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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

#51

Post by AllegedAlec »

ericb wrote: post #47
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."

> 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.

Yeah, it's legal, but that doesn't mean it's not malevolent.

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

#52

Post by esotericn »

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…

Maybe I'm just an outlier.

My cars generally cost about 300-500 quid. If it breaks I buy another one. I can buy 5 or more of them for your quoted 3K.

Are they as safe as a Model S? No. Are they substantially more dangerous than other things I do in my life? Probably not.

Once things start to break you scrap it and get another one. Done.

I bought a Civic for 325 GBP, changed the tyres for ~150, and drove it around half of Europe, putting 10K miles on it before selling it because I moved in to a city for a while. I basically just treat cars as a 'subscription cost' model rather than any form of capital.

In the US you have the issue that a car might be a hard requirement to get to work. In that case I'd probably just buy two and drive them on alternate days so there's always a backup. You guys seem to have enough land for this to be viable. Still cheap as chips.

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

#53

Post by rootusrootus »

billylindeman wrote: post #30
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…

Sounds like you're a fiscally responsible person. Keep in mind most people are not, and our economy is built on top of easy credit / debt.

It is far from a sure bet that a 15-year-old $3K Ford is the fiscally responsible choice. It's kind of the reverse of the problem of people spending too much on cars -- someone getting focused on the absurdly low price and not factoring in what it will actually end up costing them over time.

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

#54

Post by jakevn »

simonebrunozzi wrote: post #39
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…

It's a good question. Three things: 1) Your TCO (Total Cost of Ownership) for a cheap used car can't be $100/month. If you look at Kelley Blue Book or similar websites, they'll tell you that even super cheap cars like that 2005 Ford Focus will still cost you $300-400/month, all included. 2) I almost died in a car accident two years ago, and a result, I value car security way more than before, which means I wouldn't m…

My TCO for my 2003 Toyota Sequoia has been $70 a month. I paid $8,000 for it 3 years ago and have paid $500 in maintenance (standard scheduled maintenance plus $60 in repairs). I pay $23 dollars a month for liability insurance. Depreciation has been approximately $1,200 (at worst). I'm not so sure I'd own anything but a larger (safety) Toyota (reliability) that old, but just wanted to provide some anecdata.

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

#55

Post by moduspwnens14 »

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…

My prior car was new and I later decided that the added expense of a new car did not justify it. My plan was to get a few-years old "A to B" used car (like a Corolla or something) when it started needing work.

But I did change my mind and get a Model 3.

* Autopilot is quite nice. I'd compare the experience to driving a car with cruise control as compared to one that doesn't have it. It's not the end of the world, but if you have a car with cruise control, it's tough to imagine intentionally buying your next one without it barring financial difficulties.

* Not having to fill up at gas stations is nice. There's a little more planning involved for trips, but for normal day-to-day, it's waking up every day to a full tank.

* Upcoming software updates. The initial Model 3s didn't have summon or the dashcam feature, both of which have been added over the air, and more of which will be added sooner.

* I think the auto industry in general has become stagnant and "safe" in terms of innovation, and I want to support a disruptive entity that will force the others to re-think the ways they're doing business.

* It's got an API, which already has third party tools for an Apple Watch app, detailed analytics, etc.

* They're taking a risk with the interior of the car, with the lack of gauge cluster and spartan design. To me this looks like what happened when the software industry switched from "as many UI buttons and features as possible" in the '90s to the simplified, "overall user experience" focus we see in modern software. And I want to support that.

* There's some "feel-good" factor to damaging the environment less, and supporting the market that will allow for society to join in.

I agree with you in that I can't imagine spending $63k on a non-Tesla. The differences between a basic used car and a new Mercedes or something just don't justify it. But I do feel differently about the Tesla.

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

#56

Post by kevin_thibedeau »

samfisher83 wrote: post #9
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…

Because someone wants a nice car. You are spending a couple hours a day in your car so if it small, cramped, slow, vibrates a lot why would you subject your self to that especially if you have disposable income.

> You are spending a couple hours a day in your car

Most people don't have 1 hour commutes.

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

#57

Post by InTheArena »

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.

There is no doubt that there were players in the markets that were doing their best to actively destroy Tesla for personal profit reasons.

But then there were a lot of people - even Tesla fans - who knew the numbers and still worried.

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

#58

Post by cowmoo728 »

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…

1. A lot of new cars are leased (30% of new car volume)

2. A lot of new cars are purchased with auto loans (44% of Americans are paying an auto loan)

3. The average new car loan amount is going up by a lot (reocrd high of $31,000 now)

4. A lot of people are defaulting (5.8% are > 60 days late, higher than the financial crisis years)

PDF warning https://static.ed.edmunds-media.com/unversioned/img/industry...

Consumers Skip More High-Rate Auto Payments Than During Crisis

https://www.bloomberg.com/news/articles/2018-05-14/consumers...

So to answer your question seriously, people take out auto loans and lease expensive cars because they like buying expensive things, even if they can't really afford it.

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

#59

Post by petre »

InTheArena wrote: post #7

This seems like a good breakdown - but it's also that Tesla (like SpaceX) runs really really close to the edge every time they do a product launch. How many people doubted SpaceX until the Falcon 9 flew? How many until the Falcon 9 landed on land? How many until Falcon 9 Heavy launched? How many are still doubting until Falcon 9 completes it's first manned mission? How many doubted Tesla until the Roadster shipped? T…

> hyperbolic VW statements about "delivering a car as good as any Tesla at half the cost" this morning.

This while launching yet another compact SUV, based on the Polo platform w/o 4wd and the the base model using a three-cylinder one liter engne. Give me a break VW.

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

#60

Post by crysin »

wbrasky wrote: post #12
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…

I am equally baffled by people's love of throwing money at cars. When I needed a "new" car two years ago, I asked my mechanic what sort of car they would want from a reliability/value standpoint. I was told Subarus or Toyotas not later than about 2007 were very nice. I spent 3 months watching used listings and wound up with a very low mileage 2006 Rav4 (for ~$10k) and it has been wonderful.

You're baffled by people spending money on things that make them happy? Not everyone buys a car just for transporting them from point A to point B.
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