9 ms·

I think an important advantage is vertical integration. Similar to Apple and iPhone, Tesla controls most of the stack. They can do a lot more than their competi

I think an important advantage is vertical integration. Similar to Apple and iPhone, Tesla controls most of the stack. They can do a lot more than their competitors.

dragontamer 8y ago
There are a ton of differences between Apple and Tesla. Most noticeably, Apple actually made a profit selling the iPhone. 6-years after the release of the Model S, Telsa has yet to turn a profit. And instead, is facing bankruptcy within the next two years unless it can roll over its debt or otherwise raise yet a few more billion $$$$. Compare and contrast: the iPhone was released in 2007. The Tesla Model S was released in 2012. Steve Jobs died in 2011 (4-years after the iPhone). You can tell that that Apple was a successful company by the time Steve Jobs died. Furthermore, Apple accomplished its iPhone launch during the 2007 to 2008 financial crisis. In contrast, Tesla's rampup is during the cheapest money ever to be seen in modern history: low interest rates and a grand bull market. The political, environmental, and financial headwinds Apple faced during its time to create the iPhone were exponentially more difficult than Tesla's. And yet, Apple turned a profit and became a lasting company. The same cannot be said yet of Tesla.
- trisomy21 8y ago
  “The political, environmental, and financial headwinds Apple faced during its time to create the iPhone were exponentially more difficult than Tesla's.“ I get that you might not be bullish on Tesla, but do you seriously believe this?
  - dragontamer 8y ago
    Were you around during the 2008 financial recession? Major US banks were literally going bankrupt, credit dried up. There was almost no opportunity to borrow money, the stock market was crashing, no opportunity to IPO or perform a secondary offering. Tesla is operating under one of the greatest, and longest, bull markets the US has ever seen. The great 2011 to 2018 (maybe longer??) boom. Tesla has been able to either secondary-offering, or borrow, roughly billion+ each year, every year, since its IPO. During recent years, its borrowed or otherwise raised over $2 billion / year.
    - trisomy21 8y ago
      I was. And all that might even be relevant if you weren't comparing Tesla to Apple. The iPhone actually launched in 2007, the same year in which Apple generated over $24B in revenue and was sitting on $15B in cash at the end of the fiscal year. In 2008, they did $37B in revenue and ended the fiscal year sitting on about $25B in cash. The claim that Apple's financial challenges with launching a smartphone were "exponentially" greater than Tesla's, is laughable.
      - dragontamer 8y ago
        > And all that might even be relevant if you weren't comparing Tesla to Apple. I'm not comparing Apple to Tesla. The parent article is. And I'm trying to point out how utterly silly the comparison is. Quote the first paragraph: > When Nokia people looked at the first iPhone, they saw a not-great phone with some cool features that they were going to build too, being produced at a small fraction of the volumes they were selling. They shrugged. “No 3G, and just look at the camera!” > When many car company people look at a Tesla, they see a not-great car with some cool features that they’re going to build too, being produced at a small fraction of the volumes they’re selling. “Look at the fit and finish, and the panel gaps, and the tent!” -------- This comparison is fundamentally insane, and shouldn't be the starting point of any serious discussion.
        trisomy21 8y ago
        You said: “The political, environmental, and financial headwinds Apple faced during its time to create the iPhone were exponentially more difficult than Tesla's.“ I brought attention to this and showed how ridiculous of an assertion it was. And now you're saying: "I'm not comparing Apple to Tesla. The parent article is. And I'm trying to point out how utterly silly the comparison is." The other quotes you've added are all irrelevant. You're all over the place. Give it a rest and come back when you have a properly thought out point to make with some evidence to support it.
        slededit 8y ago
- seldon999 8y ago
  Do you know how to read a financial statement? They have 26% gross margins on the Model S. Model 3 just turned gross margin positive in Q2. Your response is boring and boneheaded. Next.
  - dragontamer 8y ago
    I'm not talking gross margin. I'm talking raw and simple profits. If I wanted to talk about margins, I would have said "margin" in my post earlier. I said profit. To be more specific, how about the words "Cash Flow Positive" ?? In any case, Tesla has only had ONE profitable quarter since its IPO, and has never had a profitable year.
    - zaroth 8y ago
      Tesla is not a company that wanted to nor needed to be cash flow positive until now. They raised cheap capital and applied it to grow their business faster than bootstrapping would have allowed. Which is why the point about margins is so crucial. No one anticipated such great margins on an electric car. The tear down analysis demonstrates that the $35k standard-range Model 3 is not a unicorn, but will be profitable to make and sell once the production lines have any slack at all at the higher price points.
    - Latteland 8y ago
      But the point of tesla is they are making investments long term. Yes, they definitely need to produce those new products that justify all that money (like the model 3). They don't have dozens of different car products where they can trade off their current cash flow against future development costs - they have had just the S & X. How can you evaluate any company if you can't think about these separately - how much profit they make on one widget, and how much they spend on developing infrastructure and the next things, how much value will that have.
      - dragontamer 8y ago
        > But the point of tesla is they are making investments long term. What definition of "long term" do we have here? How many years did it take for Apple to become profitable from the iPod? The iPad? The iPhone? It was profitable throughout all of those years. That's the very point of technology gadgets: they don't require huge upfront costs like Tesla. Apple does have innovations (see their custom ARM chip, which is consistently superior to Snapdragon in benchmarks every year). But even with the billions of dollars needed to custom-make an uncore from scratch, Apple remains profitable. https://www.statista.com/statistics/267728/apples-net-income-since-2005/ https://www.statista.com/statistics/267728/apples-net-income... https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-income https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-inc... Since 2005 (and maybe earlier), Apple has made a profit every quarter. Since 2009 (before Tesla's IPO), Tesla has NEVER made a profit. Its completely insane to compare these two companies. They're run completely differently, aside from both being California based.
- tommymachine 8y ago
  They are two different companies. Apple had its share of turmoil during the 30 years it was a company prior to the success of iPhone. For instance, having around six months of money left to burn when acquiring NEXT in 1996. Tesla has been around for ~15y. Sure, tech cycles are getting shorter, but still, it's a long slog over many years to scale any vertically involved hardware company.
  - dragontamer 8y ago
    I mean, if you want to compare the current state of Tesla to the state of Apple in 1996, I think that more or less solidifies my point? Tesla cannot be compared to the 2000-era Apple company. There are simply too many differences.
    - tommymachine 8y ago
      Then we agree.
- dasil003 8y ago
  This comparison is flat out ridiculous. Jobs returned to Apple 10 years before the iPhone and launched a series of successful and profitable products: iMac, iPod, and iTunes leveraging an existing rabid fanbase, and putting them in prime position to design and launch a category changer like the iPhone. I'm not particularly impressed with Musk or Tesla, but you can't compare bootstrapping an automobile company to leveraging a decades-old vertically integrated consumer electronics behemoth to disrupt UX in a $1000 hand-held device. The financial crisis was probably the optimal time to launch such a product.
tonyedgecombe 8y ago
Mainstream car companies used to do that then decided it wasn't a good idea and that their suppliers were better at innovation.

I think an important advantage is vertical integration. Similar to Apple and iPhone, Tesla controls most of the stack. They can do a lot more than their competitors.

dragontamer 8y ago

There are a ton of differences between Apple and Tesla. Most noticeably, Apple actually made a profit selling the iPhone. 6-years after the release of the Model S, Telsa has yet to turn a profit. And instead, is facing bankruptcy within the next two years unless it can roll over its debt or otherwise raise yet a few more billion $$$$. Compare and contrast: the iPhone was released in 2007. The Tesla Model S was released in 2012. Steve Jobs died in 2011 (4-years after the iPhone). You can tell that that Apple was a successful company by the time Steve Jobs died. Furthermore, Apple accomplished its iPhone launch during the 2007 to 2008 financial crisis. In contrast, Tesla's rampup is during the cheapest money ever to be seen in modern history: low interest rates and a grand bull market. The political, environmental, and financial headwinds Apple faced during its time to create the iPhone were exponentially more difficult than Tesla's. And yet, Apple turned a profit and became a lasting company. The same cannot be said yet of Tesla.

trisomy21 8y ago
“The political, environmental, and financial headwinds Apple faced during its time to create the iPhone were exponentially more difficult than Tesla's.“ I get that you might not be bullish on Tesla, but do you seriously believe this?
- dragontamer 8y ago
  Were you around during the 2008 financial recession? Major US banks were literally going bankrupt, credit dried up. There was almost no opportunity to borrow money, the stock market was crashing, no opportunity to IPO or perform a secondary offering. Tesla is operating under one of the greatest, and longest, bull markets the US has ever seen. The great 2011 to 2018 (maybe longer??) boom. Tesla has been able to either secondary-offering, or borrow, roughly billion+ each year, every year, since its IPO. During recent years, its borrowed or otherwise raised over $2 billion / year.
  - trisomy21 8y ago
    I was. And all that might even be relevant if you weren't comparing Tesla to Apple. The iPhone actually launched in 2007, the same year in which Apple generated over $24B in revenue and was sitting on $15B in cash at the end of the fiscal year. In 2008, they did $37B in revenue and ended the fiscal year sitting on about $25B in cash. The claim that Apple's financial challenges with launching a smartphone were "exponentially" greater than Tesla's, is laughable.
    - dragontamer 8y ago
      > And all that might even be relevant if you weren't comparing Tesla to Apple. I'm not comparing Apple to Tesla. The parent article is. And I'm trying to point out how utterly silly the comparison is. Quote the first paragraph: > When Nokia people looked at the first iPhone, they saw a not-great phone with some cool features that they were going to build too, being produced at a small fraction of the volumes they were selling. They shrugged. “No 3G, and just look at the camera!” > When many car company people look at a Tesla, they see a not-great car with some cool features that they’re going to build too, being produced at a small fraction of the volumes they’re selling. “Look at the fit and finish, and the panel gaps, and the tent!” -------- This comparison is fundamentally insane, and shouldn't be the starting point of any serious discussion.
      - trisomy21 8y ago
        You said: “The political, environmental, and financial headwinds Apple faced during its time to create the iPhone were exponentially more difficult than Tesla's.“ I brought attention to this and showed how ridiculous of an assertion it was. And now you're saying: "I'm not comparing Apple to Tesla. The parent article is. And I'm trying to point out how utterly silly the comparison is." The other quotes you've added are all irrelevant. You're all over the place. Give it a rest and come back when you have a properly thought out point to make with some evidence to support it.
        slededit 8y ago
seldon999 8y ago
Do you know how to read a financial statement? They have 26% gross margins on the Model S. Model 3 just turned gross margin positive in Q2. Your response is boring and boneheaded. Next.
- dragontamer 8y ago
  I'm not talking gross margin. I'm talking raw and simple profits. If I wanted to talk about margins, I would have said "margin" in my post earlier. I said profit. To be more specific, how about the words "Cash Flow Positive" ?? In any case, Tesla has only had ONE profitable quarter since its IPO, and has never had a profitable year.
  - zaroth 8y ago
    Tesla is not a company that wanted to nor needed to be cash flow positive until now. They raised cheap capital and applied it to grow their business faster than bootstrapping would have allowed. Which is why the point about margins is so crucial. No one anticipated such great margins on an electric car. The tear down analysis demonstrates that the $35k standard-range Model 3 is not a unicorn, but will be profitable to make and sell once the production lines have any slack at all at the higher price points.
  - Latteland 8y ago
    But the point of tesla is they are making investments long term. Yes, they definitely need to produce those new products that justify all that money (like the model 3). They don't have dozens of different car products where they can trade off their current cash flow against future development costs - they have had just the S & X. How can you evaluate any company if you can't think about these separately - how much profit they make on one widget, and how much they spend on developing infrastructure and the next things, how much value will that have.
    - dragontamer 8y ago
      > But the point of tesla is they are making investments long term. What definition of "long term" do we have here? How many years did it take for Apple to become profitable from the iPod? The iPad? The iPhone? It was profitable throughout all of those years. That's the very point of technology gadgets: they don't require huge upfront costs like Tesla. Apple does have innovations (see their custom ARM chip, which is consistently superior to Snapdragon in benchmarks every year). But even with the billions of dollars needed to custom-make an uncore from scratch, Apple remains profitable. https://www.statista.com/statistics/267728/apples-net-income-since-2005/ https://www.statista.com/statistics/267728/apples-net-income... https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-income https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-inc... Since 2005 (and maybe earlier), Apple has made a profit every quarter. Since 2009 (before Tesla's IPO), Tesla has NEVER made a profit. Its completely insane to compare these two companies. They're run completely differently, aside from both being California based.
tommymachine 8y ago
They are two different companies. Apple had its share of turmoil during the 30 years it was a company prior to the success of iPhone. For instance, having around six months of money left to burn when acquiring NEXT in 1996. Tesla has been around for ~15y. Sure, tech cycles are getting shorter, but still, it's a long slog over many years to scale any vertically involved hardware company.
- dragontamer 8y ago
  I mean, if you want to compare the current state of Tesla to the state of Apple in 1996, I think that more or less solidifies my point? Tesla cannot be compared to the 2000-era Apple company. There are simply too many differences.
  - tommymachine 8y ago
    Then we agree.
dasil003 8y ago
This comparison is flat out ridiculous. Jobs returned to Apple 10 years before the iPhone and launched a series of successful and profitable products: iMac, iPod, and iTunes leveraging an existing rabid fanbase, and putting them in prime position to design and launch a category changer like the iPhone. I'm not particularly impressed with Musk or Tesla, but you can't compare bootstrapping an automobile company to leveraging a decades-old vertically integrated consumer electronics behemoth to disrupt UX in a $1000 hand-held device. The financial crisis was probably the optimal time to launch such a product.

tonyedgecombe 8y ago

Mainstream car companies used to do that then decided it wasn't a good idea and that their suppliers were better at innovation.