Tesla stock drops 29% in first quarter as global dominance wanes | Hacker News Reader

Tesla stock drops 29% in first quarter as global dominance wanes

cnbc.com

61 pointsMilnerRoute111 comments

I still have never understood the valuations. Sure, they'd make sense if Tesla ended up being the only game in town, forever. But even though they undoubtedly have been streets ahead in many places for a long time and Western manufacturers have been caught on the back foot, the Asian players are snapping at their heels, and (some of) the Western brands are slowly waking up. And even if they weren't, I don't see how Tesla would have been able to dig a moat wide enough to last so long that a trillion dollar valuation could be realised before they become just another EV brand in the pack.

Tesla is a Schrodinger, depending on the narrative needed:

They're David going against the Goliath of "the dinosaurs", "legacy auto".

And then their fans like to remind people of their (IMHO laughable) Goliath market cap. You know, the market cap that says Tesla is worth more than: Toyota, Volkwagen Group, Hyundai/Kia, General Motors, Ford, Nissan, Honda, Fiat Chrysler, Renault, Suzuki, Daimler, BMW, Mazda and Mitsubishi. COMBINED. But wait, there's more, also worth more than all of these AND several Chinese manufacturers: SAID, Geely, Changan, Dongfeng.

With the recent NACS deals they have basically also become the charging network of choice in North America, which is certainly worth something.

With North America slowing working toward a common EV plug and CCS winning the charging standard war, North American EV charging will become more like Europe. Charge any brand of EV on any brand of charging network, just as nature intended. No more vendor lock in.

NACS is winning, not CCS.

NACS is CCS. It's CCS type 3. It's why older Teslas can't charge on NACS chargers without a retrofit. They can't talk CCS without upgrades.

Don't get confused by the branding.

They are CCS with a proprietary connector (well, soon to be SAE J3400), so it still means we (CCS1 cars) can’t use their chargers without an adapter, even if they let us.

It won't be proprietary. It is SAE J3400. It is CCS. That's why other manufacturers are willing to support it.

It's true that North America should have standardized a plug and charging standard a long time ago so drivers aren't in a situation where they have to waste money on adapters just to charge their car.

Europe has much better EV infrastructure today in part because manufacturers have been able to build to a common standard and have it work across all brands. That standardization has driven investment, development, and deployment.

It didn’t help that Tesla seemed to be much better at setting up charging infrastructure than VW. Electrify America is kind of a joke now, with busted chargers being the norm rather than the exception.

The lockin is at the charger level. Fill up with petrol? Drive up, tap your card, fill up. At some places you fill up then go into the shop and tap your card.

Electric? Drive up, work out which of the dozen of apps there are, try to download it, hold your phone in the other hand to try to get a signal, finally download it, then register, sell your personal data, then finally you can try to work out how to charge your car.

More sensible infrastructure regulation in Europe. They're mandating contactless payments on charger. No app required: https://www.fleetnews.co.uk/news/latest-fleet-news/electric-...

Even on Tesla's newer dispensers: https://www.youtube.com/shorts/yflZN0dLT8s

It's true that North America still has a long way to go on EV infrastructure, but it will get there eventually.

Damn government, making things better for everyday people. How can honest corporations abuse their captive audiences when the government keeps restricting their abilities?

We need less/more/same regulation, whichever one satisfies my desires at any given moment!

Who else right now manufactures NACS chargers?

All CCS charger manufacturers. NACS is CCS with a different plug on the end. It's CCS type 3.

It's a very simple change for all manufacturers.

Here are interviews with various charger makers:

https://www.youtube.com/watch?v=xbPa6nO6GyM

https://www.youtube.com/watch?v=mfyO-o85U-8

Alpitronic and Kempower make the best chargers.

Because once the valuations are proven incorrect they just sell the company on to the next fool trying to justify the valuation. Look at Twitter, complete failure of the company, totally worthless but the legal system and media prop it up, even though it’s only ever lost money.

I think the argument for it goes as folllows:

Tesla has more 'self supervised' driving data than any other car brand, so if data is key to making self driving work, they win. You could also see how this is a winner take all monopoly once self driving gets cracked.

Now before I get flamed, I don't own Tesla stock, and no I don't think self driving is just around the corner. I'm perfectly happy with good autopilot though and I think the model 3 is a great mid level car. But yes I think Tesla stock was quite over valued.

> You could also see how this is a winner take all monopoly once self driving gets cracked.

… _Why_, though? Even if you buy the idea that Tesla is going to come out with self-driving cars Any Day Now(TM), that really seems like the underpants gnome part of the narrative. It’s most unclear why it would be a winner takes all thing.

It is only winner takes all if Tesla keeps being only one with self-driving... Which to me looking into history is insane. Is there any technology where there is only single provider?

It is big enough market that eventually there will be multiple-players and then it will be race to bottom. Marginal profits. Self-driving taxis will be dumped like Uber and Lyft did against other players. And then it will be low margin business.

Right? And even if they did score a virtual monopoly in the US through assiduous lobbying, they can't keep a global lid on development forever. Especially that if they do crack it, they prove that it both can be done and it's "just" the software. Even without the Asian manufacturers, the German ones wouldn't just roll over and die either.

It’s winner take all because if the scaling hypothesis applies to self driving, they have way more telemetry to do self supervised training on, which initiates a feedback loop: more people buy their cars which gives them even more training data, making their self driving system even further ahead of the competition.

Even if that were the case (big "if"), that can't go on forever. Even if it's literally just a matter of who has enough data and training core-years, at some point a competitor, maybe with state-level support, will have "enough" data to come after you with their own self driving option. Perhaps now Tesla is at 90% (just say, it's just an example) and Mercedes (again say) is at 10%. One day Tesla may be 100% and Mercedes is at 30%, and the German government, for one, will be shoveling cash into the furnace the whole time if the German auto industry is in existential danger. The gap can only close.

Meanwhile once you reach full self driving, you're stuck at diminishing returns. Doubling your data won't double that: at best you could make a very marginal improvement to safety stats or range economy. Maybe with a lot of lobbying you could swing a slightly higher Tesla-only speed limit, but double self driving isn't a thing. Everything else in the car is commodity stuff like sound systems and seat heaters that anyone with a car factory and a team of designers and a copy of the Bosch Automotive Handbook can do if they want to. Probably you could get some network effects from the "Rent your Tesla out" app, but again, that's an option for anyone with a team of designers once the self-driving part is done and they'll be in the disruption phase and aggressively undercutting as best they can.

This also assumes that in 2029 you can't just use 80% (again... just a random date and a random number) synthetic training data and leapfrog nearly all of those hard-won physical miles. The costs of doing that will plummet too, so the training cost moat will only shrink as well.

Meanwhile Tesla will be ossifying as gigantic trillion dollar behemoths tend to do, accruing costs like pensions, management entrenchment will be in its third decade and so on.

On the other hand, if we're doing hypotheticals, if it did come to pass and Tesla is sitting pretty on a 13-figure valuation predicated on it being the only self driving car out there and a competitor pops up suddenly from stealth mode with a fully-formed alternative, much of the value could evaporate so fast it would be a structural hazard to the economy. That would be an interesting situation. And, remember, are that point it's all predicated on the software being the key, so Upstart Autonomy Inc. can license it to Mercedes and get it in cars almost immediately.

Is Tesla worth a lot? Undoubtedly. Is it that much? Questionable to me. But then the market disagrees, so what do I know (but also the market was off by 30% by it's own estimation so how much does it know?)

I'm not sure I agree. In our (very very) hypothetical scenario, it seems that self driving would play out similar to how software incumbents in general are very hard to displace.

You could use the same argument for search, operating systems, or public cloud as well? "Why couldn't a more nimble or well funded company come in and commoditize {software industry}"

I'm not sure, but we only have two major app stores, we only have three big public clouds, we only have three companies making major operating systems for consumer devices, two search engines, I could go on.

I think that marginal benefit that comes from first mover and scale really makes it hard to catch up in the world of software. Big tech is not afraid to use rapidly rising stock to retain talent, which makes it very hard for startups to acquire comparable talent unless VCs are willing to throw gobs of money at companies, that then go to exorbitant comp. (and you see this in the bull market run of 2015-2022).

Even if that didn't ignore the scaling behavior of auto manufacturing, which it very badly does, that would only be a reason it might be winner-take-all, because it has a giant load-bearing “if”.

right, above I mentioned that it's too big of an if for me to invest. Hence why I think Tesla is a decent car that people should consider, but I'm not a shareholder.

Steering has gone out twice on a family member’s Model Y. N=1 example but plenty of other companies now make EVs and they do a decent job of it… shedding 29% still leaves the company at an astronomical valuation, ~100bn larger market cap than Toyota.

Also, steering-by-wire is not exclusive to electric cars, it's common ICE's as well - so it's even more apalling to have catastrophic steering failure on a new car, it's not the bleeding edge of tech.

Toyota will have a greater marketcap than Tesla, by the end of this year.

I just purchased a Camry Hybrid and it is just an incredible driving experience.

Toyota is a dinosaur that’s going extinct with their policies on EVs

…or they’ll be the only one left alive after everyone else loses a fortune.

Toyota's [IMHO correct] insistance on manufacturing hybrids instead of full-EVs is what is going to help them be so successful. My Camry hybrid gets 50mpg+, and "re-charging" it on roadtrips is as simple as filling the gastank.

Does that include the super annoying lane-keeping? Rented a Corolla and would never want to drive that again.

That feature is easily turned off, which is a good thing because it is more dangerous than helpful.

> Xiaomi CEO Lei Jun said the standard version of the SU7 will sell for the equivalent of $30,408 in China, a price he acknowledged would mean the company is losing money on each sale

Isn't dumping banned by the WTO?

Many US companies are also losing money on EV sales. I think dumping is more specific than just losing money you have to be selling in foreign markets for lower prices than you charge locally.

“Ford is losing money on each EV it sells” https://www.npr.org/2023/08/11/1193083777/ford-electric-vehi...

Indeed:

> Dumping is, in general, a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country.

-- https://www.wto.org/english/tratop_e/adp_e/adp_info_e.htm#:~....

Sorry edited that a few times, thanks for the link.

Are they losing money on the incremental production, or not selling enough volume to cover development costs?

A Chinese company losing money on sales in China isn’t dumping and has nothing to do with the WTO.

"Since 11 December 2019, the Appellate Body is no longer able to deliver binding resolutions of trade disputes. Nor can it guarantee the right to appellate review. New appointments to the WTO's Appellate Body are blocked."

This is due to the US blocking appointments to the Appellate Body. Basically the US does not want WTO rules to be binding, and want to be able to invoke national security to override any WTO rule without having this permit any kind of trade measures in response.

Edit: I don't think this is necessarily terrible. The MFN rule is a problem for countries that form close associations in trade blocks, like the EU, so its destruction is probably good.

Xiaomi isn't dumping (yet), but BYD is, and US is already keenly aware of Chinese dumping of electric vehicles years ago, that's why US currently has the 25 percent tax on Chinese made autos that Trump started in 2018, and Biden has continued since [1]. And that has so far prevented BYD and its Chinese EV peers (90 makers so far, but looking like 2-3 bankruptcy each month) from entering US market. Republican lawmakers and Trump are also looking to apply a 100% tariffs [2]

Europe, the slow hare to US's rabbit, finally woke up in 2023, but just barely. They kicked off an inquiry into tariffs on Chinese EV vehicles in October 2023, and would take up to a year to finish [3]. These tariffs looks to be retroactive, as they have started requiring Chinese EV vehicles to be registered [4]. Europe, albeit slow witted, probably isn't going to willingly allow China to kill its own car industry, especially since China is actively helping Russia in attacking Europe.

[1] https://www.vox.com/climate/2024/3/4/24087919/biden-tariff-c...

[2] https://fortune.com/2024/03/16/trump-100-tariff-for-cars-mad...

[3] https://www.reuters.com/world/europe/eu-launches-anti-subsid...

[4] https://finance.yahoo.com/news/eu-moves-slap-retroactive-tar...

It's just a matter of time. China is making ev like android phones. Other countries are also catching up. The high profit margin of Tesla cannot last forever

It's not a matter of time, cars and the car industry are treated as national security. Chinese EV cars will be even more tariffed in US and Europe in 2024/2025

We were talking about Tesla's profit margin and evaluation in the thread. Not sure if you replied to the wrong post

Ah, your statement sounds like Chinese EVs were inevitable

The competition is inevitable. It comes from everywhere

Will tariffs work if BYD does final assembly of vehicles in Mexico?

I'm just concerned about battery safety with Chinese EVs. I've seen more than a few video clips of Chinese EVs just spontaneously catching fire (not from an accident).

I would be more confident in owning a Chinese-made EV if it conforms to appropriate battery safety standards, and that those standards are enforced by USA regulations.

I'm sure at least half the problems with the Chinese EVs are the inadequate regulatory environment created by the PRC.

BYD appears to be the leader re battery safety.

https://m.youtube.com/watch?v=CSGESKhtZD0

It’s fairly easy to point at things that have annoyed customers that they call features, like missing wheel stalks and poor autowipers

The autowipers are so bad on my 3 lol. I have to manually toggle them.

The CEO too. I know a few people who refuse to buy a Tesla because of him.

People buy Volskwagen, Porsche, Ford or Renault cars without thinking about the actions of the previous people attached to the manufacturer.

Your friends have a point. Volkswagen to my knowledge isn't currently actively spreading conspiracy theories or boosting the voices of fascists.

There was the whole diesel-gate thing with volkswagen which was pretty shadey.

And the whole Nazi history.

https://en.wikipedia.org/wiki/Volkswagen#History

Yes I am aware. Henry Ford was also problematic. There's a difference between present day which will impact my life and the lives of my kids and something that is 80 years old. I have gay family members and a daughter and I worry about what this election cycle will do to both. VW isn't going to change that, Musk might.

Even more importantly from a strictly business point of view, the CEO of VAG isn't telling his engineers to make the customer experience significantly worse to save $50 of parts on a $50k vehicle.

VW is saving money on stupid things on their vehicles. Hard plastics, terrible buttons on the steering wheel, tiny screens and bad sound systems on the default models to invite you to pay more…

Bad sound systems... wow, yeah, that's right up there with building gas vans.

People also do things like travel to and buy products from Germany without thinking about the actions of the previous people running that country.

One difference is that a man in the high castle is running Tesla today.

(...Not that I have a lot of love and goodwill for other industrialists in the general.)

Nobody currently working at VW/Porsche worked for Hitler, and nobody currently working at Ford helped Henry run the presses for his antisemitic pamphlets. So that's a nonissue.

What did Renault's founder do? Hadn't heard about that.

VW was involved in a colossal emissions con.

As consumer I always wondered, were the cars worse for it? Or were they actually better, if I don't consider emissions critical in my decision making process.

They were better.

Renault was collaborating during ww2, and built trucks for nazis. Female workers got their head shaved at the liberation (male workers got out OK though, funny how things works), and Renault got nationalized, and was under state control for the 4cv, 4l and r5/r6/r8/r11/r19/r21 models, as well as the 'moteur F', still used in the 2010s.

Its director was assassinated by a far right commando also (I think the killers got out early 2000s, the story is quite interesting).

The biggest problem has been that they stopped innovating ever since the CEO decided his focus was needed more on an app he found mildly annoying that he ended up buying accidentally because he couldn’t contain his bravado.

Model 3 and Model Y era had the momentum they needed and instead of focusing on expanding to other segments or offering more range of models, they decided they needed an impractical truck. They could be building bespoke 500k luxury cars with Rolls Royce or a 30k hatchback or a 40k crossover.

You really believe all of the innovation at Tesla was being done by Musk? The cybertruck was his baby.

The point is a CEO can almost certainly derail a company despite not being fully or even partially responsible for previous innovative products.

That was my point. The ceo dictates where the resources are allocated and what direction the company needs to go in. Elon especially hates to delegate, which makes it hard to keep doing new things if he’s not around. Add to it the fact that Elon literally took key Tesla and SpaceX engineering & staff to make Twitter work, definitely makes sure Tesla wasn’t continuing to innovate.

"Investors are concerned about auto sales as the company faces increased competition from China and disruptions in Europe."

Tesla have practically defined the market so far. They made EVs cool, created a comparatively vast world wide charging distribution network and so on. Now we have competition, proper competition. Mind you some of it is a bit shag, but nonetheless there is competition, and a lot of it is pretty good.

I drive a thing called a MG4. I went to school in Abingdon near to where the Morris Garage originated. My Dad had an MG Midget, back in the '60s. The car I drive is Chinese, it just has MG plastered on it.

My MG4 (its the extended range version) has comparable range to most of the current crop of EVs and is also comparably cheaper, and somewhat smaller, so less space. Swings and roundabouts. My point is that there is a lot more variety now than say five years ago. There is Polestar (from Norway) and Volvo and ... and.

However, what all the johnny come lately's lack, which Tesla has, is its charging network. They have lost their lead in style and all that S3XY wankery - all the rest can do a reasonable job in looking cool/menacing. They do have a lead in infrastructure and should capitalise on it. I suggest opening it up to everyone and expand as fast as they can possibly manage/acquire.

The real winners will be the energy suppliers. If you can ensure you are the flogger of the hardware that consumes that energy then its win/win. Swallow your pride: partner with everyone and get them to brand their stuff as Tesla.

If Tesla manage to bugger this up (given their head start) then they only have themselves to blame and the market will be merciless.

Just in case I didn't spell it out:

ICE: You buy a Ford/Volvo/VAG and you run it on Shell, Esso, BP etc EV: You buy a Tesla, power it with Tesla. Buy another EV - power it with ... electricity

Tesla seem to have go this early on and then perhaps lost focus.

> There is Polestar (from Norway)

Minor correction: Polestar is Swedish. It is co-owned by Volvo and Geely, a Chinese car company, which in turn is an owner of Volvo.

This year, Volvo stopped funding Polestar and has handed responsibility over entirely to Geely [1], and plans to get rid of their stake. So you could say Polestar is now a fully Chinese brand.

Agreed about there being a lot of alternatives now. Other than MG, you can get great EVs from VW, Peugot, BMW, Audi, Kia, Hyundai, Nissan, Volvo, Opel etc., ranging from very cheap (MG4, Opel Mokka) to ridiculously expensive (Lotus Eletre).

[1] https://www.reuters.com/business/autos-transportation/automa...

Whoops ... (well Norway did gain independence from Sweden but that's history) ... but not really.

The EV market will be mostly or is already Chinese owned. Nothing wrong with that but they do have rather a lot of cameras and sensors in them which is handy but they also have an always on internet connection too.

Note how I've been DVd to exactly zero, across most of this thread.

I will choose my words more carefully in future.

I wonder if Bill Gates is still shorting TSLA [1].

[1] https://www.businessinsider.com/elon-musk-bill-gates-super-m...

Tesla is overvalued to any rational player, but the market can stay irrational longer than you can stay solvent.

Gates on the other hand can certainly stay solvent for longer than you or me.

The title is from CNBC's home page -- which is also the title in the title tag of the web page (and visible in tabs).

Further down the page, CNBC has a less specific title -- that "Tesla's awful quarter has Wall Street on edge ahead of delivery numbers"

The company is so far ahead that it doesn't matter as long as they can keep executing on their plans. Not a popular opinion right now because of the Musk hate, but Tesla is not like other companies and Elon is not like other CEO's.

They are not far ahead. We’ve seen peak Tesla, competitors are catching up fast.

Tesla has no competition. Cars is a small part of what they do.

Tesla's most recent 10-K (numbers in millions of $):

"""

Automotive sales: 78,509

Automotive regulatory credits: 1,790

Automotive leasing: 2,120

Services and other: 8,319

Energy generation and storage segment revenue: 6,035

"""

Which part are you referring to when you say cars is a small part?

Robots, self driving, solar, just engineering excellence alone is enough.

What about Tesla says “engineering excellence”? Every time I get into one, it feels cheap and outdated compared to other modern cars.

> Tesla has no competition.

Didnt Elon himself say that Chinese EVs are their biggest competition right now.

For cheap cars. Not against Tesla building the future.

What does even mean?

Are you saying Elon is wrong about those Chinese EVs?

Their only significant business is cars; beyond that they have a small solar business and homeopathic quantities of semi trucks. But they are clearly a car manufacturer, albeit with some weird hobbies.

They have massive competitors selling more cars for a lot longer.

Far ahead in what?

Building the future.

Sheez. And brainwashing, apparently.

Every time I hear one of you haters, I think the same thing, fyi. The difference is I think about things when they come out and you have your mind set on hating.

People will continue to call you out in this way because when asked "what do you think they do better" you replied with some handwaving nonsense. If you replied with some specific points, ideally quantifiable and backed by data, you would get quite a different response.

This. "Building the future" is just asking for a similarly lazy retort.

I desire no retort from doubters or haters. Positive comments are welcome.

That's a very bad technique for living in reality. I respectfully suggest that you challenge your opinions from time to time instead of seeking out constant validation.

I can't seem to respond to arcticbull, the person who responded to me about this not being a good way to live.

When I say I don't desire a retort, it's because a retort is a failure to think. I have many good discussions with people who aren't trying to retort or dunk on people. There is little of that here and to suggest any of the people I've replied to wanted a real conversation is what's disingenuous.

What do you think of other people who make the same claims over and over but never give any evidence of their claim and dismiss all the people giving counter evidence as "haters and doubters".

I know you're actually asking him what he thinks of himself, but you're not going to get a coherent or rational answer. I personally think he's acting like an irrational star-struck fan-boy who imagines conspiracy theories and organized persecution against his poor helpless billionaire idol, when it's actually justifiable disgust at Musk's pathologically disingenuous self-promotion and provably false lies and fraud, blatant racism and Apartheid ideology, mentatious and bullying transphobia, his neglectful failure as a parent and divorced deadbeat dad, his off-the-rails sociopathic attention-starved narcissistic misbehavior, his promotion of hate speech and Nazis and right wing trolls and ridiculous racist conspiracy theories on Twitter, and Musk's sycophantic Trump worship and political meddling and populist pandering, all of which DustinBrett apparently has absolutely no problem with even though he's fully aware of it all, and which actually seems to appeal to him at a deep personal level that he would sacrifice his own credibility by gullibly carrying Musk's water in public, because that's just the kind of dystopian "future" he wants Musk to build. But that's all pretty obvious, and goes without saying.

I've played that game. They will move the goal post. These people don't give a shit about a logical discussion.

Always reflexively thinking the same thing is a sure sign of brainwashing.

™

All companies and all individuals are part of building our single future and our future is hardly a Tesla dominated one.

I have no interest in them dominating and neither does Elon. It's about building a future.

Last time I checked there is basically zero revolutionary things with Teslas cars, their battery tech, or manufacturing processes. Whatever advantage they had in range, charger network, manufacturing, side-businesses etc at least superficially seems to be pretty marginal. Sure, a marginal advantage can be huge in a competitive market, but building the future sees to be a bit hyperbolic.

Oh, in the US they started off with revolutionizing the buying experience. But that of course only worked because the US dealer model was there to be disrupted. Elsewhere that advantage didn't exist either.

I don't believe you have the ability to "check". The Cybertruck is their latest move but they always have more. Robots, solar, charging, fsd. This stuff isn't going away.

I know only what they have publicly announced. And none of what I have seen, not their past record, indicates they have a future that will be any brighter than that of their competitors.

So Tesla is not like other companies…that survived secular changes. Tesla demographics changed quite a bit in the past five years.

Well I don't know what you mean by secular changes. I can't speak to what has changed in the last 5 years as far as staff. But they still seem to be planning big and thinking the same way. They are the slow giant.

It starts being less likely though. The plan was to make the expensive models fund the mass production. The cheap versions of 3 already happened, meanwhile other expensive brands got higher level driver assist, and other cheap brands got both lower cost and better quality of low end. They're months away from not being ahead at this point and there's nothing announced yet that could change it. What do you think they can keep executing on?

They still have the charging network, but that's due to everyone else failing more than them succeeding. At some point someone else will overtake them too.

It's that time of the day again where the doubting begins. I could list things they've said about their plans but it's easier to hate and na-say than believe. We are talking about a company that was nothing a decade or so ago and people are still saying the same tired doubts.

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