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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

#161

Post by mixmastamyk »

ghaff wrote: post #129
PopeDotNinja wrote: post #93

Earlier quoted context omitted.

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.

Isn't that what the "under body" coating supposed to help with?

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

#162

Post by anoncoward111 »

paddy_m wrote: post #148
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 paid $5000 for a 2001 GMC 2500 with a lift gate and 56k miles. There are some dents and surface rust, but the truck is generally solid. Crank windows and only one working speaker. I call it my luxury vehicle because I have the luxury of not worrying about it. I will be supplementing this with a 10+ year old hatchback for better gas mileage and less wear on the truck. I'm expecting to pay around $5k for that too.

Nice find!! My 98 VW cabrio lost electric power to all 4 windows so I am jealous of anyone with manual windows, feels like luxury to me :)

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

#163

Post by balabaster »

jklinger410 wrote: post #153
randomsearch wrote: post #149

Earlier quoted context omitted.

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…

The issue with that trope is that while Musk's bet on good always winning in the end, that may not be for many generations.

We're still fighting for an equality that's been fought for thousands of years. Fanatical Muslims fighting against Fanatical Christians as a facade covering a war for resources. Who is good? Who is bad? Are either one really any worse than the other?

I'm hoping that his bet moves us towards a more utopian society.

Sadly, while I'm an optimist, my cynicism prevents me from believing that humanity will allow us to get there.

The winners are the ones that write the history books, while the losers are painted to be evil, if they're even included in the history books at all. Some are even written out of the history books and not taught in schools in the hope that in a generation or two they're forgotten.

Humanity doesn't exactly have a very inspiring track record when it comes to good always winning... in fact, its track record is pretty abysmal.

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

#164

Post by Redoubts »

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…

> VW is planning to get to 10 million EVs by 2022.

They say, as they discontinued production of VW eGolfs.

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

#165

Post by thewhitetulip »

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…

It is true that his actions were kind of reckless, plus, I agree that the hero worship must stop. He could've done it better, but it is a good sign that it all worked out well.

I also think that this will serve as a base for Tesla. The first few profitable products are the hardest to produce. If they launch an even affordable version, they'll be able to manyfacture in bulk and not he stuck in "production hell".

I don't know if I am mis informed, but I've always thought about the analysts as someone who, I don't know, are kind of traditionalst people. They might not be, that's just my perception.

I'm very happy that Tesla broke even, just look at a few months back. Who would've thought this would happen? I would read an article a day saying Tesla will go bankrupt, but now they are making more number of cars and cash. The main advantage Tesla had was that ither manufacturers are busy milking ICE engines.

JLR recently, said that they plan to go all electric in 2025, they are doing it NOW!!!! I'm an investor in JLR's parent org and its insane that JLR didn't think of this switch before it got burned down due to low sales in China! This is like a governmental response. Slowly and reactionary

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

#166

Post by anoncoward111 »

marssaxman wrote: post #160
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 ex…

Completely agree my friend! After taxes, insurance, principal balance on the car, and routine maintenance, my beater as described above is running me at $175 a month.

I know so many people who have a car that's costing them over $600 a month all in. That really confuses me, because that's just about the price of a bedroom in our area.

It is entirely feasible to live on $1000 to $1500 a month here as a single person and bank the difference in salary without feeling like you are truly being frugal!

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

#167

Post by PopeDotNinja »

mixmastamyk wrote: post #161
ghaff wrote: post #129

Earlier quoted context omitted.

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.

Isn't that what the "under body" coating supposed to help with?

Think of an under coating like underwear you never take off. It's not going to protect you for long if refuse to wash your underside.

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

#168

Post by InTheArena »

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 are a number of things here that I would quibble with:

1) There are absolutely reasons you can't raise cash with relatively inexpensive bond insurance, or by equity based capitalization. Investors get unhappy, and your bond ratings degrade. Bonds often are secured, so you can't just shaft investors by driving down the stock price.

2) Tesla's stock price is in no way discounted by standards of car companies - just startups. It's also the most shorted stock on the face of the planet - I suspect that has much more to do with volatility and downward pressure.

3) Your interpretation is "flustered" and "consequences". All sides agree that there were discussions prior to the tweet, but that the statement implied things that it ought not (Funding secured). This was a poor tweet, poorly though out. You bought into the conspiracy theory - that this author debunked - that cash management was a problem, and Tesla was about to go broke, so flustered desperate tweet. I think we can safely discount that, given the current results.

The rest of your argument is basically emotional attacks, so forgive me if I choose to ignore that.

All that said, I think Tesla will benefit by better governance - having a separate chairman role. This is just a good idea for all corporations.

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

#169

Post by ghaff »

mixmastamyk wrote: post #161
ghaff wrote: post #129

Earlier quoted context omitted.

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.

Isn't that what the "under body" coating supposed to help with?

"Help" is the operative work. Modern auto manufacturers do a lot of things to help vehicles resist rusting out both in terms of the structure and in the various brake lines and so forth. So now they rust out in maybe 10+ years rather than 5 or less.

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

#170

Post by Anderkent »

cheeko1234 wrote: post #83
paulddraper wrote: post #63

Earlier quoted context omitted.

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

As bfuller already said, they do exist. I got my 2005 Honda Accord (Manual) on craigslist (2 days of research) for $2900. It has lasted me 5.5 years now with no maintenance except oil changes.

Possible that you got lucky in a lemon market?
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