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Hold off on buying your Tesla

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Old May 3rd, 2018, 07:52   #11
green van man
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Thank you I-S, a clear explanation of a complex financial system.
Hopefully your explanation is correct, whatever one thinks of Musk the world needs innovators or we stagnate.

Paul.
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Old May 3rd, 2018, 10:06   #12
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Some interesting things came out in Tesla's quarterly call.

One is that the Model 3 is already outselling the BMW 3 series, Audi A4 and Lexus IS in the USA, and very close to passing the Merc C-class, putting it at the top of the "Mid-size Premium Sedan" class.

More than 10% of Tesla revenue in Q1 came from Powerpack and Powerwall, 161% up on Q4.

People are very focused on Tesla the car company, because that's very visible. However, note well that in 2017 the company was renamed from "Tesla Motors" to "Tesla Inc". There is a good reason for this.

Many people will be aware that Tesla is building a huge factory in Nevada called Gigafactory 1. When complete to plan it will be the largest building in the world by enclosed volume and floor area. This factory is for building battery cells and drive units - not cars.

The reason for this is that they identified that the bottleneck to producing electric vehicles is that there's simply not enough production capacity in the world for Li-Ion batteries to support serious electric vehicle production. In order to secure supply for themselves, and to avoid bidding wars against other manufacturers for what can be supplied by the likes of LG Chem and Panasonic, Tesla built their own factory, and on a scale not before seen.

(Note that this supply constraint on batteries is why every other volume car manufacturer is offering EVs "coming 2020". Only low-volume high-price manufacturers like Jaguar can get enough to offer anything)

That's great, but it is risky. Much like semiconductor wafer fabs, battery plants need to work to capacity, 24/7, to make money. Keep the battery plant full, keep demand high and things will be fine. Demand drops? You've had it.

So to that end Tesla have effectively thought "What else can we do with batteries?". Power storage products are a very cheap to develop and build way of selling batteries because you're not building a car around them with all that entails - you're basically selling someone a battery in a box with an inverter.

Solar power and wind power work even better with energy storage, so Tesla have also invested in solar power products (such as Tesla Solar Roof: https://www.tesla.com/en_GB/solarroof). These create demand for energy storage which creates demand for batteries which keeps Gigafactory 1 in business.

Tesla Semi truck will contain 800kWh-1MWh of batteries, and so offers a huge demand creation. The trucking industry isn't against electric vehicles because of "personal preference" - if the vehicle will do the job reliably and at lower cost than diesel then they will be there.

The other part of Tesla that many people don't see or understand is the automation and factory building part. Tesla realised that there's multiple levels of automation - not only the machine (car assembly robot) that builds the machine (car) but the machine (factory assembly robot) that builds the machine (car assembly robot factory) that builds the machine (car assembly robot) that builds the machine (car). Tesla have a subsidiary (Tesla Grohmann Automation) that does exactly this. Tesla are also the prime contractor on building the Gigafactory (which is designed as a modular factory system, so they are using the factory even though it's only half-built - it's designed to allow for that so it can be added on as and when needed) - building the factory themselves so that they learn how to do it and can automate and improve it when they build the next one.

Ultimately whether Tesla itself is still producing cars in 20 years time is irrelevant. Tesla's battery factory is a hugely valuable asset and if other automakers manage to get themselves into shape and beat Tesla cars out of the market then Tesla will likely morph into a battery/energy/drivetrain supplier.

However, given that they're already pushing hard on the likes of the BMW 3 series with an early days product where quality improvements are still coming it would seem to me that the rest of the auto industry should be very worried. Tesla has already changed the game.
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Old May 3rd, 2018, 10:23   #13
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Excellent knowledge and so expertly put I-S.
I for one can;t wait to tile my roof and store my own power.
Sadly i’ll Probably be waiting on the Local Authority before I can charge my own car.
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Old May 3rd, 2018, 10:30   #14
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What unbiased and clear, descriptive writings there from I-S.

Thank you.
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Old May 5th, 2018, 13:07   #15
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Quote:
Originally Posted by green van man View Post
Financial report on radio this morning saying Tesla is well on the way to fileing for bankruptcy in America.
Seems they have got through a billion $ in 3 months and investors are not forthcoming with new money.

It would be a pity to see the innovation go but I would wait and see before buying mine.

Paul.
DeLorean cars are worth quite a bit after they went bust?
May be the time to buy if prices crash....
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Old May 5th, 2018, 13:36   #16
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You have to hold off anyway because the waiting lists are so long!
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Old May 9th, 2018, 13:24   #17
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And what about Space-X? His little sideline making rockets.
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Old May 9th, 2018, 15:50   #18
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He also sells blowtorches.
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Old May 10th, 2018, 16:03   #19
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My son has a Model S and loves it.
He is of a generation that has faith in technology and so I do see a future for battery cars as he's one amongst many.
Not so for me. I cant even get a mobile signal in my village.
When I retire I'll go back to making things with my hands, using tools I understand and methods my grandfather would be familiar with.
Each to their own.
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Old May 10th, 2018, 17:44   #20
green van man
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Quote:
Originally Posted by Grimble View Post
My son has a Model S and loves it.
He is of a generation that has faith in technology and so I do see a future for battery cars as he's one amongst many.
Not so for me. I cant even get a mobile signal in my village.
When I retire I'll go back to making things with my hands, using tools I understand and methods my grandfather would be familiar with.
Each to their own.
The technology is fine until it doesn't work, how many truly understand the technology they use and rely on ?
Very few I venture to suggest.
Inevitably, if you are using something you know how to use but do not understand it's working principles you are going to fall foul of the big bill syndrome when it breaks.

I understand the science of hammers, I can repair a hammer if it breaks, I can sharpen chisels and saws to perfection, I get bent over royaly when I have to take the laptop to curries because it's stopped working 3 weeks past its garentee period.

When all the technology goes Pete tong, it's us old farts that can make things will survive. Back in the 70s when we had protect and survive it always amazed me that the powers that be genuinely thought that the great and the good would emerge from their bunker and start running things again. I was and still am of the opinion that the first thing I would do is grab a couple of batteries and some welding rods to weld the bunker doors shut before sorting out survival.
If I managed to survive by my whit and wisdom for 18 months, why would I let the great and the good take charge again.

Paul.
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