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Comment by jqpabc123 | Hacker News Reader

It's pretty safe to say that after a decade of unfulfilled projections and promises, the Tesla EV fantasy is now a bust.

So now it's off to new fantasy --- robotaxi.

The problem with this fantasy --- ride hailing isn't nearly as profitable as auto manufacturing.

Half the world isn't going to ditch their autos in favor of robo rides any time soon. This is what it will take to justify Tesla's current outlandish stock price.

Uber P/E is about 20. Tesla P/E is around 170. Can Tesla ride hailing be 6 times bigger/more profitable than Uber in the near future? I personally don't think so.

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> Half the world isn't going to ditch their autos in favor of robo rides any time soon.

I don't know. Take cities like Bangalore (India) for example. I don't live there but do occasionally visit family every couple of years. And I consistently hear a general sentiment of "I just take Uber because the traffic is insane. But the traffic is insane because of too many Ubers"

But in all of that sentiment, nobody's saying "I wish I could drive instead" – they're more than happy to have someone drive them around if it's cheap enough. That was true with Auto Rickshaws, and it's even more attractive in an air conditioned car.

If taxis get cheaper, people will use them in even more situations, like daily commutes. Why not?

And what do you mean by "EV Fantasy" – I get if you meant Robotaxi or self-driving fantasy. But there are hundreds of thousands of Teslas (maybe a million?) driving around the world isn't there? Are all these people imagining that they're driving a Tesla EV? Which part of it is a fantasy?

The US isn't like that. The people with the money for the magic taxi are in the burbs.

The fantasy that any of this nonsense is a sustainable business, especially when the charismatic leader completely FUBARed his government hobby project and is biting the hand that feeds him. Tesla's biggest source of revenue is the US government.

Suburbs and commuter towns desperately need Robotaxi - there’s literally no other option. Public transit isn’t coming, Waymo isn’t coming, Uber and Lyft are shrinking

Even a US city of 100,000 people, it can be really tough or impossible to get an Uber - good luck getting a ride from the airport at 12:30 in the morning

If you can't afford a car, time to migrate. The economics of the magic robot taxi aren't going to save you.

Why do you say Waymo isn't coming? Waymo is already available in the suburbs of LA, and it seems clear that Waymo will be expanding to any US metro area that doesn't put roadblocks in their way.

How many people in a city of 100,000 are getting rides from the airport at 12:30 in the morning ?

Which part of Tesla EV is a fantasy? The part where the volume explodes enough to justify a P/E of 170 today.

The Model Y is literally the best selling car on earth across all categories and people on HN are still calling it a fantasy.

This is just driven by partisan anti-Elon sentiment.

The fantasy projected by Tesla and sold to investors was a growth rate of 20-30% per year.

The reality is Tesla has never accounted for more than 2% of light vehicle sales worldwide. And over the last 2 years; instead of spectacular growth, sales have actually declined.

To be fair to the people on HN, it wasn't them who made Elon partisan. It was Elon himself.

Exactly, this is 100% deserved, even self-inflicted, damage. Not nearly enough.

Partisan or not, certain facts (like sales figures) should be treated as facts whether we like the person or not, right?

It's literally not, you're living in the past. While the model y was the best selling car in 2023, the RAV4 was the best selling car in 2024.

It was the best selling car. It no longer is[1].

And of course, Tesla isn't even in the top 10 for top selling brands of cars. Only about 1 in 50 new cars being sold is a Tesla.

Their valuation is largely based on hype.

[1] https://www.thedrive.com/news/the-worlds-best-selling-car-is...

If taxis get cheaper, people will use them in even more situations, like daily commutes. Why not?

Sure --- if roborides are cheap enough and safe enough, more people will use them.

The immediate question for Tesla and their investors --- can they really provide "safe" robo rides using their current approach?

This is far from being proven since Tesla is only rated as Level 2 autonomy which according to Tesla itself, requires constant supervision. Placing passengers and the public in danger with inadequate technology is a textbook legal definition of negligence.

The longer term question; assuming they solve FSD --- is can they make tons of money from cheap rides? Enough to justify their current outlandish stock price.

Can they really do it? Tesla is making steady progress and has reached a few new milestones recently.

They recently launched their Robotaxi service in Austin, and it seems to be as good as Waymo or better. https://youtu.be/RcaBZenrCCs

They also recently autonomously delivered a car to a customer’s apartment straight from the factory line. https://youtu.be/lRRtW16GalE

Still only classified as Level 2 autonomy --- which requires constant supervision. This is according to Tesla itself.

https://www.synopsys.com/blogs/chip-design/autonomous-drivin...

Tesla also backs that up with actions since all of the robotaxis are supervised by a dude in the front seat that can abort the drive if the level 2 self-driving goes bonkers.

Supervision wasn't part of the original fantasy/sales pitch and calls into question their stated value proposition for competing with Uber and Waymo.

Absurdly idiotic statement. Tesla has gone from 50k cars sold in 2015 to 1.78m in 2024. Their marketcap has increased from 31b to 1.3t in the same period. That’s not even factoring the potential growth of Optimis.

I bought a model Y dual motor in 2021 is it’s been hands down my best car ever. Almost zero maintenance. Yet more proof of never take stock advice from HN, in fact do the opposite in most circumstances. Elon derangement syndrome at its finest.

>8 million Teslas have been manufactured

It seems you are not up to date on Bangalore (India). The unit economy of taxis has gotten out of hand. People now prefer bike taxis. Those were banned recently and reportedly that is causing even the Auto Rickshaw costs to spiral.

> If taxis get cheaper, people will use them in even more situations, like daily commutes.

This seems straight out of the Uber pitch from its early days. "Our total addressable market is the entire auto industry because people will prefer taxis over driving themselves". And a decade later where are we? Most ridesharing apps are shrinking day by day.

The unit cost of a taxi isn't sustainable in a long term. People might want to pay for someone to drive them around but that is an expensive proposition.

Robo taxis now seem to be selling the same dream. Cut out the driver and that will make rides cheaper. But deploying taxi is going to be a huge expenditure. This might be doable with VC money upfront and even cheap just like the early days of Uber. But in the long run same thing is going to happen. Once all competition is gone robotaxis are not going to be any cheaper. It will be back to square one.

> If taxis get cheaper, people will use them in even more situations, like daily commutes.

That was my life in Beijing until I moved back to the states 8+ years ago. Forget about even buying a car, where would you park it? The subway was an option, especially after line 10 opened which was basically one line to work but...it was always really crowded and I didn't like standing for an hour (loop lines aren't very direct).

But there were too many cars, to make it work I had to shift my working hours, so I would leave super early (~6 AM) and come home around 3PM. It definitely didn't feel sustainable but it worked out (now I WFH...and in LA I lived right next to my lab...so I still avoid driving).

> Bangalore > Uber because the traffic is insane

Robotaxis can't deal with insane traffic, and would be disadvantaged when aggressive drivers learn how to trick robotaxis to give way submissively.

Some countries have highly developed road systems that are more predictable, and where drivers are more likely to cooperate rather than aggressively defect.

The business of robotaxis is equivalent to the business of cheap taxis, and we know cheap taxi services are not trillion dollar companies.

I'm not sure what you mean by Tesla's EV fantasy being a bust? In the last decade they've got from delivering 75k cars a year to delivering 1.8m cars a year. It's not a fantasy, it happened. Now, the stock price isn't based on the reality of the fundamental economics of a car company, but they didn't fail with EVs, they succeeded.

The fantasy was that Tesla would somehow become the only electric car maker, or indeed the only car maker. This was obviously stupid, but it was the only way that the valuation would make any sort of sense.

I have been paying about (premium lost from rolling puts) 1k/month for the last 4 months to short Tesla. I made about 12k on the last dip so I’m profitable but I’m just waiting for the bubble to burst. Today I doubled down when it went up, hoping to one day see it fail.

Whereas on the other hand I've gained handsomely from holding Tesla stock for many years, and plan to hold it for many more years.

It feels good to support American-made sustainable technology that has revolutionised the electric car and battery storage markets.

I struggle to understand those who would short-sell Tesla, unless they have some kind of emotional hangup against Elon Musk or government efficiency?

What exactly have you gained from holding?

I own stock that is worth many times what I paid for it, and any time I want to, I can exchange the stock for cash. Unless perhaps I missed something about how the stock market works?

> I struggle to understand those who would short-sell Tesla, unless they have some kind of emotional hangup against Elon Musk or government efficiency?

It’s objectively clear that the company is in a bad market condition, and you don’t need to have an “emotional hangup against Elon Musk or government efficiency” to know it’s bad business to alienate your potential customer base and deliver shockingly bad public appearances.

If Ford’s CEO was stumbling-down drunk or higher than a kite at a presser, I’d short Ford too.

Musk was never a conventional squeeky-clean ultra-safe stage-managed CEO that speaks through a media team.

That didn't stop him from raising the value of $TSLA from a penny stock to one of the largest companies in the world.

With his initial investment, and with him as the product architect of the first Tesla vehicle (the Roadster), he transformed an academic project with no products to the world's most valuable automaker.

An automaker so valuable, it's worth more than Toyota, BYD, GM, VW, BMW, Mercedes, Ford and Honda COMBINED.

People have shorted $TSLA before because they underestimated Musk, and let their own personal affectations cloud their understanding of Tesla's potential, and Musk's singular genius.

> An automaker so valuable, it's worth more than Toyota, BYD, GM, VW, BMW, Mercedes, Ford and Honda COMBINED.

This doesn't give you the slightest bit of pause?

It can’t; this is how meme stocks operate. If too many traders examine their motives and revert to trading rationally, the stock price corrects accordingly.

> meme stock

Poor explanation since ~50% stock is owned by institutions.

I think retail holds 38% of ownership.

Rest of ownership is mostly Elon ~13%.

indexed fund ownership doesn't explain institutional holdings. Tesla is 5% of NASDAQ 100 by market cap. Vanguard owns 7.7%, BlackRock owns 6.4%.

Disclaimer: not a financial analyst and I might have numbers wrong (mostly from Tiger Trading App).

The silver lining is as long as these people exist and continue to be wrong (which seems like it’ll be forever given no amount of Tesla success gets them to update their position) there will be money to be made.

An automaker so valuable, it's worth more than Toyota, BYD, GM, VW, BMW, Mercedes, Ford and Honda COMBINED.

Yes. Wildly overvalued for an automaker that it has never accounted for more than 2% of light vehicles world wide --- and instead of the wild growth projections they sold to investors, sales over the last 2 years have actually declined.

Any "potential" here remains largely unrealized.

> An automaker so valuable, it's worth more than Toyota, BYD, GM, VW, BMW, Mercedes, Ford and Honda COMBINED.

... I mean, that's exactly why one might short it, surely? Clearly, this cannot be the case; the valuation makes no sense, and no bubble lasts forever, so one could reasonably expect it to return to reality at some point. Of course, as always the real difficulty is figuring out _when_ that happens ahead of time.

Exactly!

Tesla is currently priced as if it is the predominate auto manufacturer. It should be obvious by now that this is pure hype and fantasy.

> I struggle to understand those who would short-sell Tesla, unless they have some kind of emotional hangup against Elon Musk

Wait, do you have an emotional hangup FOR Elon Musk ?

> or government efficiency?

Is this satire ?

The decline has nothing to do with projections and promises and everything to do with Elon alienating a huge part of potential customers. I was someone who went from wanting a Tesla to never buying one as long as Elon own a single share in the company.

If robotaxis were commensurately cheap and available I'd happily dump my car. I don't see it happening for another decade or more, though.

I might do the same if they weren’t a privacy nightmare. The tech company running the robotaxi service would need to buck some Silicon Valley trends before I’d use their product

The robotaxi sales pitch is an inherent contradiction --- robo rides will be safe, readily available, cheap --- and wildly profitable.

Maybe pick one or two of these at best but all of the above is highly unlikely.

What makes this unlikely is simple marketplace competition. Just as unlikely as Tesla conquering the auto manufacturing market.

Can we please stop calling it "robotaxi"? There's a fucking person being paid to sit in the car, who honestly has to be even more bored and awkward feeling than an uber driver. It's about as robotic as a carnival ride with some guy being paid to maybe press a red button.

God, I would love to see an AMA from one of these guys that have to sit in a seat with their hands folded staring at the road 8 hours a day.

You're skimming over the fact that the car is doing 99.999% of everything

Which means the safety driver is probably deeply bored and inattentive.

Sure, we'll see in the data soon enough how safe it is

Or maybe not.

Do you really trust a taxi service that opposes reporting accidents?

https://www.reuters.com/business/autos-transportation/trump-...

Can we please stop calling it "robotaxi"?

Talk to Elon. He has "Robotaxi" painted on the side of his vehicles.

Robotaxi isn't even a new fantasy. In April 2019 Elon Musk said Model 3's would make their owners money participating in the autonomous ride-hailing fleet.

He forgot to mention one small little detail --- owners would have to ride along to supervise their "autonomous" vehicle. Otherwise, they will be sued for negligence when (not if) the "Full Self Driving" screws up.

Don't forget: they're also on the humanoid robot fantasy.

Musk's new Tesla pitch is they are going to sell ten robots for every human. Just multiply some profit times 80bn robots and the stock is way underpriced!

In some ways the Tesla EV fantasy has worked - build a high priced car to finance a medium priced car to finance cheap cars and move the world to sustainable transport. The only difference is the cheap cars are being made by Chinese manufacturers rather than Tesla.

Which is actually in line with their thing on patents:

> Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology. (2014)

Not sure what you're talking about. Model Y was best selling car in the world last two years. That's a bust?

It's pretty safe to say that after a decade of unfulfilled projections and promises, the Tesla EV fantasy is now a bust.

I guess historically, lots of companies have operated by selling dreams.

The real estate industry sells dreams of suburban utopias.

The fitness industry sells dreams of sexy good times.

The cola industry sells dreams of likability and friendship.

Apple sells dreams of in-crowd later-day eco-hipsterism.

Tesla sells… dunno. Maybe dreams of billionaire crypto-bro futurism?

As long as the company is worth $900B+, you're never going to convince its fans that they're wrong.

Even if the stockholders all lost everything, I think a significant portion will still think they were following the messiah, the same way that old ladies give their last three pennies to tele-vangelists while eating cat food off of paper plates.

I guess historically, lots of companies have operated by selling dreams.

Among it's peers, Tesla has no equal in the "dream" category.

Tesla is one of the "Magnificent 7" technology stocks. Leaving Tesla aside, the average P/E of this group over the last 2 years is around 30. Tesla is currently around 170.

But even this doesn't really capture the full extent of the Tesla "dream". Tesla is the only one of these stocks with an earnings decline over the past 2 years.

The highest valuation combined with the poorest results --- that's a lot of dreaming.

> the Tesla EV fantasy is now a bust.

Tesla is still one of a handful of trillion dollar companies. Maybe it will be a bust, but it isn't one today.

> Uber P/E is about 20. Tesla P/E is around 170.

So the expectation is tesla will continue to grow at a significant rate while uber "stagnates".

> I personally don't think so.

Investors do. I'm surprised how well the stock is doing given the all the distractions. It certainly isn't trading like it is about to bust.

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