Why almost everyone was wrong about Tesla’s cash flow situation • Hacker News Board

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

#121

Post by paulie_a » Fri, Oct 26, 2018, 3:26 PM UTC

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've found uber and potentially renting a car is more cost efficient to owning a car and paying parking. I drive so little my car was collecting dust. I still have insurance to drive but that is half of what it used to be. Plus I hate driving in congested traffic.

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

#122

Post by aurailious » Fri, Oct 26, 2018, 3:26 PM UTC

newguynewguy wrote: post #67

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…

I'm going to be replacing a taurus soon. $3k is my budget. I took highschool auto, but would absolutely not feel comfortable buying a used focus. Where are the resources to learn what I 'need to look out for'?

Wasn't there a year recently where reliability skyrocketed? 2004 or something? I thought I heard there is a clear cutoff point where you should not consider buying a car before that date.

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

#123

Post by athenot » Fri, Oct 26, 2018, 3:27 PM UTC

ansible wrote: post #73

kurtisc wrote: post #26

Earlier quoted context omitted.

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?

The example of the Subaru Outback comes to mind: these are relatively harder to find used because most owners hang on to them.

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

#124

Post by nnforall » Fri, Oct 26, 2018, 3:27 PM UTC

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…

For many, many years I have had a personal benchmark in mind when purchasing vehicles. I want my TCO to be So if I purchase a car for $3000, I expect to own it for 5 years with minimal problems. There is room for a bad alternator or a starter. But not too many of those over that 5 years. Of course, if I can sell it for $1500 after the 5 years, that's another $1500 I can sink into maintenance and still justify that it cost me If I spend $10K, I have to think the car will be reliable for 15 years with ~$5K of repairs along the way.

In the past five years or so I have thought I might need to raise that $1000/year figure to reflect modern practicality. But, surprisingly, I haven't really needed to. Cars are becoming amazingly more durable, and prices in the used car market aren't sky-rocketing the same as in the new car market.

Still, it is time to make the transition to electric. The used electric market is still very immature. I don't want a used Prius. I'm ignorant of how to value used batteries, so I'm not sure what the maintenance costs will be on an 8-year-old Honda hybrid with original batteries. A 10-year-old Tesla is still way beyond $1000/year. To step into this brave new world will probably require me to suspend my $1000 rule until the water settles a bit.

Or I can pick up one more ICE car and stretch it out for 10 more years while things sort... Or compromise and just get a series of 3-4 year clunkers until I'm ready to dive into electric.

Or just bite the bullet and take the plunge now... Or...

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

#125

Post by derekp7 » Fri, Oct 26, 2018, 3:27 PM UTC

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 used to be a used car person, then after I got my first new car I became a new car person. When I get a new car, it is still a new car to me even after 10 - 15 years. My previous new vehicle cost just over 20K, and lasted about 15 years.

When I bought used cars, in the 2-5K range, they would last about 3 years before I felt I needed to trade them in, and I'd be constantly working on them. A new car gives me a break for about 8 years or more before I really have to work on them (other than regular maintenance). And that is really nice knowing that I can get in the car in the morning, and have a really high rate of confidence that I'll get to work and get home.

The other thing, having a car from day 1 means that I know how it was maintained. The biggest item is having it garage kept, keeps the morning dew off it and therefore have fewer problems with internal components (and rusting) over time.

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

#126

Post by appleiigs » Fri, Oct 26, 2018, 3:28 PM UTC

wjnc wrote: post #108

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 had the same feeling. Could use an accountant chiming in here. On the one hand the third quarter update clearly states 'Unaudited' above the statement of operations and balance sheet. On the other hand, they present GAAP-figures. As far as my practical knowledge of working with accountants go, they would frown quite heavily upon using 'new and improved' accounting methods for their Q3-update. Even for 'unaudited' G…

For a public company the size of Tesla, unaudited will be the same as audited. Sometimes in the MD&A, they use adjusted figures because it tells a story differently (maybe more accurately) than un-adjusted GAAP figures.

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

#127

Post by earenndil » Fri, Oct 26, 2018, 3:28 PM UTC

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…

> Are they substantially more dangerous than other things I do in my life? Probably not

Depends on the other things you do in your life, but statistically, I would say: probably. Rock climbing, assuming you use a proper harness and rope, is significantly less dangerous.

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

#128

Post by Certhas » Fri, Oct 26, 2018, 3:29 PM UTC

InTheArena wrote: post #115

ryandrake wrote: post #90

Earlier quoted context omitted.

I'd love to see Tesla succeed, but cynical part of me thinks that old stogy BigAuto is simply watching them and taking notes. Waiting for Tesla to take all the arrows and blaze the trail, and then they'll swoop in and copy once Tesla's done all the hard work for them. They're not creative enough to do a Model 3, but once the formula looks sound, they can slap together a half-assed version and flood the market with it…

I heard the same arguments about SpaceX though. Building new cars are large, complex engineering projects, that have insane complexity around operations, manufacturing and technology. Plus things like Brand awareness and identity. So image that GM wants to really compete with Tesla. They want to go Electric only. How do they: 1) Deal with dealers - which aare independent, and have their own view as to the product mix…

That's the US, but the charger network argument for example looks very different in Europe or China.

And while Tesla has a good share of current capacity, the amount of capacity that is being built and will come online in China over the next few years is many times larger than what we have right now. Further, while European manufacturers and industry threw away a healthy position in battery R&D over the last decade or so, there is every indication that they are correcting this mistake. Whatever is going to succeed as the post Lithium-Ion tech might well not come out of Teslas labs.

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

#129

Post by ghaff » Fri, Oct 26, 2018, 3:29 PM UTC

PopeDotNinja wrote: post #93

esotericn wrote: post #52

Earlier quoted context omitted.

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…

I didn't truly understand what a rust bucket was until I tried buying a used car in Northern Virginia (I had just moved from California). Everything below $2000 USD was a rust covered death trap that couldn't pass a vehicle inspection. I test drove a $1500 car and cut myself on the rust as I got into the vehicle. Another $1900 car was kind of low rust, but it couldn't pass the vehicle safety check. Snow & road salt i…

Yeah. It used to be a lot worse believe it or not. But, still, anything over about 10 years old in the Northeast and other snowy regions are pretty much at EOL. I made the mistake with a prior vehicle (which I bought used) of doing a couple fairly major repairs when it was about 12 years old and it ended up being just a cascading set of failures due to rust.

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

#130

Post by notaki » Fri, Oct 26, 2018, 3:31 PM UTC

Certhas wrote: post #117

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 not convinced about the multi year advantage. Everyone else has EVs out. They are not pushing them, probably because they are reaping the profits on past ICE investments, but the next tech platforms under development for years now at VW/Mercedes/BMW are electric. VW is planning to get to 10 million EVs by 2022. I'd give credit to Musk and Tesla for bringing forward this point by several years, but it would be sil…

But no one else is mass producing EV's. VW is just starting to talk about building a gigafactory. Everyone is doing a lot of talking, but they are all years behind Tesla. And even if they stop talking and start doing, they'll need to build a more compelling product than Tesla. That will be very very difficult. Tesla FTW.