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Comment by ricw | Hacker News Reader

This is impressive, but the most impressive part is that Tesla will likely grow another 50% in the coming year given their guidance.

Tesla China can now produce 3k cars a week, let’s extrapolate that to the year at a really conservative 2k, which results in about 100k extra cars annually. The same can be expected from the model Y ramp which according to Tesla rumors is already well under way, given that it’s effectively the same process as the model 3.

All while not being legally allowed to sell in half of the USA due to outdated car dealership rules, I’d expect this trend to continue given their product roadmap. If they can keep this trend going for 10 years, they’ll be the largest car manufacture in the world. Hah kidding, that would just be impossible to keep up for so long.

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If self driving cabs happen within those 10 years, I don’t think anything can stop them.

If that doesn’t come to pass, Tesla has a tougher road. They will face competition. But from where? Companies still selling a large % of ICE vehicles can’t market their EVs effectively. So realistically Tesla won’t start getting competition until the petroleum tipping point in the auto industry. I don’t know when that will be. Not next year!

And that’s the starting gun for Tesla’s competitors. Tesla has already been building factories, flat out, for a decade.

So, I would say “impossible” is too strong a word.

>Companies still selling a large % of ICE vehicles can’t market their EVs effectively.

This is nonsense. Every major manufacturer is marketing an EV. The problem is that nobody, including Tesla, has figured out how to make these cars profitably.

My understanding was that they aren't profitable because they are sinking every penny into growth. Not because they're selling cars at a loss.

Yup, it's the Amazon model.

This comment demonstrates a lack of understanding of both company's business models.

Here's the two company's R&D spend:

https://ycharts.com/companies/AMZN/r_and_d_expense

https://ycharts.com/companies/TSLA/r_and_d_expense

Amazon: billions and billions. 9 Billion this quarter alone, which is more than Tesla has spent on R&D in their entire existence. Tesla? 300 million this quarter and trending down.

Amazon was generating REAMS of cash flow, for 10 years before they earned a profit. Billions and billions of dollars for investment. Tesla is regularly cash flow negative, almost half a billion per quarter on average:

https://ycharts.com/companies/AMZN/free_cash_flow

https://ycharts.com/companies/TSLA/free_cash_flow

So can you explain how these "models" are at all similar? Do you think all unprofitable companies are like Amazon?

Yes I can.

That's your understanding based on what, exactly?

Because I can see in their financial statements that their R&D spending is decreasing over time, and that their investment is actually below what is required to maintain plant and equipment depreciation.

What about the new factory in China and the myriad of products being brought into production right now like the model y, semi, roadster and solar roof? Do you have any credible source that Tesla is selling cars at a loss?

On a separate note, I've been wondering how Tesla's relationship with China will affect Starlink. When I first learned about Musk's satellite internet plans, I was optimistic that it could bring unfettered internet access to the billion+ people subject to aggressive internet censorship. Now I doubt Musk will go against a country that is providing over a 1/5th of his car sales.

Starlink is done by SpaceX, not Tesla.

Why do you think China will make that distinction?

I doubt they'll see any difference between them though.

Chinese government might not care too much about this kind of corporate details. Elon & Tesla will simply be kicked off China if he tries to mess with communists censorship rules.

Radio spectrum is regulated by virtually every country on their own land. As a result, companies wanting to beam data into / out of each country have to work with local regulators for legal access. This means working with the Chinese government which also likely means going in / out the great firewall of china. It has nothing to do with Musk going against China, but if you want to play in a country, you play by their rules and respect their laws. Personally, I just imagine how much Starlink is going to help much of rural Africa and some of the most (internet-wise) under-served parts of the world.

Starlink doesn't mean that magically Russia, Cuba, and North Korea are all going to have unfettered internet access.

Starlink requires bi-directional user terminals - they're not just a passive dish, but also a transmitter. That means whereever in the world you deploy them, unless you're in international waters, you're going to need a spectrum license. SpaceX won't be going against any countries - they'd just end up with their users going to jail.

If SpaceX wants to deploy in China, it will be on China's terms. I think that Tesla's chinese factory doesn't greatly change that. SpaceX will get permission to sell to users in China only if the Chinese leadership thinks it's in China's and their interests.

I'd also argue that there is basically 0 chance that China thinks putting telecommunications infrastructure under a US companies control is in their interest.

Well, it might happen as part of a quid pro quo deal. China also has plans in this space: http://www.ecns.cn/news/sci-tech/2018-09-19/detail-ifyyehna1...

If China wants access to the US market for Hongyan, SpaceX and the FCC might be able to negotiate some form of access for Starlink to the Chinese market. Likely this would involve access from China relayed through Chinese ground gateways.

Sure, but I think that China would rather keep the US out of their infrastructure than get into the US infrastructure, and the reverse. Neither side seems likely to make such a deal.

China especially heavily leverages their infrastructure for geopolitical purposes. Censoring and monitoring inside the country, launching attacks outside of the country, etc. I really doubt they want the US to get any leverage in the form of controlling some of the nodes, even if they are supposed to by agreement only route traffic from inside China to inside China.

China could always license the use of Starlink connections to certified Chinese ISPs which they trust to wire them up through the government provided censorship box.

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