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Long-Term Fundamentals of Tesla Motors (TSLA)
- Thread starter Robert.Boston
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- elon is an ass investing TSLA
I think this line of reasoning results in double counting of $. Ostensibily, you are paying $2000 for the supercharging for a Model S. That money is counted in the average sales price and adds to the various cash items on the accounting books. this $2000 isn't specifically earmarked for supercharger construction. you can't say that SC's are paid for by each car sale and then not change the other accounting items.
While in China a few months ago, Elon suggested another factory or two in 3 to 4 years out. He was very brief in his comment, and there was no indication whether that meant beginning work on a factory at that point or targeting that point to open one. I suspect the former, which fits with common sense as to learning from making GF1 before diving into GF2 and GF3. What's more, at the time when he was asked about a potential Chinese partner, he said Tesla was a bit young to be thinking about dating yet.
Apparently, Tesla discussed this a bit more with Deutsche Bank.
"Through our discussions with Tesla management, it has become increasingly that the company is already pursuing the acquisition of additional assembly capacity. While we do not expect any news on this front just yet, we believe that the announcement of one or two additional assembly facilities is likely (each with capacity in the 200,000-500,000 units) by the time that Tesla launches production of its Model 3 (in early 2017). Consequently, we would be surprised if Tesla targets anything less than 1 million units annually by 2025."
http://news.investors.com/081114-712679-deutsche-bank-upgrades-tesla-expects-production-surge.htm?ven=yahoocp&src=aurlled&ven=yahoo
This seems to be following a pattern we've seen before with Tesla, for example with the Gigafactory... first sort of a throw away mumbled line about possible future major initiative, subsequently repeated, and then revealed as a focus of the company. It may be 1-2+ years before we get to that last stage of this pattern, but I think we'll continue to hear hints. It underscores the folly of assuming Tesla's rapid growth phase will end with 500K/year production at Fremont.
Fwiw, I believe even Adam Jonas only models 1 million in production for year in 2028 (I've been out in front of him on this... for nearly two years I've been estimating 1-1.5 million/year by 2025
, though to be fair, I a glimpse of this from Jonas' early reports on Tesla).
Apparently, Tesla discussed this a bit more with Deutsche Bank.
"Through our discussions with Tesla management, it has become increasingly that the company is already pursuing the acquisition of additional assembly capacity. While we do not expect any news on this front just yet, we believe that the announcement of one or two additional assembly facilities is likely (each with capacity in the 200,000-500,000 units) by the time that Tesla launches production of its Model 3 (in early 2017). Consequently, we would be surprised if Tesla targets anything less than 1 million units annually by 2025."
http://news.investors.com/081114-712679-deutsche-bank-upgrades-tesla-expects-production-surge.htm?ven=yahoocp&src=aurlled&ven=yahoo
This seems to be following a pattern we've seen before with Tesla, for example with the Gigafactory... first sort of a throw away mumbled line about possible future major initiative, subsequently repeated, and then revealed as a focus of the company. It may be 1-2+ years before we get to that last stage of this pattern, but I think we'll continue to hear hints. It underscores the folly of assuming Tesla's rapid growth phase will end with 500K/year production at Fremont.
Fwiw, I believe even Adam Jonas only models 1 million in production for year in 2028 (I've been out in front of him on this... for nearly two years I've been estimating 1-1.5 million/year by 2025
, though to be fair, I a glimpse of this from Jonas' early reports on Tesla).
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
The most important parts of the Conference Call transcripts are [inaudible]
That's just how Elon is. I've come to understand that he is one you should most of the time not take With a grain of salt at all.
The most important parts of the Conference Call transcripts are [inaudible]
That's just how Elon is. I've come to understand that he is one you should most of the time not take With a grain of salt at all.
Except for probably timelines
The most important parts of the Conference Call transcripts are [inaudible]
That's just how Elon is. I've come to understand that he is one you should most of the time not take With a grain of salt at all.
This conference call and letter was full of about 3X the nuggets of most calls. for about a week I've been meaning to make a list of key points indexed to the time they were discussed on the call for future reference... will try to find some time in the next day or two.
These nuggets, among other things, make me more confident that the stock can support a 30+ pe for many years to come. In a bear market it could dip below that, but in average to bullish conditions I think a 30+ pe is realistic into the 2020s.
The most important parts of the Conference Call transcripts are [inaudible]
That's just how Elon is. I've come to understand that he is one you should most of the time not take With a grain of salt at all.
"Well, you see we have also been spending a lot of time on [inaudible] teleportation [inaudible] quantum [inaudible]"
Interesting quote from CS report:
"Electric vehicles are inherently better than Internal Combustion (ICE) vehicles," said Gaives. "If Tesla can get to cost-parity with ICE and still offer $1,400-$2,500 per year fuel savings to the consumer, it won't be a fair fight."
Read more: http://www.benzinga.com/analyst-rat...overage-on-tesla-says-its-not-a#ixzz3AN0g8cOl
"Electric vehicles are inherently better than Internal Combustion (ICE) vehicles," said Gaives. "If Tesla can get to cost-parity with ICE and still offer $1,400-$2,500 per year fuel savings to the consumer, it won't be a fair fight."
Read more: http://www.benzinga.com/analyst-rat...overage-on-tesla-says-its-not-a#ixzz3AN0g8cOl
chickensevil
Active Member
It really wont! That is why they want to get the battery cost down to 100$, even 150$ would be a huge help. This is going to be so much fun watching this massive technology shift
It really wont! That is why they want to get the battery cost down to 100$, even 150$ would be a huge help. This is going to be so much fun watching this massive technology shift
And still nobody realizes that Tesla's real opportunity is in the battery storage market in the energy industry...
erha
Member
Has anybody here laid out the potential for that marked? Lots of people say it is HUGE, and I don't doubt it, but it would be nice to have an idea of how huge. What makes it a greater opportunity than car sales in the millions?
Higher margins (50% gross margins or more possible) and no service needed. No service center infrastructure, no superchargers, no hundreds of moving parts like in a car. Less repairs than a car.
Samsung is selling storage units for Japanes solar farms at $963/kWh. You can do the math from there, it is very simple...
erha
Member
Thanks! The price Samsung is charging is exactly what I needed. However, it seems a little bit wierd that you can have higher margins on just selling battery packs than an entire car. In lack of any competition on storage units and ICE competition for EVs I see why it is like that for now and will probably stay like that until there is no supply constraints for batteries.
Perfectlogic
Member
Pretty much every household has a car, if every household would have a storage unit too in a bullish scenario (wouldn't it be more efficient to have grid storage more centralized?) it still wouldn't come close to the auto market as I see it, as the battery is only 20-25% of the cars cost and the battery for the household would probably be significantly smaller than the car battery. I'm also pretty sure you won't see even close to 50% margins on a commodity like batteries in the future.
erha
Member
I believe there is a huge a huge market for battery storage on ships and offshore structures. By having diesel-electric propulsion you save a lot of fuel. And those battery packs need to be massive
Samsung is charging that price for a 20-year lifespan. It will replace any bad cells over that time period, so there is some kind of warranty/service included in that price.
Perfectlogic
Member
Pretty sure this will still be a niche compared to the grid that controls home electricity usage and commercial entities on land, with the home usage being the largest consumer, this is just a hunch though, I am sure the numbers are relatively easy to find.
I disagree with your line of thinking:
The battery storage market is a lot better business, because it doesn't require the huge infrastructure that building and servicing vehicles requires.
And yes, TSLA will be able to charge 50%+ gross margins since they will be by far the lowest cost battery storage producer in the world. If they can make batteries at $100/kWh and the rest of the world is making them at say $200/kWh, then TSLA can Charge $250/kWh and make a 60% gross margin, while the rest of the world is selling at the same price for a 20% gross margin.
Those margins will come down over time, but still there are a lot of benefits to simple selling batteries over cars. The only reason Tesla is selling cars is because there is not enough demand for battery storage today at current prices, so TSLA is doing things based on market conditions.
Selling cars might make the top line look better, but selling batteries is significantly better for the bottom line. And the bottom line is all that matters, since that is what goes to the shareholders.
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