Is Tesla a good investment?

[talltexan]

Pre-paying toward a Tesla by building savings in Bitcoin seemed like a reasonable strategy to me.

[ColoradoTribe]

Lengthy podcast discussion of Tesla’s position relative to other auto makers and valuation. Well worth a watch if considering or holding Tesla stock.

https://www.youtube.com/watch?v=ln2czFNI6mk

[mistymoney]

Lengthy podcast discussion of Tesla’s position relative to other auto makers and valuation. Well worth a watch if considering or holding Tesla stock.

https://www.youtube.com/watch?v=ln2czFNI6mk

90 minutes long? Is there a clifts note version?

[ChpBstrd]

Lengthy podcast discussion of Tesla’s position relative to other auto makers and valuation. Well worth a watch if considering or holding Tesla stock.

https://www.youtube.com/watch?v=ln2czFNI6mk

90 minutes long? Is there a clifts note version?

If you want the information (in this case, a YouTuber's opinion), you have to watch 20 minutes of ads. It's not like there's a 10k form or something.

[soulpatchmike]

Comparing Tesla to other automakers is like comparing Amazon to Barns and Noble back in 2005 when they launched Amazon Prime and had started selling things other than books and AWS was in its infancy.

Tesla:
Cars, SUVs, Energy Storage, Charging infrastructure, Energy generation(solar), Self-driving, AI humanoid robot development, light duty trucks, local travel semis, robo-taxi most of these segments are in their infancy or yet to be launched.

Any other non-startup vehicle manufacturer:
Cars, Trucks, SUVs...some might be working on self-driving, but none are working on charging infrastructure or energy generation or energy storage or AI or local travel semi's AFAIK.

Apples and oranges.  Long investors are not worried about Tesla becoming the highest volume production car manufacturer out there.  They have already proven that they can make significantly more profit per vehicle than traditional auto suppliers.  They don't need to be the highest volume auto manufacturer, but they do need to be top 5 in all of their segments(once they become commercially viable) to continue the growth expectation of each of these segments and make the crazy valuation catch up and continue their growth path.

Rockefeller made his money from oil sold to consumers for home lighting.  When electricity came along and threatened his business model, he ended up using the waste from the lighting oil refining process to make gasoline for the internal combustion engine.  Musk has learned to branch out to adjacent industry segments a bit faster...

[MinorMiner]

Lengthy podcast discussion of Tesla’s position relative to other auto makers and valuation. Well worth a watch if considering or holding Tesla stock.

https://www.youtube.com/watch?v=ln2czFNI6mk

I watched this and thought I should post it here... looks like you beat me to it!

I agree that this is good information. As far as length, the fact of the matter is that there is a lot of nuance to the Tesla story. Nuance takes time to convey.


As a side rant:

If you want the information (in this case, a YouTuber's opinion), you have to watch 20 minutes of ads. It's not like there's a 10k form or something.

Digital ad spend in USA in 2020=$137 billion
Population of USA = 330 million
Ad spend per capita = $455

They wouldn't be spending that money if there wasn't a return on it.

Please use protection.

Ad Block for Youtube

[mistymoney]

welp tsla sure took a dive today!

I'm up less than 60% now!

[lemonlyman]

Monster beat with Q4 deliveries representing ~$3 billion more in revenue higher than analysts expected. 934k deliveries for 2021. Q4 will be a massive + to cash flow.

I took delivery of a Model Y a couple of weeks ago. Great product. Things still look good going forward to me for the company.

[MinorMiner]

Beta 10.8 is pretty darn good.

https://www.youtube.com/watch?v=vNX89uqly6U

It's starting to work on 100% snow covered streets (My experience, not this video).

There was an interesting quote on a recent podcast with Elon Musk/Lex Fridman that if the current trend of Tesla's self driving safety continues on it's current rate of improvement, it will match that of the average human by the end of this year.

I know the idea of self driving cars sounds crazy... But so did supersonic flight in 1946. Allow your imagination to run wild with the possibilities of electric autonomous RV's for 15 minutes. Fall asleep in Cincinnati on Friday night, have Saturday brunch in Tallahassee, go diving at Ginnie springs after lunch. Spend the night there, dive all day Sunday. Be back to work tanned and rested on Monday morning.

I'm just as frugal as the rest of you, but man...  I can see spending $1000 a month to have that capability... Think what the spendy pants among us would be willing to part with...

[mistymoney]

the future is coming up fast upon us! And Tesla may well lead the way on a lot of it.

[mistymoney]

On the other hand, did hear that South Korean couples are gifting tesla stocks.

That seems really odd to me!

Made me think of tulips.....

[gooki]

On the other hand, did hear that South Korean couples are gifting tesla stocks.

That seems really odd to me!

Made me think of tulips.....

Crazy as it may be, damn that's some good brand awareness for a company that doesn't advertise.

[ColoradoTribe]

On the other hand, did hear that South Korean couples are gifting tesla stocks.

That seems really odd to me!

Made me think of tulips.....

Crazy as it may be, damn that's some good brand awareness for a company that doesn't advertise.

Gifted each of my kids a Tesla share for Christmas 2020. They can’t cash it in until their 16th birthday (at earliest). Good lesson in market volatility and learning to ignore short term swings, up or down. They’ve stopped asking if they can sell, so I think its sinking in or they just capitulated.

[MinorMiner]

Tesla's self driving software is improving rapidly. It drove me ~120 miles the other day without any disengagements (Airport to home). Here is a recent video of it working in downtown Chicago:https://www.youtube.com/watch?v=weGPquybDlU. Tesla's approach to autonomy is going to work. The only question is how long it will take. When it does work, a huge amount of value will be unlocked.

[ColoradoTribe]

Stock price approaching ATH with another stock-split on the horizon. Second half of 2022 and 20223 will be huge as Austin and Berlin ramp alongside 4680 cell production, CyberTruck production starts in 2023, and energy storage continues to slowly ramp. Margins will continue to improve, hard to believe since they're already 2x - 3x industry averages. In the grand scheme, Tesla is just getting started.

[ColoradoTribe]

@ColoradoTribe:  I agree EVs will do great things. However, Tesla has to still be around to benefit from that.

They have built amazing cars. They have big dreams for the future. I personally want them to be successful, I want to be able to buy a used Model 3 in the future. I want to be able to have solar with a battery back up. The problem is that investors have been pumping up the stock based on the dreams of what Tesla 'could be,' and not what it is today. Expectations have been set unrealistically high and Tesla has borrowed money based on those expectations.

Five years from now it will not matter whether it took them an extra six months to get production up to 5k/week.

Actually, in reality, it might matter a lot. It could be the difference between Tesla producing 1 million cars/year in 5 years VS bankruptcy within 12 months. Tesla will need more funding soon. Bond investors don't live in the clouds, they don't trade based on dreams of what could be in 5-10 years. Bond investors like results, and they like those results printed on boring balance sheets and cash flow statements. If Tesla doesn't increase Model 3 production, FAST, like really FAST, then the next time they issue bonds they might not find willing investors. Tesla isn't Apple or Google, or even Ford. Those companies have cash on hand. They can handle shocks. They can recover from mistakes. Tesla is running on borrowed money and broken promises. Many great companies have fallen prey to big dreams... and too much leverage.

People have been predicting Tesla's imminent bankruptcy and demise for as long as I've been following the company/stock. I bought more common shares today and will sleep well tonight. Those aligned against this company and its disruption (not you personally) know that once the model 3 ramp is complete that Tesla becomes profitable and this narrative goes away, so they're milking it one last time. I see indication that the model 3 ramp has picked up to 1500 - 2000/week the past week or two. They'll likely hit 2500/week in the first of Q2, in plenty of time to satisfy bond investors. There was a chance of Tesla failing in the early going, the chances of such a failure now are very low IMO. We'll know for sure in a few years.

Sure people have predicted bankruptcy before but past performance cannot be extrapolated forward.  This is clearly make-or-break time for Tesla.  In the past investors have bailed them out, by giving them more cash.  However, given that this is what the company has been shooting for, the high-volume, mass market EV, if they can be successful in ramping up production (and have enough demand) then they should be okay.  If not, they may go bankrupt in the next 1-12 months. 


However, even if they are successful at their ramp up, the main remaining potential worry that I see is that they will likely not be a top-5 automaker and thus cannot justify their market cap.  Once they stop being a company valued on future potential and our desire to see a sustainable transportation future but on actual sales and revenue and profits and reliability and all the other boring stuff that most blue chip companies are judged on, then I see it as unlikely that their sales will be similar to the big car makers.  Remember all the other guys are bringing out EVs and PHEVs too and that car buyers are notoriously picky about their cars in terms of brand, design, model, style, etc. . .  Teslas, despite their cool factor, are not for everyone. Just like Priuses or F-150s or Camrys or Accords aren't.

I think you way over simplify how easy it will be for the ICE manufacturers to turn to EVs, while maintaining their ICE production. Its hard to serve tow master. I would also point out that Tesla's biggest advantage is not their cars per se, its there ability to produce enough batteries for mass produce EVs. Unless I missed it, Ford, and GM do not have a gigafactory to mass produce the Lithium Ion batteries.

As far as valuation, the stock price will almost always stay ahead of the valuation for disruptive growth companies. THat's okay with a buy and hold strategy. Tesla is no longer a "car company", it's an energy and transportation company. As I mentioned above, Tesla is tackling grid scale battery backup/stabiliztion, residential battery storage, commercial trucking, solar roofing shingles, manufacturing automation, self-driving cars, and more. Will Tesla hit a home run with all these, no, but chances are they'll succeed on multiple fronts.

I suggest, instead of going back and forth and likely not change either of our opinions, let's make some predictions and see what happens. Here are my predictions for 2018. Tesla will finish the year:

With at least one, possibly two profitable quarters
Sell over 250,000 vehicles (S, X, M3), which would be 150% YOY growth
Stock price over $400


PS - I also predict the M3 will be named Popular Mechanics 2018 Car of the Year :)
https://www.popularmechanics.com/cars/g19605464/best-cars-2018/

Sure, sounds like fun. 
I predict Tesla won't sell 100,000 model 3's this year (and I think that will be very impressive and a win for them if they get close to 100k ).  Remember that they were shooting for 500k this year. 
I think TSLA won't end the year over $300, and there's a decent chance it'll go below $200 this year.


Remember there were only 200k EVs and PHEVs sold in the US in 2017.  It's not as if there was a supply issue for these vehicles.  It takes time for consumers to become aware of and wrap their minds around the changes that driving a plug-in car entails.  It's not a switch that happens overnight.

Thought it would be fun to revisit some old posts from this thread. For this bet, Tesla SP finished the year above 300 and Tesla delivered 145,000+ Models 3s in 2018.

[ColoradoTribe]

Buying TSLA shares is a great idea. But only if your goal is to learn what it feels like to have a stock you own go to zero in a bankruptcy. It's the single best short in a market full of overvalued companies. The unsecured bondholders will also lose most of their money (and bondholders have to get 100% of their money back before shareholders get a penny). I think the odds of bankruptcy this year are over 10% and over 70% by the end of next year. They will lose about $1 billion this quarter, and the same next quarter, and will lose at least $500 million per quarter even if they eventually can start making 5000 Model 3's per week (which I don't think they can do until next year, even if they are still in business).

The stock price got so out of control because of incredibly naive people who have no idea what they are doing with investing, but did listen to the media worship and maniacal proclamations from Musk (who routinely intentionally misleads investors in order to separate them from their cash). People are going to lose enormous amounts of money as reality hits. Don't be one of those people.

This one didn’t age well. Stock up 17X since this post.

[mistymoney]

Is the proof in the pudding yet?

Seems like a lot of predictions did not pan out, did any of the naysayers actually short the stock? Some were super confident it was going to bk.

[medinaj2160]

I finally screwed up investing in Tesla. I sold 1200-1300 covered calls for December way to early. I will end up with about $4M if I lose the shares. I am 37 and I am not sure what to do with my money after Tesla and I am plan to retire by the end of the year. I might get to keep 500 shares.

[talltexan]

I saw the news about Musk buying into Twitter, and decided to plunge in myself!

[soulpatchmike]

If these stats don't provide proof in the pudding, not sure what can.  Growing this fast with a 6-12 month backlog to get a car and no marketing/pr department. 

The EV revolution is happening right under everyone's noses...the delivery(sales) numbers below are from 2 factories.  As of March/April, they have 2 additional factories capable of more than doubling output.  The made $4.5B profit in Q421 alone.

Ad spending per vehicle sold:
Lincoln: $1,553
Jaguar: $1,235
Lexus: $984
Cadillac: $908
Honda: $183
Mini: $91
Dodge: $78
Mitsubishi: $43
Tesla: $0
Source: Ad Age (2020 spending)

US Auto Q1 2022 unit sales vs Q1 2021:
Toyota - 510,348 - down 15%
GM - 485,330 - down 24%
Ford - 431,123 - down 17%
Stellantis - 411,174 - down 13%
Honda- 252,205 - down 27%
Tesla (US)-111,595 - up 57%
Tesla (global) - 310,048 - up 68%
Source: Company Reports (Q1 21 vs 22)

[ChpBstrd]

Is the proof in the pudding yet?

Yes, a TSLA investment in 2017 would have been putting your money in exactly the right place at exactly the right time. As it turns out, 2017 was right on the cusp of a massive boom in tech stocks with simple narratives, and TSLA happened to be on the verge of solving both their main manufacturing problems and their short term financing problems.

No, I'm not convinced that we've learned anything about a decision-making formula would work reliably in the future. The formula that would have led people to buy TSLA in 2017 was to buy nearly broke potential disruptors in a capital-intensive, highly-competitive industry making products that were more expensive and inconvenient than their competitors, while counting on the company to maintain a triple-digit PE ratio even after having reached sustainability. This specific strategy would work at some points in the market cycle, but not others. Additionally, TSLA's good fortune was unique to it, as investors in Lordstown, Nikola, and Canoo discovered. It would be inconsistent to say "see, told ya" about TSLA, while not being invested in these firms and the numerous Chinese EV makers.

[HPstache]

Still riding the TSLA wave with my total stock market index fund

[lemonlyman]

Additionally, TSLA's good fortune was unique to it, as investors in Lordstown, Nikola, and Canoo discovered. It would be inconsistent to say "see, told ya" about TSLA, while not being invested in these firms and the numerous Chinese EV makers.

Why is that inconsistent? What's the inconsistency in investing in a company executing very well on its business while not investing in companies that are not shipping any significant amount of products? Tesla was still selling 100,000 vehicles in 2017 with a roadmap for growth and production increases. Have any of those companies done anymore than 100 total? I've been reading Tesla financials for years. You may not believe Tesla will continue to grow, but it's not hard to read a Nikola 10Q and figure out it's trash.

[theoverlook]

The massive difference between Lordstown, Canoo, and Nikola vs Tesla in 2017 was that Tesla had actually made a product and shipped large numbers of them to very pleased owners. The other three had not. People (not you, just "people") keep acting like Tesla is a house of cards or a scam and yet the cars keep coming and the growth keeps happening. It was not at all comparable to the other three you mentioned, even in 2017.

[MustacheAndaHalf]

People (not you, just "people") keep acting like Tesla is a house of cards or a scam and yet the cars keep coming and the growth keeps happening

Maybe I missed part of this conversation, but I don't see anyone using those terms.

The massive difference between Lordstown, Canoo, and Nikola vs Tesla in 2017 was that Tesla had actually made a product and shipped large numbers of them to very pleased owners. The other three had not.

Lucid Motors has more than doubled since their IPO (by SPAC), so in my mind they belong in that list while Nikola does not.

Nikola is up +1% in the past year, a year in which fortunately a short seller targetted Nikola with criticism.  That short seller got paid for being right, and Nikola had to admit they had faked their EV truck video: Nikola rolled one of their trucks down a hill.  That sounds much closer to a scam to me than anything from another EV car company.

[Niceday]

Is the proof in the pudding yet?

Yes, a TSLA investment in 2017 would have been putting your money in exactly the right place at exactly the right time. As it turns out, 2017 was right on the cusp of a massive boom in tech stocks with simple narratives, and TSLA happened to be on the verge of solving both their main manufacturing problems and their short term financing problems.

No, I'm not convinced that we've learned anything about a decision-making formula would work reliably in the future. The formula that would have led people to buy TSLA in 2017 was to buy nearly broke potential disruptors in a capital-intensive, highly-competitive industry making products that were more expensive and inconvenient than their competitors, while counting on the company to maintain a triple-digit PE ratio even after having reached sustainability. This specific strategy would work at some points in the market cycle, but not others. Additionally, TSLA's good fortune was unique to it, as investors in Lordstown, Nikola, and Canoo discovered. It would be inconsistent to say "see, told ya" about TSLA, while not being invested in these firms and the numerous Chinese EV makers.

Why would anyone group Tesla, Lordtown, and Nikola together, even back then? If you dismiss a company just based on superficial information, then there is a lesson to be learned.  One big difference between these companies is their people. Not that that is the only difference.

Tesla has disclosed recently that they'll grow 50% per year in the next few years. If they deliver, then it's not too late to own the stock. And if you're really paying attention, you'll know that they can grow 50% this year with just the Fremont and Shanghai factories alone.

[MinorMiner]

Is the proof in the pudding yet?

Yes, a TSLA investment in 2017 would have been putting your money in exactly the right place at exactly the right time. As it turns out, 2017 was right on the cusp of a massive boom in tech stocks with simple narratives, and TSLA happened to be on the verge of solving both their main manufacturing problems and their short term financing problems.

No, I'm not convinced that we've learned anything about a decision-making formula would work reliably in the future. The formula that would have led people to buy TSLA in 2017 was to buy nearly broke potential disruptors in a capital-intensive, highly-competitive industry making products that were more expensive and inconvenient than their competitors, while counting on the company to maintain a triple-digit PE ratio even after having reached sustainability. This specific strategy would work at some points in the market cycle, but not others. Additionally, TSLA's good fortune was unique to it, as investors in Lordstown, Nikola, and Canoo discovered. It would be inconsistent to say "see, told ya" about TSLA, while not being invested in these firms and the numerous Chinese EV makers.

So I got in in July 2019. Some of the thoughts/experiences that drove this initial investment:

• Climate change is an existential threat and will out of necessity require a big money solution. Tesla seems to be on the right track to make it happen.
• I took my first test drive in a Model S in 2016. This was a bit of an eye opener and caused me to start watching what was going on with Tesla
  
• I've always been a space nerd, so I was aware of what was going on with SpaceX. These guys were landing rockets? No one expected that to work. Something is going on here... Watch this video if you haven't yet: https://www.youtube.com/watch?v=A0FZIwabctw
• I Turo'd a Model 3 in summer of 2019 for a day. This knocked my socks off. A silent, fast, car that drives itself. Woah. I had no idea that these things were this good.
• I saw the second ever Starlink train in May 2019. These guys are making whole new astronomical sights. HOLY COW. They can do what they say that can, even if it sounds impossible.
• Press coverage of Tesla was very negative in 2018-2019. Lot's of angst over the Model 3 ramp. It seemed contrived as the ramp was happening, just a bit slower than expected. This reeked of short-term thought, which represents an opportunity for long term investment.
• I listened to Musk speak directly, not filtered through the media. (Why would you trust a communications major to tell you about technology!?!?) As an engineer, everything he said made perfect sense. His logic was very, very clear.

To sum this up, my decision making had nothing to do with finance (These indicators seem to be lagging, not leading). It had everything to do with rate of technological improvement and the size of the problem being solved for. I believe this formula still applies today. See previous posts about FSD if you're curious.

[talltexan]

I feel like that last bullet point (about Musk) also has to acknowledge his outrageous behavior on more than one occasion. Speaking about engineering is fine. The performance art on Twitter rubs me the wrong way.

[ChpBstrd]

Is the proof in the pudding yet?

Yes, a TSLA investment in 2017 would have been putting your money in exactly the right place at exactly the right time. As it turns out, 2017 was right on the cusp of a massive boom in tech stocks with simple narratives, and TSLA happened to be on the verge of solving both their main manufacturing problems and their short term financing problems.

No, I'm not convinced that we've learned anything about a decision-making formula would work reliably in the future. The formula that would have led people to buy TSLA in 2017 was to buy nearly broke potential disruptors in a capital-intensive, highly-competitive industry making products that were more expensive and inconvenient than their competitors, while counting on the company to maintain a triple-digit PE ratio even after having reached sustainability. This specific strategy would work at some points in the market cycle, but not others. Additionally, TSLA's good fortune was unique to it, as investors in Lordstown, Nikola, and Canoo discovered. It would be inconsistent to say "see, told ya" about TSLA, while not being invested in these firms and the numerous Chinese EV makers.

So I got in in July 2019. Some of the thoughts/experiences that drove this initial investment:

• Climate change is an existential threat and will out of necessity require a big money solution. Tesla seems to be on the right track to make it happen.
• I took my first test drive in a Model S in 2016. This was a bit of an eye opener and caused me to start watching what was going on with Tesla
  
• I've always been a space nerd, so I was aware of what was going on with SpaceX. These guys were landing rockets? No one expected that to work. Something is going on here... Watch this video if you haven't yet: https://www.youtube.com/watch?v=A0FZIwabctw
• I Turo'd a Model 3 in summer of 2019 for a day. This knocked my socks off. A silent, fast, car that drives itself. Woah. I had no idea that these things were this good.
• I saw the second ever Starlink train in May 2019. These guys are making whole new astronomical sights. HOLY COW. They can do what they say that can, even if it sounds impossible.
• Press coverage of Tesla was very negative in 2018-2019. Lot's of angst over the Model 3 ramp. It seemed contrived as the ramp was happening, just a bit slower than expected. This reeked of short-term thought, which represents an opportunity for long term investment.
• I listened to Musk speak directly, not filtered through the media. (Why would you trust a communications major to tell you about technology!?!?) As an engineer, everything he said made perfect sense. His logic was very, very clear.

To sum this up, my decision making had nothing to do with finance (These indicators seem to be lagging, not leading). It had everything to do with rate of technological improvement and the size of the problem being solved for. I believe this formula still applies today. See previous posts about FSD if you're curious.

How many of the above points could be repurposed to justify NIO? We can't test drive the newly launched, 644hp, 419 mile range ET7 yet, but chances are anything Musk said in favor of electric cars applies to them. Negative sentiment is probably overblown (particularly since TSLA, by comparison, is at least 1/3rd a Chinese company now) and they're solving a problem of huge scale in the world's most populous country. At 4% of TSLA's market cap, maybe the financials do matter.

[MinorMiner]

Is the proof in the pudding yet?

Yes, a TSLA investment in 2017 would have been putting your money in exactly the right place at exactly the right time. As it turns out, 2017 was right on the cusp of a massive boom in tech stocks with simple narratives, and TSLA happened to be on the verge of solving both their main manufacturing problems and their short term financing problems.

No, I'm not convinced that we've learned anything about a decision-making formula would work reliably in the future. The formula that would have led people to buy TSLA in 2017 was to buy nearly broke potential disruptors in a capital-intensive, highly-competitive industry making products that were more expensive and inconvenient than their competitors, while counting on the company to maintain a triple-digit PE ratio even after having reached sustainability. This specific strategy would work at some points in the market cycle, but not others. Additionally, TSLA's good fortune was unique to it, as investors in Lordstown, Nikola, and Canoo discovered. It would be inconsistent to say "see, told ya" about TSLA, while not being invested in these firms and the numerous Chinese EV makers.

So I got in in July 2019. Some of the thoughts/experiences that drove this initial investment:

• Climate change is an existential threat and will out of necessity require a big money solution. Tesla seems to be on the right track to make it happen.
• I took my first test drive in a Model S in 2016. This was a bit of an eye opener and caused me to start watching what was going on with Tesla
  
• I've always been a space nerd, so I was aware of what was going on with SpaceX. These guys were landing rockets? No one expected that to work. Something is going on here... Watch this video if you haven't yet: https://www.youtube.com/watch?v=A0FZIwabctw
• I Turo'd a Model 3 in summer of 2019 for a day. This knocked my socks off. A silent, fast, car that drives itself. Woah. I had no idea that these things were this good.
• I saw the second ever Starlink train in May 2019. These guys are making whole new astronomical sights. HOLY COW. They can do what they say that can, even if it sounds impossible.
• Press coverage of Tesla was very negative in 2018-2019. Lot's of angst over the Model 3 ramp. It seemed contrived as the ramp was happening, just a bit slower than expected. This reeked of short-term thought, which represents an opportunity for long term investment.
• I listened to Musk speak directly, not filtered through the media. (Why would you trust a communications major to tell you about technology!?!?) As an engineer, everything he said made perfect sense. His logic was very, very clear.

To sum this up, my decision making had nothing to do with finance (These indicators seem to be lagging, not leading). It had everything to do with rate of technological improvement and the size of the problem being solved for. I believe this formula still applies today. See previous posts about FSD if you're curious.

How many of the above points could be repurposed to justify NIO? We can't test drive the newly launched, 644hp, 419 mile range ET7 yet, but chances are anything Musk said in favor of electric cars applies to them. Negative sentiment is probably overblown (particularly since TSLA, by comparison, is at least 1/3rd a Chinese company now) and they're solving a problem of huge scale in the world's most populous country. At 4% of TSLA's market cap, maybe the financials do matter.

Absolutely! A lot of these things may apply to NIO, however I don't really know for sure as there is no car available to test.

What I was trying to get at above were not the details in particular, but a method of looking at the world. Be curious. When you see something you've never seen before or don't understand, look deeper. Don't only rely on the internet for information, be sure to seek out information in the real world. In general, real world information is more valuable than information that has been packaged for the masses. Try to understand where a company sits in the arc of history. Use your own reactions to a product as proxy for what the average persons reaction will be. The sooner you understand a new technology, the more valuable that knowledge is (I've built a career on it).

I hope that doesn't sound preachy, it's just a way of seeing the world that has been very valuable to me and I'd like to pass it along.

[ColoradoTribe]

Is the proof in the pudding yet?

Yes, a TSLA investment in 2017 would have been putting your money in exactly the right place at exactly the right time. As it turns out, 2017 was right on the cusp of a massive boom in tech stocks with simple narratives, and TSLA happened to be on the verge of solving both their main manufacturing problems and their short term financing problems.

No, I'm not convinced that we've learned anything about a decision-making formula would work reliably in the future. The formula that would have led people to buy TSLA in 2017 was to buy nearly broke potential disruptors in a capital-intensive, highly-competitive industry making products that were more expensive and inconvenient than their competitors, while counting on the company to maintain a triple-digit PE ratio even after having reached sustainability. This specific strategy would work at some points in the market cycle, but not others. Additionally, TSLA's good fortune was unique to it, as investors in Lordstown, Nikola, and Canoo discovered. It would be inconsistent to say "see, told ya" about TSLA, while not being invested in these firms and the numerous Chinese EV makers.

I bought first shares in 2013 and held on for 6 long years as the stock traded sideways. I didn’t sell a single share and instead added to my position on dips. I saw the execution and investment back into the company and knew the stock price would eventually have to reconcile with reality. My investment wasn’t due to luck and neither was Tesla’s success.

[ColoradoTribe]

Is the proof in the pudding yet?

Yes, a TSLA investment in 2017 would have been putting your money in exactly the right place at exactly the right time. As it turns out, 2017 was right on the cusp of a massive boom in tech stocks with simple narratives, and TSLA happened to be on the verge of solving both their main manufacturing problems and their short term financing problems.

No, I'm not convinced that we've learned anything about a decision-making formula would work reliably in the future. The formula that would have led people to buy TSLA in 2017 was to buy nearly broke potential disruptors in a capital-intensive, highly-competitive industry making products that were more expensive and inconvenient than their competitors, while counting on the company to maintain a triple-digit PE ratio even after having reached sustainability. This specific strategy would work at some points in the market cycle, but not others. Additionally, TSLA's good fortune was unique to it, as investors in Lordstown, Nikola, and Canoo discovered. It would be inconsistent to say "see, told ya" about TSLA, while not being invested in these firms and the numerous Chinese EV makers.

So I got in in July 2019. Some of the thoughts/experiences that drove this initial investment:

• Climate change is an existential threat and will out of necessity require a big money solution. Tesla seems to be on the right track to make it happen.
• I took my first test drive in a Model S in 2016. This was a bit of an eye opener and caused me to start watching what was going on with Tesla
  
• I've always been a space nerd, so I was aware of what was going on with SpaceX. These guys were landing rockets? No one expected that to work. Something is going on here... Watch this video if you haven't yet: https://www.youtube.com/watch?v=A0FZIwabctw
• I Turo'd a Model 3 in summer of 2019 for a day. This knocked my socks off. A silent, fast, car that drives itself. Woah. I had no idea that these things were this good.
• I saw the second ever Starlink train in May 2019. These guys are making whole new astronomical sights. HOLY COW. They can do what they say that can, even if it sounds impossible.
• Press coverage of Tesla was very negative in 2018-2019. Lot's of angst over the Model 3 ramp. It seemed contrived as the ramp was happening, just a bit slower than expected. This reeked of short-term thought, which represents an opportunity for long term investment.
• I listened to Musk speak directly, not filtered through the media. (Why would you trust a communications major to tell you about technology!?!?) As an engineer, everything he said made perfect sense. His logic was very, very clear.

To sum this up, my decision making had nothing to do with finance (These indicators seem to be lagging, not leading). It had everything to do with rate of technological improvement and the size of the problem being solved for. I believe this formula still applies today. See previous posts about FSD if you're curious.

How many of the above points could be repurposed to justify NIO? We can't test drive the newly launched, 644hp, 419 mile range ET7 yet, but chances are anything Musk said in favor of electric cars applies to them. Negative sentiment is probably overblown (particularly since TSLA, by comparison, is at least 1/3rd a Chinese company now) and they're solving a problem of huge scale in the world's most populous country. At 4% of TSLA's market cap, maybe the financials do matter.

Is relatively easy to create an EV prototype that can approximate the range and performance of a Tesla. What none of these companies have proven, outside on Chinese companies selling within China, is that they can produce in mass profitably. Tesla has achieved this and has margins 3X the industry average on each vehicle sold. These margins will only increase with further economies of scale. Tesla also has the supercharger network. Do Rivian or Polestar have a supercharging network? Do they own their own battery production? Did they lock in raw material contracts for their battery cells years in advance? How will they grow to Tesla scale if they are limited by battery supply? Tesla’s lead isn’t shrinking, if anything its growing.

[MinorMiner]

I feel like that last bullet point (about Musk) also has to acknowledge his outrageous behavior on more than one occasion. Speaking about engineering is fine. The performance art on Twitter rubs me the wrong way.

The key here is to go read the original comments in context. Most of the things that have been portrayed as outrageous behavior really aren't. Remember, this guy is on track to overturn some of the biggest industries on Earth. Trillions of dollars of fossil fuel value will evaporate in the next 20 years because of what is going on with Tesla/Clean energy revolution. Consider that the automobile industry spent $15 billion advertising last year (https://www.statista.com/statistics/243603/projected-online-ad-expenditure-of-the-us-automotive-industry/). This buys a lot of influence in the media.

[ChpBstrd]

Is the proof in the pudding yet?

Yes, a TSLA investment in 2017 would have been putting your money in exactly the right place at exactly the right time. As it turns out, 2017 was right on the cusp of a massive boom in tech stocks with simple narratives, and TSLA happened to be on the verge of solving both their main manufacturing problems and their short term financing problems.

No, I'm not convinced that we've learned anything about a decision-making formula would work reliably in the future. The formula that would have led people to buy TSLA in 2017 was to buy nearly broke potential disruptors in a capital-intensive, highly-competitive industry making products that were more expensive and inconvenient than their competitors, while counting on the company to maintain a triple-digit PE ratio even after having reached sustainability. This specific strategy would work at some points in the market cycle, but not others. Additionally, TSLA's good fortune was unique to it, as investors in Lordstown, Nikola, and Canoo discovered. It would be inconsistent to say "see, told ya" about TSLA, while not being invested in these firms and the numerous Chinese EV makers.

So I got in in July 2019. Some of the thoughts/experiences that drove this initial investment:

• Climate change is an existential threat and will out of necessity require a big money solution. Tesla seems to be on the right track to make it happen.
• I took my first test drive in a Model S in 2016. This was a bit of an eye opener and caused me to start watching what was going on with Tesla
  
• I've always been a space nerd, so I was aware of what was going on with SpaceX. These guys were landing rockets? No one expected that to work. Something is going on here... Watch this video if you haven't yet: https://www.youtube.com/watch?v=A0FZIwabctw
• I Turo'd a Model 3 in summer of 2019 for a day. This knocked my socks off. A silent, fast, car that drives itself. Woah. I had no idea that these things were this good.
• I saw the second ever Starlink train in May 2019. These guys are making whole new astronomical sights. HOLY COW. They can do what they say that can, even if it sounds impossible.
• Press coverage of Tesla was very negative in 2018-2019. Lot's of angst over the Model 3 ramp. It seemed contrived as the ramp was happening, just a bit slower than expected. This reeked of short-term thought, which represents an opportunity for long term investment.
• I listened to Musk speak directly, not filtered through the media. (Why would you trust a communications major to tell you about technology!?!?) As an engineer, everything he said made perfect sense. His logic was very, very clear.

To sum this up, my decision making had nothing to do with finance (These indicators seem to be lagging, not leading). It had everything to do with rate of technological improvement and the size of the problem being solved for. I believe this formula still applies today. See previous posts about FSD if you're curious.

How many of the above points could be repurposed to justify NIO? We can't test drive the newly launched, 644hp, 419 mile range ET7 yet, but chances are anything Musk said in favor of electric cars applies to them. Negative sentiment is probably overblown (particularly since TSLA, by comparison, is at least 1/3rd a Chinese company now) and they're solving a problem of huge scale in the world's most populous country. At 4% of TSLA's market cap, maybe the financials do matter.

Is relatively easy to create an EV prototype that can approximate the range and performance of a Tesla. What none of these companies have proven, outside on Chinese companies selling within China, is that they can produce in mass profitably. Tesla has achieved this and has margins 3X the industry average on each vehicle sold. These margins will only increase with further economies of scale. Tesla also has the supercharger network. Do Rivian or Polestar have a supercharging network? Do they own their own battery production? Did they lock in raw material contracts for their battery cells years in advance? How will they grow to Tesla scale if they are limited by battery supply? Tesla’s lead isn’t shrinking, if anything its growing.

And Tesla grew despite the legacy auto companies' dealer networks, gas station networks, parts distribution networks, financing networks, and economies of scale. The moral of the story is that things easily bought with money are no moat.

What is the most likely thing to disrupt Tesla's model? The same thing that disrupted American car companies before - Asian manufacturing expertise, electronics expertise, and ability to scale. Despite promises about the Model 3, which ended up costing as much as a BMW, Tesla remains unable to produce an affordable EV outside the luxury car market after about two decades of work. The Chinese will accomplish that with their shorter supply lines and more competitive market for basic materials, batteries, chips, components, etc. 

[MinorMiner]

Is the proof in the pudding yet?

Yes, a TSLA investment in 2017 would have been putting your money in exactly the right place at exactly the right time. As it turns out, 2017 was right on the cusp of a massive boom in tech stocks with simple narratives, and TSLA happened to be on the verge of solving both their main manufacturing problems and their short term financing problems.

No, I'm not convinced that we've learned anything about a decision-making formula would work reliably in the future. The formula that would have led people to buy TSLA in 2017 was to buy nearly broke potential disruptors in a capital-intensive, highly-competitive industry making products that were more expensive and inconvenient than their competitors, while counting on the company to maintain a triple-digit PE ratio even after having reached sustainability. This specific strategy would work at some points in the market cycle, but not others. Additionally, TSLA's good fortune was unique to it, as investors in Lordstown, Nikola, and Canoo discovered. It would be inconsistent to say "see, told ya" about TSLA, while not being invested in these firms and the numerous Chinese EV makers.

So I got in in July 2019. Some of the thoughts/experiences that drove this initial investment:

• Climate change is an existential threat and will out of necessity require a big money solution. Tesla seems to be on the right track to make it happen.
• I took my first test drive in a Model S in 2016. This was a bit of an eye opener and caused me to start watching what was going on with Tesla
  
• I've always been a space nerd, so I was aware of what was going on with SpaceX. These guys were landing rockets? No one expected that to work. Something is going on here... Watch this video if you haven't yet: https://www.youtube.com/watch?v=A0FZIwabctw
• I Turo'd a Model 3 in summer of 2019 for a day. This knocked my socks off. A silent, fast, car that drives itself. Woah. I had no idea that these things were this good.
• I saw the second ever Starlink train in May 2019. These guys are making whole new astronomical sights. HOLY COW. They can do what they say that can, even if it sounds impossible.
• Press coverage of Tesla was very negative in 2018-2019. Lot's of angst over the Model 3 ramp. It seemed contrived as the ramp was happening, just a bit slower than expected. This reeked of short-term thought, which represents an opportunity for long term investment.
• I listened to Musk speak directly, not filtered through the media. (Why would you trust a communications major to tell you about technology!?!?) As an engineer, everything he said made perfect sense. His logic was very, very clear.

To sum this up, my decision making had nothing to do with finance (These indicators seem to be lagging, not leading). It had everything to do with rate of technological improvement and the size of the problem being solved for. I believe this formula still applies today. See previous posts about FSD if you're curious.

How many of the above points could be repurposed to justify NIO? We can't test drive the newly launched, 644hp, 419 mile range ET7 yet, but chances are anything Musk said in favor of electric cars applies to them. Negative sentiment is probably overblown (particularly since TSLA, by comparison, is at least 1/3rd a Chinese company now) and they're solving a problem of huge scale in the world's most populous country. At 4% of TSLA's market cap, maybe the financials do matter.

Is relatively easy to create an EV prototype that can approximate the range and performance of a Tesla. What none of these companies have proven, outside on Chinese companies selling within China, is that they can produce in mass profitably. Tesla has achieved this and has margins 3X the industry average on each vehicle sold. These margins will only increase with further economies of scale. Tesla also has the supercharger network. Do Rivian or Polestar have a supercharging network? Do they own their own battery production? Did they lock in raw material contracts for their battery cells years in advance? How will they grow to Tesla scale if they are limited by battery supply? Tesla’s lead isn’t shrinking, if anything its growing.

And Tesla grew despite the legacy auto companies' dealer networks, gas station networks, parts distribution networks, financing networks, and economies of scale. The moral of the story is that things easily bought with money are no moat.

What is the most likely thing to disrupt Tesla's model? The same thing that disrupted American car companies before - Asian manufacturing expertise, electronics expertise, and ability to scale. Despite promises about the Model 3, which ended up costing as much as a BMW, Tesla remains unable to produce an affordable EV outside the luxury car market after about two decades of work. The Chinese will accomplish that with their shorter supply lines and more competitive market for basic materials, batteries, chips, components, etc.

In regards to the first bit about the incumbents advantage, Tesla used time as a lever. Of the good, fast & cheap triangle (Google it), Tesla picked good and cheap over a long time horizion. Because western competitors drug their feet on the transition, they are left with picking between good & fast incurring large expenses (VW) or cheap & fast and delivering a shitty end product (GM).

As far as Tesla coming into competition with Chinese manufacturers, this will happen. However, it will only happen after the weak competitors have been killed off and their market share eaten. Think GM. Think Stellantis.

[ColoradoTribe]

Is the proof in the pudding yet?

Yes, a TSLA investment in 2017 would have been putting your money in exactly the right place at exactly the right time. As it turns out, 2017 was right on the cusp of a massive boom in tech stocks with simple narratives, and TSLA happened to be on the verge of solving both their main manufacturing problems and their short term financing problems.

No, I'm not convinced that we've learned anything about a decision-making formula would work reliably in the future. The formula that would have led people to buy TSLA in 2017 was to buy nearly broke potential disruptors in a capital-intensive, highly-competitive industry making products that were more expensive and inconvenient than their competitors, while counting on the company to maintain a triple-digit PE ratio even after having reached sustainability. This specific strategy would work at some points in the market cycle, but not others. Additionally, TSLA's good fortune was unique to it, as investors in Lordstown, Nikola, and Canoo discovered. It would be inconsistent to say "see, told ya" about TSLA, while not being invested in these firms and the numerous Chinese EV makers.

So I got in in July 2019. Some of the thoughts/experiences that drove this initial investment:

• Climate change is an existential threat and will out of necessity require a big money solution. Tesla seems to be on the right track to make it happen.
• I took my first test drive in a Model S in 2016. This was a bit of an eye opener and caused me to start watching what was going on with Tesla
  
• I've always been a space nerd, so I was aware of what was going on with SpaceX. These guys were landing rockets? No one expected that to work. Something is going on here... Watch this video if you haven't yet: https://www.youtube.com/watch?v=A0FZIwabctw
• I Turo'd a Model 3 in summer of 2019 for a day. This knocked my socks off. A silent, fast, car that drives itself. Woah. I had no idea that these things were this good.
• I saw the second ever Starlink train in May 2019. These guys are making whole new astronomical sights. HOLY COW. They can do what they say that can, even if it sounds impossible.
• Press coverage of Tesla was very negative in 2018-2019. Lot's of angst over the Model 3 ramp. It seemed contrived as the ramp was happening, just a bit slower than expected. This reeked of short-term thought, which represents an opportunity for long term investment.
• I listened to Musk speak directly, not filtered through the media. (Why would you trust a communications major to tell you about technology!?!?) As an engineer, everything he said made perfect sense. His logic was very, very clear.

To sum this up, my decision making had nothing to do with finance (These indicators seem to be lagging, not leading). It had everything to do with rate of technological improvement and the size of the problem being solved for. I believe this formula still applies today. See previous posts about FSD if you're curious.

How many of the above points could be repurposed to justify NIO? We can't test drive the newly launched, 644hp, 419 mile range ET7 yet, but chances are anything Musk said in favor of electric cars applies to them. Negative sentiment is probably overblown (particularly since TSLA, by comparison, is at least 1/3rd a Chinese company now) and they're solving a problem of huge scale in the world's most populous country. At 4% of TSLA's market cap, maybe the financials do matter.

Is relatively easy to create an EV prototype that can approximate the range and performance of a Tesla. What none of these companies have proven, outside on Chinese companies selling within China, is that they can produce in mass profitably. Tesla has achieved this and has margins 3X the industry average on each vehicle sold. These margins will only increase with further economies of scale. Tesla also has the supercharger network. Do Rivian or Polestar have a supercharging network? Do they own their own battery production? Did they lock in raw material contracts for their battery cells years in advance? How will they grow to Tesla scale if they are limited by battery supply? Tesla’s lead isn’t shrinking, if anything its growing.

And Tesla grew despite the legacy auto companies' dealer networks, gas station networks, parts distribution networks, financing networks, and economies of scale. The moral of the story is that things easily bought with money are no moat.

What is the most likely thing to disrupt Tesla's model? The same thing that disrupted American car companies before - Asian manufacturing expertise, electronics expertise, and ability to scale. Despite promises about the Model 3, which ended up costing as much as a BMW, Tesla remains unable to produce an affordable EV outside the luxury car market after about two decades of work. The Chinese will accomplish that with their shorter supply lines and more competitive market for basic materials, batteries, chips, components, etc.

All the things you listed are anchors weighing auto legacy down, not things Tesla has paid to overcome. Gas is more expensive than electricity (who needs gas stations, Tesla owners fuel at home), dealerships are unnecessary middle-men, a pain to deal with and add to the cost of the car, but add little of value. They survive primarily by servicing and repairing combustion engines. EVs don’t require routine maintenance and rarely need repair. Good luck to legacy auto trying to convince their dealers to kill their own business model by selling EVs. As for reaching their current scale, there was nothing easy about the ramp to mass production for Tesla, as other EV start-ups are quickly finding out. Heck, GM produced less than 50 EVs in all of Q1 and they been “electrifying" for a years now!

Tesla could sell a Model 3 profitably today for $35k. They could build a line and sell an economy sedan for $25k and a 200 mile range today. But why? Tesla margins are insane, 3X that of legacy auto. Tesla has been increasing their prices even as their cost to produce has been coming down because there’s a 6-12 month wait for most of their models. Why decrease price when you are production and battery cell constrained? They’ll continue to plug billions in profits to further expansion and a pipeline of new products. The plan has always been to start in the high-end of the market and work their way down, which they will do when they have the production capacity to service that market segment. Lastly, the Chinese manufacturers are not competing with Tesla, they’ll end up replacing the legacy auto ICE market share as legacy spend billions they can’t afford to try and pivot while maintaining their most profitable ICE lines. Respectfully, I don’t think you have a good grasp of what’s happening here.

[theoverlook]

Despite promises about the Model 3, which ended up costing as much as a BMW, Tesla remains unable to produce an affordable EV outside the luxury car market after about two decades of work.

Average new car price, 2022: $47,000
Tesla model 3 base model MSRP: $46,990

Seems pretty far from a "luxury car market" model if it's exactly average.

[EchoStache]

Despite promises about the Model 3, which ended up costing as much as a BMW, Tesla remains unable to produce an affordable EV outside the luxury car market after about two decades of work.

Average new car price, 2022: $47,000
Tesla model 3 base model MSRP: $46,990

Seems pretty far from a "luxury car market" model if it's exactly average.

I saw a 5 year cost analysis that put a new Tesla model 3 cheaper than a new Honda Accord when taking into account purchase price, gas/electricity cost, maintenance, and retained value.  I think that past the 5 year point, the Tesla, or any EV would continue to pull significantly ahead past the 5 year mark.

[ChpBstrd]

Despite promises about the Model 3, which ended up costing as much as a BMW, Tesla remains unable to produce an affordable EV outside the luxury car market after about two decades of work.

Average new car price, 2022: $47,000
Tesla model 3 base model MSRP: $46,990

Seems pretty far from a "luxury car market" model if it's exactly average.

I saw a 5 year cost analysis that put a new Tesla model 3 cheaper than a new Honda Accord when taking into account purchase price, gas/electricity cost, maintenance, and retained value.  I think that past the 5 year point, the Tesla, or any EV would continue to pull significantly ahead past the 5 year mark.

Edmunds.com has a calculator that can solve for these things. Let's compare the 5 year cost of ownership for used cars from the 2020 model year:

Model 3 standard range, no AWD: $49,052
https://www.edmunds.com/tesla/model-3/2020/cost-to-own/?style=401839826

Honda Accord LX: $37,090
https://www.edmunds.com/honda/accord/2020/cost-to-own/?style=401827085

Prius Prime: $35,161
https://www.edmunds.com/toyota/prius-prime/2020/cost-to-own/?style=401802251

Corolla LE: $31,666
https://www.edmunds.com/toyota/corolla/2020/cost-to-own/?style=401788243

As you can see, the Tesla is a luxury car in terms of the cost of ownership. Even a used Tesla like a 2020 model is a bad financial decision. Admittedly, it's not the same financial suicide as a BMW 3 series, but it's closer to that type of car than an Accord.

Your results may vary because zip code is one of the parameters.

[StashingAway]

Despite promises about the Model 3, which ended up costing as much as a BMW, Tesla remains unable to produce an affordable EV outside the luxury car market after about two decades of work.

Average new car price, 2022: $47,000
Tesla model 3 base model MSRP: $46,990

Seems pretty far from a "luxury car market" model if it's exactly average.

I don't think it's reasonable to take the lowest option base model of a lineup as a representation of how luxury a brand is. Also, averages are not great for comparison because the high prices of, say, a $200,000 Porsche can skew the numbers (statistics 101 here). Median price would be closer, although doesn't appear to be any data on that. A look at other luxury car brands when viewed through this lens:

Base BMW X1: $35,000
Base Land Rover Discovery Sport: $43,300
Base Lexus IS: $39,850
Base Audi Q3: $36,400
Base Cadillac XT4: $36,990

[ColoradoTribe]

All this talk about wether or not a Tesla Model 3 is “luxury” or not, misses the point. Tesla could see the Model 3 for far less and profitably because the margins on Tesla vehicles are 3X of legacy ICE auto sales. Tesla could also build a compelling EV with 250 miles of range in the $25k range. They simply have no incentive to do that right now. Why spend capital to build out a new line when you are supply constrained and running a 6-12 month backlog with the demand for your current, high margin vehicles. When Tesla increases production capacity to meet current demand they will move down the price scale to expand market share.

[mistymoney]

was looking at the tesla site - did not realize that the FSD was a 12k add on to car cost.


so, I thought that was interesting!

[TomTX]

I finally screwed up investing in Tesla. I sold 1200-1300 covered calls for December way to early. I will end up with about $4M if I lose the shares. I am 37 and I am not sure what to do with my money after Tesla and I am plan to retire by the end of the year. I might get to keep 500 shares.

You know, I'd love to be 37 with an "investing screwup" which netted me $4M. That's more than double what I would need for the family to FIRE.

[StashingAway]

All this talk about wether or not a Tesla Model 3 is “luxury” or not, misses the point. Tesla could see the Model 3 for far less and profitably because the margins on Tesla vehicles are 3X of legacy ICE auto sales. Tesla could also build a compelling EV with 250 miles of range in the $25k range. They simply have no incentive to do that right now. Why spend capital to build out a new line when you are supply constrained and running a 6-12 month backlog with the demand for your current, high margin vehicles. When Tesla increases production capacity to meet current demand they will move down the price scale to expand market share.

That's a good point. There isn't much reason for them to make an economy car right now.

Regardless, they are luxury priced cars currently.

[ChpBstrd]

All this talk about wether or not a Tesla Model 3 is “luxury” or not, misses the point. Tesla could see the Model 3 for far less and profitably because the margins on Tesla vehicles are 3X of legacy ICE auto sales. Tesla could also build a compelling EV with 250 miles of range in the $25k range. They simply have no incentive to do that right now. Why spend capital to build out a new line when you are supply constrained and running a 6-12 month backlog with the demand for your current, high margin vehicles. When Tesla increases production capacity to meet current demand they will move down the price scale to expand market share.

That's a good point. There isn't much reason for them to make an economy car right now.

Regardless, they are luxury priced cars currently.

So either...
1) they can't do it because of a lack of materials or capacity, and must prioritize, or
2) they're leaving the door open for other manufacturers to claim the middle/working class market.

[TomTX]

They're selling every dang car they can make and have a backlog of orders approaching a year.

Presuming a similar margin, should they focus on producing $60k+ cars or $30k cars? Remember that throughput is essentially equal - every $30k car produced means one less $60k+ car produced.

[ColoradoTribe]

All this talk about wether or not a Tesla Model 3 is “luxury” or not, misses the point. Tesla could see the Model 3 for far less and profitably because the margins on Tesla vehicles are 3X of legacy ICE auto sales. Tesla could also build a compelling EV with 250 miles of range in the $25k range. They simply have no incentive to do that right now. Why spend capital to build out a new line when you are supply constrained and running a 6-12 month backlog with the demand for your current, high margin vehicles. When Tesla increases production capacity to meet current demand they will move down the price scale to expand market share.

That's a good point. There isn't much reason for them to make an economy car right now.

Regardless, they are luxury priced cars currently.

So either...
1) they can't do it because of a lack of materials or capacity, and must prioritize, or
2) they're leaving the door open for other manufacturers to claim the middle/working class market.

Pretty much every EV manufacturer is production constrained, most due to battery capacity. GM delivered less than 50 EVs in Q4. I think Tesla is doing just fine relative to the “competition". It was never Tesla's goal or mission to claim 100% market share. Their goal was to drive the transition to electric transportation. They’re succeeding. I’ve no doubt there will buyers for Tesla vehicles when they roll out new, lower-priced offerings. The Tesla brand is synonymous with EVs and they have yet to spend a dime on marketing. Tesla will sell every car they make as the rapidly ramp production for years to come. GM, Ford and Chrysler will be lucky to still be in business in 5 years without another round of government bailouts.

[ColoradoTribe]

https://static1.squarespace.com/static/60c24f91684d920cb6097d4e/t/625affb36a000b41381f8455/1650130893591/The+Tesla+Decade+-+Worm+Capital+-+4-18-2022.pdf

One of the best summations of the Bull case for Tesla that I’ve come across.

[mistymoney]

from the link above:

We believe Tesla shares could offer a 10x return by 2030 – and potentially much more.*
• *Note: Our 10x by 2030 valuation assumptions include Tesla’s current business lines. This figure does not include Tesla’s planned
Robotaxi network or real-world AI product revenue, each of which have profound upside implications to our financial models.

10X return in just 8 years.....seems....incredible!