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  • Tesla Motors prices base Model X at $80K [View news story]
    The company borrowed money and issued shares in order to grow aggressively. They then spent that money to grow aggressively. You call it "inefficient" but you don't provide any alternatives to make that growth happen. The company is growing sales and production quickly and they are at the end of a large production expansion (with more expansion going on). The production expansion recently completed roughly doubles production capacity. Further, the outlook is continued production and sales expansion at a dizzying pace and demand for their products are tremendous. There is a chance of positive free cash flow in Q1 with the doubling of production capacity. There is no negative growth if you actually understand the company and its operations.

    Basically, you are claiming that the company is unhealthy because they are growing too fast. Maybe you can call them reckless, but all signs point to that recklessness paying off in big ways.
    Nov 25, 2015. 09:49 AM | 1 Like Like |Link to Comment
  • Tesla: Examining The Bull Case [View article]
    Mr. Greenhalgh,

    Given that Tesla recently received a temporary certificate of occupancy (October, 2015), work has hardly stopped:

    Panasonic has already committed funds for the Gigafactory. You can see this in their public financial reports. It would be difficult for Panasonic to have done all that much onsite until the interior was sufficiently complete. Further, you have no idea how much Panasonic has already invested in the Gigafactory.

    There is already enough of an interior that the Tesla Energy product assembly has started at the Gigafactory:
    Nov 24, 2015. 09:05 PM | 8 Likes Like |Link to Comment
  • Tesla Prices Model X From $81,200 To $151,450 [View article]
    Apparently you haven't priced German premium vehicles and their options. Let's not even touch some of the Italian ones.
    Nov 24, 2015. 08:47 PM | 1 Like Like |Link to Comment
  • Tesla: Examining The Bull Case [View article]
    Day's sales does not take into account the changes in opening up international markets, the changes in shipping, nor the lag effect of increasing production across the quarter. Again, in a production constrained environment, the behavior is different and the model has to be altered to match. It's a common mistake to examine Tesla's business model as if it were other automaker's business models. However, the differences are large.

    Also, since Tesla stocks their service loaners and their galleries themselves, while other automakers have the vast majority of their demo units as part of normal inventory that is already counted as sold by the automaker, increases in loaner cars, service locations, and galleries also produce an increase in finished goods inventory. Also, CPO program vehicles do count in finished goods inventory. Your model has to take all these into account too.

    The magnitude of the days' sales metric you are using is actually still well within the shipping variances and the opening of new markets. Further, the draw down of inventory is well within two weeks of production, which means it can be achieved merely by altering regional allocation or merely by switching to deliver two week's worth of North American vehicles beyond the west coast by truck again.
    Nov 24, 2015. 08:43 PM | 1 Like Like |Link to Comment
  • Tesla Motors prices base Model X at $80K [View news story]

    That estimate was given in 2012, before the Model S even shipped. That was before the Model S shipped, won all sorts of awards, and demand skyrocketed. Things changed.

    You can see in the 2011 Company Overview:

    That at the time, Tesla thought they'd sell 20,000 units of the Model S per year and the Model X would sell 10,000 to 15,000 units per year. Basically, to grow past 20,000 units per year on the way to the Model 3, they thought they would need the Model X.

    Instead, the Model S surpassed all expectations. They didn't need to ship the Model X in late 2013. As it stood, they had to re-negotiate their supplier agreement with Panasonic in the fall of 2013 since they ran out of cell supply. They forged ahead with the Gigafactory and expanded the factory on the back of Model S demand. To try to ship the Model X in late 2013 would have actually been a negative for the company.

    Even now, we are only just trying to sort out the depths of Model S demand.

    If they shipped the Model X earlier, it would not have been as good of a vehicle. So they spent time making the Model X better and better while expanding the factory yet again. Now, they have had deposits for quite some time so they had to ship, and the last 3 months or so of delay corresponds to the real delay - getting a complex new vehicle line sorted out for production and market.
    Nov 24, 2015. 08:30 PM | 2 Likes Like |Link to Comment
  • Tesla Motors prices base Model X at $80K [View news story]
    You might want to re-read the SEC filings. You have clearly no idea what you are talking about.
    Nov 24, 2015. 08:19 PM | 3 Likes Like |Link to Comment
  • Tesla: Examining The Bull Case [View article]
    TFTF, the pilot plant is sufficiently large enough to equal the expected nameplate capacity of all of LG's lithium ion production capacity in 2015. Of course, LG isn't even close to nameplate capacity.

    Now, the build out of Tesla's Gigafactory has been well telegraphed. It should be of no surprise and the factory is actually ahead of schedule.
    Nov 24, 2015. 08:16 PM | 4 Likes Like |Link to Comment
  • Tesla: Examining The Bull Case [View article]
    New CCS standard isn't likely to be settled until 2017. At that point, new CCS equipment would have to be certified and interoperability testing done. Maybe, just maybe they will start deploying some of the new CCS EVSE's in late 2017, but then there is no way for them to catch Tesla's Supercharger network in the 2018 timeframe. It is likely they won't catch it even in the 2020 timeframe. You can see it with the existing CCS network build out... they are usually built in the wrong places and with only a single plug.

    The bigger issue is that there isn't a viable business model for DC fast charging networks since they have to compete against very low cost home AC charging. Further, these networks have to build out in advance of demand and that puts a lot of strain on these companies. You can see it in the financial reports.

    Audi is only just discussing the new CCS network, they really haven't done anything yet (as usual):

    "At this point, Audi is only in the conversation stage, Scott Keogh, president of Audi of America, told reporters. It hasn't decided how to set up a network."

    They have time until 2017 to sort things out as long as they aren't serious about catching up with Tesla. By all indications, they aren't serious about it since VAG has cut budgets in a big way.
    Nov 24, 2015. 05:59 PM | 3 Likes Like |Link to Comment
  • Tesla: Examining The Bull Case [View article]
    Actually, we don't yet know the depths of Model S demand. Not that the demand is a static thing. As the Supercharger network is built out along with Service Centers and Galleries, the demand will naturally increase. Not only are there plenty of expansion possibilities within the U.S., Tesla can also open new international markets that have been clamoring for the Model S.
    Nov 24, 2015. 05:54 PM | 5 Likes Like |Link to Comment
  • Tesla: Examining The Bull Case [View article]
    Mr. James, you might want to express the finished goods inventory with an adjustment for production levels. Expressing as production weeks of inventory is likely more enlightening. Also, on a quarterly basis, model the change in shipping to new markets. I think you'll see that the growth of finished goods inventory matches well with changes in production and shipping delays.

    To illustrate, I'll provide a small example. Let's say you need 2 weeks to deliver product and all product is custom ordered. In the first quarter, you can make 200 a week, so at the end of quarter, you have 2 weeks worth of inventory that are completed but awaiting delivery. That's 400 units in your finished goods inventory. If you double your production to 400 units per week in the next quarter and your shipping time remains the same, then you exit the next quarter with 800 units in your finished goods inventory. Then, you start selling to Europe. That adds 4 weeks of shipping, and you have 50% of your orders going to Europe. So then, you average 4 production weeks of inventory in finished goods, so you now have 4 x 400 = 1,600 units in your finished goods inventory. You had 200 in your finished goods inventory at the end of the first quarter, but now you have 1,600 in your finished goods inventory. That doesn't mean that you are over-producing or changed your business model. As you increase the production level and you ship to more distant overseas markets, the finished goods inventory is likely to increase. The exact mix of product going to various regions and the resulting differences in the shipping times also have a big impact on the total number.

    For Tesla, shipping more vehicles to North America rather than to UK, China, Hong Kong, or others would cause a lowering of finished goods inventory. Right hand drive dual motor Model S was recently introduced to the markets that require right hand drive and those markets are more distant (UK, Hong Kong, Australia, etc.). It is natural to have a higher mix during a launch quarter and Q4 is likely to have a lower emphasis on those markets.

    Don't forget that Tesla switched to rail shipping across the U.S. in 2015 as a cost saving measure. That bumped shipping times for regions east dramatically, about 2-3 weeks. That includes all vehicles going to Europe. Tesla can take a small margin hit and deliver vehicles by truck again in the 4th quarter, especially Model X and cut down 1-2 weeks worth of delay. That represents about 1,300 to 2,000 or so vehicles alone. Emphasizing North American deliveries can also have similar effects and we know that all Model X's shipping in 2015 are North American.
    Nov 24, 2015. 05:40 PM | 6 Likes Like |Link to Comment
  • Should BlackBerry Sell QNX? Yes [View article]
    No, almost all of those IoT devices don't need Blackberry's QNX, especially not "to help companies manage and make sense of data." QNX delivers almost nothing in that part of the equation. There are rows upon rows of computers that crunch big data algorithms all day with extremely few of them running QNX.

    There is no pricing power for Blackberry, as there are perfectly adequate or, in some cases, superior alternatives.

    QNX is not required to do over the air updates in a secure fashion. Matter of fact, it provides near nothing in that context other than it's been done on QNX. Well, it's been done on many computers that do not run QNX also. The signed binary checks that everyone uses to establish trust is the same across the industry.
    Nov 24, 2015. 05:27 PM | 3 Likes Like |Link to Comment
  • Should BlackBerry Sell QNX? Yes [View article]
    xoleo, so apparently you haven't attended a CoreOS session at WWDC and yet you are so sure that you can't be further educated at all? Hmm...

    Zack 800,

    CNET is a terrible source. The author makes several incorrect assumptions, like that CarPlay requires QNX (it doesn't) or that QNX is required because of some Switzerland metaphor. There are plenty of computer systems that are not running QNX that are already integrated in modern vehicles. The article is fully sourced from QNX marketing literature, with no counterbalance at all. As an investor, you really want to invest based on marketing literature alone?
    Nov 24, 2015. 10:28 AM | 4 Likes Like |Link to Comment
  • Tesla Prices Model X From $81,200 To $151,450 [View article]
    Did you forget the parts where Nissan, GM, Ford, Mercedes, Toyota, and others get the exact same tax credits?

    Nissan has sold more BEVs than anyone else so far in the U.S. (more than 75,000) so they have consumed the most tax credits for BEVs. Further, the tax credits represent about 25-30% of the vehicle, a far larger percentage. Way more tax credits than Tesla, which has sold a little more than 50,000 in the U.S. Therefore, Nissan has had about 50% more federal tax credits for the Leaf. Toyota has gotten lots of tax credits for their Plug-in Prius which has a measly 11 miles of EPA rated all electric range, selling about 40,000 of them in the U.S. with about $3,000 in federal tax credits and another $1,500 in CA tax credits.

    Stop pretending that the EV tax credits is somehow a Tesla only thing or that it's kickbacks through some sort of political process.
    Nov 24, 2015. 10:18 AM | 9 Likes Like |Link to Comment
  • Tesla Prices Model X From $81,200 To $151,450 [View article]
    Do you say that about mortgage interest deduction? That has a far larger impact on tax revenue.
    Nov 24, 2015. 10:04 AM | 8 Likes Like |Link to Comment
  • Tesla Motors prices base Model X at $80K [View news story]
    The company is going to sell a lot of expensive product. That's a negative in your view?
    Nov 24, 2015. 09:57 AM | 14 Likes Like |Link to Comment