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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

#211

Post by dsfyu404ed »

jki275 wrote: post #206
dsfyu404ed wrote: post #195

Earlier quoted context omitted.

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.

If you do your own maintenance then it makes even less sense to "pay for quality" because the cost of addressing issues yourself is minimal. It's very rare to have issues out of the blue anyway.

I drive an early 90s shitbox and have an almost exactly 60mi commute. Obviously it would be a massive waste of time to try to keep it in tip top shape at all times but it's really not the stressful "am I going to break down today?" experience that some would think. The main difference between my current shitbox and the variety of late 2000s and early 2010s cars I used to drive for work is that the 90s interior rattles a lot more and there's more wind noise.

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

#212

Post by QuantumGood »

balabaster wrote: post #131
jklinger410 wrote: post #74

Earlier quoted context omitted.

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 o…

He didn't really make "efficient financing" part of his portfolio of obsessions until recently. That's why suddenly the Musk magic/insanity began applying to doing more with amazingly less on the financial side.

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

#213

Post by QuantumGood »

cvbhhbgh wrote: post #205
leesec wrote: post #136

Earlier quoted context omitted.

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-Mobi…

Profit is from cigarettes. Source: friend who buys gas stations.

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

#214

Post by QuantumGood »

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…

I hear this a lot, but it's always (necessarily?) very vague. What scenario(s) are insufficiently affected by the first mover advantage? Define the scenario(s), define "insufficiently", define first mover/head start.

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

#215

Post by QuantumGood »

ryanmarsh wrote: post #171
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 can't be too specific but the conversations I've had with Tesla's competitors show they're terrified. No matter what competitors say in the press, Tesla is transforming the auto industry in two fundamental ways that traditional car companies cannot adopt quickly. As easy as everyone makes electric cars and online ordering seem, Tesla's competitors are finding this challenging. The auto manufacturers must build a re…

Clearly you're being downvoted because of lacking source or specifics, but also, there are public statements of terror and confusion from competitors you could be referencing.

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

#216

Post by QuantumGood »

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…

I haven't bought a car for more than $2,500 in decades. In Minnesota all those decades, with snow and salt problems. I have had to educate mechanics in person by paying mechanics on the internet to answer questions. I do keep a spare car so I don't have to buy one in a hurry when one is on the way out. Only once bought a car from a family member in that time.

But it's pretty well established that near end-of-life cars are cheaper on an annual basis than at other points in their lifespan. I don't know anything about cars myself. Never worked on one. By buying before I need to (mostly) negotiation is easier. I can wait for the right price.

My biggest mistake was buying a (probably) repaired-after-crash car for $2,000 and not reselling it soon enough—everything kind of went at once. Best buy was $100 for a non-running car that a mechanic had been puzzled by that needed only $450 to fix, and is still running, five years later. (It did have a windshield crack that was hit by a tree branch before I could pay to get it repaired, so additional luck there—insurance covered the branch situation, but not the pre-existing crack).

All this said, I'm considering buying a new Model 3.

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

#217

Post by [deleted] »

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…

[deleted]

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

#218

Post by mlevental »

shakestheclown wrote: post #204
anoncoward111 wrote: post #157

Earlier quoted context omitted.

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.

how the heck did you get $65/week? is that without insurance coverage for the rental?

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

#219

Post by ghaff »

esotericn wrote: post #191
ianai wrote: post #185

Earlier quoted context omitted.

My experience has been more and more highly dense real estate is built with exactly the number of parking spaces as needed and no more. Developers extract the most revenue that way - to the detriment of people who actually wind up living there. That was my experience in LV anyway. It looked to be the case in SV as well.

Is on-street parking generally restricted in suburbs in the US or something? It's confusing me that you refer to 'parking spaces', that's what I mean by restricted parking - generally anywhere outside of public transport range in the UK is free-for-all - you park at the side of the road. There are no 'spaces', aside from the physical restriction of the length of the road.

It can be, especially in the winter in areas that are prone to snow. Also a lot of "suburbs" don't consist of developments but are just houses along roads. In many cases, those roads don't have anywhere for cars to park.

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

#220

Post by calabin »

InTheArena wrote: post #210
calabin wrote: post #188

Earlier quoted context omitted.

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…

1) I agree that there are certain instances, especially in startup-land, where we have to bet the company. Lord knows I've had to do it with the company I'm a part of. That said, I don't think that this was one of those moments.

2) I've worked intimately with both buy and sell side clients, so I have pretty good first-hand knowledge of analysts on "the street". I can confirm to you that they are as irrational and misinformed as much of the general public. Bringing attention to themselves and their firms plays a big role in what they say/do. I agree that there has been a ton of irrational work done on Tesla, but I think that a reduction in target prices to reflect the company's financial state was reasonable.

3) I think we both just see this very differently.

I agree on Mulally, that would be great. Thanks for the detailed responses and thoughtful back-and-forth.

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