Is Tesla the new Apple or Amiga?

I’ve been following the Tesla story closely over the last few months.

Tesla have launched their Model S since the last quarter of 2012. This is the make or break car for the company. The performance model sells for 80k+ in the US which is equivalent to Audi or BMW models. It has a maximum range of 300 miles. Other cheaper versions have significantly lower range.

They had a bad write-up in the NYT but got a lot of publicity out of it as there were many questions as to the fairness of the reviewer and his judgement. The issues were more with unfamiliarity with charging electric cars along with the current lack of charging infrastructure. The car is also more suited to warmer climates. Top gear also do a hatchet job on electric vehicles to make the story appear more interesting or funny to it’s readers. … iles&_r=1&

I can see this car getting traction as a new status thing for the rich in the US, it’s made by a silicon valley company and will get traction with early adopter types especially in California. Think Apple’s iPhone for the cashed up , fashion conscious and environmentally concerned. The bragging rights on fuel savings alone are amazing, coming in at perhaps 1/10th of the fuel cost of other luxury sedans, that’s got to add up after a while! The Toyota Prius is already the number one selling car in California. It’s also got very positive reviews in terms of it’s performance , styling and decor. … -s-review/ … 0130209/10

They are burning through money but if they can reach their target of 20,000 cars sold in the next few months they should have no problem raising more money and getting cheaper models out to the middle classes. To be honest they may even be doing the right thing by focusing on the 1% (or 10%) as they have bags of money to burn and it still adds up to a huge potential market.

If they get traction in the US and Europe they could eventually go global with the global rich eager for the next latest and greatest thing and bored with the Mercs and BMWs and Audis that they and their friends have. I know which car I’d like to purchase if I had the money and it’s not the ones you see on the roads already.

So what do you think, stick a few quid into Tesla and go for it?

I haven’t looked into Tesla for the last year or two because they were taking too long to get their mass-consumer car to market, but I believe they are getting a share of every Toyota electric car sold via technology sharing.

Tesla Powertrain.

Personally I think electric cars are a technological dead-end. Tesla make some nice-looking products, but the problems they’re having are the problems inherent in trying to pretend an electric car is, well, a car. The entire road infrastructure was designed around petrol-engined vehicles, and that’s all there is to it. Electric vehicles will come into their own when there is an infrastructure designed for them, but in that eventuality they won’t look like cars any more. The vehicle and the infrastructure will co-evolve - as happened with cars.

So to answer your question, I’d say put a few quid if you can afford to lose it, and then cash out when there’s a spike, because Tesla are going under within the next 5 years unless they change their business model. In the long run, the electric-car market is going nowhere. At least I hope it doesn’t, because it’ll be an environmental disaster. We have enough trouble getting rid of AA batteries, never mind the monsters they have to put in those machines.

A good point regarding the battery recycling issue. However supposedly the batteries will plateau around 70% for a long-time and could be used for other things, of course I am far from an expert on this. Also the batteries are modular so the individual units are replaceable as they fail. I don’t think anybody is going to redesign the transport infrastructure of the world anytime soon, there just isn’t the money or incentive for that at present.

I’m thinking in pure commercial terms here that Tesla could be very very successful , if they can get that market cache going that the world’s brand obsessed consumers die for. Too many cars look the same and drive the same. Then their stock will really shoot up, with blips for the odd recall here and there since this a new company pushing fast. As Charlie mentioned they control a lot of their own technology and this Model S was designed entirely in-house from scratch. The big tech players are sitting on enormous piles of cash, some with over 100 billion in cash and significant investments in automobile software already, they would love to get a piece of this action, they could probably even bring it back from abroad with tax incentives by investing in an American company.

NYTIMES has some kind of issue with Tesla… and owner’s club under close watch from the company disproved many of their claims.
All in all, i see Tesla more of a beta testing for electric cars… a la early androids… still best bet in the west for the acceptance of this kind of vehicles… … -192254006 … -247951069

Certainly not as well run as Apple e.g… We tried to get the Tesla distributorship for Taiwan and in spite of trying to spend maybe 5 million dollars on cars to start, they turned out ( even from the very top) to be a complete bunch of tossers who had no idea of the direction they wanted to go . They would not consider supporting a dealership and insisted that anyone, next door even,could open a dealership. On that basis who the hell is going to invest millions in stock/showroom/support.
Only my personal experience but not impressed with their Management.They also dicked around for ages …bad experience. I would personally prefer to stick a red hot poker up my arse than invest in Tesla.
They will probably go on to make billions now I have said this :slight_smile:

Tesla has very few showrooms around. I only know of one. Right next to a bunch of boutiques on Santana Row in San Jose. Its a Taiwanese style showroom. Not like other US auto dealerships, in that its super small. Size of a small cafe. Has two cars in there and a few people to answer questions. No demos. I am starting to see a few cars here and there though. The new sedan is quite pretty. I am not liking the door handle moving out when you touch it though. I think thats gimicky and will be a problem later on.

Electric cars can work for a lot of urbanites who have a second car. Because most people work within a 100 mile commute (most far less) round trip. And an electric car will work under these circumstances. They come home (they do have to have their own homes with a garage and a place to plug the car into the power grid) and plug the thing in over night. Next day go and do their thing and repeat.

But they are not yet catching on. The Nissan Leaf is not selling that well. Tesla is maybe under equipped to really make it happen. Other auto makers are quietly shelving electric car plans or at least are only interested in them in order to bring their “fleet” mileage up. For the CAFE average of their offerings in America.

The main problem is the battery. Current li-on technology battery means non disposable and will be a humongous problem when electric car volumes start to go way up.

I think if they solve the problems with battery disposal and bring more offerings to the table (more models) and lower prices way way lower, the electric car will take off.

But the future is probably with hydrogen powered cars.

You think consumers are worried about the recycling on the batteries? Not a chance.

What they worry about (the 10%) is having the latest and greatest toys, and this is one of them with Eco buzz thrown in.

One other interesting fact that Shiadoa alluded to is their sales channel model. They only sell online directly from their website at present. This is all very Applish isn’t it, control of the sales and delivery and slow move out from the core markets of the US and Europe. There are 13 million cars sold in the US every year (something like 15-20 million in China!), so they only need a small fraction of this to be profitable.

Most of the customers are along for the ride in terms of them understanding they are part of the beta testing crew, as long as there no major recalls they should be okay. There is no better way to test the vehicles than on the road, if they get over the first year or two hump hey will have a massive advantage over everybody else in terms of first mover launch and impact with consumers. The vehicles are all wired up and Tesla can simply download and analyst the data immediately from the field. The customers also act as the showroom, as long as the car performs well and looks nice and stands out from the crowd. This is the Apple way again, get the media behind them, although the auto crowd can be a lot tougher. If you read the comment section of the WSJ you can see a lot of people are rooting for them to fail because the are perceived as being a ‘bailout’ , ‘liberal supported’ company that is ‘wasting taxpayers dollars’ meanwhile these same morons drive their Audis and Pickups on foreign oil.

BMW and others can try and follow but they are not a core electric car/technology company at heart, that’s the difference. These things are more like electronic gadgets with wheels!

Leaf sales have been disappointing due to the rather limited range and charging infrastructure but plug-ins and hybrids are getting very popular.

[quote]You think consumers are worried about the recycling on the batteries? Not a chance.
What they worry about (the 10%) is having the latest and greatest toys, and this is one of them with Eco buzz thrown in.[/quote]
Yes, there’s a huge gap between reality and public perception of what’s “green” and what isn’t. In fact if you drew a Venn diagram of the overlap it would look like a pair of boobs. Like you said, the name of the game is merely to convince people with more cash than sense to part with some of that cash - these things are, indeed, just gadgets with wheels. But eventually people will figure out you’re selling a lemon. As tommy525 said, other electric auto manufacturers have already realised this and are quietly withdrawing support. BYD - which has some key patents for battery technology and the entire Chinese auto market in its pocket - is making a lot of noise about electric cars being the future, but in true Chinese style they don’t intend to actually do anything about it.

Shiadoa’s experience is interesting. We deal with Apple (MFi program), and it’s a bit painful. Their insistence on keeping everything closed and under control is already pulling their company apart. Incidentally, a lot of Taiwanese IC companies do the same thing, and it severely limits their potential market. The car market is too huge for any one company to keep under their own thumb, even for a limited sector like electric autos. You need your independent dealerships.

If you want to have a punt on Tesla, no harm in putting in a few hundred $, but consider it a bet on the horses, and (IMO) strictly a short-term investment (especially in view of shiadoa’s experience with their management).

Apple did the exact same thing for years, ignored overseas markets, ignored independent dealers, treated their suppliers like shit, still worked out for them, at least in their home market.

I’m not saying selling and servicing a car is as easy, but without the ICE it should be easier and the existing dealer network does not necessarily add a lot to what is a very different product.

In terms of the overseas market they obviously will have to work with dealers, in terms of the US less so (at least that is what they are aiming, there are some strange laws that stop manufacturers selling directly in many states).

It’s no surprise they use this model as their head of sales formally worked for Apple.

Anyway there are 1.5 million luxury type vehicles sold in the US per year, taking just 5% of that market would be 75,000 vehicles and put them well on the way to success. With a similar % of sales in Europe (where gas is significantly more expensive and less range issues) they could well up over 100,000 cars within a few years

However I agree with Finley that it seems unnecessarily restrictive not to work with independent dealers as surely the aim should be to increase market coverage not push a sales model.

There’s a key number that makes all this feasible. Battery costs are predicted to be less than 1/3rd of current prices by 2025 and thats definitely very possible due to industrial capacity ramp-up.

Use your head here. The so called “Green” foolishness is just that and except for a few rich movie star types and the companies getting the amrican taxpayers money for these so called green cars rebates, they are economically foolish. The same withsolor and wind power. Follow the money. The money is on gas and oil.

I’ve used my head and written down the figures. The chance of making money from other automobile stocks is very limited, this one on the other hand just needs to sell a rather minuscule number of cars worldwide to be a success, just 40-50k per year. Since their sales in Europe may surpass the US Im not sure of the relevance of your facile stereotypes.
Saying the money is on gas and oil doesn’t make any difference to how I calculated the numbers.

I didn’t invest much in the end (issues at the time…darn), however it’s looking like Tesla is more Apple than Amiga at this time.
120 USD stock price, 4X from start of year and I wouldn’t be surprised to see a climb to 200 per stock at some stage in the year or next year. It’s been incredible execution by Tesla and they’ve faced down their naysayers in a well thought out plan so far with a great product. If they continue to play their cards right they can pick up the mantle where Apple left off, although the competition in the auto market is stronger than perhaps what Apple faced in the PC and electronics industry.

However I’m a bit leery of investing now as I think the stock market, and this stock, will be in some for volatility along the way and I missed the big run up for this year to what i think the new base level is at around 100+ USD/stock.

I’m not sure there are many meaningful parallels between Tesla and Apple aside from both of them having two genius businessmen at the helm. Well that and the fact that both are very volatile and can go up or down in a hurry. But it was a nice call and I hope you made a little bit of money on it. I have also liked Tesla for a long time and believed in the story even though it seemed the media was shitting on them every chance they got. But I don’t buy stocks so I’ve just been watching with a smile from the sidelines. It just goes to show that you should never bet against a good idea and an incredible management team led by a genius at the top.

I admit the comparison is a bit facile, I just think Tesla can get a lot of the media that Apple got for being a successful American innovator in technology led by a biz genius. The auto market is one of the worlds biggest businesses so its very exciting to see a new company coming through and obviously interesting to see how it all pans out. They are not at the scale of the big guys but they can easily raise more money if they need to expand more.

Shares hitting 144 USD per stock today, how high can it go? Plenty higher I’d say with no real competition in the market for electric cars at the moment.

It’s still too early to value Tesla and give a reasonable fair value to it, but I have to say I really don’t like how fast and choppy it’s climbing in price. I love the Tesla story and Elon is a genius, but this kind of price action just isn’t healthy for any asset class regardless of what it is. It wouldn’t surprise me one bit to see it below 100$ before climbing back to much higher prices in the next 3-5 years. It’s been a positive news frenzy for the last several months, but this can’t last. Any negative news at all is going to freak people out. It would be much healthier for it to form a longer term base before making the next leg up.

I have had a look at the supposed competition and they are years behind, that’s one major plus in Teslas favour. Not only are they years behind, their focus is diluted by their large ICE product ranges. The BMW i3 is a case in point , it’s promoted as an electric car but its actually just a sexier version of the Chevvy volt (therefore it is not a pure electric car) because it uses a range extender and it will only launch some time next year! The Japanese could come up with something , perhaps a sexier Leaf or all electric Prius…but they haven’t captured the imagination or sales like Tesla yet.

Electric cars are simply more far more fuel price efficient than ICE cars (the difference can be 0.1-0.3 cost per mile of cheapest oil source), and with rapidly reducing battery price this difference will become more apparent. You are talkin about at least half reduction in batterry prices over the next ten years (follow solar story …it could be more…it’s simply a question of creating a positive feedback cycle with industrial capacity > cost > demand > industrial capacity!) but with ICE you are just playing around at the edges to get maybe 10% more efficiency out of the engine and costs increase for the engine. Peak oil is here already so it means that electrics time has come and is now. More oil is being found all the time but exploration and extraction costs are increasing all the time also, the energy output to input ratio is declining. The reality of peak oil this time (versus 1970s) is the real reason why Tesla can be a success.

I agree the stock has climbed ridiculously quickly , it should see some ups and downs in the next few years but the core product is really streets ahead of the competition, if they can get popularity in Europe and Asia this will make the stock jump to the next level again. I think they can.

And that’s where you lost me… :laughing:

I’m all for reducing emissions and saving the planet, but I don’t think that deceiving people is the right way to go about it. I’m not saying you, I’m talking about the geologists that are backing this idea of peak oil. It’s simply not true. I’m fortunate to have spoken to many oil experts as I grew up in Calgary, Alberta, and my dad owned a small oil and gas exploration company for 30 years. If you talk to oil experts, at least in my neck of the woods, most scoff at the idea.

Having said that, I’d still love to completely eliminate the need to burn fossil fuels and attempt to correct the damage we’ve done to our planet ( sometimes I fear it’s irreversible) But when the debate starts with a false premise, it makes it very easy for the ignorant non-environmentalists to poke holes in your argument. I prefer to start the debate by saying there’s plenty of oil to continue this disaster for another 100 years. SO ? Does that mean we should? :fume:

You need to understand what peak oil means. It doesn’t mean we are running out of oil, it means that the cost of extracting it will not reduce but increase over time. It means we are running out of CHEAP and SWEET CRUDE oil. So the Alberta sands is a massive energy source but it requires enormous amounts of heat and water to extract the liquid oil. It’s also very damaging to the environment but that is another issue. There would be no way in hell this would be economic except for the advent of peak oil. Similarly there are still reserves in deep ocean areas as technology advances to make it possible to extract the oil, but it is more expensive than land based methods or the mega oil fields of sweet crude that have been more easily exploited previously. At the same time demand will not go down for energy but is expected to significantly increase globally, especially in Asia and Africa and the Middle East.