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Tesla Burns Through Record Cash to Bring the Model 3 to Market

bloomberg.com

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Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#31

Post by rohit2412 »

feld wrote: post #17
jgalt212 wrote: post #15

Earlier 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.

Motors aren't a secret technology. And Panasonic makes the batteries and sells to Tesla. The only thing Tesla can sell as technology is Autopilot, which is just hyped up driver assistance.

Have you even heard of electric cars like Renault Zoe, Chevy Bolt, BYD ev300? All with range from 180-230 miles, selling since 2016.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#32

Post by abritinthebay »

simonsarris wrote: post #7

> “He’s going to need capital,” said Ross Gerber, chief executive officer of Gerber Kawasaki Wealth & Investment Management, which holds Tesla shares. “That’s the one part of the financials that are a little bit troubling. To underestimate the cash burn over the next six months will be a mistake.” It's not that troubling. Even massive companies (AMZN in 2014) need to raise big capital. When you have something you wan…

Your point about companies with large cash hoards is true but breaks down at the sheer scale of Apple & it’s cash reserve.

Apple is routinely making several billion dollar bets. They invest Amazon & Tesla debts regularly but it just doesn’t make a dent.

At some point a cash pile is so large it’s basically impossible to spend responsibly. Even with big bets.

They have so much cash they could buy Disney outright if they wanted to. Think about that for a second...

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#33

Post by wott »

feld wrote: post #17
jgalt212 wrote: post #15

Earlier 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.

Er... you cannot use future tense to claim that.

It can be your fantasy, your dream, your oprinion, that's all very fine. But you cannot say that is what is going to happen, that's just one bet, one possibility (and not the most likely IMO) amongst several possibilities.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#34

Post by rohit2412 »

lumberjack wrote: post #29
jotjotzzz wrote: post #4

Earlier quoted context omitted.

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.

And Renault Zoe, and BYD ev300. There are electric cars available all round the world, but somehow Tesla got the hype up that they are the only one.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#35

Post by dkrich »

bflesch wrote: post #18
jgalt212 wrote: post #15

Earlier 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.

Most people will be driving either a Tesla or a Chinese-made electric car in a couple of years, and like with the iPhone vs. cheap Androids there is a good chance that people will prefer Teslas for their familiar UI, American design, or some other reason we currently don't even have on our radar.

Why are people so sure of this, especially given the recent plummet in oil prices? Car sales are at all time highs. Why do people assume that there's going to be a mass exodus to Tesla and EV's in the next few years?

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#36

Post by emodendroket »

jgalt212 wrote: post #15
simonsarris wrote: post #7

> “He’s going to need capital,” said Ross Gerber, chief executive officer of Gerber Kawasaki Wealth & Investment Management, which holds Tesla shares. “That’s the one part of the financials that are a little bit troubling. To underestimate the cash burn over the next six months will be a mistake.” It's not that troubling. Even massive companies (AMZN in 2014) need to raise big capital. When you have something you wan…

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.

Why do you say that? When's the last big American antitrust action you can remember?

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#37

Post by annerajb »

melling wrote: post #3

“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

Which is one of the reasons why I agree with their strategy to sell to its own employees and investors first. Their feedback loop is so quick and they have a financial and personal interest in the product being perfect.

If they see any issue they will already have a lot of knowledge to debug it/know immediately who to contact to get it debug and have a financial and personal interest for it to be done quickly and correctly.

Which is also part of the reason why the ramp up is really slow at the beginning.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#38

Post by 4rt »

samfisher83 wrote: post #5
princekolt wrote: post #2

> 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 think a slower roll out would be prudent. If you burn all your cash and you are forced to raise cash it puts you in a bad situation. This is brand new car. Companies like Toyota have issues with their cars and they generally only make incremental changes to each model, and Toyota Production System is probably one of most taught and studied system for production.

the federal tax credits are structured to expire x months after shipping y units, tesla is working to those constraints.

https://cleantechnica.com/2017/01/20/predicting-us-federal-e...

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#39

Post by simonsarris »

abritinthebay wrote: post #32
simonsarris wrote: post #7

> “He’s going to need capital,” said Ross Gerber, chief executive officer of Gerber Kawasaki Wealth & Investment Management, which holds Tesla shares. “That’s the one part of the financials that are a little bit troubling. To underestimate the cash burn over the next six months will be a mistake.” It's not that troubling. Even massive companies (AMZN in 2014) need to raise big capital. When you have something you wan…

Your point about companies with large cash hoards is true but breaks down at the sheer scale of Apple & it’s cash reserve. Apple is routinely making several billion dollar bets. They invest Amazon & Tesla debts regularly but it just doesn’t make a dent . At some point a cash pile is so large it’s basically impossible to spend responsibly. Even with big bets. They have so much cash they could buy Disney outright if th…

> They have so much cash they could buy Disney outright if they wanted to. Think about that for a second...

Yeah and they don't.

Why don't they buy Tesla? Why don't they buy Disney? Why don't they attempt to reinvent home construction which is a stagnant for the most part? Why aren't they the next Bell labs? Why not reinvent major home appliances most of which are a huge drag and a dumpster fire of usability? "This changes everything" was their tagline for a phone. Why stop at the phone? Why not redesign everything?

Why stop at a nice looking HQ, why not create Castalia? Why not create a house of study and give one hundred architects and designers a rest-of-their-life pension and see what they come up with? Because it might cost too much?

Why not pick a hard problem of any kind and actually tackle it? Because Q3 might look bad? Is that why?

Why don't they do anything ambitious with that hoard? Really ambitious. Not hire more CS students for machine learning and deciding which iPad to kill next to make Q3 look the best.

If you ponder the existence of money-to-imagination ratio, Apple is dead last. They are guilty of all the interesting things they do not do. Just an astonishing lack of real vision.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#40

Post by bekaus »

jgalt212 wrote: post #24
feld wrote: post #17

Earlier 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.

Robert Bosch GmbH, the - amongst other things - automotive supplier is not a publicly traded company, but the German equivalent of a LLC. (Some subsidiaries are traded on the stockmarket, though)
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