Author Topic: The effect of Tesla being added to the S&P 500. Our Index funds...  (Read 9874 times)

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #50 on: December 11, 2020, 11:23:44 AM »
Legacy auto is very good at spinning up new production lines they do it all the time. I doubt building a car around a body and battery is much different than building a car around a body and engine. Judging from initial quality of model Y I could be wrong tho.

New production lines all the time for new ICE vehicles, where 90% of the parts are unchanged from one model to the next. You donít just swap out a gas engine for a battery pack and call it good. New EV lines will require ground up designs and retooling of the manufacturing lines. Elon has said it dozens of times. Building the prototypes is easy. Far, far harder is building the machines that build the machines. Sourcing all the new components that go into the EVs alone will be a huge undertaking as the legacy autos arenít vertically integrated to the extent Tesla is. Thereís no radiator, transmission, spark plugs, engine, fuel tank, oil reservoir, fan, etc. The heating system is totally different (Teslaís have heat pumps). Again, you donít just take an existing ICE vehicle and swap out a few pieces and restart the line.

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #51 on: December 11, 2020, 11:32:26 AM »
In related news, Toyota is claiming that they have a "solid-state" battery that can do 500km (300 miles) on a single charge and can be charged in 10 minutes. They plan on rolling out in 2021. I really gotta dump my ICE vehicle soon before they become worthless lol

https://electrek.co/2020/12/11/toyota-electric-car-solid-state-battery-10-min-fast-charging/

To clarify, they will be rolling out a prototype in 2021. I am happy to see that Toyota is moving away from fuel cells at least. That was a dead end. This is promising and I want all the legacy autos to move in this direction for the sake of the planet.

Legacy autos have rolled out lots of prototypes, compliance vehicles, and plans. Unfortunately, still waiting for any of them to start mass production of new EV lines designed and built from the ground up.

The advantage of solid state is the rapid charge time. Issue has always been the number of cycles the batteries can handle and how fast they degrade. Unclear if Toyota has cleared this hurdle from the article.

Lastly, keep in mind that Tesla announced battery cell improvements at their battery day this year that if fully realized will improve the efficiency and reduce the cost of their in house cells by roughly 56% by 2023. Again, Tesla is not a stationary target and none of the legacy autos have committed to fully competing in this space yet because they canít realistically maintain their ICE business profitably while simultaneously going all in on EVs. They risk cannibalizing their profit center and shareholders would scream bloody murder. No such dilemma for Tesla.

3toesloth

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #52 on: December 11, 2020, 11:36:59 AM »
New production lines all the time for new ICE vehicles, where 90% of the parts are unchanged from one model to the next. You donít just swap out a gas engine for a battery pack and call it good. New EV lines will require ground up designs and retooling of the manufacturing lines. Elon has said it dozens of times. Building the prototypes is easy. Far, far harder is building the machines that build the machines. Sourcing all the new components that go into the EVs alone will be a huge undertaking as the legacy autos arenít vertically integrated to the extent Tesla is. Thereís no radiator, transmission, spark plugs, engine, fuel tank, oil reservoir, fan, etc. The heating system is totally different (Teslaís have heat pumps). Again, you donít just take an existing ICE vehicle and swap out a few pieces and restart the line.
[/quote]
Can't be that difficult. Dozen or more companies have already done it and dozens of more models available 2021.

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #53 on: December 11, 2020, 11:57:50 AM »
In related news, Toyota is claiming that they have a "solid-state" battery that can do 500km (300 miles) on a single charge and can be charged in 10 minutes. They plan on rolling out in 2021. I really gotta dump my ICE vehicle soon before they become worthless lol
At least another 10 years for fleet to turnover, even if the technology's 100% ready today.

While true that it would take 10 years to physically replace the entire fleet (at a minimum assuming adequate EV supply), I think the point FIPurpose is making is that ICE resale values will collapse longe before all ICE cars are replaced. Once EVs approach near universal acceptance as the vehicle of the future, ICE resale values will collapse, especially at the high end price points. This could happen with as little as 5% market share for EVs. People will hold onto and stretch their current ICE vehicle until they can justify or afford an EV purchase.

As the benefits of EVs become more universally known, for examples the batteries and drive trains can easily last 500k miles and the low cost of ownership (cheap fueling and maintenance costs), EV resale values will increase and ICE resale values will plummet. The Model 3 already has the highest resale value at one year of ownership of any car.

https://thedriven.io/2020/02/10/tesla-model-3-top-list-of-cars-that-hold-their-value/

The legacy autos are already seeing declining sales in all segments where Tesla currently competes. The Model Y ramp and coming CyberTruck roll out from Austin Texas in 2022 will accelerate overall declining sales and in their most profitable market segments.

Itís not that no one will be driving ICE vehicles. There will be ICE vehicles on the road for decade to come in steadily declining numbers. It's just that new sales will dry up and resale values will drop precipitously such that ICE ownership will be a class distinction. I see a situation where lower income classes will buy up top end used ICE vehicles at basement prices and lower end used ICE vehicles will make their way south across the border for their second act.

FIPurpose

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #54 on: December 11, 2020, 12:40:02 PM »
In related news, Toyota is claiming that they have a "solid-state" battery that can do 500km (300 miles) on a single charge and can be charged in 10 minutes. They plan on rolling out in 2021. I really gotta dump my ICE vehicle soon before they become worthless lol
At least another 10 years for fleet to turnover, even if the technology's 100% ready today.

While true that it would take 10 years to physically replace the entire fleet (at a minimum assuming adequate EV supply), I think the point FIPurpose is making is that ICE resale values will collapse longe before all ICE cars are replaced. Once EVs approach near universal acceptance as the vehicle of the future, ICE resale values will collapse, especially at the high end price points. This could happen with as little as 5% market share for EVs. People will hold onto and stretch their current ICE vehicle until they can justify or afford an EV purchase.

As the benefits of EVs become more universally known, for examples the batteries and drive trains can easily last 500k miles and the low cost of ownership (cheap fueling and maintenance costs), EV resale values will increase and ICE resale values will plummet. The Model 3 already has the highest resale value at one year of ownership of any car.

https://thedriven.io/2020/02/10/tesla-model-3-top-list-of-cars-that-hold-their-value/

The legacy autos are already seeing declining sales in all segments where Tesla currently competes. The Model Y ramp and coming CyberTruck roll out from Austin Texas in 2022 will accelerate overall declining sales and in their most profitable market segments.

Itís not that no one will be driving ICE vehicles. There will be ICE vehicles on the road for decade to come in steadily declining numbers. It's just that new sales will dry up and resale values will drop precipitously such that ICE ownership will be a class distinction. I see a situation where lower income classes will buy up top end used ICE vehicles at basement prices and lower end used ICE vehicles will make their way south across the border for their second act.

Yep. This exactly. I've already determined that our current car is our last ICE. Still thinking about a potential move to Europe in a couple years where we would likely go car free, but if we stay in the States for the foreseeable future, I think we will likely move to Hybrid within the next year or 2.

It doesn't help that my 50k miles ICE vehicle broke down recently, power train broke and has been in the shop for almost 4 weeks now. I asked the tow truck driver how many electric/hybrid vehicles he does. He said he's never done an EV due to mechanical failure, he said he never started seeing prius' unless they were over 200k miles. Honestly, that right then and there has sold me that people will very quickly consider EV's superior to ICE once they get charging to under 20 mins (only necessary for away from home charging), 350 miles single charge, less than $30k. That combination will be the death of the ICE vehicle.

Also I don't think car companies are afraid to eat their own profits. The problem has been that consumer vehicles are already close to not profitable. Drive past any car dealership and what's it full of? Giant trucks. The current fleets of these car companies are all subsidized by people willing to over pay for gigantic trucks. No one is willing to pay 40k for an ICE sedan anymore, so the auto companies are already abandoning that part of the market. But they have to sell consumer vehicles in order to meet fleet mpg requirements. So they sell sedans basically at cost in order to have more trucks to sell which is where they make their money.

The problem that they'll have in a few years is California and likely more states saying that they won't be allowed to sell ICE trucks anymore in a few years. That is the bigger burden that these companies face.

mistymoney

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #55 on: December 11, 2020, 12:56:54 PM »
Legacy auto is very good at spinning up new production lines they do it all the time. I doubt building a car around a body and battery is much different than building a car around a body and engine. Judging from initial quality of model Y I could be wrong tho.

New production lines all the time for new ICE vehicles, where 90% of the parts are unchanged from one model to the next. You donít just swap out a gas engine for a battery pack and call it good. New EV lines will require ground up designs and retooling of the manufacturing lines. Elon has said it dozens of times. Building the prototypes is easy. Far, far harder is building the machines that build the machines. Sourcing all the new components that go into the EVs alone will be a huge undertaking as the legacy autos arenít vertically integrated to the extent Tesla is. Thereís no radiator, transmission, spark plugs, engine, fuel tank, oil reservoir, fan, etc. The heating system is totally different (Teslaís have heat pumps). Again, you donít just take an existing ICE vehicle and swap out a few pieces and restart the line.

since you seem to know, I have a question/s!

I took my vehicle in for service this week, about $600 - mostly just regular maintenance but this is the first time it's been pricy. Car is 8 yo.

What is the regular maintenance schedule like on teslas? and how much does it cost?

And I suppose we don't know the older tesla costs as yet? 8-10-12-15 yo cars.

3toesloth

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #56 on: December 11, 2020, 01:07:18 PM »
Companies shift to where the profits are. American companies build trucks and SUVs because they have the best margins and the leave cars for imports because they don't have as high of tariffs like the "chicken tax". Tesla doesn't compete with legacy because they don't make the same types of vehicles.
Cost is everything including for EV's. I agree that widespread adoption is going to require lower costs, quick charging time, and high range. I don't understand the point of BEV when hybrid already does all of this. Most people drive less than 50 miles a day with occasionally much larger trips. This new Toyota technology is the first I would consider buying depending on cost. However, I'm in a rural area. Trips on my ICE motorcycle with a 250 mile range get dicey and gas is available in every little town around, I couldn't imagine driving a BEV around here.

3toesloth

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #57 on: December 11, 2020, 01:10:10 PM »
since you seem to know, I have a question/s!

I took my vehicle in for service this week, about $600 - mostly just regular maintenance but this is the first time it's been pricy. Car is 8 yo.

What is the regular maintenance schedule like on teslas? and how much does it cost?

And I suppose we don't know the older tesla costs as yet? 8-10-12-15 yo cars.
[/quote]
FYI just read up on Tesla service barely existent at this point. People waiting weeks and costs billed to "goodwill" instead of warranty costs to help pad their numbers.

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #58 on: December 11, 2020, 01:21:43 PM »
Legacy auto is very good at spinning up new production lines they do it all the time. I doubt building a car around a body and battery is much different than building a car around a body and engine. Judging from initial quality of model Y I could be wrong tho.

New production lines all the time for new ICE vehicles, where 90% of the parts are unchanged from one model to the next. You donít just swap out a gas engine for a battery pack and call it good. New EV lines will require ground up designs and retooling of the manufacturing lines. Elon has said it dozens of times. Building the prototypes is easy. Far, far harder is building the machines that build the machines. Sourcing all the new components that go into the EVs alone will be a huge undertaking as the legacy autos arenít vertically integrated to the extent Tesla is. Thereís no radiator, transmission, spark plugs, engine, fuel tank, oil reservoir, fan, etc. The heating system is totally different (Teslaís have heat pumps). Again, you donít just take an existing ICE vehicle and swap out a few pieces and restart the line.

since you seem to know, I have a question/s!

I took my vehicle in for service this week, about $600 - mostly just regular maintenance but this is the first time it's been pricy. Car is 8 yo.

What is the regular maintenance schedule like on teslas? and how much does it cost?

And I suppose we don't know the older tesla costs as yet? 8-10-12-15 yo cars.

I do not own a Tesla (someday). I need one of current vehicles to die.

I did purchase a new Nissan LEAF in 2013. In the past seven years I have:

Replaced tires once.
Replaced the in cabin air filter once.
Replaced with windshield wipers once.
Topped off the windshield wiper fluid.

Thatís literally it. Total vehicle upkeep cost is roughly $400/7 = $57/yr

Iíve had zero mechanical issues. Not surprising with so few moving parts and no heat or friction issues that come with ICE.

My only complaint would be the rate of battery degradation. Iím at 65-70% of new. From everything I read there are early Teslas with 500K miles on them and still have 90% battery capacity. Tesla has thermoregulation of their battery packs and LEAF cut corners and did not do this.

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #59 on: December 11, 2020, 01:50:41 PM »
New production lines all the time for new ICE vehicles, where 90% of the parts are unchanged from one model to the next. You donít just swap out a gas engine for a battery pack and call it good. New EV lines will require ground up designs and retooling of the manufacturing lines. Elon has said it dozens of times. Building the prototypes is easy. Far, far harder is building the machines that build the machines. Sourcing all the new components that go into the EVs alone will be a huge undertaking as the legacy autos arenít vertically integrated to the extent Tesla is. Thereís no radiator, transmission, spark plugs, engine, fuel tank, oil reservoir, fan, etc. The heating system is totally different (Teslaís have heat pumps). Again, you donít just take an existing ICE vehicle and swap out a few pieces and restart the line.
Can't be that difficult. Dozen or more companies have already done it and dozens of more models available 2021.
[/quote]

Letís be clear. No legacy auto has mass produced a ground-up EV that competes head-to-head with Teslaís current offerings. What they have produced for the most part is concept cars and compliance cars. The compliance cars are intended to balance their fleetís CAFE numbers and are produced in the thousands to tens of thousands per year. Tesla will likely sell 500k vehicles this year and one million vehicles in 2021.

After Tesla, the EV with the most cumulative sales has been the Nissan LEAF, but the LEAF does not compete with Teslaís current offerings. The LEAF is an honest attempt and not merely a compliance vehicle, but Nissan took the Versa ICE platform and shoehorned an EV powertrain and battery pack into it. I own one and appreciate it that it gave me an economical EV entry point back in 2013, but there is no way I would buy a Nissan Leaf over a Model 3 today even though the LEAF still qualifies for the Federal tax credit and the Model 3 would run $10k-$15k more. Tesla value proposition crushes the LEAF on performance, range, charging network, charging speed, over-the-air software updates, self-driving capabilities, actively thermoregulated battery back, build quality, driver interface, etc. Once Tesla rolls outfits cheaper Model 2 no one will choose to purchase a LEAF or a Bolt over the Tesla Model 2.

To repeat, no legacy auto has sold a new ground up EV design to the public in significant numbers. The reason being they lack the battery and manufacturing capacity to do so and that is the difficult part and the reason Tesla will face no real competition for years to come. To offer a true Tesla competitor they would lose thousands of dollars on every vehicle they produced until they ramped up production into the 100ís of thousands. Iíve already explained why they havenít put the resources into that endeavor.

3toesloth

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #60 on: December 11, 2020, 02:26:08 PM »


Letís be clear. No legacy auto has mass produced a ground-up EV that competes head-to-head with Teslaís current offerings. What they have produced for the most part is concept cars and compliance cars. The compliance cars are intended to balance their fleetís CAFE numbers and are produced in the thousands to tens of thousands per year. Tesla will likely sell 500k vehicles this year and one million vehicles in 2021.

After Tesla, the EV with the most cumulative sales has been the Nissan LEAF, but the LEAF does not compete with Teslaís current offerings. The LEAF is an honest attempt and not merely a compliance vehicle, but Nissan took the Versa ICE platform and shoehorned an EV powertrain and battery pack into it. I own one and appreciate it that it gave me an economical EV entry point back in 2013, but there is no way I would buy a Nissan Leaf over a Model 3 today even though the LEAF still qualifies for the Federal tax credit and the Model 3 would run $10k-$15k more. Tesla value proposition crushes the LEAF on performance, range, charging network, charging speed, over-the-air software updates, self-driving capabilities, actively thermoregulated battery back, build quality, driver interface, etc. Once Tesla rolls outfits cheaper Model 2 no one will choose to purchase a LEAF or a Bolt over the Tesla Model 2.

To repeat, no legacy auto has sold a new ground up EV design to the public in significant numbers. The reason being they lack the battery and manufacturing capacity to do so and that is the difficult part and the reason Tesla will face no real competition for years to come. To offer a true Tesla competitor they would lose thousands of dollars on every vehicle they produced until they ramped up production into the 100ís of thousands. Iíve already explained why they havenít put the resources into that endeavor.
[/quote]
GM partners selling more BEV cars in China, 5 brands likely to sell more BEV cars in Europe this quarter. Only a matter of time for Tesla to lose dominance in North America too.

ChpBstrd

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #61 on: December 11, 2020, 02:50:29 PM »
I do not own a Tesla (someday). I need one of current vehicles to die.

I did purchase a new Nissan LEAF in 2013. In the past seven years I have:

Replaced tires once.
Replaced the in cabin air filter once.
Replaced with windshield wipers once.
Topped off the windshield wiper fluid.

Thatís literally it. Total vehicle upkeep cost is roughly $400/7 = $57/yr

Iíve had zero mechanical issues. Not surprising with so few moving parts and no heat or friction issues that come with ICE.

My only complaint would be the rate of battery degradation. Iím at 65-70% of new. From everything I read there are early Teslas with 500K miles on them and still have 90% battery capacity. Tesla has thermoregulation of their battery packs and LEAF cut corners and did not do this.

For the price difference compared to a Tesla, or replacement with any vehicle, you could replace the Leaf battery a few times.

https://hackaday.com/2020/10/23/battery-swap-gives-nissan-leaf-new-lease-on-life/

dandarc

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #62 on: December 11, 2020, 02:57:51 PM »
Thinking about that, because why wouldn't I be thinking today about what I'm going to do with the 2014 Leaf I bought a year ago in 5 to 15 years when the battery has degraded to where it doesn't serve our needs any more. $5K for a new battery vs. just getting a whole different car is an interesting analysis. Maybe one of those fast-charging solid state batteries will be available to swap in then.

I think somewhere in the 2013 model was when the 'lizard battery' was released, so I'm expecting better degredation than Colorado described - has gone from 11 down to 10 bars since we purchased it, but I have no way to know how long it took to go from 12 to 11 since I bought it used - losing a bar every 3 years or so would probably put us at about a decade before we're looking to replace either the car or the battery.

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #63 on: December 11, 2020, 04:30:13 PM »
I do not own a Tesla (someday). I need one of current vehicles to die.

I did purchase a new Nissan LEAF in 2013. In the past seven years I have:

Replaced tires once.
Replaced the in cabin air filter once.
Replaced with windshield wipers once.
Topped off the windshield wiper fluid.

That’s literally it. Total vehicle upkeep cost is roughly $400/7 = $57/yr

I’ve had zero mechanical issues. Not surprising with so few moving parts and no heat or friction issues that come with ICE.

My only complaint would be the rate of battery degradation. I’m at 65-70% of new. From everything I read there are early Teslas with 500K miles on them and still have 90% battery capacity. Tesla has thermoregulation of their battery packs and LEAF cut corners and did not do this.

For the price difference compared to a Tesla, or replacement with any vehicle, you could replace the Leaf battery a few times.

https://hackaday.com/2020/10/23/battery-swap-gives-nissan-leaf-new-lease-on-life/

I’m at 65%-70% of battery capacity at 50K miles in the LEAF. That is considered battery replacement time, though it still meets my range needs. That means for me to get to 500k miles with my LEAF I would need 9 battery replacements at $6,000 per battery pack, or $54,000. Or, I could pay $15,000 more for the Model 3 upfront and go $500k on the original pack. Not to mention the Tesla comes with a bare minimum 300 mile range, faster recharge, FSD capabilities, over-the-air vehicle updates, a national network or chargers, best resale value, one of the safest cars on the road, etc. The Tesla is worth every penny of the $15k premium and then some IMO.
« Last Edit: December 11, 2020, 04:42:21 PM by ColoradoTribe »

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #64 on: December 11, 2020, 04:34:10 PM »
since you seem to know, I have a question/s!

I took my vehicle in for service this week, about $600 - mostly just regular maintenance but this is the first time it's been pricy. Car is 8 yo.

What is the regular maintenance schedule like on teslas? and how much does it cost?

And I suppose we don't know the older tesla costs as yet? 8-10-12-15 yo cars.
FYI just read up on Tesla service barely existent at this point. People waiting weeks and costs billed to "goodwill" instead of warranty costs to help pad their numbers.
[/quote]

Gasp! I just read Tesla has the highest buyer satisfaction rating of any brand. Actually, I known this for years and is part of the reason I continue to invest. How could that be? Maybe best not to extrapolate from anecdotal evidence.

https://www.thestreet.com/tesla/news/tesla-tops-consumer-reports-owner-satisfaction-survey

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #65 on: December 11, 2020, 04:39:24 PM »
Thinking about that, because why wouldn't I be thinking today about what I'm going to do with the 2014 Leaf I bought a year ago in 5 to 15 years when the battery has degraded to where it doesn't serve our needs any more. $5K for a new battery vs. just getting a whole different car is an interesting analysis. Maybe one of those fast-charging solid state batteries will be available to swap in then.

I think somewhere in the 2013 model was when the 'lizard battery' was released, so I'm expecting better degredation than Colorado described - has gone from 11 down to 10 bars since we purchased it, but I have no way to know how long it took to go from 12 to 11 since I bought it used - losing a bar every 3 years or so would probably put us at about a decade before we're looking to replace either the car or the battery.

Your point about the old lizard pack is a fair one and I believe Nissan has somewhat improved their battery degradation issue in subsequent iterations. I was originally considering doing a battery swap for my LEAF. However, buying a new pack doesnít address the lack of a thermoregulation system in the LEAF. I say better to buy a used Model 3 in a few years for all the reasons I posted above.

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #66 on: December 11, 2020, 05:03:37 PM »


Letís be clear. No legacy auto has mass produced a ground-up EV that competes head-to-head with Teslaís current offerings. What they have produced for the most part is concept cars and compliance cars. The compliance cars are intended to balance their fleetís CAFE numbers and are produced in the thousands to tens of thousands per year. Tesla will likely sell 500k vehicles this year and one million vehicles in 2021.

After Tesla, the EV with the most cumulative sales has been the Nissan LEAF, but the LEAF does not compete with Teslaís current offerings. The LEAF is an honest attempt and not merely a compliance vehicle, but Nissan took the Versa ICE platform and shoehorned an EV powertrain and battery pack into it. I own one and appreciate it that it gave me an economical EV entry point back in 2013, but there is no way I would buy a Nissan Leaf over a Model 3 today even though the LEAF still qualifies for the Federal tax credit and the Model 3 would run $10k-$15k more. Tesla value proposition crushes the LEAF on performance, range, charging network, charging speed, over-the-air software updates, self-driving capabilities, actively thermoregulated battery back, build quality, driver interface, etc. Once Tesla rolls outfits cheaper Model 2 no one will choose to purchase a LEAF or a Bolt over the Tesla Model 2.

To repeat, no legacy auto has sold a new ground up EV design to the public in significant numbers. The reason being they lack the battery and manufacturing capacity to do so and that is the difficult part and the reason Tesla will face no real competition for years to come. To offer a true Tesla competitor they would lose thousands of dollars on every vehicle they produced until they ramped up production into the 100ís of thousands. Iíve already explained why they havenít put the resources into that endeavor.
GM partners selling more BEV cars in China, 5 brands likely to sell more BEV cars in Europe this quarter. Only a matter of time for Tesla to lose dominance in North America too.
[/quote]

Good lord, Tesla is not ďlosing dominanceĒ in Europe or anywhere else. They sell every car they make, as soon as they make them, as fast as they can make, at a profit (23% gross margin), and are roughly doubling production year-over-year. The fact that other manufacturers are helping to speed the transition to EV is great news and part of Elonís long-stated goals. Tesla doesn't need every EV sold to be a Tesla to be wildly successful. Tesla will sell 500K vehicles this year. No other major is coming anywhere close to that total.

And you think the fact that the GM partnership in China sold slightly more micro cars than Tesla sold Model 3 is a sign that GM is competing with Tesla? The micro car sells for $4,200 (sounds like a glorified golf cart).  Let me know when GM actually builds an EV to compete with Tesla's existing models. Again, great that they are serving a market segment that Tesla is not currently addressing, but this canít be called competition. No one is deciding between a Model 3 and the GM-backed golf cart that no one outside of China has ever seen or heard of.

https://www.reuters.com/article/gm-electric-china/gm-ventures-mini-car-becomes-chinas-most-sold-ev-surpassing-teslas-model-3-idUSKBN25Z1E6

 

3toesloth

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #67 on: December 11, 2020, 05:19:34 PM »

Good lord, Tesla is not ďlosing dominanceĒ in Europe or anywhere else. They sell every car they make, as soon as they make them, as fast as they can make, at a profit (23% gross margin), and are roughly doubling production year-over-year. The fact that other manufacturers are helping to speed the transition to EV is great news and part of Elonís long-stated goals. Tesla doesn't need every EV sold to be a Tesla to be wildly successful. Tesla will sell 500K vehicles this year. No other major is coming anywhere close to that total.

And you think the fact that the GM partnership in China sold slightly more micro cars than Tesla sold Model 3 is a sign that GM is competing with Tesla? The micro car sells for $4,200 (sounds like a glorified golf cart).  Let me know when GM actually builds an EV to compete with Tesla's existing models. Again, great that they are serving a market segment that Tesla is not currently addressing, but this canít be called competition. No one is deciding between a Model 3 and the GM-backed golf cart that no one outside of China has ever seen or heard of.

https://www.reuters.com/article/gm-electric-china/gm-ventures-mini-car-becomes-chinas-most-sold-ev-surpassing-teslas-model-3-idUSKBN25Z1E6
[/quote]
How can you say they aren't losing dominance when their market share is dropping considerably? 5 brands are outselling Tesla in Europe, can you dominant while being 5th place?
As for China GM sells a product that China consumers are more willing to buy than the Tesla. Is it a bad idea to sell people what they want? GM is only one of many car makers in China rapidly ramping up.

mistymoney

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #68 on: December 11, 2020, 05:38:30 PM »
Legacy auto is very good at spinning up new production lines they do it all the time. I doubt building a car around a body and battery is much different than building a car around a body and engine. Judging from initial quality of model Y I could be wrong tho.

New production lines all the time for new ICE vehicles, where 90% of the parts are unchanged from one model to the next. You donít just swap out a gas engine for a battery pack and call it good. New EV lines will require ground up designs and retooling of the manufacturing lines. Elon has said it dozens of times. Building the prototypes is easy. Far, far harder is building the machines that build the machines. Sourcing all the new components that go into the EVs alone will be a huge undertaking as the legacy autos arenít vertically integrated to the extent Tesla is. Thereís no radiator, transmission, spark plugs, engine, fuel tank, oil reservoir, fan, etc. The heating system is totally different (Teslaís have heat pumps). Again, you donít just take an existing ICE vehicle and swap out a few pieces and restart the line.

since you seem to know, I have a question/s!

I took my vehicle in for service this week, about $600 - mostly just regular maintenance but this is the first time it's been pricy. Car is 8 yo.

What is the regular maintenance schedule like on teslas? and how much does it cost?

And I suppose we don't know the older tesla costs as yet? 8-10-12-15 yo cars.

I do not own a Tesla (someday). I need one of current vehicles to die.

I did purchase a new Nissan LEAF in 2013. In the past seven years I have:

Replaced tires once.
Replaced the in cabin air filter once.
Replaced with windshield wipers once.
Topped off the windshield wiper fluid.

Thatís literally it. Total vehicle upkeep cost is roughly $400/7 = $57/yr

Iíve had zero mechanical issues. Not surprising with so few moving parts and no heat or friction issues that come with ICE.

My only complaint would be the rate of battery degradation. Iím at 65-70% of new. From everything I read there are early Teslas with 500K miles on them and still have 90% battery capacity. Tesla has thermoregulation of their battery packs and LEAF cut corners and did not do this.


wow - I did not know about that maintenance side of things, and that is certainly another draw for EVs. I would put my corolla at about 1-200/yr before this year when I guess it lost it's newish car glow.

So no oil changes, huh?

I had been wanting to do a hybrid as my next car - but things were tight when I got the low level toyota. Now - the 100% EV has become much more prevalent and now tesla. I'd like to buy a tesla for my next car, hopefully, they come down some in price - aim for more affordable markets. Likely about 5 years away for my purchase. I do tend to like to support businesses that do things that I believe in, environment is top of that list. Will be great to end that ICE contribution to pollution.




3toesloth

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #69 on: December 11, 2020, 05:54:28 PM »
Hey mistymoney,
There are maintenance benefits to EVs for sure. However, the environmental benefits are more difficult to quantify. Mining the metals that go into these batteries produces horrible hellscapes that are deemed the worst places on Earth. USA is better at mining these materials as we have stringent pollution standards, however, it is very difficult to get new mines approved in the USA. CO2 emissions from buying a small ICE might be less than the typical BEV when the total CO2 cost of production is taken into account. New cars have much fewer maintenance intervals than older cars, often once a year or less. Look into Tesla wheels falling off brand new cars, they are horribly designed with low initial quality, check out the consumer reports puts Tesla second to last in reliability.
Sorry if I'm a bummer, curse of being an engineer.

mistymoney

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #70 on: December 11, 2020, 05:57:34 PM »
Hey mistymoney,
There are maintenance benefits to EVs for sure. However, the environmental benefits are more difficult to quantify. Mining the metals that go into these batteries produces horrible hellscapes that are deemed the worst places on Earth. USA is better at mining these materials as we have stringent pollution standards, however, it is very difficult to get new mines approved in the USA. CO2 emissions from buying a small ICE might be less than the typical BEV when the total CO2 cost of production is taken into account. New cars have much fewer maintenance intervals than older cars, often once a year or less. Look into Tesla wheels falling off brand new cars, they are horribly designed with low initial quality, check out the consumer reports puts Tesla second to last in reliability.
Sorry if I'm a bummer, curse of being an engineer.

Hopefully by the time I purchase, Tesla will be getting its materials from SpaceX with little impact to mother earth. :)

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #71 on: December 11, 2020, 06:25:21 PM »

Good lord, Tesla is not “losing dominance” in Europe or anywhere else. They sell every car they make, as soon as they make them, as fast as they can make, at a profit (23% gross margin), and are roughly doubling production year-over-year. The fact that other manufacturers are helping to speed the transition to EV is great news and part of Elon’s long-stated goals. Tesla doesn't need every EV sold to be a Tesla to be wildly successful. Tesla will sell 500K vehicles this year. No other major is coming anywhere close to that total.

And you think the fact that the GM partnership in China sold slightly more micro cars than Tesla sold Model 3 is a sign that GM is competing with Tesla? The micro car sells for $4,200 (sounds like a glorified golf cart).  Let me know when GM actually builds an EV to compete with Tesla's existing models. Again, great that they are serving a market segment that Tesla is not currently addressing, but this can’t be called competition. No one is deciding between a Model 3 and the GM-backed golf cart that no one outside of China has ever seen or heard of.

https://www.reuters.com/article/gm-electric-china/gm-ventures-mini-car-becomes-chinas-most-sold-ev-surpassing-teslas-model-3-idUSKBN25Z1E6
How can you say they aren't losing dominance when their market share is dropping considerably? 5 brands are outselling Tesla in Europe, can you dominant while being 5th place?
As for China GM sells a product that China consumers are more willing to buy than the Tesla. Is it a bad idea to sell people what they want? GM is only one of many car makers in China rapidly ramping up.
[/quote]

This really shouldn’t be this hard to grasp. The total EV pie is growing. Tesla can both sell every car they make AND have shrinking market share. However, Tesla market is holding steady or growing slightly despite the total pie increasing. You seriously can’t believe consumers comparison are shopping a $4,200 golf cart and the Tesla Model 3 and choosing the golf cart, no more than people are deciding between a Ford Fiesta and F150. These are different animals. Great that those that can’t afford Tesla have an EV option. I’ll say it one more time in the hope it will penetrate:

Tesla sells every car they make, as soon as they make them, as fast as they can make them, at a profit (23% gross margin), and are roughly doubling production year-over-year.

You can carve out Europe, where some lower cost options out-sell Tesla because Tesla does not yet compete at the lower price points, but it's more informative to look at global sales. In global terms, Tesla is going to sell 500K vehicles and no other major is going to sell anywhere close to that total despite the fact Tesla is yet to offer an economy vehicle.

It’s becoming clear you have some an axe to grind with Tesla. If you can refrain from posting any more false or misleading information, I’d be happy to end this back and forth here as it’s clear you’re opinion is set, which is fine.


« Last Edit: December 12, 2020, 06:28:23 PM by ColoradoTribe »

Telecaster

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #72 on: December 11, 2020, 06:34:36 PM »
Sorry to yank this thread back on track, but a couple thoughts.

As mentioned up thread, TLSA will become only a small portion of the index.  So no really a big deal.  That's why we buy the index.  We're betting on all the horses.

If you are still concerned, as also mentioned up thread, you can simply start buying (or rebalance if you are retired) a nice mid-cap fund or ETF.  That why you are not betting so heavily on the big companies.

And finally, don't forget the simple "fire and forget" beauty of buying VTSAX and being done. 

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #73 on: December 12, 2020, 03:58:52 PM »
Hey mistymoney,
There are maintenance benefits to EVs for sure. However, the environmental benefits are more difficult to quantify. Mining the metals that go into these batteries produces horrible hellscapes that are deemed the worst places on Earth. USA is better at mining these materials as we have stringent pollution standards, however, it is very difficult to get new mines approved in the USA. CO2 emissions from buying a small ICE might be less than the typical BEV when the total CO2 cost of production is taken into account. New cars have much fewer maintenance intervals than older cars, often once a year or less. Look into Tesla wheels falling off brand new cars, they are horribly designed with low initial quality, check out the consumer reports puts Tesla second to last in reliability.
Sorry if I'm a bummer, curse of being an engineer.

Hopefully by the time I purchase, Tesla will be getting its materials from SpaceX with little impact to mother earth. :)

Hey Misty, few thoughts and corrections to add here.

There is a significant domestic supply of lithium salt in the US and around the world. Lithium is plentiful and can be surface mined with minimal environmental impact. Nickel and Cobalt are rare and mining these is impactful. However, Tesla is reducing the amount of cobalt in its batteries and is now using a cobalt free  battery chemistry (LFP or lithium, iron, phosphate) in its Chinese made Model 3s.

Obviously, the biggest environmental threat to the world right now is climate change. On that front, EVs are far and away better for the planet. If weíre talking environmental hell scapes, check out the oil tar sands of Alberta. Anyway, the beauty of EVs is they are as green as the energy source used to produce the electrons. In my case, Iíve powered every EV mile Iíve driven with roof top solar. The lifetime greenhouse gas emissions of an EV using the dirtiest possible coal-fired electricity will still be better than a comparable ICE burning gasoline over its life time. As the percentage of renewable in the grid mix improves, so does the environmental advantage of the EV. An ICE car will never run on anything but 100% fossil fuels.

Another consideration, as the EV market matures, there will be a secondary market for the car batteries as electrical grid backup storage, and finally recycling of the spent batteries into new batteries. Most of the materials in the battery, including the rare earth materials are recyclable (80% of battery material is recyclable).  Further reducing the environmental impact of EVs compared to ICE vehicles.

https://www.cnbc.com/2020/06/01/joint-venture-to-specialize-in-recycling-electric-vehicle-batteries.html

Lastly, please do not accept the opinions of Teslaís performance or quality from detractors who have never driven or owned the vehicle. Teslaís have the highest customer satisfaction of any brand. Speak with owners, they will say Tesla is not always perfect. Service appointments can be slow, but issues are few and ultimately get resolved. Nearly all are satisfied and would buy again.

Best of Luck!

PS - I apologize for my part in derailing the intended topic, but there is a lot of misinformation out there when it comes to Tesla and I have a hard time not providing a balanced picture. As for the thread topic, Tesla SP may be overvalued currently with some degree of future performance baked into the stock price. However, Tesla has also been significantly de-risked and will continue to grow exponentially. So, unless you plan on cashing out of your index funds soon (<1 yr) itís very likely Tesla as part of the S&P 500 will be contributing to your account appreciation. Great way to get some exposure to a great American growth company and invest in a cleaner future for the planet.

3toesloth

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #74 on: December 14, 2020, 11:07:38 AM »
Colorado Tribe
Think I should clear up some misinformation from earlier.
Mining in general is horribly dirty for the environment. Saying one hellscape is worse than another misses the point. The point is that they are both bad. Strip mining oil is on the way out tho as fracking is considerably cheaper and cleaner while the amount of mining needed for batteries needs to exponentially increase. You well know that the LIFO battery is much lower quality and much heavier and will only be used in the low end models. CO2 emissions is a concern, however, if you buy a small efficient car the lifetime CO2 emissions are about equivalent to a heavy BEV. You said it yourself "comparable" most of the comparisons use large expensive ICE cars or SUVs to compare to model 3, not really comparable. Also the main factor in the CO2 calculation is efficiency, newer high end diesel engines are on a par with most coal fired plants as this tech trickles down to autos the benefits of BEV will diminish. You have the only setup which guarantees low operating emissions, good on ya. To say ICE will only run on fossil fuels is just false as they can and currently are running on many different hydrocarbons. Diesels were running on peanut oil from the beginning more than 100 years ago.
Don't believe any anecdotal evidence regarding quality, instead go to the people that take large sample surveys and samples, like consumer reports and the like that rank Tesla second to last in quality. Tesla fired their quality control group to save money last year in the push for S&P inclusion, so if you do buy a Tesla I would wait until those workers are hired back as Tesla is also trying to get rid of the 7 day return policy. Many states have lemon laws so I encourage people to check those out.

As for S&P inclusion. Tesla is valued equivalent to the entire auto industry combined. To say there is some future performance backed in is a huge understatement. In 3-4 years we will be talking about Tesla being the poster boy for the current market bubble or will be referring to Musk schemes where a company drives up share price and dumps that bag on index investors. To talk about Tesla as a greener alternative is nuts when their ESG score is at the bottom of all major car makers, better than only a few Chinese companies.

Travis

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #75 on: December 14, 2020, 06:54:54 PM »
CO2 emissions is a concern, however, if you buy a small efficient car the lifetime CO2 emissions are about equivalent to a heavy BEV. You said it yourself "comparable" most of the comparisons use large expensive ICE cars or SUVs to compare to model 3, not really comparable.

I imagine these comparisons are made because that's what Americans are buying. Out of the top 10 purchased cars in the US, the top 6 are trucks and SUVs. Our favorite Honda and Toyota ICE fuel sippers are on the list, but on the bottom half.  Out of the top 20, 14 are trucks and SUVs. Ford and GM's sedans don't make the list at all.

https://www.edmunds.com/most-popular-cars/

https://www.forbes.com/wheels/news/top-20-selling-vehicles-first-six-months-2020/#:~:text=Fifteen%20of%20the%20top%2Dselling,Silverado%20and%20Ram%201500%20pickups.

3toesloth

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #76 on: December 15, 2020, 10:45:56 AM »
CO2 emissions is a concern, however, if you buy a small efficient car the lifetime CO2 emissions are about equivalent to a heavy BEV. You said it yourself "comparable" most of the comparisons use large expensive ICE cars or SUVs to compare to model 3, not really comparable.

I imagine these comparisons are made because that's what Americans are buying. Out of the top 10 purchased cars in the US, the top 6 are trucks and SUVs. Our favorite Honda and Toyota ICE fuel sippers are on the list, but on the bottom half.  Out of the top 20, 14 are trucks and SUVs. Ford and GM's sedans don't make the list at all.

https://www.edmunds.com/most-popular-cars/

https://www.forbes.com/wheels/news/top-20-selling-vehicles-first-six-months-2020/#:~:text=Fifteen%20of%20the%20top%2Dselling,Silverado%20and%20Ram%201500%20pickups.
Good point. Also I suspect price point.

EricEng

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #77 on: December 15, 2020, 01:46:05 PM »
Tesla sells every car they make, as soon as they make them, as fast as they can make them, at a profit (23% gross margin), and are roughly doubling production year-over-year.
Then why is Tesla shutting down production lines?  Stated reason is they made all they needed, but if demand truly is outpacing supply (even at such small numbers), they shouldn't be stopping production ever.
https://www.slashgear.com/tesla-stops-model-s-and-model-x-production-for-over-two-weeks-14651046/

Other companies are producing and selling EV models, enough so that most don't need Tesla's credits anymore either which will kills Tesla's current ability to stay out of the red.
https://seekingalpha.com/article/4394486-teslas-zev-credits-real-truth
Despite all the talk, Tesla still only represents about 1% of all US auto sales. 

They can talk and hope all they want, but they still way far to go to actually start proving anything.  They also have to start fixing their terrible Quality Control issues which is a symptom of their corner cutting/process skipping method.  Yeah, they can be quick and cheaper if they go by seat of their pants, but that costs in quality and reliability.  Not to mention their horrible treatment of self repair folks, they try to keep a monopoly on it threatening to remotely disable your vehicle if you fix it yourself.
https://www.forbes.com/sites/jamesmorris/2020/06/27/can-tesla-be-beaten-by-its-own-quality-control/?sh=903b8fd5da72

effigy98

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #78 on: December 22, 2020, 10:48:10 PM »
Story is 100% more important to the stock market now vs real earnings. The generation moving into the stock market probably doesn't even know what a PE ratio is and stocks can only go up. There is also a fed put in place. Not sure it matters much. Worst case scenario we probably just go sideways like the lost decade of the early 2000's. If worried, put on some hedges or get into a more conservative allocation like golden butterfly (with a tiny bit of bitcoin).
« Last Edit: December 22, 2020, 10:50:35 PM by effigy98 »

EricEng

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #79 on: December 23, 2020, 12:01:45 AM »
Story is 100% more important to the stock market now vs real earnings. The generation moving into the stock market probably doesn't even know what a PE ratio is and stocks can only go up. There is also a fed put in place. Not sure it matters much. Worst case scenario we probably just go sideways like the lost decade of the early 2000's. If worried, put on some hedges or get into a more conservative allocation like golden butterfly (with a tiny bit of bitcoin).
Which is terrifying.  Tesla could shut down, liquidate everything and they could still keep the stock price high by refusing to sell and having people willing to buy it.  What is investing if the physical company has no relation or link the actual stock value?  China has this all the time with fake companies putting out fake financials, people are happy to trade and buy the stock for years not knowing there is no actual company or business behind the stock.  I don't want to see that here.

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #80 on: December 25, 2020, 01:05:55 PM »
Story is 100% more important to the stock market now vs real earnings. The generation moving into the stock market probably doesn't even know what a PE ratio is and stocks can only go up. There is also a fed put in place. Not sure it matters much. Worst case scenario we probably just go sideways like the lost decade of the early 2000's. If worried, put on some hedges or get into a more conservative allocation like golden butterfly (with a tiny bit of bitcoin).
Which is terrifying.  Tesla could shut down, liquidate everything and they could still keep the stock price high by refusing to sell and having people willing to buy it.  What is investing if the physical company has no relation or link the actual stock value?  China has this all the time with fake companies putting out fake financials, people are happy to trade and buy the stock for years not knowing there is no actual company or business behind the stock.  I don't want to see that here.

Are you saying their isn't an actual company making products behind the Tesla name or are you saying IF Tesla didn't produce anything they wouldn't be worth anything? Confusing, since neither option reflects current reality.  In fact, Tesla does produce products for a profit. Their products are well made and in demand.

https://www.tesmanian.com/blogs/tesmanian-blog/tesla-model-3-and-tesla-model-s-are-the-best-american-cars-according-to-consumer-reports

I just don't get the disdain for this American manufacturing company. Don't like the cars, don't buy one. Don't like the company or think its worth its stock price, then don't buy the stock or short it. Do you go around the internets posting about every stock you don't own and/or you think is overvalued? If not, why the exception for Tesla?

waltworks

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #81 on: December 26, 2020, 07:25:13 PM »
It's funny, it seems like there are two camps on Tesla:
1: Tesla is going to change the world and no valuation for the stock is too high.
2: Tesla is a big fraud and no stock valuation is too low and they'll never sell 10k, or 100k, or 500k, or a million cars a year (increase number as needed as time goes by).

Is it not possible to think Tesla makes awesome stuff and could well dominate a couple different industries in a decade, and also believe that the valuation is actually still to high in that scenario?

-W

Paul der Krake

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #82 on: December 26, 2020, 10:00:36 PM »
It's funny, it seems like there are two camps on Tesla:
1: Tesla is going to change the world and no valuation for the stock is too high.
2: Tesla is a big fraud and no stock valuation is too low and they'll never sell 10k, or 100k, or 500k, or a million cars a year (increase number as needed as time goes by).

Is it not possible to think Tesla makes awesome stuff and could well dominate a couple different industries in a decade, and also believe that the valuation is actually still to high in that scenario?

-W
Goodness, no, that's not how we judge stocks on the internet.

You must also have a stance on the CEO. The choices are:
1) he is  the greatest mind of our generation
2) he is basically Hitler

EricEng

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #83 on: December 27, 2020, 12:42:25 AM »
Story is 100% more important to the stock market now vs real earnings. The generation moving into the stock market probably doesn't even know what a PE ratio is and stocks can only go up. There is also a fed put in place. Not sure it matters much. Worst case scenario we probably just go sideways like the lost decade of the early 2000's. If worried, put on some hedges or get into a more conservative allocation like golden butterfly (with a tiny bit of bitcoin).
Which is terrifying.  Tesla could shut down, liquidate everything and they could still keep the stock price high by refusing to sell and having people willing to buy it.  What is investing if the physical company has no relation or link the actual stock value?  China has this all the time with fake companies putting out fake financials, people are happy to trade and buy the stock for years not knowing there is no actual company or business behind the stock.  I don't want to see that here.

Are you saying their isn't an actual company making products behind the Tesla name or are you saying IF Tesla didn't produce anything they wouldn't be worth anything? Confusing, since neither option reflects current reality.  In fact, Tesla does produce products for a profit. Their products are well made and in demand.

https://www.tesmanian.com/blogs/tesmanian-blog/tesla-model-3-and-tesla-model-s-are-the-best-american-cars-according-to-consumer-reports
You missed that entirely.  He said "Story is 100% more important to the market vs real earnings".  I took that to mean the Story/Fable of Tesla is what matters to the stock value, not what an underlying company actually produces.

By his stated logic (which I'm terrified has some truth to it), the underlying business could cease to operate and the stock would stay sky high.  Case in point, Nikola stock was sky high just on a story without any substance and finally crashed down with more to follow.
Quote
I just don't get the disdain for this American manufacturing company. Don't like the cars, don't buy one. Don't like the company or think its worth its stock price, then don't buy the stock or short it.
Did you miss the original premise of this thread?  We don't get that choice anymore.  They forced it down our 401k throats as most company plans don't have good alternatives to SP500.
Quote
Do you go around the internets posting about every stock you don't own and/or you think is overvalued? If not, why the exception for Tesla?
You are really trying to normalize a stock that isn't normal.  I don't think there has ever been a stock this overinflated beyond it's actual value while also to this market cap.  I'm sure there are hundreds, if not thousands of random micro/small caps that mistakenly get priced at 1000 times their actual value, but there hasn't been anything like this since the likes of Yahoo circa 1999 and that is still dwarfed.  So yes, we are going to discuss and analyze the gigantic elephant dominating the room (which is an understatement sadly).

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #84 on: December 30, 2020, 02:38:33 PM »
Story is 100% more important to the stock market now vs real earnings. The generation moving into the stock market probably doesn't even know what a PE ratio is and stocks can only go up. There is also a fed put in place. Not sure it matters much. Worst case scenario we probably just go sideways like the lost decade of the early 2000's. If worried, put on some hedges or get into a more conservative allocation like golden butterfly (with a tiny bit of bitcoin).
Which is terrifying.  Tesla could shut down, liquidate everything and they could still keep the stock price high by refusing to sell and having people willing to buy it.  What is investing if the physical company has no relation or link the actual stock value?  China has this all the time with fake companies putting out fake financials, people are happy to trade and buy the stock for years not knowing there is no actual company or business behind the stock.  I don't want to see that here.

Are you saying their isn't an actual company making products behind the Tesla name or are you saying IF Tesla didn't produce anything they wouldn't be worth anything? Confusing, since neither option reflects current reality.  In fact, Tesla does produce products for a profit. Their products are well made and in demand.

https://www.tesmanian.com/blogs/tesmanian-blog/tesla-model-3-and-tesla-model-s-are-the-best-american-cars-according-to-consumer-reports
You missed that entirely.  He said "Story is 100% more important to the market vs real earnings".  I took that to mean the Story/Fable of Tesla is what matters to the stock value, not what an underlying company actually produces.

By his stated logic (which I'm terrified has some truth to it), the underlying business could cease to operate and the stock would stay sky high.  Case in point, Nikola stock was sky high just on a story without any substance and finally crashed down with more to follow.
Quote
I just don't get the disdain for this American manufacturing company. Don't like the cars, don't buy one. Don't like the company or think its worth its stock price, then don't buy the stock or short it.
Did you miss the original premise of this thread?  We don't get that choice anymore.  They forced it down our 401k throats as most company plans don't have good alternatives to SP500.
Quote
Do you go around the internets posting about every stock you don't own and/or you think is overvalued? If not, why the exception for Tesla?
You are really trying to normalize a stock that isn't normal.  I don't think there has ever been a stock this overinflated beyond it's actual value while also to this market cap.  I'm sure there are hundreds, if not thousands of random micro/small caps that mistakenly get priced at 1000 times their actual value, but there hasn't been anything like this since the likes of Yahoo circa 1999 and that is still dwarfed.  So yes, we are going to discuss and analyze the gigantic elephant dominating the room (which is an understatement sadly).

So, youíre telling me that you donít own any TSLA shares individually and arenít short Tesla, but are spending all this time railing against the company and its valuation because Tesla makes up 1.5% of an S&P fund that makes up a subset of your 401K. So, assuming you even had half of your 401k in an S&P fund and Tesla went all the way to zero, your retirement account would go down less than 1%. And, itís not like all your concern and railing is going to get Tesla removed from the S&P, so again, not sure why all this disdain for an American manufacturing success story that provides high quality engineering, programming and manufacturing jobs to thousands of Americans, reducing our fossil fuel consumption, and nearly doubles production yoy. Sorry if Tesla doesnít fit the standard investment metrics. Then Tesla is not Yahoo or any other company to come about the past century. Whenís the last time you had a single company threatening three sectors simultaneously, like Tesla is disrupting transportation, energy/utilities, and oil and gas? Whenís the last time you had a company this large and still in rapid growth phase?

Youíre just the latest in a seemingly endless parade of folks, including paid financial advisors, who having been talking about Teslaís imminent fall or demise since I bought the stock in 2013. Buy and hold has me up 11X. Funny, the folks from 7 years ago are hard to find now. They talked about how nobody wanted an EV. Tesla would never scale. Demand would dry up. The cars catch fire. The legacy autos will crush Tesla any day now. The goal posts move and the narrative of doom shifts to the boogeyman du jour and all the while Tesla keeps executing and accelerating its pace of innovation.

Tinker

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #85 on: December 30, 2020, 03:10:48 PM »
Tesla is very hot right now, but still seems an odd thing to be concerned about.
Facebook is in the S&P500, along with other IT services whose value proposition is questionable and business can be literally deleted with a few button presses.

Tesla at least produces something.

Paul der Krake

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #86 on: December 30, 2020, 03:57:31 PM »
Tesla is very hot right now, but still seems an odd thing to be concerned about.
Facebook is in the S&P500, along with other IT services whose value proposition is questionable and business can be literally deleted with a few button presses.

Tesla at least produces something.
Facebook sold 70 billion dollars worth of ad space in 2019.


bacchi

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #87 on: December 30, 2020, 04:05:06 PM »
Tesla is very hot right now, but still seems an odd thing to be concerned about.
Facebook is in the S&P500, along with other IT services whose value proposition is questionable and business can be literally deleted with a few button presses.

Tesla at least produces something.
Facebook sold 70 billion dollars worth of ad space in 2019.

And has a 31 PE ratio.

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #88 on: December 30, 2020, 05:19:01 PM »
Tesla is very hot right now, but still seems an odd thing to be concerned about.
Facebook is in the S&P500, along with other IT services whose value proposition is questionable and business can be literally deleted with a few button presses.

Tesla at least produces something.

Exactly, if the issue is Tesla hurting the S&P 500 then where are the posts railing against GE? Talk about a company bringing down the index.

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #89 on: December 30, 2020, 05:28:50 PM »
Tesla is very hot right now, but still seems an odd thing to be concerned about.
Facebook is in the S&P500, along with other IT services whose value proposition is questionable and business can be literally deleted with a few button presses.

Tesla at least produces something.
Facebook sold 70 billion dollars worth of ad space in 2019.

Iíd much rather be Tesla in 5 years than Facebook in 5 years. Different trajectories.

On a personal note, I wouldnít invest in any company doing as much harm to society and our democracy as Facebook. And since I donít like Facebook, I donít invest in it, nor do I troll the internet badmouthing the company and trying to convince others not to invest. Might try to convince you to deactivate your accounts though :)

EricEng

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #90 on: December 31, 2020, 01:14:19 AM »
So, youíre telling me that you donít own any TSLA shares individually and arenít short Tesla, but are spending all this time railing against the company and its valuation because Tesla makes up 1.5% of an S&P fund that makes up a subset of your 401K. So, assuming you even had half of your 401k in an S&P fund and Tesla went all the way to zero, your retirement account would go down less than 1%.
Sadly S&P500 is 100% of my 401k due to lack of alternatives.  If Tesla continues on its madness trajectory it could be more than 1.5%, (currently 1.6% to be precise).
 
not sure why all this disdain for an American manufacturing success story that provides high quality engineering, programming and manufacturing jobs to thousands of Americans, reducing our fossil fuel consumption, and nearly doubles production yoy. Sorry if Tesla doesnít fit the standard investment metrics. Then Tesla is not Yahoo or any other company to come about the past century. Whenís the last time you had a single company threatening three sectors simultaneously, like Tesla is disrupting transportation, energy/utilities, and oil and gas? Whenís the last time you had a company this large and still in rapid growth phase?

Youíre just the latest in a seemingly endless parade of folks, including paid financial advisors, who having been talking about Teslaís imminent fall or demise since I bought the stock in 2013. Buy and hold has me up 11X. Funny, the folks from 7 years ago are hard to find now. They talked about how nobody wanted an EV. Tesla would never scale. Demand would dry up. The cars catch fire. The legacy autos will crush Tesla any day now. The goal posts move and the narrative of doom shifts to the boogeyman du jour and all the while Tesla keeps executing and accelerating its pace of innovation.
Why are you so defensive over people discussing?  You act as if you are being personally attacked by people who disagree with Tesla's valuation and wish to discuss it, which is a weird thing to get so hurt over.  You remind me of Console Fanboys (there's a personal attack for you).

That's part of the issue.  You are making them out to be this giant success, when that has yet to be proven.  Their quality control is garbage (see roofs flying off brand new cars).  Their right to repair is non existent and terrible for a sustainable future.  They struggle to get 1% of the car market and seem unable to increase production.  Doubling production when your base production is tiny is nothing to brag about.  Their designs appear to be too difficult to scale up production easy while still cutting corners and failing at quality control and longevity (go watch Rich Repairs to see lots of wear point design issues).

Their biggest success if their image and cult following (you are case in point).  It is how a certain president has done so well off just talk and image while actual results are poor.  However, this discussion isn't about the quality of their product, but the valulation of their stock and forced inclusion in retirement accounts via S&P500.
Tesla is very hot right now, but still seems an odd thing to be concerned about.
Facebook is in the S&P500, along with other IT services whose value proposition is questionable and business can be literally deleted with a few button presses.

Tesla at least produces something.
Facebook sold 70 billion dollars worth of ad space in 2019.
Well said.  Facebook sells a product and reliably earns money with lots of financials to justify their valuation.  No one is saying Tesla is worthless or a terrible company, we are saying it is just priced far FAR beyond where it should be.  It has a lot of potential, but many other companies can do what they do.  Their is hardly a product China hasn't managed to copy and undercut for instance.
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Exactly, if the issue is Tesla hurting the S&P 500 then where are the posts railing against GE? Talk about a company bringing down the index.
GE is only .3% of SP500 market cap vs Tesla 1.6%.  GE isn't doing much to SP500 and hasn't seen even a fraction of the volatility of Tesla over last few years (. GE Beta is 1.1, Tesla is 2.2 which is pretty high with 1.0 being average.  GE has swung about 100% over last 2 years while Tesla has moved 1,800%.

The point is the stock price is completely detached from having any relation to what the company is currently doing or could even potentially do over the next 5-10 years.  Tesla could double US market share for the next 5 years to reach 32% (starting at current 1% and somehow going from 200k US cars a year to 5.5million) and that still wouldn't justify the current price where it exceeds all the other car companies combined.  By the current market cap Tesla (exceeding combined top 9 biggest auto companies) has to take 100% of the entire auto market and then somehow still sell more cars to justify it which will be a neat trick because Teslas are mostly sold as expensive luxury higher margin cars, but most auto sales are lower margin cheap cars for poorer people.

lemonlyman

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #91 on: December 31, 2020, 09:26:02 AM »
Sadly S&P500 is 100% of my 401k due to lack of alternatives.  If Tesla continues on its madness trajectory it could be more than 1.5%, (currently 1.6% to be precise).

It doesn't matter what the price is for the S&P 500. Tesla is one of the largest US companies and will do $50 billion in revenue next year, profitably. If it wasn't tracked by the major indexes, that would be a pretty poor representation of the US market. Spreading the risk for price anomalies is the point of the index. You seem pretty sure about Tesla's valuation and potential over the next 5-10 years. You should take your expertise in valuing companies and make a lot of money investing companies you are confident in.
« Last Edit: December 31, 2020, 09:33:32 AM by lemonlyman »

mistymoney

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #92 on: December 31, 2020, 09:43:44 AM »
https://www.scmp.com/business/companies/article/3115897/teslas-reputation-burnished-jd-power-quality-survey-after-report



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Tesla cars made at the companyís Shanghai Gigafactory were among the highest-quality models sold in China, second only to NIOís vehicles, according to the most recent quality survey by JD Power.
ďTesla Model 3 is well-received by Chinese consumers as its design and performance beat their expectations in many aspects,Ē said Jeff Cai, general manager of auto product practice at JD Power China. ďIn terms of driving experience and digital connectivity, conventional car brands now have a lot to learn from smart EV makers like Tesla.Ē

EricEng

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #93 on: December 31, 2020, 10:56:46 AM »
https://www.scmp.com/business/companies/article/3115897/teslas-reputation-burnished-jd-power-quality-survey-after-report



Quote
Tesla cars made at the companyís Shanghai Gigafactory were among the highest-quality models sold in China, second only to NIOís vehicles, according to the most recent quality survey by JD Power.
ďTesla Model 3 is well-received by Chinese consumers as its design and performance beat their expectations in many aspects,Ē said Jeff Cai, general manager of auto product practice at JD Power China. ďIn terms of driving experience and digital connectivity, conventional car brands now have a lot to learn from smart EV makers like Tesla.Ē
https://www.cnbc.com/2020/11/19/tesla-model-s-no-longer-recommended-by-consumer-reports.html
Quote
Overall, Tesla ranked second to last in the reliability study.
I'm discussing US production and US standards, see Consumer Reports for instance.  China's domestic quality is usually pretty lacking to begin with, go watch some expat videos of folks who have lived their for couple decades (happy to recommend a few).  Some recent stand out cases in US are roof flying off and instrument panel completely crashing.
https://www.theverge.com/2020/10/5/21502379/tesla-modely-roof-flies-off-convertible-quality-issue
https://jalopnik.com/watch-a-bunch-of-tesla-stans-dogpile-someone-for-making-1845957260
If Tesla was 20-30% of the car market you'd expect some outliers on weird issues, but they are only 1%.  On top of that, it is beyond unreasonable that they don't have backup computers running for such critical functions.  In the defense and Space world I work, life critical functions have at least 1 if not more backup computers always running in case primary system crashes.  This is an example of Tesla cutting corners and rushing.  The difference between 99% and 99.999% reliability in life dependent scenarios is huge.  Even Apollo systems in the 1960s had backup computers.

Tesla's cars should have less issue by basic design.  An electric engine ran off batteries is very simple with a lot less points of failure than a gas engine.  Anyone who has ever played with RC battery and gas cars can attest to that.  So they are starting with an easier build case, yet still having issues mostly of their own fault due to rushing and cutting corners and no quality control process.
« Last Edit: December 31, 2020, 11:02:10 AM by EricEng »

3toesloth

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #94 on: December 31, 2020, 11:47:36 AM »
Complexity is the enemy of reliability, and Teslas are unnecessarily complex. Give me manual everything with as few computerized controls as possible. Possibly getting locked inside a burning car is not my idea of fun. Now add unbreakable glass on the cyber truck, oofda.

ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #95 on: January 01, 2021, 07:50:31 PM »
Complexity is the enemy of reliability, and Teslas are unnecessarily complex. Give me manual everything with as few computerized controls as possible. Possibly getting locked inside a burning car is not my idea of fun. Now add unbreakable glass on the cyber truck, oofda.

Once again you spread misinformation. ICE cars catch fire at a much higher rate than EVs, Teslas in particular. There is one incidence of a Tesla owner burning to death. One. How many have died in ICE vehicle fires. ICE cars can literally burst into flames upon impact. When a battery pack is punctured it takes several minutes before it overheats and ignites, giving the driver ample time to exit safely. Any driver can become trapped if the vehicle is mangled of course. Much safer to drive an EV if youíre worried about vehicle fires.

As for complexity, ICE drivetrains have over 200 moving parts compared to 17 moving parts in a Tesla drivetrain. Add in all the friction, heat and vibration and its no wonder Teslas can go 500k miles compared to an average 150k for an ICE vehicle. As for the software and electronics, Tesla have more for sure. But Tesla is also able to update, improve and even fix their vehicles with over-the-air software updates and upgrades. When was the last time an ICE manufacturer upgraded your vehicle (for free) after you bought it?


ColoradoTribe

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #96 on: January 04, 2021, 09:02:22 AM »
Tesla (up ~5%) doing its best to prop up the S&P 500 (down over 1%). I expect those worried about TSLA's inclusion to be selling out of your index funds today and waiting to buy back once Tesla collapses?

dandarc

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #97 on: January 04, 2021, 09:06:00 AM »
Tesla (up ~5%) doing its best to prop up the S&P 500 (down over 1%). I expect those worried about TSLA's inclusion to be selling out of your index funds today and waiting to buy back once Tesla collapses?
The often advised "throw the baby out with the bathwater" trade.

theoverlook

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #98 on: January 04, 2021, 09:48:14 AM »
Give me manual everything with as few computerized controls as possible.
So I assume you have fun driving your 80s Toyota Corolla?

Manual everything and few computerized controls doesn't exist in 2021.

waltworks

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Re: The effect of Tesla being added to the S&P 500. Our Index funds...
« Reply #99 on: January 04, 2021, 09:56:45 AM »
I think there would be a (small) market for something like an 80s Corolla, actually. But by the time you made it comply with safety and emissions requirements, I'm not sure how cheap it would end up.

And for a car company, why try to serve a market of cheapskates who are going to turn up their noses and keep driving their 20 year old beaters (guilty as charged...)?

Very basic cars exist in other markets, but in the US, there's really not enough demand for them for anyone to bother.

-W