Tesla Reports a Profit (Sorta) While Elon Musk Regrets Mentioning Hyperloop
wired.com
wired.com
Somebody then had the audacity to pester him with Hyperloop on the earnings call for Tesla. It's like asking the president about his veggie garden while hes giving a press conference on the war on (whistleblowers|drugs|terror).
No air, no water, no plants or animals, no fuel, plenty of radiation (on the trip and while there) and dust and extreme cold. Other than very expensive chest-beating (for which the Moon is a closer dead body), reason suggests that continued support of robotic exploration will pay off better for science.
In the meantime we can invent new technologies which will greatly ease the burdens and dangers - once we have invented actual goals to make of such journeys worth the enormous investment.
Long-distance tube transport seems more than a little pipe-dreamish. Regional OTOH seems inevitable.
With Tesla, on the other hand, I'm with you. I see Tesla like Luciano Pavarotti back in the day. Arguable the greatest in his field, but no matter how amazing he was, he did not end up changing everything we know about music. He started the huge change on how general public sees the opera, but he wasn't alone and it was just the beginning.
Now, Tesla might be the beginning of a big shift towards how we perceive electric cars, and it could even be the next Ford or General Motors, but it's not the next Benz Autowagen or the invention of the railroad, which Hyperloop clearly would have potential for.
With self driving cars on the horizon, it certainly feels like a revolution is looming, but Tesla doesn't seem to me to be nearly as singular of a force of change as SpaceX is to it's respective industry.
Heck, they are still doing that. Just look at BMW i3. BMW is still treating electric cars as some sort of "concept cars" for the mass market, rather than "real cars" for the mass market.
We could also say touchscreen smartphones would've inevitably arrived, too, since we already had PDA's with crappy resistive touchscreens, and LG Prada even launched before the iPhone in 2007. But how much slower would they have improved to reach they level they are now, if it wasn't for Apple? And how much worse would they be now?
Perhaps it will, but I live in the US and have still never even seen a Tesla vehicle. I've seen Nissan Leafs and Chevrolet Volts. My town even has charging stations.
Maybe that's how things will shake out, but I don't think they're there yet.
I too see Model S vehicles everywhere in Chicago.
The car market is also much slower to change, since you don't buy a car every 1-2 years, but once every 10 years. Plus, they are much more expensive than phones. That's why we're talking about thousands of cards vs millions of smartphones.
They intend to build lighter cars which will benefit electric mobility.
The BMW i3 is only the first of its kind but if its lightly successful they will iterated on that.
The Quandt Family (Susanne Klatten) is a huge driver in this space.
What we miss the most right now for electric mobility is infrastructure.
The i3 is a special vehicle which has too many compromises to meet stupid laws in place by various governments, the worst being a requirement to qualify as an EV its range extender cannot provide more range than its batteries. The real eye opener from BMW is the i8. The i3 is more mass market than the S, its in the range of affordability of most car drivers.
The key difference in the markets between the S and the rest is, the S targeted consumers whose income levels usually results in large amounts of disposable income. Levels where having an extra car or two isn't unusual.
So, until they deliver on their 35k 200 mile range car, I am not going to go as far as you did in claims they are changing the game, they simply went for a more sure market.
As an example: had Ford released the Model S and sold the exact same volume with the same revenue and profit/loss, would they have added $3 billion of market cap with yesterday's earnings report? I for one doubt it.
So as much as people like to compare the Model S to the iPhone, I don't think the analogy fits. The Model S is not really a revolutionary vehicle in the way the iPhone was a revolutionary phone. Six years after its launch, every phone on the market looks like an iPhone. Even though the auto market has much longer sales cycles (several years for most cars) so one shouldn't expect to see an immediate market saturation, I don't think Tesla has a real sustainable advantage over other auto manufacturers the way Apple had over Dell/Samsung/Motorola because plenty of car companies in Tesla's price range already have the cool factor and the product is not different enough today to take over the market.
All that said, I love what Elon Musk is doing and plenty of companies have been built on brand alone so I'm certainly not writing off Tesla. I'm just arguing that people should check their expectations. I think the company is severely overvalued at current stock prices.
With all due respect Ford has been around a lot longer, and could produce a lot more , so could (potentially) sell a lot more. Tesla's selling those numbers because they're starting from scratch, and thus don't have the capacity to sell more.
But creating a method for getting from one side of the country to the other in less than an hour (or even twice that long) is probably more ambitious.
Also, worth noting other automakers are slowly catching up. Remember Tesla had a big start with their roadster, but expect fierce competition from Japanese and European automakers. Which is all good for consumers.
1 : http://www.wired.com/autopia/2010/08/tesla-subsidy-vanishing...
Disclaimer: I'm super-long TSLA.
I also think Tesla has a bright future. But I hope they're relying on their brand value rather than transient advantages like patents. If I hear from Musk that he thinks their patents are going to be competitive advantage, I will be factor that (negatively) in my opinion of the company's prospects.
Patents can and should be used when they were legitimately obtained through costly R&D.
Value based on brand value? Bullshit. Value based on innovation? Solid.
I'd guess it's something to do with the fact on a Tesla earnings call, which has nothing to do with hyperloop, someone brought it up.
He is already doing a herculean feet with the work on SpaceX and Tesla, from an investors point of view you want to make sure he isn't going to ditch Tesla for this other transport project.
In that context his comment makes sense.
I think it's sad that Musk doesn't have (public) plans to actually work on the hyperloop. As many here have said in the past, him being behind the project is what moves it from fantasy to actually having a shot in a lot of people's minds.
It's probably smart of him to not start it himself though, as it's risky, and a failed venture of that sort could bleed uncertainty into the minds of investors when regarding his other ventures.
Assuming boarding time was 30 min and your going 500MPH a 500mile hyperloop trip would take 1.5 hours vs 7+ by car. And presumably drop you closer to mass transit / the center of the city than an aircraft.
In this letter and going forward, we will report our results on a GAAP basis as well as on a non-GAAP basis, excluding lease accounting. We believe these non-GAAP financials are useful as they align with the underlying cash flow activity and timing of vehicle deliveries, and because we use such information internally for operational management and financial planning purposes.