I still struggle with what’s so unique about them. We’ve literally known for decades lithium-ion has the best energy density. The original electric and hybrid vehicles didn’t have them due to cost. The cost has gotten better due to adoption in mobile devices driving economies of scale. The fact they are used in mobile devices around the world means tons of people are knowledgeable on the design and manufacturing of them.
The real issue will be as we use up the limited supplies of the materials for them. People used to talk about using up all the oil supply. The supply of battery materials is much, much smaller. I think battery is just a stop gap on the way to fuel cell technology. We’ve also known that for decades.
Always so sure. I’m always not sure. Just in case, nobody said $400 is 100% certain (note the word, “might” in previous post), is in the realm of possibilities, one of the possible outcome. At this point, I can’t rule it out because it depends on pattern of wave 5: Normal, extended or truncated. Wave 5 is not completed yet If wave 5 is extended then $400 is highly unlikely. Possible if normal. Almost certain it would if truncated. Btw, if you read back my previous post, is what I have said - just rephrasing (ok, expand a little since you don’t seem to understand) what I have said that day.
More likely is your feeling of fear and happiness. I have no emotions on TSLA since I have no stake.
I said exactly the same thing today as that day. Remember, events and what other said are NEUTRAL. You put feeling to them.
Look at AAPL chart from 1997, there are 6 20-90% declines!!!
I think you still don’t seem to understand. Who said I am confident that AAPL won’t decline to $140? I don’t recall saying it. But I am confident that Apple will navigate itself and recover. But you are very confident that TSLA won’t decline to $400. That’s the difference.
Time to continue our life. Anyhoo, none of my stocks are requiring immediate interventions I have set many GTCs (both buys and sells). Unless price behavior deviates too much from what I have expected, no intervention from me. I will let the GTCd trigger. Today GTC sell for VEEV trigger around $168, now trading at $163.91. I love EW and GTC, allow me to do nothing for a long time.
Depreciation:
AAPL: 3.1% of revenue
TSLA: 7.8% of revenue
R&D spend:
AAPL: 4.8% of revenue
TSLA: 4.7% of revenue
SG&A:
AAPL: 5.7% of revenue
TSLA: 9.5% of revenue
Tesla has 50% lower gross margin and needs 2.5x more capital investment to generate each dollar of revenue. Spending more on capital investment to generate lower margins is undoubtably a worse business. The only similar metric is R&D spend as a percent of revenue.
Tesla will never generate Apple style profits with a gross margin that’s 50% lower. They’d need to be 2x Apple’s revenue and become 50% more efficient in SG&A spend.
How will they create the scale though? Auto plants cost billions and each one can make roughly 500,000 cars a year. That means for Tesla to be Toyota, they need 20 plants at a cost of billions per plant. They also assemble their own battery packs which means even more factory investment. They are in a capital intensive business vs Apple who uses contract manufacturing and only owns the tooling.
They also won’t scale to 10M cars a year with only 3 models. They’ll need a lot of models like Toyota has. That means R&D as a percent of revenue isn’t likely to improve.
They may get SG&A leverage as they grow. That’ll help the bottom line by a few percentage points.
I also don’t see how Tesla improves gross margin. That’ll always limit profitability the same as every other auto company. That’s why I don’t see them as tech with a tech valuation.
Even if the Tesla bulls are right on the revenue growth the profits aren’t going to justify the valuation.
For manufacturers like Tesla, GM = Total Revenue - Total cost of manufacturing, excludes SG&A and Capital Expenditure, right? Hence, doesn’t go down with scale/infrastructure, right?
Better hope the author is wrong. Dropping now without a new ATH means it would decline to below @Jil purchase price of $730, the first support is 50-day SMA around $650. It might even means a truncated primary degree wave 5 i.e. primary degree wave 5 completed at lower than primary wave 3 ($968.99). In EWT, a wave five (generic term not 5) is supposed to be higher than wave three (generic term, not 3). Normally an impulse has five waves but I realized something has changed since EWT was discovered, 3-waves impulse is fairly common nowadays.
If wave 5 is extended then $400 is highly unlikely. Possible if normal. Almost certain it would if truncated. Btw, if you read back my previous post, is what I have said - just rephrasing (ok, expand a little since you don’t seem to understand) what I have said that day.
Time to continue our life. Anyhoo, none of my stocks are requiring immediate interventions 
Art of communication.
