Tesla USA sales struggling
- Thread starter David Green
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R P
Well-Known Member
I agree Toyota could fix a lot of Tesla's problems. But why should they? They can do their own better,... if they want. And they will..., when the market is ready for them.
However, Apple, Google and Amazon are looking to expand their universe. Electric cars, esp Tesla would fit right in with their vision of the future. And they have the money to make it happen. They just need a willing partner. I think it will happen in the next 3 years.
David Green
Well-Known Member
I feel like once the Tesla equity / debt is wiped out, and Toyota can buy Tesla for dimes on the dollar in receivership , it will be a good investment. Apple, Google, and Amazon are not interested in Tesla as they have no experience in cars that can be valuable to Tesla, and EV manufacturing profits will never fit what Wall Street expects from their business model. FYI if Apple bought Tesla today for nothing, Apple's Equity would be worth less than it is today as Tesla loses money, and Wall Street would just view it as increased risk, and liability exposure for Apple. Tesla assets like SC network, and GF1 are worth less to Apple than the Debt Tesla carries, you could re-build the assets from scratch cheaper than buying them, and without all the winging it decisions like assembling cars in a tent. Fremont factory has no value other than for development (terrible location for a car plant as local cost of living is too high), and the environmental cleanup would be extensive.
R P
Well-Known Member
Don't disagree with your logic, and you could very well be right. I just have a hard time seeing Toyota buying them, as I really don't think they need/want them, and are more than capable of going it alone. They are actually closer to Subaru (now own 20%) in culture and synergies, and will be very interesting to see what their new EV (jointly developed) will look like. I don't think it will be in the Audi/Porsche category, but could certainly put a dent in Tesla's lower priced mass market aspirations.
interestedinEV
Well-Known Member
I agree with you. If Toyota were to buy, Toyota would be more interested in the consensus (nemawashi) culture of Suburu then then shoot first and ask questions later culture of Tesla. If you look at the top manufacturers, I think Toyota can move very fast if they want, given that they already have a very strong presence in HEV. The move to PHEV (which they already have market share with Prius Prime) is an easy leap and it is not too far a leap to BEVs from there. They have battery technology, they have the best production capabilities. Why would they want to inherit Tesla's problems? When they are producing 10 million vehicles today, adding about 500,000 more in cars would be easy in their present plants. If they bought Tesla, they would have to tear down and rebuild the current plants to make it fit their way. They do not believe in the type of automation Elon does. Even though Fremont is an ex NUMI plant, I do not think Toyota would recognize it after Elon's changes. The only two reason why Toyota might make a move in that direction is the charging network and self driving capabilities. That might be worth the most to them.
VW has their own charging network, products in the pipeline, it again makes less sense for them. They are already going it alone. Hyundai might want Tesla, they are opportunistic and will be able to rope in the Korean Government to help. GM again has products in the pipeline, self driving capabilities through Cruise and hence the only attractive part would be the charging network, but unlikely they would want to inherit Tesla's problems. Ford needs Tesla more than anyone else, unless their Rivian investment pans out. Nissan could make a play given their need to catch up due to their management problems. If they move, they could bring Renault and Mitsubishi into the play. Honda might, especially if they fell it would help them move up.
Remember if it comes to pennies to the dollar, every large traditional manufacturer will look at it and it could start a bidding war. If a bidding war starts, Toyota will be less inclined to compete, unless the price is right, which fly's against the concept of a bidding war. More than one company has the funds to buy Tesla at pennies to the dollar. And always waiting in the wings would be a Chinese manufacturer with infinite funds from the Chinese Government. Other than a move by the US Government to stop the sale (and that would be more difficult in a bankruptcy court, but not unreasonable for the US government to do so), the Chinese Government might be willing to pay for the IP (may be a little simpler tactic now a days than just stealing it
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interestedinEV
Well-Known Member
I see where you are coming from and sort of agree with you that it might be a more traditional manufacturer would buy out Tesla, if Tesla ever went into bankruptcy. What Apple, Amazon and Google bring to the table is AI technology as applied to self-driving cars and deep pockets. You do not need to be a car manufacturer to develop self driving technology as proven by Waymo (Google).
Google, I would rule out, as they have self driving technology today and do not need Tesla for it. They already have partnerships with FCA and Jaguar and could in fact get a better return by buying one of them out if they wanted to. Amazon has a big investment in Rivian and while the could still invest in Tesla, are unlikely to do so. They are in a pretty good position today with Rivian. Apple might but again they have other options, but I would not rule them out. They appear to be furthest in the race and would not want to cede any more market share to Android. Do you think that Waymo will not in some way integrate its technology with Android O/S, so that it is the preferred choice as opposed to iOS? That is the reason why most analysts feel that Apple is a better fit than the other two, as Apple will integrate driver-less technology with iOS.
Remember, if any of them buy it as pennies to the dollar, most of the liabilities get written off, so they are carrying a much smaller burden that Tesla did (may 70-90% less). But the correct question is do any of them really want to get into designing and manufacturing cars, when they can get someone else to do it for them? I agree that Wall Street may not go for it. Apple for example could buy Tesla and then spin off the car operations but keep the driver-less technology IP. Google did exactly that with Motorola. The bought the company, sold of the various manufacturing and component parts but kept the entire patent portfolio.
So that leaves hedge funds and traditional automotive manufacturers. Hedge Funds may see a future, but Chrysler was bought out by a hedge fund, which lost its investment. So I am going to guess they would be more reticent about it but you never know. Of the traditional manufacturers, I see Toyota and VW as the least likely to want to buy Tesla.
Again, all this hypothetical. To paraphrase Mark Twain. "The rumors of Tesla's death are grossly exaggerated." I for one am optimistic that Tesla will survive but only time will tell.
R P
Well-Known Member
Yeah, if they buy the company, and not just the assets, they could utilize Tesla's tax losses, too. That might benefit Apple more than the rest. And I agree getting IOS into the driver-less and connected car technology can only be good for Apple.
As per other thread on 3rd qtr results, TSLA needs to fix their financials very soon, before it is too late. Once the dreaded financial death spiral sets in, the end could come quickly. They need to keep growing sales and increase cashflow to fund more capex. If either falters, look out below... I don't think banks or the markets are going to help them raise more cash if that happens.
As per other thread on 3rd qtr results, TSLA needs to fix their financials very soon, before it is too late. Once the dreaded financial death spiral sets in, the end could come quickly. They need to keep growing sales and increase cashflow to fund more capex. If either falters, look out below... I don't think banks or the markets are going to help them raise more cash if that happens.
David Green
Well-Known Member
Huh?
"Apple for example could buy Tesla and then spin off the car operations but keep the driver-less technology IP."
Dude, Tesla does not have driverless car Tech, how many fully autonomous miles did Tesla log last year? Zero is the right answer. Waymo, and Cruise... Millions... Tesla does not have any valuable IP to Apple. Apple would not put Tesla's vision based system on the road in public, it will never work with the right level of safety and redundancy for a careful company like Apple... IMO. You can see how poorly Tesla does in simple parking lots, far slower, and more lumpy than even a 15 year old new driver. Apple had a great business that is slowly evolving and maintaining margins, they do not need to take moonshot risks, with 10s of billions of dollars, they need to buy early start ups for new tech, and develop new business. For what it would take to acquire Tesla, they could buy 50-100 early startups, and maybe hit on 10 of them, and create a lot more value for shareholders, without exposing shareholders to too much risk. Tesla was an acquisition target 8 years ago, but now the valuation is not inline with their business reality, unless you believe they are close to FSD, sorry I am not buying that BS... They need to show me something besides a powerpoint presentation before I am going to buy into their sales driving tech, and after seeing smart Summon in action, I believe even stronger they are a decade away at least, as Cruise was much further along when GM bought them for 500M. When it comes to Tesla, Momma taught me a good lesson growing up, believe half of what you see (on the internet) and nothing that you hear.
For Tesla to survive and thrive, Musk has to go, When you add up all of his bad decisions, he is just killing the company a slow death. You could argue he is the reason Tesla can raise money.. OK, but then he just wastes the money with mistake after mistake. Now they are reshuffling the dealership program again, because Musk's cutbacks did not work as expected, sales are dropping in all of Tesla's mature markets, including the USA. Model 3 is quickly maturing in Europe, China, and other markets and as it matures sales fall. When you look at a typical car company, they need to make their program investment back on a vehicle in the first 2 years of production, Tesla is past 2 years on Model 3, and yet to make a program profit. As Model 3 matures in all Markets and sales drop, what will they do? Spend more money and introduce Model Y? Haha! Thats what they did when S could not turn a profit, Build X, and then when X lost money, we need 3, haha! Come on bro, you have to understand if you keep building losers, the company just gets weaker and weaker, more debt piles up...
Look at GM for comparison, when they announce Q3 results soon, they are 1 year into their new pickup truck production, and only 3 months into the 2020 HD Diesel production Their brand new factories launched on time, and at production levels / quality expected. No panic, no reshuffles, no drams, no funding secured, as you will see on the Q3 report, just profit, and lots of it...