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Steve Funk

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  • Why Does Tesla Not Appear In The Detroit Auto Show Press Conference Schedule? [View article]
    double E,
    "estimating quarterly sales midway into the quarter is a lot easier than it would be for a GM where the majority of sales are made from dealer inventory."

    That is not how the sales reporting is handled with GM (or Toyota for that matter). The major manufacturers provide excellent transparency on production volumes on a monthly basis. Check out the detail for Toyota monthly reporting, then compare it with the aggregated quarterly numbers and then decide if you think Tesla is being upfront with investors.
    Dec 16, 2014. 04:45 PM | 2 Likes Like |Link to Comment
  • Why Does Tesla Not Appear In The Detroit Auto Show Press Conference Schedule? [View article]
    "I'm an investor, you're not"
    And it is obvious that you know very little about manufacturing, or General Motors, or recalls. cparmerlee has great insight into manufacturing and associated costs. Unlike most California businesses, manufacturing costs do matter a great deal to the investment community. If a capital intensive, high cost manufacturing business like Tesla replaces 100% of a very expensive component "just-in-case" then I am not sure that company makes for a good long term investment. In the auto business manufacturing and warranty costs can sink a company quickly.
    Dec 16, 2014. 04:33 PM | 3 Likes Like |Link to Comment
  • Why Does Tesla Not Appear In The Detroit Auto Show Press Conference Schedule? [View article]
    The 2014 Corvette sold 37,288 cars.

    So it looks like Tesla will be thousands of units behind the Corvette. I am pretty sure that Elon would swap with Corvette numbers in a minute.

    Fact is that the Tesla will never be a club racer. It will be a snappy sedan around town, and that will have to be enough given its inherent physical limitations.
    Dec 15, 2014. 07:43 PM | 2 Likes Like |Link to Comment
  • Tesla: Why This One Thing Is The Biggest Game Changer Yet [View article]
    Mr. Musk did a great job of painting an enticing picture with his battery swapping scheme. However, it was just another of his well crafted PR pieces (that definitely cost money) that was not fully thought out. Or perhaps Mr. Musk, like a politician, knew that the public memory is short and months down the road people will still feel good about the company but not really remember why.

    From an investor standpoint the battery swap is a bust. There may be specific geographic areas where you could fund such a facility and make it worthwhile. The scheme might work in very high density, high income areas such as Manhattan, Silicon Valley, etc but in general there is a logistics problem and the business model won't scale.

    Just do a back of napkin estimate on the inventory needed for a busy shop to swap and charge batteries in a day. If you are only doing a dozen/ day how are you going to pay for the equipment and labor? If you are doing hundreds/ day like a gas station where are you going to stack and charge all of the battery packs? You will need cooling and charging systems for each battery brought back. Then there is the billing mechanism that would have to make allowances for swapping a five year old pack with a new one. There is no profitable way to make this work.
    Oct 16, 2014. 10:58 AM | 12 Likes Like |Link to Comment
  • EVs Winning Is Not The Same As Tesla Winning [View article]
    You have about half the NUMMI story correct. When NUMMI came back workers had to interview for their jobs. The "trouble makers" were not invited back. The UAW local there did not participate in the national agreements, so while it was a union shop it was unlike any other organized auto plant.

    The GM bankruptcy gave NUMMI the perfect cover to bolt for the door. California is a terrible place to make cars for a whole lot of reasons. Why else is there no car manufacturing in one of the biggest car markets on earth? Toyota not only abandoned Fremont, they moved their corporate headquarters out of California.

    Also, it does not seem that your numbers of a "couple hundred dollars" per car difference is correct. Do you have any data to support that? The biggest hindrance GM had going into bankruptcy was the medical and retirement benefits and it was much more than a "couple hundred dollars" disadvantage. You have to use a fully burdened labor cost and not just wages. It is also hard to make a direct comparison with overseas competitors because of the differences in labor taxation (e.g. SUTA & FUTA). The fact is that the German makers are high cost manufacturers and that is why they do not compete in the sub-compact market in the US.
    Sep 26, 2014. 03:45 PM | 2 Likes Like |Link to Comment
  • The PHEV Arbitrage [View article]
    Hard to follow your calculations. I am not going to try too hard because your conclusions are way off. Try reading some of the data at the National Renewable Energy Lab website. Here is one summary:
    "In the United States, the buildings sector accounted for about 41% of primary energy consumption in 2010, 44% more than the transportation sector and 36% more than the industrial sector."

    tomfrompv is right, it is probably easier to save more primary energy by updating our building stock. But upfront costs are higher, it is not sexy, banks are not handing out home improvement loans, etc., etc.
    Sep 26, 2014. 03:19 PM | Likes Like |Link to Comment
  • Why A Profitable $35,000 Tesla Model E Is A Pipe Dream [View article]
    Fact: Elon Musk is not trained as an engineer.
    Fact: Elon Musk has never worked as an engineer.
    Fact: Elon Musk does not hold utility patents on cars or rockets.

    The good news is I would not invest in a company with a "real" engineer type at the helm. Like all really successful businessmen Elon is a financier and salesman extraordinaire. The engineering is comparatively easy to hire but seems to make better folklore.
    Jul 13, 2014. 09:12 PM | 1 Like Like |Link to Comment
  • Tesla May Have A Huge Unfunded Warranty Problem Due To Defective Drivetrains [View article]
    Value Horizon,
    Conjecture; an opinion or conclusion based on incomplete information.

    Seems that any stock I have ever bought was based on conjecture.

    It is pretty easy to verify the Edmunds problems with their long term tester. The probability that three drive units would go bad on one vehicle are pretty remote if there are very few bad drives. That lead me to suppose that there is a rather large population of "bad" drives. The primary alternative thesis would be that the Edmunds folks have a lead foot and are hard on cars. Only Tesla will know the real failure rate as LT points out. No manufacturer routinely gives information on component failure rates so we will be left to guess for the next few quarters.
    Jul 13, 2014. 09:05 PM | 3 Likes Like |Link to Comment
  • Why A Profitable $35,000 Tesla Model E Is A Pipe Dream [View article]
    "ought to translate to 6% greater range, or 6% less weight in batteries"

    If only the real engineering calculations were that easy.... With your assumptions and linearization of non-linear effects the probability you are in the ball park is very small.
    Jul 9, 2014. 10:41 AM | 2 Likes Like |Link to Comment
  • Tesla Stock Forecast Based On Predictive Analytics [View article]
    "no, the patents are not worthless"

    Yes, they are. Just saying patents are worth money does not make it so. I have read many of the patents and I can't find one that could be licensed in the industry, at least not for significant cash. If you really believe Tesla patents are valuable just name one patent and a potential buyer for it. You can't or you would have mentioned it.
    Jul 8, 2014. 05:01 PM | Likes Like |Link to Comment
  • Tesla Stock Forecast Based On Predictive Analytics [View article]
    Interesting speculation on open sourcing the patents. Did you investigate the fact that most of Tesla's patents are encumbered by liens? Basically they were taken as collateral by Tesla's creditors.

    What makes you think the creditors would sign off on giving away valuable patents? Then again, maybe the patents are not so valuable as everyone thinks. There are very few seminal patents in the auto industry and Tesla has none. Maybe this is a last ditch effort to generate some publicity with worthless patents? While Mr. Musk is not an engineer he most definitely is a world class promoter and would not let an opportunity like this pass.
    Jun 11, 2014. 10:31 PM | 1 Like Like |Link to Comment
  • Tesla: An Amazing Company, But Shares Are Still Too Expensive [View article]
    "Nummi is a great place for Tesla's first factory and they should be able to reach 500K production there."

    How do you figure this? Toyota never produced 500k/ year at NUMMI. How is Tesla going to produce 500k when they are putting two models through one paint shop (maybe 50k units in 2015) and the other idle paint shop only has a 250k rating? The other problem is that Tesla is using Fremont for battery pack assembly, motor manufacture, and apparently some plastics work. There will not be enough room for the required assembly lines to make 500k. That is assuming Tesla can get the necessary California permission to fire up the second (and probably third) paint shop. Like Ken says in the article, there is not going to be more Tesla manufacturing in California after Models S and X.
    May 22, 2014. 01:59 PM | 1 Like Like |Link to Comment
  • Why Tesla Will Slowly Lose Credibility With The Market [View article]
    "Then respectfully you do not understand disruption. "

    You are rarely respectful in your rebuttals. I would suggest that the inevitable future that you foresee in transportation and the inevitable domination of Tesla in that future may not be all that inevitable.

    To achieve Tesla's domination, and hence warrant it's valuation, one of the major car companies will have to go under. Which will it be? Will Germany sit by while Volkswagen folds? Will Japan's METI stand by while Mazda hands over it's factories? Or will the US government give up on GM and the UAW in order to throw all it's weight behind Tesla? In a perfect world they would all divide up the pie equally and be happy, but that is not how it will end. The realities of huge capital investments and break-even production volumes will see to that.
    Apr 23, 2014. 05:21 PM | 1 Like Like |Link to Comment
  • Why Tesla Will Slowly Lose Credibility With The Market [View article]
    Perhaps you mean this rebuttal;

    The editorial hardly calls Broder to be completely at fault in the article. My read is that the editor feels there were wrongs on both sides. Sort of, let's move on from this silly argument.

    Fact is, Tesla refuses to acknowledge that driving with batteries in the northern winter is a problem. Why did the recent Tesla cross country trip take a 150 mile detour to Wyoming when any normal person would have taken I-76 out of Denver? Perhaps it is not possible to make the 200 mile I-76 stretch where there is no charger?
    Apr 23, 2014. 03:55 PM | 2 Likes Like |Link to Comment
  • Why Tesla Will Slowly Lose Credibility With The Market [View article]
    "when the Gen III is introduced the company will be in a much better position to sell 500K units per year."

    Several times in this thread there have been assertions that Tesla will produce 500k/year Gen III. That is a distortion of facts. Tesla has announced a "nameplate" maximum capacity of the Gigafactory at 500k car equivalents/ year. Since the Gigafactory is still a dream it is highly doubtful maximum capacity will be reached in three years.

    There is no auto assembly line in the world that has a 500k capacity that I am aware of. A more reasonable assembly line capacity would be 200k/ year and there is little chance Tesla would reach that number in 2015.
    Apr 23, 2014. 02:28 PM | Likes Like |Link to Comment