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I'm generally critical of companies which have high valuations yet continuously lose money, but in the case of Musk's ventures, I think what he's doing is so ge

I'm generally critical of companies which have high valuations yet continuously lose money, but in the case of Musk's ventures, I think what he's doing is so genuinely innovative that I would be more inclined to put the blame on the system than on Musk himself. Elon uses long-term thinking but unfortunately our economic system tends to favour short-term returns. In my mind there is a huge difference between Tesla losing money versus Twitter losing money - But to an economist, it's the same kind of beast.

kuschku 10y ago
The issue is that Tesla isn’t doing something really new, and won’t be able to keep any advantage in the market in the long term. Their reputation has also taken a heavy hit after investigations into their autopilot discovered major issues with it, and it was deemed unsuitable for even testing (For example, it will always stay behind the car ahead of you if it can’t find lane markings – even if the car ahead of you switches lanes, but you can’t switch lanes because the lane besides you is occupied – the car will crash). Long-term, it looks as if the traditional car makers will win again.
- snsr 10y ago
  > The issue is that Tesla isn’t doing something really new Objectively they absolutely are.
  - kuschku 10y ago
    Oh, they are? Did they invent any new batteries? No. That IP belongs to Panasonic. Did they invent any new technology for electric motors, or any gear technology, or even chargers? No, there are even older, and better, and more widely deployed supercharger standards, and they are doing nothing unusual regarding the rest. Does Tesla do anything new regarding self-driving cars? No, the teams from Sony and VW, Here, Google, etc are all further ahead, and every competitor has more reliable lane assist technology already in production. So what is it where Tesla is doing something new? What did they invent, or create?
    - ricardobeat 10y ago
      Enjoy your reading: http://stks.freshpatents.com/Tesla-Motors-Inc-nm1.php http://stks.freshpatents.com/Tesla-Motors-Inc-nm1.php
greglindahl 10y ago
Let's see: Tesla: Growing rapidly, huge customer interest & pre-orders, positive margin on product, easy to see that it may grow big enough to overcome fixed costs. Twitter: Not growing rapidly, hard to see that they'll become profitable without cutting out a lot of expenses. Not at all the same kind of beast.
- jondubois 10y ago
  Less than 0% is not what I would call "huge margins": https://www.google.com/finance?q=NASDAQ%3ATSLA&fstype=ii&ei=H_sMWKHsEJiPsQGPyrFY https://www.google.com/finance?q=NASDAQ%3ATSLA&fstype=ii&ei=... Twitter revenue is growing very rapidly, just like Tesla's: https://www.google.com/finance?q=NYSE%3ATWTR&fstype=ii&hl=en&ei=e_sMWNHYO8mSsQHWs5jYDA https://www.google.com/finance?q=NYSE%3ATWTR&fstype=ii&hl=en... Economically speaking, they're very similar.
  - greglindahl 10y ago
    By margins, I'm referring to the car COGS vs selling price, not including the cost of design. (Yes, I know that this isn't the usual yardstick for mature car companies, but we have no idea how many model S/X cars are going to sell before it needs a new platform, and this IS the usual yardstick for Silicon Valley startups.) Twitter revenue is growing much slower than Tesla's, especially if you take into account the pre-orders for Model 3. I agree that some economists/financial people see it the way you describe. That's not the only point of view out there.
    - greglindahl 10y ago
      p.s. I never said "huge margins".
nabla9 10y ago
Technological edge Tesla has seems to be relatively thin. The innovation is in good productization, PR, risk taking and bold business strategy. If I understand it correctly, Panasonic is the more tech-heavy partner (patents for example). Tesla makes good cars with very low reliability and I see it as conscious choice. They add performance features and cool factors at the cost of reliability. Bigger car makers could have done the same but they protect their brand and bottom line. Tesla can't continue like this when production numbers ramp up.
- TenJack 10y ago
  Can you give some examples of Tesla's low reliability?

kuschku 10y ago

The issue is that Tesla isn’t doing something really new, and won’t be able to keep any advantage in the market in the long term. Their reputation has also taken a heavy hit after investigations into their autopilot discovered major issues with it, and it was deemed unsuitable for even testing (For example, it will always stay behind the car ahead of you if it can’t find lane markings – even if the car ahead of you switches lanes, but you can’t switch lanes because the lane besides you is occupied – the car will crash). Long-term, it looks as if the traditional car makers will win again.

snsr 10y ago
> The issue is that Tesla isn’t doing something really new Objectively they absolutely are.
- kuschku 10y ago
  Oh, they are? Did they invent any new batteries? No. That IP belongs to Panasonic. Did they invent any new technology for electric motors, or any gear technology, or even chargers? No, there are even older, and better, and more widely deployed supercharger standards, and they are doing nothing unusual regarding the rest. Does Tesla do anything new regarding self-driving cars? No, the teams from Sony and VW, Here, Google, etc are all further ahead, and every competitor has more reliable lane assist technology already in production. So what is it where Tesla is doing something new? What did they invent, or create?
  - ricardobeat 10y ago
    Enjoy your reading: http://stks.freshpatents.com/Tesla-Motors-Inc-nm1.php http://stks.freshpatents.com/Tesla-Motors-Inc-nm1.php

greglindahl 10y ago

Let's see: Tesla: Growing rapidly, huge customer interest & pre-orders, positive margin on product, easy to see that it may grow big enough to overcome fixed costs. Twitter: Not growing rapidly, hard to see that they'll become profitable without cutting out a lot of expenses. Not at all the same kind of beast.

jondubois 10y ago
Less than 0% is not what I would call "huge margins": https://www.google.com/finance?q=NASDAQ%3ATSLA&fstype=ii&ei=H_sMWKHsEJiPsQGPyrFY https://www.google.com/finance?q=NASDAQ%3ATSLA&fstype=ii&ei=... Twitter revenue is growing very rapidly, just like Tesla's: https://www.google.com/finance?q=NYSE%3ATWTR&fstype=ii&hl=en&ei=e_sMWNHYO8mSsQHWs5jYDA https://www.google.com/finance?q=NYSE%3ATWTR&fstype=ii&hl=en... Economically speaking, they're very similar.
- greglindahl 10y ago
  By margins, I'm referring to the car COGS vs selling price, not including the cost of design. (Yes, I know that this isn't the usual yardstick for mature car companies, but we have no idea how many model S/X cars are going to sell before it needs a new platform, and this IS the usual yardstick for Silicon Valley startups.) Twitter revenue is growing much slower than Tesla's, especially if you take into account the pre-orders for Model 3. I agree that some economists/financial people see it the way you describe. That's not the only point of view out there.
  - greglindahl 10y ago
    p.s. I never said "huge margins".

nabla9 10y ago

Technological edge Tesla has seems to be relatively thin. The innovation is in good productization, PR, risk taking and bold business strategy. If I understand it correctly, Panasonic is the more tech-heavy partner (patents for example). Tesla makes good cars with very low reliability and I see it as conscious choice. They add performance features and cool factors at the cost of reliability. Bigger car makers could have done the same but they protect their brand and bottom line. Tesla can't continue like this when production numbers ramp up.

TenJack 10y ago
Can you give some examples of Tesla's low reliability?