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Tesla Q4 2018 Earnings Letter

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Re: Tesla Q4 2018 Earnings Letter

#31

Post by ksherlock »

dragontamer wrote: post #19
marvin wrote: post #10

Earlier quoted context omitted.

Didn't also Musk abstain from voting before the SolarCity acquisition? That's what I remember, anyway.

Yes. Musk abstained from voting. Musk made his opinion known, but otherwise "fairly" let the shareholders vote on the issue. At least technically fair. It was 85% in favor of merging. I say "technically", because Musk also went around trying to convince people that they should allow SCTY to be acquired by TSLA. But hey, shareholders trust Musk and were willing to follow his opinion on the matter. So I guess its fair…

They also did the fake shingle demo and pushed numbers around to report a quarterly profit.

Re: Tesla Q4 2018 Earnings Letter

#32

Post by btilly »

threeseed wrote: post #15
chollida1 wrote: post #2

Pre: - Will they give guidance on Model 3, Geographic breakdown(most other peers do)? - how many sales are high end cars vs low end? - TSLA down 11% on year vs market up 5ish - convertable debt issue, we're now in the 20 day average window, option implied vols show market doesn't think they'll make it - Elon commented that they could pay bond w cash and didn't seem concerned, cash balance is up, though so are short t…

For me the next couple of years are going to make or break Tesla. You have pretty much every car manufacturer releasing flagship electric cars in 2019/2020. And most of them are either cheaper than Tesla or offer far more value i.e. premium branding and better interiors. And whilst they have their Supercharger network I suspect that pretty soon we will governments intervening to regulate standards and build out infra…

As I most recently pointed out in https://news.ycombinator.com/item?id=18712442, there is good reason to believe that all the other car manufacturers are going to learn the hard way that their interests do not align with their dealers. Which means that consumers will learn that they shouldn't go to existing car companies to buy electric cars. Which does not bode well for the future of existing car companies.

(This is a prediction that I've been aware of for around 20 years now. And the form of the problem - that existing tech manufacturer's wind up hamstrung by their existing supply and sales networks, is a common one for companies that get destroyed by disruptive innovation.)

Re: Tesla Q4 2018 Earnings Letter

#33

Post by gcheong »

Cyclone_ wrote: post #17

I think Tesla may start to face issues when the other automakers start coming out with electric cars within the next few years. I sold off all my stock in Tesla, although I think they may still be a good short term bet. The supercharger network and cool factor is their big advantage at the moment, but I think in the future they won't do as well when there's more competition.

I don't think at this stage the number of electric cars being made by other companies is the main threat to Tesla. The main threat is still convincing people that electric cars are a viable alternative to ICE cars, in which case the more alternatives there are a different price points then more people may be convinced to buy one, which actually helps Tesla. Ultimately, if there isn't demand on the level of ICE cars for electric, the Tesla is doomed with or without competition.

Re: Tesla Q4 2018 Earnings Letter

#34

Post by Reedx »

threeseed wrote: post #15
chollida1 wrote: post #2

Pre: - Will they give guidance on Model 3, Geographic breakdown(most other peers do)? - how many sales are high end cars vs low end? - TSLA down 11% on year vs market up 5ish - convertable debt issue, we're now in the 20 day average window, option implied vols show market doesn't think they'll make it - Elon commented that they could pay bond w cash and didn't seem concerned, cash balance is up, though so are short t…

For me the next couple of years are going to make or break Tesla. You have pretty much every car manufacturer releasing flagship electric cars in 2019/2020. And most of them are either cheaper than Tesla or offer far more value i.e. premium branding and better interiors. And whilst they have their Supercharger network I suspect that pretty soon we will governments intervening to regulate standards and build out infra…

> For me the next couple of years are going to make or break Tesla.

Maybe, but haven't people been saying that about Tesla for 15 years now?

Re: Tesla Q4 2018 Earnings Letter

#35

Post by fvdessen »

threeseed wrote: post #20
anilshanbhag wrote: post #11

Looks like everyone is worried about a few percentage points up and down in financial numbers. There are three keys points I took away: 1) We expect the capital spend per unit of capacity for this factory to be less than half of that of our Model 3 line in Fremont. 2) Since Model Y will be built on the Model 3 platform and is designed to share about 75% of its components with Model 3, the cost of the Model Y producti…

> Tesla is significantly ahead of the pack so far Not really. Audi e-tron, Jaguar iPace and BMW i3 are all well reviewed. And 2019/2020 will see a wave of car companies e.g. Hyundai, Mercedes entering the market including plenty of interesting startups coming out of China. So Tesla is going to need far more to differentiate themselves than just range.

Audi e-tron and Jaguar iPace compete with the Model S; BMW i3's small range puts it in another category entirely. There's no competition for the Model 3 yet, and I don't think there will be for a while.

Re: Tesla Q4 2018 Earnings Letter

#36

Post by ChuckMcM »

chollida1 wrote: post #2

Pre: - Will they give guidance on Model 3, Geographic breakdown(most other peers do)? - how many sales are high end cars vs low end? - TSLA down 11% on year vs market up 5ish - convertable debt issue, we're now in the 20 day average window, option implied vols show market doesn't think they'll make it - Elon commented that they could pay bond w cash and didn't seem concerned, cash balance is up, though so are short t…

Nice summary! I was under the impression that the services loss was from the free electricity they gave out at superchargers to some owners. Their boosting of the prices there was a response to converting that line into a something at least revenue neutral. Also no details on how they proceed with their power swap arrangements.

Personally I expect them to use the Google hack where they create a wholly owned subsidiary that is a registered power company so that they can negotiate at grid rates for power rather than with various power providing entities where the super chargers are located.

Re: Tesla Q4 2018 Earnings Letter

#37

Post by janoc »

fvdessen wrote: post #35
threeseed wrote: post #20

Earlier quoted context omitted.

> Tesla is significantly ahead of the pack so far Not really. Audi e-tron, Jaguar iPace and BMW i3 are all well reviewed. And 2019/2020 will see a wave of car companies e.g. Hyundai, Mercedes entering the market including plenty of interesting startups coming out of China. So Tesla is going to need far more to differentiate themselves than just range.

Audi e-tron and Jaguar iPace compete with the Model S; BMW i3's small range puts it in another category entirely. There's no competition for the Model 3 yet, and I don't think there will be for a while.

Well, given that the Model 3 is going to cost around 60k EUR in Europe according to recently announced prices, they aren't going to sell many of them.

That's a price you can have a huge (gasoline) SUV for. Or a luxury Mercedes. Or two smaller BMWs ... People aren't going to buy the Model 3 (which is supposed to be a "budget" car) only for Musk's puppy eyes at such price.

The other reason is a horrible lack of charging infrastructure. Europe isn't US where everyone has a house, garage and a driveway so plugging a car in to charge overnight isn't a problem. Here a huge amount of people live in apartments and the shared parkings simply don't have charging spaces. And a token one/two slow charging poles at some larger supermarkets are really not a solution. Even Tesla has a very poor coverage with their superchargers here.

That's why the electric cars aren't exactly selling like hot cakes here. That Model 3 doesn't have an equivalent electric competitor is very much irrelevant when everyone is going to compare it with a gasoline (or diesel) powered car - which cost half the price and have higher utility value.

Re: Tesla Q4 2018 Earnings Letter

#38

Post by ucha »

fvdessen wrote: post #35
threeseed wrote: post #20

Earlier quoted context omitted.

> Tesla is significantly ahead of the pack so far Not really. Audi e-tron, Jaguar iPace and BMW i3 are all well reviewed. And 2019/2020 will see a wave of car companies e.g. Hyundai, Mercedes entering the market including plenty of interesting startups coming out of China. So Tesla is going to need far more to differentiate themselves than just range.

Audi e-tron and Jaguar iPace compete with the Model S; BMW i3's small range puts it in another category entirely. There's no competition for the Model 3 yet, and I don't think there will be for a while.

The Chevy Bolt?

Re: Tesla Q4 2018 Earnings Letter

#39

Post by ikjadoon »

drudru11 wrote: post #29
threeseed wrote: post #20

Earlier quoted context omitted.

> Tesla is significantly ahead of the pack so far Not really. Audi e-tron, Jaguar iPace and BMW i3 are all well reviewed. And 2019/2020 will see a wave of car companies e.g. Hyundai, Mercedes entering the market including plenty of interesting startups coming out of China. So Tesla is going to need far more to differentiate themselves than just range.

Anecdotal, but a friend of a friend bought the jag. He is having a very poor experience with the car.

Alas. Tesla, like all companies, could use compelling competiton.

Is it the range? I think they went too low.

Or just general Jaguar unreliability?

Re: Tesla Q4 2018 Earnings Letter

#40

Post by reitzensteinm »

btilly wrote: post #32
threeseed wrote: post #15

Earlier quoted context omitted.

For me the next couple of years are going to make or break Tesla. You have pretty much every car manufacturer releasing flagship electric cars in 2019/2020. And most of them are either cheaper than Tesla or offer far more value i.e. premium branding and better interiors. And whilst they have their Supercharger network I suspect that pretty soon we will governments intervening to regulate standards and build out infra…

As I most recently pointed out in https://news.ycombinator.com/item?id=18712442 , there is good reason to believe that all the other car manufacturers are going to learn the hard way that their interests do not align with their dealers. Which means that consumers will learn that they shouldn't go to existing car companies to buy electric cars. Which does not bode well for the future of existing car companies. (This i…

This is a bizarre argument to me, and I remember thinking that the last time you "pointed it out".

You're essentially saying that tens of thousands of dealers and hundreds of billions of dollars worth of car companies are going to go out of business because they can't find a mutually beneficial incentive structure.

It's not going to be all roses, but Tesla shunning dealers hasn't exactly been either, from a service quality and cost structure perspective.

Porsche doesn't seem to have any trouble shifting Taycans, doubling their production from an initial 20k to 40k units a year (simultaneous to Tesla cutting their X/S production from 100k to maybe 80k).

Here's my prediction: legacy auto manufacturers will continue to be years behind Tesla, but if and when the space matures that'll stop mattering. At that point, Tesla better stop acting like a startup and have their shit figured out, lest they become the Myspace of EVs.

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