Re: I bought 75 shares of Tesla Stock for $231 per share
Posted: May 06 2015 6:16pm
Electric Vehicle and Technology Forums
liveforphysics wrote:TheBeastie wrote:Chevy's 2016 Volt costs just $25,000 if you live in California
http://www.engadget.com/2015/05/03/chev ... t-pricing/
I wonder if headlines like these can put fear in Teslas share price?
Nothing the Volt does is going to impact Tesla sales... The Volt is like a covered wagon in comparison, and still hauls around a tank of cancer-fluid on board.
When GM releases a real dedicated EV, it will be the first product with the potential to give GM future relevancy.
Which is why Musk has car sales and battery sales in mind. Diversification.JackB wrote: Investing is about diversification.
And institutional stock investors understand that. Remember the old adage: Past performance is no guarantee future results.lester12483 wrote:None of which are profitable mind you........
Why Now Is The Time To Buy Tesla Motors Stock
http://www.forbes.com/sites/adamhartung ... ors-stock/
Crude oil has dropped 50% in just 6 months
At under $50/barrel, gasoline is now selling for under $2/gallon in many USA locations. This is a price rollback to 2008 – something almost no one expected in early 2014.
Don’t jump to conclusions
It is easy to jump to conclusions about what this will mean for sales of some products. And many analysts have been saying this is a terrible scenario for Tesla, which sells all electric cars. The idea is pretty simple, and goes something like this: People buy electric cars to save on petrol costs, so when petrol prices fall their interest in electric cars decline. With gasoline cheap again, nobody will want an electric car, so Tesla will do poorly.
But this view of Tesla is an example of where common wisdom is completely wrong. And now that Tesla has lost about 1/3 of its value, due to this popular belief, investors are offered a tremendous buying opportunity.
There are three big reasons we can expect Tesla to continue to do well, even if gasoline prices are low in the USA.
First, Teslas are great cars.
Not simply great electric cars. Too quickly we forget that Consumer Reports gave the Model S 99 out of a possible 100 points – the highest rating for an automobile ever. In 2013 Motor Trend had its first ever unanimous selection of the Best Car of the Year when all the judges selected the Model S. The Model S, and the Roadster before it, have won over customers not just because they use less petroleum – but rather because the speed, handling, acceleration, fit and detail, design and ride are considered extremely good. Even when comparing with the likes of Mercedes and BMW. And completely ignoring it is an electric car.
It is a gross mis-assumption to say people buy Teslas because they are electric powered. People are buying Teslas because they are great cars which are fun to drive, perform well, look stylish, have low maintenance costs and very low operating costs. And Teslas are more ecological in a world where people increasingly care about “going green.” In 2015 consumers will be able to choose not only the Roadster, and the fairly pricey Model S, but soon enough the smaller, and less expensive, Model 3 which is targeted squarely at BMW Series 3 customers. Teslas are designed to compete with all cars for consumer dollars, not just electric cars and not just on the basis of using less fuel.
Second, the market for autos is global and gasoline isn’t cheap everywhere.
Take for example Hong Kong, where gasoline still retails for $8.50/gallon (as of 31Dec. 2014.) Or Paris or Munich where gasoline costs $5/gallon – even though the Euro’s value has shrunk to only $1.20. Outside the USA most developed countries have a lot more demand for oil than they have production (if they have any production at all.)
Almost all of these countries offer incentives for buying electric cars. For example, in Hong Kong and Singapore the import tax on an auto can be 100-200% of the car’s price (literally double or triple the price due to import taxes.) But in these same countries the tax is greatly reduced, or eliminated entirely, for buying an electric car for policy reasons to promote lower oil consumption and cleaner city air. So a $100,000 Mercedes E class in Hong Kong will cost $200,000+, while a $100,000 Model S costs $100,000. It takes really low gasoline prices to make up that difference!
Further, outside the USA most countries heavily tax gasoline and diesel in order to discourage consumption. So even as oil prices go down, gasoline prices do not decline in lock-step with oil price declines because the taxes remain (which are often more than the actual price of the fuel.) Consumers in these countries have a much greater demand than U.S. consumers for high mileage (and electric) cars almost regardless of crude oil prices. So thinking that low USA gasoline prices reduces demand for electric cars is actually quite myopic.
Third, do you really think Oil is a commodity with incredible political impact. Pricing is based on much more than “supply and demand.” At any given time Aramco, or its lead partners such as Saudi Arabia and the UAE, can decide to simply pump more, or less, oil. Today they are happy to pump a lot of oil because it hurts countries with which they have a bone to pick – such as Russia (now almost out of bank reserves due to low oil prices) and Iran. And by helping USA consumers it reduces domestic interest in things like the Keystone Pipeline which could lessen long-term reliance on Aramco oil. And it hobbles investing in risky development projects like the arctic ocean.
Tomorrow these countries could decide to pump less, as they did in the mid-1970s, driving up prices and almost killing the U.S. economy.
Oil prices have a long history of instability. Like most commodities. That’s why a state economy like Texas, which produces a lot of oil, could boom the last 4 years, while manufacturing states (like Wisconsin and Illinois) suffered. With oil back under $50/barrel drilling rigs will go into mothballs, oil leases will go undeveloped, fracking projects will be stalled and the economy of oil producing states will suffer. Like happened in the mid-1980s when Saudi Arabia once again began flooding the market with oil and exploration and production companies across Texas went out of business.
Don’t be overly simplistic when projecting future scenarios
Most people are smart enough to realize you look at all aspects of owning a new car when buying one. There are a lot of reasons to buy Tesla automobiles. Not only does Tesla make good cars, but the company is changing the sales model by eliminating those undesirable auto dealers most consumers hate. And Tesla is building charging stations in many locations to make refills painless. And consumers don’t have to change the oil, or do quite a bit of other maintenance. And they do less damage to the environment. The purchase decision is not simply an economic analysis of fuel prices.
It is always risky to oversimplify consumer behavior. Decisions are rarely based entirely on price. And, as Apple AAPL +1.1% has shown with sales if iOS devices and Macs, people often buy more expensive products when they are offered a better experience and brand. More important is understanding the impact of any specific market variable in relation to long term trends. Looked at this way, Tesla remains smack dab on top of 3 critical long-term trends - (1) the move to quality products which work really well, improve productivity and carry brand cache, (2) the move to globalization, global brands, and targeting markets where product advantages maintain advantage, and (3) recognizing that ecology and decreasing reliance on fossil fuels are long-term goals accepted and pursued by policy makers and consumers alike.
Long term investors know that when a stock is beaten down by a short-term reaction to a short-term phenomenon (such as this fast decline in oil prices) it often creates an opportunity to buy into a company with a great future potential for growth.
What he doesn't mention is that Tesla is selling utility scale models at $250 kwh for packs produced in Fremont. EM mentioned a current 20% profit margin. That means the packs cost Tesla something like $200 kwh. The cell costs and pack production costs will be at least 30% less when they get production ramped up in NV. That bodes really well, for their prospects in both energy storage and cars. That means that they can either lower their prices or increase their profit margins by at least 30% in 2016 when they start producing energy storage packs in Nevada.The economics are almost there to make it cost effective for a wide market. [Update: It might actually be cost effective in the US today. See the third cost estimate down below.] And within just a few years, it almost certainly will be cheap enough to be cost effective for a broad market. Not a complete game changer for the home market today, but a shot fired in an incredible energy storage disruption.
At the utility scale, it may actually be even more disruptive. Tesla appears to be selling the utility scale models at $250 / kwh. Multiple utility studies suggest that such a price should replace natural gas peakers and drive gigantic grid-level deployments.
If you want to understand the overall energy storage technology race and market, read this: Why Energy Storage is About to Get Big, and Cheap.
Beyond that, is the battery cheap enough to make storing your self-generated solar power worthwhile for hundreds of thousands or millions of homes across the US and overseas? If not, how close is it?
As I’ve written before, the number that really matters is the round-trip cost of electricity over the lifetime of the battery. How much do you pay for every kilowatt-hour put into the battery and then retrieved later? We can talk about this as LCOE (levelized cost of electricity).
Here are two (make that three) ways we can calculate the LCOE of the Tesla Powerwall.
1. Rule of Thumb: 1,000 Full Charge Cycles. This gives an LCOE of $0.35 / kwh. That compares to average grid electricity prices in the US of 12 cents / kwh, and peak California prices on a time-of-use plan of around 28 cents / kwh.
2. 10 Year Warranty + Daily Shallow Cycles. Tesla is offering a ten-year warranty on these batteries, which is bold. Yet evidence shows that Tesla automotive batteries are doing quite well, not losing capacity fast. Why? It’s because they’re rarely fully discharged. Most people drive well under half of the range of the battery per day. So let’s assume 10 years of daily use (3650 days, if we ignore leap days) and 50% depth of discharge on each day. Using the 7kwh battery, that gives us a price of around 23-24 cents / kwh.
3. UPDATE: 10 Years of 7kwh Cycles. Cheap Enough. I’m adding this after some twitter conversations with Robert Fransman. Let’s assume for a moment that the Tesla Battery actually can be used for full 7kwh charging and discharging every day during its 10 year warranty. That would make the cost around 12 cents / kwh.
[I had initially assumed that daily 7kwh cycling was impossible, despite the specs Tesla provided. No Li-ion battery today can handle 3650 discharges to 100% depth. But Robert Fransman has done the math on the weight of the battery vs. Tesla car batteries. He suggests that the 7kwh battery is actually a 12kwh battery under the hood. Discharging a battery to 60% 3650 times is still a stretch, but much closer to plausible. Tesla may here be just assuming they'll have to replace some on warranty before 10 years, but given that the price of batteries is plunging, future replacement is far less expensive. Smart.]
All three of these prices are the price to installers. It’s not counting the installer’s profit margin or their cost of labor or any equipment needed to connect it to the house. So realistically the costs will be higher. If we add 25% of so, the bottom price, the one backed by the warranty, is around 15 cents per kwh.
Tentative Conclusion: The battery is right on the verge of being cost effective to buy across most of the US for day/night arbitrage. And it’s even more valuable if outages come at a high economic cost.
In Sunny Countries: Bigger Impact, Drives Solar
Outside the continental US, the battery’s economics look far better, though. 43 US states currently have Net Metering laws that compensate solar homes for excess power created during the day. A good Net Metering plan is simply a better deal for most solar-equipped homes than buying a battery.
In some of the sunniest places in the world, though, retail electricity prices from the grid are substantially higher than the US, plenty of sunlight is available, and Net Metering either doesn’t exist or is being severely curtailed.
Here’s a map from BNEF of sunshine vs grid electricity rates.....
Elon Musk (Chairman and CEO)
Let me just talk more broadly about the response to the Powerwall and Powerpack because I think that's really the questions you should be asking. The response has been overwhelming, like, crazy.
In the course of less than a week, we've had 38,000 reservations for the Powerwall, 2500 reservations for the Powerpack. The Powerpack, it should be noted, typically this is brought by utilities or large industrial companies, for heavy industrial work.
Typically, Powerpack, it's at least 10 Powerpacks per installation. So if there's 2500 reservations, actually 25,000 Powerpacks.
Powerwall also is, we suspect, is probably an average of the number of Powerpacks is probably 1.5 to 2 per installation. 38.000 reservation is more like 50,000 or 60,000 actual Powerwalls.
So there is no way that we could possibly satisfy this demand this year. We are basically sold out through the middle of next year in the first week. It was just crazy.
We had 2500 requests from companies that want to distribute and install Powerwall and Powerpack. We can't even respond to them. We have to, like, triage our response to those who want to be a distributor.
It's crazy off the hook. It seems to have gone super-viral.
For the specific case of Solar City, what they are referring to is that there is two versions of the Powerwall. There's the daily cycling version and there is the power back-up version.
One is energy optimized in one is daily cycling optimized. For the daily cycling optimized one, the economics, it is true in the US, with rare exceptions, are more expensive then utility.
If somebody wants to do a daily cycling, basics, they go off-grid. It's going to be more expensive than being on-grid.
This doesn't mean that people won't buy it, because There are people who want to go off grid on principle or they just want to be independent. That's what the Solar City comment is about.
Jeffrey Brian Straubel (CTO):
It might also be worth noting that Solar City doesn't yet operate in Europe. And the main target application for the daily cycling battery pack was actually -- were several markets not in the continental US, and particularly Germany and Australia are very strong markets where it does make economic sense today, based on the feed-in tariff and the electricity rate structures in those countries. Solar City's comments, I think, need to be put in the regional context.
Elon Musk (Chairman and CEO):
Solar City's only operating in the US. The Powerwall -- it will be available from Solar City and from other installers in both configurations. But if someone is doing a daily cycling application, they are doing it because they specifically want grid independence. There's some number of people who will want to do that, and that's good.
It's also important to appreciate for, even to say the power backup systems so that you always have power in the event of power outage. Let's say that appeals to 2% of households in the US, or 1%. That is 1 million households. Like, is there 1 person in 100 care about having battery backup in the event of utility outage? Probably.
We couldn't even support a small fraction of that Right now. So its kind of a moot point.
Andrea James (Analyst - Dougherty and Company):
Just to build on the Tesla energy conversation. What are your revenue and gross margin targets on that business? How do we look at the 2015 ramp?
Elon Musk (Chairman and CEO):
The gross margin revenue obviously is going to change with time. When it's low volume, made in three months, it will be relatively low margin.
Once we get to Gigafactory up and running and high-volume, get the economies of scale working, this is just a guess right now, but maybe it's somewhere around 20%. This is not like -- it's like we don't have enough information to say exactly what that would be, but probably 20% is a reasonable guess.
In terms of volume, we are going to try to scale it as fast as we can -- as the slowest manufacturing constraint. It's easier to say what's the long term without saying exactly which quarter is it going to be in? I don't know.
I think we'll see demand for stationary storage, as measured in megawatt hours or gigawatt hours, to be approximately double that of the car. That's our best guess for long-term demand. Yes.
Tesla will survive, as will a lot of other companies. As for the big crash you may be worried about, remember Rule # 1.lester12483 wrote:I love Tesla and what they are doing. But buying their stock right now at such high valuation is dangerous. Considering the stock market is only going up due to stock buybacks and not legitimate economic growth.
http://www.zerohedge.com/news/2015-05-1 ... k-buybacks
"In addition to building its own engines, rocket bodies, and capsules, SpaceX designs its own motherboards and circuits, sensors to detect vibrations, flight computers, and solar panels," Vance wrote. "The cost savings for a homemade radio are dramatic, dropping from between $50,000 to $100,000 for the industrial-grade equipment used by aerospace companies to $5,000 for SpaceX's unit."
We've discussed before what the vision is, short term: A reusable rocket that can fly over and over and over again, one that could quite literally make it impossible for anyone--including massive government contractors with deep pockets--to compete with Musk until they follow suit.
But, in the meantime, SpaceX has been going to crazy-seeming lengths to cut the costs of its Falcon 9 rocket, reusable or not.
"There are dozens if not hundreds of places where SpaceX has secured such savings," Vance wrote, referring to the $5,000 radio, which, like many SpaceX parts, was made out of consumer electronics-level equipment, not "space grade" stuff.
But how do you know if a $5,000 radio designed in-house is going to work against the tried-and-true legacy parts? How do you build the entire rocket's avionics computer system for just over $10,000, when standard rocket companies use systems that cost in the neighborhood of $10 million?
Well, you test both of them on the same flight. While we've been watching SpaceX try to land a rocket on a boat, Vance notes that the company has been performing dozens of experiments in secret. It'll load a rocket with both the legacy part and the one it's designed in house, and test them both without making a big deal out of it.
"Engineers then compare the performance characteristics of the devices. Once a SpaceX design equals or outperforms the commercial products, it becomes the de facto hardware," Vance wrote.
Musk did this type of thing with Tesla too, of course, but with SpaceX, he not only trusted people who had no hardware designing experience to make things that would fly on a real-life rocket, he demanded that they make something best-in-class for absurdly low prices on absurdly short deadlines.
Vance relays a story from 2004, in which Musk asked Steve Davis, now SpaceX's director of advanced projects, to source an actuator that would help the second stage of the Falcon 1 rocket steer itself.
"Naturally, [Davis] went out to find some suppliers who could make an electro-mechanical actuator for him. He got a quote back for $120,000," Vance wrote. "'Elon laughed,' Davis said. 'He said, 'That part is no more complicated than a garage door opener. Your budget is $5,000. Go make it work.''"
Davis spent nine months designing and building the thing for a grand total of $3,900.
Repeat that process hundreds of times, and you've got a rocket that's cheaper and, seemingly, just as reliable as anything that's ever been made.
Well, since you like repeating this stuff on various threads, I will repeat my reply also...MitchJi wrote: "Naturally, [Davis] went out to find some suppliers who could make an electro-mechanical actuator for him. He got a quote back for $120,000," Vance wrote. "'Elon laughed,' Davis said. 'He said, 'That part is no more complicated than a garage door opener. Your budget is $5,000. Go make it work.''"
Davis spent nine months designing and building the thing for a grand total of $3,900.
No it is not.dnmun wrote:the $3900 is what it will cost tesla to build it themselves.
http://www.businessfinancenews.com/2252 ... n-stanley/lester12483 wrote:None of which are profitable mind you.
Look, I love Tesla, but their stock is in big time bubble territory.
....The research firm stated: “We argue Tesla cannot be valued on near-term multiple metrics like traditional auto companies given that we expect Tesla to multiply revenues by more than 3x from 2014 to 2018, 6x by 2020, and around 18x by 2029.”
Majority of the Street analysts are bullish on Tesla stock. 12 out of 23 analysts providing coverage on the stock rate it Buy, seven recommend Hold, and the remaining suggest a Sell rating. The 12-month consensus target price (TP) is $268.5, representing an 8.7% potential upside based on current stock price...
MitchJi wrote: "Naturally, [Davis] went out to find some suppliers who could make an electro-mechanical actuator for him. He got a quote back for $120,000," Vance wrote. "'Elon laughed,' Davis said. 'He said, 'That part is no more complicated than a garage door opener. Your budget is $5,000. Go make it work.''"
Davis spent nine months designing and building the thing for a grand total of $3,900.
This is extremely simple:Hillhater wrote: Well, since you like repeating this stuff on various threads, I will repeat my reply also...
How did Davis conclude that final cost $3900 ?
Does it include his own time, that of the designers, materials procurement guy, machinists, overheads etc etc..?
And what about those test flights they claim to employ to prove their in house parts ?...where is the costs for those ?
That part probably actually consumes several hundred thousand dollars to produce and be flight ready.
.Musk is cleaver, but even he cannot avoid the reality of correct cost accounting.
Elon Musk’s SpaceX Is About to Tap a Huge New Market
The U.S. Air Force certified SpaceX to launch satellites for the Pentagon, it was announced Tuesday.
It'll take on Boeing and Lockheed
This is significant news for Elon Musk’s 13-year-old aerospace company, which has long been involved in a court case over certification from the Pentagon. As the Washington Post reports, obtaining Pentagon certification means SpaceX can compete with United Launch Alliance, a joint space venture formed in 2006 by Lockheed Martin and Boeing Defense, Space & Security.
ULA provides launch services to government entities like NASA and the Department of Defense—customers SpaceX also wants to service.
The certification process began when SpaceX sued the U.S. Air Force in April of last year, arguing its bidding process for awarding contracts to launch Pentagon satellites had turned ULA into an unfair monopoly. (In 2012, the Air Force awarded 36 launches to ULA, which was the only contractor certified to launch under the EELV, or Evolved Expendable Launch Vehicle program.) Musk framed the lawsuit as a broader effort to get future launches reopened to widespread competition.
The suit was a rare and risky example of a company suing the organization that would be its biggest customer if it won the suit. In January of this year, SpaceX dropped the lawsuit and the certification process began.
Now Musk has earned what he sought—the right to compete. It’s a big win for Musk and SpaceX, which last year won a contract to fly astronauts to NASA’s International Space Station. In a statement about earning Pentagon certification, Musk said it is an “important step.”
He’s not the only one that thinks so. The news is getting big reactions from major names in the defense industry. Republican Senator John McCain, for instance, said in a statement: “The certification of SpaceX as a provider for defense space launch contracts is a win for competition . . . I am hopeful that this and other new competition will help to bring down launch costs and end our reliance on Russian rocket engines that subsidizes Vladimir Putin and his cronies.”
The external suppliers, did their F and D, and made their performance/reliability guarantee, on the basis of expensive ground testing (temperature, zero gravity, acceleration etc.). When they had a completed product they were probably the only supplier and their only customer was the government, so they could get away with charging whatever they wanted.Punx0r wrote:
I imagine the price quoted from the external supplier was for a one-off with some sort of performance/reliability guarantee. I'm sure it'd be different if the quote had been for 10,000 identical parts.
The example above sounds like a DIYer spending a weekend making a TV wall bracket rather than buying one for £20. Satisfying? Possibly. Basis for a business?
Tesla Stock Hits 2015 High On 1st Utility-Scale Deal
Tesla Motors (NASDAQ:TSLA) has inked a couple key new deals for its batteries to be used in big power projects, after debuting its Tesla Energy business unit in April and showing off Tesla Powerwall batteries for the home. That sent Tesla stock to a 2015 high.
Ireland-based wind energy and energy-storage company Gaelectric Group said Thursday that it will deploy Tesla Energy's first battery power utility-scale project there next year — a one-megawatt demonstration project — while the companies collaborate to develop a pipeline of battery projects to build new transmission system services that are needed to help integrate renewables such as solar power and wind power with the electric grid...
Gaelectric said that it and Tesla are focused on "exploring the development and demonstration of innovative business models for energy storage within transmission systems" and that Ireland "has many compelling features" for the commercialization of the Tesla Energy product range, "given its scale and ambitious renewable energy targets and favourable regulatory framework."
Gaelectric said that investigation of other European markets will be part of the collaboration.
On Wednesday, Georgia-based public utility Southern Co. (NYSE:SO), which serves more than 4.5 million customers in the U.S. Southeast, announced at its annual stockholders meeting that it has reached an agreement with Tesla to test commercial-scale battery storage....
Well, that is just speculation also.....MitchJi wrote:Hi,
The external suppliers, did their F and D, and made their performance/reliability guarantee, on the basis of expensive ground testing (temperature, zero gravity, acceleration etc.). When they had a completed product they were probably the only supplier and their only customer was the government, so they could get away with charging whatever they wanted.
...which suggests the supplier was asked to "make an actuator" for Davis...(Possibly a unique specification),...Not pick a stock one off the shelf !MitchJi wrote: "Naturally, [Davis] went out to find some suppliers who could make an electro-mechanical actuator for him. He got a quote back for $120,000," ......