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> People are blinded by so called conventional wisdom This seems to be the exact kind of thinking that led to the dotcom bust. I've commented before on the wh

by cbanek 9y ago

> People are blinded by so called conventional wisdom This seems to be the exact kind of thinking that led to the dotcom bust. I've commented before on the whole Tesla valuation thing, and people try to think of it like a tech company, and want to value it like a tech company. Tesla needs to actually produce things in a factory, deal with regulations and supply chain, which are very conventional business problems, and where the trouble is.

lmilcin 9y ago
Tesla is not a production company yet. Tesla is a promise of what it can be. The promise is that it can be one of the biggest, greatest and most important companies in the world, sometimes in the future. The current job of Tesla is not to start producing tons of cash, it is to maintain the faith that the promise will be fulfilled. The faith is maintained in few ways: - by constantly kicking ass technologically -- improving the products way outside of what competitors believed was even possible, - by iterating crazy fast on their ideas -- something that conventional car companies will not be able to do. They won't be able to do because they would have to replace most of their management with people that are suited to this pace of change. Conventional car companies may flex muscles, but all their money will not be enough because the biggest problem doesn't lie in having the funds but in people. Funds are easy once you show you can do it, but getting the right people is much more difficult once you have large and established business. - by showing they can maintain exponential growth until they are dominant force in the market.
- dragontamer 9y ago
  > Tesla is not a production company yet. Tesla is a promise of what it can be. A company that loses $1.5 Billion per quarter? Not even Amazon at "peak investment" had such horrible cash flow numbers. There's very little value in a charity. If Tesla can't correct itself and actually start making money (or at very least: become a sustainable charity and prevent itself from losing money!!), then it simply has no future. It will eventually run out of cash and die. That's the worry. If Tesla dies, then Tesla cars won't have anyone to take care of them, because Tesla's horrible model prevents 3rd parties from learning how to maintain a Tesla car.
- empath75 9y ago
  If they can’t build cars, all the tech demos in the world don’t matter.
- cbanek 9y ago
  > Tesla is not a production company yet. Tesla is a promise of what it can be. Well, it's not exactly a startup anymore either, which is what it sounds like you're describing (escape velocity). They're a public company that has existed for some time. But like you say, really, it's valued on "faith."
- semi-extrinsic 9y ago
  > improving the products way outside of what competitors believed was even possible None of their competitors have said anything Tesla has done is impossible, merely that it's been (and remains) unprofitable without crazy VC funding that Tesla is tapping into. > by iterating crazy fast on their ideas -- something that conventional car companies will not be able to do On the flipside - did you ever hear of conventional car companies with the kind of problems Tesla has, where they've overpromised/underdelivered on production rates by 20x - 30x? And they're stuck on elementary things like they don't know how to automate welding metal bits together? > by showing they can maintain exponential growth until they are dominant force in the market Can you show me the numbers supporting that claim? Tesla growth e.g. in number of vehicles sold from 2010 to 2016 isn't very different from the total automobile market in the US, which also grew almost 2x in the same period. If you look at it quarter by quarter, it's obviously linear growth for each of their models (Model S, Model X). And their total numbers for cars sold, revenue, income etc. remains at the sub-one-percent level as compared to GM, Ford etc.
  - ricardobeat 9y ago
    > did you ever hear of conventional car companies with the kind of problems Tesla has, where they've overpromised/underdelivered on production rates by 20x - 30x Yes: https://truckyeah.jalopnik.com/why-wont-gm-deliver-its-huge-backlog-of-diesel-chevy-co-1748533129 https://truckyeah.jalopnik.com/why-wont-gm-deliver-its-huge-... It is incredibly common for cars to have 3-4 month back orders. The Model 3 production is actually in-line with the original 'late 2017' start of deliveries, the goalpost was pushed closer later.
- lttlrck 9y ago
  I’ll be convinced they are kicking ass when the Model 3 is shipping in promised volumes and there is no other competitor in sight. Getting 0-60 times through the application of inherit properties of electric motors doesn’t count.
- danso 9y ago
  > by constantly kicking ass technologically -- improving the products way outside of what competitors believed was even possible... by iterating crazy fast on their ideas -- something that conventional car companies will not be able to do. Since you're so keen to bag on those dopey conventional car industries and their inferior practices and dumbass managers, explain to me why Tesla, who have in your assessment, have successfully proven their kick-ass technology and superior processes, have been chronically terrible at meeting quarterly production estimates? Is industrial engineering and optimization just too mundane for the exemplars at Tesla?
  - fooker 9y ago
    When you try things no one has tried before, you make mistakes.

by cbanek 9y ago

lmilcin 9y ago

Tesla is not a production company yet. Tesla is a promise of what it can be. The promise is that it can be one of the biggest, greatest and most important companies in the world, sometimes in the future. The current job of Tesla is not to start producing tons of cash, it is to maintain the faith that the promise will be fulfilled. The faith is maintained in few ways: - by constantly kicking ass technologically -- improving the products way outside of what competitors believed was even possible, - by iterating crazy fast on their ideas -- something that conventional car companies will not be able to do. They won't be able to do because they would have to replace most of their management with people that are suited to this pace of change. Conventional car companies may flex muscles, but all their money will not be enough because the biggest problem doesn't lie in having the funds but in people. Funds are easy once you show you can do it, but getting the right people is much more difficult once you have large and established business. - by showing they can maintain exponential growth until they are dominant force in the market.

dragontamer 9y ago
> Tesla is not a production company yet. Tesla is a promise of what it can be. A company that loses $1.5 Billion per quarter? Not even Amazon at "peak investment" had such horrible cash flow numbers. There's very little value in a charity. If Tesla can't correct itself and actually start making money (or at very least: become a sustainable charity and prevent itself from losing money!!), then it simply has no future. It will eventually run out of cash and die. That's the worry. If Tesla dies, then Tesla cars won't have anyone to take care of them, because Tesla's horrible model prevents 3rd parties from learning how to maintain a Tesla car.
empath75 9y ago
If they can’t build cars, all the tech demos in the world don’t matter.
cbanek 9y ago
> Tesla is not a production company yet. Tesla is a promise of what it can be. Well, it's not exactly a startup anymore either, which is what it sounds like you're describing (escape velocity). They're a public company that has existed for some time. But like you say, really, it's valued on "faith."
semi-extrinsic 9y ago
> improving the products way outside of what competitors believed was even possible None of their competitors have said anything Tesla has done is impossible, merely that it's been (and remains) unprofitable without crazy VC funding that Tesla is tapping into. > by iterating crazy fast on their ideas -- something that conventional car companies will not be able to do On the flipside - did you ever hear of conventional car companies with the kind of problems Tesla has, where they've overpromised/underdelivered on production rates by 20x - 30x? And they're stuck on elementary things like they don't know how to automate welding metal bits together? > by showing they can maintain exponential growth until they are dominant force in the market Can you show me the numbers supporting that claim? Tesla growth e.g. in number of vehicles sold from 2010 to 2016 isn't very different from the total automobile market in the US, which also grew almost 2x in the same period. If you look at it quarter by quarter, it's obviously linear growth for each of their models (Model S, Model X). And their total numbers for cars sold, revenue, income etc. remains at the sub-one-percent level as compared to GM, Ford etc.
- ricardobeat 9y ago
  > did you ever hear of conventional car companies with the kind of problems Tesla has, where they've overpromised/underdelivered on production rates by 20x - 30x Yes: https://truckyeah.jalopnik.com/why-wont-gm-deliver-its-huge-backlog-of-diesel-chevy-co-1748533129 https://truckyeah.jalopnik.com/why-wont-gm-deliver-its-huge-... It is incredibly common for cars to have 3-4 month back orders. The Model 3 production is actually in-line with the original 'late 2017' start of deliveries, the goalpost was pushed closer later.
lttlrck 9y ago
I’ll be convinced they are kicking ass when the Model 3 is shipping in promised volumes and there is no other competitor in sight. Getting 0-60 times through the application of inherit properties of electric motors doesn’t count.
danso 9y ago
> by constantly kicking ass technologically -- improving the products way outside of what competitors believed was even possible... by iterating crazy fast on their ideas -- something that conventional car companies will not be able to do. Since you're so keen to bag on those dopey conventional car industries and their inferior practices and dumbass managers, explain to me why Tesla, who have in your assessment, have successfully proven their kick-ass technology and superior processes, have been chronically terrible at meeting quarterly production estimates? Is industrial engineering and optimization just too mundane for the exemplars at Tesla?
- fooker 9y ago
  When you try things no one has tried before, you make mistakes.