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Sure, it probably won't get profitable, as Tesla expected less preorders. Investors don't have a problem with that. The only thing that matters now is whether

by xiphias 11y ago

Sure, it probably won't get profitable, as Tesla expected less preorders. Investors don't have a problem with that. The only thing that matters now is whether Tesla can build a great car profitably and cheaply in high amount, not cash-flow.

mtgx 11y ago
I think all of Tesla's cars are profitable, and Model 3 will probably be even more so thanks to all the software "upgrades" Tesla will likely charge for. The "problem" is Tesla is trying to become the GM or VW of EVs before GM or VW get a chance to use their massive cash cows to dominate the market. So they're trying to cover the market with as many different models as their financials allow them, as well as trying to build the SuperCharger infrastructure globally. All of that R&D and infrastructure costs a lot of money and it has to come from somewhere -> current cars' profits. To make things even simpler to understand, Tesla will operate on an Amazon model of not giving a damn about quarterly profits for the next decade or two, while building the biggest (Tesla-only) fast-charger network in the world (huge competitive advantage) and at the same time trying to grow as a company as fast as possible and entrench itself in the car market as the Apple of EVs. Oh, and almost forgot about the whole Gigafactory thing. And one of those isn't even going to be enough by 2020 (don't forget it also has to make PowerWall batteries). That alone cost $5 billion and Tesla couldn't even build it all itself (just goes to show how much money Tesla needs to invest in its future, not pay dividends or brag about its 30%+ profits every quarter).
- ars 11y ago
  I suspect that they're going to run out of lithium (or at least run out of affordable lithium) before they can accomplish this goal. Electric cars are not the future, there just isn't enough lithium on earth to do this. The US might be able to, but not worldwide. Powerwall is definitely not ever going to get off the ground - cars are more profitable, and they will never have enough extra supply to shunt some to powerwall.
  - aerovistae 11y ago
    I feel like Elon Musk is generally well-informed and thinks pretty far into the future. While I don't know the answer myself, I am inclined to think that Elon's not just planning on running the company straight into a widely foreseeable dead-end. Seems unlikely, don't you think? Like, imagine this interview: Interviewer: What is your plan for when lithium reserves run out? Elon: Wait, what? There's a limited supply? Hold on, need to google this. Take 2: Interviewer: What is your plan for when lithium reserves run out? Elon: Oh, I'm sure we'll figure something out, cross that bridge when we get there. (Has he EVER given an answer like that, politician-style? No. Never.) Seems like a safe bet that this imagined problem has a solution which hasn't been shared with us because nobody's asked him.
    - ars 11y ago
      > Elon: Oh, I'm sure we'll figure something out, cross that bridge when we get there. Why do you think this is wrong? He'll have many years to figure this out - this is a longterm problem, not a short term one. It's not like you can't do the math yourself on global extractable lithium supply, and how many cars you can make with it. I'm betting, not on new battery technology (any element except the big 10[0] would run into the same problem), but rather on a new engine that can burn very clean synthetic hydrocarbon fuel. But if I did have to do research on battery tech today it would be on an aluminum ion battery. [0] https://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth's_crust https://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth... [1] https://en.wikipedia.org/wiki/Aluminium-ion_battery https://en.wikipedia.org/wiki/Aluminium-ion_battery
      - tamana 11y ago
        Of someone discovered a clean synthetic CHEAP hydrocarbon fuel, they could burn it and put it on the grid to feed electric cars.
        ars 11y ago
        I know I said fuel, but it's not really a fuel. The synthetic hydrocarbon would be energy storage. The energy source would be something else - nuclear or solar thermal probably.

by xiphias 11y ago

mtgx 11y ago

I think all of Tesla's cars are profitable, and Model 3 will probably be even more so thanks to all the software "upgrades" Tesla will likely charge for. The "problem" is Tesla is trying to become the GM or VW of EVs before GM or VW get a chance to use their massive cash cows to dominate the market. So they're trying to cover the market with as many different models as their financials allow them, as well as trying to build the SuperCharger infrastructure globally. All of that R&D and infrastructure costs a lot of money and it has to come from somewhere -> current cars' profits. To make things even simpler to understand, Tesla will operate on an Amazon model of not giving a damn about quarterly profits for the next decade or two, while building the biggest (Tesla-only) fast-charger network in the world (huge competitive advantage) and at the same time trying to grow as a company as fast as possible and entrench itself in the car market as the Apple of EVs. Oh, and almost forgot about the whole Gigafactory thing. And one of those isn't even going to be enough by 2020 (don't forget it also has to make PowerWall batteries). That alone cost $5 billion and Tesla couldn't even build it all itself (just goes to show how much money Tesla needs to invest in its future, not pay dividends or brag about its 30%+ profits every quarter).

ars 11y ago
I suspect that they're going to run out of lithium (or at least run out of affordable lithium) before they can accomplish this goal. Electric cars are not the future, there just isn't enough lithium on earth to do this. The US might be able to, but not worldwide. Powerwall is definitely not ever going to get off the ground - cars are more profitable, and they will never have enough extra supply to shunt some to powerwall.
- aerovistae 11y ago
  I feel like Elon Musk is generally well-informed and thinks pretty far into the future. While I don't know the answer myself, I am inclined to think that Elon's not just planning on running the company straight into a widely foreseeable dead-end. Seems unlikely, don't you think? Like, imagine this interview: Interviewer: What is your plan for when lithium reserves run out? Elon: Wait, what? There's a limited supply? Hold on, need to google this. Take 2: Interviewer: What is your plan for when lithium reserves run out? Elon: Oh, I'm sure we'll figure something out, cross that bridge when we get there. (Has he EVER given an answer like that, politician-style? No. Never.) Seems like a safe bet that this imagined problem has a solution which hasn't been shared with us because nobody's asked him.
  - ars 11y ago
    > Elon: Oh, I'm sure we'll figure something out, cross that bridge when we get there. Why do you think this is wrong? He'll have many years to figure this out - this is a longterm problem, not a short term one. It's not like you can't do the math yourself on global extractable lithium supply, and how many cars you can make with it. I'm betting, not on new battery technology (any element except the big 10[0] would run into the same problem), but rather on a new engine that can burn very clean synthetic hydrocarbon fuel. But if I did have to do research on battery tech today it would be on an aluminum ion battery. [0] https://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth's_crust https://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth... [1] https://en.wikipedia.org/wiki/Aluminium-ion_battery https://en.wikipedia.org/wiki/Aluminium-ion_battery
    - tamana 11y ago
      Of someone discovered a clean synthetic CHEAP hydrocarbon fuel, they could burn it and put it on the grid to feed electric cars.
      - ars 11y ago
        I know I said fuel, but it's not really a fuel. The synthetic hydrocarbon would be energy storage. The energy source would be something else - nuclear or solar thermal probably.