Tesla Looked Like the Future, Now Some Ask If It Has One

>They've _always_ fought against the odds and always looked like a bad bet if you only looked at numbers.

To quote Peter Thiel, "Never bet against Elon Musk."

> the so called production ramp up has been postponed for a year now

In what sense?

Elon originally said they were going to try to start production in July 2017. He also said they’d probably miss that date due to supply chain failures, but that he needed to set a date so suppliers could set plans.

To say they delayed the ramp by a year, that would mean they were delivering the first units in Summer 2018. They’re obviously ahead of that so it would seem to me the delay is much less than a year.

Musk's companies are putting better rockets in space than NASA. Optimism does get a premium sometimes, because sometimes it actually pulls through. Frankly I'll root for them to succeed over a company based around showing me the last product I reviewed on amazon again. It shows we're capable of so much more.

Until the recent declines they were already worth ~20% more than Ford or GM. The market cap had already baked in massive success, but the financing necessary to get them there was dependent on an every rising share value. A virtuous cycle until it becomes vicious.

There’s a floor for the stock value: the value of the mark to a Chinese upstart EV company (of which there are already a dozen producing a higher volume than Tesla).

You reminded me ... christ, can you imagine what a disaster an Apple car would have been had they continued pursuing it? Two companies competing in the same already-challenging space....

There's no need to compare Apple with Tesla. It's like comparing apples and monkeys. They're two completely different beasts.

Everyone knows building cars is a capital intensive business. You need to build expensive factories for every new line you want to roll out. It takes time. I think Elon has been whipping his employees a bit harder in the last few days - and I'm confident they'll be able to turn the situation around. All their jobs depend on it...

Renault already has a compelling electric car. A happy owner of a Zoe. Absolutely no regrets with this car. Which I can have today.

Tesla is fundamentally trying to change a 100 year old industry and get cars off fossil fuels. If Apple never existed we'd have uglier mobile phones. If Tesla never existed the switch to electric cars might well be delayed by a decade.

Perhaps people forget the scale of the Gigafactory and how important batteries will be over the next 100 years.

Let's see when Apple starts giving all their patents away for free.

> and failed to differentiate in other areas, falling behind most other automakers (and non-automakers) in innovation (especially autonomous driving).

What other car has better autonomous driving?

> It has failed to achieve what is the standard baseline for mass production of cars today, a sustained production rate within controlled quality parameters

Which is ironic given that Tesla is in the old Fremont facility where Toyota schooled GM on how to do exactly that ...

I don’t see evidence of the failure. As far as I’ve seen, Tesla has met and then exceeded every single production target they’ve set, including Model 3 production start (which was on time even, last summer). Some were delayed by _years_ but they hit them.

The most recent goal they have set is 5000/week. It was originally slated for Q4 2017. So that date has slipped now by at least 3 months.

I doubt they’ll hit it in Q2. Maybe they won’t hit it until 2019.

But all available evidence suggests the will hit it. Every previous goal was met, why would this be the first one that isn’t?

If they’re failing to deliver any competitive advantages, why are there still no competitive cars available from any other company, or even just announced?

So far the closest thing is the Bolt, and it’s not all that close.

> Tesla high valuation is the only thing that has prevented it getting bought by one of the big car companies

I don't think so. Musk doesn't seem like the type of person to compromise on a vision for a (relatively) small buyout. He'd have probably declined if given an offer.

> I don't think the market cap will fall anytime soon for this company.

Really? The stock is down about 20% since the beginning of this month. It already happened.

I want Tesla to succeed. I think the company has done a lot to make electric cars mainstream, at least in people's minds if not in their driveways. But I see no justification for Tesla having a market cap in the same range as GM, which sells 10 million cars per year, or Ford, which sells about 7 million cars per year. Tesla sells about 100k cars per year and is burning through money pretty fast. It might have made a positive contribution to society, but at the end of the day it's a money-losing company and the stock price is going to reflect that.

Vehicles like the Prius have been around (and immensely popular) for a long time now.

It's a space that has a future, sure. But the thing that kills more companies than anything else is failure to execute effectively.

Tesla is failing at manufacturing. They have been for a while but they got away with it because their innovation was perceived as far enough ahead. With Nissan, GM, Jaguar, BMW, Porsche, etc. now in the EV space and Uber, GM, Waymo, etc. in the SDC space they have meaningful competition.

They have survived on innovative products for a while...they are trying to continue that with the Semi and with the power wall, time will tell if they can actually build them - which is a precursor to just about everything else.

Glib answer: You can't hot patch paint

More serious answer: I think its fair to say the concern isn't the miss of an individual deadline or even multiple deadlines. Its the attitude and the process and the communication that surround those misses. There is no seemingly justifiable cause for continued misses beyond Tesla not having the internal knowledge or controls to make this happen. That, the process concern, is more of what you are seeing than a concern over a late project. When the response to missing a project deadline seems rooted in CEO ego I get concerned.

Technology is not the only space where Tesla is innovating. Tesla has also very innovative financing and they are really starting to stretching it.

Tesla made financial bet that they deliver high volumes of Model 3. It does not matter if Model 3 is good car and customers love it. Tesla must ramp up their production very fast or Tesla runs out of cheap money.

Tesla has no problems with customers. They love the car with passion. It's the investors who will choke Musk to death later this year if he has to ask more money to continue with struggling production. He will get the money but it will have high interest rate and Tesla stock will come down 30-50 percent. Currently Tesla is producing 20% of it's target. Their production curve is not growing steeply enough. In fact it's slowing down.

https://www.bloomberg.com/graphics/2018-tesla-tracker/

ps. High flying arguments that don't look into details of each case, like "Never bet against Musk" or others have solved technical difficulties too, are not really useful for investor.

Car companies and software companies have completely different capital requirements and cash-flow constraints. Tesla is not a small software startup. They are a 40-60 billion industrial manufacturing company that is burning through its already-dwindled cash reserves while struggling with manufacturing bottlenecks. Coincidentally, said manufacturing is Tesla's sole method of generating revenue. They already have massive amounts of outstanding debt. Even before Moody's downgrade, it was not going to be easy to finance.

In general, comparing a massive company's notable operational issues to "software project delivered late" is nonsensical. If your software company's sole source of revenue is selling packaged units of your software and your company is continuously showing that it's unable to deliver those units of software in time, creating massive cash shortages - then yes, the market cap of your software company is going to suffer.

> There are already some serious questions about quality control at Tesla,

Quality control specifically for the Model 3 or quality control for the Model S? Clearly the Model 3 quality isn't good enough right now, but it seems quite likely that given time they should be able to bring it up to Model S levels. I don't know if that's good enough, but I think it might be. Will Tesla have time to reach that quality level? I think they probably will, but they may have to raise more money to pull it off. And they may have to raise that money at a less than favorable valuation. However, the idea that they won't be able to raise money at all seems unfounded to me, just like the implied notion that they can't fix the quality problems.

There's a big difference between "Tesla is struggling" (yes they are, and it's not even the first time) and "Tesla is going to fail".

I'll tell you when I buy a car the first thing I look at is how many millimeters between the door panels. Nothing else makes me happier than to have a car with 2 millimeter gap between door panels. Driving Experience, fuel economy, range, safety - those are always secondary to 2 mm door panel spaces. And that is what people mean when they talk about Tesla's low-quality they mean 3 4 5 mm door panel spaces...

A year has hardly gone by over the last seven or eight, where the crowd hasn't largely proclaimed Tesla would die, and die very soon. Analysts were overwhelmingly bearish at every step. Competitors said none of what Tesla has accomplished could be done, including the Model S period.

I keep seeing people say that Tesla is dead in three months. They have ~$3 billion in cash with the ability to dilute at will. The irrational, negative emotionalism that's being directed at Tesla right now is incredible. I can't imagine where it's coming from or why. There's almost a lust for them to fail. Nobody cheered for the death of Fiat or Jaguar like this.

"If it bleeds, it leads." News media will rarely say something positive about any tech company, probably even worse so than the general bias towards negativity

If major (non-tech) publications are saying good things about a tech company, it's probably a submarine article.

Looking at the last week, I count at least five positive articles about tech companies, including Apple's new iPad, Waymo's expansion, an AI VFX startup, Dropbox's IPO, and Safari's picture-in-picture mode.

Most reported news appears to be negative for some reason... at least in the mass-media

The Bolt isn't a Model 3 competitor and the 652K EVs sold in China in 2017 are a fraction of today's Model 3 numbers?

https://www.greencarreports.com/news/1114853_china-plug-in-e...

Two things are the biggest problem for Tesla:

$900m in bonds due in early 2019

Loss of full $7500 federal tax credit probably in Q2 2018 but definitely Q3.

NYTimes doesn't truly paywall anything. You get a finite number of articles each month but easy to get around that with incognito mode. That being said, I'll probably subscribe soon.

A bit of both; there were self-driving cars before Tesla, but Tesla was the first to commercially field any kind of "autopilot" feature, spurring on the existing competition

Bankruptcy is a death sentence if you rely on suppliers that won't sell you the supplies you need because they fear they won't get paid for them. This is what happened to Toys R Us.

You're right that it's not a death sentence because the brand/trademarks have value and are part of the bankruptcy process. But many companies that still exist in name aren't "really" the original companies. Such as Pabst Blue Ribbon beer, Blockbuster Video, or Atari, to name a few.

I drive an Autolib. What does Ferrari have to offer to justify their valuation?

Exactly what "new industry" are they building? They're just selling people movers that get you from A to B. They're an EV Mercedes of the 21st century... The implementation is interesting, but the idea is old and tired.

> How much is too much to build the future?

That statement is pretty irrelevant, though, when it comes to whether or not Tesla can be a going concern. There were tons of railroad companies in the late 1800s that "built the future", and same thing with telecom companies in the late 1990s. While we're still reaping the benefits of those investments today, almost all of those original companies went bankrupt.