Ford: "We have no idea how to invest this money. I guess let's just put it in the bank."
Tesla: "We have so many idea for investments, we're only constrained by cash. Let's go back to the capital markets!"
Ford investors: "Let me soberly evaluate the company's present and future financial situation before I make any commitments"
Tesla investors: "TAKE MY MONEY"
Tesla on the other hand is a darling of retail investors attracted to the marketing machine of "Silicon Valley disruption" and they have already priced in a belief that Tesla will win the global automotive market. DDM? What's a DDM?
Meanwhile Ford, GM, and all the other automotive incumbents are investing in the same technologies as Tesla. Is it more likely that Tesla never falters (even slightly)? Or is it more likely one of the 10+ incumbents surprises with a self-driving/electric success?
I know where I put my money. Interest rates will be climbing at the exact same time as Tesla will be attempting to expand their market to a larger audience who always purchase new cars with an accompanying loan. Oil prices are showing no indication of climbing again for years to come. Consumers have just replaced their aging vehicles in record numbers and won't be in the market for a new one for roughly 7-12 years. Good luck Tesla.
(Personally I have no idea whether this is likely or not).
> Tesla: "We have so many idea for investments, we're only constrained by cash. Let's go back to the capital markets!"
I think becoming as big as Ford already is, is one of Tesla's most positive possible futures if all of their many ideas play out. But they are already valued higher than that. How can this possibly work? There are so many car makers, there is no monopole they could get. Same for solar and batteries.
The automobile industry will contract as we move from individual ownership to mobility. But along with that transition some manufacturers will keep up and others will not. Tesla is hoping to be one of the winners, taking perhaps 25% of the mobility market as the car buying market dries up.
Tesla's valuation is also based on the idea that clean energy will replace fossil fuels. If that happens, the battery market will grow by orders of magnitude. Tesla will basically take the market from coal and petroleum.
They don't need a monopoly in either of these to justify their valuation. Simply get 10% of mobility and 10% of electricity storage and they'll have justified well above their current valuation.
Remember mobility services will subsume much of public transit and shipping too. The borders between industries are moving around. You can't just ask "how much of industry X will Tesla get?" because whole industries will ascent and others will wither as we transition to sustainable energy.
From article:
> Dozens of other companies around the world have battery-powered cars on the market, and more are in development. Investors “act as if Tesla has some sort of patented product that cannot be replicated,” said Dave Sullivan, an analyst at researcher AutoPacific Inc.
> “By the end of this decade, there’s going to be some significant choice for consumers looking for an electric vehicle,” he said, calling Tesla’s valuation outpacing Ford’s “mind boggling.”
What does this even mean? People like to leave stuff in their cars (e.g. mug, gym bag). They like them to be at their preferred level of cleanliness or disorder. Some even use them as a means of personal expression.
If "mobility" were so desirable, ZipCar would have taken off 10 years ago. The "mobility" market will be about the size of the taxi, bus, and train market.
I know many people who keep golf clubs in their car because sometimes a salesman is looking to round out a 4-some. I like going to walmart/lowes... over lunch and leaving my treasures in my car.
Car sharing won't actually work out anyway because everyone needs their car during rush hour. Everyone is driving then anyway, and then the cars sit idle.
For example: Mom takes service to work, possibly carpooling. Dad takes uses family car to drop off kids and goes to work. Car drives itself to mom's work for her to use to pick up kids and commute home. Dad takes service home. Or whatever. The point is kids can always be in the car with the extra diapers, with safety features parents want, etc.
The other part of this that people ignore is that a car sharing service could open up a lot of flexibility. For example, maybe our dedicated family car is just a sedan, but on this particular weekend with the grandparents in town, we can use the car sharing service to get a minivan and have everyone ride together. Or I want to pick up a piece of furniture and request a truck from the service. Or it's my anniversary, and I can request a luxury sedan to drive us to the restaurant for a touch of opulence. I'm sure there are many other examples people can think of.
Like you say, car sharing won't cover everyone's need, especially at first, but eventually, the big players in the space will have enough sophistication to cover many cases, especially for a second car.
Car sharing starts to make sense when you want the car outside of rush hour. Want to go to the store for an hour at 2:30, no problem there are plenty of cars free. Want to get to work every day - you are paying peak rates for a car that will probably be used exactly twice that day, once to get you to work and once to get you home.
(This assumes that you're also from the US, for rhetorical convenience.)
At this point in time, I think it's wise to avoid laying costly new tracks with the dawn of driverless cars on the horizon.
In fact, this is a perfect use case for driverless cars. The problem with trains everywhere is the wasted time not on the train and the million stops along the way.
It gives us exactingly detailed information on what journeys people need. The dataset will be immensely valuable in allowing the companies that sit on them to first start doing quasi-bus services:
Order a bunch of minibuses. During peak hours, offer an option: Wait for the next dedicated car to be free, or ride share with quicker availability and a discount. Limit detours strictly - there'll be plenty of "Follow road X and pick up 6 people on the way to station Y" type stretches that will make people happy (little time lost; feels efficient if there's not lots of turning off).
Then you can see them partnering with bus providers to dynamically fill in during peak hours, or even bidding for bus franchises and proposing contract changes that would allow for more dynamic, demand-based scheduling.
Ultimately this can feed into planning train type services - companies offering these type of drive share will be able to e.g. let people order "end to end" journeys of the type "pick me up at address 1, get me to address 2" where they show journey options that include rail when it makes sense. The key beying that if they do so, they will know the entire desired journey, and would be able to offer insight into the most efficient interchange locations or other changes to train services would be most desirable.
The raving reviews you'd get the first times people order a car and are told instantly "your car is already waiting right outside your door" would be rather interesting.
Get in, and your favorite radio station or music is playing.
And for colder climates: Your car is already pre-heated. I remember too many winter mornings during winter in Norway when even ensuring our car would actually start in the morning was an annoyance (even with a garage, space heaters in the garage or motor heaters is sometimes necessary).
Yes they will; the magic trains you're thinking of are called streetcars. And, with the oddities in oil and the difficulties of maintaining suburbia, we'll be moving back to dense streetcar suburbs soon enough.
We still have typewriters around too, and some people ride horses. Old tech doesn't die, it just diminishes to a smaller niche.
Car seats will be a bigger problem: they are unwieldy, legally mandated, and require careful installation to be effective. Unlike diapers, even the small boosters used for older children can't fit in a shoulder bag.
A young couple expecting to have children in the next few years might balk at these inconveniences, and that could depress adoption of the 'mobility' model. You have to keep prospective purchasers in mind, who are evaluating their needs over the use-life of a car.
It's like saying "I prefer my horse, I can feed it grass off the side of the road, but you have to find some fancy petro-chemical station for your auto-mobile? Insane! My gas grows next to the road!"
I get it, but try to put yourself in the place of someone younger who doesn't make decisions like "I would never replace my car because I keep spare diapers there!"
>If "mobility" were so desirable, ZipCar would have taken off 10 years ago. The "mobility" market will be about the size of the taxi, bus, and train market.
This is very Bill Gates "no one would ever need more than ..." argument. Come on!!
ZipCar has literally nothing on the future of mobility.
You (and many people your age, conditioned from birth to place massive value on personal car ownership) may never move past that paradigm. You might go to your grave in 50 years a proud owner of a vehicle in an era where almost no one owns.
I think, instead of sagely predicting failure, maybe try creativity, use that entrepreneurial mindset to solve future challenges.
You want to keep spare diapers nearby? Why not have a secure storage module in the vehicle, lets say the trunk can be split into 2 or 4 secure storage modules.
You order an autonomous electric vehicle to your location, ETA 5 minutes. You hit the "bring my secure storage container to my location" option, restricting the available pool of cars to meet your need to those close to your container, at a small additional fee.
Boom, the "insolvable" problem of personal storage in a vehicle is solved by commoditizing the storage and use the AI vehicle to transport it where you need.
I'm sure you could come up with a better solution if you tried.
I doubt I'll last another 50 years, but I'll probably live long enough to see the end of the current robot taxi fad.
Cars have not been. The earliest proto-human sought shelter from a storm. They did not seek personalized shelter during transportation.
I don't like the argument at all, and I think it's a cop out, a slippery slope argument.
>Do you AirBnB your bed (at hourly rates)? Do you AirPantsAndT your clothes? Most people don't.
This is just a very feeble slippery slope that ignores the very real differences.
Yes, clothing and shelter have been humans needs for far longer than civilization itself.
Can you say the same for micro-space in a personal transport?
Were humans owning personal space inside of pack animals 10,000 years ago?
It's a bad argument. There's no slippery slope here. Homes and clothes are fundamentally different than cars.
You cannot live a civilized life without a home and clothes. You can live a civilized modern life without a car. Obviously we approach higher order needs differently than lower order.
> Cars have not been. The earliest proto-human sought shelter from a storm. They did not seek personalized shelter during transportation.
Are you familiar with New World Economics' discussion of "really narrow streets"? One thing the author points out (in "Let's Take a Trip to an American Village") is that even in the 19th century, the US was very interested in what he calls "My Personal Means of Transportation" -- the fashionable thing to do was to have a carriage house, no matter how little you actually needed a carriage. I think you see less of this pattern elsewhere in the world (or else you just see less wealth; consider how "pedestrian" seldom has positive connotations and "equestrian" never has negative ones), but there's definitely an enthusiasm for personal transport in the US.
The need for transportation is just as ancient as the need for shelter. Before cars, it was a horse, or camel, or a chariot, or something else on wheels.
I think you underestimate the strength of car culture, and the value people place in personal space (at least in the US).
And as with so many things, why can't these unnecessarily-competing worlds coexist?
There are millions of overly confident entrepreneurs rationalizing millions of wacky, over-engineered money-grabs and only a few of those ideas have strength to be so culturally and socially transformative as the world you describe. Is the end of car ownership one of those lofty ideas? I am not so sure.
Edit: and on a more personal level, I see ideas like that -- the end of ownership, whether it be cars, software, or land -- as an attack on individual ownership, so that moneyed interests can instead own everything and lease it to the peasants at their leisure (and profit). The world needs the opposite: to make ownership easier and less costly, and to restore the the increasingly-stratospheric costs of everything* down to levels that put ownership within reach of the common man. Not owning cars is just another step towards feudalism.
* As for how, there could be much to gain simply by analyzing the cost structure of stuff and stripping out unnecessary middlemen, expenses, and materials. Adopting a more restrained form of capitalism, like what one sees in tight-knit economic communities or in idealized small-business environments, could perhaps foster a business culture centered around balancing customer, employee, and shareholder value. The current system of only maximizing shareholder value creates much of the turmoil, unnecessary innovation, and naked profiteering we see today.
Yes, it's great to have personal space. But you know what? People sacrifice personal space for spending less money all the time. And for convenience.
Consider e.g. London - a city awash with money, where a lot of even people who could afford to be driven around by a personal chaffeur will opt for public transport for convenience.
As another example for London: People will opt to smell someones armpit on the train in the regular train carriages rather than pay a few pounds extra for a seat in the First Class carriages all the time. The value of personal space when travelling, as it turns out, is deemed by large parts of the public to be very low.
People tend to opt for personal space mainly when the public transit options are unusably bad compared to driving.
Places like London are perhaps the areas where this transition is most likely to start: Places where those who even own cars often own cars as a "contingency" for those times when the bus doesn't arrive or you're going somewhere odd that just doesn't work well with public transport currently.
In those cases, for a lot of people, it'd be very attractive to e.g. pay a membership fee to guarantee a certain level of "contention" for cars to be able to just press a button and have one arrive "fast enough". Even more so with the ability to do that on either end of a train ride. For a lot of people this will make a car pointless.
And in environments like this "personal space" is moot, as almost everyone are already used to using public transport some or most of the time.
At the same time, it is somewhere where local authorities are clamouring for ways to reduce parking and make car ownership less desirable. Expect housing units to start coming without parking spaces or with very few parking spaces in high density areas as cost saving measures, or because they'll sell some of those parking spaces to ride share companies, or make residents who want them buy them separately.
Expect planning rules to start reducing the maximum allowable number of parking spaces.
Places with plenty of space, sprawl and a strong culture of cars as independence will certainly experience this change last.
But consider e.g. the impact of a generation of youth who will eventually grow up with a situation where they may be able to rent a self-driving car on demand from before they are able to (afford to) buy one, and where e.g. parents may opt to just order a journey rather than driving them somewhere once old enough, and who will grow up increasingly likely to get used to some car taking them somewhere without needing to take the step to car ownership to get that freedom from parents driving them around. The "liberation" may become to be able to sign up for your own account so your parents can't see your every journey.
I think that the whole culture where car ownership is seen as a rite of passage and signifier of liberation from your parents could change far faster than you think.
Different people have different values. Also I'm quite young, so I don't think age is a strict delineation.
Yes I did point out that most Americans and many people are conditioned from birth to value car ownership, even when it's a poor financial decision.
"Perfect example where Uber fails - I can't take my dog anywhere
As I told the other guy: Stop predicting failure based on problems, put on your creator and builder hat, and solve the problem.
Why not have pet friendly vehicles available at a small charge, guaranteed clean?
It bothers me that these problems are so easy to solve and yet people are so willing to write off a future possible technology without so much as thinking through any of the solutions.
Regarding the dog, I'm just pointing out something that currently doesn't work for me. Until they fix it I don't care - right now their solution does not help me and nobody has done anything to address it.
My point is simple. Right now owning a car is better than not owning a car for me. Until that changes I will want to own a car. If you don't want to own a car then good for you - different people have different desires.
I literally did share a solution in this post, and the one before.
- Commoditize storage and transport it to you on demand
- Offer pet friendly cars
Boom. Solved.
As I also wrote: "I'm sure you could come up with a better solution if you tried."
Is this hackernews, where builders come to talk about exciting ways they're solving tomorrow's problems?
Am I on the wrong site?
You haven't solved anything until you've demonstrated a working solution. If it were so easy to fix problems in the real world, politicians would have our economy constantly booming, there would be more jobs than people, and the Middle East would be the most peaceful place on Earth.
Anyway, I don't think we're going to agree on anything. I'm exiting this thread.
By the same standard uber as a whole is not a working solution.
And I was just pointing out that your personal experiences with today's ride sharing aren't relevant to a hypothetical discussion of an unrelated future transport technology.
I'm defensive because you're continually derailing a thread about futuretech to list your personal experiences with todaytech. I don't get why you derail this conversation to make it emotional and personal, so I get defensive about the track of the conversation of solving tomorrow's problems. Stop taking it personally, think bigger! Solve a problem!
You might have noticed that people are hoarding a lot of stuff, that are of little value to them. It's probably an intrinsic value to most people to own things. It might vary a little between cultures, but it seems to be a common trait.
If you don't - great for you.
However. It might happen that you one day walk by a car on display in a mall, and notices the nice paint, a practical laptop holder, the particularly nice storage boxes for diapers and what not, and thinks to yourself - "I want that car."
A teenager doesn't just "want a car." He wants that freedom that car gives him... to go somewhere without bugging his parents or friends for a ride. If you're in a big city or someplace where this is not the norm, I could see you believing otherwise.
(And I laughed at "guaranteed clean." Right. All that means is you get a refund when you find the dog turd in the back seat.)
Precisely, and this is why owning the car isn't that important. This teenager presumably still has to pay for the car and fuel, or bug his parents for it. Paying for the (cheaper) self driving ride is no different.
It is different. If you're relying on someone (or something) else, waiting around, you're not "independent."
Really, this doesn't seem like much of a stretch.
Self driving shuttle services will be a great new way to transport us, especially in metro areas, but this won't work very far from the center of those so if the valuation of that market is too optimistic in regards to Tesla the holders of their stock will pay for it.
If you look at the number of US car companies that have started from scratch in the past 70 years you don't see many still standing (pretty close to none). Tesla has a very different model though so we can't lump them in with most all of the others.
In my own humble opinion, I think Tesla's fate will be decided by how fast they can produce a low end, very affordable and dependable car for the masses. If they can deliver that within the next 3-4 years they've got a very good shot at moving up to competing with Ford and GM.
If they instead try to compete with higher end cars they'll find that's a hard road to travel. At some point soon the big players will produce a car that's a competitive option and dilute their market and they'll die.
It's worth remembering that both Honda and Toyota captured market here with affordable dependable cars, not luxury cars. Those came quite a few years later.
I fully expect Tesla will produce an affordable car though, and it would make perfect sense if they called it a "Model T".
- A personal, individual vehicle which comes to pick you up where you are and take you to exactly where you want to go is a much MUCH higher value proposition than public transit.
- Add self-driving to the mix, and the cost of that service will plummet.
- When the car providing that service can drive itself, then there is little to no inconvenience to the vehicle owner to offer that service, and significant financial incentive.
- Because car owners will be able to make "rent" from their capital investment, owning a car will start to look more like property ownership than a depreciating investment-- especially as maintenance and operation costs fall for electric vehicles.
- There will be very strong financial incentive to use self-driving ride pools instead of putting up a large wad of cash to own a car. So total car ownership will go way down, and will be done much more by the wealthy and much less by the working/middle class.
- Cost of ownership is especially high in cities (parking), and the market for ride sharing is highest. So probably many fewer city dwellers will own cars.
- Families that own can shrink to one car instead of two, since the car can drop people off or pick them up.
I think there are a lot of pretty good reasons why the vehicle market is going to change significantly in the next 15 years.
If it's really self-driving it can go park wherever. Not very good for the environment, perhaps, but it completely solves that problem.
The end result is fewer cars owned by fewer people, but utilized much more fully, so the cars that do exist in cities spend more of their time driving and in-service, rather than sitting parked and empty for 98% of their lifetimes.
As someone who doesn't own a car, the only potential appeal to me of owning a car is shorter waits and predictability (always there). If the predictabiity and waits drop for rental services, my reasons for considering buying a car would rapidly drop. If the waits to use a car I own go up, my reasons for considering buying one would drop further.
It does not matter if a car is selfdriving or not. To be recognized as available by someone means a utilization of about 30% by the providing company. But a utilization of about 30% does not drive down costs. You still of costs for producing and servicing the vehicle, which is way higher than just the energy costs.
Tesla has no experience in free floating vehilce fleets. Uber has no experience in such thing. ZipCar has. Car2Go has. Car2Go as an subsidary of Daimler even has experience in car production.
Now think of that.
1 - the zip cars available to me are a few blocks away to walk which isn't convenient if I'm carrying something or lazy.
2 - high cost. Taking uber right now is so much cheaper. Imagine if cars were self-driving. Costs would plummet
3 - parking. This can be very hard depending on where I'm going
4 - I have to pay for the length of time I'm out, not for my ride. I also need to return the car when I'm done.
These are the biggest pain points in my opinion. Also, not needing to drive myself is a huge bonus. The leverage of solving these pain points are huge, imo.
the bike shares solve this by driving trucks around, collecting bikes from areas where they aren't going to be needed and moving them to areas where demand is about to spike. it's hard to load up a truck full of cars to meet demand in the business district at 5pm, but it's very easy to send over all the spare capacity in your autonomous vehicle fleet.
Smoothing that out, so that you come to expect a car to be available very rapidly no matter what, with only minor inconveniences, may not end private car ownership but certainly will make a lot more people opt for alternatives - I know for myself (I don't own a car) the occasional lack of predictability in how soon I'll get picked up is the one aggravation that occasionally make me want one.
Self driving car networks basically can solve that.
Comparing either of those or public transit to self driving cars misses the point entirely.
Problems include:
- Cost. All of the (limited) Tesla automation technologies cost more than my last car.
- Liability. Who is liable for mishaps? As Uber has demonstrated accidents and traffic violations happen with automated tech.
- Utility. The majority of users aren't high income people in SFO and NYC. We have parking, getting picked up is cool, but not high ROI.
- Pool vs own. As we've seen with transportation services as varied as stagecoaches, cabs, railways, and airlines, service based transportation models aren't cheap. Service price is always demand driven, it will cost more when you need it.
- Owning a car in the US is one of the greatest values available in any market. I can be at any point in the CONUS in <3 days for under $500 with most cars.
I think self driving cars may put the bullet in some cabs for good after Uber and Lyft implode, and may bring train-like scale to intercity transit. But the fantasy being sold today is just that.
plus there will be additional benefits Safety: Less drunk drivers on the road, less accidents from fatigue, etc. Cost: at a minimum, it will bring cab prices down Efficiency: Less traffic jams as autonomous systems won't slam on the brakes when they see a police car, etc. Smoother flowing traffic, higher legal road speeds if reaction time is shorter
And then there are other non-car transport which will benefit: logicistics, mail, deliveries etc. Minibuses that could pick you up door to door through automated route planning etc.
Cost is a short term problem. Costs will go down. Liabilities can be insured against.
Here is where I see it going:
Stage 1: Taxis start being replaced by self-driving vehicles at much lower cost. Car rentals too - liabilities potentially go down once they reach a certain level of safety as you don't face the risk of a poorer than average driver. Usage skyrockets as costs drop, and as services can cut pick-up times drastically by more optimally having a larger fleet parked around town and/or driving around town.
Stage 2: We start seeing pooling options from more and more rental providers to deal with high demand situations. E.g. Rental company crunches their numbers and see that my road => the local train station always maxes out capacity during rush hour and decides that rather than buying more vehicles, surge pricing coupled with offering a discount that brings the price back towards normal for each rider as long as it at most takes X minutes extra will be popular and more profitable.
Stage 3: They put in minibuses on some of the most congested streches and/or team up with the local bus companies to launch apps where you can tell them you're at the stop and get guaranteed pickup within Y minutes by either the regularly scheduled bus or a car. You pay a slight premium for the guarantee, which covers the car when the bus won't be there and a profit share with the bus company. (For me the only reason not to consistently use the bus is that if I need to be somewhere urgently, I can't always risk waiting for a bus that might be full; if I had a guarantee that if I press the button and walk to the bus stop, I will get picked up in 5 minutes, it'd make me use the bus more)
Stage 4: As self-drive increase in general, cities put the thumb on parking spots. E.g. in parts of London you already won't get planning consent for housing with more than 1.5 parking spaces per living unit as a means to cap car ownership. Expect to see that gradually driven down, with the expectation that people will buy parking space for their self-driven car elsewhere and/or forgo having one. Driving down the limits on parking will allow for denser developments, making ride share options etc. even more viable.
Stage 5: Youth grow up without depending on their parents to drive them anywhere from the moment they are trusted to go by themselves.
Basically, I see it as a process where the convenience of apps to get you somewhere will keep increasing to the point where people will find themselves increasingly opting to check these apps first and find themselves needing a car less and less. Some transport apps are already combining route-finding with then offering to order an Uber for you.
Expect to see more of that making it less attractive to get a car over time.
Especially as youth get used to a greater flexibility and level of freedom using these type of apps before they can buy a car. Car ownership many places represents freedom from parents driving you around, but more and more teenagers can expect to be in situations were parents opt to order them a car instead of driving themselves.
Before long, a whole generation will experience car ownership as irrelevant to the ability of liberating their transport options from parental control.
Sure, some people will still opt to own one, but many already forgo car ownership, and that number will certainly rise rapidly.
Maybe there will be a stratified market for rental self-driving cars; one for "just this trip" and another for "five days of exclusive use for a road trip."
But not necessarily shrinking the market. The cost of mobility goes down, consumption will go up. How high? I'm going to guess absurdly high. The reason US cities are sprawling messes is that they were built as the cost of mobility dropped off a cliff (cars and trucks replaced horses). Go read Clifford Simak's "City". People will live in self driving cars and commute in their sleep. It's going to be nuts.
Maybe poor people will take the robocab from hell, with sick on the floor. Most people will not.
The difference being that poor people will have the "robocab from hell" alternative rather than have nothing they can afford, and that more people will afford said high end sedan when it's self-driving, and will be able to justify it more often, and more people will afford to trade up to even more luxurious services.
There is already a marked class difference in commuting in London: Low paid people take the bus four two hours+ for commutes that'd take less than half that if they could afford the train from the outer fare zones (bus-rides cost the same within the entire London fares area), so transport is already today segregated by income. A lot of the longer bus lines makes no apparent sense until you realise that low paid people often can't afford the train, or a car.
Why must some people see new inventions always as colossal destroyers of products they don't like instead of the more humble 'enriching ones freedom to choose'?
If self-driving cars has as massive an impact on car ownership as e-books have had on the paper book market, that will be a dramatically noticeable change in most cities.
Last month Tesla sold 10,000 electric vehicles to Fords 2,500.
If we are serious about climate change, then sometime in the 2030s [1] we have to stop building new combustion engines.
The entire technology platform on which these 6,7 million Ford sales rest is about to be swapped out in little over a decade.
[1] https://arstechnica.com/cars/2016/10/germanys-bundesrat-vote...
But predicting the future is hard.
Or there might be a breakthrough in carbon capture, converting atmospheric CO2 into petroleum and we can drive combustion engines forever.
CO2 capture is an area of active research and it's entirely possible that advances there will make Tesla and Solar City moot.
I don't know how likely that is. Even if carbon capture comes through, the low hanging fruit of fossil fuels are gone so now we have to get more invasive in harvesting the hard-to-get ones (strip mining, fracking, etc). It's likely that even with C02 emissions taken care of that we'll want electric vehicles and renewable power in general.
The battery is the thing that makes an electric car "expensive" today, but it's following a consistent downward price curve. In ~5-7 years, it will cost more to make an ICE car than an EV car, and then ICE dies. Simple as that.
Energy density. Jet fuel has about 25x the energy per kg as the best lithium batteries. Perhaps batteries will be able to match carbon fuels some day, but it's a long way off.
CCS + Power2Gas + synthetic fuel is unlikely to be cost competitive. It's not like climate scientists don't consider that option. In fact the only half way plausible scenarios for reaching the two degree target involve going carbon negative after 2050. And synthetic fossil fuels are probably the only way to make airtravel carbon neutral.
Full de-carbonisation requires a multi-pronged approach, and cars are at a point where electric vehicles are already very close to conventional vehicles. Within a factor of two or three for range, so totally sufficient for most needs, and not much more expensive. It's one of the better options we have to de-carbonize a huge sector. Second only to the energy production sector itself.
Compare to food production which looks absolutely hopeless (the two degree pathways often assume we manage to implement massive dietary changes see e.g. here http://tool.globalcalculator.org )
Any likely method of CO2 to petroleum is likely to be below 50%, more like 15-30% efficient. Round-trip efficiency an entire order of magnitude worse than battery. That's why batteries are better for ground-based applications and will remain so.
Regardless, if any of the biological/algal methods of CO2 to fuel techniques become successful, why would we care if 5%, 50%, 100% of the solar energy received makes its way to the end product. It's basically free energy at that point. The only thing that would matter is real estate to house the facilities.
[1] https://corporate.ford.com/content/dam/corporate/en/investor...
Please show your math.
>Tesla will basically take the market from coal and petroleum.
And you base this off, what, exactly?
Sometimes I think that half of HackerNews didn't even know solar or battery backups were a thing before Tesla. These are competitive spaces where Tesla has essentially no market share (just like cars).
I think Tesla will be successful, but I doubt they end up market leader in any of these things.
I'm genuinely curious if the numbers reported by SolarCity represent the full picture. [1] shows SolarCity with ~35% national marketshare while the closest competitor is at just over 10% (Vivint). This was in 2015, but it still appears to have a significant lead.
[1] https://www.greentechmedia.com/research/subscription/u.s.-pv...
Ford doesn't have any good ideas for the future, they are too busy with the here and now and haven't shown an ability to do anything but incremental improvements with their R&D spending. Like we don't expect much more from IBM, we don't expect much more from Ford, but we do from Tesla.
Tesla is making larger swings and potentially accepting larger risk. Ford is... iterating.
Electric vehicles prior to the Telsas where research projects and low torque ultralight budget vehicles. Listing the differences between a Telsa and its closest successor, if you could pick one is not an easy task. Listing the difference between an F-150 and and F-150 with and aluminum was already done this sentence the hardest part was spelling aluminum.
You can pick an threshold for choosing what is evolution and revolution, I am just trying to choose a reasonable one.
Plenty of other manufactures are doing innovative things with automation, technology, etc. Not to mention most of them can build a higher quality interior/driver experience for far less than what Tesla wants for a Model S
Seems like the most basic, obvious, easy to implement feature but they still can't manage it. Apparently because it's "illegal in Germany" to have a car running without an operator behind the wheel. What a joke.
Tesla will wipe the floor with them.
I know it's not very innovative but if the incumbents can't even do this then how are they going to leapfrog Tesla at, say, self driving?
That's what I'm kinda waiting for - I don't want a car; I like having a pickup. Ideally, it would be 4WD (and my next pickup will be - right now my off-road vehicle is an Isuzu VehiCROSS that I'm pouring money into). I would love it if my next pickup truck was a self-driving, off-road, 4WD electric beast.
But I don't see that happening any time soon - at least not before I get to the point of replacing my current truck.
It's based on nothing other than the weird contempt you see for large, established corporations in the SV crowd. Big established corporation = big established rule book and management hierarchy = stifled innovation. Nevermind the fact that most of the major technological breakthroughs of the past 100 years were developed by the research wings of big corporations (Bell Labs, defense contractors).
Based on committed capital, I think this is at least partially correct.
As anyone who has every used software will attest to: Most of the time, we can count our lucky stars if our commercial software 'works' for a year and a half.
Cue all the: "If Microsoft/Apple/Google/Facebook/Snapchat made cars" jokes.
I, for one, kinda like driving a car that doesn't require an internet connection, doesn't have forced OTA updates, doesn't send analytics data back to base, and won't potentially be bricked if someday the manufacturer goes out of business. Other manufactuers are starting to do the same thing but I'm going to enjoy my "dumb car" for as long as it lasts. Hopefully when fully electric vehicles become more mainstream and affordable there will still be an option to get a "dumb" version.
I've contemplated the idea of my next pickup being a commercial vehicle, if I can get one (as a single unit and not a fleet sale) - which I probably won't be able to, but I can dream.
It seems like that's the only way (except for going used) that I'm going to be able to get what I want: A standard-cab, short-bed pickup, ideally 4WD.
I don't have kids, and won't have kids. I have no need for four doors and an extended cab. I don't need a long bed. I want a short wheelbase. So far, it's either buy a used pickup (back when they made and sold these kinds of trucks) or go with a commercial vehicle (where you can still sometimes find them - sometimes).
The other perk about a commercial version is that they are stripped down to the bone. Nothing fancy in the cab, just the bare basics for a radio, cloth interior, non-electric controls for windows and seats. Basically, eliminate all the fru-fru stuff to make that much more reliable for work-based usage.
In other words, I want a truck to be a truck - not some fancy "I only go to the mall to show off" substitute for a minivan. Add in some basic 4WD with manual hubs (again - nothing to break) - and there ya go. That's my dream truck (ok - if there were a Raptor version of it that'd be nice, too - but I can't afford that, so who really cares).
But you're right -- there are no Chevy S10 or Ford Ranger type pickups anymore. The closest you'll find is probably the Toyota Tacoma, which has more than I would want or need.
So I just got another Corolla. It does have some fancy features I enjoy, but luckily they aren't reliant on the internet to function. And it's cheap.
How? Uber has passed as a software company by making its drivers pay for capital and depreciation. Tesla currently sells physical cars to individual people. They may be aiming for "self-driving," but if they ever get there, there's still the question of who pays to build and maintain the cars. Compared to that, the value of the controlling software seems fairly small.
The market could be wrong, Tesla could fail to achieve their vision, Ford and other existing big companies could somehow turn themselves into organizations that aggressively pursue ambitious new visions.. but the market is betting not. You're welcome to make an opposing bet.
That said, it's not like they are exactly just making small refinements to gasoline engines, while SV companies are the only real innovators, chasing electric and self-serving vehicles. We just tend not to talk about it as much on HN (compared to Tesla, for example):
https://www.google.com/amp/s/electrek.co/2017/01/03/ford-new...
Ford does normal science [0], Tesla does revolutionary science [1].
[0] https://en.m.wikipedia.org/wiki/Normal_science [1] https://en.m.wikipedia.org/wiki/The_Structure_of_Scientific_...
Suddenly we believe in a rational market when it comes to Tesla? Everytime I ask basic valuation questions in these threads, I get touchy-feely answers about "potential". And HackerNews is supposed to be a data/tech place. Imagine what average Joe thinks?
I don't know about 'we', but I don't believe in an irrational market - the market may well be wrong, but it's not usually wrong for unreasonable reasons. And potential is all investors ever care about: they're looking to put their money where it has the most potential to turn into more money. Predicting the future is necessarily uncertain and involves ambiguous judgment; you can call that touchy-feely if you want to be dismissive, but there is no such thing as data on things that haven't happened yet.
In the case of Tesla vs Ford, there is probably a sense in which the longer the market is 'irrationally' convinced of the value of Tesla, the less irrational it actually is - it's a bet on Tesla's viability and vision, and the longer it seems like a good bet to most people, the more likely it is that it is a rational bet to have made.
Sounds like they may be trying to compete with Android, Apple, and Tesla on the software side. And QNX has a good microkernel architecture for an automotive OS.
https://www.forbes.com/sites/greatspeculations/2016/11/03/wh...
Ford's P/E ratio is 9.89. IBM's P/E ratio is 14.02.
Facebook's P/E ratio is 40.79. Tesla's P/E ratio is infinity since the E is negative.
I'm sure Ford has done many incremental innovations, I didn't say they didn't. IBM does the same thing, and has "record profits" every few years also. Its just the market isn't expecting the next big thing to come from Ford, while they are expecting that from Tesla.
If you think the market is wrong or too irrational, you can make a killing by shorting Tesla and buying cheap Ford stock.
And it makes sense: a high P/E ratio indicates high potential. The lower the earnings, the higher the P/E ratio. But if earnings went negative, then the P/E ratio would automatically go negative (since that is how math works, as you say). So if my stock price is $100, and I earn $1, my P/E ratio is 100...so much potential! If I accidentally lost a dollar instead, my P/E ratio automatically becomes -100 even though not much changed in my earnings.
I don't short stocks because I don't believe in trying to time the market. I actually think Tesla could move well north of where it is currently trading. Not because I think they are going to grow to justify the valuation, but because I think lots of people will look at the $45 billion valuation and will incorrectly compare it to Amazon, Facebook (as you just did), Alphabet, and Apple and think $45 billion is low.
However I am long Ford. In fact it comprises the largest percentage of my personal portfolio. I continue to add more to it with every drop and just added more a few days ago. While the value has been dropping over the past couple of years, I've been collecting healthy dividends along the way ($F pays out now over a 5% yield), and am happy to sit and wait to see how long people will wait for Tesla to move beyond a niche auto maker and into the mainstream market.
Edit: One other point- this recent run-up is attributable to Tesla delivering more cars this quarter than expected, not because they just unveiled some new technology the market wasn't previously aware of. TSLA has been extremely volatile whether you've been long or short over the past 2-3 years. All it takes is one missed earnings report and it'll send this stock down at least 25%.
The only thing happening now is that investors seem to be extremely worried of 'missing the boat' on automated driving. See the big investment in Uber, a taxi company with an app that essentially anyone can copy. But they raised billions on the promise of automated driving.
The only thing here is the idea that the organisation that perfects automated driving first will dominate every transport sector. That seems far fetched to me though.
But hey, I'm just a regular person too. So maybe I'm dead wrong.
Shorting is the way you capitalize on a stock that you think is overvalued. It is an advanced maneuver but can be done for the long term as well.
IBM...man, IBM is a tech company that got rid of most of its R&D to focus on consulting and accounting tricks. But ignoring that, IBM has a huge R&D division but has been unable to come up with any breakthroughs for quite some time now, it is the canonical mature tech company that isn't going to have rapid growth like a startup.
the market can remain irrational for longer than you can remain solvent!
The likely long-term outcome is for Tesla to be bought out for a pittance (maybe $20-$30 a share? $10 would be surprisingly low, $50 surprisingly high), by a mature automaker interested in the marque; in the meantime, the way to make money off Tesla is to realize that all the people who are zealously pumping their money into Tesla are leaving everything else under-valued.
Incremental changes is what most senior management folks at places like Ford can do because that is what they teach at MBA schools using linear growth graphs.
Self driving tech is really novelty thing now. And nobody expects it to work anytime soon.
The real deal now is mind-blowing battery tech. Batteries that are rugged, can charge quickly and a car that can give a big range on a charge.
Meanwhile talking of how efficiently somebody can build an ICE based car is really like someone talking about how quickly they can produce horse carriages. Doesn't really matter because that disruption is happening else where.
Apple was making billions in profit on the iPhone at launch. Tesla has never made a profit and sold 70k vehicles last year. Companies like Ford and GM have huge numbers of loyal customers and move millions of vehicles a year and quite profitably. So while it sounds great to pretend that the automobile industry is dying and Tesla is capturing their market share by sheer innovation, the numbers tell a different story.
Tesla on the other hand, has millions of potential customers who would and will buy one once they become a little more affordable and the charging infrastructure becomes more built out. We already saw how fast the pre-sales for the Model 3 went. And that was just people who were willing to put down money on a car that wasn't even available yet.
It's not just about innovation or not. Tesla has a lot of room left to grow. Ford is about as big as it's ever going to get.
Yeah but it's not like people buy one car, and never buy one again. Ford sells over 800,000 units of just the F150 every single year.
Now it's true that they don't have as much potential for growth because they've reached a sort of stable place in the market. Maybe sales can grow a few percentage points year over year but Ford is unlikely to jump by 20% the way Tesla can.
But that's not really saying much as Ford is a mature company with a complete lineup and Tesla is only on its 4th model of car.
But they are already trading at a higher valuation than Ford.
So unless you think that Tesla can command much higher margins than Ford does, then shouldn't Tesla only trade at a similar valuation when they are making similar amounts of cash?
Ford bet $1 billion on Argo.ai to build self-driving cars, and they also acquired Chariot. They are planning on using these to roll out self-driving vans in 2021 to compete with Uber, Lyft, etc.
https://media.ford.com/content/fordmedia/fna/us/en/news/2017...
I think you just don't read about it because you don't care about Ford, but you read about it for Tesla. And it's not entirely your fault; there is definitely publication bias as well.
Here is an article from literally today:
https://techcrunch.com/2017/04/03/ford-tops-the-list-of-auto...
according to who? your average HN reader who basically hates cars? yeah, sure. the guy who hates cars is bearish on ford, shocking.
what about all the people buying raptors and gt350s and fgts and fists and fosts, hand over fist?
do you even know what i'm talking about? do these insanely popular cars even register on your radar?
it sounds like you're not-a-car-guy-but-a-tech-guy which makes up for a huge portion of tesla fans. and you're exposed when you make shit up like "ford doesn't innovate" or whatever your thesis is.
signed,
-not even a ford guy. porsche, there is no substitute.
People who "just want to get to work" aren't buying cars that start at $35,000, either.
I will also avoid buying a car connected to the Internet/which has a tablet-like dashboard for as long as I could, and I say that as a guy who has done web-programming for the last 10+ years.
People misunderstand post car like post PC: it doesn't mean the market is going away, but merely that it is no longer growing. Therefore, WYSIWIG on earnings, because they aren't going to change dramatically. Ya, Ford might have record earnings that are slightly more than last year, but no one sees them doubling before inflation makes that happen naturally.
> do you even know what i'm talking about? do these insanely popular cars even register on your radar?
I have to admit, I prefer Japanese cars and would never consider buying an American brand. I found them unreliable in the past, and got burned more often than not. But I still don't see the Japanese companies pulling a Tesla in the future, they are fairly stable companies with stable market share and profits. They don't change the game.
> -not even a ford guy. porsche, there is no substitute.
German cars break down too much. Ya, you can get one, but after the warranty is up, you are toast. Better to lease instead.
india and africa will be china in 20 years. this is the market that tesla is fighting for a fraction of, not the other way around. you're out of your mind.
people like cars. people will spend an irrational amount of money on their cars. they don't give a shit if it pollutes, or kills people, or doesn't because it drives itself sometimes. the trends show this, decade after decade. guess what? teslas pollute also. how many tons of CO2 was emitted extracting all of the rare earths and other super toxic shit that makes a tesla?
i'm sure tesla will be super successful. the rest of the brands aren't going anywhere either. and toyota was the first tesla. look at the prius figures. someone will do it again with electric cars. it won't just be tesla. you can't be serious if you think that.
India and Africa are going to buy Fords?
China has been really nice to Ford, it has kept them afloat while the American market tanked at home, BUT let's not delude ourselves about how Chinese JVs work. Also, China has some weird tax games going on, so its not clear where demand will eventually settle (disclaimer, I lived in Beijing for most of 2016). Other countries have and will follow similar home-grown biases.
You seem to have a bullish outlook on Ford, I don't know. I don't see them as a tech company, they make cars, they always have and always will, nothing will change for them. They aren't aiming for a shot at more greatness than they already have.
do yourself a favor and never own or run a business. record breaking numbers do not happen by accident or because of inflation. you have a fundamental misunderstanding of what is actually going on here.
the analogy you are looking for is "right before the car showed up the record sales of horses looked unstoppable." but you're not putting the pieces together in a coherent manner.
also, ford will make whatever the car is. doesn't matter if it's electric or gas or diesel or bio.
Ford Focus is insanely reliable. I have a 2002 with a bazillion miles on it and it's still running like new.
To be fair, Japanese cars are generally great as well, especially Hondas.
However changing from petrol to electricity doesn't seem to be a drastic change. An important part of car making is changed (engine and energy), but it's not a radical shift (the rest of the car is still the same).
Today, Tesla represents a very small fraction of the number of cars produced in the world. There are still quite expensive, even Model 3, and there are not as convenient as current gas cars (long recharge time and lower autonomy). EV are definitely interesting but they are still in their infancy.
It's still to early for big car markers to shift completely. But the shift will come in 5 to 10 years, then it will be an interesting moment, we will see which companies have prepared enough to jump in the good wagon, and which companies will die.
As a side note, cars, either gas or electric have always amazed me, and not in a good way, from an energy and ecology standpoint. A 1500Kg vehicle to move on average 1.5 persons or 120Kg seems a huge waste of energy.
I do see their usefulness in low density environments such as rural areas as it's a system that doesn't require a complex infrastructure. But in dense environments like cities, transports needs could be far more efficiently provided by public transport and coherent urban planning. I truly hope that cars will not be as common in the second half of the XXI century as there are today.
Is that true? $100 is such a small amount of money that you're completely at the mercy of the supply chain. When you have $100B to spend, you are the supply chain (or at least a major part of it). Big money always makes the rules. They're either making money off of you now or planning to in the future.
Now you might say, "but wait, plenty of products/companies have done poorly because I wouldn't give them that $100." But that's not true. In reality, product success is always in terms of big money -- it's just spread out over enough consumers who individually have the $100 buy/don't-buy option.
Another objection: "yeah, but I always hear about big money wasting $30M (for example) on something stupid." Maybe so, but remember the scale. $30M waste on $100B is the same as $0.03 on $100. Moreover, the stupid thing they're wasting money on may not be that stupid -- you just might not be privy to all the details.
All that may sound like it's bad, but I think it's pretty great system. I sell my products at a markup to get small money, then have the discretion to buy or not buy somebody else's stuff with the money I made. En masse, I form a part of the "big money" consumer group at Home Depot, Amazon, etc. that has power over the more centralized big money.
You can skip to 3:00 for an answer.
Make no mistake, as much as Tesla is loved by the Tech crowd they are currently nothing compared to Ford and other established auto makers.
Tesla ships nowhere near as many cars as Ford. Doesn't matter what you may see locally or what "blends in", but there is nothing generic about the number of cars Tesla produces (which is very small compared to Ford, and other major Auto companies). Tesla has nowhere near the level of business as the other major auto companies.
As mentioned elsewhere in the thread, there is nothing generic about:
"Tesla sold 40,697 vehicles in the U.S. last year, according to researcher IHS Markit. Ford sells that many F-Series trucks in the U.S. about every three weeks"
Ford sells that many trucks every three weeks. Every three weeks, versus an entire year for Tesla.
Maybe the Model 3 will change that, but I do not have high hopes with how thinly spread Elon is.
Ford has been in business for almost 120 years, and has contributed untold billions to the economy. What a terrible company, am I right?
Rainy day funds look like such a waste of money until the roof starts leaking.
1. Telsa has many investment ideas
2. Tesla spends massive amounts of CAPEX
3. Tesla incurs large amount of depreciation
4. Tesla's net income goes downHow do they spend in relation to the other car makers? Do you think that auto manufacturing capex simply turns off one day? It's a capital intensive industry.
Ford share holders, presumably, received a return on their investment in the form of a dividend. While Telsa haven't and won't in the "foreseeable future".[1]
So your overly simplified analysis is complicated somewhat by the individual investor carrying out a risk assessment and deciding which companies should or shouldn't be in their share portfolio.