Black Tesla Model X prototype with a trailer hitch and redesigned front end
Quite an interesting statement from Tesla CEO Elon Musk in last night’s earnings call. With all of the “Apple car” talk and fight for employees, it is interesting to note how big Tesla thinks the market for electric cars and lithium batteries will be in the coming decade (assuming 10% yoy growth and P/E ratio of 20).
For the record, I’ve also heard rumblings of an early vehicle program at Apple which could be an R&D exercise or turn into something significant. One of the leaders of the program recently left Apple for Oculus if that’s any indication of what kind of technology Apple is hoping to bring to the automotive world.
Also make sure to read about Elon Musk’s secret demand weapon to deploy on car dealers and new consumer battery product.
[youtube=https://www.youtube.com/watch?v=wvB01EibT2g&start=900]
FTC: We use income earning auto affiliate links. More.
everybody wants to be Steve Jobs – the truth though Apple was able to grow as is due to massive subsidies of iPhone by carriers around the globe. Case in point – iPad for which customers have to pay full price has dismal growth compared to iPhone. In the U.S. on two year contract one can buy an iPhone for $199, which cost $650. This massive consumer surplus explains insatiable demand for iPhone. As long as Tesla will make $70K+ cars they will never grow to Apple’s level. Also replacement cycle for cars is such that Tesla cannot count on annuity business that Apple generates by retaining its customers.
BS you’re paying the full cost of the phone and more over the lifetime of your phone contract. Only an idiot would think their iPhone only costs $199.
Of course you are, his point remains valid though. People don’t mind paying a lot of money long-term, as long as the upfront cost isn’t too high.
It’s like if mortgages/loans disappeared, the number of people being able to afford buying houses would go down dramatically. Doesn’t mean all those people are stupid and don’t understand the concept of a loan.
This is not subsidy. Basically a hidden installment plan with extremely high interest rate. Carriers make a lot of money this way.
Depends on your carrier. The “interest rate” is not necessarily extremely high, in my case it’s a *negative* interest rate.
With my carrier for instance, I only get a 10% discount if I bring my own contract-free device. Let’s do the math. Considering I’m getting a $500 subsidy I have to pay back over 24 months, 500/24 = $20.83/mo of my monthly bill that goes towards paying that subsidy back.
My plan is $60, so 34.7% of my monthly fees goes towards paying back my phone subsidy. That means the BYOD rebate should be at least 34.7% for it to be profitable for me. With a 10% BYOD rebate, I’m effectively having an interest rate of *-24.7%* by choosing to sign a contract. Over 24 months, I’m saving a total of $356+tx compared to buying the device upfront and getting a 10% rebate on my plan.
Please don’t assume contracts are necessarily more expensive for everyone just because it’s the case for your specific carrier.
Must be easy to become CEO these days, as apparently you don;t have to be good at anything. Simply make absurd statements like this one and simply hope investors will begin to trust your company. So far, that hasn’t happened yet, and Tesla is nothing more than a money pit. On their $3B revenue they still loose money. Must be a reason for Musk to only hold 28% of stock.
Read this: http://eandt.theiet.org/news/2015/jan/tesla-sales.cfm
“Tesla Motors ‘not profitable until 2020′”
ya of course its super easy to be the CEO of a super innovative company like Tesla. Why don’t you try it in your spare time or maybe you have more important things to do? And ya Elon desperately seeks the trust of investors who distrust him so much that tesla stock 10-folded in a few years time.. distrust at its best..
tesla could be profitable right now.. its throwing every cent it makes to growing the company, it this a concept your genious-ceo head can grasp? stay off drugs buddy… just say no, lol
Elon Musk is easily the smartest CEO on the planet. You know not of which you speak. Not profitable until 2020? Ya. That’s how it works. Reply when you’ve finished your MBA.
Please Apple & Tesla, play nice with each other. I want to be able to pilot my 2020 Model Y from my iPhone 9.
I feel you… I don’t like seeing my two favourite companies “fighting” either :(
Musk is a Marketing Genius, He manage to stay in the Blog-sphere 24/7 for no news bits like these.
Problem is, Marketing alone is kinda pointless. You have to have a great product first.
In China nobody is buying the Tesla Cars.
Its all Hype!
After listening to their conference call last night I have less faith they can actually survive. I haven’t herd that kind of BS spun on a conference call since the Enron days, it would be nothing short of a miracle if they make to it Apple’s market cap in 5 years. If they do survive 1/20th of Apple’s market cap seems more realistic.
Yeah. Sure.