Tesla glory/failure

[Sigmetnow]

... I am not against innovation that aids the ability for humans to live nice yet green lives...I just happen to not think that Tesla doesn't fit the bill or is honest about what they are doing.)

So, to your mind, what company does fit the bill?  Who, or which one, has done more than Tesla to “honestly” wean individuals, companies, utilities, even whole islands, off of fossil fuels?

Beyond Meat, Impossible Foods, Giant Manufacturing, Hero Cycles, Mesta Board, World Centric, Tipa. Any company involved with permaculture or carbon negative farming or earthen construction.

CARS ARE NOT GREEN. Period.

But CARS ARE NECESSARY.  TODAY.   So we could wait a few decades until, maybe, enough other solutions arise to make them unnecessary.  Or we can act today to make necessary cars cleaner.  Also, advance autonomy, which will reduce the total number of cars needed by a factor of two or three, at least.  A step in the direction you want.

Cars will continue to be made — no amount of wishing or hatred will change that. But advancing the advent of sustainable transport is better than continuing production of fossil-fueled vehicles.

Besides, Musk expects Tesla’s green energy business to eventually be much bigger than its vehicle business.  We don’t hear as much about it because solar and storage simply isn’t as sexy as cars.  And Tesla is helping get us off fossil fuel energy perhaps faster than anyone else.

[zizek]

I agree, Neil, but don't you find it somewhat strange that so many financial people leave?

While not Neil, I’d like to throw in my two cents.
The CFO left, Tesla hired a new one.
The new one, for whatever reason, found quickly that they didn’t want the job, and left.
The original CFO returned to help out until a new person could be found to take on those duties.  This time, hopefully, Tesla can take more time to insure the next CFO will be a good fit.

Now, Tesla has announced they found such a person, and that the original CFO is staying on for a time to help ensure a smooth transition to the new guy.

This could be a sign of funny business as GSY insists.  Or it could simply be that the first replacement was a mistake and Tesla is being much more careful this time (which is my opinion).

Unusual, perhaps, but nothing more.

If all the assumption by Tesla and Tesla bears are correct, then why would any of the executives leave? These are all people that are no strangers to hard work that a start-up demands.   So why would they all leave just before the pivotal point where Tesla is about to become the leading car manufacturer in the world. Have you met anybody from California? I don't think there is a single soul living there that would deny themselves that sort high profile exposure.

"Hello, I am one of the 58 executives that have left Tesla in the last year. We love Tesla and there is nothing wrong with Tesla. We didn't want to stick around when Tesla got too popular you know. I'm a humble person and that sort of career advancement would be too much for me. I didn't become an executive so I could work for the biggest brand in the world. Naw, I'll just stick to herding sheep"

[zizek]

... I am not against innovation that aids the ability for humans to live nice yet green lives...I just happen to not think that Tesla doesn't fit the bill or is honest about what they are doing.)

So, to your mind, what company does fit the bill?  Who, or which one, has done more than Tesla to “honestly” wean individuals, companies, utilities, even whole islands, off of fossil fuels?

Beyond Meat, Impossible Foods, Giant Manufacturing, Hero Cycles, Mesta Board, World Centric, Tipa. Any company involved with permaculture or carbon negative farming or earthen construction.

CARS ARE NOT GREEN. Period.

But CARS ARE NECESSARY.  TODAY.   So we could wait a few decades until, maybe, enough other solutions arise to make them unnecessary.  Or we can act today to make necessary cars cleaner.  Also, advance autonomy, which will reduce the total number of cars needed by a factor of two or three, at least.  A step in the direction you want.

Cars will continue to be made — no amount of wishing or hatred will change that. But advancing the advent of sustainable transport is better than continuing production of fossil-fueled vehicles.

Besides, Musk expects Tesla’s green energy business to eventually be much bigger than its vehicle business.  We don’t hear as much about it because solar and storage simply isn’t as sexy as cars.  And Tesla is helping get us off fossil fuel energy perhaps faster than anyone else.

Have you seen the people driving Tesla's? They almost all are wealthy people that live in large houses in the suburbs. Nothing about that sounds necessary.

The problem of solving climate change is exactly this. People like you screaming that cars are necessary while completely ignoring proven solutions like public transportation and sustainable urban planning. YOU ARE THE PROBLEM.

[GoSouthYoungins]

But CARS ARE NECESSARY.  TODAY.

Besides, Musk expects Tesla’s green energy business to eventually be much bigger than its vehicle business.  We don’t hear as much about it because solar and storage simply isn’t as sexy as cars. 

The world could get by just fine in 2020 with 1% the number of total miles driven that 2019 will have. Some amount of automotive transportation is necessary, but the vast vast vast majority currently is for frivolous convenience. Bikes move ppl very well. And there is really no reason why people have to work and live in different places.

Do you think planes are necessary too?

I doesn't matter that Musk wants the energy business to become huge. Fact is, it is shrinking.

[GoSouthYoungins]

Have you seen the people driving Tesla's? They almost all are wealthy people that live in large houses in the suburbs. Nothing about that sounds necessary.

The problem of solving climate change is exactly this. People like you screaming that cars are necessary while completely ignoring proven solutions like public transportation and sustainable urban planning. YOU ARE THE PROBLEM.

I couldn't agree move. It is so sad and kinda weird that people get transfixed by the way things function now, and don't think anything else is realistic. THEY ARE THE PROBLEM. I'd guess it is caused by lack of neuroplasticity.

[Archimid]

The world could get by just fine in 2020 with 1% the number of total miles driven that 2019 will have. Some amount of automotive transportation is necessary, but the vast vast vast majority currently is for frivolous convenience.

Let’s assume your 1% statistic wasn’t pulled out of where the sun doesn’t shine. What is your plan to make it happen? How do we eliminate all frivolous driving and only keep the absolute necessity. Please  don’t spare any details of your plan. 

[magnamentis]

Donald Trump is the president of the most powerful nation in the world. The heart of the global financial system, the UK, is about to willingly implode its own economy due to..... reasons. 

this is an error that the U.S are the most powerful country, they only are able to pretend to be because too many are not up to date in their slow mind and still leech their ass but in reality the U.S. are basically owned by foreign powers financially, chinese and russian leaders are far more powerful and those two nations would easily sack the U.S. conventionally. basically if one would take the nukes from the U.S. they would topple within a few decades at best but topple anyways, just that it will take another 150 years or so (approx)

as we all know there is a lot of fear by the underlings and they only loose that fear once the old alpha has been toppled by a new alpha and bit the old one to death.

as it happens we all shall not see this, certainly not me, i'm wondering whether i will be able to witness a significant first shift in public awareness of the imminent and inevitable downfall of "gods own country" while that term alone means doom if it's meant seriously.

"haughtiness comes before the fall"

[GoSouthYoungins]

The world could get by just fine in 2020 with 1% the number of total miles driven that 2019 will have. Some amount of automotive transportation is necessary, but the vast vast vast majority currently is for frivolous convenience.

Let’s assume your 1% statistic wasn’t pulled out of where the sun doesn’t shine. What is your plan to make it happen? How do we eliminate all frivolous driving and only keep the absolute necessity. Please  don’t spare any details of your plan.

Steep carbon tax. Payments for sequestration. SOOOOOOOOOOOOOOOOOO COMPLICATED!

[oren]

The circular arguments in this thread are so tiresome. At their heart is the conviction that Tesla and Musk are to blame for the world's woes, regardless of any evidence or logic.
There are 80+ million new cars being sold each and every year, globally, burning fossil fuels. A total of more than 1 billion are prowling the globe. This is the problem. Is Tesla/Musk to blame for that? No. Does it matter if Musk is a liar or not? No. Does it matter how many Tesla execs have come and gone? No. Does it matter if Tesla goes chapter 11 or 7? No. And yet the concerned citizens on this thread keep coming back to those issues.

But when confronted with opposing arguments on these issues, they swoop with the killer argument - we, the posters on this thread are the problem, because we support a non-ideal solutions to these 80 million annual new cars. Instead of banishing them with a flick of the fingers and a carbon tax and some regulations, we support electrifying them.

To put things straight - I would bet >90% of thread posters support reducing the number of cars worldwide, a steep carbon tax, and any and all other regulations aimed at reducing fossil fuel use and GHG emissions, even if it means reducing living standards and shrinking economies. If anyone wants to argue these arguments, I strongly suggest that the place is not in this thread. Banishing cars, public transportation, curbing over-consumption, all have nothing to do with Tesla. Should these measures be adopted, Tesla will be bankrupt anyway, and good riddance.

I do beg the question - in the interim, while these measures are sadly not adopted yet, should we continue to build fossil fuel cars, or is it better that these cars are electrified? I personally believe that the answer is an obvious yes to electrified vehicles. I strongly suggest that if you believe otherwise the place to argue that argument is in the cars cars cars thread, or some other thread, but certainly not here.

The subject of this thread is - will Tesla succeed or fail in its mission to convert global transportation to electric (as well as converting energy generation to renewable, but that is currently the secondary focus)? If you hate Tesla for what it represents, a Green BAU partial solution to a BAU problem, why do you care if is succeeds or fails? It's all the same anyway, BAU. If Tesla goes bankrupt, somebody else will make these 80 million cars. I strongly suggest that if Green BAU hatred is your motivation, this thread is not for you. The underlying assumption in this thread is that cars are being electrified, Tesla is the supposed leader in this field, but some claim it is a fraud or a failure. Is it or is it not? These are the arguments appropriate for this thread.
When you lose or get tired of such arguments and immediately jump the high horse of cars are evil and we are the problem, it strongly smacks of concern trolling to me.

Zizek's " The world does not have the capacity for more cars. We need to move away from the suburban lifestyle. And Elon Musk is not offering an alternative to excessive consumption, but rather a very expensive replacement to a single problem that exists within a much bigger picture." - True, but totally does not belong here. Sorry.
GSY's "It is so sad and kinda weird that people get transfixed by the way things function now, and don't think anything else is realistic. " - Does not belong here. Sorry.

The way to resolve arguments and move this thread forward, is to focus on each relevant issue, rather than issue hopping. Fraud or not. Executive rollover. Financial Results. Cash balance. Bankruptcy scenarios. Upcoming new models. Base version will happen or not. Competition. Energy business.

[Archimid]

Let me see if I get this straight. In less than a year we can eliminate 99% of all unnecessary driving with a steep carbon tax.

I mean sure, make the liter of gas $ 1,000  and very few rich people, corporations and governments will use fossil fuels. Also, most people will starve to death. Let me say that again. A tax that makes transportation a luxury will end the world as we know it faster than climate change.

A Carbon emission tax is necesary for survival of our civilization. The sooner and the higher, the better. The tax should be on Carbon emissions not energy use. People should pay for emitting, not purchasing or using energy.

If car makers make a 1 mile per gallon car, where 90% of the energy is used to not emit and 10% to propel the car, such car would be a solution to climate change yet it will be inhibited by the energy use tax. Only emissions should be taxed, because people should pay for their trash. Trash in general should also carry a very high tax.

How large a tax? It must start small and progressively become as large as GSY describes, and the recovered funds must be used to make the transition to a sustainable civilization. However, without replacement technologies, most people will simply pay the tax and the poor will become poorer. It is not a simple matter of just tax. Humans need energy to sustain and grow quality of life. Humans need new forms of transportation. Tesla and others, are working on that. We should help them in any way we can.


By the way, Solar City was part of Tesla's master plan from the beginning. When Elon decided to risk Tesla in order to save solar city is when I was convinced that Tesla was the real deal. That's when I bought my first few shares of TSLA. I didn't buy them because it was sure money. I bought them because they are working in real solutions to climate change and are willing to take the necesary risks and do the necesary work. We need more Elon Musks and more companies like Tesla. If they are not out there now, Tesla is laying the groundwork for them.

[oren]

I doesn't matter that Musk wants the energy business to become huge. Fact is, it is shrinking.

Not a fact.
Please separate the solar business - quite the failure - and the energy storage business - which is growing exponentially.

From Tesla's Q4 newsletter:

While 2018 was predominantly the year of Model 3, our Energy business also reached a significant milestone. In 2018, we deployed
1.04 GWh of energy storage, nearly tripling our energy storage deployments compared to 358 MWh deployed in 2017. In Q4, energy
storage deployments reached 225 MWh, a decrease of 6% sequentially, and up 57% compared to Q4 2017. A new manufacturing line
made by Tesla Grohmann is further increasing production of Powerwall and Powerpack modules at Gigafactory 1. With a better supply
of cells and new manufacturing equipment, we are aiming to more than double energy storage deployments to over 2 GWh in 2019.
Through various operational efficiencies, our average sale-to-installation time also decreased by about 50% in 2018.
We see growth opportunities for Powerwall not only in North America, but also
in Australia and Europe where electricity rates are high and solar panels
combined with Powerwall units will help reduce electricity bills. South
Australia has recently initiated a Virtual Power Plant program where the plan is
to install 50,000 interconnected Powerwall units that will provide increased
grid reliability and lower cost for all customers. The profitability of our energy
products continued to improve partially due to the increased efficiency of
Powerwall installations.

We deployed 73 MW of retrofit solar systems in Q4, a 21% decrease sequentially. We are still in the process of transitioning our sales
channel from former partners to our Tesla stores and training our sales team to sell solar systems in addition to vehicles. Cash and
loan sales made up 75% of residential deployments in Q4, up from 51% in Q4 2017. Likewise, while total deployments decreased by
38% to 326 MW in 2018, cash and loan residential deployments increased from 39% in 2017 to 71% in 2018. This was an important
contributor to improving the cash generation and profitability of the solar business.
We plan to ramp up the production of Solar Roof with significantly improved manufacturing capabilities during 2019, based on the
design iterations and testing underway. In the meantime, we are continuing to install Solar Roofs at a slow pace to gather further
learnings from our design changes, as well as about the viability of our installation processes by implementing them in areas around the
U.S. that are experiencing inclement weather.

From the conference call transcript, some additional comments:

Elon Musk

I mean, our internal projections for stationary storage are closer to 3 gigawatt hours. But some of it is kind of lumpy and may not be completed this year. We would have done more in stationary storage last year except we were so strong for vehicle production. So we had to convert a bunch of stationary storage lines, battery lines, to vehicle battery lines. Otherwise, we would have done quite a bit more in stationary storage. I expect that to grow, I mean, probably twice as fast as automotive for short - a long time.

Jeffrey Straubel

We continue to set production records basically every month. So that's growing.

Deepak Ahuja

And the profitability of the storage business and the gross margin continue to improve as we keep ramping up production and scale.

Elon Musk

It's going to be a gigantic business down the road.

[Neven]

Enough with the general debates already! This is a forum full of threads, and if you can't find one to fit your general debate, then create one!

I have to sleep at night, and now there are too many off-topic rants, one after the other. But the next time I will delete every single one of them. I created this thread to discuss Tesla glory/failure. I want to see bull/bear links, op-eds, videos, whatever, and not too much personal opinion, let alone rants and insults.

This is going to play out for a while, so please, have some patience and stop this repetitive vicious cycle.

[Sigmetnow]

It’s E-Day in Europe!  The GLOVIS Captain has docked; thousands of EVs are on their way to new owners.  And more are on their way!

Don't Bet Against Elon (@SteveHamel16) 2/4/19, 6:05 AM
Glovis Captain is getting close to making history!
E-Day!
The Electric invasion of Europe.
The liberation from the Gas and Diesel oppression!
Fear not, reinforcements are not far behind!
#EDay
$TSLA

https://twitter.com/stevehamel16/status/1092378681232814080

From a few hours ago.  Love the windfarm markers!

MacGyver (@MacGyver_BE) 2/4/19, 6:18 PM
#GlovisCaptain is now off the coast of Calais, France. Arrival at this speed in Zeebrugge in 5 hours.
The blob of green/red dots are all ships waiting to enter the Port of Zeebrugge or Antwerp.
Further to the right, the rectangle of blue dots are offshore windfarm markers.

https://twitter.com/macgyver_be/status/1092562973032361989
Image below.

[Sigmetnow]

Tesla’s Insanely Awesome Growth Not Impressing People Who Expected Much Worse … Wait, What?

As one Tesla shareholder put it, “It’s just so effing funny to hear ‘TSLA missed analyst consensus on earnings’. Name one analyst who last year predicted that Tesla would not need to raise cash in 2018 and beyond to fund growth. Name one analyst who last year predicted TSLA would be profitable in both Q3 and Q4. Name one analyst who predicted FCF positive in a massive way for those Q’s.” In my opinion, this shareholder appropriately added, “The level of douchebaggery has reached epic proportions.”
…
While you can say that expectations — related to micro factors as well as macro factors — changed for various reasons, thus leading to the difference, the overall exasperation seems warranted when you consider that no major analyst expressed belief in the middle of last year that Tesla could show two profitable quarters. Quite the opposite, they were all claiming that Tesla would “burn cash” indefinitely and needed to raise or borrow more money. Yet these same analysts are now disappointed by Tesla’s two profitable quarters? They are now disappointed that Tesla brought in less money than “they expected” … when they previously expected Tesla to bring in no profits at all? Wait, what? …

https://cleantechnica.com/2019/02/04/teslas-insanely-awesome-growth-not-impressing-people-who-expected-much-worse-wait-what/

US sales, January

Otmar Ebenhoech (@CafeElectric) 2/4/19, 6:53 PM
@AutoNewsTV , a Auto Dealer news outlet has just started listing Tesla sales. This is sure to spur some awareness.
https://www.autonews.com/video/first-shift-january-us-sales-winners-losers

https://twitter.com/cafeelectric/status/1092571889237512192
Image below.  Would take an exponential scale to show these precisely on a graph!

[Sigmetnow]

And about that year-end “7k inventory”:

Tesla delivered 90,700 cars in Q4.  So 7,000 would have been about 7 days’ worth of sales.

The average inventory for the industry at the end of December was a 62-day supply.

The lowest inventory is at US Subaru dealerships at 26 days.
Mitsubishi Motors North America had a 109-day supply and was the only automaker above the 100-day mark. At the brand level, long-struggling Fiat again posted the industry's highest inventory level at 194 days. Volkswagen was at 129 days, Buick at 112, Mitsubishi at 109 and Mini at 102.

https://www.autonews.com/sales/inventory-levels-line-last-6-years

[NeilT]

I agree, Neil, but don't you find it somewhat strange that so many financial people leave?

Hi Neven, sorry busy rebuilding the house next door that we bought.  I know you have personal experience of that one.

There are several reasons why I'm not overly concerned about financial people leaving.  Finance is one of the last bastions of conservatism in large companies. They want a forecast for the whole year at least 3 months before the previous year has ended, they don't want any changes and get fairly upset if you ask them to keep on producing forecasts and trend analysis on a monthly basis.

It has already been reported here that the senior finance exec's have gone to better jobs, with more pay, less hassle and kept their very lucrative Tesla share options.

In order to assume they were rats sinking the fleeing ship, we would have to assume that the new employers have done virtually no due diligence in checking out their work and the state of the company they were leaving.

Also I'm even more sure that Tesla is using an Agile company strategy rather than the Lean strategy used by just about every other car manufacturer on the planet.  Agile is lean, mean and burns people out at incredible speed.  It also requires constant quarterly reanalysis of the entire budget situation and a brand new forecast for the next 3 months.

The most interesting one for me was the exec who chose not to start.  My take?  He was shown just how much work it would be and decided to take an easier job for less, potential, money.

I'm sure you have met many people who can't understand why you would choose to work for  yourself with freelance translations.  I know that I've met hundreds of people who can't understand why I can't just "get a real job" and stop working all those contracts.

Tesla is not a standard manufacturing company.  It is a new kind of company, a high tech company which has chosen to manufacture its own vehicles whilst also developing the software and hardware technology to drive it into the 22nd century.  Musk is not the only person working 18 hours a day 7 days a week for Tesla. Guaranteed.  Question.  How long would you stay?

[GoSouthYoungins]

Neil, none of that explains why Tesla can't find a credible CAO or CFO. Although, maybe you are on to something: Tesla does "agile" accounting.

[GoSouthYoungins]

And about that year-end “7k inventory”:

Tesla delivered 90,700 cars in Q4.  So 7,000 would have been about 7 days’ worth of sales.

The average inventory for the industry at the end of December was a 62-day supply.

The lowest inventory is at US Subaru dealerships at 26 days.
Mitsubishi Motors North America had a 109-day supply and was the only automaker above the 100-day mark. At the brand level, long-struggling Fiat again posted the industry's highest inventory level at 194 days. Volkswagen was at 129 days, Buick at 112, Mitsubishi at 109 and Mini at 102.

https://www.autonews.com/sales/inventory-levels-line-last-6-years

I'm not sure you understand how most car companies work. They sell their vehicles to their dealers (and the dealers usually finance the cars until they are sold, so really a bank owns the cars at dealers, but whatever). Tesla is the only company that doesn't use this model. So there is no middleman, and if Tesla can't find a buyer, they are stuck with the inventory.

[b_lumenkraft]

I'm not sure you understand how most car companies work. They sell their vehicles to their dealers (and the dealers usually finance the cars until they are sold, so really a bank owns the cars at dealers, but whatever). Tesla is the only company that doesn't use this model. So there is no middleman, and if Tesla can't find a buyer, they are stuck with the inventory.

Wait, if the car is delivered to the car dealership and the bank has paid for it, why would the car company include it in their inventory then?

[GoSouthYoungins]

I'm not sure you understand how most car companies work. They sell their vehicles to their dealers (and the dealers usually finance the cars until they are sold, so really a bank owns the cars at dealers, but whatever). Tesla is the only company that doesn't use this model. So there is no middleman, and if Tesla can't find a buyer, they are stuck with the inventory.

Wait, if the car is delivered to the car dealership and the bank has paid for it, why would the car company include it in their inventory then?

They don't.

[magnamentis]

<snip, I warned; N.>

[Sigmetnow]

Magnamentis, you say “one-sided,” I say, “the truth.”   Not liking their CEO or the precise way they are progressing does not change the fact that Tesla is currently our best hope for transitioning to sustainable transport and energy.  I choose to see their efforts in a positive light.  YMMV.

[magnamentis]

<snip, I warned; N.>

[Sigmetnow]

<snip; N.>

I agree there is a Dark Side.  While I do not ignore it, the Light Side seems much more important and powerful.  Besides, others seem much more capable of emphasizing the negative news than I am. 

[magnamentis]

<snip, use the Like button; N.>

[Sigmetnow]

Inventory versus Demand:  Who’s doing it better, OEMs or Tesla?

The old established manufacturers have several control points — other than production — that Tesla does not have:
- Dealer stock choices
- Advertising
- Discounts from sticker price (average of $3,720 per vehicle in January to incentivize sales)
- Leases

So theoretically, their inventories could be quite lean.  One reason they are not, is because U.S. sales peaked three years ago.  Sales in 2019 are expected to be “cool” as well.  Demand problem there?  Most definitely yes! — see the article below.

But while almost all OEM sales declined in 2018, Tesla sales leaped — I think we can safely say “skyrocketed.”    And Tesla does no public advertising, offers no leases on the Model 3, and (except for exceptional circumstances) gives no discounts on new cars.  So to suggest that Tesla’s comparatively tiny inventory is somehow a sign of waning demand is ludicrous.  A much more likely reason is pure logistics: the difficulty of suddenly getting many more cars to the many more people who have ordered them.  Tesla has a buyer for every car it makes (other than test, demo, and service loaner vehicles, of course, which have their own destinations).

US Car Dealer Lots Are Flush With Unsold Cars as Sales Are Expected To Drop

Car dealers are beginning 2019 with a heavier inventory of unsold vehicles on their lots, a situation that some analysts say will put pressure on them to cut factory output as U.S. auto sales are expected to cool this year.
…
There were 3.95 million vehicles on dealership lots at the end of January, a 4% increase from December and up nearly 3% from the prior-year January,
…
General Motors Co. has already moved to end production at five North American factories this year in response to falling sedan sales, and aiming to get ahead of an expected U.S. car market downturn. More auto makers could be forced to follow suit as rising interest rates on new-car loans and more affordable options on the used-car lot are expected to put a damper on new-car sales this year.
“We could see more of the pain we saw last year with GM and inventory being taken out on the car side,” said Tyson Jominy, an analyst at J.D. Power.

Ford Motor Co., which late last month reported a 27% drop in operating income for the full-year 2018, has moved to phase out slow-selling sedans and shift more production to higher-margin crossovers, sport-utility vehicles and trucks.
…
Jonathan Smoke, an economist with Cox Automotive, said last year’s strong results were lifted by sales to fleet buyers that aren’t likely to be repeated again this year.
…
With sales projected to weaken this year, analysts say auto makers will be under pressure to trim factory production in order to avoid offering steeper discounts—a task made harder with many new crossovers and electric vehicles set to roll out in the coming years, further crowding dealer lots.
…
Some dealers say auto makers are being overly optimistic for the projected demand.
David Rosenberg, chief executive for New England dealership chain Prime Automotive Group, said he is already getting flooded with too many recently launched crossover and truck models, such as the Toyota RAV4, Ram 3500 and Audi Q8.
“There is an oversupply of new products, but not everyone is going to achieve their sales targets,” Mr. Rosenberg said.

Ryan Gremore, president of the O’Brien Auto Team, a dealership chain in Illinois, Florida and Kentucky, said low interest rates in the past have made it cheaper for dealers to carry higher levels of inventory. But with rates now going up, it will become more expensive to hold on to unsold vehicles and retailers are likely to be pickier about what they stock, he added.
“We’ve carried too much inventory because we’ve been conditioned at artificial rates,” Mr. Gremore added.

Wall Street Journal article:  https://www.wsj.com/articles/car-dealer-lots-are-flush-with-unsold-cars-as-sales-are-expected-to-drop-11549319709
Or:   https://apple.news/AAtAxtb1sReSKX7RPzvg8Mg

[GoSouthYoungins]

Can a Tesla Bull please explain where they think the new products are going to come from when Tesla is spending less on Capex than the amount the equipment is depreciating? Wouldn't that imply shrinking, not growing?

[oren]

I am not exactly a Tesla bull, but I will just point out there is a lot of auomotive product pipeline that is supposed to be coming out in the next two years: the Semi, the model Y CUV, the Pickup, the Roadster 2. IMHO this is too much anyway and may lead to loss of focus. Even the Model 3 is far from general availability (still missing Standard Range, RHD, non-premium interior, global availability, various features such as tow hitch). And there's the Supercharger network that needs expansion, addition of CCS connectors, Supercharger v3. And improvements in service centers and spare parts. Still a lot to do without adding lots of new products.
Capex is investmemt in plant & equipment, once the factories are running it's obvious it will shrink. New products would entail R&D spending, a different metric.
I expect that when the Y enters production Capex will rise again.

[NeilT]

I wasn't aware that companies only bought equipment that lasted 5 years so that they could depreciate it over and over again.  Personally I thought companies bought 10-20 year equipment, depreciated it over 5 years then used the equipment to make money.

Of course with the changing technology and the constant fight for market share, there will be constant churn.

Yet again you mis-read the situation.  Tesla said it was going for cost cutting so it could finally ship the mass market "affordable" Model 3.  The way you do that is with fully depreciated equipment, fixed models that don't change and a ramp up in volume for the same workforce without expending on new capital.

That is how you increase profits in a market that you dominate.  Some time later they will have to innovate, update models, revamp the line and buy more equipment.  But the thing about the car market is that they can produce new variants of the models they already produce using 85% of the existing jigs and assembly tools.  The automotive business has been doing this for at least 3 decades now.  When GM owned Vauxhall, Opel and Saab, Saab 9-5 owners were distinctly disgruntled to learn that their prized cars shared 90% of their parts and pressings with Vauxhall and Opel models.

[GoSouthYoungins]

I wasn't aware that companies only bought equipment that lasted 5 years so that they could depreciate it over and over again.  Personally I thought companies bought 10-20 year equipment, depreciated it over 5 years then used the equipment to make money.

Of course with the changing technology and the constant fight for market share, there will be constant churn.

Yet again you mis-read the situation.  Tesla said it was going for cost cutting so it could finally ship the mass market "affordable" Model 3.  The way you do that is with fully depreciated equipment, fixed models that don't change and a ramp up in volume for the same workforce without expending on new capital.

That is how you increase profits in a market that you dominate.  Some time later they will have to innovate, update models, revamp the line and buy more equipment.  But the thing about the car market is that they can produce new variants of the models they already produce using 85% of the existing jigs and assembly tools.  The automotive business has been doing this for at least 3 decades now.  When GM owned Vauxhall, Opel and Saab, Saab 9-5 owners were distinctly disgruntled to learn that their prized cars shared 90% of their parts and pressings with Vauxhall and Opel models.

So it's just a lie that they are building the model y, pickup, semi, roadster, new factory, new service centers, new charging stations, roof tile?

[GoSouthYoungins]

For all y'all blah blahing about how Tesla selling on 6500 (max) model 3s in the US wasn't about demand....Tesla just cut prices again.

https://www.autonews.com/retail/tesla-cuts-model-3-price-second-time-year

Just in case y'all are Muskian Economists, I'll explain how reality actually works: a business cuts prices when they don't have demand at the current price.

[Sigmetnow]

For all y'all blah blahing about how Tesla selling on 6500 (max) model 3s in the US wasn't about demand....Tesla just cut prices again.

https://www.autonews.com/retail/tesla-cuts-model-3-price-second-time-year

Just in case y'all are Muskian Economists, I'll explain how reality actually works: a business cuts prices when they don't have demand at the current price.

Tesla does not operate like other businesses. 

[Sigmetnow]

This is fascinating/amusing.  Tesla and Daimler have collaborated before.  Tesla built electric powertrains for MB and Smart; Daimler invested (profitably) in Tesla stock; Tesla’s President of Automotive is a former Daimler executive.

Now, MB has its own EV platform it’s trying to sell to others.  But Tesla’s is better.  And Tesla needs electric vans for its mobile service fleet.  But MB’s e-Sprinter van doesn’t have the required range.  So, is some new sort of mash-up in the works?

Tesla and Mercedes-Benz have been holding ‘talks’ about collaborating again, says Daimler CEO
https://electrek.co/2019/02/06/tesla-mercedes-benz-holding-talks-collaboration-daimler-ceo/

[GoSouthYoungins]

For all y'all blah blahing about how Tesla selling on 6500 (max) model 3s in the US wasn't about demand....Tesla just cut prices again.

https://www.autonews.com/retail/tesla-cuts-model-3-price-second-time-year

Just in case y'all are Muskian Economists, I'll explain how reality actually works: a business cuts prices when they don't have demand at the current price.

Tesla does not operate like other businesses. 

Oh, so the laws of supply and demand dont apply. Tesla is cutting prices to be nice. Gottcha.

Don't mind the fact that 1/4 of the (inflated/bs) margin has evaporated in the last 6 weeks. At this rate they will be selling 35k version by the end of the quarter. For a loss.

[Sigmetnow]

Tesla does not operate like other businesses. 

Oh, so the laws of supply and demand dont apply. Tesla is cutting prices to be nice. Gottcha.
...

Yes, “nice.”  Like:
- opening their patents for anyone to use, for free
- free Supercharging for life, for early customers
- not making Supercharging a profit center
- not making Service a profit center
- upgrading all their cars via OTA updates, for free

Tesla is supply-constrained, NOT demand-constrained.  Every car they make is already sold, and 3/4 of their sales last quarter were from new orders, not reservations.

[Sigmetnow]

“No demand.”  LOL.

EV sales, over the last 8 years.

Don’t bother looking for Model 3, when it shows up you can’t miss it.

https://twitter.com/tesla_truth/status/1092980837216280576
GIF at the link.

[GoSouthYoungins]

2016: Solar Roof Tile (lol)
2017: Full Self Driving (lol)
2019: 12,000 more Supercharging Stations
2019: Dozens of new Service Centers
2019: Semi
2020: Model Y
2020: Roadster, hover-enabled (lol)
? : Pickup that can fit a F150 in its bed (lol)
? : Model S update
? : Model X update

Easily $20 Billion in Capex required in next 2 years to meet timeline. 2018 had negative free cash flow (while filing creme-de-la-creme orders) and $2.3 Billion in Capex (shrinking every quarter). How can y'all actually think this is going to work?

[GoSouthYoungins]

“No demand.”  LOL.

EV sales, over the last 8 years.

Don’t bother looking for Model 3, when it shows up you can’t miss it.

High-school math: the amount of demand is equal to the area under the line.

[Sigmetnow]

The facts argue against major price sensitivity for the Model 3:  More customers continue to order the higher-priced All Wheel Drive versions.

Model 3 VINs (@Model3VINs) 2/6/19, 11:43 AM
2/ Since its introduction in mid-2018, AWD demand has been incredibly high. In the 1st ~month after the configurator opened, around half of new orders were AWD. This was higher than expected, and @Tesla @elonmusk didn't seem to think this trend would continue.

https://twitter.com/model3vins/status/1093188363127947264
Text image of the comments from the call, at the link.

Model 3 VINs (@Model3VINs) 2/6/19, 11:43 AM
3/ And yet, 6 months later, AWD orders are still coming in above RWD. In fact, cumulative AWD VINs have now passed RWD — despite a 54k head start!

https://twitter.com/model3vins/status/1093188364394614785
Image below.

[GoSouthYoungins]

The facts argue against major price sensitivity for the Model 3:  More customers continue to order the higher-priced All Wheel Drive versions.

It warms my heart to know that the reason I can get such ridiculously good odds betting against TSLA is that the bulls genuinely believe things like "Tesla is cutting prices because demand is so strong". Wonderful, truly wonderful.

[Sigmetnow]

...
Easily $20 Billion in Capex required in next 2 years to meet timeline. 2018 had negative free cash flow (while filing creme-de-la-creme orders) and $2.3 Billion in Capex (shrinking every quarter). How can y'all actually think this is going to work?

No problem.  Revenue will be around $30Billion in 2019, and closer to $45Billion in 2020. 

$TSLA annual revenue (billions).
2018: $21.46
2017: $11.76
2016: $7.00
2015: $4.05
2014: $3.20
2013: $2.01
2012: $0.41
2011: $0.20
2010: $0.12
2009: $0.11
2008: $0.01

[GoSouthYoungins]

Neil,

Please get back to me about how you know the DOJ's investigation has concluded.

Also, you never answered why it makes sense not to have a CFO or CAO with any experience for a $50b company.

Finally, where is Tesla going to acquire the $20b they for capex in the next 2 years? Or do you have a drastically different estimate about how much is required to complete the stated projects?

Congratulations on all your airline miles and your multiple homes.

[gerontocrat]

High-school math: the amount of demand is equal to the area under the line.

Not in this case.The SALES are equal to the line which registers the cumulative sales. It is very possible that demand has not increased at the same rate the area under the curve has increased.
The real demand for the TESLA vehicles in the next n years is unknown.
e.g.
A few people on the reservation file might be dead.
Others on the reservation list might say no-thank-you when they get a call to buy a TESLA because - they've lost their job, they are getting divorced, they are sick with big medical bills etc etc etc.

Other people might buy a TESLA when
a) they think they will get it straight away and / or
b) their current set of ICE wheels have got too long in the tooth, and / or
c) to keep up with the Jones's,
d) they have change their view of climate change and want to do their bit (?*!??)

I would love to see their confidential market survey stuff.

Meanwhile
- their current CFO has not run away. He is hanging around as a senior advisor to the company.
- the energy storage business will remain a minority business even if they install over 2 GWH (i.e. double 2018) of stationary storage in 2019. Just 250,000 TESLA 3s with the small battery of 50KWH = 12.5 GWH of storage,
- I think they won't roll out solar roof tiles in large quantities until 2020 - that is when all new dwellings in California will have to have solar power installed? That makes the economics of using
solar roof tiles much more attractive.
- looking at the 5 year share price graph says that TESLA was a 200 dollar a share company until 2017 and during 2017 it changes into a 300 dollar a share company by 2018. All the short-term ups and downs are just market hysteria.

So the question is - can it during 2019 get up to the next stage by 2020. It needs 10,000 cars a week as normal production to do that.
That is my hypothesis that belongs to me

[GoSouthYoungins]

...
Easily $20 Billion in Capex required in next 2 years to meet timeline. 2018 had negative free cash flow (while filing creme-de-la-creme orders) and $2.3 Billion in Capex (shrinking every quarter). How can y'all actually think this is going to work?

No problem.  Revenue will be around $30Billion in 2019, and closer to $45Billion in 2020. 

Revenue means NOTHING. They need to generate free cash flow. Model S and X sales down vs 2018. Two model 3 price cuts in the first 6 weeks of 2019. Gross income in 2018 was $4b. That number will, at best go up to $7b. SG&A $5b. Debt repayment $1b. Even with this extremely generous and crude accounting approximation, $1b for capex. Please should your math to get to $10b...

[Sigmetnow]

HA!!! MODEL 3 IS DOOOOOOMED!!! TESLA IS DESPARATE! Prices are NEVER EVER EVER reduced on SUCCESSFUL CARS!!!!

https://twitter.com/vuryfurrybur/status/1093168322856681474
Image below.

[GoSouthYoungins]

So the question is - can it during 2019 get up to the next stage by 2020. It needs 10,000 cars a week as normal production to do that.

The answer is "NO". There is nowhere to build those cars. Easy.

[GoSouthYoungins]

HA!!! MODEL 3 IS DOOOOOOMED!!! TESLA IS DESPARATE! Prices are NEVER EVER EVER reduced on SUCCESSFUL CARS!!!!

https://twitter.com/vuryfurrybur/status/1093168322856681474
Image below.

Without having ever met you, it is abundantly clear you have never run a business. (Helpful Hint: You learn Econ 101 for free by just watching a few youtube videos.)

As price goes up, demand goes down. As price goes down, demand goes up. A business should pick the price where (the demand) X (the margin) is highest. Ford sold 10 times more cars in 1915 vs 1911 (which also must have drastically lowered the cost to produce each vehicle).

If Tesla is, as you claim, supply constrained, then the only reason to lower price is because the demand isn't there. (You are sort of right about them being supply constrained since they can't make more than 5k model 3s per week. But more importantly, there isn't the demand to meet that supply at a 20% margin. This is why they are lowering the price. DUH. If they lowered price to $35k, the demand would be more than the 5k a week they can make, but they would lose money on each car. They will likely settle on a price near $40k by the end of the quarter. Margin less than 10%.

If you actually want me to draw out the supply demand profit maximization charts for Ford in the 1910s vs Tesla in the 2010s, I will.

[Sigmetnow]

Pretend you know more about Tesla financials than they do, and suggest as many ‘alternative facts’ as you like, but the price reductions were made possible by the ending of the referral program, which had grown to the point where it was adding considerable expense to each Model 3. 

Tesla attributes the price change “primarily” to the end of the referral program.

A Tesla spokesperson sent us the following statement:
“Primarily as a result of ending the referral program, which cost far more than we realized, Tesla is able to lower the price of Model 3 by $1,100.”

https://electrek.co/2019/02/05/tesla-model-3-price-reduction/

It’s great to see referral program money being used instead to reduce the cost of the 3. It's the right move, it was time.

[GoSouthYoungins]

Pretend you know more about Tesla financials than they do, and suggest as many ‘alternative facts’ as you like, but the price reductions were made possible by the ending of the referral program, which had grown to the point where it was adding considerable expense to each Model 3. 

Tesla attributes the price change “primarily” to the end of the referral program.

A Tesla spokesperson sent us the following statement:
“Primarily as a result of ending the referral program, which cost far more than we realized, Tesla is able to lower the price of Model 3 by $1,100.”

https://electrek.co/2019/02/05/tesla-model-3-price-reduction/

It’s great to see referral program money being used instead to reduce the cost of the 3. It's the right move, it was time.

Show me your math of why a supply constrained company would lower their prices. Good luck.

[GoSouthYoungins]

https://insideevs.com/drone-flyover-tesla-gigafactory-3-progress/amp/

Tesla is about to turn a field of mud into a 3k vehicle per week factory in the next 330 days. AMAZING!