Seeking Alpha

Tesla Motors eyes global mass production

  • Tesla Motors (TSLA) CEO Elon Musk says the EV automaker will build factories in Europe and Asia as demand picks up in the regions.
  • Currently, most Tesla production is done at a plant in Fremont, California - although a small facility in the Netherlands also handles some assembly.
  • TSLA +0.4% premarket to $148.50.
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Comments (32)
  • Tales From The Future
    , contributor
    Comments (5020) | Send Message
     
    I doubt TSLA can pick up another car factory for close to free (they got lucky with NUMMI). Adding or building "real" factories overseas is very expensive.

     

    I doubt they could build one without another capital increase.

     

    Another end assembly in Asia, like the one in the Netherlands for Europe, probably looks more realistic and could give them tax breaks.
    22 Aug 2013, 07:55 AM Reply Like
  • ursf
    , contributor
    Comments (134) | Send Message
     
    I know, tftf, because you seem to have doubted for ever whatever Tesla wanted to do. Maybe the current share price is not real either...., maybe just some kind of conspiracy....
    22 Aug 2013, 09:30 AM Reply Like
  • Tales From The Future
    , contributor
    Comments (5020) | Send Message
     
    No conspiracy. I was once long TSLA (when it was below $30), I just think TSLA is over-valued at the moment in the triple digits, so I'm short now.
    22 Aug 2013, 10:20 AM Reply Like
  • ursf
    , contributor
    Comments (134) | Send Message
     
    o.k., tftf, thanks and, fair enough. I have been long (since $55) and I would agree that, measured in conventional/financial terms, this share is overvalued now. However, for many reasons (as outlined many times in SA forums), there are very non-conventional forces at work. And I think, as much as they have driven the price from $30 to $150, such forces (whatever you may call them) have become sustainable and are alive and kicking. Of course this makes holding TSLA at current levels a high risk proposal. But it takes real guts to actually bet against these forces (which now have proven to be real for a while) by shorting the stock. I know of a bunch of people who have not typically bought cars that cost more than $30T - $40T but who now do everything they need in order to get their hands on a Model S, especially after they have test driven them. So I think it is incomplete to only think of the typical buyers of the Model S price level car. A lot of people may have had the money in the past to buy more expensive cars but were just not willing to spend that much for a car. Now these same people (I could name have a dozen on the spot) look for self-excuses, such as "it will not just be a car, it will be a hobby" or, "come-on, I deserve this for my midlife crisis" or "ultimately my golfing cost more than that" to buy the stock AND the car. Just to name one of the forces at play here. In my opinion we have just only seen the beginning of the Tesla phenomena. I can understand if one does not want to believe in it, but betting against it? Wow.
    22 Aug 2013, 11:07 AM Reply Like
  • joenjensen
    , contributor
    Comments (708) | Send Message
     
    You were long and missed the up side when it was below 30, just think of all the profit you missed because about two weeks after it crossed 34 it went up and hasn't stopped yet.

     

    Now your short, and that tells me you love to miss profit or loose your money.
    23 Aug 2013, 12:16 AM Reply Like
  • Joe E Coyotee
    , contributor
    Comments (251) | Send Message
     
    Prepare to buy back to cover my shares and help for the second short squeeze
    keep in mind Tesla is Partnered up with Toyota and Daimler Benz
    Yes it seams TSLA is over valued I thought the highest it would go for 2013 is 60 , now my new high for this year is 200 and yes even i think its getting ahead of itself , but there are unforeseen forces at play with this one , for example New battery technology that we never heard about or know very little about.
    23 Aug 2013, 01:50 AM Reply Like
  • winfield100
    , contributor
    Comments (750) | Send Message
     
    @tftf "The WSJ said today that short-sellers are having their worst year in a decade...Russell 300 the 100 most-heavily shorted stocks are up 33.8 percent through the middle of August....Notable stocks... that heavily shorted, yet continued to outperform include Tesla Motors (Nasdaq: TSLA), which is up over 300 percent in 2013..."
    22 Aug 2013, 08:09 AM Reply Like
  • wigit5
    , contributor
    Comments (4119) | Send Message
     
    @winfield
    what does this have to do with tftf's comment?
    22 Aug 2013, 08:24 AM Reply Like
  • winfield100
    , contributor
    Comments (750) | Send Message
     
    @wigit5... see comment above by ursf
    22 Aug 2013, 11:28 AM Reply Like
  • wigit5
    , contributor
    Comments (4119) | Send Message
     
    Wait so demand hasn't picked up in Europe and Asia? I thought all the TSLA bulls were raging about how much demand there is in those places?
    22 Aug 2013, 08:25 AM Reply Like
  • Jack Rice
    , contributor
    Comments (886) | Send Message
     
    What? Hasn't picked up? C'mon, get real. It's picked up to the point where they're contemplating building factories instead of shipping them over!
    22 Aug 2013, 09:22 AM Reply Like
  • wigit5
    , contributor
    Comments (4119) | Send Message
     
    "Contemplating" so you are proving my point demand isn't so strong that building a factory is more then a possibility it's being worked on right now. Instead they are just considering it.

     

    If you had the type of demand that TSLA bulls are suggesting you wouldn't be 'contemplating' a factory there you would already be in the process of acquiring.

     

    I'm not saying they aren't already but the words being used today seem to point to it not being that far yet.
    22 Aug 2013, 09:28 AM Reply Like
  • Surf Dog
    , contributor
    Comments (825) | Send Message
     
    Most often you start with a plan, then execute, when the timing is right.

     

    Just because demand is building at a steady and satisfactory rate, it doesn't mean that it has, or should be expected to peak in the first Month of European sales.

     

    Sounds like some short pain whining to me.
    22 Aug 2013, 11:07 AM Reply Like
  • wigit5
    , contributor
    Comments (4119) | Send Message
     
    As I've said before I don't short stocks, and I was long TSLA and took my gains.

     

    I'm just noticing the subtle difference in the verbage being used. A week ago it was European demand was so strong there was no end to demand... now it's only 'so strong' that opening a plant there is being considered not actively pursued.

     

    I have driven a model S (family member owns one) and it is a sweet ride for sure. I have nothing against tsla nor Elon. But this stock is a rocket that will probably fall back to earth before to long.
    22 Aug 2013, 11:11 AM Reply Like
  • AlaaSadek
    , contributor
    Comments (193) | Send Message
     
    Tesla bought the NUMMI factory for $42M. Tesla now has nearly one BILLION dollars in cash. They can easily open a new factory anywhere in the world. I suspect it is smarter to buy a GM factory some where in the world where GM can not make a profit from. Having said that I suspect that GM will try and make a buck out of that and Tesla will out smart them AGAIN.

     

    http://bit.ly/17MQX7I
    22 Aug 2013, 08:53 AM Reply Like
  • Tales From The Future
    , contributor
    Comments (5020) | Send Message
     
    "Tesla bought the NUMMI factory for $42M."

     

    They were very lucky at the time. NUMMI basically was a gift from Toyota after lots of bad PR (brakes issue...).

     

    This is nowhere near the real cost of a car factory.
    22 Aug 2013, 09:27 AM Reply Like
  • AlexiaEP
    , contributor
    Comments (1076) | Send Message
     
    People and companies make their own luck.
    22 Aug 2013, 11:24 AM Reply Like
  • Tales From The Future
    , contributor
    Comments (5020) | Send Message
     
    What about battery supply costs or having to potentially build their own factory? (Nissan already did it because they had similar problems)

     

    In case people didn't believe me when I mentioned this earlier: CEO Elon Musk now talked about the issue himself, see here:

     

    http://cnb.cx/153Vvu5

     

    Even Samsung and Panasonic combined will have issues as suppliers at today's production levels.

     

    In the past some people didn't believe me when I noted this fact alone could postpone the Gen III car to 2017-2018 (TSLAs target was 2016).
    22 Aug 2013, 10:41 PM Reply Like
  • Joe E Coyotee
    , contributor
    Comments (251) | Send Message
     
    Model X was delayed also and look at the stock performance since then, I remember I was very upset when this was announced for model X being pushed back.
    23 Aug 2013, 02:00 AM Reply Like
  • Joe E Coyotee
    , contributor
    Comments (251) | Send Message
     
    He said the problem is going to get solved one way or an other
    Plan B is probably a good one also I bet .
    23 Aug 2013, 02:07 AM Reply Like
  • AlaaSadek
    , contributor
    Comments (193) | Send Message
     
    If as Elon says that the current battery supply is only good for a few HUNDRED THOUSAND cars then we are home and dry already. He is looking for BIG GEGA factory to supply him with more than a FEW HUNDRED THOUSAND cars. Now what does that say to you?
    23 Aug 2013, 07:04 AM Reply Like
  • Joe Dirnfeld
    , contributor
    Comments (1128) | Send Message
     
    No other CEO in the car business has a desk on the assembly line. The rest are sipping champagne in a faraway ivory tower. Tesla will produce whatever it has to produce, though battery production remains an issue.
    22 Aug 2013, 09:13 AM Reply Like
  • SharkDude
    , contributor
    Comments (639) | Send Message
     
    Yeah and someone else will pay for it because Elon is a rockstar and everyone wants to be his buddy. This is a heavy manufacturing company that has had a lot of luck and help. They will be more and more on their own now. And everyone keeps forgetting that someone in Germany or Japan will produce a battery better than the current TSLA battery. It will be very expensive to upgrade their battery to compete.
    22 Aug 2013, 09:25 AM Reply Like
  • ursf
    , contributor
    Comments (134) | Send Message
     
    SharkDude, I just wonder what else Elon Musk would have to do (besides Tesla, you know the list, no need to repeat what he has already achieved) to get your dear coveted seal of approval. I guess "nothing". You might think TSLA is overvalued, you might not have the same expectations about a continued bright future for Tesla. But calling him just a "rockstar"...... makes me wonder why you come across as so bitter. Are there some unlucky shorts in the recent past?
    22 Aug 2013, 09:39 AM Reply Like
  • Joe Dirnfeld
    , contributor
    Comments (1128) | Send Message
     
    Shark dude, the other CEOs are studying Elon and tesla, but they never learn. They would not be caught dead on the assembly line, the workers are their enemies.

     

    What is that Chevy commercial, "Chevy runs deep" , Well Tesla runs deeper.
    22 Aug 2013, 01:38 PM Reply Like
  • embryorambo
    , contributor
    Comments (258) | Send Message
     
    lithium is about 50-70lbs per Car
    50% of world production out of Chile
    Heaven forbid an earthquake or natural disaster hits there and there is a battery production problem. TSLA risk in scaling is supply chain, plain and simple
    22 Aug 2013, 02:57 PM Reply Like
  • Rik1381
    , contributor
    Comments (1420) | Send Message
     
    @embryorambo, your claim is ridiculous.

     

    First, lithium ion batteries are used in many applications including laptops, mobile phones, tablets, powertools, flashlights, radios, handheld games, cameras and camcorders, hybrid vehicles, plug-in hybrid vehicles and EVs besides those sold by Tesla.

     

    Second, the global lithium supply is not going to be a problem. For example, there is this
    http://bit.ly/14mUxXo
    22 Aug 2013, 03:16 PM Reply Like
  • embryorambo
    , contributor
    Comments (258) | Send Message
     
    Rik that mine is 10yrs out my friend..in 10yrs lot of things could happen, brown or greenfield expansion doesn't happen overnight. You also forget at current rates of production, think about how big lithium demand would explode if say the whole world was to convert to electric or hybrid using the batteries. There is upward pressure on the entire supply chain for the materials needed to make those batteries which-Lithium included-That article states nothing about costs to extract the material or a feasability study. To think there is infinite amounts of every material out there is dangerous assumption-720yrs of current production could be 70yrs if mass production takes place, changing all the metrics involved on a Tesla car. I believe an article a few days ago said it best, TSLA is for Speculators, not investors. At this point there is nothing about the business that justifies its market cap except a wall street story, and pumpers like yourself who think that no matter what price TSLA is trading at it is not overvalued becuase Elon Musk, consumer reports, and crash tests reports-it is amazing that the tulip bulb craze is still alive and well
    22 Aug 2013, 04:45 PM Reply Like
  • Locked Down Investments
    , contributor
    Comments (1362) | Send Message
     
    Embry you really need to do a little bit of research on Lithium.
    The biggest lithium producer in the world Sociedad Qumica y Minera de Chile (SQM) stated in a book I read not long ago that they intentionally RESTRICT lithium supply to prop up prices and that they could EASILY triple lithium supply in just a few months if they wanted to.
    I really love how people seem to think the world will go from 0.01% Electric Vehicles to 100% overnight.
    The transition will be faster than most think however miners and suppliers will easily see the trend and will expand to allow for increased demand over time.
    No issues with Lithium...none whatsoever.
    Cobalt supply may be more of an issue...however Panasonic now uses batteries with 75% less Cobalt than they did just 5 years ago.
    23 Aug 2013, 04:03 AM Reply Like
  • Rik1381
    , contributor
    Comments (1420) | Send Message
     
    embryorambo, there are other supplies of lithium. Through 2020, lithium is projected to be seriously oversupplied.
    http://bit.ly/W5bxtM

     

    Lithium reserves have been identified in many parts of the world. 1 billion EVs could be built with current lithium reserves.
    http://bit.ly/176Okxq
    22 Aug 2013, 05:27 PM Reply Like
  • Locked Down Investments
    , contributor
    Comments (1362) | Send Message
     
    Oh yeah and let's try and remember...lithium batteries are RECYCLABLE... so really many billion's of EV's are possible...way more than we will ever build.. until ultra capacitors replace lithium batteries...or until everyone travels on the hyperloop instead of individual vehicles ;-)
    23 Aug 2013, 04:03 AM Reply Like
  • radesigns
    , contributor
    Comment (1) | Send Message
     
    ... and maybe, years before that lithium supply issue, graphene may change the way "batteries" are used in EVs etc.
    http://bit.ly/16wfWgc
    23 Aug 2013, 11:06 AM Reply Like
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