Will Los Angeles based Tesla Motors be able to deliver at $35K by 2018?

Voice of Reason wrote:

Ford Motor Company

Total Market Cap $51 B

Total Earnings $7.3 B

2.6 Million Units sold-$2800 per unit profit.

Tesla

Total Market Cap $32.6 B

Total Earnings Negative 950 Million.

50,000 units sold-$19,000 loss per unit

Tesla has 60% the market cap of Ford, yet sells less than 2% of the vehicles as Ford, and loses $19,000 on each and every sale-even with a $10,000 per unit subsidy. And their current product Is a luxury item with presumably higher margins than would be expected from a more low brow offering.

Tesla is priced for perfection. Any growth that might happen is already priced into the stock. It's priced as if it already sells 1.8 Million widgets, at a profit of 3000 dollars per widget. Yet it has never demonstrated an ability to build 5% of that number of widgets, and has never made a nickel on any widget it's sold.

It's a tulip frenzy.

Like I said before, absolute moron.... Tesla DOES NOT lose $19,000 per car.... The "losses" as you call it, are actually the result of expansion, not the result of the car costing more than what they sell it for, which is what you've implied.

Sharjah wrote:

Could somebody explain why there would be any state laws requiring purchasing autos via a franchise?

Seems like the dealer network did a great job lobbying for something that only helps themselves. Net zero to customers.

For the same reason we don't allow there to only be one telephone company. Because competition is better. Do you want to go back to when AT&T had a monopoly on telephone service? Yes, I know liberals love monopolies, but most rational people do not.

fisky wrote:

While on Teslas, a friend asked his son over dinner how many miles you'd have to drive a Tesla compared to a $54,000 BMW to break even in gas savings.

I showed him how to do the math on a napkin. He surprised his dad a few minutes later by telling him it was about 360,000 miles. That was when gas was about $2.50/gallon so it would be a lot more miles now.

Are you you saying to buy a BMW because it is a more practical cost?

Pretty funny

Hey stock boy....look at my resume on LinkedIn. I've been with two EV startups and know 1st hand the tooling cost and "total burden" per car. I've also been in Detroit all my life.

Ford, Toyota BMW ect .... spread "cost burden" over 5-6 years on a particular platform with only YoY "face lift" changes. Plus, they have common component across many platforms.

Tesla is shipping cars out a huge loss. Even with California start up subsidies....ect.

Wall Street wanted GM/Chrsler to fail....but when their asses where in trouble they came crawling to "government" to bail them out.

Two "Detroit" EV startups???? Fantasyland.

Tesla will fail wrote:

I doubt it. L.A. SUCKS.

Blah Blah Blah Blah wrote:

For the same reason we don't allow there to only be one telephone company. Because competition is better. Do you want to go back to when AT&T had a monopoly on telephone service? Yes, I know liberals love monopolies, but most rational people do not.

There's only one telephone company in this area, and probably the same in most other areas of the country.

Yes, you are spot on about a Detroit EV start up. Why would they? Gas is low and trucks will always be king. Also, Toyota already has US EV market locked up from entry on up.

Other parts of the world need EV's. Hence me going with EV start up's with Chinese money/ French Technology.

Why is it people who have no clue or on this subject are experts?

"Tesla burns cash, loses more than $4,000 on every car sold"

http://www.reuters.com/article/us-teslamotors-cash-insight-idUSKCN0QE0DC20150810

I wonder what the real books show.

Regards.

First, Ford sold 6.64 million cars globally in 2015, not just 2.6 million (US sales).

Second, Tesla will not outsell Ford in 15 years. Not because it isn't producing a great product, but because the Tesla product is rather easy to reproduce. Once the major auto companies decide to really produce one (spend capital), the market will be flooded with very similar cars with different body styles. As it stands, Tesla has to spent all their money (actually their money plus a crapload that they don't have) developing the approach. The other car companies simply could not take the massive loses that Tesla is able to because they are not considered growth companies like Tesla is, and Wall Street would not stand for it. So Tesla gets a free pass at this point. It's serving a great purpose to the industry.

The companies that should be fearing and frantically reacting to Tesla are the luxury automakers like BMW, MB, Audi, Porsche, etc. These guys have been slowly losing share to Tesla, not necessarily the mainstream Big 3, Toyota, Honda, Nissan, etc. Even at the Model 3 price point ($35-55K), the luxury automakers will be hurt more.

A couple thoughts:

1) Cars are not cellphones. I've read several stories comparing Tesla to Apple. I think this is apples and oranges. People are willing to accept the fact that cellphones- which are inexpensive and fit in one hand- are virtually the same across all producers. There are a relatively small amount of options (Apple, Samsung, other) because of this fact. It's not the hardware that's important; it's the software and apps that people use constantly that gives them the freedom/individuality they seek. I mean, what do people do right away to distinguish their phones externally? They cover them up with unique protective covers!! You don't buy a Tesla and then wrap it in a different design. A Tesla is still a car to get you from point A to point B. When you get to point B, you can go right back to playing on your phone.

2) The fact that Toyota, which was the pioneer of hybrid technology and benefitted from a "green" image brand-wise, is not buying into lithium ion battery technology being the future is very interesting. Hydrogen fuel cell technology is really the ideal solution from a resource and pollution standpoint. But how long until it can become practical/economical for the mainstream with an infrastructure that supports it?

rundogrun wrote:

Yes, you are spot on about a Detroit EV start up. Why would they? Gas is low and trucks will always be king. Also, Toyota already has US EV market locked up from entry on up.

Other parts of the world need EV's. Hence me going with EV start up's with Chinese money/ French Technology.

Why is it people who have no clue or on this subject are experts?

"Tesla burns cash, loses more than $4,000 on every car sold"

http://www.reuters.com/article/us-teslamotors-cash-insight-idUSKCN0QE0DC20150810

I wonder what the real books show.

Regards.

The "real books"? What world do you live in?

Tesla will be fine if their demand continues to grow. Their gross profit on was 24.5% on their automotive operations, which is double that of GM. The difference is that GM has significantly more sales to cover their SG&A.

Sounds like you're a failure, as well as a liar. You stated you have ALWAYS been in Detroit. Now, suddenly, you're a world traveler in hot demand because of your "skill" set. Butt, you keep bouncing around--company to company-- which means your skill set is not as important as you believe it to be: you are easily replaced.

As previously stated, US Automakers always lose $$$ on new car models. It takes years for them to break even. That is why automakers keep models around for about seven years.

cpmfa wrote:

rundogrun wrote:

Yes, you are spot on about a Detroit EV start up. Why would they? Gas is low and trucks will always be king. Also, Toyota already has US EV market locked up from entry on up.

Other parts of the world need EV's. Hence me going with EV start up's with Chinese money/ French Technology.

Why is it people who have no clue or on this subject are experts?

"Tesla burns cash, loses more than $4,000 on every car sold"

http://www.reuters.com/article/us-teslamotors-cash-insight-idUSKCN0QE0DC20150810

I wonder what the real books show.

Regards.

The "real books"? What world do you live in?

Tesla will be fine if their demand continues to grow. Their gross profit on was 24.5% on their automotive operations, which is double that of GM. The difference is that GM has significantly more sales to cover their SG&A.

The fool claimed "Toyota already has US EV market locked up". Toyota only made the RAV 4 EV which has been discontinued. Toyota is backing fuel cell cars which are YEARS away from seeing the streets. Toyota is losing money big time on fuel cells. Zero car sales means zero profit, only money suck away from profits of gasoline using cars.

Not exactly. Model 3 at $35K in 2018, but without the $7.5K tax credit. The tax credit will only apply to higher priced vehicles with more options, not to the base Model 3 "priced" at $35K.

Pay attention to what I wrote you ADD spoiled Millennium. I agreed with gentlemen/ women about Detroit.

Yes, My skill set is in needed around the world.

Go ahead and disprove Reuters report is wrong since the price of lithium was 40,000 yuan/ton Feb 2015 and is now 160,000 yuan/ton. Note the hockey stick spike in 4th Qtr.

Since I have no skill set, please share with us what you think your price of a 25kw battery pack should be. How about 85Kw since these prices have risen in "SG&A".

Sorry you are still in your parents basement running 17 flat 5k's at age 23 working at a Taco Bell. You can stay at Taco Bell or use you "skill set' and move up to a Wendy's.

rundogrun wrote:

Yes, you are spot on about a Detroit EV start up. Why would they? Gas is low and trucks will always be king. Also, Toyota already has US EV market locked up from entry on up.

Other parts of the world need EV's. Hence me going with EV start up's with Chinese money/ French Technology.

Why is it people who have no clue or on this subject are experts?

"Tesla burns cash, loses more than $4,000 on every car sold"

http://www.reuters.com/article/us-teslamotors-cash-insight-idUSKCN0QE0DC20150810

I wonder what the real books show.

Regards.

notrump wrote:

Not exactly. Model 3 at $35K in 2018, but without the $7.5K tax credit. The tax credit will only apply to higher priced vehicles with more options, not to the base Model 3 "priced" at $35K.

Not sure what you mean here. The price is $35K before the credit. All cars are eligible for the federal tax credit, plus various state credits. So the cost of a base model will be no higher than $27,500 at first. After Tesla crosses the 200,000 deliveries threshold, it becomes less clear. The current federal subsidy is scheduled to drop to $5000 and then $2500 as companies produce more cars -- but I'm sure that there will be vigorous efforts to extend the tax credit. We'll have to wait and see.

rundogrun wrote:

Since I have no skill set, please share with us what you think your price of a 25kw battery pack should be. How about 85Kw since these prices have risen in "SG&A".

I know you didn't ask me, but roughly $2500 and $8500, respectively, according to Jefferies.

What's your sense of the rate at which battery technology will improve cost/efficiency in the unfathomable future in which there is a demand for millions of EVs?

Do you think people will place any value on cars with better acceleration and handling, zero emissions, and dramatically lower cost and effort involved in maintenance and upkeep?

webby wrote:

notrump wrote:

Not exactly. Model 3 at $35K in 2018, but without the $7.5K tax credit. The tax credit will only apply to higher priced vehicles with more options, not to the base Model 3 "priced" at $35K.

Not sure what you mean here. The price is $35K before the credit. All cars are eligible for the federal tax credit, plus various state credits. So the cost of a base model will be no higher than $27,500 at first. After Tesla crosses the 200,000 deliveries threshold, it becomes less clear. The current federal subsidy is scheduled to drop to $5000 and then $2500 as companies produce more cars -- but I'm sure that there will be vigorous efforts to extend the tax credit. We'll have to wait and see.

I imagine the original response was a poorly articulated attempt to say that Tesla is prioritizing orders that have more options configured, and shipping those orders before the orders for base models. (As well as other sorting on the queue, such as regional and previous customers).

The truth is more complicated, as you mention. At least from what I read, the way the tax credit is written is that the 200,000th U.S. sale triggers a 3-9 month grace period where all cars sold during that time still receive the full $7,500 credit, then 3 months after that of 50% credit and finally 3 more months at 25% of the $7,500 credit. Tesla has stated that they're planning to use this strategically, e.g. building a stockpile after the 199,999 car sold and then releasing as much as possible in the 9 month grace period, getting well beyond 200,000 sold with the full tax credit.

There are a number of threads discussing this on the official Tesla forums:

rundogrun wrote:

Since I have no skill set, please share with us what you think your price of a 25kw battery pack should be. How about 85Kw since these prices have risen in "SG&A".

You didn't respond to my post but I felt compelled to point out that battery packs aren't SG&A and statements like this bring your credibility into question.

Tesla will fail wrote:

I doubt it. L.A. SUCKS.

10/10

Take note, kiddies - this is how you troll. Firstly, get key facts wrong (Tesla being based in LA). Also, in the error, make a negative judgement that will get some responses ("LA sucks"). And the whole post's thesis must be a contentious issue. In this case, the success or failure of Tesla motors.

Bravo, OP, bravo!