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Tesla posts big loss, cuts production of Models X and S to catch up on Model 3

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Re: Tesla posts big loss, cuts production of Models X and S to catch up on Model 3

#261

Post by tomatocracy »

JumpCrisscross wrote: post #199
paulpauper wrote: post #167

Earlier quoted context omitted.

then the stock should be at $3 instead of $300 if insolvency is such an issue. obviously there is more than meets the eye here. or this is the short of the decade, more than even 2008.

In my general experience, bond traders tend to be a savvier (if more jittery) lot than stock buyers.

What's interesting is that at the level of rating that Tesla has, most bond investors are active traders of one form or another rather than "buy and hold" investors. The most common strategy is to look for credit migration (ie buy the bond when it's B-, sell it when it relatively quickly moves up to BB and benefit from the capital appreciation as the yield or spread drops in consequence). A lot of them are 2+20 hedge funds. The people who play in that market are all professional investors and if they play in enough size they have good access to management.

So yes, they are probably more savvy than the average equity investor; the bonds falling doesn't mean they think a default is neccessarily on the horizon, just that a ratings upgrade is not (and potentially also that the company will come back for more money sooner rather than later, as that implies more supply vs demand which may not scale equally).

This would all seem to make a good case for the equity being overpriced, but to short the equity you need a conviction that the rest of the market will realise this sooner rather than later.

Re: Tesla posts big loss, cuts production of Models X and S to catch up on Model 3

#262

Post by nickik »

gozur88 wrote: post #185
nickik wrote: post #181

Earlier quoted context omitted.

Thinking in a bigger scale then just right now Model 3 will make it clear. The way Tesla has transformed the whole car industry and the scale at which they approach the problem is way beyond anybody else. The Bolt can not be produced in the numbers needed for a revolution. The people who produce it are not interested in a revolution in the first place. The stock might be below peak right now, but the scaling they hav…

>The Bolt can not be produced in the numbers needed for a revolution. The people who produce it are not interested in a revolution in the first place. That's an odd argument to be making in favor of a company that's having so much trouble producing cars. Why do you think the Bolt can't be produced in larger numbers? Does Tesla make in a year as many cars as GM makes in a day?

I'm not saying its impossible. I'm saying that they don't seem to want to do it.

Meaning that they are totally unprepared to sell 1million cars a year and they also don't seem to have plans of scaling to that.

Re: Tesla posts big loss, cuts production of Models X and S to catch up on Model 3

#263

Post by hackerguy99 »

maxerickson wrote: post #155
hackerguy99 wrote: post #114

Earlier quoted context omitted.

> The Leaf is even mostly aimed at fleet mileage scoring. So it's your contention that 95% of HackerNews can see the future of EVs, but all the major manufacturers have and/or are going to miss it? Shaky bull thesis, my friend.

The range on the Leaf so far has not been especially good, limiting the market for it. The fleet bonus is not imaginary: https://insideevs.com/nissan-starts-selling-green-credits-pu... My "vision" for the future of EVs is that increasing range and decreasing prices will drive adoption. With sales of the Leaf totaling about 2 weeks of US auto sales, it is risky to expect it to represent Nissan's strategy.

>The range on the Leaf so far has not been especially good, limiting the market for it.

And yet it's the best selling EV on the planet.

It's foolish to compare a car that you can buy today (the Leaf) to a car that you might not be able to buy for another year or more (the Model 3), unless you think Nissan will improve nothing over that time.

Re: Tesla posts big loss, cuts production of Models X and S to catch up on Model 3

#264

Post by jjeaff »

jVinc wrote: post #239
11thEarlOfMar wrote: post #14

Earlier quoted context omitted.

The most worrying is the slowing production of models S and X, coupled with what I'd call a collapse in the gross margins of those products. Why is the margin declining so drastically?

Might have something to do with countries cutting the subsidies for electric cars. I know in Denmark the price of a Tesla is set to more than double in the next years as they normalice registration taxes which were previously omitted on electric cars.

Are you saying that registration taxes in Denmark amount to tens of thousands of dollars?

Re: Tesla posts big loss, cuts production of Models X and S to catch up on Model 3

#265

Post by addicted »

NegativeLatency wrote: post #113
saas_co_de wrote: post #74

Earlier quoted context omitted.

They definitely seem to have hit a plateau in terms of demand which was declining before they started to slash prices in order to move inventory. The S/X and are old now and the car market requires new models to keep sales going. That combined with the approaching launches of other high end luxury electric cars does not bode well for future S/X sales. The negative press on autopilot and failure to deliver on autopilo…

Anecdotally the Tesla brand is at an iteresection of wealth and Silicon Valley elitism that is incredibly unappealing to people. Maybe the market for electric cars is larger than the market for a tesla specifcally.

I think what really damaged the Tesla brand was going with my cousins to pick up his >100k Model X.

1) They had done the paperwork wrong and hadn’t informed his bank about some additional charges so it required an additional hour for them to get that sorted before my cousin basically just paid that additional amount upfront. 2) There were scratches in quite a few places that were noticed by us and cleaned up once we mentioned them. My cousin has purchased a couple of BMWs in the past for a lot less and never seen that before. 3) Some parts were not fitting well and had to be adjusted. 4) The autopilot to remove the car from the garage doesnt work because the garage is at the top of a slight incline. This is pretty common in many US garages. Hopefully this is just a software fix. 5) The overall car quality simply doesn’t match up to what you’d expect from a 100k car.

That being said, it’s still a pleasure to drive and a really nice car. He can’t go back to driving an ICE anymore.

Tesla does seem to have a lot of quality control issues which may have been to,reared by the initial set of buyers that will become more of a problem with a less forgiving next wave of potential customers. And a lot of their solutions currently appear very manual and ad hoc. Hopefully they can improve on them soon.

Re: Tesla posts big loss, cuts production of Models X and S to catch up on Model 3

#266

Post by coldtea »

Fizzer wrote: post #220
Animats wrote: post #213

Earlier quoted context omitted.

Most auto production lines produce nearly 500 cars per shift . Normal cycle times in an auto plant are about one minute. Here's a Mercedes production line.[1] That's a vehicle on a par with Tesla's products. Something is terribly wrong in Fremont. [1] https://www.youtube.com/watch?v=fbfTlwm248k

Most auto production lines don't need EV-size batteries. The post above specifically says batteries are the bottleneck, so it isn't really evidence that something is "terribly wrong"

Since batteries are the whole selling point of a Tesla, I'd say it remains evidence that something is "terribly wrong".

Re: Tesla posts big loss, cuts production of Models X and S to catch up on Model 3

#267

Post by coldtea »

api wrote: post #222
Animats wrote: post #213

Earlier quoted context omitted.

Most auto production lines produce nearly 500 cars per shift . Normal cycle times in an auto plant are about one minute. Here's a Mercedes production line.[1] That's a vehicle on a par with Tesla's products. Something is terribly wrong in Fremont. [1] https://www.youtube.com/watch?v=fbfTlwm248k

It's almost like Mercedes has been doing this for a long time.

That's a moot point though.

If you want to compete in a market, you got to play at the speed/quality/prices of the market -- there is no slack given for being new.

Re: Tesla posts big loss, cuts production of Models X and S to catch up on Model 3

#268

Post by richardknop »

crush-n-spread wrote: post #134
draw_down wrote: post #69

It sounds like they are struggling. Hopefully they can pull it together and turn things around.

They are not struggling. This Yahoo article is fear mongering. I just listened to the whole earnings call and everything sounded terrific: They pulled their best engineers to Gigafactory to mitigate a supplier misleading them about one of their battery production lines, and so they dropped production of S and X. Apparently as a result of the supplier f * up, they rewrote "20 man years of software in 4 weeks". Which i…

Rewriting "20 man years of software in 4 weeks" cannot result in anything else than bug ridden convoluted spaghetti code in my opinion. That is nothing to brag about.

Re: Tesla posts big loss, cuts production of Models X and S to catch up on Model 3

#269

Post by hwillis »

cjhopman wrote: post #170
hwillis wrote: post #52

Earlier quoted context omitted.

"reallocating resources" is not the same as "unable to sell cars". Tesla is still selling every car they make with zero problems.

Companies don't usually drop prices when they have zero problems selling.

To what exactly are you referring? Because right now they're reducing production, not prices.

Re: Tesla posts big loss, cuts production of Models X and S to catch up on Model 3

#270

Post by rtuulik »

jjeaff wrote: post #264
jVinc wrote: post #239

Earlier quoted context omitted.

Might have something to do with countries cutting the subsidies for electric cars. I know in Denmark the price of a Tesla is set to more than double in the next years as they normalice registration taxes which were previously omitted on electric cars.

Are you saying that registration taxes in Denmark amount to tens of thousands of dollars?

Yeah, they do. Luxury cars are taxed heavily in Denmark. Import tax on new cars can be up to 180%. After removing the subsidy on EVs, Tesla prices became comparable to other cars and sales dropped sharply.
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