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Pretty much exactly what that guy from Mad Money predicted would happen. I wouldn't invest in Tesla. Either electric cars take off or they don't, but if they d

• bdlang 16y ago
  I don't believe the IPO is about the model S; it's about ramping up to build a sub 30K (or was it 20K) model at the newly acquired plant in Nor Cal, partnered with Toyota.
  • jaekwon 16y ago
    citations? I thought it was about the model S, e.g. model S _is_ their consumer model. wikipedia: "On May 20, 2010 Tesla Motors announced it would form a partnership with Toyota to produce a new lower-priced model along with the Model S at the former NUMMI assembly plant in Fremont, California.[6]"
    • joshfinnie 16y ago
      I am confused by our comment, jaekwon. It seems as though you are asking for proof and then give it. Maybe I am just misunderstanding, but the wikipedia quote does state that there is a new model along with the Model S.
      • jaekwon 16y ago
        You got me. I guess I skipped the words "along with" when scanning. To my credit, the cited link [6] tells nothing about a new lower-priced model other than the Model S.
    • deleted 16y ago
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• pavs 16y ago
  To the best of my knowledge, none of the big car manufacturers have any electric cars that is anywhere comparable to the mileage of Tesla. The second best option, Nissan Leaf, has less than half of Tesla's mileage. Can anyone else verify this?
  • ynniv 16y ago
    That may be true, but only because the Tesla Roadster has twice the battery capacity (53 kWh vs Leaf's 24 kWh). The Roadster battery costs about $36,000, which is more than the sticker price of a Leaf. The Roadster is supposed to get 21.7 kWh/100mi, which is about the same as the Leaf (22.5 kWh/100 mi) and the Volt (25 kWh/100 mi). Given the current (im)maturity of the electric car industry, I would say those numbers are too close to differentiate. [http://en.wikipedia.org/wiki/Tesla_Roadster http://en.wikipedia.org/wiki/Tesla_Roadster] [http://en.wikipedia.org/wiki/Nissan_Leaf http://en.wikipedia.org/wiki/Nissan_Leaf] [http://www.businessinsider.com/theres-no-way-the-model-s-just-a-glorified-golf-cart-right-now-2009-4 http://www.businessinsider.com/theres-no-way-the-model-s-jus...]
  • hugh3 16y ago
    I assume by "mileage" you mean "range"? But yes, the Leaf has a shorter range than the Tesla Roadster, and is also a lot cheaper. Price vs range is the basic tradeoff when building an electric car. Nissan could build a more expensive Leaf with a longer range if they thought there was a market for it. I like the Chevy Volt's best-of-both-worlds solution, since it will do your sub-40-mile commute on electricity but still fire up its petrol-powered generator if you want to do hundreds of miles on the weekend. For an electric car, a zero risk of getting stranded is a huge selling point.
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    • jolan 16y ago
      > I like the Chevy Volt's best-of-both-worlds solution Ditto. I'm sure it provides them quite a bit of flexibility for the future. Once gas prices stay consistently high, they can augment the battery capacity/gas tank size ratio on the next year's models.
• neurotech1 16y ago
  Don't forget that Toyota has a stake in Tesla, and they are a big car company. It's not inconceivable that Toyota could assist in distribution, as it doesn't directly compete against the Prius.
  • ghurlman 16y ago
    It wouldn't surprise me one bit if down the road Tesla became a Toyota-owned & operated brand, much like Scion is today.
  • hugh3 16y ago
    Or they could say "thanks for the technology, suckers!", write off their piddly $50 million investment in Tesla, and start cranking out electric Corollas from a factory in Yokohama and/or Guangzhou.
    • eru 16y ago
      While this outcome would not be very glamorous, I'd might still be worthwhile for the founders.
• huhtenberg 16y ago
  > muscle in and eat Tesla's lunch This would largely depend on whether Tesla would strive to become a mainstream car maker or would choose to retain its focus on building luxury/exotic cars. Think Aston Martin kind of company. Though they have already announced an average-priced sedan version that was scheduled for mass production in 2012, so I guess they are going after the behemoths.
  • keltex 16y ago
    You mean the Aston Martin that was part of Ford until 2007? Ford still own a portion of and to which they contribute the parts and engineering know how.
  • sbov 16y ago
    Last I heard the model S was going to start at 49k. That definitely is in the luxury car price range, and not competition with toyota/nissan/etc.
  • hugh3 16y ago
    Luxury and exotic cars is a terrible business to be in. Small-volume supercar manufacturers pop in and out of existence every few years, leaving behind tiny production runs of awesome-looking machines and no spare parts. The only luxury/exotic car manufacturers which have survived are the ones which managed to pick up enough of a history to be bought out by a much larger mass-market brand as a halo. afaik they mostly operate at a loss. Bentley, Lamborghini and Bugatti belong to VW. Ferrari is Fiat. Lotus is Proton, and Rolls-Royce gets passed around like a cheap hooker. Only Aston Martin is currently owned by someone other than another car company, but that may not last.
    • deleted 16y ago
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    • shin_lao 16y ago
      What about Porsche, BMW and Mercedes? Any business is good to be in - provided you're good enough. There's no such thing as easy money.
• phreeza 16y ago
  By that logic, no startup that somehow touches on established players markets would be worth doing. A bit like saying Writely should never have built a web-based text processor because Microsoft can "easily muscle in" and eat their lunch.
  • hugh3 16y ago
    What I should have said is that the car industry, unlike the software industry, has huge advantages for big players (due to the enormous capital cost of... well, nearly everything), and small advantages for first movers (due to the near-nonexistent network effects).
    • jbooth 16y ago
      Yeah, but the product cycle is 2-4 years. Plenty of time for you to get rich by being bought out by the big guys to accelerate time to market, or by land-grabbing a decent market share in that window before they catch up to you.
  • nostrademons 16y ago
    That's largely true. Writely and Word are in different markets - the market for web-based cloud word processors is very different than the one for full-featured desktop word processors. Same goes for most of the web startups that have succeeded. Somebody is inevitably going to bring up Google, since there were established players in search when Google was founded. But at the time of Google's founding, all the established players in search thought that their business was in portals, leaving the search market itself open for a hungry competitor. Clayton Christensen has more on this in The Innovator's Dilemma/Solution. Innovations that make things better for an established market's existing customers tend to be sustaining innovations, benefiting entrenched players. Even if a startup gets a foothold on one, they can and will be bought out or outcompeted by a big firm, which has more resources and every incentive to pour them into development. Innovations that make things better for a new and untapped customer base, however, tend to be disruptive innovations, the sort of which new successful startups are made. The defining characteristic of disruptive innovations is that they're less profitable than sustaining innovations: therefore, at every point in time, the large entrenched competitors have every incentive not to succeed in the startup's market. Things like the PC for IBM, the web for Microsoft, free online access for newspapers, and search for Altavista. Note that in all cases, those companies did enter the new market, they just didn't succeed in it. Because it was not in the company's interest to succeed: A success would mean that the company's overall profit is less than it started with, which is awfully hard to justify to shareholders. I'm not entirely sure which category Tesla fits into, but I'm having a tough time seeing a $109k roadster and $57k sedan as disruptive innovations, which usually target cheaper market segments that big companies overlook as unprofitable.
• bobbyi 16y ago
  > Pretty much exactly what that guy from Mad Money predicted would happen. How so? Mad Money was bearish on Tesla as a company and so far since its IPO it is beating the market as a whole (the Nasdaq Comp and the S&P 500).
  • hugh3 16y ago
    Well, he predicted a first-day bump followed by a long slide. There's still room for him to be proven wrong, though.
• mattmcknight 16y ago
  I did buy some, but I only sold about half when it was up 50%. I own a lot more of BYD, which is way up from when I got hold of it. I am still not sure the whole electric car concept makes sense yet. One thing about plugin electrics that gets me though is that, for me, they switch from gasoline powered energy to coal power off of the grid, which would seem to be a bit more carbon-y. Another slightly amusing negative is that the current Energy bill winding its way through congress looks like it is going to put a carbon tax on utilities (where the power for the cars would be paid) and not on gasoline, thus making it potentially more expensive for electric power than gas power (and making the scapegoat utility companies appear to be raising rates for customers while the politically unpopular gas tax is avoided.
• timwiseman 16y ago
  If Tesla develops relatively good technology and a good patent portfolio then it is much more likely that they would get purchased than simply be out competed. If they are purchased while on the path to success it is likely that the founders and many early investors will make a very nice sum in the process.