Want to invest in electric cars? GM could be a better bet than Tesla

alan auerbach

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Link here: CNN By Chris Isidore, CNN Business

Tip: DO NOT take Chris Isodore's advice on anything stock related!
Can anybody guess how much the Texas plant will cost Tesla to open? And how much profit Tesla would make on each CT sold?

I would guess (with no training or credentials to do so) that the costs -- spending over a year on the massive fleet of construction equipment and operators; the stamping, pressing, robotic, and painting machinery that's being prepared offsite; the army of unseen planners and supervisors; and the land itself -- would set Tesla back five million.

I'd similarly guess that the profit (after material and operational costs) per vehicle (CT or Y's) would be a couple thou.

If correct, suppose they make and sell 100 vehicles a day, six days a week. In a decade the $5 mill investment would yield $60 mill.

Do my figures and math look at all realistic?
 

Crissa

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Can anybody guess how much the Texas plant will cost Tesla to open? And how much profit Tesla would make on each CT sold?

....would set Tesla back five million.

...
Do my figures and math look at all realistic?
Alas, no. You're off by a couple orders of magnitude.

The purchase price for the land in Austin was $97 million itself, not counting additions since.

Their M3 production line aims for 5000 cars a week, or 750 a day. They expect to crank out Cybertrucks faster, because of the simplified build and purpose-built building.

-Crissa
 

ajdelange

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I think they are way low. 100*6*52= 31,200 vehicles per year. Tesla is hoping for 400,000 units this year. Quarterly revenue for the last quarter was $8.8B

Tesla is in a rapid growth phase. Much of what they net from sales of the CT will go into plant expansion, research... Don't expect a fat dividend checque any time soon.
 

alan auerbach

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I think they are way low. 100*6*52= 31,200 vehicles per year. Tesla is hoping for 400,000 units this year. Quarterly revenue for the last quarter was $8.8B

Tesla is in a rapid growth phase. Much of what they net from sales of the CT will go into plant expansion, research... Don't expect a fat dividend checque any time soon.
Good thing I never tried to work as a cost estimator!
 

Luke42

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The argument is obvious.

Tesla is overvalued by any measurement more objective than "I believe they will change the world and make a lot of money doing it."

GM and Ford are not overvalued to the same degree as Tesla, but they make electric cars too. They may even be undervalued.

One could argue, therefore, that GM and Ford are a better investment.

Bring a better investment is not the same thing as being the best team to root for.

I don't know if GM and Ford are good investments (I thought Ford was a good bet for a while, but I've been a little underwhelmed by their EV product announcements so far), but it is an argument worth considering with your calculator out.
 

ajdelange

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Tesla is overvalued by any measurement more objective than "I believe they will change the world and make a lot of money doing it."

GM and Ford are not overvalued to the same degree as Tesla, but they make electric cars too. They may even be undervalued.
If the companies are evaluated as automobile manufacturers the above is probably correct. But Tesla is not primarily an automobile maker. Many analysts support share prices close to what Telsa is trading at now based on the fact that the automotive part of Tesla's business is only a small part of where its future profit potentials lie. Some think that the value of their AI totally eclipses their value as a car company. I won't argue the wisdom of that assessment but there it is.

One could argue, therefore, that GM and Ford are a better investment.
No investment advisor has ever suggested I buy a single share of any auto manufacturer. Good advice I'd say. Of course none have advised me to buy any TSLA either (but I did anyway).
 

Zam

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I think they are way low. 100*6*52= 31,200 vehicles per year. Tesla is hoping for 400,000 units this year. Quarterly revenue for the last quarter was $8.8B

Tesla is in a rapid growth phase. Much of what they net from sales of the CT will go into plant expansion, research... Don't expect a fat dividend checque any time soon.
Q1 to Q3 already made 330,000 units, Q4 usually is the stronger quarter, some estimates 530,000 units this year.

A fair comparison would be GigaShenghai, it has only one M3 production line and managed to make 5,700units/week recently, which would be 814 units/day.
 

FullyGrounded

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Alas, no. You're off by a couple orders of magnitude.

The purchase price for the land in Austin was $97 million itself, not counting additions since.

Their M3 production line aims for 5000 cars a week, or 750 a day. They expect to crank out Cybertrucks faster, because of the simplified build and purpose-built building.

-Crissa
I so want a tour! peace
 

Challeco

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The argument is obvious.

Tesla is overvalued by any measurement more objective than "I believe they will change the world and make a lot of money doing it."

GM and Ford are not overvalued to the same degree as Tesla, but they make electric cars too. They may even be undervalued.

One could argue, therefore, that GM and Ford are a better investment.

Bring a better investment is not the same thing as being the best team to root for.

I don't know if GM and Ford are good investments (I thought Ford was a good bet for a while, but I've been a little underwhelmed by their EV product announcements so far), but it is an argument worth considering with your calculator out.
Ford and GM have been using planned obsolescence for decades. I understand they are large and diverse corporations with their own credit companies. But, for them to build an E.V. to rival Tesla, means they will need to build vehicles that last, for a comparable price point. I do not trust them to be able to do it.
 

Diehard

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I would guess (with no training or credentials to do so) that the costs -- spending over a year on the massive fleet of construction equipment and operators; the stamping, pressing, robotic, and painting machinery that's being prepared offsite; the army of unseen planners and supervisors; and the land itself -- would set Tesla back five million.
Giga Berlin was estimated to cost 4 Billion Euros.
 

firsttruck

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Can anybody guess how much the Texas plant will cost Tesla to open?

Giga Texas is a $1.1 billion plant that is set to open in the fourth quarter of 2021.
Elon Musk: Tesla hiring 10,000-plus employees for Austin, Texas Gigafactory
by Teena Maddox in CXO on April 1, 2021
https://www.techrepublic.com/articl...-plus-employees-for-austin-texas-gigafactory/


Tesla Giga Berlin Investment Rises To $6.9B
Recently, Tesla has won a $1.2 billion dollar subsidy from the EU to go towards building the world’s largest battery factory at Giga Berlin.
It’s not yet clear if 6.9 billion dollar number also includes the EU’s $1.6 billion dollar subsidy or if Tesla is planning to invest that amount in addition to the EU grant. Either way, this makes Tesla’s Giga Berlin the largest industrial project in the EU.
By Tinsae Aregay Mar 17 2021
https://www.torquenews.com/11826/te...on-musk-downplays-plant-s-impact-water-supply
 

Carlfluk

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Also, the thing they are overlooking here is almost all GM's are total shit boxes, whereas Tesla's are fantastic cars. Just because it's electric doesn't mean it still wont ultimately be a GM shitbox.
 

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