One massive advantage that I'm not sure most people realize quite yet is the Supercharger network. No manufacturer (other than Porsche talking about it recently) has actually built out chargers for their cars.
Every other electric car has to rely on a broken, sparse, expensive charger network. Blink chargers and some ChargePoint chargers are expensive in many places ($2 an hour!), and Blink is notorious for having broken charging stations. There's 4 ChargePoint stations in a garage near me that have been broken and unmaintained for years, and they're out of warranty and the mall doesn't have a financial incentive to fix them.
And then there's the DC fast chargers. I'm not aware of a single BEV (Volts or other PHEVs are excluded here) that can travel across the US with a reasonable route without worrying about finding chargers along the way. In fact, last time I looked, there was no physical way I could do a road trip I've been meaning to do through the western US in my i3 (my car, of course, has half the battery range of a Bolt) because of a lack of chargers.
Tesla's Supercharger build out is extremely important to their future. Until other companies step up and install DCFC stations everywhere (and figure out the CCS vs CHAdeMO format war), Tesla is going to have a massive advantage. Sure, not everyone is going to want to do a multi-thousand mile road trip, but driving one of Tesla's cars might make them.
Eventually, yes, it will become a commodity. But the issue is, someone has to spend a lot of money to build out these chargers. Tesla has a big incentive to do it-- their very survival depended on early adopters willing to buy their car, which also means they need a place to charge it. Being able to go 100 miles from your house before you have to turn around was never going to work for car owners, hence Tesla's initial Supercharger build out.
But other car manufacturers, for whatever reason, don't get this. They build their compliance cars with a modest investment in EVs, but honestly, they aren't very good. The Leaf has its niche-- it's a good city car with low range and low cost. The Bolt really is one of the first non-Tesla players with a decent range, yet you can't drive it from Seattle to Yosemite because the lack of chargers and GM isn't investing anything in them. The same goes for BMW.
Volkswagen is forced to build chargers due to the diesel settlement, but ironically without their cheating and forced investment in EV, there would be fewer chargers out there than there are today (or in the near future).
Maybe I'm wrong and hydrogen or some other form of fuel will win, but if EVs do, car manufacturers will be scrambling to catch up and invest in chargers. I don't think this will happen soon, but maybe in 5 years they'll start thinking about it. Really, if they wait until the Model Y in 2020 and Tesla starts eating their lunch in the biggest segment in the US (CUVs), it might wake them up sooner.
Other carmakers don't need to build their own charging network. It's already being handled for them by thousands of businesses installing standards-compatible chargers. There are 3 new chargers on my block that were installed within the last month. Another 6 scheduled to be installed in my building's garage in the next month. That's in addition to the dozens that are already located in my part of LA. In Santa Monica, the city installed several dozen chargers in their city parking structures and lots. The Inglewood Stadium and the Dodgers are installing chargers in the off-season. Most malls have dedicated spots for charging EVs. Nearly every parking structure in Century City has EV chargers....
Meanwhile, the closest Tesla superchargers are nearly double-digit miles away, far from the freeways, so at best 30 minutes away without traffic and up to 3 hours away with traffic. And since there are so few of them, you basically cross your fingers and hope that one of them is free when you get there.
If you're referring to Blink and Chargepoint chargers, then I'm not worried for Tesla at all. Both of these suck really badly and take forever to charge. I used to use these all the time for my electric Focus and would maybe get 20 miles charged in an hour. With my Tesla, I charged the car up to full in about 20 minutes and it sent me a text with 5 minutes left so I was able to grab a quick bite to eat.
Most of the ChargePoint and other chargers are 6-8kW.
SuperChargers are 100-120kW... they are more than 10x faster to charge. It's the difference between 10min for 100mi 2hours!
That means that even with absurd 6mph traffic that takes 3 hours to get 30mi, you might still finish charging first on the SuperCharger (15min vs 3hours).
Destination chargers are normally much slower charging and are not really usable for a long trip. Good for overnight but nobody wants to charge a half hour for every hour on the road.
The problem is that all of these community chargers inevitably break down and there is zero incentive for them to be repaired. It seems like local businesses might get a tax break to install a charging station, but without any incentive to maintain them they get broken in a few months and never work again.
I rented a Tesla for a few days for a long drive, and very quickly I learned to ignore any charging station that wasn't a supercharger. For a gas station analogy, non-superchargers are a broken-down single-pump station with peeling paint in a bad neighborhood that may or may not be open, and a supercharger is a clean, brightly-lit 24-hour Shell station. Which would you prefer for filling up your car?
Tesla currently has 400 supercharger sites in Europe, 2400 bays in total, by 2020 Ionity, which is a consortium of Daimler, BMW, Porsche, Ford, Audi and VW, is planning to build 400 sites, 2400 bays total, most with a 350kW charging capacity, which is double the power of Tesla’s chargers. There are also about 5000 CCS chargers already existing in Europe, lower power but ‘destination chargers’ will probably be valuable as well. Tesla plans to double its network over this time frame, but Ionity is just one organization, there will be many smaller players as well, both commercial and government. It seems very likely this advantage will be commodified as the market emerges.
All chargers are not created equal. "Planning" to build something is not building it. 350kW is a lot of energy and you need to pay for all the power electronics to run that much DC power.
I have no doubt the'll start building chargers but I think the ramp up will be slower and the power levels will be lower than what people think. Most cars can't even charge at 350kW because their batteries are too small. You'd damage the batteries.
I have no doubt that they are serious and ambitious, but they are so far behind Tesla that it‘s not likely that they will catch up until 2020. Also, they are planning to place their fast chargers only 120 Km apart to accommodate for a wider range of vehicles, which puts them at a disadvantage too.
350kW is about 1800 m^2 of PV panels; you need twice that plus a battery bank to operate at night. You might want a grid tie only so you can do net metering. At current prices for Chinese panels (not counting the Trump tariff) that's on the order of a million dollars. Now double that to pay for the electronic chargers themselves. So $2 million in capital costs and no recurring costs except maintenance. That's almost certainly cheaper to build and permit and operate than a petrol station, and those seem to pop up everywhere.
I don't think it will take more than a couple of years for well-maintained superchargers to be ubiquitous, and that's if you give away the power for free with government subsidies. If you charge customers for the energy, it might happen even faster.
So they say that in a couple years in a time the market is moving fast. Given Tesla experience with these chargers, its quite difficult to handle the whole cycle of regulatory approval, build and operation.
So far I have heard a lot of announcements about great cars and great charging networks from these companies but nothing they have actually done gives me any confidence.
People also said that the other car makers will switch the electric and start building electric cars in mass easily and quickly. So far however most of these projects have seen delays and other problems.
I would also say that all the 'lower' level chargers will benefit Tesla equally to everybody else, so its no intensive to buy a non-Tesla.
I would love to see them do that. I traded up from an electric Focus that uses the standard chargers and they suck balls. The Tesla is amazing in comparison. Ionity can plan to have all these by 2020 but that doesn't mean they will. Meanwhile, Tesla is already planning upgrades to the Supercharger network and is also constantly adding new locations. I think Tesla will be the one that other EVs turn to and they'll probably have to license the standard.
Licensing the standard has likely been the long-term plan. Since Tesla bought SolarCity and built the gigafactory, Tesla must think of itself as an energy company.
Tesla has always thought of itself as an energy company. Electric cars were to bootstrap battery manufacturing capacity (typically low margin, made high margin by Tesla through selling luxury vehicles). Who would've given Tesla funds (through bonds) to build Gigafactory 1 with no proven demand for those cells produced?
I hope so. Someone needs to invent some goddamn self-contained solar covered parking spaces. I live in the Southwest and I can't believe that we're in 2018 and no one is tapping into solar power for everything during the day.
Only on the low power "AC" version of CCS, this is limited to 17KW, and so is quite slow in comparison to the high power DC CCS-2 adapter, which can (at least in theory) pump out 350kW. There are quite a few 150kW stations already available, but the Tesla can't use them either.
Tesla’s can use CHAdeMO with an adapter. In the States, there are still more Chademos than CCS, and most new DC Fast chargers have both CHAdeMO and CCS.
CHAdeMO is the better standard for fast charging, IMHO, since it allows bidirectional charging.
I've never heard it was bidirectional use, are there any vehicles that support that? The main negative against chademo (besides the huge plug format) is that it's not Hugh enough power in practice.
Agree - Tesla had an existential incentive to build chargers, but other car makers would prefer to wait and see (and let someone else build out the commodity chargers).
I disagree - I've been driving EVs exclusively (Ford Focus Electric followed by Tesla MS) since 2013 in So Cal and can attest to how poor user experience is with 3rd party charge networks. First of all, there are 4+ distinct networks each requiring separate account/payment setup and RFIDs. They are often broken, fully used, overpriced or cumbersome to start. Most are L2 with 20-30A - charging at <20 MPH. Fast chargers are sparse - and this is in California where the most EVs are sold in the US. When I leave the state, charge networks become almost nonexistent in many areas.
To the contrary, user experience at Tesla superchargers is great. There are enough of them, evenly distributed, that I never have range anxiety, they work, they are usually not over crowded (although getting busier), they are free or at cost, they are high powered, usually located near nice amenities, and they are simple - pull in, plug in and wait 15-45 minutes. I don't see anything on the horizon from other manufacturers that will even remotely approximate what Tesla offers today with supercharging. Partnership/expansion of for-profit networks will never get there.
>Partnership/expansion of for-profit networks will never get there.
So people believe that Tesla is going to upend the entire auto industry, but can't believe that some company will figure out how to build nice charging stations?
So many contradictions in the arguments here. Yes, the Supercharger network was, basically, necessary for Tesla to reach a critical acceptance level. But operating and maintaining those stations is not free.
The idea that the major fuelling stations won't start adding fast chargers is incredibly naive. They already have the infrastructure and real estate. It's a no-brainer. If/when EV demand reaches those levels, it will happen.
>So people believe that Tesla is going to upend the entire auto industry, but can't believe that some company will figure out how to build nice charging stations?
I think you're underestimating Tesla's first-mover advantage. My father works for a city in LA county and when Tesla decided to build a supercharger there, they initially asked the city to not only provide free real estate and grid connection, but to pay them to do it. Now, the city didn't pay, but it did incentivize in the form of free spaces in a prime shopping center because both city and property owner knew superchargers will bring a steady flow of well-to-do captive audience customers. I'm guessing this scenario is repeating itself all over the country wherein Tesla is building out superchargers for very low upfront and recurring cost.
No other charge network or automobile manufacturer has this type of leverage, nor will they for likely many years. If Electrify America were to approach that same city with the same request they'd likely have to pay/lease real estate, or install in sub-optimal locations (like Walmart parking lots), because they will not bring even remotely close to the same amount of traffic and economic activity as superchargers.
The problem is they aren’t doing it. The ones who are are charging about the same price (or often higher!) for electricity that you would spend for gas (per mile) while even the Supercharger users who have to pay end up spending almost half the price as they would for gas.
If you don’t have an electric car (I have two, a Volt with no quickcharge and a Leaf with a quick charge), it’s hard to understand just how strong Tesla’s position in the market is here. It’ll probably be a decade before others catch up. Less if they partner with Tesla.
But here’s the thing: the market for electric cars is enormous, as big as the market for regular ICE cars. It’s not a niche. That’s why the “Tesla killer” argument is dumb: if your target is Tesla, you’ll lose because you’ll always be behind, fighting over a niche that Tesla created. Because Tesla wasn’t targeting other EVs, or even hybrids, they are targeting the entire market. If your target is ICE vehicles, then you may win because there will be plenty of market to go around.
The only chance to beat Tesla is to beat ICE cars.
> The idea that the major fuelling stations won't start adding fast chargers is incredibly naive. They already have the infrastructure and real estate.
Do they?
I was under the impression most fueling stations had standard single-phase 200A hookups to the grid.
So, at minimum, that would mean an electrical upgrade, no?
I've never heard charging speeds referenced in this way, but it's a really clever way to take into account the charging rate and vehicle efficiency, while being very intuitive! Is this a common "unit" in the EV space?
On Tesla's at least they show you this number alongside the kW's. Definitely easier to communicate with most people and very impressive to see the car getting 400+ miles per hour and the mileage just rolling up while plugged in (so much so that the first time I used one I had to take a video of the screen to show my family!). Obviously that slows down as the battery gets closer to capacity, but damn impressive.
Wouldn't it be awful if you could only buy Ford gasoline from Ford gas stations? The lock in model is attractive until you think about broader implication, I agree with Evans too that it will be a commodity race to the bottom for recharging, with cost introduced for the power
Tesla's aren't locked into using Tesla chargers. They do have a proprietary connector on the vehicles but they come with several adapters including J1772. Superchargers are a phenomenal perk, not a lock in.
> One question posed during Wednesday's Tesla quarterly earnings call involved allowing other manufacturers to access Tesla's supercharger network and Elon Musk's response was surprising.
> "This is not a walled garden."
> By that Musk means that he's open to allowing other EV manufacturers to configure their vehicles to be able to use the Superchargers. He stipulates that these manufacturers would have to pay their fair share of the costs and would have to either adopt Tesla's plug standard or include an adapter in their vehicles.
No, but the point is that this is not a reason Tesla won't succeed, it's just a reason that superchargers suck for non-Tesla EV owners. From a business standpoint, this is the right place to be; lock others out, but don't lock your customers in.
Exactly. I don't think Tesla would have anywhere near the sales they've had without Superchargers. The other EV manufacturers need to figure out how to offer something similar if they want any chance of competing.
Superchargers only work with Teslas due to some signaling and they aren't free for all Teslas. You can get an adapter that goes from a Tesla connector to J1772 but it won't work at a Supercharger, just home or destination chargers.
In the US they can't even be used because the plug is different. Even if it weren't the superchargers access Tesla's services to hand over payment information when you plug in.
It's funny you say that because that's the exact reason Superchargers exist. The other chargers in question charge incredibly slowly compared to a Supercharger. Teslas main advantage was that they had to foresight to realize that people wouldn't swap to electric vehicles unless they could have a similar experience to pulling up, filling up your tank, and driving off. A Supercharger is the closest thing - 0 to full in 20 to 25 minutes. The Blink/Chargepoint/WhateverElse networks are a full charge in 8 to 12 hours.
20 to 25 minutes is still an eternity compared to gasoline. Yes, it's faster than the other chargers, but that's about the same amount of time an oil change takes. That's something people have to plan around since it's not 3-4 minutes.
Realistically, people who could afford an electric car are more likely to take a plane and rent a car when traveling, unless they travel all the time as part of their job, then they’d be using ridesharing exclusively.
But people tend to be dominated by edge cases instead of giving up a small amount of mobility.
>people who could afford an electric car are more likely to take a plane and rent a car when traveling, unless they travel all the time as part of their job, then they’d be using ridesharing exclusively.
What is this based on? I know several people with electric cars and none of us take planes and rent cars on trips unless they're to another country. I drive to California and Austin all the time and the Tesla is the first car that I don't have to stay the night charging for.
I agree that that model would be awful, but I think maybe that that is too simple of an analogy. We do already have fuel stations which are exclusive right now, in the form of card access only truck stops which only dispense diesel fuel. There are also similar fuel distribution mechanisms in the marine and aviation industries which dispense different types of fuels (Bunker fuel, 100LL, Jet-A, etc.) which can't be used in automotive applications.
The biggest difference here is that electricity, thankfully, is the same in any form, and the key differentiator is the speed at which you can deliver it. I definitely hope that we can agree on better, faster, common, charge delivery formats, but I wouldn't want to put a hamper on innovation, particularly when the electrical automotive industry is so nascent.
Invented by the same person that invented Freon, too. Talented chemical engineer but possibly the most harmful human to have ever lived by some metrics.
His whole wiki reads like a horror story. So many people died of lead poisoning at DuPont where they were developing it.
> Midgley participated in a press conference to demonstrate the apparent safety of TEL, in which he poured TEL over his hands, placed a bottle of the chemical under his nose, and inhaled its vapor for 60 seconds, declaring that he could do this every day without succumbing to any problems.
Tesla can do superchargers and almost all other 3rd party chargers. They aren't lock in, they are like a super-capable system. Only other cars can't use tesla chargers.
Technology always starts out exclusive and then is then broadens out. Tesla network gives them a huge advantage because now they are in control over how this process is gone happen.
Unless they can make charging as quick as filling a tank with gas, there is a lot of opportunity in location and surrounding services, provided while the batteries are being charged.
Are there any U.S. hotel chains that are in on this?
Hotels have facilities that aren't used after breakfast until the evening, however they still have to have a lot of staff on-site during these hours.
You could have nice food and coffee instead of motorway service station junk, with booking facilities so you can have that coffee ready as you walk through the door and your parking spot for the charging reserved.
This could work really well in the more scenic parts of the world where there is a lot of the infrastructure built out already, just the right plugs with the right volts and amps needed.
Not just "high-end" hotels. On my recent trip round-trip Florida-Texas drive in my Model 3, I stayed at a Hilton Garden Inn and two Hampton Inns that had Tesla Destination Chargers. It was nice to pull in with 10-20% charge and pull out in the AM fully charged and not paid anything extra for it.
It's almost there. A Supercharger can charge in about 20 minutes and the navigation in the car shows you food stops and amenities near the Supercharger and then sends you a push notification when the car is nearly completely charged. Considering that this experience is more rare than me being able to charge the car every night at home instead of having to stop at a gas station ever, I think the trade off is in Tesla's favor.
Let's be real here. I just did a 2500 mile road trip in my brand new Model 3. While it is true that 20-25 minutes will give me enough range to drive for 120-160 miles, 20 minutes does not give me a full charge. Charging my Model 3 from ~10% SOC to 80% SOC takes 40 minutes at a Supercharger. The car charges quite quickly from 0% to 50%, but slows down dramatically after that. If you pull in to a Supercharger with 10-20% SOC, 20 minutes will get you up to 50-60% SOC at best.
That being said, I generally didn't mind this. I came to like the slower pace of stops. I know my wife is looking forward to the first road trip we take together in the car, as she always wants to stop and stretch her legs more often than I do.
I just wish more Superchargers had convenient access to 24 hour bathrooms.
I don't think that's accurate either, though. I charged from 5% to the max daily limit (not the trip limit) in 25 minutes and it gave me approximately 264 miles. When I last charged to the full trip limit, I had 314 miles on the car and that took about 40 minutes.
So, even if I just charged every time to the daily limit, I'd still have about the same range as a gas car and I can't fill up my gas car at home on a regular basis. That benefit alone outweighs the cons of a slightly longer trip for me.
PS. Slow down. ;). If you're only getting 160 miles from the daily charge, you're driving pretty fast or using up power in some other way.
What I mean to say is, every product that is used by almost everybody will become a commodity at some point. That is not the question. The question is
a) How long can you keep it from not becoming a commodity?
b) How can you build your business model as market leader around it being a commodity?
E.g. gas stops can be considered a commodity at this point, but the powerhouse oil companies still own the whole thing and make hundreds of billions out of gas sales. If Tesla can use their leverage and tech-know-how to get into that position for electrical gas stations they might be in a good position to take that leadership position for a generation or two in providing electricity for the cars, making more money than with actual car sales.
So for Tesla, as much as for the not-yet-existing space station business, the fact that they will become commodities at some point is more of a strategic detail than a kill factor.
Alas, I would have thought the same for ISPs. Any reason why EV charging won't naturally evolve into a similar overpriced, regulator capturing, locale-by-locale monopoly?
I'm talking about the subset of the EV owners without home charging. Currently this number is small, but as battery prices drop and EVs become the de-facto 'regular car,' there's ~60% of the population who have no "at-cost" home charging (being locked-in to whatever exclusive vendor their apartment complex chooses).
In this respect EVs are very different from gasoline vehicles, and I say this as a big supporter of EVs. I can drive across town to buy gas, but I can't park my car across town overnight.
The problem with competing firms is that eventually someone wins.
The thing is ISPs almost became a commodity until we figured out we could get higher speeds with cable infrastructure. We all remember the local phone company offering dial-up back in the 90s. In many European countries, ISPs are a commodity since the owners of the cable have to provide access to anyone at reasonable market rates.
That's why the fight for net neutrality is so important.
The comparison to your apartment example would be pay-laundry, not ISPs. ISPs gain monopolies because of the last-mile infrastructure. Charging services are quite interchangeable as electric service is already running to buildings.
Tenants need permission from the owner to install charging infrastructure, and the owner has little incentive to allow competition because the vendor gives them a cut of the [overpriced] charging fee. Even California's progressive tenant EV charger law[1] doesn't apply if 10% (!) of parking spots already have chargers.
Your example of pay laundry is instructive. In theory laundry service remains interchangeable (after all, "water/electric service is already running to the buildings"), but in practice the owner simply forbids tenants from installing their own laundry machines (typically citing flood risk).
This is a great point and one that forward-thinking apartment owners need to consider. There's no reason not to start offering much more EV parking and charging residents a premium for it or offering solar-powered EV charging stations.
I sure hope it does become a commodity! However, Tesla's network is not a disadvantage here; they can charge (just not FAST charge) from other chargers, and the fast charging can be 'bolted on' later, I'm sure, via an adapter and software update.
I winder if the Spuerchargers will at some point become an outdated liability once (if) other manufacturers decide on a standard. Being a first mover often can become a problem.
They’ve already decided on CHAdeMO and CCS, both of which are usually much slower and have a huge, unwieldy, and expensive plug.
It’s not that hard for Tesla to adapt to a new standard, too. The power electronics are the same, just a different plug and protocol. Tesla’s can connect to a CHAdeMO charger with a relatively cheap adapter.
Nissan has done a good job of installing CHAdeMO DC fast chargers at all their dealerships. I own a Leaf (bought used for $10k), and this allowed me to travel significant distances in spite of the small battery. Granted, this is a huge pain because:
1) Charge rate is 50kW peak, less than half of Supercharger’s 120kW.
2) Leaf battery is small, so you need to stop like every hour or so to charge.
3) 1st gen Leaf battery has no cooling. That’s right, none. Not even air cooling. It relies on thermal mass of the battery & very slow leakage of heat through the structure of the car. This is sufficient for daily commute usage, but Quickcharging produces heat. After 2 or 3 quickcharges, the battery is hot so quickharging rate reduces to more like 15-20kW to reduce heat production (power lost to heat is proportional to current squared, so halving charge rate halves the total heat per unit energy). Teslas and Bolts don’t have this problem as their batteries are liquid cooled.
So you end up only being able to travel 200-300 miles in a day even with Quickcharging. And because of the small battery, Nissan needs a lot more chargers to enable a given trip.
The new Leaf is supposed to have a >200 mile battery and 100kW charger. So about where Tesla was in 2012. But the existing charger network for CHAdeMO is only 40-50kW. Not too bad for an emergency stop, but if your whole trip is that slow charging, it’s significant.
BTW, Teslas can use Chademos with a $500 adapter since the CHAdeMO standard is the basis for the Supercharger standard. Also, CHAdeMO is capable of bidirectional charging, so it’s possible to do vehicle-to-grid with a Nissan Leaf. CHAdeMO is a better standard than the CCS one, but unfortunately most other EVs are using CCS.
And one big advantage Tesla’s Supercharger has is the plug is much smaller (and I believe cheaper to make!). CHAdeMO and CCS plugs are huge and unwieldy. And no one seems to be seeking a more sleek design like Tesla’s.
Fortunately, though, it’s not TOO expensive to provide both a CHAdeMO plug and CCS plug, since the expensive power electronics are the same, just a different protocol and plug, so many DC fast charging stations have both.
Until other companies step up and install DCFC stations everywhere
Disclaimer: I am long TSLA
I hightly doubt other car companies are gonna do this in a reaonable time frame (3-4 years). They will rely on the dealer network to build out the chargers and suck up the setup cost. Now dealers can potentially finance this with debt and get this done, but I doubt GM or any car company will be able to get consensus from the dealers and roll this ouut fast.
Agreed, and locating them at dealers is often an impractical choice for drivers: they are not consistently located strategically next to highways, sometimes they put them in an area that is not physically accessible outside of business hours (e.g., fenced yard), and the incentive to maintain them is less.
Funny enough, that's the one current huge investment outside of Tesla in charging infrastructure. If it takes a car company cheating on emissions and being forced to invest in electric, then all of them are going to be doomed to playing catch up.
For sure. I personally think that Electrify America is a stop gap. In the longer term, I would expect to see businesses that already exist near highway exits start to build out DCFC to lure potential customers.
I live in the southeastern US. I have been saying for two years now that Cracker Barrel should be adding DC Fast chargers to each of its restaurants' parking lots. Who cares if the car takes 45 minutes to charge if I can grab a nice meal while I wait.
I used this strategy on my recent Florida-Texas roundtrip in a Model 3. The Baton Rouge Tesla Supercharger is located next to an Acme Oyster House location. I ate a nice lunch while the car charged. I pulled in with a 10% charge and pulled out with about a 90% charge. It was a heck of a lot nicer than eating a hamburger while driving.
Yeah, and they’re slow rolling it and plan to charge high prices. It’s frustrating to me as an EV owner. But perfectly logical if you want to appear to be doing something while in fact protecting fossil fuel car sales.
Having a proprietary charging system and network was necessary to get EVs into the market in the first place. A little bit like ICE powered cars. Back the day fuel could ibly be bought at pharmacies.
In that regard Tesla is having, fir now, clear advantage over traditional car makers. Until, that is, these car makers agreed on a common standard for charging their cars. Once that standard is established (supercharger-like solutions) the risk for third parties to set up charging networks comparable to gas stations became very low.
It is great to see Tesla turn a profit. But it seems to have some down sides, quality for example. Lets hope it is sustainable. I for my part am not convinced it is. We will see who is faster, Tesla at getting mass production right or competitors getting EVs developed and sold.
The current situation with dealers sucks for non-tesla EVs, they're often inside and not accessible. They have other cars parked in the way, the people at the dealer don't care, there aren't enough chargers etc.
All the other companies combined probably have fewer EVs on the road than Tesla. Building a charger network for 200,000+ Teslas makes sense, but building a similar network for 20,000 BMWs doesn't.
I'm not sure where you get your information, but Tesla has 360k vehicles produced as of Q2 3018. The leaf alone is at 350k, making it "world's all-time best-selling highway-capable electric car in history". I think it's clear that Tesla comment is not true.
Laughable, isn't it? Once second of Google would prove it wrong. People literally don't care about reality when it comes to this company. Some PR site says it, and it becomes "fact". The list of things people claim Tesla has done/can do that has no basis in reality is long and growing longer.
For all the talk about "range anxiety", it is a real concern that only Tesla seems to be actively working towards eliminating.
I've needed to drive across the country every year for the past 4 years, and allocating extra days to stop and charge was never an option. That's one aspect where my cheap Honda beats most electric vehicles. For EV to go truly mainstream, that should not be the case.
Best is the enemy of good, and perfect is the mortal enemy of best. Just because a vehicle isn't 100% perfect for 100% of people doesn't mean it isn't the best vehicle for most people.
True, true. But in the end, a car is a car is a car. It gets me places. I'd say the ability to get to places is pretty critical for a car. It's what distinguishes it from something that's not a car, for example, a boat anchor.
A long road-trip is not an edge case. It's the most affordable - and one of the most popular - ways to have a vacation[1]. National parks alone get over 300 million visits, but they're by far not the only destination. Overall, road trips account for an astonishing 39 percent of vacations[2].
As both articles note, the reasons to choose a road trip over flying include economical considerations; most people travel in their own cars.
Does it mean that EV aren't good? No. But to prevail, EV need to be better than ICE cars at the same price point. And as of today, they are really not the best vehicle for most people, by far.
Without the supercharger network, EV are not practical for most. See this thread[3] for examples of when Tesla owners use ICE cars.
All that is to say that how good an EV is for most people is determined a lot by the available infrastructure. So good on Tesla for being way ahead of the competition here.
It seems to me that a long road trip is an edge case. It's not extremely rare, but it's quite far from the most common use of a car, IMO.
If you plot "number of long road trips per car per year", the mode is probably zero and I'd wager that fewer than 10% of cars are taken on a long road trip more than one time per year and fewer than 5% more than two times per year.
Taking your one-year figure of 39% of vacations as road trips, that's still fewer than one road trip per car per year. There's little over 1 car registered per adult in the US. Assuming an average 1 week vacation 1 time per year, with 39% being road trips, and 2 adults per road trip, that's one road trip per year for every 5 cars. If the average car is driven 8000 miles per year (lots of cars driven under 1000 miles to offset the more typical 12-15K/yr figure) and a road trip is 500 miles, it's about 100 miles of road trip usage against an average of 8000 miles, or about 1.25% use for road trips. Considering most of the road trip car use would be on cars used a more typically 12-15K, it's under 1% of usage.
It would take some significant errors in the Fermi estimates above to suggest that road trip usage is a typical use. If you have a battery electric and don't want to or can't road trip in it, rent a gas car one week a year. If you do more frequent road trips, a gas car or hybrid is a better bet probably.
"Electrify America is investing in roughly 900 charging stations across the United States by mid-2019. These stations have multiple dispensers with more than 5,000 charging ports available."
"Electrify America’s DC Fast EV charging stations will be located along high-traffic corridors in 39 states, including two cross-country routes. Locations will accommodate between four and ten chargers, with charging power levels up to 350kW available at every station, capable of adding 20 miles of range per minute to a vehicle. Nationally, each planned station site will be located no more than 120 miles apart and, on key East and West Coast highways, planned locations average only 70 miles apart."
Don't get me wrong. There are gaps in their planned build-out, but they should be able to quickly build out to a point where their charging network suffices for the vast majority of Americans typical long distance driving needs. For everything else, rental cars are still an option, and the future should bring even more DCFC infrastructure build-out.
The supercharger network is indeed a massive advantage for Tesla. For now, it's obviously necessary, since the range of the cars on the road is generally limited to 200-300 miles. But even in 3-4 years, when new Teslas likely have a range of 400 miles, or in 7-8 years when the standard range is maybe 600 miles, it will grant drivers the certainty that even if they forget to charge at home or at work for several days, or even if they wanna do a road trip that exceeds the range, there will be the fall back of the super chargers.
Given that the amount of Teslas on the roads is growing exponentially these months, Tesla will probably have to grow the supercharger network too. Until recently, there were around 300,000 Teslas on the roads worldwide sharing some 11,000 charging points at 1,350 super charging stations. Soon there are twice as many Teslas on the roads. Next Christmas maybe close to 1 million Teslas in total. They will need to expand with new locations, more charging points per location and faster charging times.
Also, in 3-4 years there will be millions of old Teslas with today's "short" range that still will have to be serviced by super chargers.
Most importantly, many apartment dwellers, i.e. the younger buyers in the cities that will constitute a great deal of the core customer base for Model 3 and Model Y once prices drop to $35,000 or below, may find it more convenient to use super chargers in stead of charging at home. This is especially true, if charging times can be reduced a bit.
Going forward, Tesla can use the charging stations for all kind of things like promoting other products (solar tiles, powerwall batteries etc.) and even selling third party products, just like regular gas stations.
Tesla currently has 400 supercharger sites in Europe, by 2020 Ionity, which is a consortium of Daimler, BMW, Porsche, Ford, Audi and VW, is planning to build 400 sites, with 6 bays each, most with a 350kW charging capacity.
The best situation would be if Ionity and Tesla can agree to merge, or share standards so everyone can charge at all of them. But I imagine Tesla will not be interested until Ionity has parity, or nearly so, with them.
Ionity does not follow their own personal standards. It is the CCS standard. Tesla is the outlier who went with its own proprietary standard. And a post builtout agreement is not going to change hardware connectors on a car.
My understanding is that Tesla wanted to use a standard for their build out but the standards committee dragged their feet in order to stall them.
In Europe they do use a standard plug.
Well they just opened the first 350kw one in denmark and there are two more that will open soon. The first electric car cabable of taking 350kw will first come late next year. [0]
Surely Pilot/Loves/FlyingJ et al will begin installing chargers in the near future. They would love a bunch of captives milling around their travel centers. That’s 1000+ locations, and they could install several thousand charging stalls in a matter of months. Since the super charger network currently exists, it is a competitive advantage for sure, but it also could become a liability having to honor free supercharging for some cars and then not really providing value over a travel center.
> Since the super charger network currently exists, it is a competitive advantage for sure, but it also could become a liability having to honor free supercharging for some cars and then not really providing value over a travel center.
That's assuming they don't become travel centers themselves.
That's actually another advantage. If they build travel centers around their superchargers, anyone with free supercharging (which is a large fraction of the current installed base) would prefer theirs over ones they have to pay for. But then they get all the people milling around buying coffee, burgers, phone chargers, sunscreen, etc.
For that matter they could go into business with the truckstop companies. Supply the charging hardware and expertise to install/operate/maintain them at the truckstops in exchange for a share of the overall take.
In my city (Bellevue, WA), there's ChargePoint stations operated by the city in free street parking and in the park, so the cost is entirely in the operation of the EV station and electricity. It might not seem bad, but it isn't necessarily competitive with a Supercharger or home charging in terms of cost. Blink is worse, at 39c-49c per kWh, which is about $2.50 per hour at the low end.
Worth noting that although other cars can't use Tesla's supercharger stations, there is an adapter you can get for a couple hundred bucks that will allow you to charge at all of Tesla's 'destination' charging stations.
>One massive advantage that I'm not sure most people realize quite yet is the Supercharger network. No manufacturer (other than Porsche talking about it recently) has actually built out chargers for their cars.
Its electric scooters rather than electric cars but Gogoro in Taiwan has built out a network of charging stations for the vehicles they sell. 810 "gostations" according to their website.
I'm pretty sure every Nissan dealer that sells a leaf must operate a charging station. Granted they're not as easy to access at the supercharger network... but it exists.
I tried to use one of the Nissan dealer chargers a few weeks ago on a trip. The dealership was closed so they blocked access to the lot with the charger. This is pretty typical.
They do, but no one wants to go to one of the few Nissan dealers in their area to charge their car in the event they need it. Not to mention, many dealers only have 1-2 chargers total, which is not sustainable for the number of cars that are (or will be) sold.
Plus, what about the Bolt, Volt, i3, Soul EV, or any number of other EVs? They wouldn't be comfortable or possibly even welcome at a Nissan dealership to charge.
> Plus, what about the Bolt, Volt, i3, Soul EV, or any number of other EVs?
Only teslas can charge on the supercharger network afaik. And, Nissan dealers will let other manufacturers car's charge if you pay, ymmv but it happens.
Listen, I'm not defending Nissan's setup, I'm just countering the point that there's only the supercharger network.
And how the heck does a charging station, at a car dealership in the middle of a city, actually help you when you're on a highway trying to actually drive between cities?
But I do see that planning a road trip in Tesla is going to require a lot of additional stops. Last time when when I planned for a coast to coast ride, it was 14 hours additional to a regular ride because of the charging time. It's 3000 mile so 10 stops. Sure I can kill those charging times if they bring their 600 mile range roadsters.
You can mitigate the impact of charging time by charging during meals and breaks (which is why the preponderance of superchargers are located next to restaurants).
If your route allows, you can also take advantage of what Tesla calls "destination chargers" - Tesla chargers at hotels that are free-to-use for patrons.
Most people don’t care. You buy a car and you charge it. Blacklisting only happens if you buy a car with a salvage title and repair it, which is not something done by the vast majority of people.
I understand if this drives you away on principle, but you’re not representative.
That's a great question. Model 3 owners pay to use superchargers where S/X owners typically do not. That said, it's not prohibitively expensive (26c/kWh in CA where it cost me 16c/kWh to home charge, off-peak only, in tier 1 (tip: I'm not in tier 1!)
Because it's not prohibitively expensive, Model 3 owners will use them fairly regularly, but not to replace home charging in a way an S/X owner might. For the most part.
Right before our 3 arrived new superchargers went in within 5mi from my house; 1 in East Palo Alto and 1 in San Carlos. They're virtually everywhere around the bay area now, so they've been pretty good at quick rollout of urban superchargers, and it FEELS LIKE they can keep up with demand, here at least. When I check on the map they're busy but never full.
When? That time has already arrived for many of us in California. :)
Their response is to build more, of course, and to expand the current ones. I agree with the sibling that this is a good problem for Tesla to have, particularly as new Teslas are paying into those costs.
This would be a great problem for Tesla to have and a signal for them to simply build more stations/partnerships. It reminds me of great the Yogi Berra quote: "Nobody goes there anymore, it's too crowded."
It'll be worse for the next couple years as they ramp up, but I expect with Urban Superchargers coming in more places things will get better. It's even worse right now if you have a non-Tesla EV and rely on the 1-2 DCFC stations in some random mall and can't count on them being working or not filled. I really think the problem will be significantly worse for non-Tesla cars until another manufacturer-- or maybe an investor in EVGo or ChargePoint or some charging company-- invests hundreds of millions into building out new stations with large numbers of chargers, and maintains them.
While superchargers are great, I don't think they as big an advantage as you are making them to be. How often do you drive more than 200 miles in a day? 3 times a year? I am not going to buy a specific car for that reason.
Besides using supercharger is not free as well. As more and more cars go electric, charging stations are going to be as common as gas stations and there will be competition with pricing etc. Not sure if I want to rely on one company's charging network.
> While superchargers are great, I don't think they as big an advantage as you are making them to be. How often do you drive more than 200 miles in a day? 3 times a year? I am not going to buy a specific car for that reason.
So every time you go on a road trip, what do you do? Get a ride to a rental car place, initial a stack of paperwork denying a half-dozen $10-25/day charges on top of whatever base rate you agreed to, finally get the keys to a super-bare-base-model of some car that looked good from the outside, drive it back to your house, then load everything up and hope for the best?
Or would you rather just load up in the car you already own, and are comfortable and familiar with driving, and not need to budget an extra hour or two on either end of the drive for rental company nonsense?
> Besides using supercharger is not free as well. As more and more cars go electric, charging stations are going to be as common as gas stations and there will be competition with pricing etc. Not sure if I want to rely on one company's charging network.
Tesla's supercharger network is a huge advantage precisely because no one else has anything like it. It also now has a fair amount of redundancy along major routes. It would be wonderful if competing networks actually existed, but they meaningfully don't. Tesla realizes that you actually need the network, and that having it allows a Tesla car to be your only car. Everyone else just thinks they can sell something with X miles of range, wipe their hands, and thinks spending 8 hours at a ChargePoint station in a grocery store parking lot is actually acceptable.
Congrats to Tesla and Musk.
The numbers are just insane:
"The electric car-maker reported adjusted earnings of $2.90 per share on revenue of $6.82 billion, exceeding average analyst expectations of losses of 15 cents per share on revenue of $6.32 billion."
$2 Billion? I'm only aware of the $920 Million due in March 2019. Is there another major bond worth discussing?
> $1.2B increase in payables
That's a yearly increase. $500M-ish increase between Q2 -> Q3. I think its reasonable to expect payables to go up as they ramp up from 2000 M3/week to 4000 M3/week, but the number still gives me worry.
I think you're right to worry about these numbers. But its important to worry about the CORRECT numbers.
Per http://ir.tesla.com/static-files/6db4f56e-1532-4cd6-b8dc-3ff... they have $230 million due in Nov 2018, $920 million due in March 2019, $560 million due in Nov 2019, $113 million due in Dec 2020, $1,380 million due March 2021, and $977.5 million due in March 2022. Plus coupons on all of these payable regularly between now and then.
By my count this totals $4.1805 billion. They claim to currently have $3 billion in cash and cash equivalents on hand. But there are various outstanding liabilities.
Given a GAAP profit in the $300 million+ range this quarter, and a projected European market twice the size of the American one, this may all be doable. But it is still a balancing act.
A lot of companies have a lot of bonds out. Its not necessarily unhealthy to keep some debt around, especially through the 2013 through 2017 timeframe when interest rates were abnormally low.
Elon will have to roll over the debt somehow: either into stock offerings or maybe into new bonds. The meager profits reported this quarter aren't anywhere near the amount they need to pay off those debts... even if the profits grow 2x or 3x larger in Q4 and Q1-2019.
But, paying off some of those debts will put the company into a stronger position.
>Its not necessarily unhealthy to keep some debt around, especially through the 2013 through 2017 timeframe when interest rates were abnormally low.
The Tesla bonds in question have a coupon of 5.3% and were sold into one of the lowest interest rate environments in history. They currently have an 8.5% yield. Rolling debt over on those terms is not fun.
According to financial theory, how you structure a company has no correlation with its success. Therefore the kind of debt financing that Elon is using is just fine.
Financial theory and reality tend to agree except in a crisis. Unfortunately crises do tend to come along periodically. How TSLA weathers the next one will be interesting to see.
The Modigliani-Miller 'theorem' is dangerous nonsense. It proves a fact about a model rather than a fact about the real world.
From Wikipedia "The basic theorem states that in the absence of taxes, bankruptcy costs, agency costs, and asymmetric information, and in an efficient market, the value of a firm is unaffected by how that firm is financed". See anything wrong with this picture?
I agree with you that the grandparent misinterpreted the theorem as the Wikipedia article includes something similar to your reply:
"These results might seem irrelevant (after all, none of the conditions are met in the real world), but the theorem is still taught and studied because it tells something very important. That is, capital structure matters precisely because one or more of these assumptions is violated."
But it's already painfully obvious that one or more of the assumptions is violated. That should only be surprising if you've spent years being indoctrinated by academic finance or economics.
Your comment got me interested and I was looking at this March 2021 bond issuance. Does anyone know how in the world Tesla was able to borrow over $1.3B at 1.25%?
There must be some special case here.
Who would loan money to Tesla below the rate they could get in risk free t-bills?
Your claim seems optimistic given that at the current after hours share price, only the December 2020 issue would convert. And just a few hours ago it would not have.
Yes, it is possible that in March Tesla could be trading around over 20% above what it was most of today, but it would be unwise to depend on it.
I'm not actually keen on the details of the March 2019 bond. A lot of people seem to think its a mandatory conversion (ie: it ALWAYS turns into stock).
If its a mandatory convertible, then Tesla pays it off in shares proportional to the value assuming Tesla was $360ish in price. So you "can't lose", you'll get 33% more stocks if TSLA was only $270 to ensure the bond-holder doesn't lose money.
I haven't been able to verify the status of the March 2019 convertible however. But just note that mandatory convertible vs non-mandatory is a big detail.
First because articles like http://www.latimes.com/business/la-fi-musk-convertible-bonds... indicate that they are not. And also because the potential dilution indicated in the Tesla statement that I linked to shows zero dilution if the stock prices is not sufficient for them to convert.
But realizing the huge financial consequences for the company of having the stock price high does shed light on why Elon is so eager to push his stock price up. He would much rather pay in stock than cash.
Incidentally the LA Times article indicates that there is a lot more debt than just the issues I listed. That's a list of all of Tesla's convertible debt. But not all of it is convertible...
They have $3B cash, but owe their suppliers a total of $3.5 Billion right now. (Accounts payable).
There's a LOT of assets / liabilities to juggle. Tesla also has $1.5 Billion of incoming cash (Accounts receivable), which is basically people who are currently in the process of paying Tesla right now.
But in any case: Tesla's liquid liabilities are larger than their liquid assets. Its a bad spot to be in for sure. Its solvable though, but the question is what does Tesla lose by solving it.
You forgot Tesla's $3.3 billion in inventory. Their liabilities are greater than their assets to the tune of $1.7 billion. That plus the $4.2 billion in bonds is $5.9 billion in debt.
Subtract the $3 billion in cash and they'll need to come up with $2.9 billion between now and March of 2022, which is $.2+ billion per quarter.
Edit - Double counted cash. It should be $.4+ billion per quarter.
I didn't mean to have a complete list. My only point is that "its complicated". There's a lot of moving parts here. Full details can be found on page 8 of the linked PDF.
> Their liabilities are greater than their assets to the tune of $1.7 billion. That plus the $4.2 billion in bonds is $5.9 billion in debt.
You're double-counting. Liabilities include debt. No need to double-count.
> Subtract the $3 billion in cash
You're double-counting, again. Assets include cash. Lets do this once, and correctly, shall we?
* Total current assets: $7,920,491 (thousands)
* Total current liabilities $9,775,324 (thousands)
That's a total shortfall of $1.85 Billion. Again, page 8 of the PDF provides these numbers.
> they'll need to come up with $2.9 billion between now and March of 2022, which is $.2+ billion per quarter.
Elon Musk has raised capital ever year, roughly to the tune of ~$1 Billion/ year. Either by convincing people to take on more debt for the company... OR by selling more shares out.
The only issue is if a recession hits between today and then, which would close capital markets.
Good point! Still, Tesla went from -$520 million to +$516 million in non-GAAP net income, and that's with the vast majority of 3s being sold in the US. Expanding to Canada and launching in Europe should be very profitable.
In terms of capital raises, this SA article posits why Tesla may not need as much capital going forward.
They take the "official" accounting earnings and add back in charges they either 1) don't feel represent the true financial position or 2) are one-off charges. In this case they back out stock-based compensation (like most companies), turning GAAP earnings of $311m into adjusted earnings of $516m. Voila!
Worth noting that Tesla didn't really experience those losses due its special stock issuance to Musk to cover the portion of the fine that was due to Tesla. The only material effect to Tesla's corporate finances from that debacle was Musk now has more concentrated equity ownership of the company.
Yes, it's an interesting result of corporate mismanagement, that he gets to sign off (with board approval, but let's be honest about the control they have) on even more equity stake. However, he did have to give up the chairmanship, so overall he lost control of the company though in this dimension (portion of equity ownership) it is an interesting curiosity and contradiction.
Tesla could realistically hit 500,000 cars next year, almost 10% of total cars sold in America. The electric revolution is here and it’s finally profitable! Budget EVs with solid range are coming next year too with the 2019 leaf!
Convince congress to extend the federal tax rebate (no real increase in spending just keeping what’s already there) by like 2 years which is just maybe $1-2B more and electric will be the way to go for good!
> Tesla could realistically hit 500,000 cars next year, almost 10% of total cars sold in America.
US consumer auto sales per year are in the 16-17 million range. I personally wouldn't consider 3% to be "almost 10%", do you?
But I don't think they realistically can hit 500,000 cars next year, either. They moved 70k cars in Q3. There's no reason to believe they can double that in 6 months or so particularly as the Model S & X sales have been fairly stable. So that means the Model 3 needs to somehow grow to around 400k/year in order to get to 500k cars next year.
They state production of Model 3 was up to 5,300 per week and that the production system had stabilized with gradual monthly improvements. So currently Tesla can only even build 275k Model 3's a year. I don't think doubling that in such a short time frame meshes with Tesla's comments of "gradual monthly improvements."
350,000 cars in 2019 seems much more likely assuming Model 3 demand holds strong.
I meant cars, not all autos. Cars are 6.2 million. Musk said he’s trying to get to 6000 a week by the end of August and 10,000 a week in 2019. The demand is clearly there as are the profit margins even sans ev credit. I know he overestimates things a lot but that tells me they are seriously considering ramping up production. As the production and now delivery processes streamline, they can definitely hit 6000 by end of year and realistically hit 8000 by mid 2019.
Elon Musk has reiterated recently that Tesla's goal is to reach Model 3 production of 10,000 per week in 2019.
But not all of those sales will be in the US. According to the Q3 update document:
"The mid-sized premium sedan market in Europe is more than twice as big as the same segment in the US. This is why we are excited to bring Model 3 to Europe early next year. "
> But not all of those sales will be in the US. According to the Q3 update document:
Which would make it even less likely Tesla can hit 10% of US passenger car sales as they'll be sacrificing what little production they have to try and break into other markets.
Anyway just hitting 10k/week in 2019 isn't sufficient for the 500k number. They'd need to average 10k week for the entirety of 2019. Very different things.
> US consumer auto sales per year are in the 16-17 million range. I personally wouldn't consider 3% to be "almost 10%", do you?
The parent comment said "cars." You switched that to consumer auto sales. 6.3 million passenger cars were sold in the US in 2017. With passenger car sales declining and generally losing popularity in the US (dropping from 7.9m in 2014), it's plausible that 500,000 will in fact be "almost" 10% of total cars sold in the US in 2019.
>What's just as amazing is that this whole revolution is done off the back of the Li-Ion 18650/21700 battery cell.
18650 is the cell form factor, not a specific anode/cathode/electrolyte combo. There have been leaps and bounds in cell chemistry over the last 10 years which have made it possible to build high-end expensive cars, but we still need about double the performance of current tech to achieve true low cost mass adoption. A $45,000 car with 300 miles range is just barely enough to convince well off people to buy a new toy. The first $20,000 EV with 300 miles range will change the world.
I recall reading many HN posters commenting that this cylindrical form factor was a terrible choice for cars. Now several other carmakers have adopted it.
From an engineering perspective it's suboptimal since they have small surface area relative to volume. That's probably why Telsa went with the 2170 instead of the 26650, which has a larger diameter.
Despite this disadvantage the Telsa battery cost, power density, cost per kwh, peak power, and longevity are unmatched. Especially as measure by real people driving real cars on real roads.
So sure in theory batteries with more surface area would have greater package efficiencies. So far nobody has managed to.
> So sure in theory batteries with more surface area would have greater package efficiencies.
There's way more to a battery than just density; however, one of the things that needs to be managed is the heat generated during charging. There might be a case to be made for slightly suboptimal packaging strategies if it makes cooling all those cells that much easier.
Yeah, this really strikes me as a forest for the trees kind of situation. Sometimes it pays to engineer things to death, other times you need to step back and see the whole picture; how important is packaging for efficiency vs cooling vs manufacturing speed, etc.
Automakers putting battery packs in the trunk of their cars are complaining about battery size.
Is anyone complaining the floor on a Tesla is too thick and compromises interior space? Of course not.
The packaging probably DOES add a not-insignificant amount to the total weight of the pack vs an ideal battery of some custom design. But again, you have to weigh (ha!) all of the factors.
I read an article that made the case that lithium of batteries are sensitive to the direction of the heat gradient. Tried looking, can't find it. But the upshot was you want the gradient parallel to the electrode layers not perpendicular. Which means you want to remove the heat from the ends of the cell.
Money quote: For automotive applications where 80% capacity is considered end-of-life, using tab cooling rather than surface cooling would therefore be equivalent to extending the lifetime of a pack by 3 times, or reducing the lifetime cost by 66%.
Meaning battery packs that last not 150,000 miles, but 450,000 miles.
I think GM switched from pouch cells to cylindrical cells between the Volt and Bolt. The Leaf still uses a flat pouch. In the US, the Bolt and Leaf are the only other BEVs with significant sales.
The comment is a precise and accurate definition of the technology, I don’t see why you jump to “FUD”? Not everyone is trying to influence the stock price.
What? Define “rare”. If you’re in any reasonably-sized metro I’d be quite shocked if a day goes by where the average person doesn’t see a BMW or Mercedes.
If EV wins and they can no longer collect all that juicy tax revenue from gas - how are they going to afford to maintain infrastructure? They collect far more than 20bn in revenue from fuel taxes.
They will just move the tax to the Tesla Superchargers and the other electric charging stations. Alternatively they could tax it at the DMV level, like they already do to some extent. i.e. instead of a $100 registration fee every year, it will be a $500 registration fee.
I'm going to guess it will be a mix of both, but the govt(s) will be slow to do either, until they realize, too late, that they didn't meet their income goals on fuel taxes last year and suddenly have a shortfall in the budget :)
Applying a tax at EV charge points wouldn't work well because most charging happens at home. It's difficult to distinguish electricity used to charge an EV from that used elsewhere in the home.
I suspect most states/countries will eventually adopt a combination of higher annual registration fees and mileage-based road user charges.
Ah good point, make it based on usage.. your mileage counter says you went 100k miles this year, here is your 500k registration bill!
As for the charging @ home vs a supercharger(and the like) I agree with you, but the government is not known for always being wise or letting facts get in the way of something they want to do :) They understand a "Gas tax", so including EV chargers as part of the gas tax is easy to understand and easy to approve.
Check odometer readings as a requirement of renewing the vehicle's registration. Assess a fee as a function of vehicle weight per axle and distance traveled. Sure, at the state level there will be some missed edge cases (what if I am registered in Washington but do most of my driving in Idaho?), but it should be close enough. It's basically fair and way less invasive/expensive than GPS-based tracking for road use.
>what if I am registered in Washington but do most of my driving in Idaho?
Also it's likely to be evened out by someone who's registered in Idaho, but is driving in Washington. And in any case, the taxes can be adjusted to account for a fraction of cases like that.
This is also more fair than fuel taxes because low-efficiency vehicles aren't necessarily doing more road damage.
This is a really, really big deal. They've still got a long way to go (as I'm sure Musk would be the first person to admit), but turning a profit is no small feat and should be applauded as such.
I dunno. Its not yet a yearly profit. Its a quarterly profit (which is good for sure!!) but they're -$1.5 Billion from Q1 and Q2 so far. So they're likely going to be very negative on this year.
The only thing suspicious to me is the number of executives who have left the company in Q3. Why would they leave if the numbers were going to be good?
A glass ceiling is a metaphor used to represent an invisible barrier that keeps a given demographic (typically applied to minorities) from rising beyond a certain level in a hierarchy. The metaphor was first coined by feminists in reference to barriers in the careers of high-achieving women. –Wikipedia
when i visited china, it was filled with electric cars from multiple manufacturers, and the fit and finish was just as good if not better than tesla. i don't view tesla as beyond anyone. when other car manufacturers enter the market, tesla might have a hard time keeping up because other manufacturers know how to build cars and not just an okay car with an electric motor.
There are a number of reasons those cars aren't sold in the US, and inability to pass any kind of safety standard is certainly going to be one of them.
Of course, the fact that our market is (probably) smaller than theirs with way more red tape (including the aforementioned safety standards) doesn't hurt.
I mean, there's a risk/reward ratio. if I was in a country with 1bn people, I probably wouldn't risk moving to a market with less people that are suspicious of Chinese manufactured cars at this point either
those are all excuses that, in my opinion, causes one to ignore the progress over there. it's dangerous thinking. do you really think that tesla is as safe as other established car manufacturers? (i am aware of their "ratings", which i find hard to believe.)
edit: and you can see my other reply or do a google search to see that china's car manufacturing revolution, including their massive and unparalleled surge into electric vehicles, is something one cannot simply write off. i don't know why people like you hold your opinions in the face of the history of brands like hyundai and kia. kia used to make terrible cars, but is now one of the top auto manufacturers in terms of value, execution, and design. just take a look at the new kia stinger and huge success of the optima model line.
> i am aware of their "ratings", which i find hard to believe.
Is this common among the anti-Tesla crowd? I think you're the first crash rating conspiracy theorist I've come across. If anything I'd assume that the organisations doing the testing would be deeply connected with traditional car manufacturers and that Tesla (as a newcomer) would actually be at a disadvantage.
Some of Tesla's statements regarding safety were apparently a bit exaggerated, in the way advertising often hides fine print to tell you they are the absolute best.
Non the less does Tesla seem focused on safety and I also haven't come across credible reports finding them unsafe, as GP is implying.
i didn't imply they were unsafe. i said i felt they weren't as safe. for example, the Insurance Institute for Highway Safety rates the model s below the kia optima, which was landed their top safety rating. i simply call into question elon musk simply claiming they are the safest car ever and the fact that everyone seems to buy into that. there are a lot of stories and examples of hurried and amateur designs at tesla, including examples from teardowns of the vehicles. i simply have a hard time believing that "the best ever" safety emerges from such stressed processes at tesla.
I have not ignored the progress made 'over there'. I recently rode in a JAC S5 and a Great Wall sedan (I forgot the model).
I never said they wouldn't be able to catch up, I said they would not be able to sell in the US today for many reasons, one of which is the small size of the US market compared to the domestic market. I'm not sure why i'm still typing, I'm just restating what was clearly apparent in my original comment that you ignored.
I'm sorry you're not willing to believe a thing called 'data'. Yes, I believe Tesla vehicles are precisely as safe as the results show they perform on the various crash tests. Crash tests that every automaker designs their cars to perform well on. Crash tests whose parameters every automaker knows full well.
You should share what those cars are. Also, when are they planning to enter the market at large? Why haven't they done so yet? I don't doubt other major manufacturers will soon give Tesla a run for their money, but mysterious Chinese manufacturers? Certainly.
"Global annual sales of EVs surpassed one million for the first time in 2017, and China (where EV sales doubled in 2017) accounted for more than half of those."
you are the one uninformed, so maybe you should do a search? there is nothing mysterious about chinese auto manufacturers, in particular the ones making electric vehicles. what do you consider the "market at large"? as someone else mentioned to you, china is the biggest electric vehicle maker and seller in the world. china is also the world's largest auto market.
some of the ones that i have personal experience with are nio, geely, saic roewe, and byd. there are many, many more. i have ridden in the last three brands multiple times and saw the nio showroom cars. the three brands i rode in were very nice cars and obviously affordable since most of my rides in them were with didi drivers, china's uber.
hacker news, along with many in technology in the u.s., has a huge bias against china. but this is going to catch up with the u.s. in a bad way. china is catching up, and in many cases, exceeding, the u.s. in many industries.
There's also the charging network. At least in the North America the Tesla supercharger network is the only viable option if you are doing a road trip.
i am not knowledgeable about the charging network in either the u.s. or in china. but china has sold more electric cars than anyone, so if i were to wager a guess, i would have to assume the charging network is superior to the one in the u.s.
Their software with OTA is best in class with nobody even close, their self driving tech is also the best with Cruise coming in second (but including all the other negatives of GM).
The seats they’re making in house now are also very comfortable and I like the minimalist interior of the 3, but that’s personal preference. The buying experience was also nice not having to deal with dealers.
Their power train and supercharger infrastructure is awesome but it’s not the only thing they’re good at.
The other thing they are very good at is marketing, both to consumers and to potential employees. I think this is largely thanks to the cult of personality around Elon Musk. I don’t really mean that in a bad way either.
If they can retain the engineering talent that has been making their cars (which is by no means guaranteed, from the stories I’ve heard of working conditions) then I think they have a good chance of catching up in the areas where they currently lag behind other companies.
That's just non-sense. If you look at the teardown you will see that Tesla has great electronics (and cheap), best in class battery packs, a fantastic design, great suspension, software integration, innovative air condition, good charging speed and autopilot that is better then most competition.
Really the only thing they are not great at is some part of the interior (and not the important console part at the front) and that they have a somewhat cumbersome heavy body.
> Really the only thing they are not great at is some part of the interior (and not the important console part at the front) and that they have a somewhat cumbersome heavy body.
Pretty sure you're oblivious to what fit and finish means based off of this comment. You listed a bunch of stuff that's not fit and finish followed by acknowledging that stuff that does contribute to fit and finish is poor.
Fit and finish are things like panel gaps, paint job quality, interior quality, etc...
Amazing how quickly things can change with Tesla. Just a month ago the sky seemed to be falling, with constant negative press news about the SEC, concerns over Elon Musk's mental health, Tesla losing money, and so on. Had someone shorted Tesla just a week ago based on the media's pessimism, they would be down 20%. of course, Tesla could face problems, but this was a really solid earning report that dispels a lot of the gloom we have been seeing lately.
It is one profitable quarter, so. Whether this is sustainable or not, well I don't know.
The most important for Tesla now would be to keep production stable. Reports about bad quality might hint at some issues on that front. The other risk I see is how debt is structured. With debt converting to stock above certain values means Tesla is much more reliant on stock courses than other companies. So Tesla needs to keep production stable to keep the cash flow positive and keep the valuation high to be able to cover debt. Riky position if you ask me.
In hindsight Elon’s frustration with the negative press makes sense since he’s seeing these numbers along the way. Though he did end up making things worse, but I would probably find the negative press frustrating too.
It‘s not surprising that the reputation of the press is worsening when it values drama around eccentric personalities higher than simple facts and research.
Well, don't believe everything you read in the newspapers :) I often get a feeling that journalists, at least in Sweden, really just want big companies to fail, instead of being excited and curious about new technology.
It's the neverending battle between the short side and longs when it comes to TSLA. Whenever there is some negative news, the shorts just spam social media. The same with the longs.
I feel like the way that the press reports on corporate earnings in general is in bad need of an overhaul. There is a lot of talk in here about "rare" profits and the needs for financing, but little about why that might be the case.
Does the reporter genuinely believe that a business like Tesla could be built without doing those things? If you had to recreate Tesla from scratch tomorrow, how much would it cost? And wouldn't you have even bigger loans and debt than the business does?
There is just so much context that is not merely left out, but replaced with confusion.
I don't think anyone objects to Tesla taking on debt to finance its growth. The thing is that if your debts are falling due and you don't have enough cash to pay them, you will need to borrow money, sell shares or renegotiate the debts. Your only other option is bankruptcy.
Elon Musk nailed his colours to the mast earlier in the year by saying Tesla would not take on any new debt in 2018. And issuing shares has gotten a bit less simple since his "taking Tesla private" tweet. Which leaves renegotiation or bankruptcy. It remains to be seen whether creditors will renegotiate to avoid the hassle of bankruptcy and the possibility of significant upside through some kind of debt/equity deal. Or whether they will look at the $10Bn of PPE on the assets side of the balance sheet and say "well we can probably get $5Bn for that in a firesale to Toyota, Ford or GM and come out ahead".
Great numbers and congratulations to Tesla. If we as a country are going to lessen our dependence on fossil fuels companies like Tesla will need to lead the way.
Just a side note that Tesla received a ~$500m loan from the US government back in 2009, which was paid back in 2013 (the loan went out to some other automakers for electric vehicle R&D), and I believe the tax break on electric cars are still valid. Tesla is a really nice example of there being a problem that is both in the interest of the public and private sector to solve, and those sectors working together to innovate.
The loan was a terrible deal for taxpayers. It enriched early Tesla equity holders -- including foreign Mercedes-- at the public's expense. The govt was taking on huge risk, the loan was vastly bigger than the company's revenues, but taxpayers got no corresponding upside for that risk. A similar loan to Fisker was a $139 million loss for the government.
Government and business aren’t known for considering externalities in their decision making, but it seems noteworthy that the impact of the loan is not a small return, but the survival of a successful electric car and battery company. Would you be alright with providing equivalent money in grants to produce this tech? Because I would argue loans to a business have a better chance of reaching market successfully. Could they have gotten here without that loan? Maybe. Could better terms have been arranged? Possibly. But I think it was a praiseworthy investment nonetheless.
It doesn't seem that _that_ loan was a terrible deal. It was a loan and it was repaid.
The upside to citizens was probably evaluated under different terms - the development of a nascent industry that could pay social dividends over time in the form of jobs, oil security, etc... (whether that's an appropriate function for government is an entirely different concern).
The person you are replying to did not explicitly identify 'we' as referring to the USA. Fossil fuel pollution and climate change is a global problem; the atmosphere knows no national borders. Globally we are still dependent on Saudi Arabia for oil and Tesla is having a global impact in lessening that dependency
Fracking shale oil is a bad investment. Most of the drilling and exploration companies heavily involved in shale oil "tight oil" fracking are suffering financially due to poor estimates of well productivity and longevity. The primary reason for low oil prices in the Permian is due to a lack of pipeline in that region. The US is not actually self-sufficient in regards to crude oil used to refine into gasoline and other fuel products.
Oil is fungible. We're on oil as long as Saudi Arabia is contributing oil to the global marketplace. Take their oil off the marketplace, watch the price skyrocket.
Not really; the issue with Saudi oil has mostly not been direct imports US has (both as a net importer and net exporter) for some time gotten more of it's gross imports from other, nearer sources.
The issue for the US with Saudi oil has been global oil prices and the knock-on effects on, well, everything else.
Anyone paying any attention in the Bay Area over the last few months has known what the Wall Street shorts and national media don't. Model 3 is an unbelievably massive success. It went from zero on the road, to more common than seeing a BMW 3 series in 6 months.
I’ve seen a ton of them in suburban Philadelphia (Main Line). I travel to SF frequently and have spent a lot of time in Palo Alto. Model 3’s are at least as common on the roads here in suburban Philly as the Model S was in downtown Palo Alto a year or so ago. I know Tesla’s strategy was to ship close to HQ first and then expand elsewhere. Seeing this many here makes me think they are hitting their stride in a big way.
They have to be happy with those numbers, interesting question of whether they continue to sell the S,X,3's and generate a pile of cash before they start burning it on model Y development.
In general it should also muzzle a lot of the nay sayers, it isn't easy to lie about money in the bank.
Solar City is a disappointment. I keep watching the solar roof tile business to see if that goes anywhere. I'm getting close to putting in Powerwalls and getting off the grid completely, the PG&E shenanigans are just that annoying for grid tied solar systems.
> They have to be happy with those numbers, interesting question of whether they continue to sell the S,X,3's and generate a pile of cash before they start burning it on model Y development.
That's not how Elon works. He's likely to get a capital raise to fund Model Y development.
The Gigafactory was built on millions-of-shares being sold between 2013 and 2015, plus some loans (the 2014 5-year convertible which is now due 2019).
The thing about Q3 profitability was that it was necessary for Elon to achieve Q3 profitability... so that he can now start to push for the Model Y funding. Shareholders/ Investors need to be convinced that giving more money to Elon is worthwhile. So I think this Q3 profitability is very important to the message and plan that Elon is trying to build here.
Just a heads up. Make sure you get both solar and powerwall at the same time if you don’t yet already have solar. I learned the hard way about the additional cost associated with replacing the ac inverter.
Here we’re mandated by the city to be connected to the grid at ~$10 a month, which (along with net metering) pretty much disincentives a powerwall.
I was early to the solar thing, I put in a 5kW system in 2002[1] and we've replace one of the inverters when it failed with a single 6kW inverter. So any Powerwall install is going to be either in addition to that, or as part of a re-engineer to replace the panels with new panels that have more power for the same footprint.
When you say 'mandated by the city' do you mean to say that you can't get a permit to put up solar unless you grid tie it? And if so does your power company allow for an even 'watts in vs watts out' scheme?
[1] And yes it has paid for itself and is nominally cash flow positive at this point.
Could you expand on why you think SolarCity is a disappointment? To be sure, they're slow developing and rolling out their product in volume, but your last sentence points out the massive strategic disadvantage a lot of utilities might have in a few years.
To me, this seems very promising for a company developing tech that can be used, to a significant degree even through software/policy changes, to greatly reduce grid dependency. If utilities keep squeezing adopters of renewable energy by charging ridiculous connection fees, there's a significant risk they will have a nasty surprise once storage adoption is high enough.
It has to do with their sales approach and technology. Last time I checked they are selling a lot directly to consumers with local slaes reps. That is expensive. Offering leasing agreements is just adding to their financing needs and cost.
Installation requires a local entity, either in-house or a third party, to plan it, visit the premises and so on. Offering a fixed rate up front (some companies in Germany do that, not sure whether Solar City is doing the same) carries risk for bith parties. In a nutshell, sales is expensive and capital intensive.
Regarding tech, solar modules are a commodity by now, they get cheaper basically every quarter. And more efficient ever year at least. So on that front there is not a lot to gain. Also, full grid independence is still not achievable for reasonable prices. Smart grids are better solution, inverter producers and utilities are in a better position than the company produucing and installing solar modules.
The technological curve results in guaranteed obsolescence. For solar roofs that means either to keep production for older models up or reliability high enough for the full life time of a roof.
My understanding is that the conditions inside of Tesla's manufacturing are brutal. I have friends who work on the production side and they effectively tell me corporate culture is driven by fear. I am definitely cheering Tesla on for global warming reasons but I worry that Musk is running a Faustian bargain that may bite him in the backside long term.
I've got a friend on the assembly line in Fremont. He says he doesn't mind the hours too much. However, they basically keep adding extra or overtime shifts to his schedule. I think right now he might be working 5 or 6 day weeks, and I'm fairly sure they're minimum 8 hours, and obviously with overtime could be several hours above that.
Sounds awful, but in some ways isn't that how manufacturing has sort of always been?
Sounds better than bustin' ass for 60 hours/week for my base salary. Your friend is getting paid 1.5X for every hour over 40. And, yes, it is not uncommon over the years. My dad would seemingly work every overtime hour given. And at time-and-a-half, so would I.
The person I was responding to was expressing gratitude at having the opportunity to earn 150% ones normal wage per hour. My point is that it’s not enough to offset the opportunity cost. If anything, employers should be discourage from asking for overtime pay at all, and make it 10x regular pay or something instead of 1.5x so that people can enjoy a better work life balance.
I understand what you’re saying, that 50% is better than nothing. Which obviously, I agree with. My contention is that even 50% is not enough to make up for what the worker gives up. Obviously the lack of opportunities may force the employee to accept the arrangement, but I’m speaking about a work life balance overall.
And there are many positions where the cost of hiring/training/retaining employees is higher than 50%, so it’s more advantageous for employers to just give overtime, which employers obviously utilize. But because an employer can force the employee to work overtime, it’s not clearly a beneficial arrangement to both.
Meh, we're just talking past each other, probably were from the start. I'm saying, "time-and-a-half beats working on games at EA for 80 hours/week for base, your factory-working friend has it better than a lot of tech workers" and you're saying "overtime sucks". Both statements are true, we're just negotiating the price...er, wait, wrong metaphor.
Yeah, I worked for a while for an electronics component manufacturer that had a monthly hockey stick production schedule. For the first half of the month, I came in to work to wipe down my desk and bullshit with my coworkers. For the last week of every month, it was all-hands plus overtime. If the last day of the month happened to be a Monday, the production manager would try really hard to talk you into coming in for the weekend.
It was absurd. Sensible people hated that place, while a lot of other folks just accepted it as normal.
I suspect the conflicting accounts of life at Tesla work out similarly.
I worked on the line at GM, and it seem half the worker were always looking for some way to get less work or have someone else do part of their job while they get paid the same.
I was personally told to slow down because I was making my job look too easy, IE not as many workers were needed.
Those type of people would find working for Tesla a living hell where you are expect to work and not laze off. I am sure working at Tesla is hard work, but lots of people love working like that, however there are tons of people who will whine and complain if you try to get them to work properly.
I'm sure a lot of that will go away as their manufacturing process settles down. I like the recent announcement that they're going to simplify interior options, and that tells me that they're taking a look at optimizing their process.
Simplifying the process means better quality control, which means more predictability, which means less stress for employees.
I'd love to see them get on par with other car manufacturers on cars produced per employee per factory.
They're simplifying the Model X interior choices, that's a lower-volume model. Model 3's only interior option is color, black or white.
Tesla is not planning to get on par with manufacturers that outsource a lot more than Tesla does. In fact their new Chinese factory is planned to be even worse, because it will produce battery cells and car motors in-house.
So, less options for customers (not saying that e.g. Audi is exaggerating on that front) and full vertical integration. There are reasons why oitsourcing happened, I did not see a convincing explanation why it is good for Tesla not doing it.
And they keep hiring amazing people, so what's the problem? Isn't it great to have people come and go if they remain strong believers in the company and are ready to work again with Tesla?
For instance, John McNeill was Tesla's global sales and service VP and is now COO of Lyft. I wouldn't be surprised to learn about some deals between the two companies in the future.
Great news but I have to ask. Maybe someone here can share their view/opinion about the market and what’s going on.
Musk can’t tweet about going private. So a major short seller sue him and Tesla. Stock ”crash” during two months. Short seller completly turn around and now long the stock which rises A DAY before this report?
Eyebrows should be raised so high everyone go bald. Where Will this end with SEC? And How is this not manipulation from both sides?
Disclaimer: Sure I am a fan boy and we all ”knew” they were going to make a profit soon. Great work and this is promising for the future!
The problem wasn't that Musk can't tweet about going private. The problem was that he made a false claim about planning to go private in a direct and bald-faced attempt to manipulate the stock to the detriment of short-sellers.
As a CEO in charge of the company, he doesn't get to lie to the public, his shareholders, or putative shareholders, about what he plans to do. He doesn't have to tell them everything--but he absolutely cannot lie to them.
A shortseller not connected to the company isn't in the same position. Since they're not a company insider, they don't have any knowledge of what the company is doing and others follow their advice at their own risk. It's only a problem when they make false claims that aren't supportable by data or reasonable (if not necessarily accurate) analysis.
He got into trouble for a misleading or false statement and that was about the price, not about going private. He did not get in trouble for market manipulation or anything to do with short-sellers. That's just an interpretation some people have claimed.
Greatly simplifying here. Essentially because what the CEO of a publicly traded company says can have real world consequences for the man on the street. If Elon tweeted that they were about to sell triple the number of cars analysts predicted, everyone would run to buy Tesla stock thinking its a can't lose. Each of those people buying the stock causes the stock price to go up (generalizing here), so the next person to buy purchases at a higher price. But hey they are trippling expectations, this stock is going to the moon. Hedge funds, pensions and retirement accounts also get into the action.
Now if it turns out that Elon was just pulling a joke and a few days later he tweeted, just kidding guys. The stock would tank. Everyone that had purchased at the higher and higher price would take a massive loss, including all of those retirement accounts. That's why executives of publicly traded companies cant lie because people make financial decisions based on those lies. Some of those buyers control billions in retirement funds (maybe even your 401k). If Tesla happened to be in the process of negotiating a loan or bond at the same time, it's massively fraudulent if they get better rates off the lies that were tweeted out.
In addition, anybody shorting the stock faced a real risk of being liquidated due to the stock sky rocketing due to a lie.
I am a huge fan of Musk, and think he is doing incredible things but he really should not have done that.
"Funding secured" after the Saudi repeated multiple times that they would pay cash for the operation – which was refused repeatedly in the past by Elon himself? Since most shareholders wanted to remain, the cost of the operation was estimated to be below $20B so who doubt that the funding wasn't secured?
Amazing results - I am especially taking great pleasure in watching the shorts get decimated.
The Model 3 is a game-changer for the masses. I walked past 6 of them just on my way to get coffee this morning. We're truly witnessing the EV revolution.
I will never understand why Tesla people are so obsessed with short sellers.
They exist for every company. And the majority of them would have hedged their bets in some form so it's not like they are likely to lose substantial amounts of money. Tesla almost seems to be similar to Trump in that they need a fictitious enemy to distract the attention away from themselves.
Everyone's got shorts, but Tesla's short position as percent of float is very high, at almost 29%. GM, for example, is under 2%, and Ford around 3%. That makes it a material point of discussion.
Second, yes, they are probably hedged. But usually they hedge against correlated securities such as industry competitors so they can hedge away risk they don't want to take (i.e., they have a position against Tesla, but no position about car sales in general, so they hedge against the rest of the industry to protect themselves against economic growth raising all car sales). So if Tesla reports good numbers relative to the industry, it will absolutely impact shorts and they are likely to lose substantial amounts of money. What else would they be hedging with? Maybe their bonds, if you had some sort of complicated capital structure arbitrage play, but I haven't seen much of a case being made about the bonds being undervalued relative to equity.
Having said that, I think shorts play an important role in the economy to keep companies honest.
> Tesla's short position as percent of float is very high, at almost 29%. GM, for example, is under 2%, and Ford around 3%.
Auto comparisons are worthwhile, but equally valid are comparisons to companies of a similar age, not just established stalwarts (for better or worse).
There's substantial evidence that (some of them) are actively working to crush the company, rather than to merely profit if the company fails to succeed. I believe in the principle of short selling, but I am not a fan of Tesla shorts specifically.
I don't own any stock, but I have vested interest in seeing them succeed as I own a car that I would prefer not to see turned into a paperweight; of course, I have always recognized that this is a gamble I am choosing to make.
Because it's one of the most heavily shorted stocks on the index. Basically Tesla has always been the underdog and tons of people are itching to see them fail. So watching them succeed against the odds and the naysayers getting burned is quite satisfying - just speaking from a human story perspective.
Can you please not take HN threads into tedious flamewars? Of all the stupid loops we get into, Musk Mania—hate him, love him, boo, yay—is about the stupidest. It's worse than bickering about Spiderman.
I can't really answer the implicit or explicit question of "what have you got against Tesla?", or the accusation of being emotional, without bringing in an alternative.
Which makes it difficult to have the discussion about Tesla-as-Tesla. Admitting that I have an emotional reaction to an individual is the honest response.
My policy, in your position, would be to just ban Tesla posts. When a conversation topic becomes repetitively boring, I ban it, as there are plenty of places to discuss Tesla or Elon Musk or any other topic.
Musk has his faults for sure, and he really needs some people reviewing his twitter posts before they go live.
But I find it amusing that people are so quick to point out his faults and criticize the guy when he's accomplished more in his life to date than any single one of his critics, with at most a couple exceptions, like Bezos.
Basically if he's a wanker, what's that make you? I don't think it's fallacious reasoning here at all to say that. Basically your standards for a non-wanker must be so high as to include almost nobody. I'm not just talking about his financial success, I'm talking about changing the world for the better with his companies, for raising 5 children, etc. The guy has his faults, but so do we all. If he's a wanker, than really who isn't?
Everyone just give him a free pass which is bullshit.
Personally I think the guy is a narcissist given how much he loves attention. Like most narcissists he will shit on you if you get in his way, right and wrong be damned - something to keep in mind.
Regardless of how you feel about this person or any other, would you please not post uncivil and/or unsubstantive comments to HN? We're trying for better than this here.
Its similar to if Edison, Bell or Einstein had a twitter account. You are watching the world change due to the drive of a single person. I find it fascinating. End of the day, the guy is human with all the flaws that come with that, but he is also operating on a level matched by only a few today. I don't have to want to be friends with the guy to be amazed at what he is doing and to admire the effort he is putting forth.
My understanding is that Tesla short sellers are more visible because of the amount of money betting against Tesla. With an estimated ~$11B of short position (https://www.forbes.com/sites/chuckjones/2018/04/15/tesla-has...), that is not fictitious.
With so much money at stake, some short sellers might be tempted to start false rumors or even damage the company, in order to recoup some of their money.
Many of them are funded by big oil - and have been spreading FUD in an attempt to manipulate the price. Tesla is the one of the most shorted companies on the market today.
The share price is below some highs, but still... talking about memory, the stock was ~$35 5 years ago, and now trading at ~$300. Yes, some stocks did better during that time, but it is not that bad.
This is massive for Tesla. I cannot imagine they have achieved this after the tumultuous last few months. Tesla is bigger than Musk, that's the key to its success. I agree that Musk's blind ambition and hubris has made this possible, but now is a good time for Tesla to get a veteran COO to take things to the next level.
Congrats Tesla. Your growth is a source of inspiration for me.
I wasn't following it closely but it does tickle me that the headline couple of hours earlier was __Tesla stock skyrockets after legendary short seller goes long__ [0].
One thing to consider that an analyst pointed out. Telsa has alot of net 60 and 90 and 120 day relationships with suppliers, but gets paid from car sales much quicker. This means that they can "financially engineer" quarters to make their cash flow look much better than it would if the payment periods were all net 30.
Pre Close:
- bit of a perfect storm for Tesla to make a profit
- Model X ramp up spend is mostly done, Model Y ramp up spend hasn't really started yet.
- Model Y ramp up could be $250 million/quarter drag
- Started selling dual motor Model X, more than single motor, (probalby push for more expensive cars first to try and get profitable)
- this will mean we'll ahve to watch per car margins going forward as less profitable models are rolled out.
- Solar weighing on results, Spent 2 Billion to buy Solar City, and assumed alot of debt in the transaction
- solar installations have fallen through the floor since then,
- Tesla is no longer largest solar company in the US
- with multiple layoffs in Solar City division
- The Model 3 outsold all but four sedans in the U.S. last quarter.
- Tesla Junk Bonds trading at 86 cents on dollar, an 8% Yield, not too spicy, probably means bond market expects to be paid off in cash not shares.
- Good quote from car analyst
"So Tesla going from 0% to 1% U.S. market share and not profitable or cash-flow positive for the ytd -- `Yay, Tesla!' -- but let's not get crazy. This is still a niche brand building vehicles by hand in a tent."
- Tesla has made money!!! net income of $300 million, now can they show that they didn't just cook the books for a quarter?
- back to 3 Billion of cash in the bank
- even without ZEV(Zero emission credits) Tesla would still be well into the black
Misc:
- 15 days of inventory, for Model 3, about a quarter of what other companies have
- building an average of 4,300 Model 3's per week
- labour hours are down on the assembly line by 30%
- little under 20% of Model 3 pre orders have cancelled
- Musk said he wants to start producing cars in China next year, this is a put up or shut-up situation as they've sat on the factory and done nothing since announcing it.
- China acceleration seems to be pretty darn Tariff driven
AutoPilot:
- now on software upgrade 9.0, which can change lanes and exit highways on its own.
I take issue with your market share comment. You are referring to an installed base of 1%.
Market share is a sales based number, which according to the document the Model 3 is the number 1 selling car in America by revenue over the last quarter.
I had the same question and ran the numbers in my head, but I don't think that's accurate; there are 253m cars on the road in the US according to the googles, they're nowhere near 1% installed base.
But it's also disingenuous to compare a single electric car from a single carmaker to the entire body of every kind of passenger car for sale in the US. At least compare ALL electric car sales to ALL gas car sales.
> Musk said he wants to start producing cars in China next year, this is a put up or shutup situation as theyv'e sat on the factory and done nothing since announcing it
They've bought the land and started grading it, as of a few days ago, I think.
> This means that they can "financially engineer" quarters
Sure, look at their balance sheet from the 8-k filing. How many quarters in a row showing a $1.2 billion increase in accounts payable will their suppliers tolerate?
FWIW, Tesla sales are typically engineered to actually receive payment details before the car itself is delivered. They want to either receive a check on delivery or EFT before/by delivery. That said, my bank doesn't play that game; I'm surprised anyone issues a secured loan without collateral. I guess a purchase 'agreement' is good enough, but they're not even a lienholder in most cases! I don't get how that works.
The staff screwed it up badly enough that I don't think they got the money for our car for at least 6-8 weeks after we took delivery. I kept wondering if it would ever fund.
I'm not sure "perfect storm" is quite correct; we've seen these cycles with every model launch and there are a few profitable quarters, but this one is much more so than most, and should last longer than most, BUT you're absolutely correct that they need to ramp up Model Y spend, then Roadster spend, then.. every other model refresh.
* Free cash flow of $881M for the quarter equates to $3.5B annualized. Current market cap is around $50B, so Tesla is trading for $50B / $3.5B = 14.3x annualized free cash flow. Even if this figure is not sustainable in the short to medium term, Tesla no longer looks that expensive.
* $3.0B of cash and cash equivalents at quarter-end, increasing by $731M during the quarter -- consistent with reported free cash flow. Tesla no longer seems to be facing a cash crunch in the near term.
Very impressive.
It remains to be seen whether this kind of profitability is sustainable, especially as more competition enters the market for EVs... but for now, Musk, his team, and his shareholders are looking like big winners.
Why is there this obsession with trying to defeat shorts in the Tesla community? Every negative comment or story about Tesla or Elon is accused of being fake news purpotrated by shorts. It’s really weird, I’ve never seen it in any other community, and it doesn’t seem healthy.
There's some degree of competitive play that I think is healthy. People like to be right, and "the bulls" vs "the bears" is a common theme among investors.
Where things get unhealthy is when people start to push conspiracy theories with "the shorts" controlling media. And Tesla discussions consistently cross the line into conspiracies.
With that being said, this particular comment you've replied to seems relatively tame compared to what I normally see around the internet (and its tame even by the standards of this Hacker News discussion! I'm seeing some "conspiracy level" comments elsewhere in this discussion right now...) . There's nothing really wrong with claiming that the shorts were wrong on Q3 predictions IMO, as long as the author doesn't go full-on conspiracy theorist... it isn't too bad to push the classical bulls vs bears discussion which have gone on for over a century.
My impression is that many Tesla shorts had covered to book profit on the way down from high 300s which I'm pretty sure they would count as a "win". Short interest has declined since earlier in the year.
Positive Q3 was widely expected. Citron Research (one of the more well-known Tesla shorts) was among those who saw this coming and publicly not only took profits on their short position but moved into a long position ahead of earnings.
The scale of the positive FCF is however a big shock. It's not clear at this point how much of this was "real" and how much short-term timing or one-off factors. As a big part of the short case was/is a short-term free cashflow/need for funds story, I'm sure this will be picked over in some detail over the next few days.
The longer-term bear case is simply about relative value and harder to assail with one good quarter. Difficult to take a short position on that basis though.
They've only lost if TSLA is not overvalued. (The "us vs them" mentality is really tiring by the way.) The Q3 numbers don't significantly change expected future cashflows. Don't forget that they've tried really hard to make the numbers look as good as possible, they've pulled every trick they could think of.
I've been quite bearish on Tesla and Q3 changed my mind to some extent. But, it's just one data point, people are biased to extrapolate short-term trends. Does Q3 really change our understanding of Tesla's financial situation?
> Tesla no longer seems to be facing a cash crunch in the near term.
I agree these numbers are, essentially, a spectacular turnaround over the past 6 months for which Tesla deserve enormous credit.
That said, current assets are $7.92 billion and current liabilities are $9.77 billion. It's one thing to have around three billion dollars of cash at hand, but not as great if you have three and half billion dollars of bills falling due soon.
Tesla's current ratio is below 1, they will need that positive cashflow to remain consistent to deal themselves out of debt in time.
I'm not sure why this comment is being downvoted, but its true. Tesla's moment of profitability has come, but it was SUPPOSED to come Dec 2017. Or at least, by the original plans.
Tesla's debt structure over the next year is complicated, with March 2019 convertibles coming in soon. But in either case, Tesla has to build $920 Million to pay back that loan... among many others in the coming years.
Elon Musk really needs another round of capital raises, either stock offerings or bond offerings. If those are successful, then the company will be in a much better spot. Their cash-on-hand is very weak and is definitely a valid point of criticism at the moment.
I went long at $218 160 and have held on for the ride the entire time. So far it was the right call, I guess we'll really be able to tell in a few more years.
It would be interesting if they bought Workhorse, the electric delivery drone and pickup and van company. Low market cap, lots of good projects out, and possibly complementary capabilities.
NON-Gaap reports are a joke. Honestly, why are they still legal? All reports should be GAAP. Accounting mechanics make it easy for non-gaap to show a profit!
GAAP can give an inaccurate picture so management can give non GAAP numbers to show how they see things. They still have to produce GAAP figures as well by law. Or:
>Management also believes that presentation
of the non-GAAP financial measures provides useful information to our investors regarding our financial condition and results of
operations because it allows investors greater transparency to the information used by Tesla management in its financial and
operational decision-making so that investors can see through the eyes of Tesla management regarding important financial metrics that
Tesla management uses to run the business as well as allows investors to better understand Tesla’s performance.
Well You can't count future sales as revenue. To recognize revenue you have to deliver the product.
Here are the things from wikipedia:
Risks and rewards have been transferred from the seller to the buyer
The seller has no control over the goods sold
Collection of payment is reasonably assured
The amount of revenue can be reasonably measured
Costs of earning the revenue can be reasonably measured
They claim to remain profitable next quarter.
Which is a good sign.
I just couldn’t help noticing.
I also don’t see an expected revenue for next quarter.
One massive advantage that I'm not sure most people realize quite yet is the Supercharger network. No manufacturer (other than Porsche talking about it recently) has actually built out chargers for their cars.
Every other electric car has to rely on a broken, sparse, expensive charger network. Blink chargers and some ChargePoint chargers are expensive in many places ($2 an hour!), and Blink is notorious for having broken charging stations. There's 4 ChargePoint stations in a garage near me that have been broken and unmaintained for years, and they're out of warranty and the mall doesn't have a financial incentive to fix them.
And then there's the DC fast chargers. I'm not aware of a single BEV (Volts or other PHEVs are excluded here) that can travel across the US with a reasonable route without worrying about finding chargers along the way. In fact, last time I looked, there was no physical way I could do a road trip I've been meaning to do through the western US in my i3 (my car, of course, has half the battery range of a Bolt) because of a lack of chargers.
Tesla's Supercharger build out is extremely important to their future. Until other companies step up and install DCFC stations everywhere (and figure out the CCS vs CHAdeMO format war), Tesla is going to have a massive advantage. Sure, not everyone is going to want to do a multi-thousand mile road trip, but driving one of Tesla's cars might make them.
Please don't. It lowers the signal/noise ratio and makes it harder (a lot harder!) to merge threads.
Instead, let us know at hn@ycombinator.com if there are two discussions going on about the same thing. We'll happily move your comment over along with the other on-topic ones.
They will absolutely continue to print money for another quarter or three.
They need sustained demand domestically, though.
Followed by international sales (lots of pent-up international demand already, so that's not an issue in the short-mid term)
Of course, then they need to start gearing up (read: sink massive piles of cash into) to produce the Model Y, and the Roadster, and refresh/redesign the S and the X.
And scale superchargers.
And scale the repair network.
They're certainly not out of the woods, but I think this is one of the best signs yet that they will make it.
The last few big Tesla threads on HN were non-stop piling the shit onto Tesla talking about how untenable they are, bad business model, inability to scale, etc, etc. Is that just an indication that the short sellers have sock puppets here on HN as well? HN happens to be an important source of Tesla news.
I got smacked with waves of downvotes for repeatedly stating a few obvious things: the Model 3 would sell at least 100,000 units this year and that Tesla wasn't going bankrupt anytime soon or going to run out of money soon. These outcomes were not difficult to compute at all. I was mocked for it here, the responses were wildly emotional in nature instead of rational and analytical. You basically couldn't hold a disciplined conversation about Tesla on HN at the time. Despite that abnormal behavior (abnormal for HN), I don't think the very aggressively negative posters on HN were shills at all, they were merely incapable of being objective about Musk & Tesla, falling back on emotional reaction instead. Musk generates an unusually strong negative reaction in some people, they either plainly dislike his personality, or are just falling into the common psychological trap of wanting to see someone brought low (cutting the tall poppies). That reaction then colors how they see Tesla and how they judge the facts of a situation. Failure to correctly assess a situation is almost always a better explanation than something malevolent as motivation.
Just shows how fake all of the "expert analysis" is. It's so painfully obvious that all of the expectations of losses of 15 cents/share were just paid for by either the govt./big oil.
My prediction is they ramp up R&D spend and hoist a slew of consumer products. Or even get into aviation. Such as this drone spinoff from a former battery engineer.
If you are a recent engineering grad, next couple of years will be a great time to join ;)
Every other electric car has to rely on a broken, sparse, expensive charger network. Blink chargers and some ChargePoint chargers are expensive in many places ($2 an hour!), and Blink is notorious for having broken charging stations. There's 4 ChargePoint stations in a garage near me that have been broken and unmaintained for years, and they're out of warranty and the mall doesn't have a financial incentive to fix them.
And then there's the DC fast chargers. I'm not aware of a single BEV (Volts or other PHEVs are excluded here) that can travel across the US with a reasonable route without worrying about finding chargers along the way. In fact, last time I looked, there was no physical way I could do a road trip I've been meaning to do through the western US in my i3 (my car, of course, has half the battery range of a Bolt) because of a lack of chargers.
Tesla's Supercharger build out is extremely important to their future. Until other companies step up and install DCFC stations everywhere (and figure out the CCS vs CHAdeMO format war), Tesla is going to have a massive advantage. Sure, not everyone is going to want to do a multi-thousand mile road trip, but driving one of Tesla's cars might make them.