Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Fact Checking]

Why would Tesla do this while they are supply constrained with batteries?

Money: there is a price where it's worthwhile for Tesla to do. Not sure FCA would be willing to pay $50k-$100k per unit though - maybe for high end brands.

 

[Nocturnal]

Nobody is paying sticker and one can get $5-$6K off all day, any day on Camry,Altima, Malibu, Sonata, etc. $$3-4K off Accords.

Roughly, the cheapest used Model 3 is around $37K

https://www.cars.com/for-sale/searc...&searchSource=SORT&sort=price-lowest&zc=76543

Not many people buy the base model. Most are adding features so that probably comes close to balancing off the sticker price discount.

I wasn't able to negotiate 5k off my Toyota Highlander, despite working at it with several dealers for weeks. This is a more popular car than a Camry, but also higher price so 5k off is a smaller percentage.

 

[M3Rider]

Here's the problem as I see it with the "sleeping giants" theory:

I see a problem with people writing pages and pages responding to obvious trolls, like
Tsla3Owner, Tsla30wner, ElectricOrgan, CaptKerosene etc.

Come on, they are not going to buy Tesla regardless of what you say, because they don't make enough being trolls to afford one.

The argument of Tesla killer is over. Everybody who tried failed. Why do we need to keep proving this to the trolls?

 

[FreqFlyer]

Here's the problem as I see it with the "sleeping giants" theory:

Imagine you are the CEO of, I dunno, Ford. You're at the apex of a long and successful career. You're looking at retirement in 10 years or less. The board likes you. The suppliers like you. The customers love your pickup trucks. People write hit country songs about you.

Along comes this quirky California upstart thinks they can be the first American car maker to not go bankrupt in 100 years. Their technology is unproven by industry standards. They have one factory they bought on the cheap. They've sold some cars to greenies in California who like that they get HOV stickers. Most of your customers don't even know what an HOV sticker is. OK, they gave Porsche a run for its money on a track recently, but you just doubled down on the F-150, and you know the sedan isn't a money maker anyway. Americans like their vehicles beefy and you have the single best seller on four wheels.

Your VPs are starting to whisper that they're seeing a lot of neighbors buying Teslas and maybe this EV thing has some legs. Stupid California is making noise about emissions again. What do you do? Do you go to the board with a plan to pivot your entire century-old operation? Sink your personal reputation, throw away all your industry cred, burn your supply chain to the ground? Fire a bunch of factory workers? You know how the UAW feels about that. Commit to being unprofitable for a decade while you relearn how to make cars?

Even if you answer yes to all those questions: where ya gonna get the batteries? Are you really going to go so far out on a limb as to make your own? Or would you go shop Panasonic or LG or Samsung or one of the other couple of battery suppliers who knows they have you over a barrel along with everyone else in the industry?

Of course you're not gonna do any of that. You reassure the UAW, the suppliers, and the dealerships that you aren't going anywhere and that nobody wants a Tesla. Maybe you stick your toe in the water and do some experimenting just in case some of your greenier customers are thinking about jumping ship (and hey, if nobody buys your little experiment, even better). You do your fiduciary duty to the shareholders not to lose their money. And by the time it matters, you'll be floating away on your golden parachute.

What would it take for a captain of industry to go all in on EVs in the face of all that? As long as there's any plausible deniability whatsoever, the giants are going to keep right on sleeping.

Nice synopsis.

We are past this point, read the automobile trade mags, and all of the boardrooms are griping how to do EV and do it profitably. It take 3-4 years to design a car and bring it to production. The market will see them in a year or two.

Regards the last sentence, there is no more sleeping. Government regulations on emissions took care of that. To the automakers, going EV is not a movement, its by necessity.

 

[Curt Renz]

Chou Zhou - today:

 

[FreqFlyer]

Not many people buy the base model. Most are adding features so that probably comes close to balancing off the sticker price discount.

I wasn't able to negotiate 5k off my Toyota Highlander, despite working at it with several dealers for weeks. This is a more popular car than a Camry, but also higher price so 5k off is a smaller percentage.

That's bad news, I am in the market for that very CUV for my wife.

 

[Svetlin]

First batch of 15 Model 3 from Giga3 Shanghai:

15 Made-in-China Tesla Model 3s seen in the latest Gigafactory 3 drone footage

Just piling up on the parking lot. Nobody wants them.

 

[Electroman]

I was telling a friend of mine the other day to think about where battery technology would be had EVs won the day in the early days of the automobile - or even had they gained momentum some time in the last 30 years. I truly believe we'd have a battery 1/4th the size of today's battery's powering cars for over 1000 miles.

The only real question is - is this finally the time for EVs to gain that momentum? I know a LOT of people here think so, but there are 10 times more people on the other side who believe it's just a passing fad (or an environmentalists movement that's being forced on everyone) - and trust me, the oil companies, dealership associations, and legacy automakers are doing their best to push any narrative they can to kill this momentum before the real tipping point truly arrives. With only ~2% of overall sales, we are nowhere near that tipping point yet. That's why I don't feel good when other EVs and EV companies continue to fail. If the new EV makers fail, and the legacy manufacturers continue to produce vehicles on par with the Jaguar IPace and the Audi Etron, this movement will be over in less than 5 years. Tesla simply can't do it alone.

Agreed. Good points.

 

[StealthP3D]

He’s free to buy another car, but the he’d be choosing one that will give less satisfaction.

And that will likely come with worse service issues (if you go by the actual data).

 

[MissAutobahn]

Xauto - today: 15 Made-in-China Tesla Model 3s seen in the latest Gigafactory 3 drone footage

Chou Zhou - today:

I already can hear the answer from TSLAQ:
"Those are no produced cars but 15 key fobs in a row."

 

[kbM3]

Uh, huh. Heard that story before starring the Chevy Bolt when it beat the Model 3 to market. Heard it again when BMW was coming out with their carbon-fibre EV masterpiece they spent over 2B-b-billion on developing. Heard it again about the i-Pace and the Taycan.

Your suggestion that anything coming down the EV pipeline ‘in a couple years’ from a current OEM is a threat to Tesla is hysterical. Dude, it’s already been over 7 years since the Model S debut and nobody can even replicate the 2012 model, let alone today’s and certainly not tomorrow’s. And there already are cheaper EVs on the market. Problem is, they aren’t Teslas and never will be.

Kona, Ioniq, Bolt, Leaf, ID.3 are not really competition for any Tesla as they’re not performance/premium vehicles.

Model Y’s competition (EQC, I-Pace and E-Tron) are all smaller, slower, have less range, less performance and are $25k more expensive. Maybe more luxurious? and quieter, but completely out of the ballpark in price.

Model S competition is Taycan Turbo and Turbo S, Better overall performance, but less range, smaller interior/cargo and WAY MORE expensive. The lower trim Taycans will be more price competitive, but less performance, fewer features and even less range.

The most serious competitor so far seems to be for the Model 3, with the Polestar 2. It is likely less range, but close in performance/luxury/interior room and only a little more (<$10k) more expensive. It will still have an uphill battle as I believe it won’t be sold through Volvo, so it will be difficult to cash in on Volvo’s reputation, and of course Tesla has great brand cachet among EVs. Still seems like it will be the most competitive yet.

 

[Nocturnal]

That's bad news, I am in the market for that very CUV for my wife.

This was back in 2017 when they were newer so the market might be more forgiving now. I sold mine last year for my 3 and resale value was still really good.

Great car all in all. No Tesla, but for good for an ICE car.

Kona, Ioniq, Bolt, Leaf, ID.3 are not really competition for any Tesla as they’re not performance/premium vehicles.

Model Y’s competition (EQC, I-Pace and E-Tron) are all slower, have less range, less performance and are $25k more expensive. Maybe more luxurious? and quieter, but completely out of the ballpark in price.

Model S competition is Taycan Turbo and Turbo S, Better overall performance, but less range, smaller interior/cargo and WAY MORE expensive. The lower trim Taycans will be more price competitive, but less performance, fewer features and even less range.

The most serious competitor so far seems to be for the Model 3, with the Polestar 2. It is likely less range, but close in performance/luxury/interior room and only a little more (<$10k) more expensive. It will still have an uphill battle as I believe it won’t be sold through Volvo, so it will be difficult to cash in on Volvo’s reputation, and of course Tesla has great brand cachet among EVs. Still seems like it will be the most competitive yet.

Volvo is also scamming the EV credit program by double dipping. I'm hoping that the Dems regain congress and we can fix the current law. ​

 

[StealthP3D]

yes a Corrolla and Civic are rather bland, but the broader point is affordability. Folks should not be spending their annual income on a car; really bad financial planning.

Previously, I thought this too. It's true if you only make, say, $15/hr. But if you have a career and family and investments, there's a lot to be said for just going and buying a new car and being done with it. No time wasting doing VIN searches for accidents, flooding, etc. Time is money and low operating costs, no tune-ups and much less likelihood of shop time saves time *and* money. Keep it for 10 years or more and go buy another. Makes a lot of sense if your time is worth much at all.

If battery prices continue to drop, and Elon could produce a basic car with 200+ miles for say, $25k, it'd sell like hot cakes.

Tesla is already selling all they can make at $40,000 to $60,000 and they are still ramping new production facilities. I would say they *are* selling like hotcakes.

 

[jbcarioca]

Business Insider - today: Fiat Chrysler’s CEO says the carmaker could buy technology from Tesla

This seems to be no accident. I wonder how much they have thought about and discussed this topic. They certainly do need a major boost...

 

[Curt Renz]

AP through Yahoo: Cranberry farmers want to build solar panels over their bogs

 

[humbaba]

Kona, Ioniq, Bolt, Leaf, ID.3 are not really competition for any Tesla as they’re not performance/premium vehicles.

Model Y’s competition (EQC, I-Pace and E-Tron) are all smaller, slower, have less range, less performance and are $25k more expensive. Maybe more luxurious? and quieter, but completely out of the ballpark in price.

Model S competition is Taycan Turbo and Turbo S, Better overall performance, but less range, smaller interior/cargo and WAY MORE expensive. The lower trim Taycans will be more price competitive, but less performance, fewer features and even less range.

The most serious competitor so far seems to be for the Model 3, with the Polestar 2. It is likely less range, but close in performance/luxury/interior room and only a little more (<$10k) more expensive. It will still have an uphill battle as I believe it won’t be sold through Volvo, so it will be difficult to cash in on Volvo’s reputation, and of course Tesla has great brand cachet among EVs. Still seems like it will be the most competitive yet.

Don't hold your breath on the Polestar 2: you are assuming it won't have a significant jump in price (e.g., like the Taycan) and that it will actually have the details you've been told.

FWIW: according to wikipedia it will start at $63,000. That is not less than +$10k, it is more than +$10k. In fact, that's something like +$25k without having features found in the base Model 3 (such as autopilot). Despite its much larger battery it will have barely more range than the SR+ (assuming the produced models actually get the listed EPA) and will charge slow, which means for traveling it will require significantly longer stops for charging.

Even if it were currently in production it would not be in competition with any Tesla vehicle and a year from now it will be even farther behind.

[edit: I saw a picture of their cockpit and some things cannot be unseen. OMG that is bad.]

 

[StealthP3D]

Well tesla is made in California, and that is close to but separate from America-- that is the vibe i get in Texas after having lived in CA for 12 years now Texas for 1-2 years...

It's just jealousy. They couldn't afford the wonderful climate and beaches of California so they had to move to a barren patch of desert in Mexico. Well, it was formerly Mexican wasteland, now it's technically part of the U.S.A.

 

[Sparky4life]

We definitely need a model 1/0 OR equivalent from other makers.

I was thinking of folks in sunny California in that post.

Self reported data would typically exaggerate issues rather than happy customers though. Right? Indifferent or happy people are usually less motivated than those who are upset. ​

Maybe, maybe not. The point is you don't know. The magnitude and direction of the bias are unknown, or we could remove it.

 

[MikeC]

Key quotes:

• "Morgan Stanley's Adam Jonas asked Manley for insight on just how much FCA is paying Tesla to pool vehicle fleets for regulatory compliance reasons in Europe, to avoid fines. The figure has been reported at levels ranging from millions to billions, but Manley declined to provide Jonas with any additional information."

IMO FCA would probably only decline to give a figure if it's high ...

It's also interesting that Adam Jonas spent his precious FCA earnings call analyst question to the CEO to inquire about ... Tesla.

• "The customer will be agnostic" to certain components, Manley said, noting that batteries and drivetrain would be among them. He added that a company could buy a "skateboard" platform from Tesla, then tune other systems, such as suspension and handling, to suit various brands (FCA already has marques as diverse as Jeep, RAM, Maserati, and Alfa Romeo in its portfolio).

Btw., "skateboard design from Tesla" would include the drive train - that's why he listed the differentiation components as "suspension" and "handling".

• "Manley also said that FCA's pooling deal with Tesla would conclude in 2021, with 2022 being the first year that the company achieves the full benefit of its own efforts."

Translation: FCA admits that they'll need Tesla's credits for at least the next 2 years. Whether they'll be able to ramp up BEV products and production by 2022 is an open question.

I'm sure Audi would prefer to sell hundreds of thousands of Etrons per year, instead of the current trickle of tens of thousands. Competing against Tesla is not easy.

• "Our relationship with Tesla goes back a long way," Manley said. "It really has helped us. But FCA are absolutely committed to reducing CO2 emissions around the world."

It's good IMO that the FCA CEO sees Tesla as a positive factor. Obviously they'd want to eliminate all CO2 emissions penalties - but that's easier said than done.

Does anyone have a link to the full FCA earnings call transcript?

This isn’t the first time he talked about Tesla on a FCA call, either. Remember this quote from May:

“Mergers aside and speculation aside, is there -- can you give us any update on just kind of how your conversations with partners on the strategic level are going? Is 2019 too early to see some form of alliance, partnership? Again, I don't want to necessarily hurt the question by saying merger, but just something you can really do at a high volume, cost reduction level instead of paying Tesla all this damn money.”

Edited Transcript of FCA.MI earnings conference call or presentation 3-May-19 12:00pm GMT

 

[ggr]

Low volume day, shorts get to play with making TSLA close in the red.

Edit: indeed, in the last few seconds, the price oscillated between +/- 10 cents of yesterday's close, and ended down 9c.