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Comment by chollida1 | Hacker News Reader

And their Chief People Officer, is not coming back from her leave.

From the outside it looks like Telsa is about going to go into a tough winter like moment.

They are almost losing by winning. They are at capacity in their Fremont factory but still not making a profit.

They need to start designing and building out manufacturing facilities for their next car and the help bolster Model X manufacturing.

Stop and think for a second that Tesla is one earthquake away from no longer being a company.

- They are cash flow negative,

- they have about a year of cash runway left( optimistically)

You can't just collect insurance money and build a new factory like you can with a house, this is a many year project.

Tesla can't afford to not build cars for multiple years.

Forget the SEC investigation hanging over their head. From what I read, they are likely to get a large fine and a strong talking to.

And the most worrying thing for them is that their next car will compete head on with Mercedes, BMW, Audi, and GM. That will be the first time they've had to compete head on with a competitor.

View on HN

> they have about a year of cash runway left( optimistically)

Much less than that actually. At their current burn rate they won't even be making it to the end of this year without either selling enough M3 to generate some real cash, or by raising some new money from the market. Also, they have a lot of debt come due next year (and even more over the following years) while yields are up to over 8%.

However, M3 production numbers are actually looking good now, and they are hitting their targets for the first time. And their cash burn for Q2 came in lower than expected after some cost cutting. So they might be able to turn the corner just in time. Musk has repeatedly stated that the company will not need to raise new money, but had also done that before some previous financing rounds, so the market does not put that much faith in his words at this point.

It all hinges on the M3 now. Can they get production (and sales) numbers to where they need to be in order to become cash flow positive?

They're also going to sell somewhere between $100 and $200 million in ZEV credits this quarter.

Don't they also have some heavy debt obligations coming due very soon?

>However, M3 production numbers are actually looking good now, and they are hitting their targets for the first time.

Really? Where can I read the official quarterly numbers? Of what quality are these cars? Do they all need to be reworked?

>Musk has repeatedly stated that the company will not need to raise new money

He said that prior to raising cash the last 3 times. He also said he was going to take the company private at $420. For some reason, I'm doubtful.

Given that he knows his memes, and that “420” is a weed meme, and given it was a ridiculously stupid thing for him to tweet, I’m of the opinion he was literally high when he said that.

Not sure if that is better or worse for the CEO of a public company with a market cap well into the billions. Regardless it doesn’t inspire confidence in his leadership.

I have to agree with you on all counts.

When I first heard that he did 100 hour weeks voluntarily, I was envious of his ability to put that many hours in. I’ve done that once and… vowed never again.

Now I am of the opinion that it broke him and he was unaware of it, and that all of his goals will be better met if he halves his work week.

Having worked +100 hour weeks for years at a time in the past, i found that it has an insidious effect on your judgement. You think you are ok, but you slowly start to drift out of alignment with reality. Looking at Elon from a distance he appears to be acting the same, functional but with impaired judgement.

If he really did do it while high and without any factual basis, then the SEC case against him is solid.

"I did it for the lulz" is unfortunately not a valid legal defense.

It's not purely about the production volume - remember, the Model 3 was billed as a $35,000 car and a lot of the M3's projected demand is predicated on that range of price. Wall Street analysts have been vocally skeptical that Tesla can produce cars profitably at that price point. Tesla needs to simultaneously dramatically slash costs and dramatically increase volume, while also presumably retooling their production lines on the fly to address the quality issues that have been in the headlines lately.

Hey, honestly though...the name ‘M3’ de facto belongs to BMW. You know that. Everyone else who’s commenting on a thread about luxury cars knows that. The fact that you’re using that name to describe some upstart car company’s new model, it’s...it’s weird. Like, just call it the model fucking 3.

God I can’t wait for the Tesla fanboydom to just be put in its place. Cool concept, not cool people attached to it. M3, lol.

Who refers to a Tesla Model 3 as a “M3”?

“M3” has and will always refer to a BMW.

Maybe that’s his backup plan if it doesn’t work out... use a BoringCo drill to “accidentally” trigger an earthquake, collect insurance money, funnel it all into SpaceX and launch himself to Mars.

Taking the meaning of "playing the long game" further than anyone else ever has.

Maybe he's gonna use a BoringCompany drill to DRILL to Mars. Ever think of that?

Tengen Toppa Gurren Lagann?

There was an old story that I can't seem to find by Googling, but the gist of the plot that I recall was that Mars was stealing Earth's atmosphere through a kind of vortex, like a huge double ended tornado, and some guy in an old plane flew through it, getting to Mars without a spaceship.

I agree on all points except that the most worrying thing is the entry of Mercedes, BMW etc. First of all, GM and BMW have sunk a lot of money in electric cars that are on the market and being crushed by Tesla in sales. Second, and most importantly, car brands are incredibly valuable.

People said that the Prius would go away when other car makers started making hybrids. After years of competition, the Prius still dominates. Why? Because the economic reasons for owning a hybrid really aren't that compelling. The social signaling reasons are. So, if you want to say those things about yourself you own a Prius because everyone knows you are driving a hybrid at a glance. A Tesla makes a different-- but I would argue equally powerful-- statement to all who behold it. If Tesla goes into bankruptcy the brand and the cars will be revived.

They can't afford any capex on new factories though. They are extremely close to breaching covenants on their debt and personally can't understand why they are not raising equity money as their stock price, despite Musk's crazy antics, is holding up well.

Their stock price has been highly volatile in the last year. It's "holding up," but only by the hairs on its teeth. They're hovering very close to their 52 week low when the rest of the market is having a banner year.

Management said they don't need to raise funds to cover the capex needed to ramp up Model 3 sales to 7/week, which is (as confirmed multiple times by Musk) more than needed to turn a profit. They just need to turn a profit in Q3 to get the stock price back up and then, they might raise funds to finance the next products (Model Y, truck and Semi). Why raise funds when Wall Street bet on the company to go bankrupt? Raising capital in this environment would mean that the management don't believe in their ability to turn a profit. But then, why raise further equity and make the problem worse?

Occam razor: they expect to be profitable this quarter and are more patient than short-term speculators.

"Wall Street" is not betting on them to go bankrupt. Collectively, investors value this company that produces, at best, 7K cars a week at $45 billion. The idea that one quarter of profitability achieved through slashing capex to the bone fundamentally would fundamentally change their valuation doesn't carry much water in my view.

>Collectively, investors value this company (...)

Most large investors are just holding. The small amount of shares that are exchanged every day are bought/sold by speculators and they are backed by institutions that get paid for this intraday activity. Also, with all the short positions on TSLA, the bank are risking an almost infinite sum of money (in case of a short squeeze).

Since Tesla doesn't intend to raise capital for the foreseeable future, banks can only gain from volatility or from a major event that would force Tesla to raise funds.

>The small amount of shares that are exchanged every day are bought/sold by speculators and they are backed by institutions that get paid for this intraday activity.

The largest shareholders were dumping shares last disclosure. Do you have data that says otherwise?

Tesla is more than just a car manufacture. I doubt self driving + solar + battery + charging network etc is worth the kind premium they have over just being a car company.

But, analysis based strictly on car sales a mistake, especially as established car companies outsource so much parts production.

The Solar is a liability.

Agree with Jacques M on solar, and would also add that much of the battery tech is Panasonic's and self-driving is a long ways away from being road-ready.

In terms of cash flow I agree.

But, if you had a company that just did self driving and had as many cars on the road as Tesla does people would value it. Likewise for a giant battery factory, or a company putting out those solar shingles even with just a handful of installs.

Now suppose they sell those lines of business off to some other company to free up some capital. It's a path through the cash crunch that may catch people off guard.

PS: I am not saying buy the stock, but I don't think it's dropping enough to become a 45 billion dollar company any time soon.

How are they going to sell the battery factory when it's owned by Panasonic, not Tesla?

Panasonic is a partner Tesla still put up money for the factory.

EX: Several companies could sell Hulu to free up some cash. The Walt Disney Company (30%), 21st Century Fox (30%), Comcast (30%), AT&T (10%)

> "Wall Street" is not betting on them to go bankrupt.

27.88% of all shares in existence are short-sold. Its one of the biggest shorts on the market at the moment.

Wall Street is CERTAINLY betting that they're going down.

There's a difference between overvalued and bankrupt.

That's a solid point, and I guess the stock market is a bad figure to talk about bankruptcy.

Instead, we can look at the Bond market for that. Moody's rates Tesla 2025 bonds at Caa1, and today the interest rate on Tesla has risen above 8.8%

The bond market certainly is pricing in the risk of default and/or bankruptcy at this point. 9%ish bonds are really bad on a 7-year bond, especially in today's market that's got relatively low-interest rate.

I work at a hedge fund specializing in corporate credit. No serious market participants think that Tesla is going actually bankrupt but does run the risk of debt restructuring. Bankruptcy vs debt restructuring would happen under very different terms. As a better metric clogged by less noise, Tesla 1yr CDS is pricing in a 12% chance of default while 2yr is 20%. The bonds you mentioned should actually be a lot lower but they had a large retail allocation and are hard to borrow to short.

BTW, you mention the "interest rate" on those bonds when I think you meant yield. Very big difference.

> BTW, you mention the "interest rate" on those bonds when I think you meant yield. Very big difference.

I'm not very knowledgeable here, but is the key difference that yield is more a result of the market (i.e. bonds fluxuate in value but the return on the bond itself is fixed, so the yield reflects the relationship between cost and payout)?

He's right. I misused the terms. "Interest rate" isn't precise at all, and since we're talking finances, the details are actually important and I should have been more careful about which terms I used.

There is a "coupon", which is the amount a bond pays each year. Which is one kind of interest rate.

There is the "yield to maturity", and since Tesla's 2025 bond seems like a normal bond, so Yield implies yield-to-maturity. This is another "interest rate" but just saying "interest rate" is meaningless.

Since coupon vs yield is ambiguous, I should have used more precise language earlier.

> bonds fluxuate in value but the return on the bond itself is fixed, so the yield reflects the relationship between cost and payout

Yes.

If I were to hear interest rate mentioned in relation to a bond, I would assume they were talking about the coupon which in this case is fixed. I think you have the right understanding, various yield methods basically are just the IRR of the security under different assumptions. If you bought at par and held to maturity, the yield would be equal to the coupon which in this case is 5.3%. Without knowing where the bond is actually trading, given that it has a yield higher than its coupon, you know that it is trading below par; the difference is how much it is trading below par under the assumption you get 100% of the principal at maturity.

I wouldn't normally refer to the return as "fixed" as that is primarily only used in reference to the coupon and because of the fact that you mentioned earlier in that sentence; bonds fluctuate in price so the yield is regularly changing given a change in price.

> Stop and think for a second that Tesla is one earthquake away from no longer being a company.

This is highly unlikely in the short term and in the long term they'll be building more plants. It's also something anyone can insure against by placing a bet that an earthquake will destroy their factory in the next five years. You'll presumably get 50:1 odds or better (a good chunk of which is the vig), which means the insurance would cost less than 2% of the sum you want insured.

> they have about a year of cash runway left( optimistically)

Unless they turn a profit (or come closer to it), which it's plausible they're about to do.

> You can't just collect insurance money and build a new factory like you can with a house, this is a many year project.

No, but you can buy insurance in the amount of the value of the output (or of your shares) rather than the cost of building a new facility, if you were really that worried about it.

> And the most worrying thing for them is that their next car will compete head on with Mercedes, BMW, Audi, and GM. That will be the first time they've had to compete head on with a competitor.

The entire EV market is production capacity constrained and will be for a couple more years at least. They can't lose sales to Mercedes or BMW EVs because they'll all already be selling 100% of the EVs they can manufacture, all of which are coming at the expense of petrol cars.

Tesla's liquidity issues are completely overblown. Nevermind that their cashflow and spend numbers are improving. People also tend to overlook the amount of investor liquidity we have in the market. SoftBank has a $100bn fund. Saudi's have a $1 trillion sovereign wealth fund. I believe the UAE have something similar as well. Raising a couple billion dollars in this environment would be extremely easy. Especially when you have a backlogged demand on your product and the product has a 20% gross margin

The complaint isn't that Tesla faces challenges in raising money, but that Tesla is delusional in believing that it doesn't need to raise money.

Yeah, but Musk always said that he won't raise money, but does so anyway.

I bet you Musk does another stock offering by the end of the year. Its kind of a yearly-tradition at this point, with exception of 2014 when Musk decided to raise a few billion in bonds instead.

Tesla automotive does not have a 20% margin, it's much closer to 10%. In the '18-H letter they claimed 20% margins including ZEV/GHG credits and added back Services & Other (in all Tesla 10-Q's the Services & Other are subtracted). Tesla calculates gross margin by not only including the ZEV/GHG credits but by basing the margin on the retail price of the vehicle rather than the bulk invoice. Cost of stores and R&D expense are also omitted from the gross margin.

Can you point to a source ? I am looking at Q2 statement and gross margin before ZEV is 20%. With ZEV it is 21%. It's on page 2 here

http://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9ec...

Also, gross margin is literally margin after cost of goods. Doesn't include SG&A expense.

>I am looking at Q2 statement and gross margin before ZEV is 20%. With ZEV it is 21%.

The statement given is ex ZEV and stock based comp, not ex ZEV/GHG and Services/Other. ZEV/GHG accounted for ~2% of margin in the first half of 2018 while Services/Other accounted for a little over 5%. Check the 10-Qs.

> Also, gross margin is literally margin after cost of goods. Doesn't include SG&A expense.

Most OEMs use the delta between the retail price and the bulk invoice including cost of stores to calculate their margin.

Sorry, it took me a while to get back. Why would stock based comp be included in gross margin ? That is not part of Cost of Goods sold. That is reflected in net income.

I have no idea what your last statement means. There is US Accounting definition of what gross margin is and it is Revenue - Cost of Goods. Other expenses such as compensation, stores, are part of operational expense and it included in net income.

https://en.wikipedia.org/wiki/Gross_margin

I don't think you'll find many people claiming that Tesla is on the brink of bankruptcy. You'll find plenty of people saying that the stock is overvalued and they bet it will go down (possibly to zero over a longer time horizon).

The point is that if Tesla wants to remain solvent then it will be forced to offer an attractive chunk of equity as part of a raise, and that will be a blow to the share price. They're out of assets to put up as security and their unsecured debt is already yielding north of 8%. They'll have to offer equity.

Who cares if they offer equity ? Would anybody remember that 5 years from now ? I have no recollection of when they raised equity in the past.

With its unsecured 2025 bonds trading at 83 cents on the dollar and an SEC investigation ongoing, they might have to accept a lot of equity dilution on a raise big enough to keep them operating. 10% dilution in exchange for operating cash that will be promptly burned would add 10% more headwind on their earnings per share. If the market had at least to some extent believed Musk that another raise was unnecessary then that would negatively affect the share price.

I have a friend who bought a Tesla and is now asking for a buy-back. His experience has convinced me the negative hype isn't all just shorts propagandizing and "Musk fatigue." This company has huge, huge problems.

When he first got the Tesla it had huge body panel alignment problems. Eventually these were fixed, but it took too long and was difficult to get Tesla to fully acknowledge them.

After that he had a range of little annoying problems, many of which were likely software bugs, but then he (actually his GF) experienced something in autopilot mode known on the Tesla forums as "shadow braking" -- the car braking hard on the highway because it seems to see the shadow of an overpass and think it's a wall. This is extremely dangerous. It was on the I-405 (SoCal) going 70-80mph, and such a thing could easily cause a rear end collision.

At that point they're starting the process of returning the car. Not only have there been many problems including a major safety issue, but Tesla has apparently been evasive and difficult getting them fixed.

I hate to type this because I love most of what Musk has done and I really credit Tesla with helping get the ball rolling on EVs. EVs are tipping now, and I'm not sure that would have happened without Tesla. It at least would likely have taken longer. But... it is what it is. I'm just telling the truth.

Reading between the lines a little Musk seems horribly burnt out. If I could give him advice I'd say pass Tesla to someone with more experience in the car industry, start gracefully exiting Tesla, take a break and do a little personal inventory, and then focus 100% on SpaceX. The latter is the far more important of the two companies and is in much better shape. I also feel like it's his real true love.

If Telsa can't be righted its fate will probably be purchase (or purchase of its assets in bankruptcy) by another car company. That's fine. As I said: EVs are tipping.

Finally to speculate a bit... I wonder if Tesla is an indirect victim of the latest wave of AI hype? It seems like they were on the right track until they decided to go all in and shift their major focus from making a great electric "driver's car" to self-drive or bust. Self-drive probably consumed insane amounts of capital, and has greatly harmed the company's reputation by causing serious accidents because it is clearly not ready.

The shadow braking thing really reveals how primitive "AI" actually is-- this is something a bumblebee would not do, and its brain consumes milliwatts of power. From what I've read self-drive is really just object recognition combined with spatial mapping, path finding, and a lot of heuristics. The latter is what worries me. "Expert systems" can't capture complex problem domains due to the exponential nature of a combinatorial explosion. There will always be edge cases. Needless to say we will not be uploading consciousness anytime soon, nor will fully autonomous AIs be taking over the world.

> After that he had a range of little annoying problems, many of which were likely software bugs, but then he (actually his GF) experienced something in autopilot mode known on the Tesla forums as "shadow braking" -- the car braking hard on the highway because it seems to see the shadow of an overpass and think it's a wall. This is extremely dangerous. It was on the I-405 (SoCal) going 70-80mph, and such a thing could easily cause a rear end collision.

This is a known issue. It isn't a software bug. It is autopilot learning that the overpass isn't a tractor trailer or other large object the camera can't discriminate crossing the path of the vehicle. [1] It was introduced after this fatality [2].

With that said, if that causes concern for the driver, the vehicle isn't for them.

[1] https://www.tesla.com/blog/upgrading-autopilot-seeing-world-...

[2] https://electrek.co/2016/07/01/understanding-fatal-tesla-acc...

Holy shit!!!?!

Potential life threatening maneuvers on the road are a feature of the self-learning Autopilot system???? Because without it the car will just ram itself into a wall???

>With that said, if that causes concern for the driver, the vehicle isn't for them.

What if it causes concern for the driver behind them, what then? My family will get a settlement after a Tesla kills me?

How the fuck are these cars legal anywhere???

The driver behind a vehicle is primarily responsible for any rear end collision (US-specific, YMMV elsewhere). Should probably not tailgate a Tesla (or tailgate in general).

> How the fuck are these cars legal anywhere???

They're legal because Autopilot is driver assistance. The driver is still 100% responsible, just as they would be for cruise control.

> The driver behind a vehicle is primarily responsible for any rear end collision (US-specific, YMMV elsewhere).

Not if you slam on the brakes without cause on the highway.

Here is the general state statute you're up against (as the person rear ending someone on the interstate):

“Any person driving a vehicle on a highway shall drive the same at a careful and prudent speed not greater than nor less than is reasonable and proper, having due regard to the traffic, surface and width of the highway and any other conditions then existing, and no person shall drive any vehicle upon a highway at a speed greater than will permit the driver to bring it to a stop within the assured clear distance ahead.”

Maybe if you have a dash cam. Maybe if you can prove there was nothing in front of the person in front of you. Lot of maybes.

You've described the statute in some state for spacing between cars or something, but in some states "brake checking" is mentioned explicitly in the criminal code, and in others it can be prosecuted as vehicular assault. It's harder to prove without a dashcam, but if there are witnesses it is certainly possible.

That's a bit of a sideshow. Tesla needs to worry about the civil liability involved in making a car that stops suddenly in the middle of the road. For example, "The driver is still 100% responsible, just as they would be for cruise control" is absolutely not going to impress anyone as a defense if there is enough property damage or personal injury involving such a feature to justify a class action.

If you’re not at a safe following distance behind the car in front of you, regardless of why they’re stopping, your driving skills are deficient. Following distances don’t change because it’s a Tesla; you shouldn’t follow closely as a tire blowout or a piece of debris falling into the path of travel of the vehicle in front of you is just as possible. Im sure there are states with more strict statues; they aren’t the majority of states.

Anyone can sue anyone in the US. Take it up with their general counsel.

> For example, "The driver is still 100% responsible, just as they would be for cruise control" is absolutely not going to impress anyone as a defense if there is enough property damage or personal injury involving such a feature to justify a class action.

Class action vs. direct action is immaterial; Tesla can't disclaim it's liability for manufacturing g defects even if it tried, and stating that the driver remains responsible for following traffic laws isn't even superficially a disclaimer of product defect liability anyway.

Product defect liability is strict liability for damages produced, and there's a fairly high bar for excluding liability due to intervening causes which would not generally apply to the simple negligence of a driver (either of a Tesla or the other involved vehicle) which contributed to a collision where the defective operation of an assist system was also a contributing cause.

Being in a car is life-threatening.

Which is why there are so many laws and regulations surrounding them, the most basic of which is a technical inspection every few years.

If your brakes don't work your car is illegal on the road (at least here in Europe). But apparently if its a software bug in the brakes then its okay to drive it around...

The US NHTSA and state regulators have allowed Tesla to continue to offer Autopilot, therefore I believe your argument to be invalid (versus that of domain experts), although you are entitled to your opinion.

There is no way that Autopilot is worse than human drivers: https://i.imgur.com/au8A1o3.gifv

The number of question marks and exclamation points in your original post does not fit the relative severity of the issue you are describing. If you used that many question marks to describe a car with an imperfect auto-braking system, I can't imagine how many you'd use to describe a car with a human braking system. In the U.S., those humans fail to brake, with consequences, 2.5 million times a year. https://www.scmitchell.com/blog/2017/may/rear-end-collisions...

Even when self-driving cars become popular, people will still be injured and die in them. And it won't be just a subset of the people who would have died without such cars. It will almost certainly be a different, randomly selected group of people. If it's your time to go, does it matter to you whether you died because a texting teenager slammed into your stopped car? Or because an edge case triggered in a car's software? The former case is just stupid. The latter case is something society can learn from and prevent from ever happening again.

If you are in favor of more people dying in "normal" accidents, then by all means, please continue expressing your outrage.

The cost of progress in this area is computers making mistakes instead of people making them.

Oh well then I guess high speed braking maneuvers on a highway without user input are just fine then.

> How the fuck are these cars legal anywhere?

Because product defects don't (in general) make the car illegal, they just incur strict liability for the manufacturer (and the chain of commerce, but in Tesla’s case that's moot except as to defects that originate upstream of them, since they sell direct to consumer) when they cause damages.

Hard braking at 80mph isn't as dangerous as not seeing a tractor trailer, but it could definitely cause a serious accident.

I'm starting to understand why all the other self-drive companies use active sensors like lidar. You need that to compensate for the fact that the AI actually driving the car is less intelligent than a honeybee.

A self-drive "AI" is dumb. It's just a glorified expert system with a lot of pattern recognition and other stuff bolted on. But the performance of dumb things can sometimes be improved by giving them more information. Self-driving cars need super-human senses.

Lidar is doubly special because its an active sensing system. If the car hits an undecidable edge case it can probe it to see if it's physical or a lighting artifact. It needs to be able to do this because it has no higher order conceptual model of the world to reference. It doesn't "know" what an overpass or the sun "are."

Edit: This principle is also why "big data" has helped revive "AI." We need big data because our AI isn't very I. Biological intelligences do incredible things with very small amounts of data because they have more I. What's so impressive about biology is what it can do with small data.

> I'm starting to understand why all the other self-drive companies use active sensors like lidar.

Every roboticist since the DARPA Grand Challenge knew this, as every team that finished had a Velodyne LIDAR. It was THE piece of tech that made that race possible. So for everyone who learned that lesson, to then see Telsas out on public roads with a feature called "autopilot" that did not have any LIDAR sensor attached to it... well... Let's just say we've been saying "I told you so" since then.

I think it's a little early for people who don't "do" to call it that LIDAR is mandatory, and that optics and radar aren't sufficient. Autopilot is still in development.

LIDAR is not necessarily categorically mandatory, but shadow braking and other autopilot failure modes demonstrate that it or something with its capabilities are probably necessary right now to enable today's "AI" to safely drive a car. My point about active sensing being able to decide edge cases explains why this is likely the case.

IMHO doing without precise active sensing would require a breakthrough in AI that hasn't happened yet.

On the plus side the fact that Tesla's autopilot is able to work as well as it does without lidar might indicte that with a lidar system it might be the best autopilot on the market. Who knows.

Seems weird that the Tesla can't infer that there is no wall there from GPS data.

They do over time. The vehicle “learns” from no impact at the overpass and uploads that to the mothership for fleet-wide distribution.

What if a wall is there tomorrow?

Obviously LIDAR is not mandatory. We have a billion proof of concept controllers that only use binocular image data to navigate just fine. So one day ostensibly that could be enough. But we need a computer as good as the human brain to make it work, and that's not happening anytime soon. So until then, dropping LIDAR from the sensor suite is really going to limit your performance.

It's clearly a software defect. I don't know how you could possibly claim otherwise. The reasons behind the defect are irrelevant from a customer standpoint.

A human driver who did that during a driver's license test would be failed.

"If you don't want your Tesla slamming on the brakes on a highway at 80mph, don't buy a Tesla."

You must own a lot of Tesla shares to make such a ridiculous statement.

> You must own a lot of Tesla shares

I do, but I also entrust my wife and kids in a Model S. I specifically bought the Model S (a used 75D) for them due to its safety record. That's worth far more to me than any Tesla shares. With that said, my wife is aware under what conditions it is safe to engage Autopilot, and is also aware that she is still the responsible party if an accident happens when it's engaged. She doesn't use her phone, she doesn't not pay attention, she is babysitting the vehicle while at speed and still has final authority.

> to make such a ridiculous statement.

You think the statement is ridiculous. 40,000 people a year die in the US driving due to human decisions. Several friends I attended high school with were killed in car accidents. Loved ones have been killed in car accidents. I don't think my statement is ridiculous in that context. These sorts of efforts are necessary to move the needle on transportation safety. Perfectly happy with my TSLA shares going to zero in the process, as long as progress is made.

The ridiculous thing I was commenting on was your suggestion that if sudden high-speed braking maneuvers on a highway were "cause for concern" then you shouldn't buy a Tesla. MV death statistics are completely irrelevant to that point.

Your issue isn't with my suggestion, it's with regulations that specifically allow Autopilot to continue to be sold and engaged in Tesla vehicles.

"The vehicle could do X while under your control. If you are not comfortable with X occurring while under your control, do not buy the vehicle (or buy the vehicle, but do not purchase Autopilot). The vehicle feature that could cause this is still permitted by regulators to be functional. You are solely responsible for the actions of the vehicle while operating it."

As someone who may be behind a auto-brake slamming Tesla one day, where is my opt-out from this dangerous beta?

> where is my opt-out

Don’t tailgate.

That's not a panacea. Realistically, you can easily be rear-ended because you slowed or stopped for a traffic jam caused by something like that Tesla. It is a fantasy that people are in control of every significant danger around them.

Your stopping distance should always allow for the slamming on the brakes of the car in front. If not, you are tailgating by definition.

The scenario is that I am at a standstill because the car in front of me stopped, and am then rear-ended by someone who didn't notice traffic was stopped. Legally, the car behind me is probably responsible, but the car in front of me contributed.

A randomly stopping car is dangerous even to people who aren't tailgating. A human would be charged with dangerous driving for that - which is a felony in my jurisdiction.

Both behaviours aren't great, but the at-fault driver would be at the back. Even though the stopping frequently randomly is likely more dangerous.

Fault isn't necessarily exclusive, and drivers of the front vehicle in a rear end collision may be at (legal) fault. [0]

More importantly for discussion of an automated system shadow braking, however, fault of drivers based on negligence (or more serious mental states, like recklessness) is a separate concept from fault of manufacturers for product defects (which is based on strict liability, not negligence, and therefore bars to liability based on negligence of the injured party due to contributory or modified comparative negligence theories would not generally apply; liability might be barred on a theory of superseding intervening cause, but that would require the intervening cause to be unforseeable—too close freeway following is not so rare as to be an unforseeable intervening cause and thus would not usually limit recovery on a strict liability product defect claim.)

[0] see, e.g., https://www.nolo.com/legal-encyclopedia/is-fault-automatic-r...

>After that he had a range of little annoying problems, many of which were likely software bugs, but then he (actually his GF) experienced something in autopilot mode known on the Tesla forums as "shadow braking" -- the car braking hard on the highway because it seems to see the shadow of an overpass and think it's a wall. This is extremely dangerous. It was on the I-405 (SoCal) going 70-80mph, and such a thing could easily cause a rear end collision.

Why is he not leaving the beta of Autopilot then? The car would still be better than the competition in most domain (acceleration, navigation, range...) wouldn't it?

Does your friend believe the car is worthless if it isn't on Autopilot? All benchmarks of driver assist systems show that Tesla is far better than comparable cars, so it's pretty dumb to ask for a buy-back for a car because of such a small and extra feature. He could have asked for a buy-back of the Autopilot option but then, your comment wouldn't add to the conversation (that would be a non story, actually, considering all the Tesla owners who love it).

What does he think of the rest of the car?

It's been an overall bad experience. Here's a rough chronology:

(1) Serious and clearly visible body panel alignment issues. They got fixed, but it took a while and Tesla didn't have a loaner car. There was also a scratch on the car when it was delivered.

(2) Door handles not extending. This problem occurred multiple times. The first "fix" was to reboot the computer.

(3) A whole host of software bugs including constant apparently false (according to Tesla) warnings about suspension problems, inability to pair with Bluetooth devices, UI glitches, inability to lock the car (turned out this was a 'feature' but one with no documentation and no UI feedback), etc.

(4) Dangerous autopilot failure modes.

The car's drive train is indeed excellent. It accelerates great, has great range, and performs and drives well. The rest of the car however is really problematic.

The big thing causing him to want to return the car is that Tesla service has apparently been less than helpful and evasive. It's been back and forth, back and forth, back and forth... The dangerous failure modes in the autopilot are the brick that broke the camel's back.

He said he's been many times more patient than Tesla than he would have been with any other car company because he like me believes in what Tesla is trying to do.

Given that Tesla owners are the most satisfied (cf. https://eu.usatoday.com/story/money/cars/2017/12/21/tesla-po...), that implies that the other owners are even more happy with their Tesla that I would have expected.

All surveys about panel gaps points to Tesla being above average (expect in the first few cars out of the line, which are generally owned by employees).

If your friends' Tesla has serious software bug, I'm curious to know his experience with other brands! Unless he can't stand a small bug in an optional, beta feature.

As for autopilot, he knows he can turn the autosteer off and still get the best ADAS available on the market?

>inability to lock the car (turned out this was a 'feature' but one with no documentation and no UI feedback), etc.

I don't own a Tesla and only test drive one and somehow I was aware of that. Looks like PEBCAK to me.

Most of this you’re arguing against someone’s subjective opinions, which makes no sense. They are unhappy with the car and service and are taking advantage of a program to return the car. This is how it’s supposed to work. The customer has less bad will against the company and gets out of a car they don’t like. And other potential customers can see that there is less risk for them is they don’t like their new Tesla.

But this part...

Unless he can't stand a small bug in an optional, beta feature.

That’s not okay. Shadow braking is not a small bug. It’s a dangerous thing that can happen. Calling something “beta” doesn’t work when you’re driving down the road at 70 MPH. That’s just plain dangerous. Putting something like that out into the public as a “beta” feature puts not only the customer but everyone else on the road in danger.

I have no problem with a company testing car features on the road with test drivers who are well trained (with well marked cars). But “beta” doesn’t belong on the highway in the hands of a customer.

>If your friends' Tesla has serious software bug, I'm curious to know his experience with other brands!

Most brands have actual knobs and handles instead of putting everything in a digital interface in the entertainment console.

He showed me pictures. The panel issues were really bad. It wasn't something you had to squint to see. It was visible from a distance. There was also a clearly visible scratch on the delivered vehicle.

Maybe he got a "lemon," but in that case Tesla should have been much more ready to fix or exchange the vehicle instead of dragging their feet and arguing over minutia.

I also question what's happening at Tesla when they even ship a vehicle with such obvious defects to a customer.

My Subaru never shadow brakes. Its driver assistance technology is certainly more rudimentary than Tesla's (only has lane keep assist and adaptive cruise control, and the adaptive cruise control doesn't see speedups far ahead and doesn't catch people switching into my lane until they're already halfway switched), but it is very reliable at doing what I expect to, and not having any dangerous shadow-braking like that.

> My Subaru never shadow brakes.

Do your Subaru is electric? Does it range compare to the Model 3? How does it compare to its acceleration?

Don't ever buy a product for a feature in beta. For the sake of anyone, never ever EVER do that.

My Subaru is not electric. Its range is significantly higher than the Model 3. It has much lower acceleration, but it's plenty to meet my needs (and indeed, I did not get the version with higher engine power because I do not need high acceleration). It also cost me half as much as a Model 3 would.

On the other hand, none of the features on my Subaru are in beta. Most importantly, it has fully functioning adaptive cruise control, which is a crucial feature for making highway drives more pleasant (particularly when driving in traffic), and in this day and age, I wouldn't buy a commuter vehicle which lacks a fully functioning adaptive cruise control system.

Indeed, though I think tesla is part of a strategic solar plan, so losing one pillar could see the roof fall.

Sorry to take things off-topic but

>Needless to say we will not be uploading consciousness anytime soon

I'd say that uploading consciousness is an entirely orthogonal problem to AI. Uploading a consciousness is all about scanning the brain and simulating it accurately. It doesn't involve any AI since the intelligence already exists. Conversely if you succeeded with uploading it wouldn't necessarily help with AI, since it would still be hard to see how the brain was working.

So I don't think progress in one field can tell you anything about the other.

I feel like the comment was poking fun at the "fields", which are so hyped that they might as well be called hunting for the philosopher's stone.

Where do you upload it to? What hardware? How much RAM? What's the CPU's clockspeed? Bus speed? Those are the right questions to ask when researching a new electronic gadget's capabilities, but I'm sure those are the wrong questions to ask if presented with hardware that could hold consciousness. Humanity understands so very little about consciousness, that, were we able to simulate it under the umbrella of AI, it would still advance the pre-natal field of uploaded digital consciousness.

I can think of specific exceptions, especially using a very strict definition of the field of AI research, that says that the fields are separate, but until we've succeeded at both, it's impossible to say what was actually necessary in order to get there.

"The shadow braking thing really reveals how primitive "AI" actually is-- this is something a bumblebee would not do, and its brain consumes milliwatts of power."

I'm not impressed with self-driving AI so far, but I think you should be fair if you're comparing it to bugs. Insects are notoriously not good at avoiding collisions on the highways.

I'm comparing path finding and other navigational and body maneuvering abilities within the context of their world and constraints. Insects are very good at navigating their space and other very complex behaviors that are at least as difficult as driving a car.

I was comparing the two to illustrate how far behind biology we still are when it comes to AI. Our AIs consume hundreds or thousands of watts and are demonstrably inferior to the brains of insects that consume milliwatts. We are many orders of magnitude behind what biological brains can do both in absolute terms and in terms of efficiency. The difference in efficiency is so large I think it argues strongly for unknown unknowns -- things living brains are doing that we simply don't understand at all.

"Insects are very good at navigating their space and other very complex behaviors that are at least as difficult as driving a car."

And yet, they are commonly seen splattered over the front of cars. Which is failing at exactly the same problem driving AI needs to solve.

You seem to be dismissing this as not part of "their world", but if we're going to compare them at all, I think it is. Conversely, avoiding being eaten is not something driving AI needs to solve.

Kind of depressing that yours is the top comment, given how many outright lies it is based on.

>From the outside it looks like Telsa is about going to go into a tough winter like moment.

From the outside, it looks like they have a product that's a generation ahead of the competition and is flying off the shelves.

> They need to start designing and building out manufacturing facilities for their next car and the help bolster Model X manufacturing.

They are. Apart from the Shangai one, they've never actually stopped building the Reno factory, which still has to triple in size before it reaches its final form.

>They are cash flow negative, they have about a year of cash runway left( optimistically)

Based on 2 quarters during which they built up a factory. Their guidance for Q3 or Q4 has them turning a profit. Usually, people doing these wild extrapolations form the basis of jokes (ie Discu Stu's record sales).

> And the most worrying thing for them is that their next car will compete head on with Mercedes, BMW, Audi, and GM. That will be the first time they've had to compete head on with a competitor.

This is growing the EV market as a whole. Tesla does not want to own 100% of a sub-5% EV market. They want to own a decent chunck of a 100% EV market.

People really, really don't like hearing this particular point, but their cars are approximately a generation ahead of other EVs. Specs wise, Taycan and EQC are essentially matching a 2016-era Model S / Model X and will be available about 2 years from now.

Everybody seems to have forgotten how the Bolt was supposed to be the "Tesla Killer". Look, I even found one specifically from the same source as this article: https://twitter.com/business/status/554725778420957184

Then people were "worried" about their ability to manufacture at scale: https://www.theatlas.com/charts/HkNUFo57f

The problem is that when you actually have to put real money down and these theoretical comparisons become real, things go the opposite direction. Current Bolt sales are flat/declining around ~1500/month, while Tesla is pushing out 5000+ Model 3s per week.

> Kind of depressing that yours is the top comment, given how many outright lies it is based on.

Most of the time I comment, its more to get my ideas clarified, if you think I've outright lied then please correct me.

As your comment stands you didn't actually refute any of my points.

Is the Reno factory going to be building cars if not then its irrelevant to the topic of factories to build cars with?

The China factory hasn't started yet, so I think I'm on strong footing with this.

Tesla has also been cash flow negative for not just two quarters, but almost its entire life, now to be fair to Tesla, this was by design. It's possible with all the cost cutting and M3 sales that they could be profitable in Q3 but does anyone think they have finally turned the corner and will leave their trail of losses behind them?

I'm not convinced of that:)

I'm looking for actual thoughtful dissent to change my mind, but so far you haven't actually provided any facts or even opinions to show "outright lies" in my statement.

> Most of the time I comment, its more to get my ideas clarified

As others have noted in this thread, the unceasing torrent of negativity around Tesla has made it practically impossible to tell trolls and haters apart from regular folk. So how can I tell from your writing which one you are? Honest question here. Does your writing express doubt, pose questions, use qualifications? Or is it judgemental and prescriptive?

After all, commenting takes time, why would you expect others to invest their time in responding throughtfully to you, when you come across as simply wanting validation for your negativity from the echo chamber?

> The China factory hasn't started yet, so I think I'm on strong footing with this.

You mean they're not building the physical building at the moment? No, but they've signed the agreement with the government, hired people, etc. So they've started on it, and it will make cars. But... that doesn't confirm your pre-existing views, so you have to discard it.

> Tesla has also been cash flow negative for not just two quarters, but almost its entire life

No, you said they have a one year of cash left. That's only at the rate they were spending when building their factory. If they're not spending at that scale, they have years left. You're trying to change your assumptions, while keeping your original views.

> I'm not convinced of that:)

Yes, but have you actually purchased on EV in the last year? I mean, it's really easy to hold any opinion you want when it costs you nothing (actually, here it gets you internet points, because negative denouncements are rewarded handsomely). But what would happen if you had to actually pay tens of thousands of dollars based on your opinion?

I mean, you said they'll have to compete with GM, completely ignoring the reality that they are competing with GM today https://www.reddit.com/r/teslamotors/comments/9dm0i2/the_tes...

> I'm looking for actual thoughtful dissent to change my mind

I don't see that at all. I think you just want the echo chamber to confirm your views. How else would you explain looking at the above graph and thinking "oh boy, Tesla's gonna be in big trouble because of GM"?

Your comments have been repeatedly crossing into incivility. Could you please re-read https://news.ycombinator.com/newsguidelines.html and stop doing that?

Online arguments can certainly be annoying; we all feel this. That makes it more, not less, important to follow HN's rules.

> Specs wise, Taycan and EQC are essentially matching a 2016-era Model S / Model X and will be available about 2 years from now.

A 2016-era Model S is very, very similar to a 2012 era Model S, and a 2019-era Model S looks a lot like a 2016-era one with a less-safeguarded but comparably capable cruise control added on. The Model 3, as far as I know, is similar but hopefully has less technical debt.

As far as I can tell, Tesla leads in four respects:

- A good drivetrain. It’s impressive to build a reliable <300lb motor-and-controller-in-a-box that outputs up to ~400kW and is efficient at a wide range of operating points. But everyone else will get it eventually. As far as I know, it’s not actually that hard.

- A willingness to put monster screens and few buttons in a car. It’s unclear that this is actually a good thing. Certainly every other major manufacturer could follow suit if they wanted.

- Cruise control that claims to self-drive. Enough said.

- Cachet. Teslas are sexy.

- Superchargers. This is a big deal. The technology is boring. The fact that they’ve built and deployed a bunch of them is important.

Your post is spot on except, I think, for the point about any other major manufacturer being able to make the switch over to a screen based interface. I think that's far from clear. Building the whole user experience from navigation to climate control to the app on your phone to control everything remotely requires a very different skillset from the firmware type development that car manufacturers are used to. This might be one of those things like when smartphones appeared and makers of feature phones found that the whole game had changed from making great hardware to making great software. Elon Musk talks about a marketplace for apps to run on your car, which is a bit much, but integrations with smart homes and solar systems for power management or first class car-to-car communications could be key differentiators. Software is a totally different game.

Software done well is a different game. Tesla’s touchscreen software quality, at least for the Model S, appears to be very, very low. There were some fun posts on HN earlier about a former Tesla employee whose NDA expired talking about the software.

A couple of decent embedded Qt developers should be able to cranks out a system of comparable quality in a few months. The major exception is the map app, which would take at least some real effort.

compete head on with Mercedes

Tesla’s brand is strong enough that they can charge Mercedes level prices with poor quality interior fittings. Sit in a Tesla, it feels like a car costing half as much.

If Mercedes can maintain their user experience in EVs without a significant price premium, Tesla is toast.

With their current production rate they have 11 billion in revenue from the Model 3 alone.

They guidance suggest they should be profitable this quarter because as of right now they are hitting their production target.

May i see your napkin math for the 11 Billion figure?

5000 cars per week * 52 weeks * 50000 average selling price = 13 billion dollar revenue per year

I think that would be something like 5,000 cars per week times 52 weeks times the average price of 42,000 dollars per car

If they are at capacity, why don’t they charge more money?

>They are almost losing by winning. They are at capacity in their Fremont factory but still not making a profit.

Source?

They are now at capacity and they are expected (by Tesla top management) to announce profitablity for this quarter. In other words, they were not a capacity last quarter and not profitable.

That's why with the record sales and production of this summer, Q3 earnings publication will be very interesting. But we won't know the actual result until end of October. By then, the shorts (with billions in backing) will do all their best to give the company an extremely bad look. Because if Tesla manage to turn a profit this Q3, they'll lose dozens of billions. It's now or never for them.

> By then, the shorts (with billions in backing) will do all their best to give the company an extremely bad look.

Please stop with this thought process. TSLA is doing a fine job all on its own making themselves look bad. On the business side, Musk has missed how many production estimates? There are also concerns about quality. On the personal side, he's still harping on this pedophile thing /facepalm. Then what looks like a complete lie about being bought out.

The way you fix the shorts problem is to actually deliver on your promises and make some money. Deflecting that it's the shorts causing problems for TSLA is typical TSLA deflecting the horrible job they have done at running TSLA.

I don't think you realize how much FUD is disseminated daily in the mainstream media.

Take this Reuters article for instance, which has been published and translated by dozens of top newspapers: https://www.reuters.com/article/us-tesla-germany-daimler/ele...

3rd paragraph: "The market for upscale electric cars is Tesla’s to lose, with sales of its entry-level Model 3 sedan expected to reach about 50,000 cars this year and almost double that in 2019."

All sources indicates that Tesla has already produced 50K Model 3. In the first three quarters. There's is still one quarter to go in 2018. And Tesla plan to produce more than 300K Model 3 next year, not 100K.

What kind of error is that? Reuters is aware of this "mistake" and they are not correcting it. All media who published the report and were made aware of the wrong numbers kept it "as is", even though the 50K has already been proven wrong.

How can Reuters and co keep such blatant errors while knowing it's bullshit? For some reasons, the disinformation only increases as Tesla pressures the legacy automakers margin (Tesla surpassed both BMW and Mercedes in US car sales this summer while the German are losing big time).

Reuters & co might not be short themselves. But they knowingly play the short game and kep spreading the FUD ("See these terrible numbers? Who can expect Tesla to turn a profit? Now, let's hear what competitors and short sellers have to say...").

>What kind of error is that? They've aware of this, they are not correcting. All media who published the report and were made aware of the "mistake" kept it, even though the 50K is already proven wrong.

Who cares? What influence do you think this article and that estimate has?

"Disinformation"; that's laughable. Tesla and Musk are being sued and investigated for stock manipulation, but you're crying about Reuters being off on their prediction. Who is showing bias? Where is the outrage?

>And just as Tesla surpasses BMW and Mercedes in car sales in the US, it's only getting worse.

Sedan sales, while the whole industry moves to CUVs and SUVs. Do you think this is sustainable, or is it clearing a backlog? Why can you get a car in 2 weeks now?

> "Disinformation"; that's laughable. Tesla and Musk are being sued and investigated for stock manipulation, but you're crying about Reuters being off on their prediction. Who is showing bias? Where is the outrage?

I never understand how this is a legit argument.

Just because one party shows disinformation doesn't make another party's disinformation right.

>Just because one party shows disinformation

I don't think you know what disinformation is. You really believe one party is deliberately misleading, while the other is not?

> I don't think you realize how much FUD is disseminated daily in the mainstream media.

FUD is what people do to Apple when they are making money hand over fist every quarter. TSLA is just a terribly run company that may end up out of business. Which is sad, because they have what appears to be a good product. Their production arrogance may not be able to be overcome though.

This is also standard Musk to blame short-sellers for TSLAs financial and production woes. Please tell me how short-sellers impact TSLA's production floor? The short-seller problem fixes itself if TSLA ever delivers.

>And Tesla plan to produce more than 300K Model 3 next year, not 100K.

I'll be amazed if they hit that number. They had to pull out all of the stops to hit the last one.

A company that went from selling 11 cars in 2011 to 200k cars in 2018 is poorly run ?

A company that went from losing $49 million per quarter in 2011 to losing $742 million per quarter in Q2 2018 is poorly run.

Yes. That's pretty bad. Their growth is quite backwards, they've learned to lose more money over time.

http://ir.tesla.com/news-releases/news-release-details/tesla...

http://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9ec...

Not sure what your point is. If you are growinig like crazy in a capital intense industry, you are bound to grow your loses. Tesla could have chosen to sell zero cars and have zero losses. What matters is demand and profitable unit economica (Tesla cars have healthy gross margins)

Okay, well lets ignore CapEx then (~$600 Million). Yeah, lets get rid of it. Pretend that in Q2 2018 Tesla spent ziltch, nada, absolutely nothing, on expanding its factories or buying equipment.

EVEN IF WE IGNORE $600 Million worth of CapEx, Tesla is still $100 million loss. Again, Tesla lost a total of $742 million, and no, investments into equipment or building space does NOT fully explain the loss.

TSLA is horribly run and managed. Another responder already mentioned the losses from TSLA itself, but I think the SolarCity bailout is proof enough.

https://www.forbes.com/sites/greatspeculations/2016/07/12/ba...

Ford makes 50-90k F-150's a month without the drama.

There is no universe where Tesla will be manufacturing 25,000 (300k/12) $40-50k cars per month. BMW alone sells something like 9,000 3-series vehicles in that price range per month. It's not credible that Tesla, with a limited sales network, limited charging infrastructure, high costs and long backlog is going to magically take away double digit percentages of the highly competitive small luxury sedan market.

They have been an amazingly innovative company. Hopefully when they do bankrupt the carcass gets picked up by a company who is a good steward of the assets.

Apparently Tesla is already producing 5,000 a week, which isn't very far off from 25,000 a month.

We are practically living in that universe today — never mind once slack capacity opens up and they go down market with the standard range model at $35k.

Did you miss the report last week that Tesla is outselling BMW’s entire passenger car lineup? [1]

Also, double check your numbers - “The BMW 3 Series (the Model 3's direct competitor) sold only 3,751 cars in August.“

Tesla delivered between 17,000 - 20,000 Model 3’s in August, by comparison.

> Ford makes 50-90k F-150's a month without the drama.

“Production of the F-150, the most important vehicle in Ford’s showrooms, has ground to a halt.

Ford on Wednesday was forced to suspend all production of the F-150 after a fire at a key supplier’s manufacturing facility. It remained unclear how long the plants in Kansas City, Missouri, and Dearborn, Michigan, will need to wait before building F-150s again” [2]

That was back in May. Today they announced a recall of 2 million F150s due to a fire risk which is estimated to cost them $140 million dollars. [3]

[1] - https://www.autoblog.com/amp/2018/09/06/tesla-model-3-outsel...

[2] - https://www.foxbusiness.com/markets/why-the-ford-f-150-is-a-...

[3] - https://interestingengineering.com/ford-recalls-more-than-2-...

Does the tesla fan really want to get in to an argument about build quality right now?

A fire at a factory shutting it down is not hte same type of drama as constantly missing estimates and using a tent to extend the line.

Fan or not, GP said there was no way Tesla could make and sell 25,000 cars a month and here they are last month selling 20,000. Would it be so shocking to see a month with 25k?

GP said Ford makes the F150s with “no drama” and yet their factory is burning and their cars are catching fire — something I recall Tesla getting flack for, but Tesla never had a $140 million recall for it.

I get it, different standards for different companies. The company making 20 mpg pickup trucks in business for 115 years I completely agree it’s a different kind of drama for their factory to burn, all F150 vehicle production to cease, and to recall 2 million vehicles for spontaneously combusting.

GP said, “It's not credible that Tesla, with a limited sales network, limited charging infrastructure, high costs and long backlog is going to magically take away double digit percentages of the highly competitive small luxury sedan market.”

Except that’s exactly what they’ve done. Fan or not, those are the facts, and I think to debate about Tesla it helps if you’re not in denial about their actual accomplishments.

Give me a break. Tesla is working massive backlog of pre-orders generated by the hype associated with the company. Some people have been waiting years. There’s no world where 25,000 people a month are showing up and driving away with a car.

Ford had an F-150 production stoppage due to a fire, and was able to restart production a few weeks later. They had the capital and (invisible, unsexy) team to deploy Russian heavy lift aircraft to move key tools in hours and restore production. It was largely invisible.

With Tesla, you have the constant stream of PR and the apparent need for the CEO to personally assume control of the factory to meet minimum requirements. The process and company is broken.

> Tesla is working massive backlog of pre-orders generated by the hype associated with the company.

The Model 3 certainly smashed all records for new car reservations — 232,000 in two days, 500,000 by July 2017. (The previous record was for the 1955 Citroën DS that had 80,000 deposits during the ten days of the Paris Auto Show) [Says Wikipedia]

But these are by no means pre-orders. Refundable $1,000 deposits, of which about 25% have actually been refunded to date, it’s not so much of a hook when you can click a button to refund it, and the car costs $50k+

> There’s no world where 25,000 people a month are showing up and driving away with a car.

Do you dispute that 20,000 people showed up, paid $50,000+, and drove away with Model 3’s in August?

Do you think that number won’t be 25,000 in September?

You sound offended that Tesla has a hot product that people have lined up to buy. Yeah, they took pre-orders and people have waited years to get one. Because they want one. Because it’s like nothing else on the road today. Because, as the WSJ said, it’s a “rainbow-farting spaceship.”

This is the CEO that wanted his 3 models to spell S-E-X but couldn't because of Ford’s trademark, so he settled for “S3X”. You might not like his style, but you’re simply denying the reality of the sales numbers.

Mmmhh, I don't understand what is meant with "selling" in the first article ("https://www.autoblog.com/amp/2018/09/06/tesla-model-3-outsel...). Is it related to "delivering" the vehicles that were ordered long time back or is it related to brand new orders for new cars?

Asking because if it's the first case then of course the comparison would not be fair.

These are cars that Tesla is collecting $50k+ at the time of delivery for each one.

Yeah there are about 400,000 people lined up to buy them, and they will keep on selling them just as fast as they can make them for many many more months.

We don’t know how many new reservation holders are being added at the end of the list, just that the total dollar value of all deposits on hand is increasing.

You’re right though it’s not a comparison. No car company in history has been able to get 400,000 people to put down $1,000 on a vehicle, sight unseen, never mind an electric one at that.

The BMW i3, by comparison, sold a grand total of 418 cars last month. No one is lining up around the block to buy that one.

They really are sales. Anecdotally, I pre-ordered a model S, for a little more. Eventually when it can time to buy, I got my money back (actually more due to exchange rates). I then pre-ordered a model 3. Eventually, I will cancel that order too because I ended up upgrading to a Model S. The point here is, Tesla still need to convince people to hand over the cash. The cost of withdrawal and sunk cost in minimal if you don't like it.

>They are now at capacity and they are expected (by Tesla top management) to announce profitablity for this quarter.

Honest question: when did you start following this company? Elon has claimed profitability for years. Where is it? Where are the economies of scale that were promised?

>By then, the shorts (with billions in backing) will do all their best to give the company an extremely bad look.

The shorts will? Really? Which stories are false?

Who says they aren't? They're already charging $60k for their "mass market" $35k sedan.

Update: I guess technically it's $50k, the other day I read the average selling price was $60k and that was stuck in my head. Regardless, far away from $35k!

Why wouldn't you build out the higher priced orders first?

The more concerning part is that they're still losing a fortune while only building out the supposedly high margin top end models.

Tesla gross margin on an AWD Model 3 with Autopilot is ~$20,000.

Twenty thousand dollars.

And they are outselling BMW’s entire passenger car lineup.

It cost them a pretty penny to get here but cash is literally pouring in for Tesla right now.

> It cost them a pretty penny to get here but cash is literally pouring in for Tesla right now.

And also pouring out, they are losing a massive amount of money every quarter.

They did. I put in my order on August 1st, and they increased prices by about $1000 per car on August 3rd. I just got in before the increase.

> Tesla is one earthquake away from no longer being a company.

So is most of Silicon Valley, which is actually in an earthquake zone that some believe is overdue an earthquake.

Are many/most companies with billion dollar valuations so exposed?

I would imagine most billion dollar companies have multiple sites and manufacturing and data centers spread across multiple sites.

Most of Silicon Valley is not as highly indebted as Tesla. Apple, for instance, could literally afford to send all of its employees on vacation for 10 years while their headquarters is being rebuilt, without going into debt (Not that they would, of course).

Your typical Internet startup wouldn't lose its means of production, which are people with computers, assuming they are deployed to the cloud. Even those that do any kind of hardware (say scooters) aren't the factories elsewhere and then shipped?

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