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the credits are forecasted to get much smaller in 2021/2022 and will go to $0 in next few years as more manufacturers roll out their own EVs...so if investors a

by xoxoy 6y ago

the credits are forecasted to get much smaller in 2021/2022 and will go to $0 in next few years as more manufacturers roll out their own EVs...so if investors are excited by the profitability these credits afford Tesla then they better move on figuring out how to make their stock appealing even without them.

mikelyons 6y ago
Mission accomplished? (Accelerating the transition)
mrkstu 6y ago
There are plenty of manufacturers behind the curve that will be buying credits for the foreseeable future.
- marvin 6y ago
  The irony is that some of them will go bankrupt because they're unable to compete once electric vehicles become the obviously best option. So no more credits maybe, but also less competition.
  - rightbyte 6y ago
    When the battery supply is running smoothly it wont be hard making EVs. ICE vehicles are harder to make.
    - marvin 6y ago
      Everyone assumes that cheap and reliable electric drivetrains and battery packs will shortly be a commodity, available to anyone in the 100 TWh/year volumes that are required to cover the world's road transportation needs. I'm betting that this won't be the case until about two decades from now. Battery cell & pack production will be a strategic requirement for any vehicle manufacturer that wants to produce in volumes > 100,000 vehicles/year. Also, the goal posts aren't fixed -- if your commodity battery packs cost 10% more than those the competition have access to, but are still expensive enough that they make up a substantial portion of the total vehicle cost, you won't be able to compete. So even though battery cells will eventually reach a point where it's "easy" to make an EV, there will already be enough competitors that make it economically impossible for new entrants to compete.
_ph_ 6y ago
If you followed news about Tesla, they just announced big innovations in the battery sector cutting battery costs down in half over the next 3 years. So by the time the credits are no longer contributing to the revenue, the production costs will have been lowered considerably.
- ksec 6y ago
  Well yes. But if anyone followed news about Tesla, we should have Lv4 / 5 AV or RoboTaxi by now. i.e Elon's Time Scale are not very reliable. Although I have come to the conclusion he does it on purpose to push the team to come up with the results.
  - _ph_ 6y ago
    Yes, Elon time scales can be shifting. But this was only one of several examples of where the technology is changing, especially making car production cheaper. By the time the credits run out, car production will be cheaper. The FSD claims of Elon certainly are the ones, which have shifted most and basically autonomous driving is still an unsolved problem. The planned production enhancements are far more straight-forward, so one can expect them to come to pass. And even with FSD: if you look at the new beta release released two days ago, it is an amazing improvement, check out the first user reviews.
DarmokJalad1701 6y ago
> to make their stock appealing even without them. As an investor they are plenty appealing to me. They made 23% gross margin on their cars excluding credits, and operating margins have also increased every quarter, now at 9.2%. These kinds of numbers are unheard of for an automaker. And they achieved these numbers while building out three factories.

by xoxoy 6y ago

mikelyons 6y ago

Mission accomplished? (Accelerating the transition)

mrkstu 6y ago

There are plenty of manufacturers behind the curve that will be buying credits for the foreseeable future.

marvin 6y ago
The irony is that some of them will go bankrupt because they're unable to compete once electric vehicles become the obviously best option. So no more credits maybe, but also less competition.
- rightbyte 6y ago
  When the battery supply is running smoothly it wont be hard making EVs. ICE vehicles are harder to make.
  - marvin 6y ago
    Everyone assumes that cheap and reliable electric drivetrains and battery packs will shortly be a commodity, available to anyone in the 100 TWh/year volumes that are required to cover the world's road transportation needs. I'm betting that this won't be the case until about two decades from now. Battery cell & pack production will be a strategic requirement for any vehicle manufacturer that wants to produce in volumes > 100,000 vehicles/year. Also, the goal posts aren't fixed -- if your commodity battery packs cost 10% more than those the competition have access to, but are still expensive enough that they make up a substantial portion of the total vehicle cost, you won't be able to compete. So even though battery cells will eventually reach a point where it's "easy" to make an EV, there will already be enough competitors that make it economically impossible for new entrants to compete.

_ph_ 6y ago

If you followed news about Tesla, they just announced big innovations in the battery sector cutting battery costs down in half over the next 3 years. So by the time the credits are no longer contributing to the revenue, the production costs will have been lowered considerably.

ksec 6y ago
Well yes. But if anyone followed news about Tesla, we should have Lv4 / 5 AV or RoboTaxi by now. i.e Elon's Time Scale are not very reliable. Although I have come to the conclusion he does it on purpose to push the team to come up with the results.
- _ph_ 6y ago
  Yes, Elon time scales can be shifting. But this was only one of several examples of where the technology is changing, especially making car production cheaper. By the time the credits run out, car production will be cheaper. The FSD claims of Elon certainly are the ones, which have shifted most and basically autonomous driving is still an unsolved problem. The planned production enhancements are far more straight-forward, so one can expect them to come to pass. And even with FSD: if you look at the new beta release released two days ago, it is an amazing improvement, check out the first user reviews.

DarmokJalad1701 6y ago

> to make their stock appealing even without them. As an investor they are plenty appealing to me. They made 23% gross margin on their cars excluding credits, and operating margins have also increased every quarter, now at 9.2%. These kinds of numbers are unheard of for an automaker. And they achieved these numbers while building out three factories.