This works in a zirp environment after the Steve Jobs era where a single company released one success after the other. People believe anything and have personal interest in pumping claims they know to be at best exaggerated, at worst outright fraudulent.
The problem for Tesla, though, is that we aren’t in a zirp environment anymore so money will become harder and harder to come by and they have exhausted the early adopters. They are already suffering deflation in their prices, having to cut prices to stimulate demand which still seems to result in lackluster numbers relative to valuation.
I don’t see how this company is going to sustain its valuation given the basic fundamentals at play.
BTW, it’s important to understand that Elon is incredibly focused on the share price and his genius perception. This was made evident in 2022 when he split the stock in an attempt to create incremental buyers during a very tumultuous time, but he was careful to do a 3 for 1 split so that the stock price would still be three digits (it was around $900 at the time) so that the perceived value wouldn’t be diminished.
He’s also made reference to the share price and worked frantically on Twitter to try and pump the share price and hurt short sellers on many occasions. CEOs who are overly concerned with share price fluctuations are always a red flag for me and in Elon’s case it is abundantly clear he needs to keep the savior image going. I would not be at all surprised if the timing of the CT delivery event came about due to nervousness over the slumping share price.
I do not follow tesla that closely, but do they not work hard on lowering the manufacturing price (fewer parts, creating batteri themselves) do that they can sell at a lower price, and if they can sell and still make money but the competitors have to either sell with a loss or have highere prices?
I think their strategy is to charge the highest prices they can, early adopters pay up, demand gets exhausted and they have to keep the illusion alive that supply is the growth constraint, not demand. Demand falling is a death knell for them so that is one thing they absolutely must avoid at all costs.
They want people to believe that the demand is a foregone conclusion and they need to build more factories to satisfy it. But clearly they are trying to maximize the profit. Of course they would like to lower their costs in pursuit of that but it’s not to charge the least they can, otherwise they’d have led with a compact EV instead of an $80k luxury sedan.
I’m struggling to understand what insight you think you are providing.
Tesla had a very explicit plan for a long time to make high margin luxury cars and keep scaling up production to make cheaper and cheaper cars to make electric cars dominate.
Lowering prices isn’t some sign of “struggling to hold on”.
The insight is that they may intentionally be propagating the "supply limited" story despite it not being true. I believed it (while thinking "but why? the chinese seem to have none of these problems").
They are lowering prices because demand is falling off. And it's not just one price reduction. They have done multiple at this point. It's one of the worst positions for a company to be in.
Lowering their cost makes Tesla in a position to lower they prices if they want to. Lowering prices because the demand is low is OK if you have better margin then you competitors and as far as I can tell they are making more money per car. Its natural that they decrease prices to sell more. But as long as they are making money on each car and is taking more and more market share I think they are happy.
Without any real substantive changes to the vehicles, Tesla's prices rose as much as 50% (for the Model X) from 2021-2023. Even the Model 3 has increased by about 25%.
You can make inflation arguments, but it's pretty hard to claim that Tesla is driving prices down. (Prices have come down in 2023, but it's too early to know if this change is sticky. The reality is, most observers think Tesla uses price to regulate demand - so dropping price could just well mean less people want Teslas than before.)
Your right, maybe my formulation was a bit clumsy. I'm not arguing that Tesla is driving the price down for consumers (more then necessary).
I agree that they use price to regulate demand. But they want to sell as much as they can. So if the price is too high they will not sell out all cars. And they can afford to lower prices more then many of their competitors because they earn more per unit sold then the rest of the field [source: https://asia.nikkei.com/Business/Automobiles/Tesla-earns-5-t... ]
Toyota has a 3000M/year across-company cost reduction target. It's Tesla who has to keep up with that, normalized by production figures. Not the other way around. Else bZ4X will start making more sense(or RAV4 for that matter) and they'll be out of market.
Not sure I understand you argument here. Toyota is way bigger then tesla. A quick Google search [1] shows that tesla makes 8x of what Toyota is making pr car. (Des 2022)
The main drivers of Tesla's valuation are that 1) they make incredible cars (some of the bestselling in the world already),
2) they have a massive head start on EVs, 3) they have fantastic margins (most other manufacturers are selling their EVs at a loss), 4) they have the full self-driving lottery ticket, which, while still unproven, will pay off huge if it succeeds.
They are planning a new cheaper model which will allow them to offer a car to a lower priced market. Also, Tesla buyers are very loyal so they will get a lot of sales when existing owners get new cars https://jalopnik.com/tesla-buyers-are-remarkably-loyal-to-th.... And BEVs are still the fastest growing segment of the market, but not even 10% share yet, so there is the other 90% of the market to go after.
Not sure why you bring up interest rates as a weakness when Tesla is the least dependent on debt of all the major car companies. High interest rates will be much more of a burden on their leveraged competitors. Same thing with the price deflation. Yes, that will hurt Tesla's profits, but it will hurt competitors that are selling BEVs at a loss even more.
Because higher interest rates make everything more difficult. It incentivizes people to save instead of buy expensive cars. It makes it more expensive to finance expensive cars. It makes it more expensive to raise financing to pay for factories and workers. It can very well bring about a recession where unemployment rises and your TAM shrinks.
Tesla is still trying to convince people it is in hyper growth mode constrained only by its ability to supply cars with robots, self driving cars, semis and compact cars all in the pipeline.
Let’s see how that plays out with fed funds at 5.5% for a few more months.
Tesla is in hyper growth mode. Q3 revenue was up 50% year over year, which is absolutely hyper growth mode for a car company, or really any company as big as Tesla. Fed funds rate during Q3 was 5.25-5.5%.
There is a grain of truth: Tesla's P/E makes no sense. However, we should count the lower EV prices they have achieved as a great success. Musk stated from the beginning that that was the goal: Prices would be high initially to fund development, and as they scaled the learning curve, prices would come down. If anything, they haven't gotten cheap enough! They need to get to BYD's prices and lower -- both for "altruistic" reasons (to achieve EV ubiquity) and "selfish" ones (to appeal to remaining consumer segments, who do not have demand for EVs at these prices).
Finally, our cheerleading or hate of public figures and of companies should not distract us from what's in our best interests. We should be happier as EVs are cheaper.
TSLA's valuation has been insane for a while. I would probably buy them as a car manufacturer if their price was more in the $70b range rather than $700b.
They will keep selling cars but put more focus on their AI capabilities to stay on trend. I think we can already see this with their llm and robots, once they start making their own chips Elon will want vertical integration and start making their own silicone. the focus will be more on the autonomy of the car and larger tesla ecosystem rather than on the fact the cars are electric since every car is now electric.
Musk compensation package is tied to Tesla's share price(and profitability). Sp there is a high insensitive to pump the stock, hence the countless empty promises. Tesla bots have been pumping TSLA stock since 2013[1].
Robotaxi is not a foregone conclusion. Maybe they'll pull it off. I don't know if there's going to be a giant leap like GPT, or a continued slow indefinite grind like we've seen so far with self driving. I'd be skeptical of anyone who claims to know unless they've already accomplished it.
The current generation of neural networks already seem to do pattern recognition better than humans. And that is all that is needed to press the brake in a dangerous situation. All that is needed is to train them on enough examples of different situations that occur on the road.
I've seen examples of humans beings shot out of cannons where they were perfectly fine afterwards and the crowd applauded. I haven't seen any examples of people being shot out of cannons where they were not fine afterwards. Should I shoot people out of cannons?
That understanding is not the same as pattern matching and if that's all you rely on to drive your car you're going to end up dead or seriously injured.
Even when pattern matching is your only tool and you have seen only positive outcomes of humans beings shot out of cannons, you will still not want to shoot people out of cannons. Because it matches so many negative patterns. You learned that explosions are bad, cannons are bad, weapons in general are bad, loud bangs are bad, people flying through the air are bad etc.
So this is not an example of pattern matching being insufficient to avoid danger.
Even if this were a given (and it isn’t), I think it’s unlikely Tesla robotaxis capture the transport market like that.
There’s a lot of cars to replace. Capturing 10% of yearly car sales, worldwide, is already a very tall order.
Capturing 10% of all cars on the road would require this level of gargantuan sales for many years, and that’s just so 10% of cars in the world are your brand, not so 10% of rides are on cars owned by the fraction of people who bought your brand and decided to let it drive strangers while they’re not using it.
Moreover, beyond the safety concerns there’s policy concerns— knowing how to safely drive in Indonesia doesn’t mean being allowed to drive in Indonesia. Resource constraints— where is all the lithium going to come from, and how will the people around the world feel about this?
And there already are alternatives beyond the car industry. Public transit, for example. Demand for not driving or not owning a car can’t only be safely fulfilled with robotaxis.
I said 10% of rides will be robotaxis and 10% of that will be in Teslas.
That is 1% of all rides taking place in Tesla robotaxis, not 10%.
Also it is about rides, not about cars. Less than 1% of cars being Tesla robotaxis is enough for 1% of rides to be Tesla robotaxi rides. A robotaxi will do multiple times more rides per day that the average car.
>All that is needed is to train them on enough examples of different situations that occur on the road.
The only real way this would work is if you build a pipeline where you have a simulated world with realistic physics, rendered through some pipeline to represent camera images (in relatively high fidelity) and/or lidar outputs, and teach the network to predict the evolution of these scenes, and do this with a shitload of random data
This is probably orders of magnitude more expensive to do than training GPT models, since for vision, you would have to render it with ratyracing.
Have you not seen the results that have been shown recently with Gaussian splatting? Photorealistic rendering looks like it'll become a hell of a lot cheaper than raytracing soon enough, and this might actually be a realistic idea.
I dunno if statistical methods can be applied to generating photorealistic images from simulation, where you don't have enough information in a scene, since you are starting with 3d models.
I hate that companies in the vision self driving space like Tesla and Comma AI have made the act of driving seem like its trivial.
Human drivers drive with EXCEPTIONALLY more "software" under the hood.
We simulate the world around us using learned rules across multiple domains. For example, if someone has never driven at night, but understand that the cars have tail lights that are red, we can deduce that pairs of red lights are cars on the road without ever being subjected to the visual of driving at night. Its this kind of processing that lets us be safe.
In the current form, ML models are way subpar to this. A superhuman driving agent should be able to drive through a construction site with cones and debris, or a busy parking lot, or a grass field full of logs. No model out there can do this. This is why you absolutely need simulations if you want to do it traditional way. Comma AI has gained quite a bit of success in training in a simulated environment that simulates deviations from straight line driving on real world video.
we can deduce that pairs of red lights are cars on the road
Generalization, abstraction, understanding. That is what neural networks are about. Current NN's are already very good at that. FSD constantly has to understand lighting situations it has not seen before.
Even if you had a simulation set up for training, and enough compute on the vehicle to run something like MuZero real time inference for self driving, you would still run into the problem of humans setting up all the possible driving scenarios, which will likely leave some out and the model will never learn the right actions for those - meanwhile, to any human, the action would be very obvious. Over time you could probably get close enough to a very very small error rate, but you would still be hesitant to trust the system.
A true superhuman driving agent would most likely be able to take a picture of a scene, and then give a prediction of evolution of object position in 3 dimensions for a given time window, and give a confidence score on that. For example, if the single image is from few on a highway, it should be able to predict that cars are in fact moving, because the chance of cars standing still on a highway is very low.
And to train a model like that, you most likely need a base model that can "understand" physics.
Additional images from the past or the future would generate prediction that is more accurate, and also improve the model self assessed confidence. And then you would have some heuristic algorithm like MCTS based on confidence levels on the best course of action.
It's not just objects, but it has to predict what people are doing, going to do, or are trying to communicate. For example, police redirecting traffic, a passenger having a medical emergency, other drivers driving erratically, etc.
The players deploying robotaxi right now are entering a market that resembles shared micromobility(scooter, e-bike) - what they need is not just vehicles, but to get on the side of the appropriate regulatory bodies and to get eyeballs on the product. It's a fight won one city at a time, and it favors partnering with companies like Uber that have built experience in both of those aspects.
This is a fight that Tesla doesn't seem to be engaged with - it's staying on the manufacturing side of the issue. Its opponents are going to see this as a gun they can fire to shut out Tesla's supply-centric economics: install regulations on robotaxi - vehicle form factor, signals, testing - that make it impossible for anyone but a well-capitalized player to enter. Then it doesn't matter how cheap the vehicle gets if the other costs required to operate legally keep small players out.
Tesla's recourse in this market is to either sell a commodity product that passes regulation, which is terrible for their bottom line, or to become a robotaxi company themselves, which is not unfeasible(they have the Supercharger network, they can grow more vertically) but which they aren't currently aimed for. If they did that the fast path would be to find a ridehail partner and acquire them.
I believe in the robotaxi concept, but I don't think it's settled as to what form it ultimately takes.
I'm sure that if Tesla creates the best robotaxi software, it will find its way onto the road one way or another. My feeling is that they will operate the robotaxi fleet themselves. But they might also just sell or rent the cars. Or even just the software.
Given what's happening with all the rest of AI, I suspect the demand for commuting is going to go down by the time robo-taxis are viable.
Will robots that lead to less commuting be simply balanced with more fun trips for similar revenue potential, or will they lead to a complete shift of world economics that means the money stops being meaningfully comparable to today's?
> Less people will commute to work. But more people will meet for a coffee and order stuff online which then gets delivered in 30 minutes by a robotaxi.
We havn’t ever seen a situation where a reduction in the cost of work lead to less work being done.
What happens is that employers (and the market) demand more work, and only labour law holds back the demand that employees work all their waking hours.
You’ll probably respond that UBI will give everyone all the free time they want… but capital owners will have to fund UBI through tax. And capital HATES paying tax.
This feels like stuck gears to me. What am I missing?
> You’ll probably respond that UBI will give everyone all the free time they want… but capital owners will have to fund UBI through tax. And capital HATES paying tax.
> This feels like stuck gears to me. What am I missing?
Communism.
Or at least, some variant of it. If your government owns the full automation and operates it for the citizens, that's much the same as the upper limiting case of a corporation owning the same full automation for the benefit of the shareholders.
(I'd say "and this time nobody needs to go to the gulags", but having the government aligned with the citizens is a separate problem: any given state might get it right, or history might rhyme).
This is simply "calculating yourself into richness", and in the mean time forgetting a lot of cost and failure modes. If you can get money from a VC that way the joke is on the VC.
I've heard the same flavour of equations from everyone I've ever heard talking about starting a company. One guy was calculating that if he sold his gadget to "just" 10% of people in Africa, he'd make so much money.
Spoiler: he did not sell a thing to 10% of people in Africa.
Not profit. Cost. Using robotaxis is going to cost less than operating your own car.
The cost of operating the current car fleet is way higher than $700B. Buying the cars alone is higher. There are 70M new cars on the road each year. At $10,000 per car, that would already be $700B.
What is the difference in utility of a robotaxi and a meat taxi besides maybe a reduction in cost per ride (how much is labor vs. non-labor cost), and why isn't everyone using Uber to get everywhere now?
The robotaxi vehicle still needs to be manufactured, purchased, financed, maintained, fueled, insured, with room for profit for the robotaxi company. None of these things are free.
Capacity utilization will make using a robotaxi multiple times cheaper than owning a car. You car stands still most of the time. A robotaxi can drive most of the time.
Automation and economies of scale (maintenance, repair, cleaning, charging) will also contribute to the lower cost of a robotaxi fleet compared to privately owned cars.
Besides driver breaks, robotaxis are bound by the same constarintsbas normal ones. So no, it won't arrive faster, might (and that is already some claim) be a tad cheaper if you ignore CAPEX, have yet to prove to be safer than humans (so far self druving cars are not, and by a long shot, safer than humans) and convenience doesn't change except for the most, how to put it politely, asocial beings that cannot stand being anywhere near to other human beings, in case of taxis a driver.
More taxis mean more CAPEx, mean utilization goes down off-peak, bothe of which result in lower profitability.
Robot driver or not, basic financials and operational constraints still apply. They can only be ignored for quite a while if a company has endless VC money, unit economics ultimately catch up so, always.
> It arrives faster because there are more of them
I think you’re overestimating how many people will buy Teslas.
Also, how many people who own Teslas would robotaxi it. A company might do it as a business, but it’d just take waking up one morning to discover a drunk passenger puked all over your back seat, or fluid remains of someone having sex in there [1] for individual owners to pull out of the program.
It is way cheaper because majority of Uber cost is the driver.
That is only true because Uber doesn't have to pay for buying and maintaining the cars in their 'fleet', having offloaded that cost to their drivers. If Uber were to move to owning robotaxis then they have to have to move the car ownership costs back onto their books.
But sure, as long as other take all the costs and most of risks away from the new liberatrian tech nobility we are suppossed to not care about those little things, right?
It trivial to project big profits if you assume a monopoly. The problem is that it's true for any sector, you have to justify why Tesla is the one to achieve it or else your numbers are meaningless.
Which is exactly ehat Tesla did trying to maintain a "tech" market cap instead of defaulting back to a more realistic car maker one. Among other things.
Things like this make one think. Perhaps bullshitting on a cosmological scale is an extremely valuable skill for a modern CEO of a billion dollar plus tech company?
Think about it. From the point of view of someone responsible for a huge company that may well go under due to bad cash flow. Is it better to bamboozle a thousand rich people into lending you a chunk of spare change for a couple of years, or risk going under with a company that employs thousands of people and affects hundreds of thousands indirectly in its supply chain. Considering it like that one can feel almost sorry for Elon forced into the role of a bullshitter by his enormous responsibility...
The more Elon talks about something you know about, the more you realise he's not a tech genius, far from it, but he is a powerful momentum guy. By that I mean that he seems to have a compulsive need to constantly push himself and his companies forward as aggressively as possible, regardless of methods & outcome. That's definitely a skillset that CEOs need but I'd never want to be anywhere near Elon's version of it. Other CEOs manage to do the same without causing the same level of damage that Elon leaves in his wake.
Which other CEOs have managed to move as fast as Tesla and SpaceX in a hardware space without similar amounts of damage (presumably in the burnout sense)?
This assumes that I think being fast is by itself a worthy competition, which I don't, plus fails to provide a definition of speed. There are plenty of companies with phenomenal growth that we've never heard of because they don't make headlines. Even in the automotive market there are companies that are experiencing big growth and stealing market share from Tesla quicker than Tesla built that market. Yes they were first but that's no guarantee of long term success.
Picking from the dataset of companies you can think of is something that Musk's marketing strategy relies on as it's what we do when comparing companies for buying cars, buying stock or talking about.
A recent episode of The Verge's podcast titled "Land of the Giants: "The Tesla Shock Wave" uncovered how Tesla's work culture led to many problems for the employees like extremely long hours, unsafe working conditions, harassment, scandals, fines, lawsuits, and even the slightest of mistake could lead to termination."
Or you could ask rich people and get willing contributions.
There is an amazingly deep irony that someone who was supposed to be building fully automated gigafactories, is being apologized for lying for funds and failing to deliver tech.
Reading the linked article about the 5,300 lb Lucid, it’s pretty bananas that a car which weighs 1000 lb more than a Mustang (just for reference because it’s a recognizable muscle car) can do a sub 2 second 0-60.
electric vehicles are interesting in that regard because of the radically different power-band and torque numbers compared to ICEs.
if the majority of your time is spent spinning rubber fruitlessly at launch then you can begin to lessen the problem by adding weight to increase mechanical friction.
electric vehicles are torquey, so their weight profiles vs. their 0-60s is a lot different than you'd expect from an ICE.
> if the majority of your time is spent spinning rubber fruitlessly at launch then you can begin to lessen the problem by adding weight to increase mechanical friction.
It doesn't really work like that. Say you double the weight, but keep the coefficient of friction - you also double the force. But the now-doubled force has to accelerate double the weight, so the acceleration remains absolutely identical. That's a small simplification, because on snow, gravel, mud and other loose surfaces you have a more complicated relationship, but on asphalt it holds more or less exactly.
The reason EVs accelerate better is usually because of instant, better-controlled and gapless application of torque and power - no shifts, no delays, no turbo lag, etc.
Not only that, but they can enforce nearly 50-50 weight distribution (the Lucid Air is something like 49.5/50.5) and the torque doesn't all come from a single spot in the car, then having to be distributed.
With the Lucid, each axle gets a motor, and the back axle gets two, so you can distribute the torque at will, limited only by how much power the battery can output, since the motors can do more than the battery will let them. You also get things like torque vectoring on the rear wheels, so you can send that thing into turns at high speeds like nobody's business without a squeal to be heard.
Acceleration is the most interesting part about electric cars... I dont care if they use gas or not. Just got a Yamaha R1 to fix that. about 450lbs and close to 200hp I think (about half the cost of the cheapest tesla and I can go faster quicker)
Very insightful indeed. It suggests this article is not factual. Not the first anti Tesla article from that website featured on HN. Light on facts and evidence usually. And in this case spreading (deliberate?) lies.
"Test rides were given at the event for those who immediately paid the first $5,000 of a $50,000 deposit to pre-order the vehicle"
A bit less dramatic than Tesla getting a quarter million for nothing, which the article is leading with. Presumably, the kind of people that have 250K would also be able to hire some expensive lawyers to get it back in case of a failure to receive a car. I don't think that happened. The narrative that Tesla survived near bankruptcy by ripping off wannabe roadster customers seems like it is a complete and utter fabrication.
Those 5k deposits are still interesting of course but I doubt that made a lot of difference for Tesla. Assuming the number of 1000 people is actually correct of course. Which given the rest of the article is not a safe assumption. That's a lot of test rides. Just saying.
The roadster would have launched in 2020, which as some people may have forgotten was the first covid year that created a few logistical challenges for lots of companies; Tesla included. Then we got the Ukraine crisis, chip shortages, etc. So, yes they are 3 years late, not 6, delivering what was always going to be a bit of a niche car. And there seem to be some valid reasons as to why that might be. Also, people took test rides so the car was real enough for that. Tesla actually managed to keep on growing marketshare in the past three years throughout these events. So they aren't doing that poorly.
> Very insightful indeed. It suggests this article is not factual.
It's really weird when someone summarizes a reference completely incorrectly. Like is it just intentional disinformation hoping that most people don't check you on it?
From the link:
> the first 1,000 to be produced, known as the Founder's Series, will be priced at $250,000.[17][37] Full payment would be required to pre-order the latter vehicle.
You can no longer preorder the Founder's Series as they've all been accounted for already.
> Those 5k deposits are still interesting
... wow, like even worse you misrepresent even the part that you quoted out of the article. $5,000 is a prepayment of part of the deposit that allowed a test drive at the event, the pre-order deposit for non-founders cars is $50,000.
And those $50,000 deposits are in fact mentioned in the article: "That quarter billion just for the Founders Edition cars probably helped the company quite a bit, and there’s no telling how many $50,000 deposits the company got and still holds"
If you'd invested the 250k and then held through all the various strata of insane valuations between then and now, yes. I never regret not buying these stocks because I know I would've sold 100 times over.
Or if you invested $1k in Tesla shares, it would be worth more than $16k now. I can see why tesla fanboys/shareholders are so protective about the Tesla's image..
Isn't "fake it till you make it" about presenting self-confidence in achieving something despite not (yet) having the skills to do so?
What Tesla did was starting a presale on a product they probably had no intention or resources to actually build, in order to get a cash-injection to continue working on Model3 ramp-up...
I'd argue even the cybertruck wasn't seeing much of development work beyond that presentation during that period, considering that the self-praised exoskeletton chassis of it actually turned out to be impractical and was dropped entirely.
What's so pernicious though is the fail it till you make it. This absurdly performant roadster 2 isn't going to happen, ever. Tesla semi seems unlikely to be real. Cybertruck seems dubious. There's no skunkworks team of engineers that can go wild & make dreams fantastic dreams real here. But just riding the grift, riding the promises along, that's been ok. There's been no checks. The lies enabled survival amid the darkest times, actually: the fantastic lies are the only thing that counted, for a while.
You say "it is too often now" but actually it feels like the opposite. There isn't anyone left swinging for big, as far as I can tell. Everyone is receeding. No one is making new big claims. I don't like the lies, but I think we are better as a species holding ourselves in some heat of competition, to be good, to try hard, and it feels like we're in a diminishing expectations world, and that... that is shit. That is the failure mode, where the broadband efforts of trying all cojointly give up. I don't like it.
Are you aware that there are Cybertrucks in show rooms right now? And the launch event is tomorrow? [0]
Tesla has already delivered 21 Semis to Pepsi. [1]
That he makes up products they have no intention of delivering on has been obvious for a few years now. What’s so perplexing is why the market continues to reward it. The company has a $800 billion market cap and an 80 pe.
I suspect it’s on a long road back to reality and being given some premium because of the first mover advantage, but still the company is basically BMW with the illusion of being run by the next Steve Jobs.
> I suspect it’s on a long road back to reality and being given some premium because of the first mover advantage, but still the company is basically BMW with the illusion of being run by the next Steve Jobs.
Unlike BMW Tesla actually sells meaningful quantities of electric vehicles that people can actually afford.
Just look at the models BMW is advertising [1]: 2x 55k (iX1, i4 GC), 1x 67k (iX3), 1x 70k (i5 L, i4 M50 GC), 1x 77k (iX), 3x 100k+. In total, across all (!) BMW i models, they are on track to sell 340k this year worldwide [2], while Tesla aims for 1.8 million units [3].
Because of the asymmetrical risk of betting against it. It's easy for people to buy a Tesla lottery ticket with the chance (at least in the past, and in their minds still) of 10X or 100X your money. Much like crypto. Or the actual lottery. But those who believe it's overvalued have to either risk their entire investment betting on it to crash within a relatively short period, using options, or risk an unlimited amount (or more likely a quick stop-loss exit) with limit upside and high borrowing costs, if they short sell.
I'm pretty damn confident Tesla is overvalued, but I'm not confident I can time when it will drop, nor that it won't go up significantly before then, so I don't really have an attractive way to bet against it.
> This absurdly performant roadster 2 isn't going to happen, ever.
Read the article: other electric cars already hit these performance figures. With tech advancing and Tesla’s strong finances, it comes down just to their willingness to produce it.
As I understand, this is mostly due a battery production capacity issue. When they have more battery production capacity, they will begin mass production. Also, you can Google for pictures of Tesla semis driving in Silicon Valley during testing. They are real, but not yet mass produced.
I assume you're referring to this widely circulated blog post [1]?
I think what has been written there sounds plausible, but ... I wouldn't write it off as "has worked out terribly" yet. Pepsi is the first one to actually adopt electric trucks, it's inevitable that they're hitting issues now. No one before has ever even considered trying to design an electric vehicle that delivers hundreds of kilowatts of power continuously - even the multi-megawatt hypercars are only able to deliver that power for seconds to minutes.
The semi will happen. The cybertruck will work but it’s goddamn ugly and the trunk is small and useless. The roadster always seemed too good to be true, it’s not going to happen. A 600 miles per charge is a rubicon and we’re not there yet.
Things are only going to get more difficult for them as money gets tighter. Auto manufacturing is a notoriously capital intensive business and running factories with lots of employees is very expensive. You have to make enough money to keep the factories open and the workers employed. I think very soon the new realities of the post zirp world are going to catch up.
Even if this monstrosity was released on time and people actually wanted them (a big if) I still think they would struggle mightily to move them after the early adopters for the simple fact that these are very expensive vehicles. Which brings me to the most incredible point in all this- they are claiming sales when people don’t even know what it costs!
The Lucid Air Dream managed >500 miles per charge in multiple real-world tests. The EQXX concept from Mercedes has managed >620 miles in two separate real-world tests, though admittedly it probably benefits from ideal conditions and doesn't have to deal with the challenges of being produced at scale.
Sorry for my ignorance but I’ve never been interested in car. I wondered why they said Tesla has not delivered the roadster. Is can not be so hard to produce a roadster (if you have already produced other cars), isn’t it? So what is the problem? They don’t see the market for it?
That's the nature early adopting. I've always paid more to support products I believe in even though the first iteration isn't as great others down the road. I like the first dumpy PS3. I like development.
> Much the same way Starbucks isn’t really a coffee company, Tesla isn’t really a car company.
> Tesla is a promise company. It makes promises to its customers, various governments, and other businesses. Those promises require up-front payment, and whether they come to fruition or not, the company keeps the money while continually blowing through deadlines.
This is a silly statement to make. It produced the world’s top selling car in Q1 2023.
But we cannot deny the fact that, musk introduced the roadster out of desperation to get some up-front payment and save Tesla.
It is possible that roadster specs were made up and now the RnD department is suffering to achieve the same, delaying the deliveries of the final product.
So he basically did sell the promise but now Tesla has to deliver it as 6 years is a very long gap.
That’s not a fact, you just made that up and it’s pretty obviously false if you look at their cash flow statement and how much cash they got from the new roadster.
Tesla trades at an insanely inflated multiple compared to other car manufacturers. It’s pretty clear they’ve had no difficulty raising money.
The alternative would have been a credit line from a bank, that also needs to be reimbursed, eithbinterest! Reimbursed down payments from customers are an interest-free credit. Well played actually... And quite despicable.
> Tesla does note that the reservation is still refundable, so if the final price is too high or it doesn't materialize, you can cancel and get your money back.
If you don’t wish to trust the media, here’s the Reservation Policy itself:
Yet it still sells vaporware. I was really excited for this company, but the self driving promises and fails, in addition to build quality issues made it a no go for me. While I buy new/unproven tech all the time, I guess I draw the line at cars.
It should. Cars get recalled for serious flaws. That means Tesla is shipping flawed products to paying customers that get used in the road, and then try to fix those OTA like some app on a phone. That is bad engineering, period.
Well, I don't think I'd be much bothered if I'm honest. Instead of going to the mechanic's it just gets fixed while parked outside? I think I would prefer that to my Subaru.
You still don't get it. If a product requires so many fuxes after being shipped, it was not fully developed when shipped, and defective in tip of it. Hardware ain't software, and those recalls are just the peak of the iceberg, because a lot smaller issues come along withbsaid bad engineering that cannot be fixed with a recall: suspension, power train...
And the latter already shows in data published by the German TÜV (cars here get an official road safety check every two years, the results of which are being aggregated by brand and model and published regularly): Teslas are among the cars with the highest failure rates for cars older then three years.
I mean, my car doesn't have a boombox or pedestrian warning system, so the former can't beat the latter on it. If the latter is louder than the former I wouldn't exactly be actually upset.
This honestly sounds like the conversations I'd have with people about the iPhone. Somehow it was the worst thing ever made but everyone who had a lot of money was buying one. When I eventually got around to getting it, it was awesome.
A car with quality issues on structural and safety critical parts, e.g. suspension, is more like a faulty board in a phone that risks making the battery go boom. Nothing that can be fixed OTA, but something that needs repairs in a workshop. And statistics, now that Teslas are on the market long enough for us to have those, show that being the case with Teslas.
This is decidedly not a problem of the entertainment system. And all those recalls Tesla has, hint at some engineering deficiencies. Same for all other brands and cars with similar problems, which absolutely do exist. E.g. VW quality is in decline for decades by now.
Just want to remind you that Tesla was delivering vehicles that didn't even have their seats attached properly[0]. Build quality issues are certainly something legacy automakers deal with -- but Tesla has generally brought these issues to an entirely new level.
Citation badly needed, because the evidence is against you.
I bought a Model X three years ago. It's been in service more than 10 times. My neighbor bought a Model X this year. I asked him what was broken on it, and he laughed and said "Everything".
I bought a brand new Scion FR-S, the first year if the first model ever. I've had zero issues and zero build quality issues in 100k miles. Same with our F-250.
>This is a silly statement to make. It produced the world’s top selling car in Q1 2023.
A company, on the whole, can operate as described therein while still simultaneously producing "the world's top selling [whatever]".
I mean, this article basically proves that point - Tesla took up-front payments from people six years ago for a car that it still hasn't delivered, and the Model Y was the best-selling car of Q1 this year.
I am not defending Tesla making promises, but does anyone who popped down $250k on a preorder with no release date care? They probably are on a secret mail list with Musk and are enjoying the secret progress updates.
Ah, got it. Just a heads up, maybe try and refrain from quoting long sections about a company making promises and then immediately follow that section with, "This is a silly statement to make". I don't think I would've misunderstood your approach had you only quoted that first sentence about Tesla not being a car company.
> They probably are on a secret mail list with Musk and are enjoying the secret progress updates.
This is a good point. They probably have his phone number and call him up to chat when they can’t sleep. They probably have one long tandem bike that they ride around on together but you’ll never see the mainstream media report on that
Arguably, Starbucks is a mid-sized bank that also sells coffee.
“Here's the shocking part -- Starbucks has about $1.6 billion in outstanding gift card balances. That info comes courtesy of its annual 10-K filing with the SEC.
This essentially means Starbucks is getting a $1.6 billion loan from its customers at a 0% interest rate. And it's paying that loan back in coffee, not cash.
It's already a great deal for Starbucks, but it gets even better. Some customers don't end up redeeming their gift card balances, which means the coffee chain doesn't even need to pay back the full "loan" amount. For the 2022 fiscal year, Starbucks reported $196 million in breakage, meaning unused gift card balances…”
Starbucks gets prepayments for goods and services and just has a neat bit of accounting and marketing gimmick around it. Besides being a sensationalist take, it's also misunderstanding what makes a company into a "bank".
You can't withdraw your balance in cash, as you can with a bank account. You can't transfer your balance to someone else like you can with a bank account. And, unlike a bank, your Starbucks gift card balance expires after some period of time. Can you imagine your bank telling you that all the money in your account is theirs because you haven't used the account in a few months?
Actually true in a technical sense. At least for Starbucks, their gift cards don't expire anywhere globally. In accounting terms though, the company still reduces the value of its gift card liability every year by about 10-15% [1], and claims that this is based on historical data.
Now clearly, there are circumstances in which banks do something similar and close accounts of account holders that are unknown. However, if that occurred at even one hundredth of the Starbucks breakage rate, all regulatory hell would break loose on the bank.
[1] Starbucks reports breakage of around $212.7m in FY22 ($181.1m in FY21). Their liabilities to Stored Value Cards are $1,641m and $1,596m respectively, coming out to a breakage ratio of 13.0% and 11.4% respectively.
Anything from fool.com is as bad as forbes.com these day -- in my eyes. They pump out so much sensationalist garbage that masquerades as good investment advice. Fifteen years ago, they were really impressive -- the original authors.
I've heard similar things said about airlines, but I'm not convinced; this relegates every company selling something they'll exchange their products for a "bank" rather than what they obviously are - supermarkets, department stores, airlines, coffee shops, petrol stations. Apple, Amazon, Netflix, Spotify, Steam? Banks. Chipotle? Bank.
Even if it technically conforms to a broad sense of the word, what's the point?
I go to Starbucks to buy coffee. So it's a coffee shop.
I guess the way to look at it is does Starbucks sell coffee to make profit or does it sell coffee to get people to buy gift cards to make profit. The idea of a loss leader being part of the core visible business isn’t that strange. Even better if you can make money on both though!
Hopefully there is enough nuance in the world to recognise that they are both coffee shops and a bank. In the same way Google is both a search company and ads company.
This arguments feels like it's trying to be an inch too smart.
Consider the following: Amazon isn't really an online retail company; it doesn't really sell goods to the consumer. What it does is use "goods" that it delivers as a loss leader to get people to click on buttons to give Amazon money.
Starbucks is a coffee company, that introduces an optional extra step of gift cards for other consumer convenience reasons. The fact that there is a comically large amount of money held in the gift cards system is just that: a slightly comical fact.
Your attempted example isn’t the same though. It’s much more apparent if you look at the search example. Without search there would be no ads business (to a degree)but search itself only loses money and gets compromised in favor of the ads business
Nit pick: It would be better to compare Starbucks coffee profits vs gift card "profits". Without expired gift card balances, the profit margin is zero (or negative) on gift cards.
That absolutely wasn't the issue. Starbucks cost pretty much the same as everyone else. The coffee was dreadful. We have a massive coffee culture in Australia and in general good quality coffee can be found in most urban centres.
I have been told that what most Americans call good coffee we find undrinkable.
Well, there is also that its competitor (also from the US but failed there) Gloria Jeans happened to fill its niche. The fact that each chain won in one country and failed in another seems to suggest it is just luck.
Being a "company that builds cars" and being a "car company" are different things. Tesla is a sales and R&D company, which happens to occasionally produce cars worth buying.
That assumes that if Elon were less distracted, i.e. more focused on Tesla, it would improve the performance of the company. The opposite could be true.
I wonder how many of those 1000 people used a large chunk of their life savings. Or went into debt.
I mean 250k dollars is a lot more than I have saved up. I couldn't imagine paying that much for a vehicle pre-order. Are all 1000 of them very rich bay area millionaires?
The degree of singular outrage this guy produces is something else. It's like a switch flips in peoples' brains and they go through a two-minutes (or maybe two hours in this article's case) hate session when they comment about him. Who else has gone from such adoration from the general internet to such revulsion?
It's a name not everyone will remember, but Musk is not unlike Peter Molyneux in some senses. The reason Musk has generated so much hate, though, is that he's become quite powerful, with an outsized impact on western society, and many see him as especially dangerous as a result.
Many people looked up to him, until they realized that they were being tricked with empty promises. The reaction of realizing that you have been lied to is quite strong and lasting.
Basicaly the government is embedded in all big tech and media and control the narative.
What stories are told what is suppressed, who get elected, etc.
Twitter files were hand picked by Musk and shared with select reporters to share on twitter, often without any context. They were an attempt from Musk to control the narrative and did not reveal anything new.
How the Biden laptop story was framed and shut down just before the election.
How it was a concerted effort between FBI, big tech and media done behind the scene.
How everyone went along with it.
If that is nothing new, what a joke is the election process?
> How the Biden laptop story was framed and shut down just before the election.
Twitter had/has a rule to not allow hacked data. Nothing to do with any government interfering as you implied.
> How it was a concerted effort between FBI, big tech and media done behind the scene.
Hunters laptop story? No it did not show how it was a concerted effort of those parties. Blocking that story on twitter was twitters doing with no input on it from any government agencies. As far as that story goes twitter was blocking links to articles from media. What you are suggesting is that media wrote the stories and then worked with twitter to block those same stories....
> If that is nothing new, what a joke is the election process?
You said that we should read twitter files but it seem you haven't read them.
>Twitter had/has a rule to not allow hacked data....
There are rules for millions of things, same is true in government, police and so on but if they are applied selectively to shut down things you don't like and ignored the rest of the time then it's not rules and normal behaviour.
The coordinated effort to shut down Trump campaign is clearly visible. Same as all the fabricated hoaxed that were pushed in the media non-stop.
Most people in tech and media are very very progressive, to the point where you would loose your job in a lot of place for openly supporting Trump or go against the current progressive orthodoxy.
I was on the very progressive side for all my life, but at some point started to see the cracks, and the deeper you dig the more you will find.
If you follow your curiosity you will find the lies but that will also make you an outcast in a lot of places, not a price most people are willing to pay.
> There are rules for millions of things, same is true in government, police and so on but if they are applied selectively to shut down things you don't like and ignored the rest of the time then it's not rules and normal behaviour.
What is your evidence that they are applied selectively? Twitter files? You can't even quote those to prove your point and those were hand picked by a person to create the narrative that your are now trying to push. You really haven't read the twitter files, haven't you?
> The coordinated effort to shut down Trump campaign is clearly visible. Same as all the fabricated hoaxed that were pushed in the media non-stop.
The coordinated effort to shut down Biden campaign is also clearly visible. What stories are you referring to?
> Most people in tech and media are very very progressive, to the point where you would loose your job in a lot of place for openly supporting Trump or go against the current progressive orthodoxy.
And? Go to any field that is very very conservative and try to openly support Biden or go against conservative orthodoxy. Do you expect different results?
> I was on the very progressive side for all my life, but at some point started to see the cracks, and the deeper you dig the more you will find.
And yet you pointed to twitter files that are complete bullshit. Seems your digging got you to a pile of shit that you mistook for gold.
> If you follow your curiosity you will find the lies but that will also make you an outcast in a lot of places, not a price most people are willing to pay.
You maid claims about twitter files that even twitter files do not support(as have musk and his select reporters). You aren't an outcast because you found some truth. Your an outcast because you are talking bullshit.
Your response is typical of the progressives: dismissive and personal attacks.
Like I said, I can not force you to see the other side, only you can if you follow your curiosity. It's your choice, but it's comforting to believe the common progressive narative.
If you try to see you will find, if you don't there is no point trying.
Edit:
Can you imagine the story of the Biden laptop happening to trump and not most of his family endding up in jail?
Just that is enought to make you see the other side if you are open to it.
Heh, Rimac sold robo taxi to Croatians, we paid and got nothing. I'm 100% sure whole electric car scheme is a scam. It's just a current thing that will go away in 50 years or so.
The problem for Tesla, though, is that we aren’t in a zirp environment anymore so money will become harder and harder to come by and they have exhausted the early adopters. They are already suffering deflation in their prices, having to cut prices to stimulate demand which still seems to result in lackluster numbers relative to valuation.
I don’t see how this company is going to sustain its valuation given the basic fundamentals at play.
BTW, it’s important to understand that Elon is incredibly focused on the share price and his genius perception. This was made evident in 2022 when he split the stock in an attempt to create incremental buyers during a very tumultuous time, but he was careful to do a 3 for 1 split so that the stock price would still be three digits (it was around $900 at the time) so that the perceived value wouldn’t be diminished.
He’s also made reference to the share price and worked frantically on Twitter to try and pump the share price and hurt short sellers on many occasions. CEOs who are overly concerned with share price fluctuations are always a red flag for me and in Elon’s case it is abundantly clear he needs to keep the savior image going. I would not be at all surprised if the timing of the CT delivery event came about due to nervousness over the slumping share price.