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Elon is a fundamentals kind of guy and that drives his strategy. The fundamentals with respect to electric cars from the time he started were: a)electric is a much better technology than ICE for automobiles. Electric is way simpler, lower center of gravity means better handling, smaller and lighter motors mean more interior space and better performance. Battery tech is a pain point but no CO2 is essential for everyone.

b)Large automakers know this but simpler for them translates into less maintenance which means lower profits. Automakers therefore will pay lip service to electrics, drag their feet and kill off any real electric competition if they can. The world's environment is not a shareholder in the large automakers.

So his "master plan", (the Truth but not the whole truth) he published in 2006. What he left out was that he knew as he moved to a high volume model that's when the large automakers would try to cut Tesla off at the knees and then go back to resting on their laurels.

If his high volume model was mediocre and expensive to build Tesla would be dead in the water. He needed an excellent car but even more than that he needed Tesla's cost to be much lower than the majors could match so they couldn't low ball the market long enough to cut off Tesla's oxygen.

When Tesla got 400k Model3 pre-orders that's when he decided to double down on the 'low unit cost/large production investment' strategy for the model3. Making this work is critical to Tesla's strategy. You can be sure Musk and his team put a lot of effort into the production tech knowing it was make or break for Tesla.

The Economist is under estimating Musk and they should give him a little more credit given his track record. Telsa is not a slam dunk but it's also nowhere near as fragile as they make out. Musk also has a bit of equity in SpaceX he could lean on if the markets demur at the end of 2019.

> The Economist is under estimating Musk and they should give him a little more credit given his track record. Telsa is not a slam dunk but it's also nowhere near as fragile as they make out. Musk also has a bit of equity in SpaceX he could lean on if the markets demur at the end of 2019.

https://static.seekingalpha.com/uploads/2018/3/1/37229846-15...

Tesla is going to run into issues in 2019 if they are unable to ramp up the Model 3. Tesla lost $1.6 Billion last year, and they only have $3 millionish in cash. Furthermore, Tesla has debt that is due in 2018 (~$300 million or so) and early 2019 (~$900 million).

Over the next year, Tesla needs to pay off $1.2 Billion in debt, AND needs to increase revenue by ~$1.6 Billion or so to stay even. They're not exactly in a good situation.

I'm relatively confident that Mr. Musk can raise another $3 billion in capital through stock offerings or rolling over their debt in the short term, but those options have some risks involved. Furthermore, people will not want to lend money to Tesla if they think that the company is sinking.

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All the while, Tesla has bought SolarCity and also inherited all of its debt and issues. Tesla was having enough issues ramping up Model 3, but now they ALSO have to make the solar company profitable too. It was a bad time to buy SolarCity.

> smaller and lighter motors mean more interior space and better performance

Except you need a whole lot fo heavy battery. The model S is not a light car.

You can make anything sound amazing is you ignore every drawback.

> Except you need a whole lot fo heavy battery. The model S is not a light car.

And that heavy battery concentrated at a very low point makes Teslas (or, for that matter, most E vehicles) excellent in handling.

I’m not sure I’d agree. The Model S is quite prone to understeer, and it’s not just slight understeer but real unrelenting understeer. I’m not sure how though because there isn’t a lot of weight over the front axle that would cause the nose to push wide so perhaps it’s because of how the suspension is setup. This is quite unlike the BMW M5, for example.

Electric/Electronic is not better than ICE.

Most of the problems in my modern car come from failures in the electrical / electronic subsystems.

Meanwhile my grandpas no bs 1980's Honda Accord is still going with just some lube and gasoline.

When you make a motherboard that works properly for more than 5 years, let us know.

1. Electric != electronic. Electrical engines have been a staple of engineering for about 200 years, about as long as ICE. Integrated circuits, on the other hand, have only been around for some 60 years, and while those are pretty reliable on the hardware side, we're still figuring out how to manage the complexity that they enable, and how to make software that's not shitty.

2. One anecdote does not a rule make.

3. "When you make a motherboard that works properly for more than 5 years, let us know." Maybe you should stop buying bottom-shelf. I've seen 10-year-old Thinkpads work like they did on the first day. And my current Asus notebook is already 6 years old and shows no sign of old age at all. Even the battery still holds over 80% charge.

You’re both right. Industrial electric motors run 24/7/365 for decades in all sorts of harsh conditions. The motors should not be an issue.

On the flip side these cars are filled with electronics. Just look at the dash... I don’t trust those to last more than the warranty period. However, I feel the same about most modern cars, especially luxury cars.

I recently learned that he was into ultracapacitors in college and very early wanted to go into EVs. He's often portrayed as a rich internet dude that learned rocketry but he had an actual serious background. That's not everything but it's a bit less shallow foundations and Tesla battle is not against the elements but against markets, a tad different.

Zetsche, Mercedes Benz CEO, just admitted to Shareholders that they will switch to electric cars, but it will be bad for their bottom line. That's why they are dragging their feet.

The only reason to switch are moronic German politicians, who require fleet CO2 standard and want to ban ICEs completely.

> b)Large automakers know this but simpler for them translates into less maintenance which means lower profits. Automakers therefore will pay lip service to electrics, drag their feet and kill off any real electric competition if they can. The world's environment is not a shareholder in the large automakers.

If I'm not mistaken, maintenance translates to profits for dealers which are completely different from manufacturers (unless you're talking about Tesla). From the standpoint of the manufacturers, it's in their interest to force people to buy new cars instead of buying them, so they should be making cars that fall apart quickly--except the evidence is that car quality has dramatically improved over the past 40 years.

>Large automakers know this but simpler for them translates into less maintenance which means lower profits. Automakers therefore will pay lip service to electrics, drag their feet and kill off any real electric competition if they can.

That might have been the original plan, but nowadays it would be suicidal. That is because the Chinese government is totally committed to EV's. I am sure the mainstream auto execs are totally aware of that.

> At first people doubted SpaceX can replace NASA

SpaceX cannot replace NASA, at least not yet. SpaceX is a component supplier to NASA like Boeing, United Launch Alliance, etc. There's a whole lot of other stuff that NASA does that SpaceX is not even trying to do.

Isn't this exactly how it goes though? e.g. "They're selling books, Bob. Books. Not widgets. We're fine, Bob".

NASA is not a corporation. It has entirely different motives than SpaceX.

Unless SpaceX plans to do science missions without expecting anything in return, they're not competing with NASA.

So capitalism is supposed to be about taking risks and (potentially) getting rewarded (so we are told, although in reality it seems to be about establishing a monopoly or extracting corporate welfare from the government).

So here's a company (or two if you count spacex) that is taking huge financial and organisational risks and running at the edge of their capacity to expand all the time and all the industry observers just shit their pants in fear about it and try to shoot it all down.

> So capitalism is supposed to be about taking risks and getting rewarded (so we are told, although in reality it seems to be about establishing a monopoly or extracting corporate welfare from the government).

I like how "taking risk" is talked about as if it meant "statically you will gain out of it". That is not what risking means. Risking means that you can either loose or win and that plenty of people really loose. Risk does not entitle you to reward.

I like how "taking risk" is talked about as if it meant "statically you will gain out of it"

That's not what I said or meant. I have added a (potentially) to what I wrote. My point still stands imho.

The emphasis is always on "getting reward" each time "taking risk" is said where "getting punishment" is never said. That is not what capitalism is supposed to be about. That is just a glib used by people invested into treating risk taking as some kind of virtue (will, virtue if you get rewarded, if you the bad part of risk happen you are lazy looser who deserves no sympathy).

The capitalism is supposed to be about rational decisions in competition and environment of reasonable transparency. Which may mean taking risk or not taking risk depending on how likely the reward part is to happen and how much punishment there would be.

> So capitalism is supposed to be about taking risks and (potentially) getting rewarded

No, capitalism is about owning capital and getting rewarded. That's why it was called “capitalism”, and not “riskism”. That's why, while all actors in the system take risks, the lions share of the rewards go the holders of capital.

But, anyhow...

> So here's a company (or two if you count spacex) that is taking huge financial and organisational risks and running at the edge of their capacity to expand all the time and all the industry observers just shit their pants in fear about it and try to shoot it all down.

SpaceX coverage is fairly positive, so let's not count them in this criticism. The financial press is frequently negative on Tesla because they repeatedly keep failing to meet what Tesla management announces they are going to do (with production targets for the Model 3, they've repeatedly failed to meet them, adjusted then downward, and failed to meet the adjusted targets.) Even to the extent that it's defenders characterize capitalism as being about rewarding risk taking, they don't say it's about rewarding blind risk taking.

> At first people doubted SpaceX can replace NASA

I think SpaceX will provide services to NASA, but replace it? Not a freaking chance.

It sure can replace the Space Launch System and the manned space program.

I’m really interested in how you see NASA being replaced by SpaceX, though my initial feeling is that you have might have a very limited idea of what NASA does.

Can anyone here even imagine trying to pull off a Tesla? Burning through billions, haters at every turn, safer products that alas lead to deaths, huge pieces of hardware that must be recalled to fix, and on.

Hmm, frankly, "SpaceX will 'replace' NASA" sounds quite naïve. That makes no sense whatsoever.

I think you meant assist / boost / "lend a hand to" NASA, by delivering some payloads to ISS and collaborating on other missions.

Another company that tried to do a lot of cool automation, perhaps ahead of their time, was Webvan.

SpaceX can't replace NASA but it can replace ULA :-)

> I feel like the author missed the dip caused by the April Fools joke

The slide from $310 to $250 happened in the 10 days prior to April 1, after it became clear autopilot was turned on in the recent California Model X accident, which is exactly what the author says.

Presumably banks have propped the stock back up to the current $298 and are running PR cover in an attempt to make back some of what are inevitable losses. I can't imagine anyone on r/teslamotors buying more right now. The general consensus is AP is not up to snuff. Only people investing other people's money would try to save TSLA right now.

I think Tesla would've been fine with robotic manufacturing and electric vehicles. With autopilot, they've entered risky territory in order to earn investment dollars. It's not clear whether or not that risk will pay off. It seems clear now that full self-driving isn't happening any time soon without lidar.

EDIT: Please explain your downvotes, thanks!

> they try to automate all manufacturing instead of doing what everyone else is doing

I like how this whole argument hinges on the idea that companies like Toyota don't know how to Automate.

Not like they are the world standard in manufacturing efficiency or anything.

Apparently on HN advances only happen if Elon tweets about them.

Ehm, they are the world standard in manufacturing, and that standard rather famously includes letting humans do a lot of the general assembly. No one is raining on Toyota, they are excellent at almost everything.

Musk is trying to beat the standard.

Yea, but sadly he’s going about “beating” the standard using the mantra robots are better than humans, which is just not true. When you have a process that’s not a bottleneck, with enough throughput that’s cheaper to do manual, the only thing you do by using robots is throw away money, increase your potential for breakdowns and remove flexibility. Musk is acting exactly like the classical Lean “dufus” who forgets to analyze his process and considers robots a goal in the self instead of minimizing waste and optimizing throughput.

Tesla isn’t pushing the standards, they’re not even playing in the same league as Toyota and other established manufacturers. But they sure are good at hyping their flawed methodology.

Tesla is so secretive that nobody outside really has a clue what the problems are. Even the automotive trade press doesn't know. There are so many possibilities. As I wrote last time this came up, Tesla would probably be better off letting some competent automotive reporters tour the plant. Right now, investors are assuming the worst.

What's surprising is that Tesla is also having trouble with battery pack manufacturing. That's far simpler than building a car. It's a good job for robots, building identical units made of a large number of the same components.

I don't think Musk is running different companies at all. They are all the same, working towards the same goal - a city on Mars. Such a thing, should really benefit from totally automated factories.

You know that Tesla uses way more people per car than say a GM or Toyota in their assembly line...right ? This number may go down in the future but it is a fact right now. Don't take my word for this: http://www.autonews.com/article/20170611/OEM01/170619951/tes...

It's because in this temple of lean manufacturing, Tesla uses far more workers than NUMMI employed to build far fewer cars. In 1985, its first full year of production, NUMMI had 2,470 employees and produced 64,764 vehicles — about 26 vehicles per worker per year. By 1997, it had 4,844 workers and produced 357,809 vehicles — about 74 vehicles per worker per year.

Tesla, on the other hand, had between 6,000 and 10,000 workers in 2016 and manufactured 83,922 vehicles. That puts its vehicle-per-worker number between 8 and 14, about one-seventh the efficiency of NUMMI at its peak.

Does that include retail workers (no outsourced dealers)? Supercharger installation workers? SolarCity employees and salespeople?

> Musk is trying to beat the standard.

And I would not be surprised if part of this will be a massive simplification of the current "cable trees" with cables from each component to the central fuse board to something like 2 24V power rails and 2 high speed data buses (one for safety critical stuff, the rest for everything else), with plugs every 20-30cm or so, fuses inside the components themselves and everything controlled with intelligent boards in the components.

Installing the cabling tree is inarguably one of the most complex parts in building (or, for what it's worth, servicing/maintaining/extending) a car and also the part where you right now need humans in the loop. By including the power rails e.g. directly in the car's composite frame and only running a tiny strand of wire for the bus you save a boatload of money.

I kind of assumed they already did that. It's so obvious and also rather SpaceX.

For your information, both Toyota and other automakers already tried the "automate all" approach, and they reverted because the economics didn't work out. This time it might be different, or it might not.

I'm not sure if you read the article or not, they are attributing the slow down Tesla has in production because apparently Tesla is betting on automating everything related to production as opposed to what other automobile companies do which is only automating things that are easy to automate and make people do the rest.