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Comment by Animats | Hacker News Reader

Does this mean that Tesla is pivoting from their attempt to produce a medium-priced car in quantity and going back to hand-building high-end cars?

Tesla is good at high-end, low volume products. But the Model 3 production fiasco shows they don't know how to do what Detroit and Wolfsburg and Toyota City do. This is in a way a step backwards. Tesla is going back to targeting the 1%.

There are lots of little supercar companies. It's not that hard to build an electric supercar in tiny volume. I know some people who've done it. It's fun, and there are idiots with too much money who'll buy the thing. But it's a waste of engineering talent which should be getting the volume product out the door.

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Pretty mich every car company makes a high end sports car. This isn’t a pivot, this is establishing Tesla as a car company with a range of cars rather than just 1 or 2 that are very similar. Product diversification is a good thing for companies that make physical products. The manufacturing process and higher margins on this will likely fund new developments that will trickle down to the less expensive models.

Also I think the sports car helps solve problems. You can spend a little more on a solution, then figure out how to do it cheaper on the next generation family sedans. Even decide if that’s just the wrong approach due to maintenance headaches.

> Does this mean that Tesla is pivoting from their attempt to produce a medium-priced car in quantity and going back to hand-building high-end cars?

It's a halo car...

Car companies build halo car to get consumers attention to their brand and to sell other models.

Nissan didn't have to build the GT-R R35 but it did because it's a halo car.

Another example is Toyota LFA.

But why does Tesla need a halo car? They already have the consumers’ attention. Lots of people would buy Teslas today but can’t because Tesla is unable to mass produce the Model 3.

Musk did mention in his presentation that the motivation for making this car was as "a complete smack down to gas powered cars" and it may be no more than that, though the halo effect doesn't hurt and neither does the R&D effort.

To get featured the list of fastest cars in magazines etc., to go to car shows, to get people into a show room, to get featured on TopGear/The Grand Tour, for kids to talk about at school and so on. All of which boost Tesla's brand (outside the tech echo-chamber, where it is already strong).

> to get featured on TopGear/The Grand Tour

I doubt they'd allow that judging by what happened the last time they were featured.

Yes, on the UK one. However, there are many versions around the world. Also, the presenters involved have all left, and are now on the Grand Tour. My point was about halo cars in general, not Telsa's experience in general.

The team at the Grand Tour are going to have to get used electric cars, since I expect all the fastest cars will be electric from this point. If they can't get a loaner car, they'll borrow or buy one, they've done that before.

Model x is enough for all of that.

I don't think kids are going to be lusting after an SUV the way we used to lust after the Lamborghini Countach. This, on the other hand, is lust-worthy.

Why not? It's their Formula One of development. Lots of competitors are entering the area. This helps remind everyone who the best is.

Because they already have enough on their plate and are worse off for the distraction?

The project / delivery timeline seems to stage this rather clearly as "next".

Product design / R&D is also different resource pool to manufacturing (well, at least in my mind it is). Manufacturing issues may have forced redesigns but they'll need to keep working on the next thing; competition certainly won't stand still.

Maybe because the target is investors, rather than consumers.

I imagine some of the technology in "halo" cars trickles down to mass-produced cars too?

They might want to learn how to mass produce cars first, though...

1,000 reservations @ $250k means they can pay for 5% of their new gigafactory, and that's just the founder's run. If that means they can scale better, I'm all for it. And I say that as someone who won't be able to afford a car like this for a looong time, if ever.

1,000 reservations @ $250k means they can pay for 5% of their new gigafactory, and that's just the founder's run.

That only works if the Tesla don't bother to deliver the 1,000 'Founder' Roadsters, or Tesla have a way of making them for free.

It works because they're using a stack & roll approach to financing the corporate build-out.

In two years they'll have a new thing to take deposits on. Stack the pre-orders, roll to the next announcement, deliver the last thing, then do it all over again. They're floating a lot of cheap financing this way.

In the meantime, the approach of announcements & pre-orders keeps their stock charged, which they can also abuse for financing if necessary.

It's precarious and dangerous (inevitably stock market decline & recession), and it works extremely well while it works.

Of course, but what I mean to say it's a not-insignificant amount of short term (2y?) cash.

More generally, my point was that producing a high-end vehicle with (most likely) much better margins for the company than, say, the Model X, would subsidize advancements in their more accessible options.

I would have to guess that they didn't decide to make a Roadster in the last month or two.

I think that that is the person's point. This is several years of development which amounts to wasted resources in light of the manufacturing setbacks of their truly disruptive product.

While I actually agree with Animats, I do feel the need to point out that I do not agree that the Model 3 is the "truly disruptive product" vs. this newly announced Roadster... this car has a 620 mile range... that is "truly disruptive"; the Model 3 only has at its best a 334 mile range: this is finally an electric car that can rival the long-range convenience of a gasoline vehicle (as no matter what the range, filling up your take with gas is essentially instantaneous vs. trying to charge a battery).

> This is several years of development which amounts to wasted resources in light of the manufacturing setbacks of their truly disruptive product.

Different teams. Model 3 design & engineering was completed in July.

The folks working on the Roadster design would've otherwise been idle (or mostly idle except for maybe any refinements that might've been necessary due to production process limitations/issues) during Model 3 production ramp.

I'd place good money on them having already produced the first draft of this design as part of the whole lineup remodel that did away with the Model S's nose-cone prior to the Model X launch. i.e figuring out a "Tesla" design language that worked across the S, X, 3, and R (and perhaps the Semi, to some degree)

These seem like orthogonal competencies though. Technologies to sell at volume don't match technologies for small-scale design and engineering.

Next you'll be telling me Apple didn't decide on the final hardware design of the iPhone X in August. Pshaw!

Toyota owns Lexus, Ford had Jaguar and Land Rover, Hyundai owns Genesis, Volkswagon has Bentley, Fiat owns Ferrari. Just like other car manufacturers, Tesla does it all.

edit: Ford didn't start Jaguar.

Tesla doesn't run a volume production line. All the major players have production lines that make about one car a minute. Tesla isn't able to play in the big leagues until they can do that.

Fair enough, but how will they ever achieve that without first trying to compete in this outrageously competitive industry?

By solving their biggest problems first, rather than create new distractions? Kinda the same thing any company would do.

Ford didn't start Jaguar or Land Rover; it bought them in 1990 and 2000 respectively. And sold both to Tata Motors in 2008.

> Tesla does it all.

Except make enough Model 3's, they don't do that.

I don't think (although it's complicated), Fiat still owns Ferrari?

I think not. They still have the same (biggest) ownership, but they are not the same company. FCA still owns Lamborghini, though.

As mentioned above, Lambo is VW, but FCA retains Alfa and Maserati.

Oops, I meant Maserati.

Lamborghini is Audi (VW Group).

Ford sold Jaguar and Land Rover to Tata motors during the recession. They also sold Aston Martin and Volvo.

> edit: Ford didn't start Jaguar.

I don't even know what this even mean. Nor do I understand what the original comment of yours mean. It doesn't make any sense and it doesn't seem like you are well verse with cars or automakers at all...

> But the Model 3 production fiasco shows they don't know how to do what Detroit and Wolfsburg and Toyota City do.

What fiasco? It was obvious from the start that their schedule was wildly optimistic. But that's probably just Elons way of pushing workers as hard as possible.

It's way too early to call the Model 3 a success or failure. Of course it takes a few months to ramp up and stabilize production. It's their first truly mass produced car, and there's a lot of differences from their previous model. Not to mention that they're using a brand new battery.

Let's wait a year to call the Model 3.

If it's that obvious, how come Tesla didn't know that? Contending that Tesla is incapable of comprehending basic, obvious facts isn't a great way to promote confidence in the company.

We're a long way from fiasco territory, sure, but it's also pretty clear Tesla are still quite a way off from getting their production process under control.

Given how many people are involved, I‘m pretty sure they have considered a lot of the problems they have now, beforehand. I mean, do you think they don’t have a time range of best case through worst case? Elon just constantly tells us the best case, or almost best case version.

The biggest criticism from industry analyst is that they don't consider all the problems before hand, and they were proven right.

Your explanation is laughable when applying it to other companies.

"Oh sorry, your iPhone X is delayed till next year. We just gave you the best case timeline. You knew that right?"

There is a narrative in the business world that TSLA doesn't know what its doing. They are taking a three month delay to its first mass market car as an opportunity to push that. Anyone who has done anything of significance knows that this would be considered wildly successful if they can keep to just a three month delay.

If it's that obvious, how come Tesla didn't know that? Contending that Tesla is incapable of comprehending basic, obvious facts isn't a great way to promote confidence in the company.

No it’s not a pivot. They’ve planned a new roadster for a while.

They've been saying they would make a second roadster for years. This isn't like some surprise change of plans.

Give Tesla a few months before you decide that the Model 3 release is a fiasco.

It makes no sense to go back and it's financially almost impossible. If Tesla gets into trouble, it's better to sell the company or parts of the company for some carmaker who can mass produce.

That's what it looks like. They have utterly failed to make model 3s.

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