Tesla races past $100B in market valuation • Hacker News Board

Re: Tesla races past $100B in market valuation

#111

Post by shyn3 » Wed, Jan 22, 2020, 5:06 PM UTC

nerdkid93 wrote: post #2

I for the life of me cannot figure out what could possibly justify this valuation for Tesla. Sure, their cars are pretty great, they have a ravid fanbase, and they have a pretty entertaining CEO who excels at driving interest in the company. They would need to execute perfectly and deliver more cars to customers than Volkswagen in a few years to justify such a valuation right now, and I just don't see that happening…

Everyone seems to miss the biggest reason why Tesla has won and the other companies won't be able to catch them. The dealer network.

The Nissan Leaf came out and was way ahead of everyone but nobody bought it because they couldn't find it. The dealers would hide the car in the back and avoid showing it to you. There was no incentive for them to get you in a Nissan Leaf because they would make profits, negligible ones, on the sale but the place they make their money is maintenance and that would deplete their profits.

The issue with this is the dealerships aren't owned by the organization so the incentives aren't aligned. If GM/Ford/Toyota create the best EV the dealer won't have any incentive to sell them until unless they make up significant profits, which means they would have to make up 5-7 years of maintenance profits on the initial sale. In essence they will just sell their land and move on and have to take a loss. The smart dealers sold their stake in the dealerships and now the suckers are holding onto the last bit hoping to get out.

The dealerships we have now Ford/GM/Chrysler/Toyota/Volkswagen/Nissan are all going to disappear, that's why their valuation is justified. The only competitors are going to be the new car companies because they will adopt the same model Tesla has where they own their own dealerships. It's why the current Auto companies and dealers are lobbying to not allow Tesla to own their own dealership.

Re: Tesla races past $100B in market valuation

#112

Post by shmerl » Wed, Jan 22, 2020, 5:06 PM UTC

ec109685 wrote: post #82

donogh wrote: post #53

Earlier quoted context omitted.

Tesla is the Apple of the auto industry. They are getting stellar customer satisfaction ratings, which is translating into brand loyalty[1]. They've built an ecosystem between their above-average EV hardware, industry-leading software (with frequent improvements), and a top-notch charging network. I can see some automakers matching them on hardware, but they have a huge lead in software. Traditional car manufacturers…

One thing Tesla doesn’t have is the lock in that Apple has. If you are using iPhoto, iWatch and iMessage, switching to another manufacturer is hugely disruptive. I totally agree that Tesla’s software chops are light years ahead.

Which is good. Lock-in is disgusting and is a huge reason not to use Apple.

Re: Tesla races past $100B in market valuation

#113

Post by stephencanon » Wed, Jan 22, 2020, 5:07 PM UTC

donogh wrote: post #53

nerdkid93 wrote: post #2

I for the life of me cannot figure out what could possibly justify this valuation for Tesla. Sure, their cars are pretty great, they have a ravid fanbase, and they have a pretty entertaining CEO who excels at driving interest in the company. They would need to execute perfectly and deliver more cars to customers than Volkswagen in a few years to justify such a valuation right now, and I just don't see that happening…

Tesla is the Apple of the auto industry. They are getting stellar customer satisfaction ratings, which is translating into brand loyalty[1]. They've built an ecosystem between their above-average EV hardware, industry-leading software (with frequent improvements), and a top-notch charging network. I can see some automakers matching them on hardware, but they have a huge lead in software. Traditional car manufacturers…

> Also, Musk is right: no one else has even come close to matching the 2012 Model S. Tesla's lead is starting to look unassailable (in the medium term).

This is kinda sorta true, if you ignore non-performance factors, but also no one actually needs what Model S provides. In the classic setup for disruption Tesla isn't the disruptor, it's the established "high quality use" getting disrupted. It is not very unreasonable to expect the growing "good enough" products in China to claim much of the world's car market.

Re: Tesla races past $100B in market valuation

#114

Post by extrapickles » Wed, Jan 22, 2020, 5:07 PM UTC

ec109685 wrote: post #82

donogh wrote: post #53

Earlier quoted context omitted.

Tesla is the Apple of the auto industry. They are getting stellar customer satisfaction ratings, which is translating into brand loyalty[1]. They've built an ecosystem between their above-average EV hardware, industry-leading software (with frequent improvements), and a top-notch charging network. I can see some automakers matching them on hardware, but they have a huge lead in software. Traditional car manufacturers…

One thing Tesla doesn’t have is the lock in that Apple has. If you are using iPhoto, iWatch and iMessage, switching to another manufacturer is hugely disruptive. I totally agree that Tesla’s software chops are light years ahead.

Their charging infrastructure is pretty good lock in, especially if you install one of their chargers in your house.

Re: Tesla races past $100B in market valuation

#115

Post by papito » Wed, Jan 22, 2020, 5:07 PM UTC

rb808 wrote: post #9

So about the same as Ford, GM and FiatChrysler combined. Crazy times. Wow even Uber market cap is higher than each of those three. Feels like 1999.

Elon Musk knows a thing or two about 1999. That's when he received $22 million for CitySearch. Some HTML stitched together with Perl scripts.

At least Tesla is a real thing.

Re: Tesla races past $100B in market valuation

#116

Post by sixQuarks » Wed, Jan 22, 2020, 5:07 PM UTC

ec109685 wrote: post #82

donogh wrote: post #53

Earlier quoted context omitted.

Tesla is the Apple of the auto industry. They are getting stellar customer satisfaction ratings, which is translating into brand loyalty[1]. They've built an ecosystem between their above-average EV hardware, industry-leading software (with frequent improvements), and a top-notch charging network. I can see some automakers matching them on hardware, but they have a huge lead in software. Traditional car manufacturers…

One thing Tesla doesn’t have is the lock in that Apple has. If you are using iPhoto, iWatch and iMessage, switching to another manufacturer is hugely disruptive. I totally agree that Tesla’s software chops are light years ahead.

ummm, what about the fart app? No other manufacturer offers that. But seriously, there are things that you get with a Tesla that you can't get anywhere else and that list keeps growing. For example, Dog Mode is such an important feature to me, my next car will again be a Tesla.

Re: Tesla races past $100B in market valuation

#117

Post by TomVDB » Wed, Jan 22, 2020, 5:07 PM UTC

nicoburns wrote: post #89

ec109685 wrote: post #82

Earlier quoted context omitted.

One thing Tesla doesn’t have is the lock in that Apple has. If you are using iPhoto, iWatch and iMessage, switching to another manufacturer is hugely disruptive. I totally agree that Tesla’s software chops are light years ahead.

Do most apple hardware users use those apps? I'd imagine at least as many if not more use google photos + whatsapp or facebook messenger.

WhatsApp is pretty popular, but Google Photos?

The vast majority of people take a picture with the standard camera app and never look at the pictures again. You don’t need a non-native app for that.

Re: Tesla races past $100B in market valuation

#118

Post by ganzuul » Wed, Jan 22, 2020, 5:07 PM UTC

reilly3000 wrote: post #17

nerdkid93 wrote: post #2

I for the life of me cannot figure out what could possibly justify this valuation for Tesla. Sure, their cars are pretty great, they have a ravid fanbase, and they have a pretty entertaining CEO who excels at driving interest in the company. They would need to execute perfectly and deliver more cars to customers than Volkswagen in a few years to justify such a valuation right now, and I just don't see that happening…

With each car they get a lifetime of service revenue, mostly without competition. They expand their network effect, their supercharger footprint, and their technology lead as they maintain momentum. Cybertruck is poised to be a giant success, reaching into new markets outside of traditional EV buyers and into rural and suburban light trucks, the highest margin section of auto sales. Finally, its prominence attracts u…

You've got a lot of nerve calling buy-and-hold unsophisticated.

Re: Tesla races past $100B in market valuation

#119

Post by _ph_ » Wed, Jan 22, 2020, 5:07 PM UTC

WBrad wrote: post #95

jrbuhl wrote: post #63

Earlier quoted context omitted.

Tesla payed a lot of money (billions) to build the super charger network. Money no government or other company seems to want to spend. Legislating away vendor lock-in would just cause companies to be even more averse to capital investment in recharging infrastructure.

Elon has received billions from the US government across his companies. It'd be a slap in the face to the entire US population for Tesla to have a 100% proprietary charging network when we helped get the company going.

Did he? What kind of government money did Tesla get? I am not aware of any specific money paid to Tesla, only general benefits for electric cars, which were paid to the buyers, not Tesla. Not like GM, which got billions in a government-bailout, which they used to build their charging network /s.

Re: Tesla races past $100B in market valuation

#120

Post by Reedx » Wed, Jan 22, 2020, 5:07 PM UTC

ec109685 wrote: post #82

donogh wrote: post #53

Earlier quoted context omitted.

Tesla is the Apple of the auto industry. They are getting stellar customer satisfaction ratings, which is translating into brand loyalty[1]. They've built an ecosystem between their above-average EV hardware, industry-leading software (with frequent improvements), and a top-notch charging network. I can see some automakers matching them on hardware, but they have a huge lead in software. Traditional car manufacturers…

One thing Tesla doesn’t have is the lock in that Apple has. If you are using iPhoto, iWatch and iMessage, switching to another manufacturer is hugely disruptive. I totally agree that Tesla’s software chops are light years ahead.

That's a good point, though this may still happen between superchargers and Telsa apps/games - which could leverage your historical driving data.