To put this into context, BMW, Audi and Mercedes moved around 200k each. Porsche managed about 60k. Jaguar Land Rover did around 130k.
Zero to 25k is solid growth, but they're still a long way from bring equal, let alone dominant and profitable, which feels like where people think they'll be in the future.
To put that into context, most of those cars are not Full Size luxury sedans. Tesla only has 2 models right now, and completely dominates the fullsize luxury space.
The link does have estimates for Tesla U.S. sales in December 2016.
Tesla: 2400 (WSJ) to 5300 (hybridcars.com) compared to the "class leading" Mercedes-Benz S-Class: 1494.
It does seem Tesla is dominating in this class (luxury cars).
Figures for the whole year are 26,525 - 29,156 (Tesla) vs. 18,803 (Mercedes-Benz S-Class).
Drivetrain aside, I think the E-class would compare favorably to the model S for many people. This comparison is similar to the Apple computers sales numbers at least from the Jobs days. They would claim to set sales records, but only had a 4 model lineup when their competition would have 6 models just in their SOHO lineup.
I'm willing to go out on a limb and say the S Class and the Model S aren't in the same category. The E would be closer, but given the mindset behind purchasing each, I'm not certain there is a competitor to the Model S.
There's no equivalent to "buying a Tesla" for another brand, which is a lot of why you buy one. The picture gets more interesting when you look outside the US, where they sell about 15/20% of the E class, BMW 5 series, Audi A4 and other similar cars, which are a much closer match to a Tesla.
Whilst I like and appreciate the technology in the Model S, I too would struggle to class them as luxury along side the S class.
I genuinely find the fit, finish, and comfort (cabin noise in particular - thank you double glazing!) in my 20 year old S Class to be better. The E-class feels a much better comparison to me.
It is a tough comparison. E class starts at $52k USD, Tesla Model S at $72k (no fed tax credit, and the 60 will be discontinued soon so jumps to $78k w/ the 75), S class at $97k.
Model S tops out at $160k, S class at ~$250k w/ a S65 or technically a Maybach.
Interior and luxury the S class wins for sure. Performance and tech the Tesla wins.
Are you sure that Tesla's tech is significantly better than that of a S class? The S class Benz has been at the forefront of safety tech for over a decade now; I recall it having adaptive cruise control in 2005 or so.
I didn't write significantly. Anecdotally, it is better (I own both). Highway self-driving, OTA updates, situational awareness, screens, auto Homelink, GPS air suspension, etc.
This is also an unfair comparison, since it's unclear how inelastic demand is for full size luxury sedans vs mid size luxury sedans. I'd bet that if BMW stopped selling the 1-4 series, a decent chunk of their followers would buy a 5+ series. Likewise, many people buy a Model S because they want a Tesla and would buy a 3 if it were available.
Tesla stock is speculative. You can't really compare Tesla to its specific market slice without losing much of the big picture.
The car market is a huge market, so there is a lot of room for Tesla to grow. Tesla is at a junction point right now. It is a strong player on the Luxury segment (eg: Porsche territory), and they seem to be going for the Premium segment (eg: BMW territory) which is what their valuation expect it to go.
It looks like the natural way to go, especially considering the investment in SuperCharger network. Except when you consider the scale of that market. Tesla would need to be able to scale by an order of magnitude (think dealer and garage network too) and a huge chunk of those purchases are fleet purchases. Once the competition enter the premium electric market ( all the premium brand have a 2020 target date, which of course means potentially nothing ), Tesla will need to be ready to have a new generation of all its car ready and be ready to do refreshes on a regular basis.
Even that context is not the full context. Automatic driving is coming which will change the relationship of people to car owning.
Tesla is a growth company, if you don't think they can go bigger you should short them.
They will need a network of places to buy and repair. There are something like 15 showrooms in the whole of UK, half of them in London. 7 Service Centers.
A then Tesla.com lists the BlueWater as a showroom. It had 2 cars last time I was there, both in the same colour.
That's not nearly enough to sell a popular car in the premium segment.
note: I understand that Dealer is something special in the US. I use the term liberally to mean "Some places that sells Tesla car". I believe that the hate of Dealer in the US is not so fundamental that they would buy a 30K car online only. Hell Apple is doing great with Apple Store with the opposite approach and nothing they sell is close to the same level of financial commitment.
As a company, Tesla would have interest in focusing on high-end cars (with high margins). But, on the other hand, their vision implies making Tesla cars affordable.
It's a limited market. Once all the rich people have their tesla, they won't buy many more because:
- they already have one and want another toy
- it's not trendy anymore since everybody has it
The ideal move would be to create separate models. Affordable ones to keep Tesla afloat. Luxury ones (with a very distinct design) to keep the brand PR on top.
And like calling them a car company, it is incorrect. Tesla is a clean energy company. Their products to date (including solar city merger):
1. Electric cars, released to be more affordable with each iteration, with the idea being for full level 4-5 autonomy
2. Solar panels
3. Battery Storage
4. Solar roof
5. Electric vehicle charging network
The one thing all of those involve, is electricity. Solar panels (or roofs) are massively more attractive with battery backup, but batteries are too expensive, so they built a Gigafactory to make them cheaper. By doing that, and building their own solar panels (the smaller solar gigafactory in buffalo, ny) they bring the price of solar down, which encourages more people to buy solar with battery backup. It also encourages utilities to purchase large scale batteries which make large solar panel installs more viable, and the trend continues... Elon has been quite forthcoming in his master plan part one and deux that he wants other car companies to compete with him so that more electric cars are on the road.
TL;DNR: Tesla is an energy company, and Elon wants more companies to "compete" with Tesla as it simply helps him realize his vision of a clean electric future faster.
No, it's an unethical company that greatly relies on government subsidies in the US and abroad, and the share price is ludicrous.
Additionally it creates products that pollute more than their non subsidized competitors.
It's a super volatile stock and very expensively priced. The current stock price assumes a successful Model 3 launch, and also growth beyond the Model 3 in the shape of new models, much greater market share and considerable likelihood of success with battery pack sales and solar installations. Tesla's current market cap is equal to Ford's, so a bull scenario would require Tesla to operate at higher margins, and/or higher total market-share, relative to the competition. Possibly combined one or more of the biggest traditional auto manufacturers fumbling the transition to electric and going under. (And obviously, a central thesis is that most people will want an electric rather than a combustion engine-powered vehicle in 5-10 years).
On the other hand, in the best-case scenario Tesla has huge room to grow. The 4 largest auto manufacturers sell on the order of 10 million vehicles per year, to Tesla's 100.000. Note that if Tesla were to grow production this much, it would have to happen either with favorable capital raise terms, requiring less capital than is generally understood, or by having very high margins and reinvesting very aggressively.
Tesla also has ambitions to become a leading energy supplier, under the thesis that solar installations will not be a commodity, but a product where superior user experience and system integration will be in demand. The bear case for this is that demand for solar installations will be limited to the cheapest supplier slapping the cheapest panels on a roof and calling it a day, or that a well-integrated solar system will be so simple to design that many companies will do it. We don't have the answer here yet, since this market is not mature. It also hinges on solar being at a tipping point where it is poised to displace a large amount of fossil power generation due to rapidly decreasing costs in cell and battery storage.
Tl;dr: you wouldn't invest in Tesla today unless you have a very big risk appetite and also believe that the transportation and consumer energy landscape will look very different in 10 years.
On Tesla growing to millions of cars per year: at those volumes, most likely the government won't give subsidies anymore. So this means a car needs to be priced at the area of $20K( from $40k today) for a 200 miles range, and that means batteries below $100/kwh.
Whether this is possible with Tesla's li-ion is a big question, some predictions i saw talk about $150/kwh as the limit, graph[1], from this nature article[2].
On the other hand, musk is predicting they will be below $100/kwh in the 2020's[3] - but that doesn't sound like a really reliable source.
Also, there are possibly other battery chemistries, like li-sulfur , which could probably reach $100/kwh. Assuming it works, will it stay the giga factory(will it even fit?) with exclusivity for Tesla cars ? or more likely be available to more companies(with many new giga factories that will become established) - leading to a great situation, but maybe not a happy one for Tesla stock owners ?
60kwh * 150$ / kWh = 9000$. Also, electric cars can be more expencive to buy as they are much cheaper to operate as many people lease making it a pure cost per month calculation.
A very important caveat when comparing car companies is they source a lot of components from a network of suppliers many of whom are worth billions. So, if Tessa is supplying the battery systems for Ford etc they can still make significant profit from that relationship without selling any cars.
While I think Tesla's valuation is high, it's worth mentioning that Ford's valuation might be exceedingly low. They live in alternate universes. Tesla's stock price is based on everything going right. Ford's stock is based on everything going wrong, with a P/E ratio of 7 (roughly half of the industry standard). Investors are already baking the subprime auto loan problem into the stock price.
Personally I'm more interested to see how GM fares against Tesla now that they're selling the Bolt. Everybody says it's a great car (never tried it), but I don't think anyone expects it to sell like a Tesla.
Whatever happens, it's fun to watch from the sidelines.
This is my take as well and I actually have the largest percentage of my stock portfolio invested in them (also have a decent % in GM). Ford makes huge profits and sells hundreds of thousands of vehicles a year, including the F150, which is has been the best-selling vehicle in the US for some time (and quite profitable too). They're also a very innovative company despite reports to the contrary.
Tesla's stock price accounts for lots of assumptions about the auto market that still remain to be seen. One other thing that I think people discount is brand loyalty, which is stronger in the auto market than in most industries.
People who like a brand tend to buy most or all of their cars from that manufacturer, and that's a very difficult thing to overcome for a new market entrant. Every time Tesla releases a brand new vehicle it's an enormous risk. Market demand for cars is pretty predictable for well-known brands, which is why major car manufacturers have continued re-releasing new generations of the same models for decades. Each model has its own brand that is worth millions (in some cases, billions). A brand new model has to build that demand from scratch. A new version of an existing model already has a huge market that already know about and want that car.
I view them both very similarly- both are very well-run with great leadership teams and produce great products at nice margins. I personally like Ford a bit more because I think the valuation at the current price is a little better and because they sell the F-150 which is arguably the most valuable car model in the world. But at the current valuations I like both.
I am not an expert in the traditional automaker space, but I think about it more about where they're heading. While I certainly take into account the subprime auto loan issue, I'm more curious how each company is adapting to the future.
GM is focused on competing directly with Uber with their acquisition of Cruise and rolling out the Bolt (they could use almost any car, but having a great EV already in production certainly helps).
Ford is focused on competing with more traditional public transportation by acquiring Chariot and investing $1 billion in Argo.ai, and hope to have autonomous fleets ready to deploy in 2021.
I actually feel like they're going to become more unique moving forward. I think Ford will likely have an easier time working with cities and using Chariot as a new form of public transportation. I think GM will have an easier time (hopefully) dominating the more traditional ride-share program.
I feel like there's more upside for GM, but it's riskier. I'm also very confused by how Ford structured Argo.ai, but maybe it'll work the way they intended.
Those two things aren't contradictory. A stock can be inflated for 20 years and provide great returns to investors during that period. The best investments are in stocks that are growing quickly and are valued at a low multiple of earnings.
There are much better investment opportunities out there than Tesla. People invest in Tesla because they're inspired by Elon Musk or because they regret not having invested earlier on. You shouldn't make investment decisions based on those emotions.
If you want to invest in the future of cars I think you'll get much better returns investing in Magna Int'l and NVIDIA.
I completely agree you shouldn't invest from "liking" something. But it's an interesting proposition to buy their products to support them when they lose money on every car sold.
Actually, if markets are efficient enough, you can just buy any old thing for a good price. (Ie efficient markets preclude superior returns, but before-taxes-and-transaction-costs also protect you from inferior returns.)
So the downside to investing-by-liking might not be too bad.
Wait a little while and the share price will crash. It does every once in a while. In my opinion the stock is richly valued right now, based on assumptions that everything will go pretty good with the Model 3 launch.
58 comments
[ 2.2 ms ] story [ 118 ms ] threadZero to 25k is solid growth, but they're still a long way from bring equal, let alone dominant and profitable, which feels like where people think they'll be in the future.
http://www.goodcarbadcar.net/2017/01/usa-december-2016-large...
I doubt Tesla dominates anything regarding global sales, at this moment :)
There's no equivalent to "buying a Tesla" for another brand, which is a lot of why you buy one. The picture gets more interesting when you look outside the US, where they sell about 15/20% of the E class, BMW 5 series, Audi A4 and other similar cars, which are a much closer match to a Tesla.
I genuinely find the fit, finish, and comfort (cabin noise in particular - thank you double glazing!) in my 20 year old S Class to be better. The E-class feels a much better comparison to me.
Model S tops out at $160k, S class at ~$250k w/ a S65 or technically a Maybach.
Interior and luxury the S class wins for sure. Performance and tech the Tesla wins.
Exactly what context is this supposed to be?
The car market is a huge market, so there is a lot of room for Tesla to grow. Tesla is at a junction point right now. It is a strong player on the Luxury segment (eg: Porsche territory), and they seem to be going for the Premium segment (eg: BMW territory) which is what their valuation expect it to go.
It looks like the natural way to go, especially considering the investment in SuperCharger network. Except when you consider the scale of that market. Tesla would need to be able to scale by an order of magnitude (think dealer and garage network too) and a huge chunk of those purchases are fleet purchases. Once the competition enter the premium electric market ( all the premium brand have a 2020 target date, which of course means potentially nothing ), Tesla will need to be ready to have a new generation of all its car ready and be ready to do refreshes on a regular basis.
Even that context is not the full context. Automatic driving is coming which will change the relationship of people to car owning.
Tesla is a growth company, if you don't think they can go bigger you should short them.
I hope they can do this without a dealer network.
A then Tesla.com lists the BlueWater as a showroom. It had 2 cars last time I was there, both in the same colour.
That's not nearly enough to sell a popular car in the premium segment.
note: I understand that Dealer is something special in the US. I use the term liberally to mean "Some places that sells Tesla car". I believe that the hate of Dealer in the US is not so fundamental that they would buy a 30K car online only. Hell Apple is doing great with Apple Store with the opposite approach and nothing they sell is close to the same level of financial commitment.
- they already have one and want another toy
- it's not trendy anymore since everybody has it
The ideal move would be to create separate models. Affordable ones to keep Tesla afloat. Luxury ones (with a very distinct design) to keep the brand PR on top.
https://youtu.be/_ih1ptOguaM?t=2m2s
1. Electric cars, released to be more affordable with each iteration, with the idea being for full level 4-5 autonomy
2. Solar panels
3. Battery Storage
4. Solar roof
5. Electric vehicle charging network
The one thing all of those involve, is electricity. Solar panels (or roofs) are massively more attractive with battery backup, but batteries are too expensive, so they built a Gigafactory to make them cheaper. By doing that, and building their own solar panels (the smaller solar gigafactory in buffalo, ny) they bring the price of solar down, which encourages more people to buy solar with battery backup. It also encourages utilities to purchase large scale batteries which make large solar panel installs more viable, and the trend continues... Elon has been quite forthcoming in his master plan part one and deux that he wants other car companies to compete with him so that more electric cars are on the road.
TL;DNR: Tesla is an energy company, and Elon wants more companies to "compete" with Tesla as it simply helps him realize his vision of a clean electric future faster.
On the other hand, in the best-case scenario Tesla has huge room to grow. The 4 largest auto manufacturers sell on the order of 10 million vehicles per year, to Tesla's 100.000. Note that if Tesla were to grow production this much, it would have to happen either with favorable capital raise terms, requiring less capital than is generally understood, or by having very high margins and reinvesting very aggressively.
Tesla also has ambitions to become a leading energy supplier, under the thesis that solar installations will not be a commodity, but a product where superior user experience and system integration will be in demand. The bear case for this is that demand for solar installations will be limited to the cheapest supplier slapping the cheapest panels on a roof and calling it a day, or that a well-integrated solar system will be so simple to design that many companies will do it. We don't have the answer here yet, since this market is not mature. It also hinges on solar being at a tipping point where it is poised to displace a large amount of fossil power generation due to rapidly decreasing costs in cell and battery storage.
Tl;dr: you wouldn't invest in Tesla today unless you have a very big risk appetite and also believe that the transportation and consumer energy landscape will look very different in 10 years.
Whether this is possible with Tesla's li-ion is a big question, some predictions i saw talk about $150/kwh as the limit, graph[1], from this nature article[2].
On the other hand, musk is predicting they will be below $100/kwh in the 2020's[3] - but that doesn't sound like a really reliable source.
Also, there are possibly other battery chemistries, like li-sulfur , which could probably reach $100/kwh. Assuming it works, will it stay the giga factory(will it even fit?) with exclusivity for Tesla cars ? or more likely be available to more companies(with many new giga factories that will become established) - leading to a great situation, but maybe not a happy one for Tesla stock owners ?
[1]http://energypost.eu/wp-content/uploads/2016/04/Schalk-Cloet...
[2]http://www.nature.com/nclimate/journal/v5/n4/full/nclimate25...
[3]https://forums.tesla.com/forum/forums/how-soon-can-tesla-get...
While I think Tesla's valuation is high, it's worth mentioning that Ford's valuation might be exceedingly low. They live in alternate universes. Tesla's stock price is based on everything going right. Ford's stock is based on everything going wrong, with a P/E ratio of 7 (roughly half of the industry standard). Investors are already baking the subprime auto loan problem into the stock price.
Personally I'm more interested to see how GM fares against Tesla now that they're selling the Bolt. Everybody says it's a great car (never tried it), but I don't think anyone expects it to sell like a Tesla.
Whatever happens, it's fun to watch from the sidelines.
Tesla's stock price accounts for lots of assumptions about the auto market that still remain to be seen. One other thing that I think people discount is brand loyalty, which is stronger in the auto market than in most industries.
People who like a brand tend to buy most or all of their cars from that manufacturer, and that's a very difficult thing to overcome for a new market entrant. Every time Tesla releases a brand new vehicle it's an enormous risk. Market demand for cars is pretty predictable for well-known brands, which is why major car manufacturers have continued re-releasing new generations of the same models for decades. Each model has its own brand that is worth millions (in some cases, billions). A brand new model has to build that demand from scratch. A new version of an existing model already has a huge market that already know about and want that car.
GM is focused on competing directly with Uber with their acquisition of Cruise and rolling out the Bolt (they could use almost any car, but having a great EV already in production certainly helps).
Ford is focused on competing with more traditional public transportation by acquiring Chariot and investing $1 billion in Argo.ai, and hope to have autonomous fleets ready to deploy in 2021.
I actually feel like they're going to become more unique moving forward. I think Ford will likely have an easier time working with cities and using Chariot as a new form of public transportation. I think GM will have an easier time (hopefully) dominating the more traditional ride-share program.
I feel like there's more upside for GM, but it's riskier. I'm also very confused by how Ford structured Argo.ai, but maybe it'll work the way they intended.
I guess we'll find out in ~5 years.
There are much better investment opportunities out there than Tesla. People invest in Tesla because they're inspired by Elon Musk or because they regret not having invested earlier on. You shouldn't make investment decisions based on those emotions.
If you want to invest in the future of cars I think you'll get much better returns investing in Magna Int'l and NVIDIA.
(If you don't have to ask, go run a hedge fund or join Goldman Sachs.)
So the downside to investing-by-liking might not be too bad.
> The delivery count only includes a car if it’s transferred to the customer and all paperwork is correct.
I wonder, how can these two statements be reconciled? If the car is delivered, then the total number cannot be preliminary?