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

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

#131

Post by mikeash »

dkrich wrote: post #129
mikeash wrote: post #122

Earlier quoted context omitted.

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…

Why are you comparing to your clamshell Samsung flip phone specifically? You said "The iPhone on pretty much every metric was demonstrably better than every other phone on the market" so I'm comparing to every other phone on the market, not one specific low-end model.

Every feature I mentioned there existed in contemporary smartphones. I even looked them up! The iPhone got a ton of criticism at the time for missing things like this.

65k cancelled reservations out of over half a million total, with net reservations increasing rapidly... what of them?

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

#132

Post by fragmede »

rsync wrote: post #71
simonsarris wrote: post #39

Earlier quoted context omitted.

> They have so much cash they could buy Disney outright if they wanted to. Think about that for a second... Yeah and they don't. Why don't they buy Tesla? Why don't they buy Disney? Why don't they attempt to reinvent home construction which is a stagnant for the most part? Why aren't they the next Bell labs? Why not reinvent major home appliances most of which are a huge drag and a dumpster fire of usability? "This c…

"Why don't they buy Tesla? Why don't they buy Disney? Why don't they attempt to reinvent home construction which is a stagnant for the most part?" I think it's worth considering that prices for assets just might be a little high right now. I have no idea what Apple is doing and don't have any specific insights but I have, in the past few years, found myself passing on certain growth and investment opportunities becau…

> I think it's worth considering that prices for assets just might be a little high right now.

Have you seen what Apple charges for their products?

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

#133

Post by amaranth »

reallydontask wrote: post #106
j7ake wrote: post #80

Earlier quoted context omitted.

So what has been the net reduction of CO2 usage because of tesla to date?

I'm going to venture that it's not even a rounding error. In fact, in places it will likely have increased the CO2 emissions, again rounding error figures, due to the electricity generation mix and associated losses with generating that electricity (30-60% efficiency), plus transport losses (0.5 - 10%), plus charging loses, plus the efficiency of the motor itself.

The internal combustion engine in a car is around 20% efficiency while a coal power plant is around 55%. Gasoline powered drivetrains are also fairly inefficient leading to around 16% "tank to wheel" efficiency. Electric motors are about 90% efficient. An electric car is making more efficient use of the energy. It's also centralizing the source of the pollution rather than having to try to deal with it in every car on the road.

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

#134

Post by merb »

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:/…

well seriously tesla is way way better than any german car company (and I'm from germany). Tesla burns trough cash (yes that's bad) and the germans "burn" (pollute) the cities. not that much better.

just looking at the diesel summit, what a big kind of joke.

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

#135

Post by Animats »

Cash flow is not a big problem as long as the product is selling well at a profit. The question with the Model 3 was whether Tesla could make money at $35K per unit. In practice, the cars are going out the door above $50K with options, and it's much easier to be profitable at that price. (This is an old Detroit strategy, called "more car per car". Profit comes from the add-ons.)

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

#136

Post by mbreese »

toomuchtodo wrote: post #66
mbreese wrote: post #65

Earlier quoted context omitted.

To be honest, I'll be surprised if Tesla is producing EVs at that rate too... They have 3 models of cars. I'm not even sure there is a market for 500k/year of those three models. Even expanding that to 4 models (Y) would still leave those numbers hard to hit.

17 million new cars are sold each year in the US alone. The market is there and proven.

And how many of those new cars sold for > $35-40k?

Tesla certainly has a market, but it isn't competing for the same consumers that Honda is. The market Tesla is competing for is significantly smaller than 17M.

The amount of people who can afford any new car is not the same as the number of people who can afford a new Tesla.

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

#137

Post by dkrich »

smokeyj wrote: post #59
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…

Tesla is the Apple equivalent for cars. Consumers see the Tesla brand as innovative and high quality regardless if it's true. Even if other manufacturers make a Tesla equivalent, that's like iPhone vs Android. It's a status thing for many, and for that alone I'd bet on the Tesla brand.

This seems like an availability bias. Are you saying that consumers don't regard Porsche, Audi, BMW, Lexus, Mercedes and Infiniti as innovative and high quality?

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

#138

Post by dkrich »

toomuchtodo wrote: post #130
dkrich wrote: post #128

Earlier quoted context omitted.

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!

Seems like you're missing the point. If a set of parts costs you X, and you can sell it as one product for 2X and as a different product for 3X, which one yields better profits?

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

#139

Post by mbreese »

catawbasam wrote: post #91
mbreese wrote: post #65

Earlier quoted context omitted.

To be honest, I'll be surprised if Tesla is producing EVs at that rate too... They have 3 models of cars. I'm not even sure there is a market for 500k/year of those three models. Even expanding that to 4 models (Y) would still leave those numbers hard to hit.

Have you driven a Tesla? If not, then you should. Might change your view.

I've had my Model 3 reservation since the day they opened... but it's highly unlikely to assume that Tesla can hit those production marks with the (admittedly) limited line up it has.

Across their entire lineup BMW sold 2.4M cars in 2016 (including MINI) [1]. I just don't see them selling 500k/year in the immediate future. Once they add models (the Y, a replacement for the Roadster, and a Truck), then they very easily could blow through that rate. But baby steps... I'd rather see Tesla exceed modest expectations than fail to meet unrealistic ones.

[1] https://www.press.bmwgroup.com/global/article/detail/T026708...

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

#140

Post by mrtron »

j7ake wrote: post #80
flexie wrote: post #61

Earlier quoted context omitted.

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 environment, for ending the strategic dependence on oil dictatorships, and for renewing the belief i…

So what has been the net reduction of CO2 usage because of tesla to date?

That is a poorly phrased question to consider the value of the investment. Specifically, 'to date' is not appropriate for an investment. It is like looking at a half built widget factory and asking what is the net reduction in human labour for all widgets because of the factory, to date?

What is the net change in CO2 usage that results from the investments Tesla has made?

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