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Musk urges Tesla workers to cut costs ahead of fundraising round
- digitalengineer 10y ago"Tesla burned through $611 million in cash in the first half of this year and $2.2 billion last year..." Can someone explain WHY this company wants to buy SolarCity?
- martinko 10y agoDespite Musk's positioning on the topic it really feels like a bailout of his other investments. Does anyone have information regarding the time of the shareholder vote on the merger? Given that Musk and co. will abstain, there might be a reasonable chance that it will not go through.
- prklmn 10y agoSome people are indeed naive enough to be every word that comes out of his mouth. However, you are correct - this was a bailout that screws TSLA shareholders, plain and simple. SCTY was arguably heading towards bankruptcy. http://www.fool.com/investing/general/2016/05/11/solarcity-is-starting-to-make-the-same-mistakes-as.aspx http://www.fool.com/investing/general/2016/05/11/solarcity-i... http://www.zerohedge.com/news/2016-06-22/analyst-slams-teslas-bid-solarcity-proposed-acquisition-suggests-scty-worth-little-v http://www.zerohedge.com/news/2016-06-22/analyst-slams-tesla...
- andrewtbham 10y agoit will go through. if you didn't like the deal, you sold the stock. they have a lot of the same large investors, that have already approved the deal, such as fidelity.
- prklmn 10y agoTesla was down 12% upon announcement of the deal. I guess if your crystal ball didn't tell you this value-destructive deal was coming, you got screwed.
- toomuchtodo 10y agoYou're only screwed if you sell. Why would you sell a volatile growth stock during the dips?
- mschuster91 10y ago> I guess if your crystal ball didn't tell you this value-destructive deal was coming, you got screwed Non-professionals shouldn't act in the short-term market anyways, at least not if they can't afford to lose 100% (or even more, like Uli Hoeness, who screwed up with leveraged deals). Just invest in long term - in my opinion Tesla and SpaceX are decent bets. Both won't go under the bus any time soon, I'd rather be concerned about fossil fuel stocks.
- brianwawok 10y agoOne day price bump doesn't matter. If it regains the 12% in a week, to a long term investor it destroyed 0 value.
- prklmn 10y ago"If" is the key word that you used. Nothing in the future is promised. See what long term holders of Valeant have to say..it goes both ways. The only thing that is certain is that the stock lost 12% of its value in a single day over acquisition/poor corporate governance concerns. That would be alarming to me as a long term shareholder.
- brianwawok 10y agoA long-term shareholder that is worried about an announcement day bump must be new to the stock game, or not that good at it.
- lukasm 10y agoThe biggest problem for Tesla is battery cost. They have to increase the production to drive down the price, so they want to leverage SolarCity to sell more Powerwalls. Tesla can use solar panels for supercharger stations where grid electricity is not available. You can create a new product or solution etc. etc. There is quite a lot of synergy.
- sachingulaya 10y agoYou may be underestimating the power draw of supercharger stations. My model X pulls 200-300Amps of 400V power at a supercharger station with 8-12 stalls. That is over 80,000watts per stall.
- jakub_h 10y agoWhich is quite an incentive to save on electricity as much as you can, I'd think.
- hindsightbias 10y ago10kW array would be at least 600 sqft, so that will be a lot of commercial real estate. The state/feds should stop subsidizing utility solar and incentivize covered parking lot panels. Prettier than lots and putting the energy where the cars are.
- stevep98 10y agoBut the stalls work in pairs. They all can't deliver 80kw simultaneously. Ever wondered why sometimes you only get 100A? Because your neighbor, who got their first, gets first dibs on the power, and you get the leftovers.
- ranman 10y agoI've never actually experienced this. I believe the 320 amp / 320 volt charging is for emptier cars... I've plugged in at a 100% full charger and gotten full power charging.
- psifun 10y agoI can't believe that it's a stupid choice, which makes me think that it's a desperate one.
- ksherlock 10y agoSpace X has purchased $225 million in Solar City bonds. Elon Musk has a 21% stake in Solar City (he is also buying $65 million in Solar City bonds, half of their most recent offering).
- farcical_tinpot 10y agoFunny, but inevitable. Musk was asked specifically if Tesla would takeover SpaceX or vice versa in a tesla conference call and he said no, but it is really inevitable. Without some creative accounting through shifting investor cash and grants from one company to another Solar City has no future, and that then goes for Tesla as well.
- hughperkins 10y agoi thought solar cells are dirt cheap, because China can produce them at very low cost?
- andrewtbham 10y agohttps://www.tesla.com/blog/master-plan-part-deux https://www.tesla.com/blog/master-plan-part-deux
- the_mitsuhiko 10y agoMost likely lack of options.
- endswapper 10y agoIn addition to the article itself, there are multiple, thorough discussions that attempt to answer your question over here: https://news.ycombinator.com/item?id=12405092 https://news.ycombinator.com/item?id=12405092
- farcical_tinpot 10y agoPart of some half-arsed rescue attempt. Solar City doesn't have much life left to it on its own and it needs some creative accounting to stay afloat.
- Keyframe 10y agoInteresting question, considering buying someone like Saft would make more sense in their current position.
- _ph_ 10y agoWhile they have about $16 billion in Model 3 orders. So to actually sell so many cars, they need to invest a lot to get the production going. Part of that is the Gigafactory, but also the production line and of course, the parts for those cars have to be bought, before the cars can be made and sold. So the next quarters will see a lot of more spending that has to be balanced with the future Model 3 revenue. The SolarCity acquisition is certainly risky, but there are large business overlaps as other posters have described.
- sna1l 10y agoI wonder what kind of cost cutting they will do. Whenever I hear cost cuts, I always think layoffs, but at a time where they need to ramp up production, I feel like that would be counterproductive.
- farcical_tinpot 10y agoThere will be a call to cut whatever costs they can, which won't get far, and then there will be layoffs.
- godzillabrennus 10y agoSteve Jobs had some cost cutting conversations during his day as well: https://youtu.be/BNeXlJW70KQ?t=16m14s https://youtu.be/BNeXlJW70KQ?t=16m14s Great leaders know when to cut costs to save great companies.
- brakmic 10y agoAs far as I know Bill Gates saved Apple.
- angstrom 10y agoAnd luck save Apple as much as Bill Gates. He may be a great philanthropist, but corporate philanthropy isn't his shtick.
- melling 10y agoA bit of an oversimplification. If Apple hadn't produced products that people wanted, the loan/investment wasn't going to help. If Bill had said no, it's hard to know if Steve had another avenue for the money. Wasn't he rich again because of Pixar? http://blogs.wsj.com/wsj125/2014/11/29/nov-30-1995-pixars-ipo/ http://blogs.wsj.com/wsj125/2014/11/29/nov-30-1995-pixars-ip...
- deno 10y ago> Microsoft's $150 stock investment was the result of a settlement of a lawsuit. http://www.zdnet.com/article/stop-the-lies-the-day-that-microsoft-saved-apple/ http://www.zdnet.com/article/stop-the-lies-the-day-that-micr...
- jacquesm 10y agoI don't like these SpaceX-Tesla-Solarcity cross links one bit. If one of them falls it could cause the rest to go with it. Solar City 'power walls' are a shaky proposition at best, if that becomes a key element in Tesla succeeding then they have a problem.
- farcical_tinpot 10y agoThe whole Solar City/Tesla crossover I can see in a way, when you've proved the technology and are making some profit from it. Tesla and Solar City are a long, long, long way from doing that and the Solar City takeover is a way of saving it, not because of any sensible plan and integration.
- nardi 10y agoTesla makes the Power Wall. And they have had a ton of orders for them. Those are an asset, not a liability. And merging with Solar City will actually help them sell those with less overhead.
- FireBeyond 10y agoThe Powerwall is at least a commercial disappointment, if not poor performer / sale: https://www.google.com/?client=safari#q=powerwall+poor+sales https://www.google.com/?client=safari#q=powerwall+poor+sales
- TaylorAlexander 10y agoWait, wait... you're saying that a battery is a shaky proposition? For an energy company that currently can only provide energy during the day? SolarCity is an energy company. They collect and sell energy. They do not sell any solar panels. They use the customer's homes for a distributed collection system. But they sell energy. And currently they cannot sell energy at night. Conveniently, lithium batteries are a proven product growing in popularity. What's sweet is that SolarCity has close ties to a company that has shipped more large scale lithium batteries than any other company in the world. Nissan has shipped a lot of 24 kWhr battery packs since 2011, but Tesla has been shipping 56 kWhr packs since 2008, 85 kWhr packs since 2011, and now ships 100 kWhr packs. You know what would be great? If Tesla sold more product, and if they did so through a partner company that needs lots of batteries. Oh boy, then they'd need a bigger factory! If only...
- stevep98 10y agoMy model S has been in the shop after a collision since a June 10. The repair shop has been waiting for parts. The last thing we're waiting for is some kind of spring related to the airbag assemblY. Originally tesla said they would pull one off the production line since I waited so long, but now they are backing off that. It's going to be at least another 3 weeks. Be aware if you are buying a car from tesla, that you are at their mercy in terms of parts. There are no third party parts available, and tesla is using all the parts for new cars.
- nitrogen 10y agoDo they provide a loaner in that case, even if not a Tesla? Or maybe your insurance company?
- brianbreslin 10y agoThat's not tesla exclusive. My dad's been waiting 3 months for a replacement airbag for his 2008 lexus. They were one of the ones takata (sp?) recalled but can't make enough replacements.
- chrisper 10y agoThis seems to be a circumstantial issue that is probably not the norm. Kind of like a special case!
- davidf18 10y agoSorry to hear about the 3 month delay and provides some insight in the construction of luxury cars at least Lexus. Auto manufacturers were warned that the propellant for the airbags was dangerous and were warned by other airbag vendors who refused to use it to save a few dollars per airbag and lost the contract to the Japanese airbag vendor. I wonder if other luxury brands such as BMW, Mercedes, Audi, used these types of airbags. I'm guessing not.
- deleted 10y ago[deleted]
- farcical_tinpot 10y agoIt's a bit late now. When your company is basically one research and development project you need to cut all costs down to specifically those that's going to provide you with a product you can sell, and then keep iterating over until you can sell for a profit. You do the boring grunt work until that is achieved. The fact that Musk told us stage one was done when he came up with that ridiculous grand plan, designed to drum up yet more investor cash, was laughable. Once the Model 3 sells for a profit, and for $35,000, which it never will do, then you can start looking at further grand plans. The Model X was a ridiculous distraction with gull-wing doors any sensible automotive engineer would have pointed out was a production and maintenance nightmare that would never end well. They're also swallowing Solar City, basically to save it, not because of any grand plan for 'synergy' as Musk says that makes sense. The Emperor's clothes are starting to dissolve and the wheels are coming off I'm afraid.
- eclipxe 10y agoFalcon Wing Doors
- farcical_tinpot 10y agoWhatever. It's kind of like arguing whether you sat on deckchairs or garden chairs on the deck of the Titanic.
- toomuchtodo 10y agoI can't see giving any weight to anyone in an online forum criticizing when there are people like Musk out there doing actual progress. The Emporer Without Clothes is you sir, who sits from your chair, complaining ever so.
- bdcravens 10y agoIt's called discourse. I know Musk is HN's new Jobs, supposedly beyond criticism and some sort of holy figure to be worshipped, but I personally feel whatever progress he (his engineers and designers that is) makes is worthless if it's in a vacuum of silence.
- partiallypro 10y agoI love Tesla cars, I think they look amazing, the technology behind the is incredible...but it is just not well run in terms of money. Musk is a visionary, but seems to overlook his cash burn. I am waiting for the headlines when people are talking about Tesla'a stock plummeting down to earth. Maybe he has enough billionaires in his network of friends to keep him going long enough to maintain his image. I don't know. People aren't as friendly with their money during economic downturns and we're due for one. That's when we'll find out what lies beneath the veneer. I love his work, but I question his financial decisions.
- greglindahl 10y agoYou are commenting on an article which is all about Musk paying attention to cash burn.
- prostoalex 10y agoI am not very good at Twitter search, but at some point Elon pointed out that out of all US car companies only two have never went bankrupt - Ford Motors and Tesla Motors. The car manufacturer industry does not have any good role models on being run well in terms of money.
- prostoalex 10y agoI am not very good at Twitter search, but at some point Elon pointed out that out of all US car companies only two have never went bankrupt - Ford Motors and Tesla Motors. The car manufacturer industry does not have any good role models on being run well in terms of money.
- blubb-fish 10y agoI think one big problem about privatization of such complex projects is that if they go down the acquired knowledge and research results might end up nowhere instead of being reused by a following generation of companies and researchers.