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Their build quality problems are solvable. So are the production issues. These are not issues that will sink the company, especially because they are solvable a

Their build quality problems are solvable. So are the production issues. These are not issues that will sink the company, especially because they are solvable and generally something to be expected during hyper growth like Tesla is right now. > And this isn't even their biggest problem, which is that the cars are too expensive for the mass market. How is Tesla's biggest problem that their cars have a very high ASP? Demand is not a problem for Tesla at all, much less their biggest one. Now, if you think that Tesla should make a cheaper car, don't hold your breath. Elon has said many times that rather than make a cheap electric car, he thinks it will make more sense to make a mid-price car that can do self-driving to earn the owner money during off-driving hours that the owner can then use to offset the cost of ownership of a Tesla. Yes it is a bold play, and it might not work. But Tesla's biggest problem is not that they make expensive cars. I'm not sure what their "biggest problem" would be, except for solving their current issues so that they could scale up more smoothly.

matte_black 9y ago
You have to be incredibly out of touch to think people are going to want to rent out their personal car to filthy strangers to help offset the cost of ownership.
- maxxxxx 9y ago
  Especially once more people start doing this the profit margins will go down quickly.
- cryptoz 9y ago
  > You have to be incredibly out of touch to think people are going to want to rent out their personal car to filthy strangers to help offset the cost of ownership. You have to be incredibly out of touch to group all car consumers into the same category. That's insulting and rude and wrong. I, for one, and literally everyone I know in person, would absolutely jump up and down with excitement, throw-our-money-at-Tesla-forever if I could buy a Tesla and rent it out to offset the cost. You are incredibly out of touch if you think that there aren't hundreds of millions of people just like me on this one. Edit: And, what, HN agrees that "filthy strangers" is a good way to talk about your fellow peers and neighbours? Ugh. The people renting cars are not "filthy strangers". They're just people. Why is all this hateful language, specifically pointed towards the less-wealthy in society, considered reasonable language on HN? It's rude as shit and infuriating that it's tolerated here. Your fellow humans are not "filthy strangers".
  - stevenh 9y ago
    This is the most soy comment I've ever seen on this site.
  - zdragnar 9y ago
    People over whom you have social interaction- neighbors, work peers and so forth- are on better behavior than arbitrary strangers. This isn't a solid rule by any means, but I think most people with experience in retail know what I'm talking about... if someone thinks they're never going to see you again, they will behave very differently, and never for the better. There is a HUGE difference between your peers, neighbors, and "fellow humans". OTOH, Airbnb and VRBO make pretty compelling arguments the other direction; I suspect this is at least partly due to security deposits and the reputation systems where owners can leave feedback about renters.
    - matte_black 9y ago
      I did my stint in retail and know exactly what you’re talking about. Thank god I escaped and lived happily ever after.
- username223 9y ago
  Agreed -- this seems like a terrible plan. Taxis are designed to be durable more than comfortable, have drivers to constrain rider misbehavior, and generally have fares ride in back, and they still get nasty. If I wanted my car to serve as an unsupervised taxi, it would have to be durable inside, I could never leave any personal belongings in it (e.g. gym bag, sunglasses, recent purchases), and I would have to get it seriously cleaned on a regular basis. That would dramatically increase the cost and/or decrease the value of ownership. Just look at bikes: either you hire/"share" a 40-pound tank that sucks to ride, rent something decent with a substantial deposit, or buy a nice bike that you would never loan out to random strangers. Public transportation is a great thing, but it is fundamentally different from private vehicles.
  - Klathmon 9y ago
    And yet Uber and Lyft are monumentally successful, which is the exact same thing, but with a driver.
    - username223 9y ago
      Uber and Lyft are "monumentally successful" (while still hemorrhaging money and, in one case, flirting with being sued out of existence) because people are bad at math. People are much better at noticing that their stuff gets trashed. Don't underestimate the importance of "with a driver."
      - Klathmon 9y ago
        Okay but if your argument is that "people won't sign up for it", you are clearly wrong. Regardless of the financial success of those companies, they are everywhere in just about every major city and even most suburban areas in the US. Throw a streaming camera in the car, and require a credit card on file, and they can trash the inside of my car all they want, they are just paying for the cleaning or new interior.
        matte_black 9y ago
- jameslevy 9y ago
  I am also a bit skeptical, but then again I would have said a similar thing about the entire concept of UberX/Lyft in 2010.
- aianus 9y ago
  People are already successfully renting out Porsches and Teslas on Turo in my city at over a hundred dollars a day (and with 5 day minimums!). If you give me $500 you can puke in my car all you want. And I'm relatively well-off and don't need the money, imagine someone struggling to make the payments like most Americans.
  - matte_black 9y ago
    People also rent out their homes on AirBnB. Yet we don’t live in a world where most people buy a primary home they can’t afford with the intention that they will just rent it out to offset the mortgage a bit. The closest we get is people getting roommates for an apartment.
- jstandard 9y ago
  Turo (fka RelayRides) has been successful at doing exactly this. Airbnb has also shown people's willingness to share personal spaces to offset their mortgage or rent.
  - matte_black 9y ago
    Yea? And how do you know these platforms haven’t already peaked? If so many people are willing to rent out space why isn’t damn near every house on AirBnB? There is nothing to support the idea that a few people being willing to rent out space means a much larger class of consumers is willing to do so.
    - jstandard 9y ago
      If that is your position, it's quite different from your initial statement that GP had to be "incredibly out of touch". There are multiple, billion dollar companies where users rent out large, personal assets to others. I don't see that as "nothing to support the idea". It's direct evidence that people are willing to do it at a reasonable level of scale. I'm not sure what level of scale you're thinking or what you're responding to at this point. If you can scale back a bit on the hyperbole and adversarial mindset, I'm interested to discuss.
      - matte_black 9y ago
        The notion that people are so desperate for an expensive Tesla that they will buy it and then happily rent it out to help pay for the cost is out of touch. People have other options, people value keeping their private property private, and people will certainly just wait for when they can buy a cheaper used Tesla, just like any other car.
        jstandard 9y ago
        It is interesting to consider how much fully autonomy will impact attitudes toward private property. I agree it's a stretch to assume most potential buyers are willing to rent their car out as an autonomous vehicle to offset the cost. However I do think that % of people will be higher than it is today because full autonomy creates more situations where you've bought an expensive asset which sits idle throughout most of the day when you're working or sleeping. Elon's assuming that Tesla will be the first to market with Level 5 autonomy. If that's the case, people will be willing to pay a huge premium to get one, especially if they think they can offset the costs by having it "pay for itself while you sleep".
maxxxxx 9y ago
" Their build quality problems are solvable. So are the production issues. These are not issues that will sink the company, especially because they are solvable and generally something to be expected during hyper growth like Tesla is right now." Don't underestimate production and quality. It takes a lot of time and experience to get the supply chain reliable and cost efficient. This is not software where you can make changes quickly. You need tooling and production facilities which are expensive and take years to build.
- cryptoz 9y ago
  > Don't underestimate production and quality. I am not underestimating production and quality. I even said that I think that Tesla's production and quality problems they have currently are their biggest problems. I do not underestimate them - but I also do not think they will sink the company. > This is not software where you can make changes quickly. Compared to the previous industry's way of doing things, yes it is like software where you can make changes quickly. Even on the scale of years, Tesla is showing itself to be more agile than traditional car manufacturers.
  - maxxxxx 9y ago
    I still think you are underestimating how much effort goes into production and quality of physical products. The "previous industry" are no dummies and they have optimized their processes for a long time. It will be very difficult for Tesla to catch up in short time.
    - cryptoz 9y ago
      I don't expect Tesla to catch up in a short time. It has already been decades almost, and I would expect it to be decades more. Without doing any real math, 2040, 2050 seems like a good mental calculation result for when I would expect Tesla to be a larger company that matches or surpasses the outputs of their competitors in terms of car production. Yes, it takes a long time to build a car company. Tesla isn't going anywhere, production issues or not. They will find a way, and they will do it more efficiently than previous car companies. > The "previous industry" are no dummies I don't agree with this, but I wouldn't use the word dummy exactly either. I would say stubborn, and they are very very stubborn. It will take them longer to pivot to winning and sustainable strategies like Tesla's than it will for Tesla to resolve its production and scaling issues.
dragonwriter 9y ago
> Elon has said many times that rather than make a cheap electric car, he thinks it will make more sense to make a mid-price car that can do self-driving to earn the owner money during off-driving hours that the owner can then use to offset the cost of ownership of a Tesla. What Elon is really saying is that the early adopters are subsidizing development of fleet vehicles that aren’t aimed for significant individual ownership. Owning a personal vehicle and renting out it's idle time is a big maintenance and liability commitment which inherentlt reduces the reliable access that is the whole reason for ownership. Specialized rental operations will be able to optimize handling the liability and maintenance overhead. Individual owners will be better of not owning and doing on-demand rental of self-driving vehicles than renting them out, because specialized rental orgs will drive the rental price down to where non-specialists won't be able to make a profit with the maintenance and liability costs imposed.

matte_black 9y ago

You have to be incredibly out of touch to think people are going to want to rent out their personal car to filthy strangers to help offset the cost of ownership.

maxxxxx 9y ago
Especially once more people start doing this the profit margins will go down quickly.
cryptoz 9y ago
> You have to be incredibly out of touch to think people are going to want to rent out their personal car to filthy strangers to help offset the cost of ownership. You have to be incredibly out of touch to group all car consumers into the same category. That's insulting and rude and wrong. I, for one, and literally everyone I know in person, would absolutely jump up and down with excitement, throw-our-money-at-Tesla-forever if I could buy a Tesla and rent it out to offset the cost. You are incredibly out of touch if you think that there aren't hundreds of millions of people just like me on this one. Edit: And, what, HN agrees that "filthy strangers" is a good way to talk about your fellow peers and neighbours? Ugh. The people renting cars are not "filthy strangers". They're just people. Why is all this hateful language, specifically pointed towards the less-wealthy in society, considered reasonable language on HN? It's rude as shit and infuriating that it's tolerated here. Your fellow humans are not "filthy strangers".
- stevenh 9y ago
  This is the most soy comment I've ever seen on this site.
- zdragnar 9y ago
  People over whom you have social interaction- neighbors, work peers and so forth- are on better behavior than arbitrary strangers. This isn't a solid rule by any means, but I think most people with experience in retail know what I'm talking about... if someone thinks they're never going to see you again, they will behave very differently, and never for the better. There is a HUGE difference between your peers, neighbors, and "fellow humans". OTOH, Airbnb and VRBO make pretty compelling arguments the other direction; I suspect this is at least partly due to security deposits and the reputation systems where owners can leave feedback about renters.
  - matte_black 9y ago
    I did my stint in retail and know exactly what you’re talking about. Thank god I escaped and lived happily ever after.
username223 9y ago
Agreed -- this seems like a terrible plan. Taxis are designed to be durable more than comfortable, have drivers to constrain rider misbehavior, and generally have fares ride in back, and they still get nasty. If I wanted my car to serve as an unsupervised taxi, it would have to be durable inside, I could never leave any personal belongings in it (e.g. gym bag, sunglasses, recent purchases), and I would have to get it seriously cleaned on a regular basis. That would dramatically increase the cost and/or decrease the value of ownership. Just look at bikes: either you hire/"share" a 40-pound tank that sucks to ride, rent something decent with a substantial deposit, or buy a nice bike that you would never loan out to random strangers. Public transportation is a great thing, but it is fundamentally different from private vehicles.
- Klathmon 9y ago
  And yet Uber and Lyft are monumentally successful, which is the exact same thing, but with a driver.
  - username223 9y ago
    Uber and Lyft are "monumentally successful" (while still hemorrhaging money and, in one case, flirting with being sued out of existence) because people are bad at math. People are much better at noticing that their stuff gets trashed. Don't underestimate the importance of "with a driver."
    - Klathmon 9y ago
      Okay but if your argument is that "people won't sign up for it", you are clearly wrong. Regardless of the financial success of those companies, they are everywhere in just about every major city and even most suburban areas in the US. Throw a streaming camera in the car, and require a credit card on file, and they can trash the inside of my car all they want, they are just paying for the cleaning or new interior.
      - matte_black 9y ago
jameslevy 9y ago
I am also a bit skeptical, but then again I would have said a similar thing about the entire concept of UberX/Lyft in 2010.
aianus 9y ago
People are already successfully renting out Porsches and Teslas on Turo in my city at over a hundred dollars a day (and with 5 day minimums!). If you give me $500 you can puke in my car all you want. And I'm relatively well-off and don't need the money, imagine someone struggling to make the payments like most Americans.
- matte_black 9y ago
  People also rent out their homes on AirBnB. Yet we don’t live in a world where most people buy a primary home they can’t afford with the intention that they will just rent it out to offset the mortgage a bit. The closest we get is people getting roommates for an apartment.
jstandard 9y ago
Turo (fka RelayRides) has been successful at doing exactly this. Airbnb has also shown people's willingness to share personal spaces to offset their mortgage or rent.
- matte_black 9y ago
  Yea? And how do you know these platforms haven’t already peaked? If so many people are willing to rent out space why isn’t damn near every house on AirBnB? There is nothing to support the idea that a few people being willing to rent out space means a much larger class of consumers is willing to do so.
  - jstandard 9y ago
    If that is your position, it's quite different from your initial statement that GP had to be "incredibly out of touch". There are multiple, billion dollar companies where users rent out large, personal assets to others. I don't see that as "nothing to support the idea". It's direct evidence that people are willing to do it at a reasonable level of scale. I'm not sure what level of scale you're thinking or what you're responding to at this point. If you can scale back a bit on the hyperbole and adversarial mindset, I'm interested to discuss.
    - matte_black 9y ago
      The notion that people are so desperate for an expensive Tesla that they will buy it and then happily rent it out to help pay for the cost is out of touch. People have other options, people value keeping their private property private, and people will certainly just wait for when they can buy a cheaper used Tesla, just like any other car.
      - jstandard 9y ago
        It is interesting to consider how much fully autonomy will impact attitudes toward private property. I agree it's a stretch to assume most potential buyers are willing to rent their car out as an autonomous vehicle to offset the cost. However I do think that % of people will be higher than it is today because full autonomy creates more situations where you've bought an expensive asset which sits idle throughout most of the day when you're working or sleeping. Elon's assuming that Tesla will be the first to market with Level 5 autonomy. If that's the case, people will be willing to pay a huge premium to get one, especially if they think they can offset the costs by having it "pay for itself while you sleep".

maxxxxx 9y ago

" Their build quality problems are solvable. So are the production issues. These are not issues that will sink the company, especially because they are solvable and generally something to be expected during hyper growth like Tesla is right now." Don't underestimate production and quality. It takes a lot of time and experience to get the supply chain reliable and cost efficient. This is not software where you can make changes quickly. You need tooling and production facilities which are expensive and take years to build.

cryptoz 9y ago
> Don't underestimate production and quality. I am not underestimating production and quality. I even said that I think that Tesla's production and quality problems they have currently are their biggest problems. I do not underestimate them - but I also do not think they will sink the company. > This is not software where you can make changes quickly. Compared to the previous industry's way of doing things, yes it is like software where you can make changes quickly. Even on the scale of years, Tesla is showing itself to be more agile than traditional car manufacturers.
- maxxxxx 9y ago
  I still think you are underestimating how much effort goes into production and quality of physical products. The "previous industry" are no dummies and they have optimized their processes for a long time. It will be very difficult for Tesla to catch up in short time.
  - cryptoz 9y ago
    I don't expect Tesla to catch up in a short time. It has already been decades almost, and I would expect it to be decades more. Without doing any real math, 2040, 2050 seems like a good mental calculation result for when I would expect Tesla to be a larger company that matches or surpasses the outputs of their competitors in terms of car production. Yes, it takes a long time to build a car company. Tesla isn't going anywhere, production issues or not. They will find a way, and they will do it more efficiently than previous car companies. > The "previous industry" are no dummies I don't agree with this, but I wouldn't use the word dummy exactly either. I would say stubborn, and they are very very stubborn. It will take them longer to pivot to winning and sustainable strategies like Tesla's than it will for Tesla to resolve its production and scaling issues.

dragonwriter 9y ago

> Elon has said many times that rather than make a cheap electric car, he thinks it will make more sense to make a mid-price car that can do self-driving to earn the owner money during off-driving hours that the owner can then use to offset the cost of ownership of a Tesla. What Elon is really saying is that the early adopters are subsidizing development of fleet vehicles that aren’t aimed for significant individual ownership. Owning a personal vehicle and renting out it's idle time is a big maintenance and liability commitment which inherentlt reduces the reliable access that is the whole reason for ownership. Specialized rental operations will be able to optimize handling the liability and maintenance overhead. Individual owners will be better of not owning and doing on-demand rental of self-driving vehicles than renting them out, because specialized rental orgs will drive the rental price down to where non-specialists won't be able to make a profit with the maintenance and liability costs imposed.