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> Over the last five years, Ford has posted net income totaling $26 billion, while Tesla has lost $2.3 billion. Ford: "We have no idea how to invest this money

by crabasa 10y ago

> Over the last five years, Ford has posted net income totaling $26 billion, while Tesla has lost $2.3 billion. Ford: "We have no idea how to invest this money. I guess let's just put it in the bank." Tesla: "We have so many idea for investments, we're only constrained by cash. Let's go back to the capital markets!"

oculusthrift 10y ago
except ford is spending an order of magnitude more than tesla. it's much easier to spend 100 dollars meaningfully than a 100 billion. I also hope you're willing to level the same charge at Google and Apple.
- seanmcdirmid 10y ago
  It is like comparing a spunky startup to an entrenched corporation. Ya, IBM once spent more than Facebook, but Facebook was worth more because it had potential while IBM didn't. Ford doesn't have any good ideas for the future, they are too busy with the here and now and haven't shown an ability to do anything but incremental improvements with their R&D spending. Like we don't expect much more from IBM, we don't expect much more from Ford, but we do from Tesla.
  - dkrich 10y ago
    What is this based on? Ford has had record profits over the past few years and has continually improved their vehicles and manufacturing processes, including remaking two assembly plants to make aluminum body F 150s. They also invested a billion dollars in Arvo AI and are making aggressive moves into self driving technology.
    - sqeaky 10y ago
      An aluminum body is exactly the kind of iteration that was being talked about. It is neat, but its not and all new drive train on a totally different tech. Aluminium is a pretty well understood material, while self driving cars are virgin territory. Tesla is making larger swings and potentially accepting larger risk. Ford is... iterating.
      - foofoo55 10y ago
        I would much rather drive an iterated vehicle than one based on a large swing or risk.
        beamatronic 10y ago
        But you can drive the latter in the car pool lane
        Neliquat 10y ago
        You can drive anything in that lane with a passenger. Just sayin.
        cr0sh 10y ago
        IIRC, here in sand-land (AZ) you can drive solo in our OHV lanes with a vehicle that has less than four wheels (mainly motorcycles - but if you have the cash for one of those nice 3-wheeled "cars", you're still good).
        vkou 10y ago
        For now. Once enough EVs are on the road, it'll go back to being 2+ or 3+.
      - bluGill 10y ago
        What innovation is Tesla making? Electric cars are not new. In fact the first production car to reach 60mph back in the day was electric. Aluminum in a production car is a lot more innovative that an electric car. (li batteries in a production car though is innovative)
        sqeaky 10y ago
        Electric cars aren't new... if you really want to compare modern vehicles to those it pile batteries. When the roadster came out there was nothing like it. Electric vehicles prior to the Telsas where research projects and low torque ultralight budget vehicles. Listing the differences between a Telsa and its closest successor, if you could pick one is not an easy task. Listing the difference between an F-150 and and F-150 with and aluminum was already done this sentence the hardest part was spelling aluminum. You can pick an threshold for choosing what is evolution and revolution, I am just trying to choose a reasonable one.
    - iamatworknow 10y ago
      >What is this based on? It's based on nothing other than the weird contempt you see for large, established corporations in the SV crowd. Big established corporation = big established rule book and management hierarchy = stifled innovation. Nevermind the fact that most of the major technological breakthroughs of the past 100 years were developed by the research wings of big corporations (Bell Labs, defense contractors).
      - MR4D 10y ago
        I'm not the parent poster, but I'd offer one reason why some people feel this way - Ford is a car company, while Tesla is a software company. Big difference in expectations, capital expenditures, etc. Based on committed capital, I think this is at least partially correct.
        vkou 10y ago
        If Tesla is a 'software company', the last thing I'd ever want to do is buy a car from them. As anyone who has every used software will attest to: Most of the time, we can count our lucky stars if our commercial software 'works' for a year and a half. Cue all the: "If Microsoft/Apple/Google/Facebook/Snapchat made cars" jokes.
        iamatworknow 10y ago
        Definitely agree with you there. We're already seeing some of the more unpleasant idiosyncrasies of the software world with Tesla. I, for one, kinda like driving a car that doesn't require an internet connection, doesn't have forced OTA updates, doesn't send analytics data back to base, and won't potentially be bricked if someday the manufacturer goes out of business. Other manufactuers are starting to do the same thing but I'm going to enjoy my "dumb car" for as long as it lasts. Hopefully when fully electric vehicles become more mainstream and affordable there will still be an option to get a "dumb" version.
        cr0sh 10y ago
        I'm kinda with @iamatworknow on this, too (thus right there with ya too). I've contemplated the idea of my next pickup being a commercial vehicle, if I can get one (as a single unit and not a fleet sale) - which I probably won't be able to, but I can dream. It seems like that's the only way (except for going used) that I'm going to be able to get what I want: A standard-cab, short-bed pickup, ideally 4WD. I don't have kids, and won't have kids. I have no need for four doors and an extended cab. I don't need a long bed. I want a short wheelbase. So far, it's either buy a used pickup (back when they made and sold these kinds of trucks) or go with a commercial vehicle (where you can still sometimes find them - sometimes). The other perk about a commercial version is that they are stripped down to the bone. Nothing fancy in the cab, just the bare basics for a radio, cloth interior, non-electric controls for windows and seats. Basically, eliminate all the fru-fru stuff to make that much more reliable for work-based usage. In other words, I want a truck to be a truck - not some fancy "I only go to the mall to show off" substitute for a minivan. Add in some basic 4WD with manual hubs (again - nothing to break) - and there ya go. That's my dream truck (ok - if there were a Raptor version of it that'd be nice, too - but I can't afford that, so who really cares).
    - youngtaff 10y ago
      Ford have also been quite innovative in the engine department building small volume turbo charged engines for greater efficiency and lower emissions https://en.wikipedia.org/wiki/Ford_EcoBoost_engine https://en.wikipedia.org/wiki/Ford_EcoBoost_engine
      - jnicholasp 10y ago
        Being innovative at small details of existing concepts isn't likely to produce huge gains in stock value, as opposed to being innovative at entire categories of new industry- and infrastructure-disrupting products. Ford does the former, Tesla does the latter, and the market is valuing them accordingly. The market could be wrong, Tesla could fail to achieve their vision, Ford and other existing big companies could somehow turn themselves into organizations that aggressively pursue ambitious new visions.. but the market is betting not. You're welcome to make an opposing bet.
        TFortunato 10y ago
        Maybe that's part of it. I'm sure another part of it is that Ford is already big enough, that there isn't a lot of growth potential there. That said, it's not like they are exactly just making small refinements to gasoline engines, while SV companies are the only real innovators, chasing electric and self-serving vehicles. We just tend not to talk about it as much on HN (compared to Tesla, for example): https://www.google.com/amp/s/electrek.co/2017/01/03/ford-new-electric-cars/amp/ https://www.google.com/amp/s/electrek.co/2017/01/03/ford-new...
        jnicholasp 10y ago
        Ford doesn't have much room to grow because they are a mature company in a mature field. Tesla is creating new fields. Ford doesn't know how to create new fields, therefore they're stuck making small improvements to existing things, and, once someone like Tesla makes it very clear that a new field exists and is viable, Ford will reluctantly follow the market trend. Ford does normal science [0], Tesla does revolutionary science [1]. [0] https://en.m.wikipedia.org/wiki/Normal_science https://en.m.wikipedia.org/wiki/Normal_science [1] https://en.m.wikipedia.org/wiki/The_Structure_of_Scientific_Revolutions https://en.m.wikipedia.org/wiki/The_Structure_of_Scientific_...
    - nwah1 10y ago
      Ford also signed a deal with Blackberry's automotive division and will be making their own software platform based on QNX. Sounds like they may be trying to compete with Android, Apple, and Tesla on the software side. And QNX has a good microkernel architecture for an automotive OS. https://www.forbes.com/sites/greatspeculations/2016/11/03/why-blackberrys-software-deal-with-ford-is-promising/#587c42731343 https://www.forbes.com/sites/greatspeculations/2016/11/03/wh...
    - seanmcdirmid 10y ago
      Market perception. Ford's P/E ratio is 9.89. IBM's P/E ratio is 14.02. Facebook's P/E ratio is 40.79. Tesla's P/E ratio is infinity since the E is negative. I'm sure Ford has done many incremental innovations, I didn't say they didn't. IBM does the same thing, and has "record profits" every few years also. Its just the market isn't expecting the next big thing to come from Ford, while they are expecting that from Tesla. If you think the market is wrong or too irrational, you can make a killing by shorting Tesla and buying cheap Ford stock.
      - pbtflakes 10y ago
        That's not how the math works out, according to Nasdaq.com Tesla's P/E was -53.63 for 2016 and estimated -103.48 for 2017.
        seanmcdirmid 10y ago
        Sorry I guess. I couldn't find Tesla's P/E ratio on Google like I could for the other companies. It is my understanding that they don't report P/E ratios for companies with negative earnings. And it makes sense: a high P/E ratio indicates high potential. The lower the earnings, the higher the P/E ratio. But if earnings went negative, then the P/E ratio would automatically go negative (since that is how math works, as you say). So if my stock price is $100, and I earn $1, my P/E ratio is 100...so much potential! If I accidentally lost a dollar instead, my P/E ratio automatically becomes -100 even though not much changed in my earnings.
        kbenson 10y ago
        The interesting thing is that as soon as you go negative, a larger negative P/E is better than a smaller negative P/E, and it's really wonky at earnings close to 0.
        frgtpsswrdlame 10y ago
        Those numbers are meaningless since Tesla has negative earnings. Infinity is basically right.
      - 10y ago
    - kamaal 10y ago
      Sorry but this is like Nokia saying they are spending all this money to make their phones and manufacturing processes awesome, all the while when a iPhone is getting designed somewhere. Incremental changes is what most senior management folks at places like Ford can do because that is what they teach at MBA schools using linear growth graphs. Self driving tech is really novelty thing now. And nobody expects it to work anytime soon. The real deal now is mind-blowing battery tech. Batteries that are rugged, can charge quickly and a car that can give a big range on a charge. Meanwhile talking of how efficiently somebody can build an ICE based car is really like someone talking about how quickly they can produce horse carriages. Doesn't really matter because that disruption is happening else where.
      - dkrich 10y ago
        That all sounds good in theory, but where are the numbers to back it up? Apple was making billions in profit on the iPhone at launch. Tesla has never made a profit and sold 70k vehicles last year. Companies like Ford and GM have huge numbers of loyal customers and move millions of vehicles a year and quite profitably. So while it sounds great to pretend that the automobile industry is dying and Tesla is capturing their market share by sheer innovation, the numbers tell a different story.
    - imgabe 10y ago
      Pretty much everyone who wants a Ford has one, or could buy one. There's not a lot of growth left for Ford. Their only hope is to steal a few customers from the other automakers, but those other automakers will steal a few back. It's unlikely that large numbers of people who don't currently own a Ford are going to buy one any time soon. Tesla on the other hand, has millions of potential customers who would and will buy one once they become a little more affordable and the charging infrastructure becomes more built out. We already saw how fast the pre-sales for the Model 3 went. And that was just people who were willing to put down money on a car that wasn't even available yet. It's not just about innovation or not. Tesla has a lot of room left to grow. Ford is about as big as it's ever going to get.
      - paulpauper 10y ago
        exactly. Ford is stagnant. Tesla has much more potential.
      - GVIrish 10y ago
        > Pretty much everyone who wants a Ford has one, or could buy one. Yeah but it's not like people buy one car, and never buy one again. Ford sells over 800,000 units of just the F150 every single year. Now it's true that they don't have as much potential for growth because they've reached a sort of stable place in the market. Maybe sales can grow a few percentage points year over year but Ford is unlikely to jump by 20% the way Tesla can. But that's not really saying much as Ford is a mature company with a complete lineup and Tesla is only on its 4th model of car.
      - emodendroket 10y ago
        Huh? Do you own a car?
      - dkrich 10y ago
        I don't understand this argument. Tesla is currently trading at a higher valuation than Ford. Ford has saturated the North American market. Tesla could eventually grow to saturate the North American market but is just a fledgling auto maker right now full of potential but not many sales. But they are already trading at a higher valuation than Ford. So unless you think that Tesla can command much higher margins than Ford does, then shouldn't Tesla only trade at a similar valuation when they are making similar amounts of cash?
    - snambi 10y ago
      Does anyone pre-order a F150?
      - prklmn 10y ago
        Does it matter? https://en.wikipedia.org/wiki/List_of_best-selling_automobiles https://en.wikipedia.org/wiki/List_of_best-selling_automobil... Take a look at the USA on this chart.
        snambi 10y ago
        True, but that is not the point. In terms of electric + self-driving technology, Tesla has a huge lead over every other auto player including Ford.
      - emodendroket 10y ago
        There's no need to because there are plenty. People did preorder the Focus RS.
        snambi 10y ago
        Interesting. When did this happen? Was it discounted?
        emodendroket 10y ago
        Not even a whole year ago, and, no, it wasn't discounted, it was marked up.
      - msisk6 10y ago
        Yes. Lots of private individuals as well as fleets will pre-order trucks to get the exact options they want.
        snambi 10y ago
        Sounds like customization. Tesla pre-order is basically a queue for a future delivery, not about getting a specific feature.
  - petra 10y ago
    Also ford is investing in on-demand shuttles service, offered at low cost, and expanding to 8 cities this year. Executed well this could become very popular.
    - samstave 10y ago
      More info on this please
      - blawson 10y ago
        https://techcrunch.com/2017/01/09/fords-chariot-ride-sharing-service-will-expand-to-8-cities-in-2017/ https://techcrunch.com/2017/01/09/fords-chariot-ride-sharing...
  - MegaButts 10y ago
    > Ford doesn't have any good ideas for the future Ford bet $1 billion on Argo.ai to build self-driving cars, and they also acquired Chariot. They are planning on using these to roll out self-driving vans in 2021 to compete with Uber, Lyft, etc. https://media.ford.com/content/fordmedia/fna/us/en/news/2017/01/03/ford-adding-electrified-f-150-mustang-transit-by-2020.html https://media.ford.com/content/fordmedia/fna/us/en/news/2017...
  - mhermher 10y ago
    "Ford doesn't have any good ideas for the future..." I think you just don't read about it because you don't care about Ford, but you read about it for Tesla. And it's not entirely your fault; there is definitely publication bias as well. Here is an article from literally today: https://techcrunch.com/2017/04/03/ford-tops-the-list-of-automated-driving-leaders-in-new-study/ https://techcrunch.com/2017/04/03/ford-tops-the-list-of-auto...
    - neom 10y ago
      Truth. I sat down with Ford exec group last week (Fontinalis is an investor in the company I work for) and they explained all their ideas. Most of them are excellent, very few of them are related directly to cars, and I don't expect they will start talking about them for quite some time. Long Ford. :)
  - iamacynic 10y ago
    > Ford doesn't have any good ideas for the future, they are too busy with the here and now according to who? your average HN reader who basically hates cars? yeah, sure. the guy who hates cars is bearish on ford, shocking. what about all the people buying raptors and gt350s and fgts and fists and fosts, hand over fist? do you even know what i'm talking about? do these insanely popular cars even register on your radar? it sounds like you're not-a-car-guy-but-a-tech-guy which makes up for a huge portion of tesla fans. and you're exposed when you make shit up like "ford doesn't innovate" or whatever your thesis is. signed, -not even a ford guy. porsche, there is no substitute.
    - erikpukinskis 10y ago
      The kind of people who buy raptors and gt350s are a tiny fraction of the market compared to the people who just want to get to work. Tesla isn't interested in car enthusiasts, they want to be the default answer to the question "How do I get from point A to point B for $1?"
      - emodendroket 10y ago
        The most popular cars are crossovers and SUVs, a segment Tesla hasn't shown any interest in so far.
        Malice 10y ago
        http://www.theverge.com/2017/4/2/15155572/tesla-q1-production-delivery http://www.theverge.com/2017/4/2/15155572/tesla-q1-productio...
        mee_too 10y ago
        Sure, if (your_universe == USA).
        emodendroket 10y ago
        OK, sure, the picture becomes a lot more complex if we want to talk about international markets. Anyway the car I see in the Tesla showroom does not say "car for practical people who just want to get from point A and point B." The article claims they're selling to the kind of people who would normally buy a Porsche.
  - neuralFatigue 10y ago
    https://techcrunch.com/2017/04/03/ford-tops-the-list-of-automated-driving-leaders-in-new-study/ https://techcrunch.com/2017/04/03/ford-tops-the-list-of-auto...
  - kakwa_ 10y ago
    On on side, Ford, and most other companies in the automobile industry, are big corporation. The bigger it gets, the more difficult it is to change. And all the sub-contracting done in the industry might lead to even more difficulties to move things around. However changing from petrol to electricity doesn't seem to be a drastic change. An important part of car making is changed (engine and energy), but it's not a radical shift (the rest of the car is still the same). Today, Tesla represents a very small fraction of the number of cars produced in the world. There are still quite expensive, even Model 3, and there are not as convenient as current gas cars (long recharge time and lower autonomy). EV are definitely interesting but they are still in their infancy. It's still to early for big car markers to shift completely. But the shift will come in 5 to 10 years, then it will be an interesting moment, we will see which companies have prepared enough to jump in the good wagon, and which companies will die. As a side note, cars, either gas or electric have always amazed me, and not in a good way, from an energy and ecology standpoint. A 1500Kg vehicle to move on average 1.5 persons or 120Kg seems a huge waste of energy. I do see their usefulness in low density environments such as rural areas as it's a system that doesn't require a complex infrastructure. But in dense environments like cities, transports needs could be far more efficiently provided by public transport and coherent urban planning. I truly hope that cars will not be as common in the second half of the XXI century as there are today.
- unit91 10y ago
  > it's much easier to spend 100 dollars meaningfully than a 100 billion Is that true? $100 is such a small amount of money that you're completely at the mercy of the supply chain. When you have $100B to spend, you are the supply chain (or at least a major part of it). Big money always makes the rules. They're either making money off of you now or planning to in the future. Now you might say, "but wait, plenty of products/companies have done poorly because I wouldn't give them that $100." But that's not true. In reality, product success is always in terms of big money -- it's just spread out over enough consumers who individually have the $100 buy/don't-buy option. Another objection: "yeah, but I always hear about big money wasting $30M (for example) on something stupid." Maybe so, but remember the scale. $30M waste on $100B is the same as $0.03 on $100. Moreover, the stupid thing they're wasting money on may not be that stupid -- you just might not be privy to all the details. All that may sound like it's bad, but I think it's pretty great system. I sell my products at a markup to get small money, then have the discretion to buy or not buy somebody else's stuff with the money I made. En masse, I form a part of the "big money" consumer group at Home Depot, Amazon, etc. that has power over the more centralized big money.
  - pakitan 10y ago
    You're talking about power, oculusthrift is talking about capacity. Of course big money has the power. But spending that big money in a non-wasteful way is a very hard job. What would you do if you were the head of Ford and had $100B to spend? Build more plants to manufacture more cars? You won't have who to sell them to. Easiest way out is to buy other companies, which is what big money usually do.
  - oculusthrift 10y ago
    Ask Eric Schmidt why Google has billions laying around in cash. You don't actually have to since peter thiel did: https://www.youtube.com/watch?v=2Q26XIKtwXQ https://www.youtube.com/watch?v=2Q26XIKtwXQ You can skip to 3:00 for an answer.
martinko 10y ago
Capex is not included in net income, so your analysis is completely wrong.
- crabasa 10y ago
  Of course Capex isn't included, but its direct consequence (depreciation) is. Tesla incurred almost $1B of depreciation in 2016: http://www.marketwatch.com/investing/stock/tsla/financials http://www.marketwatch.com/investing/stock/tsla/financials
  - martinko 10y ago
    So I dont see how the quote ties in with your statements about Tesla knowing where to invest (=capex)
    - crabasa 10y ago
      Let's break it down for you: 1. Telsa has many investment ideas 2. Tesla spends massive amounts of CAPEX 3. Tesla incurs large amount of depreciation 4. Tesla's net income goes down
      - bigtimeidiot 10y ago
        >Tesla spends massive amounts of CAPEX How do they spend in relation to the other car makers? Do you think that auto manufacturing capex simply turns off one day? It's a capital intensive industry.
urda 10y ago
That's not how the reporting works at all. Not at all. Make no mistake, as much as Tesla is loved by the Tech crowd they are currently nothing compared to Ford and other established auto makers.
- TheGRS 10y ago
  Well if we're going to be making generic claims I'll just add my own anecdotal observation: I notice Teslas all the time in Portland now. They are easy to spot and it brings a smile to my face. On the other hand Fords tend to blend into the background, save for occasional jacked-up F-150 or maybe a spiffy Mustang.
  - urda 10y ago
    It's not a generic claim at all, and not surprising a town like Portland has a number of Teslas. Tesla ships nowhere near as many cars as Ford. Doesn't matter what you may see locally or what "blends in", but there is nothing generic about the number of cars Tesla produces (which is very small compared to Ford, and other major Auto companies). Tesla has nowhere near the level of business as the other major auto companies. As mentioned elsewhere in the thread, there is nothing generic about: "Tesla sold 40,697 vehicles in the U.S. last year, according to researcher IHS Markit. Ford sells that many F-Series trucks in the U.S. about every three weeks" Ford sells that many trucks every three weeks. Every three weeks, versus an entire year for Tesla. Maybe the Model 3 will change that, but I do not have high hopes with how thinly spread Elon is.
allendoerfer 10y ago
> Ford: "We have no idea how to invest this money. I guess let's just put it in the bank." > Tesla: "We have so many idea for investments, we're only constrained by cash. Let's go back to the capital markets!" I think becoming as big as Ford already is, is one of Tesla's most positive possible futures if all of their many ideas play out. But they are already valued higher than that. How can this possibly work? There are so many car makers, there is no monopole they could get. Same for solar and batteries.
- erikpukinskis 10y ago
  > There are so many car makers, there is no monopole they could get. Same for solar and batteries. The automobile industry will contract as we move from individual ownership to mobility. But along with that transition some manufacturers will keep up and others will not. Tesla is hoping to be one of the winners, taking perhaps 25% of the mobility market as the car buying market dries up. Tesla's valuation is also based on the idea that clean energy will replace fossil fuels. If that happens, the battery market will grow by orders of magnitude. Tesla will basically take the market from coal and petroleum. They don't need a monopoly in either of these to justify their valuation. Simply get 10% of mobility and 10% of electricity storage and they'll have justified well above their current valuation. Remember mobility services will subsume much of public transit and shipping too. The borders between industries are moving around. You can't just ask "how much of industry X will Tesla get?" because whole industries will ascent and others will wither as we transition to sustainable energy.
  - emodendroket 10y ago
    Will they though? Traditional car makers are not ignoring renewables by any means. From article: > Dozens of other companies around the world have battery-powered cars on the market, and more are in development. Investors “act as if Tesla has some sort of patented product that cannot be replicated,” said Dave Sullivan, an analyst at researcher AutoPacific Inc. > “By the end of this decade, there’s going to be some significant choice for consumers looking for an electric vehicle,” he said, calling Tesla’s valuation outpacing Ford’s “mind boggling.”
  - 10y ago
bigtimeidiot 10y ago
>Ford: "We have no idea how to invest this money. I guess let's just put it in the bank." Ford has been in business for almost 120 years, and has contributed untold billions to the economy. What a terrible company, am I right?
shawkinaw 10y ago
More like Ford investors: "Let me soberly evaluate the company's present and future financial situation before I make any commitments" Tesla investors: "TAKE MY MONEY"
- deleted 10y ago
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- pembrook 10y ago
  Dead on. The price of Ford is predominantly being determined by institutional investors with a strong understanding of the dividend discount model. Investors moving the market on Ford are buying/selling what they believe to be a stable, mature company and are pricing pretty much ZERO potential for innovation into Ford. Tesla on the other hand is a darling of retail investors attracted to the marketing machine of "Silicon Valley disruption" and they have already priced in a belief that Tesla will win the global automotive market. DDM? What's a DDM? Meanwhile Ford, GM, and all the other automotive incumbents are investing in the same technologies as Tesla. Is it more likely that Tesla never falters (even slightly)? Or is it more likely one of the 10+ incumbents surprises with a self-driving/electric success? I know where I put my money. Interest rates will be climbing at the exact same time as Tesla will be attempting to expand their market to a larger audience who always purchase new cars with an accompanying loan. Oil prices are showing no indication of climbing again for years to come. Consumers have just replaced their aging vehicles in record numbers and won't be in the market for a new one for roughly 7-12 years. Good luck Tesla.
  - zxcmx 10y ago
    Right so for Tesla to make sense, it has to make the iPhone of cars with Ford analogously in the position of Nokia. It looks like that's the expected level of disruption priced in right now. (Personally I have no idea whether this is likely or not).
  - kerhackernews 10y ago
    Once self driving cars a the norm you'll see companies like Uber buying fleets of electric cars.
TheSpiceIsLife 10y ago
That sounds simple. Maybe overly simple. As though if only Ford could spend money on growing it's business and building more cars per year they could be in a better position. Ford share holders, presumably, received a return on their investment in the form of a dividend. While Telsa haven't and won't in the "foreseeable future".[1] So your overly simplified analysis is complicated somewhat by the individual investor carrying out a risk assessment and deciding which companies should or shouldn't be in their share portfolio. 1. http://ir.tesla.com/faq.cfm http://ir.tesla.com/faq.cfm
simplyluke 10y ago
Ford's experienced how devastating an economic downturn can be for an auto manufacture. Tesla started their first serious mass market car (Model S) in 2012 and has had the benefit of being in a growing and healthy market. Rainy day funds look like such a waste of money until the roof starts leaking.
barkingcat 10y ago
Uh ... Ford issues dividends so that money is distributed out to shareowners, many of whom are part of the Ford family.

by crabasa 10y ago

oculusthrift 10y ago

except ford is spending an order of magnitude more than tesla. it's much easier to spend 100 dollars meaningfully than a 100 billion. I also hope you're willing to level the same charge at Google and Apple.

seanmcdirmid 10y ago
It is like comparing a spunky startup to an entrenched corporation. Ya, IBM once spent more than Facebook, but Facebook was worth more because it had potential while IBM didn't. Ford doesn't have any good ideas for the future, they are too busy with the here and now and haven't shown an ability to do anything but incremental improvements with their R&D spending. Like we don't expect much more from IBM, we don't expect much more from Ford, but we do from Tesla.
- dkrich 10y ago
  What is this based on? Ford has had record profits over the past few years and has continually improved their vehicles and manufacturing processes, including remaking two assembly plants to make aluminum body F 150s. They also invested a billion dollars in Arvo AI and are making aggressive moves into self driving technology.
  - sqeaky 10y ago
    An aluminum body is exactly the kind of iteration that was being talked about. It is neat, but its not and all new drive train on a totally different tech. Aluminium is a pretty well understood material, while self driving cars are virgin territory. Tesla is making larger swings and potentially accepting larger risk. Ford is... iterating.
    - foofoo55 10y ago
      I would much rather drive an iterated vehicle than one based on a large swing or risk.
      - beamatronic 10y ago
        But you can drive the latter in the car pool lane
        Neliquat 10y ago
        You can drive anything in that lane with a passenger. Just sayin.
        cr0sh 10y ago
        IIRC, here in sand-land (AZ) you can drive solo in our OHV lanes with a vehicle that has less than four wheels (mainly motorcycles - but if you have the cash for one of those nice 3-wheeled "cars", you're still good).
        vkou 10y ago
        For now. Once enough EVs are on the road, it'll go back to being 2+ or 3+.
    - bluGill 10y ago
      What innovation is Tesla making? Electric cars are not new. In fact the first production car to reach 60mph back in the day was electric. Aluminum in a production car is a lot more innovative that an electric car. (li batteries in a production car though is innovative)
      - sqeaky 10y ago
        Electric cars aren't new... if you really want to compare modern vehicles to those it pile batteries. When the roadster came out there was nothing like it. Electric vehicles prior to the Telsas where research projects and low torque ultralight budget vehicles. Listing the differences between a Telsa and its closest successor, if you could pick one is not an easy task. Listing the difference between an F-150 and and F-150 with and aluminum was already done this sentence the hardest part was spelling aluminum. You can pick an threshold for choosing what is evolution and revolution, I am just trying to choose a reasonable one.
  - iamatworknow 10y ago
    >What is this based on? It's based on nothing other than the weird contempt you see for large, established corporations in the SV crowd. Big established corporation = big established rule book and management hierarchy = stifled innovation. Nevermind the fact that most of the major technological breakthroughs of the past 100 years were developed by the research wings of big corporations (Bell Labs, defense contractors).
    - MR4D 10y ago
      I'm not the parent poster, but I'd offer one reason why some people feel this way - Ford is a car company, while Tesla is a software company. Big difference in expectations, capital expenditures, etc. Based on committed capital, I think this is at least partially correct.
      - vkou 10y ago
        If Tesla is a 'software company', the last thing I'd ever want to do is buy a car from them. As anyone who has every used software will attest to: Most of the time, we can count our lucky stars if our commercial software 'works' for a year and a half. Cue all the: "If Microsoft/Apple/Google/Facebook/Snapchat made cars" jokes.
        iamatworknow 10y ago
        Definitely agree with you there. We're already seeing some of the more unpleasant idiosyncrasies of the software world with Tesla. I, for one, kinda like driving a car that doesn't require an internet connection, doesn't have forced OTA updates, doesn't send analytics data back to base, and won't potentially be bricked if someday the manufacturer goes out of business. Other manufactuers are starting to do the same thing but I'm going to enjoy my "dumb car" for as long as it lasts. Hopefully when fully electric vehicles become more mainstream and affordable there will still be an option to get a "dumb" version.
        cr0sh 10y ago
        I'm kinda with @iamatworknow on this, too (thus right there with ya too). I've contemplated the idea of my next pickup being a commercial vehicle, if I can get one (as a single unit and not a fleet sale) - which I probably won't be able to, but I can dream. It seems like that's the only way (except for going used) that I'm going to be able to get what I want: A standard-cab, short-bed pickup, ideally 4WD. I don't have kids, and won't have kids. I have no need for four doors and an extended cab. I don't need a long bed. I want a short wheelbase. So far, it's either buy a used pickup (back when they made and sold these kinds of trucks) or go with a commercial vehicle (where you can still sometimes find them - sometimes). The other perk about a commercial version is that they are stripped down to the bone. Nothing fancy in the cab, just the bare basics for a radio, cloth interior, non-electric controls for windows and seats. Basically, eliminate all the fru-fru stuff to make that much more reliable for work-based usage. In other words, I want a truck to be a truck - not some fancy "I only go to the mall to show off" substitute for a minivan. Add in some basic 4WD with manual hubs (again - nothing to break) - and there ya go. That's my dream truck (ok - if there were a Raptor version of it that'd be nice, too - but I can't afford that, so who really cares).
  - youngtaff 10y ago
    Ford have also been quite innovative in the engine department building small volume turbo charged engines for greater efficiency and lower emissions https://en.wikipedia.org/wiki/Ford_EcoBoost_engine https://en.wikipedia.org/wiki/Ford_EcoBoost_engine
    - jnicholasp 10y ago
      Being innovative at small details of existing concepts isn't likely to produce huge gains in stock value, as opposed to being innovative at entire categories of new industry- and infrastructure-disrupting products. Ford does the former, Tesla does the latter, and the market is valuing them accordingly. The market could be wrong, Tesla could fail to achieve their vision, Ford and other existing big companies could somehow turn themselves into organizations that aggressively pursue ambitious new visions.. but the market is betting not. You're welcome to make an opposing bet.
      - TFortunato 10y ago
        Maybe that's part of it. I'm sure another part of it is that Ford is already big enough, that there isn't a lot of growth potential there. That said, it's not like they are exactly just making small refinements to gasoline engines, while SV companies are the only real innovators, chasing electric and self-serving vehicles. We just tend not to talk about it as much on HN (compared to Tesla, for example): https://www.google.com/amp/s/electrek.co/2017/01/03/ford-new-electric-cars/amp/ https://www.google.com/amp/s/electrek.co/2017/01/03/ford-new...
        jnicholasp 10y ago
        Ford doesn't have much room to grow because they are a mature company in a mature field. Tesla is creating new fields. Ford doesn't know how to create new fields, therefore they're stuck making small improvements to existing things, and, once someone like Tesla makes it very clear that a new field exists and is viable, Ford will reluctantly follow the market trend. Ford does normal science [0], Tesla does revolutionary science [1]. [0] https://en.m.wikipedia.org/wiki/Normal_science https://en.m.wikipedia.org/wiki/Normal_science [1] https://en.m.wikipedia.org/wiki/The_Structure_of_Scientific_Revolutions https://en.m.wikipedia.org/wiki/The_Structure_of_Scientific_...
  - nwah1 10y ago
    Ford also signed a deal with Blackberry's automotive division and will be making their own software platform based on QNX. Sounds like they may be trying to compete with Android, Apple, and Tesla on the software side. And QNX has a good microkernel architecture for an automotive OS. https://www.forbes.com/sites/greatspeculations/2016/11/03/why-blackberrys-software-deal-with-ford-is-promising/#587c42731343 https://www.forbes.com/sites/greatspeculations/2016/11/03/wh...
  - seanmcdirmid 10y ago
    Market perception. Ford's P/E ratio is 9.89. IBM's P/E ratio is 14.02. Facebook's P/E ratio is 40.79. Tesla's P/E ratio is infinity since the E is negative. I'm sure Ford has done many incremental innovations, I didn't say they didn't. IBM does the same thing, and has "record profits" every few years also. Its just the market isn't expecting the next big thing to come from Ford, while they are expecting that from Tesla. If you think the market is wrong or too irrational, you can make a killing by shorting Tesla and buying cheap Ford stock.
    - pbtflakes 10y ago
      That's not how the math works out, according to Nasdaq.com Tesla's P/E was -53.63 for 2016 and estimated -103.48 for 2017.
      - seanmcdirmid 10y ago
        Sorry I guess. I couldn't find Tesla's P/E ratio on Google like I could for the other companies. It is my understanding that they don't report P/E ratios for companies with negative earnings. And it makes sense: a high P/E ratio indicates high potential. The lower the earnings, the higher the P/E ratio. But if earnings went negative, then the P/E ratio would automatically go negative (since that is how math works, as you say). So if my stock price is $100, and I earn $1, my P/E ratio is 100...so much potential! If I accidentally lost a dollar instead, my P/E ratio automatically becomes -100 even though not much changed in my earnings.
        kbenson 10y ago
        The interesting thing is that as soon as you go negative, a larger negative P/E is better than a smaller negative P/E, and it's really wonky at earnings close to 0.
      - frgtpsswrdlame 10y ago
        Those numbers are meaningless since Tesla has negative earnings. Infinity is basically right.
    - 10y ago
  - kamaal 10y ago
    Sorry but this is like Nokia saying they are spending all this money to make their phones and manufacturing processes awesome, all the while when a iPhone is getting designed somewhere. Incremental changes is what most senior management folks at places like Ford can do because that is what they teach at MBA schools using linear growth graphs. Self driving tech is really novelty thing now. And nobody expects it to work anytime soon. The real deal now is mind-blowing battery tech. Batteries that are rugged, can charge quickly and a car that can give a big range on a charge. Meanwhile talking of how efficiently somebody can build an ICE based car is really like someone talking about how quickly they can produce horse carriages. Doesn't really matter because that disruption is happening else where.
    - dkrich 10y ago
      That all sounds good in theory, but where are the numbers to back it up? Apple was making billions in profit on the iPhone at launch. Tesla has never made a profit and sold 70k vehicles last year. Companies like Ford and GM have huge numbers of loyal customers and move millions of vehicles a year and quite profitably. So while it sounds great to pretend that the automobile industry is dying and Tesla is capturing their market share by sheer innovation, the numbers tell a different story.
  - imgabe 10y ago
    Pretty much everyone who wants a Ford has one, or could buy one. There's not a lot of growth left for Ford. Their only hope is to steal a few customers from the other automakers, but those other automakers will steal a few back. It's unlikely that large numbers of people who don't currently own a Ford are going to buy one any time soon. Tesla on the other hand, has millions of potential customers who would and will buy one once they become a little more affordable and the charging infrastructure becomes more built out. We already saw how fast the pre-sales for the Model 3 went. And that was just people who were willing to put down money on a car that wasn't even available yet. It's not just about innovation or not. Tesla has a lot of room left to grow. Ford is about as big as it's ever going to get.
    - paulpauper 10y ago
      exactly. Ford is stagnant. Tesla has much more potential.
    - GVIrish 10y ago
      > Pretty much everyone who wants a Ford has one, or could buy one. Yeah but it's not like people buy one car, and never buy one again. Ford sells over 800,000 units of just the F150 every single year. Now it's true that they don't have as much potential for growth because they've reached a sort of stable place in the market. Maybe sales can grow a few percentage points year over year but Ford is unlikely to jump by 20% the way Tesla can. But that's not really saying much as Ford is a mature company with a complete lineup and Tesla is only on its 4th model of car.
    - emodendroket 10y ago
      Huh? Do you own a car?
    - dkrich 10y ago
      I don't understand this argument. Tesla is currently trading at a higher valuation than Ford. Ford has saturated the North American market. Tesla could eventually grow to saturate the North American market but is just a fledgling auto maker right now full of potential but not many sales. But they are already trading at a higher valuation than Ford. So unless you think that Tesla can command much higher margins than Ford does, then shouldn't Tesla only trade at a similar valuation when they are making similar amounts of cash?
  - snambi 10y ago
    Does anyone pre-order a F150?
    - prklmn 10y ago
      Does it matter? https://en.wikipedia.org/wiki/List_of_best-selling_automobiles https://en.wikipedia.org/wiki/List_of_best-selling_automobil... Take a look at the USA on this chart.
      - snambi 10y ago
        True, but that is not the point. In terms of electric + self-driving technology, Tesla has a huge lead over every other auto player including Ford.
    - emodendroket 10y ago
      There's no need to because there are plenty. People did preorder the Focus RS.
      - snambi 10y ago
        Interesting. When did this happen? Was it discounted?
        emodendroket 10y ago
        Not even a whole year ago, and, no, it wasn't discounted, it was marked up.
    - msisk6 10y ago
      Yes. Lots of private individuals as well as fleets will pre-order trucks to get the exact options they want.
      - snambi 10y ago
        Sounds like customization. Tesla pre-order is basically a queue for a future delivery, not about getting a specific feature.
- petra 10y ago
  Also ford is investing in on-demand shuttles service, offered at low cost, and expanding to 8 cities this year. Executed well this could become very popular.
  - samstave 10y ago
    More info on this please
    - blawson 10y ago
      https://techcrunch.com/2017/01/09/fords-chariot-ride-sharing-service-will-expand-to-8-cities-in-2017/ https://techcrunch.com/2017/01/09/fords-chariot-ride-sharing...
- MegaButts 10y ago
  > Ford doesn't have any good ideas for the future Ford bet $1 billion on Argo.ai to build self-driving cars, and they also acquired Chariot. They are planning on using these to roll out self-driving vans in 2021 to compete with Uber, Lyft, etc. https://media.ford.com/content/fordmedia/fna/us/en/news/2017/01/03/ford-adding-electrified-f-150-mustang-transit-by-2020.html https://media.ford.com/content/fordmedia/fna/us/en/news/2017...
- mhermher 10y ago
  "Ford doesn't have any good ideas for the future..." I think you just don't read about it because you don't care about Ford, but you read about it for Tesla. And it's not entirely your fault; there is definitely publication bias as well. Here is an article from literally today: https://techcrunch.com/2017/04/03/ford-tops-the-list-of-automated-driving-leaders-in-new-study/ https://techcrunch.com/2017/04/03/ford-tops-the-list-of-auto...
  - neom 10y ago
    Truth. I sat down with Ford exec group last week (Fontinalis is an investor in the company I work for) and they explained all their ideas. Most of them are excellent, very few of them are related directly to cars, and I don't expect they will start talking about them for quite some time. Long Ford. :)
- iamacynic 10y ago
  > Ford doesn't have any good ideas for the future, they are too busy with the here and now according to who? your average HN reader who basically hates cars? yeah, sure. the guy who hates cars is bearish on ford, shocking. what about all the people buying raptors and gt350s and fgts and fists and fosts, hand over fist? do you even know what i'm talking about? do these insanely popular cars even register on your radar? it sounds like you're not-a-car-guy-but-a-tech-guy which makes up for a huge portion of tesla fans. and you're exposed when you make shit up like "ford doesn't innovate" or whatever your thesis is. signed, -not even a ford guy. porsche, there is no substitute.
  - erikpukinskis 10y ago
    The kind of people who buy raptors and gt350s are a tiny fraction of the market compared to the people who just want to get to work. Tesla isn't interested in car enthusiasts, they want to be the default answer to the question "How do I get from point A to point B for $1?"
    - emodendroket 10y ago
      The most popular cars are crossovers and SUVs, a segment Tesla hasn't shown any interest in so far.
      - Malice 10y ago
        http://www.theverge.com/2017/4/2/15155572/tesla-q1-production-delivery http://www.theverge.com/2017/4/2/15155572/tesla-q1-productio...
      - mee_too 10y ago
        Sure, if (your_universe == USA).
        emodendroket 10y ago
        OK, sure, the picture becomes a lot more complex if we want to talk about international markets. Anyway the car I see in the Tesla showroom does not say "car for practical people who just want to get from point A and point B." The article claims they're selling to the kind of people who would normally buy a Porsche.
- neuralFatigue 10y ago
  https://techcrunch.com/2017/04/03/ford-tops-the-list-of-automated-driving-leaders-in-new-study/ https://techcrunch.com/2017/04/03/ford-tops-the-list-of-auto...
- kakwa_ 10y ago
  On on side, Ford, and most other companies in the automobile industry, are big corporation. The bigger it gets, the more difficult it is to change. And all the sub-contracting done in the industry might lead to even more difficulties to move things around. However changing from petrol to electricity doesn't seem to be a drastic change. An important part of car making is changed (engine and energy), but it's not a radical shift (the rest of the car is still the same). Today, Tesla represents a very small fraction of the number of cars produced in the world. There are still quite expensive, even Model 3, and there are not as convenient as current gas cars (long recharge time and lower autonomy). EV are definitely interesting but they are still in their infancy. It's still to early for big car markers to shift completely. But the shift will come in 5 to 10 years, then it will be an interesting moment, we will see which companies have prepared enough to jump in the good wagon, and which companies will die. As a side note, cars, either gas or electric have always amazed me, and not in a good way, from an energy and ecology standpoint. A 1500Kg vehicle to move on average 1.5 persons or 120Kg seems a huge waste of energy. I do see their usefulness in low density environments such as rural areas as it's a system that doesn't require a complex infrastructure. But in dense environments like cities, transports needs could be far more efficiently provided by public transport and coherent urban planning. I truly hope that cars will not be as common in the second half of the XXI century as there are today.
unit91 10y ago
> it's much easier to spend 100 dollars meaningfully than a 100 billion Is that true? $100 is such a small amount of money that you're completely at the mercy of the supply chain. When you have $100B to spend, you are the supply chain (or at least a major part of it). Big money always makes the rules. They're either making money off of you now or planning to in the future. Now you might say, "but wait, plenty of products/companies have done poorly because I wouldn't give them that $100." But that's not true. In reality, product success is always in terms of big money -- it's just spread out over enough consumers who individually have the $100 buy/don't-buy option. Another objection: "yeah, but I always hear about big money wasting $30M (for example) on something stupid." Maybe so, but remember the scale. $30M waste on $100B is the same as $0.03 on $100. Moreover, the stupid thing they're wasting money on may not be that stupid -- you just might not be privy to all the details. All that may sound like it's bad, but I think it's pretty great system. I sell my products at a markup to get small money, then have the discretion to buy or not buy somebody else's stuff with the money I made. En masse, I form a part of the "big money" consumer group at Home Depot, Amazon, etc. that has power over the more centralized big money.
- pakitan 10y ago
  You're talking about power, oculusthrift is talking about capacity. Of course big money has the power. But spending that big money in a non-wasteful way is a very hard job. What would you do if you were the head of Ford and had $100B to spend? Build more plants to manufacture more cars? You won't have who to sell them to. Easiest way out is to buy other companies, which is what big money usually do.
- oculusthrift 10y ago
  Ask Eric Schmidt why Google has billions laying around in cash. You don't actually have to since peter thiel did: https://www.youtube.com/watch?v=2Q26XIKtwXQ https://www.youtube.com/watch?v=2Q26XIKtwXQ You can skip to 3:00 for an answer.

martinko 10y ago

Capex is not included in net income, so your analysis is completely wrong.

crabasa 10y ago
Of course Capex isn't included, but its direct consequence (depreciation) is. Tesla incurred almost $1B of depreciation in 2016: http://www.marketwatch.com/investing/stock/tsla/financials http://www.marketwatch.com/investing/stock/tsla/financials
- martinko 10y ago
  So I dont see how the quote ties in with your statements about Tesla knowing where to invest (=capex)
  - crabasa 10y ago
    Let's break it down for you: 1. Telsa has many investment ideas 2. Tesla spends massive amounts of CAPEX 3. Tesla incurs large amount of depreciation 4. Tesla's net income goes down
    - bigtimeidiot 10y ago
      >Tesla spends massive amounts of CAPEX How do they spend in relation to the other car makers? Do you think that auto manufacturing capex simply turns off one day? It's a capital intensive industry.

urda 10y ago

That's not how the reporting works at all. Not at all. Make no mistake, as much as Tesla is loved by the Tech crowd they are currently nothing compared to Ford and other established auto makers.

TheGRS 10y ago
Well if we're going to be making generic claims I'll just add my own anecdotal observation: I notice Teslas all the time in Portland now. They are easy to spot and it brings a smile to my face. On the other hand Fords tend to blend into the background, save for occasional jacked-up F-150 or maybe a spiffy Mustang.
- urda 10y ago
  It's not a generic claim at all, and not surprising a town like Portland has a number of Teslas. Tesla ships nowhere near as many cars as Ford. Doesn't matter what you may see locally or what "blends in", but there is nothing generic about the number of cars Tesla produces (which is very small compared to Ford, and other major Auto companies). Tesla has nowhere near the level of business as the other major auto companies. As mentioned elsewhere in the thread, there is nothing generic about: "Tesla sold 40,697 vehicles in the U.S. last year, according to researcher IHS Markit. Ford sells that many F-Series trucks in the U.S. about every three weeks" Ford sells that many trucks every three weeks. Every three weeks, versus an entire year for Tesla. Maybe the Model 3 will change that, but I do not have high hopes with how thinly spread Elon is.

allendoerfer 10y ago

> Ford: "We have no idea how to invest this money. I guess let's just put it in the bank." > Tesla: "We have so many idea for investments, we're only constrained by cash. Let's go back to the capital markets!" I think becoming as big as Ford already is, is one of Tesla's most positive possible futures if all of their many ideas play out. But they are already valued higher than that. How can this possibly work? There are so many car makers, there is no monopole they could get. Same for solar and batteries.

erikpukinskis 10y ago
> There are so many car makers, there is no monopole they could get. Same for solar and batteries. The automobile industry will contract as we move from individual ownership to mobility. But along with that transition some manufacturers will keep up and others will not. Tesla is hoping to be one of the winners, taking perhaps 25% of the mobility market as the car buying market dries up. Tesla's valuation is also based on the idea that clean energy will replace fossil fuels. If that happens, the battery market will grow by orders of magnitude. Tesla will basically take the market from coal and petroleum. They don't need a monopoly in either of these to justify their valuation. Simply get 10% of mobility and 10% of electricity storage and they'll have justified well above their current valuation. Remember mobility services will subsume much of public transit and shipping too. The borders between industries are moving around. You can't just ask "how much of industry X will Tesla get?" because whole industries will ascent and others will wither as we transition to sustainable energy.
- emodendroket 10y ago
  Will they though? Traditional car makers are not ignoring renewables by any means. From article: > Dozens of other companies around the world have battery-powered cars on the market, and more are in development. Investors “act as if Tesla has some sort of patented product that cannot be replicated,” said Dave Sullivan, an analyst at researcher AutoPacific Inc. > “By the end of this decade, there’s going to be some significant choice for consumers looking for an electric vehicle,” he said, calling Tesla’s valuation outpacing Ford’s “mind boggling.”
- 10y ago

bigtimeidiot 10y ago

>Ford: "We have no idea how to invest this money. I guess let's just put it in the bank." Ford has been in business for almost 120 years, and has contributed untold billions to the economy. What a terrible company, am I right?

shawkinaw 10y ago

More like Ford investors: "Let me soberly evaluate the company's present and future financial situation before I make any commitments" Tesla investors: "TAKE MY MONEY"

deleted 10y ago
[deleted]
pembrook 10y ago
Dead on. The price of Ford is predominantly being determined by institutional investors with a strong understanding of the dividend discount model. Investors moving the market on Ford are buying/selling what they believe to be a stable, mature company and are pricing pretty much ZERO potential for innovation into Ford. Tesla on the other hand is a darling of retail investors attracted to the marketing machine of "Silicon Valley disruption" and they have already priced in a belief that Tesla will win the global automotive market. DDM? What's a DDM? Meanwhile Ford, GM, and all the other automotive incumbents are investing in the same technologies as Tesla. Is it more likely that Tesla never falters (even slightly)? Or is it more likely one of the 10+ incumbents surprises with a self-driving/electric success? I know where I put my money. Interest rates will be climbing at the exact same time as Tesla will be attempting to expand their market to a larger audience who always purchase new cars with an accompanying loan. Oil prices are showing no indication of climbing again for years to come. Consumers have just replaced their aging vehicles in record numbers and won't be in the market for a new one for roughly 7-12 years. Good luck Tesla.
- zxcmx 10y ago
  Right so for Tesla to make sense, it has to make the iPhone of cars with Ford analogously in the position of Nokia. It looks like that's the expected level of disruption priced in right now. (Personally I have no idea whether this is likely or not).
- kerhackernews 10y ago
  Once self driving cars a the norm you'll see companies like Uber buying fleets of electric cars.

TheSpiceIsLife 10y ago

That sounds simple. Maybe overly simple. As though if only Ford could spend money on growing it's business and building more cars per year they could be in a better position. Ford share holders, presumably, received a return on their investment in the form of a dividend. While Telsa haven't and won't in the "foreseeable future".[1] So your overly simplified analysis is complicated somewhat by the individual investor carrying out a risk assessment and deciding which companies should or shouldn't be in their share portfolio. 1. http://ir.tesla.com/faq.cfm http://ir.tesla.com/faq.cfm

simplyluke 10y ago

Ford's experienced how devastating an economic downturn can be for an auto manufacture. Tesla started their first serious mass market car (Model S) in 2012 and has had the benefit of being in a growing and healthy market. Rainy day funds look like such a waste of money until the roof starts leaking.

barkingcat 10y ago

Uh ... Ford issues dividends so that money is distributed out to shareowners, many of whom are part of the Ford family.