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Is Tesla A Game Changer?

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  • hpmctorquehpmctorque Posts: 4,118
    edited August 2013
    Good catch!
  • nvbankernvbanker Posts: 7,285
    The ROE is much better if the E isn't so high.....
  • yes but would you buy an E with a 75 mile effective range? If the answer is "yes", then why didn't you buy a Leaf?
  • bwiabwia Boston Posts: 1,057
    What a difference a year makes

    While some are still sitting on the fence waiting for Tesla's stock to tank a la Facebook they have missed an opportunity to make serious money. The stock price was $29.41 on August 24, 2012, today it is $161.84. If my math is right, that is a 450% increase in one year.
  • Hindsight is always 20/20. And...you could have climbed on board Apple when it was at its high at 702 in October 2012 and sold it at 385 in April 2013.
  • hpmctorquehpmctorque Posts: 4,118
    So true about 20/20. You can only make your decisions with the information available at the time. For example, the possibility that Tesla could become an auto manufacturer and also an energy company, with its charging stations, is clearer now than it was, say, a couple of years ago. But, could it become a GM plus an Exxon Mobil in the next 20 years? Very, very doubtful, given that the possibilities are clear to very capable competitors too. That said, a few astute investors saw the potential for Tesla shares, and have or will profit handsomely. Others will lose because, sooner or later, the stock price will suffer a strong correction.

    There's clearly brilliance associated with Tesla, in terms of the design, product, the business execution, and the marketing. We'll only know in hindsight whether or not Tesla stock is in a bubble phase.
  • That's so true. A stock like Tesla, build on clouds, could drop 50 points in a day, easily.
  • bwiabwia Boston Posts: 1,057
    edited August 2013
    Getting Tesla From Here to There

    In this 8/24/2013 NY Times article, a reporter posed this question to a Tesla Manhattan Assistant Sales Manager--

    Yes, I’d love to buy a Tesla. But:
    a. I live in New York City and park in a public garage;
    b. drive on weekends to a house in rural upstate New York, far from any current or planned Tesla charging station;
    c. can afford only one car;
    d. occasionally make longer car trips far beyond the Tesla range; and
    e. the base Tesla S costs $71,000 before rebates.

    How would you respond to these objections? Read the full article to get the sales manager's response at: http://www.nytimes.com/2013/08/24/business/wondering-if-tesla-can-get-there-from- - - -here.html?adxnnl=1&ref=automobiles&adxnnlx=1377371253-5Pv6NSP2dC0ENDy7p6fHGA

    And a final quote "...Before the first-quarter results, people were betting Tesla wouldn’t last the year. Now the question is, These guys are for real, but how big can they be? There’s been a seismic change. The auto industry hasn’t seen anything this disruptive since the dawn of the Japanese manufacturers.”
  • MrShift@EdmundsMrShift@Edmunds Posts: 43,636
    edited August 2013
    "There’s been a seismic change. The auto industry hasn’t seen anything this disruptive since the dawn of the Japanese manufacturers.”

    That is a textbook case of Wall St. stockbroker puffery IMO, with little reflection upon actual automotive history. This is not what the NY Times said, it's what Morgan Stanley said.

    it is this very kind of published hyperbole that is going to hurt Tesla.

    Let's unpack this a bit:

    1. "With a charging station installed in my barn"...

    Zoning? Building permit? Contractor? Cost of equipment?

    2. "Mr. Berkley said that if I adhered to 55 miles per hour on the highway, I was likely to get 230 miles.

    Hot day? AC on? Very cold day? Heat on? Right-lane driving with trucks for 230 miles? Really?

    3. "Mr. Berkley showed me a map of the country with current and planned high-speed charging stations, where Tesla owners can recharge the battery in 30 to 40 minutes at no cost. "

    Note the term "planned" charging stations. There are now less than 20 in the USA. Also note the term "no cost", which is not true, since the charging system necessary to receive a quick charge like this is a $2,000 option. On top of the $10,000 extra batteries the salesman just recommended.

    4. "He estimated that every $1 of electricity is the equivalent of $5 in gas".

    NOTE: Yes if you're paying .07 per Kwh. if you're paying .12, like me, it's more like $4 a gallon.

    So let's come back to reality and take a hard look.

    Impressive car? Yes. Actual cost to the shopper in this article---probably close to $100K with the options and 220v charging station installed in his barn.

    Will he make it to work and back on one "fill"?---maybe,, maybe not.
  • bwiabwia Boston Posts: 1,057
    edited August 2013
    This is not what the NY Times said, it's what Morgan Stanley said

    Point well taken and thanks for the deconstruction although I don't quite agree with your rebuttal. I was a bit intellectually lazy and omitted that important information as I thought the [...] preceding the quote would suffice to indicate that something was skipped.

    The article made a compelling point though. In the event of a power failure you'd be up the creek without a paddle.

    By the way, I'd like to share this YouTube video that explains why Apple, The Wright Brothers, and Dr. Martin Luther King succeeded while others who had more capital, more scholars and equally gifted orators had failed or were not as persuasive. http://youtu.be/mqZyg2XAmDk
  • If Mr. Sinek is correct (and I'm not so sure he has that circle of his quite right), then what is the WHY of Tesla? it's certainly not equivalent to the first powered flight or to the effect of MLK on the world.

    At best, it is a better mousetrap.
  • fintailfintail Posts: 32,898
    " And I’d be willing to bet that early Teslas will be valuable collector’s items."

    Yeah, the electronics should age really well in 30 or 40 years. Good luck with that.

    At least the [non-permissible content removed] (and worked in "wealth management", shocking!) looking sales manager didn't try the story of the time you'll save not being at a gas station, and valuing that at $100/hr against the running costs, like Tesla itself tried when their creative math scheme came out a while back.
  • I found some interesting "side glances" about Tesla.

    I'm NOT trying to diss the car by posting these things, only showing a bigger picture than the current media hype.

    NHTSA disputes Tesla's advertising:

    ""The agency's 5-Star Safety Ratings program is designed to provide consumers with information about the crash protection," NHTSA said in a statement. "NHTSA does not rate vehicles beyond 5 stars and does not rank or order vehicles within the star ratings."

    Tesla Employee Reviews:

    http://www.indeed.com/cmp/Tesla-Motors/reviews
  • fintailfintail Posts: 32,898
    edited August 2013
    I like Tesla, the S is a remarkable car, but I am skeptical about a few things too, namely the hype and the coddling given to what is still a toymaker for the very affluent and rich alike. Their recent numbers apparently not adhering to GAAP is amusing too.

    The employee stuff sounds typical for startups, and really, many companies in the US overall now, as workers seem to be valued less over time.
  • NHTSA's main gripe with Tesla was for them touting that they had the "world's safest car" when, in fact, NHTSA does not crash-test luxury cars. I'm sure BMW and MB found this annoying as well.
  • bwiabwia Boston Posts: 1,057
    edited August 2013
    Their recent numbers apparently not adhering to GAAP is amusing too.

    Your concern is understandable but no need to panic, as Tesla explained its alternative financial reporting approach in its letter to shareholders.
    "Here Are The Four Items In Tesla’s Second Quarter Earnings That Turned A $30.5M Loss Into A $26.2M Profit"
    http://www.ibtimes.com/here-are-four-items-teslas-second-quarter-earnings-turned- - -305m-loss-262m-profit-1377617

    GAAP is one those nebulous and contentious accounting concepts. There generally is agreement on most accounting measuring and reporting issues but Revenue Recognition is not one of them, that is why, this a big FASB project under review for massive change. Stay tuned.
  • hpmctorquehpmctorque Posts: 4,118
    edited August 2013
    Tesla continues to make impressive gains, since in June it sold more cars in California than Buick, Cadillac, Chrysler, Fiat, Jaguar, Land Rover, Lincoln, Mitsubishi, Porsche, and Volvo. It'll be interesting to see what happens in the second half of this year. Will the declining price of gas, if it continues, affect the appeal of the Model S? I'd guess only modestly.

    I think an article on the company from the investment newsletter "Seeking Alpha" (see MarketWatch) sums up the company and the stock well by saying "Tesla is a great company with a world-class product and very pricey shares."
  • Well the people who sold Tesla stock short got stung but, by god, there are still a lot of people selling short--so I would not say investor confidence is all that high.
  • bwiabwia Boston Posts: 1,057
    Well the people who sold Tesla stock short got stung

    As they should be for taking such a contrarian position. Perhaps they are not aware that Tesla is only utilizing only 20% of its facilities and has the physical plant capacity to produce in excess of 500,000 vehicles.

    Tesla's strategy is clear.
    1. Demonstrate the feasibility of a long range EV (the Roadster)
    2. Develop a high performance sedan for early adopters, good enough to compete with BMW, Audi and MB (the Model S)
    3. Produce a less expensive mass market EV vehicle (the Model E)

    They have proven the technology is flawless, and given the strong demand for the EV, the only major hurdle left is to build more fast charging stations to saturate the market. And if there are enterprising individuals or companies out there, they should get into the business of developing solar and wind power driven charging stations. (Oil companies are you listening?)
  • fintailfintail Posts: 32,898
    Time to set a 40-50K MSRP limit for subsidies on the cars, then.
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