The future of Tesla

[Hrothbern]

If it's not clear yet, I absolutely hate Elon Musk, but I'll give him one thing: going after electric cars surely brings a lot of rage and fury from the oil industry, so he is pretty much one musky boii fighting against stagnant corporations and oil moguls who only care about filling their pockets and dying before the Earth get completely destroyed. That takes some guts.

I know for a fact some car reviewers and events were scripted to give Tesla terrible reviews just to gut the idea of electric cars and make it never happen, so what it's worth, at least he is doing something anti-establishment. I guess.

Yes
but that is pretty much a domestic US battle. As Moriarte says, toyota, VW are not sitting idle.
VW will launch in 2020 already, and that car is much more fitting the demand for smaller cars, for the smaller parking places, in crowded European cities, where electric cars will be encouraged by parking privilege and cost benefits until forbidden completely in the city centres in the longer run.
Big enough a market to scale up the manufacturing to such a cost efficient scale that it will allow export of more fancy electric cars that can compete on status and luxury with Tesla.
Killing Tesla equates I think to hindering the US car industry of the future.

 

[HoloDoc]

The demand for electric cars will be there once cities start banning ICE cars within their limits. And if there is one thing that Tesla accomplished, it is that they have shown that there is enough demand for electric cars right now. The problem with Model 3 is not that nobody is willing to buy them, but that Tesla's production costs are currently too high to make a profit with it. Mass production of cars is just much harder than scaling your internet startup by adding more servers.

When Tesla started, the established car manufacturers didn't really take electric cars seriously. So there was an opportunity there for a new company to set themselves up by filling that gap. The challenge was to establish the new company in the market before the established players can take it over. It remains to be seen, whether Tesla will ultimately fail or succeed at that.

Personally, I would put my money on Google to corner that market. They'll probably buy up Tesla eventually, and focus on combining their self-driving cars with electric cars.

 

[innonimatu]

The demand for electric cars will be there once cities start banning ICE cars within their limits. And if there is one thing that Tesla accomplished, it is that they have shown that there is enough demand for electric cars right now. The problem with Model 3 is not that nobody is willing to buy them, but that Tesla's production costs are currently too high to make a profit with it. Mass production of cars is just much harder than scaling your internet startup by adding more servers.

When Tesla started, the established car manufacturers didn't really take electric cars seriously. So there was an opportunity there for a new company to set themselves up by filling that gap. The challenge was to establish the new company in the market before the established players can take it over. It remains to be seen, whether Tesla will ultimately fail or succeed at that.

I disagree on both counts. Toyota and Nissan were taking them serious, although Toyota's strategy was different from what is now popular. And might have been better.
Tesla rode the same wave of political and economic support for electric cars that the other manufacturers have (they're been putting new models out). The other manufacturers have just incapable of burning tens of billions per year to push electrics on a greater scale. Tesla had capital to burn but that kind of capital comes to an end some day.

Musk's incompetence as a manager (l'll do manic through automation!) explains some of Tesla's losses. Musk criminal decisions (buying solarcity to avoid losing money personally) while heading the board explain some of Tesla's debt load. But even past all that, Tesla still would be losing money on the cars they make if they were to sell them "cheap" as promised (and never delivered) for this model 3.

The other thing I disagree with is that there will be another wave of public subsidies for electric cars. The necessary investment to replace ICE cars with electrics in a short time frame would be huge. That public financing would me much better employed in increasing the availability of mass transportation, which would actually decrease overall energy consumption, not just reduce localized pollution. I hope that people notice this and push for it before more resources are sunk into some government subsidized mass drive for electric cars.

Personally, I would put my money on Google to corner that market. They'll probably buy up Tesla eventually, and focus on combining their self-driving cars with electric cars.

Google is a one-trick pony. Their specialty is slurping information, not manufacturing things.

 

[uppi]

Personally, I would put my money on Google to corner that market. They'll probably buy up Tesla eventually, and focus on combining their self-driving cars with electric cars.

I don't think so. They're probably better off just making a car software platform and let others handle the hardware. They might make a few reference models (like the Google Nexus for phones), but I don't think they would like to go into the low-margin business (at least in terms of Google's usual business) that is car manufacturing.

 

[Ajidica]

Really disappointed in the SEC here. They had what appeared to be an open/shut case against Musk and they settled for a pittance and a wrist slap. He has to step down as Chairman for three years. Big deal! He is still CEO and if you think he won't be kept fully informed on the side about what is going on and asked for his opinions, then I have a bridge to sell you.
Plus, since this is a settlement, Musk neither admitted to or denied the charges. This tendency toward settlements is one of the most concerning things about the SEC over the last decade. If the SEC believes Musk broke the law, then file a civil suit against him and get a court to determine it. This whole thing encourages laziness, disregard for the law, and in the words of James Comey, turns the SEC/SDNY into "the chickenshit club" where they don't take any real risks.

 

[HoloDoc]

I don't think so. They're probably better off just making a car software platform and let others handle the hardware. They might make a few reference models (like the Google Nexus for phones), but I don't think they would like to go into the low-margin business (at least in terms of Google's usual business) that is car manufacturing.

Businesses have a tendency to expand into wverything when they get to that size. I foresee them at least attempting to integrate both horizontally and vertically over the next few decades.

 

[uppi]

Businesses have a tendency to expand into wverything when they get to that size. I foresee them at least attempting to integrate both horizontally and vertically over the next few decades.

There is also pressure on businesses to split off unrelated and not as profitable branches. Alphabet shareholders expect the holding to have a high return on investment and you are not going to get that making cars. For example, Volkswagen has about 7 times as many employees as Alphabet, but only half the operating income.

If Alphabet was owning VW right now, I am pretty sure shareholders would demand that they sell it.

 

[caketastydelish]

Not defending his behavior, but it's hard for me to see "Tesla isn't profitable and therefore is done."

My dad wanted to buy one and there's a huge waiting list because they're struggling to make enough of them to keep up demands and they're having to add new factories, etc.

This hardly sounds like a business that is going down.

 

[hobbsyoyo]

Not defending his behavior, but it's hard for me to see "Tesla isn't profitable and therefore is done."

My dad wanted to buy one and there's a huge waiting list because they're struggling to make enough of them to keep up demands and they're having to add new factories, etc.

This hardly sounds like a business that is going down.

The thing is that the waiting list comes with a huge problem of its own - the fact that there is so much demand means they have to rapidly build out their production capacity to meet it before the market moves on. They don't get a slow, easy ramp into this. They've been burning capital for the better part of a decade and failing to turn a profit or even meet their much-touted production targets. Moreover they seem to always increase their burn rate rather than slowly wind down the capital investments as they should be aiming too in the long run. Even this wouldn't necessarily be a problem (lots of companies end up spending more capital during start-up than they anticipated) except that it's been going on for soooo long.

In essence they are trying to grow too much and too fast and seem to be flailing. That they had to set up tents to push through hand-crafted Model 3's does not bode well for the company in spite of Musk touting it as bootstrapping scrappiness and innovation.

To make things worse, the hype surrounding the company has dramatically inflated its stock value. On paper, Tesla was at one point bigger than GM which is ridiculous. This level of hype makes it very difficult to accurately assess the state of the company and make a rational investment because so much of their value is purely speculative and divorced of reality.


I think they can turn things around but crap like this from Musk doesn't help and they are quickly running out of runway.


Also - the fact that your dad seems to have given up on buying a Tesla because of the wait list is instructive of their problems in and of itself. That people can't buy their products and don't even know when they will be able to does not make for a stable market position.

 

[HoloDoc]

The thing is that the waiting list comes with a huge problem of its own - the fact that there is so much demand means they have to rapidly build out their production capacity to meet it before the market moves on. They don't get a slow, easy ramp into this. They've been burning capital for the better part of a decade and failing to turn a profit or even meet their much-touted production targets. Moreover they seem to always increase their burn rate rather than slowly wind down the capital investments as they should be aiming too in the long run. Even this wouldn't necessarily be a problem (lots of companies end up spending more capital during start-up than they anticipated) except that it's been going on for soooo long.

In essence they are trying to grow too much and too fast and seem to be flailing. That they had to set up tents to push through hand-crafted Model 3's does not bode well for the company in spite of Musk touting it as bootstrapping scrappiness and innovation.

To make things worse, the hype surrounding the company has dramatically inflated its stock value. On paper, Tesla was at one point bigger than GM which is ridiculous. This level of hype makes it very difficult to accurately assess the state of the company and make a rational investment because so much of their value is purely speculative and divorced of reality.


I think they can turn things around but crap like this from Musk doesn't help and they are quickly running out of runway.


Also - the fact that your dad seems to have given up on buying a Tesla because of the wait list is instructive of their problems in and of itself. That people can't buy their products and don't even know when they will be able to does not make for a stable market position.

It's almost like they are playing Europa Universalis and minting to get that early advantage, killing themselves in the long run. Or, considering the site we're on, they've rushed a bunch of settlers but not bothered with the ground troops to defend their new cities, which are about to be lunch for their neighbours.

 

[civvver]

Not defending his behavior, but it's hard for me to see "Tesla isn't profitable and therefore is done."

My dad wanted to buy one and there's a huge waiting list because they're struggling to make enough of them to keep up demands and they're having to add new factories, etc.

This hardly sounds like a business that is going down.

You have to put a down payment to get on the waiting list and they've burned through that money and still need to deliver the cars. So yes it's bad.

 

[uppi]

Not defending his behavior, but it's hard for me to see "Tesla isn't profitable and therefore is done."

My dad wanted to buy one and there's a huge waiting list because they're struggling to make enough of them to keep up demands and they're having to add new factories, etc.

This hardly sounds like a business that is going down.

The demand is certainly there. The problem is that they need to actually make a profit on their cars. Losing money on every car they sell is something that a business can only keep up so long.

The price of the Model 3 has been set with a certain production cost in mind. Part of that production cost is the operating expenses of the assembly lines divided by the number of cars these assembly lines make. There is only so much you can do about the operating cost of an assembly line, so you need to make enough cars that the cost per car is low enough in order to turn a profit. I obviously don't know anything about how many cars is enough cars and where exactly Tesla stands on Model 3 production, but this is what the fuss is all about: Investors worry that Tesla is unable to meet the production targets they had in mind when they set the price and will burn through cash with every car they sell.

 

[hobbsyoyo]

It's also worth pointing out that Tesla isn't even selling the mass-market Model 3 yet, only the luxury edition which starts at over $55k before government rebates. Also, the federal rebate of $7.5k has either expired or will expire very soon for Tesla making it less of a bargain for everyone.

 

[civvver]

If tesla was actually smart they would've done a join venture with a us auto manufacturer, retooled some plants to build their cars. Electric cars are awesome to drive. A volt isn't a super fast car but it feels way more responsive and zippy than a gas sports car cus of instant torque.

Also people need to understand going electric doesn't magically eliminate all car emissions since most of our electricity comes from coal. Depending on the state you live in, driving an electric car is equivalent to the emissions of getting 50-80 mpg. I know that's very high as only the smallest, most efficient cars get 50 mpg, but sometimes I think a lot of the focus on 100% electric could be spent well on making gas suvs and trucks get 30 mpg vs the 20 they get now. That's a 50% increase.

 

[hobbsyoyo]

If tesla was actually smart they would've done a join venture with a us auto manufacturer, retooled some plants to build their cars. Electric cars are awesome to drive. A volt isn't a super fast car but it feels way more responsive and zippy than a gas sports car cus of instant torque.

Also people need to understand going electric doesn't magically eliminate all car emissions since most of our electricity comes from coal. Depending on the state you live in, driving an electric car is equivalent to the emissions of getting 50-80 mpg. I know that's very high as only the smallest, most efficient cars get 50 mpg, but sometimes I think a lot of the focus on 100% electric could be spent well on making gas suvs and trucks get 30 mpg vs the 20 they get now. That's a 50% increase.

Tesla partnered with Toyota and other manufacturers in the past though I don't think they worked with US automakers. Musk likes to vertically integrate as much as possible and partnering with another manufacturer makes it harder to vertically integrate.

Under Obama, the EPA did go after SUV and truck mileage. Donald Trump's administration rolled back the regulations that would raise the minimum MPG of those vehicles before they took effect.

 

[Broken_Erika]

Under Obama, the EPA did go after SUV and truck mileage. Donald Trump's administration rolled back the regulations that would raise the minimum MPG of those vehicles before they took effect.

Real Americans drive Hummers!

 

[civvver]

Tesla partnered with Toyota and other manufacturers in the past though I don't think they worked with US automakers. Musk likes to vertically integrate as much as possible and partnering with another manufacturer makes it harder to vertically integrate.

Under Obama, the EPA did go after SUV and truck mileage. Donald Trump's administration rolled back the regulations that would raise the minimum MPG of those vehicles before they took effect.

I know, and it was a dumb decision. I think Bush actually got the ball rolling with new cafe standards before obama was elected, and obama ran with it and improved them but I'm not positive. Either way, once trump was elected, that's when gm announced they are phasing out cars entirely cus they don't have to meet cafe standards anymore. Pretty dumb.

I have 2 kids and we haul a lot of stuff, I get why people want a big car when they need it. But I don't need the amount of horsepower it has, I don't tow anything, and people who mostly drive themselves only don't need huge suvs. It's a status symbol and a feeling of security and safety when driving, not a practical thing.

 

[hobbsyoyo]

You're right, Bush did raise emission standards and Obama increased them further.

 

[uppi]

Also people need to understand going electric doesn't magically eliminate all car emissions since most of our electricity comes from coal. Depending on the state you live in, driving an electric car is equivalent to the emissions of getting 50-80 mpg. I know that's very high as only the smallest, most efficient cars get 50 mpg, but sometimes I think a lot of the focus on 100% electric could be spent well on making gas suvs and trucks get 30 mpg vs the 20 they get now. That's a 50% increase.

Minor nitpick: going from 30 mpg to 20 mpg only reduces fuel consumption by 33% because of the unintuitive way mpg works

Other than that, this is very true, right now. But in the long run we can reduce the electricity generation from coal in favor of cleaner methods. If cars are all electric, you have much more freedom in how to generate the required electricity. Cars are relatively easy to power with renewable energy, because they already come with batteries and you have a lot of flexibility when to charge them.

But even now there is an advantage to burn stuff in one big facility instead of burning it in a lot of small combustion engines: It is much easier to minimize emissions for an immobile power plant compared to something that has to move around and thus cannot be that heavy.

 

[Zkribbler]

I don't know if this post belongs in a Tesla thread, but the first hyperloop capsule has just been manufactured in Spain.

https://edition.cnn.com/travel/article/hyperloop-capsule/index.html