Seeking Alpha

JackB125

JackB125
Send Message
View as an RSS Feed
View JackB125's Comments BY TICKER:
Latest  |  Highest rated
  • Tesla Motors to test referral program [View news story]
    I don't drive (medical restriction) and do not own a Model S. However, I am a stockholder and very enthusiastic about the car. So, I talk about it with friends and family. So far, I've gotten 7 people to take a test drive. One was close to buying, but had a change in employment and decided to wait. Another test driver is considering a 70D. All the rest are waiting for the Model 3. I'm planning on convincing a cousin to finally take a test drive when I can make sure that a P90D "Ludicrous" model is available. And, I think it very likely that the cousin will either buy the "Ludicrous" model or perhaps a high end Model X after a spousal "Oh no you're NOT" conciling session.

    In any case, I have been acting as a pseudo salesman/educator for Tesla -- not to be paid; but, just because I believe in the products & technology.

    However, if my activities generate a sale, I think it only fair that Tesla should give me some small compensation. I'm not really interested in the $1000 for a future purchase. But, I would very much appreciate the recognition.

    I have heard many owners express similar views on generating incidental sales like this. And, I've heard folks express this opinion to Elon multiple times.

    Consequently, I think that this new program is about making sure that current Tesla owners who generate sales feel like they are being treated fairly. And, more importantly, get some recognition for those sale(s).

    The program has nothing to do with demand -- it's about customer satisfaction (in my case, investor satisfaction).

    If demand were a problem, a little advertising would make a lot more sense.
    Jul 30, 2015. 06:40 AM | Likes Like |Link to Comment
  • Tesla Will Need To Restructure [View article]
    Whenever I see that an argument is based on comparing Tesla to long established nearly exclusively based ICE technology auto manufacturers, I pretty much dismiss the article at that point and move on. Tesla is a very rapidly expanding technology company -- the old auto manufacturers are anything but.
    Jul 27, 2015. 07:31 AM | 2 Likes Like |Link to Comment
  • GM Pokes Tesla With Chevy Bolt Development Progress Report [View article]
    Hello @Davewmart,

    First let me say that I agree with you that the PHEV solution for long distance trips is likely to always be superior than that of a quick charge pure BEV. That said, with a PHEV you loose every other benefit that makes the BEV so compelling.

    1) Reliability -- The Model S has 20% of the moving parts of a comparable ICEV. That percentage is even lower when compared to a PHEV with all the parts of an ICEV plus all the parts of an EV plus the crossover system.

    2) Maintenance -- See 1.

    3) Safety -- With all the additional ICEV & crossover parts, you will have a higher center of gravity, a likely uneven distribution of weight across the front and rear wheels, smaller crumple zones & less ideal energy absorbing crush members.

    4) Convenience -- Less passenger space & less storage space.

    I don't know how much value most folks put on each of these characteristics. However, if I were still driving, I would very rarely (2-3% of the time) be going on trips that would be long enough to enjoy the better range and quicker refueling of the PHEV. Also, with a PHEV I would be giving up the four superior BEV characteristics listed above 100% of the time. It's really true that you can do so many things better with a BEV when compared to an ICEV, HEV or PHEV. Putting an ICE into a BEV ruins the BEV's value proposition -- at least it would have for me.

    All that said, I am sure that there are folks that for one reason or another would do better with a PHEV. Nevertheless, I suspect most of us have driving patterns that would favor the BEV as long as it had at least a 250 mile range.
    Jun 27, 2015. 02:04 PM | 5 Likes Like |Link to Comment
  • GM Pokes Tesla With Chevy Bolt Development Progress Report [View article]
    @watchingfromabove,

    Thanks for laying out such a detailed explanation. I can see both the legitimization argument and the additional ICE amortization time argument from GM's perspective. From the customer's perspective, however, I think that the comparison to Tesla's SuperCharger network will put GM's CHaDEMO solution in a very bad light. I wonder how this might affect initial sales -- it sure won't help. And those that buy a Bolt and live with the disparity for 2-3 years may be much more likely to choose Tesla if they go for another EV.

    I think that the most disappointing part of this is that GM is doing their Bolt customers such a disservice with this choice. GM sure doesn't need to add any more doubt or even ill will towards their brand. But, they are in a much, much better position to see how to run their company than I am.

    Final thought... I really would like to see GM get past all the negative recalls, pay back its loans and regain all the respect it once had. If they had gone the other route, their customers would definitely be happier & perhaps some of the Tesla cache would come their way as well. But, again, they know their business far better than me.
    Jun 27, 2015. 01:13 PM | 4 Likes Like |Link to Comment
  • GM Pokes Tesla With Chevy Bolt Development Progress Report [View article]
    Dave_M,

    I too see the "no road trip capability" as a glaring hole in their business plan. If they were serious about the BOLT, why not strike a deal with Tesla for use and buildout of the SuperCharger network? The fact that they haven't done so leads me to think that they want this to be a limited run compliance car only -- absolutely no cannibalization of any of their ICE vehicles. GM is still treating their EV group like a "red-headed stepchild." <-- That is one of my Dad's very strange sayings. I always translated it to "least favored child by a wide margin."
    Jun 27, 2015. 09:44 AM | 5 Likes Like |Link to Comment
  • Will Tesla's Model 3 Compete? [View article]
    Dave:

    Great reply. I find myself dismayed about the early 2013 near sale to Google with no indications whatsoever that there was such a serious cash problem at the time. I have to remind myself that with Elon it's all about the mission. That is "to accelerate the advent of vehicle electrification in order to move to a sustainable energy system." We investors should print that out and read it at least once a week. It's not about the money with Elon; it really is all about the mission. With most companies it's just the opposite -- money is #1, #2 & #3 and the mission statements are just nice prose that executives feel obligated to put down every so often then forget about.

    I think that this all consuming drive for the mission is what compels him to not be as open with investors as I wish he would be. On the other hand, it was largely this very same drive that got me to invest in Tesla during the high $20's to low $30's in 2012 & 1H2013 (stock & calls). I was very lucky & did well with those investments and I'm still holding on to the bulk of my TSLA stock. But, I too no longer trust that I'm getting the full story. Consequently, I've been putting 3-6 month collars around my TSLA stock to protect a good portion of my unrealized profits.

    Back to Elon's (atypical for a CEO) goals... Making money is a secondary objective done entirely to support the above mission. However, it's this secondary objective that is usually the primary goal for the investors. We're fortunate that the $ objective and the primary mission are so closely aligned. I still believe Elon to be basically honest, but often misunderstood. On the one hand, we don't hear about the near sell to Google; on the other, he blurts out that the stock price is "higher than it deserves to be" at the Nevada Gigafactory press conference! I think the former was done in an attempt to safeguard the mission; the latter was just an engineer blurting out what he was thinking at the time.

    I too love the car. It was after I watched Peter Rawlison's 3 Tesla Engineering YouTube videos that I began to think that EV's could displace ICE vehicles over the next 20-30 years. I just wish that I could drive one of the darn things! I became medically restricted (Parkinson's) from driving in 2013 -- sigh... That was a drag, but my TSLA investments were a godsend right when we needed one.

    On to reliability... They certainly had some troublesome early problems & still have some annoying minor problems. But, when I think of them building a completely new, from-the-ground-up design in a new manufacturing facility with new equipment operated mostly by an inexperienced workforce, I am AMAZED with how good the reliability was!
    I expected significantly more problems. And, it sounds like the quality has made great strides forward since those first handful of sedans were delivered in June 2012. Furthermore, I fully expect the quality to continue to improve.

    In closing, I agree with you that TSLA is still quite risky at this point & that risk is exacerbated by Elon's incomplete communication. On the other hand, I still think that perhaps as much as 10-20x gains are possible over the next decade or so. I'd give the chances 60% for the very good outcomes & 40% for problematic outcomes. Ten years from now (if an AI hasn't destroyed the world) we'll probably know.

    I've enjoyed our conversation. If you would like to continue it further, would you consider a phone call? The PD makes typing this much difficult for me. If so, you could send me your number in a private message. Or, if you prefer, I could send you mine. Just let me know.

    Best regards,

    Jack
    Jun 27, 2015. 08:41 AM | 3 Likes Like |Link to Comment
  • Will Tesla's Model 3 Compete? [View article]
    @Davewmart,

    In 2012, Tesla only sold 2,650 Model S's. Suppliers didn't believe the order sizes that Tesla attempted to line up & were caught flat-footed when Tesla was actually selling cars in the thousands. Tesla had to do crazy expensive things like shipping tires via international air flights. Those parts were wildly expensive. But, Tesla kept making cars & suppliers' orders kept coming in. Some suppliers were dropped; some new ones added.

    In 2013, Tesla sold 22,477 Model S's; in 2014, 31,655. This year they are aiming for 50,000+ -- we'll see.

    These numbers are insignificant when compared to the VW group or Toyota. So, you are correct that the larger manufacturers will certainly get better prices on common parts.

    However, from 2650 to let's guess 50,000 in 3 years with a business plan for 500,000 vehicles in 2020, I think it is safe to assume that Tesla has gotten some significant price reductions from their suppliers since 2012. Yes, the VW group can get even better prices due to their size. But, the suppliers don't expect the same year over year growth from the VW group that they do from Tesla -- that's bound to help a bit as well.

    Also, I imagine that some of the suppliers may be thinking along the same lines as Ron Barron. If Tesla hits its 2020 $100/kWh cell cost, they will have cost parity with ICE vehicles. That will be the beginning of an unstoppable decline of ICE vehicle sales. If the EV (I'm assuming a 250-350 mile range & even faster SuperChargers in 2020) costs the same as an ICE vehicle, most people are going to choose the EV. The EV will be safer, cost less to operate, and will be more reliable (only 20% of the moving parts of an ICE). Any supplier with that sort of outlook will want to develop a good relationship with Tesla now.

    It will be years (if ever) before Tesla will get supplier pricing in absolute terms as good as the VW group. But, if they can execute to their plan, they should continue to see pricing improvements that when compared on a year-to-year percentage improvement basis would be something the VW group could never even hope to dream for.

    One last thought... I've read again, and again over the last couple of months, "LOOK AT TESLA'S CASH BURN!!!" Then, in the next paragraph, "xyz competition is coming!" I would argue that the latter (although not as dire as it is often stated) is the cause of the former. As an investor, yes, I too am concerned about how fast the cash is going. But, I also believe it is in the best long-term interests of the company to expand as quickly as possible at this stage of the game. And, I'm relieved with the slow pace of EV development by the major manufacturers. In fact, it looks like compliance car games only to me at this point. When one of the majors works out a deal for use and shared buildout of Tesla's SuperCharger network, that we be the sign that they are serious about building & selling EV's.
    Jun 27, 2015. 06:22 AM | 4 Likes Like |Link to Comment
  • GM Pokes Tesla With Chevy Bolt Development Progress Report [View article]
    More EV's in the market can be a good thing for Tesla. It helps educate the new vehicle consumer about EV's & it bolsters consumer confidence that EV's are a viable product that will be here in the future.

    The disappointing thing about the GM announcement is that they did not share any ambitious plan for significant increases in battery production. Are they planning on just a small number of compliance cars? That would be very disappointing.

    Also, what if any provisions will they have for quick charging on long trips? Will their packs be able to charge at 100+ kW power levels? Are they planning to build their own SuperCharger network or will they try to strike a deal for use of Tesla's SuperCharger network?

    Anton, thank you for disclosing that you are short TSLA -- the article certainly reads that way. IMO, it seems like you have started with a conclusion about TSLA, then cherry-picked facts in support of your conclusion. Any "Tesla Killer" article that does not cover a huge new battery production project and a viable plan for long cross-country type trips seems incomplete at best & disingenuous at worst.

    Sorry to be so harsh, but IMO, you have done much, much better articles that have had novel information & insightful analysis. This one appeared to be more of a "talking your book" article -- at least to me.
    Jun 25, 2015. 10:46 AM | 12 Likes Like |Link to Comment
  • Will Tesla's Model 3 Compete? [View article]
    @watchingfromabove

    When state legislatures wrote the first vehicle franchise laws in the 1950’s, the manufacturers were indeed not acting in good faith with their dealerships. The laws provided a reasonable remedy at the time. However, the laws were problematic in that they:

    1) were inherently anti-competitive and protectionist (rentier capitalistic);

    2) had no time limit; and,

    3) did not provide the manufacturers with sufficient flexibility in the following decades to adjust to new and changing business environments.

    If the laws had been written with a reasonable time limit, perhaps 10 years, they would have acted more like patents granting the existing dealerships protection from direct sales for a limited time only. I strongly believe that these protections should have expired at some point in order to allow for the return to a fully competitive new vehicle free market.

    You wrote:

    “This legal obligation should be retained and corporations should not be able to renege on legal obligations as long as the independent party meets its obligations of the contracts.”

    I agree with you that both parties should meet their contractual obligations. However, the problem with the state laws is that they went way beyond any of the existing contracts of the time. Furthermore, state legislatures repeatedly modified these laws over the ensuing decades giving dealerships ever more protections. See "Markets State Franchise Laws, Dealer Terminations, and the Auto Crisis" at http://bit.ly/1GjqbDm . It was through this process that even new manufacturers with no previous dealership arrangements are now forced to use third parties in many states.

    As you also wrote:

    “Tesla entered no such agreements with independents and should not in any way be bound by the arrangements of other companies with their sales and service representatives. In my opinion this is a restraint of trade on any company which has not created prior obligations to independent outlets. No company without prior commitments should be restrained in lawful trade with viable consumer protections based on what other companies did before them.”

    Here we are in complete agreement.

    The problem that exists today is that these laws have long outlived their usefulness. Now they provide nothing but rentier capitalistic protectionism. And, I am far from alone in this opinion. See the FTC blog “Who decides how consumers should shop?” at http://1.usa.gov/1Gjq9eW . Also see “Over 70 economists and law professors sign letter opposing anti-Tesla direct automobile distribution ban | Truth on the Market” at http://bit.ly/1GjqbDp . An incredibly diverse set of people and groups are against these laws today. See “Koch Brothers, Sierra Club Join Tesla in Fight With Dealers - Bloomberg Business” at http://bloom.bg/1GjqbDq .

    Sixty years of protection is far more than enough. It’s time for manufacturers and their dealerships to negotiate new contracts and go back to a relationship that doesn’t depend on who spends the most money on lobbyists and political contributions. No other country on Earth has such a byzantine set of laws denying direct sales for new vehicles. You can buy a Model S directly from Tesla in China -- but not Texas! Again, it’s time for the state vehicle franchise laws to go.
    Jun 18, 2015. 12:33 PM | 3 Likes Like |Link to Comment
  • Will Tesla's Model 3 Compete? [View article]
    @ cparmerlee

    I have nothing against dealerships. In fact, prior to moving to Oregon last year I used a central Texas Toyota dealership for new vehicles and ALL service (which was excellent) for over 20 years.

    That said, I think it is crazy that the State has legislated that only third party dealerships can sell new vehicles. There are many, many excellent economic arguments for repealing these anti-competitive laws & over 85% of the Texas electorate believes that they shouldn't be restricted to only dealerships for new vehicle purchases.

    If a dealership provides good service, they should be able to succeed in a free market without some sort of state-mandated, rentier capitalism laws that protects them from any new business model that may come along.

    Again, I have nothing against dealerships; but, the state franchise laws should go.
    Jun 18, 2015. 02:39 AM | 4 Likes Like |Link to Comment
  • Will Tesla's Model 3 Compete? [View article]
    WOW! What an article! Randy, your analysis is superb. This is truly a GREAT contribution to all of us that have interest in Tesla. Thank you putting in all that work and sharing it with the SA community.

    The only other comparison category that I can think of is safety. Moreover, I would expect that the nature of a pure EV (no drivetrain, no exhaust system, no fuel tank, very low center of gravity, more crush space & nearly ideal energy absorbing crush members) plus the “auto pilot” style smart safety features will result in a level of overall safety in the Model 3 that ICE/hybrid vehicles by their very nature will never be able to match.
    Jun 16, 2015. 12:30 PM | 6 Likes Like |Link to Comment
  • Full Simulation Of The Tesla Battery: Insights For Investors [View article]
    Great article! Thank you for putting in all that work & sharing the fact based, non-biased writing. I wish that more TSLA articles shared this level of objectivity.
    May 6, 2015. 01:55 PM | 5 Likes Like |Link to Comment
  • Tesla Motors: Did Elon Musk Already Lower 2015 Delivery Guidance? [View article]
    IMHO, Elon’s ambiguous statement to a news organization does not even come close to rising to the level of a Regulation FD violation.

    On the other hand, the BATS exchange sells order flow and pricing information to a whole host of HFT’s about 300 milliseconds before the NBBO computers obtain and make the data public. The HFT’s pay hundreds of millions of dollars annually for the early access to this information and make billions of dollars in profits from these early “selective disclosures.” Does anyone think that this practice is a “Fair Disclosure” violation? Most of us pay for it on the majority of our trades. Thoughts?
    May 5, 2015. 06:22 PM | 2 Likes Like |Link to Comment
  • The Silliness Of Tesla's 10kWh Back-Up Battery [View article]
    Hi Dave_M, I've spent a lot of time trying to puzzle-out some way to put a dryer in a conditioned space without creating the huge infiltration & vent balancing problems that the darn things can cause. I eventually resigned myself to placing it in an unconditioned space -- an unsatisfying solution. This last weekend I read about a Whirlpool heat-pump dryer that doesn't use need a 4" vent to the outside! See http://bit.ly/1F2xhSk . LG is supposed to come out with one as well before long. These heat pump dryers look like an ideal (albeit expensive) solution.

    Before you go with a NG dryer (if you plan for it to be in a conditioned space), while it may be much cheaper to run than a full electric dryer, you also have to pay an infiltration penalty 24/7. Plus, the dryer will overwhelm any other exhaust vent you may have running at the same time. The only way to know the best cost solution is to run an energy balance for your particular situation.

    Best of luck.
    May 4, 2015. 04:44 PM | Likes Like |Link to Comment
  • The Silliness Of Tesla's 10kWh Back-Up Battery [View article]
    For any market to work well, we must have good, current information. To that end, I think that the entire grid charging fees and costs need to be updated to reflect the new available technologies. Homes that have a PV/battery system will help to smooth the demand curve thus saving utilities the capital and labor costs associated with peak generation equipment that will no longer be needed. Moreover, peak-shaving and load-shifting from this type of local generation and storage will allow for higher utilization of the remaining generation equipment as well decrease repair expenses. Furthermore, in a smart grid, the nature of the widespread generation serves to harden the grid against attacks and/or natural disasters. The local generation equipment, the battery packs and eventually tied-in BEV's as well, will additionally make the system more reliable and resilient. Lastly, the bulk of our non-renewable generation has well-known deferred costs in the form of global warming gases that have often been dismissed as pure economic externalities -- externalities that the overwhelming scientific consensus predicts will lead us to a true tragedy of the commons that will likely take centuries to unwind.

    The net of all this is that local generation and stationary energy storage at the current prices would be likely to decrease the true total costs of the majority of today's electric utilities. Moreover, as PV and energy storage costs continue to drop, these benefits will enjoy further gains. The trick is to setup the market so that all of us are paying a realistic portion of our costs to the system minus whatever benefits our local generation and energy storage bring to the table. The most controversial elements of a "true-cost" system like this will be getting people to agree on the values of enhanced equipment utilization, decreased maintenance & repair costs. However, the truly contentious challenge will of course be estimating the savings of the decreased greenhouse gases. Perhaps we could treat this effort as we have done military base closings. Hand the problem over to a body of qualified experts to estimate the projected costs and savings, then require an up or down vote on whether to accept the new proposed cost structure or not.
    May 3, 2015. 09:47 PM | 1 Like Like |Link to Comment
COMMENTS STATS
356 Comments
1,286 Likes