Tesla Model 3 Unveil

[MarquetteDano]

Teslas are everywhere out here.  And Leafs.  And Volts.   One guy in the parking structure brings his own extension cord and plugs it into the wall rather than going to the charging station.  People have a good time unplugging it for him because he's stealing from the company.

Spend at least one week a month in Torrance for my client and it blows me away how many Teslas are on the road plus the charging stations.  I kick myself every time I see where TSLA stock price is at.  I sold  at $50 and made a tidy profit but left a lot of money on the table.

[Tugg Speedman]

It wasn't quite 115K, but an entire years allocation of Dodge Challenger Hellcats were sold before they were built. 
And it is a little weird that Tesla gets to operate their own stores.  I believe it is illegal for car manufacturers to own their selling outlets.  Except for Tesla.

Their not stores, they are showrooms.  You buy a tesla online.

But to your larger point, among the many thing tesla is doing to disrupt the auto industry is trying to break the model of manufacturer and dealer.  Tesla are not sold though dealers, you buy direct from the manufacturer.

This in addition to ...

electric,

forward styling (the car has no buttons on the dashboard), also seats 7 (no gas tank so the trunk is big enough for two jump seats.

automated driving, the car is the most advanced self-driving car on the road.  It will even self-drive in heavy city traffic.

digital download (the car has wifi and constantly gets upgrades and patches downloaded, like software/apps do.   Traditional cars only do this via government recall).  So see self-driving above, upgrades and patches stream in regularly making this get better and better all the time.  Contrast this with Audi.  The are promising the 2017 A8 will be the most advanced self-driving car on the road.  It will be for about 1 day.  After you put down $80k for one, like all current car manufacturers, the technology is forever frozen and will never change, unless you put down another $80k on a 2018 or 2019 A8.

8 year warranty which includes everything (even flats).

Because of this, see the stocks of traditional automakers, they are terrible even though they are selling record numbers.  Wall Street thinks their business models are wrong for the current age and they are a bunch of buggy whip makers enjoying the last surge of sales before everything changes.

Tesla is causing this to happen and traditional car makers are too slow and bureaucratic to know how to compete.

[buckchuckler]

Their not stores, they are showrooms.  You buy a tesla online.

But to your larger point, among the many thing tesla is doing to disrupt the auto industry is trying to break the model of manufacturer and dealer.  Tesla are not sold though dealers, you buy direct from the manufacturer.

Yes, but this is illegal for traditional manufacturers.  The manufacturers can't sell direct to customers. 

[Tugg Speedman]

Yes, but this is illegal for traditional manufacturers.  The manufacturers can't sell direct to customers.

Correct, and Tesla has been fighting this state by state to break these rules.

Texas and NJ have put up the biggest fight.  Most of the rest of the states have caved and allow it.

The manufacturers are not fighting it, it is the dealers that have been fighting it, and mostly losing.  Politicians are loath to be on the side of used car salesman.

Saying in Silicon Valley ....

Banning Tesla is an index of the corruptness of state governments as banning Uber is an index of the corruptness of city governments.

[buckchuckler]

Correct, and Tesla has been fighting this state by state to break these rules.

Texas and NJ have put up the biggest fight.  Most of the rest of the states have caved and allow it.

The manufacturers are not fighting it, it is the dealers that have been fighting it, and mostly losing.  Politicians are loath to be on the side of used car salesman.

Saying in Silicon Valley ....

Banning Tesla is an index of the corruptness of state governments as banning Uber is an index of the corruptness of city governments.

Really?  Kind of creates an unfair advantage for Tesla don't you think?  If Ford, GM, FCA, Toyota, Nissan, Honda could sell direct they would.  They would love to.  It would save them tons of money, give a more consistent experience and look. Most of the problems with the car buying experience is because of the dealers.  It is a rule that was put in place to prevent price fixing by the manufacturer, completely outdated, should be revoked, I'd say, but not just for Tesla. 

[buckchuckler]

As for Uber, it is kind of a joke right?  I mean cab companies have tons of regulations to meet and other gigantic fixed costs they need to support, where Uber is a ride share, not a taxi service.  Riiiiiiiiiight.  I can understand why Cab companies would be furious as how Uber is treated. 

It is a good service (usually) but operates under the guise of something it completely is not.  Quite like Daily Fantasy.

And I'm sure Silicon Valley has no motivation for Uber and Tesla to get preferential treatment over traditional sources. 

[Tugg Speedman]

Really?  Kind of creates an unfair advantage for Tesla don't you think?  If Ford, GM, FCA, Toyota, Nissan, Honda could sell direct they would.  They would love to.  It would save them tons of money, give a more consistent experience and look. Most of the problems with the car buying experience is because of the dealers.  It is a rule that was put in place to prevent price fixing by the manufacturer, completely outdated, should be revoked, I'd say, but not just for Tesla.

They have repeatedly said they are in favor of the dealer model and have defended it for their business practices. They stopped fighting it from a regulatory standpoint.

[Tugg Speedman]

As for Uber, it is kind of a joke right?  I mean cab companies have tons of regulations to meet and other gigantic fixed costs they need to support, where Uber is a ride share, not a taxi service.  Riiiiiiiiiight.  I can understand why Cab companies would be furious as how Uber is treated. 

It is a good service (usually) but operates under the guise of something it completely is not.  Quite like Daily Fantasy.

And I'm sure Silicon Valley has no motivation for Uber and Tesla to get preferential treatment over traditional sources.

Turn it around, Uber has exposed how useless and expensive taxi regulations are. They don't serve the best interest of the customer they don't serve the best interest of the taxi driver. They serve the best interest of the politicians that make them.

It's the Taxi industries own fault for getting in bed with the politicians to create such a Byzantine system that allowed uber to come and take it away from him in three years.

[Tugg Speedman]

@lebeaucarnews

NEW: $TSLA Model 3 reservations top a quarter million.  @elonmusk says Total now stands at 253,000.

-------

still not done taking pre-orders

No other car like this in history

[buckchuckler]

They have repeatedly said they are in favor of the dealer model and have defended it for their business practices. They stopped fighting it from a regulatory standpoint.

I'm shocked they wouldn't publically fight the structure they need to sell their cars.  Shocked!

[ChicosBailBonds]

Turn it around, Uber has exposed how useless and expensive taxi regulations are. They don't serve the best interest of the customer they don't serve the best interest of the taxi driver. They serve the best interest of the politicians that make them.

It's the Taxi industries own fault for getting in bed with the politicians to create such a Byzantine system that allowed uber to come and take it away from him in three years.

Uber and Lyft are under assault here in California, Massachusetts, New York and elsewhere.  A Federal judge just ruled this week that Lyft and Uber will likely have to pay for Medallions just like taxis.  In Calif, the self contract role that Uber wanted has been gutted.

As for the service, I was on Uber when it first came out here and have used it fairly religiously.  Unfortunately, the quality the last 6 months has really gone down.  Taxis used to refuse to take folks from the airport to a short distance without bitching about it, despite the $21 minimum price.  It was easy to get a Uber to do it for about $6.  Now, Uber drivers are starting to decline those rides in the app leading to many pissed off customers....who are writing bad reviews, etc. as a result.  Ultimately, follow the money.  As the politicians start to lose out on their revenues from one, they will clamp up the regulations on the other...it's what they do.

[buckchuckler]

Turn it around, Uber has exposed how useless and expensive taxi regulations are. They don't serve the best interest of the customer they don't serve the best interest of the taxi driver. They serve the best interest of the politicians that make them.

That's fine and likely true.  All I am suggesting is that everyone in the same business should have to play by the same rules.  It is a distinct competitive advantage for Uber to not need medallions and registration.  It is a similar advantage for Tesla to not need (or rely upon) a dealer network. 

[ChicosBailBonds]

Spend at least one week a month in Torrance for my client and it blows me away how many Teslas are on the road plus the charging stations.  I kick myself every time I see where TSLA stock price is at.  I sold  at $50 and made a tidy profit but left a lot of money on the table.

Yeah, in our parking garage at work alone....I don't...crazy number.  I still think Musk is a crazy F, but he's a rich crazy F. 

[Tugg Speedman]

That's fine and likely true.  All I am suggesting is that everyone in the same business should have to play by the same rules.  It is a distinct competitive advantage for Uber to not need medallions and registration.  It is a similar advantage for Tesla to not need (or rely upon) a dealer network.

Consumer are not avoiding unregulated taxis (Ubers) and non dealership sold cars.  Instead they are seeking them out specifically because they have concluded those regulations are useless, making the product worse and more expensive.

The answer should be to gut the regulations.  The problem is without those barriers taxis and dealers would not suruvuve five minutes, which is what your post suggests.


The world no longer needs regulated taxis** for car dealerships ... just like it concluded it no longer needs book stores and video rental shops.

** = actually the genius of Uber is the double rating model.  Passengers rate drivers and drivers rate passengers.  So if either misbehaves, they are banned or punished.  That simple technique has invalidated a 100 years of stupid taxi regulations.

[buckchuckler]

Fine and dandy, my point was just that Tesla is not being ground breaking, or disturbing the industry with their sales model.  They are taking advantage of laws that for some reason don't apply to them and have been pressed upon other manufacturers.

[Tugg Speedman]

Fine and dandy, my point was just that Tesla is not being ground breaking, or disturbing the industry with their sales model.  They are taking advantage of laws that for some reason don't apply to them and have been pressed upon other manufacturers.

Tesla
2015 unit sales 21,000
Market Cap $31.4 billion
Market Cap per car sold = $1.54 million

GM
2015 unit sales 3.1 million
Market Cap $48.5 billion
Market Cap per car sold = $15,700

Ford
2015 unit sales 800,000
Market Cap $53.8 billion
Market Cap per car sold = $67,200

If Wall Street valued GM the same way it values Tesla, it would be worth $4.7 trillion, or eight times Apple.

Tesla's PE is now 205

The last three years
Tesla's stock, up 527%
Big three auto, 0% (no typo unchanged)
S&P 500, UP 41%

The Model S
Car and Driver called it "The Car of the Century"
Consumer Reports gave it its highest safety rating in its history.

Is Tesla being disruptive?  Absolutely, Elon Musk is forcing change on the auto industry like no one since Henry Ford.   Tesla is the most significant auto company since Ford starting making the Model T. 

Wall Street thinks Tesla is blowing up the auto industry.  That is why all the auto stocks suck (even though autos are seeing record sales of 18 million/year) and Tesla is up 500%.  The auto industry's business model, including the dealer selling model, is done and must go away.

It is the auto industry's fault for strangling itself with this inferior business model.  Tesla is liberating the car industry.

[4everwarriors]

Can ya pimp that ride, hey?

[Tugg Speedman]

Can ya pimp that ride, hey?

Comes that way from Tesla!

[4everwarriors]

So, if one were ta throw a grand down on one of these beauties and the msrp is roughly 40g's, what's da real price after tax credits etc., hey?

[jesmu84]

So, if one were ta throw a grand down on one of these beauties and the msrp is roughly 40g's, what's da real price after tax credits etc., hey?

The tax credit is worth 7k. However, the credit only applies to the first 200k cars eligible for each manufacturer. So a LOT of people won't be getting the credit from Tesla

[4everwarriors]

I got no interest now then, hey?

[buckchuckler]

Tesla
2015 unit sales 21,000
Market Cap $31.4 billion
Market Cap per car sold = $1.54 million

GM
2015 unit sales 3.1 million
Market Cap $48.5 billion
Market Cap per car sold = $15,700

Ford
2015 unit sales 800,000
Market Cap $53.8 billion
Market Cap per car sold = $67,200

If Wall Street valued GM the same way it values Tesla, it would be worth $4.7 trillion, or eight times Apple.

Tesla's PE is now 205

The last three years
Tesla's stock, up 527%
Big three auto, 0% (no typo unchanged)
S&P 500, UP 41%

The Model S
Car and Driver called it "The Car of the Century"
Consumer Reports gave it its highest safety rating in its history.

Is Tesla being disruptive?  Absolutely, Elon Musk is forcing change on the auto industry like no one since Henry Ford.   Tesla is the most significant auto company since Ford starting making the Model T. 

Wall Street thinks Tesla is blowing up the auto industry.  That is why all the auto stocks suck (even though autos are seeing record sales of 18 million/year) and Tesla is up 500%.  The auto industry's business model, including the dealer selling model, is done and must go away.

It is the auto industry's fault for strangling itself with this inferior business model.  Tesla is liberating the car industry.

Dude, glad you did so much research here.  Didn't say they weren't being disruptive (or if I did, I thought you would be able to infer in what manner I meant).   Just meant it for the dealership crap.  Geesh. 

It is also quite different to be a low quantity specialty manufacturer, a niche player, as opposed to someone that needs to make something for everyone.  Of course margins and profits will be higher. 
Will Tesla be a car for everyone someday?  Maybe, but I would bet at that time they'd have a lot of similar competitors and their numbers would reflect that.  To compare them to GM, Ford FCA, etc, is not an apples to apples comp. 

[Tugg Speedman]

Dude, glad you did so much research here.  Didn't say they weren't being disruptive (or if I did, I thought you would be able to infer in what manner I meant).   Just meant it for the dealership crap.  Geesh. 

It is also quite different to be a low quantity specialty manufacturer, a niche player, as opposed to someone that needs to make something for everyone.  Of course margins and profits will be higher. 
Will Tesla be a car for everyone someday?  Maybe, but I would bet at that time they'd have a lot of similar competitors and their numbers would reflect that.  To compare them to GM, Ford FCA, etc, is not an apples to apples comp.

I'm long Tesla, both the stock and the Model S in my garage, pulled these numbers off the top of my head.  (also, put down a down deposit on a model 3 earlier today).  As to the final cost, 90% of the Tesla's sold are the top of the line.  I expect that to be the same with the model 3 which, I'm guessing will be about $50k to $60k (versus $130k or so for the top end Model S, P90D)

You're right Tesla is going to get a lot of competition ... from Google and Apple to name two as they are getting in the car business (strongly rumored by not confirmed but Apple) and Uber (rumored again).

The big three are done, that why their stocks are going down even though they are selling a record number of cars, this is their last cycle.  They are incapable of handling the change that is coming, too stuck in the past with their thinking,

[buckchuckler]

You think tesla apple and google are ready to produce 15 million cars?  That's what was sold last year.  I think once they have those production capabilities and the overhead that goes along with it their financials will look much different. 

[jficke13]

Really?  Kind of creates an unfair advantage for Tesla don't you think?  If Ford, GM, FCA, Toyota, Nissan, Honda could sell direct they would.  They would love to.  It would save them tons of money, give a more consistent experience and look. Most of the problems with the car buying experience is because of the dealers.  It is a rule that was put in place to prevent price fixing by the manufacturer, completely outdated, should be revoked, I'd say, but not just for Tesla.

I'm pretty sure that the dealership model was created by the traditional manufacturers as an additional layer of protection from lawsuits if cars malfunctioned. It just is the way it is now because that's how it's always been. (That and some sweet sweet bribe money to politicians to encode the dealership model into law).

If Amazon started selling cars, no negotiation, no bloody car salesmen, it would take a year or two but they would sell the vast majority of the cars and the dealers would die off in droves.