What is your take on Nissan? https://arstechnica.com/cars/2019/07...ll-98-percent/

 

Nissan has lost 98% of it's profit and is laying off people. Tesla is expanding and hiring people for it's Chinese plant and now is trying to plan where it will build it's fourth plant in Europe. Yet people want to give Tesla all the flap and somehow avoid mentioning what is going on the rest of the car industries.

Earl Colby Pottinger (Tesla, Bollinger, Rivian and other BEVs fan)

 

Been very busy with work the past couple of weeks so no time to comment but I’ve been reading the posts. As we all wait for the formal September Taycan launch, this forum is a blast as occasionally it turns into a civilized food fight. The entertainment value is high.

I’ve stated previously that at this time Tesla is making the best BEV’s in the industry. Nothing wrong with the product itself. Where I have issues is that on a personal level I just do not trust Elon. While he is brilliant I also think he is a huckster and like many entrepreneurs builds a company from scratch and then proceeds to run it into the ground with bad autocratic decisions. Then there is the overall business model and valuation of the company, I believe both are nothing but a house of cards. The marketplace views Tesla as a technology company rather than an automobile company. Hence the sky high multiples and raft of believers that Tesla will become the next Amazon. Yes, Tesla developed the BEV market space but it was done by piling up $12 Billion in debt and not having proprietary technology to keep future competitors locked out. Long story short I still see Tesla filing for bankruptcy somewhere in the 2021 to 2022 timeframe.

I think Tesla's biggest problem that will crash the stock price and ultimately the company is perpetuating the myth that Tesla is a technology company. Technology companies are expected to continue growing exponentially and eventually dominate the space and turn profitable. Hence sky high stock multiples, in spite of hemorrhaging cash. This is why Elon keeps pushing growth at all costs, if Tesla does not grow as projected, suddenly the emperor has no cloths and the myth dies, and the stock price and borrowing ability craters.

I believe Tesla’s growth numbers are going to significantly miss future projections for a couple of reasons. First of all I do not see BEV’s gaining overall market share of the automobile marketplace at the very optimistic rates a lot of analysts are predicting. As a baseline as of June 2019 YTD sales BEV’s only have 1.2% of the US market. If you throw in PHEV sales, it’s only 1.7%. Yes, the BEV sales will grow but I think we have seen a short term platue and while volumes will grow they will still remain at tenths of a percent per year not the 1% or higher growth rates predicted. My reasoning for this is a lot of potential buyers realize BEV’s are still a maturing technical product and today’s technical star can be replaced overnight by something new that will tank the value of what they just purchased. Also, except for California the average price for gas is still under $2.70 across most of the nation. The economic reason for a BEV is just not as compelling.

There are some trends in Tesla’s 2019 sales numbers that bear watching, both the Model X and S are showing significant Year over Year sales declines. These are the high dollar flagships and the continued loss of revenue with additional declines in volume will not be good for Tesla’s image or bottom line. Yes, M3 sales appear to be strong but a not positive trend has shown up that shows relatively flat month to month sales in the first two months of a quarter and a big spike up in the last month of a quarter. That last month of the quarter spike is from rebates and price reductions that seem to come and go. As the rebates expire to almost zero in the 3rd quarter it will be interesting to see how monthly sales progress the rest of the year. If I have my numbers correct, in just the US Tesla has to sell 19-22 thousand M3 per month for the rest of the year to hit sales projections. Considering June was the only month in 2019 to reach those levels, should be interesting to see how future sales pan out.

Last but not least competitors have entered the BEV market space that was exclusively Tesla’s. Combined the eTron & IPace moved about 3150 SUV’s compared to 9000 Model X SUV’s in the first 6 months of 2019. A year ago those 3150 units would have gone to the model X. The model S is being cannibalized by the Model 3 and anticipation of the Taycan. Tesla is truly a one trick pony with the M3. If a single or several competitors to the Model 3 show up in 2020 that capture even 15-20% of current M3 sales it will seriously hurt the stock price and ultimately the company as Tesla is not perceived as an automobile company but a technology company. Miss your volume numbers and you get crushed.

ICE manufactures still have 98.3 % of the market and while times are tough and layoffs are occurring, almost all of them are generating billions in profits each year. Oh yeah, they are investing billions in new BEV plants and battery contracts while still generating profits. What a concept.

My thoughts of the day as, I’m working from home and it’s a slow day.

 

I agree with much of you wrote about Tesla being a dumpster fire. However I don’t believe that their market will be stolen by other EV’s. A few reasons.

The supercharger network work is still a huge, huge advantage. Basically makes having a long distance EV possible. Without that, it’s nearly impossible to own an EV and take it on longer trips.

The Model S has been on sale since 2012 and still has not had its range and performance equaled by another EV. The long distance, high power EV market is still dominated by Tesla.

Tesla is still viewed as a counterculture company by many. It will continue to be supported by those who want to “stick it to the establishment” even if that’s nonsense.

Finally, a rising tide lifts all boats. All manufacturers are full in on EV’s. This is not a minor investment of capital and they will be pushing over the next decade to increase the EV market exponentially. Go to any major car show or read the daily roundup of car news. The industry is in the midst of a large paradigm shift and that shift is largely based on EV’s. For this reason alone, I think Tesla will be saved. Despite their best efforts to continually shoot themselves in the foot.

 

It all depends on how fast EV acceptance goes and when the tipping point will happen. If it happens in 3 to 5 years the market will belong to Tesla. If it happens in 10 years or more then anyone has a shot at it. It's not like let's go all in now I'm convinced it's the future of the industry. It will take a long time for traditional auto companies to write off past investments and to invest in new technology. Not to mention the human factor. Engineers and technologists are not all the same. Like Munro said you'd better go to trade school if you are an engine designer. How are you transform your engineering workforce based on engine and transmission to one based of battery chemistry and electronics? That needs time.

Musk' strategy is obviously to make this transition to happen as fast and as soon as possible, either for his mission or the betterment of his company. He's often misunderstood at the time but he knows exactly what he's doing. It'll take a few year for people to see that though. The proof is all there if you just look at things he started more than a few years ago.

 

TSLA stock doesn't seem to be reflecting this supposedly improved outlook for the company. Has gone nowhere in 5+yrs. Here's a CHART vs a rip-roaring SP500. Money talks, BS walks.

And the departure of Streubel signals much more than TSLA bulls would like the world to believe.
https://www.cnbc.com/2019/07/27/with...ust-a-cto.html

The level and quantity of the people jumping ship only seem to be increasing with time -- not a good trend. Musk may be left with only a bunch of robots to BS and abuse in the end.

The odds of TSLA surviving the next crash/recession are <5%, in my book.

 

One of my first posts on this thread, almost a year ago, was explaining this point and why it is false to take it on face value.

Historically, ever since the Model S came out, Tesla has focused on shipping cars outside the U.S. in the first month or two of each quarter, then focusing on U.S. sales in the final month. Thus, you will always see significant month to month swings, 'spikes' in your words, in U.S. sales.

Up until the beginning of this year, the Model 3 was only shipped to North America. Starting in 1Q2019 they started filling the export pipelines with Model 3s. So the past couple quarters are showing the exact same swings as the Model S and X have shown for years.

J. B. stepping aside (though not leaving the company) is interesting. But we have no idea why he doing it. Doesn't seem like a palace coup. Perhaps he feels he wants to spend more time with his family while his kids are young.

A couple weeks ago, I took our Volt over to the local Chevy dealer for its second oil change in 50k miles. (Until recently, we've run it 98+% EV.) The dealer is one of the largest volume Volt/Bolt dealers GM has. The showroom was nearly idle compared to the Tesla delivery center over in Fremont - which was probably delivering close to 300 cars/day when I picked up my Model 3.

 

We don't know how many of those executives resigned and how many were let go. Either way it's because it's a tough place to work even for talented people. Chris Lattner was one of those people and he couldn't survive there for long either. In this interview below he briefly described his experience at Tesla (@1:05:10). He mentioned even with that kind of turnover Elon has the ability to attract amazing talents because he has a clear vision and is able to have those people to buy in. It's no big deal for a mediocre company to be able to keep mediocre people there for a long time.


J.B.'s case could be he just want to have some rest after all those years. He's more of a researcher type than an executive type. Few if any beside Elon could stand this many years of tough situation like that. Hats off to him for what he has done.

 

Great interview - thanks for the link! (I've used clang a bit over the years for C++ code. Currently in the midst of trying to get flang running. I'm a bit of a compiler groupie as well, having studied and followed them since the 1970s. Even have a copy of the 'red dragon' book they showed at the end of the video. When I bought the book, it had just replaced the earlier 'green dragon' book.)

 

Time will tell on both the overall growth rate of the BEV market and Tesla's ability to keep growing the volume of M3 sales. Some random thoughts:

In the US, 5 states account for 90% of BEV sales, NY, TX, Fl, WA, & CA. Compared to the other top four states California accounts for over 50% of all BEV sales in the US. That is a small slice of an even smaller market niche to keep growing at the rates that have been seen for the past 18 months. This is why I do not see the BEV market growing at the rates a lot of optimistic forecasts project. I can see sales rates plateau near current levels going into the second half of 2019 into 2020. Not projecting a reduction but a leveling off of growth.

The tax credits for Tesla are about to expire by the end of the year and are down to a relatively low dollar amount at this point. It will be interesting to see if Tesla continues to fiddle around with pricing discounts at the end of a quarter to pump up sales. Many a direct marketer have gotten burned with discounting to pump quarterly sales. Customers tend to figure this strategy out and wait for an item to go on sale before buying. Also, over time it tends to dilute the power of the brand itself. Not saying that Tesla is in this position at this time but it is something to keep an eye on as to how they handle the end of quarter in the second half of 2019.

Tesla's market-share is not immune to new competitors coming into the space. Model X sales were humming along at 20 -22 thousand units per year in the US. YTD they are off by roughly 20% with the combined sales of the e-Tron and IPace filling in the difference. At this time the M3 has hit a sweet spot in the marketplace and is dominating. The questions is not if but when does a serious competitor or 2 enter the M3 space? Hard to say but the former king, the Model S got out sold by the Chevy Bolt in the first half of 2019 so things can change rapidly in the emerging BEV space.

Like I said just some random thoughts on a slow Sunday.

 

I bet the vast majority of BEV buyers are 2+ car households and that they aren’t buying a BEV with long road trips in mind for their BEV. So Tesla’s current supercharger network advantage doesn’t weigh so heavily for most when it comes to deciding which BEV to buy.

My wife and I drive Audi, BMW, Porsche. We test drove and seriously considered a Model S. But we couldn’t get past the stark difference in interior design and refinement between the Tesla and the cars to which we are accustomed.

I recently test drove an Audi e-Tron SUV and liked it. And I have a deposit down for a Taycan. Don’t know for sure whether I’ll buy either, but I feel like Porsche and Audi understand car design better than Tesla and know far better what consumers like me want from a BEV: style, performance, great design equal to or better than their ICE cars. Not gimmicks.

I think I am not alone. I think Tesla is in trouble, especially because consumers’ brand loyalty is stronger than whatever Tesla’s peddling.

 

Not sure what you mean by gimmicks or peddling but both Model S and especially Model 3 outsold ICE cars in their respective market segment by large margins. You may not be alone but apparently you're in the minority.

 

In real world terms, yes. Most people need far less range than they think they do. But people plan for worst case, and until you've owned a BEV, range anxiety is a real thing. So it is a definite plus. Also, you'd be surprised at how many Tesla owners take there car on thousand plus mile trips. More than a handful. So while it's real world importance isn't as huge, it's marketing value still is.

Agree on the S. It's interior is not up to it's price point, IMO. I couldn't stomach the price for what I was buying. Model 3 is an entirely different story.

Don't discount the amount of people who like the simplicity of the interior though. I've shown my Model 3 to many non-car people, including professional designers, and they absolutely love the simplicity. Also, don't discount how used to it you get.

 

Design is never an absolute thing. We may be deeply influenced by past experiences but we also have the ability to accept newer and more sensible (I'm not using the word better for obvious reasons) designs. The only difference is for people going from old to new some can fast to adapt and others can't.

This is the way how I look at this to make it more objective. Imagine an alien just landed on earth who had never seen a car before. Which design you think it will prefer? I would say more likely Tesla's than the traditional design.

 

I tend to prefer Tesla's design ascetic to this - I would humbly suggest this is not the goal…from the "never met a button I didn't like" school of design…