Tesla release their patents...
Discussion
http://www.teslamotors.com/blog/all-our-patent-are...
Not sure what Tesla have that would benefit anyone else, but this reminds me a little of the Three Point Seatbelt. Good show, anyway.
Not sure what Tesla have that would benefit anyone else, but this reminds me a little of the Three Point Seatbelt. Good show, anyway.
trashbat said:
Sure, but TSLA is a bizarre beast. Their current market cap is $25bn, twice that of Fiat-Chrysler for instance, but they hardly sell any cars. Perhaps they're worth so much because of their patents, except now they effectively don't have any.
no they're worth so much more because they have an innovative product range, real points of differentiation, are 'trendy', no historical pension grenades waiting to go off and a whole load of momentumGreg_D said:
no they're worth so much more because they have an innovative product range, real points of differentiation, are 'trendy', no historical pension grenades waiting to go off and a whole load of momentum
$25bn worth?Two models, one factory, a proprietary charger network, some dealerships. Little or no unique, monetisable IPR. Let's guess at 35k cars a year, which is on a par with Maserati, but presumably without the economies of scale that come from being in a larger group. Makes a loss. P/E of about 130.
Can you or anyone else explain $25bn without using the word 'bubble'?
Edited by trashbat on Friday 13th June 17:23
trashbat said:
Greg_D said:
no they're worth so much more because they have an innovative product range, real points of differentiation, are 'trendy', no historical pension grenades waiting to go off and a whole load of momentum
$25bn worth?Two models, one factory, a proprietary charger network, some dealerships. Little or no unique, monetisable IPR. Let's guess at 35k cars a year, which is on a par with Maserati, but presumably without the economies of scale that come from being in a larger group. Makes a loss. P/E of about 130.
Can you or anyone else explain $25bn without using the word 'bubble'?
Edited by trashbat on Friday 13th June 17:23
For example, by the end of 2015 with Model S and Model X in production, global sales could exceed 100,000 cars, instead of a mere 30k units in USA last year.
Using a somewhat simplistic example, the bulls reckon that the Model S and X will continue to have a purchase price of around $100,000 a pop and no shortage of demand. The non-GAAP current profit margin is over 25% margin. Loosely speaking that equates to $10 Billion in revenue just from vehicle sales, or $ 2.5 Billion in profit, although I doubt any dividends will ever be issued in the foreseeable future as its all ploughed back in. They have also had sizable revenue from EV drive train work for Mercedes, Toyota and others, although I have no idea about the future of that.
Using this simplistic example, and applying a "forward" looking PE ratio of only X 10, the bulls can justify the existing share cap of $25 B.
The quarterly shareholder letter states that they are gearing up to produce 500,000 cars within 5 yrs and *if* they continue to execute to plan then at some point between now and then the share price may well be considerably higher, and its where it is right now because of the faithful not wanting to miss out and piling in early etc.
They are also about to turn-over the Energy Storage market. And that might dwarf the car biz in the long run ...
Plus, they have a head start with the rapidly growing supercharger network in the US and I can see competitors licensing the use of them to play catch up with their own flavours of EV, which might also imply that they will need to use Tesla battery charging tech as well.
So, comparisons to the aging clapped out USA car industry with profit margins of just 2-3%, laden with monumental govt debt, and other massive problems like the pension issue, rising oil price, falling demand, then yeah, I can see the bulls case.
The bear case is weaker but is well fuelled by an amazing about of shorts and their media FUD.
Caveat :- Shares can go up as well as down blah blah.
Edited to add: Mkt cap on 3rd Jul '14 grown to $30B ...
Edited by Carparticus on Thursday 3rd July 01:57
Well, with respect then, and those numbers and attitude, I gently suggest you stay away from long term investing.
The product is very good, I admit. They certainly have the jump on everyone else, and have carved out a very successful niche. However, it is a niche. No shortage of demand for a $100,000 car? Erm, how about once you run out of people with $100,000 to spare? How big is, say, McLaren's road car business ever going to grow, and how much profit with it? How well would Porsche do without the rest of the group?
More importantly, I can't see any reason that any of the old, boring, clapped out car manufacturers can't get on the electric car bandwagon any time they deem suitable and muller them with scale and existing relationships. No, not being cool enough doesn't cut it. The best reason you could give is IPR ownership, possessing some secret sauce, and yet that seems to be spilling out for everyone to lap up. Even if it weren't for the patent story, a load of it is bought-in COTS kit from Panasonic etc.
500,000 cars is roughly what Chrysler (the group, not the brand) produced worldwide in 2011. When's that going to happen?
All FUD, I'm sure, but be careful with your money. I'm sure the share price will hit $400 or whatever, but I'd sooner buy tulips.
The product is very good, I admit. They certainly have the jump on everyone else, and have carved out a very successful niche. However, it is a niche. No shortage of demand for a $100,000 car? Erm, how about once you run out of people with $100,000 to spare? How big is, say, McLaren's road car business ever going to grow, and how much profit with it? How well would Porsche do without the rest of the group?
More importantly, I can't see any reason that any of the old, boring, clapped out car manufacturers can't get on the electric car bandwagon any time they deem suitable and muller them with scale and existing relationships. No, not being cool enough doesn't cut it. The best reason you could give is IPR ownership, possessing some secret sauce, and yet that seems to be spilling out for everyone to lap up. Even if it weren't for the patent story, a load of it is bought-in COTS kit from Panasonic etc.
500,000 cars is roughly what Chrysler (the group, not the brand) produced worldwide in 2011. When's that going to happen?
All FUD, I'm sure, but be careful with your money. I'm sure the share price will hit $400 or whatever, but I'd sooner buy tulips.
Bold move indeed, kudos to them.
I'd still like to see them apply for patents though, and just state that they aren't going to pursue any competitor copying them. That way should encourage their rivals to not come up with something they need and not share in return.
Tesla's real potential comes from the quickly removable battery packs though, the cars will seem like peanuts compared to that market, which would effectively be what petrol stations are to the car industry today: lucrative.
I'd still like to see them apply for patents though, and just state that they aren't going to pursue any competitor copying them. That way should encourage their rivals to not come up with something they need and not share in return.
Tesla's real potential comes from the quickly removable battery packs though, the cars will seem like peanuts compared to that market, which would effectively be what petrol stations are to the car industry today: lucrative.
Its still a mostly free world and you're entitled to your views, but I do find your assertions remarkably blinkered as to what they've been doing, what they're doing now, and where they're going. I could answer some of the things you've come up with but by the looks of it I'd be wasting my time.
Funnily enough I was an original investor into Tesla at $20. Sure, its possible they might hit $400 as you say, but they could also collapse below $100 as well. Oh wait, that's still a 500% gain. Damn.
trashbat said:
Well, with respect then, and those numbers and attitude, I gently suggest you stay away from long term investing.
Thank you for your concern. I gently suggest you review my garage for the result of my long term investing. Funnily enough I was an original investor into Tesla at $20. Sure, its possible they might hit $400 as you say, but they could also collapse below $100 as well. Oh wait, that's still a 500% gain. Damn.
By all means, go for it.
This isn't the first time or place I've asked about TSLA. I thought it was overcooked $100 ago, but what do I know. Anyway, each time, what I get from its proponents is usually an emotionally charged (ho ho) and evangelical response, which is a great thing to buy into if you're a salesman but not so good for level headed financial analysis.
Some products come along and create success because they invent a whole new need, like the home computer or television. Some aren't entirely novel but do a significantly better job of whatever came before, like the iPod or iPhone. TSLA is the latter, since it's still a car and filling the 'need a car' space. Can something like that disrupt a stagnant industry and sector, sure, been done many times. Can it be as disruptive at such a high price? Can it do it without some hard-to-poach magic, like Apple's design skills? I think that's much more difficult.
I'm really glad the product is here, on a societal and technological basis. It's great news. I just can't see how it's going to make money for itself, rather than everyone else. There's hardly any apparent barriers to competition, and although it has taken the lead, it has a very difficult journey ahead in terms of scaling up and pricing down. I think that challenge is possibly greater than the challenge for any other established manufacturer to get into electric cars.
The more interesting analyses re: this patent deal are along the lines of TSLA want everyone else to start producing similar cars so as to produce a large scale industry around making batteries, thus reducing the costs for each player. Maybe, but then you have to get into things like raw material availability, and I'm not convinced.
I'm not even convinced that Musk is particularly interested in his shareholders, and would rather change the world at their expense, to which I really do think fair play to him, but I'm not rushing to be one.
This isn't the first time or place I've asked about TSLA. I thought it was overcooked $100 ago, but what do I know. Anyway, each time, what I get from its proponents is usually an emotionally charged (ho ho) and evangelical response, which is a great thing to buy into if you're a salesman but not so good for level headed financial analysis.
Some products come along and create success because they invent a whole new need, like the home computer or television. Some aren't entirely novel but do a significantly better job of whatever came before, like the iPod or iPhone. TSLA is the latter, since it's still a car and filling the 'need a car' space. Can something like that disrupt a stagnant industry and sector, sure, been done many times. Can it be as disruptive at such a high price? Can it do it without some hard-to-poach magic, like Apple's design skills? I think that's much more difficult.
I'm really glad the product is here, on a societal and technological basis. It's great news. I just can't see how it's going to make money for itself, rather than everyone else. There's hardly any apparent barriers to competition, and although it has taken the lead, it has a very difficult journey ahead in terms of scaling up and pricing down. I think that challenge is possibly greater than the challenge for any other established manufacturer to get into electric cars.
The more interesting analyses re: this patent deal are along the lines of TSLA want everyone else to start producing similar cars so as to produce a large scale industry around making batteries, thus reducing the costs for each player. Maybe, but then you have to get into things like raw material availability, and I'm not convinced.
I'm not even convinced that Musk is particularly interested in his shareholders, and would rather change the world at their expense, to which I really do think fair play to him, but I'm not rushing to be one.
I haven't read the article; but two things spring to mind.
1; there will be a clause somewhere that says other companies need to share back with them.
2; by sharing they have dodged a lawsuit about being forced to share 'critical' patents.
Tesla now look like good guys.
I'm reminded of a quote to do with Apple.
It said something like;
In the early days of computers if IBM acted like apple in terms of patent disputes and copyright we'd all still be using pre pentium computers.
1; there will be a clause somewhere that says other companies need to share back with them.
2; by sharing they have dodged a lawsuit about being forced to share 'critical' patents.
Tesla now look like good guys.
I'm reminded of a quote to do with Apple.
It said something like;
In the early days of computers if IBM acted like apple in terms of patent disputes and copyright we'd all still be using pre pentium computers.
trashbat said:
Well, with respect then, and those numbers and attitude, I gently suggest you stay away from long term investing.
The product is very good, I admit. They certainly have the jump on everyone else, and have carved out a very successful niche. However, it is a niche. No shortage of demand for a $100,000 car? Erm, how about once you run out of people with $100,000 to spare? How big is, say, McLaren's road car business ever going to grow, and how much profit with it? How well would Porsche do without the rest of the group?
More importantly, I can't see any reason that any of the old, boring, clapped out car manufacturers can't get on the electric car bandwagon any time they deem suitable and muller them with scale and existing relationships. No, not being cool enough doesn't cut it. The best reason you could give is IPR ownership, possessing some secret sauce, and yet that seems to be spilling out for everyone to lap up. Even if it weren't for the patent story, a load of it is bought-in COTS kit from Panasonic etc.
500,000 cars is roughly what Chrysler (the group, not the brand) produced worldwide in 2011. When's that going to happen?
All FUD, I'm sure, but be careful with your money. I'm sure the share price will hit $400 or whatever, but I'd sooner buy tulips.
once the main stream car manufacturers gear up then tesla will go down the pan, there tech is not that leading edge, after all their solution to range is to simply stick 5 times the amount of batteries in the car, the tech in the merc F1 engine is in a different century to what they are doingThe product is very good, I admit. They certainly have the jump on everyone else, and have carved out a very successful niche. However, it is a niche. No shortage of demand for a $100,000 car? Erm, how about once you run out of people with $100,000 to spare? How big is, say, McLaren's road car business ever going to grow, and how much profit with it? How well would Porsche do without the rest of the group?
More importantly, I can't see any reason that any of the old, boring, clapped out car manufacturers can't get on the electric car bandwagon any time they deem suitable and muller them with scale and existing relationships. No, not being cool enough doesn't cut it. The best reason you could give is IPR ownership, possessing some secret sauce, and yet that seems to be spilling out for everyone to lap up. Even if it weren't for the patent story, a load of it is bought-in COTS kit from Panasonic etc.
500,000 cars is roughly what Chrysler (the group, not the brand) produced worldwide in 2011. When's that going to happen?
All FUD, I'm sure, but be careful with your money. I'm sure the share price will hit $400 or whatever, but I'd sooner buy tulips.
they just got lucky in getting to the party before anybody else realised there was a party
it will be interesting to look at their figures once the i8 production is up to speed
mids said:
Snowboy said:
by sharing they have dodged a lawsuit about being forced to share 'critical' patents.
Interesting, have you got any more info about that?'Critical' isn't the right word either.
There ar certain patents considered too important to be held by just one company; so that company is forced to licence them to go there for a 'reasonable' fee.
It happens a lot in IT, stuff like WiFi protocols and suchlike.
I think it happens in cars with safety kit like airbags and parking sensors - but I don't know to what degree.
I'mvjust guessing that Tesla have some juicy patents and if restricting them is slowing the advance of technology they might have been forced to share.
It's a lot more complex than that, IME, but there's not normally any such thing as forced licensing.
There's an agreement called FRAND (fair, reasonable, non discriminatory terms) that basically says you have to play nice, and through various forces, you normally have to agree to that to have your work incorporated into standards. Standards are what sees something universally accepted like Wi-Fi or the GSM phone (or sometimes less so, like HD-DVD)
So for instance (and oversimplified) Wi-Fi is actually a bunch of standards involving loads of patents, but supposing you invented one, to get all of the necessary players like chip manufacturers, the FCC, software companies to ever put out devices that include your work, you have to agree to that. Not really a government dictat, just practical business.
The same thing may apply to Tesla but it's less obvious to me.
There's an agreement called FRAND (fair, reasonable, non discriminatory terms) that basically says you have to play nice, and through various forces, you normally have to agree to that to have your work incorporated into standards. Standards are what sees something universally accepted like Wi-Fi or the GSM phone (or sometimes less so, like HD-DVD)
So for instance (and oversimplified) Wi-Fi is actually a bunch of standards involving loads of patents, but supposing you invented one, to get all of the necessary players like chip manufacturers, the FCC, software companies to ever put out devices that include your work, you have to agree to that. Not really a government dictat, just practical business.
The same thing may apply to Tesla but it's less obvious to me.
Obviously there's also anti-competition law where you can be forced to make unusual concessions to reduce a dominant market position (IIRC Microsoft have been forced by courts to make public certain IPR such as source code several times), but that's not directly linked or apparently relevant to Tesla.
The proprietary nature of their charger network is probably a positive for them, because if say GM want to come along and do electric cars, they have to spend all the same money over again on the infrastructure. That's good until everyone else clubs together and produces a standard without you to share those costs and you're left with your thinner network of oddball stations.
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