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While I agree with you, I will give you a cautionary tale about that kind of analogical reasoning, from an industry which I studied the history of....
The US finished the transcontintental railroad before we finished the railroad across BALTIMORE. Apparently crossing Baltmore was harder.
First Transcontinental Railroad, 1869 (though a continuous line across the Missouri River didn't happen until 1870): Transcontinental railroad - Wikipedia
B&P tunnel across Baltimore, 1873: Baltimore and Potomac Tunnel - Wikipedia
The cautionary tale in this is that the hard parts may not be the parts you first think are hard. The hard parts may be quite different parts. I've been warning about this with a number of Musk's ventures.
Maybe going to the moon is the easy part.
That said, I see no difficulty with demand for Model 3, no difficulty with low-cost high-volume manufacturing of Model 3, and no significant difficulty with deliveries of Model 3; the hard part is probably service in this case, and I see a number of ways they can handle it.
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I have been told that some major car companies produce almost that many cars and *throw them away* in order to do testing.
Frankly Tesla can't afford to do that yet.
larmor
Active Member
Yes i agree, but remember going to the moon is rocket science. And this level of engineering and science has not been applied to manufacturing processes-- it is hard, but with a vision of how things go together might be easier... Kaypro's and Osbourne computers were a bear to take apart as were compaq. IBM pc and apple's were much easier but not the mac...While I agree with you, I will give you a cautionary tale about that kind of analogical reasoning, from an industry which I studied the history of....
The US finished the transcontintental railroad before we finished the railroad across BALTIMORE. Apparently crossing Baltmore was harder.
First Transcontinental Railroad, 1869 (though a continuous line across the Missouri River didn't happen until 1870): Transcontinental railroad - Wikipedia
B&P tunnel across Baltimore, 1873: Baltimore and Potomac Tunnel - Wikipedia
The cautionary tale in this is that the hard parts may not be the parts you first think are hard. The hard parts may be quite different parts. I've been warning about this with a number of Musk's ventures.
Maybe going to the moon is the easy part.
That said, I see no difficulty with demand for Model 3, no difficulty with low-cost high-volume manufacturing of Model 3, and no significant difficulty with deliveries of Model 3; the hard part is probably service in this case, and I see a number of ways they can handle it.
EPA braces for possible 'devastating' 25% budget cut - CNN
EPA braces for possible 'devastating' 25% budget cut - CNNPolitics.com
"
While White House aides cast the cuts as "belt tightening" when they were announced, there is widespread concern within the EPA that the changes will dramatically alter the function of an agency that was created under Republican President Richard Nixon in 1970.
A current EPA employee, who requested anonymity in order to speak freely, said the cuts will weaken the agency to the point where it can only do its most basic functions.
"
Even Nixon rolling in his grave--
As the EPA Head, no doubt considers this 75% too high.
3 more years to mission accomplished...
with Just enough left to pay his own salary
Start up investment idea:
water 'n air self testing - FlintSticks
EPA braces for possible 'devastating' 25% budget cut - CNNPolitics.com
"
While White House aides cast the cuts as "belt tightening" when they were announced, there is widespread concern within the EPA that the changes will dramatically alter the function of an agency that was created under Republican President Richard Nixon in 1970.
A current EPA employee, who requested anonymity in order to speak freely, said the cuts will weaken the agency to the point where it can only do its most basic functions.
"
Even Nixon rolling in his grave--
As the EPA Head, no doubt considers this 75% too high.
3 more years to mission accomplished...
with Just enough left to pay his own salary
Start up investment idea:
water 'n air self testing - FlintSticks
Waiting4M3
Active Member
Just moving 500K/year cars out means 1370 cars/day (365 days), 57 cars/hour, 1 car/minute, getting loaded on to trucks. Each transport trucks carry about 9 cars, so this means >6 trucks leaving the factory every hour, 152 trucks a day. Piece of cake, right? I'm sure smart people at Tesla has this licked, but it still boggles the mind
Jo-
Member
No, but you're one click away from the reserve button...most people ordering can handle that. Nothing to see here.
Thar click did make me rewatch the reveal again, however, and that excitement came right back!
I'll be contrarian for you. It could happen if the general market valuation crashes spectacularly and stays down.
We are currently in a period when the Shiller PE or P/E10 is between 28 and 30.
There have been periods when the Shiller P/E or P/E 10 was between 4 and 7.
Recalibrate your estimates for that and we could definitely have Tesla well below 400. My model says as low as $90 would be possible, though $180 is more likely.
Of course, in this scenario, anyone invested in the S&P 500 would be torched; it would be 1929 time. So if you're expecting this, the only thing to do is to get out of stocks entirely. I'm not expecting this to happen soon. If it does happen I currently consider Tesla to be safer than the market as a whole (though, in this scenario, worse than cash) as it is in a secular growth sector which will grow even during a recession, and it has more tangible assets than your typical modern company and less financialization (despite SolarCity), so it's less prone to being destroyed by a financial crisis. I would be interested in views which challenge me on how Tesla does in this nightmare scenario, though; maybe I'm wrong about that.
My model of future Tesla earnings, as I usually run it, assumes mean-reverting PEs of 10 to 15. However, as this article says:
"A cautionary observation is that when the P/E10 has fallen from the top to the second quintile, it has eventually declined to the lowest quintile and bottomed in single digits."
Is the Stock Market Cheap? - dshort - Advisor Perspectives
So basically, my view is that anything which drags Tesla down that low would probably have trashed the rest of the stock market even more. On the whole, apparently studies show that indexers outperform stock-pickers in bull markets, but stock-pickers outperform indexers in bear markets...
*cough* this is why they're delivered by train
(One trilevel autorack can carry 12 full-size cars; a train can have 50 or 100 of these. Yes, loading them is a substantial job. There's a reason so much of the Fremont factory footprint is rail sidings.)
Once you get to really high volumes, trains are consistently the way to go. They suck for low volumes, but there is no substitute for high volumes.
Are you brand new to Tesla? You reserve a model in development. Pre-ordering will be allowed in staggered stages as production begins. I waited 3 years with a reservation for my Signature Model X. And I paid a $40k deposit to have that reservation. Preordered 3 months before I actually took delivery. The demand far exceeds the supply. And once the Model 3 is out in the wild the demand will skyrocket.
This will backfire on the administration so quickly it isn't funny.
Most of what EPA does, in budgetary terms, is to clean up Superfund sites and other toxic pollution sites. You can probably imagine how the newspaper and TV headlines are going to look -- "TOXIC SPILL WAS CAUSED BY TRUMP'S EPA CUTS"...
This is one of those things which is caused by Trump not actually knowing what the agencies he's in charge of *do*. Like Rick Perry not realizing that the Department of Energy mostly handles nuclear security and nuclear waste.
He may try to cut the enforcement budget, which mostly consists of suing companies to force them to comply with the law or to force them to pay for the cleanup of messes they made. The thing about this is, the states have concurrent enforcement power and can sue on their own. And they will.
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Yep-
From personal experience working with large scale planned land developers, I know several of these in specificity. And they are ALL near 100% funded by the EPA.
I'm talking beyond the health aspects here; It's a required expenditure to justify the Private Developer's capital investment in infrastructure and subsequent vertical.
Further a number of them are in the very areas Trump has promised to rejuvenate - Manufacturing, Iron, and Mining belts, where cleanup of past abandoned industry MUST be eviscerated before the new development facility can be financially justified (and this funding does NOT come from the EPA capital construction budgets they are allegedly preserving).
It'll take a little while for this to curl in on itself, but suggestion for Trump/Pruitt -
Prep the Fake News tweets- your gonna need 'em
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N of one weakness, and all that. A few years ago I chatted with a Tesla guy at the White Plains, NY, store. About mid thirties or early forties. He was a full time teacher at the high school level. He was fully aware of the value of special pricing of the stock as part of his compensation. I'm not at all sure he is unrepresentative of a factory line worker. My youngest son is a high school graduate and a self-taught mechanic in a bakery. For many years he has been making more money than I with three college degrees. (It is a co-op bakery, however.) He saves and invests more than I can, although I've beat him a time or two over on investments in Tesla. He lives in Santa Rosa, much more expensive place to buy than Sacratomatoe.
Don't sell these workers short on brains about money.
That may be true and some of us who are consistent longs have done relatively well with minuscule stakes. But you raise a prospect which I have been thinking about: causes of the Trump Depression.
Consider the economic losses due to a depletion of illegal immigrant labor. A recent NYTimes editorial details some of this. If I remember correctly that could be on the order of $400 billion in wages, let alone tax revenue lost, and multiplier effects. A few years ago there was a story about a shortage of skilled welders in Arizona due to Obama's deportations.
What about gutting of the admittedly somewhat flawed ACA. Most projections are it will cost more in many ways, for consumers, and probably many sectors of the health care industry (hospitals in particular?).
Look how ably has the Banking industry done in avoiding breakups or any thing like reconstitution of Glass-Steagal. Thoughtful economists have been worrying about the banking system already, what more weakness can we expect once the puny regulations are disposed of by the Bannon/Ryan Axis?
Others have debated better than I can the deleterious effects of attacking the EPA. But there's also the Wall, the increase in military spending, and attacks on the revenue base which might occur in the guise of "tax reduction." Add to all this the efforts by states to fill the gaps created must threaten local tax increases and additional costs.
And then all you need is something like a bloody Sunday which set off the 1905 revolution in Russia, or the assassination of a key billionaire or figure in the Trump administration just at the worst time in delicate negotiations with a hostile nuclear power like Korea, Russia, or Israel in some scenarios. Echoes of 1914 anyone?
Nah, you might say, the system is so complex it's metastable. Perhaps so, but even a simple handoff of an envelope can change history at the Oscars.
According to the Nevada's executive director of the Governor's Office of Economic development, Tesla will end up creating 54% more jobs at the GF: 10,000 instead of 6,500 estimated previously. This should bode well for the cost of the final product. Not only capital efficiency improved with tripling of the GF output to 150Gwh/year within the same footprint, but operating expenses will also be lower with 54% more workers producing the triple of the original output.
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Mike Smith
Active Member
I think we have to at least start considering the possibility that the Gigafactory may in fact be real.
Meh, too much risk involved - it is not a sure thing until it is a sure thing...
Duly noted. Like you, I'll take advantage of it to the best of my ability and have done modestly well with it. But I won't factor in the average joe's capability to manage their funds correctly into a fairness assessment. Dumbing things down and appealing to the sensibilities of the lowest common denominator doesn't really provide much opportunity for wild success, only mediocre "growth".
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