Tesla Burns Through Record Cash to Bring the Model 3 to Market • Hacker News Board

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

#61

Post by flexie » Thu, Aug 03, 2017, 3:47 PM UTC

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…

Whether Tesla survives or not, these billions are some of the best spent money on the planet in the last 50 years.

What are the accumulated losses so far? $5-10B? Even if Tesla were to spend another $50B and go bankrupt, I would still maintain it's great.

What Tesla has achieved is so important in the long run for the environment, for ending the strategic dependence on oil dictatorships, and for renewing the belief in technology. And the cars are really nice too.

Speculating, as some do, that the EV revolution would end with a Tesla bankruptcy is silly, not just because Google and Apple (and probably other companies) would be more than happy to take over before or after a bankruptcy, but also because consumers and the the auto industry have now been shown where to go. None of us can unlearn what Tesla has taught us. There is no way back now. Tesla has already won.

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

#62

Post by kgwgk » Thu, Aug 03, 2017, 3:47 PM UTC

toomuchtodo wrote: post #52

dkrich wrote: post #30

Earlier quoted context omitted.

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.

Legacy luxury margins. BMW: 8% Mercedes: 11% Audi: 7%

Gross margins are significantly higher than that (maybe below Tesla's 25%, but they sell many cars cheaper than the model S).

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

#63

Post by [deleted] » Thu, Aug 03, 2017, 3:47 PM UTC

frenchie4111 wrote: post #16

lafar6502 wrote: post #9

The harder they will hit the wall

Would much prefer to run into a wall driving a Model 3 than a Prius

[deleted]

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

#64

Post by simonsarris » Thu, Aug 03, 2017, 3:51 PM UTC

flexie wrote: post #61

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…

Whether Tesla survives or not, these billions are some of the best spent money on the planet in the last 50 years. What are the accumulated losses so far? $5-10B? Even if Tesla were to spend another $50B and go bankrupt, I would still maintain it's great. What Tesla has achieved is so important in the long run for the environment, for ending the strategic dependence on oil dictatorships, and for renewing the belief i…

I agree with my whole heart. I think we have a moral imperative to develop electronic transportation, sooner rather than later. We think about the future much too little.

Ever since we decide to concentrate farming and transport most food to mouths, we've relied on oil as a life-support system for 7.5+ billion people. There is no going back to pre-oil without a lot of those people dying, and oil will eventually be too pricey to extract. We should think harder about post-oil.

I've written about this before if you're interested: https://medium.com/@simon.sarris/the-moral-technology-6413ca...

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

#65

Post by mbreese » Thu, Aug 03, 2017, 3:56 PM UTC

toomuchtodo wrote: post #49

meddlepal wrote: post #25

Earlier quoted context omitted.

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.

> The automotive industry isn't going to let a company like Tesla bully them around. They already have. Its too late. Who else is going to be producing 500k EVs a year in the next 3-5 years? No one.

To be honest, I'll be surprised if Tesla is producing EVs at that rate too... They have 3 models of cars. I'm not even sure there is a market for 500k/year of those three models. Even expanding that to 4 models (Y) would still leave those numbers hard to hit.

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

#66

Post by toomuchtodo » Thu, Aug 03, 2017, 3:58 PM UTC

mbreese wrote: post #65

toomuchtodo wrote: post #49

Earlier quoted context omitted.

> The automotive industry isn't going to let a company like Tesla bully them around. They already have. Its too late. Who else is going to be producing 500k EVs a year in the next 3-5 years? No one.

To be honest, I'll be surprised if Tesla is producing EVs at that rate too... They have 3 models of cars. I'm not even sure there is a market for 500k/year of those three models. Even expanding that to 4 models (Y) would still leave those numbers hard to hit.

17 million new cars are sold each year in the US alone. The market is there and proven.

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

#67

Post by RobertoG » Thu, Aug 03, 2017, 3:59 PM UTC

simonebrunozzi wrote: post #54

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…

> [1] The flipside of this is that it's an indictment of companies that hoard huge amounts of cash, like Apple. That they can't find a way spend it building future stuff is a signal that they are out of big ideas, and (in the case of Apple) have been for some time. I partially disagree on this. Apple's $250 Billion dollars stashed in Europe is both a way to defer paying taxes on these profits (the main reason), and a…

" That amount of money is now big enough to count as a constant threat to market stability, currency stability, etc."

I'm not sure what do you mean by market stability but I doubt very much about the currency stability thing.

The USA government (Fed included there) can issue or tax money whenever they want and have total control over the monetary economy.

For comparison's sake, the FED quantitative easing program was about $4.5 trillion

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

#68

Post by [deleted] » Thu, Aug 03, 2017, 4:03 PM UTC

toomuchtodo wrote: post #49

meddlepal wrote: post #25

Earlier quoted context omitted.

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.

> The automotive industry isn't going to let a company like Tesla bully them around. They already have. Its too late. Who else is going to be producing 500k EVs a year in the next 3-5 years? No one.

[deleted]

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

#69

Post by mholmes680 » Thu, Aug 03, 2017, 4:03 PM UTC

toomuchtodo wrote: post #49

meddlepal wrote: post #25

Earlier quoted context omitted.

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.

> The automotive industry isn't going to let a company like Tesla bully them around. They already have. Its too late. Who else is going to be producing 500k EVs a year in the next 3-5 years? No one.

Eh... assuming demand is there. I guess it could be, but price of the car matters, prices of oil matter, politics and lobbyists matter, success of this rollout matter. There's some risks here before you call it "too late".

Also... nissan has an interesting play here. Waiting to see what they do.

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

#70

Post by this_user » Thu, Aug 03, 2017, 4:03 PM UTC

meddlepal wrote: post #25

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.

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.

Audi already had to scrap one of their EV models, because its technology was so far behind Tesla's by the time it was ready to hit the market.

Traditional car makers are just extremely slow to adjust, because they have never faced any real disruption. They've effectively been selling the same product for decades with only some marginal and incremental improvements. Tesla, on the other hand, is using the SV model of doing business: First create an MVP, then iterate rapidly until you have something that is so good, it can steamroll the market. When Tesla was founded, traditional car makers laughed at them, claiming they would never be able to even build a proper car. These comments are eerily similar to what the Palm CEO had to say about Apple and the IPhone ten years ago: That a couple of computer people from SV would never be able to build a proper phone.

Traditional car companies are entirely unprepared to deal with the kind disruption that is coming to their market. And that does not only concern EVs but also self-driving cars and the sharing economy. I don't think they can stop Tesla. The real question is how much of their business they will be able to save.