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Is Tesla A Game Changer?

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  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,018
    edited September 2013
    Depends on what time of day you charge it Snake. I really don't think that the claim that a Tesla costs less to drive than an equivalent plug-in hybrid has been substantiated by actual real world testing. If it has, I'd really like to read up on that testing. I'd also like to see the testing include freeway speeds, cold weather and use of AC and heater.

    Also if your Tesla grounds to a halt, where are you going to take it for repair? That's right---Only Game in Town.

    And who fixes a 5 year old flat screen TV anymore? Nobody.

    My belief is that "old tech" depreciates heavily.

    As for stock prices, well, $170 is insane. It should be about $17, same as Ford.

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  • lemkolemko Posts: 15,185
    ...a grown-up version of the old Hotwheels Sizzlers cars. You plugged the "Juice Machine" into the car for about 30 seconds, then the car was ready to roll.

    image
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,018
    edited September 2013
    Actually you've hit on one of the 3 major obstacles EVs still have to overcome.

    1. Price
    2. Batteries
    3. Charging time

    I would expect they are all related, ultimately, to a break-through in #2.

    I feel that a major battery break-through will come, but have no idea if it might be 3 years or 10 years. Once that occurs, EVs can I believe, compete effectively with plug-in hybrids.

    However, the plug-ins, the greatest market foe to EVs, may also improve substantially during that time. If you could market a plug-in with an effective range of 700 miles on one charge/one tank, that's going to be pretty difficult to beat.

    If I were Tesla, I'd market a compact electric 1/2 ton pickup truck as my next model.

    It makes little sense to buy an $80,000 car to run short-mile errands and recharging your car each and every day is going to get old fast.

    Unless of course you had some sort of charging grid you could drive onto every night--that would be nice. But again, that's in the future.

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  • crkyolfrtcrkyolfrt Posts: 2,345
    To the delight of some on this thread, Tesla took a major hit today. The stock dropped to $160.70, Down -6.27 or -3.76%.

    Well that's presumptuous. Wouldn't it behoof Americans to be happy if Tesla were to succeed with their goals? By default they already have investment in the company, why would they wish anything bad to happen to their money?

    There's a difference between being able to recognize realities, and wishing unpleasant financial outcomes for a company.

    I wish them well..but I agree with the compact p/u idea. That is something they should pursue for sure. For one thing, even if it too will be expensive and have range restrictions, at least there is a real mkt for a pick up truck in NA whose eventual income would help support more of their exotic tendencies instead of it all being financed on the backs of Americans.
  • hpmctorquehpmctorque Posts: 4,205
    edited September 2013
    ...that Tesla is a game changer, since it has prompted GM to accelerate EV development. This week GM announced that it plans to introduce an electric car with a 200 mile range between charges, that will sell for ~$30,000. It's interesting to note, though, that GM didn't include an introduction date for this vehicle, saying that battery prices will need to come down before its long-range mass market e-car becomes reality.

    Of course, it could also be argued that tightening environmental requirements is the primary factor for pouring more resources in EVs. Whatever, but based on GM's recent press releases, competition from Tesla is spurring GM and others to accelerate their EV plans.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,018
    What "game" specifically are we talking about here?

    If you mean the "expensive toy" game, ala Ferrari, I would agree with you.

    If you mean mass-produced affordable transportation, I don't think Tesla matters at all in that game, at least not at the moment. That would even be a mistake for Tesla, to attempt such a thing at this point in its short and unpredictable life.

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  • crkyolfrtcrkyolfrt Posts: 2,345
    Although...been recently reading a bit more of the plot behind their marketing, and lotsa puff going on. It's time to see the subsidy bucks get pulled back..
  • hpmctorquehpmctorque Posts: 4,205
    I agree with you, shifty, but Tesla's stock price suggests that there's something fundamental that we're missing. If we're right, the stock should correct sharply...eventually. It'll be interesting to see whether Tesla shares make yet another new high, or the current stall is a precursor to a realization that the company's fundamentals don't justify the price of the shares.

    I think that GM's game plan, and that of the major German manufacturers, is to outflank Tesla by offering a much broader range of EVs and plug-in hybrids, at lower prices. Porsche and MB will also offer models that are higher priced than the Tesla S, thereby siphoning off some high end sales. However, if there should be a significant breakthrough in batteries, making them cheaper, lighter and more compact, there'll be plenty of demand for all to thrive for several years.

    One thing I don't understand is how Tesla can afford to build a network of charging stations in North America and Europe for the relatively small number of cars that it sells. It just doesn't make sense, given that I've read that these stations won't be able to service the Leaf and other EVs, or plug-in hybrids, because their batteries are different from the Model S's. Maybe someone can explain this to me and others who are puzzled.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,018
    Well if you look at all the brokerage houses and subscription market analyses reports, nobody recommends buying Tesla stock, and it receives "poor" ratings on most metrics normally used to judge the value of stocks. They are predicting a P/E ratio in 2014 of something like 245 !!

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  • hpmctorquehpmctorque Posts: 4,205
    edited September 2013
    True, the current valuation is very high, and discounts a phenomenal future for Tesla Motors. One of the following three things will happen:

    One, reality, going forward, won't live up to expectations, and the stock will decline, maybe significantly.

    Two, the stock price will remain in this general range, because the company does well or very well, but not fabulously. Under this scenario Tesla's earnings will grow steadily until the 166 valuation is justified.

    Three, the company executes brilliantly, meeting or even exceeding the most optimistic expectations, Elon Musk reveals himself to be some combination of Steve Jobs, Henry Ford and Thomas Edison, and the stock continues to make new highs.

    You and I believe that outcome number one is the most likely one, but, hey, we've been wrong up to now. I bought some shares a while back, took a quick profit because I got cold feet, and have watched it climb. Of course I wish I had bought more and kept it, but I still don't think the future justifies a valuation of 166.

    I think we'll know the answer by the end of Q1 2014.
  • steverstever Viva Las CrucesPosts: 40,803
    It'll be interesting to see if anyone bites on this deal and how much they are willing to pay.

    Feds To Auction Green Technology Loan Made To Fisker Automotive

    "All Fisker bids must include "a commitment and business plan that promotes domestic manufacturing capabilities and related engineering for advanced technology vehicles here in the U.S.," the DOE said.

    There have been several suitors for the maker of the Fisker Karma, a plug-in hybrid, according to media reports. The company has not produced a car in over a year. "

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  • fintailfintail Posts: 33,785
    Many people in 2006 thought housing in Vegas or Atlanta was a sure thing, too.

    Funny thing about the mention of grocery shopping in another thread - I see tons of Teslas in my area, as the trendy middle aged overpaid techie suit loves the thing - but I've yet to see one at a grocery store.

    I really am curious to see what would happen if the tax break was to expire, which it needs to, today.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,018
    I think Tesla can survive and prosper if it sticks to limited goals and proceeds methodically. I see this company as a high-end niche player for a long time to come, unless it branches out to sell its technology (or itself) to some corporation capable of mass production.

    It's interesting how flamboyant wheeler-dealer high tech gurus are "saving the world" or are "visionaries" whereas if they were doing the exact same thing in lumber or bonds or Hollywood, they become "arrogant, predatory egomaniacs".

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  • hpmctorquehpmctorque Posts: 4,205
    Sure, Tesla could become a takeover candidate at some point, but not at these valuations. The price would have to be much lower than 166/share for the management of a large rival company to risk even suggesting acquiring Tesla. The stock of the potential buyer would take a hit at just the hint that it's interested in acquiring Tesla.
  • bwiabwia Boston Posts: 1,234
    edited September 2013
    There's a difference between being able to recognize realities, and wishing unpleasant financial outcomes for a company.

    I agree completely but some people's realities may be clouded by their limited or parochial experiences. Nonetheless, this past week Tesla recovered all of its temporary losses and closed at $183. This brings the company's market cap to over $22 billion, more than Ford or GM. Sounds like another American success story to me.

    Last week, I caught the tail end of a radio broadcast and they were discussing green cars. They praised the Volt and other electric plugins and wondered why Americans were so slow to adopt EVs. They said that once one drives an EV for an extended period of time they would perhaps never return to an internal combustion engine, which is so yesterday. Were they Tesla acolytes or were they drunk with irrational exuberance?

    I'm not in the market for a car right now but my next purchase will certainly be an electric vehicle.
    See related NY Times story http://www.nytimes.com/2013/09/21/business/santa-monica-bets-on-electric-cars-bu- - t-consumers-are-slow-to-switch.html?ref=automobiles
  • steverstever Viva Las CrucesPosts: 40,803
    edited September 2013
    I don't want another gas mower after using my electric, even with fooling with a cord. Ditto chain saws or weed whackers.

    Not that I plan to have any grass to mow or trimming to do in my next house anyway. :-)

    My problem is that our cars will stay parked for days or weeks at a time while we run errands on foot or bike. Then we'll hop in and do a 2 hour round trip for shopping or a road trip. I need about a 500 mile range for the occasional days I drive from 7 to 6, with a couple of hours off for breaks.

    Renting for the road would work, but that's not an option in my present locale.

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  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,018
    " Sounds like another American success story to me. "

    More like a Wall St. success story. Tesla car production is still a drop in the bucket. Ford probably makes more cars in a day than Tesla does all year.

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  • fintailfintail Posts: 33,785
    I was going to say, sounds like rampant speculation to me. Enron looked like a success story, too. Both also seem to have used sketchy accounting.

    Wishing for realistic views of Tesla isn't wishing it for fail. The quicker bubbles are evened out, better off for the entire economy.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,018
    I am certainly not wishing it to fail. Competition and innovation improves the breed.

    My only point is that there is not one competent financial advisor alive right now, nor one rating stock advisory service, that would tell you to buy Tesla stock as a sound investment. All ratings are negative except (wait for it)...public awareness.

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  • steverstever Viva Las CrucesPosts: 40,803
    "The hybrid battery will rely on the more expensive, but more durable lithium-ion component for short-term travel, switching only to the metal-air battery for longer trips. The metal-air battery has a shorter lifetime when exposed to regular charging, but is less costly to produce, meaning long-range electric vehicles using the technology wouldn’t be significantly more expensive than Tesla’s regular offerings. The only potential downside is that frequent long-distance travel would wear down the battery quickly for anyone who travels often."

    Tesla Patents Next-Gen Electric Car Battery that Gets 400 Miles on a Single Charge (inhabitat.com)

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  • hpmctorquehpmctorque Posts: 4,205
    edited September 2013
    My take on the game changer question is this: The Model S is indeed a game changer, as it competes effectively with the established luxury models in its class from Germany, Japan and the U.S. If Tesla Motors can replicate the success of the S with the X and, later, the more mass market sedan it plans to introduce, the company will qualify as a game changer.

    If the latter two vehicles offer better or even comparable performance in their respective categories, as the S does, they sell in decent numbers, and the company is profitable, Tesla will have done what no other car company has done for several decades. Plus, Tesla will have accomplished this with new technology and new applications of an old technology. Since these "ifs" won't be answered before 2017, the jury is still out on the company.

    As for the stock, I continue to feel that current valuations are too rich. Time will tell on this one, but it'll be interesting to see how it plays out.

    I agree with those who believe that EVs should not be subsidized by tax payers. Elon Musk owns 23% of Tesla Motors. How can you justify giving a tax break to a multi billionaire when our country runs up huge deficits and our economy struggles? I believe government should subsidize basic research, but subsidies to private companies is difficult to justify because it too often gets misspent, misallocated or misapplied.
  • steverstever Viva Las CrucesPosts: 40,803
    edited September 2013
    Tesla is a different entity with their own 1040s.

    Corporations are people too, remember? :shades:

    I bet they wind up making more money on licensing patents than selling cars.

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  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,018
    "it competes effectively with the established luxury models in its class from Germany, Japan and the U.S"

    I'm not seeing how you can comfortably say that. The Tesla competes as a CAR, but not as a business. It is a totally propped up business, based on subsidies and stock speculation. How does a Tesla compete with BMW, who makes 90 TIMES as many cars?

    It's certainly not a level playing field at this point.

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  • lemkolemko Posts: 15,185
    I started out with both an electric mower and weed whacker and went to gasoline. I've ruined too many extension cords accidentally running over them and that electric mower seemed too puny for the task at hand.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,018
    Ah you need the $20,000 Tesla lawnmower!

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  • hpmctorquehpmctorque Posts: 4,205
    edited September 2013
    It's difficult to compare profit margins on the cars versus licensing patents because the cost of those patents can be calculated in a variety of ways. I beleive there's a lot more latitude for calculating margins on patents than on product. You may be right about where Tesla makes more money, depending on the accounting assumptions that are used.
  • steverstever Viva Las CrucesPosts: 40,803
    If I did much of that I'd start worrying about my toes, and I'd just hire the yard work out.

    There are battery options available if your "rope-management" skills aren't all that great.

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  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,018
    Most power lawnmowers are about as reliable as a 1908 Ford.

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  • hpmctorquehpmctorque Posts: 4,205
    I was referring to the car, not the company, competing effectively, so I agree with you.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,018
    yes it is successful as an EV because it's the first EV that acts like a real car.

    The favorite argument is that the Tesla is like the first cars---very expensive--and that as production ramps up, we'll get the Model T version.

    However, I see a flaw there, in that due to battery costs, the Tesla model may not scale up very well at all.

    Cars got cheap in 1910 when fuel got cheap. Neither batteries nor electricity are cheap in 2013.

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