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Financial projections will undervalue Tesla because they are very different from other car companies - they are a monopoly with gigantic barriers to entry on ma

by tvural 8y ago

Financial projections will undervalue Tesla because they are very different from other car companies - they are a monopoly with gigantic barriers to entry on many fronts. Other carmakers could copy some features of Tesla's cars, but they can't easily copy the multi-billion-dollar factories that make other features possible. They have better engineers than other car companies and a culture that works them harder. They avoided the dealership system and built their own stores. Elon Musk's PR stunts and Twitter feed are a much more effective method of advertising than the TV and Internet ads other car companies use.

wastedhours 8y ago
> very different > gigantic barriers to entry What are those? I'm fond of Tesla, but they don't have an insurmountable moat around their technology. There's nothing intrinsically novel about their approach (especially outside the US where direct to consumer is a common model), they just had the benefit of a clean slate to build it out, rather than incrementally changing systems, platforms and procedures like other car manufacturers. The halo of an eccentric billionaire genius wears off pretty quickly if they can't continue to compete on price, design, safety, and other areas of public perception. It remains to be seen if Tesla engineers are objectively "better" than those at other car manufacturers, because very few directly compete at present. The number of "ground up" electric cars is quite small, compared with ones hamstrung by retrofitting electric powertrains into existing platforms. > Elon Musk's PR stunts and Twitter feed are a much more effective method of advertising than the TV and Internet ads other car companies use. Elon Musk's PR stunts and Twitter feed are a much more effective method of advertising to the ahead-of-the-curve, switched on audience who're interested in Tesla's current offering than the TV and Internet ads other car companies use. Again, there's nothing yet showing you can extrapolate this out once other manufacturers are truly competing in the same space. I think they're great, and I want one - but we do need to be a little pragmatic about their position in the industry.
nvarsj 8y ago
> They have better engineers than other car companies Huh... Quality of Teslas by most accounts is terrible. Not to mention the recent scandals over autopilot safety. Not sure where you got that idea.
- 0xFFC 8y ago
  I have never been in any Teslas car. But I am so curious about this: >Quality of Teslas by most accounts is terrible Can you elaborate a little bit about this?
  - emptyfile 8y ago
    https://www.google.com/search?q=tesla+quality+control+issues&ie=utf-8&oe=utf-8&client=firefox-b-ab https://www.google.com/search?q=tesla+quality+control+issues...
    - alphydan 8y ago
      Googling "toyota quality control issues" returns news about a recall of 1.75 million cars. So it seems the "reliable" brands have the same problems. Unless we can quantify it better, it's hard to compare.
      - george_morgan 8y ago
        JD Power typically produce rankings of faults per 100 vehicles, which seems to be the best metric: http://www.jdpower.com/press-releases/jd-power-2018-us-vehicle-dependability-study http://www.jdpower.com/press-releases/jd-power-2018-us-vehic... Unfortunately Tesla aren't part of this study.
      - octorian 8y ago
        Except when Toyota does a recall, its just a note in the mail and a little extra work at your next service appointment. When Tesla does a recall, its a major headline news story and fodder for many forum trolls to use in their rants against the company. (plus, a notice and a little extra work at your next service appointment)
  - nvarsj 8y ago
    Peruse Tesla owner forums and reddit. The model 3 in particular has quality issues on brand new cars. Compare it to buying a Honda or Toyota - you're not going to have the kinds of problems described.
blauditore 8y ago
> Elon Musk's PR stunts and Twitter feed are a much more effective method of advertising than the TV and Internet ads other car companies use. I think there's a bias here. This kind of PR resonates more with "techie" people (as found on HN) than with the rest. For some groups of people, TV ads are probably much more effective.
- zaat 8y ago
  Musk's tweet from 9:00 is the 10:00 news headlines. News headlines are (probably) more effective than ads.
  - simias 8y ago
    In the USA that might be but abroad I don't think it'll be enough. I doubt Musk's tweets make (regularly) the headlines in Germany, Japan or China.
    - kwhitefoot 8y ago
      Not even in Norway where we have more Teslas per head than anywhere else.
kapauldo 8y ago
I'm not convinced that the tesla s3 is that far ahead of the Nissan leaf. This reminds me of drop box, and it looks like the competitors have caught up. Don't forget GM has been making cars for a century. It's not that hard for them to make an electric.
kgwgk 8y ago
> they are a monopoly with gigantic barriers to entry A monopoly on what, precisely?

by tvural 8y ago

wastedhours 8y ago

> very different > gigantic barriers to entry What are those? I'm fond of Tesla, but they don't have an insurmountable moat around their technology. There's nothing intrinsically novel about their approach (especially outside the US where direct to consumer is a common model), they just had the benefit of a clean slate to build it out, rather than incrementally changing systems, platforms and procedures like other car manufacturers. The halo of an eccentric billionaire genius wears off pretty quickly if they can't continue to compete on price, design, safety, and other areas of public perception. It remains to be seen if Tesla engineers are objectively "better" than those at other car manufacturers, because very few directly compete at present. The number of "ground up" electric cars is quite small, compared with ones hamstrung by retrofitting electric powertrains into existing platforms. > Elon Musk's PR stunts and Twitter feed are a much more effective method of advertising than the TV and Internet ads other car companies use. Elon Musk's PR stunts and Twitter feed are a much more effective method of advertising to the ahead-of-the-curve, switched on audience who're interested in Tesla's current offering than the TV and Internet ads other car companies use. Again, there's nothing yet showing you can extrapolate this out once other manufacturers are truly competing in the same space. I think they're great, and I want one - but we do need to be a little pragmatic about their position in the industry.

nvarsj 8y ago

> They have better engineers than other car companies Huh... Quality of Teslas by most accounts is terrible. Not to mention the recent scandals over autopilot safety. Not sure where you got that idea.

0xFFC 8y ago
I have never been in any Teslas car. But I am so curious about this: >Quality of Teslas by most accounts is terrible Can you elaborate a little bit about this?
- emptyfile 8y ago
  https://www.google.com/search?q=tesla+quality+control+issues&ie=utf-8&oe=utf-8&client=firefox-b-ab https://www.google.com/search?q=tesla+quality+control+issues...
  - alphydan 8y ago
    Googling "toyota quality control issues" returns news about a recall of 1.75 million cars. So it seems the "reliable" brands have the same problems. Unless we can quantify it better, it's hard to compare.
    - george_morgan 8y ago
      JD Power typically produce rankings of faults per 100 vehicles, which seems to be the best metric: http://www.jdpower.com/press-releases/jd-power-2018-us-vehicle-dependability-study http://www.jdpower.com/press-releases/jd-power-2018-us-vehic... Unfortunately Tesla aren't part of this study.
    - octorian 8y ago
      Except when Toyota does a recall, its just a note in the mail and a little extra work at your next service appointment. When Tesla does a recall, its a major headline news story and fodder for many forum trolls to use in their rants against the company. (plus, a notice and a little extra work at your next service appointment)
- nvarsj 8y ago
  Peruse Tesla owner forums and reddit. The model 3 in particular has quality issues on brand new cars. Compare it to buying a Honda or Toyota - you're not going to have the kinds of problems described.

blauditore 8y ago

> Elon Musk's PR stunts and Twitter feed are a much more effective method of advertising than the TV and Internet ads other car companies use. I think there's a bias here. This kind of PR resonates more with "techie" people (as found on HN) than with the rest. For some groups of people, TV ads are probably much more effective.

zaat 8y ago
Musk's tweet from 9:00 is the 10:00 news headlines. News headlines are (probably) more effective than ads.
- simias 8y ago
  In the USA that might be but abroad I don't think it'll be enough. I doubt Musk's tweets make (regularly) the headlines in Germany, Japan or China.
  - kwhitefoot 8y ago
    Not even in Norway where we have more Teslas per head than anywhere else.

kapauldo 8y ago

I'm not convinced that the tesla s3 is that far ahead of the Nissan leaf. This reminds me of drop box, and it looks like the competitors have caught up. Don't forget GM has been making cars for a century. It's not that hard for them to make an electric.

kgwgk 8y ago

> they are a monopoly with gigantic barriers to entry A monopoly on what, precisely?