Seeking Alpha

Tesla extends warranty on Model S sedan to eight years

  • Tesla (NASDAQ:TSLA) says it is increasing the drive unit warranty for its Model S sedan to match that of the battery pack, and will now be covered for eight years and "infinite" miles, applying to all Model S cars produced to date.
  • TSLA expects the warranty extension to have a "moderately negative" effect on its earnings in the short term.
  • The news capped a big week for TSLA shares, which started out with a big upgrade from Deutsche Bank and registered four days of all-time highs before gaining 5.5% on the week; a negative review from Consumer Reports barely caused a ripple as far as investors were concerned.
Comments (149)
  • chipdoctor
    , contributor
    Comments (756) | Send Message
     
    Clearly a sign that you have an over-demand situation...
    15 Aug, 05:25 PM Reply Like
  • JackB125
    , contributor
    Comments (273) | Send Message
     
    Elon has repeatedly said that he wants Tesla to have the very best service in the auto industry. Even when what he says sounds outlandish, e.g., "I want to build a private rocket business", he generally means it and ultimately backs it up with deeds. This Elon Musk trait is not without side effects -- Tesla general council has a very tough job. ("He said what??!!")
    15 Aug, 07:07 PM Reply Like
  • chopchop0
    , contributor
    Comments (3301) | Send Message
     
    It sure is. People want the best and are willing to pay up for it. TSLA can't build them fast enough, and it's for reasons just like this.
    15 Aug, 08:28 PM Reply Like
  • cparmerlee
    , contributor
    Comments (2479) | Send Message
     
    Chip wrote (ironically) "Clearly a sign that you have an over-demand situation..."

     

    This has nothing to do with taking care of the customer. After all, every Model S is under warranty today and is being taken care of on that basis. It is about a) the end of the free PR machine, and b) the used market prices.

     

    This company has thrived on free publicity, and nobody has ever done that better than Musk. But there has been a dramatic change in a very short space of time. Just a couple of months ago, the story was "this is the best car every made." In the past 3 weeks, we have seen dozens of articles that was asking "what is up with all these drive train replacements?". And Edmunds, Motor Trend, and CR all have had to back-pedal on their fawning positions.

     

    This is a huge problem for Tesla because it comes at a time when demand is running soft.The US sales peaked a year ago. Europe never really took of except in Norway, and that seems to be past the peak too. The UK took a few hundred cars, but that's probably the high water mark too. And CHina only delivered about 1000 in Q2. That's probably not the peak yet because there are lots of barriers to Chinese deliveries, but that number is still shockingly small. The company is putting a brave face on that, craftily finding ways to hold up Q3 production while still pumping out the bravado.

     

    This bad press hit at the worst possible time because they really need to make good on the 35,000 number for the year and the bad press was putting that at risk. They can still make the 35,000 if they cut deals with lessors and rental fleets, but that just pushes the problem into 2015, which was already going to be a problem because of the late delivery of the X.

     

    On top of that, these drive train problems -- if not checked -- could really hurt the resale market, and that would have been a very big financial hit.

     

    So Musk added a few more cards to the house of cards bu promising 8 years of warranty coverage. This is also a back-door price cut for the 85 because it is like throwing in an extended warranty for free. So that should help with the immediate demand problem. But it kicks the can on down the road. This company is accumulating a lot of expensive commitments for the future. Three comes a point when anything even 10% short of perfection becomes a death spiral.
    16 Aug, 05:31 PM Reply Like
  • chopchop0
    , contributor
    Comments (3301) | Send Message
     
    ".The US sales peaked a year ago."

     

    Proof? Please show me that there are Model S sedans sitting on lots unsold. I'd love to see it
    16 Aug, 06:08 PM Reply Like
  • Milhouse
    , contributor
    Comments (343) | Send Message
     
    What happens with the owners who have already PAID for their extended warranties?
    Do they get a refund?
    16 Aug, 06:11 PM Reply Like
  • slevental
    , contributor
    Comments (186) | Send Message
     
    @cparmerlee : "This is also a back-door price cut for the 85 because it is like throwing in an extended warranty for free".
    Can you quantify your statement, i.e. effectively, by how much is this price cut?
    16 Aug, 07:54 PM Reply Like
  • doubleE
    , contributor
    Comments (1301) | Send Message
     
    @cparmalee

     

    Demand is running soft yet a new order today takes 3 months. It takes a special mind to cook up the conspiracy theory needed to reconcile those two facts. Let me guess, demand is soft, tesla has thousands of cars stashed in a warehouse somewhere with no buyers, but instead of offering them to buyers immediately they make them wait 3 months to keep up the illusion of demand. That's it right ?

     

    As far as reports of drive train issues affecting demand, I will say this. Pictures of burning model S were seen around the world for days and there was no perceptible change in demand.
    16 Aug, 08:11 PM Reply Like
  • drew111
    , contributor
    Comments (396) | Send Message
     
    I'd like to see proof that they are not sitting on lots somewhere. The funny thing is Tesla won't tell you if US sales peaked. They don't provide minutiae for their sales figures any longer. I wonder why.
    16 Aug, 08:35 PM Reply Like
  • cparmerlee
    , contributor
    Comments (2479) | Send Message
     
    slev wrote "Can you quantify your statement, i.e. effectively, by how much is this price cut?"

     

    It is the value of the extended warranty.

     

    Or another way to look at it is that the resale value has been boosted by a significant amount (another version of the back-door price cut) at the same time the shareholders are absorbing the cost.

     

    I'm not saying that is a bad thing. I'm only saying we should recognize it for what it is -- effectively a price cut. And when a company makes price cuts (back door or otherwise), you should look very closely at their growth claims. The demand may not be nearly as strong as they have wanted investors to believe.
    17 Aug, 12:07 AM Reply Like
  • cparmerlee
    , contributor
    Comments (2479) | Send Message
     
    Drew wrote "I'd like to see proof that they are not sitting on lots somewhere. "

     

    I don't see where anybody claimed there was one single lot with these things all parked together. But we know for certain there are several thousand vehicles that were produced over and above deliveries the past 3 quarters, and that is expected to continue in Q3 despite most markets not needing a growing pipeline. The cars are probably in a many different places: in the dealerships, on slow boats to China, in Chinese Customs, in lessors' hands and so on.

     

    Moreover, Q3 represents a significant throttling of production because there is just no point in over-producing even more at this stage. In Q2, Tesla gave people reason to believe the Q3 production should be around 10,000 units, a goal highly congruent with achieving the 35,000 2014 target. The stated purpose for the 2-week shutdown was to raise capacity to 1000 units a week (10 weeks = 10,000 units.) They cut that to 9000. That, together with the shutdown was a choice to reduce Q3 production by something approaching 3000 units. And even then they still expect to over-produce by more than 1000.

     

    They still claim they can hit 35,000 deliveries for the year. But evidently Musk decided some drastic action was needed for that. Musk is undoubtedly planning to ramp up deals with third party lessors and rental fleets. And if he wants to book 100% of that revenue (which he does), the lessors have to take the residual risk. Do you think Musk has been hearing from key lessors lately who figure all these drive problems might leave them holding a big bag? That could be one of several drivers for this abrupt action.

     

    How about you give ME some evidence. Give me evidence that they are production constrained -- a claim almost nobody even makes anymore. Give me evidence that the primary factor determining how many units they are selling is Panasonic's inability to deliver batteries. I haven't heard anybody even try to argue that lately.
    17 Aug, 12:22 AM Reply Like
  • doubleE
    , contributor
    Comments (1301) | Send Message
     
    The evidence is a 3 month waitlist. Why don't you address that. Why is there a wait for new model S. Reconcile that with all your conspiracy theories because at the end of the day that is what they are. The wait period is not conjecture; it is a fact and as long as there is one, they are production constrained.
    17 Aug, 02:04 AM Reply Like
  • tomfrompv
    , contributor
    Comments (3641) | Send Message
     
    doubleE,
    Its conjecture, not conspiracy. Tesla refuses to divulge the number of orders, otherwise investors would simply know if demand was rising, falling, or staying the same.

     

    The wait time you mention is really Tesla's estimate on when a car will be delivered after an order. Sometimes the car shows up early, sometimes late, sometimes right on time.

     

    If wait times are holding at 3 months, that pretty much means production has caught up with demand. Right?

     

    I think the boosters would like to see wait times increasing in the US. Since we know deliveries have peaked (the data shows that), it sounds like demand here has peaked too.
    17 Aug, 02:27 AM Reply Like
  • cparmerlee
    , contributor
    Comments (2479) | Send Message
     
    Tom wrote " Tesla refuses to divulge the number of orders, otherwise investors would simply know if demand was rising, falling, or staying the same."

     

    We can make some educated guesses. We know some things. We know that they tend to deliver more to the US in the 3rd month of the quarter, often accelerating deliveries into the quarter in order to make the numbers. We also know that their setting of the fulfillment expectation is a marketing exercise, not a production exercise. For US customers those dates are not precise. From time to time they make big changes in those dates -- far larger than could be accounted for by the ebb and flow of orders. They are managing image. They are trying to get the business to kick off badly needed cash while still maintaining the illusion of unlimited demand. That's a neat trick, but most people see through that by now.

     

    If they truly don't start any aspect of the manufacturing until a deposit is in hand, then 3 months is probably pretty close to the normal cycle time, even if there were no backlog at all. After the reservation is placed, a deposit must be connected. Production itself is probably at least 3 weeks start to finish when you account for the need to batch similar configurations. Then there is the time to collect final payment and do the transportation. If they really wanted to, they could probably take that down to 5 weeks end to end.

     

    Basically a 3-month fulfillment time for this sales model doesn't sound like any significant backlog at all to me. It sounds like a normal 2-month fulfillment cycle with an extra 50% pad to give them the flexibility to move things around on the fly.
    17 Aug, 11:38 AM Reply Like
  • All Your Bases
    , contributor
    Comments (181) | Send Message
     
    I believe it take the factory 5 days to produce a car. In my neck of the woods, there is 5 month waiting time.

     

    Granted, for the EU it must be taken partially apart, shipped, and reassembled in Tilburg.

     

    Maybe Tesla is hiding all the missing cars in Tilburg, way past your searching eyes, have you thought of this?
    17 Aug, 02:09 PM Reply Like
  • cparmerlee
    , contributor
    Comments (2479) | Send Message
     
    Peter wrote "I believe it take the factory 5 days to produce a car. In my neck of the woods, there is 5 month waiting time."

     

    It really depends on what you call "manufacturing". If you are talking final assembly, yes 5 days on the floor including painting might be about right. But there are lots of subassemblies that have the be manufactured and integrated too. 60-90 days from the time the customer hits send on his unpaid reservation to the time the car is in his driveway seems about right

     

    Peter wrote "Maybe Tesla is hiding all the missing cars in Tilburg"

     

    They are likely stashing inventory all over the place and they are also constraining production. Tilburg and China customers would be likely places to find a few hundred vehicles, but there would be a lot more in the stores, and in the hands of lessors that have not yet paid. At this point there are something like 3000-4000 vehicles produced but not sold. And probably 50-60% of those are legitimately in the delivery pipeline. It isn't hard to imagine 1500 vehicles scattered around.
    17 Aug, 03:17 PM Reply Like
  • doubleE
    , contributor
    Comments (1301) | Send Message
     
    It takes the factory 2 days to produce a car. 60 to 90 days only sounds about right if the car is delayed into production. It does not take months to source parts that for the most parts are already in inventory. The problem is getting a production slot. That is why deliveries are taking 3 months. The production line is not lying idle waiting for parts
    17 Aug, 03:47 PM Reply Like
  • tomfrompv
    , contributor
    Comments (3641) | Send Message
     
    Re: 'It takes the factory 2 days to produce a car."

     

    Uh, what kind of paint do they use? Or is the car assembled "wet"?

     

    Anyway, when looking at factory production, there is a huge difference between seeing a new car roll off every few minutes and then concluding it takes only a few minutes to build that particular car.

     

    Think about those proverbial nine women. After 9 months they each pop out a child, but that doesn't mean human gestation time is only 1 month!
    17 Aug, 04:25 PM Reply Like
  • Frank Greenhalgh
    , contributor
    Comments (1716) | Send Message
     
    Elon takes the challenge! Good Man
    http://huff.to/1puIbX2
    17 Aug, 05:51 PM Reply Like
  • cparmerlee
    , contributor
    Comments (2479) | Send Message
     
    EE wrote "The production line is not lying idle waiting for parts "

     

    So we won't be hearing any more about how they are production constrained because of Panasonic, right? I never believed that nonsense. You guys just keep moving from one excuse to the next. I notice the booster club has shut up about that one -- after criticizing me for months on that subject.
    17 Aug, 05:57 PM Reply Like
  • Valueseeker
    , contributor
    Comments (832) | Send Message
     
    Finally! Now how about the recall to fix these millers on the road?
    15 Aug, 05:25 PM Reply Like
  • surferbroadband
    , contributor
    Comments (1502) | Send Message
     
    I think there will be no recall. This announcement says it all.

     

    Get ready for another short squeeze.
    15 Aug, 05:30 PM Reply Like
  • Valueseeker
    , contributor
    Comments (832) | Send Message
     
    There is a mistake in the news. The drivetrain warranty is extended only for the 85 KWH cars, not all Model S.
    15 Aug, 08:00 PM Reply Like
  • tech01x
    , contributor
    Comments (705) | Send Message
     
    No, the statement reads, "Today, Tesla announced that the Model S drive unit warranty has been increased to match that of the battery pack."

     

    That means on a 60 kWh car, the drive unit warranty (not drivetrain, a subtle difference) is now 8 year, 125,000 miles.

     

    Tesla's Design Studio has been updated with that language.
    15 Aug, 08:03 PM Reply Like
  • Valueseeker
    , contributor
    Comments (832) | Send Message
     
    This is what the Tesla email says:

     

    "Today, Tesla announced that the Model S drive unit warranty has been increased to match that of the battery pack. That means the 85 kWh Model S now has an 8 year, infinite mile warranty on both the battery pack and drive unit. Moreover, the warranty extension will apply retroactively to all 85 kWh Model S vehicles ever produced.

     

    No other changes have been made to the warranty."

     

    ======
    Also read the same news here:
    http://bit.ly/XocXXC

     

    TSLA) CEO and founder Elon Musk just announced via his company’s blog that the 85 kWh Model S, Tesla’s most popular model by far, now has an 8 year, infinite mile warranty on both the battery pack and the drive unit. Originally, the Model S carried a 4-year, 50,000 mile limited warranty that..."

     

    So, my guess is, 60KWH battery is warranted for 4 years. Is that correct?
    15 Aug, 08:42 PM Reply Like
  • chickensevil
    , contributor
    Comments (665) | Send Message
     
    The warranty has been updates on the site to reflect that the 60kw has an 8 year 125k warranty.

     

    They were using the 85kw to just spell it out and it sounds better in marketing terms but it does also apply in the same way to the 60
    15 Aug, 09:50 PM Reply Like
  • Curt Renz
    , contributor
    Comments (197) | Send Message
     
    @Valueseeker

     

    Read Musks full blog which includes:

     

    "Moreover, the warranty extension will apply retroactively to all Model S vehicles ever produced."

     

    Link to full blog: http://bit.ly/1qdpROX
    15 Aug, 10:42 PM Reply Like
  • Curt Renz
    , contributor
    Comments (197) | Send Message
     
    @Valueseeker

     

    A recall is unnecessary for noise in the drive train (small motor and DC/AC inverter). It has been covered by a four-year warranty which is now extended to eight years. Anyone with a problem has a Tesla Ranger come out to fix it. In most cases it involves moving a cable that has been vibrating against the drive train and does not require bringing the car to a service center.
    15 Aug, 10:47 PM Reply Like
  • Hmpffff
    , contributor
    Comments (116) | Send Message
     
    May as well pack a free Lapdance from Elon on top
    15 Aug, 05:26 PM Reply Like
  • Sellinpanic
    , contributor
    Comments (628) | Send Message
     
    :D LOL! Today's best comment :)
    15 Aug, 05:55 PM Reply Like
  • Frank Greenhalgh
    , contributor
    Comments (1716) | Send Message
     
    How about The Challenge?

     

    http://huff.to/1puIbX2
    17 Aug, 09:25 PM Reply Like
  • Anton Wahlman
    , contributor
    Comments (997) | Send Message
     
    What will be the price to replace the drivetrain after those 8 years are over?
    15 Aug, 05:27 PM Reply Like
  • capt601
    , contributor
    Comments (389) | Send Message
     
    No issue, just a misinformed media driving rumors. Pretty sad.

     

    The real reporting should be why isn't GM or Toyota doing this? Still the same old warranty and poor service from dealers..
    15 Aug, 05:33 PM Reply Like
  • capt601
    , contributor
    Comments (389) | Send Message
     
    Did you ask the same of Porsche with all of the 996 and 997 ims issues and subsequent engine failures?
    15 Aug, 05:34 PM Reply Like
  • Valueseeker
    , contributor
    Comments (832) | Send Message
     
    The car won't last that long. So, nothing to worry.
    15 Aug, 05:37 PM Reply Like
  • doubleE
    , contributor
    Comments (1301) | Send Message
     
    @valueseeker

     

    You sound really desperate.
    15 Aug, 06:31 PM Reply Like
  • maggas
    , contributor
    Comments (473) | Send Message
     
    zero if it does not go bad.(are you assuming something?or you know something we don't?_)
    15 Aug, 07:25 PM Reply Like
  • maggas
    , contributor
    Comments (473) | Send Message
     
    how many cars have you built valueman? it was an expected comment from you, so nothing to be upset about. I am making my money the "old fashioned way- i earn it by going against shorts"
    15 Aug, 07:28 PM Reply Like
  • TheBanker
    , contributor
    Comments (1343) | Send Message
     
    Why do you always ask stupid questions? How does anybody what the drivetrain costs in 8 years? Call TSLA today and find out how much one costs today.
    15 Aug, 07:28 PM Reply Like
  • FATUGLY
    , contributor
    Comments (44) | Send Message
     
    @anton
    Imagine going into a GM show room and asking the sales person the question you just asked.
    I believe they would think your HIGH ON SOMETHING.
    15 Aug, 11:23 PM Reply Like
  • drax7
    , contributor
    Comments (240) | Send Message
     
    Wahlman appears to feed tepper positions along with Weiss. , two FUD artist that have never created value in their lives.
    16 Aug, 08:09 AM Reply Like
  • drax7
    , contributor
    Comments (240) | Send Message
     
    The guy is not a moron ,he is a delicate genius, that creates value just by taking .
    16 Aug, 08:14 AM Reply Like
  • Matt Raket
    , contributor
    Comments (183) | Send Message
     
    He actually is desperate. Claims his short position on Tesla, which is really bad by now, covers only 2% of his portfolio. Judging by the time spent trying to talk Tesla down on this forum, I guess it's more like 20%.
    16 Aug, 08:17 AM Reply Like
  • chipdoctor
    , contributor
    Comments (756) | Send Message
     
    GM sells millions of vehicles per year, and needs repeat business to keep existing.

     

    Maybe they are smarter than Tesla business-wise.
    16 Aug, 01:51 PM Reply Like
  • surferbroadband
    , contributor
    Comments (1502) | Send Message
     
    Drive train problems?

     

    There are no drive train problems. Customers should rest easy.
    15 Aug, 05:28 PM Reply Like
  • Valueseeker
    , contributor
    Comments (832) | Send Message
     
    Nice sarcasm!
    16 Aug, 12:33 PM Reply Like
  • Tech Talker
    , contributor
    Comments (125) | Send Message
     
    I see a pattern. People were not sure about the resale value of the Model S, so Tesla introduces the Resale Value Guarantee. Now people are not sure about drivetrain replacements, so Tesla extended the warranty to unlimited miles over 8 years to ensure confidence. Tesla takes care of its customers.
    15 Aug, 05:30 PM Reply Like
  • Valueseeker
    , contributor
    Comments (832) | Send Message
     
    Kia/Hyundai did the same when they introduced their cars. Tesla is late in following good examples. Tesla thought it could just ride on hype. But it doesn't work that way in the auto industry.
    15 Aug, 05:39 PM Reply Like
  • Darren McCammon
    , contributor
    Comments (1033) | Send Message
     
    Yes, next they will guarantee an entire car replacement for 8 years or unlimited miles. Tesla will once again be taking care of its customers; its investors, not so much.
    15 Aug, 06:44 PM Reply Like
  • TheBanker
    , contributor
    Comments (1343) | Send Message
     
    One thing is certain, the investors are going to wipe out the obnoxious shorts who see great service and a better warranty as a negative for the shareholders.
    15 Aug, 07:31 PM Reply Like
  • Curt Renz
    , contributor
    Comments (197) | Send Message
     
    @Darren McCammon

     

    The market is not valuing this company based on quarterly numbers in the manner one learns in business school. The market sees an amazing company with the potential to completely disrupt established industries.

     

    The addition to the warranty indicates the noisy drive train issue has been resolved. The cost should be minimal. The inclusion of earlier built cars is an exceptional demonstration to each customer, past or future, that the company is dedicated to always insuring the quality of his/her purchase.

     

    This combined with other innovative factors puts Tesla Motors light-years ahead of its competition. Look for a farsighted market to continuing rewarding the share price as the company's revolutionary concepts become more and more obvious to more and more car buyers and stock market investors.
    15 Aug, 10:51 PM Reply Like
  • drax7
    , contributor
    Comments (240) | Send Message
     
    Value seeker is one of those shorts that I use to encounter on the netflix board, eventually they were road kill.
    16 Aug, 08:16 AM Reply Like
  • Jack Rice
    , contributor
    Comments (844) | Send Message
     
    Not taking care of its investors??? A company takes care of its investors by taking care of its customers! It's called integrity. Of course, the shorts call it hype.
    16 Aug, 11:57 AM Reply Like
  • Valueseeker
    , contributor
    Comments (832) | Send Message
     
    @drax7,
    That's funny. I actually made nice money shorting Netflix, shorting it when it shot upto $450 last time. And covered @320. Recently took another small short position on that one. Heck, I even shorted AAPL when it shot upto 700 a while back.

     

    I'm not too worried about my TSLA short. My average is over 240. But it is clear, I may have to wait few months, or even a year before this baby dives to the bottom.
    16 Aug, 12:37 PM Reply Like
  • drax7
    , contributor
    Comments (240) | Send Message
     
    Long apple from $80 dollars a share back in 2009, long tesla from $35 dollar a share in early 2013. Long netflix back when the first iPad came out, though hasting is a complex character .

     

    There are a million ways to make money in the market, tesla will eventually reach a mega cap valuation.
    16 Aug, 03:12 PM Reply Like
  • vanebfbc
    , contributor
    Comments (84) | Send Message
     
    One think for certain: Elon Musk knows how to grow a business. My take is that Tesla is not interested in short term gains, but in making the market larger and providing better customer service, a win-win situation for business and customers. Valuing TSLA solely on its P/E is unwise.
    15 Aug, 05:32 PM Reply Like
  • drew111
    , contributor
    Comments (396) | Send Message
     
    Friday after the close... shocking! Moderate drag on earnings? GAAP or non-GAAP? Oh wait a minute, there are no "real earnings" so the point is moot. Also, I thought this whole drive unit issue was just a few bad ones that got past quality control. Obviously, it's a bigger issue than they were letting on. Sounds like a masked recall. Don't call it a comeback and for God's sake don't call it a recall!
    15 Aug, 05:35 PM Reply Like
  • TheBanker
    , contributor
    Comments (1343) | Send Message
     
    You know what's funny about your post? You would be pissing and moaning if he did this during trading hours and calling it hype. So he does it after hours and now you have to raise some BS FUD.

     

    You are correct. A few bad drive trains makes it really easy for TSLA to warranty them even longer. If Elon is such a bad guy in your eyes then it only makes sense if there were truly a drive train issue he would never think about extending the warranty. Try to spin that one in your favor.
    15 Aug, 07:34 PM Reply Like
  • drew111
    , contributor
    Comments (396) | Send Message
     
    Perhaps it is in his best interest to not admit there is a problem. Perhaps he needs to keep the stock price elevated for his own, yet to be known, dastardly plans which may include dilution of current shareholders. Gigafactories do not just pay for themselves and it doesn't look like Panasonic is going halfsies.
    15 Aug, 09:39 PM Reply Like
  • drax7
    , contributor
    Comments (240) | Send Message
     
    Elon pays himself an exorbitant salary, one dollar per year. He is milking it for all it's worth.
    16 Aug, 08:19 AM Reply Like
  • drew111
    , contributor
    Comments (396) | Send Message
     
    I don't recall mentioning anything about EMusk's salary nor did I imply or infer anything about it.
    16 Aug, 08:42 AM Reply Like
  • Frank Greenhalgh
    , contributor
    Comments (1716) | Send Message
     
    The Consumer report and Edmunds report together have people worried, they both had drive train problems listed.
    So why not guarantee the drive train for 8 years. Hyundai's is 10 years. It costs nothing today.
    Pump Pump Pump
    15 Aug, 05:36 PM Reply Like
  • omcdac
    , contributor
    Comments (102) | Send Message
     
    Frank - Have you ever talk anything good about TSLA ?
    15 Aug, 05:44 PM Reply Like
  • Valueseeker
    , contributor
    Comments (832) | Send Message
     
    @Frank,
    Motortrend car had drivetrain failure. Consumer reports' car only had blanked screen.
    15 Aug, 05:58 PM Reply Like
  • Mukticat
    , contributor
    Comments (1100) | Send Message
     
    Valueseeker sorry but you're underestimating the problem - Edmunds reported THREE (not one) drivetrain failures in their single test vehicle.
    15 Aug, 06:02 PM Reply Like
  • Valueseeker
    , contributor
    Comments (832) | Send Message
     
    @Mukticat,
    Certainly the problem is severe. I just wanted to correct a minor mistake in Frank's statement.

     

    In fact, I wrote one of the early articles on SA focusing on these drivetrain issues in June, titled "Is Tesla Model S Really A Quality Green Car?".

     

    http://seekingalpha.co...
    15 Aug, 06:14 PM Reply Like
  • doubleE
    , contributor
    Comments (1301) | Send Message
     
    After spamming every tesla article for months with a post claiming Panasonic would walk away from the GF, frank now spams with a comment that says "pump, pump, pump".

     

    The drivetrain problem is not severe. It is trivial.
    15 Aug, 06:27 PM Reply Like
  • drew111
    , contributor
    Comments (396) | Send Message
     
    doubleE,
    Trivial enough that they project at least a "moderate negative effect" on earnings. It's there in black and white in the press release. The use of moderate as an adjective means it is more than trivial by definition.
    15 Aug, 07:03 PM Reply Like
  • TheBanker
    , contributor
    Comments (1343) | Send Message
     
    Frank's sole purpose here is to spread FUD and make himself look foolish when he's repeatedly proven wrong.
    15 Aug, 07:36 PM Reply Like
  • TheBanker
    , contributor
    Comments (1343) | Send Message
     
    The thoughts in Frank's head are trivial as well. Has he ever been right on anything regardless TSLA other than stating something that is obvious to everyone?
    15 Aug, 07:38 PM Reply Like
  • TheBanker
    , contributor
    Comments (1343) | Send Message
     
    It's moderate only because people are now going to bring the car in for drive train issues 7 years from now from driving all over the country for free using the supercharging network. That's why it's moderate. This issue today is small. People are going to make up reasons to get their drivetrain replaced 7 years from now so you'll have fraudulent claims to deal with as well. That does cost some money.
    15 Aug, 07:41 PM Reply Like
  • Frank Greenhalgh
    , contributor
    Comments (1716) | Send Message
     
    I said "they both had drive trains listed" meaning they both reported drive train problems. CU reported from surveyed customers.
    Yes in January I said that Musk made a mistake not getting a commitment from Panasonic. I was right. Panasonic has not committed $2 billion, but just $200 million and limited manufacturing dependent on quantity, if you read the report. The groundbreaking was a sham. No other work has started.
    Tesla has claimed to know what the drive train problem is. A $0.50 shim. However they didn't say where it is located if that is the problem. If it requires removing and disassembling the motor it could be a very expensive recall.
    No other car company releases information almost daily about ridiculous things. Tesla is in full force lately. Last time that happened Tesla was touted as also leading in autonomous driving, energy storage and a $320 share price. Next came a bond offering.
    It looks like déjà vu all over again. If I am right we will see another bond offering or other cash raising effort. Now that Adam Jonas says "Tesla is the most important car company in the world."
    15 Aug, 07:51 PM Reply Like
  • doubleE
    , contributor
    Comments (1301) | Send Message
     
    You have never been right Frank. Why would you be right now ?

     

    I am sure Elon Musk needs pointers from you on how to run tesla.

     

    No "pump, pump, pump" this time ?
    15 Aug, 07:56 PM Reply Like
  • TheBanker
    , contributor
    Comments (1343) | Send Message
     
    You said Panasonic was never going to be part of the GF. Don't like Frank. We can go dig up your comments.
    15 Aug, 08:34 PM Reply Like
  • Frank Greenhalgh
    , contributor
    Comments (1716) | Send Message
     
    Please go back and find that post. I believe I said that without Panasonic, Tesla cannot build a Gigafactory, because Tesla has no knowledge of cell construction. I was told that Tesla didn't need Panasonic.
    Now we see Tesla has agreed to Panasonic's terms. Panasonic has just reopened a plant to supply Tesla with 18650 batteries for their increased production run. When Tesla requires more batteries than Panasonic can deliver, they will start building in the Gigafactory. Why close down a plant in Japan and have to lay off workers when many more Gigafactories will be needed in the future? If you read the agreement in the Q2 report, Panasonic has promised to supply cells but not necessarily build them in the US plant.
    Tesla has about 2 years to get the paperwork and factory built. By then if demand requires it, Panasonic will start building production lines in wherever USA.
    15 Aug, 10:01 PM Reply Like
  • drax7
    , contributor
    Comments (240) | Send Message
     
    Frank have you ever said anything good about tesla ?
    16 Aug, 08:20 AM Reply Like
  • Matt Raket
    , contributor
    Comments (183) | Send Message
     
    "Edmunds reported THREE (not one) drivetrain failures in their single test vehicle".

     

    I believe there was only one failure, and the others were (proactively) replaced because of a vibration/humming sound. That can hardly be called a failure. Your car probably has the same but you can't hear it because it's so bloody noisy.
    16 Aug, 08:24 AM Reply Like
  • Jack Rice
    , contributor
    Comments (844) | Send Message
     
    "My opinion is it's a bridge too far to go to fully autonomous cars."
    Elon Musk

     

    Some hype.
    16 Aug, 12:09 PM Reply Like
  • Frank Greenhalgh
    , contributor
    Comments (1716) | Send Message
     
    Here is the actual statement regarding Panasonic.
    "Earlier today, Panasonic and Tesla entered into a formal agreement to partner on the Gigafactory. Panasonic will invest in production equipment that it will use to manufacture and supply Tesla with battery cells. Tesla will prepare and provide the land, buildings and utilities for the Gigafactory, invest in production equipment for battery module and pack production, and be responsible for the overall management."
    16 Aug, 01:10 PM Reply Like
  • Frank Greenhalgh
    , contributor
    Comments (1716) | Send Message
     
    Feb 2014 Forbes
    " But perhaps the biggest news to come from Musk’s mouth came in another call with Bloomberg Television right after the earnings report, in which Musk claimed that Tesla would lead the way in nascent autonomous car technology, and also admitted to meeting with Apple AAPL +0.49% about… something." Pump, Pump,Pump
    16 Aug, 01:20 PM Reply Like
  • Frank Greenhalgh
    , contributor
    Comments (1716) | Send Message
     
    Drax
    When Tesla acts like a real company and has transparency regarding sales, deliveries, and expenses and not this foolishness of bulldozing a piece of land and saying we "broke ground" and then stopping because nothing else has been done.
    I think this "Gigafactory" is a farce. Panasonic will deliver about 700 million cells to Tesla in 2015, for 100,000, Model S and X. They will be manufactured in Japan. The "Gigafactory will have only multiples of the present Panasonic assembly line. How will that save an additional 30%? Especially with US wages.
    I have said that Elon Musk is amazing at how fast he has handled Tesla S development, publicity, financing, and expansion worldwide all while only working two days a week at Tesla. He definitely has great leadership skills and the "steel balls" (his first wife's quote) required to get projects to fruition.
    What bothers me is the lack of openness and the constant barrage of press releases to pump up the stock. What I see now is that the cost of expansion into countries, the buildout of supercharger stations and the Gigafactory will require more money. We will soon see further dilution if I am right. I do not have any position in Tesla. I am merely an observer who hasn't had enough kool aid.
    17 Aug, 10:07 AM Reply Like
  • John Bingham
    , contributor
    Comments (869) | Send Message
     
    Banker,

     

    Musk and co. will already have a very good idea of the failure rate in drive train components from the current cars on the road as they have the telemetry from the cars as well as driver information.

     

    For this reason it will probably be quite difficult to make a fraudulent claim that your car has problems if the data trail shows a perfectly operating drive system. More likely that Tesla will know about any potential problems in your car before you are aware of them!
    19 Aug, 05:41 AM Reply Like
  • Hmpffff
    , contributor
    Comments (116) | Send Message
     
    To rephrase Mr. Obama, "There will be costs"
    15 Aug, 05:42 PM Reply Like
  • adamatc1
    , contributor
    Comments (8) | Send Message
     
    Doing the right thing again.
    15 Aug, 05:49 PM Reply Like
  • ghobud
    , contributor
    Comments (4) | Send Message
     
    If the oldest model s is only 2 years old , with warranty till 2016 , how extending it for another 4 years , how this extension effects the earning in short term only ?
    15 Aug, 05:49 PM Reply Like
  • Darren McCammon
    , contributor
    Comments (1033) | Send Message
     
    Extending the warranty means you will have greater warranty expense. This warranty expense is recognized on the income statement with each sale. Since TSLA shareholders don't seem to care much about profit, but instead mostly focus on potential revenue growth, it shouldn't have much immediate impact on TSLA shares.

     

    Disclosure - short TSLA
    15 Aug, 07:05 PM Reply Like
  • Darren McCammon
    , contributor
    Comments (1033) | Send Message
     
    Extending the warranty means you will have greater warranty expense. This warranty expense is recognized on the income statement with each sale. Since TSLA shareholders don't seem to care much about profit, but instead mostly focus on potential revenue growth, it probably won't have much immediate impact on TSLA shares.

     

    Disclosure - short TSLA
    15 Aug, 07:06 PM Reply Like
  • TheBanker
    , contributor
    Comments (1343) | Send Message
     
    Extending the warranty shows confidence in their product and will increase demand. They will be able to keep margins high all that much longer now. The higher margins will pay for the extra expense of longer warranty.
    15 Aug, 07:43 PM Reply Like
  • Matt Raket
    , contributor
    Comments (183) | Send Message
     
    @ Darren McCammon: thank you for your balanced reply. You must be the first short on SA who is not trying to talk the stock down.
    16 Aug, 08:27 AM Reply Like
  • TheeSeer
    , contributor
    Comments (248) | Send Message
     
    This still does not include the decline in battery capacity over the 8 years which may be as much as 30% !! This is getting lost in the hysteria over Tesla. Only when Tesla is willing to exchange the battery when it declines will the car be worth the money. Imagine selling the car to someone and telling them that they only have 2/3 of a tank and falling.
    15 Aug, 06:01 PM Reply Like
  • doubleE
    , contributor
    Comments (1301) | Send Message
     
    And you know this how ?
    15 Aug, 06:28 PM Reply Like
  • surferbroadband
    , contributor
    Comments (1502) | Send Message
     
    Have you forgot, the battery costs are going down. So when it is time to replace your battery pack, you may be looking at only a few grand $3-4k. Its cost $5.5k to replace the Nissan Leaf battery today.

     

    How much does it cost to replace a gasoline engine? Is that price going down?
    15 Aug, 06:28 PM Reply Like
  • Valueseeker
    , contributor
    Comments (832) | Send Message
     
    "How much does it cost to replace a gasoline engine? "
    - I did that once for a car. It cost me $2K including labor and remanufactured engine. For most gas cars, it's not worth it as the car itself is worth only about $2-4K after nearly 150K miles.
    15 Aug, 07:06 PM Reply Like
  • maggas
    , contributor
    Comments (473) | Send Message
     
    Valueman,
    1)I do not think you had engine replaced. You are simply saying that to make a point
    2) If you did have an engine replaced, then you know nothing about cars, or know how to drive them, since you bought a lemon or a yugo.
    15 Aug, 07:35 PM Reply Like
  • tech01x
    , contributor
    Comments (705) | Send Message
     
    BMW M5 engine rebuild cost is likely around $10k.
    15 Aug, 08:05 PM Reply Like
  • chickensevil
    , contributor
    Comments (665) | Send Message
     
    Considering the transmission replacement in my Civic cost 2k... I find it hard to believe the much larger engine cost is only 2k and that is for a cheap car like a civic...
    15 Aug, 10:00 PM Reply Like
  • Valueseeker
    , contributor
    Comments (832) | Send Message
     
    @maggas,
    The engine was replaced after 155K miles! Not after every 10-11K miles as in Edmunds' Model S. It melted due to overheating in a hot summer ride and died.

     

    It was recession time, so I decided to replace the engine. Later, sold it at a loss actually. Just search online, or check Oreilly auto parts online or give them a call. A remanufactured engine costs about $1700-$2300 now. Then, add ~$1300 of labor.
    I shopped for a cheaper place, and they found some cheaper engine from somewhere. So, I could do that under $2K for a Ford Contour GL. Had it been a Japanese or Korean car, i think the engine might have lasted longer.

     

    Here is a good price list for Chevy V8 engines:
    http://bit.ly/YfMlbI
    16 Aug, 01:43 AM Reply Like
  • drax7
    , contributor
    Comments (240) | Send Message
     
    For my Mercedes e350 the engine cost over 20,000 plus labor of a few thousand.
    16 Aug, 08:25 AM Reply Like
  • Matt Raket
    , contributor
    Comments (183) | Send Message
     
    "This still does not include the decline in battery capacity over the 8 years which may be as much as 30%"

     

    That number is completely ridiculous and based on nothing. I've had my Model S for 1 year now, drove 20,000 miles, of which 2,000 on superchargers, and have lost 0% range. Zero!
    16 Aug, 08:30 AM Reply Like
  • drew111
    , contributor
    Comments (396) | Send Message
     
    Your experience is anecdotal at best. Unless you have driven it to the point of zero charge remaining (several times across the total time owned), how could you detect any range loss in that short of a time period (and the same goes for miles driven)?
    16 Aug, 08:52 AM Reply Like
  • bwmaki
    , contributor
    Comments (392) | Send Message
     
    Drax7- The average Mercedes e350 engine goes for a couple grand.

     

    Your mechanic should send you a thank you card for paying their kid's first year of college.
    16 Aug, 01:25 PM Reply Like
  • drax7
    , contributor
    Comments (240) | Send Message
     
    My mechanic is Autonation where I purchased the car, and I asked for curiosity , not because I need one.
    16 Aug, 03:14 PM Reply Like
  • chopchop0
    , contributor
    Comments (3301) | Send Message
     
    and it can't even beat the P85 off the line!
    17 Aug, 08:54 AM Reply Like
  • tech01x
    , contributor
    Comments (705) | Send Message
     
    bwmaki,

     

    http://bit.ly/1thzvmP

     

    Just to repair a camshaft on a Mercedes E350 costs $5,000.

     

    Balance shaft failure, typical repair cost is $4,767 at 76,000 miles and Mercedes has been named in a class action lawsuit over it:

     

    http://bit.ly/1thzvTI

     

    The E350 engine is likely over $4,000 and that's the engine alone, but that's not likely the end cost for an engine rebuild.
    18 Aug, 08:31 PM Reply Like
  • bwmaki
    , contributor
    Comments (392) | Send Message
     
    Tech01x- my point was that Drax claim that the engine cost $20k was BS.

     

    Otherwise my personal opinion is that most of what passes as a "luxury" car these days (including Tesla) is way over priced for what you get. Many people who can afford cars in Tesla's price range know this and are more than happy to drive something like a comfortable $35,000-$45,000 Lexus and pocket the difference from a $100,000. Unless you're a car guy in which place whatever toots your horn.
    18 Aug, 11:23 PM Reply Like
  • tech01x
    , contributor
    Comments (705) | Send Message
     
    The engine rebuild cost, not the engine alone, is well over $10k. Not surprising that if you went to a dealer, the cost is over $20k to have it done. After all, just the camshaft job is $5k.

     

    As for whether or not one is wiling to spend $50k+ for a luxury car is a different matter altogether. Given the market realities, the answer is yes, people across the world are willing to spend that kind of money in larger numbers than in previous years. Even a Lexus GS450h is $60k starting price. A Model S is price competitive, especially taking TCO into account in the U.S. You are really talking about an IS or an ES at under $50k, both of which are truly not worth the premium that Lexus charges.
    19 Aug, 02:08 PM Reply Like
  • bwmaki
    , contributor
    Comments (392) | Send Message
     
    >>>The engine rebuild cost, not the engine alone, is well over $10k. Not surprising that if you went to a dealer, the cost is over $20k to have it done. After all, just the camshaft job is $5k.<<<<

     

    If you like to waste $ I guess you can do that but most mechanics would buy a low mile engine from a wreck and swap it out. Its a couple grand for an e350 engine and you can end up with a better motor with less miles then the one you destroyed. Experienced mechanics can swap many models engines in a few hours labor. Way easier, cheaper, and quicker than rebuilding the original.
    19 Aug, 03:45 PM Reply Like
  • pot pie
    , contributor
    Comments (642) | Send Message
     
    "How much does it cost to replace a gasoline engine? Is that price going down?"

     

    A gasoline engine will last 150,000-200,000 miles, 15 years or more if taken care of. Certainly far longer than Tesla drivetrains.

     

    Let's see that Tesla battery after 7 or 8 years. I'll say it'll retain half of its original range. Even if it retains 60%, that's significantly less range.

     

    By then you'll have gone through about 5 or 6 drivetrain units and about ten of those 12V batteries they keep replacing.
    15 Aug, 06:52 PM Reply Like
  • maggas
    , contributor
    Comments (473) | Send Message
     
    pie pot,
    the battery technology is evolving daily. think battery packs costing next to zero to replace in 5 years. and zero charging from the sun. tesla will destroy not revolutionize the auto industry.
    15 Aug, 07:40 PM Reply Like
  • TheBanker
    , contributor
    Comments (1343) | Send Message
     
    Your credentials are???? Do you bake pot pies for a living? Are you qualified to make a single statement you just made?

     

    FUD.
    15 Aug, 07:47 PM Reply Like
  • pot pie
    , contributor
    Comments (642) | Send Message
     
    "Your credentials are???? Do you bake pot pies for a living? Are you qualified to make a single statement you just made?"

     

    You are not important enough to me to care whether or not you need any "credentials.".
    15 Aug, 08:29 PM Reply Like
  • pot pie
    , contributor
    Comments (642) | Send Message
     
    "the battery technology is evolving daily. think battery packs costing next to zero to replace in 5 years. and zero charging from the sun. tesla will destroy not revolutionize the auto industry."

     

    Battery packs costing next to zero. Gotcha.

     

    Charging from the sun (I guess the solar panels are free), zero. Gotcha.

     

    Looks like the EVangelists have been in the sun too long.
    15 Aug, 08:32 PM Reply Like
  • chipdoctor
    , contributor
    Comments (756) | Send Message
     
    TheBanker,

     

    Are you really a Banker or just FUDing people?

     

    What are your credentials?
    16 Aug, 01:57 PM Reply Like
  • capt601
    , contributor
    Comments (389) | Send Message
     
    I think the plugshare survey of roadster owners has already proven you wrong again. And the roadster is older battery tech. At 10 years they estimated 12-15% loss on roadster from owners data. Model s should be better.
    17 Aug, 11:39 AM Reply Like
  • Eric Barnett
    , contributor
    Comments (13) | Send Message
     
    How much will it cost to own in that 15 year period with oil changes, catalytic conververters, gasoline etc?

     

    I think you will find that the low cost to replace a battery will be made up from a portion of these costs.

     

    Your statement of bad drive trains being comon place is just FUD and nothing more.

     

    I will be getting a Gen III as soon as they are available, with it I will be able to save more money than I could with my Prius. Heck the 60000mile check cost me almost $500, still got the receipt.

     

    I will not be buying another ICE vehicle!
    15 Aug, 07:34 PM Reply Like
  • pot pie
    , contributor
    Comments (642) | Send Message
     
    "Your statement of bad drive trains being comon place is just FUD and nothing more."

     

    My statement is fact. They have a significant number of drivetrains being replaced.

     

    Denying it doesn't make it less true. Stating the truth doesn't make it "FUD."

     

    They have issues with the drivetrain. And the 12V battery. And cracking windshields. And creaky, noisy interiors. And misaligned panels. And quirky electronics. And staying in alignment. And door handles...
    15 Aug, 08:41 PM Reply Like
  • TheBanker
    , contributor
    Comments (1343) | Send Message
     
    They don't have bad drive trains. They need a shim or a cable, not the entire drive train. Pay attention and learn something. Spreading FUD isn't welcomed by most here reading your nonsense.

     

    Which manufacturer doesn't have small problems. I had a problem with my windshield, my paint, creaky door, creaky seatbelt, rattling dash, door panel popped off, window molding came off and dash lights that malfunctioned in my GM. I'll take a TSLA MS any day.
    15 Aug, 08:50 PM Reply Like
  • pot pie
    , contributor
    Comments (642) | Send Message
     
    "I'll take a TSLA MS any day."

     

    Hey, you want to spend $100,000 for all those problems, that's your money.

     

    There's one born every minute.
    15 Aug, 08:55 PM Reply Like
  • pot pie
    , contributor
    Comments (642) | Send Message
     
    "They don't have bad drive trains. They need a shim or a cable, not the entire drive train."

     

    Of course that's what the CEO is going to say. That they misdiagnosed it, that it's several smaller problems and easily fixable. But that's not proven to be the case in all of the drivetrain issues.

     

    I guess replacement of the propulsion battery was just a small thing, too. Because they've been replaced as well.
    16 Aug, 12:26 AM Reply Like
  • Frank Greenhalgh
    , contributor
    Comments (1716) | Send Message
     
    Where does the shim go? To add the shim probably requires taking the drive motor apart and adding the shim. This is not a $0.50 replacement.
    If Tesla has to recall 25,000 cars it could be very costly.
    I suspect that the bearings might also be a problem as S owners love to do the head snapping acceleration which takes the 2 1/2 ton car to 60 MPH in 4 seconds.
    17 Aug, 09:18 AM Reply Like
  • capt601
    , contributor
    Comments (389) | Send Message
     
    Frank. I suggest you go down to a tesla service center and get a tour. Its obvious you have never seen a tesla. It might help you from getting sued by tesla for slander. And im sure many people here woudl love to show you there model s with zero issues on them.
    17 Aug, 11:41 AM Reply Like
  • cparmerlee
    , contributor
    Comments (2479) | Send Message
     
    Frank wrote "If Tesla has to recall 25,000 cars it could be very costly."

     

    They don't have to recall any of them at this point because they have just committed themselves to doing this "recall" over the span of 8 years. The failure rate (anecdotally) has been so high that one can reasonably assume that most, of the S models currently in the field will require this rebuild at some point in the 8-year warranty. So it could easily be 35,000 cars that have to be reworked over that time.

     

    35K rebuilds spread over the next 7 years (on average) isn't the end of the world (a hundred a week or so). If we figure 3 hours labor per job (including the swap time) at $70/hr plus some transportation costs, that is probably $1.5M a year for the next 7 years. Let's say I am off by a factor of 4, that's still under $10M a year.

     

    The real questions are:

     

    1) Are current production vehicles more reliable?

     

    2) Does this really fix it?

     

    3) What else is going to break with all that torque they obviously didn't engineer for properly?
    17 Aug, 11:55 AM Reply Like
  • Pavlof
    , contributor
    Comments (168) | Send Message
     
    Wow! Well that pretty much guarantees the resale value of the car. 8 years and unlimited miles plus transferable is hard to beat. You can buy a 3 year old vehicle and still have a 5 year warranty. That is better than most new vehicles. A used Model S suddenly sounds like a deal. Well at the right price.
    15 Aug, 08:01 PM Reply Like
  • chipdoctor
    , contributor
    Comments (756) | Send Message
     
    Pavlof,

     

    You comments reminded me of Joe Isuza, so I added some more of his quotes below:

     

    "You have my word on it."

     

    "If I'm lying, may lightning hit my mother." (“Good luck, Mom!” appears on screen.)

     

    "It has more seats than the Astrodome!"

     

    "Hi, I'm Joe Isuzu and I used my new Isuzu pickup truck to carry a 2,000 pound cheeseburger."

     

    "The Isuzu Impulse: faster than a speeding—[catches a bullet in his teeth]—well, you know."
    16 Aug, 02:07 PM Reply Like
  • Aussie observer
    , contributor
    Comments (19) | Send Message
     
    It all smacks of desperation by a company that won't be around to deliver. This is not a business plan. Free chargers , free service and guaranteed resale. This is not the real world.
    The real world is the head of Honda saying the their FCEV will be as common as the Prius is today by 2020. That 2 million plus cars . All the other car companies will be doing the same.
    15 Aug, 08:53 PM Reply Like
  • chickensevil
    , contributor
    Comments (665) | Send Message
     
    The chargers are not free you pay 2k for access. The service is not free only warranty service. The resale is guaranteed to be at least in line with the competition... So unless the car isn't in line with the competition this is also not an issue.

     

    They haven't even sold one hydrogen car yet and you expect 2 million by 2020? OK... That is quite a leap of faith. And the hydrogen pumps cost a cool 500k per station... "Simple" though right?
    15 Aug, 10:19 PM Reply Like
  • Matt Raket
    , contributor
    Comments (183) | Send Message
     
    Wow, 2 million hydrogen cars? And where will those cars get their hydrogen from? My Model is being charged at home or at work. For longer trips I use the (ever expanding) Supercharger network. For hydrogen to work you need stations in every town, more in bigger towns. That means thousands of stations at a cost of $1 million each. Are Honda and Toyota going to provide those BILLIONS?
    16 Aug, 08:43 AM Reply Like
  • capt601
    , contributor
    Comments (389) | Send Message
     
    Hydrogen oumps are estmated at 1 million each, not any cheaper.. California just got a great deal on 19 of them for 40 million. Fanatstic!
    And what hydrogen foes are forgetting is that you will need a hydrogen tank at every gas station, and multiple ones at that. Remember you are touting it is quick and as convenient as filling up an ICE car. That means a hydrogen pump at every station to make it convenient. Gonna get quite expensive.
    Meanwhile, ev owners spend 5 seconds everytime they get home and have a full tank every morning. Zero hassles and searching for a gas station.

     

    And lets not even get started on price for hydrogen fuel. It wont be cheap as big oil will need to make money on it. Dont be fooled.
    17 Aug, 11:47 AM Reply Like
  • Aussie observer
    , contributor
    Comments (19) | Send Message
     
    The belief that the lack of hydrogen infrastructure will hold back the tide is wrong. Most of the infrastructure is already in place namely 200 million miles of gas pipelines and 10s of thousand service stations. All you need is a gas reducer and a pump and you are in business selling hydrogen. That's a business plan.
    Look at what's happening with forklifts because they are the lowest fruit. Fuel cells are replacing batteries.
    Iceland because they are already on renewables is the first economy going hydrogen but the rest will follow.
    The future is there to see if you look objectively
    15 Aug, 09:05 PM Reply Like
  • chickenmantesta
    , contributor
    Comments (24) | Send Message
     
    Iceland has geothermal energy out its wazoo. Imagine having the equivalent of a couple nuclear power plants underneath your tiny island and you can do all sorts of strange experiments with hydrogen.

     

    For the rest of us, the present electrical grid based on a mix of hydro, nuke, coal, natural gas, or solar sources is sufficient.
    15 Aug, 10:45 PM Reply Like
  • capt601
    , contributor
    Comments (389) | Send Message
     
    And than you have another inefficient and expensive way for people to drive around with involving big oil. Genius idea Aussie!.
    And this way the dealers will have cars that require more maintenance. Funny how Toyota and Hyundai like that idea.
    17 Aug, 11:56 AM Reply Like
  • Frank Greenhalgh
    , contributor
    Comments (1716) | Send Message
     
    If the EV is superior to the fuel cell, the Fuel Cell vehicles will fail. But if Toyota the largest car company in the world is investing heavily in fuel cells they must have good reason to.
    The pundits on SA aren't running a multi billion dollar company, they just want Tesla to rule.
    17 Aug, 09:51 PM Reply Like
  • John Bingham
    , contributor
    Comments (869) | Send Message
     
    Frank,

     

    Let's wait and see where these HFC cars are initially launched in any quantity.

     

    Toyota and the other HFCV makers are worldwide companies with a visible presence in pretty much every territory. So if the launch is worldwide with no preference other than the expected car market uptake for each region then the manufacturer means business. If it's primarily in places with the stricter emissions regulations, carbon credits or other handy deals then you can call it a compliance car.

     

    Look to CA first. That's the giveaway.
    19 Aug, 06:06 AM Reply Like
  • Miro Kefurt
    , contributor
    Comments (666) | Send Message
     
    Of course the fools that purchased the 60kWh models be dammed, and let their cars be rendered worthless !!!

     

    Also where is the fine print ? The actual terms of the Warranty can not be found on Tesla web or anywhere else !!!
    16 Aug, 03:26 PM Reply Like
  • chopchop0
    , contributor
    Comments (3301) | Send Message
     
    Click the link at the top. It clearly says that it will retroactively apply to all model s sedans ever built!
    16 Aug, 05:15 PM Reply Like
  • Miro Kefurt
    , contributor
    Comments (666) | Send Message
     
    When people start comparing ICE to EV, they seem to neglect the Automotive Data for last 100+ years and the last 14 years of NEW vehicle buyer trends.

     

    For last 28 years the average mileage when vehicle is retired (junked, crashed, etc.) and no longer re-registered has only increased from 120,000 miles to 128,000 miles that is on average 8,000 more miles in 28 years !!! (US DOT Data)

     

    The average vehicle age on the road however increased from 6.9 years to 11.4 that is back in 1985 for every one NEW car there was one that was as much as 13.8 years old, while now for every NEW car there is one that is as much as 22.8 years old ! (Ward's Auto and RL Polk Data)

     

    That is OLD cars last as much as 9 years longer, but not get many more miles on them before retirement.

     

    In that context is there any hope that NEW 2014 Model S will be still running or even the battery available in 22.8 years ?

     

    As for the Automotive Sales in USA, 82% of people replace the NEW vehicle they bought with NEW vehicle in 3 to 5 years. (NADA and Automotive News Data)

     

    Only 5% of NEW vehicle buyers ever buy car to keep it "forever", but in real life only 2% actually do. (RL Polk and JD Power Data)

     

    OEM will ALWAYS cater to the 82% of their customers, and NOT to the 2% - or else they will NOT be in business.

     

    From the 82% of NEW car buyers, 92% have trade-in - but TESLA does not do trade-ins, but tells you to sell your vehicle yourself (even if it is Roadster or Model S, especially if it is 60kwh model) or go to AutoNation.

     

    The fact that with the INFINITE warranty TESLA decided to punish all the early Model S 60kWh buyers, is simply incredible if not insane move.

     

    So the current business model that TESLA has simply does not cater to the majority of vehicle owners and NEW car buyers, and thus there is no hope that it will ever become a mass market OEM.

     

    They need Franchised dealers to become relevant in USA.

     

    But in order to attract any they business model would have to be profitable, which currently is not, thus even if they started to offer TESLA franchise tomorrow, there would be no sensible dealers that would sign up. Especially since they already poisoned their relationship with NADA.

     

    Any dealer will tell you that their highest profit segment of their Dealership is USED CAR Sales, yet TESLA has no certified used Model S, so if you want "used" TESLA you have to go to E-Bay.

     

    What does that tell you about TESLA confidence in their own cars once they were contaminated by previous ownership ????
    16 Aug, 03:43 PM Reply Like
  • cparmerlee
    , contributor
    Comments (2479) | Send Message
     
    Miro wrote "Any dealer will tell you that their highest profit segment of their Dealership is USED CAR Sales, yet TESLA has no certified used Model S, so if you want "used" TESLA you have to go to E-Bay."

     

    All of your points are very well taken, especially the points about how the mainstream buyer operates. If you haven't noticed, Tesla often acts like a petulant child, shouting and pouting, then abruptly running off in a completely different direction from yesterday. In the end, their stores will have to deal with financing, trade-ins and used car resale, no matter what they are saying today. And that begs the question whether there will actually be any real difference in their sales model in the end. The industry sales model is the way it is because the way customers are. Remember, Saturn? They aren't here anymore.
    17 Aug, 12:34 AM Reply Like
  • capt601
    , contributor
    Comments (389) | Send Message
     
    Cparmelle. Wow. "The industry is the way it is because it is the way the customers are". Wow. It is that way because of the dealers and dealers only. Kind of like a Ponzi scheme. Very few consumers like the current process, yet we are stuck with it be aside the dealers. They know what they have and they know the profit to be made off of the auto companies and the consumers. Pretty sad way to run a business. Zero customer service form dealers when you think about it. It's all about scamming the customer. And mainly with there profit center- the service center. Do you really think they build these Taj Mahal dealerships for customer service? It's to scam the consumer out of more money.
    Dealers want manufacturers to build crappy cars as that is where there profit is to be made. They don't help the consumer and improve the product,mthey just keep bilking the comsumer or the warranty side of auto company,
    17 Aug, 12:01 PM Reply Like
  • Frank Greenhalgh
    , contributor
    Comments (1716) | Send Message
     
    Capt601
    Why would a BMW dealer scam you. All service is free for the first four years or 50,000 miles? This includes a free loaner also. All dealers are not the same.
    All Dealers do allow manufacturers to even out their production lines and also take trade ins and provide financing.
    Today's ICE cars are very reliable, oil changes and fluid checks are every 6 months. You also don't have to go to a dealer for service.
    17 Aug, 10:08 PM Reply Like
  • pot pie
    , contributor
    Comments (642) | Send Message
     
    Excellent comments, Miro.
    16 Aug, 06:14 PM Reply Like
  • Atkins
    , contributor
    Comments (1040) | Send Message
     
    Miro's points are well taken. I am not about to pass judgment on Elon Musk because he's a creative genius and might be able to overcome all of the hurdles that Miro mentioned. However, unless Tesla can substantially lower the price of its vehicles, it will have no chance of unseating the well-run existing makers and will remain a niche brand.

     

    Tesla draws a ton of interest from college students and 20-somethings. Dozens of them have told me how much they like the cars. Clearly, Tesla is an aspirational brand to them, and that fact should rightfully make Elon simile.

     

    However, we know that college students are not finding decent jobs upon graduation, and 20-somethings are stuck in an economic malaise causing many of them to live with their parents far longer than they probably would like (although there are many benefits, indeed, to living with mom and dad). The 20-somethings with well-paid jobs in large urban areas are not representative of those in the vast majority of the country.

     

    To the readers of SA who would retort, "Yes, but the fog is lifting, and hiring is up," you obviously do not own, run or otherwise manage a business (and I do not mean a Website design firm in your basement) because if you did, you'd know that hiring is almost uniformly at lower wages and with lesser benefits than for similarly situated positions pre-2009.
    
    Yes, the glass can be seen as half-full, but a Tesla is still going to be out-of-reach to the generation that is its most-receptive audience.
    16 Aug, 09:45 PM Reply Like
  • cparmerlee
    , contributor
    Comments (2479) | Send Message
     
    Atkins wrote "Yes, the glass can be seen as half-full, but a Tesla is still going to be out-of-reach to the generation that is its most-receptive audience. "

     

    What you say is absolutely true. And for the vast majority of the marketplace, the price they can pay is mostly a function of age. Older people are more likely to be able to afford luxuries. But younger people are more likely to connect with the aspirations.

     

    The market is a continuum. Tesla is very high up the luxury scale, as least according to the price tag. The X is even more so. At that range there are evidently enough buyers for about 30,000 - 50,000 vehicles a year, but probably not too much more than that.

     

    The Model 3, assuming it ends up with an ASP in the 50s might get them into a market segment that will buy 100K-150K a year, but I think that is really pushing it considering how the competitive landscape is shaping up. There is no way that gets them into a segment that will buy a half million a year.

     

    This stock is not "priced to perfection". It is priced BEYOND perfection. There could certainly come a time that these things can be produced at a price millions of people can afford and will want to buy. But that isn't any time soon. Meanwhile they have some real compounding financial problems that may swallow the company alive if they can't get closer to the mainstream.
    17 Aug, 12:46 AM Reply Like
  • doubleE
    , contributor
    Comments (1301) | Send Message
     
    Funny BMW somehow manages to sell almost 2 million cars a year. The fastest growing segment of the car market is luxury. Do you even try and be factual. Tesla is not suddenly going to have compounding financial problems because you say so. It just does not work that way.
    17 Aug, 02:09 AM Reply Like
  • cparmerlee
    , contributor
    Comments (2479) | Send Message
     
    EE "BMW somehow manages to sell almost 2 million cars a year"

     

    They don't sell 2 million EVs a year. Nobody does.

     

    A John Deere 6170R tractor costs about the same as A MB SL class. Would we say that the Deere 6170R ought to sell about the same numbers as the SL?
    17 Aug, 12:03 PM Reply Like
  • doubleE
    , contributor
    Comments (1301) | Send Message
     
    Tesla makes luxury cars. The luxury car market is huge. It has shown that it can compete at the top end of the luxury car market, it will have no problems moving downmarket. Regardless of their drivetrain, they are in a market segment that can support the volume they aspire to.
    17 Aug, 03:53 PM Reply Like
  • tomfrompv
    , contributor
    Comments (3641) | Send Message
     
    EE,
    Its funny how you hear CParmerlee say one thing, but I hear another. BMW has a wide range of models. Tiny cars, huge cars, SUVs, roadsters, and ones in between. So they sell their 2 million over a large market.

     

    Tesla cuurently sells one model car, a huge car. They will sell a big SUV at a higher price than the S. And supposedly one more model in 2017. 3 models. They leave out the big markets which are lower price.

     

    The stock price IS out of whack. Tesla sells less than 40,000 cars and is worth $30 billion???? Does that mean when they sell 400,000 cars they will be worth $300 billion? Does anyone think that, seriously?
    17 Aug, 02:35 AM Reply Like
  • doubleE
    , contributor
    Comments (1301) | Send Message
     
    BMW and Daimler have done very well for themselves without competing with Toyota and hyundai. If the luxury car market was not profitable, other players would not be trying to enter it. Tesla does not need to ever compete with hyundai or Toyota to be successful. Personally I hope they never sell a car less than $35,000.
    17 Aug, 03:56 PM Reply Like
  • tomfrompv
    , contributor
    Comments (3641) | Send Message
     
    EE,
    You totally missed the point about multiple models. Tesla currently sells one model. How many types does BMW make?

     

    If you want to compare company sales, you have to go market segment by market segment. Tesla competes in one segment.
    17 Aug, 04:30 PM Reply Like
  • awakeinwa
    , contributor
    Comments (308) | Send Message
     
    Tesla is valued thusly because they are the only electric car company that can produce product that can replace an ICE car for daily metropolitan use. There are no other car companies remotely close.

     

    All this efficient market dogmatic banter about other car companies taking Tesla for lunch is akin to the same banter one hears about Samsung, Android, Google, Microsoft taking Apple out for lunch.

     

    After all these years, Apple is still the most profitable per unit and on aggregate. Similarly, I do not presume that ICE-based carmakers can just snap their fingers and come out with a Tesla-equivalent anymore than Samsung can to beat the iPhone short of dumping it as a loss-leader.

     

    Tesla has a huge moat that is only bridged by people's overactive imaginations giving the likes of GM genius level engineering ability of which history is replete with counterexamples and the astounding market acumen of which 2009 clearly demonstrates is unfounded.

     

    Tesla is in a league on its own. BMW try as they might is a houseful of incremental innovation that has stagnated for the past decade now. Once your uncle Jim can buy an electric vehicle for 30k with 0-60 <5 secs with 200 mile range, not ever go to a gas station and tells his friends about it, simply put, game over.

     

    That is what's getting priced in. Given their track record, they've executed flawlessly as is possible in the real world. And as each day passes the amount of nitpicking will fall on the wayside even as the likes of GM gets a grand canyon sized pass off
    18 Aug, 10:56 PM Reply Like
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