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Comment by zed88 | Hacker News Reader

Crazy, they barely have a product. This is Nikola 2.0.

Going public early in a company’s life used to be pretty normal. Only in recent decades has it become the norm to wait to go public until late in a company’s growth.

I think going public early is better. VC’s and insiders have been capturing the lion’s share of early-stage growth returns. If companies go public earlier, more of that growth will be accessible to more investors.

A $24bn public valuation without a product for sale has to be off the charts as "going public early", though, right? Amazon raised, what, $50M or $100M in its IPO (and is what I'd consider an early one)?

Pets.com went public the year after incorporating. The year after that they liquidated. (Granted... those were crazy times we probably don’t need to replicate.)

At least I got this sock puppet dog out of it

(Yes, for real, I have one)

you mean versus having a product that loses money ?

Uber was losing between $1B and $5B a quarter when they IPO'd. In the last quarter of 2020, Uber lost close to $1B, and they're still valued at $108B, with no real long term plan for survivability. The way I see it, risks include legislative changes WRT driver status, bad press, self driving cars, a post pandemic world where more people own a car, and less people are in cities. And we're talking about a company that is primarily marketing and software, where the wind can change very quickly, and assets are mostly intangible and untransferable.

car manufacturing is much harder to get into, so having a factory and an almost-complete design is already a huge milestone. Obviously, they'll need to sell _some_ cars, but they could even make money if they were to sell cars at a loss, through carbon credits.

I have a paranoid fear that keeping companies private MUCH longer than previously normal will be the status quo going forward now that the general public has easy access to active stock trading.

A truly open market strips away a lot of the advantage insiders and old money have enjoyed for a long time, and keeping growth companies in the private market is a way to prolong that privilege.

I should add, keeping companies private could also be a scheme for throwing a wrench into the rising calls for a wealth tax. How you value property that has no liquid market (like private company shares) is one of the issues that makes a wealth tax extremely difficult to implement in practice.

This is already the status quo, and has been for many years now. There are only rare examples today where companies that have a plausible prospect of growing >100X, go public before this growth happens.

I'm inclined to agree with you that defending some sort of insider advantage is part of the reason, along with expensive regulations and avoiding manipulative, activist speculative behavior.

Lucid supplies the batteries for Formula E, and has for a few years, and I believe they recently resigned a contract to be the continued battery supplier for FE.

Nikola had contracts too, with the likes of GM.

Nikola’s contract with GM was to buy from GM.

It is still a contract of some repute with 11% stake. Do you think GM would sell to just any other startup with no history, if it wasn't for the hype??

The 11% was an additional sweetener given to GM to induce the partnership, not money GM was investing in Nikola.

Would I be willing to take some shine from an EV company willing to give me an approximately $2B (at the time) stake in their company, pay me around $700M of my own costs, and buy vehicles from me at a cost-plus arrangement? Shall I use my pen or yours?

https://www.marketwatch.com/story/nikola-stock-drops-as-gm-d...

Disclaimer: I’ve been quite short $NKLA for a while, quite profitably; I still am.

That doesn't sound like a $24B business.

Maybe not, but they are clearly doing much more than just that, as a cursory google search (and the article) tells us.

A company that is successfully making high-performance vehicle batteries only being valued at $24bn a decade before laws force the electrification of all the cars in the US and Europe seems really undervalued to me.

It's easier to create a luxury car, just how Tesla started, so at least they have a chance to come out with the $170k product that looks great.

I can imagine people buying it just so that they can be different from Tesla.

Nicola wanted to compete in high volume battery manufacturing, which can't be done without a long ramp-up time.

It's easy to create a prototype, the true test of any manufacturer is it's ability to roll these from the factories at scale. How many have they rolled yet?

I think this is a greatly underappreciated point. Tesla is the picture of success these days but people forget things were looking quite grim from a production perspective not too long ago, and even now, Tesla's rush to scale has earned their cars a reputation for factory defects. Success is not a given even with a compelling prototype.

Why would they need scale for a $170k car? I don’t think there are many buyers in that range.

I don’t agree with the $24B valuation, I just think that they have at least a chance to sell real cars, unlike Nikola that had a bad strategy from the start.

Many Tesla fans are willing to turn a blind eye to defects that you typically wouldn't find in other luxury cars. I don't think Lucid Motors' fan base is that dedicated and forgiving.

If they get a fan base, then by definition that base is going to be willing to turn a blind eye to some defects because they love some other aspect of the car. For Tesla, people loved the acceleration, handling, and interior styling, and so they were willing to forgive some of the build quality issues like gaps between the door and the body.

The question is whether Lucid can deliver some unique experience that customers value, and if so, then they too will be forgiven for their own gaps.

I’m trying to decide between buying a Tesla or a Porsche Taycan, and the main thing why Tesla is interesting to me is autopilot and the supercharger network: many people write that they can go 2x as far with autopilot without getting tired, which sounds great for getting lots of vacations or for traffic jams.

Purely anecdotal, but modern Porsches that is not a coupe (defined as having 2 doors) have shown horrible reliability of onboard electronics. Not that Tesla is a lot better either (MCU black-screen-of-death comes to mind), but yeah, YMMV.

I do agree that Supercharger matters a lot more than its "sticker price" and all the drama on various incentives. Turns out it did compensate (somewhat) early adopters for the, uh, rather brutal depreciation not completely anticipated by all, and is a huge enabler for even the not-so-long-ranged variants.

As a recent Tesla owner, the Taycan looks real nice. As far I have distilled it, the pros list comes down to roughly

Tesla:

* Price

* Supercharger network

* Minimalism

* Autopilot on highway

* Range

Taycan:

* Interior quality

* More familiar coming from ICE

* The Porsche dealership experience

You can see my lists are a bit lopsided, and I actually prefer the minimal Tesla interior to the luxury Taycan interior.. but I actually think the Taycan is a great car and can't fault someone for considering it.

I just did come back from a 1200 mile road trip that I could not have done very easily in a Taycan. The supercharger network was pretty flawless.

Having an electric car is still a luxury, and most people understand it. Economy of scale is not yet at the level of gas cars (the turning point will be when self driving starts working or at most 2030 when the batteries get cheap).

I know a few long time luxury car owners and enthusiasts. They also invest in TSLA. I’ve asked them: if you invest in TSLA and you spend millions on your car collection how come you don’t own any Tesla cars? The answer is they are not perceived as luxury. They don’t have the exclusivity of a real luxury car. So therefore I don’t think we can say that electric car is luxury. It is just electric. Will there be luxury electric cars? Someday but not now. And im not sure with Lucid either

Taycan is considered luxury by most owners. I consider it as a dumb luxury electric car, similar to a Rolex watch that I bought but never use (compared to an Apple Watch that people use even though it’s not a luxury).

It depends on your definition of “luxury”. I’d consider Tesla “luxury” like BMW is “luxury”, but a bit less refined and heavier on the technology.

If you’re spending millions on cars you’re probably into “exotics” / “supercars” like higher-end Porches, Ferraris, and up.

You’d be paying for earnings several years out, for sure. But I think it’s hardly fair to compare to Nikola.

Trevor Milton’s experience prior to starting Nikola was selling home security systems. Lucid’s leadership team features various Tesla, Audi, Ford, VW, etc. veterans. (See page 9: https://www.lucidmotors.com/files/lucid-investor-deck-februa...)

Lucid has finished building a factory that can produce roughly 30k cars per year, expandable to 400k.

They’ve given rides in their launch vehicle to various auto journalists (https://youtu.be/gqSN2QNgO5k).

Their battery pack technology is a component of the Formula E drivetrain system (https://lucidmotors.com/media-room/atieva-powers-season-6-fo...).

This isn’t a “Nikola rolling a non functional truck down a hill” situation. They have a working product.

The car could suck, the company could be overvalued. But I think hard to compare Nikola to Lucid.

EDIT:

I should also add for comparison, that at the time that Tesla IPOed in 2010, it was a 1.7B market cap company. Only ~2450 Roadsters (their only car at the time) would be sold in total. By November 29, 2010 Tesla had not yet sold 1400 cars (https://www.tesla.com/blog/race-champions-2010-motorsport-go...).

Tesla's Fremont factory was opened in October 2010. In other words, when the company went public on June 29th, 2010 you would have been buying into a car company without a factory.

The first Model S wasn't delivered until June 2012 (https://www.tesla.com/blog/tesla-motors-begin-customer-deliv...).

Not to say that Lucid will or won't ever reach Tesla's heights, but assigning a 12B valuation to the company isn't loony. The SPAC price though is a different story.

EDIT 2:

There are some fun short videos of Lucid CEO Peter Rawlinson in the workshop from his Tesla days (https://www.youtube.com/watch?v=TrbOLHW8Pec, https://www.youtube.com/watch?v=8YxHp2ot61Y, https://www.youtube.com/watch?v=NGKqPYvtqXE). It's pretty awe inspiring to see where Tesla and the global EV industry as a whole was in 2011 vs today.

I live close to their corporate office and can easly spot test mules running around in almost no camouflage.

Comparing Lucid to Nikola is stupid. Lucid is nothing like Nikola.

Yes, you could argue a 24b valuation is too expensive. But it basic supply and demand.

You have a limited amount of shares of a very hyped up company in a very hyped up industry.

Of course valuations are going to be expensive lol.

Valuations only matter if you are selling today or tomorrow, not 10-20 years down the line.

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