_Sedan
http://en.wikipedia.org/wiki/DeLorean_DMC-12

And even if it endures, what is the probability that shareholders will earn a decent ROI? Lots of shares coming.

The first DeLorean rolled off the production line in January 1981, and production was halted in late 1982.  Approximately 9,000 were made.  (source Wikipedia)

The Model S is vastly more successful than this.

(EDIT:  besides, the DeLorean was a 2 door coupe, and it wasn't reviewed as hands down the best car ever made by Consumer Reports.).  That's really the crazy thing.  You can put 5 adults in the Tesla, plus 2 more kids in the optional 3rd row seats.  This still leaves you with that trunk in the front.  And yet the Model S Performance  is faster off the line than a Porche Carrera 4S.

This is subjective, but I've always found the DeLorean to be very ugly.  And no paint options -- only in stainless steel.  Some people only buy black cars, some only white.  Few would only want stainless.
« Last Edit: June 02, 2013, 12:22:28 AM by ERICOPOLY »


PlanMaestro

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Re: TSLA - Tesla Motors
« Reply #31 on: June 02, 2013, 07:27:57 AM »
So I guess that this is the time that the base rate will not win.

Drokos

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Re: TSLA - Tesla Motors
« Reply #32 on: June 02, 2013, 08:00:10 AM »
I'd be more interested to run some long-term top down estimates. Tesla has a huge advantages in that it has no pension and debt overhang(at least not the the extent of most automakers. Just comparing Tesla's current valuation to the market cap of the other auto companies is a mistake IMO. If you look at the total enterprise value of the industry, it seems to be  at least $500b. Of course a lot could still change, but I dont think that in a bull case it would be unreasonable to think Tesla would could get 10% of the market in 10 years. ~$50b company. I personally think the bull case chance is fairly high, if its 50/50 a 5-bagger or a 0, that's still a decent play.  Of course that is overly simplistic back of the envelope number, and assumes Tesla has the same margins and valuation as the rest of the industry. I don't have a position or much knowledge to add, that was just my quick take away.

PlanMaestro

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Re: TSLA - Tesla Motors
« Reply #33 on: June 02, 2013, 08:34:41 AM »
Quote
I dont think that in a bull case it would be unreasonable to think Tesla would could get 10% of the market in 10 years. ~$50b company. I personally think the bull case chance is fairly high, if its 50/50 a 5-bagger or a 0, that's still a decent play.

It took Toyota 35 years to reach the 10% milestone in the US with a truly disruptive product technology (the unibody) and the greatest innovative leap in manufacturing practices (Toyota Production System) since Henry Ford.
« Last Edit: June 02, 2013, 10:19:47 AM by PlanMaestro »

valueInv

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Re: TSLA - Tesla Motors
« Reply #34 on: June 02, 2013, 10:52:12 AM »
Quote
I dont think that in a bull case it would be unreasonable to think Tesla would could get 10% of the market in 10 years. ~$50b company. I personally think the bull case chance is fairly high, if its 50/50 a 5-bagger or a 0, that's still a decent play.

It took Toyota 35 years to reach the 10% milestone in the US with a truly disruptive product technology (the unibody) and the greatest innovative leap in manufacturing practices (Toyota Production System) since Henry Ford.

Yeah, but Toyota started at a very different place and time compared to Tesla.

PlanMaestro

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Re: TSLA - Tesla Motors
« Reply #35 on: June 02, 2013, 11:13:50 AM »
Yeah, but Toyota started at a very different place and time compared to Tesla.

Yes, you are right. I should have said that they were a successful and profitable mass producer in Japan, that could bankroll for years the capex, R&D, and marketing expenses necessary for that new American market.

Also they were competing against an uncompetitive high cost labor force, not like the current restructured "Detroit" producers.
« Last Edit: June 02, 2013, 11:35:42 AM by PlanMaestro »

bengrahamofthenorth

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Re: TSLA - Tesla Motors
« Reply #36 on: June 02, 2013, 11:29:30 AM »
I'm just intrigued by the possible network effects from the recharging stations. There could be a nice first mover advantage for Tesla by deploying a massive number of supercharger stations. Also, for all the doubters of electrics going main stream just imagine how incredible battery ranges and recharging times will be in 5 or 10 years from now. I'm starting to see the tipping point and wonder when the big car companies will actually start making compelling long range EV models. Having EV cars and solar will really help solve some big problems for mankind.

I have no position in Tesla although I am long Fiat.

shalab

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Re: TSLA - Tesla Motors
« Reply #37 on: June 02, 2013, 11:48:52 AM »
'm just intrigued by the possible network effects from the recharging stations.

Bingo - you nailed it on the head.

PlanMaestro

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Re: TSLA - Tesla Motors
« Reply #38 on: June 02, 2013, 11:54:29 AM »
There could be a nice first mover advantage for Tesla by deploying a massive number of supercharger stations.

You cannot have it both ways. Either the superchargers cost only $250K each and anyone can build it even Tesla. Or it's prohibitively expensive that it becomes a barrier to entry, that Tesla cannot afford it.

Also it's not like there is a layer of software developers in need of standards, so network economies are not apparent here.

When the viability of EVs become apparent, as it most probably will, that charging part of the business will have thin margins like any petrol station. Maybe more so if cheap distributed solar fragments the industry.

People are talking here as if this was a software business like Microsoft or Apple where things scale over night. Saying the kind of things that VCs and Ron Johnson like to say.

And I'm still waiting for that base probability.
« Last Edit: June 02, 2013, 12:35:47 PM by PlanMaestro »

ERICOPOLY

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Re: TSLA - Tesla Motors
« Reply #39 on: June 02, 2013, 01:05:33 PM »
And I'm still waiting for that base probability.

You might consider stiffing us on the tip and post a bad review on Yelp.