Why almost everyone was wrong about Tesla’s cash flow situation
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Re: Why almost everyone was wrong about Tesla’s cash flow situation
#2Short version: They never had a cash problem. They invested the money they had into developing a car. Turned it into a success. Then invested even more into the next car. Turned it into an even greater success. And so on.
I wonder how profitable this type of 'short opinion piece' journalism is. How much does a journalist get paid to write something like this?
Running some content websites myself which make like $0.001 per visitor, I am surprised this can be sustainable.
Re: Why almost everyone was wrong about Tesla’s cash flow situation
#3Serious 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 less than $100 a month in ammortized costs.
Are there really hundreds of thousands of people who are making $5,000+ a month necessary to justify the purchase of such an expensive vehicle? I'm not far from that number and most of my money still goes to food and rent.
Re: Why almost everyone was wrong about Tesla’s cash flow situation
#4The posts about how doomed they were did seem a bit severe to me. But on the other hand Musk acts like such a dingus these days it can be hard to know what to think.
Re: Why almost everyone was wrong about Tesla’s cash flow situation
#5I will wait until Matt Levine analyzes what happened.
Re: Why almost everyone was wrong about Tesla’s cash flow situation
#6Shouldn't we wait for the fully audited FY2018 results before making these bold claims? I feel with Tesla it is always swinging to the extremes.
You could do a lot of accounting magic to make one quarter appear great, but it will show up in the full year's numbers. We have to remember that they have a lot of churn in the financial department, for example the CFO left in April (see https://www.business-standard.com/article/companies/elon-mus... )
Re: Why almost everyone was wrong about Tesla’s cash flow situation
#7This 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? The S, the X? The 3? The low cost 3?
It's still a startup - but Elon's companies move fast and take a toll on everyone.... then one day you look up and rockets are landing on barges, and 60% of world wide lithium battery capacity has been grabbed by Tesla, and Tesla suddenly selling the top sedan by revenue, and the fifth by number of units in the US.
Then competitors have to start working and playing like Tesla and SpaceX - the companies have to become more startup like. You can see this in how ArianneSpace and ULA are trying to get to their next generation of vehicles (which won't be competitive in terms of re-usability) and by the increasingly hyperbolic VW statements about "delivering a car as good as any Tesla at half the cost" this morning....
Tesla and SpaceX have multi-year advantages - they have the super charger networks, they have the only facility capable of cranking out the amount of batteries that electric cars need, reusable rockets, dominating market share over all other luxury cars in the wealthiest market in the world, which happens to show signs of becoming more "European", as in much larger luxury market segment then there is in the United States..
It's definitely taken a hit on people's sanity - but you suddenly look up, and the competitive grounds have changed dramatically.
Re: Why almost everyone was wrong about Tesla’s cash flow situation
#8Serious 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…
If nobody buys $35,000 cars, where does the supply of reliable 10-year-old $5000 cars come from?
Re: Why almost everyone was wrong about Tesla’s cash flow situation
#9Serious 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…
Because someone wants a nice car. You are spending a couple hours a day in your car so if it small, cramped, slow, vibrates a lot why would you subject your self to that especially if you have disposable income.
Re: Why almost everyone was wrong about Tesla’s cash flow situation
#10Serious 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…
It's not about whether or not people _should_, it's just that our debt-driven society encourages it. Almost everyone these days seems to get a loan so that they can buy a vehicle they don't have the money for. This is one socially acceptable way to burn a huge chunk of your money.