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Tesla as an opportunity of investment

Tesla as an opportunity of investment

I belive that all people that are reading this post think that Tesla is a great Car Company, the most advanced, the most innoative and the most oriented at the future.
This is the reason for which I'm evaluating tesla as an opportunity of investment and i would like to discuss with you about this.

grega | October 20, 2013

Sorry JK2014, what's the dedicated battery factories panasonic is building for Tesla? I assume you're saying that Tesla has some ownership in these that will bode well for them in selling to the worldwide industry for cars and homes...

If they're just purchasing Panasonic batteries - this would mean Panasonic would enjoy the worldwide market as it grows.

Thanks for clarification, I've probably missed something obvious.

Brian H | October 20, 2013

grega;
Tesla batteries are simpler and cheaper than the industry standard, as they move the fire protection etc. off the battery "cap" and into the case structure. I think they also tweak the chemistry. All patent protected.

Brian H | October 21, 2013

A big buying opportunity? TSLA dropped about $14 today, mostly based, it seems, on articles in German Manager and Seeking Alpha. The first based on a confusion about SuperCharger costs in Europe, and the second trying to fit TM into the ICE-maker mold.

772 | October 21, 2013

Seeking Alpha have been bearish on TSLA for a while... that's not news. Even the German story is not news.

Brian H | October 21, 2013

Seeking Alpha is not a "staff writer" site. All articles are contributed by readers, who get a piece of the ad revenue depending on hits.

jk2014 | October 30, 2013

7 billion 18650 batteries over the next 4 years in Panasonic deal. Expect a significant deal from Samsung soon. The capacity question is quickly being solved with battery production scaling.

Scaling batteries means cheaper batteries and that's revolutionary tipping point not only for tesla motors automotive sales, but also for energy storage in solarcity PV systems leases.

Sunpower(solarcity's closest competitor) capacity is capped for 2014, leaving the door even wider open for Solarcity to gain market share in residential/commercial space. Together with batteries scaling, solarcity may be ready for PV/energy storage combo lease sooner then anticipated in 2015...

Iowa92x | October 30, 2013

I'll say it again, buy Panasonic stock. Mine is up 20% in two months.

Bubba2000 | October 31, 2013

I made a sizable investment on TSLA starting around $35-40. When it crossed $40, I bet the farm. i figured I had cushion from the initial shares. At $107 I sold 20% of some of the expensive shares… figuring I could sleep better. Then the stock hit $190+ all time hi, but I did not sell. When it started to come down and it hit $160, I sold out my IRA positions but kept some of the individual account. The value of my holdings have grown way beyond my reality… enough to live on the amount. I was waking at 3 am worried about loosing most of it.

Now, I want to keep what I have in Tesla. If the stock gets way cheap, I will add some shares, but not bet the farm again since price is hi now. If earnings beat significantly, I will buy at a way higher price, but a smaller amount. Just trying to manage/conserve capital and risk.

I think that Tesla can truly change the game in automobile. I own a 85P/Pano and I truly enjoy driving the car… just that I am restricted now on taking long trips, but that will change in a year. When I drive the car, I tempted to buy shares!

I have invested in great stocks over time… like QCOM in late 1998. That stock went from $40 to $1700 before all the splits in early 2000 (it was 800+ after a 2:1). That and other stocks had made me a ton of money. Mistake? Yes, not selling on the way up, 10% at a time. It is a great company, but the stock never recovered.

Tesla could well be a $100B company if it disrupts the ICE market… 5-bagger from here. I just want to control my risk.

Thought I would share with the Forum.

jk2014 | October 31, 2013

Bubba2000 --

Why sell at all? Did you go into Tesla looking for short term gains? Tesla is at the very beginning of it's growth (as you know), it won't mature (at least from my perspective) for at least another decade or two. Seems to me as a long term bet.

I see GenIII sales as a decision point for taking profits or getting out and that's about 4-5 years away. Helps me sleep at night too!

My investment story: Was at the mall one day, saw the the Tesla store, didn't think much of it, thought it would be another gimmick car, but sat in it, learned about (and impressed by) it's range and capability (performance and safety), googled Tesla Motors, learned about Elon Musk and his ambitions, got nervous(started to see the size and scope of this car), didn't sleep all night reading quarterly reports and watch Elon stutter in youtube videos, consulted with my wife on investing for the first time 10 years, opened a brokerage account, invested a substantial amount of funds at 29.70 last year...

I guess I have reason not worry about losses (nor should you at $40/share), but still don't care if it goes to 200 or below 29.70 since I intend to hold for years to come since that's the only time horizon I feel really makes sense for investing with Tesla.

Captain_Zap | October 31, 2013

The only reason I lose sleep is that I made a $40k deposit on the car then paid cash for it. Lots of opportunity cost there...
At the same time, the stock did absolutely nothing for almost a year and a half.

I haven't pulled out any shares. I think this is just the beginning of something huge. The main reason I invested to support the company and their vision anyway. (Hence the $40k deposit.)

Brian H | November 1, 2013

Bubba;
You sound like a great candidate for dollar cost averaging: $Xk/mo, regardless of price.

jk2014 | November 2, 2013

I am very curious how much effect on cost/kwh the panasonic deal will have on the overall battery system (as is everyone else!). I'm betting Tesla will stick with the 18650 form factor for a very long time since the key factor of EV adoption right now is not going to be too much about range (since I believe the 18650 chemistry leaves room for 300+ range EPA from fewer cells), but about cost.

How far can they drive cost for their current patented battery energy storage system? That's the real question for mass adoption. Not finding a better tech. There will probably be better technology available in the near future, but it won't be capable of being commercialized (supply chain network, economies of scale, etc...) in the next 3, 5, 10 years effectively.

The single best bet (in the entire auto industry)is the 18650 for the next 5 or more years. Therefore, how will the economies of scale now afforded by 2 billion cells over the next 4 years impact cost?

If the Panasonic deal proves to reduce the cost significantly (which I'm assuming Tesla will guard that info heavily) it also will have a significant impact on their stationary energy storage business as well. (i.e. Solarcity PV system/energy storage lease combo)

If Solarcity can offer at 23kwh battery storage system (23kwh average daily use in American households daily) instead of the current 10kwh system with their PV leases and still beat utility cost/kwh, then this will have a significant impact on future orders for Tesla batteries outside of automotive sales.

Elon and JB Straubel are both on the board of Solarcity as well. From recent talks, as well as from seeing massive battery storage systems in place currently at supercharger stations in California, they are keenly focused getting to this reality in the near future.

A special note: JB Straubel noted at the GCEP Symposium (October 2013) that all of the various estimates and comments about the actual cost/kwh of the battery system are completely false. He said the cost/kwh is a lot less then what is speculated. As I remember it now, he also said the cost/kwh is a guarded number not to be revealed. My read on this, is the cost is a "surprise card" to be taken advantage of in quarterly reports, earning calls, future announcements, etc...

jk2014 | November 3, 2013

Tesla will potentially roll out 10,000 home battery storage units (10-12kwh) by year end 2014. Estimated cost/system is 15K (approx. 5K purchaser cost after incentives). That right there is approximately $150 million in additional revenue outside auto sales for 2014.

Folks, this is going to be big business if they intend to keep pace with Solarcity customer goal of 1m customers by 2018. Especially if Solarcity offers battery storage as a package lease deal. If costs stays around 10-15k per battery system and potentially 500k of solarcity customers take the combo deal, Tesla is looking at $5-7.5 billion in additional revenue over the next 5 years. I hope many will all begin to see the profound impact this will have on Tesla's bottom line.

Note: I've noticed Solarcity's recent investor slideshow is already highlighting "real time energy storage control" as part of its robust technology platform.

jk2014 | November 3, 2013

And I'll make a bet that solarcity will purchase every single one of those 10k battery storage units if it fits within their zero down/less than currently utility lease structure. Could very well see an announcement early next year and possibility at earnings call tuesday(wildcard) of a Solarcity/Tesla partnership on this front...

ConFuzion | November 4, 2013

I have trade in some of my TSLA-stockprofits for Umicore-shares. They are world leader in recycling batteries, alltough their CEO told tesla is a hype, i think this can be an opportunity for the long run?

Brian H | November 4, 2013

The stock was up over 8% today, in prep for the SH meeting. Good news anticipated!?!

jk2014 | November 30, 2013

It's beginning to happen... Regulatory environment increasingly favorable to Tesla's/solarcity's big entry into energy storage market...

http://theenergycollective.com/tinacasey/309336/renewable-energy-barrier...

Again, solarcity creating the market for Tesla battery storage with each residential/commercial contract signed(1m by 2018). Energy storage is the natural progression of clean energy delivery and energy savings for utility customers. Pricing at the moment is $10/month addition to solar energy bill...

Massive growth coming very quickly in 2014 and Tesla will be right there to benefit.

Brian H | November 30, 2013

Hm, a few megawatts here and there aren't going to do the trick. Lotsa gigawatts needed, please.

jk2014 | December 4, 2013

Don't worry, Brian. Lots of megawatts surprisingly adds up to lots of gigawatts! Especially now that securitization has opened up. No longer will Solarcity have to tap the equity markets (dramatically reduce dilution from now on, really good for investors). Bonds backed by government housing(i.e.120,000 Army, air force post housing hawaii&texas), municipal power (i.e. Hawaii, Maryland, Cali,), k-12 school, universities, etc... some of the most, if not THE, most secure assets to securitize in the entire world. These bonds will quickly be rated very, very well (if not the best) very soon. Solarcity will be able to get great rates for capital. I feel the next round of bonds will be over 100 million Q1, then over 200 million per offering after that and they will be snapped up the moment they hit the market. I see easily over 500 million in capital (without dilution to shareholder value) in 2014 easy.

That's a lot of capital to ramp up operations to meet the already nearly 250 MWs of back long. Already booked 100 MWs in Q3, and expect well over that in Q4.

It will be a monster 2014 for Solarcity. Their long term contract payments will balloon from $1.7b right now to over $3b this time next year. From around 600MWs deployed to nearly 1.4GWs. Can't imagine what 2015 is going to look like...

Again, the market is being set up right now for Tesla battery energy storage. If just the military contracts for energy storage, we're looking at 120,000 homes needing 120,000 Tesla energy storage units. That is potentially $1.1 billion plus to Tesla's bottom line... and this could just around the corner late next year...

jk2014 | December 5, 2013

"We are thrilled to leverage Tesla's technology leadership in energy storage systems, charging and power electronics to enable this exciting SolarCity launch," said Tesla CTO and co-founder JB Straubel. "The economics and scale that Tesla has achieved in the automotive market now make stationary energy storage more cost effective and reliable than it has ever been in the past. We expect this market to grow very rapidly now that we have crossed this economic threshold."

http://investors.solarcity.com/common/mobile/iphone/releasedetail.cfm?Re...

elephant in a bottle | December 5, 2013

This is exciting news for both Tesla and SolarCity.

However, given Tesla's production constraint on battery supplies , does this mean production of Model S will now compete also with SolarCity DemandLogic orders? Ergo, fewer Model S production in future?

jk2014 | December 5, 2013

No. More than enough for the next 4 years starting January. I estimate the giga factory will be up and running NLT 2016 which would cover the required geniii capacity levels in 2017.

More then enough batteries, in fact, significant battery system price decreases by late 2014 should create compelling energy storage solutions for residential PV systems. At low to no upfront cost to customer. Now that will open the flood gates....

Brian H | December 5, 2013

As time goes on, retired auto batteries will have long lives ahead of them as storage systems.

jk2014 | December 5, 2013

You got it Brian, but repurposing auto batteries might not be necessary if they figure out how to recycle batteries.

Battery renewal. Take degraded batteries and restore original capacity with exact same lifespan without digging up more lithium, cobalt, etc... JB Straubel says they are working on it right now....

Once they hit a certain number of batteries, won't have to buy anymore raw materials, just a restoration process. That's f***ing amazing! This goes for residential and commercial battery storage.

Commercial storage is just the beginning. I feel it is just an extension of the pilot program, although the 100MW battery storage goal is pretty substantial IMO. Guessing Walmart in California will be first, then school, municipalities, etc... have to remember these are very secure payments too. Government and Walmart rarely, if ever, default on utility payments. These long term contracts (with battery storage now included) will product very low cost of capital bond offerings. I think 500m or more in 2014. This will put more megawatts (gigawatts maybe) out there. Will further accelerate economies of scale, reduce overall costs, and expand penetration in the addressable market. Again, they are creating the battery storage market for Tesla battery storage.

For Tesla, the more batteries they produce, the faster they can reduce costs, and the sooner we'll get to a GenIII price point that will be well within reach for the mass market. Targeting (and preparing for) the soon to be gigantic energy storage market would accelerate costs even further.

New panasonic contract is very much ample enough to cover all MS/MX production for next four years as well as energy storage for ALL current Solarcity customers... they don't protect the cost/KWh information like they do for no good reason.

Expect the giga factory announcement to come in Q1 (wildcard this month maybe). It, to me, is the real revolution crossing point.

Tesla won't have to build any of the batteries at Fremont Factory. How much space for production does that clear up? They bought the track next door, does this mean they could produce 500k cars without having to build a new factory for many years? Remember all they have to do is essentially insert the battery at the end of production. Have a holding facility for giga factory battery shipments.

I'm thinking the giga factory will not only be utilized for auto and residential/commericial/utility use, but also for future projects like the hyper loop and supersonic jets... it's going to be a big deal when the announcement hits. Tesla investors will rejoice everywhere for sure...

elephant in a bottle | December 5, 2013

+1 jk
I'm looking forward with the "giga factory" announcement.
Hopefully that will happen soon.

STY1 | December 5, 2013

Damn. Wish I had read this thread when it started and bought at $38. Heard of someone who just sold their stock and made enough to buy a MS.

elephant in a bottle | December 6, 2013

Per Elon's tweet , there's no short term battery supply constraint despite new SolarCity deal.
All is well and good. Looking forward to a strong 4Q. Weeee... !!

athisdale | December 9, 2013

Say Bubba2000,

Would you still recommend getting into bed with TSLA right now? With the stock going from 120 to 140 (average) i'm still tempted to get in there thinking this thing might get up there with the X coming out next year.

Thoughts?

jk2014 | December 10, 2013

I'm thinking the focus on battery capacity is a little misdirected right now. Really need to look at power electronics as the next big development in cost/kwh estimates. I'm feeling this will be the next breakthrough for JB and crew, not necessarily a new battery chemistry per se.

There is a lot of energy wasted through the inefficiencies of the power electronics. JB mentioned in his Stanford lecture, as well in a lecture in March, as much as to the power of six because of all the conversions from Solar panel to inverter to battery, to the motor, etc... so one or more percent in any part of that flow could do wonders for range, battery longevity, as well as pack density of the current system.

I recall hearing there is 10% - 15% energy loss through the (original MS) power electronics. If just a 2% increase in efficiency of power electronics happens, how much would that reduce weight, cost, and size of the current battery pack of the MS as well as increase the range at the same time?

I'm sure from how aggressively JB is pursuing power electronics efficiency it will be significant and quickly implemented. 4 billion cells from the panasonic deal might be enough to produce more vehicles then most estimate right now. It's just another surprise development to catch the market off guard. Not to mention the implication for cost reductions and efficiencies for stationary energy storage through Solarcity in residential/commercial spaces and more directly in superchargers throughout the world.

As an investor, this makes the 4 billion cell deal bigger then currently estimated, since they will be able to produce more cars (and produce more stationary storage) all the while reducing costs and increasing margins among many other things. Am looking for this surprise quarterly report news in 2014 (in addition to the giga factory plans) to bode well with the market.

comerbr81 | December 12, 2013

I think right now the overall stock market is overvalued, and a correction is likely in the near future. From a long term view many auto makers are great buys right now, in my opinion. Below is a chart by Toyota which shows vehicle sales and production by region over the last 10 years. Everyone talks about China and how they are now leading the world in car sales, but a lot of other regions such as Africa, the middle east, South America, and countries such as Russia and India are increasing vehicle sales as well. The United States and Europe represent a small part of the overall world population, and as the standard of living and economies in other countries continue to improve the global growth from the automotive industry will be outside the United States, Canada, Japan, and Europe. Based on the chart below, in 2003 75% of Toyota's sales came from North America, Japan, and Europe. In 2012 just 54 percent of total vehicle sales came from those countries. Based on current valuations, I think several vehicle manufactures are undervalued because of their long term global growth prospects. The big automakers are only going to get larger and larger and larger. Profit margins will likely also improve, because they are making more and more cars in countries with very cheap labor and a low cost of living.

http://www.toyota-global.com/company/profile/figures/vehicle_production_...

In regards to Tesla and energy efficiency vehicles in this country, I think this is the best graph I could find.

http://evobsession.com/electric-car-sales-hybrid-car-sales-august-2013-s...

The entire green vehicle segment is growing rapidly. Toyota's hybrids are doing exceptionally well, and Tesla and Nissan are selling a lot of electric cars. With that being said, Tesla's market cap is massive for their current size, and I think the stock is way overvalued. Tesla's market cap isn't much less than a third of GM's, and GM is selling millions of cars all over the world and has been profitable for a while now. Ford and Nissan aren't much more expensive than GM. I realize that Elon Musk even said it was overvalued, but I personally couldn't justify a market cap of over 8 billion for Tesla. I think it is a great company, but there are too many risk and the company simply isn't very large yet.

Brian H | December 12, 2013

The opportunity is commensurate with the risk. You think the "risk aversion" should win. Many don't.

Thanks for the link to evobsession.com and its charts, etc. Huge info source. Is there a more recent version of the August sales summary? Or an international chart? Couldn't locate them.

He makes an interesting point about publicity etc.:
"People want to be greener. People want to cut oil out of their lives and would love to never have to visit a gas station again. However, these are not things that the majority of people base their purchasing decisions on.

People base their purchasing decisions on desire, emotion, thrill, love. EVs are amazing to drive. When it comes to the pleasure of driving, the excitement of driving — EVs trump gasmobiles. What EV producers and EV advocates need to be doing is telling people how much more enjoyable driving an EV is. Show them — through videos of people driving an EV for the first time, or after driving an EV for the first time; through videos of EV owners, the majority of whom don’t intend to ever go back to gasmobiles."

Brian H | December 12, 2013

Interesting that he hasn't even test driven a Tesla yet!
The BMW i3′s drive was smoother than any car I’ve ever driven (of any type) — though, I’m yet to drive a Tesla.
.
The i3 has excellent acceleration. It goes from 0 to 100 km/h (0 to 60 mph) in around 7 seconds, a few seconds faster than the Nissan Leaf or VW e-Up!, which do so in around 10 seconds.
.
Overall, the i3 was definitely the nicest of the 3 cars I’m writing about today. But, having a significantly higher price, that would be expected.

comerbr81 | December 12, 2013

I came across this the other day. I'm not sure who the author is, but he does seem to give a good comparison between BMW and Tesla.

http://www.thestreet.com/story/12120702/1/tesla-vs-bmw-i3-electric-first...

I would be interested in seeing global numbers for fuel efficient vehicles as well. For some reason global numbers are harder to come by, but I'm sure it is possible.

jk2014 | December 12, 2013

Green doesn't matter. Tesla BEV tech has tremendous efficiency improvement potential compared to ICE vehicles. It is a far better play for medium and long term.

Fuel efficiencies. BEV and solar go hand in hand. Solar radiation is an endless supply of energy. It will not go away. Fossil fuels are scarce resources that will go away. Efficiencies have peaked and will be very expensive to increase by very small margins. Efficiencies in PV systems are no where near where they can be. There is tremendous growth in these areas the will reduce cost, improve range and performance that will leave ICE tech behind very quickly. Every building in America has an outlet. An outlet is all you need to fuel your car. Not every building has a gas station. As PV and BEV systems improve efficiencies so will these "gas stations" (outlets). ICE gas stations have no efficiency improvements comparable.

Tesla is a first mover, much like Ford, etc was a 100 years ago.. Not sure any other car company will have the patent portfolio or charging network with efficiency(innovation) potential as Tesla does, so may see a sustained market share foothold of decades much like ford, etc... no one has developed (or is developing) the required supply chain that Tesla has/is. Doesn't matter how much money these ICE car companies have, they don't have the TIME IN or PATENT PORTFOLIO or SUPPLY CHAIN or BEV SCALE that Tesla has/is building. They can't do it overnight. It will take years to catch up. Remember, Tesla has been dedicated to BEV exclusively for 10 years. It could be the same timeframe for traditional ICE companies to start to compete.

Brian H | December 12, 2013

Here's a more recent version of the sales chart:

http://i0.wp.com/evobsession.com/wp-content/uploads/2013/12/november-ele...

Brian H | December 12, 2013

Notice at the bottom, EVs >> PHEVs > Hybrids
by percentage, but in absolute numbers Hybrids >> PHEVs > EVs .

Timo | December 13, 2013

Amount of pure BEV is almost completely Model S + Leaf. Out of 41500 36230 is them.

Also this shows that practicality goes over affordability: 16150 Model S vs 20081 Leaf even that Model S is a quite a lot more expensive than Leaf.

GenIII will change these charts completely.

comerbr81 | December 14, 2013

It is worth noting a few things about this chart. First of all Tesla is going to sell over 20000 vehicles at the top of the luxury market this year. There aren't very many people in this country who can pay that much for a car, and Tesla just sold 21000 before this year is over.

Also, Tesla is providing various parts for Smart ED and Toyota RAV 4 ED. Tesla is making money off the sales of Toyota and Smart electric vehicles. The new electric BMW will be Tesla's competition. As shareholders and with their supplier deal, Daimler and Toyota are not really Tesla's competition. They are partners when it comes to Electric Vehicles.

jk2014 | December 16, 2013

Wow... was just thinking how batteries are estimated to have up to 20 years of life in them (of course, warrantied for 8 right now).

And, Elon says he sees leasing as the overwhelming way in which Tesla's will be "purchased" in the future (specifically Model E).

Could it be possible that Tesla offer a asset backed security bond in the future around the battery system? This would be truly revolutionary for the auto industry and provide a massive amount of funds in the next five years.

Batteries will be "refreshed" to original or greater capacity so increase life span significantly so use the same battery pack for many many years reliably. So, the more batteries Tesla produces and owns (and refreshes) then leases for monthly payments, might be something to it...

Could turn out to be just like Solarcity's $54 million PV system securitization. Elon, does like to "cross pollinate" ideas between SpaceX, Tesla, and Solarcity, so why would how they raise funds be any different?

Brian H | December 16, 2013

Well, leasing provides a more plausible basis for swapping than purchase-trade in, I guess. Could happen.

jk2014 | January 7, 2014

Interesting thought... Solarcity could "lease" stationary energy storage from Tesla in the near future. If they aim to integrate battery storage with Walmart, Military housing, schools, etc... in the near futuree, this could potentially be $100m+ of battery storage required in the next couple years. Leasing all those batteries could free up a tremendous amount of capital for acquisitions and PV system procurement, thus accelerating installations to meet more market demand sooner.

The best part, Tesla will have reoccurring monthly payments (potentially in millions) for the life of the battery, which could be 10 or more years. Could this mean Tesla could get into the asset backed securitization market? A car company??? Wow, this could get interesting, especially with Solarcity's $150-200m ABS coming soon. Might open a whole new way of raising capital for Tesla with minimal dilution. Crazy how Tesla energy storage tech could potentially transform the auto industry in ways never imagined..

martin.petr1 | January 9, 2014

infinite range in the car? Would that work? Perendev magnetic motor as a current generator.no charge just going. What do you think...

http://www.youtube.com/watch?v=PFGiWiXMHn0

Timo | January 9, 2014

infinite range in the car? Would that work?

No.

jk2014 | January 14, 2014

Giga factory news at 2013 Q4 conf. call in February will open the eyes of many. Again, not only will this significantly decrease cell/battery system costs for vehicles (Model S, E, X, etc..), it will significantly decrease stationary energy storage costs for Solarcity in their zero down lease model. Very much looking forward to the details here. Imagine many other investors are in the same boat.

Brian H | January 14, 2014

The Jan 14 release of a 20% beat of guidance, 6900 cars in Q4, boosted shares by $21. Outstanding! Expect more as the FUD of the phoney recall headlines etc. unwinds.

Iowa92x | January 14, 2014

It's nice seeing a multi-thousand $ rise in my TSLA stock today. Can't wait for Gen III, Tesla will be in beast mode by them and unstoppable.

Stock will likely drop slightly or flat tomorrow.

Brian H | January 14, 2014

Mebbe not. The fading of the "recall FUD" should fuel some further rise.

jk2014 | January 21, 2014

When the Model X sales/deliveries start up in 2015, watch out for a very good pre-owned market for Model S to happen soon after. I see a lot of trade ins for the "new" family vehicle. Those MS trade ins will reach a new buyer new MS's don't. Additional demand(immediate) is there, just has to be 20K or so cheaper and maybe we'll see that with the pre-owned program.

Also the three year mark for original MS's will come and usher in more pre-owned inventory. If range degradation is less then 3-4%, then I'm seeing resale value being very good. Elon's bet on 51% will seem silly when pre-owned market might get much more then that. See the Tesla lease program boom if this turns out to be the case.

All in all, I see this pre-owned market potentially adding a surprisingly good (and immediate) revenue stream to the bottom line. Should see cash flow steadily rise over the next few years. Not sure if this is baked into the market price as of yet or that the overvalued types have taken this into account...

jk2014 | January 21, 2014

Just to add, if the old Model S fetches a great resale value (say 70%), then we could see a dramatically lower monthly payment about on the Tesla lease. If the monthly payments hit $500 or less in actual dollars, then we could see a massive boost in sales in the next year or two...

And if this the case for MS soon, I'm wondering how low the Model E lease payments would be? Very exciting since product cost biggest barrier to mass market. Would be crazy if Model E turns out to be $199/month when it comes out... Wow.

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