TSLA: What Changed?

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joebruin77
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Re: TSLA: What Changed?

Post by joebruin77 »

wrongfunds wrote: Thu Feb 04, 2021 7:36 pm By the way, when a Model 3 Performance owner says something about saving money (or operating costs) on Tesla vs say Civic, you should just nod and wink :-) Now I give you that some places in USA do have very cheap electricity rates where it might be cheaper to operate than a gas powered car but the real life difference is quite a bit less than advertised. Jason of youtube fame (EngineeringExplained) drove his M3P 2500 miles recently. Total electricity costs was less than an equivalent gas car but not by a lot, at the most 25% savings if I recall.
I don't want you to hurt yourself winking and nodding :happy

I agree with you it is important to look at specific numbers for each person, the specific cost of electricity, and the specific cost of gasonline. Here is a helpful spreadsheet from an article published on Clean Technica:

https://docs.google.com/spreadsheets/d/ ... 1712918261

You can use this spreadsheet to plug in your own numbers. Yes, the local cost of electricity is important. So is the cost of gasoline. Here in LA, the average cost of regular unleaded per gallon is $3.27 a gallon. I used to drive a car that required premium, which today in LA is averaging $3.62 a gallon. The higher the price per gallon, the more money owning a Tesla will save you.

My original point, which may have gotten lost in all the numbers, is to show that the TOTAL cost over several years for owning and driving a Tesla is quite a bit less than the TOTAL cost of owning some ICE vehicles, despite the higher upfront sales cost of the Tesla.

BTW, if I recall correctly, Jason of Engineering Explained lives somewhere either in the midwest or northwest where gas prices are a lot lower.
stoptothink
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Re: TSLA: What Changed?

Post by stoptothink »

joebruin77 wrote: Thu Feb 04, 2021 8:14 pm
My original point, which may have gotten lost in all the numbers, is to show that the TOTAL cost over several years for owning and driving a Tesla CAN BE a bit less than the TOTAL cost of owning some ICE vehicles, despite the higher upfront sales cost of the Tesla.
There, I fixed it for you. A lot of assumptions in that original generalized statement. It might be the case in your situation, it unequivocally is not in mine (I've done the math, because again, I'll probably be buying one in the future).
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hagridshut
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Re: TSLA: What Changed?

Post by hagridshut »

stoptothink wrote: Thu Feb 04, 2021 8:01 pm
harikaried wrote: Thu Feb 04, 2021 7:41 pm
stoptothink wrote: Thu Feb 04, 2021 7:06 pmthe delta in cost between gas and electric varies wildly throughout the country. Not to mention a model 3 ... costs more to insure
Just some anecdata, the 7 seat Model Y we purchased for $64k was $800 to insure a year while the 7 year old vehicle it replaced originally cost $32k and $600 insurance today. Costco gas $2.59 @ 24mpg is $1080 to drive 10k miles vs 4.6¢/kWh EV charging (ignoring our solar) @ 4mi/kWh is $115. (Curiously, our 3 year old Model 3 with similar purchase price as the Y costs $1200 to insure and has similar efficiency but less range.)

A good chunk of the higher Tesla prices is from purchasing Full Self Driving where from our experience in the Model 3, it has been relatively disappointing to see minor (backwards compatible for 2016 vehicles) improvements to highway driving over the years due to Tesla focusing on new city driving functionality using the latest hardware (which is in vehicles that are 3+ years now but mostly underused). I do think FSD initial public release with human supervision will be quite soon and very capable, and hopefully those improvements can make it to older vehicles and those with just basic Autopilot too.
Not sure what any of that has to do with the previous comparison of cost of ownership between a model 3 and a civic. As I clearly stated, comparing overall cost of ownership to an actual competitor, yes it makes sense, but to a civic? The difference in fuel costs would be eaten up by tires alone. It takes some serious accounting gymnastics to make that comparison, and I've heard that line countless times.
Don't be so sure about that:

A $37,900 Civic has a turbo motor that makes 306 horsepower and 295 lb-ft of torque. It is roughly comparable in performance to a similarly priced Tesla Model 3 SR+ (the trim mentioned in JoeBruin77's post) in 0-60 and 1/4 mile times.

https://automobiles.honda.com/civic-typ ... comparison

Tires: 245 / 30 / ZR20 90Y Michelin Pilot Sport Cup 2. These are $392/tire at Tire Rack. Even the regular Pilot Sport 4S tires (Summer, but not track focused) are $331/tire. The Honda turbo engine has a slamming amount of low-end torque. Nobody should be under any illusion: this WILL eat tires very quickly.
Taking a break as of 2 Mar. 2021; First Principles: (1) Diversify (2) Low Cost (3) Stay the Course | 3-Fund Index Portfolio
stoptothink
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Re: TSLA: What Changed?

Post by stoptothink »

hagridshut wrote: Thu Feb 04, 2021 8:25 pm
stoptothink wrote: Thu Feb 04, 2021 8:01 pm
harikaried wrote: Thu Feb 04, 2021 7:41 pm
stoptothink wrote: Thu Feb 04, 2021 7:06 pmthe delta in cost between gas and electric varies wildly throughout the country. Not to mention a model 3 ... costs more to insure
Just some anecdata, the 7 seat Model Y we purchased for $64k was $800 to insure a year while the 7 year old vehicle it replaced originally cost $32k and $600 insurance today. Costco gas $2.59 @ 24mpg is $1080 to drive 10k miles vs 4.6¢/kWh EV charging (ignoring our solar) @ 4mi/kWh is $115. (Curiously, our 3 year old Model 3 with similar purchase price as the Y costs $1200 to insure and has similar efficiency but less range.)

A good chunk of the higher Tesla prices is from purchasing Full Self Driving where from our experience in the Model 3, it has been relatively disappointing to see minor (backwards compatible for 2016 vehicles) improvements to highway driving over the years due to Tesla focusing on new city driving functionality using the latest hardware (which is in vehicles that are 3+ years now but mostly underused). I do think FSD initial public release with human supervision will be quite soon and very capable, and hopefully those improvements can make it to older vehicles and those with just basic Autopilot too.
Not sure what any of that has to do with the previous comparison of cost of ownership between a model 3 and a civic. As I clearly stated, comparing overall cost of ownership to an actual competitor, yes it makes sense, but to a civic? The difference in fuel costs would be eaten up by tires alone. It takes some serious accounting gymnastics to make that comparison, and I've heard that line countless times.
Don't be so sure about that:

A $37,900 Civic has a turbo motor that makes 306 horsepower and 295 lb-ft of torque. It is roughly comparable in performance to a similarly priced Tesla Model 3 SR+ (the trim mentioned in JoeBruin77's post) in 0-60 and 1/4 mile times.

https://automobiles.honda.com/civic-typ ... comparison

Tires: 245 / 30 / ZR20 90Y Michelin Pilot Sport Cup 2. These are $392/tire at Tire Rack. Even the regular Pilot Sport 4S tires (Summer, but not track focused) are $331/tire. The Honda turbo engine has a slamming amount of low-end torque. Nobody should be under any illusion: this WILL eat tires very quickly.
:oops: Again, with the accounting gymnastics. Yeah, a civic type R, the fastest FWD car on the track EVER (and not by a small margin) is what is being referenced when he says "civic". We need an eye-roll emoji.
harikaried
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Re: TSLA: What Changed?

Post by harikaried »

stoptothink wrote: Thu Feb 04, 2021 8:01 pm
harikaried wrote: Thu Feb 04, 2021 7:41 pmJust some anecdata, the 7 seat Model Y we purchased for $64k was $800 to insure a year while the 7 year old vehicle it replaced originally cost $32k and $600 insurance today. Costco gas $2.59 @ 24mpg is $1080 to drive 10k miles vs 4.6¢/kWh EV charging (ignoring our solar) @ 4mi/kWh is $115. (Curiously, our 3 year old Model 3 with similar purchase price as the Y costs $1200 to insure and has similar efficiency but less range.)
Not sure what any of that has to do with the previous comparison of cost of ownership between a model 3 and a civic. The difference in fuel costs would be eaten up by tires alone.
Well, it was just numbers I had readily available as we replaced the Subaru Forester with a Model Y today. (Our Model 3 replaced an old Toyota Camry which probably is more like a Corolla today.) So Civic/Impreza/Corolla -> Model 3 and CR-V/Forester/RAV4 -> Model Y probably aren't too unusual of comparisons for us.

For the Forester, we did pre-pay $800 for oil changes, which we ended up doing 23 times over 7 years. And $26 smog check each year. There was a 60k mile maintenance involving engine air filter, spark plugs and brakes for $400 that wouldn't really apply to EVs with regenerative braking, but overall not much other maintenance that wouldn't also apply to a Tesla, e.g., tire rotation, wiper fluid+blade and cabin air filter. Averaging out over 7 years is about $200/yr in additional maintenance (not counting the 4 hours it takes to get an oil change at the dealership…).

Specifically to your point of eating through tires, yes our Model 3 factory tires were replaced at only 18k miles, but we bought a set from Les Schwab that cost $1k and after 20k miles still have 7mm tread left on track for its 70k mile warranty (and free/included rotations). The set we got for the Forester was $900 also with 70k mile warranty, so not too different after replacing the Subaru factory tires that lasted 28k miles.

And yes to your overall point, there are indeed many people that look at the upfront cost as the most important number to consider and not the accounting gymnastics of running costs, so EVs need to push down the purchase price to compete while still having 300+mi range, etc. And back on topic, Tesla seems to be the one best positioned to get there with incoming battery improvements and overall driving Wh/mi efficiency while also showing they can build new factories while reducing manufacturing costs that are passed on to customers.
4nursebee
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Re: TSLA: What Changed?

Post by 4nursebee »

wrongfunds wrote: Thu Feb 04, 2021 5:38 pm It has been more than 2 years since I have been driving Model 3P with Enhanced Autopilot. The improvement in self-driving in those two years have left me unimpressed. And this is coming from a person who knows how exponential learning works and how much progress that has been made in general machine learning space. Voice recognition and image recognition field have made exponential gains in last decade. I am NOT seeing such a rate of progress on Tesla self-driving capability. Elon was going to have his car drive itself from West Coast to East Coast all by itself in 2018. My guess is that it will be more like 2038 before that happens and somebody else aka Comma.Ai might just beat Tesla.

Heck, even today, the car can't automatically park to the supercharger stall; one would have thought instead of doing stupid parlor tricks, Tesla would have put their engineers to add useful features which can enhance driving experience.
In the video that follows they discuss the capabilities of FSD beta. The car owner allows the car into some situations I would lack faith in at present. To me that means he has developed trust in FSD. If the car can handle the road, obstacles, pedestrians, etc. as it does, my money is on that they can make the car park at a supercharger.

https://www.youtube.com/watch?v=Rb-jW65 ... e=emb_logo

Perhaps one of the things "that changed" is the FSD videos started rolling out and it is easier to see the future of transportation.

There are airplanes with autoland features. One presses a button, the plane does everything else. Surely that can happen with cars.
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fennewaldaj
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Re: TSLA: What Changed?

Post by fennewaldaj »

hagridshut wrote: Thu Feb 04, 2021 8:25 pm
stoptothink wrote: Thu Feb 04, 2021 8:01 pm
harikaried wrote: Thu Feb 04, 2021 7:41 pm
stoptothink wrote: Thu Feb 04, 2021 7:06 pmthe delta in cost between gas and electric varies wildly throughout the country. Not to mention a model 3 ... costs more to insure
Just some anecdata, the 7 seat Model Y we purchased for $64k was $800 to insure a year while the 7 year old vehicle it replaced originally cost $32k and $600 insurance today. Costco gas $2.59 @ 24mpg is $1080 to drive 10k miles vs 4.6¢/kWh EV charging (ignoring our solar) @ 4mi/kWh is $115. (Curiously, our 3 year old Model 3 with similar purchase price as the Y costs $1200 to insure and has similar efficiency but less range.)

A good chunk of the higher Tesla prices is from purchasing Full Self Driving where from our experience in the Model 3, it has been relatively disappointing to see minor (backwards compatible for 2016 vehicles) improvements to highway driving over the years due to Tesla focusing on new city driving functionality using the latest hardware (which is in vehicles that are 3+ years now but mostly underused). I do think FSD initial public release with human supervision will be quite soon and very capable, and hopefully those improvements can make it to older vehicles and those with just basic Autopilot too.
Not sure what any of that has to do with the previous comparison of cost of ownership between a model 3 and a civic. As I clearly stated, comparing overall cost of ownership to an actual competitor, yes it makes sense, but to a civic? The difference in fuel costs would be eaten up by tires alone. It takes some serious accounting gymnastics to make that comparison, and I've heard that line countless times.
Don't be so sure about that:

A $37,900 Civic has a turbo motor that makes 306 horsepower and 295 lb-ft of torque. It is roughly comparable in performance to a similarly priced Tesla Model 3 SR+ (the trim mentioned in JoeBruin77's post) in 0-60 and 1/4 mile times.

https://automobiles.honda.com/civic-typ ... comparison

Tires: 245 / 30 / ZR20 90Y Michelin Pilot Sport Cup 2. These are $392/tire at Tire Rack. Even the regular Pilot Sport 4S tires (Summer, but not track focused) are $331/tire. The Honda turbo engine has a slamming amount of low-end torque. Nobody should be under any illusion: this WILL eat tires very quickly.
Wow I didn't know Civics went that high end. I payed ~20k for mine. I honestly have no idea what horsepower it has. Enough that I can merge peacefully at least.
wrongfunds
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Re: TSLA: What Changed?

Post by wrongfunds »

fennewaldaj wrote: Fri Feb 05, 2021 6:40 am Wow I didn't know Civics went that high end. I payed ~20k for mine. I honestly have no idea what horsepower it has. Enough that I can merge peacefully at least.
No, not peacefully, NOT the Civic with the huge rear wing and bigger coffee can muffler! When *that* Civic merges in the traffic, you *know* (Tesla owner is *allowed* to take that shot!)
aqan
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Re: TSLA: What Changed?

Post by aqan »

Kookaburra wrote: Tue Feb 02, 2021 2:39 pm what suddenly changed or became known starting about a year ago that catalyzed this (if anything)?
If I can summarize it
1. Cheap money
2. FOMO
3. Cult folks jumped on the bandwagon because their fantasy was coming true.
4. COVID Boredom - can’t go to the casino so easily.. umm what’s wrong with Casino Robinhood
Tada.....
stoptothink
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Re: TSLA: What Changed?

Post by stoptothink »

harikaried wrote: Thu Feb 04, 2021 11:03 pm
stoptothink wrote: Thu Feb 04, 2021 8:01 pm
harikaried wrote: Thu Feb 04, 2021 7:41 pmJust some anecdata, the 7 seat Model Y we purchased for $64k was $800 to insure a year while the 7 year old vehicle it replaced originally cost $32k and $600 insurance today. Costco gas $2.59 @ 24mpg is $1080 to drive 10k miles vs 4.6¢/kWh EV charging (ignoring our solar) @ 4mi/kWh is $115. (Curiously, our 3 year old Model 3 with similar purchase price as the Y costs $1200 to insure and has similar efficiency but less range.)
Not sure what any of that has to do with the previous comparison of cost of ownership between a model 3 and a civic. The difference in fuel costs would be eaten up by tires alone.
Well, it was just numbers I had readily available as we replaced the Subaru Forester with a Model Y today. (Our Model 3 replaced an old Toyota Camry which probably is more like a Corolla today.) So Civic/Impreza/Corolla -> Model 3 and CR-V/Forester/RAV4 -> Model Y probably aren't too unusual of comparisons for us.

For the Forester, we did pre-pay $800 for oil changes, which we ended up doing 23 times over 7 years. And $26 smog check each year. There was a 60k mile maintenance involving engine air filter, spark plugs and brakes for $400 that wouldn't really apply to EVs with regenerative braking, but overall not much other maintenance that wouldn't also apply to a Tesla, e.g., tire rotation, wiper fluid+blade and cabin air filter. Averaging out over 7 years is about $200/yr in additional maintenance (not counting the 4 hours it takes to get an oil change at the dealership…).

Specifically to your point of eating through tires, yes our Model 3 factory tires were replaced at only 18k miles, but we bought a set from Les Schwab that cost $1k and after 20k miles still have 7mm tread left on track for its 70k mile warranty (and free/included rotations). The set we got for the Forester was $900 also with 70k mile warranty, so not too different after replacing the Subaru factory tires that lasted 28k miles.

And yes to your overall point, there are indeed many people that look at the upfront cost as the most important number to consider and not the accounting gymnastics of running costs, so EVs need to push down the purchase price to compete while still having 300+mi range, etc. And back on topic, Tesla seems to be the one best positioned to get there with incoming battery improvements and overall driving Wh/mi efficiency while also showing they can build new factories while reducing manufacturing costs that are passed on to customers.
So, you paid $1k for a set of new tires for your model 3 after 18k miles and that is comparable to a civic, which comes with tires that last twice as long and cost half as much (again, completely eliminating any other difference in maintenance costs, and then some)? BTW, in many states there is an extra fee to register an EV (it's $90/yr extra in my state), so there goes that smog (and oil and air filter) charges...You are proving my point with every post: nobody disagrees that in some respects a model 3 is cheaper than alternatives in total cost of ownership, but not a civic (unless it's a limited edition, purpose-built track car version and you live in a state with expensive gas and no extra registration fees for an EV and, and, and...). It's pretty simple, not sure why you continue to make more posts that have nothing to do with what I (or Joe Bruin) said.

The vehicle stands by itself as amazing without the ridiculous hyperbole and nonsensical comparisons.
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hagridshut
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Re: TSLA: What Changed?

Post by hagridshut »

stoptothink wrote: Thu Feb 04, 2021 8:33 pm
hagridshut wrote: Thu Feb 04, 2021 8:25 pm
stoptothink wrote: Thu Feb 04, 2021 8:01 pm
harikaried wrote: Thu Feb 04, 2021 7:41 pm
stoptothink wrote: Thu Feb 04, 2021 7:06 pmthe delta in cost between gas and electric varies wildly throughout the country. Not to mention a model 3 ... costs more to insure
Just some anecdata, the 7 seat Model Y we purchased for $64k was $800 to insure a year while the 7 year old vehicle it replaced originally cost $32k and $600 insurance today. Costco gas $2.59 @ 24mpg is $1080 to drive 10k miles vs 4.6¢/kWh EV charging (ignoring our solar) @ 4mi/kWh is $115. (Curiously, our 3 year old Model 3 with similar purchase price as the Y costs $1200 to insure and has similar efficiency but less range.)

A good chunk of the higher Tesla prices is from purchasing Full Self Driving where from our experience in the Model 3, it has been relatively disappointing to see minor (backwards compatible for 2016 vehicles) improvements to highway driving over the years due to Tesla focusing on new city driving functionality using the latest hardware (which is in vehicles that are 3+ years now but mostly underused). I do think FSD initial public release with human supervision will be quite soon and very capable, and hopefully those improvements can make it to older vehicles and those with just basic Autopilot too.
Not sure what any of that has to do with the previous comparison of cost of ownership between a model 3 and a civic. As I clearly stated, comparing overall cost of ownership to an actual competitor, yes it makes sense, but to a civic? The difference in fuel costs would be eaten up by tires alone. It takes some serious accounting gymnastics to make that comparison, and I've heard that line countless times.
Don't be so sure about that:

A $37,900 Civic has a turbo motor that makes 306 horsepower and 295 lb-ft of torque. It is roughly comparable in performance to a similarly priced Tesla Model 3 SR+ (the trim mentioned in JoeBruin77's post) in 0-60 and 1/4 mile times.

https://automobiles.honda.com/civic-typ ... comparison

Tires: 245 / 30 / ZR20 90Y Michelin Pilot Sport Cup 2. These are $392/tire at Tire Rack. Even the regular Pilot Sport 4S tires (Summer, but not track focused) are $331/tire. The Honda turbo engine has a slamming amount of low-end torque. Nobody should be under any illusion: this WILL eat tires very quickly.
:oops: Again, with the accounting gymnastics. Yeah, a civic type R, the fastest FWD car on the track EVER (and not by a small margin) is what is being referenced when he says "civic". We need an eye-roll emoji.
Ironically, it is "gymnastics" to say that a Civic Type R is not a Honda Civic.

joebruin77 stated that the Model 3 SR+ has TCO similar to SOME, not all, trims of Honda Civic:
joebruin77 wrote: Thu Feb 04, 2021 1:13 pm When comparing costs of Tesla and ICE alternatives, be sure to take into consideration all costs over the life of the car. For example, with no gas, no oil changes, no timing belts needing replacement, and no brake pads to be replaced, the five-year total cost of ownership for a SR+ Model 3 is about the same as some trims of a Honda Civic.
Civic Type R and Type R Limited Edition are the top 2 trims of Honda Civic available for purchase.

A Honda Civic Type R is a Honda Civic.
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stoptothink
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Re: TSLA: What Changed?

Post by stoptothink »

hagridshut wrote: Fri Feb 05, 2021 8:14 am
stoptothink wrote: Thu Feb 04, 2021 8:33 pm
hagridshut wrote: Thu Feb 04, 2021 8:25 pm
stoptothink wrote: Thu Feb 04, 2021 8:01 pm
harikaried wrote: Thu Feb 04, 2021 7:41 pm Just some anecdata, the 7 seat Model Y we purchased for $64k was $800 to insure a year while the 7 year old vehicle it replaced originally cost $32k and $600 insurance today. Costco gas $2.59 @ 24mpg is $1080 to drive 10k miles vs 4.6¢/kWh EV charging (ignoring our solar) @ 4mi/kWh is $115. (Curiously, our 3 year old Model 3 with similar purchase price as the Y costs $1200 to insure and has similar efficiency but less range.)

A good chunk of the higher Tesla prices is from purchasing Full Self Driving where from our experience in the Model 3, it has been relatively disappointing to see minor (backwards compatible for 2016 vehicles) improvements to highway driving over the years due to Tesla focusing on new city driving functionality using the latest hardware (which is in vehicles that are 3+ years now but mostly underused). I do think FSD initial public release with human supervision will be quite soon and very capable, and hopefully those improvements can make it to older vehicles and those with just basic Autopilot too.
Not sure what any of that has to do with the previous comparison of cost of ownership between a model 3 and a civic. As I clearly stated, comparing overall cost of ownership to an actual competitor, yes it makes sense, but to a civic? The difference in fuel costs would be eaten up by tires alone. It takes some serious accounting gymnastics to make that comparison, and I've heard that line countless times.
Don't be so sure about that:

A $37,900 Civic has a turbo motor that makes 306 horsepower and 295 lb-ft of torque. It is roughly comparable in performance to a similarly priced Tesla Model 3 SR+ (the trim mentioned in JoeBruin77's post) in 0-60 and 1/4 mile times.

https://automobiles.honda.com/civic-typ ... comparison

Tires: 245 / 30 / ZR20 90Y Michelin Pilot Sport Cup 2. These are $392/tire at Tire Rack. Even the regular Pilot Sport 4S tires (Summer, but not track focused) are $331/tire. The Honda turbo engine has a slamming amount of low-end torque. Nobody should be under any illusion: this WILL eat tires very quickly.
:oops: Again, with the accounting gymnastics. Yeah, a civic type R, the fastest FWD car on the track EVER (and not by a small margin) is what is being referenced when he says "civic". We need an eye-roll emoji.
Ironically, it is "gymnastics" to say that a Civic Type R is not a Honda Civic.

joebruin77 stated that the Model 3 SR+ has TCO similar to SOME, not all, trims of Honda Civic:
joebruin77 wrote: Thu Feb 04, 2021 1:13 pm When comparing costs of Tesla and ICE alternatives, be sure to take into consideration all costs over the life of the car. For example, with no gas, no oil changes, no timing belts needing replacement, and no brake pads to be replaced, the five-year total cost of ownership for a SR+ Model 3 is about the same as some trims of a Honda Civic.
Civic Type R and Type R Limited Edition are the top 2 trims of Honda Civic available for purchase.

A Honda Civic Type R is a Honda Civic.
You are too much, pointless to continue responding with the nonsensical goalpost moving. Yeah TCO is comparable to a "civic", if its that limited edition track-focused civic that sits on lots with a price sticker of $45k. Hey, TCO may be similar to that of a VW golf too...a Golf R. Gotcha!
Nathan Drake
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Re: TSLA: What Changed?

Post by Nathan Drake »

Most Civic sales are low 20ks...what’s the average sale price of a model 3 without ev credits? 45-50k?

Yea, a Tesla is likely more than double the cost on average.
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joebruin77
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Re: TSLA: What Changed?

Post by joebruin77 »

stoptothink wrote: Fri Feb 05, 2021 8:20 am
hagridshut wrote: Fri Feb 05, 2021 8:14 am
stoptothink wrote: Thu Feb 04, 2021 8:33 pm
hagridshut wrote: Thu Feb 04, 2021 8:25 pm
stoptothink wrote: Thu Feb 04, 2021 8:01 pm

Not sure what any of that has to do with the previous comparison of cost of ownership between a model 3 and a civic. As I clearly stated, comparing overall cost of ownership to an actual competitor, yes it makes sense, but to a civic? The difference in fuel costs would be eaten up by tires alone. It takes some serious accounting gymnastics to make that comparison, and I've heard that line countless times.
Don't be so sure about that:

A $37,900 Civic has a turbo motor that makes 306 horsepower and 295 lb-ft of torque. It is roughly comparable in performance to a similarly priced Tesla Model 3 SR+ (the trim mentioned in JoeBruin77's post) in 0-60 and 1/4 mile times.

https://automobiles.honda.com/civic-typ ... comparison

Tires: 245 / 30 / ZR20 90Y Michelin Pilot Sport Cup 2. These are $392/tire at Tire Rack. Even the regular Pilot Sport 4S tires (Summer, but not track focused) are $331/tire. The Honda turbo engine has a slamming amount of low-end torque. Nobody should be under any illusion: this WILL eat tires very quickly.
:oops: Again, with the accounting gymnastics. Yeah, a civic type R, the fastest FWD car on the track EVER (and not by a small margin) is what is being referenced when he says "civic". We need an eye-roll emoji.
Ironically, it is "gymnastics" to say that a Civic Type R is not a Honda Civic.

joebruin77 stated that the Model 3 SR+ has TCO similar to SOME, not all, trims of Honda Civic:
joebruin77 wrote: Thu Feb 04, 2021 1:13 pm When comparing costs of Tesla and ICE alternatives, be sure to take into consideration all costs over the life of the car. For example, with no gas, no oil changes, no timing belts needing replacement, and no brake pads to be replaced, the five-year total cost of ownership for a SR+ Model 3 is about the same as some trims of a Honda Civic.
Civic Type R and Type R Limited Edition are the top 2 trims of Honda Civic available for purchase.

A Honda Civic Type R is a Honda Civic.
You are too much, pointless to continue responding with the nonsensical goalpost moving. Yeah TCO is comparable to a "civic", if its that limited edition track-focused civic that sits on lots with a price sticker of $45k. Hey, TCO may be similar to that of a VW golf too...a Golf R. Gotcha!
I think we should just agree to respectfully disagree.

If you compare the MSRP of a Tesla SR+ to a standard Honda Civic LX, the Tesla is just under $40K (including destination and delivery charges). The lowest trim civic LX has an MSRP of $22,245. I AGREE with you that a Tesla Model 3 SR+ will not have a lower TCO than this Honda Civic. However, here are some important last points:

-Although not available on the Tesla website, you can still go into a Tesla store and order a base Model 3 SR (no plus), which has a lower cost of $36,200 (including destination and delivery).
-Yes, the TCO of the first 3 lower trims of a Honda Civic will be lower, but the gap is not nearly as wide as the sales price might lead one to assume. You can use the spreadsheet I referenced earlier and see the actual numbers (no gymnastics required).
-Keep in mind that the base model Honda Civic has 154 horspower and has a 0 to 60 time of 8.2 seconds. The Honda Civic Si Type R has more horsepower than a Model 3 SR+ but slightly less torque. And the two cars have roughly equal 0 to 60 times of 5.4 seconds. So in terms of performance and driving experience, the Type R is a more fair comparison.
-The Biden administration is likely to bring back the $7,500 federal tax credit and many states still offer rebates for EV purchases. Be sure to factor in these savings as well.

Bottom line, one should not assume that a Tesla Model 3 SR or SR+ is out of the question. Use the spreadhsheet tool to plug in your own numbers for the cost of electricity, gas, taxes, etc and see for yourself what your actual, real costs will be.
harikaried
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Re: TSLA: What Changed?

Post by harikaried »

stoptothink wrote: Fri Feb 05, 2021 7:14 amThe vehicle stands by itself as amazing without the ridiculous hyperbole and nonsensical comparisons.
We're talking about Civics and Model 3s in the first place because people are replacing one for the other based on actual trade-in data. Back in 2019, Tesla reported on trade-ins nearing 70% non-premium, and I was sharing our experience of doing exactly that for both of our Tesla purchases: Toyota Camry -> Model 3 and Subaru Forester -> Model Y. Of course I'm not saying the purchase price or total cost of ownership of the Tesla is cheaper than the non-premium vehicle, but like many others, we have decided to pay the premium to get a Tesla.

Looking at Edmunds' most popular vehicles in California… https://www.edmunds.com/most-popular-cars/
  1. Honda Civic $19,750 - $27,600
  2. Toyota RAV4 $26,150 - $36,080
  3. Toyota Camry $24,970 - $35,545
  4. Honda Accord $24,770 - $36,700
  5. Tesla Model 3 $37,990 - $54,990
As the Model Y sales volume starts to pass Model 3, it's quite likely at least one of RAV4/CR-V/Forester will get into the top 5 most traded-in vehicles for Tesla. And this could happen next year with Berlin and Texas factories having dedicated Model Y production lines finishing and ramping up this year (both probably targeting at least 250k+ capacity each). Compared to last year, Tesla "only" had a shared Fremont 500k capacity Model 3+Y and a dedicated Shanghai 250k capacity Model 3 lines, and Shanghai currently 200k capacity Model Y line already started selling this year. To summarize, Model Y sold about 80k vehicles in 2020, and in 2022 it looks like Tesla is targeting for at least 1 million Model Y annual production capacity.
stoptothink
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Re: TSLA: What Changed?

Post by stoptothink »

joebruin77 wrote: Fri Feb 05, 2021 10:23 am
stoptothink wrote: Fri Feb 05, 2021 8:20 am
hagridshut wrote: Fri Feb 05, 2021 8:14 am
stoptothink wrote: Thu Feb 04, 2021 8:33 pm
hagridshut wrote: Thu Feb 04, 2021 8:25 pm

Don't be so sure about that:

A $37,900 Civic has a turbo motor that makes 306 horsepower and 295 lb-ft of torque. It is roughly comparable in performance to a similarly priced Tesla Model 3 SR+ (the trim mentioned in JoeBruin77's post) in 0-60 and 1/4 mile times.

https://automobiles.honda.com/civic-typ ... comparison

Tires: 245 / 30 / ZR20 90Y Michelin Pilot Sport Cup 2. These are $392/tire at Tire Rack. Even the regular Pilot Sport 4S tires (Summer, but not track focused) are $331/tire. The Honda turbo engine has a slamming amount of low-end torque. Nobody should be under any illusion: this WILL eat tires very quickly.
:oops: Again, with the accounting gymnastics. Yeah, a civic type R, the fastest FWD car on the track EVER (and not by a small margin) is what is being referenced when he says "civic". We need an eye-roll emoji.
Ironically, it is "gymnastics" to say that a Civic Type R is not a Honda Civic.

joebruin77 stated that the Model 3 SR+ has TCO similar to SOME, not all, trims of Honda Civic:
joebruin77 wrote: Thu Feb 04, 2021 1:13 pm When comparing costs of Tesla and ICE alternatives, be sure to take into consideration all costs over the life of the car. For example, with no gas, no oil changes, no timing belts needing replacement, and no brake pads to be replaced, the five-year total cost of ownership for a SR+ Model 3 is about the same as some trims of a Honda Civic.
Civic Type R and Type R Limited Edition are the top 2 trims of Honda Civic available for purchase.

A Honda Civic Type R is a Honda Civic.
You are too much, pointless to continue responding with the nonsensical goalpost moving. Yeah TCO is comparable to a "civic", if its that limited edition track-focused civic that sits on lots with a price sticker of $45k. Hey, TCO may be similar to that of a VW golf too...a Golf R. Gotcha!
I think we should just agree to respectfully disagree.

If you compare the MSRP of a Tesla SR+ to a standard Honda Civic LX, the Tesla is just under $40K (including destination and delivery charges). The lowest trim civic LX has an MSRP of $22,245. I AGREE with you that a Tesla Model 3 SR+ will not have a lower TCO than this Honda Civic. However, here are some important last points:

-Although not available on the Tesla website, you can still go into a Tesla store and order a base Model 3 SR (no plus), which has a lower cost of $36,200 (including destination and delivery).
-Yes, the TCO of the first 3 lower trims of a Honda Civic will be lower, but the gap is not nearly as wide as the sales price might lead one to assume. You can use the spreadsheet I referenced earlier and see the actual numbers (no gymnastics required).
-Keep in mind that the base model Honda Civic has 154 horspower and has a 0 to 60 time of 8.2 seconds. The Honda Civic Si Type R has more horsepower than a Model 3 SR+ but slightly less torque. And the two cars have roughly equal 0 to 60 times of 5.4 seconds. So in terms of performance and driving experience, the Type R is a more fair comparison.
-The Biden administration is likely to bring back the $7,500 federal tax credit and many states still offer rebates for EV purchases. Be sure to factor in these savings as well.

Bottom line, one should not assume that a Tesla Model 3 SR or SR+ is out of the question. Use the spreadhsheet tool to plug in your own numbers for the cost of electricity, gas, taxes, etc and see for yourself what your actual, real costs will be.
What are we disagreeing about? Your very own math shows that even the cheapest model 3 has a much higher TCO than a civic, unless we're comparing it to a Type R. I'm with you man, it's a great car with a lot of benefits, which I'll probably buy when our economy car dies in 5yrs or so. Difference is, I'm not twisting myself in a pretzel trying to justify the purchase as if it were the same cost as an economy car. It's OK to admit you like it and are willing to pay a premium for it (over an economy option). My neighbor gave us the same pitch when he brought home his M3 performance and my wife almost fell over from laughter after asking him to explain the math.
joebruin77
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Re: TSLA: What Changed?

Post by joebruin77 »

stoptothink wrote: Fri Feb 05, 2021 11:03 am
joebruin77 wrote: Fri Feb 05, 2021 10:23 am
stoptothink wrote: Fri Feb 05, 2021 8:20 am
hagridshut wrote: Fri Feb 05, 2021 8:14 am
stoptothink wrote: Thu Feb 04, 2021 8:33 pm

:oops: Again, with the accounting gymnastics. Yeah, a civic type R, the fastest FWD car on the track EVER (and not by a small margin) is what is being referenced when he says "civic". We need an eye-roll emoji.
Ironically, it is "gymnastics" to say that a Civic Type R is not a Honda Civic.

joebruin77 stated that the Model 3 SR+ has TCO similar to SOME, not all, trims of Honda Civic:
joebruin77 wrote: Thu Feb 04, 2021 1:13 pm When comparing costs of Tesla and ICE alternatives, be sure to take into consideration all costs over the life of the car. For example, with no gas, no oil changes, no timing belts needing replacement, and no brake pads to be replaced, the five-year total cost of ownership for a SR+ Model 3 is about the same as some trims of a Honda Civic.
Civic Type R and Type R Limited Edition are the top 2 trims of Honda Civic available for purchase.

A Honda Civic Type R is a Honda Civic.
You are too much, pointless to continue responding with the nonsensical goalpost moving. Yeah TCO is comparable to a "civic", if its that limited edition track-focused civic that sits on lots with a price sticker of $45k. Hey, TCO may be similar to that of a VW golf too...a Golf R. Gotcha!
I think we should just agree to respectfully disagree.

If you compare the MSRP of a Tesla SR+ to a standard Honda Civic LX, the Tesla is just under $40K (including destination and delivery charges). The lowest trim civic LX has an MSRP of $22,245. I AGREE with you that a Tesla Model 3 SR+ will not have a lower TCO than this Honda Civic. However, here are some important last points:

-Although not available on the Tesla website, you can still go into a Tesla store and order a base Model 3 SR (no plus), which has a lower cost of $36,200 (including destination and delivery).
-Yes, the TCO of the first 3 lower trims of a Honda Civic will be lower, but the gap is not nearly as wide as the sales price might lead one to assume. You can use the spreadsheet I referenced earlier and see the actual numbers (no gymnastics required).
-Keep in mind that the base model Honda Civic has 154 horspower and has a 0 to 60 time of 8.2 seconds. The Honda Civic Si Type R has more horsepower than a Model 3 SR+ but slightly less torque. And the two cars have roughly equal 0 to 60 times of 5.4 seconds. So in terms of performance and driving experience, the Type R is a more fair comparison.
-The Biden administration is likely to bring back the $7,500 federal tax credit and many states still offer rebates for EV purchases. Be sure to factor in these savings as well.

Bottom line, one should not assume that a Tesla Model 3 SR or SR+ is out of the question. Use the spreadhsheet tool to plug in your own numbers for the cost of electricity, gas, taxes, etc and see for yourself what your actual, real costs will be.
What are we disagreeing about? Your very own math shows that even the cheapest model 3 has a much higher TCO than a civic, unless we're comparing it to a Type R. I'm with you man, it's a great car with a lot of benefits, which I'll probably buy when our economy car dies in 5yrs or so. Difference is, I'm not twisting myself in a pretzel trying to justify the purchase as if it were the same cost as an economy car. It's OK to admit you like it and are willing to pay a premium for it (over an economy option). My neighbor gave us the same pitch when he brought home his M3 performance and my wife almost fell over from laughter after asking him to explain the math.
I think we agree that accurate numbers and calculations do not lie. Please check out the spreadsheet tool I offered earlier. It can indeed help anyone accurately and definitively determine how the TCO of a Tesla compares to the TCO of any other car. The key is to make sure all data entered is as accurate as possible and that no costs or credits are excluded.

Other than that, I think we should agree to respectfully disagree.
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Re: TSLA: What Changed?

Post by harikaried »

Here's some self-reported data of non-Teslas that people currently own when ordering a Model Y. This has the percent of entries with that vehicle, and I've added the base MSRP where quite a few of them are in the $20k-$30k range:

Code: Select all

Toyota Prius	4.8% $24,525
Honda Accord	2.9% $24,770
BMW 3 Series	2.7% $40,750
Honda CR-V	2.3% $25,350
Chevy Bolt	2.2% $36,620
Honda Civic	2.2% $21,050
Audi Q5		2.1% $43,300
Chevy Volt	2.0% $28,984
Toyota RAV4	1.9% $26,150
BMW X3		1.8% $43,000
BMW X5		1.8% $59,400
Subaru Outback	1.7% $26,795
Mazda CX-5	1.7% $25,270

Code: Select all

Jeep Grand Cher	1.7% $34,220
BMW 5 Series	1.7% $54,200
Subaru Forester	1.6% $24,795
BMW i3		1.5% $44,450
Acura MDX	1.5% $44,500
Toyota Camry	1.4% $24,970
Audi A4		1.3% $37,400
Toyota Highland	1.3% $34,910
Lexus RX 350	1.2% $45,170
Ford Fusion	1.1% $23,170
Jeep Wrangler	1.1% $28,475
Nissan Leaf	1.0% $31,600
Lexus RX 450	1.0% $47,820
Most of the entries are for Long Range AWD purchases as Standard Range only recently became available, so it'll be interesting to see if the weighted average price of these before-Y vehicles goes lower from the current $34k as Model Y reaches 1 million annual production rate next year.
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MinnGuyInvesting
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Re: TSLA: What Changed?

Post by MinnGuyInvesting »

Semantics wrote: Thu Feb 04, 2021 6:42 pm

Cruise is still a separate company though, GM are not the only investors in them - Microsoft just invested in their latest round too.

Aurora, Waymo, Yandex, Mobileye, and some of the Chinese companies also have larger teams working on this problem than Tesla. If they were actually working on the same problem I would agree that data and experience would give one team the edge, but L2 and L4 are orders of magnitude different and there's a good reason that out of dozens of companies working in this space, only one has chosen cameras and not LIDAR and to start with L2 and try to incrementally get to L4. Hint: it's not because they're smarter than everyone else, it's because their actual product is a L2 system so that's the priority. The fact that none of the companies for which L4 is existential to their business are starting at L2 or using less reliable sensing hardware should tell you something.

Musk is not an idiot. He knows that the success of the company is down to their ability to produce cars. FSD is secondary; a luxury feature. The company can and will thrive with or without it. He also knows it will take years and years for anyone else to roll out a true L4 service at scale, and so in the meantime Tesla's L2 system is a great way to differentiate their product. If they were truly prioritizing L4, you would have seen cars driving on public roads with no human supervision like other companies have done in tests. But they're not close to that yet, because it's not critical to their business, and not worth the risk and effort. At say 2T market cap, a few years from now they can just buy one of the leaders in that space.

Interesting video on why Musk believes LIDAR is not the answer.

https://www.youtube.com/watch?v=HM23sjh ... e=emb_logo
Index ETF's 45% |ARK Funds 30% | AAPL 5% | TSLA 4% | GOOGL 2% | AMZN 1.3% |Other stocks 4.5% | BTC/ETH 9% |
AlwaysLearningMore
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Re: TSLA: What Changed?

Post by AlwaysLearningMore »

Seems a large chunk of Tesla's profitability comes from their selling of carbon credits.
"Other Automakers Paid Tesla a Record $428 Million Last Quarter" https://tinyurl.com/yxgqyxfa
"Tesla’s sale of environmental credits help drive to profitability" https://tinyurl.com/y2wb827z

Part of its appeal to some investors is that it's a "story" stock as well.
Retirement is best when you have a lot to live on, and a lot to live for. * None of what I post is investment advice.* | FIRE'd July 2023
benderbr
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Re: TSLA: What Changed?

Post by benderbr »

I don't dispute the accuracy of the article on credits, but what conclusion should we draw from it?

Regulatory credits is a weak argument often used to argue Tesla isn't able to turn a profit without them. This is technically true in the past, but forward looking this is not the case. Only 7% of gross revenues came from credits in 2020. Margin on the cars themselves is positive and significant. In 2020 gross profit from selling cars was over $5B, exclusive of the 1.5B credits.

Stock based compensation drove their GAAP numbers down due to Musk reaching another major milestone. I mention this because stock compensation waters down the shareholders, but first change the solid fundamentals. With PE over 1k, it seems shareholders have bigger things on their mind than stock compensation.

In 2020 Tesla sold about 500k cars. As of Jan their manufacturing capacity is 1M cars per year. It's likely increased sales will drive profits higher this year. They will still rake in more free money from credits, but they won't be needed to be overall profitable. That won't stop the articles from reading "Tesla profits would be much smaller without regulatory credits!"

I think Tesla is a great company, but the stock valuation is too high.

I used data in Tesla's slides here:
https://tesla-cdn.thron.com/static/1LRL ... ate.pdf%22
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Re: TSLA: What Changed?

Post by harikaried »

benderbr wrote: Sun Feb 07, 2021 12:10 pmIn 2020 gross profit from selling cars was over $5B, exclusive of the 1.5B credits. https://tesla-cdn.thron.com/static/1LRL ... ate.pdf%22
Is there much visibility into what Tesla is doing with their profits/cash other than operating expenses and cost of revenues? Looks like all years before 2020 had negative operating margin, and the last several years from 2016 shown in the Financial Summary (page 5) had around $3 billion in cash then suddenly in 2020 the cash balance is over $19 billion. One would expect Tesla aiming for 50% average annual growth in vehicle deliveries would maximize reinvesting earnings (whether from regulatory credits or other revenue).
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Re: TSLA: What Changed?

Post by benderbr »

I think the added cash is partly coming from the inflated stock price. Tesla has issued multiple new stock offerings at market prices in the last year - raising billions in cash.

2020 is the year that model3 truly scaled into mass production and Tesla was able to turn profitable.

I think it's clear they will continue to re-invest in rapid worldwide growth. I don't expect they will be issuing any dividends until their build outs are complete.
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Re: TSLA: What Changed?

Post by TheOscarGuy »

Kookaburra wrote: Tue Feb 02, 2021 2:39 pm I realize there are widely varying opinions as to whether Tesla stock is properly valued. Setting that aside, if we assume the market is efficient and prices in all known info about the future, what is the prevailing explanation for its all-of-sudden meteoric rise that started one year ago and continues? In other words, what suddenly changed or became known starting about a year ago that catalyzed this (if anything)?
Market is efficient in the long run.
1 year isn't enough time period to ask that question. :D
AlwaysLearningMore
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Re: TSLA: What Changed?

Post by AlwaysLearningMore »

Tesla's going to have increasing competition in the electric car market: Hyundai, Aspark (Japan), Audi, Jaguar, Lexus, Chevrolet, Mazda, Mercedes, BMW, Cadillac, Ford, GMC, Lotus, Nissan, and others. https://tinyurl.com/yyro98he

It's going to be an increasingly crowded (and competitive) space. Consumers will have choices, and at multiple price points.
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Jeff Albertson
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Re: TSLA: What Changed?

Post by Jeff Albertson »

for all you "Boglehead" stockpickers:
Some businesses that advertised during Tom Brady’s first Super Bowl:

AOL
Blockbuster
Radio Shack
Circuit City
CompUSA
Sears
HotJobs
Yahoo
VoiceStream Wireless
Gateway Computers
https://twitter.com/JonErlichman/status ... 6076526592
harikaried
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Re: TSLA: What Changed?

Post by harikaried »

benderbr wrote: Sun Feb 07, 2021 2:06 pm
harikaried wrote: Sun Feb 07, 2021 1:45 pmlast several years from 2016 shown in the Financial Summary (page 5) had around $3 billion in cash then suddenly in 2020 the cash balance is over $19 billion.
I think it's clear they will continue to re-invest in rapid worldwide growth. I don't expect they will be issuing any dividends until their build outs are complete.
Ha. Now Tesla has announced they've purchased $1.5 billion Bitcoin, so nearly 10% of their cash. I suppose maybe more interesting is that Tesla said they'll soon accept payment in Bitcoin and not necessarily cashing out to USD or other currency. I wonder how that will affect reporting going forwards as well as I think exchange rate changes in Bitcoin wouldn't show up as gains/losses unless they realize it by converting to cash -- although I see something about (unrealized) "impairment loss" needing to be reported right away but not unrealized gains?

Do businesses accepting Bitcoin need to have a "cash" equivalent Bitcoin "bank account" with some balance to start accepting payments? I suppose if Tesla intends to transact with other businesses using Bitcoin, it would be useful for that as well.
dacalo
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Re: TSLA: What Changed?

Post by dacalo »

AlwaysLearningMore wrote: Sun Feb 07, 2021 2:46 pm Tesla's going to have increasing competition in the electric car market: Hyundai, Aspark (Japan), Audi, Jaguar, Lexus, Chevrolet, Mazda, Mercedes, BMW, Cadillac, Ford, GMC, Lotus, Nissan, and others. https://tinyurl.com/yyro98he

It's going to be an increasingly crowded (and competitive) space. Consumers will have choices, and at multiple price points.
Competition is good. But the rest of the companies are ~10 years behind from battery and electric motor efficiency perspective (not to mention Autopilot). You have to remember, Tesla has been focusing on EV tech all this time, while the companies you mentioned have to transition R&D to EV (with exception of Nissan and some of others but they are still way behind). I have driven EV's available in the market and Tesla blows them all away. Is Tesla perfect? No, but they are clearly the leader and will set trends. They will need to release models that are more mass-adoption friendly.

Disclosure: Tesla Model 3 owner and planning to get a Model X down the road.
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Re: TSLA: What Changed?

Post by Eschew_Obfuscation »

For those who buy into TSLA's vision, wouldn't the purchase of Bitcoin be contradictory to its vision of sustainability given that Bitcoin is known to have a large carbon footprint?
"But I confess that half the time I worry that I have too much in equities, and the other half of the time that I don't have enough in equities." John Bogle
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Re: TSLA: What Changed?

Post by Normchad »

Eschew_Obfuscation wrote: Mon Feb 08, 2021 3:23 pm For those who buy into TSLA's vision, wouldn't the purchase of Bitcoin be contradictory to its vision of sustainability given that Bitcoin is known to have a large carbon footprint?
It’s all good so long as your mining rig is powered by Tesla Solar panels and batteries.

I’m certain that the combination of Tesla and Bitcoin in a single topic will be enough to implode the boglehead universe. :)
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Re: TSLA: What Changed?

Post by benderbr »

Eschew_Obfuscation wrote: Mon Feb 08, 2021 3:23 pm For those who buy into TSLA's vision, wouldn't the purchase of Bitcoin be contradictory to its vision of sustainability given that Bitcoin is known to have a large carbon footprint?
Yes this seems to be in conflict with Tesla's mission. Bitcoin is a terrible waste of energy. I buy into the vision, but this move doesn't make sense other than a publicity stunt.
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Re: TSLA: What Changed?

Post by crystalbank »

I still don't understand how putting 8% of a company's cash reserves in a highly speculative & volatile asset is supposed to be a good thing or part of any playbook. Companies need cash only to meet short-term or intermediate expenses or make capital investments to increase their future profits. Anything excess, goes out as dividends (or buybacks etc). Not to mention, Tesla as recently as December 2020 raised cash by selling equities and they still have a lot of debt on their books.

So is Tesla like Berkshire now? Trying to invest in better opportunities for their shareholders?
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Re: TSLA: What Changed?

Post by Blueskies123 »

crystalbank wrote: Mon Feb 08, 2021 5:59 pm I still don't understand how putting 8% of a company's cash reserves in a highly speculative & volatile asset is supposed to be a good thing or part of any playbook. Companies need cash only to meet short-term or intermediate expenses or make capital investments to increase their future profits. Anything excess, goes out as dividends (or buybacks etc). Not to mention, Tesla as recently as December 2020 raised cash by selling equities and they still have a lot of debt on their books.

So is Tesla like Berkshire now? Trying to invest in better opportunities for their shareholders?
As someone that bought Tesla stock a few years ago and a purchaser of a Tesla vehicle, he can do whatever he wants in my book. I know it's not bogleheadish but he has an enviable track record that I will defer to in this case.
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Re: TSLA: What Changed?

Post by gougou »

Massive amount of dumb money was created. People were too bored at home. So we are seeing lots of bubbles forming. But this won't last long, a fool and his money are soon parted.

To be fair, Tesla is a good company with a top product and I expect it to be worth something 5 to 10 years later. TSLA is much better than GME or the cryptos.
The sillier the market’s behavior, the greater the opportunity for the business like investor.
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Re: TSLA: What Changed?

Post by harikaried »

crystalbank wrote: Mon Feb 08, 2021 5:59 pm I still don't understand how putting 8% of a company's cash reserves in a highly speculative & volatile asset is supposed to be a good thing or part of any playbook.
Some people like to do special accounting of the credits paid from other automakers, and coincidentally(??) the Bitcoin purchase matches up almost exactly. So one could say other manufacturers effectively paid their EV credits with Bitcoin!

Maybe this really is a precursor to Tesla doing more transactions with Bitcoin going forward starting with large purchases for vehicles then maybe microtransactions for software and autonomous driving, e.g. app purchases, robotaxi, delivery services. Are there lower fees with Bitcoin that would be preferred over credit cards for these types of potential transactions?
Last edited by harikaried on Mon Feb 08, 2021 6:59 pm, edited 1 time in total.
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Re: TSLA: What Changed?

Post by Dominic »

The downside risk of Tesla (i.e. massive debt load, constant inability to deliver cars on time) isn't where it was at the end of 2019.

The market is pricing Tesla as a tech company rather than as a car manufacturer. Tesla is getting to a point where they'll be able to finance solar/battery/AI R&D with sales rather than more debt.

I still think the stock is overpriced, but there's nothing I can do about that.
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Re: TSLA: What Changed?

Post by crystalbank »

harikaried wrote: Mon Feb 08, 2021 6:57 pm
crystalbank wrote: Mon Feb 08, 2021 5:59 pm I still don't understand how putting 8% of a company's cash reserves in a highly speculative & volatile asset is supposed to be a good thing or part of any playbook.
Some people like to do special accounting of the credits paid from other automakers, and coincidentally(??) the Bitcoin purchase matches up almost exactly. So one could say other manufacturers effectively paid their EV credits with Bitcoin!

Maybe this really is a precursor to Tesla doing more transactions with Bitcoin going forward starting with large purchases for vehicles then maybe microtransactions for software and autonomous driving, e.g. app purchases, robotaxi, delivery services.
More transactions with Bitcoin? Who's really using BTC to pay for stuff in real life? Even if somehow magically a hoard of people decide to pay for their Tesla cars in BTC going forward, why does Tesla Inc need to buy a $1.5B worth of bitcoin now? Are they paying their suppliers in BTC starting today?

Maybe I'm not smart enough to see the logic and only time will tell how terribly wrong I'm today.
harikaried
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Re: TSLA: What Changed?

Post by harikaried »

crystalbank wrote: Mon Feb 08, 2021 7:02 pmwhy does Tesla Inc need to buy a $1.5B worth of bitcoin now? Are they paying their suppliers in BTC starting today?
Probably not today, but it will be interesting to see if their suppliers or partners will be more willing to transact in Bitcoin because Tesla has put serious money into it. Is saving on say 2% transaction fees worthwhile for these businesses?

One could expect exchange rates to stabilize as larger companies decide to join, but who really knows. :confused
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Re: TSLA: What Changed?

Post by Prahasaurus »

crystalbank wrote: Mon Feb 08, 2021 7:02 pm
harikaried wrote: Mon Feb 08, 2021 6:57 pm
crystalbank wrote: Mon Feb 08, 2021 5:59 pm I still don't understand how putting 8% of a company's cash reserves in a highly speculative & volatile asset is supposed to be a good thing or part of any playbook.
Some people like to do special accounting of the credits paid from other automakers, and coincidentally(??) the Bitcoin purchase matches up almost exactly. So one could say other manufacturers effectively paid their EV credits with Bitcoin!

Maybe this really is a precursor to Tesla doing more transactions with Bitcoin going forward starting with large purchases for vehicles then maybe microtransactions for software and autonomous driving, e.g. app purchases, robotaxi, delivery services.
More transactions with Bitcoin? Who's really using BTC to pay for stuff in real life? Even if somehow magically a hoard of people decide to pay for their Tesla cars in BTC going forward, why does Tesla Inc need to buy a $1.5B worth of bitcoin now? Are they paying their suppliers in BTC starting today?

Maybe I'm not smart enough to see the logic and only time will tell how terribly wrong I'm today.
1. Hedge against falling fiat, especially relevant when they are sitting on billions in cash. Sure, the dollar may strengthen short term, but longer term, what will the impact of all of this dollar printing be? Musk is being proactive.

2. A great marketing tool to show Tesla is thinking ahead, is embracing new technologies and more modern ways of doing business. I know this is going to be hard for many at Bogleheads to accept, but cryptocurrencies are seen as the future by a lot of people, especially younger people. Tesla aligning itself with that vision is incredibly shrewd.

3. Some people will want to pay with Bitcoin, especially outside of the USA (which has ridiculous capital gains laws that make using Bitcoin as a transactional currency prohibitive). What could be more modern for the 35 year old Finnish or Chinese VP than to buy a Tesla using Bitcoin? Having said that, I don't think longer term Bitcoin will be used for transactions like this anywhere, it will primarily be used to store wealth, similar to gold. But over the next 5 years, I'm sure Musk would love to earn BTC from sales, so why not?

4. Bitcoin likely has a very bright future. Again, this will come as a shock to most Bogleheads, but the under 40 crowd is very receptive to crypto, as recent polls have suggested. Bitcoin is just really getting started. Musk likely believes in that vision, and thinks it's a very good bet to hold a small % of reserves in BTC. And just by doing this, he increases the likelihood it will happen! That's the beauty of this strategy since we are still so early with Bitcoin (only 12 years old!). It becomes a positive feedback loop, with more and more CEOs all over the world jumping onboard with a small % of cash reserves. Better to buy at 45k than 145k, right? And just wait util news breaks that the first country has decided to hold Bitcoin along with gold, that's really going to drive the price higher.

Will there be pullbacks? Of course! But these same CEOs will just say they are holding BTC long term, and are not worried about short term price fluctuations. I think it's win-win for them, and you're likely going to see many more CEOs - especially younger CEOs - join Musk and embrace crypto in 2021.
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crystalbank
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Re: TSLA: What Changed?

Post by crystalbank »

Prahasaurus wrote: Tue Feb 09, 2021 12:24 am
1. ...Musk is being proactive.

2. .. .Tesla aligning itself with that vision is incredibly shrewd.

3. ...I'm sure Musk would love to earn BTC from sales, so why not?

4. ...Musk likely believes in that vision

..join Musk and embrace crypto in 2021.
Wow. :sharebeer
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crystalbank
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Re: TSLA: What Changed?

Post by crystalbank »

crystalbank wrote: Tue Feb 09, 2021 12:44 am
Prahasaurus wrote: Tue Feb 09, 2021 12:24 am
1. ...Musk is being proactive.

2. .. .Tesla aligning itself with that vision is incredibly shrewd.

3. ...I'm sure Musk would love to earn BTC from sales, so why not?

4. ...Musk likely believes in that vision

..join Musk and embrace crypto in 2021.
Wow. :sharebeer
Edit: I don't know much about your rest of the arguments, but I do have a curiosity about 'Tesla investing in BTC to protect from runaway inflation' argument. US experienced significant inflation much through the 70s and the 80s. Did CEOs then flock to inflation protected assets like Gold? I highly doubt it. I tend to think that a company's growing cash flow itself is enough hedge against future inflation.
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Re: TSLA: What Changed?

Post by fennewaldaj »

Prahasaurus wrote: Tue Feb 09, 2021 12:24 am

2. A great marketing tool to show Tesla is thinking ahead, is embracing new technologies and more modern ways of doing business. I know this is going to be hard for many at Bogleheads to accept, but cryptocurrencies are seen as the future by a lot of people, especially younger people. Tesla aligning itself with that vision is incredibly shrewd.

I am aware that that opinion exist but I admit I don't really get it. Bitcoin isn't useful for anything legal really. I mean it makes sense for Tesla to do this because people who love Bitcoin and Tesla overlap a lot.
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Re: TSLA: What Changed?

Post by Prahasaurus »

fennewaldaj wrote: Tue Feb 09, 2021 1:01 am
Prahasaurus wrote: Tue Feb 09, 2021 12:24 am

2. A great marketing tool to show Tesla is thinking ahead, is embracing new technologies and more modern ways of doing business. I know this is going to be hard for many at Bogleheads to accept, but cryptocurrencies are seen as the future by a lot of people, especially younger people. Tesla aligning itself with that vision is incredibly shrewd.

I am aware that that opinion exist but I admit I don't really get it. Bitcoin isn't useful for anything legal really. I mean it makes sense for Tesla to do this because people who love Bitcoin and Tesla overlap a lot.
I think a better formulation here is, "I believe Bitcoin isn't useful for anything legal really." It's like saying rock and roll is silly and not really of any value, can't get why people listen to it, probably only promotes drug use and Satanism, etc. Similar vibe.
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Re: TSLA: What Changed?

Post by TomatoTomahto »

benderbr wrote: Mon Feb 08, 2021 5:48 pm
Eschew_Obfuscation wrote: Mon Feb 08, 2021 3:23 pm For those who buy into TSLA's vision, wouldn't the purchase of Bitcoin be contradictory to its vision of sustainability given that Bitcoin is known to have a large carbon footprint?
Yes this seems to be in conflict with Tesla's mission. Bitcoin is a terrible waste of energy. I buy into the vision, but this move doesn't make sense other than a publicity stunt.
Exactly. I often apologize for Elon Musk’s eccentricities, but this move might be a sign that he’s lost it. How stupid!

ETA Disclosure: I did once consider using my spare solar production in summer to power Bitcoin mining, but I don’t think “green Bitcoin” is a thing.
I get the FI part but not the RE part of FIRE.
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Re: TSLA: What Changed?

Post by Valuethinker »

TomatoTomahto wrote: Tue Feb 09, 2021 7:34 am
benderbr wrote: Mon Feb 08, 2021 5:48 pm
Eschew_Obfuscation wrote: Mon Feb 08, 2021 3:23 pm For those who buy into TSLA's vision, wouldn't the purchase of Bitcoin be contradictory to its vision of sustainability given that Bitcoin is known to have a large carbon footprint?
Yes this seems to be in conflict with Tesla's mission. Bitcoin is a terrible waste of energy. I buy into the vision, but this move doesn't make sense other than a publicity stunt.
Exactly. I often apologize for Elon Musk’s eccentricities, but this move might be a sign that he’s lost it. How stupid!

ETA Disclosure: I did once consider using my spare solar production in summer to power Bitcoin mining, but I don’t think “green Bitcoin” is a thing.
The suggestion is that this is to facilitate sales of Tesla products in Bitcoin.

i.e. they are accepting Bitcoin as payment (quite a good way to liberate the newly rich crypto-rich from their winnings, I think?). However they will hedge that position against other currencies. They might be using Bitcoin holdings as collateral on those transactions - i.e. there is an offsetting transaction which nets their exposure out to zero.

I don't really understand the mechanics ... but I heard it first from a guy on the internet.
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Re: TSLA: What Changed?

Post by GT99 »

4nursebee wrote: Fri Feb 05, 2021 6:36 am
There are airplanes with autoland features. One presses a button, the plane does everything else. Surely that can happen with cars.
This is actually really not a very good analogy. Landing a plane in an airport is an extremely controlled environment. There are relatively few variables for the computer to have to deal with and respond to - wind/weather, speed, elevation, etc. For the same reason, cars that can safely drive autonomously on a controlled access highway have been around for several years now. It's a controlled environment with fewer variables. I personally think that the divided HOV lanes that many cities have built will start becoming autonomous vehicle only lanes at some point in the not so distant future. Do that and you can increase throughput dramatically - higher speeds and cars closer together much safer than with human drivers.
But driving through a city, etc, there are countless variables that have to be considered - every car around you, every pedestrian, every street sign and street light, random obstacles in the street, etc. And it's not OK to respond correctly 99% or 99.9% of the time.
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Re: TSLA: What Changed?

Post by GT99 »

Dominic wrote: Mon Feb 08, 2021 6:59 pm The downside risk of Tesla (i.e. massive debt load, constant inability to deliver cars on time) isn't where it was at the end of 2019.

The market is pricing Tesla as a tech company rather than as a car manufacturer. Tesla is getting to a point where they'll be able to finance solar/battery/AI R&D with sales rather than more debt.

I still think the stock is overpriced, but there's nothing I can do about that.
You're right, but here is the highest p/e ratio of some well known Tech companies at any point over the last 10 years (I'm looking at month end data, so I'm going to round up to be safe):
Apple - 40
Alphabet (Google) - 60
Netflix - 460
Microsoft - 50
Paypal - 80

Current P/E of Tesla - 1380. They only have a positive P/E at all because of regulatory credits - they would have lost almost $900M in 2020 without them. Let's say they sell 2M cars in 2023 (which is certainly possible and would be a tremendous accomplishment) and increase revenues from energy generation and storage 10x, and triple their overall margins (which will likely have to happen with a loss of at least $1B in regulatory credit sales that are 100% profit). If that were to happen, and the price remains exactly where it is today, when the release earnings 3 years from now, their P/E ratio will still be about 100.

I'm very bullish on Tesla the company. I own one, I love it. I'm more bullish on the growth of the EV market than most analysts, I'm bullish on the future of solar and battery storage, and I plan on getting a Tesla roof or comparable when my roof needs to be replaced in a few years. And I'm still bearish on the stock price. Tesla may well justify it. But there's just no risk built in. What people seem to fail to realize is that Tesla has been very public with everything they are doing. Others haven't. We're largely comparing knowns with unknowns.

Everyone is talking about Honda, Toyota, VW, Lucid, Rivian, Nio, etc, but there's a company out there with $180 Billion sitting in their back pocket who has spent 7 years with thousands of employees developing new car tech, having hired away many Tesla engineers, and pretty much nobody outside of their project really knows exactly what they've got. That company is Apple, and they are probably the biggest long term threat to Tesla out there. Risks like that are just not priced in at all.
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Re: TSLA: What Changed?

Post by tctreece »

I don't believe that TSLA is so far ahead of the curve that others can't compete. Starting 10 years ahead of the game doesn't mean that other companies are 10 years behind. There is plenty of public research being done at universities that isn't all that far behind TSLA proprietary tech. Toyota should have no issue jumping into things and building out their EV infrastructure over the next 5 years just using PHD students. I'm sure they have plenty of talented engineers that rival TSLA as well.
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Re: TSLA: What Changed?

Post by fennewaldaj »

Prahasaurus wrote: Tue Feb 09, 2021 7:21 am
fennewaldaj wrote: Tue Feb 09, 2021 1:01 am
Prahasaurus wrote: Tue Feb 09, 2021 12:24 am

2. A great marketing tool to show Tesla is thinking ahead, is embracing new technologies and more modern ways of doing business. I know this is going to be hard for many at Bogleheads to accept, but cryptocurrencies are seen as the future by a lot of people, especially younger people. Tesla aligning itself with that vision is incredibly shrewd.

I am aware that that opinion exist but I admit I don't really get it. Bitcoin isn't useful for anything legal really. I mean it makes sense for Tesla to do this because people who love Bitcoin and Tesla overlap a lot.
I think a better formulation here is, "I believe Bitcoin isn't useful for anything legal really." It's like saying rock and roll is silly and not really of any value, can't get why people listen to it, probably only promotes drug use and Satanism, etc. Similar vibe.
But that is the thing. Rock and Roll isn't supposed to be useful (same for classical or jazz or top 40). Currencies are supposed to be useful. BTC isn't really very useful for currency things. Calling it a digital gold makes more sense (since gold is also not useful for much). I don't think it is going to zero or anything at this point but it seems to be of limited use as an actual currency.
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Re: TSLA: What Changed?

Post by harikaried »

Ha. This article says Tesla's Bitcoin purchase in January currently has around $561 million unrealized gains today. For some context, Tesla reported $401 million regulatory credits for Q4 2020. The real reason must be to distract from people complaining about Tesla being profitable only because of these other sources! :wink: :P https://finance.yahoo.com/news/tesla-bi ... 20202.html
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