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

#151

Post by brewdad » Fri, Oct 26, 2018, 3:57 PM UTC

leesec wrote: post #136

Certhas wrote: post #117

Earlier quoted context omitted.

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.

Rent an ICE car for the couple of times a year I take a road trip. The other 350+ days a year, I can use my electric vehicle just fine.

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

#152

Post by balabaster » Fri, Oct 26, 2018, 4:01 PM UTC

randomsearch wrote: post #149

balabaster wrote: post #131

Earlier quoted context omitted.

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 o…

From one POV, Musk really has nothing to lose. Even if all his companies crash and burn, he has taken a lot of resources and spent them on things that matter: space exploration, combating global warming, etc No matter what happens, all that engineering talent will continue to exist. All that experience gained still exists. And some of the giant infrastructure that he’s built will inevitably be reused if his companies…

And that matters. In the grand scheme of things. That may be all that matters.

For that, I take my hat off to him.

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

#153

Post by jklinger410 » Fri, Oct 26, 2018, 4:02 PM UTC

randomsearch wrote: post #149

balabaster wrote: post #131

Earlier quoted context omitted.

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 o…

From one POV, Musk really has nothing to lose. Even if all his companies crash and burn, he has taken a lot of resources and spent them on things that matter: space exploration, combating global warming, etc No matter what happens, all that engineering talent will continue to exist. All that experience gained still exists. And some of the giant infrastructure that he’s built will inevitably be reused if his companies…

Agreeing with both of you but want to chime in with some conspiracy theory stuff.

The only way you beat Musk is by going somewhere that his idealism won't allow him to go, while still maintaining positive public opinion of yourself as his competitor.

I am looking directly at the Oil and Big Auto companies when I say people have incentivized bloggers (aka "journalists") and paid online trolls to make him look like the bad guy, and that they will likely then go a "step too far" in order to beat him. His Twitter tirades have either been a poor attempt at refuting this, or a game of chicken on that front as well.

Oil and Big Auto do have something to lose. Musk's bet is also on human goodness, that greater society will allow him to win because he is genuine. That whole "the truth will come out" or "good always wins in the end" trope.

One could easily see him in an orange jumpsuit one day just for daring to upset industries that have created so much evil.

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

#154

Post by joezydeco » Fri, Oct 26, 2018, 4:04 PM UTC

petre wrote: post #137

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?

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

That's still a $12,000-$22,000 car. Nobody can build one for $5,000 like anoncoward111 wants or needs, and it probably will be nowhere as reliable as a 10-year old Honda.

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

#155

Post by ajross » Fri, Oct 26, 2018, 4:04 PM UTC

calabin wrote: post #146

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…

Responsible cash management and investor relations are not mutually exclusive with innovation. There is absolutely no reason that TSLA shouldn't have raised cash with a relatively inexpensive bond issuance or moderate share issuance in the lead-up to the large expenditures required to begin Model 3 production. As a consequence of this, analysts rightly discounted TSLA's stock price to account for the tremendous amoun…

> As a consequence of this, analysts rightly discounted TSLA's stock price

TIL some of the wildest, most speculative short selling in history is "rightly discounting" a stock price.

That's revisionist. I mean, yes, you're right that they could have operated more in line with traditional accounting. But that's not why their stock price was held incorrectly low.

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

#156

Post by codeulike » Fri, Oct 26, 2018, 4:05 PM UTC

calabin wrote: post #146

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…

Responsible cash management and investor relations are not mutually exclusive with innovation. There is absolutely no reason that TSLA shouldn't have raised cash with a relatively inexpensive bond issuance or moderate share issuance in the lead-up to the large expenditures required to begin Model 3 production. As a consequence of this, analysts rightly discounted TSLA's stock price to account for the tremendous amoun…

There is absolutely no reason that TSLA shouldn't have raised cash with a relatively inexpensive bond issuance or moderate share issuance in the lead-up to the large expenditures required to begin Model 3 production.

Well, apart from the fact that TSLA already has $10b of Debt to pay back over the next few-to-ten years. I believe Tesla did borrow heavily to begin Model 3 production, but then production took longer than expected to get off the ground and Musk decided it was now or never and that they would try to break even with what they had rather than taking on even more debt. At some point they had to demonstrate they could make money, and they've already left it a long time. I'm very glad that it looks like they're going to pull it off.

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

#157

Post by anoncoward111 » Fri, Oct 26, 2018, 4:06 PM UTC

coding123 wrote: post #38

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'm guessing you're not married?

Not married nope, girlfriend drives a way more expensive car than I do but we usually do road trips on my beater because we don't want to hurt the nice car haha

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

#158

Post by vroomvroombaby » Fri, Oct 26, 2018, 4:06 PM UTC

parasubvert wrote: post #92

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 relative to whatever else you want to spend your money on. I spent $90k on my recent car because I love cars, and this was a relative deal (it was worth $110k) with decent resale value. I have friends that have spent $140k on their Tesla model X, or $190k on their Porsche 911 Turbo. That seems too high for me. Shrug. Everyone is different in their priorities. Most of these are leases where they’re paying maybe $…

> Most of these are leases where they’re paying maybe $5k a month

a fully optioned 911 turbo S lease is about $2900/month. most high end 911's lease around $2000/month. most high end bmw's and mercedes sedans (M, AMG, etc.) lease around $1500/month.

these leases are usually tax deductible for business owners and consultants (1099, K1, etc).

and you're right, the problem with HN is some people just have no idea how much money people in technology are really making. these lease payments are a drop in the bucket compared to personal earnings or, more to the point, a successful small business' revenue.

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

#159

Post by leesec » Fri, Oct 26, 2018, 4:06 PM UTC

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…

What are you talking about? Tesla was founded in 2003, and did in fact have to stomach the major economic downturn in 2008. Was not a great time to be a car company, especially a small start up.

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

#160

Post by marssaxman » Fri, Oct 26, 2018, 4:14 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 always wondered this, too. The most expensive car I ever bought cost $14K. It was really nice while I had it, but the loan and insurance payments added up to more than $500/month. With a car old enough I can pay for it outright, insurance only costs about $90/month, and even budgeting for $1000-$2000 in repair work every year I'm coming out significantly ahead.

Buying a new car seems like such an unreasonably expensive luxury that I am genuinely surprised there are enough people wealthy enough to keep the industry going.