6 ms·

This isn't the first time this kind of teardown has been performed and they all show the same thing. The $35k base model made at scale later this year will be p

This isn't the first time this kind of teardown has been performed and they all show the same thing. The $35k base model made at scale later this year will be profitable. I know this doesn't sit well with the whole "Musk is a fraudster/bullshit artist" wave that's hit HN and most online forums recently, but sometimes things are really simple. They'll make the car and sell it a profit.

karpodiem 8y ago
I'll believe it when I see positive cash flow being generated through reading a 10-K statement filed with the SEC. Historically, Tesla has never done this without selling ZEV credits (there were those two quarters it posted a profit but the amount of cash they've burned is many times greater than those two miniscule profits they posted). I say this because selling ZEV credits isn't an advantage, any automaker can do this if they sell vehicles, even if those vehicles are sold at a loss.
compcoffee 8y ago
>The $35k base model made at scale later this year will be profitable." We've been hearing about it forever. Let's see it. It's always "coming". >"Musk is a fraudster/bullshit artist" wave that's hit HN and most online forums recently" Give me a break. You're "wave" is my, finally, balance. Tesla, or more specifically Musk, has got far more postive press than they deserve. I never see any Nissan, Porsche, Audi, or rarely, GM articles on this site. Meanwhile, every time the Tesla blog/Electrek make a post, it's upvoted here.
- danhak 8y ago
  It will come as soon as the company exhausts demand for the higher-ASP variants. In what world does it make business sense for a production-constrained company to prioritize its least expensive products?
  - kasey_junk 8y ago
    When the least expensive products have higher margins than the most expensive ones?
    - froindt 8y ago
      I haven't researched specifics on Tesla, but typically bigger => larger margins in the automotive world. Manufacturers weren't thrilled when the Obama administration pushed for higher fuel economy after the bailouts. The margins on the small cars were much lower than on trucks and SUV's. For example, Ford's F-150 line is worth an incredible amount of money. "Morgan Stanley analyst Adam Jonas has estimated that the F-Series, which includes F-150 and Super Duty trucks and remains the best-selling lineup in America, is responsible for 90% of the automaker’s global profits." https://www.foxbusiness.com/markets/why-the-ford-f-150-is-a-profit-machine https://www.foxbusiness.com/markets/why-the-ford-f-150-is-a-...
    - snovv_crash 8y ago
      And even then only margins in $, not as a %. With a price difference of $49k vs $35k I don't see that as being likely, unless it is something in the upgrade package that is an assembly line bottleneck.
- gburdell3 8y ago
  I just saw a Nissan article on here a few days ago. It was about how they cheated their emissions tests.
  - dsfyu404ed 8y ago
    They didn't "cheat their" emissions test unless you're lowering the standards for "cheating" because you're running out of witches to burn. Workers at a factory falsified test data to make it look like cars that didn't pass their internal tests passed. The cars were still complaint with the relevant regulations and the tests are not advertised to customers. Nobody got cheated except Nissan itself. It's like promising your customers 99.99% up-time, considering 99.999% up-time the bar for success internally, delivering 99.99% and then fudging the numbers so that it says 99.999% internally. I love getting triggered by corporate misconduct as much as the next guy but the Nissan thing was a nothing-burger with a catchy headline. Edit: Since apparently I'mWrong(TM) can explain to me how the Nissan thing is anything worth paying attention to?
    - gburdell3 8y ago
      >falsified test data to make it look like cars that didn't pass their internal tests passed Sounds an awful lot like cheating to me, but OK.
      - FireBeyond 8y ago
        "Still met emissions requirements, but failed internal QA".
  - compcoffee 8y ago
    >I just saw a Nissan article on here a few days ago. It was about how they cheated their emissions tests. Exactly. Some stupid story that wasn't true. I rest my case.
- thephyber 8y ago
  Nissan, Porsche, Audi, GM are all behemoths. Tesla, by comparison, is an underdog (hence the widespread emotional appeal), has framed themselves as being principally for "changing how humans use energy" rather than "just a little better than the next car", and has a CEO+chairman who says outlandish things... and delivers on some of them. I would argue Musk gets press for nearly the same reasons Trump does. And it works.
  - mikeash 8y ago
    Tesla also makes really, really nice cars that appeal strongly to the HN demographic.
api 8y ago
The anti-Musk campaign is a clear and obvious example of astroturf. The likely culprits are Jim Chanos and other large scale shorts. This isn't a totally baseless allegation. Shorting potentially vulnerable companies and then launching massive smear campaigns against them is a well known underhanded Wall St. tactic. Chanos has a documented history of doing this. Musk is a hype-monger but he also has a history of actually delivering stuff. See: SpaceX reusable rockets, Dragon spacecraft, earlier generation Tesla automobiles. He is quite far from a con artist.
- MBCook 8y ago
  I assure you it’s not an AstroTurf. I’m highly critical. I used to own some of their stock before they started doing things I didn’t like (YEARS ago, when they first hit $100). I don’t like the way Musk tends to run things, always in a panic and missing dates. I don’t think it’s smart to ignore decades of hard won wisdom about building cars. You don’t have to follow it, but you shouldn’t blindly toss it out. On a personal level I don’t like the design of the interior of the 3. The S/X seem nice enough. But my criticism does not come from being paid to make them look bad. No one is paying me anything and I don’t hold any of their stock anymore.
DmenshunlAnlsis 8y ago
What $35k model? https://arstechnica.com/cars/2018/07/tesla-drops-35000-price-from-model-3-page-insists-plans-havent-changed/ https://arstechnica.com/cars/2018/07/tesla-drops-35000-price... I’ll believe it’s a thing when it starts to ship, until then it’s PR for a car that’s much less affordable. Edit: the mass downvoting of any comment critical of Tesla/Musk, and flagging of any negative article is getting really old. It’s especially galling when people float conspiracy theories about an anti-Musk bent as a justification for this.
- martythemaniak 8y ago
  Have you considered the fact that you're getting downvoted because the negativity requires an increasingly conspirational mindset? What I'm saying is, what you you're seeing could be explained thus: "It takes a few months to spin up production of new trim levels. Like other companies, this company's years-long plans sometimes get delayed by several weeks or months. The company has spent a lot of capital on fixed costs and are focusing on being cashflow positive by prioritizing high-margin sales first" To make sense of Tesla's actions doesn't require your to believe anything out of the ordinary, nor even anything specific to Tesla. I might have just as easily described Intel shipping a chip. OTOH, the negative case is always shifting, there are always rumours, the books are cooked, the production numbers are bunk, the QC issues are underreported, etc etc. Until a few weeks ago, the line was that they couldn't make them in large numbers. Now that that's gone and forgotten, the current line is about the base model. When that ships, the line will shift to the Model Y or FSD.
  - HeadsUpHigh 8y ago
    It's all until the shorts get busted. It will calm down a bit afterwards.
  - DmenshunlAnlsis 8y ago
    What I’m saying is based on missed targets, a price point that has never materialized, and a total lack of personal investment in Musk or Tesla on a financial or emotional level. If Intel made as many claims and delivered so little I’d be skeptical of their ability to ever deliver as well. When I look at Tesla I see a company that can only make its stated targets when they work out of a tent with all hands on deck. That same company is saddled with debt and has never turned a profit. It’s hardly doomed, but there are clearly real problems to be overcome. Then I contrast that with the pie-eyed faith of the “Musk is saving the world for us,” fanboys and it makes me tired. The gulf between the reality of Tesla and the “negative case” as you call it isn’t that wide, while between the promise of changing energy forever blah blah blah is a lot of PR. The most likely cases are Tesla succeeding as a car company or failing as a car company and nothing more either way. I don’t care if Tesla fails or succeeds, and I don’t know whether failure or success lies ahead for it. I do increasingly see Musk as unstable and unpleasant, and his most rabid fans as unbearable though. I’m approaching console-wars and cryptocurrency levels of burnout with this topic and how online communities discuss it. I feel dread at another predictable and heavily flagged discussion every time Musk and Tesla is submitted, not excitement or intellectual stimulation.
deelowe 8y ago
> The $35k base model made at scale later this year will be profitable Here's the thing. SV Tech companies aren't too great at the whole "at scale" manufacturing thing. Maybe Tesla can figure it out, but they need to pay more attention to what the "boring dinosaurs" are doing this this regard. If you're interested, this video is great: https://www.youtube.com/watch?v=CpCrkO1x-Qo https://www.youtube.com/watch?v=CpCrkO1x-Qo
- perl4ever 8y ago
  "Here's the thing. SV Tech companies aren't too great at the whole "at scale" manufacturing thing." There was a time when Apple was notorious for problems with manufacturing shortages, but somewhere along the line of becoming a juggernaut they seem to have figured it out.
  - deelowe 8y ago
    They outsourced it to foxconn. Apple didn't figure anything out themselves.
    - perl4ever 8y ago
      Is this chronologically consistent? I'm skeptical that the point at which they started outsourcing was the point at which they solved their problems. The latter is relatively recent, and the former must be a long time ago, surely? They made Mac SE/30s in Singapore.

karpodiem 8y ago

I'll believe it when I see positive cash flow being generated through reading a 10-K statement filed with the SEC. Historically, Tesla has never done this without selling ZEV credits (there were those two quarters it posted a profit but the amount of cash they've burned is many times greater than those two miniscule profits they posted). I say this because selling ZEV credits isn't an advantage, any automaker can do this if they sell vehicles, even if those vehicles are sold at a loss.

compcoffee 8y ago

>The $35k base model made at scale later this year will be profitable." We've been hearing about it forever. Let's see it. It's always "coming". >"Musk is a fraudster/bullshit artist" wave that's hit HN and most online forums recently" Give me a break. You're "wave" is my, finally, balance. Tesla, or more specifically Musk, has got far more postive press than they deserve. I never see any Nissan, Porsche, Audi, or rarely, GM articles on this site. Meanwhile, every time the Tesla blog/Electrek make a post, it's upvoted here.

danhak 8y ago
It will come as soon as the company exhausts demand for the higher-ASP variants. In what world does it make business sense for a production-constrained company to prioritize its least expensive products?
- kasey_junk 8y ago
  When the least expensive products have higher margins than the most expensive ones?
  - froindt 8y ago
    I haven't researched specifics on Tesla, but typically bigger => larger margins in the automotive world. Manufacturers weren't thrilled when the Obama administration pushed for higher fuel economy after the bailouts. The margins on the small cars were much lower than on trucks and SUV's. For example, Ford's F-150 line is worth an incredible amount of money. "Morgan Stanley analyst Adam Jonas has estimated that the F-Series, which includes F-150 and Super Duty trucks and remains the best-selling lineup in America, is responsible for 90% of the automaker’s global profits." https://www.foxbusiness.com/markets/why-the-ford-f-150-is-a-profit-machine https://www.foxbusiness.com/markets/why-the-ford-f-150-is-a-...
  - snovv_crash 8y ago
    And even then only margins in $, not as a %. With a price difference of $49k vs $35k I don't see that as being likely, unless it is something in the upgrade package that is an assembly line bottleneck.
gburdell3 8y ago
I just saw a Nissan article on here a few days ago. It was about how they cheated their emissions tests.
- dsfyu404ed 8y ago
  They didn't "cheat their" emissions test unless you're lowering the standards for "cheating" because you're running out of witches to burn. Workers at a factory falsified test data to make it look like cars that didn't pass their internal tests passed. The cars were still complaint with the relevant regulations and the tests are not advertised to customers. Nobody got cheated except Nissan itself. It's like promising your customers 99.99% up-time, considering 99.999% up-time the bar for success internally, delivering 99.99% and then fudging the numbers so that it says 99.999% internally. I love getting triggered by corporate misconduct as much as the next guy but the Nissan thing was a nothing-burger with a catchy headline. Edit: Since apparently I'mWrong(TM) can explain to me how the Nissan thing is anything worth paying attention to?
  - gburdell3 8y ago
    >falsified test data to make it look like cars that didn't pass their internal tests passed Sounds an awful lot like cheating to me, but OK.
    - FireBeyond 8y ago
      "Still met emissions requirements, but failed internal QA".
- compcoffee 8y ago
  >I just saw a Nissan article on here a few days ago. It was about how they cheated their emissions tests. Exactly. Some stupid story that wasn't true. I rest my case.
thephyber 8y ago
Nissan, Porsche, Audi, GM are all behemoths. Tesla, by comparison, is an underdog (hence the widespread emotional appeal), has framed themselves as being principally for "changing how humans use energy" rather than "just a little better than the next car", and has a CEO+chairman who says outlandish things... and delivers on some of them. I would argue Musk gets press for nearly the same reasons Trump does. And it works.
- mikeash 8y ago
  Tesla also makes really, really nice cars that appeal strongly to the HN demographic.

api 8y ago

The anti-Musk campaign is a clear and obvious example of astroturf. The likely culprits are Jim Chanos and other large scale shorts. This isn't a totally baseless allegation. Shorting potentially vulnerable companies and then launching massive smear campaigns against them is a well known underhanded Wall St. tactic. Chanos has a documented history of doing this. Musk is a hype-monger but he also has a history of actually delivering stuff. See: SpaceX reusable rockets, Dragon spacecraft, earlier generation Tesla automobiles. He is quite far from a con artist.

MBCook 8y ago
I assure you it’s not an AstroTurf. I’m highly critical. I used to own some of their stock before they started doing things I didn’t like (YEARS ago, when they first hit $100). I don’t like the way Musk tends to run things, always in a panic and missing dates. I don’t think it’s smart to ignore decades of hard won wisdom about building cars. You don’t have to follow it, but you shouldn’t blindly toss it out. On a personal level I don’t like the design of the interior of the 3. The S/X seem nice enough. But my criticism does not come from being paid to make them look bad. No one is paying me anything and I don’t hold any of their stock anymore.

DmenshunlAnlsis 8y ago

What $35k model? https://arstechnica.com/cars/2018/07/tesla-drops-35000-price-from-model-3-page-insists-plans-havent-changed/ https://arstechnica.com/cars/2018/07/tesla-drops-35000-price... I’ll believe it’s a thing when it starts to ship, until then it’s PR for a car that’s much less affordable. Edit: the mass downvoting of any comment critical of Tesla/Musk, and flagging of any negative article is getting really old. It’s especially galling when people float conspiracy theories about an anti-Musk bent as a justification for this.

martythemaniak 8y ago
Have you considered the fact that you're getting downvoted because the negativity requires an increasingly conspirational mindset? What I'm saying is, what you you're seeing could be explained thus: "It takes a few months to spin up production of new trim levels. Like other companies, this company's years-long plans sometimes get delayed by several weeks or months. The company has spent a lot of capital on fixed costs and are focusing on being cashflow positive by prioritizing high-margin sales first" To make sense of Tesla's actions doesn't require your to believe anything out of the ordinary, nor even anything specific to Tesla. I might have just as easily described Intel shipping a chip. OTOH, the negative case is always shifting, there are always rumours, the books are cooked, the production numbers are bunk, the QC issues are underreported, etc etc. Until a few weeks ago, the line was that they couldn't make them in large numbers. Now that that's gone and forgotten, the current line is about the base model. When that ships, the line will shift to the Model Y or FSD.
- HeadsUpHigh 8y ago
  It's all until the shorts get busted. It will calm down a bit afterwards.
- DmenshunlAnlsis 8y ago
  What I’m saying is based on missed targets, a price point that has never materialized, and a total lack of personal investment in Musk or Tesla on a financial or emotional level. If Intel made as many claims and delivered so little I’d be skeptical of their ability to ever deliver as well. When I look at Tesla I see a company that can only make its stated targets when they work out of a tent with all hands on deck. That same company is saddled with debt and has never turned a profit. It’s hardly doomed, but there are clearly real problems to be overcome. Then I contrast that with the pie-eyed faith of the “Musk is saving the world for us,” fanboys and it makes me tired. The gulf between the reality of Tesla and the “negative case” as you call it isn’t that wide, while between the promise of changing energy forever blah blah blah is a lot of PR. The most likely cases are Tesla succeeding as a car company or failing as a car company and nothing more either way. I don’t care if Tesla fails or succeeds, and I don’t know whether failure or success lies ahead for it. I do increasingly see Musk as unstable and unpleasant, and his most rabid fans as unbearable though. I’m approaching console-wars and cryptocurrency levels of burnout with this topic and how online communities discuss it. I feel dread at another predictable and heavily flagged discussion every time Musk and Tesla is submitted, not excitement or intellectual stimulation.

deelowe 8y ago

> The $35k base model made at scale later this year will be profitable Here's the thing. SV Tech companies aren't too great at the whole "at scale" manufacturing thing. Maybe Tesla can figure it out, but they need to pay more attention to what the "boring dinosaurs" are doing this this regard. If you're interested, this video is great: https://www.youtube.com/watch?v=CpCrkO1x-Qo https://www.youtube.com/watch?v=CpCrkO1x-Qo

perl4ever 8y ago
"Here's the thing. SV Tech companies aren't too great at the whole "at scale" manufacturing thing." There was a time when Apple was notorious for problems with manufacturing shortages, but somewhere along the line of becoming a juggernaut they seem to have figured it out.
- deelowe 8y ago
  They outsourced it to foxconn. Apple didn't figure anything out themselves.
  - perl4ever 8y ago
    Is this chronologically consistent? I'm skeptical that the point at which they started outsourcing was the point at which they solved their problems. The latter is relatively recent, and the former must be a long time ago, surely? They made Mac SE/30s in Singapore.