Tesla announces biggest quarterly loss
theguardian.com
theguardian.com
The Nissan Leaf is expanding where it is being sold.
https://electrek.co/2018/02/06/nissan-new-leaf-sales-seven-a...
There are now 300K Nissan Leaf's on roads:
https://www.forbes.com/sites/sebastianblanco/2018/01/09/niss...
Kudos to Tesla for pioneering and kicking off electric cars.
Why is Tesla getting kudos for something Nissan did first?
edit: cute downvotes, but the fact is GM was the modern pioneer on electric vehicles.
"The General Motors EV1 was an electric car produced and leased by General Motors from 1996 to 1999. It was the first mass-produced and purpose-designed electric vehicle of the modern era from a major automaker"
If you want to be technical about it though, then Pope Mfg deserves credit first the first mass-produced EV, released in...1897. (see http://www.pbs.org/now/shows/223/electric-car-timeline.html)
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Cost to produce, 500,000$ each. GM had zero interest in rolling these things out to the public and it showed.
Adjust for inflation and that's well over 700,000$ each in today's money.
Cost per unit would have dropped if they where making 10,000 + / year. However, that was not their goal.
"One industry official said that each EV1 cost the company about US$80,000, including research, development and other associated costs;[67] other estimates placed the vehicle's actual cost as high as $100,000.[2] Bob Lutz, GM Vice Chairman responsible for the Chevrolet Volt, in November 2011 stated the EV1 cost $250,000 each and leased for just $300 per month.[68] GM stated the cost of the EV1 program at slightly less than $500 million before marketing and sales costs, and over $1 billion in total, although a portion of this cost was defrayed by the Clinton Administration's $1.25 billion Partnership for a New Generation of Vehicles (PNGV) program.[69][70][71] In addition, all manufacturers seeking to produce electric cars for market consumption also benefited from matching government funds committed to the United States Advanced Battery Consortium."
Anything else is subject to spin as for example it costs money to setup a factory making just (parts) + (labor costs) overly optimistic. Similarly marketing and sales costs can easily inflate unit costs to make it look worse.
On the other hand if GM could have used current battery technology and current battery costs they may have tried to make it work. But, it was clear at the time it was going to fail so they had fewer incentives to keep costs down.
You're not actually reading the paragraph. It says that the government contributed an unspecified amount from a $1.25 Billion budget to GM. And that the contribution defrayed the stated costs by GM which means a portion of the $500 million they spend was grant money.
adjust for inflation and that's well over 1 million / car.
Cost estimates for the EV1 range from $80-250k per car, the $250k figure came from Bob Lutz, a GM Vice Chairman. and 3.
If you ever actually experienced the EV1 then you'd know that it pales in comparison to even the lowest end Leaf. It was a production version of Impact concept from which it was derived with only minor improvements. This was a 1990s quality GM car with a trim level around that of a Cavalier in a package smaller than a Honda Del Sol.
GM introduced the concept of an electric car to the public but the image they portrayed was unfavorable at best. You didn't look at the EV1 and think "this will take over the world", you thought "I could make that in my garage over the weekend."
Tesla gets credit for delivering the first no compromise EV and one that's actually inspirational.
Nissan gets credit for delivering the first EV that just about anyone can own or see themselves drive.
It's like when the better looking kid gets more attention.
The 36,200$ 2018 NISSAN LEAF® SL has a 151 mile range in theory, but you need a significant reserve meaning it's effectively significantly smaller than that. With a 30 mile reserve that's ~121 miles. And needs another $1590 to get a quick charge port and cable.
Tesla has continuously had a backlog of sales IMO because nobody else has gotten a great electric car to market.
Again, the Leaf has been getting much better over time and may work well for many people.
Full disclosure, I own a 2015 Leaf and I have a reservation for a 3.
What's your definition of mass production?
Tesla, a 14 year old company, has been developing electric vehicles for 14 years and has 3 mass produced vehicles that have sold over 230k units in the last 3 years.
I'm not crazy about the styling, but that's just personal preference. I wish automakers didn't feel the need to make EVs so gaudy and quirky looking. They just scream "look at me I'm a complete nerd!!"
Tesla is the only one who gets this right.
Every major auto manufacturer is aggressively moving to electric vehicles because of the spark that Tesla provided. It wasn't the Nissan Leaf that caused BMW to freak out and radically alter their plans and move everything toward electric. The same goes for all the rest of the automakers.
It'd be like pretending the iPhone didn't set off the smartphone boom, because hey the blackberry existed.
My sentiments exactly, and I can't understand what you're trying to say here. You've defeated your own point.
Electric cars are as old as ICE cars (look up Baker Electric for one's). That's beside the point. What Tesla did was to produce an electric car that was truly desirable and from many metrics, better than an ICE car. You simply cannot deny Tesla's massive impact on the car industry, even GM have publicly acknowledged it.
The car gets the best mileage per charge in town (hybrids anyway), so "wind efficient" isn't really a thing.
To be sure, there is plenty of mediocre to bad news in this quarterly report. They still can't make cars at nearly the rate they expected. They're not even mentioning the the autonomous stuff any more. But the loss itself wasn't really bad news.
However, this isn't a team that won the game; it's a team that lost $675M in 3 months. That's not wonderful good news that got manipulated and twisted around by the media. Not even if you use that trick where you make up a number ahead of time and then the reality looks good by comparison.[0]
[0]https://en.wikipedia.org/wiki/Anchoring
Some will say it's an "investment" of $675M. That will become true if it pays off, but currently it's a loss, and will remain a loss unless/until it makes money. Investments vs. "bad investments" (losses) are defined retroactively in other words, and we dont know yet.
And this isn't even their biggest problem, which is that the cars are too expensive for the mass market.
> And this isn't even their biggest problem, which is that the cars are too expensive for the mass market.
How is Tesla's biggest problem that their cars have a very high ASP? Demand is not a problem for Tesla at all, much less their biggest one.
Now, if you think that Tesla should make a cheaper car, don't hold your breath. Elon has said many times that rather than make a cheap electric car, he thinks it will make more sense to make a mid-price car that can do self-driving to earn the owner money during off-driving hours that the owner can then use to offset the cost of ownership of a Tesla.
Yes it is a bold play, and it might not work. But Tesla's biggest problem is not that they make expensive cars. I'm not sure what their "biggest problem" would be, except for solving their current issues so that they could scale up more smoothly.
Just look at bikes: either you hire/"share" a 40-pound tank that sucks to ride, rent something decent with a substantial deposit, or buy a nice bike that you would never loan out to random strangers.
Public transportation is a great thing, but it is fundamentally different from private vehicles.
Throw a streaming camera in the car, and require a credit card on file, and they can trash the inside of my car all they want, they are just paying for the cleaning or new interior.
Still, even without the "general population ridesharing" aspect, I'd love to "rent out" my car to friends and family. Between myself and my wife, we really don't need 2 cars, but we have 2 because there are some semi-rare instances where we both need to be somewhere different. The amount of time that we both need to be somewhere different at exactly the same time is even more rare.
If we had a self-driving car capable of taxiing us around, it would allow us to drop down to 1 car instead of 2, meaning it can be quite a bit more expensive and still save us money.
> Throw a streaming camera in the car, and require a credit card on file, and they can trash the inside of my car all they want, they are just paying for the cleaning or new interior.
You might want to think this one through a bit more carefully. One dude hides a joint in his back pocket, and now your car smells like weed. Another accidentally sat on a piece of gum earlier, and now part of it is stuck to your seat. When do you notice? How do you decide who is at fault, or when to start a credit card dispute? You will have a dozen random people using your car every day, very few malicious, but none with any interest in taking care of it beyond not trashing it. Taking care of "your" car will become a full-time job.
EDIT (slow-ban reply): Fair enough. Plenty of people have rental properties. I think it seems like an enormous hassle, but it can apparently be a decent living or side-hustle, so I could be wrong about cars.
I don't really want to get into an internet argument on the details of how uber and lyft work, but most of those things are easily solvable right now in-app with the click of a button, and I've personally seen the "difficulty" of having to take a few photos of what the last rider did to your car, upload it in-app, and have the company pay for repairs/cleaning in the span of a day or 2.
None of this is "impossible" to solve, and I could absolutely see the future of cars being less of "this is my car" and more of "i'm buying this as an investment" similar to how some people buy and rent housing, especially 50 or 100 years from now.
Although I believe the moderation is more strict for comments that do that, as the whole point of the reply throttling is to prevent low-effort angry replies.
If you give me $500 you can puke in my car all you want. And I'm relatively well-off and don't need the money, imagine someone struggling to make the payments like most Americans.
There are multiple, billion dollar companies where users rent out large, personal assets to others. I don't see that as "nothing to support the idea". It's direct evidence that people are willing to do it at a reasonable level of scale.
I'm not sure what level of scale you're thinking or what you're responding to at this point. If you can scale back a bit on the hyperbole and adversarial mindset, I'm interested to discuss.
However I do think that % of people will be higher than it is today because full autonomy creates more situations where you've bought an expensive asset which sits idle throughout most of the day when you're working or sleeping.
Elon's assuming that Tesla will be the first to market with Level 5 autonomy. If that's the case, people will be willing to pay a huge premium to get one, especially if they think they can offset the costs by having it "pay for itself while you sleep".
Don't underestimate production and quality. It takes a lot of time and experience to get the supply chain reliable and cost efficient. This is not software where you can make changes quickly. You need tooling and production facilities which are expensive and take years to build.
I am not underestimating production and quality. I even said that I think that Tesla's production and quality problems they have currently are their biggest problems. I do not underestimate them - but I also do not think they will sink the company.
> This is not software where you can make changes quickly.
Compared to the previous industry's way of doing things, yes it is like software where you can make changes quickly. Even on the scale of years, Tesla is showing itself to be more agile than traditional car manufacturers.
> The "previous industry" are no dummies
I don't agree with this, but I wouldn't use the word dummy exactly either. I would say stubborn, and they are very very stubborn. It will take them longer to pivot to winning and sustainable strategies like Tesla's than it will for Tesla to resolve its production and scaling issues.
What Elon is really saying is that the early adopters are subsidizing development of fleet vehicles that aren’t aimed for significant individual ownership.
Owning a personal vehicle and renting out it's idle time is a big maintenance and liability commitment which inherentlt reduces the reliable access that is the whole reason for ownership.
Specialized rental operations will be able to optimize handling the liability and maintenance overhead. Individual owners will be better of not owning and doing on-demand rental of self-driving vehicles than renting them out, because specialized rental orgs will drive the rental price down to where non-specialists won't be able to make a profit with the maintenance and liability costs imposed.
I wasn't able to find anything by Munro on the Model S--I wonder what they have to say about that car.
Spoiler, there is none.
I wouldn't turn one down though.
https://www.cnbc.com/2018/02/07/tesla-q4-2017-earnings.html
Which part of it isn't looking good?
$3.4 billion in cash. $277m cash burn in the quarter (a dramatic decrease there).
43% revenue growth with the Model 3 barely contributing in the quarter. 10k to 15k Model 3's likely to be produced in the second quarter.
Build quality... you mean on the first couple thousand Model 3's? How is that surprising?
I'm not a particular fan of Tesla in any regard, and this looks pretty straight-forward. The pessimism is comical.
They could do a ~$2 billion equity raise any time - against their $58 billion market cap - and fund the company as-is for another two years, on top of the runway they already have, without missing a beat. That's assuming the Model 3 doesn't ramp up meaningfully and push them toward cash flow positive in the coming six to eight quarters.
How does 20,000 Model 3's in the fourth quarter sound? That's an additional billion in sales just for that quarter. If Musk avoids building another giant plant in the next four or five quarters, their cash burn will drop toward zero rapidly.
Most other manufacturers work out the kinks before mass production begins.
How does 20,000 Model 3's in the fourth quarter sound? That's an additional billion in sales just for that quarter. If Musk avoids building another giant plant in the next four or five quarters, their cash burn will drop toward zero rapidly.
If Tesla could demonstrate that they were actually capable of producing 20,000 Model 3's in a quarter, people wouldn't be so pessimistic. As it stands, they're still struggling to produce a few hundred cars a quarter without serious quality control concerns, and they've missed every self-imposed target for several years straight. (Tesla reported roughly 2500 Model 3s in all of Q4. For comparison, most other manufacturers can produce more cars than that in a single day.)
There were tens of millions of vehicles recalled for manufacturer defects in America alone last year, and the same can be said about 2016. I don't think this statement is a fair one.
The vehicle quality reviews on the bottom half of all auto manufacturing says otherwise.
> If Tesla could demonstrate that they were actually capable of producing 20,000 Model 3's in a quarter, people wouldn't be so pessimistic.
They keep proving an ability to produce volumes of cars, and people keep acting like they've never built any cars at all -
"As for its higher-priced Model S sedans and Model X sport utility vehicles, Tesla said it delivered a record number during the quarter. Model S and X deliveries grew 10 percent globally over Tesla's prior record in the third quarter, and were up 28 percent compared to the fourth quarter of 2016."
Right now they're forecasting 2,500 per week of the Model 3 for the end of the first quarter. If they can hit that very near-term marker, they can hit 5k in the fourth quarter.
The way the skeptic game has worked - all the way back to the Roadster days - with Tesla is this: the skeptics say blah blah blah, Tesla can't blah blah blah. Then Tesla eventually does what they say they will. Then the skeptics move the goal post, and the entire cycle repeats, while the skeptics continue to pretend Tesla has never produced vehicles at volume. Meanwhile Tesla keeps powering forward, selling more and more vehicles each year, with their revenue skyrocketing.
The path they're on now, puts them to near profitable by the end of the year. That's while simultaneously missing the old Model 3 forecast by a mile. They're forecasting 5k Model 3s produced per week in the second quarter. Assume that production rate is further delayed until the fourth quarter, they'll still be near break-even on their cash burn rate.
The SpaceX launch was truly amazing, everybody was talking about it at work!
I wonder if that was the most expensive car commercial in history? Did Tesla pay SpaceX for promotional consideration?
Surely it was the cheapest, no? Tesla spent ~$0 for a huge amount of global advertising.
SpaceX was already going to spend the money for the launch and the media has given what is effectively free advertising covering the historic event.
Certainly someone paid for the launch. I think it was a super clever play.
I'm pretty sure that Tesla didn't pay anything for the advertising. It was Elon's own Roadster. If you look closely, the Tesla logo wasn't included in the Falcon Heavy launch promotional video: https://www.youtube.com/watch?v=Tk338VXcb24