“China's Tesla” NIO slashes thousands of jobs as losses mount
asia.nikkei.com
asia.nikkei.com
BYD buses and ABQ rapid transit saga is an interesting one. Most of the Chinese electrics are not up to the snuff and so Albuquerque decided not to order any new buses and send back the ones delivered.
Be interesting how it'll function during the cold weather - there were problems with these buses that BYD is scrambling to fix.
https://www.indystar.com/story/news/local/transportation/201...
The tech will likely percolate downwards to Geely's non-flagship cars over the next few years.
1. https://arstechnica.com/cars/2019/02/volvo-spinoff-polestar-...
Maybe the busses sucked, but this doesn’t make sense as a general point against electric: hills are where EVs shine most. Through regen you can get back most of the energy you spent getting up the hill.
You probably need a big capacitor though, or a very big battery with good cooling. So I can imagine cheap-o electric buses would have issues.
I would love to see the math on what kind of capacitor/battery you would need to capture 1000 ft of elevation loss by a city bus.
If you can't run the bus back and forth a full day without charging, this requires more buses to run the same service as a diesel fleet, which makes it a very expensive CapEx item because sourcing decently located space to store and maintain buses is not cheap, nor is maintaining all those extra buses.
Post-Xi China isn't really about internal competition. More likely they're hoping to replicate Tesla's IP. (Tesla, in turn, bets it can gain more from selling in China than the IP it will lose in domestically-fabricated components.)
https://cleantechnica.com/2018/06/30/automating-intelligentl...
[0] https://old.reddit.com/r/teslamotors/comments/d8un7f/tesla_i... [1] https://old.reddit.com/r/teslamotors/comments/d7i0vk/lg_chem...
I don’t see why Tesla can’t do the same as the more upmarket brand.
Have any of the Chinese companies come close to designing something as nice as any of the Tesla cars?
Ehn, everyone seems prone to short term thinking.
1) Is demand outpacing supply? Yes? Great, therefore...
2) The more cars we can build, the more money we make
3) The more EVs on the road, the more demand there is for Teslas.
That’s about it. That leaves them with two opportunities: A) scaling manufacturing, and B) encouraging EV adoption. That’s part of why they spend so much effort making the cars appealing, super fast, etc.
They can self sustain a virtuous cycle with just A) but if they scale manufacturing enough B) will eventually matter.
They want China to steal their IP. They also want China to help them build factories. It’s really a win-win for them.
Some of them are state-owned, but the two largest electric vehicle manufacturers in China are not. In descending order of revenue from electric vehicles (source: [1]):
* BYD (a publicly traded company, listed on the Hong Kong Stock Exchange)
* Geely (also traded on the HK Stock Exchange)
* BAIC (state-owned, sells a lot of plug-in hybrids)
* SAIC (state-owned)
* JAC motors (state-owned)
BYD and Geely's combined electric-vehicle revenue is significantly larger than that of BAIC, SAIC and JAC (combined). The electric vehicle market in China does not appear to be dominated by state-owned companies.
1. https://www.bloomberg.com/opinion/articles/2019-09-20/electr...
Instead of vague statements about everything in China being state controlled, how about some actual facts? What, concretely, does this control entail? How does it function?
Sept 23: "China Boosts Government Presence at Alibaba, Private Giants"
"The government of one of China’s top technology hubs is dispatching officials to 100 local corporations including e-commerce giant Alibaba Group Holding Ltd., the latest effort to exert greater influence over the country’s massive private sector."
“They might be checking whether the Communist party units are working effectively within the companies,” said Paul Gillis, a professor at Peking University’s Guanghua School of Management. “While China legitimized capitalism, the level of government influence was never intended to disappear. Occasionally private entrepreneurs forget about this and are reminded of it.”
https://www.bloomberg.com/news/articles/2019-09-23/china-ste...
Party members "inspecting" facilities, demanding access to records, issuing whimsical and unappealable orders, et cetera.
I'm trying to understand just how you imagine things work in China.
- the forced induction of heads of companies into the CCP under threat of corruption charges
- the historic use of the Army as a flexible labor force
- the CCP picking winners and losers in industries
All back in 2012, before Xi became premier.
Anyone can make an electric go-kart. Making a performance electric car that will be on the road for 150,000 miles is hard.
And they've been correct for the past ~six of those years? The only reason people buy iPhones today is walled garden capture and brand identity. None of the technology is superior to what Huawei or Samsung or even Motorola is selling.
Their CPUs are 3 years ahead at least.
They have proprietary low power, high reliability Flash memory tech.
They have unique 3D scanning face identification tech and secure ID data storage.
They have far superior battery life for the battery weight.
The camera systems are best in class, I would agree several other phones have camera tech and software that is close enough for most people, but not for everyone.
They have Samsung made screens that even Samsung can't use, some of the tech and QA process is proprietary to Apple.
Also the sensor precision and calibration is considerably better on iPhones than Android phones and highly consistent across models. There's a photo of a bunch of phones showing their magnetometers, with all the iPhones pointing in the same direction, and the Android phones pointing all over the place.
The brand new Apple A13 CPU beats e.g. the 2018 Snapdragon 855, fair enough. But benchmarks have already leaked for next years Snapdragon 865 (e.g. for the Samsung S11) that beat the A13 again. So far from "3 years ahead", they appear to be very much equal, just being launched in alternating years.
And why should they not be equal, when they are produced by the exact same manufacturer (TSMC) using the exact same 7nm process and have basically identical physical constraints on cooling, footprint and power budgets? Ain't no arguing with physics.
Their camera systems have lagged behind other maker's flagships for several years. You don't have to take my word for it; here is a quote from Austin Mann's recent review of the iPhone 11 Pro:
> Many of us iPhone photographers have watched as other phones like the Pixel and the Huawei P30 have passed us in low light performance.
I gather from his review that the iPhone 11 Pro is now on-par with the Huawei camera flagship.
When was the last time you heard of the flash memory on anyone's phone failing? I have a LG P500 from 2011 that the kids literally throw around in their toy box, that still boots and works just fine.
Modern day screens are far beyond what the human eye is capable of resolving. Pick up a $200 Motorola, and you need a strong magnifying glass to even make out the pixels.
Can you expand on what you mean by "the technology"?
I'm not saying there aren't small differences. The secure enclave is very nice, and I understand that for audio creation it's significantly better than Android phones.
But these advantages in some niches (and disadvantages in others, like cost, storage, display size etc) are not sufficient to say that "the technology is clearly superior". It's not, it's just different.
The iphone has the best mobile processing chips and it's not even close. The intel modems they use are inferior to qualcomm's modems, but "commodity or worse" is a bizarre take.
Software, brand, and culture play much larger roles than a milquetoast smartphone offering. What’s this chip that customers are raving about? The only points of continually tweaking the hardware are to shorten the lifespan and remove the ability to customize and repair it with any real scale.
BYD with their tiny battery packs
It's freaking heavy at 2t. It's not that small or aerodynamic. It's battery pack is definitely behind leaders in net capacity.
What makes it run that long is that they don't overprovision the battery that much, so much more of those 60kwh is available for driving.
In addition to that, BYD uses PM BLDC motors that are better than induction motors at doing regen at low and very low speeds, which is much more important for city driving.
Add to this that their battery and electronics can take more regen current, and do it more efficiently.
there's a reason they overprovision. the battery is going to wear out way sooner than their competitors.
The biggest downside is its lower specific energy, but it is compensated by all of things above, so the net capacity and energy density comes close to other chemistries. However, working around all of those "sharp corners" requires a very different engineering approach from mainstream EVs. So that's a second point. Competitors largely don't bother going deep with engineering.
The engineering philosophy there is much closer to their electric busses. Much more manufacturing conscious, with a lot considerations for commercial use.
They think of heavy users who will use the battery for 2k+ cycles with minimal service, and go through multiple battery packs through the life of a vehicle.
So with all that said, I wonder if they are on to a good idea. There is so little maintenance on these EVs that the occasional battery swap might be fine, cost-wise. You could even sell it upfront in installments -- new battery after x years.
I agree Tesla was allowed as part of their benefit. I don't think Tesla benefits any of those Chinese automakers. No one wants a competitor. Sure, Tesla would help the crap companies die faster and force the rest to adapt to higher standards. But I think the real intention is for Chinese consumers to benefit from a superior and less polluting product. They are aggressively environmental nowadays afterall.
It's all made up. A giant conspiracy of short sellers.
Tesla stock is down almost 8% today. Wonder why?
Edit: Why is this an unpopular opinion? If I offended the fanboys by implying Tesla or Toyota or Apple made overpriced products I would understand but I'm struggling to understand what thought process leads to disagreeing with my statement in the general case.
You can read the comment you replied to as “but it costs more, and more expensive things tend to be better”.
in this case i would tend to think it's appropriate, whether or not they were given for the right reasons. your nitpick only serves to detract from substantive conversation.
nitpicks (other than security nits, which tend to be substantive) and typo corrections are highly discouraged here.
https://www.theguardian.com/lifeandstyle/2019/sep/19/america...
First, if you have a lot of money, the relative or marginal value of money for you is probably pretty low. You could spend a lot on something, and actually get lots of utility and value from it, exceeding the value of the money.
Second, you could just have useful information about the thing that you're purchasing that the seller lacks, or you could have skills or some other ability to extract greater value out of the item you purchase. For example - a property or building that you happen to be able to rent, sell or otherwise turn into a profitable business.
If a widget is generally sold for $5 and you can make some amount of that back using the widget doesn't mean you're getting more than you pay for if you pay $5 for it.
My coworker is buying a lightly used $7500 Chevy spark. It's a $7500 car for a reason. Most people don't want it because its small, pretty slow and the specs aren't that great. It is a great car for his use case, equal or better than lots of $10k cars. That doesn't mean he's getting more than he's paying for.
I'm saying that in any transaction, the value transferred could be more or less for either party. If I go to auction, I can buy something for $1 and sell it later for $100. Did I get more than I paid for? I think so. Because the auction house doesn't want to do the leg work of finding a qualified buyer, they are happy to get $1 instead of dumping the item in the trash, but it's still more valuable than the purchase price.
Purchase price does not dictate ultimate value. There are many ways to evaluate the value of something.
Look, they're nice driving cars with really nice design and safety features. But:
- https://www.businessinsider.com/car-brands-least-reliable-20...
> Volvo ranked last with an average reliability score of 22 out of 100, and Cadillac ranked second-to-last with a reliability score of 32.
- https://www.forbes.com/sites/jimgorzelany/2018/10/25/the-mos...
> Volvo is the lowest-ranked brand for reliability, due largely to problems with its electronics.
- https://cars.usnews.com/cars-trucks/most-reliable-car-brands
> Bear in mind that luxury doesn’t necessarily equate to reliability, with Volvo and Land Rover falling near the bottom.
The only thing I think of when I hear "Volvo" is safety. Not luxury, not performance, not quality, not reliability, not anything but safety.
I would be very surprised if they were less reliable than most sports cars.
A fairly detailed statistics is from TÜV annual inspection reports, found here: http://www.anusedcar.com/
There, Volvo is rather average. Where I live (Finland), Volvos tend to get a bit more kilometers than most other brands, so being not at the bottom of listing means they're doing reasonable quality.
This is just one data point, sourced from Consumer Reports. They put Volvo last behind Cadillac and Tesla.
Then I look here... https://www.jdpower.com/Cars/Ratings
And Cadillac is on top. But I'd personally trust Consumer Reports over JD Power.
Really? The infotainment system makes it rank low?
edit: and looking at the _actual_ report https://www.consumerreports.org/car-reliability-owner-satisf... - no volvo's on the list?
Yes, because modern cars are so good nowadays that people expect perfection.
We are a two car family. In the past decade I've owned Volkswagen, Honda, Toyota, Ford, Mazda, Subaru and Nissan. All have been perfectly good cars, reliability wise. My last two leases I didn't do a thing beyond oil changes for four years, not even tires or brakes. Besides the odd car having some random thing replaced at the dealership under warranty, nothing ever went wrong with any of them.
I realize that's not everyone's experience, but I'm not a lottery winner either. Modern cars are a feat of engineering.
It makes sense to me. A new car shouldn't have problems, full stop. My 25 yo car got its first maintenance in 5 years apart from oil, the only problem it has is the air switcher is cranky, and that took over 20 years to crop up. If i bought a Volvo (which I’ve been considering because all I want to upgrade on is safety) and it has a problem in the first few years of ownership, even if it was under warranty, I’d be LIVID! And while we are on the topic of reliability, with the warranties that come with most unreliable cars, why _wouldnt_ a bugged infotainment system rank the car lower just as much as mechanical issues—either way it’s just a trip to the dealer.
I see cars as an appliance, I don’t want to think about it, I just want to use it. So none of this really makes sense to me, if all consumers shared the same sentiment, I feel certain that the market would look considerably different.
Were they took the enormous amount amount of money they got from investors, and put it into making electric Suzuki Alto lookalikes, they would've been bathing in cash now.
But no, those guys not only did not recognise Tesla's failure, but they doubled down on it, and ran a car company as if it was some Internet dotcom.
But as a company, they still have to find a way to make money, and that is not a given at this point.
https://qz.com/1674199/teslas-losses-are-piling-up-despite-r...
You cannot say they have failed, because they haven't yet closed the doors. But I don't see how they are "clearly not a failure" if you include "profitable business" in their list of goals.
Tesla has losses _because of_ record unit sales.
Increasing manufacturing capacity is capital intensive. It would be much easier for Tesla to stop expanding and just sell luxury vehicles, but that's not the goal of Tesla (and it would be a bad long term financial decision).
And many people who walk onto a car sales lot with $25k in mind end up getting talked into a $35k car, so with all the savings Tesla really can be the cheaper option.
With Tesla if you get talked into the $50k+ stealth performance you’re still on equal footing with the $35k car until you add future self driving.
They advertise the cheapest Model 3 at being on equal footing with a $30,315 ICE car. In a quite misleading way I must say.
In the American market. In Canada, a Model 3 now costs the same as a Model S did at launch. Other manufacturers have worked out ways to soften the price increase due to currency fluctuations.
Every so often I run numbers on electric cars for my use, but I'm never able to get a break-even point that isn't measured in decades.
If you have purchased a Tesla before that point, others will be paying you for rides in your self-driving car as part of a ride-hailing fleet. Just a thought, might not pan out, as with any investment.
It's not so much about what you support... the tax will come down from above with or without your support. It's more about what investments are you willing to make personally, because that part is really up to you. There are risks, to be sure, but in the meantime it's a fun, safe car that doesn't cost as much as people think.
https://www.edmunds.com/mazda/3/2015/cost-to-own/#style=2007...
So I'm allowed to think the Model 3 is expensive. Of course, I'm just me, I'm not "mainstream." I think it's too expensive for mainstream because the only person I know that bought one is accustomed to driving high-end German cars, and she paid $60k for her Model 3. I get the feeling the mainstream doesn't believe a Tesla is affordable. Maybe they are wrong, in that if they have a garage for charging, they'd save enough in gas and maintenance to make up the difference, but most people don't buy cars based on TCO (well, I don't know that for sure, but I have a feeling that's true.)
I would think that Tesla TCO would be through the roof once the cars start aging.
It's one thing to have the dealership fix every little thing under warranty - quite another to pay $5,000 to have your sunroof fixed because it requires a special encryption chip.
1) If you are in a crash, spare parts/body work takes months to complete, I can't afford to be without a car for 3-6 months.
2) Requires charging. I live in an apartment, it is unclear where I can charge.
I don't doubt that Tesla has more issues with parts availability than other manufacturers, but if you need a car every day, you should have a backup plan -- eg, rental car add-on to your insurance policy so you have something to drive while your primary vehicle is being repaired. I've had gas-powered cars that were in the body shop for a month or more.
[0] - https://www.sfgate.com/cars/article/tesla-repair-wait-time-c...
The body work issues you mention are mostly in the past. And you wouldn’t be without a car.
So, red herrings.
Please clarify this. I don't know of any tax regime where it pays to deliberately lose money (eg. setting money on fire).
I-R<T
and a lot of tech companies go nuts as a result with ridiculous acquisitions. In that sense, Tesla has a relative advantage because a factory's value is unlikely to go to zero.
I’ve been hearing about the death of Tesla for almost 10 years. It’s getting old.
More about profit margins in second quarter report. It seems it is currently 19% per car. https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-69...
Only under magical unicorn fantasy accounting. Under the same accounting standards every other car maker uses (GAAP), Tesla still loses money on each car.
From Tesla's own financial report:
"excluding regulatory credit revenue, automotive gross margin improved by ~200bp (compared to a decrease of 125bp on a GAAP basis). [emphasis added]
1) Tesla's GAAP gross margin was (positive) 14.5% for the most recent quarter [https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-69...]
2) Breaking out GAAP and non-GAAP figures is totally standard and commonplace among publicly traded companies. Take a look at Ford's Q2 letter, for example, which has a whole page describing why they use Non-GAAP financial measures to supplement GAAP figures [https://s22.q4cdn.com/857684434/files/doc_financials/2019/q2...]
Tesla says that the Model 3’s gross margin “should grow significantly” to approximately 15 percent in the third quarter and 20 percent in fourth quarter, thanks to “continued reduction in manufacturing costs and to some extent an improving mix.” From here on out, CEO Elon said during a call with analysts Wednesday evening, “the goal is to be profitable and cash flow positive every quarter going forward.”
Please do not quote by using a code box. Use italics (put an asterisk on either end) or a carrot > to indicate a quote, rather than creating a endlessly long sideways scroller.
1) Tesla's GAAP gross margin was 14.5% for the most recent quarter [https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-69...]
2) Breaking out GAAP and non-GAAP figures is totally standard and commonplace among publicly traded companies. Take a look at Ford's Q2 letter, for example, which includes a whole page describing how and why they use Non-GAAP financial measures to supplement GAAP figures [https://s22.q4cdn.com/857684434/files/doc_financials/2019/q2...]
I'm not rooting against or for Tesla, but they are extra shady regarding accounting. They are losing money on each car. There is so much misinformation around this pushed by Tesla fans and the company itself though that you might easily believe they are profitable, but they are not!
Right now they just can't manufacture the cars fast enough for the demand. They'll have to keep building factories which takes a big chunk from their cash.
What your opinion about the future of the company is doesn't matter about what current situation is.
People have been saying Tesla will fail 'soon' for a long time. Once they actually do fail, then we can say they have failed. Before then its just personal opinions.
Electric cars (heck, automotive manufacturing in general) are a tough business. Tesla is now competing at a (soon) $7500 disadvantage in the US compared to most of their competitors due to the phase out of the EV credit. Gas prices are incredibly, ridiculously low. And yet they're still in very high demand, outselling everyone else in the US in raw unit sales and globally in revenue.
That's no guarantee that things couldn't get worse, but Tesla has outlived many of its detractors before, and it's not just because of Elon Musk.
The 7500$ is a huge advantage for Tesla today that was pushed through a lot of lobbying. It literally means that everyone's tax money is subsidizing luxury cars for the rich.
Once this gets phased out, they will have to compete with regular prices against normal car and their high price point will make it way less attractive.
It is true that soon competitors will still get the 7500$ tax cut while Tesla exhausted theirs. That's simply because they use all their credits and now need to come to a price point that makes sense without subsidies.
The $7500 credit is all but completely phased out already for Tesla (it's only $1,875 right now). And yet they're STILL outcompeting the other Plug-in electric cars in the US by a large margin (13,150 Model 3s in August versus 2500 Prius Prime, the next most-sold plug-in vehicle). That is my point.
It's an advantage to conventional carmakers who wait to the last minute to invest in electrification, after someone else has done all the hard work, and just integrate some off the shelf electric drivetrain. It puts those who actually invest in a full, cleansheet efficient electric drivetrain domestically in the US (like Tesla and GM) at a big disadvantage versus foreign firms or for multinational corporations like the Volkswagen group who have multiple subsidiaries like Audi, VW, Porsche who each get their own group of credits (even though the Volkswagen Group's MEB platform will be available to all their subsidiaries).
It makes no sense and incentivizes the wrong behavior: advantages foreign firms above domestic. Advantages latecomers over those with the foresight to invest early (Tesla and GM, for example). There either should be one big pot of credits, or the credits should be sunsetted on a global timeline (instead of by number).
And until conventional cars are paying for their full externalities from carbon emissions (and others), they are being implicitly subsidized and an EV credit of some sort (although imperfect) will be needed to level the playing field.
At the end of the day, if we get serious about climate, Tesla is the #1 BEV company that's well positioned to actually reap the rewards of green consumers and green regulations.
from your link
> GAAP operating loss of $167M, GAAP net loss of $408M, including $117M of restructuring and other charges
So, no they aren't profitable
The graph on the first page is free cash flow and deliveries not profits.
For fun, I looked at the quarterly net incomes[1] and the profits from the profitable quarters were wiped out in the very next quarter. Heck, 2019Q1 wiped out all profits on its own.
[1] https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-inc...
Cash flow is not profit.