Tesla cars

[xelasnave]

I heard Tesla Car Company is valued at a trillion dollars ahead of all other car companies.

How can this be when it pays no dividend?

They may be developing the car of the future but they will not end up with a monopoly..I dont think Ford or Toyota will say .." oh petrol is out lets close the doors its all over" just maybe they decide to produce an electric car as well...mmm competition..and Tesla may have the jump but the F1 participants will catch up in a season.. that is what they do and further they will make a better one...even with a monopoly think of the profit needed to give a decent return on one trillion dollars..I have not worked it out but I will at just a low return...but already I know you need a lot of profit to justify one trillion.

I see Elron on social media all the time and I thought heck if a company does not pay a dividend all it has is confidence in its CEO and hope for the future..Elron certainly presents the hope of the future.

But have investors got somewhat carried away?

So what is it that I am missing.

Where is Gary he will know.

Alex

A five percent profit would be fifty billion I think .. say a billion a week..how many cars would that be?

[mura_gadi (Steve)]

careful Alex


You might find the following an interesting read, reporting for the quarterly period ended September 30, 2021.

https://www.sec.gov/Archives/edgar/d...a-20210930.htm

[xelasnave]

Thanks that is wonderful.
Alex

[gary]

Originally Posted by xelasnave

Where is Gary he will know.
Alex

Hi Alex,

I only wish I had that good a crystal ball

Market cap of a trillion and over valued? As you point out, the numbers
don't appear to add up.

But as you are aware, the stock price reflects not what a company is worth
today but what people perceive the value of the company will be in
the future.

Though I can't read the mind's of investors, my hunch is that they are
betting not on how much profit this company will be making in the
next few years but rather how much they project it might make way out
in 2030 and 2040.

Tesla themselves have given out projections of those sort of timelines.

But perhaps they don't need to. I think the investors are not just looking
inward at Tesla, they are looking outward at climate change.

My hunch is that people are betting on the sweeping changes that will
need to occur surrounding climate change will really kick in over the
next few decades.

Perhaps it is the inverse of what is happening here in Australia or more
accurately, what is not happening here in Australia.

I saw a commentary last week that included a graph that showed
business investment as a function of time here in Australia.
You would hope with near zero interest rates businesses would have
been borrowing like no tomorrow to invest. But the graph
showed business investment here had dropped to essentially
zero. The commentator's own hunch was that the lack of government
energy policy had left businesses with no certainty about investing.

[sn1987a (Barry)]

I'm all in on Tesla so here's my take.

Tesla is now so far ahead of all competition in building EVs and components, ramping up factories and R&D that they have runaway unstoppable momentum. No net debt and rivers of exponentially growing cash flowing in. The "competition" everywhere is a joke.

Legacy Auto have snookered themselves and will bleed to death as no consumer in their right mind would buy a new ICE vehicle now - they'll hang onto their old one until they can buy a Tesla.

Ford, GM, Toyota et al. are billions in debt, billions to write down in sunk cost on ICE plants that are obsolete and worthless and billions and billions needed right now to invest in EV plants in a desperate futile effort to catch up, software, batteries, R&D, supply chain ect. They're all toast.

If Elon nails Full self driving then it's all over, Tesla will eat the world. If AI with vision can drive a car in any environment then the applications are endless with humanoid manufacturing robots next.

Tesla tech will also take on global utility scale power supply everywhere

It's breathtaking and hilarious, what a ride we're in for.

[xelasnave]

Thank you gentlemen for helping me build my knowledge...I do appreciate the both of you taking your time to construct such well thought out posts.

You may like this.

https://youtube.com/shorts/qaQFPNa8ZlM?feature=share

[lazjen (Chris)]

Originally Posted by sn1987a

I'm all in on Tesla so here's my take.

Tesla is now so far ahead of all competition in building EVs and components, ramping up factories and R&D that they have runaway unstoppable momentum. No net debt and rivers of exponentially growing cash flowing in. The "competition" everywhere is a joke.

Legacy Auto have snookered themselves and will bleed to death as no consumer in their right mind would buy a new ICE vehicle now - they'll hang onto their old one until they can buy a Tesla.

There are EV competitors starting to come along (not based off legacy auto), but they are a long way behind Tesla. However a lot of them will do well because of the sheer overwhelming demand worldwide. That plus there are market segments that the Tesla doesn't handle well. But, that's good news for the consumer as eventually we'll get a lot of choice.

As for buying ICE, I think you're kinda close with the idea. I think some will transition via PHEV and others may stick with the 2nd hand market for a while. And as I said above, there's just some markets that Tesla doesn't cover right now.

The extra wrinkle to all of this though is the insane supply chain issues for all companies and industries. Wait times for things are getting ridiculous - e.g. Tesla M3s are now 6 to 9 mths wait, up from 5-7 mths from just a month ago, and that was a jump from 3-4 mths a short time before that.

[xelasnave]

There would seem no way a trillion can stand up..i was playing with numbers and get like 20 to 50 million cars needed each week....can be that be right?
Anyways I wont be getting an electric car..while folk in US put six 300 hp motors on their boat I feel no guilt driving 400 klms a month in a petrol car..besides in this weather charging would cost a fortune.
Alex

[taminga16 (Greg)]

Alex, I have a concern over the Elon Musk 'Star-link' project that is polluting our night skies, people are in wonder of the 'now affordability' of the service but fail to realise that when it is up and running Mr Musk will bump the usage costs, after all he has not become a Billionaire by giving stuff away.

[Hans Tucker (Hans)]

Originally Posted by xelasnave

There would seem no way a trillion can stand up..i was playing with numbers and get like 20 to 50 million cars needed each week....can be that be right?
Anyways I wont be getting an electric car..while folk in US put six 300 hp motors on their boat I feel no guilt driving 400 klms a month in a petrol car..besides in this weather charging would cost a fortune.
Alex

You could get a Hybrid ... best of both worlds. Toyota RAV4 Hybrid is a very popular choice. That or the Subaru Forrester Hybrid would be my next vehicle choice if I decide to replace the Honda.

[lazjen (Chris)]

Originally Posted by xelasnave

Anyways I wont be getting an electric car..while folk in US put six 300 hp motors on their boat I feel no guilt driving 400 klms a month in a petrol car..besides in this weather charging would cost a fortune.
Alex

I've done the math on the EV we're getting. Even with the crappy weather, there's still enough solar power generated at home to top up the car for our usage, which should be a lot more than 400 kms a month. So ongoing "energy costs" = very close to zero. Unless we do multi-day trips, we expect our usage to be such that we won't need to use any 3rd party chargers.

And even if we had to do non-solar charging, the costs are still way less than petrol - and that was before the recent price hikes.

So, no, certainly not a fortune compared to a similar amount of fuel costs.

[Hans Tucker (Hans)]

Originally Posted by lazjen

I've done the math on the EV we're getting. Even with the crappy weather, there's still enough solar power generated at home to top up the car for our usage, which should be a lot more than 400 kms a month. So ongoing "energy costs" = very close to zero. Unless we do multi-day trips, we expect our usage to be such that we won't need to use any 3rd party chargers.

And even if we had to do non-solar charging, the costs are still way less than petrol - and that was before the recent price hikes.

So, no, certainly not a fortune compared to a similar amount of fuel costs.

People talk about fuel but what is the through life support of an EV? What are the maintenance costs? I just read an article, whether it is true or not, about the Batteries on a Teslar 3 significantly degrading after 100,000 miles. What are the replacement cost for a new battery bank? Then there is disposal ... environmental impacts. You don't read much on this area.

[Hodur (David)]

Originally Posted by Hans Tucker

You could get a Hybrid ... best of both worlds. Toyota RAV4 Hybrid is a very popular choice. That or the Subaru Forrester Hybrid would be my next vehicle choice if I decide to replace the Honda.

Hans, hybrid is about where our tech stands. Imagine the awful range angst driving interstate. Our next car will be a Subaru hybrid. There’s enough issues to contend with I don’t need to add range to those issues.

[Peter Ward]

Originally Posted by xelasnave

.......... I feel no guilt driving 400 klms a month in a petrol car..besides in this weather charging would cost a fortune.
Alex

I have a Tesla Model 3. If I were to run it dead flat and re-charge it overnight
(at off peak rates of 14 cents per K/hr) it would cost me $11.20 to put the 80Kw the car requires to go 500km.

I also have a ICE car. It burns 8 litres of fuel to travel 100km, and to match the Tesla's range will burn 40 litres of fuel.
Fuel watch Prices in Sydney are currently around $2.25 per litre (for 95 octane), so that's $90 to travel the same 500km distance.

$11.25 Tesla vs $90.00 ICE.
and if I use a "free" 35Kw from our PV array
then
$6.30 Tesla vs $90 ICE.

So quite the contrary, it's NOT charging that costs a fortune.

Oh..and the Tesla does not need regular servicing, burn oil, require coolants, transmission oil or chew out brake pads/rotors (courtesy regenerative braking).

[xelasnave]

I am off the grid and have less than 1000 watts from my panels and of late need to run my genny because there is no Sun day in day out.

As I say to people it is not until you are into astronomy or have solar that you notice just how much cloud is around.

Even on days with total Sun I use most of the power for houshold things so there would be little power available to charge a car.

The genny runs the charger which produces 50 amp at 12 volts ( max) ... thats what I mean when I say charging would cost a fortune.

So even with many panels in this weather charging a car really would be so expensive it would be impractical.
When off grid you need a battery bank to store your power. I dont need to cost a system to know it will be probably half the price of the car or more and you still have the problem of bad weather.

Alex

[sn1987a (Barry)]

Or you could run your house from the 80kwh battery pack in the car for days after you charged it up in town at a supercharger for a few dollars

[Rainmaker (Matt)]

Tesla battery pack is about $20,000 to replace, so basically once Teslas are out of warranty they are a ticking timebomb….

If the battery is damaged (it is under the backseat) by a not warranted event like your kids spill drinks on the back seat and the water gets into the pack…. You pay to replace…. There are no repair facilities for the battery in Australia yet…. Just plug and play…..

An American owner had a stone damage the underside of his Tesla 3 right where the battery is….. cost $16500 USD to repair, not covered by warranty…

Food for thought…

[xelasnave]

Originally Posted by sn1987a

Or you could run your house from the 80kwh battery pack in the car for days after you charged it up in town at a supercharger for a few dollars

That is clever
Alex

[Peter Ward]

Originally Posted by Rainmaker

Tesla battery pack is about $20,000 to replace, so basically once Teslas are out of warranty they are a ticking timebomb….

If the battery is damaged (it is under the backseat) by a not warranted event like your kids spill drinks on the back seat and the water gets into the pack…. You pay to replace

…

Seriously? Are you employed by Chevron or Royal Dutch Shell?
There is no way "kids spilling drinks on the back seat" will cause a Model 3 battery failure. The pack is actually under the floor and is so robust that the NTSB gave the car one of the highest crash safety ratings ever.

As for the US driver that had "stone damage" actually hit a boulder at speed ruptured the pack he got off cheaply IMHO.

Battery prices are also plummeting hence I'd expect pack replacement costs will follow. But let's say it costs $10k in 8 years from now to replace a pack and give the car "as new" range. Last time I sold a seven year old and rather worn out ICE car I had dropped $40k on its original price....entire engine and gearbox rebuilds can also cost thousands.

You do the math.

[xelasnave]

My thoughts are not to if an electric car is a good idea or not but living here in a rural situation and off the grid it does not seem like a good idea.

However if I was living back in Sydney and have only a short drive to the shops it would be different..in fact I would probably go for a golf cart or just use taxis.

My ponderings were around the claim that the company is the most valuable car company in the world firstly when it is paying no dividend and how they value it at one trillion...there are two definitions of a trillion..one is a million million and the other a million million million..lets forget the second and assume whoever made the claim is thinking a "1" followed by twelve "0"...1,000,000,000,000

My thoughts are that this is the value determined by the number of shares and the price they last sold...maybe I am old fashion and things dont work like I now set out ..that is entirely possible add the unrealistic proposition that I could be wrong so I ask for the opinion of others.

A company or business or even a piece of commercial real estate is valued by "capitalisation" ..the value comes from the return on capital. All that occurs to me is a return on a trillion is extrodinarily high and when you do some simple sums you get numbers that suggest a trillion valuation is well off the mark. So what return is reasonable... Lets say only one percent...one percent of a trillion is 10,000,000,000 which can then be seen as the profit paid to shareholders...lets say each car has a profit of $100,000 that means you need to produce 100000 cars a year..doable I expect ..but if you seek a reasonable profit and investors expect say 5% the numbers take the valuation to pie in the sky....just saying is all.

It may be the best thing since sliced bread but that does not mean it becomes in effect priceless...

If you are board and have time you do this sort of thing but I suspect many investors have not done any sums.

AND overvaluation is very dangerous because if you get a run panic sets in and the company disappears.

I dont know what market slice they expect or the profit per car ...anyways I am going off to do something productive.


Alex