“You’re holding it wrong” Wonder if Tesla will have that moment. Recalling the Model 3 is probably their greatest fear. No product is perfect and they’re about to ship tens of thousands a month within a very short period of time
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Tesla Burns Through Record Cash to Bring the Model 3 to Market
21–30 of 224 posts
Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market
#22Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market
#23BREAKING: Building a car factory and battery supply chain requires a lot of up front capital.
Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market
#24Earlier quoted context omitted.
The AMZN model won't work b/c no matter how good Tesla's products are, he won't be allowed to create a monopoly. The zeitgeist has shifted, and VC's and investors who are betting on future market domination or monopolies are going to be disappointed.
They're not going to be a monopoly. They will be the only company on the planet that can produce the motors and batteries(!!) that are required for high quality and reliable EVs. Tesla will make some cars for Tesla fans. Tesla will make billions selling key parts to everyone else. So they'll be the new Bosch of EVs, really.
Fair enough, but Bosch only trades at a 44 PE, which is about double the market's PE, but not crazy high.
Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market
#25Earlier quoted context omitted.
The AMZN model won't work b/c no matter how good Tesla's products are, he won't be allowed to create a monopoly. The zeitgeist has shifted, and VC's and investors who are betting on future market domination or monopolies are going to be disappointed.
They're not going to be a monopoly. They will be the only company on the planet that can produce the motors and batteries(!!) that are required for high quality and reliable EVs. Tesla will make some cars for Tesla fans. Tesla will make billions selling key parts to everyone else. So they'll be the new Bosch of EVs, really.
I really doubt the other car companies will let that happen. Either they'll work out the battery and motor tech themselves OR they'll push for hydrogen. The automotive industry isn't going to let a company like Tesla bully them around.
Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market
#26Earlier quoted context omitted.
Yes, I learned this fact painfully. I bailed on my IPO AMZN shares because they kept taking on massive debt. Just didn't have the stomach for it. Of course, that was 2004, about 1/20 of today's price.
I wouldn't take it too badly,* its not as if there's no risk to taking on billions of debt, so if you feel something is too risky for your investing dollars, maybe you did the right thing for you at the time. If you don't think they (Musk, Bezos, I wish I could think of a failed example![1]) can spend it wisely. The interesting thing to me is that we know that Tim Cook (and other cash rich companies sorry to pick on…
I guess today's theme is "how to flagellate oneself with memories of painful investing lessons". Not only remembering Pets.com, which I avoided, how about TGLO or CMTN, which I did not... I had to sell CMTN at a 101% loss. Figure that one out. TheGlobe.com was as much a laughing stock as Pets. The best thing to come out of The Bubble was this eTrade commercial:
https://www.youtube.com/watch?v=E0_tfoTTGOQ
At least the absolute $s weren't that big for me at the time. And the lessons formed a base of experience that served me well as I had more to invest. It's been much better since.
Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market
#27Earlier quoted context omitted.
They're not going to be a monopoly. They will be the only company on the planet that can produce the motors and batteries(!!) that are required for high quality and reliable EVs. Tesla will make some cars for Tesla fans. Tesla will make billions selling key parts to everyone else. So they'll be the new Bosch of EVs, really.
Fair enough, but Bosch only trades at a 44 PE, which is about double the market's PE, but not crazy high.
the reference is to Germany's privately held Robert Bosch GmbH: https://en.wikipedia.org/wiki/Robert_Bosch_GmbH
Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market
#28> The company burned through $1.16 billion in cash in the second quarter by spending on capacity for its cheapest model yet and boosting battery output. This makes me very happy. It's very rare for a large company to literally risk their existence to bring a new product to market. Most prefer to just sit in the pile of cash and profit from margins...
I don't think it's much of a risk. They created a product that is way differentiated from every other car out there and people want to buy it. It's like seeing the iPhone for the first time, and all the other flip-phones out there is simply just not enough anymore. They will succeed. If I'm in the market for a new car, I would totally line up for this one.
This is where I disagree with most people who are bullish on Tesla. I think there's a huge risk for Tesla that most people don't factor in- that it's very possible that most car buyers simply don't want one. The interesting thing about that is that most people seem to assume that making them at enormous scale and meeting the overwhelming demand is the only risk. What a century of observing the auto industry has taught us is that car buyers in huge percentages have fierce brand-loyalty and that anytime a new model is brought to market there's a huge uphill battle to create demand.
That's not to say that lots of people won't want a Tesla, clearly there's evidence that there's a market. But it remains to be seen whether that's a niche market or the better part of the auto market. To justify the current valuation, you'd have to believe its the latter.
Comparisons to the iPhone seem oversimplified. The iPhone on pretty much every metric was demonstrably better than every other phone on the market, and by a huge margin.
Tesla is better on some metrics- doesn't rely on fossil fuels, has some cool technology, and is a novelty because there aren't that many of them on the road.
But on most other metrics, there are lots and lots of better options. Some have more power, some are much cheaper, some have more storage space, and some simply have better brand awareness and loyalty.
Again, not suggesting that they aren't developing a great product. But there are huge risks to the survival of this company beyond cash burn that I don't think people are taking into account.
Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market
#29> The company burned through $1.16 billion in cash in the second quarter by spending on capacity for its cheapest model yet and boosting battery output. This makes me very happy. It's very rare for a large company to literally risk their existence to bring a new product to market. Most prefer to just sit in the pile of cash and profit from margins...
I don't think it's much of a risk. They created a product that is way differentiated from every other car out there and people want to buy it. It's like seeing the iPhone for the first time, and all the other flip-phones out there is simply just not enough anymore. They will succeed. If I'm in the market for a new car, I would totally line up for this one.
>They created a product that is way differentiated from every other car out there and people want to buy it.
What? The Bolt has slightly better range, and probably much better build quality. The difference in price is $2k on a base price of $30k.
And if Chevy could do it, I'm positive most others can too.
Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market
#30Earlier quoted context omitted.
To sit in your pile of cash and profit from margins, you need to make money and have positive margins. You make it sound as if they could have chosen that path...
The gross margin on the Model S is over 25%.
For a luxury car, that's not really good. As you move down-market, margins only get lower, so you have to rely on volume to make significant amounts of money. If people don't buy Model 3's by the hundreds of thousands every quarter, they are going to have problems squeezing profits from this car.