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Tesla Second Quarter 2018 Update

203 points by kgwgk 8y ago

JumpCrisscross 8y ago
For the six months ending in June 2018 Tesla's operations burned $528 million of cash. It also spent $1.27 billion on CAPEX. At quarter's end, they have $2.2 billion of cash on hand. That's like 7 months of runway. What's keeping the boat plugged up is debt. Good news is, there are no obvious bond market bogeymen on the horizon in the very near-term.
- secabeen 8y ago
  Will they eventually reach a point where they can just run with the capital equipment they already have, and drop the CAPEX spending down?
  - JumpCrisscross 8y ago
    > Will they eventually reach a point where they can just run with the capital equipment they already have, and drop the CAPEX spending down? That's the plan. But you have to spend money to make money, particularly in the car business.
  - rory096 8y ago
    Their goal is 10k cars/week, so perhaps then. There's also (reported today) $5B planned for the factory in China, expected to be raised largely in-country but with some American/international investment. And, of course, some capex is always necessary to replace depreciating stock and support new models (pickup, new roadster, and truck all planned).
    - radicalbyte 8y ago
      They're talking about building a factory in Europe too, either in The Netherlands or in Germany.
    - sunstone 8y ago
      The thing about these new factories is that they will be using already developed technology and product so the risk is much lower for them than for the original model3 factory.
- sp332 8y ago
  Their burn rate varies dramatically as they start shipping new models of cars. https://arstechnica.com/cars/2018/07/teslas-cash-crunch-explained/ https://arstechnica.com/cars/2018/07/teslas-cash-crunch-expl...
  - JumpCrisscross 8y ago
    > Their burn rate varies dramatically as they start shipping new models of cars Sure, you have to build new tools, buy material, hire factory workers--all before you've sold your first vehicle. This is a known cash curve. The purpose of calculating a runway is to understand "we have to start selling lots of cars within 7 months, or else sell more debt or stock."
    - sp332 8y ago
      Right, but since they did just start selling a lot of cars, the runway calculation is now moot.
      - quest88 8y ago
        What is it now?
        sp332 8y ago
        Well that depends on how fast you think they're selling cars right now or in the near future. And how much money they make on each model. Just guess, basically.
        tedunangst 8y ago
        What if I guess they aren't making enough profit or selling enough cars to make the runway calculations moot? I mean, people basically said the same about Groupon. "Once they become profitable the losses won't matter." Except Groupon hardly turned out to be the juggernaut that rewrote how commerce is done.
- matt4077 8y ago
  Cash flow was -$528M Jan-Jun, i. e. Q1 and Q2, yes. But it was only -$128M in Q2. Tell us why you chose the longer time frame for your prediction, exactly? Your math also has some basic problems, because $2.2 billion / ($1.27 billion / 6 months) != 7 months == 11 months. More importantly: you're mixing some completely different levels of accounting: cash flow may or may not correspond to changes in capital structure such as CAPEX. When CAPEX involves actual cash being paid, it's also reflected in cash flow. In that case, you're counting the same expenses twice. etc..
  - kgwgk 8y ago
    Your parent is not mixing different accounting concepts. Those are two lines taken directly from the statement of cash flows ("Net cash used in operating activities" and "Capital expenditures").
  - mdorazio 8y ago
    CAPEX is not the only component of runway. There's also the standard operating expenses to cover as well. Tell us why you ignored that and why you think Q2 is more relevant than Q1 + Q2.
  - JumpCrisscross 8y ago
    > changes in capital structure such as CAPEX Hmm, so capital structure typically refers to the big elements liability side of a business. Equity versus debt, bank loans versus bonds--that sort of thing. When one purchases capital equipment (e.g. a factor), that counts as CAPEX. I will admit that this nomenclature could be less confusing.
- dawhizkid 8y ago
  What does that mean? I thought I read somewhere the cost of insuring Tesla debt had implied a high chance of default?
  - JumpCrisscross 8y ago
    > the cost of insuring Tesla debt had implied a high chance of default? There is a high chance of default. If the bond markets sour, Tesla will have to write off a lot of projects and lay off a lot of people to attempt stabilization. That basically shoots out their Model 3 and energy projects, which would bring the company's basic viability into question.
- chollida1 8y ago
  > Good news is, there are no obvious bond market bogeymen on the horizon in the very near-term. I actually see one. it depends on your definition of near term, but in march of next year Tesla has alot of debt coming due. This debt is convertible(to stock) at around $350ish. However, reportedly, this debt allows tesla to raise the conversion rate such that it can convert the debt to equity at any rate it wants. https://seekingalpha.com/article/4191711-tesla-stealth-capital-raise?ifp=0 https://seekingalpha.com/article/4191711-tesla-stealth-capit... I haven't verified that but I thought its an interesting thesis:)
- _Microft 8y ago
  "$528 million in six month" sounds a lot worse than what the report itself says, namely Cash outflow from operating activities in Q2 2018 was $130 million, which was significantly better than outflows of $398 million in Q1. This improvement occurred despite a substantial increase in finished goods vehicle inventory of $579 million as a result of the timing of deliveries.
  - secabeen 8y ago
    > finished goods vehicle inventory of $579 million as a result of the timing of deliveries. AKA, we delayed delivering a lot of cars to not trigger the tax credit expiration in Q2.
    - _Microft 8y ago
      I interpret it like that as well, yes.
    - rconti 8y ago
      Exactly. And this is a 'problem' they'll never again face, because now the clock is ticking. Of course, it's been replaced with the 'problem' of selling incremental Model 3s as the effective price goes up quarter by quarter in the near term, but the issue has ALWAYS been whether they'll be able to sustain demand and sales as the vehicle goes through pent-up demand and then has to rely on incremental sales, year after year after year (or until they start dumping huge amounts of cash into ramping the NEXT car). That said, I'm VERY impressed with our new 3; more so than I expected, and I suspect others will be similarly delighted and new sales will follow. Their next challenge will be ramping maintenance/service of the rapidly expanding installed base.
      - radicalbyte 8y ago
        There's a massive amount of demand here in Europe: the car is the right size, the right price qualifies for all of the tax benefits. They also have 0 competition. I expect there to be a waiting list for the next couple of years unless they keep boosting production..
Alex3917 8y ago
> In July 2018, we delivered our 200,000th vehicle in the US, which means that our US customers will have access to the full $7,500 federal tax credit until the end of 2018 So basically they have until the end of the year to produce as many cars as possible and get their finances in good shape, otherwise they're in trouble.
- sp332 8y ago
  It will drop to $3,750 in January and then $1,875 in July. https://arstechnica.com/cars/2018/07/tesla-sold-200000-cars-in-the-us-so-the-7500-tax-credit-is-going-away/ https://arstechnica.com/cars/2018/07/tesla-sold-200000-cars-...
  - Alex3917 8y ago
    Even that phaseout will probably result in a lot of cancellations from people who have been on the waiting list for several months already but who haven't taken delivery by the end of the year. Especially for the orders at the lower end of the price spectrum, which haven't even started shipping yet. Loss aversion is real, and people aren't going to be happy about being asked to suddenly pay ~20% more for the exact same car. Since the base models haven't started shipping yet, it stands to reason that after the end of the year that will be mostly what's left on the waiting list. So if they lose a lot of those reservations, they're stuck with huge capital expenses and a potentially very significant decrease in orders.
    - romski 8y ago
      The information regarding the subsidy limit being hit soon was freely available to depositors.
      - Alex3917 8y ago
        Sure, and it's fully refundable. So there is no reason not to put down the deposit and then cancel if you don't take delivery by the time the incentive starts to phase out.
lawrenceyan 8y ago
Looks like the bankruptcy short thesis has been pretty much debunked, cash burn way below expected.
- bjl 8y ago
  Not really. Accounts payable ballooned to around $3B, and cash on hand is only ~$2B (of which about $1B is in the form of revokable deposits).
  - lawrenceyan 8y ago
    You're sort of cherrypicking those numbers aren't you?... If you look a few lines down, you'll see that total liabilities and equity have gone down by over $1B. Also it's not ~$2B, it's $2.8B from $3.2B last quarter, which was my point about the cash burn. It's clear that the fears of running out of cash and defaulting are completely unfounded. They have multiple years of burn rate.
- oremonger 8y ago
  Except for the 3 billion dollars in short-term debt that they have no hope of repaying.
  - ggm 8y ago
    Cite, and I don't just mean the $3b existing, I mean the 'no hope of repaying' part. Cite, or delete.
melling 8y ago
Beyond the finances, Tesla says they’re still on target for 6000 Model 3’s a week by the end of the month. Throw in the other Models and Tesla will be shipping 300,000-400,000 electric cars a year. That’s quite an accomplishment.
- geerlingguy 8y ago
  I wish other car companies would create more compelling and somewhat affordable electric cars. At least in the US, the only two cars I can think of (besides the Model 3, which is hard to come by) that move the needle at all are the Nissan Leaf and Chevy Bolt, both of which look... not great. Why don't any other car companies offer a 'standard' mid size or compact sedan that's fully electric? Just take an existing decent car like a Toyota Corolla, Honda Civic, etc. and redesign it electric? I know it's a different drivetrain/architecture, but why not a standard looking body instead of some weird buggy space-age thing?
  - toomuchtodo 8y ago
    Innovator’s dilemma. EVs compete against existing combustion vehicles and all of the capex and supply chain that goes with it. Have to be willing to cannibalize part of your own market to succeed. Tall order for most.
  - Nition 8y ago
    Toyota has a Corolla hybrid option now too, which seems to further support your case that they could do a full electric conversion as well if they really wanted to.
  - Puer 8y ago
    Because car companies are horridly shortsighted. All of the major US car makers right now are doubling down on building gas-guzzling pickup trucks and SUVs because they have a nice profit margin and because Americans love commuting alone downtown in traffic every day in their seats 7, 20 mpg abominations with trunks and beds that are never used. Maybe it's what's necessary to survive in the moment and maybe the moment is the nature of the car industry, but all of these car producers seem to forget what happens when gas prices rise and the economy slows. Maybe then they'll actually innovate, but in terms of technology they're already playing catchup to Tesla. If Tesla can figure out how to produce these cars steadily traditional car makers are in trouble.
bhandziuk 8y ago
Is that graph of their market share true? Do they really have a ~50% market share? It sounds really high. At that sort of percentage can they really grow at the rate they need? I know they say things like > We are drawing customers from many other segments, including non-premiums sedans and hatchbacks. Is that the source of growth at this point?
- secabeen 8y ago
  > Is that graph of their market share true? Do they really have a ~50% market share? It sounds really high. At that sort of percentage can they really grow at the rate they need? Yes, when comparing to other compact luxury sedans such as the BMW 3-series and the M-B C-Class, yes, they are at 50% market share. The question becomes, are they just selling cars to people who would have bought a car in that class, or are they selling to people who normally would have been in a lower class. Anecdotally, they're growing the class, as there's a lot of interest in the Model 3 from people who otherwise would have bought a Camry, Accord, Malibu, or other mid-grade sedan.
  - ntsplnkv2 8y ago
    The Model 3's shipping though are essentially luxury models though, correct? Not the cheap one that would compete with a Camry, Accord, Malibu, all of which can be had for around 20k.
    - thefounder 8y ago
      Model 3 is supposed to be the cheap/basic version. Maybe a model 5 will be mid/luxury along with model S
  - rconti 8y ago
    Yes, but it's also selling to a somewhat-rabid list of reservation holders against a BMW 3 series that is around 3 or 4 years into its model cycle, a not-as-attractive-as-previous-generation C class that's 2+ years into its model cycle... these things are never apples to apples but its particularly bad when you have a backlog of people champing at the bit to buy your car. And all for a $7500+ discount over 'true' MSRP which will begin to evaporate over the coming months (which was one reason we jumped on the 3 when we did, rather than waiting).
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dmode 8y ago
Tesla only sold 104 Roadstars in 2011. Now they are on track to sell 250,000 Model S, X, and 3 combined in 2018. The scale of Tesla's accomplishment is truly under appreciated. It becomes even more impressive when you realize that this is an electric car, sold by Tesla owned stores, supported by over a thousand Superchargers. Amazing !!
- pseudocook 8y ago
  I wonder how many of those are Model S. I hope that Model S is not suffering any problems so that Model 3 and Model X can go forward. I am only person in my circle of friends interested in Model S as opposed to the other two models. Anecdotally, I lost count of the number of Model 3's I see on a daily basis in Bay Area.
  - jgibson 8y ago
    What attracts you about the S more than the 3?
    - rconti 8y ago
      I really, really, really wish my 3 had the same awesome dash and display of the S. And of course the S is better looking although a bit long in the tooth. And has more space inside. And the power trunklid is nice because I'm not used to sedans and don't really like manually closing the trunk on the 3. It's a 2-step motion unlike a hatchback lid that closes more naturally. But the more time I spend in the 3, the more I realize it's a MUCH nicer car inside than the S -- which I didn't expect.
    - kentm 8y ago
      I can't speak for pseudocook but the fact that they replaced the dash with a tablet really puts me off of the 3. Not only is it ugly (IMO), its less functional.
      - what_ever 8y ago
        You may want to look at this - https://electrek.co/2018/07/30/tesla-model-s-x-interior-refresh-exclusive-first-look/ https://electrek.co/2018/07/30/tesla-model-s-x-interior-refr...
btilly 8y ago
After hours trading jumped from $300.81 to ~$320. That could change again before morning, but the markets look set to smile on this update. :-)
brian-armstrong 8y ago
Buying a car that's more than, say, $30,000 is such a laughably poor decision. Cars depreciate rapidly unlike real estate where you actually maintain some equity. If you're in your 20s and looking to pump your new RSU wealth into something, almost anything is a better choice than an expensive car.
- quest88 8y ago
  But if you've already pumped your new RSUs into investments and have a lot of money saved up, go for it! It's fun!
- anyfoo 8y ago
  Who are you to dictate what I should do with my hard-earned money? As long as you can comfortably afford it without any debt, spend the money on what you are enthusiastic on. Next time you are buying groceries, laptops, or go to a restaurant, I am going to point out all your laughably poor decisions of not spending your money on the absolutely cheapest options.
  - archarios 8y ago
    That's a pretty ridiculous comparison because of the difference in scale. There are significant opportunity costs to putting 10s of thousands of dollars into something that will depreciate in value over time rather than increase. Especially when you're in your 20's. That amount of money invested could be worth a lot more in 30 years. Compound growth is your friend.
    - anyfoo 8y ago
      I said "comfortably", which implies that it should not threaten your retirement in any way. That is entirely dependent of one's individual situation, whereas the parent poster was making a blanket statement about such a choice being a "laughably poor decision". I agree that keeping in mind and taking care of your retirement is necessary, but I personally would not want to go through my entire life without the very occasional splurging on things that are a pleasure now, if the numbers work out well. Having only ever the end in sight is a pretty sorry way to live, in my view. The car (not a Tesla) is paid off, I treat its value as "lost" (even though in this particular case it has not actually gone down in value), and I'm sure that I will look at it and especially the project ideas it spawned in fondness, rather in regret of the loss of some additional compound interest. Granted, I'm not in my 20s, though. My comparisons were over the top, but vacations for example can add up to a lot over time, and they usually don't leave anything behind in terms of assets.
deleted 8y ago
[deleted]
newnewpdro 8y ago
Out of curiosity, how many of you bought and sold TSLA over the last few hours since the report?
gok 8y ago
> Gigafactory 1 battery production reached an annualized run rate of roughly 20 GWh Kind of interesting...the typical laptop has a 50 Wh battery, and there are about 160 million laptop sales per year. A typical smartphone has a 5 Wh battery and there are about 1.5 billion smartphones sales per year. So that one factory makes just about enough batteries for all the laptops and smartphones.
- femidav 8y ago
  And we would need 730 of such factories to provide all of 73 million annually produced cars with a 200kWh battery.
  - davidgould 8y ago
    Fortunately, cars do not need 200kWh batteries. 75ish seems like the sweet spot.
nodesocket 8y ago
Reading the comments, feels like HN is schizophrenic which is actually not surprising (online mob mentality). The shorts and haters were out in full force before on HN, calling Tesla the next Enron, absolutely slamming Elon. Today, praise and congratulations.

203 points by kgwgk 8y ago

For the six months ending in June 2018 Tesla's operations burned $528 million of cash. It also spent $1.27 billion on CAPEX. At quarter's end, they have $2.2 billion of cash on hand. That's like 7 months of runway. What's keeping the boat plugged up is debt. Good news is, there are no obvious bond market bogeymen on the horizon in the very near-term.

secabeen 8y ago
Will they eventually reach a point where they can just run with the capital equipment they already have, and drop the CAPEX spending down?
- JumpCrisscross 8y ago
  > Will they eventually reach a point where they can just run with the capital equipment they already have, and drop the CAPEX spending down? That's the plan. But you have to spend money to make money, particularly in the car business.
- rory096 8y ago
  Their goal is 10k cars/week, so perhaps then. There's also (reported today) $5B planned for the factory in China, expected to be raised largely in-country but with some American/international investment. And, of course, some capex is always necessary to replace depreciating stock and support new models (pickup, new roadster, and truck all planned).
  - radicalbyte 8y ago
    They're talking about building a factory in Europe too, either in The Netherlands or in Germany.
  - sunstone 8y ago
    The thing about these new factories is that they will be using already developed technology and product so the risk is much lower for them than for the original model3 factory.
sp332 8y ago
Their burn rate varies dramatically as they start shipping new models of cars. https://arstechnica.com/cars/2018/07/teslas-cash-crunch-explained/ https://arstechnica.com/cars/2018/07/teslas-cash-crunch-expl...
- JumpCrisscross 8y ago
  > Their burn rate varies dramatically as they start shipping new models of cars Sure, you have to build new tools, buy material, hire factory workers--all before you've sold your first vehicle. This is a known cash curve. The purpose of calculating a runway is to understand "we have to start selling lots of cars within 7 months, or else sell more debt or stock."
  - sp332 8y ago
    Right, but since they did just start selling a lot of cars, the runway calculation is now moot.
    - quest88 8y ago
      What is it now?
      - sp332 8y ago
        Well that depends on how fast you think they're selling cars right now or in the near future. And how much money they make on each model. Just guess, basically.
        tedunangst 8y ago
        What if I guess they aren't making enough profit or selling enough cars to make the runway calculations moot? I mean, people basically said the same about Groupon. "Once they become profitable the losses won't matter." Except Groupon hardly turned out to be the juggernaut that rewrote how commerce is done.
matt4077 8y ago
Cash flow was -$528M Jan-Jun, i. e. Q1 and Q2, yes. But it was only -$128M in Q2. Tell us why you chose the longer time frame for your prediction, exactly? Your math also has some basic problems, because $2.2 billion / ($1.27 billion / 6 months) != 7 months == 11 months. More importantly: you're mixing some completely different levels of accounting: cash flow may or may not correspond to changes in capital structure such as CAPEX. When CAPEX involves actual cash being paid, it's also reflected in cash flow. In that case, you're counting the same expenses twice. etc..
- kgwgk 8y ago
  Your parent is not mixing different accounting concepts. Those are two lines taken directly from the statement of cash flows ("Net cash used in operating activities" and "Capital expenditures").
- mdorazio 8y ago
  CAPEX is not the only component of runway. There's also the standard operating expenses to cover as well. Tell us why you ignored that and why you think Q2 is more relevant than Q1 + Q2.
- JumpCrisscross 8y ago
  > changes in capital structure such as CAPEX Hmm, so capital structure typically refers to the big elements liability side of a business. Equity versus debt, bank loans versus bonds--that sort of thing. When one purchases capital equipment (e.g. a factor), that counts as CAPEX. I will admit that this nomenclature could be less confusing.
dawhizkid 8y ago
What does that mean? I thought I read somewhere the cost of insuring Tesla debt had implied a high chance of default?
- JumpCrisscross 8y ago
  > the cost of insuring Tesla debt had implied a high chance of default? There is a high chance of default. If the bond markets sour, Tesla will have to write off a lot of projects and lay off a lot of people to attempt stabilization. That basically shoots out their Model 3 and energy projects, which would bring the company's basic viability into question.
chollida1 8y ago
> Good news is, there are no obvious bond market bogeymen on the horizon in the very near-term. I actually see one. it depends on your definition of near term, but in march of next year Tesla has alot of debt coming due. This debt is convertible(to stock) at around $350ish. However, reportedly, this debt allows tesla to raise the conversion rate such that it can convert the debt to equity at any rate it wants. https://seekingalpha.com/article/4191711-tesla-stealth-capital-raise?ifp=0 https://seekingalpha.com/article/4191711-tesla-stealth-capit... I haven't verified that but I thought its an interesting thesis:)
_Microft 8y ago
"$528 million in six month" sounds a lot worse than what the report itself says, namely Cash outflow from operating activities in Q2 2018 was $130 million, which was significantly better than outflows of $398 million in Q1. This improvement occurred despite a substantial increase in finished goods vehicle inventory of $579 million as a result of the timing of deliveries.
- secabeen 8y ago
  > finished goods vehicle inventory of $579 million as a result of the timing of deliveries. AKA, we delayed delivering a lot of cars to not trigger the tax credit expiration in Q2.
  - _Microft 8y ago
    I interpret it like that as well, yes.
  - rconti 8y ago
    Exactly. And this is a 'problem' they'll never again face, because now the clock is ticking. Of course, it's been replaced with the 'problem' of selling incremental Model 3s as the effective price goes up quarter by quarter in the near term, but the issue has ALWAYS been whether they'll be able to sustain demand and sales as the vehicle goes through pent-up demand and then has to rely on incremental sales, year after year after year (or until they start dumping huge amounts of cash into ramping the NEXT car). That said, I'm VERY impressed with our new 3; more so than I expected, and I suspect others will be similarly delighted and new sales will follow. Their next challenge will be ramping maintenance/service of the rapidly expanding installed base.
    - radicalbyte 8y ago
      There's a massive amount of demand here in Europe: the car is the right size, the right price qualifies for all of the tax benefits. They also have 0 competition. I expect there to be a waiting list for the next couple of years unless they keep boosting production..

Alex3917 8y ago

> In July 2018, we delivered our 200,000th vehicle in the US, which means that our US customers will have access to the full $7,500 federal tax credit until the end of 2018 So basically they have until the end of the year to produce as many cars as possible and get their finances in good shape, otherwise they're in trouble.

sp332 8y ago
It will drop to $3,750 in January and then $1,875 in July. https://arstechnica.com/cars/2018/07/tesla-sold-200000-cars-in-the-us-so-the-7500-tax-credit-is-going-away/ https://arstechnica.com/cars/2018/07/tesla-sold-200000-cars-...
- Alex3917 8y ago
  Even that phaseout will probably result in a lot of cancellations from people who have been on the waiting list for several months already but who haven't taken delivery by the end of the year. Especially for the orders at the lower end of the price spectrum, which haven't even started shipping yet. Loss aversion is real, and people aren't going to be happy about being asked to suddenly pay ~20% more for the exact same car. Since the base models haven't started shipping yet, it stands to reason that after the end of the year that will be mostly what's left on the waiting list. So if they lose a lot of those reservations, they're stuck with huge capital expenses and a potentially very significant decrease in orders.
  - romski 8y ago
    The information regarding the subsidy limit being hit soon was freely available to depositors.
    - Alex3917 8y ago
      Sure, and it's fully refundable. So there is no reason not to put down the deposit and then cancel if you don't take delivery by the time the incentive starts to phase out.

lawrenceyan 8y ago

Looks like the bankruptcy short thesis has been pretty much debunked, cash burn way below expected.

bjl 8y ago
Not really. Accounts payable ballooned to around $3B, and cash on hand is only ~$2B (of which about $1B is in the form of revokable deposits).
- lawrenceyan 8y ago
  You're sort of cherrypicking those numbers aren't you?... If you look a few lines down, you'll see that total liabilities and equity have gone down by over $1B. Also it's not ~$2B, it's $2.8B from $3.2B last quarter, which was my point about the cash burn. It's clear that the fears of running out of cash and defaulting are completely unfounded. They have multiple years of burn rate.
oremonger 8y ago
Except for the 3 billion dollars in short-term debt that they have no hope of repaying.
- ggm 8y ago
  Cite, and I don't just mean the $3b existing, I mean the 'no hope of repaying' part. Cite, or delete.

melling 8y ago

Beyond the finances, Tesla says they’re still on target for 6000 Model 3’s a week by the end of the month. Throw in the other Models and Tesla will be shipping 300,000-400,000 electric cars a year. That’s quite an accomplishment.

geerlingguy 8y ago
I wish other car companies would create more compelling and somewhat affordable electric cars. At least in the US, the only two cars I can think of (besides the Model 3, which is hard to come by) that move the needle at all are the Nissan Leaf and Chevy Bolt, both of which look... not great. Why don't any other car companies offer a 'standard' mid size or compact sedan that's fully electric? Just take an existing decent car like a Toyota Corolla, Honda Civic, etc. and redesign it electric? I know it's a different drivetrain/architecture, but why not a standard looking body instead of some weird buggy space-age thing?
- toomuchtodo 8y ago
  Innovator’s dilemma. EVs compete against existing combustion vehicles and all of the capex and supply chain that goes with it. Have to be willing to cannibalize part of your own market to succeed. Tall order for most.
- Nition 8y ago
  Toyota has a Corolla hybrid option now too, which seems to further support your case that they could do a full electric conversion as well if they really wanted to.
- Puer 8y ago
  Because car companies are horridly shortsighted. All of the major US car makers right now are doubling down on building gas-guzzling pickup trucks and SUVs because they have a nice profit margin and because Americans love commuting alone downtown in traffic every day in their seats 7, 20 mpg abominations with trunks and beds that are never used. Maybe it's what's necessary to survive in the moment and maybe the moment is the nature of the car industry, but all of these car producers seem to forget what happens when gas prices rise and the economy slows. Maybe then they'll actually innovate, but in terms of technology they're already playing catchup to Tesla. If Tesla can figure out how to produce these cars steadily traditional car makers are in trouble.

bhandziuk 8y ago

Is that graph of their market share true? Do they really have a ~50% market share? It sounds really high. At that sort of percentage can they really grow at the rate they need? I know they say things like > We are drawing customers from many other segments, including non-premiums sedans and hatchbacks. Is that the source of growth at this point?

secabeen 8y ago
> Is that graph of their market share true? Do they really have a ~50% market share? It sounds really high. At that sort of percentage can they really grow at the rate they need? Yes, when comparing to other compact luxury sedans such as the BMW 3-series and the M-B C-Class, yes, they are at 50% market share. The question becomes, are they just selling cars to people who would have bought a car in that class, or are they selling to people who normally would have been in a lower class. Anecdotally, they're growing the class, as there's a lot of interest in the Model 3 from people who otherwise would have bought a Camry, Accord, Malibu, or other mid-grade sedan.
- ntsplnkv2 8y ago
  The Model 3's shipping though are essentially luxury models though, correct? Not the cheap one that would compete with a Camry, Accord, Malibu, all of which can be had for around 20k.
  - thefounder 8y ago
    Model 3 is supposed to be the cheap/basic version. Maybe a model 5 will be mid/luxury along with model S
- rconti 8y ago
  Yes, but it's also selling to a somewhat-rabid list of reservation holders against a BMW 3 series that is around 3 or 4 years into its model cycle, a not-as-attractive-as-previous-generation C class that's 2+ years into its model cycle... these things are never apples to apples but its particularly bad when you have a backlog of people champing at the bit to buy your car. And all for a $7500+ discount over 'true' MSRP which will begin to evaporate over the coming months (which was one reason we jumped on the 3 when we did, rather than waiting).

dionna767675 8y ago

That is good that Telsa is constantly making new models of cars If you dont have at least 8000 dollars in your bank account right now what are you waiting for the money is not going to fall out the sky this is a real money making opportunity get paid weekly by PayPal free to join click below for more information when you become a free member watch all the tutorial videos join the amazing facebook group learn step by step training from the best of the best http://internetmarketingsolution.club http://internetmarketingsolution.club

dmode 8y ago

Tesla only sold 104 Roadstars in 2011. Now they are on track to sell 250,000 Model S, X, and 3 combined in 2018. The scale of Tesla's accomplishment is truly under appreciated. It becomes even more impressive when you realize that this is an electric car, sold by Tesla owned stores, supported by over a thousand Superchargers. Amazing !!

pseudocook 8y ago
I wonder how many of those are Model S. I hope that Model S is not suffering any problems so that Model 3 and Model X can go forward. I am only person in my circle of friends interested in Model S as opposed to the other two models. Anecdotally, I lost count of the number of Model 3's I see on a daily basis in Bay Area.
- jgibson 8y ago
  What attracts you about the S more than the 3?
  - rconti 8y ago
    I really, really, really wish my 3 had the same awesome dash and display of the S. And of course the S is better looking although a bit long in the tooth. And has more space inside. And the power trunklid is nice because I'm not used to sedans and don't really like manually closing the trunk on the 3. It's a 2-step motion unlike a hatchback lid that closes more naturally. But the more time I spend in the 3, the more I realize it's a MUCH nicer car inside than the S -- which I didn't expect.
  - kentm 8y ago
    I can't speak for pseudocook but the fact that they replaced the dash with a tablet really puts me off of the 3. Not only is it ugly (IMO), its less functional.
    - what_ever 8y ago
      You may want to look at this - https://electrek.co/2018/07/30/tesla-model-s-x-interior-refresh-exclusive-first-look/ https://electrek.co/2018/07/30/tesla-model-s-x-interior-refr...

btilly 8y ago

After hours trading jumped from $300.81 to ~$320. That could change again before morning, but the markets look set to smile on this update. :-)

brian-armstrong 8y ago

Buying a car that's more than, say, $30,000 is such a laughably poor decision. Cars depreciate rapidly unlike real estate where you actually maintain some equity. If you're in your 20s and looking to pump your new RSU wealth into something, almost anything is a better choice than an expensive car.

quest88 8y ago
But if you've already pumped your new RSUs into investments and have a lot of money saved up, go for it! It's fun!
anyfoo 8y ago
Who are you to dictate what I should do with my hard-earned money? As long as you can comfortably afford it without any debt, spend the money on what you are enthusiastic on. Next time you are buying groceries, laptops, or go to a restaurant, I am going to point out all your laughably poor decisions of not spending your money on the absolutely cheapest options.
- archarios 8y ago
  That's a pretty ridiculous comparison because of the difference in scale. There are significant opportunity costs to putting 10s of thousands of dollars into something that will depreciate in value over time rather than increase. Especially when you're in your 20's. That amount of money invested could be worth a lot more in 30 years. Compound growth is your friend.
  - anyfoo 8y ago
    I said "comfortably", which implies that it should not threaten your retirement in any way. That is entirely dependent of one's individual situation, whereas the parent poster was making a blanket statement about such a choice being a "laughably poor decision". I agree that keeping in mind and taking care of your retirement is necessary, but I personally would not want to go through my entire life without the very occasional splurging on things that are a pleasure now, if the numbers work out well. Having only ever the end in sight is a pretty sorry way to live, in my view. The car (not a Tesla) is paid off, I treat its value as "lost" (even though in this particular case it has not actually gone down in value), and I'm sure that I will look at it and especially the project ideas it spawned in fondness, rather in regret of the loss of some additional compound interest. Granted, I'm not in my 20s, though. My comparisons were over the top, but vacations for example can add up to a lot over time, and they usually don't leave anything behind in terms of assets.

deleted 8y ago

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newnewpdro 8y ago

Out of curiosity, how many of you bought and sold TSLA over the last few hours since the report?

gok 8y ago

> Gigafactory 1 battery production reached an annualized run rate of roughly 20 GWh Kind of interesting...the typical laptop has a 50 Wh battery, and there are about 160 million laptop sales per year. A typical smartphone has a 5 Wh battery and there are about 1.5 billion smartphones sales per year. So that one factory makes just about enough batteries for all the laptops and smartphones.

femidav 8y ago
And we would need 730 of such factories to provide all of 73 million annually produced cars with a 200kWh battery.
- davidgould 8y ago
  Fortunately, cars do not need 200kWh batteries. 75ish seems like the sweet spot.

nodesocket 8y ago

Reading the comments, feels like HN is schizophrenic which is actually not surprising (online mob mentality). The shorts and haters were out in full force before on HN, calling Tesla the next Enron, absolutely slamming Elon. Today, praise and congratulations.