25 thoughts on “Tesla”

  1. If Tesla becomes as successful as Amazon, he can make bigger space bets without as much outside investment. But if there’s no push for profitability which comes with a lean enterprise, the bets are less likely to pay off.

  2. Same here. I care about SpaceX. I don’t care about Tesla ()although what he’s done to that industry is a good thing.

    Elon is not capable of giving up before complete exhaustion. …and that will only slow him a bit.

  3. Rand, if you don’t care about the Tesla automobile, why are you posting this?

    The Tesla automobile is more than just a car, it is highly controversial in connection with the whole Climate Change food fight.

    If Mr. Musk and his investors were purely entrepreneurs taking a risk that they can Change the World through the first mass-market high-performance electric automobile, and if they gave it there best effort to either succeed or fail in the marketplace, I take my hat off to them.

    But something tells me that news of manufacturing problems at Tesla is the Nunes Memo of the Climate Change controversy. The Model 3 must succeed otherwise Mr. Trump, Deniers and other Deplorables will have won. The manufacturing problems are deeper than panel gaps characteristic of cars of times past — this is all discussed on Seeking Alpha, where enthusiasts for Tesla are “rebutting” and “debunking” any claims for concern. But the real data is still secret, or I guess until this Wednesday when Tesla has to make an official report under SEC rules.

    Talk about a Russia connection, Tesla is as opaque to its investors as the Soviet Union was to the outside world. At Seeking Alpha, the discussion centers around the meaning of high Model 3 (their new “mass market” car) VIN (vehicle identification numbers) registered with the government. Just like the Red Square parade overflights of their then-new jet bombers, something tells me Tesla has only a handful of Model 3’s which they keep driving out to the DMV.

  4. I know the desire to have a big wealth-producing company to support a space company. IMHO, Elon has bet on the wrong horses – electric cars and “renewable” energy. I’m just hoping that the space side is lucrative enough to keep itself going. So far, it appears to be.

    1. There is a faction on Seeking Alpha who believes that Tesla is in serious financial trouble. We do care about this to the extent that financial actions taken by Mr. Musk to save Tesla could spill over into SpaceX.

      Tesla has “bet the company” on the Model 3 as a breakout-to-the-mass-market car (the one with the panel gaps, although I have heard shade thrown on the other two Tesla models too), on their strategy of assembling their battery pack from a whole lot of cells barely bigger than a AA instead of the larger “prismatic cells” favored by other auto makers, on their ability to automate the assembly of those little cells into their battery pack, that the combination of their smarts and what robot vendors can sell you will allow them to mass produce a car up to the standard of reliability set by Lean Manufacturing rather than having to spend years mastering this, and that they can contain costs with their vertically integrated approach of trying to do everything themselves (including the Supercharger network and their eschewing traditional car dealers) rather than part everything out to vendors.

      1. I think Tesla ends up being handed off to someone who can get the manufacturing under control. There’s enough external pressure on the company to make that happen.

        1. Fine minds think alike, and this suggestion has been made on Seeking Alpha.

          There is a vibe, however, that the culture at Tesla is that they have a better way than the legacy auto companies — think Elon Musk’s First Principles (that is, don’t tell me something cannot be done a certain way because experience tells you so — also think of Mr. Obama having been alleged to say that he is a better speech writer than his hired speech writers) — that they won’t consider such a partnership until they are subject to a “hostile” merger.

          1. Paul, that reminds me of Musk’s claim that his company could build better tunnel borers than the companies who actually build them. I didn’t know if Musk simply meant that it was the management who were at fault with the designs, or if the engineers themselves were to blame. I can’t imagine that he thinks he could start from scratch and build something better than what’s out there, but one never knows.

        1. Clue me in on the punchline, here.

          You would never think Tesla is in any kind of trouble from their high-flying stock price. But they are burning through billions in cash, it is claimed, and their Model 3 launch so far looks to be a fizzle.

          No, there is not cold, hard evidence that Tesla is in financial trouble, and the people “shorting” the Tesla stock and claiming Tesla is not a viable business have been saying this for, what, a dozen years? On the other hand, companies that are as opaque with their internal goings on have known to fail “just like that.”

          So what is the laugh, that some analysts think Tesla is on the brink of financial collapse? Or it is so obvious that they are in trouble that “believes” is too weak a word?

          As to factions, if you search of Seeking Alpha Tesla and click on Tesla News (you may need to register to drill into the comments), the contributors and commenters are pretty much split into the “long” and “short” stock market positions, those who think Tesla is going to take over the global automobile market vs those who don’t think it will last the year, given what we know about the fizzle of current Model 3 production.

          1. You would never think Tesla is in any kind of trouble from their high-flying stock price.

            Tesla benefits from a cult of personality, even among people who don’t own them.

            When you pull all of the climate religion and cult of personality out of it, they are cool cars that people like to drive, for now. Charging stations would be an issue if the cars were more available but things like that and battery issues can be solved over time.

            Whether they are in financial trouble or not, they need to solve the riddle of mass production if they are to have long term success.

  5. I think of Munro, an ex-Ford executive, as a car-industry version of Loren Thompson. The entire class ca be dismissed as “Speaker to Fat-Cats.”

    I really think we should all care a lot more about Tesla and Musk’s other enterprises more than we do. We love space, but his entire enterprise is important. As I see it, neither the business case nor the environmental case closes for electric cars and trucks. But throw in distributed grid and Hyperloop, and both cases close. Hyperloop ultimately replaces the Interstate, the railroads, and the airlines.

    When you look at Tesla Model 3, it can’t outcompete a contemporary Subaru Impreza Limited, because the all-wheel drive,extended range Model 3 is $55K compared to around 25K, with a range of 310 miles, compared to 440. All it has in addition is a much better automatic pilot, compared to the Impreza’s primitive Eyesight system. Is that really worth twice the price? But if I could drive a Tesla to the nearest Hyperloop ramp, ride to LA, and have my car when I get there, rather than dropping the Subaru off at RDU, flying to LAX, then renting a car when I get there, that closes the business case. It’ll be a while before any of this comes true. I’m 67. I probably already own my last car.

    1. VR is going to kill most of the need to move bodies around on Earth over the next couple of decades. Why ship your body around the world, when you can just rent a drone body at the destination?

  6. Is it odd that I dislike the head of Telsa while being a big fan of the head of SpaceX?

    I can’t stand Tesla. I hate that it feeds at the subsidy trough (though I blame the government, not Tesla). I utterly hate the idea of an “networked” car with automatic, unskipable updates (something I’d never permit, on anything) plus the added bonus of spying on you, and I don’t like electric cars (they take too long to recharge, etc, etc.). The model S is bad enough, but this new one… the abomination of a “dashboard” it has is, alone, enough to make me loathe it. The only good thing I can think of about Tesla is, um, ah… oh yeah, they did the design for the seats on the Dragon 2 mockup, and they looked pretty good.

    But I do love SpaceX.

    1. The difference between SpaceX and Telsa will be due to their consumer demographics. Tesla isn’t that important because the car customer is diverse and many companies will close in on the right product.

      SpaceX is creating new markets where extreme lead times exist for a product that can’t easily be prototyped in a garage. Tesla will have little impact on humanity. SpaceX has already had a huge impact and their momentum is just getting started.

      The space age hasn’t started yet. History will record it started with BFR the way they talk about the Douglas DC3.

      1. Tesla isn’t that important because … many companies will close in on the right product.

        One could have said that about bricks being able to close in on clicks, but Amazon is still growing revenue at 30% while Walmart’s growing at 1% and online sales 3% of its revenue (though growing at a faster rate). It’s a different culture when the new business unit is perceived to be cannibalizing revenue from the old business unit vs. just one business unit.

        If Tesla captures just 1/6 of the global car market while others catch up, that’s $200B/year. If its margin when it’s that big is closer to apple’s 38% than Toyota’s 8%, then that’s about $50B/year in profit vs. Toyota’s $20B and Tesla’s market cap could become $500B from its current $60B.

        Even with model 3, Tesla’s a luxury car maker and the model 3 is a small luxury car. The subsidy ($7.5k dropping to $3.75k the quarter after they hit 200k sales) and the lower energy cost (~$0.60 per gal of gasoline equivalent vs. $2.60–$1.3k/yr) are only small contributions to the economics so they’ll need to build an economy car before they can sell to the median new car customer paying $33,500.

        1. Growing revenues is easy when you’re willing to sell at below cost price.

          As I understand it, most of Amazon’s profits come from ‘The Cloud’, which is rapidly becoming commoditized.

          As for Tesla gaining 1/6 of the world’s car market… LOL.

  7. Tesla is part of Elon’s many pronged attack on settling space. SpaceX is obvious but Tesla, Solarcity, Boring, and even Hyperloop are all technologies needed in space.

    But all of these need dramatic technology advancement before settling space is affordable much less cheap. And they need to pay for themselves as they get there. Follow CASIO from a digital watch to a Flat Panel TV? That took decades.

    Tesla is needed because efficient electric vehicles are not part of the old Detroit car business and never will be. If Tesla goes under ALL electric/battery powered car development will stop. Others think differently, but the entrenched automotive moguls have no interest in rocking their own boat. Especially in a era, at least for now, of cheap oil.

    But Tesla needs a culture change to fit into the auto industry to be successful. If it cannot expand to the mass car market it will, at best, survive as a high end luxury car like Maserati, Ferrari and others. This may not work.

    The automotive market is tough. It abhors new technology over cheap “Fred and Barney” ways to do things.

    1. “Others think differently, but the entrenched automotive moguls have no interest in rocking their own boat. Especially in a era, at least for now, of cheap oil. ”

      I read somewhere that the majority shareholder(s) of most major vehicle manufacturers are oil industry/finds. This keeps them locked to oil as the ‘go juice’

  8. Does your emphatic “all” in caps mean you are asserting a point that is indisputably factual? Just about everyone here is informed and motivated to be informed on all aspects of technology and is capable of weighing evidence and arguments on a subject without being ordered to accept a point of view. Furthermore, the claim of “all” has reasoned arguments to the contrary.

    Yes, the legacy automakers will not “bet their company” the way Tesla has, by abandoning their investment in internal combustion autos and making only battery-electric cars. These automakers will move in that direction when either mandated by government edict or when the economics of batteries swings that way, which if the claims of imminent sub-$100/kWHr 3000 full discharge cycles greater than 10-year lifetime batteries hold up.

    It can be reasoned that China’s BYD auto maker will continue, in part because of what Thomas Friedman was envious about China, that what the government leaders decide will take place. European countries have always tried to discourage liquid fossil fuel usage in the way that people in Japan pay three times as much for rice than if they purchased it from Arkansas. Among the legacy US automakers, GM and Ford will always “dip their toe in the pool” to keep up with alternative technologies.

    That the “entrenched automotive moguls have no interest in rocking their own boat” is a meme I will grant. Is the leather-jacket-and-spike-heels clad auto-show model who turns out to be CEO Mary Barra shilling for her GM product line one of those entrenched moguls? How about the environmentally conscious Ford-family scion William Clay “Billy” Ford Jr. who was pushing his management into hybrid vehicles? Is mass-market hybrid pioneer Toyota Motor Corporation one of those legacy companies that will be unable to adapt to an electric future?

    1. I meant no offence with the “ALL” comment, but as far as the US Detroit type crowd goes, its a good bet that they will not push electric cars until the market collapses and the buggy whips and Fred Flintstone equipment will not sell.

      Elon sees this as his policy to sell direct to users and not have a distributor system. Any distributor of both gas and electric cars will be pushing the gas/diesel models over the electrics every day of the week and twice on Sunday. If a distributor sells only electrics they will go broke.

      Cars are not a tech industry – it is a ART industry. They sell sexy hot art pieces with wheels. They like to keep the wheels part cheap. I hate to say it. but without the EPA, today’s automobile would be no more advanced than a ’57 Chevy under the hood.

      Look at the General Aviation (GA) industry. Today’s new Bonanza or Cessna have the same engine used in the 1930’s. They all fly with a Briggs and Stratton lawn mower engine. And they sell new for $800K+ and make only 200 – 300 a year.

      Tesla needs to get to a million units a year or they will fail. Gas or Electric, they cannot compete at the unit rate and the price point they have now. My first bit of advice: Get out of California, and maybe the US as well.

  9. I frankly don’t care. I wish he’d just focus on space.

    Same here. I worry that Tesla’s financial difficulties could affect SpaceX.

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