Tesla May Need Cash To Deliver On the Model 3, Says Analysts (cnbc.com)

An anonymous reader writes: After receiving more than 198,000 Model 3 preorders in the first 24 hours, Tesla may need more cash if it hopes to deliver their new electric vehicle to customers on time, analysts said. Elon Musk plans to launch the Model 3 in late 2017, eventually boosting the company's annual production tenfold to 500,000 by 2020. Many analysts believe some customers making early reservations may not receive their vehicle until 2019 or 2020. Morgan Stanley analyst Adam Jonas, predicted Tesla's sales will hit under 250,000 in 2020. Barclays analyst Brian Johnson, believes the surge of Model 3 reservations could reach 300,000 by the end of June. Some analysts expect the first cars will sell for an average of $50,000-$60,000, but Tesla prices its current models in several "tiers," depending on content and optional features. RBC analyst Joseph Spak said strong initial orders for the Model 3 could help Tesla achieve positive free cash flow. In February, the company said it expected to be cash-flow positive in March. Spak said Tesla may not be able to fulfill many of the early orders before 2019: "Demand was never really our concern, it is more about execution and getting production up to meet demand."

Comments

Err - no.

[queazocotal]

There are many commercial entities that would be overjoyed to finance Tesla some billions based on the outstanding pre-order book.

Re:Err - no.

[N1AK]

Demand alone doesn't mean things are great for Tesla, though I'm certainly not claiming there is an issue. If there's huge demand now for something that can't viably be provided at the expected price point in an acceptable time period that's an issue regardless of immediate cash flow issues. I really want Tesla to succeed and it's great that a lot of other people clearly do as well, but that alone doesn't make it a certainty.

Re:Err - no.

[AmiMoJo]

UK buyers are looking at 2020 for delivery now. First cars are expected for 2019, but there are so many pre-orders production for the first year is all sold.

US buyers are probably looking at late 2018 now too.

Looks good fit investors, years of production already sold.

Re:Err - no.

[Kjella]

Demand alone doesn't mean things are great for Tesla, though I'm certainly not claiming there is an issue. If there's huge demand now for something that can't viably be provided at the expected price point in an acceptable time period that's an issue regardless of immediate cash flow issues. I really want Tesla to succeed and it's great that a lot of other people clearly do as well, but that alone doesn't make it a certainty.

An issue for who? Sure, unfulfilled demand could let some other company scoop up the market but unless they got a hidden Gigafactory they'll probably be resource limited too. Right now Elon Musk is either going "awesome, just what I needed to secure funding and expand quickly" or "dang, I should have asked for $40k" but I don't see a single downside. Also despite getting in line they haven't really promised how they'll give priority, we know there'll be regional releases and that current Tesla owners get priority - but nothing has been said about how much priority, if they'll "finish" demand in one region before moving on, if there'll be different lead times for different levels of performance/accessories or really anything. I'm sure they'll find a way to make the $35k base model buyers stand way back in the line.

Re:Err - no.

[Richard_at_work]

An existing order book does not show you everything about the company that you need to know about in order to risk an investment - look at Boeing, nearly 1000 orders for its flagship 787 model before it even flies, forecast of massive profits ahead, but now just breaking even on *production* costs after about 380 deliveries, massive deferred costs (meaning that the development costs are yet to be covered - infact, Boeing hasnt started paying them back yet), massive debts, an accounting block of well over 1100 now (unheard of for a twin engine aircraft), on the brink of announcing a forward loss position. Boeing will eventually make a profit on the 787, but its far from the slam dunk the company was pitching back in 2004.

Tesla having a huge order book is great, they just have to follow through on it.

Re:Err - no.

[known_coward_69]

building a factory and cars are two different things. they built a factory but they still need to buy the parts and other raw materials to build the cars and pay the daily bills. for this you need cash long before you see the first dollar in revenue of selling a car

Re: Err - no.

[rworne]

I'm wondering how many cancellations they will get once people find out the $7500 fed tax rebate is no longer available. This is lowering the cost of the car to $27,500, which frankly is a hell of a deal.

At this point, Teslas are still eligible, but once they hit the magic number (200K cars sold in the US) rebate goes bye-bye. Based upon preorders, latecomers are going to miss out if they have not already. Tesla sold what? 60,000 cars in the US so far? There's 140,000 left to be sold in the US before the rebate phases out and meanwhile the Model S and Model X are still eating away at the total sales numbers while owners wait for delivery. Tesla sold 18,000 Model S's in in the US in 2014, and 27,000 in 2015. I'm expecting a lot of disappointed potential buyers in a year or so.

Re: Err - no.

[ranton]

The rebate doesn't go away at 200,000 cars. That just marks the quarter the rebates start to fade out. For that quarter and the next, the rebate is still $7500. The next two months it is reduced to $3750, and the next two months it is $1875.

Tesla will likely hit 200,000 cars delivered in the US in 3rd quarter 2017. That means every tesla delivered in 2017 will probably get a $7500 rebate. Every car delivered in Q1/Q2 2018 will get $3750, and the rest of 2018 gets $1875.

It is entirely possible that hundreds of thousands of Model 3s will get a rebate. Of tesla is smart they will delay shipments of model S/X cars until 4Q 2017 so they get amother full quarter of $7500 rebates to entice customers.

Re: Err - no.

[rch7]

It doesn't go by by at once, it is slashed in half for some time.
Besides that this US income tax credit is fully useful for relatively rich people only anyway. You need to be due these $7,500 in income taxes in single year and can't rollover credit to next year. For that you need around $56,000 taxable household income. That is income after standard $12,600/household or bigger itemized deduction, $4,000/person exemption, and all other various deductions. Gross income may need to be closer to $100,000 in practice to get this $7,500 in full. Median household income in the US is just a bit above $50,000.

Re:Err - no.

[BasilBrush]

Companies aren't expected to be profitable in their rapid growth stage. Money is expected to be spent on growth. Amazon wasn't profitable for most of it's existence. That doesn't mean it's a bad company. Nor does it mean that it wasn't very easy to raise finance.

Tesla keeps on investing in manufacturing capacity, as they keep growing 10 fold, and as they start manufacturing their own batteries.

Re:Err - no.

[LynnwoodRooster]

And all that capex spending got them a facility that can build a few thousand cars a month. Now they need to scale that up by an order of magnitude - meaning even more capex spending.

Re: Err - no.

[naughtynaughty]

Leasing an EV results in the leasing company getting the $7500 tax credit and rolling most/all of that $7500 into the lease.

Re:Err - no.

[aaarrrgggh]

Tesla needs to continue to offer multiple models for just that reason. If they can go from 50->80->130->210->350->500k vehicles per year within their current factory and with available suppliers then it isn't that hard to pull off. They basically need about a 4-5% increase in production capacity per month.

Comparing to narrow body airplane production, it would be an impossible task; certification and limited vendors for certain parts (currently seats) make faster ramp-ups impossible. However, the physical factory previously produced 300k vehicles per year, so getting to that point should be reasonably achievable.

Re: Err - no.

[FlyHelicopters]

You need to be due these $7,500 in income taxes in single year and can't rollover credit to next year. For that you need around $56,000 taxable household income.

People buying a new $35K+ car should be over that, or they are buying the wrong car.

In addition, keep in mind that $35K is the starting price of the car, most that are sold will be $10K over that price, give or take something.

Re: Err - no.

[FlyHelicopters]

I'm wondering how many cancellations they will get once people find out the $7500 fed tax rebate is no longer available. This is lowering the cost of the car to $27,500, which frankly is a hell of a deal.

It would lower it to $27,500, if most people bought base model cars.

In general, they don't. Everything from the Ford Focus to the Tesla Model S are sold are higher level trims.

In addition to the rebate going away at some point, when people see that the Model 3 will really be $50K with all the options on it, that will draw a lot of cancellations.

Musk was really careful with his words: All Model 3 cars would come with autopilot hardware installed, and the base model would come with the emergency braking feature active.

The base model doesn't come with a lot of stuff turned one, which has to be paid for separately.

Re:Err - no.

[N1AK]

Tesla. If they have in fact promised to produce a product which they can't provide at a price and time period that matches their customers expectations. To give an extreme example to demonstrate: If I offered to sell people a car that could match a BMW 330i for performance while running on water for just $20k the fact that 10 million people want to buy it doesn't stop it being an issue if I have no viable way of providing it and wreck my brand by massively failing to deliver.

Obviously I'm not saying that Tesla is in that position, but it shows a lack of critical thinking skills to think that just having huge demand for something you've claimed you can deliver doesn't mean everything must work out great for you.

Re:Err - no.

[macpacheco]

Boloney.
  Tesla stated before taking pre orders delivery is scheduled for late 2017. That's about 20 months away. I don't see how you can say Tesla can't begin to deliver in 20 months, as it already has a handful of prototypes right now (they gave test drives, you know it, doesn't you ?)
  A for Tesla doesn't have enough money, that's another BS argument. Tesla is loosing money overall because its funding for Model 3 R&D with revenues from MS/MX deliveries. For the last reported quarter (Q4 2015) MX deliveries were still inconsequential. But Q1 2016 MX deliveries have skyrocketed, and by years end more than half of deliveries will be MX, substantially increasing revenues.
  I fully expect by the time Model 3 deliveries start, there will be one million reservations. That's a US$ 1 billion interest free loan to Tesla, courtesy of its future customers. By end of Sat, 4/2/16, reservations were closing at 276k (in just three days). Half a million reservations are already a SURE thing in my book, with a very high probability of a full million reservations.
    Tesla doesn't have the obligation to deliver all of those reservations in 6 months or in a year. It might very well take them 2 years or more, which might make the whole cycle self funding (once the first 50000 units are delivered, Tesla gets paid, which funds the next 100k units and so on).
    You should take a look at this: http://www.fool.com/investing/...

Re:Err - no.

[macpacheco]

Because you just don't get it (TM).
Tesla could be profitable if it wanted to. But they choose to grow faster and do it right (TM) rather than do it profitably.
But, here's the kicker.
Once Q1 2016 financials are published, we'll see increasing revenues, and the end of Model X tooling/ramp-up expenditures. Meanwhile, Model X revenues begin to skyrocket. You do know that Model S/Model X generate about 20% positive cash flow, do you ? What happens is that 20% cash flow goes into R&D/tooling.
So what happens when MS+MX yearly revenues break through US$ 10 bi / year. That means US$ 2 bi / year in cash to invest.
Plus, I expect Model 3 reservations to break through half a million easily and very likely get to over a full million pre-orders. That's a one billion USD interest free loan to Tesla.
So it looks like Tesla should be able to in total invest some US$ 5-6 billion in Model 3 design, tooling and rampup, including moneys already invested without borrowing. Of course Tesla still needs cash to complete the giga factory, to do Tesla Energy tooling/rampup, and for the Y model. But if you understand how companies work, if Tesla needs to increase its debt by up to US$ 2 billion, the market will probably see that as a positive aspect rather than negative (its INVESTMENT money, not a cash burning money pit). It you can't understand that, then you really should shut up, as you have proven you know nothing about business. You can't compare Tesla's financials with Ford, GM or Fiat, those are established companies. Tesla is still somewhere between startup and steady state company. Tesla's revenue will eventually break US$ 25 billion / yr, and continue to grow to at least US$ 50 billion / yr on the conservative side (one million units / yr at US$ 60k average price, mostly M3, but some 20% MS+MX which sells for average US$ 100k each). At US$ 50 bi / yr, Tesla will easily pay off all of its debt, fund continuing growth and pay a dividend.

Re: Err - no.

[randallman]

People buy cars all the time without maxing out the options, such as 3 series BMW without the "M" badge. The base Model 3 was said to be delivered with autopilot safety features enabled and 0-60 under 6 seconds, supercharging and at least a 215 EPA rated range. My prediction is people might opt for a range upgrade to 250+ miles that should cost $5k or less.

Re: Err - no.

[FlyHelicopters]

I didn't say "max out", I said mid-level trim...

Few people buy the base model or the maxed out model... But there are exceptions...

More than 50% of all Yukons sold are the Denali trim, but that is an exception.

The Fusion, for example, comes in a S, a SE, and a Titanium trim, and the SE is by far the best seller.

---

I took a look at the Fusion Hybrid, based on someone else's comments...

Actually, the price is pretty reasonable, all things considered... $29K gets you a nearly loaded SE model with adaptive cruise control, nav, and lots of features.

44 MPG city, 41 MPG highway. Note: Sticker is $35K, $29k is the actual selling price due to discounts and rebates.

At say 42 MPG mixed, you'd have to drive a crap ton of miles to make it make sense over a $40K Model 3. (why $40K? because you can get a Fusion Hybrid for almost $10K less, I'm picking a well equipped model)

Re: Err - no.

[rch7]

Maybe it is the case with Tesla, but there are or will be other cheaper electric cars. Or they may have a choice of buying $25 + $10k for gas over the life of the car, or $35 for electric and e.g. $5k for electricity if their rate is low. Even if they earn $40-$70k/year, it may be more reasonable to buy a new car instead trying luck with old clunker that may require spending much more time/money on maintenance.
Sure you can lease, but it is one more restriction that slashes potential customer base. In short, the tax credit law is a really bad design, and can be used as an example of welfare for rich people toys.

Re: Err - no.

[FlyHelicopters]

The life of the car doesn't matter to the person who is only going to own it for 3-5 years.

Consider the Ford Fusion, a similar sized car to the Model 3. The Fusion gets 29 MPG mixed city/hwy.

At the average of 37 miles a day, 3 years of ownership is about $2,700 @ $2/gal.

So if you buy a mid-trim SE with reasonable features for $22K, you're looking at $25K including fuel for 3 years.

If electricity is 1/4 the cost of fuel, then you're saving about $2K over the 3 years in fuel costs. by going EV.

That is nice, but unless the cars are darn close to each other to begin with in price, the EV isn't helping much.

---

Further, consider the Fusion Hybrid. It gets mixed city/hwy of 42 MPG.

That works out to about $1,900 for gas for 3 years, the all EV would save only about $1K compared to the hybrid, give or take.

Now, this is why the hybrid isn't selling. It is $3K more to get the hybrid over the gas version, yet it only saves $1K in gas over 3 years.

It would make sense if gas was $8/gal like in some places in Europe, but in the US, it simply doesn't.

Proof of this is found at my local Ford dealer's web site. They have 114 Fusion cars in stock, only 8 of which are hybrids.

Almost no one wants them, even with 42 MPG. Gas is simply too cheap.

Tone

[Anonymous Coward]

The tone of the article is a little off, like the author wants Tesla to fail for whatever reason, and is grasping on the flimsiest available reason he can find.

"Your product is in such high demand that there's no way you'll be able to produce enough! Take THAT, Elon!!!"

Re:Tone

[Anonymous Coward]

"Nobody goes there anymore. It's too crowded."

Re:Tone

[binarylarry]

Take THAT, Elrond Musk!

- GM Shillbag

Re:Tone

[Solandri]

Didn't read TFA. But your critique sounds like an argument for losing money with each sale, but making it up with volume.

The question isn't the number of orders Tesla has gotten or how strong demand is. It's whether or not Tesla can fill that demand while making a profit. If they end up losing money with each sale, higher sales numbers actually make their finances worse. I mean if Apple offered to sell iPhones for 1 cent each, the demand would be close to 7 billion units. They'd sew up 100% of the market, then promptly go bankrupt. You don't want to invest in a company that does that.

We know Tesla can make a $80,000 car with a 25% profit margin (i.e. manufacturing cost of $60,000). They're jumping from that to a $35,000 car with presumably some profit margin. That's a huge leap - big enough to generate a large amount of uncertainty, which translates into a large amount of risk for the investor. That's the reason for the anti-Tesla articles surrounding the Model 3 - healthy skepticism about whether or not they can pull it off.

Re:Tone

[OverlordQ]

As Tesla expands from the 'enthusiast' into the general automotive market, most people aren't going to way 3-4 years for a car, they'll just buy their next choice. That's why it's an issue.

Re:Tone

[fermion]

Tesla does not have the money to make cars for sale. That is why they are asking for $1000 down. They can now borrow money based on expected purchases. It is still risky because is would be easier for a customer in a situation to lose the $1000 rather than pay $30,000 or take that in debt. A simple thing like a change in tax law over the next year could kill the company. I imagine President Trump and Paul Ryan have no love for this giveaway of tax money to support Tesla.

Tesla has not method to grow the brand beyond the initial early adopters. They are going to try to sell as many cars as Mercedes Benz in the US, but without a network of dealers. So far this has worked, but when they have a million cars on the road, when people want a new one? For instance, right now I can trade in my car at any MB dealer for a new one, and know that it will be resold and financed by MB. This keeps the value high.

I think Tesla is making a mistake going in mass market cars. I think they are doing this because they don't want to seem elitist, but to me it one is an elitists, if one can afford to live in Silicon Valley and drive a $100K car, then one should just accept who one is and not try to create a rosy façade.

Re:Tone

[BasilBrush]

Tesla are not some inexperienced startup any more. This is their 3rd EV. They know what's involved.

They didn't have to announce the price just yet if they weren't confident of hitting it and still making a profit.

The reason for the anti-Tesla articles is the same as the reason for every single other thing on commercial news websites. They need to say something that will cause people to click. Controversial being a popular technique.

Re:Tone

[just another AC]

sigh...

As always the "lose money each sale" thing comes up.

They are in no danger of losing money on each sale. The only question is HOW much of their profit margin can they safely put into investing in scaling up the factory to meet demand.

If they want to take the safe way out, they could stop investing now, take until 2028 to deliver on their orders, and still make heaps of money. But of course that is stupid, and they are much better served by scaling up.

TLDR - the only question is how much they will scale up, not whether they will make profit.

Re:Tone

[drinkypoo]

As Tesla expands from the 'enthusiast' into the general automotive market, most people aren't going to way 3-4 years for a car, they'll just buy their next choice. That's why it's an issue.

It doesn't matter if some of the people who preordered back out. Eventually they will actually start shipping cars and then the number of preorders is completely irrelevant. The preorder was just a publicity stunt to get the money needed to actually produce the car, which is a fairly normal thing for any kind of growing business to do.

Re:Tone

[DougReed]

Bear in mind that quite a bit of Tesla profits are going into the Gigafactory, which is going to make them the largest producer of batteries in the world. So the cost for batteries for them go WAY down, and they can sell batteries to other companies for a profit. This is a big part of their plan. Their cars get cheaper to manufacture if they don't have to buy their batteries from third parties at a premium because they are sucking up a HUGE part of the market. If I want 70% of the batteries in the world, and others want those batteries, the battery manufacturer is going to charge me a premium for eating such a huge chunk of their capacity. ... and even more if they know I am using my profits to eventually compete with them. Also, if I am a battery manufacturer I want to please LOTS of customers, so while I like the idea of selling lots of batteries to one guy, it costs me customers. If I am a Lithium mine operator, I don't care. My customers are middle men. If I can sell everything I can mine to one guy and my life gets simpler. I don't care if it hurts some other middleman.

The Gigafactory is going to change the economy of scale for Tesla.

Re:Tone

[FlyHelicopters]

Musk's explicitly stated goal is to revolutionize personal transport not sell vanity goods.

Fair enough, but so far he has been doing the later, not the former.

To do the former, he has to deliver a product that people want to buy in large quantities. Price, features, performance, utility, all matter in that market.

Right now, it doesn't really matter what the Model S is, so long as it is decent, because of the volume shipped worldwide (which is small, compared to major car companies).

To scale that up will require appealing to people who don't actually care as much about the whole EV thing as the early adopters and rich people might.

Re:Tone

[FlyHelicopters]

Bear in mind that quite a bit of Tesla profits are going into the Gigafactory

Profits? What profits?

A lot of people (you're not alone) here on Slashdot could really use a class in how to read a balance sheet and a P&L statement.

Tesla doesn't make a profit and the capital expense of building a factory isn't subtracted from short term profits, accounting doesn't work like that.

Even if you back out 100% of the R&D spent in the last year, they STILL don't make a profit.

Tesla is losing about $15K per Model S that it builds. The numbers never lie.

Re:Tone

[Anonymous Coward]

Let's be clear though:

Tesla took $1,000 for a reservation, but that reservation is fully refundable if the buyer chooses to cancel at any time. Accounting-wise, that's not a pre-order, it's a reservation, and can't be booked as pre-sales.

Tesla burned around $707M in 2015 per their financial statements last year, although the number is a lot higher because a lot of that is in "inventory" which is not selling well, the Model X, or in parts for the Model 3 which won't be turned to cash for 2 years. So estimates put them at around $1B in cash spent last year. They have $1.2B in cash on hand right now. At their burn rate, they run out of cash by January/February 2017, to soon for them to make it to the launch fo the Model 3. So yes, they need more cash to make it to the Model 3. Watch, in 2 weeks or so they'll do another public offering to raise cash.

There are numerous quality problems with the Model S. The drivetrain on 2/3rds of the Model S's sold have had to be completely replaced after 60,000 miles. There are numerous issues with door handles, squeaking sunroofs, the big MFD not working right, etc. That's fine for a luxury niche car; most people buying a Model S have other cars. The Model 3 cannot have those quality problems for a mass market car though.

Tesla will be 4th to market with the Model 3. The new Chevy Volt comes out in 6 months; Ford and Toyota have their own mass market EVs coming out early next year before the Model 3. Tesla needs to spend a ton of cash on sales and marketing to stay ahead, especially because they incur the cost of sales rather than use the dealer network that Ford and Toyota and GM use, so they have additional costs their competitors do not have.

This is going to be a hard road for Tesla. I hate to say it, but while the Model 3 may have awesome battery tech, there's a good chance they'll lose to GM on crappy door handles and an overworked maintenance team because they're trying to hold on to the entire distribution chain.

Personalization

[Psicopatico]

Can I have mine with carburators, please?

Love to tweak those things...

Re:Personalization

[tomhath]

Probably not. Even if it had an older design gasoline engine you would get a carburetor, not a carburator. Yea, I saw the recent /. article about people who point out misspellings :^)

Re:Personalization

[chill]

There might be an app for that. They have that lovely big screen instead of the dials. I can see adding something like Torque and maybe a carburetor-simulator app. Add in some sound effects for the old-time gear head to get audio feedback and you might have a seller there.

Re:Personalization

[just another AC]

Sure... they might not be hooked up to anything, but I'm sure Tesla can bolt a carby onto the chassis somewhere

Re:Personalization

[Amouth]

T I can see adding something like Torque

I hadn't thought about that, i'd like to see Torque connected to a Tesla. wait for the "WTF?" screen to show up on the sensor options.

Re:Personalization

[GuB-42]

Considering the massive storage space and poor range (compared to ICE) of the Tesla, I had always wanted to put a generator in there.
Do this and make sure your generator have carburetors.

Ford Credit Has A Plan For Them

[zenlessyank]

Check is in the mail.

Astrological stock analysis

[Okian Warrior]

There are many commercial entities that would be overjoyed to finance Tesla some billions based on the outstanding pre-order book.

And even more commercial entities that would be overjoyed if Tesla crashed and burned.

Analysts are falling over themselves trying to paint Tesla in a bad light. Usually this is done by "black-box analytics" without taking the context into account. We're seeing this in the original article: massive public demand is bad for Tesla because it will hurt them in the long run.

For example, Tesla has had little or no profit for the last couple of quarters because they're putting everything into the gigafactory. Looked at as a black box, Tesla is a company with little or no revenue.

...but this doesn't account for the gigafactory, or that Tesla will pretty-much corner the market in cars *and* lithium batteries in a couple of years.

The price point of Tesla is all over the map, analysts put it anywhere from $100 to $1900 .

It's insane. There's a subtext among certain analysts and pundits that they are *only* dissing Tesla because they want to bolster their GM stock. Then there's the analysts and pundits who put sterile figures into an algorithm and come up with a "buy", "sell", or "hold" outcome and then justify that outcome (any outcome, it doesn't matter) from whatever is going on at the time.

There's literally(*) no source of reliable information about stocks that a common person can access.

So far as I can tell, the best you can hope for is to have an engineer's understanding of the context and make an educated guess. Company is working on an implantable insulin delivery device? If you think the concept is feasible, it's probably a good bet. Can a company makes a razor that cuts hair with a laser? Probably not a good bet.

Reading analysts predictions about stocks is worthless. You can get just as good information by plotting a stocks' astrology chart.

(*) I'm using the term "literal" by it's dictionary definition.

Re:Astrological stock analysis

[joh]

No company with pre-orders of this magnitude can or should have cash problems. It's a bit like SpaceX: They have cornered the market for launches in the classes they can launch and are booked for years. This is not money that is already earned but it is the next thing close to that. If you have cash-flow problems in such a situation and if you do not look like a scam getting money for modest interest should be the most easy thing in the world.

But yes, people wanting to buy 200000 cars from them will be bad news for those companies who will NOT sell these 200000 cars then. These will not be additional cars, mostly. Almost all companies in this business apart from Tesla will HATE these numbers.

Re:Astrological stock analysis

[Bender0x7D1]

(*) I'm using the term "literal" by it's dictionary definition.

You keep using that word, I do not think it means what you think it means.

Re:Astrological stock analysis

[Bender0x7D1]

...but this doesn't account for the gigafactory, or that Tesla will pretty-much corner the market in cars *and* lithium batteries in a couple of years.

However, the market for electric cars is a small percentage of overall vehicle sales. According to Wikipedia, Toyota delivered 9.9 million cars in 2012, VW delivered 9.8 million in 2013 and GM delivered 9.9 million in 2015. So, even if Tesla could deliver all 300k cars in 1 year - and it sounds like they can't - it would represent 3% of what the giant automakers deliver in a single year. Given their timeline for delivery, it is more like 1%.

Now, don't get me wrong. I think Tesla is a cool company, and I don't think it's doomed because it "only" has a 1% marketshare. However, we need to consider it in context of the entire automotive industry, and it most likely won't end up as the one car company to rule the world.

Re:Astrological stock analysis

[Tough Love]

Consider it in the context of what people want. Go electric or resign yourself watching taillights tail lights recede in the distance. From now on, performance means electric, end of story. Break the price barrier and the damn will burst. Chances are, you already bought your last internal combustion car.

Re:Astrological stock analysis

[russotto]

The Porsche you linked to is a hybrid. 608HP of internal combustion power, plus 279 HP of electric. Running only on the electric, its range is 12 miles.

I think my next Porsche will have an ICE in it.

Re:Astrological stock analysis

[BasilBrush]

However, we need to consider it in context of the entire automotive industry, and it most likely won't end up as the one car company to rule the world.

This idea that it's the goal of companies to rule the world (in their their field) is nonsense. It comes from Microsoft doing that in the 90s. But despite that occurrence it's very rare indeed. And it's not what companies generally shoot for. Success doesn't require extermination of all competitors.

So, 1%. That coincidentally was the share of the market Steve Jobs said he was shooting for with the iPhone. Get in a few short years they were in the 30% to 60% area of market share, where they've remained ever since.

The only way is up for Tesla. EV technology looks like one of these.
https://slickercity.files.word...
Might take decades, but the only way is up.

Re:Astrological stock analysis

[drinkypoo]

There's literally(*) no source of reliable information about stocks that a common person can access.

There's literally no source of reliable information about stocks.

Re: Astrological stock analysis

[FlyHelicopters]

It's a car without the range to do a road trip. I realize they want to change that with rapid charging stations but it's not there yet.

This weekend we took a road trip to Galveston to visit the beach. So yea, it really isn't a road trip car.

That being said:

So for a lot of people this would be a secondary vehicle, with a primary vehicle being gas or hybrid. Could be done Werth a married family. Certainly no range anxiety for commuting

Yep, we own two vehicles, a really big expensive SUV and a full size car. The Model 3 could easily replace the car, except that it is smaller than our full size car and costs more.

I pay $347 a month for my car and that was with nothing down, and I'll own it at the end, that isn't a lease.

It would, frankly, take the Model S to provide a similar size vehicle, but even if we consider the Model 3, it would cost nearly twice as much.

It is still too expensive for what it is. Get me a Model S, even with just 200 miles of range, for $30K, and I would seriously look at one.

The Model 3 would need to be $20K, if it was, I'd seriously look at it.

Re:Astrological stock analysis

[FlyHelicopters]

Consider it in the context of what people want. Go electric or resign yourself watching taillights tail lights recede in the distance.

The number of people who care what the 0-60 time is on their car is a very, very small percentage of the total number of car buyers.

Most, as in the VAST majority, don't know what their current car is, don't care, and it isn't a factor.

It just needs to be "good enough".

Performance will only sell so many cars.

Re:Astrological stock analysis

[DerekLyons]

No company with pre-orders of this magnitude can or should have cash problems.

Other than your religious belief in the Cult of Elon - why would you believe that?
 

This is not money that is already earned but it is the next thing close to that.

No, it's not even close to that - as a deposit isn't a commitment to pay. Lenders know that even if you don't.
 

If you have cash-flow problems in such a situation and if you do not look like a scam getting money for modest interest should be the most easy thing in the world.

You might think so if you're clueless and only consider a single dimension - the size of the back order book. But other factors matter too, such as the size of their existing debt and lack of production capacity. These things matter to lenders.

If (for whatever reason) the Tesla 3 were to sink Tesla, they'd hardly be the first company to go under for being *too* successful.

Re: Astrological stock analysis

[aaarrrgggh]

200-mile range is pretty damn good. On a real road trip, that means a stop every 3-4 hours. If you really are a 1,000 mile a day driver then rent a car for the trip! If you are fine with 600 miles per day, and two long stops en-route, it isn't that big of a deal.

Re:Astrological stock analysis

[Tough Love]

The point is, the fastest production cars are now electric. The 918's motor is basically just there to charge the batteries, plus it provides a modest share of extra power, but the main acceleration is electric.

Re:Astrological stock analysis

[Tough Love]

Everybody would prefer a fast car if they could afford it.

Re:Astrological stock analysis

[Tough Love]

Actually, the 918's gas motor provides 75% of the power, however the point still stands: everything fast from now on will have an electric motor in it. As batteries improve, hybrids will rapidly be displaced by full electrics. The next iteration of the 918 will no doubt have bigger electrics and smaller internal combustion, saving weight.

Re:Astrological stock analysis

[FlyHelicopters]

Everybody would prefer a fast car if they could afford it.

That is either a troll comment, or a comment from someone who doesn't see anything beyond themselves.

My mother is 71 years old, she still drives, and couldn't care less what the 0-60 time is or how fast her car is. She really does drive like a little old lady.

My wife isn't quite that bad, but she doesn't care either. She wants something that is easy for the kids to get in and out of, something that is safe and reliable, and something that carries lots of stuff.

Performance is about number 47 on her care list, if it exists at all.

Re:Astrological stock analysis

[pslytely psycho]

"The 918's motor is basically just there to charge the batteries, plus it provides a modest share of extra power, but the main acceleration is electric."

Why on earth would you need a 600 horsepower engine to charge a battery? The electric portion is a cheap way to boost the HP to over 800 without designing a new engine. Until they can make a 1000+ HP electric motor that still has range, ICE engines will still be faster.

"The point is, the fastest production cars are now electric. "

Uh, no. With a top speed of only 218 mph the Porsche 918 it doesn't even make the top ten fastest production cars.

https://www.globalcarsbrands.com/top-10-fastest-cars-in-the-world/

Re: Astrological stock analysis

[Gussington]

The Model 3 could easily replace the car, except that it is smaller than our full size car and costs more.

An Audi R8 does too though right?

I pay $347 a month for my car and that was with nothing down

The Tesla market isn't people who want the cheapest possible car for their money. It's a new and interesting segment and as such will attract people who don't mind paying a premium for something new and interesting.

Re: Astrological stock analysis

[FlyHelicopters]

The Tesla market isn't people who want the cheapest possible car for their money. It's a new and interesting segment and as such will attract people who don't mind paying a premium for something new and interesting.

You might be right, but if that is the case, they are going to have trouble selling millions of them.

The question becomes, what is the goal? Musk claims it is to change transportation for all. But that won't happen as long as it remains expensive.

It is almost like people are so enamored by the whole thing they suspect the laws of economics.

An Audi R8 does too though right?

Yes, it does. How many of those does Audi sell? Is it changing the world?

Re: Astrological stock analysis

[Anonymous Coward]

It's a car without the range to do a road trip. I realize they want to change that with rapid charging stations but it's not there yet.

So for a lot of people this would be a secondary vehicle, with a primary vehicle being gas or hybrid. Could be done Werth a married family. Certainly no range anxiety for commuting

Seriously? How often do you do a road trip? I think you've got your primary and secondary mixed up there -- the short range Tesla will be the primary car, doing the day-to-day trips around town, while you'll have a secondary gas-powered car available for those times when you really need it.

Re: Astrological stock analysis

[Gussington]

You might be right, but if that is the case, they are going to have trouble selling millions of them.

The question becomes, what is the goal? Musk claims it is to change transportation for all. But that won't happen as long as it remains expensive.

With strategy it pays to think less about current position and more about trajectory. We know EVs are getting cheaper and will continue to do so with scale, so at some point there is a threshold that makes an EV a more attractive proposition for most people. It might not this year or in the next 5, but I think it will be in the next 10.

Re: Astrological stock analysis

[FlyHelicopters]

We know EVs are getting cheaper and will continue to do so with scale

We do?

Since when did cars becomes computers that get cheaper and faster each year?

Is there a law of economics that says EVs will become cheaper than gas cars, but gas cars will just keep getting expensive?

so at some point there is a threshold that makes an EV a more attractive proposition for most people. It might not this year or in the next 5, but I think it will be in the next 10.

1. Tesla has made a bold announcement, lets see if they can deliver. A whole lot of people are assuming this is a done deal. I might tend to agree if it was launching in 6 months, but 20 months is a LONG time.

2. I can draw a straight line on a chart with the best of them, but that doesn't mean it will come to pass. Yes, there is always the chance that EVs will continue to get cheaper, but there is no assurance they will become cheaper than gas cars.

3. Even if they do (and I don't think it would be within 10 years), then you have other issues, such as range. Price is only one reason why millions aren't rushing out to buy them.

4. Keep in mind that Nissan has thrown everything and the kitchen sink at the Leaf to move units, it is priced around $30K (less with tax credits) and Nissan has been offering some killer lease deals, and yet they sold fewer than 30k of them last year. It has 107 miles of range, which granted is half of the Model 3, but I don't think that is the problem.

---

There seems to be this "EVs for everyone" hysteria going on with Slashdot recently, but the reality is, they aren't selling in other than modest volume. Yes, the Model S cars seem to be holding their value, but have you seen the price on a used Nissan Leaf? You can get a 3 year old one for 1/3 of the sale price. That is TERRIBLE. People do not want them, or they wouldn't be going for $10K used.

Re: Astrological stock analysis

[Ranbot]

It's a car without the range to do a road trip. I realize they want to change that with rapid charging stations but it's not there yet.

So for a lot of people this would be a secondary vehicle, with a primary vehicle being gas or hybrid. Could be done Werth a married family. Certainly no range anxiety for commuting

I am a Leaf owner and I think you are mostly right. People are jumping on you a little prematurely.

Where you're right is, 1) even with a 200 mile range a road trip would still be much easier/preferable in a gas/hybrid car for most people*; 2) EVs work really well for 2 car households; 3) there is no range anxiety for commuting.

Where you're wrong is, that an EV would only be secondary vehicle. For most people the vast majority of their driving is local commuting to work and errands, which EVs are perfect for making it a great primary car, with a secondary a gas/hybrid car for longer trips. This assumes a two-car household, of course... for single-car households I would still recommend a gas/hybrid car for it's flexibility.

* - I know there will be a charging station network, but I think people are down-playing the charging time way too much. I do a 500 mile road trip a couple times a year to see my family and it takes between 7-8 hours in a gas car. If I had to do it an 200 mile range EV that would be 2 charging stops and pushing 9 hours or more and god-forbid if I have to wait in a charging line(s) on a busy traveling weekend/holiday. I love my Leaf and I think EVs are great, particularly for two-car households, but there are limitations.

Re: Astrological stock analysis

[NotDrWho]

Is there a law of economics that says EVs will become cheaper than gas cars, but gas cars will just keep getting expensive?

I remember a few years ago listening to a lecturer who asserted that the world had hit "peak oil," and that gasoline would continue from that point forward to get more and more expensive--to the point where gas-powered cars would become increasingly expensive to operate and electric cars would become cheaper and cheaper to operate by comparison (and hence more and more in demand, obviously).

To say his prediction never happened would be an understatement.

Re:Astrological stock analysis

[Tough Love]

Why on earth would you need a 600 horsepower engine to charge a battery? The electric portion is a cheap way to boost the HP to over 800 without designing a new engine.

No. A car that costs the better part of a million dollars can have any engine it wants. The car has electric motors because they have a better power/weight ratio than gas engines, an advantage maximized by a relatively small battery. It has just enough electrics to take the top spot in the 0-60 list and the rest is gas for the energy density. Each time battery energy density goes up, the electric/gas ratio will go up until the gas motor disappears completely, with a huge weight saving in motor, transmission and support systems.

Until they can make a 1000+ HP electric motor that still has range, ICE engines will still be faster.

Electric horsepower isn't the issue, the P90D already comes in a 762 HP. Range is the issue, which is the only reason the Porsche 918 is not all-electric. A secondary issue is cost: huge engineering resources beyond the power plant are required to create a street legal production car that is stable at nearly 300 MPH. I do not doubt that Tesla will go after the top speed record eventually, after all Musk also makes rockets, don't you know? But 0-60 matters a lot more in the real market, and so does price. The P90D costs ten times less than the Veyron and six times less than the 918. That's an awful lot of fast for the buck.

"The point is, the fastest production cars are now electric."

Uh, no. With a top speed of only 218 mph the Porsche 918 it doesn't even make the top ten fastest production cars.

Fastest production cars by acceleration. Porsche 918 is number one. Top two are hybrids. Number four is the all-electric Model S.

By the way, this Datsun 1200 does 0-60 in 1.8 seconds. Gas engines are well on their way to the museum.

Re: Astrological stock analysis

[FlyHelicopters]

I remember a few years ago listening to a lecturer who asserted that the world had hit "peak oil," and that gasoline would continue from that point forward to get more and more expensive--to the point where gas-powered cars would become increasingly expensive to operate and electric cars would become cheaper and cheaper to operate by comparison (and hence more and more in demand, obviously).

:) That prediction has been around for a very long time. A number of things have happened to keep it from being true.

1. We didn't just stick to the old ways of recovering oil, we have gone back to the "depleted" fields and they are in some cases producing more today than they did in the 70s.

10+ years ago I was flying off shore in the Gulf of Mexico for an oil company, the platform I flew to for 6 months was built in the 70s and went almost dry in the 90s. It was sold off from a major oil company to a smaller one who could afford to operate it at its new low level of production (a trickle). Then in the early 2000s, new technology allowed them to pump chemicals down into the well and suddenly it was back to 70's levels of production.

2. We have found oil in a whole lot of new places, and some of those finds were huge. Who, 10-20 years ago, took fracking seriously? Are you aware that Colorado, all by itself, probably has a trillion barrels of oil under it, accessible only by fracking? Shell has had pilot projects there going back more than a decade, but hasn't gotten permission to do large scale work (because, environment). If we have an oil crisis and the price rises, expect that to change.

3. We have become, overall, much better at using the oil we have. Demand has been dropping, not because of EVs, but because we finally have been making more fuel efficient cars. Well, this started 10+ years ago, but it takes time to replace the worldwide auto fleet.

Look at the F-150, Ford does still offer a V8, but it no longer is their flagship engine. A turbo-V6 is. Car companies are finally building nice, powerful, well equipped vehicles (including big trucks) that no longer suck at fuel economy.

A 10% increase in average fuel economy has a massive impact on the price of gas, and thus the price of oil.

Re: Astrological stock analysis

[Gussington]

We do?

Since when did cars becomes computers that get cheaper and faster each year?

Is there a law of economics that says EVs will become cheaper than gas cars, but gas cars will just keep getting expensive?

Cars aren't computers, but all technology gets better with time, and EVs are still not what I'd call a mature technology. So you have to admit that there is room to move there. We also know that oil doesn't last forever. I know we've been hearing about peak oil for decades, but the premise is still true. At some point oil production will peak, and when that day comes (even if it takes another 30 years), EVs get a lay down misere.

but there is no assurance they will become cheaper than gas cars.

They don't have to be cheaper because EVs don't have to account for 100% market share. The advantages of EVs are worth paying a small premium for IMO, and If the EV market grows to 50% then it's going to be a win for the likes of Tesla.

3. Even if they do (and I don't think it would be within 10 years), then you have other issues, such as range.

Range isn't really an issue for most people. It is for some, but most people travel less than 300km/day. This is purely an emotional position for a good chunk of the population.

4. Keep in mind that Nissan has thrown everything and the kitchen sink at the Leaf to move units,

The Leaf looks disgusting. I want an EV but I wouldn't have one of those if you paid me. So you are right there is more to it than price, most people want a car that looks good too.

Re: Astrological stock analysis

[Gussington]

To say his prediction never happened would be an understatement.

Yet.

Or do you think oil will last forever?

Re: Astrological stock analysis

[FlyHelicopters]

Or do you think oil will last forever?

Of course not, but it will outlast me.

Asking people, average every day people, to upend their lives for something that won't change within their lifetime, is a tall ask.

Re: Astrological stock analysis

[FlyHelicopters]

Cars aren't computers, but all technology gets better with time, and EVs are still not what I'd call a mature technology. So you have to admit that there is room to move there.

Yes, of course. I simply am pointing out that it isn't a "forgone conclusion" that EVs will end up cheaper than gas cars. They might get close, they might be a bit more, or a bit less, but from the comments I read, some people think they will drop in price by half, then half again, like computers have.

We also know that oil doesn't last forever. I know we've been hearing about peak oil for decades, but the premise is still true. At some point oil production will peak, and when that day comes (even if it takes another 30 years), EVs get a lay down misere.

The "another 30 years" comment is a human thing, not a planet thing. It is easy as humans to only think of and measure stuff in terms of our own lifetimes. But we are but a blink of an eye to the planet.

The "another 30 years" was said back in the 70s, here we are 40 years later and we have more oil reserves today than we had back then (known, proven, recoverable).

Will we run out of oil? Yes. Will we do it in our lifetimes? No. Colorado all by itself likely has more than a trillion barrels of recoverable oil shale. The planet is swimming on oil, we simply have scratched the surface. Of course we can deplete it sooner or later. I just think it is more likely to be 300 years rather than 30 years.

They don't have to be cheaper because EVs don't have to account for 100% market share. The advantages of EVs are worth paying a small premium for IMO, and If the EV market grows to 50% then it's going to be a win for the likes of Tesla.

I have a hard time seeing the EV market grow to 50%, but it is possible. Maybe in 30 years, maybe in 50... You'll run into resistance points long before 50% that have nothing to do with price. Once price is overcome, then you have range issues (real or imagined), then you have "that's different" issues, which the 20 year olds won't care so much about, but the 40 year olds will. Then you have people who don't have a garage, only have one car, need more range because they are college kids at school 250 miles away and don't want to worry about it, etc.

I can see EVs getting to 30% market share in 20 years, if we really do get a push of cheaper batteries, but I think you run into other issues somewhere around that percentage.

Range isn't really an issue for most people. It is for some, but most people travel less than 300km/day. This is purely an emotional position for a good chunk of the population.

Never discount people's emotions. Also don't discount people's desire to "do what they want".

People can go out and buy a car today that has no range issues, you can take that once a year road trip, move across country, etc. all without concerns of fuel or battery power. Now you're telling them, "yea, but it doesn't matter, 99% of your trips are less than 100 miles, you'll be fine".

Yes, but why should they have to be "fine"? They are fine now. Rent a car? Another expense? Drive someone else's car that isn't as nice as their own car? What about people who move often? Take a military family that moves every two years. How do you drive a Nissan Leaf across country when packing up and moving? Ship it and fly? That costs money.

You're trying to tell people to adapt their lives for... "save the planet" or "reasons". Everyone cares about the planet, until it impacts their own lives, then it becomes just another item lost in the "give a crap list". Yes, 5-10% of the people will accept those limits because "save the planet", but that isn't going to move the masses.

The Leaf looks disgusting. I want an EV but I wouldn't have one of those if you paid me. So you are right there is more to it than price, most people want a car that looks good too.

Yep, and frankly from looking at the prototype, the Model 3 is boring as snot. Yes, I'm serious, and no, that isn't anti-Tesla, it just is so bloody boring.

Re: Astrological stock analysis

[Gussington]

but from the comments I read, some people think they will drop in price by half, then half again, like computers have.

Well I'm not one of them. I don't expect an EV to be cheaper than an ICE, but I do think it will get close enough that the benefits make it viable for a lot of people.

The "another 30 years" was said back in the 70s, here we are 40 years later

To be fair they are different things. The original peak was conventional domestic supply and that actually happened in the 70's, the next was global supply (conventional) which also happened, where we are now is into unconventional supplies which have to run at some point (or get too expensive to extract).

Then you have people who don't have a garage, only have one car, need more range because they are college kids at school 250 miles away and don't want to worry about it, etc.

American problems. The global vehicle market is much different, and once autonomous cars are viable, they will be electric and a game changer.

Never discount people's emotions. Also don't discount people's desire to "do what they want".

People can go out and buy a car today that has no range issues, you can take that once a year road trip, move across country, etc. all without concerns of fuel or battery power. Now you're telling them, "yea, but it doesn't matter, 99% of your trips are less than 100 miles, you'll be fine".

American problems. The world can handle 50% EVs even if not one single American buys one.

Re: Astrological stock analysis

[Gussington]

Or do you think oil will last forever?

Of course not, but it will outlast me.

Asking people, average every day people, to upend their lives for something that won't change within their lifetime, is a tall ask.

No-one is forcing anyone to do anything. EVs are merely cleaner alternatives to combustion engines, you can choose to buy one or you don't.
I think most people would prefer a clean, electric motor to a dirty, noisy ICE. Once prices are close enough, the free market will do the rest.

Re: Astrological stock analysis

[naughtynaughty]

" I do a 500 mile road trip a couple times a year to see my family and it takes between 7-8 hours in a gas car."

Avis/Hertz has the solution for your twice a year problem and it will likely cost you less to rent than to rack up miles on your personal car for those long trips.

What you see as a problem with a Model 3 is really not a problem at all. Or, for that matter, a problem with an EV with even shorter range. In California you can but a Spark EV for $500 out the door and lease payments of $100/mo and potentially get $2500 back from the State of California. Net cost for 3 years of leasing about $1500. I have one, it charges at home, it is a fantastic little car that suits 95% of my driving needs and for the other 5% a 3 mile drive to my nearest Avis outlet gets me a car that takes care of the other 5% for around $35/day.

I have a deposit for a Model 3, it will meet 100% of my driving needs but I'll probably still rent from Avis for 800 mile weekend trips.

Re: Astrological stock analysis

[Ranbot]

Avis/Hertz has the solution for your twice a year problem and it will likely cost you less to rent than to rack up miles on your personal car for those long trips.

That 500 mile trip was only one example, there are others that pop up through the year, and some extended "local" driving that exceeds the LEAF's 70-80 mile range. Even if I was taking a fairly short 100 mile round trip, extending a ~1.5-2 hour drive to ~2-2.5 hours for a charging break is pain myself and many others probably don't want to deal with. My Avis budget would get ridiculous, which is why my wife's car is a Honda Accord. We swap cars when the other needs to go further in a day. In the past year this has never been a problem.

When I'm ready to retire the Leaf I'll look at the EVs with longer ranges and reevaluate.

...[buy] a Spark EV for $500 out the door and lease payments of $100/mo and potentially get $2500 back from the State of California. Net cost for 3 years of leasing about $1500.

You don't have to convince me on the economics. I already crunched the numbers and it's the main reason I bought a LEAF (used, ~$15K, barely over a year old, would have been ~$35k new). I think leasing cars is a waste of money, but your results may vary. I suspect I got my Leaf from previous lease, but they took the over 50% depreciation hit for me.

I have a deposit for a Model 3, it will meet 100% of my driving needs but I'll probably still rent from Avis for 800 mile weekend trips.

You're clearly a little biased then.... and if you're still renting that means it's not meeting 100% of your driving needs.

That said, I am supporter of EVs, and like you, I put my money where my mouth is and own one. EV technology today can work really well for many people and save them a lot of money. I just think some people get stars in their eyes about EV range and the promises charging networks.

Years down the road when you retire your Model 3 keep it in garage somewhere and I'll bet it will become a collector's item in a few decades... it's a part of car history. :-)

Re: Astrological stock analysis

[BostonPilot]

We do?

Since when did cars becomes computers that get cheaper and faster each year?

Is there a law of economics that says EVs will become cheaper than gas cars, but gas cars will just keep getting expensive?

Cars aren't computers, but all technology gets better with time, and EVs are still not what I'd call a mature technology. So you have to admit that there is room to move there.

I agree that EVs will continue to improve over the next decade or two: battery technology has a long way to go, both in capacity/weight and cost to manufacture. The trend is toward lighter cheaper battery packs allowing bigger ranges and lower costs. The Model 3 and Chevy Bolt are both examples of this: We're seeing a doubling of range versus a car like the Leaf from just a handful of years ago, and all the articles I read say we're just on the beginning of the curve of battery improvements. Meanwhile ICE may be making some improvements on emissions and some minor improvements on efficiency, but Carnot/Thermodynamics is setting limits on efficiency improvements that can be achieved. It's pretty hard to take an ICE with a 30% efficiency and compete against a 95% efficient electric motor.

We also know that oil doesn't last forever. I know we've been hearing about peak oil for decades, but the premise is still true. At some point oil production will peak, and when that day comes (even if it takes another 30 years), EVs get a lay down misery.

I don't even worry about peak oil (price); it's peak carbon we need to worry about. If we suddenly found huge oil reserves tomorrow, we still can't afford to continue burning oil. We need to cut our greenhouse gas emissions. EV is one way to start decreasing our production of greenhouse gasses. Hydrogen may be another, although I'm personally skeptical. I like EV because it's something we can do today. The grid is able to support a large percentage of BEV vehicles today, while the hydrogen distribution infrastructure simply doesn't exist and will take years to build out.

but there is no assurance they will become cheaper than gas cars.

They don't have to be cheaper because EVs don't have to account for 100% market share. The advantages of EVs are worth paying a small premium for IMO, and If the EV market grows to 50% then it's going to be a win for the likes of Tesla.

I agree that for many people, myself included, they don't have to be cheaper than ICE. A tricked out Model S is frankly out of my price range, but a tricked out Model 3 probably isn't... I'm budgeting $55-60K for a Model 3 with Ludicrous kinds of speed, and a couple hundred miles of range. BEV are in many ways more fun to drive (and some ways less). I still love my Subaru STi, but it's a whole different kind of driving experience, and one that I enjoy greatly. I'm looking forward to a Model 3 and doubt I'll buy another ICE car again, except maybe a toy like a Lotus. I've had many people who are skeptical of BEVs, but once they drive mine they change their minds. They may not be ready to run out and buy one immediately, but they start seriously considering a BEV in their future. The more mainstream BEVs become, the more people will be able to objectively decide whether a BEV can meet their driving needs, as opposed to today where much emotion and fear biases people toward the ICE that they grew up with and think they understand.

3. Even if they do (and I don't think it would be within 10 years), then you have other issues, such as range.

Range isn't really an issue for most people. It is for some, but most people travel less than 300km/day. This is purely an emotional position for a good chunk of the population.

Again, I agree. My Honda Fit EV has similar specs to the Nissan Leaf, and even with 85 miles per charge it meets my needs all but approximately once a month.

Re:Astrological stock analysis

[BostonPilot]

Now, don't get me wrong. I think Tesla is a cool company, and I don't think it's doomed because it "only" has a 1% marketshare. However, we need to consider it in context of the entire automotive industry, and it most likely won't end up as the one car company to rule the world.

I agree with you. What I predict will happen is that Tesla is the company we will all remember as causing the tipping point in the switch from ICE to BEV. Who knows whether they will even survive? But what they did was take a market that nobody else wanted to be in, except maybe as a dodge around CAFE fleet standards, and turn it into a market where people desire to buy these kinds of vehicles... to the point that the other manufacturers finally started treating it as a real market to be exploited.

Even Nissan, with the "most successful BEV" program, ships a tiny percentage of BEVs. If GM doesn't fumble the Bolt I hope to see the next 5 years as that period of time where a large percentage of people get to drive or ride in BEVs and see firsthand how nice they are to drive/operate. And if BMW, Mercedes, Ford, and maybe someday Honda and Toyota follow suite, we could be talking a large percentage of new cars being BEVs in the next 20 years.

The first thing is to make people want to buy BEVs, and I think we can all agree that Tesla has done more than any of the other companies to make that happen.

Re: Astrological stock analysis

[Gussington]

Again I agree. I could never bring myself to buy a Leaf because of how they look. My wife likes them okay, but for me they are just ugly. Some people will no doubt think that about the Tesla Model 3 which just goes to show you that styling is an individual thing. But it's not an EV vs ICE thing... I personally think that the Model 3 is pretty good looking. I think I still need to get used to the nose, but I'm thinking a graphic may fix that!

The nose is probably the one thing that is stopping me from putting a deposit on today. My car budget is about $40k (USD) but can happily add another $20k if I found something awesome. My immediate impression of the 3 is that is similar in style to the Mazda 3, maybe with a touch of the old Mercedes C class hatch or Porsche Panamera thrown in, but the nose looks wrong.
It needs a grill, even if purely cosmetic so it looks like regular car. The biggest con against EVs is that they look different, something the Telsa S addressed, but with the 3 they are falling into the same old trap.

I took the time to design an elaborate grill that improves the design of the Tesla 3 already. Elon needs to see this: http://s16.postimg.org/z5l1o14...

Re: Astrological stock analysis

[BostonPilot]

Yup, I like that much more than the current Model 3 nose. Of course, aerodynamics may have something to say about how the nose should look ;-)

Re: Astrological stock analysis

[Gussington]

Even if they stick on a hi-res print of a grill it would make a big difference to the appearance.

Comparable to Chrysler

[flyingfsck]

Those kind of figures would instantly put them on par with a smaller manufacturer such as Chrysler. Great if they can pull it off.

Old news

[Locke2005]

Over 253,000 pre-orders so far... some of those people are going to have a to wait a few years for their car. I don't see why getting cash to fulfill an existing order would be a problem.

Re: Old news

[Anonymous Coward]

Right on!!!

EV is the next thing. And energy harvesting is the next next thing.

Battery is the Keystone.

Tesla will be THE manufacturer.

  Every car company will buy from Tesla. Every bus, train and motocycle companies will buy from Tesla.

Every homeowner, industry and business owner will buy from Tesla.

Even if Tesla doesn't sell a car, their success is a done deal.

Re: Old news

[GuB-42]

You say this because Edison hasn't arrived yet.

Re:Some will cancel

[Locke2005]

Probably some will cancel when it becomes obvious they won't get there car until 2019.

This just in...

[Locke2005]

Elon Musk is STILL a billionaire. Cash to fulfill the existing orders is the least of their problems. The Model 3 will likely see quality control and manufacturing problems like the Model X did, which may push back delivery dates a few years. But running out of money is pretty much a non-problem. Also, the longer they take to deliver these, the cheaper the components get (especially batteries), so they increase profitability by delaying. Not good news for the short-term share price, but long term I don't see the delivery problems as insurmountable since there is no real deadline. Probably a significant portion of the 253,000 people that have put down deposits will cancel when they realize how many years they will have to wait, but they will be replaced by other buyers.
I'm more concerned about the quality control issues that arise when a tech companies attempts to ramp up production too fast... I wonder if Musk has a handle on how to do that successfully, the Model X experience indicates they were trying to do too much too soon.

Short people got...

[Steve1952]

There are a lot of short sellers who are obligated to deliver TESLA shares in the future at a fixed price. Unless the stock tanks, they will be in trouble. In this case I don't see that the article writer disclosed any short interest, but I also didn't see any disclaimer of any interest of any sort.

Re:Short people got...

[tomhath]

Tesla hemorrhaged over a half billion dollars in the fourth quarter of 2015, and doesn't have anything to stop it for at least a couple of years.

Re:Short people got...

[Anonymous Coward]

Tesla *invested* half a billion into a huge factory for an emerging product.

Like to try again?

Re:Short people got...

[FlyHelicopters]

Tesla *invested* half a billion into a huge factory for an emerging product.

Like to try again?

Even backing that out, they lost money, hundreds of millions of dollars.

Even backing out ALL R&D doesn't make them profitable.

Tesla is losing about $15K per Model S sold. The fanboys like to talk about future investments and the gigafactory, but if you bother to read their income statement, you'll see that backing those out doesn't redress the problem.

Tesla isn't profitable on what they build now. The Model 3 won't be profitable either, not for awhile. There is no assurance they will EVER been profitable.

Just like American Bantam Car Company.

[Jahmbo]

The government liked their 'jeep' design, but gave the design to Willys Overland and Bantam ended up making 2 wheeled jeep trailers. I guess the moral is "Don't promise something you can't deliver."

Great response!

[Okian Warrior]

Those are fine numbers, and I really *really* appreciate an argument based on numbers and simple logic.

It's refreshing not to hear "nuh-uh" or "I think it's the opposite" with no support or rationality.

Good work!

Re: Some will cancel

[ranton]

Since this time Tesla has to hit Q1 of 2018 at the last for all cars sold that quarter to get $7500 rebates, he has far more incentive to hit his targets this time.

Re:need Cash?

[LynnwoodRooster]

Bill Gates could buy Elon 5 times over, and still have enough money left to crack the the top 50 wealthiest people in the US. And much of the wealth of Musk is in Tesla shares - shares that would be worthless if the company cannot deliver cars (and would take a big hit if he started liquidating large numbers of the shares to try to finance Tesla himself).

What about a $5000 reservation

[BlueCoder]

With all the press about the number of reservations I think that would be fair. Pay more money to receive your car earlier; esp in the first year.

So what?

[DerekLyons]

0.o

Had I said they were expected to be profitable, you'd have a point. I didn't.

Nor did I say they wouldn't be able to get financing, only that it's not going to be the slam dunk the grandparent seems to assume as there are other factors at work than just a deep order book.

Did you even understand what I wrote? Or did you just reply to hear your own keyboard?

Range Anxiety

[DougReed]

My brother in law has a Model S, and he has never had problems with range anxiety. He lives in southern England (Kent) and travels to London and Peterborough frequently and says it isn't a problem. From my point of view living in Southern Florida, there are charging stations all up I75 and Across the I10, so I could visit my parents in Houston without an issue. We have driven there several times, and we stop in the gas stations and truck stops and usually spend 20 minutes or so getting drinks, hitting the restroom, or grabbing a sandwich, so the charging time would not be a huge issue. Maybe a slight inconvenience if I have to waste another 10 or 15 minutes, but for the fuel savings I would gladly do it.

Is it really like that?

[fyngyrz]

As Tesla expands from the 'enthusiast' into the general automotive market, most people aren't going to way 3-4 years for a car, they'll just buy their next choice.

The thing about that is, if it's a quality electric vehicle you're looking for, there aren't any other choices, and before any other choice could ramp up, your Tesla would probably be on your doorstep.

This probably is very little about "I need to buy a car" whereas it is very much about "I want an electric car."

I want a quality electric vehicle. There's nothing at all wrong with the vehicles we own now that requires me to buy a new vehicle. If a suitable candidate comes out while we're using this group, I will simply wait until I can get one, then go get one, and then decide which of the ICE dinosaurs goes in the tar pit. If not, I will buy new ICEs as required, and continue waiting.

Price is somewhat of an issue for me, mostly as a matter of "I will only pay so much of a premium for an electric vehicle that is otherwise comparable with an ICE vehicle" but much more importantly than that, range and places to recharge are concerns. This car won't do it; and charging stations are not yet in place along the way to most places I want to go, and not at all along the way to the places I must go.

As far as I'm concerned, it's very early days yet. I applaud Musk's efforts. I'd like to be a customer. Likely, at some point, I will be. He gets mad brownie points for doing what needed to be done when no one else was willing to step up to the plate. And if you've ever run into a mad brownie, that's really something you never forget.

Re:Is it really like that?

[fyngyrz]

You can get an e-Golf or a Nissan LEAF and a few others today

Um. Yes. I can also get a bucket of horse manure. All three on on the same list: "do not get."

Bait and Switch

[subk]

Well, shit. There goes my dream of walking into a Tesla store and buying a $35,000 electric car next year.

Re:Bait and Switch

[Shirley Marquez]

On the other hand, you probably will be able to walk into a Chevy dealership next year and buy a Bolt. It won't be as fast or as good looking as the Model 3, but it will get you from point A to point B without gasoline and offer a 200 mile range.

None of this should be surprising

[DrXym]

People plunking $1000 on a car with 200,000 people in front of them are going to wait YEARS for their vehicle to materialise. Even if Tesla scales up from 50,000 to 500,000 cars it may still be 3 or 4 years before people take delivery of theirs.

And Musk has gone on record saying he expects people to drop an average of $7000 on extras. So clearly that $35,000 is a headline price for a very basic vehicle and Tesla have an incentive to sell the rest as optional extras. I wouldn't even be sure that stuff like charging will be free any more.

Re:Activist investors

[Anonymous Coward]

I like his cars, and his space crafts. Why? Umm super fast all electric cars are pretty sweet, and I wanted to be an astronaut as a kid so I love the fact that hes building them.

What else do I know about him? Not much, and I probably couldn't pick him out of a lineup. That hardly qualifies me as a member of a "personality cult." But you. I find you and people like you interesting, it seems like you have this deep unbridled hatred for the man. I don't know why, but you and people like you seem to come on here and spout about a personality cult and refer to him as a lunatic. What the hell did he do to you, run over your dog? Are you jealous of his success? Did he do something in business that you disagree with? Has he ripped you or family/friends off some how? Has he pushed for laws that are bad for the American people? I am not being factious either, I know little to nothing of the man. It is a serious question, WTH do you have against him? State your case, maybe I will hate him too.

"on time"

[j2.718ff]

I was under the impression Tesla's goal was to begin delivery of the Model 3 at the end of 2017. The key word there is "begin". Musk never said that all pre-orders will be delivered by such-and-such date. The reason people waited hours in line is so they could be earlier on the delivery list - nobody is expecting car number 300,000 to be delivered on the same day as car number 1.

Re:A fool and their money is soon parted.

[Shirley Marquez]

The people who are already happily driving the previous Tesla vehicles would dispute that. Whether Tesla will be able to successfully mass produce the Model 3 remains to be seen, but it is clear that an electric vehicle can meet the needs of some drivers.

Re:A fool and their money is soon parted.

[Tighe_L]

Not the same range or price.

Re:A fool and their money is soon parted.

[j2.718ff]

but it is clear that an electric vehicle can meet the needs of some drivers

Not the same range or price.

Perhaps you missed the word "some". Some drivers are willing to spend a lot of money to purchase a car. Some drivers have been known to travel fewer than 200 miles before refueling.

Re: Some will cancel

[BostonPilot]

Don't think it'll be a negligible percentage, given 2019 and 2020 delivery dates. Plenty of other electric options will ship before that.

If you mean BEV, not sure I see who else is getting ready to ship competing product in that timeframe other than GM?

I think you may be right that lots of people will cancel their pre-orders because after all, 3-4 years is a very long time to wait for a car. Situations change and all. On the other hand, I think for every order they lose, they'll gain one or more back as cars start to roll off the production line. The unexpected number of pre-orders shows that lots of people think this is a very desirable car. While some of them will lose patience, or be forced to purchase another vehicle, the very fact that so many people were willing to part with a not insignificant amount of money indicates to me that Tesla basically got the equation correct. Price/Range/Styling is good enough that a lot of people want this car. So, even though some percentage will cancel their order, I think this is a very good indication that the car will sell very very well, and that Tesla will probably have a backlog for quite a while.