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Why almost everyone was wrong about Tesla’s cash flow situation

arstechnica.com

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Re: Why almost everyone was wrong about Tesla’s cash flow situation

#41

Post by InTheArena »

anoncoward111 wrote: post #3

Serious question, and I'm not a Tesla hater either: Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high. A used car from a fairly reputable source can be had for between $3,000 - $6,000, depending on mileage and cosmetic appearance. My 2005 Ford Focus sedan was $3,000 and should last me about 3 years before I need to make a decision about major repairs, so that's…

There are both sociological and economic reasons for it. On the sociological - new cars can be a status symbol - especially in the Luxury markets. Interestingly enough - the European luxury car market is roughly twice that of the United States, despite per-capita earnings being lower then the United States. Are you German and driving a beat up Honda Civic? Not a good look. Tesla is benefiting from this - the cars are highly viral, and aligned with affluence, political persuasions, environmental outlook, sports car enthusiasm, etc. It's turning Americans more willing to buy a luxury car, if it's a Tesla. Then social network comes into effect. If one of your friends buys a Tesla, you are very very likely to as well. This is basically the only marketing program that Tesla Does (Referral codes from friends).

(BTW, I say all of this as someone who finally pulled a trigger on a "Lemur" Model 3 earlier this week).

There is also the practical - when you buy a used car between 3k and 6k, you are basically on the long tail maintenance wise. It's a good bet that the reliability of the car, and the efficiency of the car are both dramatically less then then a new car. I also enjoy snappy acceleration and a car with a low center of gravity. You get into a Model 3, and Internal Combustion Cars just feel like a horrible piece of legacy technology. Could I get away with a old Ford Fiesta or a beat up Civic? Yep - and this is replacing a 15 year old Honda CRV... but I bought that Honda CR-V new, and I have gotten every bit of value from it - and I'm passing it on to family.

Re: Why almost everyone was wrong about Tesla’s cash flow situation

#42

Post by ams6110 »

madeuptempacct wrote: post #15
anoncoward111 wrote: post #3

Serious question, and I'm not a Tesla hater either: Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high. A used car from a fairly reputable source can be had for between $3,000 - $6,000, depending on mileage and cosmetic appearance. My 2005 Ford Focus sedan was $3,000 and should last me about 3 years before I need to make a decision about major repairs, so that's…

"Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high." If someone makes $250,000+ a year, it's not unreasonable. "My 2005 Ford Focus sedan was $3,000 and should last me about 3 years before I need to make a decision about major repairs, so that's less than $100 a month in ammortized costs." That's completely unrealistic. You have some sort of competitive advantag…

Not at all. You can buy a good, reliable, well maintained car for $3,000. Mileage is less important than maintenance history. The Focus is a particularly good choice IMO. They are reliable, pleasant to drive, and Ford made gazillions of them so you can get them repaired anywhere and parts are cheap.

You can also buy a basket case for $3,000, so you do need to have a bit of an idea of what to look for (or what to avoid).

Re: Why almost everyone was wrong about Tesla’s cash flow situation

#43

Post by jartelt »

madeuptempacct wrote: post #15
anoncoward111 wrote: post #3

Serious question, and I'm not a Tesla hater either: Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high. A used car from a fairly reputable source can be had for between $3,000 - $6,000, depending on mileage and cosmetic appearance. My 2005 Ford Focus sedan was $3,000 and should last me about 3 years before I need to make a decision about major repairs, so that's…

"Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high." If someone makes $250,000+ a year, it's not unreasonable. "My 2005 Ford Focus sedan was $3,000 and should last me about 3 years before I need to make a decision about major repairs, so that's less than $100 a month in ammortized costs." That's completely unrealistic. You have some sort of competitive advantag…

Seriously - I just sold a 1999 Civic with 150,000 miles for $2,000. The car made so many noises and did not feel safe at all. Yet, someone paid real money for it and was happy about it.

Most cheap used cars are pretty junky. That is fine if you want a beater to drive to work and back or if you have mechanic know-how. It's a lot sketchier if you want a car to drive your kids around in or if you want to drive on longer trips where you need reliability.

Re: Why almost everyone was wrong about Tesla’s cash flow situation

#44

Post by matwood »

BitterSweets wrote: post #16
anoncoward111 wrote: post #3

Serious question, and I'm not a Tesla hater either: Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high. A used car from a fairly reputable source can be had for between $3,000 - $6,000, depending on mileage and cosmetic appearance. My 2005 Ford Focus sedan was $3,000 and should last me about 3 years before I need to make a decision about major repairs, so that's…

Why buy a MacBook Pro for $2k+ when you can get by with a ChromeBook for $150?

I tend to spend 8+ hours/day in front of my computer. I spend 30 minutes to an hour in my car each day, and I would prefer zero. That is why.

Re: Why almost everyone was wrong about Tesla’s cash flow situation

#45

Post by close04 »

madeuptempacct wrote: post #15
anoncoward111 wrote: post #3

Serious question, and I'm not a Tesla hater either: Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high. A used car from a fairly reputable source can be had for between $3,000 - $6,000, depending on mileage and cosmetic appearance. My 2005 Ford Focus sedan was $3,000 and should last me about 3 years before I need to make a decision about major repairs, so that's…

"Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high." If someone makes $250,000+ a year, it's not unreasonable. "My 2005 Ford Focus sedan was $3,000 and should last me about 3 years before I need to make a decision about major repairs, so that's less than $100 a month in ammortized costs." That's completely unrealistic. You have some sort of competitive advantag…

Also let’s not forget that for one person to buy a 2005 Ford Focus sedan for $3000 today another person had to pay 5+ times more 13 years ago.

Having a cheap second hand car available is the result of someone buying an expensive new car. You need the latter to get the former.

Re: Why almost everyone was wrong about Tesla’s cash flow situation

#46

Post by esotericn »

anoncoward111 wrote: post #3

Serious question, and I'm not a Tesla hater either: Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high. A used car from a fairly reputable source can be had for between $3,000 - $6,000, depending on mileage and cosmetic appearance. My 2005 Ford Focus sedan was $3,000 and should last me about 3 years before I need to make a decision about major repairs, so that's…

Most people are not financially responsible.

(Not limited to cars; see the fact that even well earning individuals in the UK, US, etc, could only weather a few months without work because they scale up lifestyle to match).

That, and that many people actually have money. London alone has over 400,000 millionaires by NW, one years' interest on that pays for a Tesla.

Re: Why almost everyone was wrong about Tesla’s cash flow situation

#47

Post by ericb »

AllegedAlec wrote: post #19

I'm not sure I'm sold on the perspective that the worst Tesla detractors were actually just misinformed or wrong about the subject, rather than being actively malevolent by trying to gain money by shortselling while funding anti-Tesla articles.

Under current rules, I'm pretty sure it is legal to try and destroy a company by destroying its reputation and maligning its financials and profit by shorting it while you kill it.

That this is allowed seems anti-competitive and takes away from the notion that shorts "make a market healthier by bringing balance."

Re: Why almost everyone was wrong about Tesla’s cash flow situation

#48

Post by michaelcampbell »

anoncoward111 wrote: post #3

Serious question, and I'm not a Tesla hater either: Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high. A used car from a fairly reputable source can be had for between $3,000 - $6,000, depending on mileage and cosmetic appearance. My 2005 Ford Focus sedan was $3,000 and should last me about 3 years before I need to make a decision about major repairs, so that's…

People value different things differently.

> Are there really hundreds of thousands of people who are making $5,000+ a month necessary to justify the purchase of such an expensive vehicle?

Look around; do you see said cars? There you go.

Re: Why almost everyone was wrong about Tesla’s cash flow situation

#50

Post by vbezhenar »

anoncoward111 wrote: post #3

Serious question, and I'm not a Tesla hater either: Why does anyone spend $35,000 - $50,000 on a car? It just feels like a number that is at least 5x too high. A used car from a fairly reputable source can be had for between $3,000 - $6,000, depending on mileage and cosmetic appearance. My 2005 Ford Focus sedan was $3,000 and should last me about 3 years before I need to make a decision about major repairs, so that's…

Why would you buy modern PC, if you can buy used Pentium 4 with 2GB RAM and setup some swap for probably $50 or something like that? Some people like fast shiny things and have money to pay for it.
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