Given the fact that you've been on the record ITT with at least 10 completely wrong estimations, why do you think Musk's overpromises are so bad? You can take your own example and see how difficult it is to predict the future.

Imo if Tesla can sell 10k cars/week in 2018 or in 2020 they have succeeded very very well. The big question is can they deliver 20/50k cars/week before 2030 and if they can maintain 25/10% margins even while doing this. The 2020 is well on track for this.

Like I said earlier I sold my position on TSLA around 250. I might consider re-entering the stock soon again, imo the last meeting was positive information for me, but the stock reacted very negatively. That makes me interested!

Isn't the current production of batteries globally only ~500k Model 3 sized packs per year? Add to this the issues with his Battery Pack/Wall consumption and I can't imagine a scenario where this doesn't become a major issue in the pursuit of scale. (Are there even enough mining resources to support the levels of scale mentioned?)

Short answer is yes.

Substitutes are already developed for the "rare" parts and there is no shortage of main ingredients such as lithium and nickel.

R&D needs to happen to adopt the substitutes over time but that's happening anyway.

What am I missing about these tax credits? Doesn't electric come mostly from coal, which is worse for the environment than gasoline?

Cool. I wasn't aware of the specifics. Simply that they remarked that the global supply of lithium ion batteries is like ~500k batteries so extrapolating to 10x the global production in 5 years seems kinda like a big deal! (Assuming there are no other players in the space and lower margin uses don't cannibalize supply.)

Seems like this is assumed to be a foregone conclusion while I'm still skeptical of this as an exogenous risk that obv affects every EV company. (This is due to a lack of access to information about the subject. So if you have anything you can share, pls do.)

Depends where you live. But it can range from way better than gas (renewable/nuclear) to way worse (coal).

The credits are ???

Politics IMO.

According to the wait but why blog, which is usually pretty accurate with his facts, an electric car using 100% coal produced electricity has CO2 emissions equivalent to a 30mpg gas car. with the power mix in new york the electric car is equal to a gas car getting 112 miles per gallon for CO2 emissions.

I don't think there is any situation where an electric car is "way worse" than a gas car as far as CO2 emissions. Its just a question of whether it is similar or way better.

https://www.eia.gov/tools/faqs/faq.cfm?id=427&t=3
In Europe it is generally a bit better:


I would assume that Tesla buyers generally are a bit more energy source aware than the average electricity consumer.

Id worry about investing big in a high flyer like TSLA which relies so much on govt subsidies to survive.


ELON MUSK is a con man. He just has govt approval to milk people. Unlike Mr. Madoff who went rogue.................lol.

If you think TSLA's market cap has been magicked into existence by Elon getting in bed with politicians, shouldn't you probably be long TSLA?

He has a lot more leverage now that his companies employ like 30k people, and there's only going to be increasing political support for things like alternative energy, sustainable transport, etc.

Plus you can't discount that NASA has basically gotten married to SpaceX; and it seems at least one US senator makes it a personal priority to undermine SpaceX's competitors for military contracts.

All this stuff is self-reinforcing, with more power comes greater access to power, etc.

Really, it seems to me that the directional correlation between people's (1) judgment of Elon and (2) outlook on TSLA, is completely backwards.

If you think Elon is a visionary leader who's got this far by building companies with superior technology, you should be pretty worried by the incredibly formidable competition that's stayed on the sidelines til now.

On the other hand, if you think Elon is just the absolute GOAT crony capitalist, you don't need to worry about the competition (sort of by definition of crony capitalism), and should expect that the positive feedback loops around Elon's celebrity, power, and access give TSLA a rosy future.

But in reality, the correlation is reversed: TSLA bulls consider Elon a visionary; TSLA bears think he's a crook.

He's both a visionary and a fraud/pathological liar/nutter. The two sides aren't mutually exclusive. Only the Musk nuthuggers think it's either/or.

Regarding SpaceX and NASA, I agree that Musk is unlikely to be allowed to fail. He's in bed with the right people. Like Trump, he's a genius at PR, self promotion, crony capitalism, and making deals.

Regarding whether he's a liar: What percentage of your net worth would you bet, getting 2:1 in your favor, that Tesla delivers 500,000 cars in 2018? That's an open question to anyone who thinks Musk isn't committing blatant securities fraud.

Imo Elons biggest strength are:
Great engineer
Insane workaholic
Very good memory
Good at understanding complex problems fast
Willingness to push other people very hard
Startup "fail often fail fast"-mentality
Willingess to take big risks
Inspiring personality

Imo it will be very hard for other car manufacturers to match his leadership. Most of the other companies are lead by economists or managers, not by a geeky workaholic.

I'd agree with all the above except the last paragraph.

Cars aren't software, though. They have a real, physical presence, requires massive global supply chains numbering in the thousands, tens to hundreds of billion in deployed capital for economies of scales, etc. And they form a vast, sophisticated, cutthroat global industry pulling in $1.3 trillion a year in revenue.

Musk isn't doing anything new except chucking a big battery in the bottom. The idea that others won't do this at scale, and cheaper and better than Musk, once it starts becoming profitable to do so, is just farcical. The top of Musk's cars are inferior to others even at much lower price points; it's really the performance battery and the pure EV ride that results from that which sets Tesla apart, and that's not Tesla - that's a performance battery.

The only real shot Musk has got at not ending up in the dustbin of history is creating some iPhone level unique consumer appeal. Perhaps he'll succeed. The trouble is, $30,000 cars (a year's wages) aren't $600 iPhones (a week's wages); to create such ultra appealing features simply costs too much money to compete in the cutthroat sub $30K (let alone sub $20K) car market.

However you slice it, Tesla being past its current valuation in 10 years is really unlikely.

No more than 0%. If there was a 1 in 3 chance of success, we can only assume 2018 would have been the original timeline!

Anyways, after seeing the Model 3 reservations, I find it hard to believe the incumbents will stay out of the EV game much longer. Sure, Tesla loses money; but on the scale of the auto industry, it's not that much. (When I checked earlier in this thread, the entire company was being run on less than GM's advertising budget.)

So even if a serious EV program hurts the bottom line for a few years, wouldn't it be worth it to establish brand leadership?

I mean, eventually, it has to become a bad idea to keep spotting points to Tesla. When a company that doesn't advertise gets 400,000 people to send them $1k for the option to buy a future product a little sooner, that's pretty significant.

I think a lot of the difference is generational. Hard to believe anybody gets to the top of a major car company without being a workaholic.

But Elon is a prototypical Gen X'er---pragmatic to the point of ruthlessness. Googling indicates all the competition have Boom CEOs, a generation besot with reactionary idealists.

So if TSLA has a current market cap of $29B, what market cap do we expect it to have in the future?

They stay out of the EV game because there's zero reason to get in on it. It's that simple. Once the price and range and weight of batteries are such that EVs are a better proposition ICE (or getting close), you'll see an explosion of mainstream EV offerings.

To put Tesla's cash burn in perspective, Ford, less than 2x the cost of TSLA, makes 5 million cars/year for a profit of $7 billion/year. Tesla makes 0.06 (not a typo) million cars/year for a loss of $2 billion/year (the headline number is $1 billion/year, but unlike the rest of the auto industry, they don't properly include capex - which is ongoing and unavoidable - in their numbers).

Why on Earth would Ford burn 1/3 of their cash to add 1% to their car volume at a massive loss? It makes zero sense. There's no competitive advantage to be gained from getting in EVs now. An EV is a battery + an electric motor - not exactly rocket science - and the rest is as normal.

For research reasons? No. There are a number of cutting edge performance electric race cars that the majors have that keep them at the forefront of the tech, so there's no advantage there.

So they're ready to mainstream EVs? No. The majors also have various lower-cost consumer EV cars that keeps them in that space, research and best practice wise.

For battery technology? No. Battery tech will be decided by the giants such as LG or AESC that pour in billions in capital.

There's nothing to be gained from burning billions to produce a few more EVs.
Brand leadership is nonsense in the EV business (in fact the car business as a whole). Once EVs are superior to ICE cars (think TSLA bottom of car + performance, long enough range), people are going to choose cars for the reason they always have - price, interior quality, seats, extras, reliability, local dealerships, etc. A car is not an iPhone, because of its price point.

Why does it have to be a bad idea? Cars aren't iPhones, and Musk is no Jobs or Ives (Musk would have been fired from Apple if he produced the equivalent of the horrendously stupid gull wing doors on an iPhone).

The interest at this stage is about price, mostly. If BMW was selling $50K cars for under $30K with a tax credit, and taking $1000 refundable reservations, you'd see hundreds of thousands of reservations as well.

People are signing up for Model 3 because they're getting a $50K car for $30K. It's that simple. And I'm one of the people who didn't think it was ridiculous that they'd get 300K reservations in the first week.

The thing with cars is, quality costs money. If you want performance, and everything needed to handle that, it costs money. If you want nice paint, large wheels, good trim, a glass roof, a big iPad-like center console (like the Model 3 shown), you can't do it for $30K, let alone $20K. In fact, the Model 3 shown was a $50K car - and that's not even counting build cost. $30K gets you a cut-price set of standard options which simply doesn't create excitement or brand love. The iPhone of cars is a BMW C or E series, and Tesla (or anyone) is incapable of creating it at that price point. If you want to crack the $30K mark where volume comes in, you're left with a very stock standard boring car with few trimmings.

Tesla can certainty differentiate on brand at the high end, and they have vs other luxury cars, because 100K rich first adopters for the first of its kind performance electric is not that hard a thing to find.

At the low end, what do they have?

Even Europe has realized that sustainable green energy is a hoax. AND these are full 100% socialists. Green movement is just another re-distribution scam.

Take money from wealthy and give to warlords in dark skinned countries.



Any one notice solar companies going bankrupt, starting w Solyndra a few yearsback.

As for TSLA, who knows ? could go up . down, stay the same.

ToothSayer -

Nice response; a better response than my post deserved, as I wasn't very clear.

By "establish brand leadership" I was really thinking of say, Ford burning that $2B to just put Tesla out of business here and now. (Several years ago would have been an even cheaper and cleaner proposition, of course.)

In the process, Ford would also get tangible ROI on the R&D needed to outdo Tesla's software-centric design and OTA updates/data mining.

But the longer that Tesla is unique, the longer Wall Street will (apparently) keep gifting Elon the capital to keep building brand mystique, customer relationships, battery factories, superchargers, and ever more R&D and manufacturing momentum. (Which comes with the risk that one of Elon's moonshots---say, the incremental self-driving strategy or the Gigafactory scale advantage---lands, and does massive damage to Ford long-term.)

So perhaps the "eventual" mistake has already been made, but I think it's far from obvious that protecting margins today is better than killing a dangerous competitor that will be around tomorrow...and the day after...and the day after...

Edit - the 400k deposits matter because of e.g. this Prenzler survey that 92% of Telsa owners expect to buy/lease another Tesla. Unless you are really confident that Tesla is going under due to structural factors, letting them expand that kind of relationship to another few hundred thousand car buyers is a really bad mistake.

They have alternative costs and they have factories set up to produce one type of cars. But this is a risky long term strategy given the history of other disruptions.

Imo EVs seem like a very good consumer choice already, that's why I preordered a Model 3. So the explosion has already started to happen which the preorder numbers seem to indicate. Tesla seem to be dominant on the investment for battery factories and supercharging networks, imo if the explosion will happen 2017-2020 starting these investments not in 2017 but 2015 was probably a good idea.

To avoid disruption you need to invest heavily.

Imo this is the biggest misunderstanding. Some people think that a Tesla Model S is just a Mercedes S-class with a different engine. Imo most customers of the Model S seems to disagree a lot. With the different engineering constraints of the two types of engines comes a lot of different engineering solutions. The other car manufacturers will likely try to copy some of these, but their organisations have formed around other solutions, so they will need very strong leadership to just scrap these previous work. And while they try to catch up Tesla will keep improving.

Tesla might soon be one of the biggest players in Li-Ion-battery production.



It seems that people are willing to pay some extra for the core values and the image of the companies.

I was very impressed by the $35k car offered. I assume many buyers will think the screen, acceleration, autopilot safety etc be more exciting than competitors at the same price.

T The Model 3.

Is Ford v Tesla in any way comparable to Intel v other mobile chipmakers 10 years ago?

I don't see how an EV car is a viable choice for most consumers. In fact, it is completely useless for the vast majority of people.

https://www.youtube.com/watch?v=rpkoCZ4vBSI

They don't need to appeal to everyone for TSLA to make a large profit. And at least they were appealing to 400k buyers and some 100k owners already and the number seems to be increasing. With more owners comes more supercharges and more other charging stations making the cars appealing to a larger group of consumering, increasing the number of charging stations etc etc.

I would be surprised if EV were not much more popular than gasoline car in say 20years.

FWIW I sold all my Tesla around 253. Went back in again today at 209. I guess I was lucky with the timing, some numbers I saw and some thinking made me change my mind. Will probably stay long for a long while now. Good luck everyone!