Seeking Alpha
View as an RSS Feed

Randy Carlson  

View Randy Carlson's Comments BY TICKER:
Latest  |  Highest rated
  • Volvo Makes An SUV Out Of The BMW i8 To Compete With Tesla [View article]

    I don't suppose you would allow for this, but if the battery size (range) increases and battery costs decline for PHEVs, is it not conceivable that Tesla might also achieve improvements in range and cost?

    And isn't a cheaper, longer range Tesla the likely nemesis of every PHEV on the planet?

    Just saying.
    May 25, 2015. 09:17 PM | 7 Likes Like |Link to Comment
  • Volvo Makes An SUV Out Of The BMW i8 To Compete With Tesla [View article]
    This is yet one more 'short inspired' false comparison. And, the real comparison is right here, staring us in the face.

    The actual competition faced by Model X isn't the Volvo, it's the 550 hp Range Rover. Just ask yourself, how many Range Rover sales will be stolen away by the new PHEV Volvo? Now, ask your self, how many prospective Range Rover customers already are on the waiting list for Model X?

    None of this is to suggest that Volvo's XC90 will not find customers - well at least some customers. It just isn't likely to find too many Range Rover customers, or for that matter, very many Model X customers.
    May 25, 2015. 04:31 PM | 15 Likes Like |Link to Comment
  • Tesla: Mr. Musk's Wild Ride Continues [View article]

    You have raised what may be a key question about Tesla cars, are these cars that owners fall in love with because the ownership / driving experience is superior to other cars they have owned / driven, or are Tesla's nothing more than the latest bling thing?

    We are about to find out.
    May 25, 2015. 01:34 PM | 1 Like Like |Link to Comment
  • Stationary Batteries Will Power Tesla In The Future: An Algorithmic Analysis [View article]
    In as much as EVs charged from the grid represent a new, incremental load on the grid, would it not be appropriate to calculate their 'carbon intensity' on the basis of the CO2 emissions of newly added, incremental generation?
    May 17, 2015. 01:51 PM | Likes Like |Link to Comment
  • Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said [View article]

    With their ongoing ignition switch issue, why didn't GM switch every vehicle they make to the non-ignition switch configuration two years before the first Tesla rolled off the line? Or, at least put in robust switches??

    When I hear about yet more deaths attributed to these switches, the image that it brings to my mind is of a bunch of accountants sitting around a conference table wringing their hands about how actually FIXING the problem would disrupt product schedules, and worse yet might effect next quarter's results.

    If it is this 'difficult' for GM to change something as simple as their ignition switch, how hard will it be for them to transition to making BEVs once battery costs drop to the point that BEVs are the more economic choice? I get the sense that if battery prices dropped to $50/kWh tomorrow, GM would still be making mostly ICE cars many years from now due to pure bureaucratic inertia.
    May 17, 2015. 09:21 AM | 3 Likes Like |Link to Comment
  • Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said [View article]

    Thanks for the kind words.

    I agree with you. So far, the major legacy carmakers have 'declined to play' against Tesla. The question is for how long, and to what degree will they hold back with respect to 'D' segment. I think there is an important difference when it comes to the 'kind' of competing product Tesla is going to face.

    Judging from Model S, Tesla will 'aim for jugular' with Model 3. I expect Model 3 to be 'aimed' directly at the BMW 3 Series, from the 320i, all the way to the M3. If other carmakers do not aim their 'D' segment BEVs directly at the top-of-segment market leaders, then it seems likely they will 'miss the mark' with respect to Tesla's Model 3, and Tesla will have plenty of room in this segment.

    On the other hand, should a legacy manufacturer go after the BMW 3 Series as Tesla is likely to do with Model 3, then that carmaker will cannibalize their BMW competing ICE product, and be the same kind of threat to top-of-segment ICE product as Tesla. I don't see such a strategy being attractive to BMW who leads in this area. Audi on the other hand may be willing to write-off the A4/S4 (or just make them Tesla-like BEVs) as a strategy for taking a bigger bite out of BMW. But the companies I see as most likely to field truly Tesla competitive BEVs in 'D' segment are insurgents with little market share, and looking for traction and the opportunity to take share from the leaders. Volvo, Jaguar, Infinity (Nissan), Acura (Honda) all come to mind.

    The interesting thing about this, at least to my mind, is that a small, insurgent company entering the segment is the least likely to stand-up their own charging network, while at the same time being able to enter the market with a supported, road trip capable BEV at the earliest point offers the insurgent the greatest leverage. This would seem to make joining Tesla's SuperCharger network particularly attractive to a market insurgent...
    May 16, 2015. 09:45 PM | 2 Likes Like |Link to Comment
  • Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said [View article]

    The argument that, if Tesla has access to the technology, then so do all the other carmakers, and they will certainly match anything that Tesla does, has one little problem.

    Tesla has been steeling sales from Mercedes, BMW, Cadillac and others in 'F' segment for almost three years by offering BEVs that out-perform similar size, similar price ICE cars. But, in spite of this on-going attack on their high-end market, NONE of these companies has used the 'available technology' to build a BEV product that matches Model S.

    The reason may be that they can't build such a car from a technical standpoint. It may be that they can't figure out how to put such a high end, high performance BEV in their product lineup without cannibalizing their high margin ICE product. It might even be that all these other carmakers are just being especially nice to poor, little, new-entrant Tesla... Take your pick.

    I can't see but that legacy carmakers face the same obstacles to competing with Tesla in 'D' segment that they have trying (or not trying) to compete with Tesla in 'F' segment. I don't see the 'magic' that is going to make the situation in 'D' segment any different than what we see in 'F' segment - only that Tesla's sales are likely to higher simply because 'D' segment sells more units than 'F' segment.

    I do agree that there will be some 'entry level' BMW 320i customers for which the range of the entry level Model 3 will be insufficient. But that is not going to true of all entry level BMW customers, and Tesla only needs to carve away a fraction of BMW's 3 Series business (and that of Audi, Lexus, Infinity, Cadillac, Mercedes, Volvo...) to win. By the time you get even to the 320ix price point, the Model 3 equivalent of the S70D is likely to be 'price competitive' and as you move up to the BMW 335i / 335ix, and even the M3, BMW will be competing against ~300 mile range Model 3s, which will provide a good enough road-trip solution for very many would be BMW customers.
    May 16, 2015. 06:23 PM | Likes Like |Link to Comment
  • 2 Incremental Positives For Tesla In California [View article]

    You are, of course, referring to the noble work of CalDePop (the California Depopulation Comission), that public interest lobby that has for years been urging the state to close all the freeway off-ramps and thereby force residents to leave for other states...
    May 16, 2015. 02:58 PM | Likes Like |Link to Comment
  • Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said [View article]

    I would think a 200+ mile Model 3 will be an entry model for ~$35K base, and that most sales will be of ~300 mile versions at ~$42k base and that ASP will be ~$55-60K (because, as with Model S, Tesla seems to be selling predominantly their high-end version, with substantial take on the options). A top-of-range Model 3 AWD-Performance version, well optioned would, I presume be priced like BMW's M3, or just shy of $100,000. I would also expect such a performance Tesla Model 3 to have performance fully competitive with the BMW M3 - better acceleration, poorer sustained top speed, generally competitive on balance, and over all - to the point that it will take perhaps 1/3 of the market for cars like the M3 and Audi's S4...

    Remember, there are a lot of ICE cars in this segment and Tesla does not, by any means, need to dominate 'D' segment to reach their sales goals.

    You are correct that Model S isn't taking many BMW 3 Series sales (well, maybe an M3 sale here and there...) Model S is positioned against BMW 6/7 Series, and maybe some of their top-end 5 Series cars. It is doing well in 'F' segment, and if Model 3 does similarly well in 'D' segment, Tesla will easily get the 500,000 annual units they are aiming for (~100,000 S.X, ~400,000 Model 3s).
    May 16, 2015. 02:49 PM | 1 Like Like |Link to Comment
  • Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said [View article]

    So, you do think legacy carmakers are capable, willing, and plan to make cars competitive with their own, high margin offerings in 'D' segment, for instance? Say something like a BMW 335ix, Audi S4..., something that competes on BOTH performance and price? So far, I have seen neither prototypes nor heard any definitive announcement to support legacy carmakers doing that.

    If Chevy delivers something like the Bolt, that car isn't a competitor for a BMW performance sedans like the 320i, ix or 335, let alone the M3. Tesla has said may times that Model 3 will aim at the BMW 3 Series ICE product, and Tesla has DEMONSTRATED the ability to deliver BEVs with true road trip capability and the kind of performance needed to compete in this arena, in quantity, world wide, at price points comparable with similar size, similar performance ICE product.

    Chevy can sell all the bolts they want, BMW can sell all the i3s (even with greater range) that they want, and Nissan can sell all the '200 mile range' LEAFs they want and NONE of these cars will seriously compete against BMW 3 Series ICE product. And if they won't compete against BMW's top-of-segment cars, they aren't going to be competition for Model 3, either. Any price pressure on Tesla would come, if it arrives at all, should BMW, Mercedes, Audi, Cadillac, Lexus, Infinity... start cutting the price of their high-end ICE cars...

    If Chevy placed a BEV with the performance of a P85D in their showrooms, that electric car would 'blow the doors off' their Corvette. Tesla's Model 3, based on the experience and technology seen in Model S, but scaled to a smaller size, lower price point, and with the benefit of higher volume manufacturing efficiencies and battery improvements, will likely offer this kind of performance at BMW 3 Series price points. It is unthinkable that Chevy, or any legacy ICE carmaker is going to offer that kind of BEV in showrooms featuring their top-of-segment ICE product (except possibly with a LARGE price premium - as with the AMG SLS BEV).

    The Bear thinking here seems to be that because the Bolt, or some similar BEV offering(s) from some legacy carmaker(s) may cost less than Tesla's Model 3, that Tesla will lose sales and/or suffer price pressure. But just how cheap does a Bolt have to be for it to steal away sales of BMW's M3 or 320ix. I would argue that the Bolt is unlikely would steal a single M3 customer, even if GM gives them away, for free. And if BEVs from legacy carmakers are not going to compete with top-of-segment cars like BMWs, they simply will not compete with Tesla offerings, either.

    My expectations for Tesla's grid storage products is not based on Elon's tweets, but rather on my understanding of the economics of grid storage in the context of an electric grid that is shifting to more renewable generation. Tesla's approach of using their automotive battery, pack, management and power electronics capability gives them HUGE cost and, in many cases just as important, dramatic size advantages compared with competitors in this market.

    What most of Tesla's competitors in the grid storage space, just as their competitors in the BEV space have failed to grasp is that the 'many small cells' approach to making big batteries achieves BOTH higher battery performance AND lower $/kWh cost. By applying their liquid cooling systems from their cars, Tesla achieves further size and cost advantages through very dense packaging. And, finally, Tesla fully understands the 'value' in grid storage, is building centralized management systems for distributed storage and has partnered with key companies (SolarCity, Enernoc...) to both efficiently deploy and maximize value from their grid storage product.

    Tesla's electric cars, SuperCharger recharging infrastructure, and grid storage products should be viewed as a continuum of product that manage, deliver and utilize renewable energy at scale, maximizing utility and value by managing the physical elements and collecting, organizing and applying the associated information. Tesla's model works very well if legacy carmakers make more BEVs, especially if those BEVs are (eventually) road-trip-capable and able to use Tesla's SuperCharger network. SuperChargers, in synergy with grid storage and renewable generation sources will offer a very economically compelling solution for road-trip charging other makers BEVs because Tesla will have reached critical mass, and present a high barrier to entry, especially for companies 'incrementally' entering the long range, fast-chargeable BEV space.
    May 16, 2015. 01:30 PM | 4 Likes Like |Link to Comment
  • Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said [View article]

    You seem to argue that legacy carmakers have lower costs than Tesla, owing to their independent sales / service channel, and that legacy carmakers aren't competing against Tesla only because they know that nobody really wants a Tesla in the first place.

    That sounds good for Tesla shareholders because it suggests that Tesla can go on growing at 50% CAGR without any likelihood legacy carmakers will ever field competing product...

    I would not disagree with you when it comes to Tesla's rising costs and headcount, especially in sales / G&A. Of course, if they are setting out to make further, dramatic increases in the scope of the company, some at least of that bloated G&A may be at work increasing the company value.

    Tesla has just entered (publicly) the market for grid-connected battery storage, at a price point ($250/kWh) that is roughly HALF of what others in this space have been targeting. Between sales of residential, commercial and utility scale product - all scaleable, at low cost and good margins from Tesla's GigaFactory and automotive battery pack technology - they appear to already have more than a billion dollars of near-term business in their sights. If Tesla needs to go to the market for a few additional billions of capitalization to pursue this new business area (which builds DIRECTLY on their automotive battery and power electronics expertise) that will be an easy sell to investors. And based on the history of Tesla's previous offerings, raising additional capital will most likely enhance shareholder value.
    May 16, 2015. 11:18 AM | 3 Likes Like |Link to Comment
  • 2 Incremental Positives For Tesla In California [View article]
    Did I miss something or did the author chose to completely ignore all those new hydrogen fuel cell cars that just a short while ago he offered as a dire threat to Tesla and BEVs in general? Don't HFCVs get stickers, too? Don't the HFCVs come with very attractive lease terms?...

    The very premiss of the article, that BEV sales go up when gas is expensive and down when gas is cheap, doesn't apply to Tesla. Last fall, when gas prices were plunging, Tesla had record sales, did they not? This suggests that rising gas prices are unlikely to 'save' Tesla sales and the company will just have for plod ahead at ~50% CAGR with no serious hope of accelerating their sales to the level the Bears believe the Bulls expect...

    The very fundamental notion that continues to escape the Bears is that Tesla is NOT competing against other BEVs. They are competing against high-end 'F' segment, and soon top-of-range 'D' segment, ICE cars. Until legacy carmakers deliver BEVs that compete with their own high-end / top-of-line ICE product, they will not be competing with Tesla.

    PHEV sales have had very little impact on sales of comparable ICE product - except to the degree that these vehicles save gas (in amounts rarely justified by the vehicle price premium), and of course, they used to get one of those 'green stickers'. The Panamara PHEV had very little impact on ICE Panamara sales, and negligible impact on similar priced Model S sales. The Cadillac ELR, priced in the same range as Model S does not seem to have impacted anything, except perhaps a brick wall.

    Buyers who buy a LEAF or i3 instead of a Tesla because they can't afford Tesla's $76K entry price, were never going to be Model S customers, and imagining Tesla will loose such customers to Nissan and BMW is just that - imagining...
    May 16, 2015. 10:53 AM | 12 Likes Like |Link to Comment
  • Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said [View article]

    If you still imagine that making Model S cars isn't a profitable business, you haven't been paying attention to Tesla's financials.

    Tesla is spending ridiculous amounts standing-up SuperChargers, building out company owned sales and service organizations and investing in their supply chain. It is these things that give the company overall operating losses, not the making of the cars.

    What the legacy carmakers don't know how to do when it comes to making Model S competitive cars is how to sell such cars through their existing channel without destroying sales of their existing high-end ICE product. And make no mistake, they really, really don't know how to do that...
    May 16, 2015. 10:01 AM | 1 Like Like |Link to Comment
  • Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said [View article]
    Anton, Bryce,

    If Cadillac wanted to 'compete' with Tesla, why didn't they make a car that was competitive with Model S?

    After all, what would they need beyond a battery, a motor and 4 wheels?

    Oh yeah, maybe they just don't know how...
    May 16, 2015. 02:34 AM | 3 Likes Like |Link to Comment
  • Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said [View article]
    We are witnessing a major transformation of human society. The age of hydrocarbons is starting to end and the age of renewable energy is beginning.

    We are at that first little bend of the curve that starts a transition. Most people, many companies and quite a few governments haven't got it yet. Elon Musk is one of the people, and Tesla is one of the companies that have.

    The cost of renewable wind and solar energy is already lower than oil, coal, natural gas or nuclear for new-build generation. Batteries are reaching the point where they will not only make an 'all renewable' grid practical, they will make renewable electricity the lowest cost path, too.

    The same story applies to surface transportation. Electric cars are already cheaper to run, and we are rapidly closing in on the point where they will be cheaper to make and cheaper to buy as well. Given that we will continue to have an electric grid, the energy distribution to battery electric cars will have the lowest cost and highest efficiency compared with alternative renewable fuels like hydrogen, biofuels, or flow battery reactants.

    If there is a question about Tesla, it is not whether electric cars will succeed. The arguably open question is whether Tesla will succeed in deriving economic success from the coming transition? So far, Tesla is way ahead of the legacy car companies when it comes to performance, range, and the ability to deliver a BEV at a price comparable with similar size, similar performance ICE cars. So far, Tesla is way ahead of any energy company or 'service provider' in standing-up a practical, effective road trip recharging solution. Tesla didn't get to first place by dumb luck. Legacy carmakers will have to be a lot more agile to just keep out of their own way, let alone catch Tesla.

    GM has been building cars with ignition switches that kill people for a decade or more. Tesla not only eliminated the switch and the key, they in many ways eliminated the concept of turning the car ON and OFF altogether. If there is something in the Tesla story open to skepticism, it is the notion that GM and other legacy carmakers will ever catch up with Tesla.

    The fact that Tesla is doing things that over the long term will make a positive contribution to society and to the environment gives their investors a 'warm fuzzy feeling', and perhaps even a 'Tesla grin'. But it is the disruptive economics of renewable energy and battery vehicles that will make Tesla investors rich.
    May 16, 2015. 02:17 AM | 6 Likes Like |Link to Comment