Ok, let's look at this from the various angles you've presented.

Comparison to Ford:
Let's not waste time here. The auto industry in the US was bailed out. Ford was lucky enough to not directly get saved by the government but a lot of their suppliers were. Which in turn saved Ford.
Ford does only ~2.5x as much revenue per employee as Tesla does. Tesla is a small, not yet established company, Ford is as large as they could possibly be. This makes a huge difference for the future outlook. You are always big on the supply chain the established car companies has but look at the fact that it's maintained by 186'000 people. If you don't see how ****ing expensive it is to get rid of that many people, I can't ever convince you to see the light.

Ford business model:
Ford is in a heavy competition with every car manufacturer in the world. They are producing ICE cars which are on the way out. You must have a positive outlook on oil if even Saudi Arabia plans to get independent of it. What is the upside case for any of those companies? And if you have a look at the Volkswagen case then you know that all of them are walking a thin line between bankruptcy and glory. To be fair on Ford, they've already managed to stay out of trouble when the US government went ahead and saved the auto industry. They could claim that they didnt depend on it. In reality it's like Goldman saying they didn't need the government in 2008.

I just had a look at Ford Germany and they are employing 28'000 people. Given European labour laws, you cannot get rid of those people unless you would need to pay a significant amount of money to get rid of them. Ford generates $22bn revenues in Germany, if we take the cost structure of the company, 95% of those revenues are costs. So in order to change their business model and taking into account that it takes optimistically a year to get rid of the operation/transform the operation, we are looking at a loss of roughly $8-10bn. This is only Germany and will be the case everywhere where Ford produces with the exception of the US where labour laws allow more flexibility.


Tesla's business model:
Tesla is miles ahead of everyone in the autonomous driving space that currently exists. They are collecting data every day that no other car company has available to them. They are the sexiest and most sought after employer in the space. They have a CEO that has a long term view and strategy as well as the PR around him that helps him raise money at favorable terms.
They have 2 cars in production and already raised pre orders worth north of $10bn. This is unseen in the business. They are also competing in the electric car market. The market is so vastly different than the regular ICE market, you shouldn't compare them. The second the electric car market becomes the flavour of the month, your favorite Ford will not be able to scale up. The assembly line of a typical Ford car cannot even compare to the assembly line of a Tesla's model 3 (obvious from the difference in build of an ICE car vs an electric car).
Tesla also has technology that no other car company has. They are offering updates via an internet connection, the simple concept of it makes a large part of the overhead from a regular car company redundant (service centers mostly). An electric car has a lot less maintenance requirements compared to a regular car, so of those 186'000 employees that Ford currently has, a significant portion cannot be used in an adapted business model.

Trading:
I don't care about your trading terms. Pricing in optimism is amongst the dumbest senctences someone could use. Markets have priced in a lot of future innovation into the Tesla stock. I am certain they will deliver that innovation. But if you honestly compare Ford to Tesla based on the status quo, you will be burned.


I've answered your questions now in length. I would like to know your reply to the following questions:
- Apple's talent poaching, what has been the impact?
- Autopilot: Number of people dead due to it
- The market knowing what's up (referring to the comment you made end of last year/beginning of this year after TSLA tanked)
- Tesla's autonomous driving being worse than the competition while everyone who's independent disagreeing

Thanks

Spurious,

You seem very high on TSLA. How much more cash do they need to raise before they can hope to become self-sufficient based on Musk's absurdly optimistic ramblings? 5b-10b? Given their past history of delivery/production ineptitude, how much more cash would they need based on a more realistic estimate?

They have done great work. But the company is burning through cash, and using the most obscure accounting tricks to hide the fundamental problem that the business is just lighting obscene amounts of money on fire.

Also, Baidu is probably the top landing spot atm. (Weirdly TS doesn't think that Google losing Ng to head up Baidu was a big deal, when in reality Google has had by far the most brain drain of any company attempting SDC.)

Mikel,

I think that they need more than you're higher range. I think Tesla needs to sell more than a million cars a year in order to be at a point where they can just sell cars and not be worried about going busto.

If we assume that the Gigafactory supports 500'000 cars per year at full capacity and it costs $5bn, we would need a few years to get to the point where the Gigafactories would actually be at full capacity and be efficient. So I'm basing my cash projections of this, which is very simple but I assume we are looking at 3-4 Gigafactories i.e. $10-15bn in cash until they are self sufficient.

But at the end of the day I'm bullish on the innovation that Tesla has brought to the market. My assumptions are finger in the air but I have not met anyone who could present an argument that convinced me otherwise.

Considering a TSLA investment, but I am concerned about the -$6.90 earnings per share.

How will they possibly recoup that much?

Spur,

Ya, I think a lot of TSLA bulls just ignore the fact that they need a large amount of money under the best scenario. (It is dubious that there is even enough mining going on in 2-5 years to support the levels of gigafactory production that TSLA would need.) And an incredibly large amount under other scenarios. Kinda like how TSLA h8ters ignore the fact their cars are awesome and apparently have cool SDC innovations that make them a market leader in this space.

I'm pretty middle of the road on TSLA now that they have great SDC technology.

You guys are aware that valuations right now are ridiculous right? Case Shiller P/E is about 26, historical mean is about 16. When we actually go into a bear market (which is inevitable, this is one of the longest bull markets ever) stocks like TSLA will be cut in half in a matter of days/weeks.

There's no need for me to write out a thesis for anybody, it's pretty obvious where we are at right now in the market. If you can't see it, I hope you figure it out sooner than later.

I would never invest in anything up here besides gold / maybe few other commodities. Once Case Shiller P/E is at/below average (like it was in 2009) and valuations actually make sense again, then it's time to invest IMO. If anybody in here would actually want to invest in TSLA at these levels, I would be worried.

Anyways, I'm saying I am most likely going to buy a couple put spreads into TSLA's ER. So I'm thinking more short term like 6-12 months. 10 years from now could TSLA be higher than here, of course but I think there will be a much better entry than here for a long term investment.

I actually would like to invest in TSLA once it comes back down into the low 100's/below 100. But if you are investing in TSLA up here, I think you should be more aware of where the overall market is at in it's cycle and where valuations are....

Wealth, you sound like a someone who just started learning about investing. We know what TSLA's valuations are, so does everyone else of consequence who has money in the stock. We know what Shiller PE is. This thread is for news on TSLA and theses that incorporate some sort noteworthy thinking regarding the stock. Your take that TSLA is really overvalued and that you'd only be long gold right now contributes nothing. Come back when you have something insightful to say.

(Note: I am not long TSLA either.)

lol, yup just started today. your post was really insightful as well, glad you came in. Most of my insights are based on technical analysis and when investing I think both fundamental and technical analysis should be used. You don't buy things near the top.

If you don't think what I posted is valuable, I apologize. I'm trying to warn people that you don't invest for the long term with valuations on the S&P where they are. (From being in the institutional equity sales & trading business, I learned most PM's care the most about historical PE's as well). Obviously my opinion but I'm trying to help. Not here to argue or to win a debate. I have my opinion, other people have theirs. I think TSLA would be a terrible investment given where the market is and it's current valuation. But I think anything is a terrible investment here given where the market is. Also as previously stated, I'm not the only person with this opinion (30% of float is short which is abnormally high).

If there was only 1 thing I could use to time an investment (at least 3 year time horizon) it would be case shiller p/e. Invest when that is below historical mean. gl buddy.

Also, if you know what shiller p/e is, I hope you would agree now is not the time to be investing in anything. If you disagree fine, like I said I'm not here to argue or try to convince you who's right. I'm here to state my opinion and see what other's are thinking. Obviously, I'm not always right and nobody is. This is my investing opinion. Trading is completely different, I feel like people intermingle the two on here too often. They are completely different animals and I think investing accounts should be kept completely separate from trading accounts. bol, no need for me to check this thread again for another couple months. will be opening a couple debit put spreads on TSLA next week into their ER. gl

You are using P/E to invest in growth stocks?

You would have never bought Intel, Microsoft, Apple or any other technology company doing that.

Tesla itself has no P/E ratio, so the discussion should be about companies with negative earnings that have been in a similar situation. The situation being having an amazing product, but yet to gain a profit.

Yeah, the valuations are very high. Valued more than BMW who sold 2M+ premium cars at ~10% profit. But the future is looking pretty bright for Tesla and a bit uncertain for BMW, so it's hard to tell if the price is too high, just right or too low imo. Fwiw, I recently sold all my TSLA which was quite a lot I bought over quite a long time. Still believe in the company, but now it seems that the market shares my estimation and then I don't want to own the stock. And we will see what Apple, Google, Baidu, Uber etc have up their sleeves.

Also worth noting, it seems that quite a few European countries will have new tax rules making Model 3 very cheap compared to alternatives. By the time I will get mine (hopefully in 2018) my government will likely give me $8k tax incentives, and equivalent gasoline cars will have to pay $500-1k/year extra in taxes. So not only will it be a very sweet car which low fuel costs, it will likely also be cheaper to buy.

Germany just a few days ago announced a 4'000€ government credit for electric cars but that goes for hybrids as well (Porsche Panamera S E-Hybrid for example).

Anyone who listened, I'd cover here at $234 for an easy 9%.

Market is down a bit from recent highs, and earnings tomorrow is a big wildcard with negativity already announced (majorly missed deliveries). Tomorrow provides is a decent chance to talk up lots of things, including preorder numbers, fantasy far-future "expanded" production plans to meet those preorders, and whatever unviable-but-exciting new product or angle Musk dreams up.

I'm averse to risk, so this is a clear "cover and reshort", IMO.

What a terrible exit

How could you not know Chanos was gonna come on CNBC and reveal he's short.

J/K Nice trade

Key excs leaving as well

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These are going to be spun as Model X failure "fall guys" no doubt, but yeah, a bunch of talent has left Tesla. Never ever a good sign to lose that much talent. Interesting to see more and more go. Chanos was scathing about how much talent is leaving. Some are going to Apple no doubt. Actually, it happened again a couple of weeks ago:

As usual, the Musk fans who disagree with me are delusional. Having high and low level talent poached is a big deal. It disrupts schedules and teams, it slows down production, it transfers technology and know-how, it introduces mistakes, it hurts morale.

For a behind-schedule, money-bleeding, PR heavy firm like Tesla, who have huge competitive disadvantages vs established players, such things can make the difference between just making it and going belly up.

Utterly desperate stock pumping from Musk now. He moved up 500K cars production/year to 2018 instead of 2020. I wonder if he'll be believed.

Noticed Model S sales are way down.

http://insideevs.com/monthly-plug-in-sales-scorecard/

Completely irrelevant what TSLA does or does not do in 2018 imo. I doubt it influences the stock.

They had known problems in Jan and Feb with their production line. March was the best month ever so not sure what way down means in that regard. The way down comment makes it sound like demand has fallen off which it doesnt seem to have.
Or are you referring to April? Must admit that I dont know what happened there.

I guess this is what happened, so not demand that fell off but the same production issues came back:

agree, he is going to raise guidance anyway in 2018, even if they'll deliever just 200k cars in that year, he'll tell that they'll deliever 1m in 2022 and stock will be at least at $600 after the last report of 2018....

I think we're at the point Musk almost has to overpromise lest he leads Wall Street to believe Tesla is slowing down.

Tesla is very very close, if not already, at the point where parts suppliers are going to build factories/production lines and designate dedicated design teams just to service Tesla. If Elon Musk plays his cards right and hires the right logistics guys, he's going to have more control over supply and ability to deliver on schedule than in the past few years.

Covered TSLA @ 213.92

Dont know where you went short but pretty bad spot to cover. Market seems to finally understand Musk can't deliver.

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Looks like he wasn't. Cramer basically calling it fraudulent. The entire gallery is calling it absurd, even diehard Musk fans. Even his fanboys (except Spurious) realize that he's flat out shamelessly lying at this point.

Reports that he's sleeping in the factory overnight as well.

Tesla tanking in response today.

I think it's really hard to say whether the 500K 2018 target will be viewed as a positive. It wasn't today, obviously, and certainly a number of people today finally realized he is a fraud. But between the algos and the fans and the high short%, does it matter?

Once the dust settles, might people see this as an exaggeration/ambitious target, and cheer the attempted speed-up in volume production? Curious how bad you think this is and how low it will go. If you ignore the bluster and desperation, an attempted speed up in production is probably good for the bull case if you believe the Tesla story.

Short term the market isn't buying the 500k number as even remotely doable and your seeing that today going green to red at the open. Just think about it they're already behind schedule on production of the Model X but at the same time he comes out and says were gonna get to 500k two years earlier. Why not just come out and reaffirme their goal of 500k by 2020? Because its classic Musk always over promising and under delivering.

I'm biased though went short at $223 today.