Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Tesla Burns Through Record Cash to Bring the Model 3 to Market

bloomberg.com

Post reply on HN
Print view View original

121–130 of 224 posts

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#121

Post by mason240 »

awkwarddaturtle wrote: post #87
tpolischuk wrote: post #85

Earlier quoted context omitted.

The comment you are quoting is a snippet out of context. I'm not sure why you're so upset. 'Whether Tesla survives or not, these billions are some of the best spent money on the planet in the last 50 years. What are the accumulated losses so far? $5-10B? Even if Tesla were to spend another $50B and go bankrupt, I would still maintain it's great. What Tesla has achieved is so important in the long run for the environm…

> I'm not sure why you're so upset. I'm not. But it's interesting how I just got swarmed by 3 commenters. > The comment you are quoting is a snippet out of context. The context makes it even worse. "None of us can unlearn what Tesla has taught us. There is no way back now. Tesla has already won.'" I can't believe you think that the "context" makes it any less cultish. The comment is almost messianic.

>But it's interesting how I just got swarmed by 3 commenters.

Losing an argument? Better accuse the other side of being paid shills.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#122

Post by mikeash »

dkrich wrote: post #28
jotjotzzz wrote: post #4

Earlier quoted context omitted.

I don't think it's much of a risk. They created a product that is way differentiated from every other car out there and people want to buy it. It's like seeing the iPhone for the first time, and all the other flip-phones out there is simply just not enough anymore. They will succeed. If I'm in the market for a new car, I would totally line up for this one.

This is where I disagree with most people who are bullish on Tesla. I think there's a huge risk for Tesla that most people don't factor in- that it's very possible that most car buyers simply don't want one . The interesting thing about that is that most people seem to assume that making them at enormous scale and meeting the overwhelming demand is the only risk. What a century of observing the auto industry has taug…

They have half a million reservations for the Model 3, despite putting essentially no effort into signing people up, and spending the last year or so actively anti-selling it. They're currently adding 1,800 reservations a day, despite the fact that someone reserving today probably won't receive their car for 18 months or more.

I agree with your point as applied to a hypothetical generic car company launching an unknown model, but in this particular instance there's good reason to believe that Tesla will be able to sell every car they're capable of building.

You compare it to the iPhone saying that the iPhone was better on pretty much every metric. That wasn't the case at all. The original iPhone lacked 3G connectivity, support for more than one wireless carrier, support for CDMA networks, GPS, third-party apps, hardware keyboard, user-swappable battery, decent camera, FM radio tuner, multitasking, and removable storage.

The iPhone eventually gained many of these features, and most of the others turned out to be less important than people thought they were. But that was very much not obvious at the time.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#123

Post by tokipin »

dkrich wrote: post #28
jotjotzzz wrote: post #4

Earlier quoted context omitted.

I don't think it's much of a risk. They created a product that is way differentiated from every other car out there and people want to buy it. It's like seeing the iPhone for the first time, and all the other flip-phones out there is simply just not enough anymore. They will succeed. If I'm in the market for a new car, I would totally line up for this one.

This is where I disagree with most people who are bullish on Tesla. I think there's a huge risk for Tesla that most people don't factor in- that it's very possible that most car buyers simply don't want one . The interesting thing about that is that most people seem to assume that making them at enormous scale and meeting the overwhelming demand is the only risk. What a century of observing the auto industry has taug…

> I think there's a huge risk for Tesla that most people don't factor in- that it's very possible that most car buyers simply don't want one.

This is a legit worry, but well-designed electric cars are better than gas cars by a large margin, without question. Ultimately this is the only requirement, and it's one of the reasons Tesla is so extreme in its design aspirations.

So this risk is not a risk at all in the case of Tesla. It is certainly a risk for other companies (see Chevy Bolt).

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#125

Post by [deleted] »

awkwarddaturtle wrote: post #79

Jesus. Look at the top comment and the replies in this thread. I find it hard to believe it is real HN commenters and not a TSLA PR campaign here. "What are the accumulated losses so far? $5-10B? Even if Tesla were to spend another $50B and go bankrupt, I would still maintain it's great." Seriously? This is being voted up? Also, the top commenter here "simonsarris" is a top commenter in the other TSLA thread. https:/…

[deleted]

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#126

Post by shalmanese »

simonsarris wrote: post #46
abritinthebay wrote: post #42

Earlier quoted context omitted.

I’m trying to work out if you’re serious or satirizing someone who believes this nonsense. That’s not a failure of imagination - that’s business focus.

I am serious. What good does it do for AAPL's business focus to sit on cash for years? The management paralysis is only made more obvious by the cash hoard. Even their existing products (pro desktop) they let languish. If you don't have the imagination and need a past example, consider the success of AWS. The project was born out of Bezo's edict early on in the creation of Amazon that everything the company does inte…

Apple has run itself as a functional org as opposed to a divisional org and regards that as a key differentiating factor that provides it sustainable competitive advantage.

But one of the key constraints of functional orgs is that they require incredible focus and discipline or the entire structure breaks down. Apple doesn't have iPhone marketing and iPad marketing that report to the boss of iPhone and iPad respectively, they just have Apple marketing that is in charge of making Apple better and reports to the boss of Apple.

That's a huge reason why they were able to self-cannibalize their most successful product so ruthlessly. Because there was no iPod boss who's bonus depended on iPod sales and would throw grit in the wheels of any rival projects. But you can only do this when every single employee is able to hold the entire corporate business model in their head.

You think Apple would do better under a more divisional structure. That's fine, the pros and cons of functional vs divisional have been debated for ages. But it's also a moot point because Apple is never going to switch to a divisional structure and without switching to one, they can't do all the things you want them to do.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#127

Post by mikeash »

lumberjack wrote: post #29
jotjotzzz wrote: post #4

Earlier quoted context omitted.

I don't think it's much of a risk. They created a product that is way differentiated from every other car out there and people want to buy it. It's like seeing the iPhone for the first time, and all the other flip-phones out there is simply just not enough anymore. They will succeed. If I'm in the market for a new car, I would totally line up for this one.

>They created a product that is way differentiated from every other car out there and people want to buy it. What? The Bolt has slightly better range, and probably much better build quality. The difference in price is $2k on a base price of $30k. And if Chevy could do it, I'm positive most others can too.

You get a lot more car with the Model 3 than with the Bolt. Not only do you save $2,000, but you get somewhat better performance, better looks[1], access to Tesla's excellent fast-charging network[2], and excellent active safety systems. If you're willing to pay the extra $5,000 to activate it, you can get Autopilot, which is a game-changer for long highway drives.

Chevy seems to agree with this assessment, planning for an annual production of around 50,000 units.

[1] Subjective, I know, but I think I've yet to see anyone say the Bolt looks better.

[2] You have to pay an extra $750 just to get fast charging enabled in a Bolt, and it only gives you access to CCS chargers, which suck pretty hard as a network currently and are significantly slower.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#128

Post by dkrich »

toomuchtodo wrote: post #52
dkrich wrote: post #30

Earlier quoted context omitted.

For a luxury car, that's not really good. As you move down-market, margins only get lower, so you have to rely on volume to make significant amounts of money. If people don't buy Model 3's by the hundreds of thousands every quarter, they are going to have problems squeezing profits from this car.

Legacy luxury margins. BMW: 8% Mercedes: 11% Audi: 7%

So a company that has widening losses claims a 25% margin on its cars. Sounds like some interesting accounting is at work.

Ask Bob Lutz whether margins are greater on a Chevy Camaro or a Cadillac ATS (exact same platform, one sells for about $10k more than the other).

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#129

Post by dkrich »

mikeash wrote: post #122
dkrich wrote: post #28

Earlier quoted context omitted.

This is where I disagree with most people who are bullish on Tesla. I think there's a huge risk for Tesla that most people don't factor in- that it's very possible that most car buyers simply don't want one . The interesting thing about that is that most people seem to assume that making them at enormous scale and meeting the overwhelming demand is the only risk. What a century of observing the auto industry has taug…

They have half a million reservations for the Model 3, despite putting essentially no effort into signing people up, and spending the last year or so actively anti -selling it. They're currently adding 1,800 reservations a day, despite the fact that someone reserving today probably won't receive their car for 18 months or more. I agree with your point as applied to a hypothetical generic car company launching an unkn…

one wireless carrier, support for CDMA networks, GPS, third-party apps, hardware keyboard, user-swappable battery, decent camera, FM radio tuner, multitasking, and removable storage

I don't know about you, but my clamshell Samsung flip phone didn't support any of that except a user-swappable batter and removable storage, both of which I would argue are not net positives, but negatives as they increase the form factor of the phone.

Also, what of the 65k or so of cancelled reservations for the Model 3?

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#130

Post by toomuchtodo »

dkrich wrote: post #128
toomuchtodo wrote: post #52

Earlier quoted context omitted.

Legacy luxury margins. BMW: 8% Mercedes: 11% Audi: 7%

So a company that has widening losses claims a 25% margin on its cars. Sounds like some interesting accounting is at work. Ask Bob Lutz whether margins are greater on a Chevy Camaro or a Cadillac ATS (exact same platform, one sells for about $10k more than the other).

GM: 8.4%

Sad!

Post reply on HN