Tesla existential threat?
03-04-2019, 03:01 AM
#691
You may not realize the demographic you're speaking to here. This is not a Tesla forum or enthusiast group. There are no acolytes. This forum is composed of mainly Porsche owners, a handful of which ALSO own Tesla or interested in purchasing or considering a Tesla. You would have a hard time finding a more qualified group of car critics or experienced car enthusiasts and drivers than this forum.
Additionally you may find folks here participating who are more than qualified - at a professional level to evaluate the company in many other aspects. In fact the main giveaway to me (besides posting long opinions based on not having the facts on hand as my last reply to your post) that you do not have the experience or qualifications to evaluate the business as a whole is your certainty with how the whole business will play out.
Additionally you may find folks here participating who are more than qualified - at a professional level to evaluate the company in many other aspects. In fact the main giveaway to me (besides posting long opinions based on not having the facts on hand as my last reply to your post) that you do not have the experience or qualifications to evaluate the business as a whole is your certainty with how the whole business will play out.
03-04-2019, 09:05 AM
#692
Addict
Rennlist Member
Rennlist Member
Our house started with Tesla in the "Apple II" days of early adoption ... the 2008 Roadster. We still have it.
My wife had an early 2012 Model S P85 and now has a 2018 P100D version of same. She's convinced that electric cars (well ... Teslas, anyway) are a good thing.
I have a Taycan in my sights which likely will replace the 2018 Panamera Turbo S e-Hybrid now doing PHEV duty. The 680 hp Panamera's long-term (13k miles) fuel economy is currently 27 mpg if one ignores the cost of electricity. I can't wait to go all electric. If the Taycan disappoints for any major reason, I can see a Model 3 Performance in my future.
What the late adopters fail to appreciate is the magnitude of appeal for not ever going to a gas station again. We've never used a Supercharger except at the Tesla service center once or twice, just for fun. We "fill up" overnight in our garage. It's sooooo convenient and hard to communicate the satisfaction of doing it that way to people who haven't tried it.
03-04-2019, 10:06 AM
#693
Burning Brakes
I recently described the switch to a Tesla this way.
I have owned 36 cars in the 25 years I've been driving. Everything from a 1987 Honda Accord to a 2018 991.2 GT3. Looking back, every time I purchased another car, it typically was a slight improvement on one I owned previously. A little faster, better gear box, nicer interior, etc. Nothing has been a dramatic leap. Even going through different generations of 911's, at the end of the day they have more in common then differences. The 991.2 GT3 had more in common with my 1989 911 Turbo than my wife's Model X.
Driving a Tesla is unlike anything else I've ever driven. Not even close. Some of the experiences apply to electric vehicles in general, but some apply specifically to Teslas. For example, everyone loves to talk about features like launch control in a sports car. But you need to press several buttons, have the car in the right mode, hold the brake, wait for launch control to activate, and then go with a lot of drama and noise. Not something you are going to do regularly around town. Compare that to a Tesla where every time you start accelerating, if you gun it, it's the equivalent of launch control without the drama. It's a blast.
Then you have all of the tech, the new driving experience with the large touch screen (yes some new gas models are starting to get large touch screens, but none are nearly as good as Tesla), autopilot, charging at home, mobile app to control the car, over the air updates. It goes on and on. Then there are even silly things like Fart Mode. Many people just roll their eyes, but when have you ever had a feature in your car that can regularly makes your kids laugh hysterically. Kids start to argue in the back, activate Fart Mode, and suddenly they are laughing.
To be honest, I've been getting a bit bored of 911's and other sports cars lately. When the new model comes out I kinda just yawn. A little bump in horsepower, a new bumper and interior, but overall it's really the same. With Tesla, for the first time since I was 22 and bought a GTI with a 6-speed manual, have I REALLY been excited about a car. Tesla has shown how exciting an electric car can be, and it's made me passionate about cars all over again.
***Warning, this will be a trigger for climate change deniers***
I'll add one more piece. I was hit pretty hard by the recent climate reports this year. It really made me think more about the world I'm leaving my kids and their future children. I know driving a Tesla isn't going to save the environment, and in order to really prevent catastrophic results changes need to be made on a very large scale. I want to show my kids that I was at least able to make some small contributions that were within my control. We added solar panels to our house this fall (enough capacity for two electric vehicles in addition to our house) and the Tesla compliments this perfectly. Hopefully when my kids are adults and look back, they can at least know that I tried.
I have owned 36 cars in the 25 years I've been driving. Everything from a 1987 Honda Accord to a 2018 991.2 GT3. Looking back, every time I purchased another car, it typically was a slight improvement on one I owned previously. A little faster, better gear box, nicer interior, etc. Nothing has been a dramatic leap. Even going through different generations of 911's, at the end of the day they have more in common then differences. The 991.2 GT3 had more in common with my 1989 911 Turbo than my wife's Model X.
Driving a Tesla is unlike anything else I've ever driven. Not even close. Some of the experiences apply to electric vehicles in general, but some apply specifically to Teslas. For example, everyone loves to talk about features like launch control in a sports car. But you need to press several buttons, have the car in the right mode, hold the brake, wait for launch control to activate, and then go with a lot of drama and noise. Not something you are going to do regularly around town. Compare that to a Tesla where every time you start accelerating, if you gun it, it's the equivalent of launch control without the drama. It's a blast.
Then you have all of the tech, the new driving experience with the large touch screen (yes some new gas models are starting to get large touch screens, but none are nearly as good as Tesla), autopilot, charging at home, mobile app to control the car, over the air updates. It goes on and on. Then there are even silly things like Fart Mode. Many people just roll their eyes, but when have you ever had a feature in your car that can regularly makes your kids laugh hysterically. Kids start to argue in the back, activate Fart Mode, and suddenly they are laughing.
To be honest, I've been getting a bit bored of 911's and other sports cars lately. When the new model comes out I kinda just yawn. A little bump in horsepower, a new bumper and interior, but overall it's really the same. With Tesla, for the first time since I was 22 and bought a GTI with a 6-speed manual, have I REALLY been excited about a car. Tesla has shown how exciting an electric car can be, and it's made me passionate about cars all over again.
***Warning, this will be a trigger for climate change deniers***
I'll add one more piece. I was hit pretty hard by the recent climate reports this year. It really made me think more about the world I'm leaving my kids and their future children. I know driving a Tesla isn't going to save the environment, and in order to really prevent catastrophic results changes need to be made on a very large scale. I want to show my kids that I was at least able to make some small contributions that were within my control. We added solar panels to our house this fall (enough capacity for two electric vehicles in addition to our house) and the Tesla compliments this perfectly. Hopefully when my kids are adults and look back, they can at least know that I tried.
03-04-2019, 11:18 AM
#694
Rennlist Member
+1 @manitou202 - EV + Solar is a very compelling combination - i also recently obtained two powerwalls - since day 1 of their installation i’m 100% solar now even at night!
im still looking forward to actual competition for Tesla - but I continue to believe the other guys still don’t quite get it and Tesla is going to be harder to knock off than people realize - at the moment even into late 2020 nothing is of the scale or vision that Tesla offers and the EV’s are still not these guys focus - we will see what comes to pass
im still looking forward to actual competition for Tesla - but I continue to believe the other guys still don’t quite get it and Tesla is going to be harder to knock off than people realize - at the moment even into late 2020 nothing is of the scale or vision that Tesla offers and the EV’s are still not these guys focus - we will see what comes to pass
03-04-2019, 11:30 AM
#695
Manitou202 Well said! After a lifetime of listening to automakers and press wags trying to convince me that incremental changes are actually HUGE LEAPS FORWARD, along comes Tesla outta nowhere with a genuine HUGE LEAP FORWARD. An American company building cars in America with American engineering.
03-04-2019, 11:41 AM
#696
Leap ahead
Manitou202 Well said! After a lifetime of listening to automakers and press wags trying to convince me that incremental changes are actually HUGE LEAPS FORWARD, along comes Tesla outta nowhere with a genuine HUGE LEAP FORWARD. An American company building cars in America with American engineering.
I guess that is what I see wrong with the other car companies. They have the money, they have the factories, they can if they are willing to spend the money even buy the talent needed. They should be making cars that leave Tesla cars in the dust.
When I first saw picture of the Mission-E the first thought that crossed my mind is "That is how you leap-frog Tesla - put that out and prepare the electric cattle prods to drive the customers back if they crowd you too much.". I still have hope for Taycan to match or be a little better than Teslas.
However, most companies seem to be holding back a little to protect their present products. I understand they can't just make the previous cars obsolete, anyone who know the "Osborne Effect" realizes why. But even far future cars promised do not seem to be that advanced.
Earl Colby Pottinger (Tesla, Bollinger, Rivian and other BEVs fan)
03-04-2019, 01:21 PM
#697
And in what future quarter will Tesla be profitable with a marginal M3 GP?
An then we have a repeat of the 2016 M3 reservation scam quoting overly optimistic delivery times. Remember, in 2016 Tesla with its 300K+ reservations, generated $300B.
https://seekingalpha.com/article/424...l-invited?dr=1
However, the following day - March 1 - Deutsche Bank analyst Emmanuel Rosner published a report for DB’s clients called “SR M3 Likely Addresses Issues;
Questions Now Back To Margin.” In this report, DB writes as follows: “In our follow-ups with the company, management outlined a high level bridge to maintaining
profitability which includes savings from higher fixed cost absorption…Tesla indicated that initially, the $35k Model 3 will generate a positive cash gross margin
(gross profit plus depreciation of approximately $1,500)….”
Questions Now Back To Margin.” In this report, DB writes as follows: “In our follow-ups with the company, management outlined a high level bridge to maintaining
profitability which includes savings from higher fixed cost absorption…Tesla indicated that initially, the $35k Model 3 will generate a positive cash gross margin
(gross profit plus depreciation of approximately $1,500)….”
https://seekingalpha.com/article/424...l-invited?dr=1
03-04-2019, 01:49 PM
#698
Second quarter of 2019. Seeking Alpha has been wrong for 12 plus years. Every year Tesla was to go out of business according to them, every year Tesla just get bigger - Tesla has problems but Seeking Alpha is not the place to get proper info.
Remember it is Volume times Profit equals Gross Profit.
If profit per car goes down but sales of cars goes up you will just have to wait to see who wins.
Earl Colby Pottinger (Tesla, Bollinger, Rivian and other BEVs fan)
03-04-2019, 09:29 PM
#699
Banned
03-04-2019, 09:45 PM
#700
Banned
"Model Y, being an SUV, is about 10% bigger than Model 3, so will cost about 10% more & have slightly less range for same battery"
So same price per cubic foot.
03-04-2019, 11:00 PM
#701
Second quarter of 2019. Seeking Alpha has been wrong for 12 plus years. Every year Tesla was to go out of business according to them, every year Tesla just get bigger - Tesla has problems but Seeking Alpha is not the place to get proper info.
Remember it is Volume times Profit equals Gross Profit.
If profit per car goes down but sales of cars goes up you will just have to wait to see who wins.
Earl Colby Pottinger (Tesla, Bollinger, Rivian and other BEVs fan)
Remember it is Volume times Profit equals Gross Profit.
If profit per car goes down but sales of cars goes up you will just have to wait to see who wins.
Earl Colby Pottinger (Tesla, Bollinger, Rivian and other BEVs fan)
Gross sales for 2018 - $21B ($21 x 10^9)
Unit sales - 245,000 (2.45 x 10^5), ASP $84K
GP - $4B ($4 x 10^9)
GP($/vehicle) = $4 x 10^9 / 2.45 x 10^5 = $16.3K per vehicle
GP(%) = $4B / $21B = 19
GAAP (loss) = $1B ($10^9)
GAAP (loss/vehicle) = $10^9 / 2.5 x 10^5 = $4,000 per vehicle
So for every vehicle (out-the-door"), Tesla gave away $4,000 of shareholder wealth. Tesla is another potential Apple/Amazon, right? And what would one expect
long term given that Tesla is basically operating with an automotive business model? And given that the MS/MX sales have basically peaked at about 100K per year
and now with a price cut, and the M3 new volume price (~ $35k - $40K) is down, the outlook for 2019 is very marginal. Remember, Tesla vehicles at the present price
point are still basically an inelastic product, i.e. the M3 price reduction will not generate enough GP to result in a GAAP profitable Tesla in 2019! Let's not forget that
CAPEX, R&D, & other overhead must be paid for and just focus on GP per vehicle - as some do. By the way, where will the needed increase in production capacity
come from, assuming Tesla has reached its max at about 20-25K/month to achieve the needed profit to offset the lower future ASP per vehicle, and that's notwithstanding
marginal product demand?
Additional Calcs:
2018: GP + Loss = Overhead = $4B + $1B = $5B
Assuming present Tesla at max capacity per year of 300K (25K/month);
Needed GP/vehicle = $5B / 300K = $17,000
Given the latest price MS/MX/M3 price reductions, Tesla most likely will have another GAAP loss for 2019 without more overhead reductions.
Here are the actual 2018 Tesla numbers; https://www.nasdaq.com/symbol/tsla/f...come-statement
Last edited by Lorenfb; 03-05-2019 at 10:42 AM.
03-05-2019, 11:27 AM
#702
Have admit, the Acolyte reference was a deliberate prod, and it worked as intended as the usual suspects, got personal and resorted to pontifying and implying I was unworthy of posting my opinions. As a sales pro it is a lot of funs to push someone’s buttons and have them react exactly as you expect. I could easily sense the frustration and was LMAO reading the posts.
Professionally, I’ve been a successful Sales Manager for over 35 years. I’ve worked in several different industries, all in complex sales environments. I’ve run distributor channels and direct sales environments. Last couple of weeks has been good to me, won contracts worth over a million bucks. I deal with Corporate decision makers every day. I think I’m qualified to comment on the financial and sales aspects of a company like Tesla
On the personal side I’ve owned Porsches for over 35 years and currently have a cash deposit on a Taycan. I have never said anything detrimental about Tesla’s products. At the moment I agree they are the class of the industry. BEV’s are the future of the auto industry; the only question is timing of when they truly supplant ICE vehicles.
I’ve made a couple of posts, where in my opinion Tesla Corporation is going to go bankrupt somewhere around 2022. Not from bad products, but from unsustainable debt load and sinking market share due to competition. What I’ve found interesting is most of the replies center around the superiority of BEV’s vs. ICE and that Teslas products are superior. All well and good but no one has responded as to why they believe Tesla Corporation will continue to survive in what will shortly be a highly competitive and crowded BEV market space. Currently Tesla has somewhere between $9-10 Billion in debt. Flagship models S& X are ageing. Model 3 seems to be a short term success but what are the actual sales volumes going forward. Model Y announced but you have to build a factory before you can sell it, which will likely eat up about $1.5 Billion in cash. Oh and by the time we get to 2021 there will be 20 + new BEV models in Tesla’s market space. Tesla’s market share, in their space, is near 100%. The only place to go is down, the question is how far. Please explain your rational as to how they survive.
The move to close the lion’s share of Tesla stores and go to a 100% on-line sales model makes no sense to me. Sales teams are the face of a company, and as far as the BEV market is concerned we are still in the early adopter phase. Competitors entering the BEV market space have dealer networks that in aggregate will provide thousands of touch points for future BEV buyers. I’d like to hear the counter argument that 100% on-line is a positive for Tesla.
Professionally, I’ve been a successful Sales Manager for over 35 years. I’ve worked in several different industries, all in complex sales environments. I’ve run distributor channels and direct sales environments. Last couple of weeks has been good to me, won contracts worth over a million bucks. I deal with Corporate decision makers every day. I think I’m qualified to comment on the financial and sales aspects of a company like Tesla
On the personal side I’ve owned Porsches for over 35 years and currently have a cash deposit on a Taycan. I have never said anything detrimental about Tesla’s products. At the moment I agree they are the class of the industry. BEV’s are the future of the auto industry; the only question is timing of when they truly supplant ICE vehicles.
I’ve made a couple of posts, where in my opinion Tesla Corporation is going to go bankrupt somewhere around 2022. Not from bad products, but from unsustainable debt load and sinking market share due to competition. What I’ve found interesting is most of the replies center around the superiority of BEV’s vs. ICE and that Teslas products are superior. All well and good but no one has responded as to why they believe Tesla Corporation will continue to survive in what will shortly be a highly competitive and crowded BEV market space. Currently Tesla has somewhere between $9-10 Billion in debt. Flagship models S& X are ageing. Model 3 seems to be a short term success but what are the actual sales volumes going forward. Model Y announced but you have to build a factory before you can sell it, which will likely eat up about $1.5 Billion in cash. Oh and by the time we get to 2021 there will be 20 + new BEV models in Tesla’s market space. Tesla’s market share, in their space, is near 100%. The only place to go is down, the question is how far. Please explain your rational as to how they survive.
The move to close the lion’s share of Tesla stores and go to a 100% on-line sales model makes no sense to me. Sales teams are the face of a company, and as far as the BEV market is concerned we are still in the early adopter phase. Competitors entering the BEV market space have dealer networks that in aggregate will provide thousands of touch points for future BEV buyers. I’d like to hear the counter argument that 100% on-line is a positive for Tesla.
03-05-2019, 12:06 PM
#703
Many appear to ignore this fact, and that the mass BEV market is less than $25K especially when the consumer considers his perceived BEV negatives, i.e. charging time & range.
03-05-2019, 12:13 PM
#704
Rennlist Member
amazon has no sales reps.
it doesn’t surprise me that a sales guys thinks it’s a mistake to get rid of sales people - i heard the same thing from travel agents as they were being shown the door by the internet.
my impression is very few people value a sales person and if given a choice would gladly do with out - but until recently they were a necessary evil
marketshare wise there is no where to go but down for Tesla, but that is simplistic sales guy thinking - if the market is growing you can have less share but increase revenue and volume - the EV market is growing so you need a more nuanced metric than pure market share...
while I’m unwilling to pick a date I feel Tesla’s business execution flaws will ultimately be its undoing - it will be bought or go out of business - however I’m open to being pleasantly surprised - product wise Tesla is the leader - they however lag in every other metric that is not sustainable - it will have to change - most people assume the only change is by going out of business - well that’s one way...and entirely possible
we will see - for the time being I feel strongly the industry needs Tesla nipping at their heels and stealing their segment market share to be properly motivated to transition to EVs - in a few years Tesla will no longer be necessary - but we are not there yet.
it doesn’t surprise me that a sales guys thinks it’s a mistake to get rid of sales people - i heard the same thing from travel agents as they were being shown the door by the internet.
my impression is very few people value a sales person and if given a choice would gladly do with out - but until recently they were a necessary evil
marketshare wise there is no where to go but down for Tesla, but that is simplistic sales guy thinking - if the market is growing you can have less share but increase revenue and volume - the EV market is growing so you need a more nuanced metric than pure market share...
while I’m unwilling to pick a date I feel Tesla’s business execution flaws will ultimately be its undoing - it will be bought or go out of business - however I’m open to being pleasantly surprised - product wise Tesla is the leader - they however lag in every other metric that is not sustainable - it will have to change - most people assume the only change is by going out of business - well that’s one way...and entirely possible
we will see - for the time being I feel strongly the industry needs Tesla nipping at their heels and stealing their segment market share to be properly motivated to transition to EVs - in a few years Tesla will no longer be necessary - but we are not there yet.
03-05-2019, 01:50 PM
#705
Rennlist Member
also I think losing the stores won't be that big of an effect - Tesla was effectively 100$% online ordering already - they were not so much as a purchasing location as they were a show room…and remember service centers also serve as show rooms and touch points…
I believe dealer sales in the US in an artificial concept - every major manufacturer has online configuration and online inventory - it would be a very very simple matter to add a "buy now" button to existing online automotive sites and use the dealers as service and delivery locations - the sales part of the network is artificially enforced by outdated laws preventing direct sales from auto manufacturers…
I've yet to meet anyone who considers their car salesman as a value add in the process and Porsche has effectively built 99.9% of an online ordering system with the PorscheCode and provide a "send to dealer" button - I'm really really not sure the dealer is adding any value to that process, but they are extracting a tax for their "service".
I believe dealer sales in the US in an artificial concept - every major manufacturer has online configuration and online inventory - it would be a very very simple matter to add a "buy now" button to existing online automotive sites and use the dealers as service and delivery locations - the sales part of the network is artificially enforced by outdated laws preventing direct sales from auto manufacturers…
I've yet to meet anyone who considers their car salesman as a value add in the process and Porsche has effectively built 99.9% of an online ordering system with the PorscheCode and provide a "send to dealer" button - I'm really really not sure the dealer is adding any value to that process, but they are extracting a tax for their "service".
