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  • Genius Of The Tesla 70D: Sell More Cars, Use Fewer Batteries [View article]
    Hello Siddharth!

    Great article! I hadn't thought about the potential battery utilization improvements. That's a very important piece of information. Thanks for taking the time to put this together & share with the rest of us.

    I recall a comment yesterday with the bearish observation that the 70D sales would be robbing the 85, 85D & P85D sales resulting in a lower ASP. The comment reminded me that Elon's prime directive for Tesla goal is to accelerate the advent of the electrification of transportation -- not to make every dime you can as quickly as possible. The latter is certainly a requisite to fund the former at this point. But, we investors should make sure that we know the difference between the two. Thanks again for the article and its insights.

    Best regards,

    Apr 10, 2015. 12:19 PM | 30 Likes Like |Link to Comment
  • Tesla And The State Of The Electric Vehicle Debate [View article]
    @Davewmart, Thanks for the great reply! That was just the info that I was looking for.
    Apr 9, 2015. 12:10 PM | Likes Like |Link to Comment
  • Tesla And The State Of The Electric Vehicle Debate [View article]
    Has anyone heard anything about the expected life cycles of the smaller battery packs? I'm thinking that they will be undergoing a full discharge/recharge cycle on most commutes & hitting those capacity endpoints repeatedly may have a significant effect on the pack's life cycle.

    Also, will any of the smaller battery packs have active thermal management systems? I lived in Texas most of my life & can attest to a Central Texas August being hard on a battery.

    Thinking about the above questions makes me wonder if they may elect to use a lower specific energy cell chemistry in order to get a more robust life cycle.
    Apr 7, 2015. 02:45 PM | Likes Like |Link to Comment
  • A Tesla Valuation Using DCF Under 3 Scenarios [View article]
    Navigant Research has done a lot of work in this area. And, for many of the reasons already mentioned in the replies to your comment, Li-ion batteries are thought to be the most likely technology at this time.
    Apr 6, 2015. 05:16 PM | 1 Like Like |Link to Comment
  • A Tesla Valuation Using DCF Under 3 Scenarios [View article]
    Listen to the keynote address, read the article about the deal. The Texas wind farm produces electricity for less than $0.03/kWh. It kills them to have to shut things down because there is no place to put the energy.
    Apr 6, 2015. 05:12 PM | 2 Likes Like |Link to Comment
  • A Tesla Valuation Using DCF Under 3 Scenarios [View article]
    The current discussions with Oncor for $5.2B is a single deal that we know about. It doesn't include any residential systems or other possible commercial systems that may be under discussion. However, reading about a single deal this big makes me think that JB Straubel could be right about a future Tesla stationary energy storage business that might actually eclipse the Tesla car business. With so many unknowns, I'm only saying that it is a plausible possibility at this point. We live in interesting times.
    Apr 6, 2015. 05:08 PM | 3 Likes Like |Link to Comment
  • A Tesla Valuation Using DCF Under 3 Scenarios [View article]
    Andre, Thank you for taking the time and effort to put together this valuation of Tesla. I do see one hole in the work... Tesla is soon to expand beyond their auto manufacturing business.

    You've likely heard of the upcoming residential battery announcement at the end of the month. But, you may not be aware that Tesla is in discussions with the West Texas Wind Farm electric utility named Oncor. This deal (to be completed in 2018) is worth $5.2B and is completely outside of the Tesla Motors business other than some battery expertise. You may want to take a deeper look at Tesla's nascent stationary energy storage business. There is more going on over there than most analysts realize. JB Straubel (Tesla CTO) believes that Tesla's stationary energy storage business will eclipse their auto business in the next few years. When Elon was taking about Tesla growing into an Apple size valuation in 10 years, I doubt if he was thinking that cars would be even 50% of it. Take a look at JB Straubel's Keynote Address to the 2014 Stationary Energy Symposium on YouTube. See .

    Other than "bigger than the auto business" we have very little guidance. Still, if you can, I would love to see your valuation with this new business added in to the tune of 55-60% of Tesla's total business 10 years from now. Perhaps that could be a second article.

    Best regards.
    Apr 6, 2015. 06:01 AM | 9 Likes Like |Link to Comment
  • Tesla says Nevada battery plant on track, refutes report of delay [View news story]
    Smart money lowering the price & culling nervous fools so they can pick up shares at a discount?
    Mar 6, 2015. 04:19 PM | 14 Likes Like |Link to Comment
  • Tesla: Gigafactory Tipping Point [View article]

    I agree with you that acceleration is not the most highly sought after characteristic for every auto consumer. My wife is definitely in that group. On the other hand, my two daughters would love exceptional acceleration (no wonder our insurance premiums are so much higher at 20 years of age than at 45 years of age -- all else being equal).

    Probably about 12 months after the Model 3 becomes generally available, I'm planning to buy one each for my wife and two daughters. Alas, I became medically restricted from driving right when the Model S came out. Oy vey!

    However, moving on... The #1 characteristic that I value in those cars that no comparable ICE or hybrid will ever be close to matching??? SAFETY! The floor battery pack will give the vehicles an incredibly low center of gravity. With the placement of the battery pack and no engine, transmission or exhaust system to design around:

    1) The very low center of gravity will greatly mitigate the risk of a rollover.

    2) The weight distribution over the front and rear wheels will be close to 50/50 % making for superior handling & stopping distances.

    3) Compared to ICE or Hybrids, the Model 3 will have enormous sacrificial crush spaces with nearly ideal energy absorbing crush members that the engineers won't be have to weave around big ICE's, transmissions, etc.

    By the nature of the Tesla skateboard design & the lack of large ICE mechanical components, it will be virtually impossible for ICE or hybrid vehicles to match (or even come close to) the expected superior safety characteristics of the Model 3.

    The second most important item on my list of vehicle characteristics is RELIABILITY. Before I go any further, let me concede that the Model S's reliability has not been flawless. There has certainly been well (if not overly) documented problems with the early drive units, unusual tire wear with the 21" wheels, and the "vampire" power losses. My understanding at this point is that the first two problems have been resolved; the third, heavily mitigated.

    However, what should we have realistically expected in the area of reliability for the early Model S units? In 2012, the Model S had a completely new, from-the-ground-up design with a very high level of novelty that was manufactured in a brand new facility (except for the shell) with mostly brand new equipment by an inexperience workforce. Were there reliability issues? Yes. However, think about the following question before we go any further...

    If GM were building a completely new ICE/hybrid car, drastically unlike anything else it had ever done, under those conditions, do you think the new GM vehicle would have been as reliable as the new Tesla vehicle?

    I can’t help but think that they would have had far more reliability issues. Furthermore, I believe that this would have been true for any of the ICE/hybrid manufacturers. The Model S only has 20% of the moving parts of comparable ICE vehicles. That percentage has to be even lower (although I haven’t seen the numbers) for hybrid vehicles (all the parts of an ICE & BEV, plus crossover systems).

    I’ve come to believe that the reason the early Model S units didn’t have far more reliability issues is primarily due to the nature of the mechanically simpler Tesla BEV design. Moreover, this is something that no ICE or hybrid design will ever be able to match.

    So, there you have it. At least one future auto consumer that fully expects to be choosing the Tesla Model 3 primarily for its safety and reliability characteristics rather than its expected exceptional acceleration. I guess that I should mention that my brother is of the same thinking. So, there are at least two of us; and, I suspect many, many more.

    Best regards.
    Mar 5, 2015. 03:47 PM | 9 Likes Like |Link to Comment
  • Tesla: Gigafactory Tipping Point [View article]
    Hello PVGO,

    Similar questions have been going through my mind. I can’t imagine that Tesla would want to release the Model X with ranges less than that of the Model S. Therefore, I’m guessing that there may be enough manufacturing capacity around of the new format/chemistry batteries to supply whatever Model X deliveries are made prior to the beginning of production at the Gigafactory. Once the Gigafactory is producing a sufficient supply of the new batteries, I expect that we’ll see a new top-end battery pack option (110-120 kWh?) for the Model S with improvements in range (325+ miles?) and performance (0-60 mph in the high 2’s?). Even if I’m correct in the direction of these changes, I have no feel for the timing. But, another December surprise upgrade (or at least an announcement) for the Model S would be nice!
    Mar 5, 2015. 02:48 PM | 3 Likes Like |Link to Comment
  • Tesla Motors lower as annual report dissected [View news story]

    You are correct that Elon does not have any formal graduate degrees associated with rocket science. Nevertheless, he is probably the most astounding autodidact of several generations. Moreover, many of the SpaceX rocket scientists that do have formal graduate degrees call Elon a technical genius.

    I am surprised to see your statement denigrating his technical prowess. Perhaps you feel that his business practices are dodgy (many do -- although I am not one of them). If so, I suspect that those feelings may have biased your discernment of the man's technical abilities. IMO, you could not be more wrong in this area.

    If you want to be short TSLA, do so if you trust that prospective outlook of the company. However, if the level of Elon Musk’s technical skills plays much of a roll in that prospection, I encourage you to spend some time listening/reading to some of the interviews of the technical folks that have worked with him. It may not change your mind about the company (or its governance), but you will be making your decisions from a more informed position.

    Best regards.
    Mar 3, 2015. 04:33 PM | 3 Likes Like |Link to Comment
  • Tesla: Gigafactory Tipping Point [View article]

    Thank you again for a very complete, well-written, well-researched article. You have an excellent talent for taking technical details and writing about them in such a way that they are readable to a wide audience. Moreover, especially for the Elon Musk companies, these details should be a primary consideration when making investment decisions.

    Many Tesla articles seem to start with some pre-conceived conclusions (Elon the carnival barker, etc.). Then, the author then uses the latest news of the day to support that those conclusions. There are no surprises & very little new thinking.

    Your articles, on the other hand, follow a much more useful and satisfying pattern. Starting with valuable new, hard information, you then add unbiased (IMO) insightful thinking that ties the data to a prospective view of the company.

    Again, bravo!
    Mar 3, 2015. 01:18 PM | 46 Likes Like |Link to Comment
  • Tesla Motors hammered in new BAML note [View news story]

    Again, I find myself wishing that I could "like" one of your comments more than once.

    The first few times that I saw this type of fundamental analysis article/report comparing Tesla to large existing auto manufacturers, I just thought, "This comparison doesn't really make sense." But, after seeing basically the same writing again & again, it became an irritant. I'm a bit surprised that many of the online venues where these repetitive articles appear don't have a higher level of novelty required before accepting the article for publication.
    Mar 3, 2015. 12:52 PM | Likes Like |Link to Comment
  • Tesla: Real Competition Ahead? [View article]
    Hi solucky,

    I would characterize the <=$100/kWh battery cell cost in less that 10 years as a prediction rather than a promise. It came from a discussion with Elon Musk, JB Straubel and Rod Lache (Deutsche Bank) in the 2Q2014 results meeting on 7/31/2014 (we're nearly 7 months into that less than 10 year prediction:-) ). Go to

    Then search on "cost parity". That will take you right to the spot where you'll see...

    ********** Beginning of copied reference **********************

    Elon Musk - Chairman and CEO
    I'd be disappointed if it took us 10 years to get to $100 a kilowatt-hour pack.

    Rod Lache - Deutsche Bank
    So basically you're saying that, you know, within the next -- within that timeframe you would expect electric vehicles to reach cost parity and maybe even improve upon the cost of an internal combustion vehicle?

    Elon Musk - Chairman and CEO

    Rod Lache - Deutsche Bank
    Uh-huh. That's interesting.

    Now another -- that's a pretty big statement.

    Elon Musk - Chairman and CEO
    Seems pretty obvious to me.


    *********** End of copied reference **************

    Best regards,

    Feb 26, 2015. 04:27 PM | 3 Likes Like |Link to Comment
  • Tesla: Real Competition Ahead? [View article]

    I'm borrowing from a previous comment of mine in another article... I rarely do that, but it was too good a fit not to this time.

    *** Beginning of copied material **********************...

    I agree with you 100% that it can be (and usually is) extraordinarily difficult for established companies to torpedo their most profitable product lines even if they have plenty of warning that a new product is a significant threat & will likely put them into an uncompetitive position at some point. I suspect that the Wall Street culture that is always looking to the next quarter exacerbates what is already a poor environment for making good long-term decisions when faced competition from new technologies. The arguments usually go:

    * The new market is too small to worry about; until it isn’t.

    * We can’t afford to move development resources away from our premium profit making product(s); until you can’t afford not to.

    * Validating this change in technology will throw the value of our most lucrative assets into question; until their value is shown to be significantly diminished in any case.

    There is no road that will provide a smooth transition for companies that find themselves in these sorts of deteriorating competitive positions. At least one big creative destruction cycle is just part of the deal if they plan to survive.

    *** End of copied material **********************...
    Feb 20, 2015. 03:53 PM | 5 Likes Like |Link to Comment