This interview with Elon Musk, the billionaire founder of SpaceX and Tesla Motors shows how deeply he thinks about the tech projects he kicked off.
Tesla was the laughing stock of the motor industry for a number of years, but has become the leader in electric transportation. More importantly it has kick started Apple and a number of other companies into the space.
It was a mixed set of results but I listened to the Q&A with Elon Musk and Deepak Abuja the CFO. It was an interesting call.
We seem to be heading for some significant growth over 2013 with a slight fly in the ointment over the reconfiguration of the Tesla Factory for the production of the Model X. For prospective owners of the Model S or X the range of features available (for example colours and models) has been streamlined to reduce the manufacturing options which is a very smart move.
As a customer, I think that options are great, but there can be too many choices, especially around models and colours. I personally regret not going all out for the P85+ rather than the P85, but that is the benefit of hindsight.
I think Tesla doesn’t believe that demand is the problem, so why offer so many choices. Typically choice is something that you use to get the last 10-15% of customers rather than the 90%.
As a shareholder I am fairly confident that they are in a good place to achieve the growth they suggest. The margin they make as an automaker is much higher than the peer group and the high price point does say they don’t need to sell too many cars. In fact they reduced guidance from 35,000 cars this year to 33,000. This isn’t a seismic shift but a blip due to the issues of complexity of supply chain and reconfiguring the line (around 2-3 days production capacity lost in a project that was certainly more than 2-3 days to complete).
The stock is up around 50% this year, I expect the market to open up this morning and I am keeping hold for the long term and might even buy a little more.
As a customer, shareholder and watcher I couldn’t be more impressed with Tesla as a company.
Generally I don’t like to talk about investments on this blog, my general investment strategy is linked to Andrew Carnegie quote. “The way to become rich is to put all your eggs in one basket and then watch that basket.”
Human nature isn’t good at doing nothing. So the financial services industry is built on encouraging you to sell one stock and buy another. My personal view is do stock selection up front and then do nothing.
Tesla is one of the stocks in my portfolio. I have a large position which isn’t something that sits comfortably with me. I bought the car itself as an early adopter not just because I love new technology but there are very few car makers in the world that are using a new channel dynamic (selling online). In the press this week the 20 year anniversary of the first online transaction was celebrated by stating 90%+ of us now buy online, so why should cars be any different. Sitting in your bed and comparing, checking prices and specifying something is really the ultimate consumer experience. It is incredibly convenient!
The issue with Tesla is it isn’t just changing the dynamics of car buying, it also has a truly unique product with supply side constraints that do mean it can only sell a few (keeping prices high in the short term). In the long term, it’s new battery factory will help bring electric vehicles to the middle market, and the word of mouth I have seen in the few weeks since I have owned the car is amazing. Most people in my friends and family would seriously consider the car if it cost approximately half of the current price (around £30,000-£40,000). This is still a huge premium to an ICE car (Internal Combustion Engine – geeks!) but with running costs and range anxiety gone the barriers to adoption fall.
The stock price has been on a one way movement vertically, which would warn me that it should correct at some point, but the remarkable customer service attitude that Elon Musk has to knocking down barriers to adoption keep me pretty hooked on the long term as a holder, even if their are price corrections over the years.
I would never recommend buying stocks to anyone, but it is worth keeping an eye on Tesla through the years to see what happens.
Disclaimer: This probably means the stock will bomb – and the reason I tend to invest in private companies!
For anyone expecting a Tesla Model S, the importance of installing a home charging point is high on the list. I personally have found this a nightmare, especially as there are limited providers in Scotland to proide the government supported installation.
My house has a garage which is approximately 20m away from the mains supply. There is cabling but this goes through a consumer unit within the house, then a second one in the garage.
There is a 32a breaker in the house and similar in the second consumer unit.
I contracted with Everwarm to install which was completed last week. They installed the Chargemaster Homecharge I 30 A (White H7T2T unit). This is a Type 2 Tethered unit (see photo below).
All was well at 30a for around 20 minutes and then the Chargemaster unit developed the red light fault, charging stopped.
Reset and same again around 15 minutes later. We reduced the input to 20a and all worked OK, anyone else had a similar problem.
Voltage is around 237v, it is a little way from the main supply so might be voltage drop, but not expert enough to comment!
Have posted on Tesla Forum, emailed Chargemaster and will email Everwarm too.
As a “carbon diet champion”, I have thrown out a pile of high carbon habits that I had stored in my cupboard this weekend. This is no different from any other diet I have been on, it will be tough to manage the conflict between consumer freedom and restriction. On a typical diet, you feel that you are losing something, but I think on my carbon diet I will just change my habits rather than removing carbon completely (as if we could!). So it’s a balanced low carbon diet not an extreme crash carbon diet!
So first small steps taken this week:
1. Took the train. In fact I got the train for only £10 from Aviemore to Edinburgh, I had Wi-Fi all the way (all the way would be defined as intermittently!). Did work and enjoyed the relaxation of travelling by train.
2. Bus – I live in Morningside, it is so well served by buses it’s embarassing to not take them to work. I work in Leith so I can get a bus outside my house and within 30 minutes (in rush hour) be at my office, quicker than taking the car.
3. Turned the tap off – I know its a bit corny but my daughter Freyja has been looking at the impact of environmental change at school (she is only 9) and she has given me a lecture about leaving the tap running – I have changed this habit this week and stuck with it!
So Day 3 and 3 changes – small steps I know but what have you done?
Oh and if you want a regular diet – we launched our Go Lower diet today check out the new website at www.golower.co.uk