Tencent buys 5% of Tesla | Hacker News Reader

Tencent buys 5% of Tesla

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606 pointsjhartmann356 comments

Tesla recently announced they are ramping up their Model 3 production even more than what some people thought was already optimistic numbers: https://www.bloomberg.com/news/articles/2017-03-27/tesla-mod...

> For Musk to hit all of his targets, Tesla would need to build about 430,000 Model 3s by the end of next year. That’s more than all of the electric cars sold planet-wide last year.

> Even if half of the Model 3 inventory shipped to other countries, 2 U.S. sales under Musk’s targets would outpace the BMW 3 Series and the Mercedes C class—combined.

> To sell that many $35,000 sedans in the U.S. “would be absolutely unprecedented based on what we know about car markets today and how people spend their dollars,” said Salim Morsy, electric car analyst at Bloomberg New Energy Finance. “It could happen. I’m pretty sure it won’t.”

If they could pull this off this might be a great investment by Tencent.

It's also great for the car industry and environment as well. Especially considering their work on automated driving. If they get that many cars on the road it would give them a ton of data and a big advantage/lead in AI over other companies. But it could also be setting the bar too high and setting them up for failure (even though they might otherwise have nailed targets).

Regardless, as a design fan it would be interesting to see so many Teslas on the road. They are great looking cars.

Model 3's will sell literally as fast as Tesla can push them off the production line. The pent up demand for this thing is insane. Over 400,000 people have already paid $1000 deposits on their cars.

The only thing that could possibly stop Tesla is their own inability to deliver.

Or withdrawals from people. The deposits are non-committal so people can cancel without losing anything.

> Or withdrawals from people. The deposits are non-committal so people can cancel without losing anything.

I feel this is going to be the killer for them.

I would assume that a company investing billions would try very hard to make accurate sales estimates.

I would be surprised if Tesla isn't surveying random people on the list, asking questions about their planned purchase and making estimates on the % that will end up cancelling.

> I would be surprised if Tesla isn't surveying random people on the list, asking questions about their planned purchase and making estimates on the % that will end up cancelling.

I hope this would give an accurate result. People might say one thing and do something else when they have to actually shell out the money...

Is there a secondary market for places in the line?

Sure, there will be tons of people who cancel... but then there will also be tons of people who wanted to wait until the car was fully finished before signing up to get one. They'll be fine.

This is the car version iphone, with people queuing up at the store days before the product is seen. I would believe they would stop production exactly at 400K cars, the current waiting list and start a new Model 4 waiting list. They have an air of exclusivity now with their current models. People still gawk at the sight of a Tesla. They would want to maintain that awe factor with Model 3 as well.

You're assuming a pure profit motive. Literally everything Elon Musk is doing has a strong element of trying to save the world.

The goal of Tesla is to make every new car sold electric, if they have to command 100% of the market they will do that, but they'd rather there be some competition.

> Literally everything Elon Musk is doing has a strong element of trying to save the world.

Maybe. Or maybe he's just saying that to make money. If Elon Musk ends up being completely successful in all of his endeavors, he will be the world's richest person by far.

I suspect the truth is in the middle. He does want to change the world, but he's not willing to become poor (let's say a net worth of less than a million dollars) in the process.

I have no problem with people getting rich, especially if they've earned it. But I see Elon Musk as a salesman more than anything, and he's damn good at it. He has generated a cult following of people who believe he is doing everything possible to save the planet.

I am very skeptical that Elon Musk is half as great as he's made out to be on certain internet forums. I do not mean to say he is not an incredibly accomplished person, only to say that he does not live up to his self-generated hype.

Of course time will tell. I truly hope he is as great as people make him out to be. But I just don't see it. Hopefully he makes me into a believer by delivering on all his promises.

He's 79th richest person on the planet at age 45 with only Zuckerberg being richer while also being younger.

He was foundationally involved in one of the biggest early online payment companies, one of few private rocket launch companies with NASA contracts, basically the single electric car company to change the world's views on electric vehicles, and a major solar / battery company.

https://www.reddit.com/r/spacex/comments/590wi9/i_am_elon_mu...

https://www.reddit.com/r/IAmA/comments/2rgsan/i_am_elon_musk...

These are Reddit AMA quotes from a car company CEO.

Do you really think it's likely that he can't code, can't handle electronics, doesn't understand rocketry, doesn't understand any engineering, hasn't earned any riches, and is just tricking everyone and leading a cult of personality?

If the combined 50,000 employees of Tesla, SpaceX and Solar City can't deliver on his promises, that means he's a fraud? And if they can, it's solely down to his brilliance?

If he's only half as great as he's made out to be, that's still 200th richest person in the world and head of only one or two international industry changing companies, but that's just not good enough for you?

smh.

"I do not mean to say he is not an incredibly accomplished person, only to say that he does not live up to his self-generated hype."

I think that summarizes how I feel, which is why I said it. I never said any of the things you imply. But let's take a specific example which shows why Elon Musk isn't as great as he says.

Tesla's autopilot function has killed at least 2 people (one in the US and one in China). Elon Musk continues to spin this technology as amazing, and completely overhype the technology by saying it can achieve level 4 autonomy. As someone who's spent over 10 years working on self-driving cars, I can tell you definitively that the sensor suite on the upcoming Tesla cannot do it. And now you'll say "well maybe he knows something you don't" You're right - maybe he does. But if he doesn't then he's a liar and he should be called out on it because people have literally died and he has shirked himself of responsibility for it.

Elon Musk is a salesman first and foremost and people have literally died as a result of it.

World annual traffic deaths in 2010 were estimated by the WHO to be 1.25 million. If Elon Musk has the guts to let people voluntarily test out a system that ends up killing 100 people (and this estimate seems very high. The system could save more than it kills during development) but develops a system that reduces traffic deaths by just 50% one year earlier, that would be saving 625,000 lives. From a practical human suffering perspective, I am glad he is pushing hard to develop automatic cars a soon as possible.

Also: reusable rockets.

The problem with this is he is selling it as a working product. Imagine if pharmaceutical companies could eventually cure diseases by testing a drug on consumers, but sold it to them as working - when in reality it is going to kill a bunch of people while the company figures out what works. In the long run this could be a win, but would you be okay with that?

The obvious solution to my complaint - rename Autopilot something else so people don't confuse it as a self-driving car (and many people do think this).

I don't think Elon Musk is interested in educating the public. I think he's interested in dazzling them. Which is why he strikes me as a salesman.

Imagine a car company that sells cars that may kill people driving them. And imagine that it would actually be one of the most common accident type that kills people. Would you be okay with that?

The thing is, every product is working and not working at the same time to a degree. It is only a matter of statistics - are we better off with or without the product.

The difference is, until recently, nobody knew the statistics for self-driving cars and how often they disengaged (by the way, Tesla is doing horribly in this regard). The information for traffic deaths has been public for decades.

Again, my emphasis is on the point that Elon Musk is spinning the information to his advantage. He has no interest in bringing attention to the shortfalls of his technology, only to sell the public on his soon-to-be-level-4 Autopilot system. He is also wildly misleading the public as to the capabilities of his technology, but unless you work on self-driving cars you wouldn't know that.

Of course it's his job to do this, and any sane businessman would. Which is entirely my point - Elon Musk is a salesman first and foremost.

But he does bring the shortfalls to public attention, he has repeatedly said that driver's should not view current version of the system as self-driving vehicle, for example.

His plan is to evaluate the self-driving capability by comparing its performance to the human drivers, in shadow mode, perfect the technology to surpass human driver (10 times safer, per his comments), then present statistics from that to the relevant authorities (who should be qualified to evaluate any claim they make on these grounds), and only then proceed to release the self-driving technology to market.

I disagree that he is first a salesman. He is an engineer - and as an engineer he knows that anything he sells has to work or the product - and the company - does not last. He knows that very well, and has bet his fortunes on his engineering skills.

He is a salesman only second. And that is why this can actually work.

>> Of course time will tell.

Time has already done that. He is simply put, the real deal. Major car OEMS are always talking about what they will do in three (or more) years from NOW. Elon has done it. Is doing it. And will continue to push the envelop. Zig Ziglar reminds us that EVERYONE sells. Elon is just that much better at it. Then he executes unlike very few others. I didn't get the merger, but now with the home batteries and commercial ones, I do. Brilliant.

Tesla is nowhere near GAAP profitable, and after numerous instances of "this is the last time we're raising money" Elon Musk has once again secured a large loan for Tesla. It is still very risky, especially now that GM is already selling the Bolt before the Model 3 has even come out.

SpaceX is nowhere near their goal of colonizing Mars. Yes, they are working on it, and more power to them, but it's not done yet. I love what this company has accomplished, but it's nowhere near reaching Musk's current trajectory.

Solar City went bankrupt and Elon had to pull several strings in order to save his relatives' company. Sure, there is an obvious alignment between Solar City and Tesla but it clearly wasn't doing great.

Elon Musk has an excellent track record of making promises and delivering on them years later. As his promises become more ambitious, and he spreads himself thinner, it becomes more and more likely that he will fail at some point. My money is on Elon Musk becoming the modern Greek tragedy. I want the guy to succeed, but he's clearly making promises he can't deliver with Tesla (it doesn't matter how good their software is - and frankly it's pretty bad compared to the competition - they can't make a level 4 vehicle with their intended sensor suite) and I suspect he's doing the same for SpaceX.

Elon Musk has accomplished a lot, and he deserves recognition for that. But if he makes a promise and fails, he should also be called out on his bullshit.

Unless Musk gives away much of his wealth in his lifetime, he could very well be the world's first trillionaire. Think of Toyota and Exxon Mobil rolled into one with virtually no competition in sight.

To put things in perspective, this car is just 10 grand more than a full featured Toyota Camry. In countries that import both cars and oil like India, the price of the Tesla would be less than a Camry if they reduce the import tariffs. It's a foreseeable option to reduce foreign oil dependency. Also in developing countries, for every person that can afford to buy a Tesla and also knows how to drive, there would be dozens more who can't drive but could very well afford one. Once Tesla delivers their first 400K cars and proves they can drive themselves anywhere in the world, the demand would far exceed supply in the foreseeable future.

He will need all the money he can get to realize the Mars colonization efforts.

If most of the things he plans to to are realized he will make even more money in the process.

I disagree. The backlog will be so long, that there will almost certainly be someone who will pay for your spot in line.

The same thing happened with the S and the X. "Flipping" a 3 won't be difficult.

That will be a good reason why people who choose not to buy a Model 3 for themselves will not cancel their preorder and sell it instead.

Well, they lost access to $1,000 until they cancel (plus 3-6 weeks, since it can allegedly take Tesla this long to refund the money).

I don't think 400,000 have just $1,000 to spare for a really anything they will just cancel. The $1,000 mean that the person who reserved it really wanted the car and is unlikely to just refund it unless they have a very good reason to do so.

The sort of people who would consider buying an expensive sedan can probably afford to loan Tesla $1000 for a year or so.

I reserved a Model 3 because I figured that if I didn't, I would be at the end of a very long waiting list and would probably lose out on the federal rebate. The most likely outcome is that I'll decide that's too much to spend on a car and cancel, but it still made sense to me to keep my options open.

I expect a lot of those reservations to be converted to actual sales, but a lot of them won't. In any case, I think Tesla will have plenty of demand if the product meets expectations.

Fair enough but there are many foreigners who do not have a tax credit and still made a reservation.

You could always sell it immediately.. you would probably get even a slightly higher price than you paid by impatient people

I think the commitment of $1000 is overblown. What is the actual opportunity cost here? Maybe $50-$150 depending on the interest rate and time frame you want to use for your estimates. That is nothing in the scale of a car purchase and it buys you the right to receive the car several months quicker. Relatively speaking it is like someone paying $10 to have a new laptop shipped to them overnight instead of by ground except the shipping has been prepurchased a year before the laptop.

If you aren't the type of person who can find a spare $1000, you also probably shouldn't be the type of person who spends $30,000 on a car.

I think you vastly underestimate how much demand is represented by 400,000 people willing to part with $1k before a product even exists. Refundable or not.

I am not questioning the demand. I am questioning the commitment of people who put down a refundable deposit on a product they had very little information about. I am one of those people who threw down my $1000 before any of the presentations. I am still not sure whether I will purchase one. My interest has actually waned with recent leaks like the complete lack of any dashboard readouts. However I am still perfectly fine with Tesla keeping my deposit until I make a final decision. The opportunity costs of that extra $50-$150 is worth a lot less to me than the chance of securing a Tesla quickly if a do make the purchase (not to mention it increases my odds of a full federal tax rebate). I can't imagine I am the only one of the 400,000 with that mindset.

You're not the only one. I'm nearly identical. Losing access to $1k for a year or two (with the ability to get it back within a few weeks) is completely a non-factor, and since it increases my chance of a $7500 rebate, seems like a pretty good investment, actually.

Also, same feeling of 'meh' based on leaks so far. I was really hoping for a scaled down S with fewer amenities, lower performance, etc. rather than something from scratch. The no dashboard instrument cluster thing bugs me, as does the fact that AWD won't be available initially (hurting the chances of the rebate if I want AWD), but I'll wait until at least the final reveal if not later to make my decision.

You are missing the psychological element. In general, people:

(a) Feel a strong obligation to be consistent with past behaviour - not just in placing the deposit, but then thinking and reading about the new car design and wanting a Tesla for months or years.

(b) Want to avoid admitting the 'mistake' of giving Tesla a free loan. Not just admitting the mistake to themselves, but also to all their friends they told about their deposit.

(d) Value something that's scarce more than something that's easily available

(e) Are more likely to want something that other people love and are queueing up to buy.

Thinking about this a bit more, Musk should run a split test: Half the people queued for a Model 3 are offered $100 to move to the back of the queue. People who decline such an offer will feel compelled to buy the car when it is released in order to be consistent with their previous actions. I'm confident this would boost sales, but the split test would tell us for sure.

I can't think of any product I'd rather have than a Tesla.

I think Tesla will sell millions of Model 3. Which other car is 400,000 people waiting patiently to buy for two years, even putting down a $1,000 deposit?

Tesla is doing to traditional car manufacturers what Apple did to Nokia.

I'm with you 100%.

If my basic needs like housing and healthcare were already met (unfortunately they aren't), my next purchase would probably be a Tesla or a Solar/Powerwall combo for the house, or both.

> Tesla is doing to traditional car manufacturers what Apple did to Nokia.

Sincerely, and with all due respect, this is a false analogy.

What happened to Nokia was pretty much self inflicted. Mismanagement, competing empires, complacency.

Apple did not start shipping low end brick phones and eat Nokia's market.

Post '08 bailout automotive manufacturers are lean and hungry (for the most part)

Furthermore, the 'traditional' car market, while slow to move, is not far behind. And in some cases is taking a longer view. E.g. Ford is going straight to Level 4 in 2022. Forget the ICE v. electric debate, that ship has sailed and everyone is heading to EV. The real battle will be to produce the safest self driving product.

I am long on TSLA, I expect them to do well however they are in a far riskier spot than Apple was when the iPhone dropped. They were healthy, profitable and experienced (+Jobs). TSLA is none of those.

I'm not disagreeing with your sentiment. I just thought we were past the Apple analogies.

Car companies are selling bricks. In large part because of the used car market no company makes reliable and cheap because the cost conscious don't buy new cars.

Further, the dealer model forces high markups, heavy advertising, etc to attract the kind of people that buy new cars.

I dont know...

Tesla is currently training their driving AI using the existing fleet in shadow mode. How do you skip this step and go straight to level 4? They need months of tuning outside a lab, worldwide.

A lot of car manufacturers still refuse to build an EV from the ground up. They are reusing an ICE platform and converting them to EVs.

Mazda don't even acknowledge that they need to build EVs. https://electrek.co/2017/03/07/mazda-no-pressure-from-custom...

heh, I'm sorry. Musk is still alive and surpassed Jobs long ago now, he's up to his 5th disruptive successful company. Online Payment, Cars, Space, Solar roofs and AI beat shiny laptop and smartphone.

I see car companies getting off the shelf solutions from companies like Nvidia, which is what is being trained in Tesla's today. And Nvidia have their own demo. I genuinely wonder who owns the algorithm...

It actually makes sense to jump to level 4 from both a liability & design/platform perspective.

The fact that Tesla is bleeding through the first few stages with driver-in-the-loop doesn't necessarily mean they get to maintain a competitive advantage long term.

(Also, Mazda is a 2nd tier manufacturer, little resources, mostly Ford parts Inc drivetrain, engine and firmware)

Finally, I appreciate the Musk fandom. As someone with a little skin in TSLA, I aim to take an objective view fwiw.

That is no longer true with respect to Mazda.

Good to know, just sold my '04 Mazda 6 which was pretty much all Ford. After looking it up I see that Ford reduced ownership from 1/3rd to 10% in '08. Thanks for the correction.

The german manufactures are not asleep at the wheel, get into the newest E-Class and despite it being a lot cheaper than a Model S, the self driving capabilities are impressive. Don't even let me start on the interieur quality, which is my biggest gripe with Tesla considering their price segment.

I agree. However they are still behind with regards to cars that are designed from the ground up to be electric.

"Impressive" is not the word I'd use. If you didn't drive Model S, perhaps. Otherwise, meh.

http://www.thedrive.com/tech/4591/the-war-for-autonomous-dri...

Fair opinion, but I think you are arguing the wrong point.

Apple ate market share from Nokia because of brand advantage.

Many commentators mention that manufacturers are improving their EV product, but I think that boat has long sailed: Tesla vs. Ford won't be about features, but the brand.

Sorry, when the product is north of 30K, you'll find a significant number of people will put what they can afford ahead of brand loyalty.

Lots of people really love Ford.

And with an EV, there won't be that awkward moment when their friends ask how their transmission is doing...

> Which other car is 400,000 people waiting patiently to buy for two years, even putting down a $1,000 deposit?

None, but I would hazard a guess that's because if you want to buy a BMW, a Mercedes or an Audi, you don't need to. You can simply go and buy one!

But the closest thing to a $35k electric car from BMW, Mercedes, or Audi is BMW's i3 - which I think is targeting a different market.

Don't forget about two car households. We have an x1 and an i3 as our commuter car. The i3 will eventually be replaced with a Tesla, the x1 will not.

Agreed, but it's not about the brand - it's just that in the market segment for a $35-40k mid-size sedan, there's not a whole lot of need to wait two years for a car, which is why it's so uncommon. The reason it doesn't happen to other manufacturers, is because although they have 3-4 year lead times on new models they produce, they're still continuously producing the current models

Mercedes has the $40k B-Class electric car.

With a 124 mile range [http://www.mercedes-benz.co.uk/content/unitedkingdom/mpc/mpc...].

How about retiring 2-5 years early? That's about what you get if you invest the $35k instead...

https://xkcd.com/947/

Ten years is short. Thirty years at 6% gives you $200k, for instance.

what? Not on $1k it doesn't.

1.06^30 is like 5.5 ish? Unless you mean on saving 1k pa which is not what they are talking about, and means you're very much changing the game (and apparently not derisking towards retirement)

35k?

On $35k, the price of a Tesla, which is what prompted that xkcd link

Ah, that makes more sense. Sorry!

Here's another illustration of how our intuition about compound interest can be really wrong:

Futurama scene where Fry has been transported to the year 3000 and he still has his ATM card: The bank teller checks Fry's bank balance. She says, "You had 93 cents in your account in 2000. With an average interest rate of 2.25% compounded for 1000 years . . . that brings your balance to $4.3 billion dollars."

The math is correct. Plug those numbers into the compound interest formula, Pn = P0 (1 + r/100)^n, and you really do get $4.3 billion.

Your gut feeling is that even with 93 cents, you could retire rich. Not a billionaire, but comfy. It ain't so. In 50 years, you'd have $2.83. And even that $2 gain would be wiped out by a single monthly banking fee :-).

In 400 years, $6820. My intuition told me that I should be in the millions by then. Wasn't even close. Didn't even account for taxes and inflation.

Another thing that many people forget is that while compound interest gives you more money, at the same time inflation makes your money worth less. So what you should really be looking at is the difference between the inflation and the interest rate: the so called 'real interest rate'. Currently in the US, that rate is negative ..

I feel like I can't get a handle on the inflation numbers I see. I pay - and the math checks out - roughly the same amount for gas, produce, and essentials. My smartphone is 1/3 the cost it was 10 years ago.

And then housing and health insurance is like 2.5 times higher. It all totals to be the official rate, but man does it feel uneven.

My life priorities will be different when i'm 59.5 years old compared to now.

you do realize market forces for a $600 consumer device is very different than a durable good that costs 50x more?

Your anecdotal insight into how desirable the tesla is to you means nothing in terms of the market

Curious, did Tesla published updated stats ? or anyone else for that matter. The announcement numbers were way above expectations, but it's not much if half of that evaporated after the hype.

Apparently Tesla has not published an update. This article https://www.fool.com/investing/2017/03/14/teslas-model-3-res... guesses that the number hasn't changed much, due to the "Customer Deposits" line on Tesla's quarterly balance sheet.

A $1000 deposit is a significant commitment to ordering the car, even if it is fully refundable. Very few people would do this until they are basically decided on buying this. For everyone who would reconsider, there are for certain plenty of people, who are interested in the car but would not put down money without a test drive first. So, judging from the deposits, I would rather assume the actual list of interested buyers way exceeds the amount of people who put money down.

I disagree. I put down the deposit because I wanted to reserve my spot in line. Putting down $1k now isn't that much if it might save me $8K in tax credits by having an earlier spot in line.

I still haven't figured out if I can get a charger in my apartment building. I haven't decided I like the look of the car. I haven't even decided I want a sedan.

I love Tesla, so on the chance that I do want the car I put down the deposit. But I'm still 50/50 on actually buying it. I imagine many are in a similar positions.

I can't remember a product that sold 400,000 preorders (many of which were sight unseen) with a $1,000 deposit in my lifetime. I think anyone trying to downplay the demand isn't looking at it in the right context.

A related concern is how well their repair and service operation scales. There are already repair horror stories all over internet for the relatively tiny number of cars already on the road.

The model S is a beautiful car, but it's a luxury toy. I'll venture that most Model S owners have at least one additional car. If you're in the market for a 35k sedan though, you're looking for a commuter and family car that needs to be reliable. Having it out of commission for three weeks while the one repair shop within 50 miles waits for a backordered part is unacceptable.

It is worth noting that Jon McNeill (Pres. Global Sales and Service) took the time to post on a user forum in direct response to service delays and spoke with a fair bit of detail about how they are fixing the problem. Whether or not you are a fan, I think everyone can agree that this level of engagement is a strong positive for their cause. https://teslamotorsclub.com/tmc/posts/2004525/

That's really interesting. Seems like the answer is they need a lot more third party shops - the problems that McNeill describes sound like the kind of thing that happens when there isn't enough competition. If I'm a model 3 customer, I don't really care about your service record in Palo Alto. What can you do for me in Skokie?

Very interested to see how all this plays out. The success or failure of the Model 3 could decide whether Tesla is the next Ford or the next Delorean.

Ford doesn't do batteries, solar, supercharging stations, autopilot tech, etc. Delorean produced 8,583 vehicles. :) But I get your point.

> autopilot tech

On the contrary. They're well along that path.

Not sure what solar has to do with cars.

And charging stations? Do you think that's profitable secret sauce?

Tesla bought SolarCity http://www.theverge.com/2016/11/21/13698314/tesla-completes-... - even if they totally flump on cars they still have solar installations, gigafactory (developments), charging stations they could lease and tech/patents they could sell to other EV manufacturers.

Sorry, Tesla bought struggling Solar City as it needed a complete residential energy storage solution to leverage rebates from energy companies. I.e. the sum of the parts is greater than the whole in terms of final price to consumer.

SolarCity was/is $4B in debt at the time of the acquisition. If Tesla's car division fails, solar panels is not the cash cow the company is going to fall back on.

Let me know when Ford autopilot is available on the street. They did buy Argo, but current Ford projections are saying 2021..

"whether Tesla is the next Ford or the next Delorean" Tesla is neither of these because it is more than a car company. It is vertical integration that incumbents can't match at this point.

? Yes, of course. You must not own an electric car.

> Yes, of course. You must not own an electric car.

You may have responded to me instead of someone else. I own a Leaf, I didn't say "whether Tesla is the next Ford or the next Delorean". I work at an organisation that supplies both Tesla & Ford with the toolchains in which they do all their control design. (And Nvidia for that matter). I'm intimately familiar with what these companies are doing today and are capable off. It's amazing to see what they are producing.

Agreed.

"And charging stations? Do you think that's profitable secret sauce?"

Would you drive your Leaf from LA to Phoenix in a day? Guessing not. With the superchargers it's one more piece of the TSLA ecosystem.

The problem McNeill discussed was related to 3rd party body shops. Tesla does not do any body work in its repair centers.

Yep :)

I was responding to smogcutter, not you. Your comment about Ford and Deloran was great, so I didn't need to make that point, and I upvoted you for it.

My mistake, I read it incorrectly.

Right. The point is that soon they'll need a whole lot more of them, and first party repair centers as well. "Sorry, we have trouble with quality control at 3rd party shops" isn't going to cut it for a mass market car.

Re: Ford and Delorean, this is not the hill I want to die on. But what I mean is that the batteries, charging stations, etc, all live or die with the cars. If they can successfully create a mass market for consumer EVs, sky's the limit. If not, you can see a future where Detroit eats their lunch and the Model S is a footnote.

Uh, what fraction of body shops do aluminum? Model 3 is not like Model S/X. And problems at body shops has nothing to do with problems at first party repair centers. I'm happy to agree that the future is uncertain, but you aren't adding much in the way of fact into the discussion.

I'm sure a growing number do, now that the most popular vehicle in America is made out of the stuff (F150)

Only a small fraction of the F150 is aluminum, but yes, I'm sure it's a growing number of body shops.

So they need a network of dealers.

Personally, I've found The vehicle itself to be very reliable. But they need to scale out service operations. I can call an Audi dealer and have my car brought in within a couple days (or go to one of many third party shops). With Tesla, they're typically booking 1-2 months out (and that's in the bay area, where we have like 3 service centers). Luckily, the only times I've had to bring in my Tesla, it was something super non-trivial.

This reminds me when the iPhone came out. Tesla is making a revolutionary new product. Millennials are also coming of age now through the next decade. Many of these buyers, either purchasing first-time, or upgrading their "college/hand-me-down" car, will buy Tesla, just because it's fashionable (ala iPhone).

I'm bullish on Tesla and Musk.

Edit: I should add that the product extends past the car itself. The whole direct to consumer, transparent pricing, no haggling, will win over a new generation of buyers.

If they can deliver the cars, and at a reasonable price, you are probably spot on.

I think for a young late 20s, early 30s professional with disposable income, maybe a baby on the way, it's really a no-brainer deciding between a 3-series, C-class, Volvo, vs a Model 3.

And if you can only afford a Camry/Altima/Jetta/etc. a 5-10K increase in price for a much better (perceived) product is also a no-brainer. People will def max out their credit to get the upgrade to a Tesla.

The above, doubly-so for Chinese consumers.

Model T :: iPod --> Model 3 :: iPhone

Does the model 3 have sufficient room for a rear facing car seat? One of my main concerns

If I can fit a family of four in a 2012 Mustang it is nearly inconceivable a mid-size EV would not have enough space. Almost inconceivable that it won't have plenty of space.

> Millennials are also coming of age now through the next decade.

Millenials start from 1981 so some of them are nearing 40. Generation Z is coming of age.

> environment as well

It's not going to do anything great for the environment and we've been over this on previous Tesla threads (years ago). Driving electric cars instead of hybrids in areas where the electricity is primarily derived from unclean sources is not better than hybrids for the environment.

And everyone said that of the Prius too. And now we have fully electric cars. You have to start somewhere or you get nowhere.

What would you propose instead?

Instead of the battery the less toxic way would be hydrogen based engines.

How would you make the hydrogen though? Does it suffer the same criticism as your original comment?

Unclean power plants are still vastly more efficient than the most efficient internal combustion engines. That's why trains are electric wherever possible.

https://en.wikipedia.org/wiki/Electric_locomotive

> Unclean power plants are still vastly more efficient than the most efficient internal combustion engines.

I don't think so.

> That's why trains are electric wherever possible.

1. Thing is, you don't have to refuel electric locomotives, so that saves time and logistics. Unless you plan to install a pantograph on the roof of your Tesla, you still have to refuel it.

2. Unlike cars, diesel locomotives do not use any kind of direct transmission anyway, they generate electricity from Diesel engines to power electric motors. Because unlike cars, they have to transmit huge power and torque to make the first wheels turns, and mechanical transmissions are not good for that, but electric engines are. So since they use electric engines anyway, why not power them from electrical energy instead of diesel? That's why locomotives are electrical wherever possible.

You don't think so? Is that your opinion or a fact?

Most calculations I've seen seem to conclude electric are more CO2 efficient per mile; from 2 to 9 times depending on which state is producing the power.

> Unclean power plants are still vastly more efficient than the most efficient internal combustion engines.

I'm an automotive engineer specializing in hybrid vehicle powertrains. Published and everything.

As of two years ago the only country in the world where the power source makes an EV not worthwhile, well-to-wheel emissions-wise, was India. Every other country in the world has clean enough power production to make EV cars an environmental net positive.

And I believe India's power is getting much cleaner over the next few years, so it may not be the case much longer.

Side topic: just curious what powers Caltrains's trains?

The important distinction is that this abstracts the "cleanliness" away from the individual. Replacing one coal plant with a wind plant, for instance, is far more easily done than waiting for all affected consumers to replace their cars.

as you indicated - this depends on where you live - and if you're ready to just fix the problem yourself with solar power. Stating that it won't help is IMO misleading - Tesla is basically offering you all the missing tools to carry a high energy American lifestyle towards being carbon neutral. The footprint you missed in terms of consumed goods or at home, could be compensated by buying CO2 certificates.

https://docs.google.com/spreadsheets/d/16K4gNhy_AN8Eg4Ov3z7p...

Not better in the short term, but still better in the long term, as it leads to greater adoption of electric cars, etc.

> Driving electric cars where the electricity is from unclean sources is not better than hybrids for the environment

Some of the widely reported research about the power generation and electric cars is flawed [1]. Electric vehicles and hybrids come out about even in the worst markets, like Missouri [2]. But nearly everywhere else, an electric vehicle is better for the environment. People don't always consider that the electric grid is moving away from coal [3], which means your electric car will get greener during the time you own it without you having to upgrade it.

[1] http://midwestenergynews.com/2016/04/20/minnesota-study-chal...

[2] http://blog.ucsusa.org/rachael-nealer/gasoline-vs-electric-g...

[3] http://www.renewableenergyworld.com/articles/2016/08/renewab...

> Driving electric cars instead of hybrids in areas where the electricity is primarily derived from unclean sources is not better than hybrids for the environment.

As of two years ago the only country where that was the case was India. Right before that, South Africa and China both became clean enough for EVs to be an environmental net positive.

Power produced in the US is some of the cleanest in the world, and getting cleaner every day as coal plants are decommissioned. We are well above the environmental net benefit line.

> Driving electric cars instead of hybrids in areas where the electricity is primarily derived from unclean sources is not better than hybrids for the environment.

There are no longer significant areas where this is the case. Even most coal markets in the US are clean enough (not sure what will happen with new de-regulations). The US, on average, is by far clean enough.

Source: I'm a hybrid vehicle powertrain engineer

The entire clean energy argument depends on your classification of nuclear energy. Long term storage issues put it squarely in the unclean category for me so I'd argue that US energy is by and large pretty unclean. I'm also pricing in the expected value of meltdowns in my unclean rating. It's hard to quantify exactly but the black swan events have pretty catastrophic consequences for the environment. Since I've witnessed two very severe ones in my lifetime, one in what many people would call a technically very advanced country I don't think it's unreasonable. If you think that's tinfoilhat-crazy, fell free to talk to an insurance or reinsurance company about insuring nuclear plants fur a fon conversation.

Nuclear power is only 20% of US energy production.

Nuclear waste is a political problem, not a scientific or engineering one. We're not allowed to recycle it the way we want. Blame President Carter.

Coal power puts more radiation into the atmosphere than nuclear does.

You have no idea how to "price" the cost of meltdowns into your "unclean" rating. TMI's incident did not have any effect on public safety.

I don't think it's tinfoil-hat-crazy, I just think it's uninformed.

Just to clarify. the two incidents I was referring to were Chernobyl and Fukushima (as they are INES 7). The Three Mile you mention was "only" INES 5. I'd argue it's still pretty bad but INES 7 is what I'd consider the black swan events.

>Driving electric cars instead of hybrids in areas where the electricity is primarily derived from unclean sources is not better than hybrids for the environment.

ICE cars are far less efficient than fossil-fuel power plants, due to the weight/size restraints of a car-engine form-factor. Given this, electric cars actually do emit less energy than cars that burn fossil fuels.

But frankly, you're looking at this the wrong way - most electric cars are at the start of their life, and have at least 10 years' worth of use, if not 20 or more. Given that renewables will inevitably become a major portion of the electricity grid within 10 years (and realistically, almost certainly within 5), they'll become more efficient in the future, and make renewables reduce even more CO2 emissions, since they're punting petrol away, too.

> “would be absolutely unprecedented based on what we know about car markets today and how people spend their dollars,” said Salim Morsy, “It could happen. I’m pretty sure it won’t.”

That quote implies people won't choose to buy that many Model 3's. We know there are almost that many pre-orders, so it's not a question, and it's not something to be doubted. It's a fact people will spend their money that way.

One thing I've wondered about this: exactly what data is Tesla able to collect from the vehicles on the road? I've not found this on their website, nor any way to opt-out of data collection. For a vehicle with an always-on camera and cellular connection that can't be shut off, you'd think more people would be concerned about this.

How many people you know concerned about what data their phone software collect on them? Their laptop? Web browser? Facebook?

Probably not many. So Tesla will do just fine too.

This is my primary concern about Teslas. I'd love one from a pure tech and driving point of view, but I'm not willing to submit to a panopticon just to get one.

My second concern is aftermarket serviceability. I would never buy a car that the manufacturer could later remotely disable (leaving me with no recourse) just because they feel I've breached their ToS or something. Tesla is far too much like Silicon Valley software companies in that regard - 99.9% of the time "you'll be fine", but the other 0.1% of the time you're screwed and there's no way to fix it.

Isn't it an error for the article to compare the Model 3 to the luxury brands? The 3 isn't going to be a premium/luxury car like the S is.

Has anyone looked into the various subsidies around the world? It seems that Tesla are smart enough to design around various regulations and taxes. SUVs became a thing in part because of differential tax treatment, and I've heard in the UK that company cars and business vehicles are heavily slanted towards electrification (both hybrid and full EV) I can see things changing faster than people would think based on the retail prices.

An interesting follow up would be investigating how much those subsidies cost or earn for the governments that provide them e.g. if you can provide all your electricity from homegrown hydro electricity rather than imported gasoline, then how much money does it save you to have an EV on the road. Is all that value being passed onto EV users?

Tesla shorts can't get a break. First a smooth $1B+ capital raise without a stock hiccup and now this.

Every budding short seller needs to, at some point in their career, learn the lesson of never shorting a growth tech stock.

Or to confuse Tesla with a tech company.

What kind of company would you call it?

A battery/renewable energy company.

I think the key distinction is hard costs. Tech companies have server costs. Tesla has manufacturing and contractor expenses.

Exactly. Tesla is a tech company like GE is a tech company. It's modern manufacturing.

(This only matters for valuation sake, a classic tech play can achieve profit margins far higher than a manufacturing firm.)

Tesla has plenty of server architecture, their cars are constantly talking to it for data collection and updates.

The word "tech" apparently has changed meaning in some circles. https://en.wikipedia.org/wiki/Technology:

"Technology ("science of craft", from Greek τέχνη, techne, "art, skill, cunning of hand"; and -λογία, -logia) is the collection of techniques, skills, methods and processes used in the production of goods or services or in the accomplishment of objectives, such as scientific investigation. Technology can be the knowledge of techniques, processes, and the like, or it can be embedded in machines which can be operated without detailed knowledge of their workings."

You can argue that that isn't accurate, but I don't see how you can argue that the categorical statement "tech companies have server costs" follows from it (I can't even find the word "server" on that page, or on https://en.wikipedia.org/wiki/Tech)

I thought panasonic was their white label battery supplier/partner?

Yes, but even they can't keep up with the projected demand for batteries which is why Tesla is building out its own factory [1] in partnership with Panasonic [2] to manufacture batteries.

[1] https://www.tesla.com/gigafactory

[2] https://www.tesla.com/blog/panasonic-and-tesla-sign-agreemen...

Every company these days is a tech company in some respects, but I don't think Tesla fits the bill in the general sense. Tesla is a green energy manufacturing company.

The only reason I think this matters is their finances are a lot different than a tech company. You are correct that Tesla is currently priced like a tech company though, so maybe I'm way off!

..so what is a tech company then?

TSLA behaves mostly like 3 X Musk Tweets Bull ETF.

Now now, don't give Direxion any ideas

A car company.

They changed their name this year from Tesla Motors to Tesla Inc. to indicate a wider focus on technologies, not just cars (solar panels, batteries). How do they not qualify as a tech company?

They changed their name because they bought Elon's solar company (which was also not a tech company).

I'm curious about what you would consider a tech company.

For me a tech company is any company that uses the development of technology as a competitive advantage. Solar is not, major solar companies are not developing innovative technology. Tesla is, they do not have an advantage in scale or low prices, but have advantage in how their vehicles function.

So you don't think that 3d printing solar roof tiles is innovative solar technology? I don't think anyone else is talking about that.

Is 3d-printing car parts an innovative technology? Is Ford now a tech company? [1]

[1] https://techcrunch.com/2017/03/05/ford-begins-testing-3d-pri...

For me a tech company is any company that uses the development of technology as a competitive advantage.

So then is Ford a tech company? If not, then I'd be interested to hear why not, based on that criteria. Their cars are technology and they continuously develop and improve them as a competitive advantage.

I think people think of Tesla as a tech company because the founder is Elon Musk. If Tesla were a spin-off brand of GM or Ford, it would be another car company.

You know, at first I thought this was a silly question, but as I think about it, there's a lot of merit to your point.

I've been thinking about it, and this is where I've landed.

Most companies develop technology as a competitive advantage these days, certainly any large company. Walmart has innovated a lot in the supply chain management space, but most people don't consider Walmart a tech company. It's a company that uses technology to deliver goods and services cheaper, more reliably, etc. This is essentially true for Ford also. People generally don't buy a Ford because of any technological innovation. So even though it is Ford's technology that lets them deliver an affordable, reliable car, people don't think of Ford as a tech company.

Whereas Tesla's primary focus is on developing new technology. Their product is not really cars; their real product is inventing and applying new scientific knowledge. The car is a way to fund that research, i.e., it's the opposite of a traditional car company where research is a way to sell cars. Elon Musk has said that Tesla is a battery company, not a car company. His stated goal of Tesla is to "is to change the way the world uses energy at an extreme scale."

So, that feels like a legitimate difference to me. But I think you're actually right that it's a tech company mostly just because the founder is Elon Musk, insomuch as he is the one driving the focus and vision of the company. That is, he is the one saying Tesla is a battery company instead of a car company.

A more interesting comparison to me would be Volvo. I don't know if it's still true, but for decades Volvo was a leader in passenger safety. They had the first 3-point seat belt, first side impact airbags, first blindspot detection system, among others IIRC. I'm still not sure they'd be considered a tech company, in that they were using the safety innovation primarily to drive sales of cars. But I think it's a bit more nebulous. If they'd had a marketing-savvy CEO who proclaimed, "Volvo is a safety innovation company, not a car company," I don't know. :)

Knowing the company's core competency is very important. Stray from that, bad things happen. Is Tesla an electric car company? or an electric supply chain company? or what? If EV manufacturing, then focus on the car construction & experience, doing what's needed to power the thing (battery production, home solar services) but realize those can/should be ejected when better solutions arise. If a "tech" company, then we'll see Tesla stray into solar strip mining, long-distance delivery, app writing, and a host of other activities utterly unrelated to EVs - eventually dropping the EV part altogether.

Apple dropped the "Computer" from its name when moving firmly into a market (pocket supercomputers) which was a natural extension of its real core competency (high-UI/UX computers), but which (phones) were deeply perceived by the public as something profoundly different from "computers". Steve Jobs rediscovered the company's core competency, focused on it, and adjusted name & strategy accordingly.

Kodak thought its core competency was photochemical consumables. That was a pivot away from imaging, and into oblivion when the imaging technology shifted.

Smith Corona's competency was typewriters. We still need typewriters, but because SC tried to compete with computers (a spreadsheet on an electric typewriter is a non-sequitur), rather than being the best product for a shrinking yet enduring market, the biggest world brand vanished overnight.

If a company is going to pivot (which a name change absolutely signifies), then it better pivot around its core competency. Tesla's "tech" need be absolutely about either electric cars (by which batteries and solar are incidental and expendable for more suitable power sourcing), or solar (by which the consuming device may be far different than just a car), or power storage (source and use of power being incidental). Tesla is only "tech" insofar as they're pushing the limits of technology for building & powering electric cars. Stick with the cars, with solar ONLY as a means to free their power sourcing (and extra powering one's home), and they'll do fine; self-identify as a "tech" company, and they'll die of confusion. Musk is smarter than that mistake.

Interesting sidenote -- after reading the keyboard.io adventures-in-manufacturing emails, what really jumps out at me are the extent to which Apple's true brilliance these days is on the manufacturing/supply chain end of things.

While my wife was getting her MBA, she one day turned to me and without context asked "what do you think of supply chain management?" Having no idea what she was talking about, I instantly retorted "I think it is evil and should be banned."

Now that I know what she was talking about, I'm deeply impressed by Apple's mastery of the subject, and see why Tim Cook is running the place.

you seem to have a very narrow understanding of what technology means. computers are not the only "technology" in the world.

Rather needs to understand how to have a basket of shorts and manage risk as opposed to shorting single names.

Yes. Short-selling pioneer Bob Wilson nailed the key insight on these situations. They are "manana stocks," Wilson declared, way back in the 1970s. Their valuation is premised on the notion that something wonderful will happen in the future. Time horizons keep being pushed out, but the stocks' fans don't mind.

Shorts can get very cranky and righteous about each little bit of slippage. But as long as new enthusiasts keep showing up, and old ones feel lenient, it's hopeless to insist on strict accountability. Even a short-lived burst of optimism is sufficient to arrange more funding, so manana always seems within reach.

Worst case: you're shorting Amazon. The bulls were right, and you go broke.

Best case: you're shorting something like Energy Conversion Devices, which eventually did run out of money and file for Chapter 11 in 2012. Shorts had been predicting its demise since the 1970s. That is a long time to wait.

"The market can stay irrational longer than you can stay solvent." – John Maynard Keynes

Best case: you're shorting Sun Microsystems at the beginning of 2000, and it goes from $300/share to $3/share in the next 3 years. (http://www.1stock1.com/1stock1_211.htm)

My advice is to just not touch tech stocks; going short on them is just as dangerous as going long.

Even the best case wouldn't have you more than double your money, if you put up 1:1 collateral. I guess you could have less collateral than this, but in that case, given a growth stock, you would be wiped out if there was a modest increase. I don't see the risk/reward curve for long-term shorting.

When the price starts dropping, you would have to sell more shares to maintain a 1:1 ratio. For example, you can double the number of shares each time the price drops by half, and make up to 200%.

The raise will dilute earnings for common shareholders, so definitely a downward force on stock price. That being said, this investment and the recent raise you alluded to should clobber the put skew.

http://www.volcube.com/resources/options-articles/what-is-op...

One of life's little mysteries is that you almost always lose money if you invest internationally. A friend of mine says it is because the locals know what is going on better than you do.

Tencent was a major investor in Magic Leap and the Saudi Sovereign Fund invested heavily in .coms in early 2000. It is definitely not a sell signal, but I would not buy what Tencent is buying.

You should have told this fact to Yahoo management before they invested in Alibaba or maybe to Naspers before they invested in Tencent.

Sounds like confirmation bias, also one of life's mysteries.

Citation definitely needed.

Most of my investments are in stocks and funds outside of where I live (Netherlands). Guess which parts of my portfolio aren't doing so well? The EU bonds.

"I would not buy what Tencent is buying."

Tencent own a lot of stock in (international) companies that are doing well too. For example, Riot Games, Epic Games and Snapchat.

Similar things can be said about Alibaba.

>The raise will dilute earnings for common shareholders, so definitely a downward force on stock price.

The stock is detached from reality.

It's my understanding that this was another offering, so, essentially, Tesla sold 5% to Tencent at an average price of $217 and change. Current shareholders get diluted. Prices go up.

I don't get it, but I'd love an explanation. Were people, prior to these capital raises, concerned Tesla couldn't raise any more money? That would make sense, but certainly isn't the sentiment I gathered from my travels.

How is that really any different from any Silicon Valley company raising a new round of money? So long as the valuation goes up enough to compensate for the dilution, the per share stock price will be the same or higher. I'm not saying the valuation is correct but the fact that dilution happens and stock price goes up isn't that had to reconcile, right?

>So long as the valuation goes up enough to compensate for the dilution, the per share stock price will be the same or higher

But per stock price is the "valuation".

My comment re: being detached stems from the fact that on Day X, you can buy Tesla for price $Y. Then Tesla sells more shares (dilution). So now each individual share represents a smaller proportion of company ownership...yet the next day people are willing to pay more for that smaller ownership.

Obviously there are far more dynamics at play; but generally, dilution should cause the price to drop.

It seems to me that people viewed Tencent's purchase as signifying confidence in Tesla from a legitimate, cash-stacked player.

As a result, it was all aboard the hype-train for retail investors to secure their seat in yet another speculative rocket ship.

Tesla's ability to deliver has been in question for a bit. This cash will be used as fuel to prevent the rocket ship from experiencing a sudden, gravity-induced trajectory into the earth's crust

This is not a new raise. The filing indicates shares were primarily purchased on the open market and then topped off by the Goldman-led round earlier this month. No new dilution here.

fair enough. so if it's not new shares, put skew should remain strong as there is still non-trivial risk Tesla runs out of cash. And probably at least a small positive push to stock price as investors would reasonably bet that Tencent could be called on to buy more shares.

Is anyone actually short Tesla to a significant degree? I can understand the normal hedging positions and daily trading, but shorting a stock with so much positive sentiment is folly...

31 million TSLA shares are currently held short, which represents somewhere in the region of 20% of the non-insider shares. (Yahoo finance says 38% of the float, so I guess it depends how many shares you consider freely available on the market).

http://www.nasdaq.com/symbol/tsla/short-interest

Petrodollar players doubling-down?

There are some reasonable bets here. Russia has a vested interest in climate change... their biggest liability is cold and ice, a rise in sea level and 5 degree bump in average temps would give them a much bigger role in agriculture and shipping. Add that to the petrodollars from selling their oil reserves and you've got a game changer for them economically.

China probably loses at least temporarily in the runaway climate change event due to destroyed cropland and refugees. The U.S. has exposure on both sides so it's a little more moot for us. We'll lose quite a lot of biodiversity, and may take a big hit to agriculture but we're banking petrodollars and have so much upside when people move to virtual reality we'll be fine. If we were horribly exposed Dems/Reps wouldn't be split on the issue, as clueless as they are.

And of course there are the Saudis and corporate/investment petro interests you allude to.

Russia/Saud/Exxon vs China with U.S. on the sidelines... not sure who wins there.

I really hope we can transition to sustainable energy, but there are big players that stand to gain from delaying it until the reserves are burnt. It's not a bet I would take but I understand why people would bet on there being plenty of feet sticking out to trip up Tesla and co.

There's this guy named Jim Chanos...

Isn't the time to short a stock when there is too much positive sentiment? I would never short stocks because I don't believe in timing the market, but if I were to, I wouldn't seek out stocks with overall negative sentiment as those would seem to have the most upside.

Yes and no.

At the end of the day, stock prices are moved by demand/supply of the shares themselves. Whether or not there's demand depends on sentiment.

Positive sentiment is often an excellent signal that the emperor has no clothes. Most people will ignore what they can see with their own eyes if everyone around them seems to see something different.

The stock has been stagnant for a long time, and it's still off its high. Shorts have done fine.

What's amazing are the longs seeing capital raises at mediocre terms as a wide open positive.

Who says the capital raise is a 'wide open positive'? As someone long TSLA I'm not ecstatic. But short of selling my stock, how else can I signal?

>Who says the capital raise is a 'wide open positive'?

The guy at the top of this thread who said "Shorts can't buy a break".

It's at least arguable that these sorts of capital raises are exactly what the shorts are looking for.

This was not a capital raise. Read the filing. Tencent acquired most of the shares on the open market and the remainder in the round that was announced earlier this month.

>This was not a capital raise. Read the filing.

I don't need to read a filing to know that when you create shares out of nowhere, and sell them, diluting current shareholders, it's a capital raise. What else would you call it?

Do you understand that's not what happens when shares are acquired on the open market?

>Do you understand that's not what happens when shares are acquired on the open market?

Do you understand that Tencent bought shares in a secondary offering? Apparently you do, you said it. Not sure what you're arguing. Do you understand the purpose of selling shares is to raise money for operations?

Maybe I'm misunderstanding. Your comments suggest to me that you think there was yet another secondary offering associated with this news.

> The 8,167,544 shares of Issuer common stock were acquired by the reporting persons in a registered offering of common stock by the Issuer on March 17, 2017 and through open market purchases, for an aggregate purchase price of $1,777,842,836 (including commission).

That means Tencent acquired its position at an average price of $217 / share. The March 17 secondary was priced at $255 / share. Algebra tells us that > 98% of Tencent's position was acquired on the open market and the rest via the March 17 offering.

>Tencent's position was acquired on the open market and the rest via the March 17 offering.

Editing because I think we were talking past each other. Yes, I didn't mean this specific event. I tend to meld all these TSLA threads together in my mind.

Here's a comment you wrote elsewhere in this thread:

> It's my understanding that this was another offering, so, essentially, Tesla sold 5% to Tencent at an average price of $217 and change. Current shareholders get diluted. Prices go up.

This is entirely incorrect. The only shares Tesla told to Tencent were priced at $255 as part of the March 17 offering, and that only represents < 2% of Tencent's position.

>This is entirely incorrect.

The comment was 4 hours old, based off a Seeking Alpha news bulletin (I should have known better) and was prefaced with "it's my understanding..." which left it open for you, or anyone else, to correct.

What exactly are you out to prove here?

I'm not out to prove anything. I was just trying to correct misinformation, just like you said!

Isn't that exactly what he did? Correct you?

This is why you should purchase put options instead of short selling. Exposure to short selling is theoretically infinite. Exposure to put options is just the price you paid for the option.

Shorting generally should only be for companies whose solvency is in doubt.

With put option you pay a big premium for the right for someone else to take that risk. If the company has a high volatility like Tesla you will pay a big premium to buy that option.

Upside insurance isn't free. There's no free lunch.

This is wrong. You should not be trading options if you only have a directional view of a stock, as you will get eaten alive. Options pricing involves much more than just the underlying stock. Most importantly, as another poster said, there is implied volatility. There is also time risk and interest rate risk priced into the option.

With options, you could be right on direction, and still lose money.

If your strategy is to hold them in order to exercise them you do not need to worry about their pricing.

I wish people could buy something like an "implied short", which would basically be an index minus Tesla.

In general, I wish there were safer ways to short.

I didn't short the stock but I can understand why someone would.

They are expected to generate over 90% of their value after 2020 [0]. There's the expectation that Elon Musk will definitely deliver, that Tesla market share will not be eaten up by other carmakers when they seriously start releasing electric vehicles. The expectation that electric and not another form of energy, such as hydrogen, will dominate, etc.

There's a lot that could go wrong and a lot of unknown variables. Then again everything might turn out fine, the point is that no-one know for sure.

[0] https://webcache.googleusercontent.com/search?q=cache:UBQtFu...

> when they seriously start releasing electric vehicles

They've been "serious" for a long time. Chevy has been selling the Volt since 2010. If they were going to muscle out Tesla they would have done it by now. And it's not just about technology. Tesla has the customer reputation that companies like GM will never have again.

I own a Volt. Best car I've ever driven. GM doesn't care much for it. The only advertising they really do for it basically is trying to steal EV customers from Nissan's Leaf. Really dumb. And the dealers don't like it because 1) they don't know how to service them and especially 2) they almost never need servicing. If you run almost exclusively on electric, you only need like 4-5 oil changes in the entire life of the car. And the brakes last forever, too.

Yup, which is why any entrenched player is going to have to both build an incredible car and fight against their dealerships to sell it.

Actually, the reason GM "doesn't care" about the Volt (I'm exaggerating here; they obviously care a little bit) is because they're rational: electric cars are not popular with mass-market consumers, and it's far from clear that they're going to become popular.

GM is investing in what sells, and right now (i.e. for the last decade or two), that's SUVs and light trucks. Which doesn't bode well for Tesla, at least in the near term.

You can certainly argue that fuel prices are going to go up and make electric cars popular. The question is: does it happen before Tesla goes broke?

(Edit: downvoting doesn't change facts. From GM's own 2017 outlook [1]: "Ten all-new or recently redesigned crossovers are expected to drive GM’s sales and share higher in 2017, including the Chevrolet Equinox and GMC Terrain, which will compete in the industry’s largest segment." And they're not joking about that last part. As of February 2017, SUVs and Trucks dominate the list of most-popular vehicles sold in the USA [2].)

[1] https://www.gm.com/investors/sales/us-sales-production.html

[2] https://www.cars.com/articles/top-10-best-selling-cars-febru...

The whole point of advertising is to make something popular that isn't already or to maintain popularity for something that would otherwise decline in popularity. As long as all GM is doing is sniping at other electric cars while doing general broad-based advertising of their fossil fuel powered vehicles, they're not lifting a finger to expand the EV market.

I wouldn't worry about Tesla, anyway. Tesla has huge brand clout and advertises by making really awesome, inspiring vehicles. You want the fastest production sedan? There's only the Model S. And Model X is, after all, an SUV/crossover. And Model 3, which isn't, will be the basis for the Model Y, which /will/ be a crossover and/or light truck. Again, Tesla will be perfectly fine on the demand front.

"The whole point of advertising is to make something popular that isn't already or to maintain popularity for something that would otherwise decline in popularity."

You can't push on a string. Consumers buy bigger cars when gas prices are low, and more efficient cars when gas prices are high. It's why Toyota (which has built a brand identity around fuel efficiency) does worse when fuel prices go down.

Marketing can influence consumers' affinity for brands and perception of product quality. It can't change economics.

"Tesla will be perfectly fine on the demand front."

I'm sure there's a market. After all, Lamborghini is "perfectly fine on the demand front", too. But will the demand for electric vehicles justify a valuation on par with General Motors? That's the rub.

> Marketing can influence consumers' affinity for brands and perception of product quality. It can't change economics.

Actually, I would say marketing is one of the few things that actually can change economics, since it affects perception. Marketing can make someone think they need a new car when they don't, or that a car is affordable than an alternative when it really isn't (given financing, fuel economy, services, etc which are not always taken into account).

People don't make decisions based on reality, they make decisions based on their perception of reality. If you can change that perception, you may change their decisions.

You can make all the theoretical arguments you want, but the fact remains: when gas prices go up, sales of trucks and SUVs goes down. And vice-versa.

You think car companies want to change their assembly lines and tooling, if they can magically change consumer buying habits with a bit of advertising? Come on.

> You can make all the theoretical arguments you want, but the fact remains: when gas prices go up, sales of trucks and SUVs goes down. And vice-versa.

If I was attempting to make an argument against that, I would have done so. You seem to have mistaken my comment as some rebuttal to your entire argument. I just thought one specific point was interesting, but not entirely correct from my point of view.

> You think car companies want to change their assembly lines and tooling, if they can magically change consumer buying habits with a bit of advertising? Come on.

Since you're asking, no, I don't think car companies want to change anything. That doesn't mean they won't be forced to change, and I think being forced to change rarely works out as well as noticing the trends and changing along with, or better yet, slightly in advance of those trends.

It's obvious by the change in types of cars bought based on gas prices that gas prices influence buying decisions for many people. But influence does not necessarily mean control. Many factors go into the decision of which car to purchase, electric or not. Fuel cost is but one of those factors. Tesla has shown that there are people that buy based on other decisions, since the price of a Tesla means that fuel costs are basically moot. Luxury, performance and status are all factors that the automakers and intimately familiar with marketing towards and selling to, usually each to varying degrees with different products. That they've left these areas mostly untapped for electric vehicles after Tesla has shown there is a market, since there were 400k+ Model 3 preorders as of roughly a year ago, leaves many people confused, and I don't think it can be entirely explained away by gas prices. That's enough presales a year ago to be on par with yearly Camry sales. GM is obviously doing something to try to tap into this with the Bolt, but that's still one entry and at the low-end.

>But will the demand for electric vehicles justify a valuation on par with General Motors? That's the rub.

Yep. Building cars for the mainstream is a low-margin, capital-intensive business. That doesn't go away because Musk is brilliant.

Most people just need their car to get around and will migrate to whatever is the cheapest option with the capabilities they want. Right now, electric cars cost more. Eventually, they will probably be cheaper than gas. When that happens, the market for electric vehicles will be essentially the same as the market for vehicles. (Gas may still be needed in the medium-near-term for things like pulling a trailer up a long hill.)

By what definition is the Model S the fastest production sedan? Its top speed is limited to 155 MPH (249 km/h) 155 mph (249 km/h). Compare that to the Aston Martin Rapide S at 203 MPH (326 km/h), or the more affordable Dodge Charger SRT Hellcat, who's top speed as given by the manufacturer is 204 MPH (328 km/h).

The other common measurement of 0->60 acceleration and not top speed. The proper description would be "quickest production sedan" instead of "fastest production sedan" but I digress.

Close to 200,000 Prius's are sold each year. While that's no where near the "best selling" car, their Camry (400,000 cars a year), that's substantial.

Ford sold 66,000 F-Series pickups in February 2017, alone. Small car sales are declining, across the board.

https://www.cars.com/articles/top-10-best-selling-cars-febru...

You can't really compare the "F-Series" with a single car. A more accurate comparison would probably be all sedan's with the F-Series.

But yes, trucks are on the rise again.

I'm having a hard time connecting the facts with the discussion. Are you saying that GM should have made a crossover instead of the Volt/Bolt? Are you saying that Tesla doesn't have a crossover?

"I'm having a hard time connecting the facts with the discussion. Are you saying that GM should have made a crossover instead of the Volt/Bolt? Are you saying that Tesla doesn't have a crossover?"

GM already has a crossover line. In fact, it has a bunch, and they sell really well:

http://www.gmfleet.com/vehicle-search/by-body-style/suvs-cro...

Point out Tesla's crossover SUV with the range of a gasoline vehicle and the price point of a Chevy Equinox ($25k). I'll wait.

> Point out Tesla's crossover SUV with the range of a gasoline vehicle and the price point of a Chevy Equinox ($25k). I'll wait.

Whoa — you have to realize what you just did there, right? This is a massive shifting of the goalposts from what you said Tesla's problem was earlier, which is that SUVs and light trucks are what sells.

Anyway, I don't think most people with SUVs actually go through a full tank of gas a day, so having completely equal range doesn't seem like that big an issue. So now it sounds like Tesla's major problem is that they're competing with the Range Rover rather than the Equinox.

How large are those cars? No wonder traffic is so bad.

You're getting downvoted because you missed the argument that I presented.

It's not about what market segment that sells, it's that dealers have no incentives to sell electric vehicles since there's no margin on services and maintenance.

(Assuming non-material edits by the parent,) IMHO, he didn't miss your argument.

The topic's GM and GM dealerships. You said GM has to fight the GM dealerships due to conflicting interests, whereas, he's saying GM and the GM dealerships don't want "non" mass-markets customers to begin with (i.e. no conflict).

This kind of proves the thesis. EV is a hobby for the legacy guys that competes with much more powerful (by revenue) business units in the company. It's like expecting Kodak to compete and win with their own digital camera.

Every one does not start with a blank slate, that is a luxury Tesla has as an upstart. GM is "saved" to save jobs by US government. GM has paid back, but its operational reality depends on selling "profit-making" vehicles, which are SUVs and Trucks, pair it with cheap gas prices, there is a strategy for GM to be profitable.

Tesla on the other hand, lives and dies by its EV performance, and their approach to the market at higher end kept them alive along with loans from US with few strings attached (for various reasons).

Tesla did not "break through" any thing. If any thing, existence of BoltEV and Volt does demonstrate couple of things, a legacy car company when there are profits are going to turn on dime and make shit ton of EVs, if that is what market wants.

Tesla has brand recognition behind it, but again as some one pointed out when the market for EVs in high demand and profitable, from BMW to GM, you will have them roll EVs in millions.

EVs are unpopular because cheap ones aren't very good yet. You have to choose between almost unusably short range, or a very high price. Something like the LEAF is affordable, but only useful as a city car. A Model S is a great car, but extremely expensive.

The cost is coming down. Chevy is now selling the Bolt, which has pretty good range, for under $40,000. Tesla's Model 3 is coming soon. More will follow. The high cost comes from the batteries, which are getting cheaper all the time.

I'm not sure that "unpopular" is quite the right word. A lot of people really like Teslas. Most of them can't afford them. The desire is there, the means is not (yet).

It's smart to invest in what sells right now... until things change and that's no longer what sells. GM is investing in what sells today. Tesla is investing in what might sell in a decade or two. Tesla's approach isn't certain but if they're right then GM is going to relive their experience of the 1970s where they take way too long to react to a changing market.

I've had the exact same discussion with somebody else today on /r/futurology, more exactly I told him that "under $40,000" it's still pretty damn expensive for a small hatchback. My 1.4l European small hatchback costs around 13,000 euros new, you just can't expect people to not take into consideration the huge difference between the 2 prices.

I'm not sure if this year all figures are the same, but when I was car-shopping in November, Colorado state granted up to $6,000 in tax credits for new EVs. Federal tax credit was $7,500. And on top of that, Nissan was adding their own discount for their new Leafs.

So, nobody pays the full price of an EV at the moment. You can currently buy 1-2 year-old, certified Nissan Leafs for less than $13,000.

With the number of reservations Tesla has for the Model 3, we are going to find out rather quickly what effect losing the big tax credits has on electric adoption. Maybe that is hidden somewhat by the leasing -- buying an EV right now is foolish, leasing is a much better choice. Even the Model S is going through the auctions at half MSRP or sometimes less, and less prestigous cars like the 500E are auctioning at 4K or so. Anybody who purchased on outright a few years ago is going to be extremely upside down for a while longer.

Here's a couple of questions for those out there with more knowledge of the subject than me. Firstly, how long do you think it will be before there is a thriving second hand market in EVs? Secondly, do EVs currently hold their value better than traditional vehicles?

I think you can only say EVs are a success when a used market is thriving. Many people can't afford new after all.

There's a pretty decent market for used Model Ss out there. It's not huge, since Model Ss of sufficient age don't exist in great numbers, but it's not too bad.

I've been looking at cheaper used EVs for a second car. There are lots of used LEAFs out there, some Smart EDs, and a couple of Focus Electrics, which look really nice if you don't mind the short range, but aren't very popular at all. These cars seem to drop in value a lot for the used market. I saw several that were not all that old going for under $10,000.

Teslas seem to retain their value better. I'd guess it's partly because the car is more desirable, and partly because Tesla treats their batteries a lot better, so they can be expected to last longer. The LEAF in particular was known for a while for losing quite a bit of range in just a few years.

As far as how they'll retain their value in the long term, it's hard to say. EVs should lose less value due to things like drivetrain wear, since you don't have a bazillion moving parts in an engine and transmission to go wrong. But they'll lose more value to battery degradation. Much will hinge on how well the batteries age and how much they cost to replace in 10+ years.

One of the reasons for why there are so many used LEAFs on the market, is that a lot of EV early adopters sold their Leaf to buy a Tesla. If you wanted an EV, and could afford it, the specs on the Model S are much better.

This is not really great news for the low-end EV market, though - if the average person isn't interested in a midly used <$10,000 EV, how well will a $35,000 (With no frills - the average vehicle will probably be closer to $40,000) EV sell for?

Keep in mind that after years of making cars, Tesla is still struggling with quality control, supply chains, and repairs.

If we took a time machine, and traveled back to the early 00s, would you have dropped $40,000 on a vehicle made by Kia?

That's roughly where Tesla is today, in terms of maturity. I'm sure it will get better - but it may take a decade.

> This is not really great news for the low-end EV market, though - if the average person isn't interested in a midly used <$10,000 EV, how well will a $35,000 (With no frills - the average vehicle will probably be closer to $40,000) EV sell for?

I don't understand this. The <$10,000 EV in question has a range of maybe 80 miles, probably less at this point. The $35,000+ EV will have a 200+ mile range and access to an extensive fast-charging network for trips beyond that.

Personally, I've stopped looking at the <$10,000 EVs in favor of waiting for a Model 3, because even though it's far more expensive, it's also far superior.

Tesla has no trouble selling Model Ss and Xs today even though they start at $68,000 and go up well into the 100s. They have a metaphorical line out the door for the Model 3. Tesla is struggling with quality control and such, and it could come back to bite them down the road, but it's not making it hard for them to find customers now.

Used LEAFs are super cheap because they have short range, and new LEAFs have a 50% larger range. The tech keeps getting better and making old electric cars less desirable to the market of buyers looking for an electric car.

Well, I bought my '12 Volt used for under $10,000 with 60,000 miles. At the time I bought (last year), they were usually about $12,000 at a dealer, and trade-in about $8000 for the same car. I got mine from a friend who wanted to trade-in (to get a new Volt... the Gen 2 Volts--starting with 2016--are even better than Gen 1), so we both got a good deal. Fantastic car.

Anyway, there are plenty of used electric cars out there if you're happy with the models that have been out for a few years.

How hot is the market for a used Model S? It seems you can get a decent one for under $50,000. Is this generally regarded as a good deal? I know an "early adopter" who has had a Model S for many years, and I've lost count of the number of times it has left him and his family stranded.

At that price you're probably looking at a pre-Autopilot car, which I'd probably avoid. Autopilot is great, for one thing, but also because Tesla's build quality got substantially better over time. I don't think it's because of Autopilot, but its introduction makes for a decent dividing line between old and new.

I haven't looked too hard at the used market, but it looks like a decent way to get one for less. This web site lists a bunch that Tesla is selling through their CPO program if you want to see what's out there:

https://ev-cpo.com/hunter/

For what it's worth, I have an early 2015 Model S and it's had a few minor problems, but nothing close to leaving me stranded.

100% agree but they have to be careful with the idea that "It's smart to invest in what sells right now... "!

The story is so reminiscent of Kodak. Huge 'titanic' of a ship that saw the writing on the wall, actually released digital cameras but the bulk of their infrastructure, employees and expenditures were in traditional film cameras. Once the industry fully shifted they still couldn't change course and died a slow agonizing death as taking pictures became a commodity that came 'free' with your cellphone.

It's a little different though. Kodak was invested in a huge consumables business and neither they (nor really anyone else) figured out a way to translate that sort of pay per use model to the digital world.

GM doesn't get money from gas (though their dealers do get money from maintenance which is hypothetically(?) lower with electric vehicles. Different anyway.)

Aside from market share, it doesn't seem like much of a risk to go with what works now and save the big EV push for later. GM still came out with the Bolt, which is an excellent competitor for the Model 3. Not too pretty, but the numbers are all very good. So they know how to do it, and when the sales are there they can scale up production of whatever they're marking 10 or 20 years from now. I'd bet on GM in a battle with Tesla, to be honest, though Musk has a lot of chutzpah.

Kodak was a chemical company that was expected to start making semiconductors or consumer electronics. It's all "photography" but the film and digital industries are very different.

> GM is investing in what sells today. Tesla is investing in what might sell in a decade or two.

It seems to me that the Bolt and Model 3 should be pretty similar in terms of cost, range, and price. The main difference is the Tesla brand / visual design and probably more self-driving tech in the Model 3. Am I missing something?

Superchargers.

I regularly make a ~300mi roundtrip with our Tesla, I wouldn't own one today if that wasn't possible.

[edit]

Before anyone brings up ChaDeMo(I have the adapter), SAE combo neither are nearly as fast(120kW) in real-world use and have nearly as much market penetration.

The super-charger network is also something that's planned and built-out with the intention of being to make the major arterials rather than having a patchwork of various companies providing chargers.

Non-Tesla fast charging stations also tend to be broken a lot, and are installed in small numbers, often single units. It's tough to plan a trip where you need a charge at a particular location when you could be screwed if a single spot is occupied or out of order. Most Tesla locations are 6 spots or more, and they're much better about fixing them when they break.

Yup, and the just added real-time status on the nav map so you can see how many slots are available and re-route if needed.

Have you made use of that feature yet? I've poked at it on the nav system, but haven't had to use any Superchargers since it came out.

The Bolt can't really make road trips because the fast charging network it can use is pretty bad. (That's in the US. Supposedly Europe is a lot better in this respect.) Even where the facilities exist, the Bolt's charging rate is about half of what Tesla can do.

The self-driving/driver-assistance tech gulf is pretty big. The Bolt is fairly basic, while the Model 3 will have at least Tesla's Autopilot 2 hardware, which they say will be sufficient for full self-driving once the software is done. Even if that doesn't work out, it'll have excellent traffic-aware cruise control and lane keeping at the least.

I'd say the brand is also fairly important. Not (just) because Tesla is "cool," but because Tesla is committed. Supposedly GM is planning for something like 50,000 Bolts per year, so it seems like yet another car where dealers will try to steer you to a nice pickup truck or something instead, and finding someone willing to service it could be tough.

Putting it all together, and it seems like GM is putting their toe in the water, while Tesla is balls-to-the-wall (forgive the mixed metaphor).

> probably more self-driving tech

I probably shouldn't be sharing this but I know someone who is working on the Bolt and he told me they've been having a lot of trouble integrating self-driving tech that's close to Tesla's

I am very interested to see how this plays out. Gas prices drive interest in electrics, and electrics drive down gas prices. Maybe the future of the consumer car market is going to split largely between gas-powered pickups and electric-powered sedans/crossovers.

This of course completely ignores the potential effect of self-driving cars. I'm still skeptical we'll see large scale automated driving for at least 10-20 years.

I think gas prices are driving EVs less and less. It's still a factor, for sure, but things like performance, noise, maintenance, and convenience are driving it heavily as well. Of all the reasons I love my Model S, fuel savings are pretty far down the list, although I certainly don't mind!

Yeah, that's the thing. If gas ever gets back up to $4/gallon in the US, EVs which are just somewhat competitive at $2/gallon are going to be radically competitive.

However, if EVs become widely used, then the lower demand for gasoline will mean gas prices stay low. So long-term, EVs need to compete with low gas prices anyway, even if prices creep back up in the near-term.

But yeah. Once batteries are cheap enough, then electric vehicles may actually become cheaper than internal combustion engine vehicles /upfront/, in addition to the much lower running costs.

I am an Volt owner and I approve your comments. GM with BoltEV and Volt has demonstrated they are up with the EV tech, did they make miscues? Yes, no doubt. But the market needs to educated and for now Tesla is the Apple of Cars and the only brand Customers are willing to be educated from. Nissan Leaf had a decent start, but they cut too many corners, and I do not recommend Leaf. i3 is too limited.

Even though I whole-heatedly recommend Volt esp. Gen2. The market is not ready yet, and GM is doing what an established Car company does. Tesla's life depends on pushing EVs, so they are who they are.

> GM is investing in what sells, and right now (i.e. for the last decade or two)

Yup. They haven't adopted the Andy Grove/Bill Gates/Larry Ellison philosophy of "Only The Paranoid Survive," yet. They are banking on the expectation that if/when consumer interest spikes they'll be able to use their influence to jump to the front of the line, like they did with past ICE competitors.

The question is... will the electric car market be more like the ICE market where paranoia is (apparently) unnecessary, or the semiconductor/software markets where it is (apparently) quite important.

Very interesting points. So as the other comment has pointed out, traditional automakers will have difficulties selling through their dealerships. Do any of the established players have any plans for their own dealerships / showrooms?

They can't as the rights to having local dealerships has already been split out. They'd have to buy out their dealers and probably change a bit of State law to accommodate that.

Yes. https://www.thestar.com/business/2016/04/19/cinespace-sells-... GM Canada purchased land in downtown Toronto and made the announcement for a corporate campus with a dealership/showroom. The challenge will be with the existing franchise dealerships that will balk at GM taking a bite out of their market share. edit - The GM official announcements specifically refers to the sale and service of electric vehicles. http://media.gm.com/media/ca/en/gm/home.detail.html/content/...

I'm about to buy a Volt as soon as VW buys my dieselgate car back from me. I have had to go through a few different dealers to find someone who is serious about selling the thing.

The platform looks amazing. It boggles my mind in all the years this vehicle has existed that they haven't made more vehicles based on it.

Agreed. A pickup based on the Volt technology would be fantastic. Electric can allow crazy good torque. And you have a nice big battery, backed by a quiet and efficient built-in generator that only needs to run occasionally, to run power tools off of.

I'm a small minority market, but I'd love an electric replacement for my 30hp diesel small compact utility tractor.

It's a natural fit. The extra weight is a positive not a negative. The tractor is already a hydrostatic transmission in order to get continuous torque across RPMs and some in this market already use an electric motor for hydraulics (powered from a generator via the engine). It's only used for short bursts of activity so doesn't need a particularly huge battery even.

But such a product doesn't exist yet :-(

It is coming soon! Here is a Hybrid ZTR prototype my company has been working on. https://www.youtube.com/watch?v=J34KU9OG9M8

That's nice and I would even consider buying one, but it's not a tractor.

Need three point hitch, loader, PTO, and industrial tires.

When you (or someone else) makes one with equivalence to about 30 or 40hp for under $30k and, I will instantly buy it.

The ZTR is just a test platform to ensure our motor drives can handle the load swings. We specialize in the power and drive systems, so we likely won't be making complete mowers ourselves.

All of those things are certainly doable, although we will be pretty much eliminating the hydraulic system, so the PTO and loader might need to be thought out a little differently.

I'm on a work visa here in the US, and I couldn't get financing on a Volt because GM Financial insisted on doing > 30 months lease on their hybrid cars (and my work visa expires before then, though it's likely to be renewed anyway).

Go figure. It's not like I can't afford the monthly payments.

Did you talk to an independent leasing company? You don't have to lease via the automaker.

http://www.marketwatch.com/story/the-greatest-auto-lease-dea...

Will bear that in mind for next time, thanks! My other consideration is I am still trying to build a credit history, and don't really want more hard hits on my file than necessary...

Sheesh. When I bought a Prius (admittedly, 2007), I was here on a fiancee visa. Toyota Financial had no problem okaying a three year lease even though my visa was (technically) three months (but available for extension).

Ah, interesting. A colleague had a similar experience to me getting an Audi (his lease doesn't extend beyond the H-1B expiration) so I wonder if the regulation is tightened up by now.

Then again, maybe statistically people on fiancee visas are more likely to end up with permanent residency than people on H1B?

When people claim "best X I've used", they should list all models of X that they have used.

Granted. :)

Is there something special about the brakes? Less maintenance needed makes sense, but I would have thought the brakes are no different than gasoline cars?

GM isn't a threat to tesla unless Cadillac starts selling something to compete with the model S. As a Tesla shareholder what keeps me up at night are Mercedes, BMW, and Lexus.

Have you seen the 2016 Cadillac ELR? [ 1 ]

As it turns out, it's already discontinued?

[1] http://www.cadillac.com/legacy-vehicles.html

People didn't want to pay $65k+ for a rebodied Volt.

If you get scared easily, or aren't in it for the long term, TSLA might not be the stock for you.

Disclaimer: I'm long TSLA and Solar City Solar Bonds.

Isn't a large part of Telsa's value that it will eventually move into the Camry/malibu/Taurus field?

> Tesla has the customer reputation that companies like GM will never have again.

Tesla is more like a luxury brand so its biggest potential competitors will be the big 3 in Germany and possibly Lexus (which all have a pretty good reputation), and currently none of them propose that many options.

Audi and Lexus have none. BMW has two, but only one of them can sort of compete with Tesla (can't go far with the i5 battery). Mercedes only has one (if I'm not mistaken). It really feels like they're only getting started, and if/when they start releasing really compelling models, it will be something more to deal with for Tesla.

Oh there's a very good reason why the German carmakers are only now just getting started:

http://www.spiegel.de/international/business/german-governme...

In short, German carmakers' historical expertise in designing good internal combustion engines are worthless if electric cars take over. The auto industry is ripe for some serious disruption.

btw. mercedes buys the batteries from asia and their engine did come from tesla, however they broke up and now they have a new partnership which helps them. german manufacturers have no interest in selling electric vehicles to the masses.

Before automaker were only focusing on the fully urban, second car. The like of Nissan Leaf, Renault Zoe, even BMW i3.

Tesla has opened up a slice of the market the traditional maker didn't expect would work: primary car. This has a feel of Apple with iPhone in 2007.

Even if Tesla ramp up tremendously and try getting in every car segment simultaneously, they will not have the capacity to provide all the cars that people are looking for, so the rest of the companies will likely continue to provide the bulk of the car market. Which is not a negative for Tesla, the market is simply enormous: it would take Tesla to produce over 2 million cars per quarter to even get over the single digit market share.

The biggest risk now for Tesla is not being able to reach critical mass fast enough. I can understand their valuation and their need for cash. I can understand the shorters too, unlike the smartphone market, car purchase has at least a 4 years cycle and even in the first world, a car purchase is one of the biggest investment.

The year is 2051, SpaceX has made significant progress on building out infrastructure on mars. In the last 25 years we have seen the explosion of Musk's empire across the solar system. Starting with the seed efforts on earth, robotic rockets have been flowing to Mars in droves. The exceptional thing is how they have delivered the infrastructure to the planet once there.

These rockets are far superior to their ancestors. With orbital factories around earth, and regular deliveries of colonization supplies, the network is vast, complex and efficient.

Starting with battery manufacturing on earth, all the colonization components required of earth are delivered to the orbital factories where humans and robots work in a beautiful synchronized effort to prepare each packet to Mars. Batteries and other components are delivered to orbit. They are then constructed into the various machines to be delivered to mars on the massive Falcon-33s that will haul them to Mars.

The autonomous Tesla Landers are quite complex, they have impressive batteries, but its their job which is more impressive.

Once orbiting Mars, the payload shall be unpacked and deployed to the surface, where they will continue the construction of the massive solar arrays which already have a large contingent of batteries to slurp up the solar energy and store it for all the other needs of the build-out.

The project has been going on for decades, but we are starting to see some serious results in this phase...

The original idea was laughed at, but it was all backed by sound science and a simple phased approach:

* Develop seed infra at home; Batteries, rockets, robots

* Consumerize these to fund later phases

* Proof-out orbital autonomous delivery services via the ISS

* Commoditize space tourism, popularize it with celebrities

* Exploratory missions to Mars

* Develop orbital manufacturing capabilities, where supplies can be delivered autonomously

* Build Ultra-heavies in orbit, modularly to avoid launch costs from surface (required tethering technology to be developed)

* Deploy communication relay probes between spatial bodies

* Deliver initial robots to surface of Mars, they prep for solar install

* initial solar install to feed robot population already on surface

* Add batteries

* further infrastructure to follow, but with a working autonomous robot service group ready to build out

We are now at the deployed battery stage, the Organization is now preparing the life support systems for long-term human colonization, and within the next 25 years, we will have a permanent Human Civilization2 on the planet Mars... perhaps, Again?

aah, there's nothing like utopian geek idealism...

Much better than the hollow cynicism of your post, though...

"In the last 25 years we have seen the explosion of Musk's empire across the solar system. " - you have to admit that is pretty funny...

you hollow cynic!

Funny, but silly. Why would people want to live in other places in the solar system? Earth, the Moon, and Mars are the only places that really make any sense at all. Even Mars is iffy because the gravity is rather low, it's far from Earth, the atmosphere is barely there, it's cold, and there's no radiation protection without going underground. The Moon is even worse, but at least it's close to Earth so it'd be really useful for mining or offworld/low-g manufacturing, and it's close enough for quick trips back to Earth.
Venus is far too hot to be useful for anything besides dirigible cities, and what are you going to do there except sightsee the yellow clouds? Maybe it could be terraformed to something livable, but that would take a long time. If that could be done though, it'd be a great place, since it's close to Earth's size and gravity.
Mercury is too close to the Sun and too hot. You could put a city on the dark side, but the city would have to move constantly to stay on the dark side.
The asteroid belt might be useful for mining, as would other places farther beyond, but anything that far out is going to be very cold, because it's so far from the Sun. Also, the Moons of Jupiter are bombarded with massive amounts of radiation from their planet. And all those places have horribly low gravity too, which probably won't work well with human biology, unless perhaps we genetically engineer ourselves to fix that.
Space exploration is great for science and maybe resource extraction, but I just don't see the point of colonization except for a couple of somewhat-convenient places, at least not in this star system. I really can't imagine an "empire" across this solar system. Now it would be really cool if we could explore the TRAPPIST system and maybe find livable worlds there.

Why leave town? why jump on a ship and sail to unknown horizons? why get out of bed in the morning? Some people like the idea of adventure and the unknown. Practical realities be damned

That's nice, but no one can afford to go establish a colony in orbit around Saturn by themselves; that money has to come from somewhere, and it's a huge amount. That means you need to justify that expenditure of resources, and get other people to fund it. Personally, I'm not willing to work my ass off to spend a bunch of my money funding such a project. An automated probe, sure; a mission to investigate the potential for asteroid mining, sure; a Moon base, maybe. Some silly project with nothing going for it besides a few people who want me to fund their fantasy? And they want me to work hard here so they can have fun with no practical benefit? Hell no.
Even with your "jump on a ship" bit, European exploration of the "New World" was very expensive and required investment from wealthy patrons. It wasn't something a small group of adventurers could just do on their own.

Well, good thing it looks like it's going to be largely private hands doing the work, and there'll be no shortage of volunteers. You and your lack of adventure can stay exactly where you are :)

It's not a matter of willing workers, it's a matter of funding. The problem is if you start demanding money in the form of taxes. I find it highly dubious that one rich person could fund such an endeavor all by himself; this kind of thing is a project of enormous magnitude, and just as with the Apollo missions, normally require the funding only possible with a very large nation-state, which gets that funding from taxes and has to answer to its voters.
If you can fund a Mars colonization mission all by yourself, then more power to you. But I just don't think it's possible, at least not any time soon. As a species, we haven't even managed to do any better than landing 3 men on our very nearby Moon for very short missions. We have zero experience in building and living in actual offworld habitats. It's never been done, not even in the one place where it's so close by that a rescue mission wouldn't be hard to do. The closest we've come is Biosphere II, a glass building in the Arizona desert, and that was a big failure.

>We have zero experience in building and living in actual offworld habitats.
It's too late to edit this, but I just want to qualify it: we have zero experience building and living in habitats on other celestial bodies. A small space station in low-Earth orbit within the Van Allen radiation-protection belts doesn't really count.

sure. we don't have experience doing anything until we try. Ultimately it doesn't matter what you or I think about this: in the scheme of things (and not to channel musk, but it remains a fact) our species will blip out of existence unless we get off the planet.
Funding be damned. No one is asking you to work your arse off Interstellar style to fund a secret program to fund humanity and get us out of here. And no-one is asking the US government to pump a trillion into setting up colonies out there. But it will happen - and there will be commercial starts to it - asteroid mining, with initial small numbers of support personnel up there, then maybe a few habs. Maybe it will take generations; or maybe we'll be wiped out before then. But it is either part of the inevitable march of the story of our civilisation; or there won't be a civilisation to talk about

TBH, I really really admire those ancestors of our past who jump a ship and sail into the unknown. That takes serious balls.
If you meditate on this you will see that the amount of gumption doing this, especially when info was not so easily begot and Safeway didnt exist... jesus - humanity was REALLY tenacious in the past. So, if given the opportunity to go on a craft to mars with even a single digit % survival probability - I would do it, if anything just to honor those who have done the same in the past...

Political freedom has often been the primary motivation for groups of people to emigrate. Hypothetical sea-steading aside, moving somewhere with no existing political system in place is not possible on Earth. Wealthy patrons might sponsor the pioneers. This was how much of early New England was settled by Europeans.

Yeah, but the problem here is that it seems unlikely that it'll be affordable to set up a self-sustaining colony any time in the foreseeable future without the resources of a large nation-state. And again, remember my previous post is talking about (and questioning the idea of) colonizing places other than Mars and the Moon (see the line about "except for a couple of somewhat-convenient places"), which are certainly the two easiest places in the solar system to colonize. I see I've been downvoted by some jerk, but of course no one can come up with a logical response to my question; how typical. So again, why would anyone bother colonizing one of these places (again, *other than Moon or Mars)? If you have that much money, and want to set up a self-sustaining colony and those two worlds aren't available for some reason, wouldn't it make a lot more sense to just build an independent space station? Then you could just stick it in Solar orbit not too far from Earth, or at a Lagrangian point, so you're not too far from or too near to the Sun, you're close enough to Earth for resupply in case that becomes necessary, you're close enough to Earth/Moon to take advantage of and participate in any space-based industrial activity there, and there's effectively unlimited space for space stations.

I agree independent space stations make more sense than anywhere but maybe Mars. Using small, near-Earth asteroids for bulk resources at first seems likely. But for political autonomy, near Earth is unlikely. Earth's political systems will have a high incentive to have some control over massive objects moving very fast near the planet.

They don't have to be that near Earth. Just nearer than the outer planets, the asteroid belt, probably Mars, etc.
Besides, if it's strategically placed, it could easily threaten Earth with kinetic projectiles if Earth's political systems attempt to take control of it. Military units inside a deep gravity well have an enormous disadvantage to those outside the gravity well.

> ...that Tesla market share will not be eaten up by other carmakers when they seriously start releasing electric vehicles
Tesla has been around long enough that it can no longer be replaced by a large company that just throws a ton of money and talent at it. They're too far ahead. There's no substitute for the raw amount of time Tesla has spent developing its product.

Which is often summed up (I'm paraphrasing) from The Mythical Man Month, "No matter how hard you try, nine women can't make a baby in a single month".

Exactly! I love this saying.

ahead of who? There are several low-end electric cars already on the market (Chevy, Nissan, BMW), and one high-end (Tesla). They are meeting in the middle

They are expected to generate over 90% of their value after 2020
This is true of many startups, especially in a low rate environment. It's the "Terminal Value" in the calculation that drives value. Of course the Terminal Value also is extremely volatile, and changes a lot to small changes in inputs.

I have a small investment in TSLA stock. What I'm betting on is that in addition to being a car manufacturer on the scale of Ford/GM that TSLA will also be the world leader in AI/driverless cars. I don't have a huge position, but intend to hold onto it forever.

I think that a surprising number of people buy stock based on how they feel about the company rather than how they feel about the company compared against the current price.

> another form of energy, such as hydrogen
Hydrogen is unlikely to win, it's fair to say that it has already lost [1]. The hydrogen economy was mostly a myth [2]. 95% of hydrogen is made from natural gas [3].
[1] http://www.salon.com/2016/11/19/who-killed-the-hydrogen-car-...
[2] http://www.triplepundit.com/2010/02/hydrogen-is-not-the-fuel...
[3] https://energy.gov/eere/fuelcells/hydrogen-production-natura...

If there were a significant economic downturn, I wonder how much that might impact their initial wave of buyers.

Over the next year or so, it should be clear if they'll be left in the cold, or very wealthy. Pretty much everyone seems to agree that the Model 3 needs to do well in an unprecedented way (not impossible), or Tesla is in very deep trouble (not impossible). It's hard to imagine the BMW and Mercedes aren't working on things too, and they won't have horror stories of their cars being in the shops for the better part of a year.
This is still so uncertain, and I for one wouldn't feel comfortable even guessing, never mind guessing with real money.

meanwhile the straddlers and long haul guys are making a killing right now.

I see this move as a blessing for Tesla to gain market share in China. The stock is valued for growth far into the future, and achieving that outcome is really iffy without a robust China market.
[edit] I'm speculating, but I don't think TenCent could have gotten as big as it has without the blessing of the Chinese government. That is the basis for my view.

> I see this move as a blessing for Tesla to gain market share in China.
Yes, and Tencent is betting on it, since Tesla Chinese market sales has just broken $1B [1], soon Chinese market will be Tesla's biggest market with Chinese government's policy leaning on supporting EV industries in a MAJOR way. Win-win!
http://fortune.com/2017/03/03/tesla-one-billion-sales-china/

> Tencent is a prolific investor. It holds equity in Snap, this year’s hot tech IPO, among others following an early investment. While that interest in messaging makes sense since Tencent’s operates China’s dominant chat app — WeChat — it isn’t immediately clear whether the Tesla investment has strategic undertones.
This was my immediate question as well. Is this purely an investment for its portfolio or is there a strategic element as well? I imagine being able to send/receive messags on WeChat as the beginning of something more.

Having access to the internals at Tesla is interesting and potentially powerful -- significant ownership share brings many benefits that are by no means small. Albeit on a need-to-know basis and through a peephole, it is nonetheless advantageous.
It may cost $1.7B but it guarantees continued access, whereas throwing technical exfiltration (ie: hacking) and manual exfiltration (ie: mole in Tesla staff) whose resources are limited and unpredictable.
It's also a good financial investment.

Can you explain what kind of access you mean? I thought preferential information sharing with specific investors violated SEC rules?

not if they have board seats

Yes, that's the real question. If Tencent obtained a board seat as well, then I could think of all sorts of scenarios that could benefit Tencent in China, but not necessarily Tesla.

As mentioned by the other comment, board members get preferential information sharing. I would haphazard to guess that Tencent balked at the purchase price of a seat on the board of directors (eg: 20% stake or something to that effect) or Tesla opposed it on principle. Probably the latter and then Tencent moderated their stake offer.
However, shareholders are afforded access regular updates on the financials of the company, which Tencent may be satisfied with on its own.

Is that true? I've never read the SEC rules or looked into this in detail but my understanding was that information sharing only becomes a problem if you actually trade on that information (ie. insider trading). I didn't know the rules actually tried to limit what was shared. How does that work with employees etc, who will almost certainly have access to a lot of preferential information and many also be investors or significant shareholders? Would love to know more!

This is my understanding as well. I get great info talking with smallcap to the just barely midcap companies if you ask the right questions. Heck, usually, I am able to get a conference with a VP or CEO if my questions go above paygrade. I am no whale.
In practice, you will not get the same level of info on larger companies if you are not institutional or in a group of retail investors holding a decent share-count. Information obtained is usually a small amount above what is found on the conference call or via google.

Could be a portfolio diversification move- not sure how they financed it but China's currency is pretty inflated, we've seen a lot of large equity investments from the Chinese in the past 2 years (in Hollywood, for example).
If the CNY crashes for whatever reason they can dump the stock and flip the currency for a lot.

Tencent Holdings is more of an investment/VC company. WeChat is just one of its subsidiaries it funded that became wildly successful. Its primary focus is still investment in technologies. Pretty sure it can find some synergy with Tesla among its wide reach of portfolio. Does it hold solar related companies?

Their strategy is reminiscent of Softbank's.
There may be some synergystic stuff from time to time (ex: Yahoo! Japan), but most of the time it's a pure investment move to amp up their returns.
Berkshire plows the cash flow from their insurance business into acquiring businesses (though they get a controlling stake), Softbank plows its telecom cash flow into speculative VC bets, and Tencent seems to be plowing its own revenue into VC bets as well.

tencent has 2 primary competitors in china, primarily alibaba and baidu. baidu's business model is to copy everything google (so google maps, youtube, self driving cars, etc), but these 3 companies are converging on a lot of these things as baidu gets into self driving cars, was an investor in uber, etc. i think because they have a huge amount of capital, that they can make these types of investments to prepare themselves to take on alibaba and baidu head on in the future.

I suppose the administration is going to argue this move supports Trump's claim that global climate change is a Chinese plot to undermine the American economy.

Is this showing that they haven´t found a Chinese company that could compete against tesla? China is investing a lot in Solar energy, batteries and have car companies that want to become global players, and most of Tencent investments are on Chinese companies that make products focused on China and Asian markets. I do not know if they buying in open market tells more about Tesla potential or about China future in cars and energy.
https://www.crunchbase.com/organization/tencent#/entity

A $2B investment doesn't really preclude other similar future plays for a $200B company. So I think there's not enough information to draw that sort of conclusion.

Worth noting that Tencent is also an investor in Future mobility which has been remarkably quiet since their funding announcement last year: https://www.crunchbase.com/organization/future-mobility#/ent...

When I first read this, my head saw "Fifty Cent"...
And I thought "A _rapper_ has just bought $1.7billion worth of Tesla shares???" and was all ready to make "Has Tesla already become the Cristal Champagne of car brands?" gags...
Still, half a billion return in two weeks on a 1.7 billion play is pretty nice money...

Fifty Cent got a minority stake in Glaceau instead of a payment for endorsing their Vitamin Water. When Glaceau sold to Coca-Cola, that equity was worth somewhere in the neighborhood of $100 million.

Pretty sure 50 is bankrupt now.

> Pretty sure 50 is bankrupt now.
It was fake: http://www.dailymail.co.uk/news/article-3470122/He-s-far-bro...

Smart move. Tencent's investing but not controlling strategy make it good supporter of the new generation of ambitious entrepreneurs against AAAAF(Apple Alphabet Amazon Alibaba Facebook): - JD - Didi - Snap - Meituan-Dianping ……

I am not following. Who are the new generation of ambitious entrepreneurs?

I guess Elon? He's no spring chicken, but certainly ambitious and an entrepreneur.

Okay, but that's kind of an unfair comparison since Facebook, Google are corporations. Elon is a person. But if the point is tech founders should actively invest on their own outside of their company, okay that's fair. I am not sure how often Jack Ma, Mark Zuckerberg or Jeff Bezos invest in for-profit companies outside of their company's investment arm, but I think they do.

> but not controlling strategy
I mean, they bought all of league of legends. Their primary driver is most likely "let's make money".

Games are Tencent's backyard and cash cow.

not entirely true, i imagine wechat is a huge advertising platform for the as well.

Tencent's reach is mind-boggling: https://en.wikipedia.org/wiki/Tencent#Investments

Funny. Just yesterday I commented on an HN thread that my first electric car would likely be Chinese, but that it might have the "Tesla" name on it.

The Model 3 will come with full automation and an Uber competitor. Just a guess why they are so confident about hitting their numbers.

this just shows how distrustful are Chinese about their own currency that they seek any way to store money abroad in safe harbor away from RMB and Chinese government

Now I can get free legendary skins with purchase of a model 3? What time to be alive.

I think they knew solar is the future, all around the world.
China has massive pollution, and most homes/businesses that have access to direct sunlight. (Yes--I know solar works 50% on cloudy day. It doesn't work well with a lot foliage coverage. China looks barren of trees--sadly.)
My hope is those solar tiles come down drastically in price. My hope is the average roof will be cost effective to put said tiles up.
I think those solar tiles will be Tesla's Trump card. It will probally be in four years, or more in the United States. We will need a new president. (I was for Trump putting Coal miners back to work, until I found out the problem is not regulations, but automation. Actually, I want clean air. We need a better way of supporting people affected by the elimination of old ways of doing things; like a Basic Income.). Sorry about being all over the place, but there are no simple answers. Trump is just finding this out.
I think Tencent saw a long value in the stock, even though their citizens will not likely buy Tesla's tiles. They will buy the cheapest knock-off as usual, but the rest of the civilized world will buy Tesla's product.
(I don't know what patents are on these new Tesla tiles, but I bet they are seen as a valuable commodity, even to a cheating society like China.)

They should've bought 10%...or change their name to Fivecent

I think puns in the comment section belong to reddit

What, we can't have puns now? Lighten up.

I came here for this pun. I also knew I had to dig it up from the bottom.

Shouldn't they have bought ten(per)cent?

I only need Twocent to know this is a bad idea.

Why?

still better and less risky than keeping money in free falling RMB

I have a bad feeling about this...

I thought I saw TenCent's name in Kong Skull Island

Ahh I guess they're not connected tencent pictures and tencent

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