hanermo
Titanium
- Joined
- Sep 28, 2009
- Location
- barcelona, spain
Has everyone else noticed that the largest new manufacturing company in the USA, Tesla, practically guaranteed a 10x fold expansion of their business today ?
We had several comments on this, late last year.
My view was that;
-they make good products, but had very high execution risk due to low cash reserves
-that if they made it to April, Model 2 unveil, they will likely become *the* new auto major
Tesla sold 4 B dollars of new product, (2 years) before delivery, in 30 hours.
Its a world record for any company.
These sales will likely go over 10 Billion dollars sales (300.000 paid 1000$ reservations) in less than 3 days (Trip Chowdry, est. I agree)
They have gotten, in one day, so far 150.000 => 150 M $ "free" cash.
At 150.000 $ they have already sold out everything they can make 2016, 2017, 2018, WHILE
- doubling production and sales still futher in 2016,2017, 2018
- AND essentially guaranteeing financing for it
Electric car sales go up 50-100% every year, or double approx every 18 months, worldwide, in every market they are actively sold.
Currently, sales are about 1-2% of all new cars, in active markets.
Active markets, now, USA, EU, China, some small ones (Norway is not EU, and 22% all are cars are electric or hybdrids).
At the current rate, electrics will overtake value of traditional auto companies, and kill them, in 2018.
This is due to resale value of old ICE vehicels, not because all of a suddent all new cars are electrics.
And the bond/stock market, that finances all auto companies.
Sales projections overall.
2016- 2-3 %
2017- 3-4 %
2018- 7-12 %
As Tesla demnstrated their entry level Model 3 will be faster than a high range BMW 340, approx 55.000$.
The tesla is 20.000$ cheaper, with no incentives.
Safer (battery).
Better cornering.
Cost 1/6 in fuel, for 90% of the worlds population. ie 85% less monthly cost.
A BMW340 / Subaru WRX STi costs about 800$ /month, EU, and 400$/month, fuel.(Used to have one. They are thirsty. Say 7 tanks).
A Tesla M3 costs 450€/month to buy, and 56 € in fuel (7 refills of full tank/month, or 7x8€ for 60 kWH, approx).
Electric cars = 85% cheaper to use.
The value proposition is totally on the side of electrics.
Hurray for Tesla engineering and (somewhat) luck on a risky strategy.
BYD (China) is also likely to due extremely well, and tripled sales last year, doubles this year, makes more electric cars than Tesla.
One or more of traditional auto majors will definitely die off.
Who makes it / makes it not ?
Dont have the faintest idea.
So far, it looks like all the traditional auto companies will die - no serious response so far, and time is running out for them.
They also take 4-5 years to launch a totally new vehicle, and have done nothing credible so far.
The problems for Toyota, Volkswagen, GM et al, is that if consumers start wanting electric cars, the existing investments in plants, 10-50 billion $, and people, 800-900.000 workers will have to be mostly written off.
They cannot do this politically,
dont have the $$ to do so from their balance sheet,
and the banks / wall street / bond market wont finance them if they dont pay off their current liabilities.
Their dealers dont want them to embrace electrics - and this will kill them.
The auto majors operate on razor thin margins, 3-5% net, and cannot afford wholesale layoffs/plant closures in a short period of time.
My point is both technical (electrics are proven to be better, cheaper) and financial- stock market basis.
I have no doubt any major car companies can/could technology-wise make good BEV cars re-engineering.
But unless they do so Real Soon Now - their business is over.
Just like IBM-PCs, Nokia-Apple, etc.
Last comment.
Its immaterial in business terms what US drivers (politicians, unions, dealers, workers, engineers, managers) want personally.
If say GM cannot effectively compete worldwide, where gas still costs 7-8$/gallon, their business is over (in less than one year).
The legacy costs of the current businesses cannot support making gas gusslers for the USA, and electrics for the rest of the world, 80+% of all auto sales in the world (approx 18M USA; 90-100M global, by 2020).
And its the bonds/banks/credit default insurance that tips the cart over in less than one year, rather than actual delivered cars.
If auto majors start losing sales at 5-8% per year, its over in 2-3 years to bankruptcy, unless other profits can be delivered.
So, even a 5%-7% EV (BEV) penetration swaps the market over, effectively in the blink of an eye.
That already happaened to the most profitable sales in the USA, large luxury cars.
Sales dropped 10-20% for everyone else, 2015, and Tesla increased by 50%+.
The midmarket and average sedans, avg price USA 34k$, today, will be the next step.
Tesla committed, again, to (some) delivery late 2017.
And they have learned from their past mistakes, with Roadster, Model S, Model X, timeframes, and hired 12.000 more (mostly high end) people since then.
Many people here have a lot to do with the auto industry.
Thus, some reflections may be in order.
I am not offering specific advice.
I am not against auto business at all, just noting that great changes will likely happen, fast.
The new auto manufacturers will still need stuff to be made.
Selling widgets to "marca acme " vs GM may actually be more profitable.
Commenting on a trend that is now, inevitable, on a global scale, imho.
And very, very fast (imo, ime) relative to market size.
We had several comments on this, late last year.
My view was that;
-they make good products, but had very high execution risk due to low cash reserves
-that if they made it to April, Model 2 unveil, they will likely become *the* new auto major
Tesla sold 4 B dollars of new product, (2 years) before delivery, in 30 hours.
Its a world record for any company.
These sales will likely go over 10 Billion dollars sales (300.000 paid 1000$ reservations) in less than 3 days (Trip Chowdry, est. I agree)
They have gotten, in one day, so far 150.000 => 150 M $ "free" cash.
At 150.000 $ they have already sold out everything they can make 2016, 2017, 2018, WHILE
- doubling production and sales still futher in 2016,2017, 2018
- AND essentially guaranteeing financing for it
Electric car sales go up 50-100% every year, or double approx every 18 months, worldwide, in every market they are actively sold.
Currently, sales are about 1-2% of all new cars, in active markets.
Active markets, now, USA, EU, China, some small ones (Norway is not EU, and 22% all are cars are electric or hybdrids).
At the current rate, electrics will overtake value of traditional auto companies, and kill them, in 2018.
This is due to resale value of old ICE vehicels, not because all of a suddent all new cars are electrics.
And the bond/stock market, that finances all auto companies.
Sales projections overall.
2016- 2-3 %
2017- 3-4 %
2018- 7-12 %
As Tesla demnstrated their entry level Model 3 will be faster than a high range BMW 340, approx 55.000$.
The tesla is 20.000$ cheaper, with no incentives.
Safer (battery).
Better cornering.
Cost 1/6 in fuel, for 90% of the worlds population. ie 85% less monthly cost.
A BMW340 / Subaru WRX STi costs about 800$ /month, EU, and 400$/month, fuel.(Used to have one. They are thirsty. Say 7 tanks).
A Tesla M3 costs 450€/month to buy, and 56 € in fuel (7 refills of full tank/month, or 7x8€ for 60 kWH, approx).
Electric cars = 85% cheaper to use.
The value proposition is totally on the side of electrics.
Hurray for Tesla engineering and (somewhat) luck on a risky strategy.
BYD (China) is also likely to due extremely well, and tripled sales last year, doubles this year, makes more electric cars than Tesla.
One or more of traditional auto majors will definitely die off.
Who makes it / makes it not ?
Dont have the faintest idea.
So far, it looks like all the traditional auto companies will die - no serious response so far, and time is running out for them.
They also take 4-5 years to launch a totally new vehicle, and have done nothing credible so far.
The problems for Toyota, Volkswagen, GM et al, is that if consumers start wanting electric cars, the existing investments in plants, 10-50 billion $, and people, 800-900.000 workers will have to be mostly written off.
They cannot do this politically,
dont have the $$ to do so from their balance sheet,
and the banks / wall street / bond market wont finance them if they dont pay off their current liabilities.
Their dealers dont want them to embrace electrics - and this will kill them.
The auto majors operate on razor thin margins, 3-5% net, and cannot afford wholesale layoffs/plant closures in a short period of time.
My point is both technical (electrics are proven to be better, cheaper) and financial- stock market basis.
I have no doubt any major car companies can/could technology-wise make good BEV cars re-engineering.
But unless they do so Real Soon Now - their business is over.
Just like IBM-PCs, Nokia-Apple, etc.
Last comment.
Its immaterial in business terms what US drivers (politicians, unions, dealers, workers, engineers, managers) want personally.
If say GM cannot effectively compete worldwide, where gas still costs 7-8$/gallon, their business is over (in less than one year).
The legacy costs of the current businesses cannot support making gas gusslers for the USA, and electrics for the rest of the world, 80+% of all auto sales in the world (approx 18M USA; 90-100M global, by 2020).
And its the bonds/banks/credit default insurance that tips the cart over in less than one year, rather than actual delivered cars.
If auto majors start losing sales at 5-8% per year, its over in 2-3 years to bankruptcy, unless other profits can be delivered.
So, even a 5%-7% EV (BEV) penetration swaps the market over, effectively in the blink of an eye.
That already happaened to the most profitable sales in the USA, large luxury cars.
Sales dropped 10-20% for everyone else, 2015, and Tesla increased by 50%+.
The midmarket and average sedans, avg price USA 34k$, today, will be the next step.
Tesla committed, again, to (some) delivery late 2017.
And they have learned from their past mistakes, with Roadster, Model S, Model X, timeframes, and hired 12.000 more (mostly high end) people since then.
Many people here have a lot to do with the auto industry.
Thus, some reflections may be in order.
I am not offering specific advice.
I am not against auto business at all, just noting that great changes will likely happen, fast.
The new auto manufacturers will still need stuff to be made.
Selling widgets to "marca acme " vs GM may actually be more profitable.
Commenting on a trend that is now, inevitable, on a global scale, imho.
And very, very fast (imo, ime) relative to market size.
