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Investors conclude that Tesla is a carmaker, not a tech firm

economist.com

211–220 of 463 posts

Re: Investors conclude that Tesla is a carmaker, not a tech firm

#211
Even if the market can remain irrational for a while, in the end it very much remains driven by expectations of growth and revenue.

"tech" as it's called benefits from a non-linear scale factor: serving one more person does not directly correlate to a static increase in cost, it's more derivative in nature (cost increases onefold with each order of magnitude). Add to that globalisation for free. That's how you can expect more growth and revenue from a "tech" company than from traditional industries. Service has an almost 1:1 relationship, manufacturing is kind of in the middle, where you benefit from scale but still need to purchase matter, and time from people to build stuff.

In that way tesla is not a tech company. To build an additional tesla you need more people and more robots. You need to purchase steel, lithium, leather, etc. You need to ship that Tesla. Growth doesn't come to them at a derivative cost.

As an investor you might judge that they might have better software, or better cars, and ride a wave of electrification that other manufacturers don't, which justified a higher price because their potential for growth is higher. That's not entirely true anymore, everyone else is producing electric cars now, at prices that are often cheaper, so their advantage is not that big anymore.

Re: Investors conclude that Tesla is a carmaker, not a tech firm

#212

Earlier quoted context omitted.

Some people like black overstuffed couches. Some people like Danish modern.

Of course some do. The point is the vast majority do NOT want the interior of a Tesla. They want everything in the same darn place that 99% of cars have it, with physical switches to be able to change things so you can just feel what you are doing without taking your eyes off the road. Most people see the interior of a Tesla as a complete gimmick.

their sales indicate otherwise

Re: Investors conclude that Tesla is a carmaker, not a tech firm

#213

Earlier quoted context omitted.

> Apple can make an even better car than Tesla Paying a premium for Apple smartphones hardware and software is a thing, paying same percentage premium for a car is a lot different, it's a lot more money.

I cringe when I see statements like that. Apple has ZERO EXPERIENCE with automotive design, automotive manufacture, automotive distribution, automotive marketing, and automotive evolution. In other words, Apple KNOWS NOTHING ABOUT ANY ASPECT of the automotive industry. Whether Apple can make a car better than Tesla is a moot point - Tesla isn't able to make cars as well as the other global automakers. Their whole sch…

> Tesla isn't able to make cars as well as the other global automakers

can you please point to where you found this data?

> experience in all the other areas of automotive manufacture that Tesla does not

I believe Tesla is still overvalued, but in 2022 they made 1.3 million cars, so dismissing them as amateurs is simply nonsensical. In 2023, they are a major car manufacturer with tons of experience with the entire process by now.

Re: Investors conclude that Tesla is a carmaker, not a tech firm

#214
post #4

I have a Tesla and I also hold a short position on TSLA. My Tesla is a great car. The best car that I've ever driven but I'm not sure if it has anything that other car manufacturers can't replicate. I think Apple can make an even better car than Tesla if they build the hardware and software like their phones and computers. The idea that Autopilot has some magic sauce that nobody else can replicate is laughable.

> Apple can make an even better car than Tesla Paying a premium for Apple smartphones hardware and software is a thing, paying same percentage premium for a car is a lot different, it's a lot more money.

I think many would happily pay it. Look at brands like Rolls Royce, Range Rover, or Maserati - I'd never pay that kind of premium for what they offer, but they still have a healthy market.

The real question is whether the high-end car market is large enough for Apple to bother with.

Re: Investors conclude that Tesla is a carmaker, not a tech firm

#215
post #115

Earlier quoted context omitted.

They also have by far the best charging network. IMO Teslas have the best long range driving experience. This detail is important although not the only thing to consider. However, it looms large in how Americans think about their cars. I say this as someone who owns an electric car by a different manufacturer.

> They also have by far the best charging network. In the US. And the US drives these crazy valuations.

Of course, the US and China are the biggest global markets accounting for need and purchasing power. Europe has 400M more people than the US, but not the need for cars like the countries mentioned.

Re: Investors conclude that Tesla is a carmaker, not a tech firm

#216

TSLA is a good trading stock. I am buying here at $110. The negativity is a good thing.

Elon hit 11 out of 12 milestones of his 10 year pay package in 2 years and then sold $40 billion of stock to buy another company. Seems like a solid buy here.

Re: Investors conclude that Tesla is a carmaker, not a tech firm

#217

Earlier quoted context omitted.

Of course some do. The point is the vast majority do NOT want the interior of a Tesla. They want everything in the same darn place that 99% of cars have it, with physical switches to be able to change things so you can just feel what you are doing without taking your eyes off the road. Most people see the interior of a Tesla as a complete gimmick.

I trust HN's opinion on many things, but definitely not on their opinion of what the vast majority of people think is fashionable. HN is solidly "overstuffed black leather couch" in their fashion sense.

I consider myself to be minimalist/modern in my choices, and in my opinion the Tesla is a garbage nightmare that took all of the complexity away from physical buttons and just shoved into a hard to navigate touchscreen menu with poor visual placement. I guess that makes me an overstuffed black leather couch type in your opinion.

Re: Investors conclude that Tesla is a carmaker, not a tech firm

#218
post #4

I have a Tesla and I also hold a short position on TSLA. My Tesla is a great car. The best car that I've ever driven but I'm not sure if it has anything that other car manufacturers can't replicate. I think Apple can make an even better car than Tesla if they build the hardware and software like their phones and computers. The idea that Autopilot has some magic sauce that nobody else can replicate is laughable.

> I think Apple can make an even better car than Tesla if they build the hardware and software like their phones and computers. I'm not sure outsourcing manufacturing and focusing on design works in auto industry - but could be wrong.

Manga Steyr builds Jaguars, BMWs, Fiskers, and others under just this model.

Re: Investors conclude that Tesla is a carmaker, not a tech firm

#219

Tesla, and even more Uber, were priced as if self driving cars are almost here. The idea that services like Uber without the drivers would make car ownership obsolete drove those valuations. Now that self driving cars are many decades away, instead of less than one decade away, is bring stock prices down. I always questions how fast we would see self driving cars, not because of the technology, but because of consume…

> There was a survey a few years ago of how much more people would be willing to pay for cars that could drive themself, and the median answer was $0. This is because quite a few people gave a negative number, that is, they would pay extra for a car that could not drive itself. I think there's an inherent distrust (which I share) of giving technology the power to end our lives with one bug. Trust in technology, in ge…

The average American will never be persuaded by statistics. Ross Perot tried that already.

Re: Investors conclude that Tesla is a carmaker, not a tech firm

#220

Earlier quoted context omitted.

The difference seems to be that Tesla was 5-10 years ahead on everything: Minimalistic interiors, modern infotainment, mobile app performance, and of course they lead the way in making electric cars viable by showing that they can both look good and blast off in record time. But you're right that other automakers see Tesla as a threat and are catching up; for example, the range and charging curve improvements on mode…

> Minimalistic interiors Is this something you see as a benefit? For me Tesla's overall aesthetic, including both their exterior looks and interior design, along with the absence of physical controls that go long with that represent their biggest downsides (outside of build quality).

Personally, I kind of like the Tesla exteriors with the exception of the nose of the 3.

The interiors though are pure trash. They look unfinished and designed by Rule of Cool, instead of practicality.

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