Musk endeavours

[odysseus2000]

Hello Howard,

If one looks at numbers what does one find?

Let’s start with debt:

https://companiesmarketcap.com/automake ... hest-debt/

What about cash:

https://companiesmarketcap.com/automake ... h-on-hand/

What about turn over:

https://companiesmarketcap.com/automake ... y-revenue/

What about operating margin:

https://companiesmarketcap.com/automake ... ng-margin/

If you look at these numbers it is clear that E.g. BMW have a lot more debt than cash, have better operating margins than Tesla & larger sales than Tesla, but let’s not forget that BMW’s are flattered by the post Covid sales bonanza & that debt does not go away, it remains on the balance sheet & is a serious impediment to growth.

The situation for BYD is that of a very low operating margin company.

Meanwhile if one considers future potential, Tesla looks to be leading in robo taxi development with all the tests I have seen showing BYD has limits to its system performance which in the current configuration is lidar dependent adding additional cost to their vehicles, but they do have apparently several hundred driverless cars operating in China. The same is true of Waymo, but in terms of low cost general solutions Tesla looks to be currently a long way ahead with BMW having nothing.

In terms of the banning of Chinese components in Europe, German legacy auto is concerned:

https://asia.nikkei.com/Business/Automo ... sses-warn#

Biden has already put 100% tariff on Chinese imports which is likely going to be a trouble for most US automakers.

I remain of the opinion that Tesla is very well positioned & has the ability to reduce prices to increase demand & has done so & still retained operating margins that are over 2x those of VW.

At some point in the relatively near future, unexpected events excluded, the car market will become close to 100% battery electric with cars that have ice components being found only in museums.

Feel free to disagree & perhaps find errors in the tables that are often prone to mistakes, but as is, so long as Musk gets his compensation approved on the 13th of June, I remain bullish on Tesla. However, it is not certain that Musk will get his pay packet & if not everything likely changes. This is currently my most pressing concern.

Regards,

[Howard]

Ody,

I’m not sure you are addressing how inaccurate your forecasts have been in the past?

Moving from BMW to erroneous forecasts for BYD. How could such a powerful competitor be dismissed so flippantly recently?

Tesla’s nemesis in China was ignored or incorrectly rubbished on this thread until it had taken massive market share from Tesla and dramatically reduced Tesla’s margins. How inaccurate were the claims that Tesla was a brand leader in China when such a powerful competitor was outselling it with a range of premium and mass market EV models?

The evidence of BYD’s successful growth and ability to launch a range of very successful EV models was decried. More attention was given to Tesla’s painfully slow process of developing its only new model which currently is reducing company profits and selling in tiny numbers. The development of the Cybertruck has been so slow that it makes legacy manufacturers' new model development look brilliant by comparison.

Forecasting that Tesla would produce a model 2 has proven to be woefully optimistic. At current development speed, will it be on roads in 2026 or later or never?

Your posts dismissed BYD, some in January 2023, when by then it was obvious to any but the most blinkered Tesla fan that BYD was a massive threat. Just read the following post:

viewtopic.php?p=560127#p560127

Even in December 2023 you were alleging that BYD cars were “stuck in fields” which was clearly a preposterous statement derived from clickbait.

viewtopic.php?p=632785#p632785

Tesla obviously has had success in the past but has it fallen into the trap of failing to assess the market? Selling volumes at ever reducing margins looks like the behaviour of a legacy company fighting to survive?

Looking ahead at autonomous vehicle developments, has this thread missed the huge advances of this technology by competitors in China? I was chatting with a Chinese University Professor this week who has a team of researchers looking at this issue (amongst others) in China. He pointed out that Chinese ports are now increasingly switching to totally autonomous electric vehicles developed by Tesla’s competitors..

Developing autonomous heavy BEV trucks for short distance, frequent charging work has been profitable and Tesla’s Semi project is threatened. Have they completely missed out as their competitors have cornered this short-range market and are now looking at other areas most suited to short-range “semis”. We don’t read much here about Chinese Robo Taxis but they are actually operating in controlled environments in China now. Tesla aren’t involved in these real world activities but need to look at their success if they don’t want to be overtaken.

So, back to BYD, it’s been informative seeing how this thread missed much of the success of this company until it was too late to ignore it.

It might be interesting to look back at the forecasts made here for other competitors like Hyundai/Kia and Toyota to see how their success at taking market share is working out. Are they sacking large numbers of workforce or are they quietly developing reliable cars which are in demand come recession or growth in the economy?

As a serious investor,surely one must accurately assess the competition, especially when other commentators are accurately pointing out their success in competing with Tesla.

Surely it's only worth making forecasts if one has researched the threat of competition competently?

regards

Howard

[odysseus2000]

I have no idea why you think BYD are a massive threat to Tesla.

BYD are the best of many Chinese auto makers and are operating at low, but positive margins in a sea of competitors who are operating at negative margins. Their expansion plans to the US are currently on hold following Biden’s 100% tariff on Chinese exports & they may get hit by similar European wide taxes. In the by & by BYD may become an international manufacturer but as of now they are not. To become an international manufacturer they will need much better & safer cars & they will have to compete with a range of other makers in their space such as Kia who have over twice their operating margins & international presence already. If byd are to be an international manufacturer they will need to spend on dealerships or develop their own selling network. They have no large charger network & a whole host of other needs if they can have the US tariffs voided by a future president.

The other major development is that Tesla are now aiming to deploy robo taxi. This may never happen, but if it does the entire auto landscape changes with it no longer being sensible for many families to own cars when robo taxi will be far cheaper & more convenient. Byd have seen this threat & now have some several hundred driverless cars operating in a similar manner to how waymo operate in the US, but they are not vision only needing lidar & I believe are geofenced rather than the general solution created by Tesla. Sure the media & your Chinese contact can paint a glowing picture of Chinese makers & their robotic capability, but all the tests I have seen show serious deficiencies in all of these products.

May I also remind you that Tesla have the fourth highest operating margins of any auto maker on the planet. The whole notion that Tesla price cuts have destroyed their margins is wrong.

May I also remind you that BMW & Toyota both have large amounts of debt. BMW has 7x the debt of Tesla, Toyota has 24x the debt of Tesla. To argue these companies are doing great is to focus on the unique conditions after the pandemic & to ignore the fundamentals of business that are both limited in how much additional debt they can raise to fund expansion and by their existing ice manufacturing operations that will have to fold.

May I further remind you that cutting staff is an ugly but important process in the creation of a lean efficient business & that the cuts at Tesla will have a positive impact on profitability that we will see in future earnings.

May I also remind you that Tesla has a humanoid robot, but I do not see any at legacy auto makers.

The greatest errors in the auto market have been made by the incumbents & commentators who have refused to transition to clean electric cars & have instead adopted the accountants view that what has worked will work into the future. Tesla have hurt all legacy car makers & as the technological lead at Tesla continues to grow their is a lot more pain ahead for legacy and I reiterate that a lot of legacy will not survive in their current form.

Less than a decade ago the accepted norm was that Tesla have done amazingly well, but that legacy will now rise up and eat them & that narrative has continued as legacy propaganda has convinced folk to stay with ice causing many to argue that electric cars were a fad. But the dominoes are aligning & when a push comes the collapse will be spectacular.

However, if the vote on the 13th forces Tesla to void the pay package for Elon Musk & not find another way to compensate him we enter into great uncertainty in a world that is very difficult to predict.

Regards,

[Howard]

Looking forward, a key issue for Tesla is how the competition will affect its profitability. Will the competition steal customers? It really doesn’t matter to Tesla if the competition is profitable or not.

BYD’s threat is twofold. It (like Toyota) correctly saw that the demand for hybrids is huge and every customer who buys a PHEV won’t consider a Tesla for a few years. BYD also saw that for BEVs Tesla only really has one platform, Y and 3 which limits their appeal to major parts of the BEV market. So BYD offered a range of competitive models in China which took market share from Tesla. This won't be recovered easily.

Global sales of new cars were around 75 million in 2023 and Tesla’s market share was just over 2%. Will its share grow this year? Who knows? But it isn’t a major threat to most car manufacturers in most markets. Tesla is a more important player in the USA (so long as it doesn’t use too many Chinese components in its US manufactured models).

Despite Musk’s initial promise that its Chinese plant would only supply the Chinese market, because of competition, China’s home demand for 3 and Y was not enough and it is now Tesla’s major export hub. Restrictions on Chinese made cars by, for example, the EU could hurt it.

BYD sold 3 million cars in 2023 and Tesla sold 1.8 million cars. It’s obvious to most analysts that BYD is important because, after the USA, Tesla’s main market for BEVs has been China. BYD in just a year has dramatically reduced Tesla’s market share in China. It sold more than a million more EVs than Tesla in 2023.

Robo Taxi developments

You suggest one of the reasons Tesla’s drop in car sales is not significant because

“The other major development is that Tesla are now aiming to deploy robo taxi.”

This could turn out to be another amusing forecast.

Are Tesla behind the curve with Robo Taxis?

We know operations like Waymo are successfully operating Robo Taxis in the USA. But even Toyota are way ahead of Tesla in China. Whilst Musk is trying to get permission to run taxis from the Chinese authorities, companies like Toyota are already operating Robo Taxis in several cities in China.

“Today, residents of Beijing, Shanghai, Guangzhou, and Shenzhen enjoy using PonyPilot+ and are experiencing the joy of autonomous driving.

Currently, the joint venture is progressing steadily with the joint development and production planning of the first bZ4X-based robotaxi model. A fleet of a thousand bZ4X robotaxis will be deployed in the first phase to provide fully driverless autonomous mobility services in Tier-1 cities across China”

Reports of Toyota’s success and the success of companies like BYD are almost incredible to read. If they are true, has Tesla missed the boat?

You can read about Toyota’s progress here https://pony.ai/business?lang=en

Ody, you might like to tell us how many cities are competitors operating in and how many successful Tesla Robo Taxis operations are taking fare paying passengers - I genuinely don’t know. But you need to demonstrate an understanding of this to make your Robo Taxi forecast sensible.

Challenge: Hopefully we can review your taxi forecast in a year.

regards

Howard

[odysseus2000]

The Toyota with pony article is vapor ware, nothing concrete, no details.

If it is legitimate, which I doubt, then legacy auto’s dominoes will be pushed over by it. Once robo taxis are established as safe & efficient the days of private cars in cities are over.

However is the Pony/Toyota system any good? We know that AI require a lot of training & it needs fast processor, the market being dominated by Nvidia with China cut off from supply.

So if Pony have got this to work they have found ways to train the AI that are both much faster & much cheaper. Alternatively they are advertised as a lidar system so it may be they are geofenced like Waymo. We also need to know what the operating margins are. As far as I know Waymo are losing money on each ride hail. Having paying passengers is good, but if the operating margins are negative all they are doing is reducing losses, not making money.

If Tesla robotaxi works it is a general system that can cope with driving anywhere as would a human, a huge difference to the Waymo system that is geofenced.

If Pony/Toyota really have something they would be all over the media, but they are not & as of now I don’t find them credible.

The 13th of June is still the date that matters for the entire auto industry. Many would be happy to see Musk gone, so I am far from confident that the pay deal is approved.

Regards,

[odysseus2000]

Tesla Chinese sales recovering:

https://x.com/garyblack00/status/179539 ... DCpgdbFBxg

Part of this is that Tesla are offering zero down payment purchase options.

Regards,

[Howard]

The Toyota with pony article is vapor ware, nothing concrete, no details.

If it is legitimate, which I doubt, then legacy auto’s dominoes will be pushed over by it. Once robo taxis are established as safe & efficient the days of private cars in cities are over.

However is the Pony/Toyota system any good? We know that AI require a lot of training & it needs fast processor, the market being dominated by Nvidia with China cut off from supply.

So if Pony have got this to work they have found ways to train the AI that are both much faster & much cheaper. Alternatively they are advertised as a lidar system so it may be they are geofenced like Waymo. We also need to know what the operating margins are. As far as I know Waymo are losing money on each ride hail. Having paying passengers is good, but if the operating margins are negative all they are doing is reducing losses, not making money.

If Tesla robotaxi works it is a general system that can cope with driving anywhere as would a human, a huge difference to the Waymo system that is geofenced.

If Pony/Toyota really have something they would be all over the media, but they are not & as of now I don’t find them credible.

The 13th of June is still the date that matters for the entire auto industry. Many would be happy to see Musk gone, so I am far from confident that the pay deal is approved.



Regards,

You are doing it again. Rubbishing the competition without doing proper research. Just google: Toyota's Robo Taxis in China or something similar.

It's not vapourware. Toyota's JV are operating Robo Taxis in several Chinese cities.

They may not be exactly the type of Robo Taxi which Tesla dreams about. But the fact is Toyota are doing it and Tesla are just talking about it.

The situation may be changing so that the difference between Tesla and Legacy companies is speed. Tesla talk about projects but are painfully slow at developing them and legacy companies like Toyota are actually delivering with the blessing of, in this example, the Chinese authorities.

You might like to read the following article published a few weeks ago for another source of information.

https://www.chinadaily.com.cn/a/202404/ ... 20province.

regards

Howard

[odysseus2000]

The Toyota with pony article is vapor ware, nothing concrete, no details.

If it is legitimate, which I doubt, then legacy auto’s dominoes will be pushed over by it. Once robo taxis are established as safe & efficient the days of private cars in cities are over.

However is the Pony/Toyota system any good? We know that AI require a lot of training & it needs fast processor, the market being dominated by Nvidia with China cut off from supply.

So if Pony have got this to work they have found ways to train the AI that are both much faster & much cheaper. Alternatively they are advertised as a lidar system so it may be they are geofenced like Waymo. We also need to know what the operating margins are. As far as I know Waymo are losing money on each ride hail. Having paying passengers is good, but if the operating margins are negative all they are doing is reducing losses, not making money.

If Tesla robotaxi works it is a general system that can cope with driving anywhere as would a human, a huge difference to the Waymo system that is geofenced.

If Pony/Toyota really have something they would be all over the media, but they are not & as of now I don’t find them credible.

The 13th of June is still the date that matters for the entire auto industry. Many would be happy to see Musk gone, so I am far from confident that the pay deal is approved.



Regards,

You are doing it again. Rubbishing the competition without doing proper research. Just google: Toyota's Robo Taxis in China or something similar.

It's not vapourware. Toyota's JV are operating Robo Taxis in several Chinese cities.

They may not be exactly the type of Robo Taxi which Tesla dreams about. But the fact is Toyota are doing it and Tesla are just talking about it.

The situation may be changing so that the difference between Tesla and Legacy companies is speed. Tesla talk about projects but are painfully slow at developing them and legacy companies like Toyota are actually delivering with the blessing of, in this example, the Chinese authorities.

You might like to read the following article published a few weeks ago for another source of information.

https://www.chinadaily.com.cn/a/202404/ ... 20province.

regards

Howard

It is an eye candy article saying nothing.

What is the technology?

What is the operating margin?

Is this like Waymo or something more sophisticated?

Without details of the science, engineering & finance it is all meaningless. Toyota have been developing solid state batteries & various other technologies for years now & have regularly put out eye candy about what they are & will do. But nothing has appeared.

I have studied the Tesla system in some depth, I understand a lot of the science, engineering & costs & I know of nothing even remotely close.

If the Toyota system is good, let us have a tear down to see, let us have the system independently accessed. The same with Byd’s driverless system.

We already know that Waymo in a geofenced area works very well in normal conditions & have known that for years now. It is however extremely expensive & the cars, as far as I know, run at a loss & can not cope with unexpected hazards like emergencies. Indeed the San Francisco fire authority campaigned relentlessly against Waymo, saying their taxis regularly interrupted fire engines responding to emergencies.

Until information like this is made available, the whole Toyota enterprise has no foundations upon which to build an appraisal of it.

If you have technical & financial data please post it.

Regards,

[odysseus2000]

This kind of thing makes me nervous of the vote:

https://x.com/sawyermerritt/status/1795 ... DCpgdbFBxg

Regards,

[Howard]

I guess, Ody, you are avoiding reading about Toyota’s real life success in operating Robo Taxis in several cities in China.

Apologies for pursuing my research into some of the markets which Tesla are supposed to be penetrating. It’s been raining so much over the last few days keeping me inside so I have enjoyed doing a bit of research on their achievements.

Since 2017 you have told us about Tesla’s development of a Semi. Is the progress on this project another example of Tesla moving more slowly than its rivals? Are they spending enough on research and development?

Where are they involved in real life heavy truck trials? Tesla received firm orders for trucks from a number of logistics companies in 2017, for example from UPS who ordered 125. Not a single truck has been delivered to most of these companies. Apparently a rare exception is Pepsico, who ordered 100 but have only received 36.

https://www.reuters.com/business/autos- ... 024-04-19/

According to a comprehensive worldwide report by IEA, “Sales of electric trucks increased 35% in 2023 compared to 2022, meaning that total sales of electric trucks surpassed electric buses for the first time, at around 54 000.”

https://www.iea.org/reports/global-ev-o ... c-vehicles

Who were key players in selling electric buses and trucks? What a surprise! BYD are quoted as a major manufacturer along with Daimler, Scania and Volvo.

The dream is, of course, to develop self driving “Semis” and a port environment has been a good place to test self-driving heavy electric trucks to fully automate the handling of containers. Companies in China are extending this technology outside ports in controlled environments.

Manufacturers with experience of this technology may become the leaders in the development of self-driving trucks.

This article covers some of the developments in the largest and busiest ports in the world.

https://equalocean.com/analysis/2022082 ... %20Tianjin.

Geely and BYD are key players in these initiatives.

“Currently, 13 ports in China have used autonomous container trucks”,

“By 2025, it is anticipated that 6,000 to 7,000 L4 autonomous container trucks will come into service in China's ports, which would increase the automation penetration rate to over 20%.”

Where are Tesla in implementing electric truck trials? Ody, you have made a lot of claims about Tesla’s Semi progress. Please would you update us on their sales figures which I may have missed. It would help us to see their potential.

regards

Howard

[odysseus2000]

The IEA article defines trucks as:

“Trucks” refers to both medium (3.5-15 tonnes Gross Vehicle Weight [GVW]) and heavy (15 tonnes GVW and above) trucks.

Most of this market is not addressed by Tesla. The Cyber truck is about the closest to the specified medium weight range, but as configured is more like a range rover than a Ford F150. The Semi is around 40 tonnes when loaded and is somewhere at the top end.

The port loaders are specialised vehicles for containers and are not addressed by Tesla.

Other than Tesla no one knows how many Tesla semi are in use as they don't break out the number.

I have also failed to find numbers for other semi makers. Mercedes have an electric semi but I can find no details as to numbers on the roads etc.

Without engineering and financial details this is all eye candy and gives us no insight into the Tesla Semi or other semi truck makers.

Regards,

[Howard]

So is this a fair summary of the current situation we have discussed?

- Tesla have no new models planned for the foreseeable future

- Competition from car manufacturers means that Tesla volumes are down around 20% for the first half of 2024

- Prices, taking into account the cost of their marketing incentives, are down about 20%

- That’s a drop in earnings of more than a billion dollars over six months

- Competition have had a good couple of years, hybrid sales are buoyant

- Tesla are cutting production volumes and 10% of their workforce

- Tesla have sold less than 100 semis? Competitors sold lots of large electric trucks in 2023

- Cybertruck is receiving a mixed reception with low sales volumes so far

- Competitors are reporting successful trials of Robo Taxis, approved by regulators, but we don’t believe them

- Competitors report very successful operations of autonomous heavy vehicles in controlled environments like ports

- Tesla are still to get approval for Robo Taxi trials from any legislative authorities but since 2017 have been hopeful that they will get this soon.

- Tesla’s performance has been so good the boss deserves his $56 billion bonus

The sun's out so I'll leave you to have the last word, Ody.

regards

Howard

[odysseus2000]

So is this a fair summary of the current situation we have discussed?

- Tesla have no new models planned for the foreseeable future

- Competition from car manufacturers means that Tesla volumes are down around 20% for the first half of 2024

- Prices, taking into account the cost of their marketing incentives, are down about 20%

- That’s a drop in earnings of more than a billion dollars over six months

- Competition have had a good couple of years, hybrid sales are buoyant

- Tesla are cutting production volumes and 10% of their workforce

- Tesla have sold less than 100 semis? Competitors sold lots of large electric trucks in 2023

- Cybertruck is receiving a mixed reception with low sales volumes so far

- Competitors are reporting successful trials of Robo Taxis, approved by regulators, but we don’t believe them

- Competitors report very successful operations of autonomous heavy vehicles in controlled environments like ports

- Tesla are still to get approval for Robo Taxi trials from any legislative authorities but since 2017 have been hopeful that they will get this soon.

- Tesla’s performance has been so good the boss deserves his $56 billion bonus

The sun's out so I'll leave you to have the last word, Ody.

regards

Howard

No, not a fair summary.

Tesla has robo taxi & Optimus coming to release.

Prices & volume are down, but gross margins are still good at over 14%.

Tesla have cut well over 10% of the work force.

Semi volume unknown

Cyber doing well as launch ramps.

Geofenced robo taxi are old news, Waymo has had them for years.

Heavy vehicle like tanks have been remote controlled for ages, but no good for road use.

Musk pay package was performance dependent & when performance achieved everyone was happy to pay, then judge refused to allow the transaction.

Regards,

[scotview]

Just saw something on Bloomberg which (I think) said BYD are bringing out a PHEV ? with 1000 mile range and cost of about $20K.

[odysseus2000]

Just saw something on Bloomberg which (I think) said BYD are bringing out a PHEV ? with 1000 mile range and cost of about $20K.

https://www.bloomberg.com/news/articles ... long-drive

Regards,

[Hallucigenia]

If one looks at numbers what does one find?.....

What about operating margin:

https://companiesmarketcap.com/automake ... ng-margin/

I find it odd that when you're taking numbers from a site called companiesmarketcap.com the one number you don't cite is market cap. It's fundamental to any kind of analysis of a share, and in this case even more so given that you could buy BMW, VW, Toyota and a couple more for the price of buying Tesla. If Tesla was also at the $65bn market cap level - say a share price of $20 - then some of the things that you're talking about as an advantage become relevant, but the discrepancy is so great that it dissipates most of your arguments.

BTW - I am always sceptical of third-party financial statistics, for instance in Q1 Mercedes made €7.106bn gross profit on revenue of €35.873bn,a gross margin of 19.8%. Tesla automotive in comparison made $3.122bn gross profit on sales of $17.378bn, or 18% gross margin.

If you look at these numbers it is clear that E.g. BMW have a lot more debt than cash, have better operating margins than Tesla & larger sales than Tesla, but let’s not forget that BMW’s are flattered by the post Covid sales bonanza & that debt does not go away, it remains on the balance sheet & is a serious impediment to growth.

The most serious impediment to growth is not having desirable products at the right price, and Tesla (Q1 deliveries down 9%, car revenues down 13% let us not forget) seems to have more of those impediments than most of the competition.

The situation for BYD is that of a very low operating margin company.

Mass-market companies like VW and BYD have a somewhat different model to a premium company, they are happy to take a lower margin on millions more cars than Tesla.

In any case, these things are not fixed for all time, in 2013 would you have said that Tesla was a low operating margin company that was going to make 7.3% gross margin forever?

Meanwhile if one considers future potential, Tesla looks to be leading in robo taxi development

This is the same vapourware story we've been hearing since 2016. If they're so far ahead, let's see them on the roads, generating profits for shareholders. You may scoff at other companies with robotaxis on the road, but they're gaining real world experience, both on the road and from the regulatory perspective. And if nothing else, Tesla's lack of investment in R&D has allowed other companies to catch up, they're not going to have a monopoly on robotaxis as they might have done had Musk's earliest forecasts come true. Heck, even Renault has autonomous vehicles doing real work on the roads of Paris, serving the park-&-ride at Roland Garros this year. As an aside, Renault's strategy is markedly different, they are happy to leave personal cars at the driver-assistance level, whilst concentrating on public transport with minibuses powered by their investee company WeRide.

with all the tests I have seen showing BYD has limits to its system performance which in the current configuration is lidar dependent adding additional cost to their vehicles, but they do have apparently several hundred driverless cars operating in China. The same is true of Waymo, but in terms of low cost general solutions Tesla looks to be currently a long way ahead with BMW having nothing.

This is the same kind of engineering-led nonsense that led to the farce of Tesla's automatic windscreen wipers. Customers don't care about the technology, they just want things to work. Every other car maker uses dedicated rain sensors which cost a few bucks, Tesla saves money by trying to detect rain with their existing cameras and it is hit or miss. Crappy rain detection is not a problem if you're in California or Texas, but a real PITA if you're in Seattle or Manchester. A company that really cared about customers would have used industry-standard sensors until they had got the no-sensor system working equally as well, but Tesla are so keen on engineering elegance that they prefer beta testing on customers to doing the right thing.

So it is with lidar. The customer doesn't care what technology goes into making autonomy happen - if lidar makes it happen sooner and/or better, then the customer will buy cars with lidar. And it looks like mass-market lidar will not be cripplingly expensive - we seem to be heading for around $500 for high-end units. Even if you need two on a car, that's 2% of the cost of a $50k car. That's doable.

You can't have it both ways - either there is so much money in autonomy that Tesla will be justifying a $5tn market cap on the back of it - in which case margins will be fat enough for competitors to easily afford <$1000-worth of lidar sensors, or margins will be so tight that competitors can't afford $1000/car of sensors - in which case Tesla won't be making huge money off autonomy either.

In any case, customers don't buy sensors they buy cars - if the competition can make their cars $1000 cheaper by other means (economies of scale, cheaper labour, access to cheap Chinese battery supply chain etc) then it makes no difference. Just look at the way the Chinese rideshare market is dominated by the Buick Velite 6 - it's far from the highest-tech car out there, in fact it looks rather archaic, but GM are happy to take a hit to margins and sell it cheap.

so long as Musk gets his compensation approved on the 13th of June, I remain bullish on Tesla. However, it is not certain that Musk will get his pay packet & if not everything likely changes. This is currently my most pressing concern.

Aside from the fact it is ridiculous that the company is being blackmailed by the "Technoking" in this way, I can't help feeling that parting with Musk would be the best thing that could happen to Tesla as a company. Obviously it would cause a wave of selling in the short term but long-term I think it would be for the best. Over the last 5 years he's become more of a liability than a benefit, chasing dreams like the Cybertruck when they could have delivered a (relatively) more normal pickup like the Rivian R1T in half the time, freeing up resources to go full steam on Model 2.

Then there's the effect of Musk on Tesla's brand - they dropped 50 places in the Axios Harris poll of top 100 brands in the US, still ranking highly for Products, but falling behind on Trust, Character and Citizenship. Or to put it more succinctly :

[odysseus2000]

1 minute 43 seconds on the case for Elon Musk:

https://x.com/elonmusk/status/179586925 ... DCpgdbFBxg

Regards,

[Hallucigenia]

1 minute 43 seconds on the case for Elon Musk:

Just how insecure is Musk if he needs to retweet an interview from 1 May 2019? And would you take investment advice from someone enthusing about Tesla at $239? If you think the enthusiasm is still valid, then buying at $239 must be still valid, no?

Musk at Tesla is going to be a fascinating example for business schools to study. There seems little doubt that Tesla in the early 2010s was driven by the kind of collective vision engendered by great leaders, but some time around 2016/17 that collective vision turned into the vision of one man - who had lost the dressingroom (qv eg Grobmann leaving in April 2017), and that seldom ends well. He now seems to be ruling Tesla by whim and fear rather than by vision - certainly his time at Twitter has been a reign of terror from the start, I don't follow SpaceX closely but maybe the collective vision is still in place there?

[Howard]

CNN's headline today:

Elon Musk once mocked China’s BYD. Now it’s running circles around Tesla

"while Tesla is an EV pioneer, it hasn’t rolled out any significant innovations in recent years that would help justify its loftier price point.

That’s why BYD — which makes both EVs and hybrids — is now eating Tesla’s lunch on the global stage."

https://edition.cnn.com/2024/05/30/tech ... index.html

Who is mocking BYD and hybrids now? They look like the future at the moment. Beating a legacy BEV manufacturer whose engineering limitations mean it is unable to bring new cars to the market to replace ageing models.

Articles like this from CNN can't be good for Tesla's reputation.

Meanwhile Toyota announces plans to accelerate their ever successful hybrid range.

Why is it that Tesla's profitable competitors are able to launch so many models so quickly with superior engineering and features which consumers like?

regards

Howard

[odysseus2000]

If one looks at numbers what does one find?.....

What about operating margin:

https://companiesmarketcap.com/automake ... ng-margin/

I find it odd that when you're taking numbers from a site called companiesmarketcap.com the one number you don't cite is market cap. It's fundamental to any kind of analysis of a share, and in this case even more so given that you could buy BMW, VW, Toyota and a couple more for the price of buying Tesla. If Tesla was also at the $65bn market cap level - say a share price of $20 - then some of the things that you're talking about as an advantage become relevant, but the discrepancy is so great that it dissipates most of your arguments.

BTW - I am always sceptical of third-party financial statistics, for instance in Q1 Mercedes made €7.106bn gross profit on revenue of €35.873bn,a gross margin of 19.8%. Tesla automotive in comparison made $3.122bn gross profit on sales of $17.378bn, or 18% gross margin.

If you look at these numbers it is clear that E.g. BMW have a lot more debt than cash, have better operating margins than Tesla & larger sales than Tesla, but let’s not forget that BMW’s are flattered by the post Covid sales bonanza & that debt does not go away, it remains on the balance sheet & is a serious impediment to growth.

The most serious impediment to growth is not having desirable products at the right price, and Tesla (Q1 deliveries down 9%, car revenues down 13% let us not forget) seems to have more of those impediments than most of the competition.

The situation for BYD is that of a very low operating margin company.

Mass-market companies like VW and BYD have a somewhat different model to a premium company, they are happy to take a lower margin on millions more cars than Tesla.

In any case, these things are not fixed for all time, in 2013 would you have said that Tesla was a low operating margin company that was going to make 7.3% gross margin forever?

Meanwhile if one considers future potential, Tesla looks to be leading in robo taxi development

This is the same vapourware story we've been hearing since 2016. If they're so far ahead, let's see them on the roads, generating profits for shareholders. You may scoff at other companies with robotaxis on the road, but they're gaining real world experience, both on the road and from the regulatory perspective. And if nothing else, Tesla's lack of investment in R&D has allowed other companies to catch up, they're not going to have a monopoly on robotaxis as they might have done had Musk's earliest forecasts come true. Heck, even Renault has autonomous vehicles doing real work on the roads of Paris, serving the park-&-ride at Roland Garros this year. As an aside, Renault's strategy is markedly different, they are happy to leave personal cars at the driver-assistance level, whilst concentrating on public transport with minibuses powered by their investee company WeRide.

with all the tests I have seen showing BYD has limits to its system performance which in the current configuration is lidar dependent adding additional cost to their vehicles, but they do have apparently several hundred driverless cars operating in China. The same is true of Waymo, but in terms of low cost general solutions Tesla looks to be currently a long way ahead with BMW having nothing.

This is the same kind of engineering-led nonsense that led to the farce of Tesla's automatic windscreen wipers. Customers don't care about the technology, they just want things to work. Every other car maker uses dedicated rain sensors which cost a few bucks, Tesla saves money by trying to detect rain with their existing cameras and it is hit or miss. Crappy rain detection is not a problem if you're in California or Texas, but a real PITA if you're in Seattle or Manchester. A company that really cared about customers would have used industry-standard sensors until they had got the no-sensor system working equally as well, but Tesla are so keen on engineering elegance that they prefer beta testing on customers to doing the right thing.

So it is with lidar. The customer doesn't care what technology goes into making autonomy happen - if lidar makes it happen sooner and/or better, then the customer will buy cars with lidar. And it looks like mass-market lidar will not be cripplingly expensive - we seem to be heading for around $500 for high-end units. Even if you need two on a car, that's 2% of the cost of a $50k car. That's doable.

You can't have it both ways - either there is so much money in autonomy that Tesla will be justifying a $5tn market cap on the back of it - in which case margins will be fat enough for competitors to easily afford <$1000-worth of lidar sensors, or margins will be so tight that competitors can't afford $1000/car of sensors - in which case Tesla won't be making huge money off autonomy either.

In any case, customers don't buy sensors they buy cars - if the competition can make their cars $1000 cheaper by other means (economies of scale, cheaper labour, access to cheap Chinese battery supply chain etc) then it makes no difference. Just look at the way the Chinese rideshare market is dominated by the Buick Velite 6 - it's far from the highest-tech car out there, in fact it looks rather archaic, but GM are happy to take a hit to margins and sell it cheap.

so long as Musk gets his compensation approved on the 13th of June, I remain bullish on Tesla. However, it is not certain that Musk will get his pay packet & if not everything likely changes. This is currently my most pressing concern.

Aside from the fact it is ridiculous that the company is being blackmailed by the "Technoking" in this way, I can't help feeling that parting with Musk would be the best thing that could happen to Tesla as a company. Obviously it would cause a wave of selling in the short term but long-term I think it would be for the best. Over the last 5 years he's become more of a liability than a benefit, chasing dreams like the Cybertruck when they could have delivered a (relatively) more normal pickup like the Rivian R1T in half the time, freeing up resources to go full steam on Model 2.

Then there's the effect of Musk on Tesla's brand - they dropped 50 places in the Axios Harris poll of top 100 brands in the US, still ranking highly for Products, but falling behind on Trust, Character and Citizenship. Or to put it more succinctly :

Sorry for delay in reply, busy with honey bee swarms

Yes,3rd party data is suspect which I did note in my reply to Howard, but as an overall quick comparison it is often useful.

The most serious impediment to growth is not having desirable products at the right price, and Tesla (Q1 deliveries down 9%, car revenues down 13% let us not forget) seems to have more of those impediments than most of the competition.

Tesla models are still selling very well and in this revolution one expects prices to fall. This is far more of an issue for legacy than Tesla. The depreciation on VW electric cars is horrendous.

This is the same vapourware story we've been hearing since 2016. If they're so far ahead, let's see them on the roads, generating profits for shareholders. You may scoff at other companies with robotaxis on the road, but they're gaining real world experience, both on the road and from the regulatory perspective. And if nothing else, Tesla's lack of investment in R&D has allowed other companies to catch up, they're not going to have a monopoly on robotaxis as they might have done had Musk's earliest forecasts come true. Heck, even Renault has autonomous vehicles doing real work on the roads of Paris, serving the park-&-ride at Roland Garros this year. As an aside, Renault's strategy is markedly different, they are happy to leave personal cars at the driver-assistance level, whilst concentrating on public transport with minibuses powered by their investee company WeRide.

I could sell £5 notes for 50p all day long and revenue would look impressive, but the business would soon go bankrupt. Waymo and BYD are losing money on every ride.

So it is with lidar. The customer doesn't care what technology goes into making autonomy happen - if lidar makes it happen sooner and/or better, then the customer will buy cars with lidar. And it looks like mass-market lidar will not be cripplingly expensive - we seem to be heading for around $500 for high-end units. Even if you need two on a car, that's 2% of the cost of a $50k car. That's doable.

It is not that simple. Lidar can only operate at low power levels as otherwise it will blind people as happens with US military lasers, so it is far less useful than folk think. Moreover Waymo et al are not general solutions, they are solutions in geofenced areas and are not scaleable. Neither of the companies is licensing the technology as its not profitable.

You can't have it both ways - either there is so much money in autonomy that Tesla will be justifying a $5tn market cap on the back of it - in which case margins will be fat enough for competitors to easily afford <$1000-worth of lidar sensors, or margins will be so tight that competitors can't afford $1000/car of sensors - in which case Tesla won't be making huge money off autonomy either.


If the Tesla system works it is a general solution with no geofence or lidar needed and it is licensable to other makers and provides anywhere to anywhere. Which would you prefer?

In any case, customers don't buy sensors they buy cars - if the competition can make their cars $1000 cheaper by other means (economies of scale, cheaper labour, access to cheap Chinese battery supply chain etc) then it makes no difference. Just look at the way the Chinese rideshare market is dominated by the Buick Velite 6 - it's far from the highest-tech car out there, in fact it looks rather archaic, but GM are happy to take a hit to margins and sell it cheap.

GM are losing money on most of their electric vehicles and, due to Biden's new 100% tax on China made, can't import their successful Chinese models into the US.

Aside from the fact it is ridiculous that the company is being blackmailed by the "Technoking" in this way, I can't help feeling that parting with Musk would be the best thing that could happen to Tesla as a company. Obviously it would cause a wave of selling in the short term but long-term I think it would be for the best. Over the last 5 years he's become more of a liability than a benefit, chasing dreams like the Cybertruck when they could have delivered a (relatively) more normal pickup like the Rivian R1T in half the time, freeing up resources to go full steam on Model 2.

Then there's the effect of Musk on Tesla's brand - they dropped 50 places in the Axios Harris poll of top 100 brands in the US, still ranking highly for Products, but falling behind on Trust, Character and Citizenship. Or to put it more succinctly :
[/quote]

Where is the blackmail? Tesla entered into a contract to reward Musk if difficult to achieve performance metrics were reached. The metrics were reached and then a judge decided that Tesla share holders were too stupid to understand the performance package they voted on and vetoed it while the lawyers who argued the performance package was too generous asked for a fee that is many times the going rates in the US. Essentially the legal system has been used to interfere in the capitalist system of a legally valid vote on a remuneration package. If this stand it is a move away from capitalism to a state/judiciary controlled system. When have such things been good for anyone?

Regards,