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Interesting article about Teslas New York Factory

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  • #16
    Originally posted by SunEagle View Post

    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.
    The movie really doesn't tell the entire story. He deigned a crosswise low rpm engine to mount
    between the rear wheels, with a torque converter on each side to drive them. It used a different
    cylinder valve activator. Of course it had no reverse. That was a failure, so he converted an
    aircraft engine to liquid cooling and used a rebuilt trans from FWD Cords. And yes, being a con
    man did him in. Bruce Roe

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    • #17
      Originally posted by J.P.M. View Post

      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.
      1 - Meant to say SC = Solar City

      2 - Yes but you need to understand that some are not. Im not advocating using one but they get paid for a reason. They provide an important service. Whether or not they are good at it is another matter.

      2b - Except this is not the case. Its not marketing when the numbers are real in that, the gross income is there, the cost are explained, and the money expenditures are also explained. If you take away growth and r&d expenses, Tesla has a P/E of about 60 which would be inline with any big company that can generate similar revenue growth (between 20%-90% per anum). There is nothing markety about this. These are real numbers and as long as the growth stays that high, the P/E will remain equally high. Is that a good valuation? Not to me but that is the trend of the current market. Recall, the average P/E of an S&P500 company is about 26 right now (yes this is bubble territory)... and that is for companies who are seeing barely average growth of about 6%-8%. If you like, I can break down a competitor and we can compare them head to head and I think you will agree, after seeing that, the Tesla's valuation is actually in line with all the others.

      3 - It does not matter what you and I think. From the business perspective, it had some merit but it was largely unproven. From a customer perspective, SC was better than sticking with SDGE (my local gangsters... i mean utility). Literally, even with their markup, SC saved you 30% on your electric bill for anyone using tier 2 and about 66% for any customer who entered tier 3. This saving came at no cost to teh customer and so it seemed plausible that a lot of people would go for it. I know several who have and they do save money and it literally cost them nothing but space on the roof. The real problem with the model was if the amount being charged was enough to cover their expenses in the long term and whether or not they can grow fast enough to keep up with corporate cost. Basically, it was marketed as a solar utility company and there was a threshold number of installs required to break even. They never met that number and as the cost of solar went down, their odds of success dropped with it.

      4 - Youre right I dont know the details. I just know that $750m to Tesla or the City of NY is about $25k for an average person with a $60k job. It might be a lot, but its not the end of the world. If the details were bad from the get go, then thats another story. Its one thing to gamble at a new business and put down $25k only to fail a year later, but its another entirely if your partner simply stole the $25k and moved to Brazil to party it up.

      5 - True only if the competition did not get subsidies themselves. Is this not the argument we make about Chinese solar panels and why we placed a tariff on them? They were being artificially discounted due to government funding. Solar competes with natural resources, all of which received huge permanent subsidies. That said I agree that its better to leave them all to stand on their own especially once they are capable of doing so. Natural resource subsidies have been around for 100 year... i would like to think that they no longer need them.

      6 - Yea thats another topic altogether. Believe it or not, I despise the investment world precisely for the reason you bring up here. The grand majority of business folks literally dont care about anyone. They are trained to be financial cannibals and they take pride in screwing each other over. Literally, they think that this type of behavior is good rather than be cooperative and constructive. The only time they seem to want to cooperate is when they see an opening to screw a bigger fish. I dont know Musk and I am not here to defend him. He doesnt need anyone to do that. But I will say that there are good folks out there so its important not assume things if we dont know the man.
      Last edited by thejumpingsheep; 08-04-2017, 07:42 AM.

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      • #18
        Originally posted by bcroe View Post

        The movie really doesn't tell the entire story. He deigned a crosswise low rpm engine to mount
        between the rear wheels, with a torque converter on each side to drive them. It used a different
        cylinder valve activator. Of course it had no reverse. That was a failure, so he converted an
        aircraft engine to liquid cooling and used a rebuilt trans from FWD Cords. And yes, being a con
        man did him in. Bruce Roe
        I never heard the story but it got me curious and I think Wikipedia article on him paints quite different picture: https://en.wikipedia.org/wiki/Preston_Tucker
        He basically overdrawn the trust and I'd agree his tactics look very similar to Tesla's. The nature took him out of the game as he died of lung cancer otherwise I'm sure he'd produced some interesting cars.

        Elon improved the technique and uses gvmt funds as his safety net to prevent the same mistake so who knows- Tesla does build cars and is behind quite a few innovative ideas. I'm not advocating for Tesla, just trying to remain open minded about it. It sounded strange (or may be fitting?) when they bought SC along with that company business practices. I had conversation with them when I was shopping for solar and the moment sales rep realized I can count numbers he lost interest. I was surprised as I'd think I'd be the easiest customer to work with as I already knew what I wanted. That encounter left strange feeling that I just missed some sort of con if you know what I mean.

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        • #19
          Originally posted by max2k View Post

          I never heard the story but it got me curious and I think Wikipedia article on him paints quite different picture: https://en.wikipedia.org/wiki/Preston_Tucker
          He basically overdrawn the trust and I'd agree his tactics look very similar to Tesla's. The nature took him out of the game as he died of lung cancer otherwise I'm sure he'd produced some interesting cars.

          Elon improved the technique and uses gvmt funds as his safety net to prevent the same mistake so who knows- Tesla does build cars and is behind quite a few innovative ideas. I'm not advocating for Tesla, just trying to remain open minded about it. It sounded strange (or may be fitting?) when they bought SC along with that company business practices. I had conversation with them when I was shopping for solar and the moment sales rep realized I can count numbers he lost interest. I was surprised as I'd think I'd be the easiest customer to work with as I already knew what I wanted. That encounter left strange feeling that I just missed some sort of con if you know what I mean.
          It is much harder to pull the wool over someones eyes if they already have a good understanding of the product they are being told to purchase.

          Knowledge of the product is a very important component to have before making any financials decisions to purchase that item and will drive away the con artists quickly.

          Comment

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