I have a lot of faith in Tesla and think it will eventually become an awesome company, but there is no way it isn't going to correct. It's valuation is silly right now. And it has a lot of obstacles to pass before it is a success by even Musk standards.

I think you are deluding your self a bit with how good of a stock it is. Great company != great stock necessarily.

I agree with your last sentence though.

Good post, couldn't agree more

Tesla is a luxury status good... an iPhone on wheels basically, for now.

That can be a very profitable business but to justify TSLA's valuation levels, it needs to be much more than a gadget.

That's where Musk's charisma kicks in. If he can convince California to subsidize and install super charging stations all over the state, in addition to boosting battery capacity, TSLA can reach a critical mass and become a mass market luxury sports vehicle brand. The performance characteristics of an electric car really is something car enthusiasts dream about, or would have dreamed about if they could think of it.

I can't emphasize this enough. Battery technology is the bottleneck right now. 265 mile range (that gets worse over time) with a $30,000 battery is very difficult to justify economically. At current rate of improvement in battery technology, we're talking about almost a decade before a pure electric cars can compete with modern gas cars on range and economy. Even then, they'll be competing against gas vehicles much more efficient than the ones sold today.

BMW i3 to start selling November this year. I have to say tesla looks much better.

With that said, there are so many things that have to go right for TSLA to become a successful company. They have to first convince everyone that electric cars are economically viable to the mass market. Next they have to beat out tons of competitors. Aside from the first mover advantage, TSLA doesn't really have any real competitive edge.

Just doubled my short position at 132.49

Jaug how much of your trading portfolio is long TSLA? I'm curious how confident you are in the strength of TSLA.

They aren't doing anything that the many other successful car companies cannot do. I think that if tsla starts to really find a good market for their cars, companies like Nissan or GM will try to get their piece of it.

Put in a sell order at $134.9

I don't agree with that. I've been to technology conferences involving TSLA. Their home grown battery control systems are clearly a generation ahead of all of their competitors. The dominance is akin to INTC's dominance over their competitors.

TSLA also works very closely with Panasonic for battery design to fit with their control systems, including hiring many former Panasonic engineers. Panasonic is pretty much the king of battery technology and design, so it is a very synergistic relationship.

The only company that I've ever seen with an equal understanding of battery control systems and technology is TI, but they are not interested in competing with TSLA. The battery control system technology is an enormous moat to cross for the other competitors, and I don't really see that happening anytime soon.

That is why there is (some) justification for the stock price now. I'm not touching it though.

I've been semi-skeptical on TSLA for a good year now, but I'm just not seeing a good entry point for a short. Would've lost buckets of money if I followed up on my feelings. Shorting is hard and it's hard to get the timing.

Sold for a nice profit. Still think it can run up more but time to take profit.

This is such an absurd statement. I don't understand why people have this feeling that any other car company can do what Tesla does. They have all failed repeatedly at doing so.

Why are GM and Nissan not doing it then? Why are they putting out VASTLY inferior products to Tesla? Because they can't. How is that not an advantage? Because you have been told over and over that you can't have an advantage without a patent?

I typed out a decently long post at Panera and got timed out of their internet.

But to cliff note it:

I think everything you are saying is true, however I don't think any of it is very important in Tesla's valuation or success.

1) It is a luxury good by design right now, and it is working exactly how it is supposed to. Float the company until they can get a large-scale cheap battery to put in cheaper cars.

2) Musk charisma is extremely important, as is any CEOs/salesman of a product, to the future and past success of Tesla I don't think it is masking anything. Maybe you were saying this as a positive, but the tone sounded skeptical. (I don't think that was an overly hard sell to California either based on what other things they have passed)

3) The battery being economical is largely irrelevant right now because of 1 and is the reason that 1 is still true.

On another note, shorting Tesla is absurdly risky and pretty dumb right now IMO, not necessarily because it has no chance of working. But I think there are better places to put your money.

Shorting a stock that people are buying for greed (IF Elon works it out they will make heaps) is silly.

But they don't.


There is a reason why Tesla is selling every car they can produce and the other makers don't.

No point in showing him anything, they don't have a patent on electric cars so they can't have an advantage. At least that is what all the lawyers say.

I agree with those guys, it's a really nice car. I just don't really see how it's the future of cars. I'm sure they will get some competition once they start to see success but at the moment it seems like one of the nicest cars on the market.

For me it feels like Tesla has thought a lot about how they want their cars to be and the other makers havn't. It kind of feels like the when the iPhone was released compared to the old Nokias. And we know what happened there:


Now producing cars doesn't scale that well, or does it?

I don't own any Tesla stocks and the car's not even for sale here. But I can see why people believe that the stock has a lot of potential; because the other carmakers sucks so much that there is a potential for a disruptive change in the market, and Tesla is a strong candidate.

boought some tsla aug 150 calls for 3.05 this morning. consensus is around 4900 cars shipped which is too low

This statement is confusing.

You think they shipped more than 4900 cars? Or did you actually buy puts?

He thinks the consensus is too low and the actual number will be higher

GM and Nissan are putting out 20-40k sedans, not 80-100k sedans, I should hope TSLA is better.

I think implied revenue is much higher than the streets estimate. Simply because of the >100% share price increase since last Q-report.

analysts change their estimates duirng the quarter. I read a report yesterday calling for 4700

http://www.slate.com/blogs/future_te...an_suv_on.html

I agree with this article. It's not just about the powertrain, it's about so much more that Tesla is doing right that BMW isn't. Sure half the price, but the door handles, the huge screen, the backward seats, the (lack of) key, the software updates, the network etc.

I really wish Tesla success for challenging the norms. It will be hard for them to scale manufacturing, but hopefully Musk can figure something out.

I actually agree with everything you're saying except I must attach the modifier "short term" to valuation or success.

Tesla's current valuations are simply non-sense unless they can get the infrastructure into place and become first movers in a "mass market" of, most likely, luxury sports cars. And the infrastructure has to go into place fast. At current snail's pace, BMW/Jag/Mercedes will all have their own all electric vehicles ready to compete in the "mass market", and those guys got literally decades more experience and data on what luxury consumers want.

lol inaneaments
so is mclaren...doesnt mean its scaleable for long term profitability.