I wished Tesla would focus more on a full ecosystem for self driving, lighter cars, including better infrastructure, rather than shoehorning their vehicles into the existing system. I just feel that with their current approach, we've ended up with an even heavier, expensive lump of metal for moving a 70kg person from A to B. I do like their product from a "coolness" perspective, but I'm not sure if it's the long term way to go.
Beyond Elon's current initiative with the Boring Company, can you be more specific with examples of what that might look like? Because otherwise, Tesla doesn't really have a choice but to shoehorn into the current multi-trillion dollar transportation network.
I think they need to focus on infrastructure, more than the car. For example, how about installing beacons in catseyes to guide vehicles so the complexity of driving algorithms can be reduced. It just seems like they're trying to solve the self driving problem in the hardest way possible by making a car "see". Also, I don't think the boring company will ever offer the same flexibility in transportation a car will.
For what it's worth, Tesla built a Supercharger network all on their own, instead of shoehorning their way in, like expecting cities and gas stations to add electric charging capability.
As far as the weight, the society would probably benefit from narrower lines and narrower single- (or double-, but in a tandem way) occupant cars, as congested city freeways could essentially double the throughput overnight. The benefit would also extend to any internal-combustion vehicle, so this is not Tesla-exclusive.
It's true that revenue and revenue growth is probably more important than earnings for Tesla's stock price, but Tesla has two challenges that Amazon doesn't have:
- access to capital is getting tight
- Tesla has less ability than Amazon to spin the story that "we can turn down our reinvestment at any time to turn on profits"
It's a fair comparison, although not to the present Amazon. The Amazon of today is financially entirely different to the one from 15 years ago.
Amazon nearly went bankrupt after the dotcom bubble era. They were drowning in particularly bad debt and red ink for years. After the dotcom bubble their financing abilities almost entirely dried up, the stock collapsed by ~93% or so. It was almost universally expected that they would not survive, culminating with the infamous Barron's Amazon.bomb story and a parade of stories thereafter. For the next three or so years after that story, bankruptcy was the anticipated end by the press and analysts. Tesla today, when you look at how they're being discussed by the press + analysts, and their financials, looks similar to Amazon's general condition back then (Tesla's growth is both faster and its red ink is greater, than Amazon was back then).
For reference, Amazon had $1.6b in sales for 1999 with a $719m loss, and a $30b plus market cap at the peak of the dotcom bubble. Tesla will probably hit around $17-$18 billion in sales for 2018. If the market lets out - the supportive environment broadly - you'll see Tesla's stock crater unless their burn rate is very sharply reduced. They'll suffer the same financing concerns that pushed Amazon's stock down to $5.51 / share in 2001.
This is interesting. So, you are saying comparing two vastly different industries - eCommerce and car manufacturing - is a fair comparison? This ignores the fact that car manufacturing is more capital intensive.
Additionally, what about the comparison between capital climates both these companies have to go through?
Amazon taking on debt had their interest obligations reducing. Interest rates started out at 5% in 1999 and then saw going as low as 1% in 2002. Increasing to 5.25 before going back to 1% again.
In comparison, Tesla has been operating under record low rates of less than 1%. The only way from here is uphill.
Very true but somehow Wall St. is valuing Tesla very differently than they valued Amazon 15 years ago. Tesla's stock hasn't gone down that much, there's volatility but not the near 100% crash that struck Amazon. On the flip side, Tesla has needed a lot more capital than Amazon and they have issued a lot more shares to raise that capital (close to 12B now). I don't think Tesla's stock price, despite it's volatility reflects it's debt economics.
Amazon is an eCommerce company with low overheads and costs which dint scale. If it grows from 1 million to 10 million orders the cost magnitude might not change that much.
Tesla on the other hand is into manufacturing. It will see some of it's costs scale as well even when it is doing better.
It seems strange for Musk to make a stupid for musk to claim that profitability in Q3/4 is important when they're talking about his debt. The maturing debt will not be covered by the small profits. If there are profits, which I suspect there won't.
Before claiming he is stupid, you need to read the balance sheet. They have enough cash in hand to pay the maturing debt. If they are cash flow positive, technically they don't need to raise money. However, Tesla wants to expand to start production of Semi and Model Y. Analysts predict they need to raise money for setting up production (which is technically optional).
>Before claiming he is stupid, you need to read the balance sheet
Before you tell someone they need to read the balance sheet, you should read the balance sheet.
Tesla has $3.5BB in cash, which they are burning through at the rate of almost $1BB a quarter, and have $4.1BB in accounts payable. Those are "bills", and their cash doesn't cover that amount, let alone the long-term debt payments.
They've been accumulating cash by letting their bills pile up; this figure grew over $1BB quarter over quarter.
Accounts payable is a rotating line i.e. there is turnover. The first X gets paid and a new X comes in. It did not grow $1B qoq.
The burn rate of of $1B+ would need to go to 0 to be called profitable + cash flow positive. Profitable => Net income > 0; cash flow positive => including capex net cash flow into business > 0.
It's interesting how there's no negativity check to discussion forums, because there is effectively zero cost to endlessly being wrong and endlessly negative. When confronted with even a 50/50 proposition, the obvious bet is to go hard negative against it.
The last two dozen, or more, Tesla threads I've read on HN, have been approximately 95% negative. I've never seen anything like it in the last eight years I've been reading the site. The Facebook blowback recently perhaps, although they've harmed the privacy of tens or hundreds of millions of people.
Maybe someone here can help me understand, why the extreme emotional reaction to Tesla these days? I've found you can't even point out actual positive facts about Tesla without suffering a wave of downvotes regardless.
They're going bankrupt next month. Or next quarter. They suck. They build shit cars. The panels don't fit together ever! Electric cars are easy to build. They have endless competition that will smoke them. Musk is always wrong. He's committing securities fraud, probably; or at least SpaceX is, or maybe Tesla is. They'll never get autonomous driving right. They're behind everyone in autonomous driving. China, or Europe, will eat their lunch. Telsa will never reach profitability. So what if they've grown sales rapidly, they still suck. All the other car companies are already out-producing them in electric cars. They'll never produce the Model 3 at scale; they'll never produce 1,000 per week; they'll never produce 5,000 per week; and even if they do, they'll still suck! And so on for another 57 negative concepts.
To give a specific example, a lot of comments I've read, have claimed Tesla would never mass produce the Model 3. Post after post for months has stated plainly that they were going to fail at it. It was obvious, supposedly. Now they're tracking to 100,000 or more in just in the second half of the year. If you point that out, the response you'll get is either: yeah but they missed Musk's original target by a mile; or: yeah, well, the quality sucks (ie a deflection and criticism shift, which points to a broader cynicism).
You'd think we were dealing with a genocidal warlord, not a car company.
>The last two dozen, or more, Tesla threads I've read on HN, have been approximately 95% negative.
Maybe people are tired of the endless claims from the Tesla fans that "everything everyone else has ever done before is wrong".
Maybe the rest of the manufacturers aren't that stupid? Why do so many people here root against Ford and GM?
>have claimed Tesla would never mass produce the Model 3
Yet to be seen. Right now they are hand-building cars for huge losses. There's no "mass" production (on an automotive scale), and there's no $35k Model 3 in the foreseeable future. Have you given thought to why people might make such a claim? Or are you of the mind that Musk is infallible? Maybe people tire of being called dumb because they don't believe "air friction" is holding back the assembly line?
>Now they're tracking to 100,000
According to whom? Tesla won't release the numbers, and the Model 3 tracker from Blomberg shows 2,300 per week. Maybe it's exaggerated claims like yours that spur negative sentiment?
> Maybe people are tired of the endless claims from the Tesla fans that "everything everyone else has ever done before is wrong".
Of course everything everyone else has ever done before isn't wrong. Lots of it is right. But if challenging all of it is what's needed to innovate in the places where they were wrong, then by all means I support Tesla and Musk. Why would I not support someone trying to innovate, and succeeding? Unless of course you want to try to tell me Tesla hasn't innovated the auto industry in any way-- in that case we can end our discussion here because we won't ever see eye to eye.
> Why do so many people here root against Ford and GM?
I root against Ford and GM and the others because with all their resources and might, they haven't done what Tesla's done....instead they've done the bare minimum. Tesla started in 2004 from scratch. If GM or Ford had committed the resources they could have to electric vehicles and autonomy and so in 2004, God knows what they would have for us now. But they didn't. They sat still, incrementally improving mileage and adding bluetooth and so on. Why would I root for that? Why are you rooting for that? What's exciting about that?
> Yet to be seen. Right now they are hand-building cars for huge losses. There's no "mass" production
"Yet to be seen"? Geez. Yeah, clearly Tesla's not scaling at all. Selling about the same number of cars as two years ago, or five years ago. No evidence of progress at Tesla.
> Or are you of the mind that Musk is infallible?
Of course Musk is fallible. Does a person have to be infallible to innovate and succeed? Do they have to be infallible to be admired?
> According to whom? Tesla won't release the numbers, and the Model 3 tracker from Blomberg shows 2,300 per week
Yep, no doubt the 2300 will decline back towards 1000, then they'll go bankrupt. No reason to believe that things are picking up. Just because it's 2300 now and was 150 three months ago, that's not evidence of any progress. Easier to believe they're going to fall apart.
So hard for me to understand your way of thinking.
It's the reaction for facts and Musk giving predictions that are off by a magnitude constantly.
Remember that Tesla was supposed to produce 20,000 units per week by the end of 2017, then 10,000, then 5000, then 2500 by end of March. It fall below the latest goal by 20%. When Musk hypes up the product for the customers, that's a good thing. When he hypes up for investors, they lose confidence and interest rate for capital will increase.
>Now they're tracking to 100,000 or more in just in the second half of the year.
Why would we trust this claim from Musk? If we assume that Musk is consistent in his messaging, we must downgrade his claims by order of magnitude. He has constantly claimed that Tesla is on track and failed to deliver.
>They build shit cars.
Tesla's are arguably very shitty cars with lots of details just plain wrong, but they are super nice to drive. This is typical for high performance luxury cars. They can spend time in repair shop because people love to drive them and they can afford the cost.
Model 3 is completely different animal. Tesla has invested so much for the production like that they can't back up to low volume manufacturing. They must produce Model 3 in large volumes or ROI will drop like a stone.
I think you what you are seeing is just pushback from years of Tesla Hype, just a couple of years ago it wasn't rare to read almost messianic message on how Musk was going to save the world.
That being said, I think you are being somewhat hyperbolic, most of the comments on Tesla posts are asking the though questions, not really putting it down.
There seems to be a broader negativity directed at Tesla for some reason, going all the way back (which SpaceX is mostly immune to, despite similarly wildly missing goals; you'd think Tesla's mission would be perhaps even more admirable). I recall a lot of comments claiming Tesla would never produce the Model S at scale, because they got off to a poor start manufacturing it as well.
I don't think I'm being hyperbolic at all. These responses are what I've observed in every thread going back two quarters roughly or more now. The paragraph of negative examples I gave is filled from actual examples I've read on here recently.
The last time I pointed out in a thread - a week or two ago - that Tesla was tracking to hit 100,000+ Model 3s for 2018, I was mocked without an actual substance reply (just open insult style mockery). And that's just a simple obvious point about their production, the odds are high they'll hit that mark. So where does all of the emotionalism come from to spur such behavior? I find it incredible a car company spurs such a volatile reaction.
I was negative about Musk from almost the beginning - but it's because he's a representative of the kind of delusional, investor-story-time silicone valley that shouldn't work, but does, because investors keep on bankrolling it.
It's extremely annoying watching him in interviews, saying stuff like his biggest advantage is his physics training, when the real reason why he was successful is a combination of luck, media savvy, and (most importantly) incredibly wealthy family.
So, while his goals are broadly admirable - his personality is so obnoxiously delusional that it reflects badly on the entire society that believes in it.
This sounds more like jealously than anything else. Musk clearly is playing a very good game in the commercial world, all the while trying to push humanity into a better place. He has to hype for investors. Broadly admirable is a complete understatement when you only need to consider the feats of SpaceX.
What I see is a person who is working considerably hard. Hes an inspiring figure that will give rise to future generations. Like Steve Jobs, Stephen Hawking, Albert Einstein, and countless more. You should think of him as a driver of energy and ideas.
I don't know about that. I'm a physicist myself and found his 2016 IAC presentation embarrasing. I wasn't expecting a crewed spacecraft inside the Jupiter radiation belts, nor a 70s artist impression of the surface of Europa. I don't know yet how he's going to shield people inside those empty shells, nor where's the money for the mind-boggling infraestructure you need before all that starts making sense.
But he has a torch and pitchfork fanbase, so we can't really have a grown-up conversation about that.
I've never read any BS authored by Einstein or Hawking, so I can't understand your comparison.
Well, Tesla passed Ford in valuation while selling fewer EVs. And on the technological side, these comments aren't that unsubstantiated either.
The negativity might be more of a reaction to the discrepancy between the wider perception and valuation and the realistic prospects, than just the latter.
Is it really clear that it will be harder for Ford/BMW/Toyota to transition to a thorough electric line up than for Tesla to master mass production? If not the valuation and hype are hard to justify.
The reason that the former scenario is not completely absurd is of course batteries. If Tesla can produce their own batteries while everyone else has to buy from China, they will capture a lot of profits that everyone else will miss out on.
Maybe that's the upside potential that people miss out on.
That still doesn't explain the extreme negative emotional reaction.
Amazon passed Walmart in valuation while having 1/4 the sales and none of the profit. Twitter is worth six times what the NY Times is. Netflix has half the income of CBS and is worth six or seven times more. And so on. That kind of valuation discrepency isn't particularly unusual when there's a bet being placed on a more distant outcome related to growth.
> Tesla passed Ford in valuation while selling fewer EVs.
Ford isn't selling more EVs than Tesla; Ford is selling hybrids that burn fossil fuels, their strict-EV business is an embarrassment. Ford is also still selling millions of fossil fuel-only burning vehicles annually. Surely it's curious that that warrants less criticism than Tesla's lagging ramp on Model 3 production.
Lots of car companies flounder. GM went bankrupt. It's extremely difficult to compete in the auto industry, it's extremely capital intensive; which is why North America and Europe have seen very few new successful car companies in the last ~40 years. The US hadn't seen a new public car company since 1956.
What makes Tesla especially deserving of the extreme negativity?
Wouldn't it make a lot more sense to criticize Mercedes or Ford for not producing a million plus electric cars already? Aren't all the other automakers overwhelmingly failing the environment and the general well-being of their customers by having dragged their feet for decades on this? Those companies are putting out about ~88 million (!) fossil fuel cars & light vehicles per year. I find it difficult to understand how the context makes sense.
If Tesla was selling 1/4th of the number of cars that Ford is selling there would be a lot less negativity.
Also I was thinking of the Chevy Bolt, not Fords stuff, my mistake.
Your arguments are also ignoring that I was exactly addressing the question of distant growth potential.
Finally I am very much of the camp that criticises classical car-makers for their inactivity. I also think that Tesla, even if it goes under, will have played an important part in transitioning the industry, by pushing things along faster than they otherwise would have moved.
> I've never seen anything like it in the last eight years I've been reading the site.
I guess you haven't seen any of the cryptocurrency threads?
I rather see a growing cognitive bias on HN, where someone will surely point out - Why does HN has negative opinion about "X"? where "X" is their favored topic/company.
> You'd think we were dealing with a genocidal warlord, not a car company.
Wow! Really?! What comment made you feel like Musk is a genocidal warlord?
The electric cars have problems that have nothing to do with actually manufacturing and it has less exciting name, it is called power grid. If we would switch to el. cars, the first effect would be light polution due to electrical wires glowing in the night. Then the complete collapse of system. To be able to power all the cars, we have to double the amount of high voltage transport wires between the power plants and consumers (cities) + additional transformators, and this is something where billions need to be spent, it will make electricity expensier (actually the other part of the bill - the power grid costs) for everyone and el. cars economicaly useless.
Electrical cars? Yeah, I want one. Does it make sense on large scale? Not really.
As far as I have noticed, there is a pattern, bad Q results, then Musk comes with a new revolutionary idea, just pumping the hype. I am eager to see what will be next, maybe electrical cargo ship or electrical magic carpet (I would have one if those :) )
That is ridiculous. The electric grid is actually facing precipitous demand growth drop[0] due (in part) to efficiency improvements. Long range electric vehicles are able to charge when demand is lowest most of the time, and for long trips, they charge at Superchargers which are buffered with stationary batteries. Far from destroying the electric grid, electric cars are critical to making utilities profitable.
Oh, sorry, I understand now. Looks like studying energetics 20 years back is something that is useful for anything else regarding electricity except electrical cars (and solar panels). My bad. I should understand that saying that king is naked will just bring downvotes from all the real experts who are learning from marketing and press (that is writing articles based on material given to them by marketing).
I will just stop posting in this thread, as usualy on those two topics every average John Doe is smarter. Just go and buy more Tesla stocks.
