For you pumpers, I have 25 yrs of automotive engr experience. It's around 600 million. Tsla sales simply do not cover this number. With or without a battery factory this company will implode, just a matter of when. I wish you luck in your investment.
Tesla claimed they could design & tool the car for $400 million.
They ran out of cash before they launched and had to raise another 200 million and then another because the tooling was inferior and they couldn't run at rate. That was last year.
They just spent another huge chunk of cash to fix the assembly line they already fixed.
Including the losses it has cost them about $1-2 billion to get this car launched and it still doesn't make money.
They still have bottle necks and have to expand paint to clear a bottle neck.
By the time they figure out how to make this car they will need to redesign it.
Basically, you can't soft tool 40k units. Soft tools are good for about 5k pcs before you need to resurface the dies. The really is no economy of scale when it comes to tooling. You can change from a 1-out to 2-out, 4out Etc. Major OEM's like to amortize over 5yrs at 100k units min. If the car ends up running under 100k units they will try not to refresh the vehicle for 7 yrs to recover their costs. Powertrain is amortized over even higher volumes due to multiple programs and longer life cycles. Tesla simply does not have the numbers to support the investment. Now if batteries ever get to 300 miles then I believe they will have enough buyers. Again, good luck aristocrat. Was a great buy at the ipo. At 262 nada, it may go higher, but it will eventually go a lot lower.
The model T was in production from 1908 to 1927. If a car is really new and innovative, I think a longer refresh time will be tolerated. (And that's not an outlier.... the original VW Bug was in production from 1938 to 2003!)
Seriously, who would mind if the 2025 Model S looks like the 2013, if it has a 500 mile range and a functioning autopilot?
Check your assumptions. The annual refresh/updates on this car will not be about the body panels.
Sounds right (my old man was a tool & die maker). Is a "2-out" or "4 out" a 2/4 cavity die or mold? Are they really just 2 and 4x as expensive? What is the cycle time (in seconds) and lifetime of a basic set of production dies?
If there is really no economy of scale to speak of, once you get to "production die" quantities, that is good news for TSLA, right? (The big guys don't really have an advantage for being bigger)
Can I assume your $600M number was for a single set of production tools. You said 100k minimum life, but what is a reasonable average/maximum number of cycles before the dies are worn out?
Have you considered that soft tooling might last longer if the body panels are aluminum? Not having to heat treat and regrind the die pieces would save some upfront costs, but the real benefit (especially for a startup) is that the tool steel can still be machined, so it's easier to modify the dies to accommodate design changes.
It should go without saying, but I'll say it anyway, that I really appreciate your thoughtful reply.
I bashed BC because he richly deserves it, but I'm not just a TSLA cheerleader. It's got to make sense. (I accept your biases coming from the ICE industry and you should accept mine as a silicon valley guy, but if we can agree to be reasonable, we can figure this thing out together)
$600M to tool for what kind of production volume? TSLA is (obviously) tooling for lower production rates than the F150. I'd be curious to see examples from the auto industry for what it costs to tool up a car for production rates of 10k, 100k and 1M per year. What are the economies of scale and where do they come from?
If you think it's a fixed price for any production rate, you are not a very good engineer and your "experience" only serves to cement your prejudice rather than inform your opinions.
To further your point how much of the Tooling cost is for Engines, Transmissions, Exhaust Systems, Drivetrains that are unique to that specific car/truck/van...?
I concede Tesla has an Electric Motor/Drivetrain and Battery, but the HUGE advantage of EV vehicles will be 3 or 4 core Electric Motor units can cover almost any vehicle. One of the big cost drivers for traditional automobile companies is that every car/truck/van uses different engines/transmissions/drivetrains/exhaust systems. Why..? Because the ICE is very picky and likes to run in narrow ranges of RPM to get peak efficiency. So their car engines don't get used in their SUV or Trucks.
I suspect the set of EV Motors/Battery/Drivetrains in a Model S would work just fine for a wider range of vehicles. It's a big advantage over time. The EV Drivetrain is far more versatile.
I would expect Gen 3 may get an entry level EV Motor of 200Hp, but likely it's performance version will be the same unit as a Model S 60 kwhr 300 hp motor.
BMW does get some synergies across their N55 engine, but even it requires different transmissions for the 1, 3 and 5 series cars. When you look at their V8 motors, M Series engines, etc. they still end up carrying a larger set of engines than I would expect a comparable EV company.
But on a big picture a good set of 4 EV motors might be all an EV Automaker ever needs to develop.
To accurately assess costs for production, you must first have a company that makes money. Does Tesla make money? No? Well, then it's all a #$%$-shoot. There are zero economies of scale because Tesla holds no sway with suppliers, unless said suppliers do business in Antarctica?
It's wonderful to know people with such superior intelligence like you inhabit the planet, Lone. You provide a lot of wind but almost zero experience to back up your theories.
Oh, and before you obviously protest, why don't you list the credits of retailing experience and/or auto experience you possess? Or are you like Justthefacts? You know, a consumer and a car owner? Yeah, that's the ticket!
Tesla is not cloning an existing car for an existing market and doesn't have the NRE/tooling expenses of an IC drivetrain. It still hasn't spent much money marketing the cars though it probably will at some point A better comparison might be the Porsche Panamera. It has the Porsche parts bin and Tesla has a common platform and probably lower costs even in California. What do you think the Panamera's numbers are in comparison?
That is why this stock is way to expensive.
I don't think Silicon Valley investors have any clue how fast a car's model becomes outdated.
They will need to spend a billion every five years per model to just keep them fresh.