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The money quote: > "I wish we had put that car on the road and not Tesla," confided a senior engineer at Porsche. "We have to earn money at the end of the day

The money quote: > "I wish we had put that car on the road and not Tesla," confided a senior engineer at Porsche. "We have to earn money at the end of the day though." The article also talks about "how will the German brands win back customers from Tesla?", but really, if you look at cars like the Mercedes S-class, BMW 7 series or the Audi A8, their sales are unchanged or even increasing since 2012 when the Model S was launched. Audi has been setting record sales numbers in the US, which is Tesla's biggest market, for five years straight. So it's a bit hard to argue Tesla has taken many of their customers. Maybe most Tesla drivers were never petrolheads in the first place, and drove a boring station wagon before the Model S came along?

ff10 10y ago
I really wonder where those customers come from.
- semi-extrinsic 10y ago
  There are a few "what did you drive before" threads on the Tesla forums, and it's all over the place, from Hummers to Jaguars to Maseratis to Nissan GT-Rs, but surprisingly many seem to be coming from Prius or a Volvo of some sort.
  - toyg 10y ago
    I wouldn't be surprised by Prius owners going Tesla, the Prius already was the "comfortable progressive" car of choice with its hybrid efficiency, so a Tesla is the natural progression. Volvo has similar brand connotations, making cars for people who care more about features and comfort than status symbol. Hummer, Jaguar and Maserati though, those are further away from the natural "ideological core" of potential Tesla owners.
    - ZanyProgrammer 10y ago
      "Hummer, Jaguar and Maserati though, those are further away from the natural "ideological core" of potential Tesla owners." True, but they are also cars for the affluent, and Teslas, in addition to appealing to people with an enviro-lefty bent, appeal to the affluent.
    - ZeroGravitas 10y ago
      There is the joke/anecdata about the affluent two car families with a porsche and a prius (apparently Lexus were appalled that 'their' customers were going downmarket to signal eco-credentials). One of the original founders of Tesla talks about spotting this target market in a video talk which most HN readers would enjoy (the relevant bit is around 10 minutes in, explaining how rich the people who bought the EV-1 were and why it's silly to target EVs at the people who want to save money on gas) https://www.youtube.com/watch?v=hf15nMnayXk https://www.youtube.com/watch?v=hf15nMnayXk
- codeulike 10y ago
  Tesla is taking customers from the german manufactuers, if you look at 2015 figures. Parent post is talking about 2012-onwards which isn't really relevant - the Model S wasn't made in significant volume until 2015.
martinko 10y ago
Just for context, 2015 numbers for the US: Tesla - 25,202 units sold; Mercedes - 380,461 units sold Of course not all Mercedes cars are in the same class, but it just goes to show that Tesla is still relatively small for now and its captured market share does not necessarily need to have a significant effect on other brands (for now).
- izacus 10y ago
  The difference between those numbers will be orders of magnitude larger in other markes - e.g. EU.
  - gambiting 10y ago
    But the reason for it is that EU countries are giving extremely generous tax breaks for EV buyers. In some countries you literally pay half the price of an Audi A8 for a Tesla, even though they both have the same sticker price. Those benefits are ending in many places too, so while right this second buying a Tesla S might seem like a smart choice financially, it's not going to last forever. Model 3 might change that once again by being positioned in the different part of the market entirely, but it's still long time away.
    - patrickk 10y ago
      > But the reason for it is that EU countries are giving extremely generous tax breaks for EV buyers. All the more reason the German car giants should've been in the game all along. They are just to tied to their internal combustion investments, such as deeply established knowledge about turbos, advanced gearboxes and so on.
      - raverbashing 10y ago
        Innovation in big German companies? It's very slow
- _Codemonkeyism 10y ago
  BMW sold 2,247,485 (+ Mini) cars in 2015. 100x the numbers of Tesla. And with making money not burning money. I'm not saying Tesla isn't the next thing and car companies shouldn't be afraid. But it's still a far bet.
dabeeeenster 10y ago
I drive a 7 year old Prius, and would never dream of buying a 7 series/S class/A8. TBH if I didn't live in London I'd buy a Model S. I am on the waiting list for a Model 3. What the incumbent car companies don't get, and this article gets right, is that Tesla are operating on a different plane. Yes, I've drunk the Musk Kool-Aid, but it's the only thing that appeals to me that is on offer. The big OEMs just don't get it, and I'm not sure they ever will. Like, how long will it be before one of the big 3 German OEMs has a > 200 mile range, fully electric car for sale? 2018? That's nuts
- semi-extrinsic 10y ago
  What about London is it that makes the Model S untenable? (I used to live in London, but didn't have a car then.) And, assuming you can afford it and you don't need a station wagon, why on earth would you not buy a 7 series/S-class/A8? They are, after all, some of the very best luxury cars in the world. If it's good enough for royalty, why isn't it sufficient for you?
  - dabeeeenster 10y ago
    It's just too big IMO. Hard to park, will get scraped all the time.
    - semi-extrinsic 10y ago
      So the reason you won't get one of the big German cars is the same as the reason why you won't get a Model S?
      - kuschku 10y ago
        The German OEMs offer smaller, city-usable cars (and electric cars), just not with enough battery capacity.
        m_mueller 10y ago
aquadrop 10y ago
When Tesla' sales will show visible dent in their sales it might be already too late to start acting on it, so they probably will want do it preventive.
flexie 10y ago
Right now, the only issues holding people back from buying a Tesla is: 1) Range 2) Price 3) Habits With the new upgrade, the largest model S can drive 613 km on a charge. And this year or next year Tesla covers basically all of North America and Europe with their chargers. Already now, the range covers what people need 99 percent of the time. I drive more than 600 km once every 2-3 years. So for me a Tesla would already cover 99.9 percent of my use cases. Some people take long hauls more often, but most of them pass superchargers on the way. Once the batteries exceed 7-800 km and the supercharger network is slightly more expanded in the American Midwest, Southern and Eastern Europe, Tesla will cover 99.9 percent for everybody. I simply cannot think of a scenario, in which an American or European in 2021 would drive 800 km and not pass several superchargers on the way, unless they drive outside of Europe and North America or go to arctic regions. Price is another thing. Model 3 is priced like a midsize car. A lot of buyers cannot afford that even when incentives and money saved on gas is included. But from mid size class and and up, you basically get a car - that is much safer - that unlike gasoline cars is upgraded for free on a regular basis after you purchased it - that unlike gasoline cars can be upgraded modularly for small investments (buying better batteries etc.) - has much more luggage space - that drives more smoothly (due to electrical engine) - with better acceleration - that to some - ever increasing - extent can drive itself - that you can buy in the city center or a mall - with longer range between charges/fill ups - with cheaper fuel for the same price as a gasoline car. But mostly, Tesla buyers will get a car where the digital stuff is integrated in everything. Tesla learns from usage just like Amazon or Google learn from usage. And just like Amazon and Google use that to get an edge from their competitors, I have a hard time seeing how Mercedes or Audi are going to be able to compete in the mid to large size class unless they too integrate digital into everything. Habits die hard, and for some people, gasoline cars are the only cars. But if the market for Tesla has been high income 30-60 year old first movers on the American coasts and Northern and Central Europe, it will soon be medium income people all over Europe. The demographics of potential Tesla buyers will be 100 times larger in a couple of years. I truly hope the large car manufacturers introduce their own fully electrical vehicles in production soon, and not just a concept car here and there. Competition is best. But if they don't do it in the next 2-3 years, they are going to be gone from everything except very high end and cheap cars, and for cheap cars as well after a decade or so, when Tesla can produce $20,000 cars. I don't think they fully understand how grave their situation is. They focus on the fact that Tesla is losing money. But Tesla basically hasn't played all their cards yet. Tesla is still 1-2 years from selling a mid size car, 5-10 years away from selling cheap cars. They haven't upgraded batteries to bury the range issue yet. They haven't integrated solar in the cars yet to further kill any range anxiety. The autopilot is learning from around a million driven km per day at the moment and soon that will be from tens of millions of km driven. Any day Tesla can license their battery technology and superchargers to any of the large car companies. And if bankruptcy threatens, they can sell to Apple, Google or another tech company. Heck, I bet I am just one of hundreds of thousands of people who would gladly pay $5-10,000 for their shares in a future round just to save them, even if I thought there was a good chance I would lose it all. The traditional car companies should be much more worried. We are in a situation like when Apple introduced the iPhone and changed the cell phone industry.
codeulike 10y ago
> their sales are unchanged or even increasing since 2012 when the Model S was launched. You need to look at 2014/2015 really, which is when the Model S started being produced in decent numbers. The Model S outsold most other 'large luxury' vehicles in the US in 2015, including the Audi A7 and A8 combined, and the BMW 6 and 7 series combined, and the Mercedez S-class. http://gas2.org/2016/02/15/tesla-model-s-outsells-mercedes-bmw-audi-and-porsche-in-us/ http://gas2.org/2016/02/15/tesla-model-s-outsells-mercedes-b... edit: re: rates of change: Model S sales increased 50% during 2015, Audi A7,A8, BMW 6,7 Mercedez S all down 5% or more.
- kuschku 10y ago
  Just Mercedes’ luxury cars combined sold more than the Tesla S.
  - deleted 10y ago
    [deleted]
  - codeulike 10y ago
    By about 12%. And they are losing ground.
- Xylakant 10y ago
  outsold is a different claim than what the GP claimed. It also doesn't say anything about profitability. A lot of startups outsell the competition at a loss per unit. And then try the "just sell more" approach. Things may work out for Tesla if they can ensure their funding helps them reach the end of the runway and lift of - or not. And then "outsold" will be a sad feather in the cap.
  - codeulike 10y ago
    My link shows that Tesla sales increased and all the others went down (comparing 2014 to 2015). If Tesla just sold the Model S, they would be profitable. Margins are pretty good for each Model S. But selling just the Model S is not the plan, hence the huge cash burn.
randomnames 10y ago
It's remarkable to look at the numbers indeed. Would be interesting to factor in the turnover of each of the models as used cars as well, assuming that this would bring us closer to an analysis what could be a loyal potential customer base. The trend of Tesla is there - question is, if typical buyers addressed by the Model 3, Tesla itself claims as essential for the success of its business model, wouldn't as well change to every other vendor bc of price, quality, etc. "Tesla is a battery company" - well, I guess a company is that kind of company, according to what it does to an utmost.
rsync 10y ago
"I wish we had put that car on the road and not Tesla," We have seen the exact same (lame) process from BMW/audi/porsche for 12 years now. First they announce an "e/i/tron/whatever" initiative, then they roll out some concept cars, then they test market a half-assed hybrid with a lanwmower engine hidden somewhere inside ... and then wait four years. Then repeat. We've seen at least three cycles like this from all of those high end manufacturers. All they have to show for it is million dollar cars from mercedes and porsche and a half-assed hybrid i8 from BMW. Oh, and I guess audi now has a small sized hybrid. Who cares.
- kuschku 10y ago
  All they have to show for is an i3, the e-up!, the e-Golf, and basically a Mercedes Tesla. All of which aren’t bought by anyone, because they’re too expensive when you can buy the same in the gas version for half the price.
  - rsync 10y ago
    "All they have to show for is an i3, the e-up!, the e-Golf, and basically a Mercedes Tesla." Exactly - a pair of onion-parody electric car models (the kind of design you would come up with if you were trying to make fun of electric cars and the people who buy them). I have no idea what the mercedes tesla is that you speak of - all I know of is the B class. Again, a bubbly e-car for people that aren't interested in cars. What I want is either an electric A8 (having previously owned two gas A8s) or an electric Porsche Panamera. Two electric motors. Identical interior / cabin design. I've been ready to throw money at that for 10 years now, as are, I suspect, many Tesla drivers.
    - thrill 10y ago
      It's gonna be hard to give up this sound: https://www.youtube.com/watch?v=K0_GCuim9kY https://www.youtube.com/watch?v=K0_GCuim9kY
      - AstralStorm 10y ago
pkulak 10y ago
The margins on Tesla's cars are actually very high, but Tesla is pouring an unimaginable amount of money into R&D and infrastructure right now. Gigafactories, superchargers, service centers, etc. Those are all things that VW doesn't have to worry about because they are already established. Saying that Tesla sells cars at a loss is just another case of sour grapes by people trying to discredit what Tesla has done. Tesla could give up on the Model 3 right now, stop building superchargers and just rest on the Modle S and X to be plenty profitable. Funny though, I'm pretty sure every stock holder would prefer they keep "losing" money.
- deleted 10y ago
  [deleted]
- andrewtbham 10y ago
  Tesla loses money on every car they sell This is an often repeated media trope that seems a bit misleading. It makes it sound like they would loose more money if they sold more cars. That is not true. Tesla has positive gross margins. Tesla is investing in future production and that is part of why it is losing money. I would also draw your attention to a strange fact about GAAP accounting principles. Some investments like the GigaFactory are depreciated and the expense is spread over the lifetime of the operation of the factory. However, R&D, although it’s an upfront cost that pays off over the long term, is not depreciated. You take the full charge in the quarter the money was spent. I suspect it’s because R&D has a less predictable payoff and timeframe than an investment in a hard asset like a factory. Another factor in Tesla’s lack of profitability is their high sales expenses (SG&A). Currently SG&A is about 20% of non-gaap revenue. At most auto companies it’s about 10%. The number of Model 3 preorders indicates that their current sales infrastructure is scalable and can support much larger revenues. At scale SG&A is likely to be a lower percent of revenue.
  - anotherhacker 10y ago
    "Tesla loses money on every car they sell" What data do you have on this? How is such figure(s) being calculated? Your claim also doesn't jive with the "Secret Tesla Master Plan": "The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model." https://www.tesla.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me https://www.tesla.com/blog/secret-tesla-motors-master-plan-j...
anotherhacker 10y ago
"We have to earn money at the end of the day though." Yes...but you can't build the products of tomorrow when you're primarily focused on selling the products of today.
- cJ0th 10y ago
  Shareholders want to make money now! But you're right. I am also curious as to how this will turn out for them in the long term.
- enraged_camel 10y ago
  You basically summarized why large companies often get disrupted by small up-and-comers: the only way they can sustain their operations is to serve the current needs of the market. This phenomenon is explained in Clayton Christensen's well-known book Innovator's Dilemma. https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma
yalogin 10y ago
This is because there is no Tesla directly competing with the entry to mid level German luxury cars. That is until the Model 3. The German auto makers are definitely going to take a hit once the 3 comes out. That is why they are scrambling.
WalterBright 10y ago
I'm the former owner of two Mercedes cars. I won't buy another because their engineering quality is poor, as well as being anti home mechanic. I'm much happier with my Ford I've owned for 25 years and is very well engineered, easy and friendly for a home mechanic to repair, and inexpensive to repair. It also has had an order of magnitude fewer random problems than Mercedes.
- foobarian 10y ago
  Getting off topic but I was pleased how easy it was to tinker around with a recent-ish Ford Escape (2014). Mostly standardized size screws, rivets and body clips throughout the body. Easily accessible service guides/manuals. It's too bad about their head unit system (Sync) but I hear it got better after 2015.
  - deleted 10y ago
    [deleted]
  - blakeyrat 10y ago
    I have a 2015 Fusion, and I agree the car is excellent and, alas, Sync is pretty dire. Being Ford, natch, it's impossible to upgrade the Sync that shipped with the car with whatever they're shipping now, which I also heard is much better. My $500 tablet I can upgrade, my $30000 car I cannot. To me the huge draw of Tesla is that the company actually seems to understand how computers work. Tesla updates their computers over-the-air. Meanwhile, Ford wants to charge me $150 to mail me a SD card, hah.
Decade 10y ago
> "I wish we had put that car on the road and not Tesla," confided a senior engineer at Porsche. "We have to earn money at the end of the day though." Yes, after 100 years of polluting the planet with gasoline- and diesel-powered automobiles, the established companies cannot spare a few billion dollars to help us end our dependence on fossil fuels. This is why climate change will not be solved anytime soon.

ff10 10y ago

I really wonder where those customers come from.

semi-extrinsic 10y ago
There are a few "what did you drive before" threads on the Tesla forums, and it's all over the place, from Hummers to Jaguars to Maseratis to Nissan GT-Rs, but surprisingly many seem to be coming from Prius or a Volvo of some sort.
- toyg 10y ago
  I wouldn't be surprised by Prius owners going Tesla, the Prius already was the "comfortable progressive" car of choice with its hybrid efficiency, so a Tesla is the natural progression. Volvo has similar brand connotations, making cars for people who care more about features and comfort than status symbol. Hummer, Jaguar and Maserati though, those are further away from the natural "ideological core" of potential Tesla owners.
  - ZanyProgrammer 10y ago
    "Hummer, Jaguar and Maserati though, those are further away from the natural "ideological core" of potential Tesla owners." True, but they are also cars for the affluent, and Teslas, in addition to appealing to people with an enviro-lefty bent, appeal to the affluent.
  - ZeroGravitas 10y ago
    There is the joke/anecdata about the affluent two car families with a porsche and a prius (apparently Lexus were appalled that 'their' customers were going downmarket to signal eco-credentials). One of the original founders of Tesla talks about spotting this target market in a video talk which most HN readers would enjoy (the relevant bit is around 10 minutes in, explaining how rich the people who bought the EV-1 were and why it's silly to target EVs at the people who want to save money on gas) https://www.youtube.com/watch?v=hf15nMnayXk https://www.youtube.com/watch?v=hf15nMnayXk
codeulike 10y ago
Tesla is taking customers from the german manufactuers, if you look at 2015 figures. Parent post is talking about 2012-onwards which isn't really relevant - the Model S wasn't made in significant volume until 2015.

martinko 10y ago

Just for context, 2015 numbers for the US: Tesla - 25,202 units sold; Mercedes - 380,461 units sold Of course not all Mercedes cars are in the same class, but it just goes to show that Tesla is still relatively small for now and its captured market share does not necessarily need to have a significant effect on other brands (for now).

izacus 10y ago
The difference between those numbers will be orders of magnitude larger in other markes - e.g. EU.
- gambiting 10y ago
  But the reason for it is that EU countries are giving extremely generous tax breaks for EV buyers. In some countries you literally pay half the price of an Audi A8 for a Tesla, even though they both have the same sticker price. Those benefits are ending in many places too, so while right this second buying a Tesla S might seem like a smart choice financially, it's not going to last forever. Model 3 might change that once again by being positioned in the different part of the market entirely, but it's still long time away.
  - patrickk 10y ago
    > But the reason for it is that EU countries are giving extremely generous tax breaks for EV buyers. All the more reason the German car giants should've been in the game all along. They are just to tied to their internal combustion investments, such as deeply established knowledge about turbos, advanced gearboxes and so on.
    - raverbashing 10y ago
      Innovation in big German companies? It's very slow
_Codemonkeyism 10y ago
BMW sold 2,247,485 (+ Mini) cars in 2015. 100x the numbers of Tesla. And with making money not burning money. I'm not saying Tesla isn't the next thing and car companies shouldn't be afraid. But it's still a far bet.

dabeeeenster 10y ago

I drive a 7 year old Prius, and would never dream of buying a 7 series/S class/A8. TBH if I didn't live in London I'd buy a Model S. I am on the waiting list for a Model 3. What the incumbent car companies don't get, and this article gets right, is that Tesla are operating on a different plane. Yes, I've drunk the Musk Kool-Aid, but it's the only thing that appeals to me that is on offer. The big OEMs just don't get it, and I'm not sure they ever will. Like, how long will it be before one of the big 3 German OEMs has a > 200 mile range, fully electric car for sale? 2018? That's nuts

semi-extrinsic 10y ago
What about London is it that makes the Model S untenable? (I used to live in London, but didn't have a car then.) And, assuming you can afford it and you don't need a station wagon, why on earth would you not buy a 7 series/S-class/A8? They are, after all, some of the very best luxury cars in the world. If it's good enough for royalty, why isn't it sufficient for you?
- dabeeeenster 10y ago
  It's just too big IMO. Hard to park, will get scraped all the time.
  - semi-extrinsic 10y ago
    So the reason you won't get one of the big German cars is the same as the reason why you won't get a Model S?
    - kuschku 10y ago
      The German OEMs offer smaller, city-usable cars (and electric cars), just not with enough battery capacity.
      - m_mueller 10y ago

aquadrop 10y ago

When Tesla' sales will show visible dent in their sales it might be already too late to start acting on it, so they probably will want do it preventive.

flexie 10y ago

Right now, the only issues holding people back from buying a Tesla is: 1) Range 2) Price 3) Habits With the new upgrade, the largest model S can drive 613 km on a charge. And this year or next year Tesla covers basically all of North America and Europe with their chargers. Already now, the range covers what people need 99 percent of the time. I drive more than 600 km once every 2-3 years. So for me a Tesla would already cover 99.9 percent of my use cases. Some people take long hauls more often, but most of them pass superchargers on the way. Once the batteries exceed 7-800 km and the supercharger network is slightly more expanded in the American Midwest, Southern and Eastern Europe, Tesla will cover 99.9 percent for everybody. I simply cannot think of a scenario, in which an American or European in 2021 would drive 800 km and not pass several superchargers on the way, unless they drive outside of Europe and North America or go to arctic regions. Price is another thing. Model 3 is priced like a midsize car. A lot of buyers cannot afford that even when incentives and money saved on gas is included. But from mid size class and and up, you basically get a car - that is much safer - that unlike gasoline cars is upgraded for free on a regular basis after you purchased it - that unlike gasoline cars can be upgraded modularly for small investments (buying better batteries etc.) - has much more luggage space - that drives more smoothly (due to electrical engine) - with better acceleration - that to some - ever increasing - extent can drive itself - that you can buy in the city center or a mall - with longer range between charges/fill ups - with cheaper fuel for the same price as a gasoline car. But mostly, Tesla buyers will get a car where the digital stuff is integrated in everything. Tesla learns from usage just like Amazon or Google learn from usage. And just like Amazon and Google use that to get an edge from their competitors, I have a hard time seeing how Mercedes or Audi are going to be able to compete in the mid to large size class unless they too integrate digital into everything. Habits die hard, and for some people, gasoline cars are the only cars. But if the market for Tesla has been high income 30-60 year old first movers on the American coasts and Northern and Central Europe, it will soon be medium income people all over Europe. The demographics of potential Tesla buyers will be 100 times larger in a couple of years. I truly hope the large car manufacturers introduce their own fully electrical vehicles in production soon, and not just a concept car here and there. Competition is best. But if they don't do it in the next 2-3 years, they are going to be gone from everything except very high end and cheap cars, and for cheap cars as well after a decade or so, when Tesla can produce $20,000 cars. I don't think they fully understand how grave their situation is. They focus on the fact that Tesla is losing money. But Tesla basically hasn't played all their cards yet. Tesla is still 1-2 years from selling a mid size car, 5-10 years away from selling cheap cars. They haven't upgraded batteries to bury the range issue yet. They haven't integrated solar in the cars yet to further kill any range anxiety. The autopilot is learning from around a million driven km per day at the moment and soon that will be from tens of millions of km driven. Any day Tesla can license their battery technology and superchargers to any of the large car companies. And if bankruptcy threatens, they can sell to Apple, Google or another tech company. Heck, I bet I am just one of hundreds of thousands of people who would gladly pay $5-10,000 for their shares in a future round just to save them, even if I thought there was a good chance I would lose it all. The traditional car companies should be much more worried. We are in a situation like when Apple introduced the iPhone and changed the cell phone industry.

codeulike 10y ago

> their sales are unchanged or even increasing since 2012 when the Model S was launched. You need to look at 2014/2015 really, which is when the Model S started being produced in decent numbers. The Model S outsold most other 'large luxury' vehicles in the US in 2015, including the Audi A7 and A8 combined, and the BMW 6 and 7 series combined, and the Mercedez S-class. http://gas2.org/2016/02/15/tesla-model-s-outsells-mercedes-bmw-audi-and-porsche-in-us/ http://gas2.org/2016/02/15/tesla-model-s-outsells-mercedes-b... edit: re: rates of change: Model S sales increased 50% during 2015, Audi A7,A8, BMW 6,7 Mercedez S all down 5% or more.

kuschku 10y ago
Just Mercedes’ luxury cars combined sold more than the Tesla S.
- deleted 10y ago
  [deleted]
- codeulike 10y ago
  By about 12%. And they are losing ground.
Xylakant 10y ago
outsold is a different claim than what the GP claimed. It also doesn't say anything about profitability. A lot of startups outsell the competition at a loss per unit. And then try the "just sell more" approach. Things may work out for Tesla if they can ensure their funding helps them reach the end of the runway and lift of - or not. And then "outsold" will be a sad feather in the cap.
- codeulike 10y ago
  My link shows that Tesla sales increased and all the others went down (comparing 2014 to 2015). If Tesla just sold the Model S, they would be profitable. Margins are pretty good for each Model S. But selling just the Model S is not the plan, hence the huge cash burn.

randomnames 10y ago

It's remarkable to look at the numbers indeed. Would be interesting to factor in the turnover of each of the models as used cars as well, assuming that this would bring us closer to an analysis what could be a loyal potential customer base. The trend of Tesla is there - question is, if typical buyers addressed by the Model 3, Tesla itself claims as essential for the success of its business model, wouldn't as well change to every other vendor bc of price, quality, etc. "Tesla is a battery company" - well, I guess a company is that kind of company, according to what it does to an utmost.

rsync 10y ago

"I wish we had put that car on the road and not Tesla," We have seen the exact same (lame) process from BMW/audi/porsche for 12 years now. First they announce an "e/i/tron/whatever" initiative, then they roll out some concept cars, then they test market a half-assed hybrid with a lanwmower engine hidden somewhere inside ... and then wait four years. Then repeat. We've seen at least three cycles like this from all of those high end manufacturers. All they have to show for it is million dollar cars from mercedes and porsche and a half-assed hybrid i8 from BMW. Oh, and I guess audi now has a small sized hybrid. Who cares.

kuschku 10y ago
All they have to show for is an i3, the e-up!, the e-Golf, and basically a Mercedes Tesla. All of which aren’t bought by anyone, because they’re too expensive when you can buy the same in the gas version for half the price.
- rsync 10y ago
  "All they have to show for is an i3, the e-up!, the e-Golf, and basically a Mercedes Tesla." Exactly - a pair of onion-parody electric car models (the kind of design you would come up with if you were trying to make fun of electric cars and the people who buy them). I have no idea what the mercedes tesla is that you speak of - all I know of is the B class. Again, a bubbly e-car for people that aren't interested in cars. What I want is either an electric A8 (having previously owned two gas A8s) or an electric Porsche Panamera. Two electric motors. Identical interior / cabin design. I've been ready to throw money at that for 10 years now, as are, I suspect, many Tesla drivers.
  - thrill 10y ago
    It's gonna be hard to give up this sound: https://www.youtube.com/watch?v=K0_GCuim9kY https://www.youtube.com/watch?v=K0_GCuim9kY
    - AstralStorm 10y ago

pkulak 10y ago

The margins on Tesla's cars are actually very high, but Tesla is pouring an unimaginable amount of money into R&D and infrastructure right now. Gigafactories, superchargers, service centers, etc. Those are all things that VW doesn't have to worry about because they are already established. Saying that Tesla sells cars at a loss is just another case of sour grapes by people trying to discredit what Tesla has done. Tesla could give up on the Model 3 right now, stop building superchargers and just rest on the Modle S and X to be plenty profitable. Funny though, I'm pretty sure every stock holder would prefer they keep "losing" money.

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andrewtbham 10y ago
Tesla loses money on every car they sell This is an often repeated media trope that seems a bit misleading. It makes it sound like they would loose more money if they sold more cars. That is not true. Tesla has positive gross margins. Tesla is investing in future production and that is part of why it is losing money. I would also draw your attention to a strange fact about GAAP accounting principles. Some investments like the GigaFactory are depreciated and the expense is spread over the lifetime of the operation of the factory. However, R&D, although it’s an upfront cost that pays off over the long term, is not depreciated. You take the full charge in the quarter the money was spent. I suspect it’s because R&D has a less predictable payoff and timeframe than an investment in a hard asset like a factory. Another factor in Tesla’s lack of profitability is their high sales expenses (SG&A). Currently SG&A is about 20% of non-gaap revenue. At most auto companies it’s about 10%. The number of Model 3 preorders indicates that their current sales infrastructure is scalable and can support much larger revenues. At scale SG&A is likely to be a lower percent of revenue.
- anotherhacker 10y ago
  "Tesla loses money on every car they sell" What data do you have on this? How is such figure(s) being calculated? Your claim also doesn't jive with the "Secret Tesla Master Plan": "The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model." https://www.tesla.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me https://www.tesla.com/blog/secret-tesla-motors-master-plan-j...

anotherhacker 10y ago

"We have to earn money at the end of the day though." Yes...but you can't build the products of tomorrow when you're primarily focused on selling the products of today.

cJ0th 10y ago
Shareholders want to make money now! But you're right. I am also curious as to how this will turn out for them in the long term.
enraged_camel 10y ago
You basically summarized why large companies often get disrupted by small up-and-comers: the only way they can sustain their operations is to serve the current needs of the market. This phenomenon is explained in Clayton Christensen's well-known book Innovator's Dilemma. https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma

yalogin 10y ago

This is because there is no Tesla directly competing with the entry to mid level German luxury cars. That is until the Model 3. The German auto makers are definitely going to take a hit once the 3 comes out. That is why they are scrambling.

WalterBright 10y ago

I'm the former owner of two Mercedes cars. I won't buy another because their engineering quality is poor, as well as being anti home mechanic. I'm much happier with my Ford I've owned for 25 years and is very well engineered, easy and friendly for a home mechanic to repair, and inexpensive to repair. It also has had an order of magnitude fewer random problems than Mercedes.

foobarian 10y ago
Getting off topic but I was pleased how easy it was to tinker around with a recent-ish Ford Escape (2014). Mostly standardized size screws, rivets and body clips throughout the body. Easily accessible service guides/manuals. It's too bad about their head unit system (Sync) but I hear it got better after 2015.
- deleted 10y ago
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- blakeyrat 10y ago
  I have a 2015 Fusion, and I agree the car is excellent and, alas, Sync is pretty dire. Being Ford, natch, it's impossible to upgrade the Sync that shipped with the car with whatever they're shipping now, which I also heard is much better. My $500 tablet I can upgrade, my $30000 car I cannot. To me the huge draw of Tesla is that the company actually seems to understand how computers work. Tesla updates their computers over-the-air. Meanwhile, Ford wants to charge me $150 to mail me a SD card, hah.

Decade 10y ago

> "I wish we had put that car on the road and not Tesla," confided a senior engineer at Porsche. "We have to earn money at the end of the day though." Yes, after 100 years of polluting the planet with gasoline- and diesel-powered automobiles, the established companies cannot spare a few billion dollars to help us end our dependence on fossil fuels. This is why climate change will not be solved anytime soon.