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> 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 constrain

> 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.”
- username223 10y ago
  > The automobile industry will contract as we move from individual ownership to mobility. What does this even mean? People like to leave stuff in their cars (e.g. mug, gym bag). They like them to be at their preferred level of cleanliness or disorder. Some even use them as a means of personal expression. If "mobility" were so desirable, ZipCar would have taken off 10 years ago. The "mobility" market will be about the size of the taxi, bus, and train market.
  - bluGill 10y ago
    Exactly. I like knowing that there are extra diapers and a change of clothing for each kid in my car should I need them. I carry enough in to cover my current needs, but as anyone with kids known sometimes that isn't enough. I know many people who keep golf clubs in their car because sometimes a salesman is looking to round out a 4-some. I like going to walmart/lowes... over lunch and leaving my treasures in my car. Car sharing won't actually work out anyway because everyone needs their car during rush hour. Everyone is driving then anyway, and then the cars sit idle.
    - moftz 10y ago
      The car sharing won't cover everyone's needs and some people will stick to keeping their own car. I'd imagine people living in urban areas are more likely to use a car sharing service since it's uneconomical to own a car in most cities. I'd imagine the suburbs will be a mix of sharing and ownership. I can imagine a family having a car they keep for weekends or whenever the parents and kids need to go somewhere but they still use a car sharing service during the weekdays when mom takes the family car to work and dad need to get to work too.
      - Tenhundfeld 10y ago
        I think you're exactly right. Once cars can drive themselves to destinations, it becomes so much easier to get by with one dedicated family car, supplemented with car sharing services. For example: Mom takes service to work, possibly carpooling. Dad takes uses family car to drop off kids and goes to work. Car drives itself to mom's work for her to use to pick up kids and commute home. Dad takes service home. Or whatever. The point is kids can always be in the car with the extra diapers, with safety features parents want, etc. The other part of this that people ignore is that a car sharing service could open up a lot of flexibility. For example, maybe our dedicated family car is just a sedan, but on this particular weekend with the grandparents in town, we can use the car sharing service to get a minivan and have everyone ride together. Or I want to pick up a piece of furniture and request a truck from the service. Or it's my anniversary, and I can request a luxury sedan to drive us to the restaurant for a touch of opulence. I'm sure there are many other examples people can think of. Like you say, car sharing won't cover everyone's need, especially at first, but eventually, the big players in the space will have enough sophistication to cover many cases, especially for a second car.
- allendoerfer 10y ago
  I think in a few years we will talk about how in 2017 people based their investment on the idea, that one company will win in not one, but in two already saturated markets, competing against companies with hundreds of thousands of employees.
- Certhas 10y ago
  > 's valuation is also based on the idea that clean energy will replace fossil fuels. Last month Tesla sold 10,000 electric vehicles to Fords 2,500. If we are serious about climate change, then sometime in the 2030s [1] we have to stop building new combustion engines. The entire technology platform on which these 6,7 million Ford sales rest is about to be swapped out in little over a decade. [1] https://arstechnica.com/cars/2016/10/germanys-bundesrat-votes-to-ban-the-internal-combustion-engine-by-2030/ https://arstechnica.com/cars/2016/10/germanys-bundesrat-vote...
  - TheSpiceIsLife 10y ago
    It's a good point: there very well could be a few Kodak Moments if technology changes and the incumbents don't adapt. But predicting the future is hard.
  - wang_li 10y ago
    > If we are serious about climate change, then sometime in the 2030s [1] we have to stop building new combustion engines. Or there might be a breakthrough in carbon capture, converting atmospheric CO2 into petroleum and we can drive combustion engines forever. CO2 capture is an area of active research and it's entirely possible that advances there will make Tesla and Solar City moot.
    - elihu 10y ago
      Effective CO2 capture might cause governments to not mandate a certain number of electric vehicles or provide tax credits for buyers or impose a carbon tax, but if electric vehicles are better and (eventually) cheaper to manufacture than gas vehicles, then people might still prefer electric to gas even without environmental motivation.
    - jeff_petersen 10y ago
      > CO2 capture is an area of active research and it's entirely possible that advances there will make Tesla and Solar City moot. I don't know how likely that is. Even if carbon capture comes through, the low hanging fruit of fossil fuels are gone so now we have to get more invasive in harvesting the hard-to-get ones (strip mining, fracking, etc). It's likely that even with C02 emissions taken care of that we'll want electric vehicles and renewable power in general.
- bigtimeidiot 10y ago
  >Simply get 10% of mobility and 10% of electricity storage and they'll have justified well above their current valuation. Please show your math. >Tesla will basically take the market from coal and petroleum. And you base this off, what, exactly? Sometimes I think that half of HackerNews didn't even know solar or battery backups were a thing before Tesla. These are competitive spaces where Tesla has essentially no market share (just like cars). I think Tesla will be successful, but I doubt they end up market leader in any of these things.
  - Robotbeat 10y ago
    Battery backups were several times higher before Tesla. Just looking at the South Australia proposed battery, Tesla's offer of $250/kWh is about a third of other bids for storage, from what I can tell.
  - delive 10y ago
    > Sometimes I think that half of HackerNews didn't even know solar or battery backups were a thing before Tesla. These are competitive spaces where Tesla has essentially no market share (just like cars). I'm genuinely curious if the numbers reported by SolarCity represent the full picture. [1] shows SolarCity with ~35% national marketshare while the closest competitor is at just over 10% (Vivint). This was in 2015, but it still appears to have a significant lead. [1] https://www.greentechmedia.com/research/subscription/u.s.-pv-leaderboard https://www.greentechmedia.com/research/subscription/u.s.-pv...
- intrasight 10y ago
  I get that that is the vision, and 10% of mobility or electricity would justify their valuation. I'm just not buying that they are going to achieve either. In fact, I'm of the opinion that they won't even exist as an independent company in five years time.
- lttlrck 10y ago
  I'm far from convinced that the people buying 40,000 Ford F150s every 3 weeks are doing it for mobility and they're just dying to take a "taxi" everywhere instead.
  - vectorjohn 10y ago
    Those aren't congesting city streets, at least that I've ever seen.
emodendroket 10y ago
A lot of these tech company valuations seem pretty questionable, not just Tesla's.

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.”
username223 10y ago
> The automobile industry will contract as we move from individual ownership to mobility. What does this even mean? People like to leave stuff in their cars (e.g. mug, gym bag). They like them to be at their preferred level of cleanliness or disorder. Some even use them as a means of personal expression. If "mobility" were so desirable, ZipCar would have taken off 10 years ago. The "mobility" market will be about the size of the taxi, bus, and train market.
- bluGill 10y ago
  Exactly. I like knowing that there are extra diapers and a change of clothing for each kid in my car should I need them. I carry enough in to cover my current needs, but as anyone with kids known sometimes that isn't enough. I know many people who keep golf clubs in their car because sometimes a salesman is looking to round out a 4-some. I like going to walmart/lowes... over lunch and leaving my treasures in my car. Car sharing won't actually work out anyway because everyone needs their car during rush hour. Everyone is driving then anyway, and then the cars sit idle.
  - moftz 10y ago
    The car sharing won't cover everyone's needs and some people will stick to keeping their own car. I'd imagine people living in urban areas are more likely to use a car sharing service since it's uneconomical to own a car in most cities. I'd imagine the suburbs will be a mix of sharing and ownership. I can imagine a family having a car they keep for weekends or whenever the parents and kids need to go somewhere but they still use a car sharing service during the weekdays when mom takes the family car to work and dad need to get to work too.
    - Tenhundfeld 10y ago
      I think you're exactly right. Once cars can drive themselves to destinations, it becomes so much easier to get by with one dedicated family car, supplemented with car sharing services. For example: Mom takes service to work, possibly carpooling. Dad takes uses family car to drop off kids and goes to work. Car drives itself to mom's work for her to use to pick up kids and commute home. Dad takes service home. Or whatever. The point is kids can always be in the car with the extra diapers, with safety features parents want, etc. The other part of this that people ignore is that a car sharing service could open up a lot of flexibility. For example, maybe our dedicated family car is just a sedan, but on this particular weekend with the grandparents in town, we can use the car sharing service to get a minivan and have everyone ride together. Or I want to pick up a piece of furniture and request a truck from the service. Or it's my anniversary, and I can request a luxury sedan to drive us to the restaurant for a touch of opulence. I'm sure there are many other examples people can think of. Like you say, car sharing won't cover everyone's need, especially at first, but eventually, the big players in the space will have enough sophistication to cover many cases, especially for a second car.
allendoerfer 10y ago
I think in a few years we will talk about how in 2017 people based their investment on the idea, that one company will win in not one, but in two already saturated markets, competing against companies with hundreds of thousands of employees.
Certhas 10y ago
> 's valuation is also based on the idea that clean energy will replace fossil fuels. Last month Tesla sold 10,000 electric vehicles to Fords 2,500. If we are serious about climate change, then sometime in the 2030s [1] we have to stop building new combustion engines. The entire technology platform on which these 6,7 million Ford sales rest is about to be swapped out in little over a decade. [1] https://arstechnica.com/cars/2016/10/germanys-bundesrat-votes-to-ban-the-internal-combustion-engine-by-2030/ https://arstechnica.com/cars/2016/10/germanys-bundesrat-vote...
- TheSpiceIsLife 10y ago
  It's a good point: there very well could be a few Kodak Moments if technology changes and the incumbents don't adapt. But predicting the future is hard.
- wang_li 10y ago
  > If we are serious about climate change, then sometime in the 2030s [1] we have to stop building new combustion engines. Or there might be a breakthrough in carbon capture, converting atmospheric CO2 into petroleum and we can drive combustion engines forever. CO2 capture is an area of active research and it's entirely possible that advances there will make Tesla and Solar City moot.
  - elihu 10y ago
    Effective CO2 capture might cause governments to not mandate a certain number of electric vehicles or provide tax credits for buyers or impose a carbon tax, but if electric vehicles are better and (eventually) cheaper to manufacture than gas vehicles, then people might still prefer electric to gas even without environmental motivation.
  - jeff_petersen 10y ago
    > CO2 capture is an area of active research and it's entirely possible that advances there will make Tesla and Solar City moot. I don't know how likely that is. Even if carbon capture comes through, the low hanging fruit of fossil fuels are gone so now we have to get more invasive in harvesting the hard-to-get ones (strip mining, fracking, etc). It's likely that even with C02 emissions taken care of that we'll want electric vehicles and renewable power in general.
bigtimeidiot 10y ago
>Simply get 10% of mobility and 10% of electricity storage and they'll have justified well above their current valuation. Please show your math. >Tesla will basically take the market from coal and petroleum. And you base this off, what, exactly? Sometimes I think that half of HackerNews didn't even know solar or battery backups were a thing before Tesla. These are competitive spaces where Tesla has essentially no market share (just like cars). I think Tesla will be successful, but I doubt they end up market leader in any of these things.
- Robotbeat 10y ago
  Battery backups were several times higher before Tesla. Just looking at the South Australia proposed battery, Tesla's offer of $250/kWh is about a third of other bids for storage, from what I can tell.
- delive 10y ago
  > Sometimes I think that half of HackerNews didn't even know solar or battery backups were a thing before Tesla. These are competitive spaces where Tesla has essentially no market share (just like cars). I'm genuinely curious if the numbers reported by SolarCity represent the full picture. [1] shows SolarCity with ~35% national marketshare while the closest competitor is at just over 10% (Vivint). This was in 2015, but it still appears to have a significant lead. [1] https://www.greentechmedia.com/research/subscription/u.s.-pv-leaderboard https://www.greentechmedia.com/research/subscription/u.s.-pv...
intrasight 10y ago
I get that that is the vision, and 10% of mobility or electricity would justify their valuation. I'm just not buying that they are going to achieve either. In fact, I'm of the opinion that they won't even exist as an independent company in five years time.
lttlrck 10y ago
I'm far from convinced that the people buying 40,000 Ford F150s every 3 weeks are doing it for mobility and they're just dying to take a "taxi" everywhere instead.
- vectorjohn 10y ago
  Those aren't congesting city streets, at least that I've ever seen.

emodendroket 10y ago

A lot of these tech company valuations seem pretty questionable, not just Tesla's.