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Comment by mulmen | Hacker News Reader

Well Tesla isn't a tech company. They should really only be compared to other auto manufacturers and maybe some dealers.

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Tesla is really strange company. They don’t pay like tech and don’t have same business flexibility. But at the same time they’re valued like tech and take same shortcuts (or “optimizations”) in the processes like tech.

Shortcut? It seemed that Tesla is doing incredible engineering and that they learned their lessons.

What lessons have they learned?

Some lessons learned here from an unverified source

For example, make sure you have enough error handling so that a malformed JSON file doesn't bootloop all of your cars

https://mobile.twitter.com/atomicthumbs/status/1032939617404...

I think you've got it completely backwards. There are quite a few broken Tesla short sellers who lost billions trying to assign an automotive valuation to Tesla.

Just curious, how do you define what a tech company is?

It's a really strange label. I think most people define it as "Whatever those crazy guys in Silicon Valley are doing/funding," because I can't imagine a world where there exists automotive manufacturing that isn't considered technology.

In addition, I think the definition of the term "Technology" is quite broad.

According to the Oxford dictionary,

Technology:

  The application of scientific knowledge for practical   purposes, especially in industry.

In the formal terms, tech industry is all industry that relies on scientific knowledge to gain leverage. What large industry today doesn't involve using science in some form or the other? Perhaps the industry of religion. It is hard to find one and there is a gradual curve between least scientifically based industry to the most.

Exactly. It feels like the term was invented by people who think that Information Technology is the only technology worth mentioning, and that's a bit perverse.

Tech companies often spend most of their money on R&D. Manufacturing typically instead has high capital expenditure.

While I agree that one would expect a tech company to spend a lot on R&D, I'm not sure how accurately this definition corresponds with what people mean when they say those words.

Alphabet only had about 20% of its expenditures going to R&D in 2019, so does that mean it's not a tech company?

Meanwhile, Tesla have had close to 50% of their expenditures going towards R&D year after year. Ford had less than 5% of expenditures go to R&D in 2019.

By this measure, Tesla is definitely a tech company, but Alphabet might not be. I might... actually want to agree with that, but again, I don't think people who use the phrase would.

Actually Google was earlier a tech company, but it was reclassified into communications sector in 2018.

https://www.google.com/amp/s/mobile.reuters.com/article/amp/...

Facebook is also classified as Communications, and Amazon is Consumer. In fact, of all the FAANG companies, the only tech company is Apple. Microsoft and IBM, too, if you include them.

Why would IBM and Microsoft be in FAANG?

When people say tech company they mean tech margins. There is no indication that Tesla will ever be able to achieve that.

To be fair R&D at 50% of revenue is massive. They are basically a university.

Actually, I looked at the wrong numbers. Their R&D is a lot more in line with other automotive manufacturers at 6.6% of total expenditures (for 2018). The majority of their expenditures go into Cost of Revenues (building and delivering the cars), with Operating Expenses being a distant second.

A company whose product is technology rather than something like advertising, media or hotel booking.

I feel the distinction these days is pretty blurry. Tesla writes a lot of software and hires a lot of engineers. I personally know of several people who left FAANG jobs to join Tesla.

Facebook, Alphabet, Netflix, and Amazon are not tech companies. Communications, Communications, Communications, and Consumer, respectively. Apple is a tech company.

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