Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to johnstevens77,Bhoddhisatva,scotia,Anonymous,Cornytiv34, for Donating to support the site

Musk endeavours

The Big Picture Place
odysseus2000
Lemon Half
Posts: 6362
Joined: November 8th, 2016, 11:33 pm
Has thanked: 1530 times
Been thanked: 959 times

Re: Musk endeavours

#146207

Postby odysseus2000 » June 17th, 2018, 6:03 am

dspp
o2000,
If I may say so, and please excuse me if I am wrong, but your last two posts are quite identified with Musk. I am trying to understand and appreciate Tesla as being, at least somewhat, distinct from Musk. So wherever possible I am quantitative, and wherever not I am qualitative but aligned in some sense with business-relevant matters. I am very deliberately not worshipping at the feet of Musk.
regards,
dspp


The big problem with business that are built by a single individual is that should something happen to that person, the whole business often suffers.

From my studies of historical entrepreneurship there has rarely been a case when the departure of a founder has had a positive impact on the business.

If you think about recent business, e.g. the retirement of Bill Gates, lead to a long decline in Microsoft made better when Gates came back part time and the business moved to cloud to supplement the declining PC market. Apple went through a similar decline when Steve Jobs died, Walmart declined after the death of Sam Walton. Msft, Apple & Walmart had been built into huge business when the founders left and yet all were impacted badly. Tesla is still a very small business and as such if Musk was to go it is very likely imho, that the share price would tank.

This is in stark contrast to business that have evolved beyond the original founder such as one of he big autos. I doubt many folk know or care about who is the CEO of GM, or who the CEO of other big business such as GE or Exxon are, yet both them were at one time very CEO dependent: Edison and Rockerfella in the latter two cases.

So yes I can see why looking at the business not the CEO is an attractive way to do things, but from an investor/trader perspective interested in the share price the founder/CEO makes a huge difference to what investors/traders will pay for the business.

Folk are not created equal and no matter how good a prospective CEO might be on paper very few people have the necessary qualities to run a business in a way that brings a loyalty from their consumers. It is a strange emotional interaction that anyone skilled in the hard stuff like science, engineering and medicine will have trouble grasping, because all of these are endeavours where the focus is on the underlying calculus, not the overlying emotion.

In my studies it is the emotion that sets the share price not the skill of the folk who make things happen. The people who most recognise this are the politicians, the ones who connect with the emotion of the moment are the ones who are seen as doing great things. Whether the UK would have surrendered to Germany had Churchill not been chosen as PM we will never know, but before his choice there was a lot of government that wanted peace with Hitler what ever the cost. It was not as Churchill noted his contributions that gave us victory, but he was the roar of the lion that lifted the UK in those terrible days of 1940.

Regards,

BobbyD
Lemon Half
Posts: 7814
Joined: January 22nd, 2017, 2:29 pm
Has thanked: 665 times
Been thanked: 1289 times

Re: Musk endeavours

#146233

Postby BobbyD » June 17th, 2018, 9:22 am

dspp wrote:Tesla contains nothing that a trad auto builder couldn't do, and that is a fair point, except they haven't done it. When you speak with trad high end German auto senior staff they admit how far behind they are in doing it. Achingly far behind. The Tesla S that I was in blows away a BMW 7-series in terms of real-world driving/travelling experience.

That speed-to-market argument is the nub of the argument for me. There is no doubt that at product level the Tesla is the way forwards, or clones thereof.


Speed to market is one thing, speed to driveway another... In order to compare like with like at the moment you have to look at what other autos will be pumping out in 2 years time when your model 3 will actually arrive. Meanwhile Tesla is building a market for them while they extract the last drops out of petrol and diesel only set ups already bought and paid for.

Electric cars are simpler than oil powered cars, it seems unlikely that companies which have spent the last 50 years building a more complex product in high volume are going to find themselves stumped by the increased simplicity in their generation of products once they turn their mind to serious large scale production.

Actress Mary McCormack films moment Tesla Model S catches fire
Tesla is investigating after actress Mary McCormack filmed her husband's electric car bursting into flames.

...

"@Tesla This is what happened to my husband and his car today," she wrote.

"No accident, out of the blue, in traffic on Santa Monica Blvd.

"Thank you to the kind couple who flagged him down and told him to pull over. And thank god my three little girls weren’t in the car with him."


- https://news.sky.com/story/actress-mary ... e-11407385

PeterGray
Lemon Slice
Posts: 847
Joined: November 4th, 2016, 11:18 am
Has thanked: 782 times
Been thanked: 343 times

Re: Musk endeavours

#146238

Postby PeterGray » June 17th, 2018, 9:33 am

dspp wrote:o2000,
If I may say so, and please excuse me if I am wrong, but your last two posts are quite identified with Musk. I am trying to understand and appreciate Tesla as being, at least somewhat, distinct from Musk. So wherever possible I am quantitative, and wherever not I am qualitative but aligned in some sense with business-relevant matters. I am very deliberately not worshipping at the feet of Musk.
regards,
dspp


While I agree with your approach, I do have to agree with ody's view that if something put Musk out of action it would have a major negative effect on the SP. I'm not sure it's the biggest risk to Tesla though - there are plenty of more mundane risks associated with getting to full commercial production which are probably matter significant and likely.

However, there's also a possible view that taking Musk out of the picture is exactly what Tesla needs. It's at a stage where letting those boring bean counters and engineers sort the job out might be just what's needed.

Peter

odysseus2000
Lemon Half
Posts: 6362
Joined: November 8th, 2016, 11:33 pm
Has thanked: 1530 times
Been thanked: 959 times

Re: Musk endeavours

#146322

Postby odysseus2000 » June 17th, 2018, 12:47 pm

BobbyD
Electric cars are simpler than oil powered cars, it seems unlikely that companies which have spent the last 50 years building a more complex product in high volume are going to find themselves stumped by the increased simplicity in their generation of products once they turn their mind to serious large scale production


Yes, but if you have borrowed or spent your own cash to build lines that are expected to last decades with everything amortised to such time scales, do you take earlier losses, & build competing cars that eat your legacy business?

All the executives in these business are trained to think in long term plans & find it very difficult to change even if they see the logic as abandoning the emotion of what has always worked is hard.

Kodak was a good recent example of management failing to change & having their business eaten by digital camera makers. Why didn't Kodak change to making digital cameras?

Regards,

BobbyD
Lemon Half
Posts: 7814
Joined: January 22nd, 2017, 2:29 pm
Has thanked: 665 times
Been thanked: 1289 times

Re: Musk endeavours

#146360

Postby BobbyD » June 17th, 2018, 6:18 pm

odysseus2000 wrote:Yes, but if you have borrowed or spent your own cash to build lines that are expected to last decades with everything amortised to such time scales, do you take earlier losses, & build competing cars that eat your legacy business?


Which is why the traditional automakers are continuing to produce traditional autos while Tesla and governments around the world increase the market to the size where it is worth getting seriously involved in.

Tesla are haemorrhaging money building electric cars, the traditional automakers aren't. Not quite sure how you see this as a boon for Tesla.

odysseus2000
Lemon Half
Posts: 6362
Joined: November 8th, 2016, 11:33 pm
Has thanked: 1530 times
Been thanked: 959 times

Re: Musk endeavours

#146381

Postby odysseus2000 » June 17th, 2018, 11:00 pm

BobbyD

Which is why the traditional automakers are continuing to produce traditional autos while Tesla and governments around the world increase the market to the size where it is worth getting seriously involved in.

Tesla are haemorrhaging money building electric cars, the traditional automakers aren't. Not quite sure how you see this as a boon for Tesla.


The trajectory for Tesla with the 3rd model 3 production line is for them to be cash flow positive soon.

Meanwhile the legacy car makers continue as they have been, sales covering very large over heads, but if sales begin to fall suddenly they can go cash flow negative as happened to GM in the Great Recession, followed by bankruptcy. If the legacy makers have to start making electric, they hurt all the sales of existing models at a time when they will be desperate for cash to make factories for batteries, electric motors etc. The banks might smile on them or they might want much higher rates to counter increased risk. This can all get out of hand very quickly as no matter what the overheads will not go away unless they shut down a lot of production & if so they will lose the chance of revenue from the production they cut.

Many think the legacy autos are so big & wealthy that they can ride out any storms. Maybe, but legacy auto has never faced such a secular head wind & so who knows. As I have mentioned many times, many big companies have been killed by new technology. Legacy auto looks vulnerable to me, but I could be wrong. Each investor/trader has to weigh up everything and act according to what their analysis tells them.

Regards,

odysseus2000
Lemon Half
Posts: 6362
Joined: November 8th, 2016, 11:33 pm
Has thanked: 1530 times
Been thanked: 959 times

Re: Musk endeavours

#146382

Postby odysseus2000 » June 17th, 2018, 11:19 pm

Musk tweeeted out this link, which is kinda interesting as it does in some ways correlate with some of the anti-Tesla stuff I see:

https://m.dailykos.com/stories/2018/5/2 ... the-Future

Of course who is right? Is it this article or the naysayers?

Regards,

TUK020
Lemon Quarter
Posts: 2039
Joined: November 5th, 2016, 7:41 am
Has thanked: 762 times
Been thanked: 1175 times

Re: Musk endeavours

#146391

Postby TUK020 » June 18th, 2018, 7:04 am

odysseus2000 wrote:
Kodak was a good recent example of management failing to change & having their business eaten by digital camera makers. Why didn't Kodak change to making digital cameras?

Regards,


It is often not the change in technology that catches companies out, but the changes in economics and patterns of distribution and usage that result.
Kodak was investing heavily in digital under George Fisher, but missed the implications of cameras being incorporated into phones, and images being shared digitally.
It wasn't digital cameras that killed Kodak, it was cell phones destroying the mass market for cameras that did.
Welcome to the world of Instagram and selfie sticks.

Yet to see how any of this plays out in cars. Possibly autonomous driving is far more destabilising than battery power/electric motors.

PeterGray
Lemon Slice
Posts: 847
Joined: November 4th, 2016, 11:18 am
Has thanked: 782 times
Been thanked: 343 times

Re: Musk endeavours

#146403

Postby PeterGray » June 18th, 2018, 9:19 am

Meanwhile the legacy car makers continue as they have been, sales covering very large over heads, but if sales begin to fall suddenly they can go cash flow negative

I think that's a key assumption in your argument - that there will be a sudden shift away from HC to electric. It's not something I see happening. Electric will grow over time, but the timescale is years and the big auto cos have no trouble working with that. They are all (or certainly nearly all) already making electric cars, and more than Tesla are (individually in many cases). They are used to rebuilding production lines every few years. I don't see any likelihood of the sort of sudden demise that you are suggesting. They can easily cope with a decade or more long transition.

Tesla are interesting in some ways - performance electric etc - but they are very small part of the story of car production now and I can't see that changing a great deal in the future.

Peter

BobbyD
Lemon Half
Posts: 7814
Joined: January 22nd, 2017, 2:29 pm
Has thanked: 665 times
Been thanked: 1289 times

Re: Musk endeavours

#146414

Postby BobbyD » June 18th, 2018, 10:22 am

odysseus2000 wrote:The trajectory for Tesla with the 3rd model 3 production line is for them to be cash flow positive soon.


What is the projection for when Musk's projections on production and profitability becoming reliable?

odysseus2000 wrote:Meanwhile the legacy car makers continue as they have been, sales covering very large over heads, but if sales begin to fall suddenly they can go cash flow negative as happened to GM in the Great Recession, followed by bankruptcy. If the legacy makers have to start making electric, they hurt all the sales of existing models at a time when they will be desperate for cash to make factories for batteries, electric motors etc. The banks might smile on them or they might want much higher rates to counter increased risk. This can all get out of hand very quickly as no matter what the overheads will not go away unless they shut down a lot of production & if so they will lose the chance of revenue from the production they cut.

Many think the legacy autos are so big & wealthy that they can ride out any storms. Maybe, but legacy auto has never faced such a secular head wind & so who knows. As I have mentioned many times, many big companies have been killed by new technology. Legacy auto looks vulnerable to me, but I could be wrong. Each investor/trader has to weigh up everything and act according to what their analysis tells them.

Regards,


The better legacy autos are really good at bolting things together to make therm in to cars. Bolting different simpler things together to make them in to cars really isn't going to phase them. If Tesla owned a patent on the battery or the electric motor they would have a significant advantage. As long as it is just bolting stuff together the solvent corporations with a long history of successfully bolting things together have two significant advantages, as do the parts suppliers who sell their electrical voodoo across the industry rather than reserving it for in house, an area which tends to get overlooked in this debate.

In the long run electrification is likely to see an increase in cars sold as emissions requirements tighten nationally and locally and social pressure makes driving a clean electric more desirable than driving a dirty diesel or polluting petrol. That is good for competent companies which specialise in bolting things together to make them in to cars.

It'll be interesting to see what choices Porsche make with the Taycan. https://www.iol.co.za/business-report/i ... e-15438686

Meatyfool
Lemon Slice
Posts: 313
Joined: November 4th, 2016, 11:43 am
Has thanked: 2 times
Been thanked: 55 times

Re: Musk endeavours

#146436

Postby Meatyfool » June 18th, 2018, 1:06 pm

TUK020 wrote:Yet to see how any of this plays out in cars. Possibly autonomous driving is far more destabilising than battery power/electric motors.


Absolutely. When autonomous actually works, TaaS (Transport as a Service) will take off - why own a very expensive depreciating asset that sits idle 95% of the time?

The manufacturers to survive will be those that get the orders for 10,000 vehicles or more from the service providers.

Meatyfool..

Meatyfool
Lemon Slice
Posts: 313
Joined: November 4th, 2016, 11:43 am
Has thanked: 2 times
Been thanked: 55 times

Re: Musk endeavours

#146437

Postby Meatyfool » June 18th, 2018, 1:14 pm

BobbyD wrote:What is the projection for when Musk's projections on production and profitability becoming reliable?


Well, possibly shortly after the end of the month with the Q2 announcement (production at least). Even if they fall just short, they will almost certainly hit the target the following month. That said, Elon will no doubt advertise another target to miss - can't stop himself!

Profitability wise - so long as the working capital holds out, that still looks like Q3/Q4 this year.

Meatyfool..

odysseus2000
Lemon Half
Posts: 6362
Joined: November 8th, 2016, 11:33 pm
Has thanked: 1530 times
Been thanked: 959 times

Re: Musk endeavours

#146438

Postby odysseus2000 » June 18th, 2018, 1:33 pm

TUK020 wrote:
Yet to see how any of this plays out in cars. Possibly autonomous driving is far more destabilising than battery power/electric motors.


Absolutely. When autonomous actually works, TaaS (Transport as a Service) will take off - why own a very expensive depreciating asset that sits idle 95% of the time?

The manufacturers to survive will be those that get the orders for 10,000 vehicles or more from the service providers.

Meatyfool..


This is a super interesting concept, the problem I have in understanding it is what about rush hour including the School run. At these times of day the roads are full of traffic & it's difficult for me to see how this traffic could be handled by a smaller fleet of cars. But for many folk who work from home, house spouse, retired etc it has huge potential imho. Currently e.g. It is a pain to visit dentists, doctors, hospitals, hair dressers etc because of the parking. If one could be taken, then collected it would be a much better experience.

Regards,

BobbyD
Lemon Half
Posts: 7814
Joined: January 22nd, 2017, 2:29 pm
Has thanked: 665 times
Been thanked: 1289 times

Re: Musk endeavours

#146439

Postby BobbyD » June 18th, 2018, 1:40 pm

Meatyfool wrote:Absolutely. When autonomous actually works, TaaS (Transport as a Service) will take off - why own a very expensive depreciating asset that sits idle 95% of the time?

The manufacturers to survive will be those that get the orders for 10,000 vehicles or more from the service providers.


I've always believed autonomous will result in a dramatic shift in car ownership and usage, but you could make that same logical argument about some car owners now. There are surely cars sat on drives up and down this land which are used so infrequently that their owners would have been better off putting the upfront cost in to an uber account, but humans like owning things. There is also a reverse economy, in that owning an autonomous vehicle will allow you to use your own vehicle for trips which, hic, you would previously have had to take a taxi.

While we are talking £120k for a new vehicle obviously you are going to see service providers driving uptake accompanied by a very limited number of private sales but with scale and increasing experience in manufacture and technological advances bringing costs down it'll be interesting to see if that margin remains wide enough for the effect to be long lived. I'm reminded of the radar equipped Jag I posted about further upthread, once an unconscionably expensive component for a car now available in sub mid-range vehicles. I'm beginning to wander if we might all have assumed a little too quickly that the change will be so dramatic or so undeniably futuristic.

As regards manufacturers, how much autonomous is provided by manufacturers and how much is provided by third party auto-part makers will have a dramatic effect.

BobbyD
Lemon Half
Posts: 7814
Joined: January 22nd, 2017, 2:29 pm
Has thanked: 665 times
Been thanked: 1289 times

Re: Musk endeavours

#146440

Postby BobbyD » June 18th, 2018, 1:42 pm

odysseus2000 wrote:This is a super interesting concept, the problem I have in understanding it is what about rush hour including the School run. At these times of day the roads are full of traffic & it's difficult for me to see how this traffic could be handled by a smaller fleet of cars.


But you could destroy every car not on the road at peak times and still have enough capacity to run through the day, and allow for the necessary maintenance and recharging across the fleet.

dspp
Lemon Half
Posts: 5884
Joined: November 4th, 2016, 10:53 am
Has thanked: 5825 times
Been thanked: 2127 times

Re: Musk endeavours

#146442

Postby dspp » June 18th, 2018, 1:58 pm

Meatyfool wrote:
BobbyD wrote:What is the projection for when Musk's projections on production and profitability becoming reliable?


Well, possibly shortly after the end of the month with the Q2 announcement (production at least). Even if they fall just short, they will almost certainly hit the target the following month. That said, Elon will no doubt advertise another target to miss - can't stop himself!

Profitability wise - so long as the working capital holds out, that still looks like Q3/Q4 this year.

Meatyfool..



That is a fairly large "provided the working capital holds out", hence the significant short interest.

regards, dspp

odysseus2000
Lemon Half
Posts: 6362
Joined: November 8th, 2016, 11:33 pm
Has thanked: 1530 times
Been thanked: 959 times

Re: Musk endeavours

#146445

Postby odysseus2000 » June 18th, 2018, 2:19 pm

That is a fairly large "provided the working capital holds out", hence the significant short interest.

regards, dspp


Then again if Tesla announce a partnership with someone like tencent or someone else, the whole short position thesis gets into serious trouble. I have no idea if something like this happens, but if I was short I would fear an announcement like this.

Regards,

Meatyfool
Lemon Slice
Posts: 313
Joined: November 4th, 2016, 11:43 am
Has thanked: 2 times
Been thanked: 55 times

Re: Musk endeavours

#146446

Postby Meatyfool » June 18th, 2018, 2:31 pm

odysseus2000 wrote:This is a super interesting concept, the problem I have in understanding it is what about rush hour including the School run. At these times of day the roads are full of traffic & it's difficult for me to see how this traffic could be handled by a smaller fleet of cars. Regards,


Yes, not really fully explained when Tony Seba prophesised this happening early-mid 2020s!

I don't have time for a long post ...

Imagine how efficient buses would be if they knew in advance who wanted the service, where and when! TaaS would essentially be Uber for buses in the rush hour. However, that doesn't mean that they end up with huge bus like vehicles that sit idle 95% of the time. Some vehicles will be buses, but others may be a bit more "sci-fi".

Off the wall, but imagine tiny individual cars (let call them pods), that do the last mile and a half to your home. They then return to the main "trunk" road where they "road train" - one behind the other (oddball, two by two side by side; major oddball, one on top of the other - but not in the 2020s!).

Just as Uber has premium and luxury rates, people can choose the service that fits their pocket and expectations.

Meatyfool..

Meatyfool
Lemon Slice
Posts: 313
Joined: November 4th, 2016, 11:43 am
Has thanked: 2 times
Been thanked: 55 times

Re: Musk endeavours

#146447

Postby Meatyfool » June 18th, 2018, 2:33 pm

dspp wrote:That is a fairly large "provided the working capital holds out", hence the significant short interest.

regards, dspp


From the article referred to earlier, Elon can just borrow on some of his SpaceX investment, and use it to see Tesla through a bump in the working capital. He has never shown himself to be afraid of being "skin in"

Meatyfool..

redsturgeon
Lemon Half
Posts: 8910
Joined: November 4th, 2016, 9:06 am
Has thanked: 1309 times
Been thanked: 3665 times

Re: Musk endeavours

#146823

Postby redsturgeon » June 20th, 2018, 9:04 am

http://uk.businessinsider.com/tesla-mod ... ?r=US&IR=T

Apparently a new production line has been built from scrap parts in a tent in two weeks...and Musk says it is better than their existing production line!

All seems a bit Potemkinesque to me.

John


Return to “Macro and Global Topics”

Who is online

Users browsing this forum: Urbandreamer and 8 guests