Why do people think Apple would ever be successful at making a car?

I don't doubt they have a project, but wow lol long odds for them to catch up and pass anyone.

http://www.marketwatch.com/story/elo...ard-2015-10-09

Musk has been talking about Apple Car Lately.

“Important engineers? They have hired people we’ve fired. We always jokingly call Apple the ‘Tesla Graveyard.’ If you don’t make it at Tesla, you go work at Apple. I’m not kidding.”

Musk tsk-tsk’d away at those electric car ambitions from Apple, saying it’s a complex thing, not like a smartphone. “You can’t just go to a supplier like Foxconn and say: ‘Build me a car,’” he said.

Who is Musk taking seriously? China. The Tesla chief said there are four electric-car start-ups funded from China just in the U.S., and they’re at the “billion-dollar level.”

Fits straight into TS's model; he's using his PR skills to reframe.

Ok, I get that...so the Tesla story is really about getting ready for a day of reckoning a few years off; and they have too many demerits and not nearly enough gold stars to make it. Will be an interesting story to follow, good luck with continued success on TSLA.

In any case, it's nice that cars are getting their first major-version upgrade in 150 years.

That's definitely the way Vance profiles him; Musk's acquired tolerance for endless stress is pretty much the main theme.

And I doubt he's Aspergers, but definitely quite unusual---for example, apparently he proposed to his current wife on their second date, apologized for not having a ring, and offered to shake on it.

TLSA down ~11% for the week.

Flat for the year

http://data.cnbc.com/quotes/TSLA

Keep moving the Cheese

Apple poaching is clearly hurting him, or he wouldn't said that in such a frustrated and snarky way. What kind of CEO disses ex-employees like that?

There's a lot of speculation that the Model X ran very late partly because of losing some key staff to Apple. I'd say Musk deeply frustrated comments make that as good as confirmed.

His comments are also completely nonsensical. It's actually good for EVs worldwide if Apple gets in on the game in a big way (drives recognition, supply chain improvement, battery investment). Any of his engineers would be well aware of this, so the claim that engineers are in it for the love and staying with Tesla to keep promoting EVs and saving the world therefore makes zero sense.

TS, read the original interview I linked earlier, if you havent already.

He sounds pissed off throughout and he said that it's good that Apple gets into the game IIRC. But he gets snarky when the interviewer asks him about the price. I think he was in general pissed off and it is the only interview where he talks about the issue so I would take it with a grain of salt.

Here is the original interview for everyone interested (seems like it's premium now).

Maybe I'm reading too much into it. But rumors are everywhere with well-placed sources (Apple Insider, people on Twitter) that Apple poaching has really been hurting Tesla's programs. And if Apple are tripling their staff as reported and going live with a major car effort, that's only going to intensify.

Anyway, after all these rumors we have Musk in February confirm that Apple are offering a $250,000 signing bonus and a 60% pay rise to Tesla employees. 6 months later, Musk is claiming that the only people who've left are the staff who have been fired. Do you believe this to be a true statement?

And then we have the Model X very (very) late, and still not rolling off yet in volume. And now we have these weirdly snarky and unprofessional comments about former staff (the likes of which I haven't seen ever from a CEO of a major company, or Musk).

I mean, if it quacks like a duck...?

highstakesfan -

Playa please, we all know that PayPal, Tesla, SolarCity, and SpaceX itself have been nothing but posturing to set up a play in the satellite internet space.

I haven't watched it but how old is the video (not the upload date but the actual interview date)?

TSLA IPOed 6-29-2010. The initial price was $14-$16 and ended the first day at $23.89 the initial shares outstanding were 13.3 million. About $300 million generated. After the IPO investors continued to flock into TSLA, probably mainly because they liked Musk and wanted to help build the best electric cars and fueling stations. TSLA did all that but they screwed up the IPO, or the IPO methodology is screwed. After the IPO, people still wanted to buy into TESLA, but when the public buys existing shares on the open market all you are doing is increasing the value of the existing shareholders.

Since the IPO they issued more shares and generated another $1.1 billion in cash. Total shares outstanding stand at 126.7 million at a present price of price of $220 with a high of about $270. The marketcap is $28.5 billion with a top marketcap near $35 billion.

Suppose TSLA issued shares preventing the stock from rising too fast. TSLA could have about $20 billion in cash right now and still leave a nice return for early adopters. A good money manager could earn 15% on the cash or the could be generating $3 billion a year for further expansion. They might even get into lithium mining and recycling to lower cost even more.

To me Musk and TSLA have done an outstanding job with the TSLA. But they screwed up completely in money management. Today they have $2 billion in debt and $1 billion in cash. They should have no debt and $20 billion in cash and generating $3 billion a year in profits off that cash.

How?

Tesla puts obviously.

Tesla technology lead is small, basically a 2 year lead in battery density. That lead will likely persist for no other reason than they are focused on it while others are not.

But that lead sadly doesn't translate to a significant competitive advantage. It's roughly 10~15% higher battery density, significant, but nothing that can't be fixed by slapping on, well, 15% more battery.

A more significant, perhaps more useful measure, $/kWh storage, has also evened out. Most estimates already have Nissan producing battery packs at comparable if not lower costs than Tesla in terms of $/kWh, demonstrating it's really only a matter of scale to catch up to Tesla in that department. Incidentally, LG, as someone else pointed out earlier with regards to PowerWall, seems to have managed to surpass Tesla in this area.

As for car design, well, I think the advantage in that department goes to BMW/Mercedes/Porsche. Model S is a beast but frankly the interior feels cheap. 2018 is when the EV war will truly begin.

But I think Tesla will be in a good position to compete. They have established themselves as a forward looking all electric sports car company. That will make them the first choice for big chunk of the likely market.

All of this might be true (or might not be), fact of the matter is that Tesla is ahead of competition. All your points were probably brought up about the iPhone at some point and yet Apple still reeks in a large junk of all the profits in the smartphone market.

All the companies you've mentioned are in the mass production market, that leaves very little room to push technological advancement. And none of the companies you've mentioned (the car companies maybe but they are the farthest away from Tesla in that space) sell a lifestyle.

If people were being asked to name a battery car company, what do you think would be the first one that pops into their head?

grizy,

I have to disagree. From what I see on the battery technology front Tesla's technology lead is virtually nonexistent. Besides the other car companies and tech companies like Apple, there are auto suppliers that are working on battery technology as well. Here is an article from the UK Telegraph about a new battery development from Bosch:
Bosch invents new electric car battery to double mileage.

Here is the press release from Bosch with contact information, if you want to know more about it:
Bosch Press Release about solid state batteries.


I really have doubts about that. With Apple poaching talent and other companies in the future looking to potentially poach talent from Tesla, I view Tesla's position as very precarious. While Elon Musk does have great vision as a CEO, I don't see Tesla doing very well in the future. I would argue the odds are far more against Tesla succeeding than what many people in this thread think right now.

They are so far away from mass production and it's probably not the first time a battery technology worked in small quantities but failed to be mass produced.

I mean it's laughable I remembered that they were far away from mass production but by their own accounts they say they are at least 5 years away.

Find and hire a real money manager. I might get on this short bandwagon, for no other reason the stock is overvalued and the stock is dropping to fundamentals.

I was thinking about this today and the Tesla debate basically falls into 2 camps. Technologists and people who invest in technology are convinced that Tesla is a great company and their cars are the future. People viewing Tesla through a traditional discounted cash flow analysis lens are convinced it's overvalued.

Short term, I think Toothsayer is right and long term I'm with the technologists and the people who make really big bets on technology for a living. The Graham's, Altmans, Benedict Evans, Larry Pages and Marc Andreesens of the world - the guys who understand great product + startup dynamics. Those saying there's no moat have got to be kidding...there is a lot of technology here and a lot of tough engineering problems solved. It's not just about dollar per kW/h it's about that + max output power, which batteries from other manufacturers lack. Also not sure where economies of scale for other manufacturers will come from.

In September 2005, eBay acquired Skype for $2.6 billion.[20] In September 2009,[21] Silver Lake, Andreessen Horowitz, and the Canada Pension Plan Investment Board announced the acquisition of 65% of Skype for $1.9 billion from eBay, valuing the business at $2.75 billion. Skype was later acquired by Microsoft in May 2011 for $8.5 billion. Microsoft's Skype division headquarters are in Luxembourg, but most of the development team and 44% of the overall employees of the division are still situated in Tallinn and Tartu, Estonia.[22][23][24] wikipedia.

http://www.bloomberg.com/news/videos...porate-america

Icahns story checked out, Ebay lost $4 billion as result of Andreessen. Silver Lake and Dell often ring together.

SPY up 4%, Tesla down 20%. You really nailed that one.

I'm right on this trade because I'm smarter than you. I follow this stock closely and I'm very often on the money. Front month puts returned 700% as of open today from when I posted.

Seeing when the writing is on the wall in multiple ways and betting on it before other people realize it is how you make money.

Tesla is an very stupid long from both metrics. Equally. It's the "technologists" who realize how easy car battery engineering is (and conversely, how difficult non-battery large volume car production is), how small Tesla's moat is, why their gigafactory doesn't matter, how inferior they are at low-cost car engineering, etc.

These guys bet on anything with a pulse that they can IPO or that has a tiny chance of making it. Most of what these guys bet on fails. That's fine as a spread-shot technology strategy when you're going for elusive hundred baggers (and the huge synergies that come with having your hand in all pies - networking, inside knowledge, etc), but for an individual investor it means that Tesla as a play is very likely to lose your money.

You're acting like there aren't millions of engineers in the world who solve tougher problems than Tesla's every day.

Tesla has done a complex engineering effort on cheap, oversupplied not-ready batteries in order to deal with the issues that arise out of cheap, oversupplied not-ready batteries.

The future is going to be very different. Have a look at the Porsche Mission E to get a feel for how absurd it is to say that Tesla has a moat.

Why hasn't this been built before? Because batteries weren't quite ready, and there was no point flushing billions down the toilet doing stop-gap engineering when you only had to wait a few years for the battery technology to be viable for profitable scale production (note: even by Tesla's own claims they won't achieve this before 2020 either. Why?).

This Tesla moat is illusory. Battery chemistry will be determined by the vast hordes of dedicated researchers in the large battery makers who blow through billions improving this stuff. Tesla's current duct tape engineering will matter not at all as new batteries designs and far lower cost per kWh wipe out any advantages of those designs.

Look at the Model E design. 800V for 15 minute charging. A different voltage and architecture will work just fine. You think Porsche or the other car makers can't pull this off, easily? lol.
From building factories? Economies of scale are not an issue; the battery market is enormous and factories are very easy and quick to build if you have enough capital (which Tesla doesn't, but the battery companies, Foxconn and the Chinese generally certainly do). A battery supply advantage is total nonsense; there is and will be no shortage.

I love a lot of what these folks put out, but Evans and Altman have been in their roles about 12 months I'd suggest pumping the breaks before putting them in the same category as those other 3.

Obviously they've earned the seal of approval from Andreessen and Graham respectively, but that's an unfair burden to put on those 2 right now; comparing them against 2 mega-billionaires and the co-founder of arguably the most successful investment firm in history.

We are still well under the highs made on the S&P a few months ago and still below the 200 day moving average. I guess that's bullish to you?