Tesla Posts Big Quarterly Loss as Its Electric-Car Sales Lag

They are basically the only OEM pushing self driving without lidar.

Their manufacturing facilities are childish compared to other large automakers.

Solar City, powerwall, and the solar roof are huge money losers and barely make a dent in the P&L statement.

Maybe just the brand name? But will the brand have the cache once it suffers bankruptcy? Maybe it will.

But after that, they turned a profit almost every quarters, generally very small compared to their revenue, but a profit, and when they lost money, it was also quite small compared to their revenue (apart from 2 isolated quarters in 2012 and 2014).

Basically, apart from it first 2 or 3 years, and some isolated losses, Amazon was, for most of its existence, targeting a slightly above 0% net margin, and succeeded at it, proving it was self-sustainable.

It's not the same as Tesla which is consistently losing around 10 to 20% of its revenue for nearly the past 10 years.

Amazon had losses for 5 years in the beginning of their existence, and then showed profit

https://www.macrumors.com/roundup/apple-car/

There are loads of companies that could be interested. If only for automated delivery like Walmart, Alibaba, Amazon etc.

But it is telling us something that the most integrated of Tesla's partners is putting on the brakes. And I remember some reports about less then optimal conditions in the giga factory. And these conditions, even if they are only half true, would the opposite of what Japanese companies would like to see

I didn’t even count the offerings from Japan which are even less.

Cars in the 35-45k range are routinely referred to colloquially as "luxury" cars. I agree you can quibble with this terminology, but it is absolutely common to refer to these cars as luxury, albeit the absolute low end of luxury.

My volt was super expensive in 2011, but 8 years on it still drives like the day it came from the factory. Unlike my Jeep (which i love) that is only a year old and already has aches and pains and squeeks and of course, drinks gas like its going of style.

BTW, when people shop for cars, the purchase price isn't the TCO. How much fuel will you be using and how much maintenance will you dump into it?

I tried Tesla test drive and one thing I don't like is how cheap it feels inside. Low quality materials. So you cannot compare just their prices without mentioning materials and build quality.

People did not expect $36k. $28k vs $36k is HUGE.

I presume "shit hits the fan" includes goodbye supercharger network.

Furthermore, unless I'm again mistaken, a bunch of people are under the impression that they'll have unlimited free supercharger access for the life of the car.

With Tesla, i would assume that in car features like autopilot would go poof, along with the proprietary chargers and spare part availability. Also, who knows what over the air maintenance is happening.

With a lease, your liability is capped to the lease payments. With ownership, you can ride it down to zero.

To Elon’s point the Model S has been out since 2013 and there’s still nothing as good on the market from any other manufacturer.

They have a huge head start to say nothing of their charging network and the issues legacy brands will have fighting with dealers.

I place the people predicting failure with those predicting a stock market crash - given a long enough time horizon you’ll eventually be right, but otherwise it seems to have mostly been nonsense so far. I suspect people outside Tesla are either just bad at predicting their ability to execute or have other reasons to want them to fail.

So yes the rapid progress means that the older cars depreciate quickly. This is only get worse with the next refresh rumored to be fairly soon.

The biggest hit to value came with the Tesla price lowering.

Id expect a 20% loss but not 50%. Porsche and Lexus don't lose 50% the first year.

https://www.tesla.com/modely/design

Or if you prefer you can order the $39.5k one and call up service and get them to change the settings, and then they'll send you a refund of $4,500.

Does this all sound strange? Sure, but I guess they have their reasons for doing it, which seem to be mainly to keep the menu simple and steer people toward the best value, because the $39.5k car is a better value than the $35k car.

How many people will be out $1000 or $2500 if Tesla goes under? I'm assuming deposits are about as low a priority as you can get for recovering money in a bankruptcy?

So let's see if I have this right: they reveal the Model Y 1.5 months ago, and say it's available in ~1 month of purchasing. From what everyone says, they hacked up a Model 3 and people drove in a prototype. Now we hear Tesla don't even know if they're going to build it in China or California. But don't worry, they've ordered all the tooling and machinery, even though they don't know which factory it'll be built in.

I'm am constantly astonished that people still believe what is happening over there. What will it take for people to realize this is a desperate company?

However, to achieve that they still need to reduce the cost of batteries by at least half. Reducing battery price has always been one of their goals though, hence the megafactory.

If Tesla intends to market the Model 3 at the "BMW audience" - whatever differentiates them from, say, the "Audi audience" - they are horribly miscalculating at what German people expect from a car. It is not limited to EV range.

Also, Volkswagen is ramping up production on their Modular Electric Drive Matrix (MEB) [1] and within 2-3 years cars with this technology will hit the market.

I wonder if Tesla can keep up when Volkswagen, Toyota or other car heavy weights begin serious EV production once they belief the market is ready. Diesel sales are better then ever in the last years, so they simply could afford to wait and continue to make money until infrastructure ramps up and technology improves. Tesla cannot do that.

[1] https://www.volkswagen-newsroom.com/en/modular-electric-driv...

Until you find out your range goes down significantly when you drive fast... I was seriously considering tesla model 3 as most of my trips are below 40 miles, but occasionally I do need to drive to another city 200 miles away, and when I do I want to be able to drive at the same speed I normally use at the motorway (around 90-95mph, or 150km/h). Tesla model 3 will give you less than 100 miles of range at that speed and that is what will kill Tesla for many people who currently drive VWs and BMWs.

Of course it is. Saving a lot of money on a car means you can spend a lot of money on other things you enjoy. So why would you pay a lot of money to drive a Tesla instead of a Hyundai? Because the Tesla looks better? Drives better? Has better safety features? Is more reliable? Has a higher status value?

I'm not saying that there aren't good reasons to buy a Tesla instead of Hyundai and had they cost the same then sure I'd buy a Tesla as well. But if I was in the market for a new electric car then "Why buy a Tesla when you can buy a Hyundai Kona for a lot less?" would definitely be a serious question I would be asking myself and I'm not sure I would come up with a good answer (or at least not a better answer than Tesla's are cool).

A lot of people can't afford expensive cars...

Tesla’s answer to the second is “no” for substantially all of the company history.

Tesla has many problems but making bad cars isn't one of them, these things are awesome.

Another example: bmw i3. 114 mile range on the 2017 model, really? And that's up from less than 100 miles before that. Painfully token.

Anyway, internal struggles holding back product lines is a very real thing.

With digital cameras they were losing film revenue which was larger than camera sales.

Car companies don't own gas stations so they will switch faster and easier than Kodak.

There will be some struggles internally but not as much I suspect.

Plus modern EVs have demonstrated more performance then ice so it's really just a matter of catering to demand as it changes.

The challenge here is more on Tesla to make a sustainable car company than it is on old companies to convert.

If a startup car company in Czech can make a hyper car EV that beasts a Veyron in acceleration then there is nothing proprietary about the tech and incumbents will have an easier time switching as demand evolves.

If they went all-in on digital, the company would have still 'collapsed'.

Do you think it's possible that all we need is ~$100/KWh, after which due to diminishing returns, find better ROI improving other areas like a dramatically cheaper wiring harness?

Manufacturing in China could bring the cost down significantly, with lower wages, taxes, material costs, etc.

The Chevy Bolt and to a lesser extent the Model 3 have already hit the "Corolla/Civic/Sonata/et al" sedan sweet spot for new sales. The mean in new car sales has always been around and just above $30k. Certainly the mean in total car sales is closer to $20k, but that hugely because of the secondary market and fast depreciation (used car sales). It's still too early to tell what sort of impact models like the Bolt and Model 3 may have on used sales (and obviously production numbers are still a factor, especially with Tesla's production and delivery woes).

Chinese manufacturers have been exploring the "bottom" of the EV market much more effectively than the US and EU markets simply because they don't need the carrot of luxury to attract early adopters in quite the same way. If Chinese EV companies are to be believed, hitting below that magic USD$20k mean is possible with new car sales alone due to EV supply chain efficiencies that ICE supply chains can't match.

> self driving makes this a nirvana

I feel self-driving is a red herring/impossible goal like the 60s AI boom all over again, and we're all going to look back on this in a decade or so and wonder what everyone was thinking.

Also, ride sharing isn't likely the answer in current America. It's enough of a culture shift to get gas-lovers/petrolheads to enjoy/love/trust EVs. It's even more of an ask to remove ownership from the question and to force them to only ever rent a car. We might not have time to take only one hurdle at a time, but we may have to.

I suspect the press vitriol is because Musk actually believes crap like this. Nobody likes someone who is high on their own kool-aid.

It seems as though any sacrifices related to "the mission" are expected to come from Tesla and SpaceX employees who have to suffer through periodic rounds of layoffs.

https://variety.com/gallery/elon-musk-buys-fifth-bel-air-hom...

https://www.latimes.com/business/la-fi-elon-musk-mortgages-m...

Edit: fwiw I've actually taken a look at a number of waymos internal systems, and sat down with people who worked on autopilot.

Phoenix, AZ, is in the real world, with real roads and real customers for a real, if limited, self-driving service. Waymo’s self-driving is far less vaporware than Tesla's.

https://ir.tesla.com/static-files/b2218d34-fbee-4f1f-ac95-05...

> Deliveries of Model S and Model X declined to 12,100 vehicles in Q1 compared to our two-year run rate of roughly 25,000 units per quarter. This decline was mainly caused by weaker Q1 demand due to seasonality, pull-forward of sales into Q4 2018 in the U.S. due to the first scheduled reduction of the federal EV tax credit in Q1 and discontinuation of our 75 kWh battery pack. We also had a mismatch between orders and deliverable cars. For example, due to adjustments in pricing mid-quarter, the take rate for the performance versions of Model S and Model X increased faster than we were able to supply

I like that Musk is narcissistic and arrogant in public. He doesn’t hide it like the execs at every automaker who was part of Dieselgate. Be an asshole, by all means, just deliver faster. (Credit to BYD and their electric bus fleet efforts, and China’s renewables push in general; I would be remiss if I made it sound like Musk alone was working towards these goals).

And yet we do not collect that tax, hence heavily subsidizing ICEs. This is credited by our children and grandchildren, who will end up with a massively changed (for the worse) planet.

There are strong arguments that Tesla is being ran very poorly by Musk (solar city acq, VW cash denied, SEC fines, etc.) despite the company being one of the champions for electric vehicles.

But I only care because I was an unashamed fanboy earlier in life. Musk kept flipping the coin to bet the company, and succeeded against all odds. It was riveting to watch.

But once Tesla got large... nothing changed. He's still flipping. Model 3? Flip. Automated factory? Flip. Autonomous driving? Flip. 420? Flip. Solar City? Flip. Tesla is a single misstep away from bankruptcy, and it need not be.

I no longer see him as someone undeterred by the odds to achieve something great, but more like a narcissistic gambler. He's not taking risks to achieve a goal, the risks are the goal. His Twitter antics don't help.

The only thing that makes it ok is that competition is legitimately catching up now. Maybe not in the smart car arena, but we are seeing real electrified competition.

I don't give a fuck if people buy cars with a cute UI or not. I do care that we move to electrification. If Tesla dies, the latter will happen at a largely uninterrupted schedule with the state of the industry in 2019. I love the idea of legislation that moves that along faster. I'd happily take a tax hike to make it happen.

Tesla fans love to hate on the "shorts" as if the only possible motivation to criticize Tesla is profit based. To that strawman I've blatantly constructed I hypocritically reply: stop arguing against strawmen.

No.

> Camera-based autonomy.

That's among the reasons the former isn't true.

> $35k price point

That PR point has largely been abandoned. I mean, nominally they’ll still sell it to you if you jump through hoops, but they’ve deliberately made it less accessible because, as much as it was an important PR point, it was never really viable.

That's arguably false. Nvidia has a more powerful FSD chip. But performance/watt might be better for Teslas chip.

here we go: > Best crash test ratings.

partly false. there are 30 cars in the same category. kias, hyundays you name it.

> Highest owner satisfaction.

partly false. only the model 3 got it. model s was dropped due to how crappy it is.

> First US-owned factory in China. Built in about 6 months.

false. it’s not built. and there are so many other corps out there that own china factories it’s not even funny.

> Willingness and ability to put auto-pilot on the road for consumers.

how many people died because of this?

> Better chip than Nvidia.

proven to be false.

> Top 2 auto battery supplier.

false. that would be Panasonic.

> Dramatically better battery efficiency.

false. same efficiency as a kia.

> No dealerships.

this is very bad.

> Plausible FSD story.

false. debunked.

> $35k price point.

false. they don’t sell $35k cars.

To me, self driving means that I can not care. If I must pay attention to avoid being killed, it is at most some glorified adaptive lane keeping and/or emergency braking. That's nice to have, but it's not self driving.

The computer was the central point though, I thought. All of that seemed very believable.

>Where will Tesla be in a few years if/when other manufacturers catch up with that?

wouldnt that be highly dependent on teslas cash burn and desperate cash grabs to survive the next quarter?

in a few years you should hope to still retain some form of autopilot, maybe the supercharger network is shared/sold off,

370 miles of range? battery tech isnt improving so much but usually battery life drops

Everyone who drives a tesla knows how their car behaves. I don't expect it to see that barrier when I'm driving my model 3.

Listen - it's hard to imagine what it's actually like to drive a Tesla and learning what it can or can't do. Everyone driving a tesla right now knows that the autopilot is more like a rookie co-pilot that needs monitoring and checking all along the way. Despite its limitations its still the best car out there from what I've personally experienced.

First is that Tesla just straight up doesn't play the traditional head unit provider game. Most OEMs go with one or two hardware suppliers (Denso, Pioneer, Kenwood, etc.) for their head units, pretty much all of which are completely and utterly behind on technology and also ridiculously overpriced for a variety of reasons. They also add expensive OS/software licenses or in-house development for, again, behind the times products to run on the head units and pair with your phone. Tesla, on the other hand, just grabs a good-enough touch screen, powers it with Nvidia hardware, and cranks out some pretty software built on top of Linux that mostly works.

Second is labor cost. Instrument cluster hardware isn't free, but it also isn't terribly expensive for your standard gauges in mass-manufacturing bulk. However, labor is not cheap to actually wire up, place, and test all those gauges. Wiring is one of those things that's hard to automate, so your costs between the hardware and labor boost the BOM cost up quite a bit. Tesla, on the other hand, just runs a single CAN bus connector to their center console display hardware, pulls the info they need to update it, and calls it a day.

The net result is that the total production cost of a single center screen ends up being quite a bit lower than the equivalent head unit + instrument cluster in a traditional car.

Bosch have their own autonomous driving development. I don't know how far along they are compared to Tesla, partly because Elon likes to boast where others prefer to hold back, but so what if Tesla would've been a few years later with self driving than others?

https://www.bosch-mobility-solutions.com/en/highlights/autom...

* No oil changes

* Charge at home, wake up every morning to a "full tank" for a lot less than it'd cost to fill up with gas

* No gas station fill-ups

* Autopilot is huge for quality of life on highways and in bumper-to-bumper traffic

* I keep the valet key card in my wallet, but there's no physical key that you need to keep with you. My car key was the last one I really needed, so I no longer carry physical keys

* The car has an API, so you can use it to automate various actions (like to start the HVAC system if the car is at work and it's 4:30pm on a weekday). With my normal schedule, the car is already pre-warmed/cooled any time I get in it

* Built-in dashcam includes side cameras, and sentry mode

* Summon, and (soon) enhanced summon

None of that helps if you're driving a loaner while you're waiting for parts, but it's tough to quantitatively measure the impact of just having things like this. And I've got more faith in Tesla to improve logistics in parts sourcing than traditional automakers becoming more like Tesla.

I still never want to see service people, or deal with service, and definitely never want to interact with a sales person ever again. Tesla is the best at making that happen. And that A to B is more enjoyable too. It really sounds like you'd be very happy if you bought a Tesla, assuming it's in the budget.

This is the way Tesla wants it.

In a car dealership world, you're sold a future revenue generator for the dealer, as you're expected to come for routine maintenance.

With Tesla's corporate ownership and generous warranty, the less they see of you (post-purchase), the better it will be for the bottom line.

I suppose any auto manufacturer selling their vehicles direct and owning their service centers outright would have a strong incentive to maintain high reliability, and yet for some reason Tesla remains the only one pursuing that model.

In 2013 Tesla won (by a wide margin) the Consumer Reports rating for the best infotainment system. It turned out that a lot of owners loved large, fast, responsive touch screens for viewing maps, navigation, controlling multimedia and vehicle settings.

You'd think that everybody in the car business would be elbowing one another to introduce a better, brighter, faster, more colorful and capable infotainment system, given a clear product market fit.

Yet the winner for that Consumer Reports award did not change in 2014, 2015, 2016, 2017 or 2018.

The main problem is unlike ICE cars that generally have so much wasted energy that temperature, speed, terrain, and driving style do not have a particularly large impact on range. In comparison electric cars are so efficient that elevation changes, cold temperatures, and running the AC or heater can make big differences. In particular speed can make a huge difference. A model 3 with a 300 or so mile range can go over 600 miles when hyper miling. To help with that the community consensus is to take all range estimates with a grain of salt until you see the EPA range.

Said claimed 435 mile range was not tested by the EPA.

Keep in mind that the battery packs Audi e-tron is using is as almost the same size (95 kw vs 100 kw), but is providing radically less range (208 miles vs 370). So clearly the Tesla is crazy more efficient. Given the expense and weight of the batteries, clearly Audi would have made a more efficient car... if they could.

It's like the only car that actually gives you new features after buying it. Listens to their consumers, and provides them with what they want (most of the time)

In this case, yes, because current battery tech charges much faster from 0-80% of the battery, so a battery with more range than you'll use is still beneficial because it'll charge faster for the portion you do use. But I'm being snarky--that's not your point.

Tesla's advantage is far more than just range.

* The battery management system, which minimizes battery degradation (google "nissan leaf degradation")

* The manufacturing process adopted to actual EVs (and not shoehorning an EV into an ICE car design)

* The lack of dealerships and resulting ability to push software updates to cars containing new features

* The standardization of self-driving hardware -- all Teslas made since ~2016 have the camera hardware set up in the same positions

* The actual ownership of the software / UI and it actually being done well, when most other manufacturers seem to be shooting for "passable, I guess"

* The big touchscreen UI, which is (effectively) the same across all models, which makes keeping software up-to-date much easier

It's just not even close. Other manufacturers can improve battery tech, too, but these other things require bold action that traditional manufacturers are too slow / cautious / encumbered to take.

Sure, given time and money any automotive manufacturer can build out their own high-speed charging network. So why haven't they?

It would be just as correct to say that Elon Musk's vision wouldn't go anywhere without his employees' vision and talents, many of which likely exceed his own in terms of technical or intellectual skill.

Obviously, he has his place, and credit where credit is due, but I think we've gotten a bit too obsessed with the cult of personality and "great man" model of thinking that creeps into history, business and science.

As others have said, his accusing of someone to be pedophile is very low. I strongly disagree with the marketing and, in my humble opinion, reckless release of Autopilot.

I also really don't like how he handled the issue with the SEC. Whether he intended to or not, he did misled investors with his tweets about having funding secured and instead of just admitting he made a mistake acted like he could do no wrong. He's actually surprisingly similar to Trump in his inability to take criticism with grace.

Again, I don't think he's an evil person but my impression is that he's let his wealth and fame get to his head. I can't say I blame him, people idolize him like he's the second coming of Jesus. I'm sure that kind of admiration isn't healthy for anyone and I am sure it'd mess me up too.

He's very much like a real life Tony Stark, and I suppose a part of me resents that he has so much admiration. It has nothing to do with him but I hate the idea that people seem to place success above everything else, when that's really not what should be important and I'd argue that emphasis on success probably leads to a lot of unhappiness in modern society. But I digress.