Musk endeavours

[GrahamPlatt]

https://www.theguardian.com/business/20 ... ubble-risk


Grantham cited shares in the electric car maker as an example of the market bubble. “As a model 3 owner, my personal favourite Tesla tidbit is that its market capitalisation, now over $600bn, amounts to over $1.25m per car sold each year versus $9,000 per car for General Motors. What has 1929 got to equal that?”

[odysseus2000]

BobbyD
Take any company's top selling product out of action and it's going to be unpleasant, but lets the game for everyone.

Compare what happens if the Tiguan stops selling overnight to what happens if the model 3 stops selling overnight.

This is a vital point.

The Tiguan is an ICE vehicle, and we know that these are being phased out, so no matter what VW does, at some point no more ICE. How does one get to that point, via a smooth decay or by short time scale sales declines of some model or models.

This could happen to a pure BEV player like Tesla, but we know that BEV are the future and so it is much less likely to happen to Tesla whereas some decline in ICE is now certain. Moreover, Tesla also have the option to move any unused batteries in to their Powerwall products, something not currently available to VW as far as I know.

2030 looks like a cut off point for new ICE sales in many nations and at some point buyers will begin to stop looking at ICE and go for BEV, Howard says he is now thinking of a BEV as his next car and there will be others with similar views. Currently VW are no where near ready to lose their ICE sales. They do not have sufficient batteries, factories, money or time to suddenly stop ICE and begin BEV. This is the pincer movement I have described and it is murderous for legacy who did not begin to prepare for BEV early enough and are still dragging their feet.

Regards,

[BobbyD]

BobbyD
Take any company's top selling product out of action and it's going to be unpleasant, but lets the game for everyone.

Compare what happens if the Tiguan stops selling overnight to what happens if the model 3 stops selling overnight.

This is a vital point.

The Tiguan is an ICE vehicle, and we know that these are being phased out, so no matter what VW does, at some point no more ICE. How does one get to that point, via a smooth decay or by short time scale sales declines of some model or models.

This could happen to a pure BEV player like Tesla, but we know that BEV are the future and so it is much less likely to happen to Tesla whereas some decline in ICE is now certain. Moreover, Tesla also have the option to move any unused batteries in to their Powerwall products, something not currently available to VW as far as I know.

2030 looks like a cut off point for new ICE sales in many nations and at some point buyers will begin to stop looking at ICE and go for BEV, Howard says he is now thinking of a BEV as his next car and there will be others with similar views. Currently VW are no where near ready to lose their ICE sales. They do not have sufficient batteries, factories, money or time to suddenly stop ICE and begin BEV. This is the pincer movement I have described and it is murderous for legacy who did not begin to prepare for BEV early enough and are still dragging their feet.

Regards,

The Tiguan is built in Wolfsburg, which has already been confirmed for electrification.

It's almost like VW understand their business better than you do, and aren't just making it up as they go along.

[dspp]

I really don't care how crude the calcs are on VAG, provided they have got the key numbers in. But nobody has them. But I (and others) can - and do - run those numbers on TSLA. So show me the VAG numbers, otherwise anybody buying VAG is just a sentiment-trader.

Now you are being hysterical.

This is no longer constructive.

Have fun.

You are welcome - but this is, as we both know - crucial. We probably both hear & read the same rumours that VAG make a gross loss on all MEBs. It would be very informative to know otherwise.

regards, dspp

[odysseus2000]

https://www.theguardian.com/business/2021/jan/06/ftse-100-stock-market-bubble-risk


Grantham cited shares in the electric car maker as an example of the market bubble. “As a model 3 owner, my personal favourite Tesla tidbit is that its market capitalisation, now over $600bn, amounts to over $1.25m per car sold each year versus $9,000 per car for General Motors. What has 1929 got to equal that?”

Great article!

It is interesting in that at one moment Graham is saying this is bubble territory while noting that he is part of the cult of Tesla by owning a model 3. In 10 years GM will not be able to get anything for its current range of ICE autos whereas Tesla may be producing several million BEV that are selling. If Tesla are selling 10 million cars per year by then, compared to the 0.5 million now, then at the current cap of $600 bn that would equate to $60,000 per car, along with income from storage, roof solar, robotics and potential robotic taxi along with the repeat business of software sales.

If we do the same calculation for Apple, we have a market cap of 2.15 Trillion and annual iPhone sales of 200 millions

2.15e12/200e6 =$10k per iPhone.

The average cost of an iPhone 12 is $800, so the sales per year are 800x200 million = $160 billion

The average cost of a Tesla is circa $50k, so the current sales/year are 0.5million x 50e3 = $25 billion.

If Tesla exceeds 6 million cars per year its sales will be equal to those of Apple currently.

Apple trades on a p/e of 38, Tesla trades on a p/e of 1497 and neither is particularly meaningful in my mind.

If Biden is to be blessed with both the House and the Senate there is very little that will stop him from adding fuel to the fire that is already raging in wall street.

Graham is right though in his appraisal as to how difficult the market is for investors and the potential for a crash.

Regards,

[odysseus2000]

BobbyD
The Tiguan is built in Wolfsburg, which has already been confirmed for electrification.

It's almost like VW understand their business better than you do, and aren't just making it up as they go along.

If so why did VW drag its feet for so long on BEV and even ridicule Tesla has not being a serious threat to their business. History suggests that VW are making it up as they go along.

Regards,

[Howard]

BobbyD
The Tiguan is built in Wolfsburg, which has already been confirmed for electrification.

It's almost like VW understand their business better than you do, and aren't just making it up as they go along.

If so why did VW drag its feet for so long on BEV and even ridicule Tesla has not being a serious threat to their business. History suggests that VW are making it up as they go along.

Regards,

Ody

I think you may be behind the times.

Germany alone has a bigger BEV market than the USA.

VW are the BEV market leader in Germany. Tesla's market share has dropped severely and it is being challenged by several other brands and I don't think it is now even in second place. We'll see the final sales figures soon.

And taking the European market as a whole, Tesla has let VW take over BEV market leadership. It's already happened.

China next for Tesla market share drop?

regards

Howard

[odysseus2000]

BobbyD
The Tiguan is built in Wolfsburg, which has already been confirmed for electrification.

It's almost like VW understand their business better than you do, and aren't just making it up as they go along.

If so why did VW drag its feet for so long on BEV and even ridicule Tesla has not being a serious threat to their business. History suggests that VW are making it up as they go along.

Regards,

Ody

I think you may be behind the times.

Germany alone has a bigger BEV market than the USA.

VW are the BEV market leader in Germany. Tesla's market share has dropped severely and it is being challenged by several other brands and I don't think it is now even in second place. We'll see the final sales figures soon.

And taking the European market as a whole, Tesla has let VW take over BEV market leadership. It's already happened.

China next for Tesla market share drop?

regards

Howard

The number of BEV sold is far from an easy number to get.

According to this web site (https://www.statista.com/topics/4421/th ... -industry/) Tesla had sold 190 K BEV by 19-Aug in the US

According to this web site (https://www.cleanenergywire.org/news/ge ... first-time) Germany reached 20k BEV for the first time in Oct or perhaps Sept of 2020.

How many BEV has VW sold?

Fleet news (https://www.fleetnews.co.uk/news/manufa ... in-october) says there were 71.8K pure BEV sold in October.

The more I try to find out the number of BEV that VW have sold the more confused I get.

Is Germany leading the US in BEV sales, or is it for one month that they are, or...?

When things are made as confusing as this I quickly realise that VW don't want to say how many BEV they have sold, nor what their margins are. This is fair enough as they like to talk about how many BEV they will make in x years. It all looks like marketing to me.

The only number that seems reliable is that Tesla have sold nearly 500k BEV this year.

However, these folk (https://insideevs.com/news/452338/tesla ... em-europe/) say they have definitive figures for Europe and argue that during the first 9 months of 2020, VW sold 87k, Renault sold 83k and Tesla sold 63k.

What happened during the last 3 months we might find out shortly, we do know that if these figures are right, Tesla sold 500-63 = (437k - European sales in last 3 months) somewhere other than Europe.

If these numbers are right then we need to know at what margins and we need to correct for the model ranges that each business offers. E.g. Tesla currently do not have a small car and so ideally we should compare the 63k cars sold to market segments of similar sized cars, not the whole BEV market. There is no way that someone who wants a shopping trolley will consider a Tesla. Additionally if a fleet buyer is offered a Tesla sized car at a low or negative margin just to get a sale and get the politicians off their back for CAFE (Corporate Average Fuel Economy) standards or co2 reduction or what ever then it ceases to be meaningful. As far as I can understand from the numbers VAG are predominantly selling to Fleets who are motivated by price more than e.g. private buyers.

Looking at overall numbers can be instructive, but one has to probe more deeply to figure out what is going on.

Regards,

[Howard]

We'll see the final figures for BEV sales in Germany soon.

But earlier this year, the German BEV market overtook California in size. Both articles below come from the same source I believe.

https://www.schmidtmatthias.de/post/exc ... m-landmark

"According to the latest October report published by Schmidt Automotive Research, the German pure electric car market (BEV) backed by recently extended purchase and fiscal subsidies, achieved 122 thousand new BEV registrations in the opening 10-months, "

https://www.schmidtmatthias.de/post/the ... t-research

Germany’s Electric-Car Market Is Poised to Overtake California’s

https://www.bloomberg.com/news/articles ... lifornia-s

"Electric-vehicle sales in Germany will surpass California’s for the first time this year, with a range of government incentives propelling Europe’s biggest auto market ahead of Tesla Inc.’s home state."

These reports were based on Jan - Oct sales figures. In November around 30,000 more BEVs were sold in Germany.

https://eu-evs.com/bestSellers/DE/Month/2020/11

In December BEV sales in Germany are said to be higher. There are estimates on the web, but we are waiting for the exact December sales figures to be published in the next few days.

regards

Howard

[odysseus2000]

Germany has about 2x the population of California so it would not be too surprising if the BEV market in Germany was 2x that of California.

But what does that prove?

Regards,

[Howard]

Germany has about 2x the population of California so it would not be too surprising if the BEV market in Germany was 2x that of California.

But what does that prove?

Regards,

I'm not trying to prove anything. I'm interested in current trends and facts.

I'm suggesting that it is significant that Tesla is becoming an also-ran brand in Germany and Europe as VW's BEV market share is rapidly increasing.

This trend has occurred through 2020, but VW brands have really begun to dominate the key BEV markets of Europe in Q4. Tesla's sales volumes have reduced across Europe and their market share has dropped.

It is also significant from an investor's viewpoint that, whilst Tesla is growing its sales in China, its market share is dropping there as well. The Chinese market is growing rapidly and the GM mini is ramping up sales dramatically quicker than Tesla. Other Chinese manufacturers are also growing their sales faster than Tesla. VW is beginning to tackle the BEV market there too. If they are as successful as they have been in Europe, they will become the leaders in the secular trend you believe is occurring.

If we accept that the three major BEV markets are Europe, China and the USA, it will be a problem for Tesla if they are relegated to being a small player in two of the three.

Will VW have the financial clout to dominate two of the three BEV markets? We don't know yet, but they have succeeded in dominating one already and their trajectory is worth watching.

regards

Howard

[odysseus2000]

Will VW have the financial clout to dominate two of the three BEV markets? We don't know yet, but they have succeeded in dominating one already and their trajectory is worth watching.

regards

Howard

This assertion maybe true in terms of overall BEV, but that is far too crude a measure.

One needs to compare market segments that are being addressed by all the BEV players and also factor in what is being done in terms of promotion. If e.g. VW are selling BEV at -ve margins just to get market share and convince folk that they are dominant, there will have to be a correction and rising of their prices otherwise they will murder their existing ICE sales which they still need.

How is VW doing in vehicles that are similar sized and specced to Model S, X, 3 and Y? What are the relative margins between Tesla and VW?

Regards,

[dspp]

Will VW have the financial clout to dominate two of the three BEV markets? We don't know yet, but they have succeeded in dominating one already and their trajectory is worth watching.

regards

Howard

This assertion maybe true in terms of overall BEV, but that is far too crude a measure.

One needs to compare market segments that are being addressed by all the BEV players and also factor in what is being done in terms of promotion. If e.g. VW are selling BEV at -ve margins just to get market share and convince folk that they are dominant, there will have to be a correction and rising of their prices otherwise they will murder their existing ICE sales which they still need.

How is VW doing in vehicles that are similar sized and specced to Model S, X, 3 and Y? What are the relative margins between Tesla and VW?

Regards,

Android has ~80% of the smartphone market, but Apple has ~80% of the smartphone profits.

regards, dspp

[Howard]

Will VW have the financial clout to dominate two of the three BEV markets? We don't know yet, but they have succeeded in dominating one already and their trajectory is worth watching.

regards

Howard

This assertion maybe true in terms of overall BEV, but that is far too crude a measure.

One needs to compare market segments that are being addressed by all the BEV players and also factor in what is being done in terms of promotion. If e.g. VW are selling BEV at -ve margins just to get market share and convince folk that they are dominant, there will have to be a correction and rising of their prices otherwise they will murder their existing ICE sales which they still need.

How is VW doing in vehicles that are similar sized and specced to Model S, X, 3 and Y? What are the relative margins between Tesla and VW?

Regards,

Android has ~80% of the smartphone market, but Apple has ~80% of the smartphone profits.

regards, dspp

I fully agree with your implication on VW's situation. We don’t know how profitable VW’s BEV models are. They are probably less profitable than VW ICE models?

However, we now also seem to agree on some more facts.

In volume terms, VW not Tesla are the dominant player in the European BEV market.

And maybe when the final Q4 share figures are out, you may be persuaded to accept that Tesla are a relatively medium-sized player in the BEV market in Europe with, currently, a diminishing market share.

Hopefully you’ll also agree that the Model S and X sales in Europe are pretty irrelevant as they are so small and declining. And Tesla’s short term success depends on sales of the Model 3 and the Model Y?

We will have a chance to see how profitable Tesla’s car manufacturing is in a week or two. Analysts are suggesting they will show a relatively small profit given their market cap.

regards

Howard

[odysseus2000]

And maybe when the final Q4 share figures are out, you may be persuaded to accept that Tesla are a relatively medium-sized player in the BEV market in Europe with, currently, a diminishing market share.

Hopefully you’ll also agree that the Model S and X sales in Europe are pretty irrelevant as they are so small and declining. And Tesla’s short term success depends on sales of the Model 3 and the Model Y?

No.

Tesla are a rapidly growing BEV maker who started with nothing and have become the cars to beat.

There is currently no evidence to tell us what Tesla's market share is doing in the sectors it competes in. One can not argue that Tesla's market share is falling when competitors have cars in sectors that Tesla does not.

Until we know what margins VW are selling at we have no comparisons either.

S & X sales are not irrelevant, they are sales in small sectors of the market, but they are sales and profitable sales too.

Regards,

[dspp]

This assertion maybe true in terms of overall BEV, but that is far too crude a measure.

One needs to compare market segments that are being addressed by all the BEV players and also factor in what is being done in terms of promotion. If e.g. VW are selling BEV at -ve margins just to get market share and convince folk that they are dominant, there will have to be a correction and rising of their prices otherwise they will murder their existing ICE sales which they still need.

How is VW doing in vehicles that are similar sized and specced to Model S, X, 3 and Y? What are the relative margins between Tesla and VW?

Regards,

Android has ~80% of the smartphone market, but Apple has ~80% of the smartphone profits.

regards, dspp

I fully agree with your implication on VW's situation. We don’t know how profitable VW’s BEV models are. They are probably less profitable than VW ICE models?

However, we now also seem to agree on some more facts.

In volume terms, VW not Tesla are the dominant player in the European BEV market.

And maybe when the final Q4 share figures are out, you may be persuaded to accept that Tesla are but a small player in the BEV market in Europe with, currently, a diminishing market share.

Hopefully you’ll also agree that the Model S and X sales in Europe are pretty irrelevant as they are so small and declining. And Tesla’s short term success depends on sales of the Model 3 and the Model Y?

We will have a chance to see how profitable Tesla’s car manufacturing is in a week or two. Analysts are suggesting they will show a relatively small profit given their market cap.

regards

Howard

Howard,

From the point of view of a TSLA shareholder (and prospective VAG shareholder, or other OEM, if I could get the facts to do the analysis) :

- I'm not terribly fussed about any one manufacturer's temporary market position in any one country or continent, provided they do not thereby gain a blocking position that would be to (my shareholding's) longer term detriment. At the moment I do not see any sign of any Tesla competitor gaining long term advantage over Tesla in that way, and so whilst the gossip is interesting, it is at present just gossip;
- I consider skin-level badge-branding exercises practically irrelevant, so for example the release of the MEB in Skoda + Seat + VW + Audi + etc or Renault + Nissan or etc does not to my mind give those players a stronger position. If anything it weakens them as they are having to manage the additional complexity for relatively little benefit. So to my mind one platform per segment, with two or three model types on that platform, is sufficient for this stage of the adoption process (which is the route TSLA are taking, and I don't have a problem with it);
- I'm not terribly fussed (at this stage) about numbers of vehicles, especially where they are of micro-car size with very small battery packs. Much more interesting to me is a balanced view of numbers of vehicles + GWh + $revenue as an aggregate indication of overall market volume position;
- (yes Tesla will in time need to release a model 2, and perhaps one day a model 1, but that day is not now and this is not a problem in my opinion at this stage);
- I think that PHEV are somewhat, but not entirely, a distraction. Therefore I monitor them, but do not give them anywhere near the same weight as full fat BEV in carrying out my own market surveillance;
- I do consider %GM to be very important, and I need to know it at the overall BEV (or PHEV) level in order to form a view as to whether any given company is able to grow profitably or not;
- And likewise I would need to be able to split out overheads costs in much the same way if I were to be able to make a sensible appreciation of the consequences of ICE decline in hampering legacy firms at shareholder level;
- Factory additions to the extent that I can ascribe globally significant capacity to them that are actually in production at that capacity (not some future nameplate capacity, except for future forecasting) are important as contributing to verification/validation of oa global numbers;
- And of everything the most important single thing is access to competitively priced batteries at the requisite volumes, and insight into that manufacturing capacity is crucial.

It follows from the above that I disagree with some assertions that I see (from you or others); and other assertions I may or may not disagree with, but do consider to be largely or entirely irrelevant.

What I do find important is what I have set out in my post viewtopic.php?p=373758#p373758 . At the overall market level it gives the ytd (Oct 20) BEV and BEV+PHEV positions in an aggregate manner. And for Tesla it breaks it down further. I would like to do a similar analysis for VAG or Renault+Nissan, or etc if I were to have access to the requisite data. And if folks give me suitable nudges I will update them if further data comes to light.

(however I will tend to post my better stuff elsewhere on other public fora, given the recent changes to TLF Ts & Cs)

regards, dspp

[dspp]

- And of everything the most important single thing is access to competitively priced batteries at the requisite volumes, and insight into that manufacturing capacity is crucial.

regards, dspp

In which vein,
https://twitter.com/DKurac?s=09

"@Moneyball@DKurac
#BYD blade #battery production capacity cannot meet the current demand, so deliveries/launches of Tang #EV, D1, e9 are delayed, #China media citing unnamed source close to the OEM.
Blade battery shortage should be solved by Q2, source added."

- etc (worth scanning down, esp at Tesla Y margins ............)
"Full localization brings 42% gross margin on Model Y allowing Tesla to set its price at ¥ 260K.
Model Y margin now at 30%.
(Guosen Sec)"

Note : TSLA use all major cells suppliers except for BYD ..................

regards, dspp

[JamesMuenchen]

https://www.bloomberg.com/news/articles ... ts-dilemma


In an interview, the chief executive officer said additional cost reductions and a speedier overhaul of the German industrial giant are vital to withstand new rivals with superior financial firepower. He’s been reflecting not only on trying to keep pace with Tesla Inc. but on the risk that Apple Inc. adds another mighty competitor with almost unlimited resources to the automotive arena.

[odysseus2000]

https://www.bloomberg.com/news/articles/2021-01-06/volkswagen-ceo-delivers-wake-up-call-on-capital-markets-dilemma


In an interview, the chief executive officer said additional cost reductions and a speedier overhaul of the German industrial giant are vital to withstand new rivals with superior financial firepower. He’s been reflecting not only on trying to keep pace with Tesla Inc. but on the risk that Apple Inc. adds another mighty competitor with almost unlimited resources to the automotive arena.

Bravo Diess!

He seems to have a better grasp of VW position than most VW investors and he understands what Tesla have done probably better than most.

I am still far from convinced that VW survives, but in Deiss they have someone who will make a fight of it and that is good for Tesla. The more VW and Tesla compete the more BEV prices fall and the faster ICE fade away. I got my Volvo through its MOT yesterday, but standing anywhere near it one can smell the exhaust and it would be nice if the children of today find such smells only very rarely, better not at all.

Regards,

[Lootman]

Tesla $800 a share and Musk is now the richest man on the planet.

Maybe this EV thing isn't just a fad? Or is me finally thinking that a contrarian indicator that his bubble is about to burst?