Musk says Tesla will be profitable in Q3 and Q4
techcrunch.com
techcrunch.com
As far as the weight, the society would probably benefit from narrower lines and narrower single- (or double-, but in a tandem way) occupant cars, as congested city freeways could essentially double the throughput overnight. The benefit would also extend to any internal-combustion vehicle, so this is not Tesla-exclusive.
The infrastructure (lane width included) is governed by US DOT and respective agencies around the world https://safety.fhwa.dot.gov/geometric/pubs/mitigationstrateg...
- access to capital is getting tight
- Tesla has less ability than Amazon to spin the story that "we can turn down our reinvestment at any time to turn on profits"
Amazon nearly went bankrupt after the dotcom bubble era. They were drowning in particularly bad debt and red ink for years. After the dotcom bubble their financing abilities almost entirely dried up, the stock collapsed by ~93% or so. It was almost universally expected that they would not survive, culminating with the infamous Barron's Amazon.bomb story and a parade of stories thereafter. For the next three or so years after that story, bankruptcy was the anticipated end by the press and analysts. Tesla today, when you look at how they're being discussed by the press + analysts, and their financials, looks similar to Amazon's general condition back then (Tesla's growth is both faster and its red ink is greater, than Amazon was back then).
For reference, Amazon had $1.6b in sales for 1999 with a $719m loss, and a $30b plus market cap at the peak of the dotcom bubble. Tesla will probably hit around $17-$18 billion in sales for 2018. If the market lets out - the supportive environment broadly - you'll see Tesla's stock crater unless their burn rate is very sharply reduced. They'll suffer the same financing concerns that pushed Amazon's stock down to $5.51 / share in 2001.
Additionally, what about the comparison between capital climates both these companies have to go through?
Amazon taking on debt had their interest obligations reducing. Interest rates started out at 5% in 1999 and then saw going as low as 1% in 2002. Increasing to 5.25 before going back to 1% again.
In comparison, Tesla has been operating under record low rates of less than 1%. The only way from here is uphill.
Source for rates:
https://www.thebalance.com/fed-funds-rate-history-highs-lows...
Tesla on the other hand is into manufacturing. It will see some of it's costs scale as well even when it is doing better.
It's interesting how there's no negativity check to discussion forums, because there is effectively zero cost to endlessly being wrong and endlessly negative. When confronted with even a 50/50 proposition, the obvious bet is to go hard negative against it.
The last two dozen, or more, Tesla threads I've read on HN, have been approximately 95% negative. I've never seen anything like it in the last eight years I've been reading the site. The Facebook blowback recently perhaps, although they've harmed the privacy of tens or hundreds of millions of people.
Maybe someone here can help me understand, why the extreme emotional reaction to Tesla these days? I've found you can't even point out actual positive facts about Tesla without suffering a wave of downvotes regardless.
They're going bankrupt next month. Or next quarter. They suck. They build shit cars. The panels don't fit together ever! Electric cars are easy to build. They have endless competition that will smoke them. Musk is always wrong. He's committing securities fraud, probably; or at least SpaceX is, or maybe Tesla is. They'll never get autonomous driving right. They're behind everyone in autonomous driving. China, or Europe, will eat their lunch. Telsa will never reach profitability. So what if they've grown sales rapidly, they still suck. All the other car companies are already out-producing them in electric cars. They'll never produce the Model 3 at scale; they'll never produce 1,000 per week; they'll never produce 5,000 per week; and even if they do, they'll still suck! And so on for another 57 negative concepts.
To give a specific example, a lot of comments I've read, have claimed Tesla would never mass produce the Model 3. Post after post for months has stated plainly that they were going to fail at it. It was obvious, supposedly. Now they're tracking to 100,000 or more in just in the second half of the year. If you point that out, the response you'll get is either: yeah but they missed Musk's original target by a mile; or: yeah, well, the quality sucks (ie a deflection and criticism shift, which points to a broader cynicism).
You'd think we were dealing with a genocidal warlord, not a car company.
That being said, I think you are being somewhat hyperbolic, most of the comments on Tesla posts are asking the though questions, not really putting it down.
I don't think I'm being hyperbolic at all. These responses are what I've observed in every thread going back two quarters roughly or more now. The paragraph of negative examples I gave is filled from actual examples I've read on here recently.
The last time I pointed out in a thread - a week or two ago - that Tesla was tracking to hit 100,000+ Model 3s for 2018, I was mocked without an actual substance reply (just open insult style mockery). And that's just a simple obvious point about their production, the odds are high they'll hit that mark. So where does all of the emotionalism come from to spur such behavior? I find it incredible a car company spurs such a volatile reaction.
It's extremely annoying watching him in interviews, saying stuff like his biggest advantage is his physics training, when the real reason why he was successful is a combination of luck, media savvy, and (most importantly) incredibly wealthy family.
So, while his goals are broadly admirable - his personality is so obnoxiously delusional that it reflects badly on the entire society that believes in it.
What I see is a person who is working considerably hard. Hes an inspiring figure that will give rise to future generations. Like Steve Jobs, Stephen Hawking, Albert Einstein, and countless more. You should think of him as a driver of energy and ideas.
But he has a torch and pitchfork fanbase, so we can't really have a grown-up conversation about that.
I've never read any BS authored by Einstein or Hawking, so I can't understand your comparison.
The negativity might be more of a reaction to the discrepancy between the wider perception and valuation and the realistic prospects, than just the latter.
Is it really clear that it will be harder for Ford/BMW/Toyota to transition to a thorough electric line up than for Tesla to master mass production? If not the valuation and hype are hard to justify.
The reason that the former scenario is not completely absurd is of course batteries. If Tesla can produce their own batteries while everyone else has to buy from China, they will capture a lot of profits that everyone else will miss out on.
Maybe that's the upside potential that people miss out on.
Amazon passed Walmart in valuation while having 1/4 the sales and none of the profit. Twitter is worth six times what the NY Times is. Netflix has half the income of CBS and is worth six or seven times more. And so on. That kind of valuation discrepency isn't particularly unusual when there's a bet being placed on a more distant outcome related to growth.
> Tesla passed Ford in valuation while selling fewer EVs.
Ford isn't selling more EVs than Tesla; Ford is selling hybrids that burn fossil fuels, their strict-EV business is an embarrassment. Ford is also still selling millions of fossil fuel-only burning vehicles annually. Surely it's curious that that warrants less criticism than Tesla's lagging ramp on Model 3 production.
Lots of car companies flounder. GM went bankrupt. It's extremely difficult to compete in the auto industry, it's extremely capital intensive; which is why North America and Europe have seen very few new successful car companies in the last ~40 years. The US hadn't seen a new public car company since 1956.
What makes Tesla especially deserving of the extreme negativity?
Wouldn't it make a lot more sense to criticize Mercedes or Ford for not producing a million plus electric cars already? Aren't all the other automakers overwhelmingly failing the environment and the general well-being of their customers by having dragged their feet for decades on this? Those companies are putting out about ~88 million (!) fossil fuel cars & light vehicles per year. I find it difficult to understand how the context makes sense.
Also I was thinking of the Chevy Bolt, not Fords stuff, my mistake.
Your arguments are also ignoring that I was exactly addressing the question of distant growth potential.
Finally I am very much of the camp that criticises classical car-makers for their inactivity. I also think that Tesla, even if it goes under, will have played an important part in transitioning the industry, by pushing things along faster than they otherwise would have moved.
Maybe people are tired of the endless claims from the Tesla fans that "everything everyone else has ever done before is wrong".
Maybe the rest of the manufacturers aren't that stupid? Why do so many people here root against Ford and GM?
>have claimed Tesla would never mass produce the Model 3
Yet to be seen. Right now they are hand-building cars for huge losses. There's no "mass" production (on an automotive scale), and there's no $35k Model 3 in the foreseeable future. Have you given thought to why people might make such a claim? Or are you of the mind that Musk is infallible? Maybe people tire of being called dumb because they don't believe "air friction" is holding back the assembly line?
>Now they're tracking to 100,000
According to whom? Tesla won't release the numbers, and the Model 3 tracker from Blomberg shows 2,300 per week. Maybe it's exaggerated claims like yours that spur negative sentiment?
Of course everything everyone else has ever done before isn't wrong. Lots of it is right. But if challenging all of it is what's needed to innovate in the places where they were wrong, then by all means I support Tesla and Musk. Why would I not support someone trying to innovate, and succeeding? Unless of course you want to try to tell me Tesla hasn't innovated the auto industry in any way-- in that case we can end our discussion here because we won't ever see eye to eye.
> Why do so many people here root against Ford and GM?
I root against Ford and GM and the others because with all their resources and might, they haven't done what Tesla's done....instead they've done the bare minimum. Tesla started in 2004 from scratch. If GM or Ford had committed the resources they could have to electric vehicles and autonomy and so in 2004, God knows what they would have for us now. But they didn't. They sat still, incrementally improving mileage and adding bluetooth and so on. Why would I root for that? Why are you rooting for that? What's exciting about that?
> Yet to be seen. Right now they are hand-building cars for huge losses. There's no "mass" production
"Yet to be seen"? Geez. Yeah, clearly Tesla's not scaling at all. Selling about the same number of cars as two years ago, or five years ago. No evidence of progress at Tesla.
> Or are you of the mind that Musk is infallible?
Of course Musk is fallible. Does a person have to be infallible to innovate and succeed? Do they have to be infallible to be admired?
> According to whom? Tesla won't release the numbers, and the Model 3 tracker from Blomberg shows 2,300 per week
Yep, no doubt the 2300 will decline back towards 1000, then they'll go bankrupt. No reason to believe that things are picking up. Just because it's 2300 now and was 150 three months ago, that's not evidence of any progress. Easier to believe they're going to fall apart.
So hard for me to understand your way of thinking.
It's the reaction for facts and Musk giving predictions that are off by a magnitude constantly.
Remember that Tesla was supposed to produce 20,000 units per week by the end of 2017, then 10,000, then 5000, then 2500 by end of March. It fall below the latest goal by 20%. When Musk hypes up the product for the customers, that's a good thing. When he hypes up for investors, they lose confidence and interest rate for capital will increase.
>Now they're tracking to 100,000 or more in just in the second half of the year.
Why would we trust this claim from Musk? If we assume that Musk is consistent in his messaging, we must downgrade his claims by order of magnitude. He has constantly claimed that Tesla is on track and failed to deliver.
>They build shit cars.
Tesla's are arguably very shitty cars with lots of details just plain wrong, but they are super nice to drive. This is typical for high performance luxury cars. They can spend time in repair shop because people love to drive them and they can afford the cost.
Model 3 is completely different animal. Tesla has invested so much for the production like that they can't back up to low volume manufacturing. They must produce Model 3 in large volumes or ROI will drop like a stone.
I guess you haven't seen any of the cryptocurrency threads?
I rather see a growing cognitive bias on HN, where someone will surely point out - Why does HN has negative opinion about "X"? where "X" is their favored topic/company.
> You'd think we were dealing with a genocidal warlord, not a car company.
Wow! Really?! What comment made you feel like Musk is a genocidal warlord?
Before you tell someone they need to read the balance sheet, you should read the balance sheet.
Tesla has $3.5BB in cash, which they are burning through at the rate of almost $1BB a quarter, and have $4.1BB in accounts payable. Those are "bills", and their cash doesn't cover that amount, let alone the long-term debt payments.
They've been accumulating cash by letting their bills pile up; this figure grew over $1BB quarter over quarter.
The burn rate of of $1B+ would need to go to 0 to be called profitable + cash flow positive. Profitable => Net income > 0; cash flow positive => including capex net cash flow into business > 0.
Electrical cars? Yeah, I want one. Does it make sense on large scale? Not really.
As far as I have noticed, there is a pattern, bad Q results, then Musk comes with a new revolutionary idea, just pumping the hype. I am eager to see what will be next, maybe electrical cargo ship or electrical magic carpet (I would have one if those :) )
[0]https://www.vox.com/platform/amp/energy-and-environment/2018...
I will just stop posting in this thread, as usualy on those two topics every average John Doe is smarter. Just go and buy more Tesla stocks.