10 ms·

Tesla is heading for a cash crunch

96 points by edward 9y ago

Zanni 9y ago
"Saloon" as a British-ism for "sedan" is a new word for me. As for the article, likely needing to "raise additional capital during the second half of 2019" is a far cry "uncomfortably close to the truth" of totally bankrupt.
- rdl 9y ago
  "Estate" is British-ism for station wagon, too. (A model S wagon would be pretty nice...)
  - Smoosh 9y ago
    I like the term "shooting brake" - seems crazy today, but makes sense when you know the history.
  - rwh86 9y ago
    Such a thing does exist[1], though it's a custom build. Incidentally, "shooting brake" is yet another British-ism for station wagon. [1] http://www.fullychargedshow.co.uk/tesla-model-s-shooting-brake/ http://www.fullychargedshow.co.uk/tesla-model-s-shooting-bra...
- jhpankow 9y ago
  tyres, bonnet, lorry, debt financing: some things lost in translation.
- Hypx 9y ago
  If you read the original Moody's announcement, Tesla needs a capital raise this year and next year. A company that needs annual multi-billion dollar injections of capital to survive is indeed, uncomfortably close to bankruptcy.
  - dayaz36 9y ago
    They don't need billions of dollars to survive, they need billions of dollars to expand
    - mhermher 9y ago
      So you haven't read it then. It is indeed to survive, as in in order not to run out of cash. Their biggest liabilities being debt payments coming up.
      - dayaz36 9y ago
        And why do you think they have a lot of debt?
        Hypx 9y ago
        The original plan was to use profits to fuel the expansion. However, there was no profits and they used debt and capital raises instead. Unfortunately, the expansion generated no profits of its own, only huge losses, requiring even more debt to expand further. Eventually, there was a vicious cycle of debt, losses, and more debt need to expand further, leading to the situation you see now.
        mhermher 9y ago
        Because they lose money and need to borrow more? But in any case, regardless of why they have it, whether they keep expanding or not: they need to pay back that debt and they won't have the money for it. It's as simple as that. Does that make sense? So no, they can't survive if they stop expanding. The only way to survive is to either be profitable within the year or raise more capital.
    - kryptiskt 9y ago
      A boutique carmaker with 11 billions in long-term debt is dead in the water. They must expand to survive.
- macintux 9y ago
  Re: "saloon", by happenstance Jalopnik posted an article on the subject a couple of hours before your comment. https://jalopnik.com/this-is-why-we-call-cars-sedans-limousines-and-saloon-1825025822 https://jalopnik.com/this-is-why-we-call-cars-sedans-limousi...
  - Zanni 9y ago
    Hadn't seen that. Thanks!
- dingaling 9y ago
  > "Saloon" as a British-ism for "sedan" is a new word for me. I believe it derives from the saloon ( main passenger accommodation ) of a bus, versus the open deck of a charabanc. In turn borrowed from the maritime sense of a large weather-protected cabin for passengers. In British car terms it indicates a car with 'separate' accommodation for the passengers i.e. not integrated with the boot / trunk as found in a hatchback.
neonate 9y ago
http://archive.is/CCY8Y http://archive.is/CCY8Y
gizmonty 9y ago
Isn't this last week's problem? I thought Tesla was fine this week.
- sabertoothed 9y ago
  I like your humour. TSLA stock fluctuations really keep me on my toes. -10% on one day, +10% on the other. It is an emotionally charged stock.
  - sunstone 9y ago
    Volatility is your friend.
    - jsolson 9y ago
      It literally bought me a boat this week. I picked up some at the money May calls Monday. I sold them today, and (mostly coincidentally) bought a sailboat. The options, after taxes, covered the boat and this year's moorage. Could've gone the other way of course, but after the beating they'd taken? Surely they'd do something to correct between Monday and earnings. They said, I might amend your statement to be emotional volatility is your friend. I mostly got lucky on the response to Tesla coming closer to meeting their production goals (entirely independently of the underlying financials). It elicited a predictable emotional response.
  - jijojv 9y ago
    you mean like Autopilot https://www.cnbc.com/2018/01/31/apples-steve-wozniak-doesnt-believe-anything-elon-musk-or-tesla-say.html https://www.cnbc.com/2018/01/31/apples-steve-wozniak-doesnt-... "Man you have got to be ready — it makes mistakes, it loses track of the lane lines. You have to be on your toes all the time," says Wozniak.
    - deleted 9y ago
      [deleted]
    - danso 9y ago
carlivar 9y ago
Another article that mentions the $35k Model 3, which is vaporware. The Model 3 starts at $49k, $54k with autopilot.
- apsec112 9y ago
  Do you have a source for that? According to https://mashable.com/2017/08/01/tesla-model-3-true-cost-more-than-35000/ https://mashable.com/2017/08/01/tesla-model-3-true-cost-more..., the Model 3 only costs $49,000 if you buy it with an extra-large battery pack and Autopilot. Those are cool, of course, but it's still a perfectly usable car without them (220 mile range). The base price is indeed $35,000, and that doesn't include tax incentives or any other "cheating".
  - gcb0 9y ago
    you can't fix a bad article citing another bad article.
    - sateesh 9y ago
      The article cites the reasons why the author arrived at the conclusion. I think usually articles in Economist are fairly accurate. So keen to know why you think this to be a bad article.
      - gcb0 9y ago
        well, I know several people who can already buy their model 3 according the upfront fee scam and they still can't buy the base model.
  - well-here-we 9y ago
    The only version you can buy right now includes the extra-large battery pack and the premium interior, which adds up to $49k. Source: my reservation number has come up and that’s my only option.
    - 9y ago
mml 9y ago
sure is quiet in here.
takeda 9y ago
I feel like the author missed the dip caused by the April Fools joke, and tries to create another one. I think what's Elon is trying with the automation is very similar to difficulties that SpaceX had initially with reusable rockets. At first people doubted SpaceX can replace NASA, then that it was possible to do have rockets to return back, later when it started looking reasonable but SpaceX rockets were still crashing, company like Blue Origin were making fun of them by posting video that they can already land (omitting that just getting 100km up and back was far less challenging than what SpaceX was trying to do). Eventually SpaceX succeeded and this resulted with much cheaper cost to send satellites to space. To me it looks like Tesla is going through same thing, they try to automate all manufacturing instead of doing what everyone else is doing, this might make things bad at first, but once they succeed it will be very easy to scale the production and the only limitation will be the supply. I believe in Tesla primarily because of Elon, he is kind of a guy who doesn't have word "failure" in his dictionary, if Tesla doesn't succeed then most likely what they were trying to accomplish was impossible.
- carlivar 9y ago
  Another company that tried to do a lot of cool automation, perhaps ahead of their time, was Webvan.
- craftyguy 9y ago
  > At first people doubted SpaceX can replace NASA SpaceX cannot replace NASA, at least not yet. SpaceX is a component supplier to NASA like Boeing, United Launch Alliance, etc. There's a whole lot of other stuff that NASA does that SpaceX is not even trying to do.
  - aaachilless 9y ago
    Isn't this exactly how it goes though? e.g. "They're selling books, Bob. Books. Not widgets. We're fine, Bob".
    - mulmen 9y ago
      NASA is not a corporation. It has entirely different motives than SpaceX.
ameen 9y ago
Tesla as a company will be fine if they start focusing more on other initiatives (trailer trucks, solar panels, batteries, etc). “Self-driving” fancy/family cars aren't a good solution for the future of our already populated cities. Mass transit is. Hyperloop/TBC have a lot more growth potential than Tesla's Model (x) line does. I was one of Tesla motors' biggest fans but I can't in good faith support them (not Tesla Inc) over a proper public transport solution. It is at best a short term solution and doesn't push humanity forward. 10-20 years down the line I can see them spinning off the Passenger car division, or they will see it impacting their other projects negatively.
- jfoster 9y ago
  They should. It looks like Waymo & partners will easily beat them to market on the electric & autonomous car future, anyway. Big energy companies tend to have a market cap at least 10x big car companies, anyway. That's where their future is. The only way I see that they could turn the car business around is if they somehow get to full autonomy in the market very soon, and then (per master plan part deux) essentially are selling cars as a means of having car owners investing in their autonomous rides network. The clock is ticking on that, though; Waymo seem to be scaling very aggressively.
  - jijojv 9y ago
    Yes Google/waymo has been at it since 2009. Musk better deliver the self-driving vaporware [1] he started selling since Oct'16 as shown in the video in https://www.tesla.com/autopilot https://www.tesla.com/autopilot before he can stall the lawsuit [2] any further... 1. https://www.hbsslaw.com/uploads/case_downloads/tesla_ap2/teslaclassactioncomplaint.pdf https://www.hbsslaw.com/uploads/case_downloads/tesla_ap2/tes... 2. https://www.pacermonitor.com/public/case/21195146/Dean_Sheikh_et_al_v_Tesla,_Inc https://www.pacermonitor.com/public/case/21195146/Dean_Sheik...
- jcranmer 9y ago
  Hyperloop has no growth potential, and TBC might (depending on how competent they are at bringing tunneling costs down, which doesn't have good augurs at the moment). The problem with the "mass" transit concepts of Hyperloop and TBC's skates concept is that they are trash at throughput [1]. Furthermore, as unproven technology, that means that you're unlikely to win contracts without spending the company's own money building demonstration tracks. Even early contracts are likely to be structured in such a way that substantial portions of cost overruns are borne not by the public. [1] Capacity is primarily determined by station dwell times and switch clear times, which means it's driven primarily by consists per hour. The original proposals here basically propose passenger capacity per consist that's in the region of 1% of bespoke mass transit systems.
duncan_bayne 9y ago
They've been having a cash crunch since day one; the only reason they exist is that the American taxpayer has been milked to the tune of $4.9 billion to support them.
- opsiprogram 9y ago
  how have tax payers been milked with regard to Tesla?
  - duncan_bayne 9y ago
    http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html http://www.latimes.com/business/la-fi-hy-musk-subsidies-2015... Now to be fair, that's a small fraction of the taxpayer funds used to prop up a seemingly countless number of crony "capitalists".
    - tim333 9y ago
      >This $4.9 Billion figure has been thoroughly debunked. It includes hypothetical tax breaks that Tesla could receive 20 years from now, discounted loans that Tesla long ago paid back in full and in advance, and even money from programs that Tesla never receives, but customers can potentially benefit from. (from Right-wing group led by Trump propagandist launches campaign against Elon Musk, Tesla and SpaceX https://electrek.co/2016/11/22/elon-musk-right-wing-trump-propaganda-campaign-against-tesla-spacex/ https://electrek.co/2016/11/22/elon-musk-right-wing-trump-pr...) Apparently the "Trump propagandist" was Laura Ingraham who's recently getting some news coverage.
      - duncan_bayne 9y ago
        Okay, say it's half that. It's still crony "capitalism", just the same as when regular car manufacturers or coal mines receive subsidies. How about not expecting taxpayers to subsidise any industry? Quibbling about the exact dollar figure doesn't change the moral issue.
matte_black 9y ago
I’m really glad I dumped TSLA stock while I still some profit. For a while I had drank the koolaid and it really tasted good, I even had my preorder for a Model 3. But it has become clear they aren’t that great as a car company. Other manufacturers will surpass them, and then what? I rate this as a sell.
- Akujin 9y ago
  You do realize that Tesla also sells batteries and solar panels right? Cars are just a small part of the puzzle. Tesla has the potential to become the next GE.
jpeg_hero 9y ago
I thought that a Tesla bankruptcy would be cataclysmic. But then I realized that Elon would kind of welcome it. Spacex has established itself as a sort of technological monopoly, where its launch prices are $70m, but the competition is $90m, but because of their technological monopoly, and their true cost of launch is $20m. And now they are on a launch cadence of every two weeks, (that is $50m in contribution margin every 2 weeks, that is $100m in profit per mo., locked in forever well at least until ULA has a competitive offering (forever+1). With that as your option set, why fuxk around with 200 versus 300 cars made a day. F it, just bk it and be done with it.
- deleted 9y ago
  [deleted]
- tim333 9y ago
  "The point of [building Tesla] was, and remains, accelerating the advent of sustainable energy, so that we can imagine far into the future and life is still good." It's not all about the money.
gerardnll 9y ago
It's incredible how "the money" believes jokes, uses one accident to throw all the work out of the window... I see how they believe on the project... As musk said "It kinda sucks running a public company".
slivym 9y ago
I understand people WANT to defend Tesla here, but there are some really rubbish arguments people are trying to push and especially some that border on conspiracy theories. Tesla has real problems: The first is that it's failing to meet production targets. There's no way around this, the company is on rocky times and while I'm sure that given unlimited time and resources they could get to the production targets we don't live in a world with infinite time and money. Other players in this market are moving quickly, if you want to see a compelling example of electric technology the Hybrids from Toyota are great, and they're producing 10 million cars a year. So it's not a sure thing that Tesla ever becomes a leading car manufacturer (and therefore pays off its debt and shareholders). Even then, there are serious questions about the full automation of their production line - what is that point of a robot doing everything if you're paying more to run the robot than a human would cost to do the same thing? Industry analysts aren't idiots, and neither are the other car manufacturers. Even if the Tesla factory goes fully automatic years before other car companies you might find it's actually not economically beneficial. So all these problems they've imposed on themselves may not even provide benefits. The second is that their self-driving program is hitting similar bumps to the automation. They've rolled out something early and they've opened themselves up to huge liabilities. There's good reason other car manufacturers are being very careful with the roll out- liability from accidents could bankrupt your company. The final thing is that Tesla's accounts as a standalone company don't look stellar. They have a lot of short term debt and they need to roll that over at a time where they're missing targets and killing customers. That's a huge economic problem. The result will be either they fix problems 1 & 2 or Musk will have to issue stock at the risk of losing some control, or pump more of his own money in. One final point I'd like to make about this: Elon Musk wanted Tesla to move everyone to electric cars. For him, Toyota or Ford selling electric cars would be a victory. For Tesla and it's shareholders that's not true. So whilst Musk may succeed, it's not necessarily going to happen through Tesla. He's done a great job of scaring other companies into Electric and autonomous vehicles. That does not mean Tesla will ever pay off to shareholders.
- mschuster91 9y ago
  > Other players in this market are moving quickly, if you want to see a compelling example of electric technology the Hybrids from Toyota are great, and they're producing 10 million cars a year. Toyota is mass-market. It's not hip. Everyone can drive a Toyota - a Tesla, though, is a status symbol. The competition in the "status symbol" range is BMW (the 7er series) - which is primarily an ICE-vehicle based company. Yes, they have the i3 and the i8 experience but that's low volume - when they try to scale up, also BMW will face issues AND they will have to either convert entire assembly lines or retrofit, both of which is expensive - compared to Tesla which HAS an assembly line, and only has to figure out how to make it work at scale. The question is, who will be faster to solve their issues - BMW or Tesla?
Proven 9y ago
Can’t wait. Enough of the plunder through state subsidies!
thisisit 9y ago
Most of the Tesla threads seem to directly jump from Tesla to Musk to SpaceX. The question on viability and profitability are never answered during such comparisons. I dug around to see how SpaceX was doing and I only found this article from early last year: https://www.nasdaq.com/article/will-spacex-earn-a-profit-in-2017-cm875897 https://www.nasdaq.com/article/will-spacex-earn-a-profit-in-... > Moreover, if SpaceX achieves its stated goal of sending 20 rockets into orbit by the end of the year, the $1.44 billion in revenues that implies suggests rising levels of profitability. And if SpaceX achieves its targeted 30 launches in 2018, the company should be even more profitable next year. When I look up the launches from SpaceX's site: http://www.spacex.com/missions http://www.spacex.com/missions There were only 18 flights in 2017. So, SpaceX also missed their target but they might be in better financial health than Tesla. For the most part defense of Tesla is similar to the ones seen for Cryptocurrencies. People often go - "This is FUD and author is trying to spread FUD to buy more coins. This coin is trying so and so technology. If it succeds then the price is going to the moon. HODL". That said I am curious to hear well reasoned arguments on what Tesla is doing which is better than the others. Or rather going to do better.
voidbip 9y ago
How does Teslas strategy fit in with the ascendance of for hire vehicles like Uber? It seems to me rich coastal types who can afford a Tesla, may just decide to ditch driving all together and just "Uber" everywhere.

96 points by edward 9y ago

"Saloon" as a British-ism for "sedan" is a new word for me. As for the article, likely needing to "raise additional capital during the second half of 2019" is a far cry "uncomfortably close to the truth" of totally bankrupt.

rdl 9y ago
"Estate" is British-ism for station wagon, too. (A model S wagon would be pretty nice...)
- Smoosh 9y ago
  I like the term "shooting brake" - seems crazy today, but makes sense when you know the history.
- rwh86 9y ago
  Such a thing does exist[1], though it's a custom build. Incidentally, "shooting brake" is yet another British-ism for station wagon. [1] http://www.fullychargedshow.co.uk/tesla-model-s-shooting-brake/ http://www.fullychargedshow.co.uk/tesla-model-s-shooting-bra...
jhpankow 9y ago
tyres, bonnet, lorry, debt financing: some things lost in translation.
Hypx 9y ago
If you read the original Moody's announcement, Tesla needs a capital raise this year and next year. A company that needs annual multi-billion dollar injections of capital to survive is indeed, uncomfortably close to bankruptcy.
- dayaz36 9y ago
  They don't need billions of dollars to survive, they need billions of dollars to expand
  - mhermher 9y ago
    So you haven't read it then. It is indeed to survive, as in in order not to run out of cash. Their biggest liabilities being debt payments coming up.
    - dayaz36 9y ago
      And why do you think they have a lot of debt?
      - Hypx 9y ago
        The original plan was to use profits to fuel the expansion. However, there was no profits and they used debt and capital raises instead. Unfortunately, the expansion generated no profits of its own, only huge losses, requiring even more debt to expand further. Eventually, there was a vicious cycle of debt, losses, and more debt need to expand further, leading to the situation you see now.
      - mhermher 9y ago
        Because they lose money and need to borrow more? But in any case, regardless of why they have it, whether they keep expanding or not: they need to pay back that debt and they won't have the money for it. It's as simple as that. Does that make sense? So no, they can't survive if they stop expanding. The only way to survive is to either be profitable within the year or raise more capital.
  - kryptiskt 9y ago
    A boutique carmaker with 11 billions in long-term debt is dead in the water. They must expand to survive.
macintux 9y ago
Re: "saloon", by happenstance Jalopnik posted an article on the subject a couple of hours before your comment. https://jalopnik.com/this-is-why-we-call-cars-sedans-limousines-and-saloon-1825025822 https://jalopnik.com/this-is-why-we-call-cars-sedans-limousi...
- Zanni 9y ago
  Hadn't seen that. Thanks!
dingaling 9y ago
> "Saloon" as a British-ism for "sedan" is a new word for me. I believe it derives from the saloon ( main passenger accommodation ) of a bus, versus the open deck of a charabanc. In turn borrowed from the maritime sense of a large weather-protected cabin for passengers. In British car terms it indicates a car with 'separate' accommodation for the passengers i.e. not integrated with the boot / trunk as found in a hatchback.

neonate 9y ago

http://archive.is/CCY8Y http://archive.is/CCY8Y

gizmonty 9y ago

Isn't this last week's problem? I thought Tesla was fine this week.

sabertoothed 9y ago
I like your humour. TSLA stock fluctuations really keep me on my toes. -10% on one day, +10% on the other. It is an emotionally charged stock.
- sunstone 9y ago
  Volatility is your friend.
  - jsolson 9y ago
    It literally bought me a boat this week. I picked up some at the money May calls Monday. I sold them today, and (mostly coincidentally) bought a sailboat. The options, after taxes, covered the boat and this year's moorage. Could've gone the other way of course, but after the beating they'd taken? Surely they'd do something to correct between Monday and earnings. They said, I might amend your statement to be emotional volatility is your friend. I mostly got lucky on the response to Tesla coming closer to meeting their production goals (entirely independently of the underlying financials). It elicited a predictable emotional response.
- jijojv 9y ago
  you mean like Autopilot https://www.cnbc.com/2018/01/31/apples-steve-wozniak-doesnt-believe-anything-elon-musk-or-tesla-say.html https://www.cnbc.com/2018/01/31/apples-steve-wozniak-doesnt-... "Man you have got to be ready — it makes mistakes, it loses track of the lane lines. You have to be on your toes all the time," says Wozniak.
  - deleted 9y ago
    [deleted]
  - danso 9y ago

carlivar 9y ago

Another article that mentions the $35k Model 3, which is vaporware. The Model 3 starts at $49k, $54k with autopilot.

apsec112 9y ago
Do you have a source for that? According to https://mashable.com/2017/08/01/tesla-model-3-true-cost-more-than-35000/ https://mashable.com/2017/08/01/tesla-model-3-true-cost-more..., the Model 3 only costs $49,000 if you buy it with an extra-large battery pack and Autopilot. Those are cool, of course, but it's still a perfectly usable car without them (220 mile range). The base price is indeed $35,000, and that doesn't include tax incentives or any other "cheating".
- gcb0 9y ago
  you can't fix a bad article citing another bad article.
  - sateesh 9y ago
    The article cites the reasons why the author arrived at the conclusion. I think usually articles in Economist are fairly accurate. So keen to know why you think this to be a bad article.
    - gcb0 9y ago
      well, I know several people who can already buy their model 3 according the upfront fee scam and they still can't buy the base model.
- well-here-we 9y ago
  The only version you can buy right now includes the extra-large battery pack and the premium interior, which adds up to $49k. Source: my reservation number has come up and that’s my only option.
  - 9y ago

mml 9y ago

sure is quiet in here.

takeda 9y ago

I feel like the author missed the dip caused by the April Fools joke, and tries to create another one. I think what's Elon is trying with the automation is very similar to difficulties that SpaceX had initially with reusable rockets. At first people doubted SpaceX can replace NASA, then that it was possible to do have rockets to return back, later when it started looking reasonable but SpaceX rockets were still crashing, company like Blue Origin were making fun of them by posting video that they can already land (omitting that just getting 100km up and back was far less challenging than what SpaceX was trying to do). Eventually SpaceX succeeded and this resulted with much cheaper cost to send satellites to space. To me it looks like Tesla is going through same thing, they try to automate all manufacturing instead of doing what everyone else is doing, this might make things bad at first, but once they succeed it will be very easy to scale the production and the only limitation will be the supply. I believe in Tesla primarily because of Elon, he is kind of a guy who doesn't have word "failure" in his dictionary, if Tesla doesn't succeed then most likely what they were trying to accomplish was impossible.

carlivar 9y ago
Another company that tried to do a lot of cool automation, perhaps ahead of their time, was Webvan.
craftyguy 9y ago
> At first people doubted SpaceX can replace NASA SpaceX cannot replace NASA, at least not yet. SpaceX is a component supplier to NASA like Boeing, United Launch Alliance, etc. There's a whole lot of other stuff that NASA does that SpaceX is not even trying to do.
- aaachilless 9y ago
  Isn't this exactly how it goes though? e.g. "They're selling books, Bob. Books. Not widgets. We're fine, Bob".
  - mulmen 9y ago
    NASA is not a corporation. It has entirely different motives than SpaceX.

ameen 9y ago

Tesla as a company will be fine if they start focusing more on other initiatives (trailer trucks, solar panels, batteries, etc). “Self-driving” fancy/family cars aren't a good solution for the future of our already populated cities. Mass transit is. Hyperloop/TBC have a lot more growth potential than Tesla's Model (x) line does. I was one of Tesla motors' biggest fans but I can't in good faith support them (not Tesla Inc) over a proper public transport solution. It is at best a short term solution and doesn't push humanity forward. 10-20 years down the line I can see them spinning off the Passenger car division, or they will see it impacting their other projects negatively.

jfoster 9y ago
They should. It looks like Waymo & partners will easily beat them to market on the electric & autonomous car future, anyway. Big energy companies tend to have a market cap at least 10x big car companies, anyway. That's where their future is. The only way I see that they could turn the car business around is if they somehow get to full autonomy in the market very soon, and then (per master plan part deux) essentially are selling cars as a means of having car owners investing in their autonomous rides network. The clock is ticking on that, though; Waymo seem to be scaling very aggressively.
- jijojv 9y ago
  Yes Google/waymo has been at it since 2009. Musk better deliver the self-driving vaporware [1] he started selling since Oct'16 as shown in the video in https://www.tesla.com/autopilot https://www.tesla.com/autopilot before he can stall the lawsuit [2] any further... 1. https://www.hbsslaw.com/uploads/case_downloads/tesla_ap2/teslaclassactioncomplaint.pdf https://www.hbsslaw.com/uploads/case_downloads/tesla_ap2/tes... 2. https://www.pacermonitor.com/public/case/21195146/Dean_Sheikh_et_al_v_Tesla,_Inc https://www.pacermonitor.com/public/case/21195146/Dean_Sheik...
jcranmer 9y ago
Hyperloop has no growth potential, and TBC might (depending on how competent they are at bringing tunneling costs down, which doesn't have good augurs at the moment). The problem with the "mass" transit concepts of Hyperloop and TBC's skates concept is that they are trash at throughput [1]. Furthermore, as unproven technology, that means that you're unlikely to win contracts without spending the company's own money building demonstration tracks. Even early contracts are likely to be structured in such a way that substantial portions of cost overruns are borne not by the public. [1] Capacity is primarily determined by station dwell times and switch clear times, which means it's driven primarily by consists per hour. The original proposals here basically propose passenger capacity per consist that's in the region of 1% of bespoke mass transit systems.

duncan_bayne 9y ago

They've been having a cash crunch since day one; the only reason they exist is that the American taxpayer has been milked to the tune of $4.9 billion to support them.

opsiprogram 9y ago
how have tax payers been milked with regard to Tesla?
- duncan_bayne 9y ago
  http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html http://www.latimes.com/business/la-fi-hy-musk-subsidies-2015... Now to be fair, that's a small fraction of the taxpayer funds used to prop up a seemingly countless number of crony "capitalists".
  - tim333 9y ago
    >This $4.9 Billion figure has been thoroughly debunked. It includes hypothetical tax breaks that Tesla could receive 20 years from now, discounted loans that Tesla long ago paid back in full and in advance, and even money from programs that Tesla never receives, but customers can potentially benefit from. (from Right-wing group led by Trump propagandist launches campaign against Elon Musk, Tesla and SpaceX https://electrek.co/2016/11/22/elon-musk-right-wing-trump-propaganda-campaign-against-tesla-spacex/ https://electrek.co/2016/11/22/elon-musk-right-wing-trump-pr...) Apparently the "Trump propagandist" was Laura Ingraham who's recently getting some news coverage.
    - duncan_bayne 9y ago
      Okay, say it's half that. It's still crony "capitalism", just the same as when regular car manufacturers or coal mines receive subsidies. How about not expecting taxpayers to subsidise any industry? Quibbling about the exact dollar figure doesn't change the moral issue.

matte_black 9y ago

I’m really glad I dumped TSLA stock while I still some profit. For a while I had drank the koolaid and it really tasted good, I even had my preorder for a Model 3. But it has become clear they aren’t that great as a car company. Other manufacturers will surpass them, and then what? I rate this as a sell.

Akujin 9y ago
You do realize that Tesla also sells batteries and solar panels right? Cars are just a small part of the puzzle. Tesla has the potential to become the next GE.

jpeg_hero 9y ago

I thought that a Tesla bankruptcy would be cataclysmic. But then I realized that Elon would kind of welcome it. Spacex has established itself as a sort of technological monopoly, where its launch prices are $70m, but the competition is $90m, but because of their technological monopoly, and their true cost of launch is $20m. And now they are on a launch cadence of every two weeks, (that is $50m in contribution margin every 2 weeks, that is $100m in profit per mo., locked in forever well at least until ULA has a competitive offering (forever+1). With that as your option set, why fuxk around with 200 versus 300 cars made a day. F it, just bk it and be done with it.

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tim333 9y ago
"The point of [building Tesla] was, and remains, accelerating the advent of sustainable energy, so that we can imagine far into the future and life is still good." It's not all about the money.

gerardnll 9y ago

It's incredible how "the money" believes jokes, uses one accident to throw all the work out of the window... I see how they believe on the project... As musk said "It kinda sucks running a public company".

slivym 9y ago

I understand people WANT to defend Tesla here, but there are some really rubbish arguments people are trying to push and especially some that border on conspiracy theories. Tesla has real problems: The first is that it's failing to meet production targets. There's no way around this, the company is on rocky times and while I'm sure that given unlimited time and resources they could get to the production targets we don't live in a world with infinite time and money. Other players in this market are moving quickly, if you want to see a compelling example of electric technology the Hybrids from Toyota are great, and they're producing 10 million cars a year. So it's not a sure thing that Tesla ever becomes a leading car manufacturer (and therefore pays off its debt and shareholders). Even then, there are serious questions about the full automation of their production line - what is that point of a robot doing everything if you're paying more to run the robot than a human would cost to do the same thing? Industry analysts aren't idiots, and neither are the other car manufacturers. Even if the Tesla factory goes fully automatic years before other car companies you might find it's actually not economically beneficial. So all these problems they've imposed on themselves may not even provide benefits. The second is that their self-driving program is hitting similar bumps to the automation. They've rolled out something early and they've opened themselves up to huge liabilities. There's good reason other car manufacturers are being very careful with the roll out- liability from accidents could bankrupt your company. The final thing is that Tesla's accounts as a standalone company don't look stellar. They have a lot of short term debt and they need to roll that over at a time where they're missing targets and killing customers. That's a huge economic problem. The result will be either they fix problems 1 & 2 or Musk will have to issue stock at the risk of losing some control, or pump more of his own money in. One final point I'd like to make about this: Elon Musk wanted Tesla to move everyone to electric cars. For him, Toyota or Ford selling electric cars would be a victory. For Tesla and it's shareholders that's not true. So whilst Musk may succeed, it's not necessarily going to happen through Tesla. He's done a great job of scaring other companies into Electric and autonomous vehicles. That does not mean Tesla will ever pay off to shareholders.

mschuster91 9y ago
> Other players in this market are moving quickly, if you want to see a compelling example of electric technology the Hybrids from Toyota are great, and they're producing 10 million cars a year. Toyota is mass-market. It's not hip. Everyone can drive a Toyota - a Tesla, though, is a status symbol. The competition in the "status symbol" range is BMW (the 7er series) - which is primarily an ICE-vehicle based company. Yes, they have the i3 and the i8 experience but that's low volume - when they try to scale up, also BMW will face issues AND they will have to either convert entire assembly lines or retrofit, both of which is expensive - compared to Tesla which HAS an assembly line, and only has to figure out how to make it work at scale. The question is, who will be faster to solve their issues - BMW or Tesla?

Proven 9y ago

Can’t wait. Enough of the plunder through state subsidies!

thisisit 9y ago

Most of the Tesla threads seem to directly jump from Tesla to Musk to SpaceX. The question on viability and profitability are never answered during such comparisons. I dug around to see how SpaceX was doing and I only found this article from early last year: https://www.nasdaq.com/article/will-spacex-earn-a-profit-in-2017-cm875897 https://www.nasdaq.com/article/will-spacex-earn-a-profit-in-... > Moreover, if SpaceX achieves its stated goal of sending 20 rockets into orbit by the end of the year, the $1.44 billion in revenues that implies suggests rising levels of profitability. And if SpaceX achieves its targeted 30 launches in 2018, the company should be even more profitable next year. When I look up the launches from SpaceX's site: http://www.spacex.com/missions http://www.spacex.com/missions There were only 18 flights in 2017. So, SpaceX also missed their target but they might be in better financial health than Tesla. For the most part defense of Tesla is similar to the ones seen for Cryptocurrencies. People often go - "This is FUD and author is trying to spread FUD to buy more coins. This coin is trying so and so technology. If it succeds then the price is going to the moon. HODL". That said I am curious to hear well reasoned arguments on what Tesla is doing which is better than the others. Or rather going to do better.

voidbip 9y ago

How does Teslas strategy fit in with the ascendance of for hire vehicles like Uber? It seems to me rich coastal types who can afford a Tesla, may just decide to ditch driving all together and just "Uber" everywhere.