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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

#71

Post by bfuller »

paulddraper wrote: post #63
ams6110 wrote: post #42

Earlier quoted context omitted.

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 avoi…

Please link to this good, reliable, well-maintained car for $3k or under, because (without a family/buddy deal) it does not exist.

It definitely does, you just have to be willing to spend the hours to look for the deal.

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

#72

Post by chosenbreed »

rootusrootus wrote: post #33
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 as many reasons as there are people, I don't know if you could really generalize an answer. I spent $40K on my current car because I'm an enthusiast and it puts a smile on my face every time I drive it that a 15 year old Focus definitely would not. To each their own. And in the grand scheme of things, the monthly payment (on a 1.9% loan) is about 3% of my income. As long as I meet my goals for savings, I do…

> As long as I meet my goals for savings, I don't really feel guilty about spending some money on stuff I enjoy.

Good approach...you gotta live a little :-)

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

#73

Post by ansible »

kurtisc wrote: post #26
joezydeco wrote: post #8

Earlier quoted context omitted.

If nobody buys $35,000 cars, where does the supply of reliable 10-year-old $5000 cars come from?

How selfless.

The people buying $35K USD cars aren't likely thinking about selflessness, true.

But the question remains, if everyone who bought new cars kept them for 20 years and drove them a lot, what would the used car market look like?

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

#74

Post by jklinger410 »

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…

Musk plays fast and loose like he's almost asking for failure. The amount of blog posts and confused short-sellers because of this one fact have been truly entertaining/infuriating to watch.

Like when everyone thought they had won by removing him from the board of Tesla. Musk could eat Ramen in a 400sq ft apartment without a cent to his name, scheming on his next startup, and still be happy. They are fighting a strawman to death.

You can't win against this guy until you prove him wrong. Either they can't or aren't incentivized to do so, so he still wins.

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

#75

Post by corpMaverick »

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…

To me the sweet spot is a $8k car (Toyota Corolla) with 6 years of usage and keep it for at least 4 more years.

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

#76

Post by antisthenes »

esotericn wrote: post #52
madeuptempacct wrote: post #15

Earlier quoted context omitted.

"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 hal…

Aren't insurance costs way higher than the amortized cost of the car itself? Especially in the UK?

> 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.

As long as you're not paying almost double insurance, this sounds like a good option. You could even rent the other car out on the C2C rental exchange.

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

#77

Post by joezydeco »

Majestic121 wrote: post #22
joezydeco wrote: post #8

Earlier quoted context omitted.

If nobody buys $35,000 cars, where does the supply of reliable 10-year-old $5000 cars come from?

That's a different question than the parent (albeit a related one). If there's no one to buy 35k cars, there won't be a steady flow of 5k cars indeed, but I don't think people buy 35k cars because they're nice people trying to provide 5k cars to other people after a while

Of course they don't. But you can't declare dependence on an ecosystem, simultaneously declare that the ecosystem is stupid, then have people take you seriously.

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

#78

Post by kreetx »

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…

I'm no expert on Tesla's economics, but on the "running close to the edge" point I would think it's not about being forced to be there, it's just the leadership trying to innovate as much as possible for each of its products -- the result of which being close to the edge is. In other words: they could have spent much less -- but why not do as much as possible if you know you'll survive. This strategy might, of course, back-fire if you fly too close to the sun but thus far it apparently hasn't. And now is payoff time I guess :)

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

#79

Post by samfisher83 »

bflesch wrote: post #6

Shouldn't we wait for the fully audited FY2018 results before making these bold claims? I feel with Tesla it is always swinging to the extremes. You could do a lot of accounting magic to make one quarter appear great, but it will show up in the full year's numbers. We have to remember that they have a lot of churn in the financial department, for example the CFO left in April (see https://www.business-standard.com/ar…

I agree Earning and cash flow can be manipulated. To improve cash flow just don't pay your vendors for a quarter. To improve earning you can shift they delivery time from 1q to another. It did look AP went up for Tesla by about 500mil so did AR which is kind of strange, but their Quarter still looked great.

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

#80

Post by Iv »

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…

If you buy a new car and resell it after 3 years, you can end up spending the same amount as you would do with a used car. You always run the risk of a bad accident ruining your investment but that's also what insurances are for. With a used car you run a higher risk of having unforeseen failures much earlier than you would want.

All in all I am still buying second hand cars but the investment into new cars is not what it seems at first.

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