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Q2 2020 Update

ir.tesla.com

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Re: Q2 2020 Update

#201

Post by jeffbee »

shuckles wrote: post #198
jeffbee wrote: post #94

Earlier quoted context omitted.

It costs them almost nothing to pay the credits. Meanwhile here in the second age of free gas the gross margins on trucks are more than good enough to cover this small expense. Ford alone makes $10 billion annual in gross profits on just the F150 model. The regulations are enough to carve out a little niche for Tesla to hoover up a few dollars, but not enough to change the industry. Pass a realistic carbon tax and se…

If Tesla would thrive in a world where gasoline was priced correctly, it would surely fail in a world where automobile infrastructure (parking, highways, sprawl) was priced correctly. This is not a reassuring line of reasoning.

I'm not trying to reassure anyone. Tesla, like the rest of the American economy, is headed for an abrupt disaster.

Re: Q2 2020 Update

#202

Post by justapassenger »

qeternity wrote: post #116
ckastner wrote: post #89

Earlier quoted context omitted.

> "The list goes on in terms of growth & profitability" It better. Tesla has a market cap of 4x that of VW, a car maker with €256bn revenue and ~€17bn profit in 2019. It is beyond me why anyone would buy this stock over VW, let alone pay 4x the price for it. Even if Tesla could put out 900K cars in a quarter instead of the current 90K, they'd still not come even close to the competition is terms of financial success.…

For bulls, TSLA isn’t a car company. It’s the climate change company. They are the best bet right now to upend the entire power mix. I’m not saying I agree with this. Even if achieved, the amount of future success being priced in today is extraordinary. Combine that with a stock that’s become “cool” to own with retail, and the huge short interest...and well it starts to make sense. TSLA price action at the moment is…

> It’s the climate change company

One (extreme) way of looking at it, is that it's a company that's enabling climate change, at a tiny scale (as they aren't really that big).

Regulatory credits, that are driving their profitability, is selling other car manufactures ability to produce gas-guzzling vehicles.

Re: Q2 2020 Update

#203

Post by rconti »

xoxoy wrote: post #113
baggachipz wrote: post #76

Earlier quoted context omitted.

I think it'll surprise you how long it lasts. These big car companies take a long time to change in a meaningful manner and every month they spend trying to do that is time Tesla is advancing themselves. These credits should stick around (albeit in a diminishing manner) for at least a few more years.

look at the pipeline for EVs coming to market in 2021/2022. there are dozens.

This is the "Macs will have just as many security vulnerabilities as Windows if they ever get more than 1% of marketshare!" from 2002.

Year after year we've heard this repeated.

I recently saw a post saying GM is launching 12 EVs. Then I looked into it, and it's like, a new Bolt, a lifted Bolt under Buick, GMC, Chevy brands, and a few other concept cars multiplied by 3 brands.

I guess the Merc EQC is out, but I've never seen one. I've seen the odd Jag I-Pace. Some eTrons now. Lots of eGolfs here in silicon valley. I saw a truckload of Taycans in Portugal, and a grand total of ONE Taycan in the US, at the VW ERL facility in Belmont.

We just keep waiting.

Re: Q2 2020 Update

#204

Post by rconti »

xchaotic wrote: post #134

Purely anecdotal but we are in the market for a new car when our current lease runs out. We were looking at Tesla and the quality is not there and dealerships means we can’t test etc. The valuation is crazy, VW can literally flip the switch and start producing more e-Golfs etc when the demand is there.

We've got a Model 3, it's been super solid over 2 years and 34k miles. VW's been making eGolfs for a long time, and... where's this world dominance? When will they flip the switch?

And, you can definitely test drive a Tesla, if there's a showroom place nearby.

Re: Q2 2020 Update

#205

Post by rconti »

JMTQp8lwXL wrote: post #9

I've seen a great deal of speculative investment in Tesla as of recently. I pray no middle class people will lose their entire net worth, much less in the middle of a crisis.

One interesting comment I heard is that Tesla is the biggest company NOT in the S&P 500 (I believe that was the index, at least).

So even if Tesla had the exact same retail 'excitement' as, say, Microsoft or Apple or GM, they'd have much wilder fluctuations in stock price because they don't have that massive institutional index fund investment to dampen the swings.

Re: Q2 2020 Update

#206

Post by bryanlarsen »

shuckles wrote: post #197
baggachipz wrote: post #91

Earlier quoted context omitted.

That's because they could build them, but not profitably . Changing the design wholesale and then retooling your lines to build the cars at scale is insanely expensive and will take a long time to do. The i3 and Bolt are objective failures (in the US) because they're just not that good compared to what Tesla is doing at about the same price. The dealers also have an inverse incentive to sell them so one has to go way…

You first point is around whether it’s economical. A carmaker can scale a program in ~3 years, so that they haven’t is almost certainly a conscious choice. Furthermore, the Bolt shares a production line with the Sonic so the process concerns are limited. In terms of competitiveness, the Bolt offered longer range at a lower price than the Model 3 at launch and still does. Here people respond by saying the Tesla is a m…

> All that said, Tesla also doesn’t build and sell cars profitably. Selling credits is the source of their profits.

GAAP gross margin is 21%. They're making excellent profits on their cars.

Re: Q2 2020 Update

#207

Post by Already__Taken »

realtalk_sp wrote: post #102
unixhero wrote: post #54

Earlier quoted context omitted.

Maybe it's red flags when you make conservative measurements against a traditional industry proxy measurement - and applying classic investment banking logic. However you have got to remember that this is not just another company, it's not just another brand. They've already changed the world, it's all there in their track record.

They don't have any significant monopolistic advantage and they're operating in a highly price-sensitive, competitive market. My personal theory is that Musk knows this and his real objective is to provoke car manufacturers into competing on electric. From Musk's point of view, the win is likely not Tesla making any significant amount of money for shareholders but instead it driving the whole market towards electric,…

I'm pretty sure musk had literally said this is not your theory. that's why there was there patent stunt. It not some plot rather being the change you want to see, a even if Tesla collapses they moved the EV needle.

Re: Q2 2020 Update

#208

Post by _mog1 »

andrewxdiamond wrote: post #143
xchaotic wrote: post #134

Purely anecdotal but we are in the market for a new car when our current lease runs out. We were looking at Tesla and the quality is not there and dealerships means we can’t test etc. The valuation is crazy, VW can literally flip the switch and start producing more e-Golfs etc when the demand is there.

If VW could do that, why havent they? Tesla proved there is a market

Tesla hasn't proved that you can make a reasonable amount of profit compared to your investment when selling to that market. Hell, they haven't showed you can make any profit on that investment, they're still deep in the red. It would take them something like 10+ more years at their current income to even break even. Is it really such a surprise that companies that need to make money aren't dying to get into that market?

Re: Q2 2020 Update

#209

Post by shuckles »

jeffbee wrote: post #201
shuckles wrote: post #198

Earlier quoted context omitted.

If Tesla would thrive in a world where gasoline was priced correctly, it would surely fail in a world where automobile infrastructure (parking, highways, sprawl) was priced correctly. This is not a reassuring line of reasoning.

I'm not trying to reassure anyone. Tesla, like the rest of the American economy, is headed for an abrupt disaster.

That escalated quickly.

Re: Q2 2020 Update

#210

Post by rconti »

grecy wrote: post #82
sbahr001 wrote: post #43

Earlier quoted context omitted.

I would argue that the model S/X should be updated for their respective costs; They pretty much sell a 6 year old interior that was "space age" at the time. Since then their have been minor interior/exterior and looks extremely dated as the competition has "caught" up and the cheaper models surpass it. The only main changes to the car have been better battery and performance, the latter doesn't improve the day to day…

> When your spending 100k on a car you expect Mercedes type of luxury This is the old way of thinking, and it illistrates perfectly why the other auto manufacturers have been caught flat footed re EVs. For many decades what you said held true - more money on a car meant a higher quality interior. Now things have changed dramatically, because what we thought of as a "car" has changed so much. You can now spend 100k to…

The Model 3 and Y make that (mostly) moot (size aside).

We've got a Model 3, I've had S loaners and my dad's got an S, and I've driven the S as far back as maybe 2013?

There are things I like about both. It's not at all clear to me that if you made me choose a free car to receive, that I'd choose the S over the 3.

If you're making me spend my own dollars, 3 all day. I just don't like the S twice as much.

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