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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

#131

Post by balabaster »

jklinger410 wrote: post #74
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 straw…

The problem is that he plays like he has nothing to lose.

He has a vision and a plan and he is willing to put everything on the line and sacrifice it all in the pursuit of that objective. He's a problem solver. He's not scared of being unpredictable. He's creative as fuck. He will do whatever he has to do to achieve his vision.

He didn't make his plan haphazardly or on a whim. He made it having observed millions of other people play this game and seeing how the market reacted to their playbooks. He developed his own playbook based on what he's seen win and lose thousands of times in the past 50 years.

If anyone thinks he didn't study every other car manufacturer intensely before he decided he could do a better job, they're foolish. Musk is an intelligent man. He doesn't go off half cocked just because he's an arrogant fucker (although, I'm not arguing that he isn't), he sees a path that nobody else is seeing and he's steering his companies along that path to greatness and profit by changing the world for the better.

"It’s one of the characteristics of a leader that he not doubt for one moment the capacity of the people he’s leading to realize whatever he’s dreaming." - Benjamin Zander

You cannot fight and win with someone like that. That's the kind of mentality that will either change the world for the better or destroy it. You'd better hope he's on your side.

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

#132

Post by Certhas »

nnforall wrote: post #124
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…

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…

It will probably not get you there, but for TCO electric you really should factor in fuel costs. Even if I think the study is somewhat optimistic (and as far as I see it is talking about new cars, not used cars), it's clear that it's a major factor:

https://www.theguardian.com/environment/2017/dec/01/electric...

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

#133

Post by eafkuor »

esotericn wrote: post #46
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.

> Most people are not financially responsible.

This is basically the real answer.

> London alone has over 400,000 millionaires by NW

But that's mostly because of house prices no? Those don't pay interest?

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

#134

Post by derekp7 »

ryandrake wrote: post #101
jartelt wrote: post #43

Earlier quoted context omitted.

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…

As someone who prefers cheap cars, one of the keys is basic maintenance know-how. Anyone can learn to do the basics (oil changes, air filter, spark plugs, brake pads, etc.) with a few hours of learning on YouTube. I'd never waste my money on a new car. My current car is 10 years old and it feels so uncomfortable new. I felt like I was spoiling myself when I bought it.

That basic maintenance worked for my Dad, he got home from work at 3:00 pm and also had whole weekends for car/house/lawn/garage/hobbies.

I work further from home, with a higher paying job, and get home typically around 6:30 pm. Weekends are spent cramming in other household maintenance, recreational activities for the family, etc. So if having that new car (and spending $80 at the dealer every 3 - 4 months for basic maintenance) means having more free time to spend with my family, I feel it is a really good tradeoff.

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

#135

Post by apo »

Tesla in its current form has never had to weather an economic downturn. It will be subject to the same headwinds as any luxury manufacturer. Unlike other car companies that sell luxury, Tesla has no economy model.

Some commenters have noted that they can easily afford the price tag. It might be time to consider the transitory nature of that situation.

Tesla is an amazing company, (because/but) it has put all its eggs in one basket.

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

#136

Post by leesec »

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…

And how will you charge them for road trips, on Tesla's supercharging network? It takes time to build up the network.

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

#137

Post by petre »

joezydeco wrote: post #8
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 nobody buys $35,000 cars, where does the supply of reliable 10-year-old $5000 cars come from?

The car manufacturers will just adjust and build some cheap car like Renault did with the Dacia brand.

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

#138

Post by weavie »

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?

Replace ChromeBook with second hand Thinkpad and you have a very valid question (in my opinion).

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

#139

Post by TazeTSchnitzel »

apo wrote: post #135

Tesla in its current form has never had to weather an economic downturn. It will be subject to the same headwinds as any luxury manufacturer. Unlike other car companies that sell luxury, Tesla has no economy model. Some commenters have noted that they can easily afford the price tag. It might be time to consider the transitory nature of that situation. Tesla is an amazing company, (because/but) it has put all its egg…

The last financial crisis led to the rich getting richer. They'll always have money for Teslas.

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

#140

Post by esotericn »

eafkuor wrote: post #133
esotericn wrote: post #46

Earlier quoted context omitted.

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.

> Most people are not financially responsible. This is basically the real answer. > London alone has over 400,000 millionaires by NW But that's mostly because of house prices no? Those don't pay interest?

It's still endgame.

If you own your home outright you're done. Add another 100-200k or so and you're (baseline) retired in a country with healthcare, etc.

After that, do whatever you want with your money, it's fun coupons.

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