I personally trust Elon Musk and I am a large investor. I don't expect him to hit all his targets, but I trust him to only raise money on the heels of good news.
Musk has always been largely bluster, but now the bluster is hurting people, and his companies as well. He's the biggest liability Tesla has.
I don't know what he's done to earn my trust, or any investor's.
The ~20x ROI since IPO has made many people trust him. Tesla itself is a marvelous success, with no established car maker able to match them yet. It is far more likely that your personal dislike of him is making you see a distorted reality.
Certainly possible. I personally think he's acting like a buffoon and I haven't been shy about stating it.
However, as I told another commenter in this thread, I think the relatively objective argument is that while Musk was necessary initially to get Tesla into existence and functioning, he's now more of a liability than an asset. It's not that he was never valuable or never deserved any trust - rather that he doesn't deserve it now.
Put another way: At what point does the goodwill he's earned expire?
Alternatively, he could dramatically change his approach as the business matures.
Martin Eberhard and Marc Tarpennin initially got Tesla into existence.
It doesn't always matter who initially created the company. For example one of the co-founders of Apple was Ronald Wayne, whom the vast majority of people have never heard of. He left Apple very early and sold all his shares back to Jobs and Wozniak for $800.
The Hyundai Kona EV is cheaper, has good range, and outperforms new model Teslas in 24-hour efficiency (interestingly finishing second to the original Tesla Roadster):
https://insideevs.com/hyundai-kona-electric-gets-shockingly-...
https://electrek.co/2018/12/23/tesla-roadster-24-hour-electr...
Teslas are among the least reliable cars you can buy. If you want high reliability and low maintenance costs, you're best off with a sensible Toyota today:
https://www.consumerreports.org/media-room/press-releases/20...
Here are some currently available and soon to be available EVs from established car makers:
https://www.hyundai.co.uk/new-cars/kona-electric
https://www.kia.com/uk/new-cars/all-new-e-niro/
https://www.jaguarusa.com/all-models/i-pace/index.html
VW has to sell electrics to meet the new fleet emissions targets set by the EU and they're going to do it with their MEB platform:
http://fortune.com/2018/12/20/volkswagen-electric-cars-emiss...
https://electrek.co/2018/09/18/vw-meb-platform-electric-for-...
Right now the primary reason to buy a Tesla is the novelty of buying a battery electric. But when all manufacturers are producing battery electrics, why am I buying a Tesla?
It is a compliance car, to reduce the emissions overall of the fleet they sell allowing them to sell more high profit ICE cars. They are likely losing money on each sale as well.
I think the Kona is a great start and wish it would have a better chance, but it is crippled from the beginning.
On a positive note, it is a step in the right direction to rev up that part of the company, as they will need the experience for future success when they can no longer rely on ICE sales
Yes, I agree. Hyundai has better quality control than Tesla:
https://www.greencarreports.com/news/1115659_tesla-model-3-q...
Agreed. The Kona's fit and finish is miles ahead of the Model 3, and the interior comfort is the same for...1/4 the cost of the Model 3? Tesla's got quite a bit of work cut out for it if it hopes for the $35k Model 3 to stand a chance in the marketplace, since it'll being facing a ton of competition by the time it comes out (if ever).
I think another advantage Tesla has is the Supercharger station access.
Supercharger access is becoming less of an exclusive as well. Electrify America is putting in a lot of stations (there's a couple near me right now, with about a dozen more planned) that support 150kW now (30 more than a Supercharger), and 350kW as soon as there's a car that can take it.
Like the Porsche Taycan:
https://electrek.co/2018/07/30/porsche-taycan-all-electric-p...
Even though I've only used superchargers 4 times in 6 months, it absolutely solves the EV roadtrip FUD in a way that nobody else has figured out yet.
[1] https://insideevs.com/november-jaguar-i-pace-sales-u-s/ [2] http://carsalesbase.com/us-car-sales-data/tesla/tesla-model-...
I live in the most EV friendly region in the US and I hardly see I-Paces. Meanwhile Tesla is just crushing it here.
With rare exception, I don't subscribe to the idea of "key men" in general, and especially not in this case. Even if I did, I don't think that Musk is acting in a way that makes him an asset.
I agree that Tesla, for instance, is doing good and important work. However, I think attributing Tesla's success, and net impact on the world to Musk alone is unsupported by evidence. That's because aside from initial investment/PR, and sufficient cult of personality to inspire people to work for him at the start, I don't see what Elon Musk is contributing to the company's work at this point. In fact, I see him as a liability and I think Tesla would be better off without him.
Candidly, I also believe that if Musk was less driven by his own ego, as he appears to be, he'd see that and step aside.
If Musk did not exist, and Tesla as a company did not exist, then all the engineers, expertise, effort, and capital that is currently with Tesla would be placed elsewhere.
Would all those people and resources do more good with all the other companies?
Of course then in that 60 Minutes interview he all but declared he wouldn't honor his side of the settlement, but we'll see if he follows through on that.
* not sure if it was initial cost or cost over the life of plus the energy savings, I don't remember nor really care. Either is fine by me.
As an upside, I think the comparison is with one roof replacement, which is supposed to be done every 8-20 years. Tesla tiles should last 100 years.
The innovation comes purely from the battery and associated electronics. The rest of the car is pretty standard and it's in this area where they are having problems.
There are plenty of car companies with electric cars today e.g. Jaguar, BMW, Nissan, GM and in 2019/2020 everyone else is jumping onboard e.g. Audi, Landrover etc. And they have managed to hit their targets.
tesla also acts like they are the only game in town. they aren’t even the largest electric vehicle maker in the world.
Twitter insults aren’t impressive.
You need to lighten up. Musk doesn't owe anything to anyone, if anything he garnered interest for selling more cars to the 18 million people that watched that podcast. If the CEO of <any fortune 500 company> was on the same podcast, do you think it would have been anywhere close to as entertaining?
He owes a lot to his shareholders, and wiped 9% off the value of Tesla with that podcast. If he has to be entertaining as well as reassuring them he's also laser focused on solving production challenges - and CEO of an engineering company is definitely a job description where being dull is no disadvantage - there were certainly better ways of doing it.
Investors and board members definitely think otherwise.
I personally don't care what Elon, or anyone does in his spare time but smoking pot on TV (or podcast, basically the same thing since both are going to be broadcast to viewers) shows a willingness to take risks with the wrong amount of upsides relative to their downsides and wall street doesn't like that.
The part of it in discussion was, because of its content.
Everything that is recorded and available outside of a narrowly controlled group is effectively national TV, in that if you do something that would be newsworthy, that's where it's going to end up.
Anyone in a PR-sensitive role, including any CEO, ought to be aware of that.
EDIT: SEO > SEC - Context switching is hard
Semi-relatedly this: https://electrek.co/2017/08/03/tesla-model-3-elon-musk-produ...
Right before a debt offering btw.
It's clear Tesla has run through higher margin demand. There aren't many people in the world who can afford a $50,000 car. Tesla is a niche market car, but priced as a mass market (like iPhones) product.
Expect Tesla's sustainable profit to be around $500 Mil per year and it's share price must be cut in half to justify that
When Amazon reached that mark in 2009, their annual profit was slightly over 1B... And the car industry isn't famous for particularly high margins.
> Expect Tesla's sustainable profit to be around $500 Mil per year and it's share price must be cut in half to justify that
There are no such rules for share prices, especially with this kind of revenue growth. Nobody knows where Tesla will be in 5 years but most shareholders expect easily an order of magnitude higher revenues and possibly profits.
- new vehicle markets (def. semi trucks, perhaps boats and trains as well) - solar - military
They don't have a ton of baggage like their competitors, so they can pivot their battery business in a variety of ways without too much additional investment.
The real question is if they can stay ahead of competition as they expand.
So far they have not only expanded their lead (e.g. Nissan Leaf used to be a bestseller), they've also proven that they got their priorities right from the start. Look at the new Audi e-tron, the Mercedes GLC and the i-Pace: they're all suffering from horrible aerodynamics that cost them 20% or more range at freeway speeds compared to Teslas. They have no fast charging networks able to support similar sales numbers even to Model S/X. Tesla apparently did proper planning while the big car makers are just trying to produce their usual cars with electric engines. They are now making expensive mistakes that Tesla avoided altogether, so I'm confident about Tesla's leadership.
You can't even buy a Leaf in most of the country, so if you were to scale up sales of the Leaf to the same geographic territory as Tesla sells to, the sales would be about comparable.
Tesla apparently did proper planning while the big car makers are just trying to produce their usual cars with electric engines.
Ah, proper planning. That certainly explains the billion-dollar line collecting dust, the year-long delay on every model, and their inability to properly deliver finished cars to their customers when promised (i.e., basic logistics). The cars you've mentioned aren't meant to have maximum range at high speeds; they're meant to have X range at commuter speeds while providing a luxurious ride. You'll also have to demonstrate (with cites) that the aerodynamics will cost them 20% of posted range, since those aerodynamics have already been factored into their range as part of the federally-mandated testing.
What are you even talking about? I bought my Model S 2 years ago and waited the same amount of time as for the previous BMW (3 months), which didn't even come from overseas (I'm in Europe).
> The cars you've mentioned aren't meant to have maximum range at high speeds; they're meant to have X range at commuter speeds while providing a luxurious rid
And this is why they are no Tesla competitors for most people - who don't want or can't afford a second car for long distances.
> You'll also have to demonstrate (with cites) that the aerodynamics will cost them 20% of posted range
Lots of people have, it's simple physics. At higher speeds, air resistance causes most of the energy consumption. The results can be calculated easily:
https://www.ecalc.ch/evcalc.php?lang=en
130 Km/h (= 80 mph)
Model S = 22 KWh/100 Km
Mercedes EQC = 30 KWh/100 Km
i-Pace = 28,5 KWh/100 Km
P/E ratios aren’t effective for high-growth or quickly-declining companies. The PEG ratio attempts to compensate for this.
Q2 and Q3 will show that Tesla has pretty much plateaued. Profit growth is even lower
And the iPace owners are absolutely glowing in their reviews of the car in a way I've never heard Tesla owners get. Indeed--while most Tesla owners I know talk their heads off about the charging network[1], they tend to be defensive about the actual quality of the car itself in ways that luxury car buyers shouldn't be.
[1] While Tesla has a geographically large charging network, it's density is pretty horrible. In DTLA for example, you're 9 miles away from the closest Supercharger, and condo/apartment dwellers are SOL for installing their own unless they want to pay excessive fees to have one installed in their parking spot. There are a number of standard EV chargers through the downtown area, and the number of non-Tesla chargers exceeds the number of Tesla-only chargers by a factor of at least 10:1.
Also, I've ridden in all of the Teslas (including the Roadsters, thanks to a former boss who collected cars) and the Model 3, while comfortable enough, is only roughly as comfortable as my Camry and certainly isn't as comfortable as the $65k+ cars other friends drive. IMO, this is Tesla's big problem. Their cars are expensive, but you're paying a lot of money for the brand and while that can get you started, in the auto market you eventually have to start competing based on features like comfort, etc.
It’s more fun to drive than my old Camero SS. It’s more comfortable than my old Infiniti. I absolutely love the interior aesthetic. And I just paid $3,500 to PPF wrap it because I think it’s absolutely gorgeous and I want to keep it looking that way.
Oh, and I paid $45k not $65k, and it saves me at least $100 a month on top of that.
You are blowing smoke with “roughly as comfortable as a Camry”. The ride quality is better than BMW in my opinion, and that’s before throwing in the mental benefits of Autopilot combined with no engine noise making my commute the most peaceful part of my day.
[1] https://electrek.co/2017/12/21/tesla-tsla-tops-customer-sati...
https://www.cheatsheet.com/money-career/the-biggest-problems...
That's sort of the point, the Supercharger network is designed to facilitate long distance travel. So the stations are spread out along highways. The other networks are bunched up in cities. Try using plugshare.com to plan a trip using CCS chargers vs Superchargers. Say San Francisco to Portland, or Denver to Dallas, or LA to New York.
But yes... I expect Toyota to have more affordable TCO, particularly on the maintenance side where Tesla gets ripped often. The will need to adjust to be competitive outside the luxury market.
For example, if every BMW or Audi dealership had some charging spots for owners of their cars, it would probably have more nationwide coverage than Tesla's Supercharger network. The dealerships are also frequently located in convenient places near major highway exits, etc.
Being able to charge at your local shopping center is nice but it's not a necessity for electric car ownership.
Even if people wanted to charge at dealerships, dealerships aren't incentivized to sell electric cars, much less charge them.
The proof is that any Chevy dealer that sells the Bolt should have a public charger already, but I'm guessing few do.
Putting universal chargers at existing gas stations or buying an entire brand and converting to charging makes way more sense.
* Seattle
* Bellevue
* Fife
Or if you go via PDX.
The dealer in the tri cities or Yakima is out of the way and the one in Spokane would add a couple hours of driving time.
There are no dealers on the direct route home for me. Realistically I could only stop at one.
And comparing the Tesla Model 3 to a Chevy Bolt is very similar!
For instance, Tesla is prepared to sell their cars at a loss, to gain market share. Amazon had the same strategy twenty years ago. Sears was never willing to do that, and Chevy wasn't going to do that with the Bolt either.
I like the Bolt - it's a very nice car. But the Model 3 seems to offer so much more for the money.
[0]https://en.wikipedia.org/wiki/Ford_Thunderbird_(eleventh_gen...
There is no rule like that on a growth stock. You don't value growth stock on a P/E ratio, but some measure of future discounted cashflows.
LOL what?
Show me another company with $50B market cap growing at 50% a year on the top line to deliver $2B in profits.
I'll wait.
50% profit growth is delusional at this stage
Q42018: 63,100 Model 3s delivered.
That's a 13% growth rate in a single quarter which is more than 50% growth rate annualized.
https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iqPFhpeWEIS...
Article: https://www.bloomberg.com/graphics/2018-tesla-tracker/
Would you normally argue that a yearly price increase of ~3% on a car portends anything in particular about demand? I guess it implies that they expected demand to fall if the increase had been ~6% instead, but that doesn't seem like anything that would preclude 50% worldwide growth.
Tesla is dropping the sticker price of their vehicles because they think that demand for their cars is at least somewhat elastic with respect to sticker price, and they're in a better position than you or me to have the data and analysis on this. (Tesla has also announced that this is why they're dropping the price so I'm not sure why you're arguing this point?)
Economies of scale are not related to this drop in price. Economies of scale refers to it being cheaper to product an product at scale due to efficiencies in the use of the largely fixed-cost capital expenditures. Companies don't usually drop prices due to EOS until at least a quarter or two after they've reached that point in the production cost cycle, largely to confirm that they've actually reached EOS operationally, and some company's retain the efficiencies from EOS as profit until/unless they need to for competitive market reasons.
Economies of scale allow them to do this.
Every Model 3 they are producing is relatively expensive and already has a buyer. What happens when they get to the end of the list of relatively well off buyers? Certainly there will still be demand, but it will be less profitable.
"Tesla said more than three-quarters of orders for the sedan in the year’s final three months were from new customers, rather than reservation holders. That suggests many consumers are still waiting to buy versions of the vehicle at the long-promised $35,000 sticker price."
they've already run out, did you not see all the tweets about tesla stores being open up until the end of the year and the reduction in price and the extra cars? clearly they've exhausted the areas they're allowed to sell in
It’s not a problem as long as they stay ahead of the curve margin wise. Lots of market demand outside of the US, which is why vehicle manufacturing firehose is pointed at Europe and China now with the US tax credit reduction.
https://www.cnbc.com/2018/11/19/neil-degrasse-tyson-elon-mus...
Straight from Tesla's press release: "we are taking steps to partially absorb the reduction of the federal EV tax credit"
So no, this price reduction is not "in line" with anything in Tesla's past.
In part because there is a lot of money to be made in spreading Tesla hate on the internet these days.
Think short sellers, etc...
It's time to let reality back in and accept that there is no media conspiracy. The big tech companies overreached and now the roosters are coming home to roost after 2 decades of largely unearned fawning media coverage.
Or the media has stopped looking at them through the rose-colored glasses of tech-optimism, and started seeing them as what they are: massive, powerful corporations that are capable of harm and dishonesty in addition to innovation.
Having to face consequences for your actions isn't a conspiracy. People reporting on these realities is not a conspiracy. It's long, long over due.
The price cuts are likely to impact margins, but is in line with what Tesla had done with the Model S and X as production efficiencies allow them to reduce manufacturing costs.
The reaction looks like a big overreaction as the market is apt to do. Seems like there is a lot of Tesla hate on the internet for some odd reason these days.