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

#201

Post by fhood » Fri, Oct 26, 2018, 5:30 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…

I don't know why, but used cars in the UK and Australia are way cheaper than in the US.

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

#202

Post by fhood » Fri, Oct 26, 2018, 5:34 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'?

Mazda Protege5. Best hatchback of the early 2000s.

...if your looking for something fun, reliable, and manual. Otherwise just get a Camry or a Matrix or something like that.

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

#203

Post by shakestheclown » Fri, Oct 26, 2018, 5:34 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?

~30% of cars are leased, so those would still be available

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

#204

Post by shakestheclown » Fri, Oct 26, 2018, 5:39 PM UTC

anoncoward111 wrote: post #157

coding123 wrote: post #38

Earlier quoted context omitted.

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

I've switched to renting cars for large mile trips. Unlimited mileage rentals are so cheap it's worth it to avoid wear and tear even on my older car or my girlfriend's nicer vehicle--and removes the risk of my old car breaking down in an inconvenient place. Last rental was an SUV for $65/week that I put hundreds of miles on. Some of the rentals I have put 1k+ miles on for <$100.

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

#205

Post by cvbhhbgh » Fri, Oct 26, 2018, 5:43 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.

The way Nissan did Also, car companies can get together and let their cars charge at each other’s dealers. Then lock out Teslas until TSLA agrees to join.

Also, gas stations don’t make money selling gas (!!) but by selling candy [1]They couldn’t care less if they’re charging $60 to fill your car or 0.60. In fact, the longer it takes to charge your car unattended the more Andy you’ll buy

[1] source: talk by Exxon-Mobile VP at my univ. back in ‘08 (?)

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

#206

Post by jki275 » Fri, Oct 26, 2018, 5:46 PM UTC

dsfyu404ed wrote: post #195

jki275 wrote: post #192

Earlier quoted context omitted.

Toyotas are the lowest maintenance used car you can buy. I've owned many and now only buy Toyota. When I can buy a 9 year old luxury model for less than 10k and drive it for another 200k+ miles putting minimal maintenance into it, that's saving me a ton of money and gives me a comfortable car to drive for my three hours a day commuting. Tahoes? Yeah. You're going to put a significant amount of maintenance into an ove…

The price difference between a Tahoe and 4Runner or Ranger and Tacoma could probably put a new drive-train in the latter. Buying a Toyota (truck/suv, the used prices for the cars are reasonable) is still paying for maintenance, you're just paying up front instead of over time.

I do my own maintenance in general. You pay extra for not getting stranded on the side of the road and with a 60+ mile commute I'm happy to pay it.

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

#207

Post by rootusrootus » Fri, Oct 26, 2018, 5:52 PM UTC

dsfyu404ed wrote: post #68

rootusrootus wrote: post #53

Earlier quoted context omitted.

It is far from a sure bet that a 15-year-old $3K Ford is the fiscally responsible choice. It's kind of the reverse of the problem of people spending too much on cars -- someone getting focused on the absurdly low price and not factoring in what it will actually end up costing them over time.

The difference in up front cost between an '04 S10 and an '08 Tacoma will put a whole new drive-train in that S10, twice.

As far as used car values go, the Tacoma is significant outlier.

Drivetrains don't usually fail, anyway, it's all the little bits around the edge that nickle and dime you to death.

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

#208

Post by smt88 » Fri, Oct 26, 2018, 5:57 PM UTC

appleiigs wrote: post #86

smt88 wrote: post #28

Earlier quoted context omitted.

The short answers are: cars can be resold, so you're only paying for interest, taxes, depreciation, maintenance, repairs, insurance, and gas. After working with vehicle data for 6 years, I can guarantee that someone who buys a 1-year-old Prius is actually paying less per month than you are for your 2005 Focus. People who buy brand new cars are obviously paying a huge "drive it off the lot" tax in the form of deprecia…

To add to your "cars can be resold" comment: my friend drives Masaratis. He always has an eye out on used inventory and snags the under-priced ones. Continuously flips them for same price he bought it for after driving for awhile (6 mo to 2 years). Many sellers are the very rich folk constantly buying new cars or who's work have been re-assigned to a different country.

To add onto this, I bought a Corolla in high school, drove it for 2 years, and sold it for more than I paid for it.

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

#209

Post by adventured » Fri, Oct 26, 2018, 6:17 PM UTC

Certhas wrote: post #141

notaki wrote: post #130

Earlier quoted context omitted.

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.

"Chinese sales of domestically-built new energy vehicles in 2017 totaled 777,000 units" To first approximation none of these were Teslas. EVs are being mass produced. Mass producing a car might be difficult. But the others manufacturers are already doing that. They need to figure out how to mass produce electronic drive trains (vastly simpler than what they are building now) and batteries. Batterys are more complex,…

> Chinese sales of domestically-built new energy vehicles in 2017 totaled 777,000 units

Those are gasoline electric hybrids, no more impressive than a Prius technologically from a decade ago that has been brought down in price.

China is not mass producing EVs, which is why it's 777,000 "new energy vehicles." That phrasing is the give-away. Otherwise we could just pretend the Prius was the first mass produced EV, when it was not.

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

#210

Post by InTheArena » Fri, Oct 26, 2018, 6:34 PM UTC

calabin wrote: post #188

InTheArena wrote: post #168

Earlier quoted context omitted.

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 - ju…

1) I agree that it can cost a material amount to raise money in any manner, be it debt or equity. That said, Tesla was in an okay place to raise money after the success of Models S and X, and had all of the information to reasonably project that spending on Model 3 production would outstrip inflows from existing sales to a degree that could put the company's finances in a relatively precarious state. They were not re…

1) Yep, and anyone who has worked in a startup knows that these are "bet the company" moments. They had to ramp to model 3, they thought they gave themselves enough room. Turns out the engineering on factories were wrong - in particular Panasonic fscked up the battery assembly system and Tesla screwed up by over automating. That made it closer then they should have.

2) I've never thought that anything the street did around Tesla was rational. I just watched Mark Speigal still hold on to his position that Tesla is doomed.

3) I agree it was irresponsible - but I also disagree with your thesis that it was manipulation. Elon had access to the sales number, and the ramp. He didn't need tweet to inflate the stock - that would have happened (with a much larger market cap then today) at the end of the quarter. That just puts it back to twitter induced stupidity.

Thanks for the well-reasoned response here. I think we are agreed on Tesla governance going forward. I am really praying that the Mullally runner is correct. That would make me a very happy camper.