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

economist.com

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

#391

Post by humanistbot »

AlexandrB wrote: post #247
humanistbot wrote: post #206

Earlier quoted context omitted.

You must have missed part of the huge hype bubble when Musk claimed that Teslas with FSD would be "appreciating assets" because owners would be able to rent them out as robotaxis when not using them. He said they should be worth up to $200k because of that, and also this p2p robotaxi fleet would make Uber and all taxis obsolete. If FSD was actually full self-driving, then the idea makes a lot of sense. Yes, Tesla cus…

> You must have missed part of the huge hype bubble when Musk claimed that Teslas with FSD would be "appreciating assets" because owners would be able to rent them out as robotaxis when not using them. If Musk actually believed this it was irresponsible of him to sell any cars at all since holding onto them would have yielded a better return for investors/stockholders.

> If Musk actually believed this it was irresponsible of him to sell any cars at all since holding onto them would have yielded a better return for investors/stockholders.

When Musk announced this, he said they were still selling Teslas because they needed just a bit more real-world data to 'complete' FSD.

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

#392

Post by twelve40 »

AnimalMuppet wrote: post #267
pjdemers wrote: post #88

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…

For so many years, the car ads were selling us freedom. The open road, and you're in the driver's seat. Driving could be fun , not just a means of getting somewhere. Sure, they were trying to manipulate public perception, but they were doing so in a way that resonated with a lot of people. A robot driving your car? Where's the fun in that?

that's a cherry on top. 99% of people come to unfortunate realization that in this country they need to buy some car to get their ass to work or daycare on time. That's what drives the big number. Everything else is just "now that you're here, let us show you how much more fun than the other brands we are"

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

#393

Post by paxys »

VirusNewbie wrote: post #353
paxys wrote: post #271

Earlier quoted context omitted.

What is laughable is thinking that Apple (or anyone else) can just walk into a multi-trillion dollar industry with zero prior experience and displace existing players. Heck they have even tried to build a car/self driving tech for many years now and constantly failed at it.

Didn’t they do that with cell phones?

They were already the market leader in computers and portable devices (iPod), plus "smartphone" was a very recent and underdeveloped sector to begin with (existing products were all focused on business use cases and no end consumer had one). Very different from cars.

Look at all their other efforts to enter areas with a dominant player. People were saying Spotify was doomed when Apple Music launched, yet it has barely has an impact (even though Apple had a massive amount of expertise and industry connections in music). Their social network (Ping) was an instant failure. Hopepod couldn't compete with Echo and Sonos. They tried multiple times to get into video gaming and went nowhere (Pippin, Arcade). iAd was dead in the water when it tried to compete with Google and Facebook. Same with Maps, MobileMe. Heck they are even having trouble with a wireless charging pad, and have basically conceded the market to Qi.

Dominance in one sector rarely extends to an unrelated one regardless of how many billions you throw at the problem.

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

#394

Post by FireBeyond »

macspoofing wrote: post #157
dopamean wrote: post #130

Earlier quoted context omitted.

> The idea that services like Uber without the drivers would make car ownership obsolete drove those valuations. Did investors really believe that? I don't know a single person who believed that years ago when the pre-IPO valuations were going through the roof. I maybe knew a few people who believed it was possible one day but not anytime soon. It's wild to me that so called sophisticated investors really believed th…

>Did investors really believe that? They didn't. I don't know what OP is talking about. Uber's self-driving initiatives were always a moonshot.

You say that like Musk didn't say a whole litany of things, including "By 2019, it will be financially irresponsible NOT to own a Tesla, because it will be paying for itself and making you money in your sleep as a Robotaxi."

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

#395

Post by Ekaros »

gitfan86 wrote: post #276
md_ wrote: post #14

This is true for so many "tech" darlings: Should Uber be priced like a tech company, or a cab company? Is Amazon a tech company or a retailer? Are ecommerce outlets like Warby Parker and Away tech companies, or just retailers with good CSS? It continues to amaze me how investors seem bamboozled by the appearance of "tech company-ness", by businesses which are obviously in markets that don't support the high price to…

As someone who has beat the market (S&P500) for the past 17 years, I agree that there is a problem with people not understanding markets/technologies. But a bigger issue is that A LOT of people are looking for short term gains. Just look at crypto, even the most serious/nonscammy people in the space believe it will take many years to reach it's true potential, but if you look that the message boards and twitter, they…

I think truth might be that markets are not as efficient as many would want everyone to believe. And then there is lot of effects that could affect the true efficiency, like index-funds and ESG scores.

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

#396

Post by Ekaros »

pjdemers wrote: post #88

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…

I never understood how self-driving could not have been seen as race to bottom. At least if there was more than one platform in competition. It would happen in both selling vehicles and in offering their services. There is enough people that are very price sensitive and would go for cheapest option. Just look at airline market.

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

#397

Post by md_ »

Scaevolus wrote: post #325
md_ wrote: post #77

Earlier quoted context omitted.

Definitely. I'm not claiming it's black and white or either/or, to be clear. But, what are the characteristics investors should look at for "tech company P:E"? Presumably a non-linear profit curve driven by low unit costs, linear or increasing revenue per unit, and strong network effects. IOW, if you're building the next Microsoft, each unit of Windows sold costs you nothing, makes you the same revenue (and thus more…

Are retailer unit costs fixed? The larger they become, the better contracts they can negotiate with suppliers, the cheaper they can make their logistics and delivery network with economies of scale, and the less they have to spend on advertising.

I guess that's true. FWIW, because this chart only goes back ten years, it's not like there's some obvious trend with WalMart (as an example) where as revenue increased, margins went up: https://www.macrotrends.net/stocks/charts/WMT/walmart/profit.... In fact, as revenue went up, margins went down-ish.

The comparison I would still draw is to pure software businesses where they:

a) Pay almost nothing per unit b) Increase in value the more users they have (due to more software for the platform, for example, and greater compatibility) c) Directly lead to significant productivity/efficiency gains in their customers, which they can then claim a piece of

If a retailer becomes a near-monopolist, short of monopoly pricing, they will generate margins that tend towards the average for retail (which are low!), and they will grow at close to the rate of economic growth.

In comparison, if a software company becomes a near-monopolist, even without monopoly pricing, their margins will increase and their utility will increase.

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

#398

Post by md_ »

gitfan86 wrote: post #276
md_ wrote: post #14

This is true for so many "tech" darlings: Should Uber be priced like a tech company, or a cab company? Is Amazon a tech company or a retailer? Are ecommerce outlets like Warby Parker and Away tech companies, or just retailers with good CSS? It continues to amaze me how investors seem bamboozled by the appearance of "tech company-ness", by businesses which are obviously in markets that don't support the high price to…

As someone who has beat the market (S&P500) for the past 17 years, I agree that there is a problem with people not understanding markets/technologies. But a bigger issue is that A LOT of people are looking for short term gains. Just look at crypto, even the most serious/nonscammy people in the space believe it will take many years to reach it's true potential, but if you look that the message boards and twitter, they…

Well, Keynsian Beauty Contest, then. As long as you play it better than the others, you win.

I don't do a lot of individual stock picking, because I can't be assed to look too closely at fundamentals and I don't think I have a good enough pulse on the public opinion that I can predict who Redditors will think is a sexy CEO next.

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

#399

Post by md_ »

shadowgovt wrote: post #193
md_ wrote: post #14

This is true for so many "tech" darlings: Should Uber be priced like a tech company, or a cab company? Is Amazon a tech company or a retailer? Are ecommerce outlets like Warby Parker and Away tech companies, or just retailers with good CSS? It continues to amaze me how investors seem bamboozled by the appearance of "tech company-ness", by businesses which are obviously in markets that don't support the high price to…

And of course, there's the meta-question: Why do investors price so highly these gambles over things that are already generating demonstrable value for real human beings? Like, why do these cultural signifiers make them salivate to be parted from their funds given the track record of tech (20% fail in year 1, 1% become unicorns, 18% of first-time founders generate a company that can even tread water)?

Presumably a combination of survivorship bias (we are most aware of the successful tech companies with asshole-founders-and-foosball-tables-in-the-lounges, and not all of the unsuccessful companies with the same) and fundamental attribution error (we think having an asshole-founder-and-foosball-tables is predictive of or causally related to being successful).

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

#400

Post by taylodl »

hnburnsy wrote: post #383
taylodl wrote: post #359

Earlier quoted context omitted.

Tesla's poor fit and finish has become legendary, certainly not up to snuff compared to other automakers at their price point. They're not even up to snuff compared to automakers making cars costing half as much. Another aspect of being an automaker for which Tesla is woefully behind on is service and repair. They've gotten away with it during their first few years because their sales were low and were to enthusiasts…

Does it pale when compared to GM, which sold 70000 EVs in all of 2022?

Which do you think is more important to the question of service and reliability - the fact that GM sold 6.5 million cars, trucks, and SUVs last year, which was a down year for them, or that they only sold 70,000 EV's?

GM has been dealing with global supply chains for decades.

GM has been dealing with auto unions for decades.

GM has been dealing with service centers for decades.

Who do you think can more quickly adapt to whom? GM to Tesla, or Tesla to GM?

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