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  • Interesting article about Teslas New York Factory

    https://seekingalpha.com/article/408...ors_picks=true

    Definitely sounds like a significant political embarrassment. I always wonder what big story is going to be the trigger where investors figure out that its not going to end well for Tesla.

  • #2
    Sad but as mentioned many time before. Tesla may be nothing more than a house of cards that can be easily knocked over.

    Comment


    • #3
      I mentioned something several months ago about this plant and some folks I know who are somewhat highly placed in the prime contractor's organization doing the plant construction. It's on the site of an old Republic Steel plant. Anyhow, lots of hassles beyond the usual project screw-ups pushing plant startup back, this being before or about the time of the Panasonic announcement. Anyone with an eye and a balloon knot knew the $750 MM the state put up was money down a rat hole.

      Comment


      • #4
        Maybe they'll give him a free back room for the DJ of his up-and-coming streaming music service

        Comment


        • #5
          Originally posted by SunEagle View Post
          Sad but as mentioned many time before. Tesla may be nothing more than a house of cards that can be easily knocked over.
          You do realize that Tesla is actually profitable already if you take away capital expenditure and R&D right? Not all analysts are idiots, we have actually seen whats under the hood. They have been profitable on existing products for almost 2 years now. That is not a reflection on the NY factory, but I think many people dont understand how to read financial reports and only listen to talking heads (who also dont understand how to read business reports) about the financial health of a company. Musk is not infallible. Solar City lease business was widely viewed as a mistake by many from the start (myself included). The purchase of CS was clearly nepotism. We also question a lot of his other ideas but make no mistake, the numbers on electric car profitability are good and margins for Tesla are expected to be astronomical due to marketing.

          Gross margins (not net) on electric vehicles are already 10%-20% higher than regular combustion engine cars and none are at mass scale yet. Once at mass scale, we expect the margin to be around 30%-40% higher with no scale limit in sight. What does this mean? If you take two vehicles, an EV and ICE and assume they sell for $10k, the gross on the EV is about $4k while the gross for the ICE is about $3500. Think about that. A startup tech, with a lot of headwind and no scale is already more profitable than a established tech with mass scale... Eventually that margin will be $5k to $3600 and it will just get wider over time. On top of that, most analysts believe that Tesla will demand a premium of about 20% over other brands a bit like how Apple works. This is why Tesla is valued where they are. They are definitely not a house of cards from the car side of the business.

          As for the factory, like all business ventures, not all will succeed. $750m might sound like big money to you and me, but it is not a lot in the grand scheme of things. Its not a lot for a major city like NY either. Its barely a few months of taxes. The bottom line however is someone needs to take a shot. If no one ever does, nothing ever moves forward and certainly you will not see much innovation. In general, in the business world, on the big business scale, you only need 1 success for every 20 failures because at that level, that one success can easily scale to overshadow 20 failures. This is also why you see so many CEO's take so many chances on things that seem silly. Some CEO's have better analytical skills than others so they are better at it but in general they all try the same tactic. Musk still has a way to go, but I think people need to take a closer look at Tesla before they criticize.
          Last edited by thejumpingsheep; 07-13-2017, 10:38 AM.

          Comment


          • #6
            Wait and see how his gross margins workout when his unsafe sweatshops get unionized.

            Comment


            • #7
              Originally posted by thejumpingsheep View Post

              You do realize that Tesla is actually profitable already if you take away capital expenditure and R&D right? Not all analysts are idiots, we have actually seen whats under the hood. They have been profitable on existing products for almost 2 years now. That is not a reflection on the NY factory, but I think many people dont understand how to read financial reports and only listen to talking heads (who also dont understand how to read business reports) about the financial health of a company. Musk is not infallible. Solar City lease business was widely viewed as a mistake by many from the start (myself included). The purchase of CS was clearly nepotism. We also question a lot of his other ideas but make no mistake, the numbers on electric car profitability are good and margins for Tesla are expected to be astronomical due to marketing.

              Gross margins (not net) on electric vehicles are already 10%-20% higher than regular combustion engine cars and none are at mass scale yet. Once at mass scale, we expect the margin to be around 30%-40% higher with no scale limit in sight. What does this mean? If you take two vehicles, an EV and ICE and assume they sell for $10k, the gross on the EV is about $4k while the gross for the ICE is about $3500. Think about that. A startup tech, with a lot of headwind and no scale is already more profitable than a established tech with mass scale... Eventually that margin will be $5k to $3600 and it will just get wider over time. On top of that, most analysts believe that Tesla will demand a premium of about 20% over other brands a bit like how Apple works. This is why Tesla is valued where they are. They are definitely not a house of cards from the car side of the business.

              As for the factory, like all business ventures, not all will succeed. $750m might sound like big money to you and me, but it is not a lot in the grand scheme of things. Its not a lot for a major city like NY either. Its barely a few months of taxes. The bottom line however is someone needs to take a shot. If no one ever does, nothing ever moves forward and certainly you will not see much innovation. In general, in the business world, on the big business scale, you only need 1 success for every 20 failures because at that level, that one success can easily scale to overshadow 20 failures. This is also why you see so many CEO's take so many chances on things that seem silly. Some CEO's have better analytical skills than others so they are better at it but in general they all try the same tactic. Musk still has a way to go, but I think people need to take a closer look at Tesla before they criticize.
              1.) What is CS ?
              2.) So you're saying that some analysts are idiots ? Nice to know. Glad I don't use one of them - or any.
              2.) So, astronomical profit by marketing alone at the public's, in the absence of and apparently to the exclusion of other things most folks view as the benefits to society of running a business is acceptable ? I guess it must be for those who can profit from it perhaps.
              3.) SolarCity is not a tech startup - it's a marketing con used to make money off solar ignorant people who have little concept of how badly they're getting it in the shorts and who don't understand how to handle money. That it's viewed by you in the abstract as a mistake doesn't make that screwing, or their business ethics, which I've seen a lot of first hand, doesn't make them palatable, at east not to me.
              4.) I'd have an easier time giving credence to your opinion about the mentioned factory if you could manage to actually figure out where it's located as well as the circumstances of the $750MM largess.
              5.) I'd suggest that product from that factory, like all products, will be better, more fit for purpose and less expensive if brought to market without gov. subsidies.
              6.) I have an easier time accepting the idea that CEO's have a lot of balls and foresight when they take chances and win or lose without the safety net rather than when they either have that safety net or actually start a business for the sole purpose of grabbing gov. largess and using the front of a business to screw people, not unlike some corner stores exist simply for the purpose of selling lottery tickets to poor souls who buy them in disproportionate numbers.

              Comment


              • #8
                Originally posted by thejumpingsheep View Post

                You do realize that Tesla is actually profitable already if you take away capital expenditure and R&D right? Not all analysts are idiots, we have actually seen whats under the hood. They have been profitable on existing products for almost 2 years now. That is not a reflection on the NY factory, but I think many people dont understand how to read financial reports and only listen to talking heads (who also dont understand how to read business reports) about the financial health of a company. Musk is not infallible. Solar City lease business was widely viewed as a mistake by many from the start (myself included). The purchase of CS was clearly nepotism. We also question a lot of his other ideas but make no mistake, the numbers on electric car profitability are good and margins for Tesla are expected to be astronomical due to marketing.

                Gross margins (not net) on electric vehicles are already 10%-20% higher than regular combustion engine cars and none are at mass scale yet. Once at mass scale, we expect the margin to be around 30%-40% higher with no scale limit in sight. What does this mean? If you take two vehicles, an EV and ICE and assume they sell for $10k, the gross on the EV is about $4k while the gross for the ICE is about $3500. Think about that. A startup tech, with a lot of headwind and no scale is already more profitable than a established tech with mass scale... Eventually that margin will be $5k to $3600 and it will just get wider over time. On top of that, most analysts believe that Tesla will demand a premium of about 20% over other brands a bit like how Apple works. This is why Tesla is valued where they are. They are definitely not a house of cards from the car side of the business.

                As for the factory, like all business ventures, not all will succeed. $750m might sound like big money to you and me, but it is not a lot in the grand scheme of things. Its not a lot for a major city like NY either. Its barely a few months of taxes. The bottom line however is someone needs to take a shot. If no one ever does, nothing ever moves forward and certainly you will not see much innovation. In general, in the business world, on the big business scale, you only need 1 success for every 20 failures because at that level, that one success can easily scale to overshadow 20 failures. This is also why you see so many CEO's take so many chances on things that seem silly. Some CEO's have better analytical skills than others so they are better at it but in general they all try the same tactic. Musk still has a way to go, but I think people need to take a closer look at Tesla before they criticize.
                Actually I have taken a close look at Tesla and while I am impressed with their EV's I do not trust the CEO who continues to move the target and end game of what they will be producing with all kinds of promises and using flashy advertisements to get the public's interest in their "new" products.

                As for being profitable. I wonder how much that company would have made if it wasn't for the FED tax incentives on each EV. Based on the little info I have found Tesla has gotten hundreds of millions of dollars over the years and still relys on people putting their money up front to get in line for a new product like the Model 3 or PowerWall battery systems.

                If they were that profitable they wouldn't need to get up front money to produce their products. I don't see any of the other automakers asking for $5000 to get in line to own one of their new cars. Lets see how Volvo acts when they switch to all hybrids and EV's. I doubt they ask for money up front.

                Comment


                • #9
                  Originally posted by thejumpingsheep View Post

                  You do realize that Tesla is actually profitable already if you take away capital expenditure and R&D right?.
                  You a\re full of BS. Tesla has not made a dime.

                  MSEE, PE

                  Comment


                  • #10
                    Originally posted by thejumpingsheep View Post
                    You do realize that Tesla is actually profitable already if you take away capital expenditure and R&D right? ..
                    And then take away the tax breaks and subsidies and public charger freebies. How many of his wonderful cars have sold outside of the USA ?

                    seekingalpha.com/article/3996573-teslas-spectacular-international-sales-collapse
                    forbes.com/sites/bertelschmitt/2016/10/16/for-tesla-electric-car-sales-explode-in-all-the-wrong-places/#440f5e224a24


                    Best guess is $10K or $20K LOSS per call sold w/o subsidies

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                    Comment


                    • #11
                      Originally posted by Sunking View Post
                      You a\re full of BS. Tesla has not made a dime.
                      Except for the fools that keep giving them money up front for a promise of getting one of their products.

                      Comment


                      • #12
                        Originally posted by SunEagle View Post

                        Except for the fools that keep giving them money up front for a promise of getting one of their products.
                        Tucker did that and look where it got him.

                        Comment


                        • #13
                          Originally posted by J.P.M. View Post

                          Tucker did that and look where it got him.
                          Uh. Who???

                          Going against big auto is an uphill battle so I do understand some of the issues that Tesla is going through. I just don't like some of the tactics the CEO is using to get people to purchase his products.

                          Comment


                          • #14
                            Originally posted by SunEagle View Post

                            Uh. Who???

                            Going against big auto is an uphill battle so I do understand some of the issues that Tesla is going through. I just don't like some of the tactics the CEO is using to get people to purchase his products.
                            Preston Tucker - The guy who, in 1948, made the car with the 3d headlight on the middle of the front end of the car, above the grill, that traversed when turning corners. He presold accessories to folks on the waiting list to buy his vehicles. Musk's deposit con seems reminiscent of that. See Google.
                            Last edited by J.P.M.; 07-14-2017, 12:09 PM.

                            Comment


                            • #15
                              Originally posted by J.P.M. View Post

                              Preston Tucker - The guy who, in 1948, made the car with the 3d headlight on the middle of the front end of the car, above the grill, that traversed when turning corners. He presold accessories to folks on the waiting list to buy his vehicles. Musk's deposit con seems reminiscent of that. See Google.
                              Sorry. I was trying to be sarcastic in my response. I remember the movie about Tucker but never saw it. I guess I missed the part about him of preselling items and a customer waiting list.

                              I guess that is typical of a start up company that does not have enough capital to build a big inventory first.

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