Tesla's 1.5B reduction of cash on hand was largely due to the 920M convertible bond payment — but that only happened because TSLA didn't perform to the level necessary for conversion (~$360 IIRC). I wonder what changes in terms this'll warrant for future capital raises.
Then they mention that they missed a lot of revenue due to missing half their shipments overseas, and onto Q2 (But also expecting a loss in Q2).
Sales for their higher-margin vehicles seemed to have cratered, explained by seasonality, lower US tax credits going forward, and inventory/demand mismatch.
Panasonic has halted their planned battery plant expansion, which implies a lot about future demand.
I don't want to be a downer, but I'm having a hard time seeing the way forward for Tesla in a manner that isn't very unfavorable for them.
This wasn't reported much, but Tesla also expanded their ABL (Asset Based Lending) credit agreement by $500M in March 2019: https://ir.tesla.com/node/19561/html
Without that, they would have $500M less cash on hand. They shipped half of their cars in the final 10 days of Q1. Finances must have been pretty tight at the start of March. That was around the time they announced they are closing all stores, firing sales personnel, and in general tightening the belt significantly. They also had the Model Y reveal in the middle of March, presumably to raise capital via deposits. Cutting prices multiple times towards the end of March must have helped to move a lot of metal, at the expense of gross margin.
Speaking of the Model Y, I also found it suspicious that on the conference call Elon Musk wouldn't divulge the number of deposits. When the Model 3 deposits were skyrocketing he talked about the reservation count frequently. I can only suspect that the number of Model Y deposits isn't so impressive.
The pool of people that put down $1000 thinking they were going to buy a $35k car, has to be much larger than the people willing to plunk down $2500 for a $48k car (the cheapest pre-order currently available).
The multi year wait for the $35k version to be available (and quickly abandoned) can't help.
With the model 3 the deposit made a huge difference in delivery time. The production ramp was painfully slow (production hell) becuase it was a completely different car than the model S and X that Tesla was producing. Because of the slow ramp the incentive for a deposit was quite large. There was also pretty minimal competition for the model 3, mostly the chevy bolt which most don't really consider in the same class.
The production ramp for the Y is expected to be much better than the model 3. There's two announced locations (Reno and China). Tesla also has substantial experience building the model 3, and the Y shared about 75% of the parts. Additionally the model Y is a very conservative design. Same motors, same batteries, same nav, same display, same steering wheel, same seats, same autonomous hardware, same sensors, etc. The announced differences I've heard of are low tech tings like the chassis and suspension. Nothing crazy like the model X gull wing doors to throw a schedule off.
Combine that with significant increase in competition from Audi, Volvo, Porsche, Rivian, and others expected in 2020 there's a much less exclusive market for people interested in a small crossover/SUV in 2020.
I'd be quite surprised if Tesla doesn't sell every model Y they can make for a good long time, but the world is a really different place than it was when they opened up the model 3 preorders. With that said I did put a deposit down on the Y, it's still my guess at the best small SUV for 2020. If things change I can get a refund.
>The production ramp for the Y is expected to be much better than the model 3. There's two announced locations (Reno and China). Tesla also has substantial experience building the model 3, and the Y shared about 75% of the parts. Additionally the model Y is a very conservative design. Same motors, same batteries, same nav, same display, same steering wheel, same seats, same autonomous hardware, same sensors, etc. The announced differences I've heard of are low tech tings like the chassis and suspension. Nothing crazy like the model X gull wing doors to throw a schedule off.
So let's see if I have this right: they reveal the Model Y 1.5 months ago, and say it's available in ~1 month of purchasing. From what everyone says, they hacked up a Model 3 and people drove in a prototype. Now we hear Tesla don't even know if they're going to build it in China or California. But don't worry, they've ordered all the tooling and machinery, even though they don't know which factory it'll be built in.
I'm am constantly astonished that people still believe what is happening over there. What will it take for people to realize this is a desperate company?
Elon's vision is to take over the world automobile market quickly. It's impressively how close he's come. From zero to #1 since 2012 in premium cars is an almost unbelievable achievement. Originally the plan was announced that the model Y would be produced in new assembly lines in Reno, then later the lower end model Ys would be produced in China.
However since then the model 3, S, and X demand had dropped significantly, at least in the USA. They are developing markets in the EU, but delivery logistics, safety certifications, dealer networks, and related have delayed things. Reduced tax incentives in the USA have also hurt demand locally.
My speculation is that Elon wanted all 4 model 3 assembly model 3 lines in Fremont to stay producing the model 3. But now after Q1 they are considering converting a model 3 line in Fremont to the model Y. This will save significant money since with 75% of the same parts, but of course will reduce model 3 production capacity.
How much this makes sense depends on if Panasonic keep up with the battery demand and how much can the new EU model 3 demand make up for the decreasing USA model 3 demand. I suspect there will be related announcements in the next quarter or so.
As for desperation. They made $3.7B with a 20% margin and just paid off $920M in convertible bonds. They have $2.2B on hand and sold 63,000 model 3s this quarter. Where's the desperation? They promised a model Y (mostly a model 3 with a bit more ground clearance and a slightly taller chassis) in late 2020. I don't really see a problem. Given that they have set up 4 model 3 lines so far, at least one model Y line in 1.5 years seems pretty reasonable.
>Elon's vision is to take over the world automobile market quickly. It's impressively how close he's come.
What? They are a microscopic fraction of global market share. They are number 1 in a particular, shrinking market segment that all other manufacturers are moving away from, because they produced 2 years worth of demand at once. Their month-over-month share of cars in that price range is decreasing.
>They made $3.7B with a 20% margin and just paid off $920M in convertible bonds. They have $2.2B on hand and sold 63,000 model 3s this quarter. Where's the desperation?
They made $3.7BB in revenue, at 20% GROSS margins, but still LOST $600MM+, after promising profitability every quarter in the future. Revenues declined 30% quarter over quarter. Paying down the debt doesn't show up on the income statement. They have $2.2BB on hand, $700MM+ is restricted deposit money, after burning through $1.6BB last quarter. They also drew down their ABL. Their capital expenditure is barely covering depreciation, yet they have to build out multiple lines and factories. Their AP barely decreased ($100MM), while revenues sunk drastically. They have $9BB+ in debt, and less cash on-hand than their AP. They are slashing prices on cars they claim have "insane demand". There are people all over Twitter and Reddit waiting months for service or parts. Insurance costs are sky-rocketing. There's inventory stuffed in abandoned car lots all over the country. Elon is fighting with the SEC and rumour has it the DOJ and FTC as well.
You don't see a problem because you don't appear to know where to look. No individual metric is an issue, but in aggregate it doesn't look good.
> Now we hear Tesla don't even know if they're going to build it in China or California.
I believe you are confused here. The car will be built in China for some markets. The part that hasn't been decided is where US production will occur. The most logical place has been guessed to be GF1 in Sparks, NV, but they have considered California as well (possibly Fremont expansion).
>The part that hasn't been decided is where US production will occur.
Point still stands: they ordered machinery when they don't even know what factory it will go in. Anyone with a modicum of sense or experience in manufacturing understands this is nonsensical.
I happen to have a modicum of sense, and realize Tesla has some serious management problems, but why is ordering machinery before having a location finalized nonsensical? It's not like this stuff is in transit or they need to buy any land.
How many people will be out $1000 or $2500 if Tesla goes under? I'm assuming deposits are about as low a priority as you can get for recovering money in a bankruptcy?
I suspect it would be a total loss. But rationally it seems like a really unlikely thing to happen. Tesla just made a $920 million payment in March, they have a 20% gross margin, and have $2.2B cash on hand. Sure they may have to slow their growth, or take out another loan, but Tesla is hardly at the brink of bankruptcy.
There are some serious competitors targeting the model S and X coming, although none I've heard come anywhere close to 370 mile range. Most impressively even those with similar size battery (like the 95kwh audi etron) only manage 56% of the range of the model S (100 kwh). It's also substantially slower in acceleration (Telsa is 4.0 second vs Audi e-tron 5.5 seconds).
But the model 3/Y competition in the $40k to $60k range is looking significantly more sparse, especially with similar range. This is where Tesla becomes significantly harder to match because if even if you can match the size of the battery, matching the efficiency is tougher. Running a substantially larger battery to make up for lower efficiency is particularly problematic at this price point.
even those with similar size battery (like the 95kwh
audi etron) only manage 56% of the range of the model
S (100 kwh).
I suspect that's because Tesla have had batteries on the road for much longer than Audi, meaning they've got better data to base the battery-life-vs-discharge-depth trade-off on.
After all, everyone's worried about how degraded their batteries will be after 10 years, and there's no better way to get hard data on that than having EVs on the market for 10 years.
But the model 3/Y competition in the $40k to $60k
range is looking significantly more sparse
There's the Hyundai Kona Electric, with 258 miles for $37k-$45k. But I agree one car isn't a lot of competition :)
> everyone's worried about how degraded their batteries will be after 10 years, and there's no better way to get hard data on that than having EVs on the market for 10 years.
Jeff Dahn, now working with Tesla (exclusively I think) does not agree, and has a fantastic lecture explaining some stuff about lithium ion degradation (specifically, how normal accelerated age testing doesn't work, but they have a different method which lines up very well with long term cell aging)
Closer. No supercharging network, tiny screen (7" vs 15"), no AWD, slower (0-60 in 7.6 vs 5.5 seconds). At least the range is close (258 vs 300).
Tesla does pretty well on safety (passive and active) as well.
My main concern was did Hyundai skimp on the cooling and battery management system like Nissan did with the leaf. The result with leaf was rapidly degrading batteries that lost more than 25% in the first 3 years. Tesla's in comparison often manage 92% of new range after 150k miles.
With all that said, it does look like the Kona Electric is the closest model Y competitor I've found.
No evidence that consumers want a large screen instead of physical knobs.
And seriously who on earth cares about acceleration beyond a certain point. I mean come on. Nobody is drag racing their car on the way to the supermarket to buy groceries.
If Elon called me up and asked how to improve the model 3 (or future model Y), I'd definitely mention a few more buttons, or maybe a dial. Sure I want buttons, knobs, AND a big screen... but not enough to pay $80k and up for a model S. So given the choice between a model 3 and the competitors (ICE or electric) I have a hard time finding something better.
I'm hoping there's a model Y killer out before the model Y ships, but if not I think I'll be really happy in a Y.
As for the acceleration. I'm married and have a kid. I drive pretty conservatively. I haven't had an accident of any kind or even a speeding ticket in 20 years. I did however find numerous occasions to floor the model S I was renting and every time it resulted in a huge grin. I'd wouldn't trade that acceleration for say a Hyundai electric that has a 0-60 in 7.6 seconds just for some extra knobs/buttons. Nor is the Hyundai cheap, starts around $38k. In a traditional ICE car the acceleration has significant down sides, cost, MPG, noise, weight, size, packaging efficiency, etc. On a Tesla the acceleration there's not nearly as much of a downside.
>And seriously who on earth cares about acceleration beyond a certain point.
Being able to launch the car and be going highway speed nearly instantly is really useful whenever you have to merge in a short distance or take a right turn into high speed traffic. You can get by with an under-powered vehicle just fine in most of the country but if you're commuting in/out of a east coast city between DC and Boston it's going to come in really handy (possibly daily if your commute includes a really bad merge). Just last night some dude in a Maserati cut me off taking a right onto a two lane road where I was going ~70mph in the right lane. Had he been driving anything else I would have had to brake but he mashed the skinny pedal and I didn't have to do anything. If I had to take that turn every day I'd want something fast too. Sure it's a luxury feature but damn does it make things less stressful when you're in that situation.
Ordinary people aren't buying cars today based purely on MPG so why do people think range, battery efficiency etc is going to be a primary reason in future ?
It's far more likely to be just one of many factors. And Tesla really isn't great in many of them e.g. interior design, build quality, easy of service, product availability, brand cachet, etc. And now they have to worry if Tesla will even be around in 5-10 years.
Agreed. But Tesla IS doing really well on what consumers care about. Search for "Tesla owners are more satisfied than any other auto brand's, according to Consumer Reports" or similar articles.
Especially for first time electric car buyers, they really do seem rather worried about moving from a 488 mile range (like a honda accord) to a 240-370 mile range (Tesla). I suspect mostly because they haven't internalized the impact of being able to start each day with a full "tank".
That report does not measure what consumers care about. It simply measures what Tesla owners think. And those owners tend to come from a very narrow demographic which is unrepresentative of the general public.
And yes people are worried about the difference in range given it's a new technology. But no evidence it significantly influences purchasing decisions especially given that most people aren't driving hundreds of miles in a day.
I agree, but it's not such a narrow demographic. 63,000 bought them in Q1. The mode similar luxury/premium car I can find is the BMW 3 series. BMW sold 8,225 of them in Q1.
So almost 8x as many people bought a model 3 for similar or higher prices than the BMW 3 series. In fact at various time periods Tesla was outselling the sum of all similar premium cars in the USA from BMW, MB, Audi, and Lexus.
So sure Tesla owners are a self selecting set, but there's apparently quite a few people that want the model 3.
> But Tesla IS doing really well on what consumers care about. Search for "Tesla owners are more satisfied than any other auto brand's, according to Consumer Reports" or similar articles.
How much of this is due to many of the buyers were fans where Tesla could do not wrong? I know one of those people.
I also know someone who bought a TSLA recently. He likes the car, but hates dealing with TSLA the company. Incompetent was the word used.
Model Y starts at $48k and has a range of 300 miles.
Doesn't seem like a fair comparison, does it?
A fairer comparison would be the model S. The Model S base is $78,000 ($3,200 more), but has a range of 285 miles (1.4x the Audi) and 0-60 in 4.0 seconds instead of 5.5 seconds for the Audi.
The biggest issue is the Audi seems to have very poor efficiency. So you need a model S size battery (95kw) to compete with the model Y (75 kwh or so). Or you compete with the Tesla model S with a 100 kwh battery and end up with only 71% of the range.
Ah, interesting, it does look much more competitive. More range, less cost, and better acceleration, looks like a direct Model Y competitor. However it's still called a concept vehicle by Audi, couldn't find any mention on a planned availability date.
> This is where Tesla becomes significantly harder to match because if even if you can match the size of the battery, matching the efficiency is tougher.
The established car makers also have to bear the cost of having dealerships. I don't find it too unlikely that some of them are selling their EV at a loss and have the production throttled accordingly.
I was surprised by your claim so I checked... the Tesla website currently allows me to configure a Model 3 that is $39,500 before discounts for estimated delivery in two weeks. Not $35k but far less than $48k too.
Like animal fries at In-n-Out, the $35k is not shown on the website. You have to call and ask for it specifically.
Or if you prefer you can order the $39.5k one and call up service and get them to change the settings, and then they'll send you a refund of $4,500.
Does this all sound strange? Sure, but I guess they have their reasons for doing it, which seem to be mainly to keep the menu simple and steer people toward the best value, because the $39.5k car is a better value than the $35k car.
The heated seats can be controlled by an iPhone app and various other means. Pretty sure this involves software. I mean sure software is not needed but then you would be in a different car.
The mid-march reveal of Model Y was announced in May 2018.
(There was a later comment from Musk saying that he just picked a date when posting this but eventuelly Model Y was revealed on March 15th 2019, so it looks like the timeframe for the reveal actually was somewhat clear back then.)
The Model 3 was a completely different market segment from the Model S, so they could hype the Model 3 to the moon without impacting Model S orders (atleast for a time).
With the Model Y, they can't brag how much better it is than the Model 3 because it will cause prospective Model 3 buyers to wait for the Model Y, rather than buying a Model 3 and Tesla needs Model 3 cash flow to fund the Y program.
Hmm, it’s quite a big difference. Model Y actually looks almost identical to model 3. Headlights, body shape etc, just slightly taller. Model X has a different body type and head/tail lights.
It still comes down to a race between Tesla figuring out the complete automotive supply chain and competitors figuring out EVs.
Tesla had, and I would assume still has, production hell. Now it's delivery hell. Both are solved, controlled and executed constantly by other car companies (VW has an exception with the new Golf 8 that proves the rule).
The competition is still struggling to solve EVs, some like Jaguar and Audi and BMW and others seem to be ahead of others.
Advantage Tesla: EV brand, EV dedicated basis for their cars, software and experience with batteries
Advantage competition: scaling production and delivery, economies of scale
I would argue that the window of opportunity for Tesla is closing now. Which might not be good news for them. And given the ever shorter life cycles in the automotive sector the window ever was max. one facelift / model replacement. Which again is something the competition is doing constantly for decades now. Tesla never did it once.
So I see the advantage on the competition but not by a big margin. Had Tesla solved their production and supply chain earlier the margin wouldn't be there at all or Tesla even be a head of others. The biggest risks for Tesla are a) to miss the window of opportunity they have and be b) to run out of cash before their issues are solved. Both are related and I suspect Elon is much a help regarding the cash side as he is a hindrance regarding the rest.
Tesla has one more advantage over all the fossils: they're all in. The old guys are still challenged on mission, twisted up and fighting internally, bringing out weak token products designed to not hurt their ICE lines.
I think this is probably more important than people give it credit for. I have an acquaintance who works R&D at a traditional car company (but on self driving features) he says the internal 'fights' between ICE and electric are very real and damaging.
You can experience it first hand if you go try to test drive a Chevy Bolt - Motor Trend car of the year in 2017. I spoke to dealers who (pretended?) unawareness of the model and didn't want to help me find one. Another tried to talk me out of it. Finally one dealer was well informed about its pros and cons, and had several for sale.
Another example: bmw i3. 114 mile range on the 2017 model, really? And that's up from less than 100 miles before that. Painfully token.
The big problem the big auto manufacturers are having is the battery and cost. A mass-market electric car cannot cost as much as Tesla's offerings, and a huge part of that cost is the battery. Even with the most optimistic cost projections of battery costs in the near future, it's hard to see how to offer an electric car which is competitive on both cost and range with an ICE car.
It's just a car, to the salesman. If I went in and looked for a Chevrolet Equinox and the dealer didn't have anyt, they'd try to sell me another model.
Just like if you went to Best Buy looking for a certain TV, they'll just try to sell you the one on the shelf
I've had on multiple occasions gone into a dealership and had them tell me that they have the car i'm asking about, but that I don't want that car, and that I want this other car instead.
I went into nissan to look at the Juke a while back, the asshole wouldn't even let me look at it until I literally started leaving. He just kept pressing the Rogue saying that I'd like it a lot more... Then when he finally took me to it, it was still wrapped in plastic and they said they couldn't do a test drive.
Another time I went to go look at the Chevy Bolt when it first came out, they said they had a few in stock, but they would not stop trying to get me to test drive a Malibu instead. They kept pushing how it was a better car, how it was cheaper, how it would go further, how it looks better.
Eventually they let me test drive the Bolt, but the whole time the guy just kept pointing out how all the features in the car were also in the Malibu.
It just left such a shitty taste in my mouth. I literally went in there asking about a single model of car each time, and it seemed like they did everything they could to actively sabotage my ability to buy it.
I went in to dealer, money in hand, to buy a specific car I knew they had in stock and that I'd already picked out. The salesman then proceeded to convince me that I actually wanted this other model which would be much better for me. Fine you've convinced me, how much for that other car. Salesman comes back a couple of minutes later and sheepishly admits they don't actually have that car in stock and won't be getting any for 4-6 weeks. I walk out without buying a car.
This is why online car shopping needs to be a thing. I experienced the exact same thing. I'm a highly informed customer who knew every car I wanted to see but almost every sales guy ignored that fact, besides at a Honda location. Which isn't surprising that I ended up with a Honda.
I would have bought it online if I could and it's very possible I wouldn't have ended up with a Honda, that has to play a role in each company's auto sales.
Same here, I ended up going into an Audi dealer after the Bolt fiasco, and it was a night and day difference. When I asked a question about a car, they answered it happily! When I wanted to look at a car, they took me to a few. When I wanted to test drive one, they pulled up their inventory of cars and asked what one I want to test drive.
No "you don't want that", no "we are trying to keep the miles down on that one", no condescending talk about how some other car is probably more in my range.
And unsurprisingly I ended up getting an Audi!
It's one of the big reasons why I think the whole "online sales" thing is perfect with Tesla. They have showrooms in many places where those who want to look at and ask questions about the cars can go, and when you actually want to buy, you buy it like something off amazon, and it gets delivered when ready.
You can pick the car and get pre-negotiated pricing online. You still have to go to the dealer to actually pick it up, but you don't need to be "sold to", negotiate the price, etc. The people I know who have used it have gotten excellent prices, but it's always worth comparing to the estimates from Consumer Reports or other sources.
I used https://www.unhaggle.com to find out the MRSP of the car and saved about $2k from the list price, basically the lowest price the dealer could offer. It's basically a lead-gen system for dealerships which I discovered after my experience mentioned above. The dealer was very welcoming with us using it and said it was getting more common.
I worked in a small sales and marketing office for IBM in the early 90's. I remember the sales people, who made very good money from mainframe sales, openly discussing how they didn't even want customers to know about RS6000's. I think the margins were pretty low on RS6000's at the time.
Anyway, internal struggles holding back product lines is a very real thing.
From what I know of at least european car makers, they see the writing on the wall, especially with various governments making noises about banning petrol and diesel cars in the next decase or so, and they are heavily investing in the switch, even if it's not so obvious to consumers at the moment because the industry moves slowly.
The shift want just digital cameras it was also the iPhone that made the digital camera obsolete.
With digital cameras they were losing film revenue which was larger than camera sales.
Car companies don't own gas stations so they will switch faster and easier than Kodak.
There will be some struggles internally but not as much I suspect.
Plus modern EVs have demonstrated more performance then ice so it's really just a matter of catering to demand as it changes.
The challenge here is more on Tesla to make a sustainable car company than it is on old companies to convert.
If a startup car company in Czech can make a hyper car EV that beasts a Veyron in acceleration then there is nothing proprietary about the tech and incumbents will have an easier time switching as demand evolves.
Kodak wasn't even really a camera company latterly and hadn't been a serious camera maker since the Japanese (mostly)--who still collectively mostly own the high-end camera space--cornered the market. They were primarily a photographic consumables business.
Even had they executed more aggressively and better than they did, they'd have gone through hard times. (See Fujifilm which did a better job with a smaller company and still struggled.)
It's also not all about 0-60 (at least for the motorsport market).
Tesla's seem to still have issues under sustained high performance driving[1]. There's many cars with significantly slower 0-60 times that smash the Model S around Nürburgring due to batteries overheating and being put into limp mode.
As the technology improves no doubt this problem will go away, but it doesn't look like we're there just yet.
For perspective the Model S made it around the track in about 10 minutes, an old diesel Jaguar S Type with a 0-60 time of 8.5~ seconds did it in about 9 [2 & 3].
It'll be tough, most gas stations don't have a lot of space for a lot of charging stations and nothing to do while you wait for the charge. The large truck stop style ones might be able to convert more easily because they already have the larger lots and buildings with spaces to sit inside while you wait.
I have heard anecdotally that gas stations make terrible money on their actual fuel sales and the real margins are on food inside so it may work out in the end but that low but broad base flow may be an important part of the business.
In the end though they'll probably largely die out inside cities with charging mostly happening at home, at work, or in parking decks/lots. There will definitely be a need for them along highways and stuff though to service long drives. In the end that's a looooong ways off, even if you completely ban the new sale and import of ICE vehicles there's going to be a long tail for used cars until electric vehicles become 100x less expensive.
Yeah, at this point inside US cities the majority of pumps have been moving to the model of grocery stores with pumps attached, and that model still works with chargers augmenting and then replacing pumps, because grocery stores generally are useful places to charge while you shop. (Just as malls seem to be good places to add chargers, if you expect and/or want people to linger/browse while they charge.)
Convenience stores and restaurants will still be useful on the highways with or without gas pumps around. (People will always need to use a restroom or grab some grub on long road trips.)
I figure some smart "medium fast" food restaurant that benefits from a lingering dining experience, but doesn't take too much advantage of it (ie, doesn't actively slow the diner down), will integrate chargers into their franchise plans and become the new king of the highways in the way that MacDonald's (and regionally, Waffle House) became synonymous with pit stops along the open road in the 50s and 60s.
It won't work quite as well just because it takes so much longer to charge an EV than it does to gas up a regular car. So the limited lots of existing stations will have a much lower turnover rate than they do now. Also most places around me are very much just the traditional convenience store you can only get a very limited selection of stuff (like a smattering for fruit and milk at best with maybe some cereals or something) those places aren't going to be long stops to shop around in so charging at them isn't going to be a draw.
> Convenience stores and restaurants will still be useful on the highways with or without gas pumps around. (People will always need to use a restroom or grab some grub on long road trips.)
Yeah like I said in my original post I don't think they'll go 100% out of business along highways but it will largely be the larger stops that have some restaurant integrated or just restaurants along the highway that survive not the small snack food and gas places that are a majority today. Charging (today and for the foreseeable future unless there's another breakthrough in batter tech that pans out at large scales) just takes too long for anything without some kind of food or other attraction to make sense as the charging stations on longer trips.
It's eventually going to be something that happens when the car is parked, rather than a specific stop for charging/gassing up. I've already seen parking garages and street side meters equipped with EV chargers (although rarely an EV parked there). Ideally all batteries would be standardized, so you'd just pull up to a place and swap like you would a propane tank, but open standards aren't as inticing to investors as trying to dominate market share with proprietary tech and licensing it to everyone. Probably going to take a law standardizing swappable EV batteries to nip that bad behavior in the bud.
The valet game should get interesting. Pay extra to guarantee charging would be a quick and easy way to gouge a few more pennies.
As far as gas stations goes, I don't see a route where most of them aren't folding. Franchises don't have the resources to retool like a big corporation that can light money on fire every month and still increase in value.
Swappable batteries likely won't be cost effective for cars for safety reasons, if nothing else. Most EVs have the batteries "buried" in impact-protected spots, with firewalls between them, and in such ways that the battery is reliant upon and sometimes in turn contributes to the structural integrity of the car. Even if the packs were standardized by regulation, getting safe access to the packs in most EVs is expensive and unsafe access is potentially hazardous to long-term fire and/or structural safety of the vehicle.
Anyway, yes, the focus on charging inside of cities should be places that cars are already parked. For travel between cities, it will be businesses that can best take advantage of 30-45 minutes of downtime (assuming fast charging), and I do think it's going to be a restaurant chain and/or mini-mall concept that's going to be the best fit for highway travel. It's going to take a smart franchise or two to experiment there, and it may even be an existing franchise like Pilot or MacDonald's perhaps, but it will be a shift away from smaller convenience stores to probably something larger with more to do.
The one spot I see swappable batteries probably happening is on large trucks where space isn't at so much of a premium and the charge time actually costs the operators money. In cars yeah the batteries probably won't be in an accessible area for easy swapping.
I don't think it will be possible. A gas station can refuel 20 cars per hour; there's no way you can do that with a charging station.
Probably they would die out, and hotels would do long distance charging, since you need to charge it when you sleep. People would just not be able to do medium or small distance charging at all except at their home.
Jaguar seems to be doing OK with the iPace, but they only sold 1400 of them in February, and of course Jaguar as a car company is a similar size to Tesla.
Tesla is wasting time, money and focus by investing too much in self-driving tech (they're even having their own chip division now! - is Tesla really in financial a position to compete with Intel/Nvidia now?).
Not to mention they made all of their Model 3's thousands of dollars more expensive by including the "full self-driving hardware-that-wasn't" in every unit to the point where it didn't even make sense for Tesla to sell the base model anymore.
Keep it simple stupid - focus on making great high-value EVs, and keep dropping their prices in a profitable manner. Stop throwing billions of dollars on "full self-driving tech" that will never work well enough.
I think you underestimate how many companies do chip design. That part of it is actually quite unremarkable.
And while that transitional Nvidia hardware obviously isn't ideal, it's still necessary to run Autopilot today. And it is what is allowing Tesla to gather mountains of real world training data for its machine learning algorithms.
I'm not confident Tesla will pull off their vision of a driverless taxi business, but if they do pull it off, the business fundamentals promise astronomical revenues. Nobody questions that Uber and Lyft are viable businesses. Tesla's plan is to be in their space but with cheaper fuel, cheaper labor and a greater revenue share.
there is a line of reasoning, rarely articulated, that EVs will never reach the price points it would take to fully 100% replace ICE cars in the private/personal market.
li-ion batteries have done an excellent job walking down the learning/cost curve, but we can all see the way it bends and how much headroom is left in the chemistry. we'll likely hit $100/kwh in the next few years, but even just $80/kwh is likely 5+ years away after that. the model 3 will never start with a $2.
so if you're going to bottom out at around 3x the price it would take to fully replace the existing market... then you have to figure out a way to get 3x+ the value out of the asset you're delivering.
that means some combination of lasting 3x longer (~500k miles) and/or being in use 3x more (~600hrs/year). the former is viably unlocked by the EV engineering advantages, but w/r/t the latter, individual drivers have no intention of tripling their car usage. so it simply has to be turned into some kind of shared asset.
imho self driving makes this a nirvanna, so I'm glad they're pursuing it, but its not actually required. tesla could add a basic uber/lyft feature set to their existing app and then when the last 0.01% of self driving winds up taking years longer than elon said it would he can blame the regulators and just make it a regular human-driver ride sharing app.
remember the mission is the end of carbon emissions, so any plan for "lets just get good market share and margins in the luxury segment" is a plan to fail.
I think that view neglects the costs of the fossil fuel infrastructure. At some point gas stations are going to start closing for lack of customers. That time is a while off yet, but all of the existing stations are not going to be able to be supported by say, half as many ICE cars. Convenience will go down and at some point prices may go up as the existing infrastructure is paid for by fewer stations and less fuel. At the same time electrics will continue getting better, cheaper and more convenient. This could provide an extra push.
I agree with your points on a longer time horizon, but elon needs to solve for model3 demand now (this year).
EVs will not drive the kind of oil distribution market retraction you're describing until they're at least 10% of cars on the road, which would be years and years after they're 10% of new cars sold.
So while I agree the affect you describe will help, we don't have time to wait for it.
I think the time horizon for a step change in oil distribution is a lot shorter than people expect, precisely because it will be more likely a severe step change (ie, a snowball/crash) than an easy transition. Oil distribution is extremely complex, amazingly baroque, and has only a small number of players (they use a shell game [Shell Oil pun intended] of a large number of different "station" brands, but are really only a few companies left). When instability hits, it is likely to hit hard and look almost immediate (look at 70s Oil crises, for example).
I don't yet have a guess what percentage of the car fleet needs to be EV for that to happen, but that number is also not the only potential disruption that may happen to cause it (again, we have the 70s Oil crises as examples).
(Not that causing an Oil crisis is necessarily the right way to combat climate change, but in the question of chicken-and-egg between ICE and EV, people sure have a short memory for how volatile Oil is.)
It is currently manufacturered in Fremont California. Nothing in Fremont is cheap, it is no different than manufacturing in Manhattan, since employees need to pay for super high housing costs and deal with high costs of doing business.
Manufacturing in China could bring the cost down significantly, with lower wages, taxes, material costs, etc.
i don't know why this comment is being downvoted. He's absolutely right about every word. Fremont is not a place to be building cars. If you're gonna build in the US, Tesla could have chosen almost any other city in the US and gotten labor cost that was 33% cheaper.
Software companies can afford the higher labor cost in the bay area because they tend to have really large margin when they win. Car companies have very very low margins, even when they win, so they really need to pay attention to things like labor cost. This is a huge mistep for Tesla and shows poor judgement on Elon Musk or whoever decided to do it in Fremont.
They bought the old NUMMI factory that used to make GM and Toyota cars. It was active right up until they bought it in 2010 (they announced the sale a month after NUMMI closed) so my guess is they were able to accelerate early progress because of that purchase.
In the long run, I'd agree, the expense vs. reward calculation doesn't make sense now. But GM and Toyota successfully used that plant for something like 30-50 years before that and there was a whole community of auto workers living around it, so I'm not sure I'd say that was poor judgment for them at all.
Nobody expected housing prices to go up 100%+ over the last few years. 2010-2015ish was a real estate boom period for Valley workers if anything. You had post-recession housing fire sales; AirBnB wasn't big enough yet to incentivize empty houses; Google, Apple and FB didn't quite own the entire Menlo Park->Sunnyvale corridor yet; etc. Good times.
> EVs will never reach the price points it would take to fully 100% replace ICE cars in the private/personal market
The Chevy Bolt and to a lesser extent the Model 3 have already hit the "Corolla/Civic/Sonata/et al" sedan sweet spot for new sales. The mean in new car sales has always been around and just above $30k. Certainly the mean in total car sales is closer to $20k, but that hugely because of the secondary market and fast depreciation (used car sales). It's still too early to tell what sort of impact models like the Bolt and Model 3 may have on used sales (and obviously production numbers are still a factor, especially with Tesla's production and delivery woes).
Chinese manufacturers have been exploring the "bottom" of the EV market much more effectively than the US and EU markets simply because they don't need the carrot of luxury to attract early adopters in quite the same way. If Chinese EV companies are to be believed, hitting below that magic USD$20k mean is possible with new car sales alone due to EV supply chain efficiencies that ICE supply chains can't match.
> self driving makes this a nirvana
I feel self-driving is a red herring/impossible goal like the 60s AI boom all over again, and we're all going to look back on this in a decade or so and wonder what everyone was thinking.
Also, ride sharing isn't likely the answer in current America. It's enough of a culture shift to get gas-lovers/petrolheads to enjoy/love/trust EVs. It's even more of an ask to remove ownership from the question and to force them to only ever rent a car. We might not have time to take only one hurdle at a time, but we may have to.
I've read that the wiring harness of a modern ICE car costs more than the transmission.
Do you think it's possible that all we need is ~$100/KWh, after which due to diminishing returns, find better ROI improving other areas like a dramatically cheaper wiring harness?
Yes but its not enough and its not soon enough. Tesla needs to stoke demand this quarter. Humanity needs to be driving toward zero emissions yesterday.
IMHO privately owned electric vehicles will only ever have been a historical oddity of the transition between personally owned cars and shared/pooled cars.
> Keep it simple stupid - focus on making great high-value EVs, and keep dropping their prices in a profitable manner.
Problem is, self-driving is an essential part of their image of high-tech luxury. Their marketing strategy depends on being the opposote of KISS. Making the best cars they can while also being electric is the only way to get the volume necessary to make electric affordable.
I don't care about self-driving tech in the least, for me it is about as likely for us to get level 5 autonomy as us getting nuclear fusion soon. Just make a good cheap electric car that works. The new Tesla chip info I've heard promising it next year sounds like a complete lie/classic Elon Musk fabrication.
Yes, the existing supply chain is not geared towards EVs (which is serious problem in terms of chanel masters and such). Still the knowledge and tools and processes and people are there. Combine that with the fact that an EV is actually less complex an ICE powered car incumbents, I assume, should be able to switch easily (biggest issues being internal struggles keeping them from executing as a lot of powerful people in these companies have to loose a lot). Still, the basis is there as is the purchasing power and the aftermarket activities and such.
As far as Tesla is concerned, they have production hell and delivery hell. On top of that I suspect they have a kind of procurement hell as well with Panasonic as one the most important suppliers. Together that results in Supply Chain hell. So while Tesla's SC is geared towards EVs im not sure on the execution side.
If only it was so clean cut. Tesla isn't even operating in all 50 states due to specific laws in 1/2 which prohibit direct sales. This is part of the reason for switching to service centers and transitioning sales completely to app based purchasing.
Tesla is driving the biggest wedge of change through the world economy in the 21st century. The impact these changes have will affect everyone who uses, sells, services and advertises automobiles. It's no wonder the amount of outright vitriol the press propagates given the lack of advertising Tesla does.
That said, their "Tesla Ranger" program where the mechanic comes to you is the future. It is easily one of the coolest things Tesla does and is a sensible way to scale out their service centers which are (admittedly) overbooked.
Sure Tesla can make good cars, but not if it has to sell them at a profit. Over the lifetime of Tesla, each car has been subsidized by like 10k from shareholders and 7.5k from government. Both subsidies are going away as we speak.
That is really not true. Each individual car is sold for more than the cost of manufacturer. Statistics like this tend to take fixed costs and historical costs into account in a way that shouldn't be divided by unit volume.
I caution you to read more about this, as you see statistics like this quoted often in the press. It is almost always an indicator of issues with article quality.
When considering whether a fleet of cars has been profitable, you can’t consider only the gross margin (which excludes certain company fixed costs to arrive at an answer to “was that last car we made profitable?”) but must also consider overall profitability (“did we make money doing all of the things we did?”)
Tesla’s answer to the second is “no” for substantially all of the company history.
Tesla doesn't make good cars. They make unremarkable cars with good drive-trains. It's like the EV version of FCA's ~700hp offerings. Sure the interior and build quality are kind of crap for what you pay but with 700 ponies on tap you don't care.
This is a joke right? They make some of the most highly regarded cars of all time. Recently buying one and showing it off almost every single person (30~) was blown away at how much better it was then their car and wanted one in the future.
Tesla has many problems but making bad cars isn't one of them, these things are awesome.
No it's not a joke. The Model 3 and Model S have relatively high NVH and a relatively cheap feeling interior compared to vehicles of the same class and price point. You're paying German car money but it goes to the drive-train instead of the "luxury German driving machine" experience. There's nothing wrong with that but to talk up Tesla's vehicles as though they're luxury cars is foolish.
I just can't agree with that on the model 3. The model 3 is basically BM 3 series money, and there is nothing particularly phenomenal about the BMW 3 series from a luxury standpoint.
I just priced out a BMW 330i (all wheel drive), which starts at $42,250. The Tesla M3 Long Range (dual motor) starts at $49,500. However, the BMW base price does not include "luxury trim" (i.e., chrome highlights), "convenience package" (basically lumbar support and keyless entry plus app access), "driver assistance", or "parking assistance". All of these seem to be standard in the M3 LR. Once you add those packages, the 330i pops over $51k. If anything, it looks like Tesla has set their prices to compete directly against the 3 series line. (These prices don't include tax subsidies or destination charges, etc.)
The ASP of Model 3 in the US is ~50k, if I'm not mistaken. The base price is just under $40k USD. In the US, the base price for the BMW 3 series ranges from ~40K to ~$56k for the M badge.
Also, the options packages for the BMW will tend to add up. TACC cruise is standard on the Model 3 SR+ for $40k. AFAIK, that will add at least 1k or so to the BMW.
Yeah thanks for explaining it to me, I own one. I personally couldn't care less about the interior but I understand some people do. The driving/overall experience to me is night and day when compared to ICE vehicles or even other EV competitors.
The interiors aren't all that nice though, certainly not for how much change they are asking for. Having everything behind a hulking iPad sucks when you are driving a car. Give me dials, give me buttons that click in, give me levers, give me something where I can tell where the setting is with my fingers without having to take my eyes off the road. I'm really surprised car manufacturers have gotten away with cramming so many features into touch screen interfaces that give you zero feedback if you aren't staring at the screen, it really should be illegal as its absurdly dangerous.
"And given the ever shorter life cycles in the automotive sector the window ever was max. one facelift / model replacement"
That assumes that Tesla's competitors actually have the expertise to compete.
Its been mentioned elsewhere I believe, that Audi's Etron has less range per kwh of battery, compared to a Tesla.
Tesla also has a charging network.
I'm tempted to turn your statement around and say there's a rapidly closing window for the other car makers to start taking EVs seriously. I suspect theres going to be a tipping point situation where the market for EVs is going to rapidly increase, and the established car makers better hope they have something they can sell, and at scale, because theres the Chinese as well as Tesla all ready to go. My crystal ball doesn't tell me what car companies are going to go bust, but I predict there'll be some big names, and Tesla could be one of them, I doubt it would disappear as a car making entity though.
Toyota and Tesla merging would be great. Toyota masters scaling and world-wide logistics but doesn't have EV technology. Their software is also very basic. Tesla doesn't control logistics but master EV and autopilot. Them merging is not impossible, Toyota once had a stake in Tesla.
Elon would be a roadblock to such a merge. Toyota won't be able to function with him in any managerial position. I doubt he'll accept anything less than full control. He won't be content as an "evangelist".
If his dream is really to have the world switch from ICE to EV cars, then he should consider this. That would be an engineering and laudable feat, and he would be in the annals of history. He can then focus on SpaceX and go to Mars. But if his dream is to become ultra-wealthy and be like Stark in Ironman, then I guess he can keep to himself Tesla.
This is a guy with 5 Beverly Hills mansions and a private jet. All financed via his Tesla stock.
It seems as though any sacrifices related to "the mission" are expected to come from Tesla and SpaceX employees who have to suffer through periodic rounds of layoffs.
I'm still trying to figure out the root cause. Is it because, production is not keeping up to demand? Or is it because demand is dying? So far it seems former, not later. Some analysts are saying random things like impact of tax credit and competition coming in to EV market. I still don't see anything close to Tesla offering in EV space, at least in US.
They really need to focus on offering EV at $18K price point with 300 mile range. Keep self-driving stuff for later. I love Tesla and hope they would come through this.
EV are still too expensive and Tesla ridiculously so. That’s not a problem if you can’t keep up with demand, but competition creeps up.
Why would you buy a Tesla when you can buy a Hyundai Kona for a lot less?
We need better leadership though. I live in Denmark where EVs aren’t very widespread because of taxes. In Norway more than half of new vehicles sold are EV. Norway has more money than us, but they didn’t really need it for this transition and nothing they did are things we couldn’t have.
They simply had better political leadership than we do. I know some Americans might call free market, but we have 150 years of history to show that big advances in society are driven mainly by the public sector if they are to benefit all and happen quickly.
First of all, you basically cannot buy a Hyundai. The production is far below Model 3 levels. Here in Germany, you are looking at 12 months wait time due to demand far exceeding supply.
Also, the Model 3 is a very attractive offering. It is the faster car, aims at the typical BMW audience, and most of all, has the supercharger network available.
As another German I can definitely tell you that no one here sees a Model 3 at anywhere near a BMW in production quality.
If Tesla intends to market the Model 3 at the "BMW audience" - whatever differentiates them from, say, the "Audi audience" - they are horribly miscalculating at what German people expect from a car. It is not limited to EV range.
Also, Volkswagen is ramping up production on their Modular Electric Drive Matrix (MEB) [1] and within 2-3 years cars with this technology will hit the market.
I wonder if Tesla can keep up when Volkswagen, Toyota or other car heavy weights begin serious EV production once they belief the market is ready. Diesel sales are better then ever in the last years, so they simply could afford to wait and continue to make money until infrastructure ramps up and technology improves. Tesla cannot do that.
Do you have any info about VW's batteries? If they are building up MEB for the next 2-3 years, they should have some idea of what they are going to do about batteries by now right?
So far, it appears that batteries and drive train efficiency are the secret to Tesla's dominance in efficiency. VW would be a dumb competitor if it comes out in 2-3 years with a car that costs as much or more than a Tesla with only 60% of its range.... there is risk for VW as well here..
Several tests comparing Tesla with NIO show that the efficiency is the same, so not sure about "batteries and drive train efficiency are the secret to Tesla's dominance in efficiency."
No. Model Y looks more like a crossover or a fastback. These types of cars are getting slightly more common here (for example BMW X4, Mercedes GLE, ...) but they are not mass market cars. These are fancy cars for people with too much money.
The sloping roof means there's not a lot of space in the back. The Model Y might be an improvement compared to Model 3, but it looks like it is still way too long for the amount of space it offers.
Lots of people drive station wagons around here. Cars like the VW Golf Variant, Passat Variant, Audi A4 Avant, BMW 5 series Touring...
People with kids buy family cars like the Citroen C4 Picasso, Opel Zafira, Touran. The Model Y doesn't look like it can compete with those on space.
Smaller SUVs (Tiguan, Peugeot 3008, Nissan Qashqai) are also very popular here, but Model Y doesn't really look like an SUV either.
> Maybe not the Model 3, but the model S has replaced a lot of the Mercedeses that used to dominate the taxi fleet in Amsterdam.
> It's entirely possible that Germany is more conservative than Amsterdam, though.
The taxi driver I spoke to about it told me they were using Teslas because they had gotten an agreement for free charging. I believe this has since changed though (this was almost four years ago).
>> I mean BMW's are considered pretty low end cars here in the US (compared to Audi and Benz) I feel BMW's have just gotten worse and worse in the last 8 years, however Audi and Benz is another story.
>> however the scale of engineering is something else ---> I had a lecture from the CEO of Benz, and i can tell you they are going all in on EV. Tesla needs to survive a few more years >> it is still significantly hard achieving what they have achieved for VW and Benz -> they have production lines tooled for Gasoline -> guess how hard it is to change that and retool? not easy...
> guess how hard it is to change that and retool? not easy...
This is one of the main reasons for VW to develop the MEB. This drive matrix can be used as the foundation for EV iterations on many of their current production models plus new ones of course:
> The MEB platform is part of a wide strategy to start production of new battery electric vehicles between 2019 and 2025. In 2017, the VW Group announced a gradual transition from combustion engine to battery electric vehicles with all 300 models across 12 brands having an electric version by 2030.
> As of May 2018, the VW Group has committed $48 billion in car battery supplies and plans to outfit 16 factories to build electric cars by the end of 2022. The upcoming Volkswagen-branded production cars will be assembled in VW's Zwickau plant in Germany for the European market from 2020, while two production centers in North America and China are planned to be "launched at almost the same time". The Škoda-branded SUV Vision E is to be produced in the Škoda plant Mladá Boleslav, Czech Republic, along with electric motors and electric car batteries. [1]
>Also, the Model 3 is a very attractive offering. It is the faster car, aims at the typical BMW audience
Until you find out your range goes down significantly when you drive fast... I was seriously considering tesla model 3 as most of my trips are below 40 miles, but occasionally I do need to drive to another city 200 miles away, and when I do I want to be able to drive at the same speed I normally use at the motorway (around 90-95mph, or 150km/h). Tesla model 3 will give you less than 100 miles of range at that speed and that is what will kill Tesla for many people who currently drive VWs and BMWs.
I don't know where you got your numbers from, but according to next move it has about 200 miles of range at 150km/h, going ever so slightly slower (and you probably will have sections with a speed limit anyway in between) would let you comfortably make the trip: https://nextmove.de/tesla-model-3-reichweitentest-bei-150-vs...
Most cars at that speed will get significantly reduced range, due to engine inefficiency and drag. Even then, a battery with 220 mile range should still get well over 100 in reality .
> People buy 5x the number of Teslas than Konas because they Teslas are much, much more delightful.
Sorry, but this is just a completely dumb statement. The reason Tesla sales are higher is partly because Hyundai literally cannot meet the demand for this car (https://www.thetruthaboutcars.com/2018/11/hyundai-reassures-...). Economics is a real phenomenon, and way more people
would rather have basic transportation + an extra $80k in their pocket than be “delighted” by owning a P100D.
Of course it is. Saving a lot of money on a car means you can spend a lot of money on other things you enjoy. So why would you pay a lot of money to drive a Tesla instead of a Hyundai? Because the Tesla looks better? Drives better? Has better safety features? Is more reliable? Has a higher status value?
I'm not saying that there aren't good reasons to buy a Tesla instead of Hyundai and had they cost the same then sure I'd buy a Tesla as well. But if I was in the market for a new electric car then "Why buy a Tesla when you can buy a Hyundai Kona for a lot less?" would definitely be a serious question I would be asking myself and I'm not sure I would come up with a good answer (or at least not a better answer than Tesla's are cool).
>I'm not saying that there aren't good reasons to buy a Tesla instead of Hyundai and had they cost the same then sure I'd buy a Tesla as well.
The MSRP on the base-model Kona is $36,950, which is a bit less than the $39,500 Tesla SR+, but not dramatically. The next level of trim above the base model Kona is $41,500, and doesn't seem to add any significant features (LED headlamps, etc., which Tesla already has.) The highest level of Kona trim is $44,900, which is only $5k less than the Tesla Long Range model! My suspicion is that, given the low production numbers, Hyundai is going to focus primarily on selling the more expensive models. In practice this means (with a few lucky exceptions) you're looking at Tesla prices to get a Hyundai.
>I'm still trying to figure out the root cause. Is it because, production is not keeping up to demand? Or is it because demand is dying? So far it seems former, not later.
That's what you conclude after seeing them produce more cars than they delivered last quarter, with inventory build-ups all over the country, and quarter-over-quarter decrease in revenues, even though they slashed prices? That they still can't keep up with demand?
I suspect we are still quite a few years away from an $18K EV, maybe even a decade.
I wonder if the industry might have been better off focusing on plugin hybrids to start with, you can get most of the benefits whilst battery production ramps up and costs fall.
They are slightly overproducing the SR+ (with fewer battery cells) and slight underproducing the LR (with more cells). What does that tell you about supply constraints?
The demand for the semi-premium model outweighed the standard by 6 to 1, so no, the demand is right where the new obvious entry model is.
It is still technically available, but not in any obvious way (if you weren’t to already know, it’d be fair enough to assume it wasn’t available anymore).
That was part of it, but also an extra $2,500 for 20 miles more range and a much nicer car was a very appealing offer. I certainly would have taken it.
I find the Panasonic thing very weird. Tesla claims to be battery limited, and also mentioned that their popular and in demand power walls are being throttled by lack of batteries.
Does make me wonder. Is Panasonic blackmailing Tesla with limited supply to influence Tesla's battery supply in China? Is Panasonic and/or Tesla lying about the situation?
Yoshio Ito was a well known pro-Tesla executive, and was in charge of the Panasonic automotive division until March 31st (EDIT: Typo). His replacement is neutral-Tesla at best (based on the actions of the new Panasonic director)
Mr. Ito was the original Panasonic executive who signed the Tesla deal for the Gigafactory in Nevada. Mr. Ito's departure from Panasonic is a big deal in the Tesla-Panasonic relationship. In effect: the Panasonic executive in charge of the Gigafactory has retired, so things will be dramatically different as his replacement tries to make his mark on the company.
My take: Panasonic is moving its chips from Tesla to Toyota/Mazda and betting the incumbent Japanese makers will be better positioned to capitalize on EV sales over the long term. It’s not strange for a 100+ year old company playing the long game. I also think Tesla’s function for many of its suppliers was to prove that Americans will buy EVs, and their expectations are fairly low about how much more Tesla will accomplish.
Well the weird thing is Panasonic is complaining about not selling enough batteries. Seems kinda crazy considering the rapid scale of Tesla's ramp up, not to mention secondary uses like powerwalls and grid sized battery systems.
I won't speculate why Panasonic is putting the brakes on. Could be anything from financing to some new guy at Panasonic not liking the color choices of the Model Y.
But it is telling us something that the most integrated of Tesla's partners is putting on the brakes. And I remember some reports about less then optimal conditions in the giga factory. And these conditions, even if they are only half true, would the opposite of what Japanese companies would like to see
People who did not experience the 80s, and the endless nightly news stories about Japanese school kids’ math test scores, will not understand your comment.
Japan is a small, rich and overpopulated country of 126 million; China is a still emerging, vast country of 1.4 billion. I don't think it's correct to assume history will repeat the same way as with Japan.
They may just be taking a calmer view of EV demand rather than betting the farm at every turn like Tesla. One or two quarters of running at capacity on a brand new factory isn't enough reason to massively upgrade your production capacity, if you think it's just a hump and that demand will settle down again. The Model 3 may be "affordable" compared with the Model S / X, but US$35k is still luxury car territory.
> The Model 3 may be "affordable" compared with the Model S / X, but US$35k is still luxury car territory.
Indeed, Model 3 is still very far from affordable. In Finland it sells starting at $70,600 (taxes included). I'm assuming there are also import duties from the US, though don't know the details. Needless to say, at this price point there are probably more people looking for an apartment than a car.
Agreed. Seems like Tesla may have misjudged the model 3 demand and should have increased the number of production lines more slowly. I think in Fremont factory has 6 lines. One for X, one for S, and 4 for the model 3. Seems like they should just move one or two of the lines from model 3 to the model Y, which shares 75% of the same parts instead of committing to building several new lines in Reno and China.
While the model 3 may be luxury, it looks crazy cheap compared to the electric Audi, Volvo, BMW, and Porsche competitors... doubly so if you consider range. The model 3 even looks pretty good on a cost to own basis compared to non-luxury cars like the Toyota Camry or Honda accord.
The cheapest Tesla (around $40k these days), isn't too far off the average cost of a new car ($34,000) and most will save easily $6k in maintenance and gas over the life of the car. I suspect most would consider the model 3 interior too spartan and plasticy to be consider luxury.
>> While the model 3 may be luxury, it looks crazy cheap compared to the electric Audi, Volvo, BMW, and Porsche competitors...
I tried Tesla test drive and one thing I don't like is how cheap it feels inside. Low quality materials. So you cannot compare just their prices without mentioning materials and build quality.
I rented a Tesla S (75d I believe) for 3 days. Felt pretty awesome, and stomping on the accelerator put a smile on my face every time. The nav system was a pleasure, actually better than Google Nav on a top of the line phone. The voice recognition for nav and music playing worked really well.
I've used similar nav systems from BMW, Subaru, and Toyota and they seemed like lame software running on a 5-10 year old phone. Poor touch screens, smaller screens, poor voice recognition, and poor nav. I'd rather they just have an aux port for music and let me hang my own tablet on the dash somewhere.
Overall fit/finish for the model S was not as nice as an Audi I've been in, but was plenty good for me.
The model 3 is of course substantially less luxurious. Single smaller display instead of two displays. Many less buttons/switches. I've only done a test drive in the 3. But I do have several friends that have switches from S to 3, or 3 to S, and they speak very highly of the 3. No doubt the 3 is built to a much lower price point, and you can tell. I think part of the Tesla plan is to have you touch nothing but the steering wheel or the display. I suspect the voice commands will get better over time, they already handle nav and music well.
But when it comes down to it, I'd pick performance, handling, and range over more expensive interior.
Not like Audi, Volvo, or BMW is selling anything close to the model 3 price and range. I drove a Chevy Volt (comparable on price, but not so much on range or performance) and it was nowhere close to the model 3.
Who is willing to buy a slower car and pay 50% more for 2/3rds the range just to get a nicer interior? Not me.
> I've used similar nav systems from BMW, Subaru, and Toyota and they seemed like lame software running on a 5-10 year old phone. Poor touch screens, smaller screens, poor voice recognition, and poor nav. I'd rather they just have an aux port for music and let me hang my own tablet on the dash somewhere.
Thought the same, but the newest Volkswagen generation has improved a lot. Their touch screens and software feel much much more usable than even 2 years ago.
No, definitely not but they have still made leaps from previous iterations. And I think that's a very positive development.
My subjective impression is it basically went from major annoyance to "quite usable". I recently used it on a trip from Northern Germany to Amsterdam and it worked really well.
Agreed, it is huge. Potential market at $36k vs $28k is quite a bit smaller. At least Tesla bundled in autopilot at zero extra cost.
It's not as good as originally promised, but still a pretty good deal in my opinion. Just depends how much people are willing to spend for good acceleration, avoiding trips to gas stations, and avoiding spending $1000-$1200 of gas per year. Of course electricity is not free either. My last fill up in California was $3.99 a gallon and I spent $51. I do that about 4-5 times a month.
> At least Tesla bundled in autopilot at zero extra cost.
For about 15 minutes, before they rolled that back.
Honestly that's the biggest red flag, to me - the chaotic mix of announcements, retractions, chops and changes to their pricing and marketing strategy. As an outsider it feels like the company has cool tech but lacks adult supervision.
If something is "zero extra cost" I would expect the base model to have it.
Beyond that, what you looked at used to cost $37,500 with autopilot as an optional $3k addon. Now it always includes autopilot but costs $2k more. Again, not exactly "zero extra cost".
Just to be pedantic, in the US market $35K is technically the low end of premium car territory. Actually luxury car territory starts significant higher.
Cars in the 35-45k range are routinely referred to colloquially as "luxury" cars. I agree you can quibble with this terminology, but it is absolutely common to refer to these cars as luxury, albeit the absolute low end of luxury.
Significantly higher? A brand new 3 series is 40k, an Audi A4 is 39k, and a C Class is 41k. I’m not even looking at the smaller 4 door models from Audi and Benz which are even less than the Model 3. Maybe Europe gets a smaller 4 door BMW.
I didn’t even count the offerings from Japan which are even less.
That’s a statement that’s easy to make from a privileged position. Luxury is in the eyes of the beholder, and that car costs two thirds of the median income (before tax, healthcare, housing, food) in the USA.
Privilege has nothing to do with it. It's a simple matter of market segment definition. It's rather silly to pretend that something like a base model A4 is a luxury vehicle when it contains barely any luxury features beyond the logo on the grill. By comparison a top trim Honda Accord lists for $35K but no one considers that a luxury car.
Personally I drive a cheap car. Average new car prices have gotten crazy high relative to median incomes, enabled by low interest long term financing. A lot of buyers are ending up overextended.
It's the same in Western Europe, the difference is that cheap lease deals and finance have made them affordable for a significant amount of people and so these cars are extremely common. You see more 3 series than Toyota's or Hyundai's.
Yes. I'm not saying that people in the market for a Ford Fiesta are instead going out and buying a 3 series. People who want a hatchback and going out and buying hatchbacks.
But people who want saloons and estate cars are largely buying from the three Germans, and not Japanese or Korean.
Odd. They are extremely common in California. My office mate has one, her second after giving the first to her daughter. A friend has a motorcycle accident and TWO Prius were involved.
So in the USA, or at least in California they are very common. Part of their popularity is their fleet use makes them direct cheap in the used market, and they tend to be pretty reliable despite the complexity of two separate drive trains.
I think one of the issues is that the Prius starts from $30,000 here - which is quite a lot - and a lot of cheaper, but still economical cars are available for much less.
That’s a pretty laughable statement unless you’re in Europe and get the lower trims we don’t. Pretty much all car reviews put the A4 in the luxury sedan segment[1]. Not the segment with the Accord or Camry.
Following your logic the model 3 isn’t a luxury car either.
The point I was trying to make is that different markets define "luxury" in different ways - I don't think anyone here in the UK would call an Audi A4 a luxury car - even at its highest spec level.
Edit: Sort of reminds me of the differences in defining "class" between the US and the UK :-)
A Jeep Wrangler will cost you 35k for a base model these days and 40k for a "premium" that well, most people still upgrade and tweak for 10s of thousands of more when they get home.
My volt was super expensive in 2011, but 8 years on it still drives like the day it came from the factory. Unlike my Jeep (which i love) that is only a year old and already has aches and pains and squeeks and of course, drinks gas like its going of style.
BTW, when people shop for cars, the purchase price isn't the TCO. How much fuel will you be using and how much maintenance will you dump into it?
I read that the plant is operating way below what the capacity should be, so this could be a reflection of them trying to improve on their utilization of what they have now instead of throwing money at the problem.
That was the explanation Elon gave via twitter:
"Pana cell lines at Giga are only at ~24GWh/yr & have been a constraint on Model 3 output since July [...] Tesla won’t spend money on more capacity until existing lines get closer to 35GWh theoretical."
https://twitter.com/elonmusk/status/1117144865299501056
Not sure I understand the difference in costs between 2 lines at full capacity vs 3 lines at 66% capacity. Obviously 3 lines is an extra 50% on hardware cost, but what's the cost of time to refine and make mistakes (not to mention the lost revenue on producing more cars) on the last 33% capacity? Apparently Elon would rather get closer to 100%.
From a cost perspective two lines at 90%+ are better then three at 66%. But considering that Panasonic is putting the brakes on might as well be the result rather than the cause of Tesla's struggles.
The current gigafactory build-out should be able to produce at 35 GWh/year but is currently producing at 24 GWh/year.
It wouldn't be surprising if Panasonic halted expansion of the lines to concentrate efforts on fixing problems with current lines. But rather than admitting problems they tried to spin it with a weird press release.
Both statements can be true. Tesla is battery limited at 24 GWh/year, and Panasonic says they can meet current demands at 35 GWh/year.
Well Panasonic is claiming Tesla is not buying enough batteries and they are taking profit warnings as a result.
Tesla is claiming that they are battery supply limited and would ship more powerwalls and cars if they had more.
Not clear that Tesla's car production doesn't have other bottlenecks, but it does seem weird that Tesla doesn't sell more powerwalls, if the supply was there.
Seems most likely some political maneuvering to try to get Tesla to commit to Panasonic batteries at other locations. Or just incompetence on one or both sides.
I was close to buying a used Tesla from Tesla, but this is making me pause. Am I being unreasonable? I live in the Bay Area where I feel like the only person without a Tesla or two.
The question is, can we see how Tesla can get yearly earnings of say $5 billion to justify the valuation?
Maintaining a high profit per car seems to depend on selling a premium product, or presuming that other car makers cannot compete. When shifting to the mass market (more than say 1 million vehicles per year), surely the profit per vehicle has to decrease sharply - even if Tesla can earn more than the industry $1k per vehicle (from the quote below).
From 2017: "Recently, Tesla’s valuation surpassed both Ford’s and General Motors’. BMW is among the other major carmakers in the rearview mirror. The logic of this is intriguing, given that Ford, for example, is coming off its second-best year in its 112-year history, earning $4.6 billion while selling more than 5.5 million cars worldwide. General Motors earned $9.4 billion selling 9.8 million vehicles." From article: https://www.vox.com/the-big-idea/2017/6/26/15872468/tesla-gm...
> Model S has been out since 2013 and there’s still nothing as good on the market from any other manufacturer.
Sales of the S are flat and the profits hardly make a dent towards my suggested $5 billion earnings.
> They have a huge head start
In some areas.
Hybrid cars have much of the same technology and no charging station limitations - they compete with full electrics. Hybrids sold 4 million in US 2016 compared to Japan's 5 million sold.
> To say nothing of their charging network and the issues legacy brands will have fighting with dealers.
Sure, but it looks like Tesla needs say 10x more sales to get $5 billion earnings. Another competitor only needs to deploy a little faster to catch up.
TSLA is the exact same position as AMZN a decade ago. They don’t need to make profits. They need to invest in assets and scale, which is exactly what they’re doing.
Except AMZN was cash positive and their lack of profitability was due to the fact that they were investing money they were generating from sales. TSLA on the other hand have to raise money from the market to fund their operations, let alone invest in assets and scale. The two companies are not in the exact same position
It's not different. Not even a little bit. TSLA has sold equity and debt to pay for assets to scale. It does not lose money on its sales. AMZN sold equity and debt to pay for assets to scale.
>People have been predicting failure for Tesla since the beginning.
This is such a bizarre argument. Things don't fall apart overnight, until they do.
Are you a software engineer? "People have been predicting our app will collapse under the burden of technical debt since the beginning. Hasn't happened yet!"
It is certainly not bizarre. Extrapolating from the past is almost always the best baseline for predicting future. I put emphasis on the word baseline.
To clarify they’ve said each step was impossible and that Musk was basically a fraud or a liar and each step has been executed so far.
I place the people predicting failure with those predicting a stock market crash - given a long enough time horizon you’ll eventually be right, but otherwise it seems to have mostly been nonsense so far. I suspect people outside Tesla are either just bad at predicting their ability to execute or have other reasons to want them to fail.
>To clarify they’ve said each step was impossible and that Musk was basically a fraud or a liar and each step has been executed so far.
This is a nonsense narrative that some people tell themselves to justify hanging on for dear life.
Sure, there was some skepticism about EVs, but it was mainly around whether there was demand and whether they could be built profitably at that level of demand. Who Killed The Electric Car? came out in 2006 and the entire premise was the feasibility of EVs.
So what has Tesla done? They've demonstrated that EVs can work, and that there is some demand there. They've burned through almost $20BB in subsidies and shareholder equity to get there. They are certainly not near profitability. In fact, they are changing their entire business model as of a week ago, apparently. Why, if they've proven that EVs can be so successful?
It's hilarious that the fanatics claim to think "long term", but then in the same breath claim Tesla has has nothing to fear because they haven't gone bankrupt yet, therefore they never will. Enron was the 7th biggest company in the US at one point, and won multiple awards for The Best Company to Work For. It doubled revenues between 1999 and 2000, and was set to do it again in 2001. Then it disappeared. "Nothing to fear!" right until the end...
>given a long enough time horizon you’ll eventually be right, but otherwise it seems to have mostly been nonsense so far.
By what metric? Most owners haven't owned the car for a year yet. If you bought the stock in the past 5 years, you're underwater. Do you consider that some ridiculous time frame for an investor or business? I certainly don't.
I'm not sure what to tell you, basically nothing you've said is true.
There wasn't 'some skepticism' about EVs, very few took them seriously back then.
During the roadster the main narrative was it couldn't be done and if they could do it nobody would buy them.
For the Model S there were constant reports of Tesla not having the money to build them etc. the same thing was said repeatedly about the Model 3 (they would never be able to manufacture enough, they didn't have the money, they were going to fail).
Tesla pulled EVs from the future to now in spite of it being a very hard market to enter with massive up front costs. Along the way they also built out a charging network and made huge improvements in car software and getting rid of the dealership model.
The next shift is autonomous driving and the pivot to it is because any car without the tech when it happens will have negative value.
I'm not claiming that there's nothing to fear because they haven't gone bankrupt yet, they could still fail - but you're not arguing in good faith and people have been saying the same thing for years even though Tesla has proved them wrong at each previous stage.
Yes, I've seen all these, and I'm staggered at how bad the used tesla experience seems to be. They can't even get simple basics right. Buying a used Tesla should be a simple, straightforward experience and run smoothly - after all, they are not cheap.
I buy and sell cheap (sub £2000) cars on the side. I have a better customer experience than that. That is a damning indictment.
I never set one up for doing that sort of thing - I wish I had done when I first thought of it (maybe 2009?), but I'm a bit lazy! There's now loads of people doing it, although they seem to just be rebuilding lamborghinis, etc... Mine would be a bit more mundane!
I bought a Model S last year and around the time of weedgate I decided the risk was too great and sold the car. It seems from the used market that the value has plummeted. The one I bought is easy $40k less just a year old.
Repairs and parts availability is one of the biggest risks. Could easily see situations where a small fender bender causes a total loss.
Especially now that the perf option used to cost twice as much (now the uprated brakes/wheels are part of the perf package). Now autopilot (not FSB) is included. Also the new motors mean 370 mile range is available with the 100 kwh battery. AP3/HW3 is also now shipping as standard.
So yes the rapid progress means that the older cars depreciate quickly. This is only get worse with the next refresh rumored to be fairly soon.
Last year this time some of the same models selling for $40k in the used market were $80k. These were for some of the oldest cars in the pre-owned segment.
The biggest hit to value came with the Tesla price lowering.
Id expect a 20% loss but not 50%. Porsche and Lexus don't lose 50% the first year.
I have a 4 year old s85d. A year ago I got an offer to trade in for 50k from tesla. I bet the value went way down because My ~260 range is so much less than 370.
AFAIK Tesla hasn't been friendly to lease arrangements so far. Parts and repair has always been my concern there--other manufacturers have a good history of parts, a robust aftermarket, etc. Porsche's EV will be the one to watch in this regard.
Unlike other car manufacturers who go bust (like Saab 7 years ago), Tesla has worked hard to limit third-parties from repairing their cars. So if they go bust, you have to hope that their service business gets spun out into a company that lives on, and that this company (which retains a monopoly) doesn't charge you ridiculous rates.
Unless I'm mistaken a major component of the Tesla value prop is the supercharger network.
I presume "shit hits the fan" includes goodbye supercharger network.
Furthermore, unless I'm again mistaken, a bunch of people are under the impression that they'll have unlimited free supercharger access for the life of the car.
I'm fairly sure cars have a required minimal / expected lifetime (especially in the EU), but I wouldn't be surprised if that's well earlier than the expected lifetime of their batteries. So far so good, I haven't heard any news about battery failure or used Tesla cars being worthless due to needing a battery replacement. Mind you that is likely to happen sooner rather than later, it's been nearly 10 years since the first Model S models appeared.
Just like with SaaS, when things go boom, you’re screwed.
With Tesla, i would assume that in car features like autopilot would go poof, along with the proprietary chargers and spare part availability. Also, who knows what over the air maintenance is happening.
With a lease, your liability is capped to the lease payments. With ownership, you can ride it down to zero.
BMW doesn't need to pay top dollar for a prestigious brand, they already have one. Tesla will be bought out by the likes of Geely or Tata who don't have strong brands of their own, but have already been going around and scooping up smaller car brands like Volvo and Jaguar.
They saw the value of the Mini brand and didn't want to put a BMW badge on a lower end car, so they held onto it when they jetisoned the rest of the Rover group. The RR brand is selling to different customers than the BMW brand is. But I don't see that BMW would need the Tesla brand, there's too much overlap there IMO.
Not really. They merged with Rover and bought Rolls-Royce in the 90s. At the time the BMW management wanted to expand. Mini is a holdover from the Rover merger. This merger is largely seen as a failure and BMW divested from all Rover brands (except Mini). For more than 20 years BMW has not expanded.
It's quite possible something similar to the Fisker bankruptcy might happen - Fisker's assets were bought out by Wanxiang Group who then launched Karma Automotive, resuming manufacture
of their 'Revero' plug-in hybrid car, which is an improved version of the old Fisker Karma.
Much worse than that: their (pre-market) valuation is 44B and takeovers require shareholder agreement, usually at least 20% premium to the market — I'd wager the ask price would be a lot more but let's be conservative... 53B buys you a 9B debt.
Seen the Cornell paper "Pseudo-LiDAR from Visual Depth Estimation: Bridging the Gap in 3D Object Detection for Autonomous Driving" or the more consumer friendly "Elon Musk Was Right: Cheap Cameras Could Replace Lidar on Self-Driving Cars, Researchers Find"?
Looks like a pair of cheap cameras with good stereo separation (distance between the cameras) provides very similar data to Lidar. All without the giant domes on the roof (like the waymo cars).
Not in scenes with poor lighting, not in rain, not in fog, not in scenes with poor surface variation, and not at the ranges needed for safe on highway driving.
Sure. Problem is cameras are more similar to humans. So a camera based system will drive more like humans, and be less dangerous. If you use a Lidar based system and conditions are great for lidar, but terrible for cameras it's going to be very dangerous to mix autonomous lidar cars with human driven cars.
That's why you should have LIDAR and cameras, if nothing else so the car can use the cameras to predict and adjust to the condition-driven changes in behavior of the human drivers.
First US car company in 60 years, electric at that. Best crash test ratings. Highest owner satisfaction. First US-owned factory in China. Built in about 6 months. Ability and willingness to use OTA updates. Willingness and ability to put auto-pilot on the road for consumers. Ridiculous performance. Better chip than Nvidia. Top 2 auto battery supplier. Best selling lux car in US (ICE or EV). Dramatically better battery efficiency. No dealerships. Online ordering. Plausible FSD story. Camera-based autonomy. $35k price point.
VW Group’s recent Audi e-tron has to 30-40% lower range than a Tesla 3 (~200 miles vs ~325 miles) and as such I would totally see them putting forward the money to buy Tesla in order to bridge this big technological gap.
I may be delusional but I actually own a VW Group car, I know of people who make their living on mostly repairing VW's past mishaps (stuff like this [1]), I have no stake whatsoever in Tesla's future financial success, and as such I can tell you that VW (and the Germans generally speaking) are way, way behind in terms of EV technology compared to Tesla because stuff like this it's not in their engineering DNA.
$10 billions is a pittance, it gives you two thirds of Whatsapp or the entire Skype before it was acquired by MS (adjusted for inflation), so I don't think I'm delusional when I'm saying that it is not a great sum to pay when the future of your entire industry depends on you being best at building EVs (and Tesla now is the best).
I've had the same discussion on places like /r/cars, i.e. that Tesla doesn't sell cars, it sells batteries and the accompanying software (with some wheels attached to the whole thing), while companies like VW, MB or BMW have almost no clue on how to build the best batteries, never mind the best software, they're only good at building cars (and lately not so good even at that), which is an industry on its way out.
Also other companies might be willing to go in on at this price to be a top compeitor for self driving or batteries. Apple must have considered it. Uber. Tencent. Facebook. Alibaba. Walmart.
Outside car manufacturers there's a lot of cashed up companies that would like to take a punt in this space.
I could not have said it better. I own a Model X, and I always tell my friends "Tesla is a tech company, but they have no idea how to build cars". I think I'm going to expand that into what you said.
> Access to the Panasonic battery supply is likely worth a pretty penny.
Licensing/partnership contracts are often written so that they don't automatically survive changes of ownership, which makes buying into such a partnership by acquisition less than reliable.
Anything that comes out of the mouth of Elon is an instant fact, and is repeated as fact until it's proven false. Then it was merely a prediction or plan.
He just went on stage and told investors that their non-existent, full self-driving robot taxi fleet will cut the cost of personal transport by 90% over Uber, and will make the car owners $10-$30k+ ("in some cases more!") in annual income. It's a pipe dream, but now it's talked about like it's already happening.
Remember Solar City and the solar shingles? Their solar deployment is 25% of what it was the quarter he made that announcement. "Synergies!". Meanwhile, they are winding down the company. In a year people will forget it was ever a thing.
Did you watch the presentation relating to the Tesla chip release - along with watching the fully self-driving vehicle video? They had the lead chip engineer explain their improvements, and they had their AI lead explain why they're at the lead for this - both very experienced and articulate people in their fields.
I don't understand how you say it's a pipe dream unless you don't comprehend what they're sharing. If they're outright lying about the operations per second speeds (TOPS) they announced then that's one thing, however I doubt they would.
Another thing to realize is Tesla will be self-interested, as they should be to some degree, so how much profit they will allow non-Tesla owned vehicles to operate in the Tesla Network could heavily be dictated by them - so I wouldn't necessarily go out and buy 20 vehicles to inject them for full-time Tesla Network usage, however some people may take that gamble and then it also fronts money to Tesla. Even if the improvements are 1/4 of what they announced, it is significant.
Re: Solar City - they've had to redirect battery and other resources to focus on the vehicles. You're making a lot of assumptions. It might help to balance that out with they're working very hard, have very intelligent people on board, their work and effort has already lead them to this level of success, they're working on creating a whole ecosystem on limited resources that they have to manage, and they have the semi and other vehicles lined up for next year - which they already have pre-orders in for as well. I'd say you're a bit too hyper-focused on certain things, and no, I'm not suggesting to not be skeptical and understand they may not meet their goals and on time the 100% that gamblers-as-investors are betting on them to have.
They lied about being the best in the world about their chips. Nvidia posted about them.
They lie about autopilot and fsd being driverless, while they are irresponsibly deployed driver assistance technologies.
Their whole argument for feasibility of driverless cars is that humans user only their eyes too, and they have a lot of data. That is like saying that if you outfit a million gopro on people, they'll have better humanoid robots than Boston Dynamics.
This whole convoluted scheme about fronting cash, wow. If they are so confident about their cars earning 30k$ a year, they should have no problem raising money via equity or debt, and pivoting from a car manufacturer to a taxi company. Later they can fire the drivers and be driverless taxi company.
Solar City, another wow. I didn't know solar panels are made of batteries, or that Tesla is the only company that makes batteries in the world. Are you just closing your eyes and denying that they laid off solar City personnel? That the 2 billion dollar was nothing but a family buyout, and infact a spacex bond bailout?
According to Elon musk and Tesla fanboys, Tesla is an amazing company. They have the most performing and cheapest batteries in the world. They have the best AI chops, not just to make the best chips, but also use it to make the most automated factory, and have the technology to have their cars be fully driverless. Their factories are so advanced that air friction is a problem, and they use strobe light to see robots. But after all these advantages, they don't sell batteries, direct AI products, manufacturing expertise, driver assistance technologies, EV drivetrains etc. They only sell cars at luxury prices, that too at a loss, while having shitty interiors, fit, finish, panel gaps, paint etc.
>Did you watch the presentation relating to the Tesla chip release - along with watching the fully self-driving vehicle video?
Yeah, I did. It was very interesting, but it was also Computer Vision 101. Karpathy essentially explained how neural nets work to a non-technical audience. It was nice.
But did you not assume this was exactly what they were doing? I certainly did. Do you think no one at Waymo/Google/Uber/Apple/Lyft/Ford/GM/VW understands this or is trying to do the same or similar? Tesla does have a fleet data advantage, but Elon's "simulated data won't work" is nonsense.
>If they're outright lying about the operations per second speeds (TOPS) they announced then that's one thing, however I doubt they would.
They weren't lying about the specs, but it isn't industry leading, like they claimed. So now they have a second best chip that they have to produce themselves in small volumes.
>Re: Solar City - they've had to redirect battery and other resources to focus on the vehicles. You're making a lot of assumptions.
No, you are making a lot of assumptions. I am looking at the data. Since the solar shingle reveal, solar revenue has decreased every quarter. It is now 25% of what it was then. The reviews on Yelp and other sites are terrible. The Buffalo plant is in trouble, and hasn't fulfilled employment requirements. What does any of that have to do with batteries going to the Model 3 in volume in 2018?
Again, your whole argument revolves around "Tesla says..."
Of course others are working towards the same. That's the point and value of competition - and what Elon wanted to cause (whether you take it up as clever PR or genuine care) other manufacturers to start producing EVs. The point is in a highly competitive environment every incremental improvement is potentially a huge advantage in getting to market and scaling faster; Elon referenced the exponential aspect of this, especially in terms of the amount of sensor data they're already capturing and able to analyze compared all competitors combined.
Citation needed for it not being industry leading, for their specific use case - hoped for TOPS along with maximum energy usage considerations? TOPS alone isn't the only factor, doing operations efficiently is required to keep energy usage as low as possible. Unless the lead engineer and whole chip team is pulling a fast one over Elon's head - he's not an idiot and not going to move forward in a direction he's not confident in.
I wouldn't say ~1MM chips per year is small volume, and that's fine that they're producing in small volume - especially because they have the next version coming out in I think Elon said 2 years. They're likewise not building the facility to produce them themselves, they're outsourcing it - I think they said to Samsung in Austin, TX?
I'm not making assumptions, and wasn't referring to that data you were referencing. Elon has said they had to divert resources from battery-related production; yes, it could be a convenient false story, however we can agree they're under a lot of pressure and have limited resources - so it's believable enough.
My whole argument doesn't revolve around "Tesla says" of your generalized statement - however it does try to put down my argument to elevate yours. If you don't want to give any amount of trust to what Tesla says - yes, they've not been honest/straight-forward in all situations which isn't ideal - then the foundation for your arguments aren't taking into account a lot of the proof points. Just like now I believe you're being genuine in your belief, and that we just have different experiences, understandings, analysis - I suppose it's possible you have financial interest in Tesla failing and haven't disclosed that, however I won't make that assumptions - and will assume you're speaking in good faith.
I don't really get what you're defending or your point is? Do you think Tesla will completely fail? Do you believe their stock is overvalued? That all auto manufacturers are now investing shittons of capital towards EV vehicles and infrastructure is perhaps the strongest signal that the market is there, and Tesla is leading it - and Elon believes they're 3-7+ years ahead of everyone else; and during even only 3 years they get get much further ahead in the race.
>My whole argument doesn't revolve around "Tesla says"
You wrote in this single reply:
Elon wanted...Elon referenced...Elon said...Elon has said...Elon believes...
This is the foundation of your argument.
Elon also said he was taking Tesla private and had a buyer at $420, and settled after being accused of fraud. Things that Elon says, wants or believes are not facts. That is my point.
>Citation needed for it not being industry leading, for their specific use case
Go look at NVIDIA’s products, or the press release they put out after the Autonomy Event. Do you think NVIDIA knows a thing or two about autonomous vehicle tech and this use case? Because Tesla’s entire program up to this point, the one I’m sure you believe is best-in-class, is built on NVIDIA product.
Can you provide a single citation that the Tesla chip is industry leading?
>I wouldn't say ~1MM chips per year is small volume,
First, 1 million is small. Second, you assume that they'll be building 1MM cars a year anytime soon, probably because "Elon said". Tesla produced ~70,000 cars this quarter. That's the reality. There is no evidence whatsoever that Tesla can produce, nor that there is demand for 1MM of these cars annually.
>I suppose it's possible you have financial interest in Tesla failing and haven't disclosed that
Ah yes, baseless accusations. You "won't make assumptions", but you'll throw that out there anyway. Just in case. If anyone disagrees about the future of Tesla, they obviously have some agenda. Elon said as much. If this forum had any neutrality, the admin would be warning and/or banning people making these accusations, which violate a number of the HN guidelines.
I don’t short stocks. I buy the odd put. I'm long everything, including Tesla through various funds. I don’t get paid by the oil industry. If Tesla went belly up tomorrow, it would harm me financially. How about you? I’m willing to bet you own a Tesla car or stock, but didn’t disclose that, while speaking with vehement positivity about the company. Why not, if you expect it of others?
I am interested in this subject matter because I find it absolutely baffling and mind-bending that there are so many red flags with this company, and yet there are segments of the population that simply cannot or refuse to see them. Of note: there seems to be a large overlap between that segment and the one that likes accusing other people of financial malfeasance or astroturfing.
>Do you think Tesla will completely fail? Do you believe their stock is overvalued?
No idea, but I doubt it fails completely. There's value in there somewhere. Probably selling high-end, high-margin EVs to wealthy people, the market they probably should have stuck to.
I'm not going to pick apart your analysis to point out the logic errors because there's enough that I don't have time - I'll just point out an obvious one:
My saying "I suppose it's possible you have financial interest in Tesla failing and haven't disclosed that" isn't a "baseless accusation" - which you claim, which then wrongly lets you build your anger and is a bad foundation giving you the argument that I'm being hypocritical and also making assumptions. I didn't accuse you of such - realize there's a difference between an accusation and brainstorming through possibilities.
In the end we'll see how Tesla and Elon does. I believe most people are terrible at understanding exponentials, terrible at foresight at the holistic level - and only believe something once it's been 100% for X years; part of the whole Product Adoption curve: innovators, early adopters, early majority, late majority, laggards (or other labels: tech enthusiasts, visionaries, pragmatists, conservatives, skeptics).
>I'm not going to pick apart your analysis to point out the logic errors because there's enough that I don't have time
Translation: you have no idea what you're talking about.
>I didn't accuse you of such - realize there's a difference between an accusation and brainstorming through possibilities.
Bull. You were implying I was a short-seller with an agenda, just like Elon does to all critics and whistleblowers, just like happens in every Tesla discussion on these boards.
It's hilarious, because the critics are "evil shorts", but the proponents are innocent "good people" who would never talk their book.
Because I find them pretty similar in terms of size, the e-tron is 4.9 m long while the model 3 is slightly shorter, at 4.6 m, but it’s in the same ballpark. For comparison my hatch-back is 1 meter shorter, it has a length of 3.6 meters. In the end the market will be the one to decide.
That's actually complete wrong. Amazon did have 2 years of somewhat heavy losses (around 1999 to 2002), with one pretty dramatic loss the quarter the dotcom bubble exploded.
But after that, they turned a profit almost every quarters, generally very small compared to their revenue, but a profit, and when they lost money, it was also quite small compared to their revenue (apart from 2 isolated quarters in 2012 and 2014).
Basically, apart from it first 2 or 3 years, and some isolated losses, Amazon was, for most of its existence, targeting a slightly above 0% net margin, and succeeded at it, proving it was self-sustainable.
It's not the same as Tesla which is consistently losing around 10 to 20% of its revenue for nearly the past 10 years.
There are network effects, maybe not as strong, but they're there.
Theres the supercharger network, if you have one car of a certain brand in your house hold, the others are probably disproportionately likely to be of the same brand, and this can radiate out to friends, family and work colleagues. Theres probably a 'no one got fired for buying IBM' element also. Tesla is kind of the default electric car, you aren't going to be judged harshly for buying one because most ev buyers do.
I'm struggling to think of any individual car manufacturer that has driven other manufacturers out of the market. The market doesn't really work in a way, capital requirements are too high, lead times too long, to make that possible. Its still reasonable for them to forgo short term profits, just not quite to the same extent as the winner takes all nature of the internet.
It has both those things. It’s literally devouring market share from similar class vehicles of competitors. The network effect is also happening slowly.
From my point of view Tesla hasn't driven BMW, Audi or Mercedes out of business in the last 15 years, but I didn't take a look at their recent numbers, perhaps they already have.
This is probably the most likely endgame for Tesla. One of the other carmakers buys them, liquidates physical assets, and sells their own cars under the Tesla brand.
Elon Musk only controls 20% of Tesla shares, the board can force a sell upon him if the other shareholders agree on one.
And I'm not sure why Apple would buy a car company, it's too far of their core business (aka selling computers ranging from phone sized to desktop size).
The other car manufacturers are not blind idiots, they are seeing EVs are becoming a thing, but it's also in its early stages. The question for them is when should they start switching their line-up, and that's the difficult decision. Too early, and they end-up with too expensive and less convenient cars compared to IC vehicules, too late and you have basically miss the bus.
I think Elon isn’t the typical startup CEO that is only looking for the biggest cash pile, which ironically Apple has probably the biggest cash pile on earth as a corp.
There is a definitely path forward for Tesla. They needs to be 1908 Model-T but for EVs of 2019. This means only two things: (1) aggressively lower the manufacturing cost and, (2) scale the battery production. I want to see Tesla that costs $18K and has a range of 300 miles. This would turn auto-industry upside down. I think this is completely doable.
Incumbent car manufacturers are actually lightyears behind in experience that Tesla provides. Just look at their dealership model that is design to robe user at every step in the process. From tech perspective, majority of Toyota line up still doesn't even have good smartphone connection story in 2019. Honda still have bare minimum driver-assist. Toyota Sequoia hasn't been literally updated for years and a giant car like this doesn't have basic safety features that one would expect in 2019. Keep in mind these are the biggest, wealthiest and most powerful car manufacturers in the world for who money in not an issue. They have perhaps 10X more people working on improving designs than Tesla but at the end of year nothing really comes out. If you look at model differences between 2018 vs 2019 for large majority of incumbent manufacturers, you will see no difference or something tragically trivial such as offering new shade of color. You may think what the hell their design staff of thousands of people did this entire year?
Tesla's main strength is design, courage and agility. Everything from door handles to dashboard is made to delight the user. They are tech company that became car company, they move fast and they deeply care about delighting users. Ideas don't boggle down in bureaucracy. Model-3 is upgraded even before year was over. Model-3 is designed for million mile life. No incumbent manufacturer would dare go in this territory. The difference is same as incumbent software giant vs new startup.
The reason incumbent car manufacturers seem lightyears behind is probably because they run a sustainable business model. While the Tesla experience seems superior it doesn't yet appear capable of turning a profit. I really doubt that lack of ingenuity on the incumbent side is the reason for the gap you describe.
Potential for lower cost as well, the part count of an electric car is lower than a petrol car. (no combustion engine, no gears, and I'm sure they can simplify the electronics as well due to not having as much legacy baggage as other car manufacturers).
However, to achieve that they still need to reduce the cost of batteries by at least half. Reducing battery price has always been one of their goals though, hence the megafactory.
Based on Q1, the problem is not production, but demand. Tesla's inventory is growing, which probably means they are having trouble selling cars they build.
Well, I guess that explains the Autonomy Day [1] event from just two days ago where they presented themselves as the Pack Leader, when everyone else knows it's Waymo (by far).
Quoting user RivieraKid [2]:
Take a moment and think about why are they doing this event now. Elon is setting a stage for a capital raise, he's pitching the autonomy narrative after the Model 3 cash cow narrative failed. They're trying to convince investors (and customers) to give them money because money-printing autonomous taxi service is coming next year.
Am just curious, why does everyone believe that Waymo is way ahead. They have more miles driven, but so does Tesla. Waymo has some incredible guys going after autonomy but they have nothing to show as of yet at the L4 or L5 level. Is it because they are playing it super safe. They don't have any urgency to make money from autonomy unlike Tesla. Are they taking it easy ?
Per my understanding, Tesla is tackling autonomy purely based on supervised learning. Waymo probably has something else, semi-supervised or unsupervised, where they collect data from a small geo-fenced area and can extrapolate that to the real world. I don't know.
First, it seems that everyone but Musk is claiming so, so either everyone else is wrong, or Musk is wrong. I find it far more likely that this is just another "funding secured" type of claim, than an actual win. Case in point: see this evaluation [1] from only a year ago, where Tesla was ranked 19 out of 19 (Waymo was #1).
And the timing of the announcement, only two days before delivering really bad financial news... well, see the previous comment.
You provided the second reason yourself: Waymo has some incredible guys going after autonomy, and they've been doing that for a decade now. So whatever shortcut the Tesla people claim to have found, it's (a) either a shortcut nobody else has thought of before, or it's (b) they have thought of it before, and ruled it out. I believe (b) to be far more likely, hence I believe them to be on the wrong path.
Also, contrary to what you say, they do have something to show as of yet. They are operating hundreds of autonomous vehicles in Phoenix.
And yes, they are probably playing it super safe, but that's exactly what you should expect from someone accelerating 1+ tons of metal to lethal speeds, and giving it autonomy.
Playing it super safe is the only way to go. Any kind of autonomy has to be done that way because if it isn't we'll see a re-run of the 'AI-winter' only this time it will be called the self driving car winter, Tesla is at risk of setting back the self driving movement a decade or more if they do not get their house in order and start treating this as if lives are in the balance.
Do you have an even worse source? This Navigant « study » keeps coming up in comments about Tesla without any explanation on the methodology whatsoever.
This is one of those "you need to be an expert to evaluate the claim" problems.
Talk to anyone with research experience who are building world scale ML systems that are used by real people, and it's unambiguous that Elon Musk is a con man.
It comes down to small details, like the nature of the training data, the nature of the customizations, the nature of the business problems, the nature of the regulatory problems, the difference between highway driving and city driving. The enormous amount of special casing, the nature of the QA infrastructure, the capital on hand, the routing and mapping problems...
What Tesla has is a decent lane finding system. What Google has is an end to end system. It won't take them long to expand to all the major cities; solving the geofencing problem is easy, they already made street view.
And they were doing L4 successfully years ago. They're keeping drivers in the cars right now mostly because something going wrong is a PR risk, not because they need them. And L5 isn't a particularly important goal.
My guess is I'd have to write up 20 pages of detailed analysis at minimum to convince folks. In general if you don't have 5 to 10 years in depth experience in this space, you probably shouldn't consider qualified to have an opinion.
Appeal-to-authority arguments are always uncompelling, but they are especially uncompelling against Musk. Authorities said hydrogen fuel cells were the future. Authorities said EVs will never outperform gas cars. Authorities said batteries will always cost too much. Authorities said reusing rockets will never work.
With each of these breakthroughs, Musk presented a well-reasoned view that was highly contrarian against the authority consensus; and in each case, his view turned out to be not only correct, but so correct that it became the new authority consensus.
Maybe this time he is wrong and you are right. But if you are wondering why the market and the masses believe him, it's because he continues to provide reasonable explanations for what he's proposing, and he has a track record to back them up. If history predicts the future, then in a few years, we'll add "authorities said you needed LIDAR for self-driving" to the list above. This is already starting to play out in the SDC space, with Hotz of Comma.ai sharing Musk's views on vision, and Levandowski sharing his more generalized concern about LIDAR (the latter is more recent if you're not familiar):
> Levandowski contends that this “race” to deploy autonomous vehicles has yet to start in earnest largely due to shortcomings from “crutch technologies,” a descriptor he uses for hardware like LiDAR and HD maps. His position is that while these provide sensing and localization for the vehicle in the present moment, they have serious compromises and don’t produce the level of predictive ability required to commercially deploy autonomous vehicles.
Karpathy was able to explain in very simple and understandable terms this week why Tesla's approach is advantageous. If the critics understand this domain so well, how come they can't provide a straightforward retort? If Feinman could do it with quantum physics, surely a machine learning expert can do it with neural networks. I would love to read/hear/watch such a retort if anybody is interested in presenting one.
I'm not saying that Musk has solved fsd or that he will in the near future, but if you asked anyone with experience building cell phones in 2006 if the iPhone was possible they would have said absolutely not. Technological progress is inherently unpredictable even for experts. Musk has some really good people working for him and their datasets get bigger every day, I wouldn't rule Tesla out just yet.
Their datasets aren't useful for the problems that make driving hard. Musk is making claims which are paper thin false. If he weren't making these kinds of claims I'd take him more seriously. I promise you that the reasons this is ludicrous are extremely solid.
Edit: fwiw I've actually taken a look at a number of waymos internal systems, and sat down with people who worked on autopilot.
If Tesla doesn’t have the right training data then no one does. Tesla has both simulations and vast amounts of real world data from cars all over the world. Extracting depth maps from 2d images is a solved problem, which negates the need for Lidar. Best I can tell Tesla is the closest out of everyone to solving self driving. I don’t think they’ll solve it by next year, but If I had to guess I’d say 2.5 to 3 years from now Tesla will have relatively safe self driving cars.
Waymo is a technology demo, not a functioning operation that spits out self driving cars by the tens of thousands per quarter. They are many years away from having that. That's fine if they pull it off; it's the way big technology startups are funded. Alphabet is playing the long game here.
However, Tesla is talking about making the tens of thousands cars they are shipping per quarter right now autonomous. We'll see how far they get with this. My guess is that the game for the next five years is going to be convincing regulators that these things are safe enough to allow on the road. Having a lot of cars on the road already will help their argument. Waymo has the same problem but all they can point too is some limited areas in the US where they are driving currently.
Tesla seems to be improving their current products continuously through software updates as well. This adds to their sales pitch: your car will gain capabilities and may even become fully autonomous one day. They've been riding this pitch for years and while they have under-delivered on the end goal, the in between milestones seem pretty interesting.
> Waymo is a technology demo, not a functioning operation that spits out self driving cars by the tens of thousands per quarter.
Tesla doesn't spit out full self-driving cars in any number in any quarter, while Waymo is actually operating FSD cars in a limited, but public and commercial, role. So Tesla is still behind.
> However, Tesla is talking about making the tens of thousands cars they are shipping per quarter right now autonomous.
Yes, if one was looking for the industry leader in talking about delivering full self-driving, Tesla would be much more clearly competitive than they are in actually delivering. But talk is cheap.
If waymo has developed tech for autonomous cars then integration into existing car brands is not going to take a miracle, hell retrofitting onto my 96 cherokee isn't out of the question.
> Tesla has already an impressive product on the road that is constantly improving.
Tesla has no full autonomy product on the road. On full autonomy, Tesla could easily go the way of vaporware.
> Waymo could (likely) go the way of vaporware for all we know.
Waymo has fully autonomous vehicles in (limited) commercial operation. Like Tesla, they plan to use self-driving to operate a ride-hailing service; unlike Tesla, they are actually doing that now, if only in a limited way.
The spherical cow is a simplified abstraction that doesn't accurately model anything in the real world.
Phoenix, AZ, is in the real world, with real roads and real customers for a real, if limited, self-driving service. Waymo’s self-driving is far less vaporware than Tesla's.
...shitty drivers from the other 49 states, blue-haired old ladies who haven’t seen the inside of a DMV in 20 years, and massive dust storms. That 200mm of precipitation happens over a couple of days. I’ve driven in every state in the western US, and those rain storms are scary.
And what do the Waymo vehicles do during such a dust- or rainstorm? Just carry on providing rides, or go into a safety shutdown mode? (Genuine question; I have no idea.)
> what do the Waymo vehicles do during such a dust- or rainstorm?
Do what most reasonable drivers in Phoenix do. Pull over and enjoy the view. (Phoenix dust and heavy rainstorms tend to pass in ten to thirty minutes.)
It is likely much easier to expand territory bit by bit and improving the baseline than it is to throw everything and the kitchensink at essentially unproven hardware. The first will likely work, the second will end in blood.
> Well, I guess that explains the Autonomy Day [1] event from just two days ago where they presented themselves as the Pack Leader, when everyone else knows it's Waymo (by far).
Awesome! So how do I order one of these Waymo cars?
Tesla already tried to build autonomous car factories and admitted a mistake. Unclear why they are so sure they can build autonomous cars - a task seemingly much more complex than car manufacturing robots?
Yep, the numbers that matter continue to trend up. More importantly, at this point those numbers are becoming a huge problem for essentially all their competitors.
Most of these are at this point bleeding market share to Tesla that they are trying to recover from by launching products that clearly are a lot less competitive and are probably being sold at a loss right now. They are going to be bleeding cash while they sell prematurely launched EVs at a loss and struggle to ramp up production for those for the next decade. Shut down production capacity for ICE vehicles that they can no longer sell because people buy Teslas instead. Write off hybrid product development for which demand seems more limited than they hoped. Write off hydrogen product development that has not been happening either. Etc.
Tesla is of course only part of their problem. There is a lot of stuff coming out of Asia right now that is low cost and full EV. Buses, trucks, small cars, etc.
Their next decade is about surviving multiple rounds of downsizing, consolidation, demand drops for essentially all their existing products, huge capital investments to catch up with Tesla and other new players in the market.
Meanwhile, Tesla has several Gigafactories coming online over the next few years that will improve their production capacity; several new products in the pipeline that will challenge their competitors even more, and business models that extend beyond just consumer EVs including solar panels, batteries to support grid operations, batteries to complement domestic solar installations, etc. In all of these markets their biggest problem seems to be getting enough capital to build the production capacity to serve the demand. The big picture here is rapid growth and dropping cost for the foreseeable future limited only by the amount of available capital.
If Tesla is selling cars at or below cost in order to increase the quoted numbers, that is obviously a very bad place to be for Tesla.
Someone upthread quoted that half the cars were sold in the last ten days of Q1, after a big price drop. Combine this with hemorrhaging cash, then I would definitely not say that the above is the only numbers that matter.
Also:
"Operating cash flow less capex should be positive in every quarter including Q2. As the impact of higher deliveries and cost reduction
take full effect, we expect to return to profitability in Q3 and significantly reduce our loss in Q2."
Yeah, they also affirmed guidance of similar S and X sales to Q4 at the same time. By that point, they should have had a pretty good idea that those would drop. There is a real credibility problem here.
Maybe the "Q1 was a huge loss" thing is more that, for the first time, they're not having to game the quarterly results in order to make it look good? At which point they've just focused on continuing to scale the company, attracting investors be damned?
They massively cut cap ex spending to the point that net of depreciation it’s basically zero. This means that without a capital raise they don’t have the money to launch model Y, roadster, semi, pickup, or any other product they’ve announced.
Elon Musk on the conference call sounded open to raising money for the first time in years, and for good reason. Their cash balance is beyond alarming and their growth has painfully and obviously stalled. Demand for model s and x was way down in Q1, as anyone who was paying attention could have told you, and contrary to what Tesla says Q2 so far looks like more of the same.
Don’t forget that just 2 months ago Musk was guiding for a small loss or possibly, with luck, a tiny profit. Instead they had a loss 4 times worse than analysts estimates, which were already cut massively. A loss so big it basically wiped out the last 2 profitable quarters. In Q4 last year Musk said he thought they could be profitable in all quarters going forward, obviously Tesla isn’t there yet.
Deliveries were approximately 63,000 vehicles, which was 110% more than the same quarter last year, but 31% less than last quarter. This included approximately 50,900 Model 3 and 12,100 Model S and X.
How do you explain a 30% quarter-over-quarter drop in a company that is rapidly growing?
Pointing at year-over-year for a company like this is deceiving. They just introduced their "mass produced" car with 2 years worth of demand. But, I guess you have until next year to keep telling this particular story.
Sounds like what you're doing is proving the NYTimes is part of the fake news problem. I wonder given your data above if the NYTimes could be sued for liable for reporting something easily provably false.
The headline is that Tesla posts "big quarterly loss" and the cause of this is "sales lag". And the article provides information to substantiate that, including a link to Tesla's report:
> Deliveries of Model S and Model X declined to 12,100 vehicles in Q1 compared to our two-year run rate of roughly 25,000 units per quarter. This decline was mainly caused by weaker Q1 demand due to seasonality, pull-forward of sales into Q4 2018 in the U.S. due to the first scheduled reduction of the federal EV tax credit in Q1 and discontinuation of our 75 kWh battery pack. We also had a mismatch between orders and deliverable cars. For example, due to adjustments in pricing mid-quarter, the take rate for the performance versions of Model S and Model X increased faster than we were able to supply
Indeed - >100% growth in YOY Q1 deliveries is actually rather impressive, however you skin it - biggest leap they’ve seen ever.
I find quarterly reporting and the credence it’s given absolutely absurd - particularly when dealing with businesses that are scaling rapidly and treading novel territory.
What happened to the decade+ holds of traditional retail investors? Why are we so obsessed with turning investments around in X months?
You hear all of these “if I’d bought IBM stock in 1956” stories - so why does the short term take such precedence?
As someone who does not have any stake in Tesla, I dont see a path forward for them without a company with the bank account on the scale of Apple/Google/Amazon funding them. Bootstrapping software is hard, hardware is harder, cars are 10x harder than those squared...
Yeah, but people have been saying they won't make it for over a decade now. It's tiresome and unproductive.
Meanwhile they've done amazing things that most considered impossible. They went for it despite the difficulty and actually changed an industry. Electric cars were thought of as golf carts! Not so anymore. The idea of covering the country with chargers was a pipe dream. Now it's reality.
I'm not sure they've done things anyone considered impossible. People have said these things will be wildly unprofitable, sure, and so far those people are mostly right.
But nobody has said it would be impossible to build a big expensive electric sedan with high range. Nor did anyone say it would be impossible to build a wide coverage fastcharge network. Surely they are impressive feats, but not "thought to be impossible".
In fact, other companies have managed to build similar things. Today the Jaguar and Audi e-SUVs are competing with the Model X, in a few months the Porsche Taycan is competing with Model S, and the ChaDeMo charger network is the same size as the Supercharger one (both have 12,000 units deployed globally).
First US car company in 60 years, electric at that. Best crash test ratings. Highest owner satisfaction. First US-owned factory in China. Built in about 6 months. Ability and willingness to use OTA updates. Willingness and ability to put auto-pilot on the road for consumers. Ridiculous performance. Better chip than Nvidia. Top 2 auto battery supplier. Best selling lux car in US (ICE or EV). Dramatically better battery efficiency. No dealerships. Online ordering. Plausible FSD story. Camera-based autonomy. $35k price point.
That PR point has largely been abandoned. I mean, nominally they’ll still sell it to you if you jump through hoops, but they’ve deliberately made it less accessible because, as much as it was an important PR point, it was never really viable.
I've been on the fence about Tesla's approach (no Lidar) being the right way. But did you see the recent presentation at all?
At this point I think it's clear that they have a high chance of succeeding.
And I think the core argument is correct: If you don't have a neural net that can estimate depth from cameras as well as a human, you don't have a viable FSD system. The classifications that the system has to do to actually implement all the requirements of true FSD, is way harder than what's needed to make Lidar redundant with cameras and radar. Lidar is a shortcut to get a proof-of-concept running when your vision system is too weak to actually do full FSD.
> as much as it was an important PR point, it was never really viable.
Of course it's viable. It's just a question of time. It's pretty silly to think that sommehow, right this year, batteries will stop falling in price and Tesla will find no other ways to continue to reduce costs.
> And I think the core argument is correct: If you don't have a neural net that can estimate depth from cameras as well as a human, you don't have a viable FSD system.
I agree that this statement is probably correct. But they're assuming the positive outcome here, and we have no proof that's correct.
In fact, it may well turn out that the current approaches to autonomous driving using neural networks won't ever yield a viable FSD system. In fact I'd take that side of the bet, to be honest.
Continuing to deny something that exists is actually beyond calling it impossible!
If you've got some spare time, go read some third party research on how cameras might actually be better. Lidar superiority is a myth. https://arxiv.org/pdf/1812.07179.pdf
Dude, if you think a CS conference paper is going to be the secret sauce that extracts Tesla from the $5b hole it’s dig itself into, you a) know nothing about business and b) know nothing about CS.
You do know that we have 3D object detection today. In fact we've had it for a few years now.
The issue isn't whether it works or not. The issue is whether you need LiDAR in the mix as well. And your paper says unequivocally that the answer is "yes we do".
Apart from the FSD bit, which is still a far way from realized and might never be, none of those things are in the category "people said this was impossible".
>I'm not sure they've done things anyone considered impossible.
Is this also a joke? They've been doing impossible stuff for literally 10 years, there's plenty examples of people claiming so.
Consider this, there isn't a better car than the one they produced in 2012, and GM's best effort at an EV (the Bolt) lost somewhere between 4-8k per unit.
Agreed- and I'm a fan from a distance. Again I have no dog in their fight, but I would at some point like to own a Tesla or equivalently performing vehicle. For me, Elon is still the guy to lead the effort. He had some missteps during a stressful period, but he is someone that will keep Tesla in the news and keep people interested. Even if half of the people want him to fail.
Aside from Autopilot and the everymans model 3, Tesla has delivered some pretty damn incredible tech that actually works in the real world. I would love to own a Model S, maybe when V2 comes out, I will be in a position to get one. Lets hope they still exist when that happens.
I personally don't understand why someone would wish for them to fail. Maybe to prove that how they feel about Elon was "right", who knows. I see some issues with autopilot coming to a head at some point. They are either going to deliver or have a giant rebate due at some point in the future. I don't see any other option. If I bought a car in 2018, and had to wait 4 years for a feature my car would be about used up(I drive about 26,000 miles a year).
I'm an ex-Tesla owner (went for an I-PACE with my last EV purchase), but I have to agree with this sentiment. Tesla will go down in history as an amazing phenomenon, regardless of whether they survive in the marketplace.
Rockets may be easier to develop than a product for the mass market. Car manufacturers have had many decades of optimizations of their processes. It’s very hard to catch up.
The bar for success is different too. A rocket which safely delivers its cargo 99.99% of the time would be a huge step forward. A car which safely delivers its cargo 99.99% of the time would be taken off the roads.
It’s funny you mention 99.99% - because 40,000 people are killed by car crashes in a year in the United States, which is actually .012% of the population. So cars actually do a bit worse than your stat...
If a majority of the population used a rocket daily then the numbers would be different. The number of people killed per space flight is probably a little higher than the number if people killed per drive in a car.
Can't find it now, but Musk said something like "For a rocket, manufacturing is 10 times harder than building the actual rocket. For cars, it's 100 times harder".
This is not that surprising, the incumbent manufacturers have decades of experience, vast amounts of know how and optimized supply chains. There's a reason why no new manufacturers have emerged.
The claims sound bold because he never made them. The poster is misquoting.
Elon said that Tesla would have a version of the software that could do full self driving by the end of this year. Then he very clearly spelled out that it would not be available to consumers until regulators approve it at some later date (possibly years).
He also stated that advanced summon would be rolled out last week, but then it didn’t happen.
Why? We (the general public) don’t know exactly but rumors are that some issues were uncovered and Tesla decided to slow down the rollout of this feature until the issues are fixed.
That’s good that they slowed down the rollout. I’d rather wait for a safer, better version of the feature than get a dangerous version, if that’s part of the issue.
There is absolutely nothing wrong with this picture except for people interpreting forward-looking statements as 100% locked-in promises. They are not promises.
In technology, people predict stuff all the time and sometimes the predictions come true on time; other times they take longer. Perfectly normal stuff but outsiders don’t always get this. Elon has correctly predicted plenty of stuff that has come to pass. Not always on time, but it is a given that schedules can slip in technology.
There is a lot of software in cars, but cars are not software. Making cars is a lot harder from a business perspective than doing AI. In the end software is just a file that gets loaded into a module - one step in a very long chain.
I doubt that will happen. The paradigm shift for a “smart” car vs just a car is nothing like a flip phone vs a smart phone.
Besides being able to drive you home when you’re drunk, what can you smart car do for you that you couldn’t already do with a regular car? Cruise for parking? These are just minor conveniences and for large swathes of the population, they’re likely not welcome either.
> Save millions of lives by being safer driving than humans?
That’s not a perceptible change. It’s a wonderful thing and I’m all for people not dying, but people aren’t suddenly going to notice the difference. It’s not like people entering a car think “Am I going to die?!” every time they go to work.
> Drive you home the rest of the time?
Again I don’t see this as being more than a convenience. At beta it leads to more screen time zoning out with a Netflix a la train commuting.
> Drive you cross country overnight while you sleep?
The vast majority of people can’t afford to take a week off to travel across the country so they would not notice this.
> Come and pick you up at the airport after a holiday?
Again a convenience, not a major change. One can already call an Uber from the airport.
> Make you money during the day as an autotaxi while you're not using it?
I don’t see this being as popular an idea as people make it out to be. The phrase “Make money while you sleep” has been pitched for years and in the case of renting your car out overnight, doesn’t factor insurance costs and the race to the bottom on pricing . Once that catches up there won’t be much money to be made.
> Save your life by avoiding accidents you didn't see?
Again this is a great thing but not perceptible to the daily user.
> Radically bring down the cost of taxis and car hire for those who don't own a car?
It’s already lower than the cost of ownership thanks to VC money.
> In our lifetimes all cars will be electric driverless cars in at least some countries. It may not be Tesla but the future is coming.
Electric has nothing to do with “smart”. It can be a gas engine. It can be a fuel cell. It could be something we don’t even know about yet.
All these conveniences mount up, I sincerely think they are in aggregate a significant selling point for most people.
Electric has nothing to do with “smart”.
This is the same mistake big automakers are still making. Electric is the future, it is also radically simpler, allows for automated recharges etc. It's be very hard to build an autonomous gas car.
No question this is coming. But I think the current car manufacturers are very well positioned to ride that wave. I don’t see much room for startups there.
Will be interesting to see how it plays out - it's quite possible other manufacturers will see the light and start producing autonomous cars (they certainly have a production advantage at the moment), but I think the advantage Tesla has is that they own the whole stack and know where they're going.
Manufacturing is understood and still hard because you have to execute well every day. With software once you are done it’s easy to replicate. Guess why the phone market is donated by hardware manufacturers? Because it’s hard to produce a phone at low cost and good quality. Same is true for cars. The development is relatively easy but producing is hard.
Current smartphones are an evolution of the PDA idea that started with the Apple Newton, Palm Pilot and others. People always dreamed of a handheld device that would enable them to communicate and get information. What do you expect a car to do other than carting people around? Once it can go autonomously from A to B what else will people use a car for?
Is it? Do people buy a $100K Tesla because the same owner owns a rocket company? Why?
I’ve never met anyone who considered a Rolls because the company used to build aircraft engines
Rolls definitely have a prestige factor due to their aircraft engines. And personally when I see Tesla hardware and tech I admire the level of engineering that goes into it and feel that part of the reason it's so good is because there's many shared competencies between the two companies
What? SpaceX and Tesla are completely distinct companies. What you're saying here is somewhat insulting to the folks at SpaceX who are actually responsible for creating the Falcon Heavy.
They're very publicly tied together by the cult of personality around Ol' Musky. I don't think it's a stretch to say that the image of Tesla as a whole is positively affected by this connection (and I don't see how this is insulting to the Falcon Heavy team).
I don’t really agree with the idea that Tesla’s are so far ahead of everyone else. Having just road in a model 3, so much of it felt really cheap. From the way you need two hands effectively to open the door from the outside, the flimsy plastic compartment in the center console that you have to “gently” close otherwise it bounces open, watching the autonomous car visualization merge and split apart cars that in reality hadn’t changed lane positions (deeply worrying), to the single point of failure touch screen eliminating any other part (for cost savings), I don’t see what the big deal is (except for their range/price, which is far better than everyone else). I hear the model S and X are better, but at their price point there are many other really nice options as well.
For reasons not clear to me, "ride in" just doesn't work as well as "drive every day for a while". From the latter point of view: one hand is plenty for the doors, the plastic thing in the middle irritates you the first dozen times then it's fine, and the single screen is a large win. The screen doesn't "test drive" well, but for daily use many find it highly preferable.
Still, to get more wide adoption they should fix the irritations for the next iteration. There is no reason for either electricity or self driving to imply doors that are tricky to open or a strange center console closure. Fixing those distractions would make it easier to sell more.
Just as an anecdotal counterpoint, I drove one for a week and my opinion of it didn't change. It continued to feel cheap to the point where I thought I would break things, the center screen did not become nice to use in comparison to the Model S split screen/gauges setup, the door handles were continuously annoying, and also the seat was never comfortable regardless of how much time I spent adjusting it (why the hell didn't they buy them from Recaro instead of building them in-house??). It does drive well in terms of general performance, responsiveness, and handling in comparison to other cars in the price class, though.
I get the impression that the actual Tesla advantage is more in the propulsion and power systems.
The rest of the car is garbage, and areas where the established incumbents should naturally be superior.
But the good news for Tesla is they should be able to improve the build quality and general car/manufacturing stuff relatively quickly now that the important differentiating foundation bits have been done spectacularly, if they can just survive long enough to iterate.
We've been hearing this since the company's inception. There was even a website back in 2008 with a time clock of when Tesla will go bankrupt. Ironically the site went bankrupt and is not around anymore. Meanwhile Tesla has become a multi billion dollar company with the largest BEV fleet in the world. Tesla has done this in the face of a constant onslaught of smears from the media and social media comments like yours.
The irony is that Tesla was supposed to bankroll SpaceX, but SpaceX is killing it on profits and Tesla is floundering. If anything it looks like SpaceX will end up bankrolling Tesla.
Musk should forget about trying to save this planet and focus on getting to the red one.
The automobile market is competitive. The automobile industry doesn't have impressive margins. It's not growing, either.
Rocket launch demand is growing like crazy. The market is not competitive. And if SpaceX doesn't fuck up, it likely never will be. In that kind of market, margins will be impressive.
I guess that is an USA centric viewpoint. Here in Europe, if you live in a city, chances are you don't need, have or want a car. People want less cars, less traffic and more public transport and bike lanes.
Personally, I'd never live somewhere where a car is mandatory.
Do you think that's some kind of permanent condition?
On a long enough timeline the world normalizes. These classifications of "first world" vs. "third world" countries can be viewed as an ordering of arrival to the modern high-energy high-tech life. Third-world countries don't stay in mud huts indefinitely. China is the fastest growing automotive market in the world, it wasn't too long ago they were riding bicycles in droves. Now we're hearing about manufacturing migrating from China to India where it's still cheap, the cycle repeats.
I don't think we can say that everyone in the world will ever be in the market for SpaceX products and services. But we can definitely say that's possible about electric vehicles. They are already often owned and operated by individuals, and the common utility is incredibly obvious.
All I'm hearing in your comment is that they're currently too expensive for most people. The price will decrease as the economies of scale take over, the buying power and interest across the world population will increase in spurts, it's only a matter of time.
Once EV-capable batteries are as commonplace as propane tanks, this picture is going to change dramatically. Eliminating a transmission and ICE from a vehicle design substantially lowers the cost to manufacture it. There's very little precision machining left in an EV, it's basically the steering rack, and myriad ball/roller bearings, wheel hubs, brake rotors and calipers, what else? It's a big difference.
I could afford to buy a car, but I have an amazing electric bike, and live in a city with fantastic public transport. The 5 days a year I actually NEED a car, I can just rent one. So why buy?
I haven’t seen anything to say that SpaceX is solidly profitable. They’ve said that they’ve had several profitable quarters but no further details. Analysis of their SEC filings suggest that they are not yet profitable (though not in danger either): https://www.teslarati.com/spacex-10-percent-workforce-fired-...
To be fair, they tried to raise money mostly to fund BFR development, which is a questionable economic investment for people expecting a decent ROI (although it's a fantastic overall future investment for humanity as a whole). If they tried to raise money specifically for micro satellite internet, on the other hand, I think investors would be more favorable.
It’s a shame people condemn Tesla’s for its troubles when internal combustion gets a ridiculous amount of subsided despite it causing irreparable harm to the planet. Musk plays on Boss Mode (along with others) while everyone enjoys bread and circus and laughs at people trying to accelerate progress with regards to climate change.
I hope those quarterly profits, trucks, and SUVs are worth it when climate change hits its stride. Humans can be irrational, ignorant animals.
Generally when people are down on Tesla or Elon Musk, it's because they want them to succeed at displacing internal combustion engines.
They're not rooting for internal combustion engines, they're rooting for electric cars and annoyed when the company (or Musk) flounders from self-inflicted damage. At least, that seems like most of the criticism here. No one is going to respond well to an advocate of a technology they want to succeed saying and doing stuff that actively harms the cause (prime examples: George Hotz with autonomous vehicles, RMS with basically everything that RMS has ever advocated, or Julian Assange allowing Wikileaks to become a tool of corrupt governments rather than a force against them).
It's great to give credit where credit is due, but even more important to hold people and companies accountable when they screw up, especially people and companies that you want to succeed.
This is exactly right. I'm bearish on Tesla, and frequently criticise it.
But I only care because I was an unashamed fanboy earlier in life. Musk kept flipping the coin to bet the company, and succeeded against all odds. It was riveting to watch.
But once Tesla got large... nothing changed. He's still flipping. Model 3? Flip. Automated factory? Flip. Autonomous driving? Flip. 420? Flip. Solar City? Flip. Tesla is a single misstep away from bankruptcy, and it need not be.
I no longer see him as someone undeterred by the odds to achieve something great, but more like a narcissistic gambler. He's not taking risks to achieve a goal, the risks are the goal. His Twitter antics don't help.
The only thing that makes it ok is that competition is legitimately catching up now. Maybe not in the smart car arena, but we are seeing real electrified competition.
I don't give a fuck if people buy cars with a cute UI or not. I do care that we move to electrification. If Tesla dies, the latter will happen at a largely uninterrupted schedule with the state of the industry in 2019. I love the idea of legislation that moves that along faster. I'd happily take a tax hike to make it happen.
Tesla fans love to hate on the "shorts" as if the only possible motivation to criticize Tesla is profit based. To that strawman I've blatantly constructed I hypocritically reply: stop arguing against strawmen.
I agree with a lot of what you've said here but I don't think anyone is legitimately catching up. There are all kinds of announcements but no one else really building EVs in the US in volume:
https://insideevs.com/news/343998/monthly-plug-in-ev-sales-s...
We are getting close though but need Tesla to keep the pressure on for a couple more years.
It's going to take time for the industry to ramp up volumes, but my sense is the commitment is there now. Many EU countries are banning new ICEs in just 11 years; that's not a lot of time to make a full transition. If Tesla went bankrupt tomorrow, I don't think the overall ramp would slow down much, and it'll ultimately end with production far higher than what Tesla alone can achieve.
If Tesla (and Nissan) never existed, this entire timeline may have been offset by 5-10 years. I believe they deserve credit for lighting the fire, but by now it's self sustaining.
The big ones are doing things at a scale Tesla can only dream of. It takes a lot of time to change production lines and the big ones don’t have much incentives to switch off ICE. The governments need to help us here.
Ford sold one million F-150s last year. A F-150 every 29 seconds. That’s only one model.
Without going off on a tangent, large companies aren’t able to innovate like smaller companies can. They prefer to buy or partner with smaller company to build someone, Mazda developed the old Ford Ranger. Ford just invested $500m in Rivian.
Exactly. Making Tesla criticism about criticizing alternative energy is a false equivocation.
There are strong arguments that Tesla is being ran very poorly by Musk (solar city acq, VW cash denied, SEC fines, etc.) despite the company being one of the champions for electric vehicles.
1) Stop making ridiculous promises about self-driving capabilities.
2) Stop giving out timelines that everyone knows aren't going to be hit for every single model.
3) Get production quality under control. Seriously, a stupid percentage of Model 3s are getting handed to customers with defects that would keep them from even making it out of the factory at any other OEM.
4) Get aftermarket logistics figured out so people aren't waiting months for their cars to get repaired.
5) Stop flip-flopping on sales models. Is Tesla selling via brick and mortar stores or not? Is it using low pressure guidance-oriented sales or calling up customers with pre-orders trying to pressure them into upgrading to a more expensive configuration? Is their pricing fixed or going to drop another $1,000 next month?
6) Stop treating employees like churnable garbage. I work in the auto industry and the number of ex-Tesla employees floating around who got burned out or sick of political bullshit in record time is astounding in comparison to every other OEM.
7) Stop treating driver safety as a suggestion. I mean that in the broad sense, not in the mechanical engineering sense. Ex. autopilot should never have been released in any capacity that allowed drivers to take a nap or read a book while the car happily plowed into a semi-truck or median.
I’ve been most bothered by the exaggerated claims and projected deadlines for AP functionality and FSD. But not being able to raise money through presales, as well as banking on the premium image that leading in autonomy confers, would make Tesla even less solid of a company, at least financially.
Tesla basically creating a market for EAV is very cool, and no matter what, I think Musk deserves a place in the history books for it.
No need to give up. Just acknowledge that is a hard problem whose success date is notably indeterminate. Then stubbornly refuse to talk about future features and only talk about one's already shipping today. If the future is going to arrive so soon, why bother to break in advance? Let everyone be amazed when it does arrive.
I love the autopilot feature, but the cars are still great without it. Tesla can be very successful and sell a lot of cars without any more self driving features.
I think that's one of the main problems I have toward Musk. He started with a strong 'hard science' stance on problems and all of a sudden he became just another salesman. If he just stated where they were .. I'd be less annoyed. But maybe it doesn't mesh well with PR
EVs are a false peak. So long as everyone is driving around in their own personal automobile, we're doing nothing to address autocentic development, with all it's accompanying sprawl, concrete, ashphalt, steel, and general hi-consumption culture that goes with it.
We need an entrepreneur to do with the city what Elon did with the car. How on earth you would fund something of that scale, I’m not sure. And many country’s attempts at “cities of the future” have ended up as ghost towns. I’d love to see someone develop a new walkable, eco-friendly city from scratch somewhere in the U.S., but all odds are against that kind of thing.
I just don't get the obsession of some people with "walkable cities". What is reasonable walking time at -20 during snowstorm or at +30 at blazing sun? Multiply that with reasonable pedestrian speed and get outer diameter of the mystic "walkable city". The way I would define reasonable values that would be roughly 2-3km. That's a village, not even a town.
Within a 3 km radius you can access 28 square kilometres. Central Paris, a classic walkable city, has a density of 6,500 residents/square kilometre. That's more like a medium sized city you can have access to within 3km if you build for people instead of cars.
Tesla is actually working against the "reduce" in the short term. Facebook groups of Tesla owners frequently include words along the lines of: I like this car so much that I drive much more than I used to. Oops.
I rarely see it broken out, but in various markets (not just the USA) Tesla is making money on selling carbon credits from other car companies that aren't meeting the carbon goals. I've seen mention of $100M CARB credits in 2014, mentions of Fiat Chrysler avoiding $billions in fines by paying Tesla for their credits. The Tesla earnings call mentioned the income, but not the broken out line item totals.
So while it not be completely fair, at least Tesla is getting substantial financial contributions from the carbon producing ICE competitors.
Yuh, electricity production totally doesn't overlap with the subsidies that petroleum drilling gets, not one little bit, not at all.
Of course moving to electric vehicles is a necessary step towards getting off of the petrocarbons, but it isn't sufficient, production of electricity also has to move off of them.
You’re being disingenuous. You want to argue drilling subsidies for fracking cheap natgas for power generation? I won’t argue against that. But it’s all going renewables on economics alone (renewables and batteries are already cheaper than natural gas and coal), just not fast enough. We need to get off of combustion vehicles and power generation as soon as possible, full stop.
We are definitely living in different universes. ICEs do not get any subsidies, quite the opposite: in many countries, e.g. the whole EU gas is so heavily taxed that more than half of the retail price is tax.
Also, Tesla is an easy target to make fun of, because of its narcistic, arrogant CEO that seems to think that he can outsmart everyone, when in fact his business is a total mess.
Of course ICEs get subsidies. The subsidy is in the form of a carbon tax that we do not collect, even though we should. Every ICE produces emissions which will soon make most of our planet uninhabitable. There should be a carbon tax, so that we can offset this destruction: by building nuclear plants, or figuring out how to re-capture the carbon emitted into the atmosphere.
And yet we do not collect that tax, hence heavily subsidizing ICEs. This is credited by our children and grandchildren, who will end up with a massively changed (for the worse) planet.
You have a point about the negative externalities, but insisting on using the word "subsidy" for that concept is just going to confuse people. That isn't the accepted meaning of "subsidy", in casual conversation at least.
Hmm — how else would you call it? As I understand it, future generations are subsidizing the price of our fossil fuels and internal combustion engines, making ICEs artificially cheap by not considering their environmental impact.
Subsidies do not have to be in the form of cash: many come in the form of tax breaks and I would consider this to be one such case.
It is just confusing to use the same word to suggest explicit assistance (cash, tax breaks, etc) and "failure to penalize". I guess mathematically they both represent a reduction in cost when compared to an alternative scenario (no subsidy and some sort of tax/fee for the externality) but they are different mechanisms and so it makes sense for them to have different words to describe them if you want to communicate clearly.
You’re arguing for carbon taxes on electrical generation. Entirely agree. This would push coal and natural gas out of the electrical grid generation mix even faster, making EVs even cleaner.
Gas is about $3/gallon in the US. Ford is moving towards only making SUVs, pickup trucks, and the Mustang. Different countries, not different universes.
I like that Musk is narcissistic and arrogant in public. He doesn’t hide it like the execs at every automaker who was part of Dieselgate. Be an asshole, by all means, just deliver faster. (Credit to BYD and their electric bus fleet efforts, and China’s renewables push in general; I would be remiss if I made it sound like Musk alone was working towards these goals).
Do you also love it when Musk calls people pedos? What about when he lies about taking the company private on Twitter? This is the narcissism you enjoy?
I don’t love it, but I don’t care about it either. It’s noise. I’ve seen far better people take far worse actions. No one’s perfect. Stress is unpleasant and will cause you to lash out.
I do love someone who doesn’t cultivate an image. I think this is 100% who Musk has become, for better and worse, and I respect someone who is genuine about who they are, warts and all.
Over the long term declaring bankruptcy and emerging from one seems to be a standard procedure for most automotive manufacturers in the US, as well as airlines.
True, it's off-the-charts amazing what Tesla has been able to accomplish. People have been convinced that it would die pretty much since the beginning. But it doesn't. If they can sell 90k cars this quarter I think they make it through this danger zone.
Volkswagen tried but Musk shot specifically shot it down on hubris, despite VW's cash and manufacturing capacity being the solution to Tesla's problems at the time.
This, of course, will ultimately catch up with Musk, just like it did for Jobs.
Elon success relies on the same 'distortion reality' shield that Jobs relied on. It forces his staff to keep trying to achieve his practically impossible demands.
Continued success requires that it keep working over and over while not burning out critical staff and burning through your investor's deep pockets.
How did it catch up with Jobs? Apple still makes the best phones and the most cash 5 years after his death. Like, Jobs is still so far ahead, no one even tries to catch up.
Jobs was kicked out from his own company after a rebellion he started. His own people decided to kick him out after they heard his arguments and the arguments of the person he wanted to oust. He had to wallow away at Next for more than a decade before he came back.
1997 Jobs was a way more humble and realistic version than 1984 Jobs. And that probably made him a better manager and CEO.
You're not supposed to go to sleep or take your eyes off the road with self driving. Just like how you can't rely on chat bots and AI to fully answer your customers' questions.
What's not reported in the media is how self driving / autopilot has saved lives. There are plenty of videos online about Teslas making the right split second decision to swerve (in the right direction) or apply the brakes to avoid an accident.
There's way too much focus on accidents due to self driving when there are a lot more accidents happening from non-self-driving vehicles.
This is drifting off topic, but... you're advocating for being constantly alert while the car drives itself? Doesn't this have the same cognitive load as driving, with possibly the additional time needed for "flexing your muscles" to regain control of the driving wheel?
To me, self driving means that I can not care. If I must pay attention to avoid being killed, it is at most some glorified adaptive lane keeping and/or emergency braking. That's nice to have, but it's not self driving.
It was fairly obvious that this was going to happen when they announced their "Investor Autonomy Day" a couple of days before earnings. Get people thinking about the long term rather than this quarter.
I don't know man, imagine all the advertising opportunities they have. They can play ads on screens all over the car the entire ride. They can suggest restaurants and bars and charge them for each customer they bring.
Yeah it kinda feels like a pattern.. he made the Truck announcement at the heart of the ramp up struggles. And obviously the Autonomy Day was well placed. Now their fleet + over the air autonomous implementation ~felt like a solid foundation with potential to grow high and large (unlike previous version of AP). Which makes me believe that Musk still manages to steer progress serious into Tesla and is not just creating a russian doll ponzi scheme in a single company.
Well, that explains the extravagant claims from 2 days ago.
No point speculating about major breakthrough or major bs or LIDAR vs NO-LIDAR.
They are probably progressing ok, but they are running out of cash, so they made a little show for investors.
I see this trend continuing for Tesla. Aside from Musk's leadership, which is very polarizing, I don't see their cars as being very compelling compared to the upcoming offerings of Audi and Porsche.
Tesla isn't really competing against Ford/Chevy/Honda/Toyota. Instead they are competing against BMW/Mercedes/Porsche/Audi. By comparison Teslas seems like a toy compared to those other brands so I will gladly wait and give either Audi/BMW/Porsche my money as I know what type of support I will get from each.
I think pretty much every single person who owns a Model S/X would tell you that they're never going back to the old German crew. Tesla enjoys the strongest brand loyalty of any car manufacturer. Apple-like loyalty.
Tesla doesn't feel like a toy, it feels like the future. They're years ahead of everybody else in terms of tech that is usable today.
Briefly thought of BMW i3, but once I tested Model3 & played with its Autopilot on stop/go commute - Teslas are years ahead of the game. Best part is, they can only get better.
- The very thought of dealership, auto repair shops feels very old now. I had a problem with my left indicator stalk, booked an appointment in the same Tesla app, a mobile mech pulled up, took out the whole driving wheel unit and fixed it on the spot.
- They have bi-monthly, monthly updates (feels like our software dev 2 week sprints) where they release NEW features, yes, brand new features... not just bug fixes or improvements.
The Model3 body feels like a frame-housing with an ever improving hardware/software under it to constantly make it better n better.
It feels like the iPhones vs Nokia smart phones debate in 2010.
The problem with software updates in cars is that they change the car's behavior, and you end up with a car that did one thing yesterday, and a different thing today. Like steering into a barrier. https://www.reddit.com/r/teslamotors/comments/8a0jfh/autopil...
These videos are getting old, boring, and annoying.
Everyone who drives a tesla knows how their car behaves. I don't expect it to see that barrier when I'm driving my model 3.
Listen - it's hard to imagine what it's actually like to drive a Tesla and learning what it can or can't do. Everyone driving a tesla right now knows that the autopilot is more like a rookie co-pilot that needs monitoring and checking all along the way. Despite its limitations its still the best car out there from what I've personally experienced.
Tell that to the woman I saw driving down I-45 recently in a Tesla. Going well under the flow of traffic in the left lane, doing her makeup, completely not paying attention to anything but herself.
That shows just how badly people want to do something else instead of driving though, and how important autonomous cars are. If tesla (or some other company) can get it right, this is transformative.
Are you actually serious right now? The number of people I see driving a Tesla on the freeway and doing anything other than monitoring and checking all along the way is ridiculous. A huge percentage of Tesla drivers absolutely do not know, or care, that autopilot requires constant attention.
So you missed the point about how it started behaving differently overnight after an update? Getting people used to one behavior and then changing it without their knowledge is fine in mobile apps, not so much when it's driving your car in traffic.
I didn't. I got this update too. It didn't start entirely behaving differently - it was handling the outside world a little differently and was fixed within a couple of days.
I'm not defending tesla here, I'm just saying this tech is still far better than the average driver paying barely any attention to the road.
There is a parallel with Apple. When owning the first iPhone, you knew you were holding the future and there was no coming back.
The competition was a joke for years, but eventually things normalised. Going Android is not at all the same feeling than going back to an nokia or blackberry of old.
So, who knows what current owner are going to do when every car manufacturer has a full line up of electric cars ?
Have you seen this thread [0] that's supposedly about their backend? Doesn't sound like years ahead, it sounds like an overstretched software startup chasing the latest silicon valley trends. How well will their cars work in 20 years? Will they have sorted out the service issues in five years?
Besides, when the other car manufacturers starts putting out electric cars with interiors that consists of more than a cost saving touch screen, their manufacturing and service experience will be a great benefit. Granted Tesla is pretty much the only option in their segment at the time, and have been for years. So why are they making such a big loss now, before the competition has really started?
I think Tesla was great for the car industry, and they do some things really well, but they've also made some questionable decisions. I still think betting on autonomous driving is a strange decision for a small company that have plenty of other stuff to focus on. The cars would still sell without it, let subcontractors worry about stuff like that.
I don't understand why some perceive the big screen as a "cost-saving touchscreen". It's so much bigger than any other car uses, I would guess other makers perceive it as a "way too expensive touchscreen”.
I do not know the actual manufacturing cost comparison between the Tesla big screen and the corresponding set of buttons and other cars, but I think the key difference is a radically minimalist design aesthetic. I suspect both a bunch of buttons or a big screen are sufficiently inexpensive.
The Tesla decision is more similar to Apple's decision, who was not saving money when they put the largest screen ever used on a cell phone, covering most of the front of the first iPhone. Even though in the long run it probably turns out that the big touchscreen is cheaper than a bunch of buttons which individually wear out and must be warrantied etc.
I've worked on the costing side of things for head units and instrument clusters, so let me weigh in here since there are a couple things at play.
First is that Tesla just straight up doesn't play the traditional head unit provider game. Most OEMs go with one or two hardware suppliers (Denso, Pioneer, Kenwood, etc.) for their head units, pretty much all of which are completely and utterly behind on technology and also ridiculously overpriced for a variety of reasons. They also add expensive OS/software licenses or in-house development for, again, behind the times products to run on the head units and pair with your phone. Tesla, on the other hand, just grabs a good-enough touch screen, powers it with Nvidia hardware, and cranks out some pretty software built on top of Linux that mostly works.
Second is labor cost. Instrument cluster hardware isn't free, but it also isn't terribly expensive for your standard gauges in mass-manufacturing bulk. However, labor is not cheap to actually wire up, place, and test all those gauges. Wiring is one of those things that's hard to automate, so your costs between the hardware and labor boost the BOM cost up quite a bit. Tesla, on the other hand, just runs a single CAN bus connector to their center console display hardware, pulls the info they need to update it, and calls it a day.
The net result is that the total production cost of a single center screen ends up being quite a bit lower than the equivalent head unit + instrument cluster in a traditional car.
I could understand if they just replaced the infotainment with a big screen like in the model S, but the only reason they replaced the gauge cluster with a section in the center screen is to save costs. Comparing for example with the interiors from Audi A3, Mercedes A class, or Volvo XC40 they all look much more finished and developed and practical, where the Tesla model 3 looks like an unfinished afterthought.
Wait–let subcontrators worry about developing state-of-the-art capabilities for them?
FWIW I think they should be way more conservative with how they advertise Autopilot, but the only way something like that is getting shipped at this stage is from in-house.
My point was that there's no reason Tesla needs to be first to market with self driving cars, they already have a unique selling point in their electric cars. The car industry is full of suppliers doing all kinds of advanced stuff. Ferrari uses dampers from MagneRide and Öhlins, brakes from Brembo, transmissions from Graziano, and so on. Rimac makes hybrid drive trains, Bosch makes ABS and ESC, few brands makes their own seats, and so on.
Bosch have their own autonomous driving development. I don't know how far along they are compared to Tesla, partly because Elon likes to boast where others prefer to hold back, but so what if Tesla would've been a few years later with self driving than others?
> I still think betting on autonomous driving is a strange decision for a small company that have plenty of other stuff to focus on.
Yeah, but how expensive is that team?
Considering that
1) it gets some good PR (although other manufacturers are slowly starting to catch up with their own lane assistance + lane departure + adaptive cruise control features)
2) that PR effect probably generates a good influx of resumes from software engineers well-versed in AI, hardware, data science, etc.
3) those engineers can then be assigned to work on other software features, as shifting priorities demand
If you fired everybody on Autopilot team, you'd probably need to spend most of that saved cash on recruiting funnel.
Conflicting reports about car brands .. I see people saying Tesla lack a lot of quality compared to German cars. Some youtube car guys like scotty kilmer are saying german brands quality has gone to the toilet compared to early 90s. Lots of over engineered electronics, a lot more cheap materials for parts (except for the actual traction subsystem).
They're not conflicting because they refer to different senses of quality, in my estimation. Tesla's models can be said to lack in quality by design (materials, luxury features) compared to German and especially Japanese cars at a similar price point. The German cars generally lack in quality in terms of longevity and robustness, statistically and anecdotally.
Well, yeah they're playing on the meaning of quality. When you spend 80k on a car you expect it to be both solid, pretty and not a money pit on the long run.
Recent Mercedes C class electronics are junk, software ditto. The interior has been 'upgraded', as a result of which everything feels flimsy and weak. You'd expect stuff like that on consumer electronics from the 90's, not on an A brand car. Usability is down, bling factor is up.
I owned a Model X for a couple of years. I didn't go back to the "German crew," but I did go "back" to an I-PACE. Maybe it's just my lifestyle, but I never need more than about 120 miles of range in any given day. Give me a car that can go about 250 miles, and I'm perfectly happy with the range part of the equation. Differentiate on things like the quality of the interior and the handling, and you have my business.
The question is whether the existing base of premium-paying fanboys is enough to sustain a company that’s losing nearly a billion dollars per quarter. Think Apple, except if Steve Jobs never returned, and with almost triple the losses.
Tesla already feels at least three years ahead of other manufacturers, and the cars other manufacturers are promising in the next few years are aiming to possibly compete with what Tesla's been selling for at least a year.
The Model S is being sold today with 370 miles of range, Autopilot, and the Supercharger network. Where will Tesla be in a few years if/when other manufacturers catch up with that?
I expected replies to my comment with links to those sites, you do know how hard they shill tesla right? only recently elons been reeing at the very author of that elektrik article
The Tesla model S 100D I bought in December 2017 now has over 17,000 miles on it, with 95% of those miles fast supercharged.
My max range has declined 2 miles. That's well under 1%, which is especially impressive given that most battery capability loss happens in the beginning of it's lifespan.
How? Well, I suppose the battery management software and hardware is as advanced as is claimed.
Selling the supercharger network to a separate company, and enabling it to serve all EVs, seems like an obviously great idea. Rebrand it from "Tesla Supercharger" to “Supercharger". Tesla cars can stiull be sold as compatible with “the Supercharger network”.
I'm not a financial modeling kind of person, but I suspect such a beast could sell for quite a lot of money, strengthening Tesla's finances. Perhaps one of the gigantic oil companies that owns/franchises a gigantic chain of gas stations would like to stake out a leading claim on EV charging, those folks have plenty of money.
It would also further Tesla's stated goal of accelerating the transition to EV's or whatever.
Of course there are downsides, giving up this proprietary advantage. Still, that downside versus retiring some risk seems like a nice trade-off.
They also said that seven years ago when the first Model S was released. In three years, some auto makers might be where Tesla was seven years ago, but it'll be a good while before anyone reaches the point Tesla is at right now.
I've never been super convinced by Tesla even after test driving, and was fairly happy with my German made car. But I had to make a change recently for a family-friendlier car and wanted electric now so got a Model 3.
Now, I'm fully convinced by Tesla in every way and am never ever going back to dealerships. The car, the service, the people, all of it is on a whole higher plane of satisfaction. It feels like the transition from a flip phone to an iPhone in 2008.
So I guess I'm one of those insane Tesla fans now :-/
> It feels like the transition from a flip phone to an iPhone in 2008.
It seems like the analogy is very apt.
Lots of people pointing out flaws with Tesla's cars and saying that when the incumbents make it into the market they will squash them. Same thing happened with the iPhone - it didn't have multitasking, copy/paste, mms (all things that even standard dumbphones had). Nokia, Blackberry are huge Apple has no chance.
A product can simultaneously be inferior in some (or many) aspects, but still feel somehow be on another plane of feeling like the future.
[product talk aside, Tesla's real problem seems to be execution - can they actually build the damn cars, and can they make a profit on them?]
> The car, the service, the people, all of it is on a whole higher plane of satisfaction. It feels like the transition from a flip phone to an iPhone in 2008.
Same here. This is how I describe it to other people.
I’m using cars to move me and family from point a to b, the less of service and Tesla people I ever see, the better - and if I ever need to get those things, the faster they get the parts and fix it, the happier I am, as most other car owners I’m sure.
In other words, I don’t get the whole Tesla club thing for basically a glorified metal bucket.
Although for some odd reason I do want Tesla to be my next car.
I get what you're saying, but there is a measurable quality of life increase over an A to B gas-powered car.
* No oil changes
* Charge at home, wake up every morning to a "full tank" for a lot less than it'd cost to fill up with gas
* No gas station fill-ups
* Autopilot is huge for quality of life on highways and in bumper-to-bumper traffic
* I keep the valet key card in my wallet, but there's no physical key that you need to keep with you. My car key was the last one I really needed, so I no longer carry physical keys
* The car has an API, so you can use it to automate various actions (like to start the HVAC system if the car is at work and it's 4:30pm on a weekday). With my normal schedule, the car is already pre-warmed/cooled any time I get in it
* Built-in dashcam includes side cameras, and sentry mode
* Summon, and (soon) enhanced summon
None of that helps if you're driving a loaner while you're waiting for parts, but it's tough to quantitatively measure the impact of just having things like this. And I've got more faith in Tesla to improve logistics in parts sourcing than traditional automakers becoming more like Tesla.
> the less of service and Tesla people I ever see, the better
This is the way Tesla wants it.
In a car dealership world, you're sold a future revenue generator for the dealer, as you're expected to come for routine maintenance.
With Tesla's corporate ownership and generous warranty, the less they see of you (post-purchase), the better it will be for the bottom line.
I suppose any auto manufacturer selling their vehicles direct and owning their service centers outright would have a strong incentive to maintain high reliability, and yet for some reason Tesla remains the only one pursuing that model.
That's what cars were to me too, until I got a Fiat 500e, and it became fun a fun way to do A to B. Which is the only reason I splurged on a german-made "luxury" car afterwards.
I still never want to see service people, or deal with service, and definitely never want to interact with a sales person ever again. Tesla is the best at making that happen. And that A to B is more enjoyable too. It really sounds like you'd be very happy if you bought a Tesla, assuming it's in the budget.
Does the lead need to be maintained? If everybody else catches up, but does not surpass, that's not a loss and Tesla is still competing. And by then Tesla may be competing at the lower margin segments of the market too.
The fact that they will stay competitive is already priced in, given that Tesla is by market cap about the size of GM and Ford. However, I find some of the loftier predictions of analysts ($1000+/share) somewhat unjustifiable at present.
I wonder if Tesla should not have entered the mass market with the 3 and stuck with the S and X. Higher margins and lower CapEx there.
I think people routinely overestimate the ability of auto-manufacturers to innovate.
In 2013 Tesla won (by a wide margin) the Consumer Reports rating for the best infotainment system. It turned out that a lot of owners loved large, fast, responsive touch screens for viewing maps, navigation, controlling multimedia and vehicle settings.
You'd think that everybody in the car business would be elbowing one another to introduce a better, brighter, faster, more colorful and capable infotainment system, given a clear product market fit.
Yet the winner for that Consumer Reports award did not change in 2014, 2015, 2016, 2017 or 2018.
I’ve been driving an x for the last three years, but we also have a 2013 odyssey and decided to upgrade that to the 2019 version.
It’s insane how archaic it feels after getting used to a Tesla. Now, an odyssey isn’t a luxury vehicle or anything, but it is the top of the line car from Honda and it really just feels like hot trash now..
40k-75k: Plastic painted to look like metal and wood veneers
75k+: Maybe metal and real wood
This refers to everything you touch and see in and outside the car.
US manufactures aren’t in the 75K+ market for sedans, US mfgs only know plastic.
For the Germans, you need to be in flagship cars to get away from metalized plastic (A7/A8, S-class, 7-series). Porsche is a safe bet for real materials.
Tesla replaced everything inside the car with a giant, great looking screen. 90% of the “value engineering” by which existing car makers use to differentiate between their Low and high end cars... Tesla just got rid of it. Tesla has no intention on playing in the “value engineering” traditional mfgs have been doing for decades (it was the only innovation game left to play).
Tesla instead is competing with tech and features they can literally upload to your car overnight. There is no comparison to traditional autos.
Tesla is an iPhone moment for car industry (if they can manage to deliver the quality and experience they promise without going out of business).
Do you have any first hand experience with a Tesla? I have a theory that people who say things like this don’t.
I used to drive a more expensive BMW than the Model 3 I have now. To say that the Model 3 is the toy, it’s absurd at best. It is so much better in terms of technology, handling, efficiency, maintenance, cost of ownership, performance, etc. that it makes comments like yours really sound completely uninformed.
Tesla is years ahead and is innovating faster, so how can they catch it? For example Audi E-tron has just 200 miles of range vs. the new Model S with 370 miles with a same size battery.
This is the point that so many people miss when arguing that an EV revolution is coming and others will catch Tesla. It's not that Tesla's lead is insurmountable; it's that Tesla's lead is growing, not shrinking, with each passing day.
No single feature or technology tells this story adequately but the compound effect of all of them does: it's 2019, and not a single manufacturer can produce a car that rivals a 2012 Model S.
>This is the point that so many people miss when arguing that an EV revolution is coming and others will catch Tesla. It's not that Tesla's lead is insurmountable; it's that Tesla's lead is growing, not shrinking, with each passing day.
Eventually you reach a point where everything is good enough so being better isn't much of an advantage. Like if Tesla gives you 700 mi range but Audi does 500mi, does anyone really care?
> Like if Tesla gives you 700 mi range but Audi does 500mi, does anyone really care?
In this case, yes, because current battery tech charges much faster from 0-80% of the battery, so a battery with more range than you'll use is still beneficial because it'll charge faster for the portion you do use. But I'm being snarky--that's not your point.
Tesla's advantage is far more than just range.
* The battery management system, which minimizes battery degradation (google "nissan leaf degradation")
* The manufacturing process adopted to actual EVs (and not shoehorning an EV into an ICE car design)
* The lack of dealerships and resulting ability to push software updates to cars containing new features
* The standardization of self-driving hardware -- all Teslas made since ~2016 have the camera hardware set up in the same positions
* The actual ownership of the software / UI and it actually being done well, when most other manufacturers seem to be shooting for "passable, I guess"
* The big touchscreen UI, which is (effectively) the same across all models, which makes keeping software up-to-date much easier
It's just not even close. Other manufacturers can improve battery tech, too, but these other things require bold action that traditional manufacturers are too slow / cautious / encumbered to take.
I think you're wrong about Tesla having an advantage in the non-electric parts of the car. The legacy car makers are way way better at actually building cars at a profit. If a big touchscreen was a way to do that they have the chops to pull it off (or at least one of the suppliers does).
There is/was a race between Tesla getting good at traditional car manufacturing and the legacy car makers coming up with their own EVs. It appears that Tesla is going to lose that race. Or at least not win it by enough where they will end up as one of the bigger car companies.
Nokia was better at building phones at a profit than all its competitors until Apple entered the market. Apple changed the market for what consumers expected from phones, which Nokia failed to adapt to, and the rest is history.
Traditional automakers are, indeed, much better at profitably making what consumers wanted in 2012. It's not clear how well they'll react as expectations change, driven in large part by what Tesla's shown can be done. Being a lot better at profitably making flip phones only helps while people still want flip phones. And just because everyone was using flip phones in 2006 doesn't mean they would be in 2010.
It only took Apple a couple years to unseat Nokia as the top phone seller. Tesla, today, still sells less than 10% of the volume of the top car makers and still struggles to be cash flow positive.
Which goes back to the initial point about there being a race on and Tesla isn't winning it. Tesla has to increase their manufacturing by an order of magnitude before the other car companies make competitive EVs. We already are seeing legacy car makers introducing EVs so the race is all but over. Tesla will survive as a niche luxury brand along the lines of a BMW, but they're not going mainstream.
> It only took Apple a couple years to unseat Nokia as the top phone seller. Tesla, today, still sells less than 10% of the volume of the top car makers and still struggles to be cash flow positive.
Apple had successful business in related fields before starting to sell phones, and the consumer purchase cycle for phones is much faster than cars. Unless traditional automakers take note and make big structural changes, the same pattern will happen here--only more slowly.
> We already are seeing legacy car makers introducing EVs so the race is all but over.
You're missing the point if you think being a good EV is the only significant differentiator Tesla has. It's probably only 1/3 of the things I love about this car that traditional automakers will be unable to compete with easily.
That eventually is a long time away. For now though, Tesla is ahead of the game.
It's like the only car that actually gives you new features after buying it. Listens to their consumers, and provides them with what they want (most of the time)
Sure, but there are other dimensions to innovate on - charging speed, self driving, active suspension, efficiency, the list goes on. And 500 miles at what price? Tesla is going for the best AND cheapest electric drivetrain.
I believe the Audi E-tron is built on a traditional chassis to allow assembly on the same line as an internal combustion version. There is probably no way it could compete with a car designed for electric from the ground up (Tesla's). I think the real competition from VW is their upcoming "ID" platform.
The profit margin is a lot thicker in the luxury car market. It's a lot harder for Tesla to compete with economy vehicles produced by Ford/Chevy/Honda/Toyota since they have established production lines and can out-produce and out-price Tesla.
The trade-in value of Tesla is very low in Finland. If you want to upgrade your model, Tesla has been offering 70-80k € trade-in value for a 6 month old 135k€ Model S.
This means that those who upgrade their vehicles often will not even consider a Tesla.
In Finland, at least, they are forefeiting one of the biggest groups of luxury car buyers.
Although the price point is still quite high, Tesla seems to be thinking of a car as a consumer electronic item: Price generally falls (more value per dollar) every year.
This may have significant consequences to the industry, if Tesla doesn’t fail.
> economy vehicles produced by Ford/Chevy/Honda/Toyota since they have established production lines and can out-produce and out-price Tesla.
Who do not pay for the lifetime externalities of each of their vehicles burning petroleum for hundreds of thousands of miles.
If you accept climate change is man made, and that combustion vehicles contribute to it, it is insane we don’t make internal combustion vehicles pay for their externalities as part of their cost to level the playing field, and force electric vehicle manufacturers to compete against them without such a handicap in place.
I'm not necessarily against that approach, but the penalties should be for externalities beyond just the tailpipe. Anything else is just short sighted. This means counting counting environmental impacts for manufacturing, including batteries
Yes. Increase them, and tax SUVs and pickup trucks to fund the subsidy. Regressive taxes are bad, but you aren’t entitled to drive a gas guzzler, merely access to wheels (hybrids, subcompacts, sedans, etc). Internalize the externalities.
It's even harder to compete when their production line is such a shambles. They tried to automate everything, which cost a fortune, and utterly failed at it because it turns out it's both stupidly hard and ridiculously expensive.
They were the first mover, and as is the case with racing, being first means others can draft and pass you.
Is there any Audi, Porsche, or BMW on the horizon that will be close to competing on price with the Model 3? They all seem to be targeting the Model S/X market and Tesla's results seem to be showing that market is shrinking.
I agree, but from what I can tell the Audi, Porsche, and BMW are targeting where the model S was... not where it is today. I.e. range in the 200-260 miles, not 370.
Seems likely by the time any of the competition is shipping in reasonable numbers (already hearing complaints of limited battery supply from the German companies) there's likely to be a model S with the improve battery pack based on the same tech as the model 3.
It seems that beating Tesla in range game is quite easy[1]
I think BMW or Audi don't do that simply because they do not care enough - they optimize for different use case, i.e. daily commute, not 1500 miles road trips.
I don't think you have any basis to say it is "quite easy" based off that article. You obviously can just keep throwing more batteries in a car, but can you do it at a reasonable cost while also making it safe and keeping the heat in check to maximize charging speed and the life of the battery like Tesla does?
Not sure how much faith I have in a 3rd party modified i3 that has a claimed (but untested) range of 435 miles. After all you can take a regular Tesla model 3 and drive 1000km if you are hyper miling.
The main problem is unlike ICE cars that generally have so much wasted energy that temperature, speed, terrain, and driving style do not have a particularly large impact on range. In comparison electric cars are so efficient that elevation changes, cold temperatures, and running the AC or heater can make big differences. In particular speed can make a huge difference. A model 3 with a 300 or so mile range can go over 600 miles when hyper miling. To help with that the community consensus is to take all range estimates with a grain of salt until you see the EPA range.
Said claimed 435 mile range was not tested by the EPA.
Keep in mind that the battery packs Audi e-tron is using is as almost the same size (95 kw vs 100 kw), but is providing radically less range (208 miles vs 370). So clearly the Tesla is crazy more efficient. Given the expense and weight of the batteries, clearly Audi would have made a more efficient car... if they could.
your comment makes no sense to me as I live surrounded by teslas (in the bay). I also know an increasing amount of people (including me) who gives no fuck about cars, and yet would be into having a Tesla if they had a driver license.
Personal attacks will get you banned here. Please review https://news.ycombinator.com/newsguidelines.html and follow those rules when posting, regardless of how wrong another comment is or you feel it is.
I've been waiting four years and counting... Model X reservation. Every time I call, I get a new person (Because the last person I talked to doesn't work there anymore) and they swear that they will certainly solve this for me! And then I never hear from them again.
I got mine back without issue shortly after they made them available to order. I wasn't convinced it was for me then but I've changed my mind recently and now i'm looking to buy one again. I had no issue receiving a paper check for the original deposit.
Damn, that sounds terrible, sorry to hear. Maybe your reservation is old enough that it got borked in a schema migration or something. Good luck getting it fixed, maybe it's time to threaten legal action.
I suggest you get on that. Next call you get will be, the VIN is issued, sorry no refund! File a small claims case if the refund is less than small claims max. File a complaint with your district attorney's consumer protection division. File a BBB complaint, Tesla is a member looks like. Squeaky wheel and all, but hey it's your money.
Tesla's biggest threat for the next year or so is themselves.
They took down the S/X lines (layoffs in January and cutting the standard range versions in March) to update them, and the end result is the S/X can now manage 370/325 miles for the long range versions.
The etron and ipace are both significantly smaller and/or have significantly less range than the S/X, and Tesla has the supercharger network to boot, which doesn't bode well for the competition.
They managed a ~20% margin on the 3 even after introducing the SR+.
Last but not least, they may be in a very beneficial position with their ZEV/GHG/etc credits if they can continue to EV/PHEV pull buyers away from other manufacturers. Those manufacturers will either have to buy credits from Tesla to offset their lower EV/PHEV sales, which increases the values of those credits for Tesla, or reduce the cost of their EVs/PHEVs, which eats into their margins and their ICE sales.
Yeah I think people are underestimating how dire the financials are. I think the cars are pretty cool (though way too much autopilot hype) and it's awesome that EVs have came so far so quickly.
If Tesla continues burning cash like this quarter, it will basically be out of money in Q2, yet they are not raising capital which suggests there is some major problem.
I think Tesla has had an awful lot of financial near misses so far and they are lucky to have made it this far, but they can't go on being so close on financials this poor forever.
If they have 2.2B in the bank, lost 700 mil this quarter, expect to lose significantly less in the next quarter, how are they out of money? Even if they lost 500mil next quarter, they'd still have another 3 quarters of that left. That's not "basically out of money", in my mind.
Cashflow and income (aka profit & loss) are different beasts. You can be very profitable and run out of cash and it's possible to be flush with cash yet post a loss.
In the near term, cash is what matters. If you run out of cash, the company is bankrupt.
For a "normal" big company, which is approximately profitable, it's fine to have much less cash-on-hand, because you will have established lines of credit and easy access to the financial markets if you need more. Much more importantly: you have a lot of cash coming through the door, approximately enough to cover cash going out the door. This varies by business: some naturally have very lumpy cashflow (eg mining) and others have very smooth cashflow (eg breweries).
A lot of what CFOs do is manage this cashflow. For corporate health, it needs to be smooth, which means at any given time some cash is being received, some is going out, some is being banked and invested in short-term instruments and some is being borrowed. Some haggling with suppliers and customers about payment dates is also normal, because cash delayed or brought forward is cash made or lost.
On the other hand, if you are not operating profitably, you will need regular infusions of cash to keep operating. You actually need a lot more cash and cash-equivalents on hand than the profitable business does, because it takes you longer to get cash in the first place. A line of credit is more or less instant, short term cash can be arranged in a day and so on. But selling bonds takes time, up to months. Selling shares takes time, up to months. You need cash to cover a cash supply delay that a profitable business doesn't need.
That's Tesla's problem. They have enough cash for a few quarters and it is not replenishing fast enough from sales income or deposits. They will need to raise money and the longer they delay, the more punitive the terms will be.
You're thinking too short term. For a large industrial manufacturer with $10B in revenues or more to be "three quarters" away from literal bankruptcy/insolvency is dangerously close to that.
Because around 1billion of that 2.2 is reserved and doesn't really count as cash (customer deposits etc). So probably leaves around 1.2bn left at bank.
They are also spending next to nothing on capex which is going to be tough to sustain long term. If their capex was back towards their guidance for the year they would be closer to a billion loss this quarter.
Billionaires have billionaire friends.
It won't be too difficult for Elon Musk to talk to the Google folks and get a few billions in funding, for an appropriate equity.
Because then they'd have stakes in two high profile L5 attempts rather than only one. That way, regardless of who wins, they'd still have their part in the inception of the self driving industry.
Sales are hardly lagging when compared to the 1 year ago quarter. Compared to the previous quarter, sure, but there is seasonal variability and Q1 is the worst for car sales.
Deliveries were low because Tesla was ramping up international deliveries for the first time, adding the extra delivery time required by slow transit on boats to Europe and Asia.
Sales of Model S and X were lower because potential buyers were waiting for rumored updates. And some former S/X buyers were opting for Model 3.
They are making all of the right moves. Assuming the Tesla chip is as they say it is - which is more believable because of their presentation and because of the lead engineer they brought on for it, and if we believe their expected improvements during the next chip version - along with the fleet of robotaxis and the Tesla Network taking 30-40% revenue share will on its own bankroll whatever issues they may have; I can't wait to see what happens to Uber, Lyft, and so on. I'm also concerned about potential vandalization (or worse attacks on users) who use these self-driving vehicle services by those who become disenfranchised, are struggling to survive, who currently try to support their living as taxi or Uber/Lyft drivers; what Andrew Yang is working towards solving with UBI for the losses coming from automation.
Unfortunately I think the people that will suffer most from mass-automation still don't believe that their job can be automated. Speaking to taxi drivers, to them it's a foreign concept sometimes spoke about briefly in the news that may or may not come around in 20 years when they're retired, so they don't need to worry. Yang's "Freedom dividend" won't be appealing to them until the day they're passed on the road by a car without a driver in the seat. The sad reality is, until that point the dividend is only "more free money to the lazy unemployed". Out of all the current candidates, if I were to pick one it would be Yang. Sadly I think as soon as the political flame train gets started, he'll be shot down very quickly.
Wow this community is incredibly toxic. I feel sorry for anyone that believes these anti-tesla smears that are constantly on hn. hn is the last place I go for peoples(bots?) opinions...
I think it's unlikely they'll be acquired. Tesla has about $9B in debt, had never been profitable on an annual basis, and most other automakers are plowing forward with their own EVs.
I don't see much upside in acquiring Tesla. I expect chapter 7 bankruptcy (liquidation), or chapter 11 if Elon can pull the ripcord soon to have some money available to weather the restructuring.
BMW, Audi, GM, Jaguar, and other automakers I forgot to mention are surely grateful to Tesla for proving the concept that a market exists for electric cars.
These established brands are going to bring a significant amount of competition for Tesla over the next few years. They know how to make cars at massive scale, and they know how to make money doing it.
Tesla is a very impressive success story, but all of its troubles so far have occurred in the absence of strong competition. The next few years will be far more difficult. I hope Tesla succeeds, but I'm glad I'm not a shareholder right now.
Yes, you would expect that someone from tech revolutionizing an entire industry at global scale would get a little bit more respect and appreciation here.
> you would expect that someone from tech revolutionizing an entire industry at global scale would get a little bit more respect and appreciation here.
I'm not one of the people negatively commenting but I personally think one's character is significantly more important than ones accomplishments and he doesn't really seem like a good person.
I admire that he is trying to do something about global warming. Nevertheless he seems like he's let his fame (or lack of sleep..) get to his head and I strongly disagree with the marketing of autopilot.
I understand why people would admire him though. He's done some amazing things and consistently.
Emailing a Buzzfeed reporter that someone is a pedo who isn’t? Telling the police that a whistleblower was planning a mass shooting attack at Tesla HQ? Marketing autopilot as anything more than a driver assist system when misuse of the system has now killed at least 4 people?
His (public) behavior is not that of someone I'd look up to.
As others have said, his accusing of someone to be pedophile is very low. I strongly disagree with the marketing and, in my humble opinion, reckless release of Autopilot.
I also really don't like how he handled the issue with the SEC. Whether he intended to or not, he did misled investors with his tweets about having funding secured and instead of just admitting he made a mistake acted like he could do no wrong. He's actually surprisingly similar to Trump in his inability to take criticism with grace.
Again, I don't think he's an evil person but my impression is that he's let his wealth and fame get to his head. I can't say I blame him, people idolize him like he's the second coming of Jesus. I'm sure that kind of admiration isn't healthy for anyone and I am sure it'd mess me up too.
He's very much like a real life Tony Stark, and I suppose a part of me resents that he has so much admiration. It has nothing to do with him but I hate the idea that people seem to place success above everything else, when that's really not what should be important and I'd argue that emphasis on success probably leads to a lot of unhappiness in modern society. But I digress.
Fair enough. To me, considering all the shit and negativity he has been hearing from so many people on a daily basis for over a decade, he doing only these things you listed I consider him a saint. I’d have done a lot worse and I consider myself a very good person.
What I like the most about the guy is that he shows that he’s pretty much a human like anyone else.
Can you provide any documentation of this being the case? Because here is Tom Mueller, Co-founder of SpaceX and designer of initial Merlin rocket engine saying that is not the case.
>but they would not do anything of this magnitude if it wasn’t for Elon’s vision and leadership. Isn’t that obvious?
It would be just as correct to say that Elon Musk's vision wouldn't go anywhere without his employees' vision and talents, many of which likely exceed his own in terms of technical or intellectual skill.
Obviously, he has his place, and credit where credit is due, but I think we've gotten a bit too obsessed with the cult of personality and "great man" model of thinking that creeps into history, business and science.
How is "Elon Musk brought up pedophilia epidemic in thailand" at all an accurate description of Elon Musk calling a cave diver a pedophile just because he was an expat in Thailand? There may be people who go overboard on the Elon hate, but this just seems like the opposite bias.
I think what is happening is totally to be expected, Tesla launched a cheaper car and the cheaper car is eating it’s margins and a lot of 3 buyers would have gone for an S if there were no 3. And the S is even with updates an old car now, they should have launched a new S last year.
So they are a car company now with a specific target group ( early adopter, affluent) and they will need to to get into new target groups and the will have to update their offerings.
I really hope they can pull this off, otherwise the pressure to electricity for the other OEMs will disappear.
> Mr. Musk, who had previously said the company did not need more capital, indicated that he had changed his mind because Tesla was now in a position to use capital more efficiently.
This concluding paragraph contradicts a quote in the middle of the article that explained the loss is due to inefficiency ("spiking costs for obvious strategy missteps really drew blood at the bottom line"). NYTimes journalists enjoy making Elon Musk look dumb, like when he smoked weed with Joe Rogan.
I'm no fan of Musk's, but it's so disingenuous and discrediting to say things like that.
Musk very clearly did _not_ get stoned with Joe. Taking a puff off of a joint is akin to taking a drink or two of beer. You're going to have much more of a placebo than anything.
There's no reason to lie to make Musk look stupid. He's doing that plenty well himself.
It’s news. Smoking weed as a guest on a talk show / podcast is something no CEO of a noteworthy company has done before. I don’t care per se but come on, it’s obviously an attention grabbing thing to do.
Nonsense. Plenty of CEOs drink excessively, pay for sex and do cocaine. They don't do it on video with Joe Rogan, though. That shows such a complete lack of discretion.
No it's people who are invested in Tesla being concerned about Musk's mental health and his ability to run his business. In particular because that wasn't his only scandal.
And it's got nothing to do with the US either. Do you see many German, Swiss or Japanese Ceos smoking pot and getting drunk on podcasts?
Because a clearance requires you to have discretion and control of yourself to maintain the secrets you learn due to it.
If you lack the self-control to not use a federally illegal drug on camera, then do you have the self-control to not leak secrets to score points in an argument or if you're drinking with a friend and they apply some social pressure, for instance? Maybe, maybe not, but it raises red flags about how trust worthy you are.
The reason I was told by someone who applied for security clearance is because it's a crime (federally) and they are afraid that someone could use that to blackmail you into giving state secrets.
I think it's a similar thing for illegally downloading music or whatever..
To be fair, with the boring company, smoking a joint live, calling a rescuer a paedophile, getting slapped by the SEC for his tweets, and messages about turning teslas into self-driving cars incredulously soon, all an NYTimes journalist needs to do to make Elon Musk look dumb is report what he actually does...
Even the recently announced closing of retail sales centers (that's a bold strategy cotton, lets see if that pays off for him) and then "woops, can't shut them all after all", if this was anyone else but someone with an internet cult of personality, an objective analyst would be telling you to stay the hell away from this company, because from outside it looks like a mismanaged train-wreck being run by an out of control nutter...
What if tesla just buys an ice company and just adds autopilot. I don’t see a reason for them to bundle battery and self driving... or even just licenses the self driving tech to others...
How much would their cars cost if they actually made a profit?
And if they were sold at those prices would anyone but them?
My point: their customer service, tech and everything else people love about them is being subsidized by debt. They're not the U.S. government, they can't print money forever...
Tesla is in debt largely because of their rapid ramp-up with costly investments in design, development, manufacturing and supply chain.
My layperson understanding is Tesla have been in a structurally profitable state for quite some time—but for their investments geared towards scaling up ever further.
The question you need to ask is "if you build a factory, across how many units should the cost of that factory be spread?"
Google "tesla profit over time". You'll see losses from 2011-2013 (12 quarters or so) and a profit, that was the ramp up to the model S. Then a series of losses up to 2016 (13 quarters) where they shipped the model X. Then a series of losses up to 2018 (7 quarters) then 2 quarters of profit for the model 3.
So generally Tesla has large costs for expanding battery production and new assembly lines for new models, and then starts profiting. Their annual production is heavily up (277,000 in the last 4 quarters). If they stopped expanding they would be quite profitable.
Given that their most popular car is very likely to be the model Y (at least in the USA the crossover/small SUV is by far the most popular). Things look pretty promising for Tesla.
> If they stopped expanding they would be quite profitable.
That's like saying if I stop eating I'd lose weight. Yes, but pretty soon I'll die.
If they need to invest 1b to make 100m we know where that ends up.
They can't scale back in the long term. Well, they can but they're not doing it right. It's hard to fix manufacturing after you're in the hole as deep as they are.
If Tesla stopped hugely spending R&D for new products and new products they would be quite profitable. Keep in mind that 63,000 model 3 cars were likely on average $52k = $3.25B. 20% gross margin = $693M. Ah, found the actual number, automotive revenue = $ 3,723,861,000 but that includes the model X and Y as well as the 3.
Sure there would be some expense keeping the products up to date, but nothing like what is required to ramp up volumes and adding products like they have been doing.
So basically Tesla has been heavily reinvesting their revenue into future growth... and it's been working. If needed, they could slow growth and increase profit. Many of the Tesla competitors in the luxury segment would LOVE to fail and "only" ship 63,000 cars costing $50k each.
Tesla doesn't need new factories and products to not die, they could easily exist by keeping the model 3, S, and X up to date. Seems a poor decision to not finish the Y, but they could greatly reduce costs by changing an existing model 3 production line into a model Y production line. The cost should be greatly reduced since they share around 75% of the same parts.
So why can't they scale back? They just repaid $920M, they have $2.2B on hand, and had a automobile revenue of $3.7B with a 20% gross margin this quarter.
I don't get the "hole" they are in. Sure they will likely need loans to grow as crazy fast as they are (from last place to first in 7 years in the luxury/premium segment). But they could decide to just grow slower, why would that kill them?
The electronics, drive train, Electric motors, and battery system all work together in a Tesla to make it more efficient and powerful than the competition “Right Now”. Tomorrow is another day. The custom components that make up these systems require R&D that the other car makers are still struggling to duplicate, that’s where they are at. Tesla still has a chance because of “time”. They are there already, where the others want and need to be, and Tesla will probably (because it can’t sit still to survive) continue to advance its technologies.
This explains why his head of AI and head of hardware looked so nervous during their presentations the other day. They've likely been pushed to embellish parts of their presentations, too, such as e.g. the forward looking statements that "you only need cameras" to solve FSD, or that it can be sufficiently solved with what they're doing in the first place.
They did present some top notch work, but I'm really having my doubts that even Google can figure this out in the foreseeable future, even though their cars are completely covered with expensive sensors.
Then they mention that they missed a lot of revenue due to missing half their shipments overseas, and onto Q2 (But also expecting a loss in Q2).
Sales for their higher-margin vehicles seemed to have cratered, explained by seasonality, lower US tax credits going forward, and inventory/demand mismatch.
Panasonic has halted their planned battery plant expansion, which implies a lot about future demand.
I don't want to be a downer, but I'm having a hard time seeing the way forward for Tesla in a manner that isn't very unfavorable for them.
https://ir.tesla.com/static-files/b2218d34-fbee-4f1f-ac95-05...