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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

#151

Earlier quoted context omitted.

Sure, maybe for Tesla, (and other similar growth at all cost technology companies) it it's not immediately profitable. Let's check back in 10 years and see if this makes Tesla and their investors any money.

By that logic, any company not yet bankrupt could be called profitable. Profit is a reflection of past performance, not future potential.

By this metric just about every single new business is a failure, including 100% of YC startups. At that point is it a useful distinction to draw?

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

#152

> “He’s going to need capital,” said Ross Gerber, chief executive officer of Gerber Kawasaki Wealth & Investment Management, which holds Tesla shares. “That’s the one part of the financials that are a little bit troubling. To underestimate the cash burn over the next six months will be a mistake.” It's not that troubling. Even massive companies (AMZN in 2014) need to raise big capital. When you have something you wan…

Tesla is (was) a tiny company with a huge amount of room to grow. I would argue that Amazon already owns a LOT of its market.

In fact, I'm pretty sure it's now many times larger on its own than the entire online shopping industry was when it started.

I am skeptical, though, that it should continue on this trend. Maybe find new markets (like AWS), but they need to watch out for the tendency of organizations to attempt to grow themselves far beyond what makes sense.

Similarly, GM or Toyota do not need to take on huge investments to grow big. They are already very big.

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

#153
post #148

Earlier quoted context omitted.

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 t…

Right, on pretty much every metric. So do you think that the Motorola Razr was a better product than the iPhone because you could buy an extra battery and swap it out? I remember well when the first iPhone came out and people waited in line for hours to be able to buy one. It was just so different than any other phone available at the time. I don't really feel that applies to Tesla, and I think most consumers (not pe…

Why do you keep comparing to middling dumbphones? Compare the iPhone to contemporary high-end smartphones and you'll see that the iPhone was behind on pretty much every metric. The big exceptions were:

1. UI.

2. Web browser.

3. AT&T unlimited data plan.

It turned out that those three metrics were really important, and that being ahead on a few really important metrics is better than being ahead on a bunch of less important ones, but it's just not the case that the iPhone was ahead "on pretty much every metric."

> I think that's the question I posed to you.

Can you be more specific? I don't know what you're actually asking. Are you asking why anyone would cancel? That's because sometimes people change their minds, especially when it involves giving a $1,000 interest-free loan. Are you asking if the cancellations are a counterpoint to the idea that the Model 3 will sell well? The fact that the cancellations are a small proportion of the overall reservations, and net reservations are still rapidly increasing, suggests the answer is "no." Or something else?

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

#154

Earlier quoted context omitted.

> 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.

Is he wrong? Did Tesla not prove to the rest of the auto industry that electric cars are not only viable but also profitable and inevitable? Would we have the Bolt, Spark, Fiat e500, eGolf without Tesla?

If any, I think it was baby steps made by Toyota Prius. Original poster specifically pointed that profitable part of your answer isn't there for Tesla, in reality.

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

#155
post #109

Earlier quoted context omitted.

Maybe, but what about what Musk has done as a whole? If he can drive home-battery adoption, solar, and electric vehicles, and create markets where companies like GM, Ford, and the Euro manufacturers have to chase the new market, that has to make a huge impact. Obviously it's not going to completely remove our dependence (mainly plastics and shipping) but it will absolutely hit the bottom line of the most oppressive r…

On the plastics front, just look at the news from earlier this week of Lego working to replace all of the plastics used in their toys with bio-plastics (or other non-oil based polymers). A few more efforts like that and plastics won't be anywhere near the driver of oil consumption they are now. That doesn't address shipping (which is horrendously polluting), but if that's the last one standing that's still a massive…

Commercial aviation as well will never be electric. It would require two orders of magnitude energy to weight density, and quadruple flight times.

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

#156
post #28

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…

> it's very possible that most car buyers simply don't want [a Tesla/electric car].

Many surveys have shown that people want electric cars [1, 2]. While the car industry overall has declined [3], the EV segment has continued to grow [4]. While it's possible that people don't want to own an EV, the available evidence hints at future growth in the EV segment [5].

[1] https://www.fool.com/investing/2016/09/20/consumers-are-more...

[2] https://arstechnica.com/cars/2017/02/30-of-us-buyers-conside...

[3] http://money.cnn.com/2017/08/01/news/july-car-sales/index.ht...

[4] http://blog.ucsusa.org/peter-oconnor/electric-car-rolling-sa...

[5] https://www.bloomberg.com/news/articles/2017-04-25/electric-...

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

#157
post #61

> “He’s going to need capital,” said Ross Gerber, chief executive officer of Gerber Kawasaki Wealth & Investment Management, which holds Tesla shares. “That’s the one part of the financials that are a little bit troubling. To underestimate the cash burn over the next six months will be a mistake.” It's not that troubling. Even massive companies (AMZN in 2014) need to raise big capital. When you have something you wan…

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…

With some products it takes a while for the penny to drop, you mention Google, think of Street View and how there was that moment when this nice idea led to something bigger - Google owning maps with all their own cartography not copied from any other agencies. They got copyright on maps by doing them better. The task they undertook was something that most companies would petition their government to do, not do it themselves. There was a cash burn on driving those cars around too, plus privacy battles.

I know that 'anyone can make an electric car' (they did on Top Gear), however Tesla have worked with the toolmakers and component suppliers to build a factory to make cars, this is the main creation, the factory not the car.

Whilst older petrol hears have been sneering about range anxiety, something wonderful has happened to what is going to happen with the energy market and these electric cars. Soon you will be able to get a plug in the lamppost by your door fitted by your electricity company, this will be a bit like getting a satellite dish installed, except the lamppost will work for three cars. Then you get the option to buy cheap electricity from the windfarms when it is windy and sell it back to the grid at peak demand time, earning someone a profit. You won't need to go to garages and those extra long journeys would work out fine too - superchargers are there for that.

This fit - domestic energy demand, variable supply renewables and cars that have large batteries for range reasons - is all coming together nicely.

Tesla could make a 2CV grade electric car if they get the manufacturing sussed. In this situation the ICE dinosaurs just can't change quick enough and it becomes Nokia/iPhone again. This probably summarises it for me, what Tesla are doing is that revolutionary a change, much like what Apple did.

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

#158

> “He’s going to need capital,” said Ross Gerber, chief executive officer of Gerber Kawasaki Wealth & Investment Management, which holds Tesla shares. “That’s the one part of the financials that are a little bit troubling. To underestimate the cash burn over the next six months will be a mistake.” It's not that troubling. Even massive companies (AMZN in 2014) need to raise big capital. When you have something you wan…

> [1] The flipside of this is that it's an indictment of companies that hoard huge amounts of cash, like Apple. That they can't find a way spend it building future stuff is a signal that they are out of big ideas, and (in the case of Apple) have been for some time. I partially disagree on this. Apple's $250 Billion dollars stashed in Europe is both a way to defer paying taxes on these profits (the main reason), and a…

How would Apple threaten the markets/government with that cash? Suddenly bringing it all back to the US, giving the treasury a windfall year that Congress will squander foolishly?

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

#159

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.

There is a long list of companies that are planning to go all electric or to significantly electrify their offerings in the next few years [1, 2, 3]. Chevy/GM is an early entrant into the market because they -- much like Nissan -- need to gain a competitive advantage over VW and Toyota [4].

[1] https://www.theatlantic.com/news/archive/2017/07/volvos-elec...

[2] https://www.usatoday.com/story/money/cars/2017/07/29/italian...

[3] https://www.ft.com/content/a43ac2ce-3198-11e7-9555-23ef563ec...

[4] https://www.forbes.com/sites/bertelschmitt/2017/01/30/its-of...

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

#160

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.

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