Musk's asset accrual and paying for Mars

[laszlo]

decide

What he said is exactly the same as the past statements, especially the Sep 2014 one. The SEC agreement is not about intent, it only covers tweets material to the company, the last time it's about the # of cars they'll produce, stock price is not material.

.

Agreed. We are in total agreement that the content of the stock price tweet is not a violation. I offered the SEC's statement about no criminal intent as evidence that the SEC will not slap him for the content of the tweet, though the stockholders might (but that's a different issue).

The fact still remains that according to the terms of the settlement with the SEC in place from the tweet about Tesla going private, all tweets from Musk having to do with Tesla have to be vetted by a Tesla lawyer. Musk admitted that this tweet wasn't vetted, therefore he is in violation of the terms of the settlement. The examples you gave where he said that the price was too high were not tweets. They were live speeches, interviews and phone calls, so they did not violate the agreement.

The question now is what is the SEC going to do about it. Not being a member of the SEC I have no idea. The possibilities range from ignoring it to a strict enforcement with appropriate legal and financial penalties. It's the SEC's call and we just have to wait and see how they decide.But until the final decision is made, Musk is exposed to possible sanctions, not for the content of the tweet but for not complying with the terms of the previous settlement.

[edit] We are not, however, in agreement that the founder/CEO's opinion of the stock price is not material to the company. We may have to agree to disagree on that, which makes no difference anyway since the SEC has the final say on what's material to a company, so our opinions don't actuall matter there.

[Brovane]

Anyways, various models show that electric car models from traditional car makers can go head to head with Tesla and come out competitive from a sales perspective. Maybe that equation has changed recently, but it is hard to tell if that is transient due to pent up demand, Elon Musk's hardcore following that is fervent but limited in size or where the traditional car manufacturers are in their product plans in what to them is a small market.

This is silly. There are more pre-orders for the model 3 in China alone than Nissan has sold Leafs in the last DECADE. There has not yet been a competitive vehicle introduction from any Car company yet to compete in this market segment. I'm sure eventually there will be, but how long will that take? Clearly the EV market will continue to rapidly increase in size and currently Tesla is positioned to gobble up most of the market and continue their rapid expansion.

You are comparing future sales to past sales. In an expanding market, that isn't necessarily apples to apples.  Anyways, there were 2.2 million plug in cars sold in 2019. 367,500 were Tesla. Their market share in the plug in space is ~17%.

I think these table tells the story more completely. 

[su27k]

all tweets from Musk having to do with Tesla have to be vetted by a Tesla lawyer.

I don't think so, only tweets containing material information about the company needs to be vetted.

[Ludus]

Question for the folks. If the starlink Constellation works more or less as intended. How hard would it be to piggy-back a Paypal like banking service onto it?

Interesting factoid, Musk have procession of his old x dot com URL again. All the web site is doing is displaying a lower case x character so far.

Banking services for X.com would be doable but would gain no inherent special advantage from Starlink. The decisive killer advantage simply from the physics of Starlink is speed. Musk will have the lowest latency data path between any two distant points. Financial data and analytics is a very profitable business dominated by Bloomberg and Thompson-Reuters. Musk wouldn’t be afraid of duplicating their functionality. Being guaranteed by physics to get financial data milliseconds ahead of the alternative services would be an offer the customers couldn’t refuse. This is a business much smaller than global internet or banking but 10X the size of orbital launch. Dominating it would means 10’s of billions a year. It’s about the right size for SpaceX Starlink near term ambitions.

[Yggdrasill]

No other company produces in two weeks what it takes Tesla all year to make.  The traditional car companies produce gas-driven vehicles.  Those are not the same as electric cars.

Those traditional car companies have been trying and failing for years to compete effectively with Tesla.  So far, they've all failed miserably.

You're correct, the traditional car companies do not produce the same product as Tesla. The traditional car company makes:
1. gasoline-powered cars
2. by the millions per year
3. that can be viewed and test-driven throughout the nation at local dealerships
4. that can be taken home the same day that they are test driven
5. that cost  as little as $3000 per seat (without heavy tax subsidies)
6. that have extensive repair networks locally available
7. that have extensive refueling networks across the continent giving the cars essentially unlimited range (fuel depots, they're not just for outer space)
8. that can be fully refueled in under 5 minutes

Tesla makes:
1. electric-powered cars

I'm not saying that Tesla won't eventually put together the rest of its vehicular ecosystem to where they can match what traditional companies are providing now, nor am I saying that they can't eventually scale up their manufacturing to the point where price and availability won't match gas-powered cars. For that matter, traditional car companies moving to electric will have to address items 5, 7 and 8, which can only help Tesla as long as common standards are followed. My point was that while Tesla is slowly climbing the learning curve, addressing the chicken and egg problems and setting up that entire ecosystem from scratch, a savvy traditional company could quietly watch, learn, re-tool existing factories and suddenly burst onto the scene with a much more generally competitive product with a complete ecosystem. Tesla, after all, has to develop everything from scratch, the existing car companies only need to develop a successful electric drive train.

It's not a guaranteed slam-dunk for Tesla and their future is nowhere near as assured as many people think it is, so neither is Musk's Mars piggy bank.

Tesla's situation isn't as bad as you seem to think. Tesla has already addressed most of the topics you list.

For instance, number 7 is for the most part handled. Superchargers are quite convenient and prevalent. I was thinking about taking a road trip from Norway to Portugal this summer with my Model X, but with Corona that seems very unlikely to happen. A couple of years ago we went to Croatia. No issues whatsoever. There's definitely still some holes here and there in the network, but overall it's pretty good.

And when it comes to number 8; refueling doesn't take 5 minutes, no. It's more like 20-30 minutes. But as a human I need to stop for food, bathroom breaks, and to stretch my legs from time to time. I will make these stops whether or not the car happens to be charging while I'm out of my car. So for the most part it's a non-issue. And it's super-convenient to get full range every night in your own garage. So dealing with some minor inconvenience (the biggest issue is being forced to stop in locations that are perhaps not your first choice, imho) on long trips is more than made up for by better convenience in everyday life.

And regarding 6. Larger population centers have service centers in fairly close proximity. (Except some places where Tesla is banned from selling/servicing cars.) There could definitely be better coverage, but at the same time, you don't need a Tesla service center for most things. Beyond easy stuff like replacing windshield wipers/cabin air filter and refilling wiper fluid, brakes and suspension is the stuff that most commonly needs work, and that pretty normal stuff that can be worked on basically anywhere. Plus body/paint, which is also pretty normal stuff. I know of people who own Teslas like 1000 km/600 miles from their nearest service center, and for the most part it works fine. The local shops can do most of the work. They do occasionally have to make the trip to the service center, though.

And when it comes to number five, Tesla isn't currently subsidized to any meaningful degree. The biggest subsidy was the $7500 federal tax credit, but those are gone, now, for Tesla. And sure, their cars are pricey, but not really much more so than their competitors BMW, Audi, Mercedes, etc.

One last thing, it's not in any way a benefit that ICE vehicles must be bought through dealerships. With Tesla you can order online in five minutes, without hours of mind games and bartering, and have the car delivered to your driveway. And if you don't like the car - you can just hand it right back.

With all of the above said, I do think there is limited upside in the current Tesla share price. A lot of success is already priced in. I still own shares, but I've reduced my position massively. But as a company I'm quite optimistic when it comes to Tesla, and I will buy back in at a lower price, if such an opportunity were to arise.

[DistantTemple]

What effect will COVID have on peoples attitude to lifestyle, work-life balance, driving, pollution and electric vehicles.
No data. No Maths. Just observations and opinions!

It has been stunningly beautiful to have quiet, safe streets, and lovely clear clean breathable air. Cleanliness of black dust from curb sides is noticeable! I Guess many working from home have benefited from no commute time, no commute cost, and got thoroughly used to the processes involved such as Skype/Zoom. The change from a hectic, aggressive rush, of urgency, and traffic jams, and a realisation that (at the moment) we are mostly still alive! And society still (appears under gov financial input) functions.

My guess it that many, (who still have jobs) will reassess what life is really all about. They will care more about time with their loved ones, clean air, and stepping back from pressure-for-pressure's sake. These people will be more likely to choose an electric car, in order to avoid contributing to pollution. For people working largely from home depreciation of lightly used cars will seem a waste, and Tesla's have extremely low depreciation, and expected very long lives due to their simple high quality electric transmissions. OTA updates help. If a car is not used daily, and under high time pressure  instant refuelling is likely to be less of an issue; definitely less frequently an issue.

The thought that ICE car resale values may start to collapse soon, along with the expected long life of a Tesla argues against another new ICE vehicle.

Obviously those hard hit by the predicted slump, will have to get whatever they can afford. Older cars will be kept going. And the price of gas/petrol loos as if it will stay very low. I bet social stigma of exhaust, and noise will begin to grow, now everyone has breathed clean air. When even trucks (T.Semi and others) start going clean, exhaust and noise will stand out more. Those that can will patronise companies that use clean transport.

As to Value/market Cap. This is like the iPhone. However it is not just phones and communication, its transportation, clean air, money saving, solar generation, energy storage, and very profitable grid services. And Tesla is physically not limited to the US. It will soon effectively be a global corporation, able to ride local political negativity. Expansion of the Shanghai plant is what we can expect elsewhere! Tesla Berlin will be 4x its initial plant!  So IMO hickups-likely, overall growth trajectory-guaranteed.

And lastly, this COVID is respiratory, and "studies suggest" (I'm not going to find references) that air quality significantly affects severity and survivability. If there are future waves and more COVIDs, the imperative to prioritise clean air can only increase.

[TrevorMonty]

What effect will COVID have on peoples attitude to lifestyle, work-life balance, driving, pollution and electric vehicles.
No data. No Maths. Just observations and opinions!

It has been stunningly beautiful to have quiet, safe streets, and lovely clear clean breathable air. Cleanliness of black dust from curb sides is noticeable! I Guess many working from home have benefited from no commute time, no commute cost, and got thoroughly used to the processes involved such as Skype/Zoom. The change from a hectic, aggressive rush, of urgency, and traffic jams, and a realisation that (at the moment) we are mostly still alive! And society still (appears under gov financial input) functions.

My guess it that many, (who still have jobs) will reassess what life is really all about. They will care more about time with their loved ones, clean air, and stepping back from pressure-for-pressure's sake. These people will be more likely to choose an electric car, in order to avoid contributing to pollution. For people working largely from home depreciation of lightly used cars will seem a waste, and Tesla's have extremely low depreciation, and expected very long lives due to their simple high quality electric transmissions. OTA updates help. If a car is not used daily, and under high time pressure  instant refuelling is likely to be less of an issue; definitely less frequently an issue.

The thought that ICE car resale values may start to collapse soon, along with the expected long life of a Tesla argues against another new ICE vehicle.

Obviously those hard hit by the predicted slump, will have to get whatever they can afford. Older cars will be kept going. And the price of gas/petrol loos as if it will stay very low. I bet social stigma of exhaust, and noise will begin to grow, now everyone has breathed clean air. When even trucks (T.Semi and others) start going clean, exhaust and noise will stand out more. Those that can will patronise companies that use clean transport.

As to Value/market Cap. This is like the iPhone. However it is not just phones and communication, its transportation, clean air, money saving, solar generation, energy storage, and very profitable grid services. And Tesla is physically not limited to the US. It will soon effectively be a global corporation, able to ride local political negativity. Expansion of the Shanghai plant is what we can expect elsewhere! Tesla Berlin will be 4x its initial plant!  So IMO hickups-likely, overall growth trajectory-guaranteed.

And lastly, this COVID is respiratory, and "studies suggest" (I'm not going to find references) that air quality significantly affects severity and survivability. If there are future waves and more COVIDs, the imperative to prioritise clean air can only increase.

When comes to recession new expensive luxury items are first things consumers stops buying. Unfortunately for Tesla their current vehicle range falls into expensive luxury item bracket.

The car industry as whole is going to be hit hard as consumers hang on to existing cars till things get better.

[Eka]

Something I think people have missed about Tesla is it really is an energy company, not a car company. Who gets the profits from the Superchargers? Who has large amounts of solar all over? As of late they've been hampered in expanding the Powerwall and utility scale battery bank side due to a battery shortage. That will come uncorked this year. Tesla just bought a huge order of battery making equipment. Utilities wanting to save money on peaking plant operating costs have been clamoring for the utility scale systems.

[Yggdrasill]

Something I think people have missed about Tesla is it really is an energy company, not a car company. Who gets the profits from the Superchargers?

No one. There aren't any profits. Their stated goal is to break even, which is probably the best case at the moment, although the economics aren't very transparent.

Who has large amounts of solar all over? As of late they've been hampered in expanding the Powerwall and utility scale battery bank side due to a battery shortage. That will come uncorked this year. Tesla just bought a huge order of battery making equipment. Utilities wanting to save money on peaking plant operating costs have been clamoring for the utility scale systems.

At the moment Tesla Energy is a fairly small part of Tesla, but it certainly has the potential for becoming quite important in the the next decade or so. If the solar roof gets properly scaled up, there could be a healthy profit margin there.

[Yggdrasill]

When comes to recession new expensive luxury items are first things consumers stops buying. Unfortunately for Tesla their current vehicle range falls into expensive luxury item bracket.

The car industry as whole is going to be hit hard as consumers hang on to existing cars till things get better.

"Stops buying" is shorthand for "significant drop in demand". The drop for BMW was 5% in 2008 and 10% in 2009. Then it's risen every year since. The great recession was barely noticable, really.

Tesla has grown volume by about 50% per year. If Fremont could have stayed open, I think they could still have gotten fairly close to that for 2020. But not being able to produce cars naturally means selling fewer cars. Seems like they've had to close for about 1.5 months - if they were on track for a 50% increase, which I think they were, 2020 might see an increase in sales of something like 30% over 2019.

Basically, the promary concern for Tesla is supply, not demand.

[Eka]

When comes to recession new expensive luxury items are first things consumers stops buying. Unfortunately for Tesla their current vehicle range falls into expensive luxury item bracket.

The car industry as whole is going to be hit hard as consumers hang on to existing cars till things get better.

"Stops buying" is shorthand for "significant drop in demand". The drop for BMW was 5% in 2008 and 10% in 2009. Then it's risen every year since. The great recession was barely noticable, really.

Tesla has grown volume by about 50% per year. If Fremont could have stayed open, I think they could still have gotten fairly close to that for 2020. But not being able to produce cars naturally means selling fewer cars. Seems like they've had to close for about 1.5 months - if they were on track for a 50% increase, which I think they were, 2020 might see an increase in sales of something like 30% over 2019.

Basically, the promary concern for Tesla is supply, not demand.

It needs to be remembered that the ones who will still be buying are the ones with large incomes. Recessions and depressions don't effect them as much. It is the average to poor people who get hit the hardest.

[FutureSpaceTourist]

I’d forgotten about this thread ...

twitter.com/valleyhack/status/1280552938004336640

I know @elonmusk likes to hold onto his Tesla shares to show committment to the cause and the company and all that, but there must be a point at which he cashes in to buy a six-pack of Mars rockets, right?

https://twitter.com/elonmusk/status/1280597571459833863

Essentially. Long-term purpose of my Tesla stock is to help make life multiplanetary to ensure it’s continuance. The massive capital needs are in 10 to 20 years. By then, if we’re fortunate, Tesla’s goal of accelerating sustainable energy & autonomy will be mostly accomplished.

Also worth noting that with the current surge in Tesla’s stock price Bloomberg now estimates Elon as the 7th richest person in the world at around $70.5B.

[oldAtlas_Eguy]

The original estimate to do all the BFR(now Starship) development landing Cargo on Mars. Then a 4 ship Manned plus 10 cargo mission on Mars before 2030. That amount was $10B. Elon has the cash to do it without even selling all his shares just 7 million of his 34 million + 20 million (in options). If Starlink works and Starship becomes a positive cash maker as well he may never have to sell that much stock unless he wants to expand rapidly the Mars base size from hundreds of persons to thousands or 10s of thousands by 2040. If such happens expect him to relocate to Mars in 2040.

[Robotbeat]

The original estimate to do all the BFR(now Starship) development landing Cargo on Mars. Then a 4 ship Manned plus 10 cargo mission on Mars before 2030. That amount was $10B. Elon has the cash to do it without even selling all his shares just 7 million of his 34 million + 20 million (in options). If Starlink works and Starship becomes a positive cash maker as well he may never have to sell that much stock unless he wants to expand rapidly the Mars base size from hundreds of persons to thousands or 10s of thousands by 2040. If such happens expect him to relocate to Mars in 2040.

It's no longer crazy to imagine Elon being able to literally relocate to Mars and establish a sizable presence there. Starship looks like it might work. Even if you don't buy that Starship will lower costs to like $10/kg or whatever, even using Falcon 9 like prices (~$1000/kg), Elon has enough wealth to launch 70,000 tons IMLEO.

Considering typical NASA Design Reference Mission concepts of about 1000 tons IMLEO per mission of 6 people, that's enough IMLEO for 420 people and surface habs and ascent vehicles, etc. A sizeable base already.

Of course, that's just the cost for the LEO launches, not the mission hardware which would be much greater. But since architectures are often weighed against IMLEO, I thought that would be instructive.

But if we take seriously up to 100 passengers and a Falcon 9-like $15m per launch (marginal cost) with, say, 4 refuelings per Mars launch, that $70b is enough to launch on the order of 50,000 people to Mars, at least from a IMLEO perspective.  That's ignoring mission hardware cost, again, but still is remarkable... That's getting close to what you could call a real "city" and at the lower end of estimates of the number of people needed for self-sufficiency. That's just the people, though, and not much cargo. But it's also probably not the lowest that a fully, rapidly reusable Starship could go, even if it might be more realistic in the near term.

If Musk continues being successful with Starship, he may be worth more like $150b. And if Starship is successful enough, Musk has said the ticket price to Mars could be as low as $100k or less (100 passengers requiring 5 launchs of Starship with 4800 tons of propellant each launch and propellant cost currently as low as $100/ton depending on where you are in the world means each Mars ticket costs about $24,000 in propellant cost, so it's not like violating conservation of energy or something), in which case that's enough for 1.5 million people to go to Mars. Or 1 million and lots of equipment. That's not counting people paying their own way there.

I suspect at that volume, we'd see optimizations like the use of hydrolox for the upper stage and trans-mars-insertion, really cheap LOx-rich first stage, maybe even water-injection to reduce propellant costs on the first stage. Possibly SEP (Starlink provides remarkably inexpensive SEP capability). Use of a Phobos tether, even propellant from Mars used for trans-Mars-insertion to reduce trip cost, enhanced hibernation (think prolonged sleep cycles on a rotating basis enabling more people in the same volume), super-lightweighted Starships for transfers, etc.

With such optimizations, you could lower the cost even further. In principle below $10,000 per person. But I digress.

If Starship succeeds, Musk will be able to launch an insane amount of material to Mars. Enough to build his megacity. He already has enough capital for an Amundson-Scott-Station-like presence of a couple hundred people using just Falcon 9 level launch costs...

[Nomadd]

It's no longer crazy to imagine Elon being able to literally relocate to Mars and establish a sizable presence there. Starship looks like it might work. Even if you don't buy that Starship will lower costs to like $10/kg or whatever, even using Falcon 9 like prices (~$1000/kg), Elon has enough wealth to launch 70,000 tons IMLEO.

The funny thing is, although it seems to be more than possible, it still seems crazy to imagine. Even all the polydirectional launches haven't really dampened my hopes that this golden age of science fiction story could happen, since the issues are nothing that hard to solve.  But parts of my brain are still having trouble processing it.
 As far as the money, I'd think the boss mainly wants to avoid the point where his control of Tesla could be in jeopardy. Or depressing the stock price by buying and selling all the options he's about to get.

[raketa]

5 years ago people laugh at me at this forum, that Elon will have enough money to sponsor it from his own pocket if necessary. I think we could see it is possible,even if starlink will fail.
I work for Tesla, I understand potential company have, that other people didn't see.

[raketa]

I look for Elon's The Boring Company to take off in the middle of this decade. Boring tunnels have way more uses than underground traveling, can be used for utilities such as sewers and water.  The BoCo is cheaper and faster than other tunnel companies. Also, would like to see Elon create a city of the future with solar/battery power, BoCo transportation and utilities, and driverless cars and AI.

Does Elon own TBC?

90-100%

[raketa]

I very much doubt that TBC will be a big money-maker in the near future. Most applicable uses involve extensive political negotiations with municipalities and regions, and highly dependent on other partners, which is not the road to quick riches. In any case, I'm not sure that tunnel digging is likely to be a high-margin enterprise -- creating local transit infrastructure rarely is.

Starlink is much more likely to be Musk's cash cow.

if you offer build tunnel for 100M instead of several B, I think it will be hard to give to your friend.

[raketa]

Musk isn’t an investor. His only assets are the companies he starts and controls so paying for Mars is about what he plans to do with Tesla and SpaceX (with TBC and Neuralink more hobby scale currently).

Tesla has plans that are influencing it’s stock price even now (It’s got the second highest market cap of any auto company after Toyota) It can be a multi Trillion dollar market cap company if it succeeds with Tesla Network robotaxis.

SpaceX Starlink has lot’s of paths to generating vast wealth too. Consider Financial Data & Analytics - dominated by Bloomberg and Thompson-Reuters. Bloomberg bills about $2000/month to over 325,000 users. Reuters a bit less to about 200,000.  Suppose Elon went after their market with a Starlink subsidiary. Many startups have tried and failed. It’s not that hard however for Elon to duplicate the Bloomberg terminal functionality and Starlink gives his version a killer advantage. It’s faster. If you don’t subscribe your competition will get critical information before you do. Other FD&A  platforms can’t match it because Starlink has it’s own end to end internet and light travels faster in a vacuum than in fiber even if there was fiber in the direct path you need (which there isn’t). It’s an offer they can’t refuse. FOMO would let them take over the global market for FD&A.

FD&A doesn’t need much of Starlink’s capacity, it’s just alphanumeric data, it just needs to have routing priority for the lowest latency. In return it would yield billions in steady income for SpaceX to invest elsewhere. What’s it called? Elon has X.com sitting around doing nothing but returning a lowercase x. That would work as well as being a reference to his return to global finance that he got forced out of a couple decades ago.

Probably all wrong but an example of possible paths.

Think in 10 years Tesla will be trillion company, at that time if Elon sell his stock, will not bring company down, like Apple didn't crash when Steve died. 200B will be great pocket change to build city on Mars.

[M.E.T.]

If Tesla reaches a trillion dollar valuation Elon's stake there would be around $200B (assuming his compensation package more or less balances out the inevitable dilution of shareholding from future capital raises).

Starlink will likely take SpaceX to a $120B valuation, with Elon probaby ending up at around 40% shareholding, so that's another $50B to add to his net worth.

Then, as much as I know Robotbeat disagrees, I firmly believe that Starship will open up asteroid mining for SpaceX. If you can cheaply transport 10,000 or so tons (100 orbitally refuelled Starship flights, so maybe 500 Starship launches in total) of equipment to an asteroid rich in precious metals to set up a mining facility, then it simply becomes a matter of transporting the extracted resources to earth for less than the market price of said resource.

E.G, if gold is worth say $50k per kg, that means Starship can transport $5B worth of gold back to earth on a round trip. So once they get the all inclusive cost of the extraction and transport down to say $4.5B, they can make $500M worth of profit per Starship round trip. If they manage to get cost down to $4B, that's $1B profit per trip.

Something NOBODY else can even dream of without the enabling technology that Starship represents. Essentially SpaceX becomes the ONLY company that can economically access this new, virtually limitless source of resources, thanks to Starship.

Anyway the point is, that will make SpaceX worth more than Tesla. And make Starlink revenues look like a pittance in comparison. That to me is the ultimate way in which SpaceX can open up space as an economic frontier. And finance Mars colonization for centuries.