A9. Tesla has more demand than supply for the Model 3
Tesla Myth: The market for the Model 3 is nowhere near what bulls think it is
The high number of preorders (~400,000 preorders) for the Model 3 demonstrated unprecedented pent up demand for an automobile. Critics and short sellers want you to believe that those pre-orders represented all demand for the Model 3, and once satisfied, demand would collapse. What they seem to miss is that a car with that much initial interest is likely so compelling that many new customers will find out about it over time and also want it. Indeed, Tesla has indicated that ~90% of new Model 3 sales are not from reservation holders, and this is quarters after some critics thought Tesla had exhausted demand for the car.
When you want to buy a car, you typically do some research, look at what excites you, go to a dealership and get more information, choose a few cars you like the most to then test drive, weigh your options, and then finally choose one. In the case of the Model 3, considering that ~400,000 people went through that process and pre-ordered a car 2 to 3 years in advance indicates it’s an extremely competitive car. Countless reviews have indicated that expectations were exceeded. Teslas are amazing vehicles, and once new customers get their cars, those people’s friends, coworkers, and neighbors can experience a Model 3. Many of those people may have had no interest in the car beforehand or might have not even heard of it. Experience so far has shown us this “word of mouth” organic marketing has led to strong ongoing demand for the Model 3.
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A10. Teslas (and other EVs) are more environmentally friendly
Added 7/2/2019
Tesla Myth: Teslas (and other EVs) are not environmentally friendly since they run from environmentally unclean sources
Even with a dirty grid, Tesla and EV’s are cleaner. Tesla’s 2019 Impact Report shows Texas, with its high proportion of coal and natural gas, has lower CO2 emissions than using a gas, plug-in hybrid, or hybrid car. Emissions are further reduced when the grid has more renewable energy.
Further, you don’t have to worry about pollution from diesel vehicles idling or an oil leak estimated at 1000x worse than the oil rig owner thought (like the BP Deepwater Horizon disaster). As a bonus, EV batteries can be recycled almost indefinitely.
“Contrast that with the 200 to 300 gallons of gasoline that simply go up in smoke and other emissions each year, when driving 10,000 miles in a combustion vehicle. 200 to 300 gallons at around ~3 kg (6.3 lb) per gallon — that’s 600 to 900 kg of ‘stuff’ that needs mining, shipping, refining, transporting, storing, and delivering each and every year. Over a 15 year lifetime, that’s around 45× more mined material than the BEV requires. Remind folks of that difference if they question the lifetime environmental impact of BEVs vs. fossil powered vehicles.” – Dr. Max Holland
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A11. Tesla is committed to only sourcing responsibly produced materials.
Added 7/2/2019
Tesla Myth – Battery production is extremely unethical
“Tesla is committed to only sourcing responsibly produced materials. We strictly follow all U.S. and foreign law, and require our supply chain to do the same.” – Tesla’s 2019 Conflict Mineral Report
Main raw materials used in battery production:
Nickel, lithium, graphite, cobalt, manganese, aluminum, copper.
Countries of origin:
South America: 75% of the world’s lithium resources come from Argentina, Chile, and Bolivia.
China: 65% of flake graphite is mined in China.
Indonesia: Main nickel source but nickel is most commonly mined throughout the world.
Congo: 65% of all cobalt production comes from the DRC.
North America: Tesla have stated that they want to source 100% of raw materials sustainably and ethically from North America.
Nickel
Currently Tesla sources most of nickel from: North America, Australia, China, Russia and Greenland.
Cobalt
Cobalt is the most controversial material, as it is linked to reports on unethical mining practices. Tesla sources cobalt from open market, just like any other manufacturer in the world.
Musk “We use less than 3% cobalt in our batteries & will use none in next gen.”
Lithium
Currently Tesla sources most of lithium from: China, Australia, Canada, U.K. and Canada.
Just 150 miles north of Tesla’s Gigafactory, a plan is brewing to build a massive mine capable of growing the world’s lithium carbonate supply by a full 15% as early as 2022 and more than 20% by 2026, compared to 2018. Tesla could, in other words, find itself neighbors with one of the largest concentrated supplies of lithium carbonate in the world less than a decade from now.
China’s No.1 producer of lithium has signed an extendable 3 year contract with Tesla Inc.
Graphite
Musk: “The amount of graphite in our car is small, comes from Japan and is mined in a very clean way.”
Manganese
Currently Tesla sources most of manganese from: China, South Africa and France.
Copper
Currently Tesla sources most of copper from South America and China.
Tesla Conflict Minerals Report:
“Tesla is committed to only sourcing responsibly produced materials. We strictly follow all U.S. and foreign law, and require our supply chain to do the same.”
All of our contracts require suppliers to adhere to our human rights policy and environmental and safety requirements. Tesla is committed to making working conditions in Tesla’s supply chain safe and humane, ensuring that workers are treated with respect and dignity, and that manufacturing processes are environmentally responsible. Tesla suppliers are required to provide evidence of the existence of policies that address these social, environmental, and sustainability issues as well as responsible sourcing.
B. Responses to Common Tesla Myths Concerning Tesla’s Products
B1. Model 3 sports close to a 20% gross profit margin
Tesla Myth: Model 3 has no (or low) gross profit margin
Tesla has a highly vertically integrated manufacturing process. Most suppliers don’t deliver at the quality or price that Tesla wants, so the company make’s most of its supplies on their own. Expert analysts have determined that Tesla’s Model 3 electronics are even up to or above military standards, and the only other place you will find such advanced technology is in an F35. Thus, when people try to calculate the manufacturing costs of the Model 3 using the high prices of other suppliers (for example, for rare military-grade electronics), they get a very inaccurate and low profit margin. Currently, the Model 3 is at approximately a 20% gross profit margin.
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B2. Tesla Autopilot is the most advanced driver assist technology on the market
Tesla Myth: Tesla’s Autopilot will never work
Tesla Autopilot already works. It just doesn’t get you from point A to point B automatically by selecting a destination on the monitor, not yet. It will already get you from onramp to offramp, though, something no other driver-assist technology in a production car can do.
In 2019, Tesla will update the swappable computer module in all Teslas that have paid for “Full Self Driving.” This upgrade will make the computer at least 100 times more powerful than the previous one. Is that enough? Many experts think it is.
Tesla already find that drivers using Autopilot on are much less likely than normal drivers to get into accidents.
Tesla Myth: Tesla Autopilot is behind everyone else’s tech
The reports that said that Tesla was behind everyone is a pretty big mystery. What is known is that they wanted an inside look at everyones technology and Tesla did not oblige which is the main reason they scored so low. However if you look at the situation with a shred of common sense, you will see that Apple only has a handful of prototypes of an autonomous system driving around and yet still seems to somehow beat Tesla, a company that has hundreds of thousand of cars on the road testing the technology with every mile they drive.
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B3. Tesla quality matches or exceeds competitors
Tesla Myth: Tesla has inferior quality versus competitors
Avowed Tesla critic Bob Lutz took a look at a red Model 3 in Michigan. He was amazed by the paint quality and he thought the panel gaps were “world class.” If that doesn’t say enough, what does? In any case, numerous other reviews of the Tesla Model 3 have indicated essentially the same thing.
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