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Tesla Stock


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20 minutes ago, FordBuyer said:

 

Well, you should short the stock and bet against Musk. Good luck to you as you guys have been losing for the last 10 years with your predictions. The shorts have lost their shirts and pants. Also put your money on Boeing besting Space X while you are at it. 

 

Boeing and ULA can go suck the exhaust stream from a Falcon 9.

 

Regarding TSLA and their skeptics and short sellers, this quote from Professor Dans back in December is even more relevant today.

 

What is a company capable of turning entire industries upside down and ultimately changing the world worth? According to the markets on Tuesday Dec. 24, 2019 $420 per share, making it worth $75 billion, greater than traditional carmakers such as Ford or GM. But in practice, Tesla is worth more, much more. Understanding this comes down to really wanting to hear and to see. And that means accepting the evidence and that one was wrong, which in turn requires a certain level of intelligence that still seems to be sadly lacking in many quarters.

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8 hours ago, FordBuyer said:

 

Well, you should short the stock and bet against Musk. Good luck to you as you guys have been losing for the last 10 years with your predictions. The shorts have lost their shirts and pants. Also put your money on Boeing besting Space X while you are at it. 

 

Well you can scoff at what I said, but none of what I said is false. Is Tesla so special that it can disregard virtually all key metrics that successful businesses have? Stock price is meaningless is they can't consistently turn a profit. Take away selling their energy credits, are they making money? No. If Tesla can stick around another 10 years not making money and their stock prices continue to be unreal, then we need to rewrite the rules of business. Otherwise, expect a fall back to earth.

 

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12 hours ago, FordBuyer said:

 

Well, you should short the stock and bet against Musk. Good luck to you as you guys have been losing for the last 10 years with your predictions. The shorts have lost their shirts and pants. Also put your money on Boeing besting Space X while you are at it. 


I like some of Tesla’s products and their tech, and I want Tesla to succeed because they are an American company.  However, you can’t deny the company has some structural issues, and it’s stock prices are not typical of a company of its profile.  Time will be the final arbiter I suppose.  

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The big issue is the last two years were their best chance at turning a profit.  Producing multiple vehicles at volume with Govt credits to help buyers and almost no competition.  That’s now changed and it’s not getting any easier.

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  • 2 weeks later...

Interesting article from Bloomberg via Automotive news (link below). Included a paragraph that some of us having been saying for a long, long time which other refuse to listen to.

 

"Specifically, Tesla would not have made money on a generally accepted accounting principles basis the last several quarters without the sale of regulatory credits to carmakers that need help complying with toughening emissions standards around the world."

 

I'm wondering if the S&P will succumb to the pressure or listen to the data?

 

automotive news

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A few fun facts followed by some musings. Granted, none of these have, so far, in any way influenced Tesla stock's meteoric rise, which reminds us that market timing is a loser's game.
 
- Tesla stock currently trades at more than double VW’s market capitalization.
- VW sold 11 million cars last year. Tesla sold just under 370,000. Tesla hopes to sell about 500,000 cars this year.
- All of Tesla's recent paper profits have come from selling electric vehicle credits to other automakers. Without those credits Tesla would have lost $300 million in the second quarter of this year alone.
- Tesla projects these credits to decline 50% in the second half of this year as other car makers ramp up their electric vehicle production.
- Tesla has developed superb electric vehicle technology, but still lacks the vehicle production expertise of legacy car companies and has not yet been able to profitably build and sell its vehicles in the retail market. It also rates poorly in build quality ratings.
 
One of several things might happen:
1. Tesla might crack the nut of efficient auto manufacturing with the world seeing soaring near term electric vehicle sales, thus making unprecedented profits from the actual sale of its vehicles and blowing the rest of the auto world to bits.
2. Tesla might transition into more of a pure technology company and make profits from developing and selling electric vehicle technology to the legacy automakers.
3. Tesla might merge with, be bought by, or buy out a legacy automaker to obtain expertise and production facilities it currently lacks.
3. Current trends might continue with Tesla's stock, at some point, plunging to Earth.
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40 minutes ago, Gurgeh said:
A few fun facts followed by some musings. Granted, none of these have, so far, in any way influenced Tesla stock's meteoric rise, which reminds us that market timing is a loser's game.
 
- Tesla stock currently trades at more than double VW’s market capitalization.
- VW sold 11 million cars last year. Tesla sold just under 370,000. Tesla hopes to sell about 500,000 cars this year.
- All of Tesla's recent paper profits have come from selling electric vehicle credits to other automakers. Without those credits Tesla would have lost $300 million in the second quarter of this year alone.
- Tesla projects these credits to decline 50% in the second half of this year as other car makers ramp up their electric vehicle production.
- Tesla has developed superb electric vehicle technology, but still lacks the vehicle production expertise of legacy car companies and has not yet been able to profitably build and sell its vehicles in the retail market. It also rates poorly in build quality ratings.
 
One of several things might happen:
1. Tesla might crack the nut of efficient auto manufacturing with the world seeing soaring near term electric vehicle sales, thus making unprecedented profits from the actual sale of its vehicles and blowing the rest of the auto world to bits.
2. Tesla might transition into more of a pure technology company and make profits from developing and selling electric vehicle technology to the legacy automakers.
3. Tesla might merge with, be bought by, or buy out a legacy automaker to obtain expertise and production facilities it currently lacks.
3. Current trends might continue with Tesla's stock, at some point, plunging to Earth.


Excellent analysis.  I think #2 is inevitable and probably where Musk planned to end up all along.  

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15 hours ago, Gurgeh said:
One of several things might happen:
1. Tesla might crack the nut of efficient auto manufacturing with the world seeing soaring near term electric vehicle sales, thus making unprecedented profits from the actual sale of its vehicles and blowing the rest of the auto world to bits.
2. Tesla might transition into more of a pure technology company and make profits from developing and selling electric vehicle technology to the legacy automakers.
3. Tesla might merge with, be bought by, or buy out a legacy automaker to obtain expertise and production facilities it currently lacks.
3. Current trends might continue with Tesla's stock, at some point, plunging to Earth.

 

A combination of 1 and 2 is most likely. Tesla just started operating the largest die casting machine in the world at its Fremont factory and plans to install another one at Shanghai Gigafactory. Technology like this has the potential to greatly improve manufacturing efficiency by making it possible to build an entire automotive structure from a single casting. 

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9 hours ago, rperez817 said:

 

A combination of 1 and 2 is most likely. Tesla just started operating the largest die casting machine in the world at its Fremont factory and plans to install another one at Shanghai Gigafactory. Technology like this has the potential to greatly improve manufacturing efficiency by making it possible to build an entire automotive structure from a single casting. 

 

Problem is, #1 and #2 are in something of a conflict. If you are the technology provider to other firms they are not going to react well to retail competition. Plus, Tesla already has great technology. It is manufacturing experience and ability to profitably produce that are Tesla's main problems (plus a retail and service structure that has struggled to scale up). I'm thinking #2 or #3 (or, lacking them, #4) are most likely, but we'll see.

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Disruption can be good, but most of what Tesla is doing is not disruption.  It’s regression.

 

The gigfactory concept works great when you’re small and that’s how a lot of automobile mfrs start out.  But as they grow they find out it’s too expensive to scale up.  So now they spread out the parts manufacturing, some of which is outsourced to suppliers because it’s cheaper and more efficient.

 

Factory direct service and delivery is the same.  Very expensive to scale out, whereas traditional mfrs have transportation companies to deliver and dealers to sell and service their vehicles and it doesn’t cost the mfr anything as far as fixed costs or capital investment.  
 

 

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On 8/28/2020 at 9:41 AM, akirby said:

The gigfactory concept works great when you’re small and that’s how a lot of automobile mfrs start out.  But as they grow they find out it’s too expensive to scale up.  

 

GM disagree - their ultium (or whatever it's called) battery plant is under construction. Not saying they are correct.

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On 8/28/2020 at 8:41 AM, akirby said:

 

 

The gigfactory concept works great when you’re small and that’s how a lot of automobile mfrs start out.  But as they grow they find out it’s too expensive to scale up.  So now they spread out the parts manufacturing, some of which is outsourced to suppliers because it’s cheaper and more efficient.

 


 

 

Ford used to manufacture a lot of their own parts until they decided to spin them off several years ago. I know that they used to own their own glass manufacturing facilities. 

 

I'm sure that owning a lot of parts manufacturing can be a lot of unnecessary overhead.

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54 minutes ago, William S said:

Ford used to manufacture a lot of their own parts until they decided to spin them off several years ago. I know that they used to own their own glass manufacturing facilities. 

 

I'm sure that owning a lot of parts manufacturing can be a lot of unnecessary overhead.

 

Undoubtedly.  That's why GM spun off their parts division to form Delphi.  Likewise Ford with Visteon.

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4 hours ago, Harley Lover said:

 

GM disagree - their ultium (or whatever it's called) battery plant is under construction. Not saying they are correct.


That’s not the same as a Tesla gigafactory.   Tesla builds the vehicle including almost all the parts in one plant including the batteries.  That’s what the Teslaphiles claim is the “disruption” factor for manufacturing.   But it’s really just small scale manufacturing that gives you more control over parts quality and supply but is also super expensive by comparison and doesn’t scale well.

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19 hours ago, akirby said:


That’s not the same as a Tesla gigafactory.   Tesla builds the vehicle including almost all the parts in one plant including the batteries.  

 

That's in conflict with what Tesla says:



Today, the Gigafactory produces Model 3 electric motors and battery packs, in addition to Tesla’s energy storage products, Powerwall and Powerpack.

In mid-2018, battery production at Gigafactory 1 reached an annualized rate of roughly 20 GWh, making it the highest-volume battery plant in the world. 

 

No mention of all the other parts that would go into a Tesla vehicle. The GM plant sounds closer to the gigafactory than what you described.

 

https://www.tesla.com/gigafactory#:~:text=Today%2C the Gigafactory produces Model,storage products%2C Powerwall and Powerpack.&text=Once complete%2C Tesla expects the,powered by renewable energy sources.

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Long time follower. First time poster

 

Tesla’s phenomenal success is going to breed it’s own problems. A $412b company (2x AT&T) in tight fiscal times is going to be facing a lot of questions as to why it and it’s (generally affluent) customers deserve preferential access (HOV, no fuel taxes, tax credits/transfers). 
 

It’s one thing to help a scrappy startup to get a leg up - but the 10th most valuable company in America? 

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Meanwhile, Tesla stock surges past $2,000/share and many are projecting Tesla sales over 2 million/year by 2023. Maybe exponential growth has something to do with meteoric stock price? Wall Street likes explosive growth and rewards accordingly. However, I agree Tesla's lack of much profit is concerning.

 

Maybe many investors are betting on Amazon growth model where you show no profit for years followed by big profits once you dominate your industry segment and put traditional retail out of business. For example, GM wants to transition into BEV company. Good luck competing against Tesla at that game. 

 

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For the month of July, Tesla didn't even show in the top ten electric vehicle sales in Europe. Sales of electric vehicles accounted for 18% of all sales in July, ~53,000, and Tesla only managed to get ~1,000 of them:

 

https://www.forbes.com/sites/michaeltaylor/2020/08/27/tesla-blown-away-as-renault-dominates-europes-july-ev-sales-party/#75c8975351e5

 

The stock price rise is nothing more than FOMO.

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30 minutes ago, valve said:

For the month of July, Tesla didn't even show in the top ten electric vehicle sales in Europe. Sales of electric vehicles accounted for 18% of all sales in July, ~53,000, and Tesla only managed to get ~1,000 of them:

 

https://www.forbes.com/sites/michaeltaylor/2020/08/27/tesla-blown-away-as-renault-dominates-europes-july-ev-sales-party/#75c8975351e5

 

The stock price rise is nothing more than FOMO.


Amazing what happens when there is competition.

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5 hours ago, FordBuyer said:

Meanwhile, Tesla stock surges past $2,000/share and many are projecting Tesla sales over 2 million/year by 2023. Maybe exponential growth has something to do with meteoric stock price? Wall Street likes explosive growth and rewards accordingly. However, I agree Tesla's lack of much profit is concerning.

 

Even with two plants (not sure if your number is world wide or not) they are going to be extremely hard pressed to make 2 million cars in 3 years. 

 

Not to mention the increase in competition that is already starting to come to market. 

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9 hours ago, mackinaw said:

Funny, that Tesla considers vertically integrated production a "disruption."  The Rouge Plant, built back in late teens/early 1920's was probably the epitome  of vertically integrated production.  Everything was made there, even steel.  

 

What's old is new again. As I mentioned before, in the automotive industry vertical integration is the old way of doing things. Outsourcing is more recent.

 

For mature businesses like manufacture of ICE powered cars and trucks today, outsourcing can make sense. But for a disruptive player like Tesla now or Ford Motor Company in the early 20th century, it's important to maintain control of critical processes and technologies which makes vertical integration more practical.

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17 hours ago, valve said:

For the month of July, Tesla didn't even show in the top ten electric vehicle sales in Europe. Sales of electric vehicles accounted for 18% of all sales in July, ~53,000, and Tesla only managed to get ~1,000 of them:

 

https://www.forbes.com/sites/michaeltaylor/2020/08/27/tesla-blown-away-as-renault-dominates-europes-july-ev-sales-party/#75c8975351e5

 

The stock price rise is nothing more than FOMO.

 

I question whether traditional auto companies have the battery supply chain to compete with Tesla in the BEV segment. Tesla will produce about 500,000 BEVs this year and probably at least 750,000+ next year. Who can compete against that with their weak battery supply chains? Rivian will be lucky to have a vehicle ready for sale next year along with the other startups, and all the traditional auto companies are battery constrained with no resolution in sight. Tesla owns the BEV market with any competitors minor players at best with very limited production that doesn't look to change anytime soon. 

 

 

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23 minutes ago, FordBuyer said:

 

I question whether traditional auto companies have the battery supply chain to compete with Tesla in the BEV segment. Tesla will produce about 500,000 BEVs this year and probably at least 750,000+ next year. Who can compete against that with their weak battery supply chains? Rivian will be lucky to have a vehicle ready for sale next year along with the other startups, and all the traditional auto companies are battery constrained with no resolution in sight. Tesla owns the BEV market with any competitors minor players at best with very limited production that doesn't look to change anytime soon. 

 

 

 

More supply is coming online all the time. As the automotive world continues to increase the supply of EVs, based upon consumer demand, the vehicles will be available. If Tesla wants to continue to sell vehicles at a loss, i think the other automotive manufacturers are happy to let them do so. At the end of the day, profits are the name of the game and Tesla only produces a profit by selling their credits. As more manufactures start selling EVs, Tesla's credits will become worthless so they better figure out how to start selling cars profitably.

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