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This seems like a good breakdown - but it's also that Tesla (like SpaceX) runs really really close to the edge every time they do a product launch. How many peo

This seems like a good breakdown - but it's also that Tesla (like SpaceX) runs really really close to the edge every time they do a product launch. How many people doubted SpaceX until the Falcon 9 flew? How many until the Falcon 9 landed on land? How many until Falcon 9 Heavy launched? How many are still doubting until Falcon 9 completes it's first manned mission? How many doubted Tesla until the Roadster shipped? The S, the X? The 3? The low cost 3? It's still a startup - but Elon's companies move fast and take a toll on everyone.... then one day you look up and rockets are landing on barges, and 60% of world wide lithium battery capacity has been grabbed by Tesla, and Tesla suddenly selling the top sedan by revenue, and the fifth by number of units in the US. Then competitors have to start working and playing like Tesla and SpaceX - the companies have to become more startup like. You can see this in how ArianneSpace and ULA are trying to get to their next generation of vehicles (which won't be competitive in terms of re-usability) and by the increasingly hyperbolic VW statements about "delivering a car as good as any Tesla at half the cost" this morning.... Tesla and SpaceX have multi-year advantages - they have the super charger networks, they have the only facility capable of cranking out the amount of batteries that electric cars need, reusable rockets, dominating market share over all other luxury cars in the wealthiest market in the world, which happens to show signs of becoming more "European", as in much larger luxury market segment then there is in the United States.. It's definitely taken a hit on people's sanity - but you suddenly look up, and the competitive grounds have changed dramatically.

petre 8y ago
> hyperbolic VW statements about "delivering a car as good as any Tesla at half the cost" this morning. This while launching yet another compact SUV, based on the Polo platform w/o 4wd and the the base model using a three-cylinder one liter engne. Give me a break VW.
- zhte415 8y ago
  So, another Polo model then. Is it called an SUV, interested to see.
  - petre 8y ago
    It's called T-Cross and it's probably intended as competition for the Citroen C3 Aircross. It's not a real SUV anyway, but more like the Seat Arona 2wd raised platform.
jklinger410 8y ago
Musk plays fast and loose like he's almost asking for failure. The amount of blog posts and confused short-sellers because of this one fact have been truly entertaining/infuriating to watch. Like when everyone thought they had won by removing him from the board of Tesla. Musk could eat Ramen in a 400sq ft apartment without a cent to his name, scheming on his next startup, and still be happy. They are fighting a strawman to death. You can't win against this guy until you prove him wrong. Either they can't or aren't incentivized to do so, so he still wins.
- balabaster 8y ago
  The problem is that he plays like he has nothing to lose. He has a vision and a plan and he is willing to put everything on the line and sacrifice it all in the pursuit of that objective. He's a problem solver. He's not scared of being unpredictable. He's creative as fuck. He will do whatever he has to do to achieve his vision. He didn't make his plan haphazardly or on a whim. He made it having observed millions of other people play this game and seeing how the market reacted to their playbooks. He developed his own playbook based on what he's seen win and lose thousands of times in the past 50 years. If anyone thinks he didn't study every other car manufacturer intensely before he decided he could do a better job, they're foolish. Musk is an intelligent man. He doesn't go off half cocked just because he's an arrogant fucker (although, I'm not arguing that he isn't), he sees a path that nobody else is seeing and he's steering his companies along that path to greatness and profit by changing the world for the better. "It’s one of the characteristics of a leader that he not doubt for one moment the capacity of the people he’s leading to realize whatever he’s dreaming." - Benjamin Zander You cannot fight and win with someone like that. That's the kind of mentality that will either change the world for the better or destroy it. You'd better hope he's on your side.
  - randomsearch 8y ago
    From one POV, Musk really has nothing to lose. Even if all his companies crash and burn, he has taken a lot of resources and spent them on things that matter: space exploration, combating global warming, etc No matter what happens, all that engineering talent will continue to exist. All that experience gained still exists. And some of the giant infrastructure that he’s built will inevitably be reused if his companies don’t work out. I feel like he’s exploiting the capitalist system to get stuff done, and I think he is prepared for everything to collapse because much of what he has created will survive no matter what. Who cares about the numbers on some balance sheet now that we can reuse spacecraft and build great electric cars? Those numbers are a drop in the ocean anyhows.
kreetx 8y ago
I'm no expert on Tesla's economics, but on the "running close to the edge" point I would think it's not about being forced to be there, it's just the leadership trying to innovate as much as possible for each of its products -- the result of which being close to the edge is. In other words: they could have spent much less -- but why not do as much as possible if you know you'll survive. This strategy might, of course, back-fire if you fly too close to the sun but thus far it apparently hasn't. And now is payoff time I guess :)
- thewhitetulip 8y ago
  They are lucky and capable enough to pull this ou5 that's why it is a good time for them. If even one thing had gone wrong they'd be in big trouble.
  - kreetx 8y ago
    I don't really agree with you. I think there were a million things to do, and in how many you can try something new and untested depends on how much buffer you have. Some of these new things come in batches, like the automation thing they tried with Model 3 that didn't work out and was reverted. And even this was probably a calculated risk.
    - thewhitetulip 8y ago
      Wasn't it my point? They took a big risk and they are lucky it worked out well for them!
ryandrake 8y ago
I'd love to see Tesla succeed, but cynical part of me thinks that old stogy BigAuto is simply watching them and taking notes. Waiting for Tesla to take all the arrows and blaze the trail, and then they'll swoop in and copy once Tesla's done all the hard work for them. They're not creative enough to do a Model 3, but once the formula looks sound, they can slap together a half-assed version and flood the market with it.
- Retric 8y ago
  Tesla is already ~2% of US car sales based on their current rate. BigAuto does not have that much room to swoop in and they don't have much time as they need vast infrastructure for battery manufacturing or a charging network among other things. My guess is we are going to see a round of car companies fail as not all are going to make the jump. Considering they don't sell pickup trucks, vans, etc things look even worse for existing companies. Who also have legacy concerns like dealerships and pension obligations dragging things down. PS: ~30k/month * 12 months / (0.02) = 18 million per year. (Though not all these sales are in the US.)
- InTheArena 8y ago
  I heard the same arguments about SpaceX though. Building new cars are large, complex engineering projects, that have insane complexity around operations, manufacturing and technology. Plus things like Brand awareness and identity. So image that GM wants to really compete with Tesla. They want to go Electric only. How do they: 1) Deal with dealers - which aare independent, and have their own view as to the product mix? 2) Develop efficient batteries and capacities - Tesla has a insane percentage of this capacity right now. 3) Deal with their unions, who definitely have a opinion about things, and are not going to let the company try anything new without their blessing and buy in? 4) Change their marketing image / brand identity? 5) Develop a electric drive-chain that is as efficient as what Tesla has? 6) Develop a network of chargers? All without taking their current business model? Note, VW really is trying to do it this way, and I am very skeptical. There are already a lot of signals that their plans are foundering despite a lot of hype around their battery contracts for example, they had to change tact yesterday and announce their own Giga-factory. Nevermind that VW's brand in the US is just slightly north of Enron's.
Certhas 8y ago
I'm not convinced about the multi year advantage. Everyone else has EVs out. They are not pushing them, probably because they are reaping the profits on past ICE investments, but the next tech platforms under development for years now at VW/Mercedes/BMW are electric. VW is planning to get to 10 million EVs by 2022. I'd give credit to Musk and Tesla for bringing forward this point by several years, but it would be silly to write that goal off as empty bluster. (After all they have been selling a well reviewed plug in electric vehicle since 2014, even if no one ever heard about it, and it was priced relatively high. Maybe so as to not interfere with ICE profits).
- notaki 8y ago
  But no one else is mass producing EV's. VW is just starting to talk about building a gigafactory. Everyone is doing a lot of talking, but they are all years behind Tesla. And even if they stop talking and start doing, they'll need to build a more compelling product than Tesla. That will be very very difficult. Tesla FTW.
  - Certhas 8y ago
    "Chinese sales of domestically-built new energy vehicles in 2017 totaled 777,000 units" To first approximation none of these were Teslas. EVs are being mass produced. Mass producing a car might be difficult. But the others manufacturers are already doing that. They need to figure out how to mass produce electronic drive trains (vastly simpler than what they are building now) and batteries. Batterys are more complex, but most of battery production coming online in the next years is Chinese. Tesla is a fraction of what the Chinese are bringing online. I don't see any reason why Teslas long term potential should be higher than, say BMWs. Mind you, creating a BMW size company from scratch while driving the electric transition and a pace faster than we otherwise could have hoped for are amazing achievements.
    - adventured 8y ago
      > Chinese sales of domestically-built new energy vehicles in 2017 totaled 777,000 units Those are gasoline electric hybrids, no more impressive than a Prius technologically from a decade ago that has been brought down in price. China is not mass producing EVs, which is why it's 777,000 "new energy vehicles." That phrasing is the give-away. Otherwise we could just pretend the Prius was the first mass produced EV, when it was not.
calabin 8y ago
Responsible cash management and investor relations are not mutually exclusive with innovation. There is absolutely no reason that TSLA shouldn't have raised cash with a relatively inexpensive bond issuance or moderate share issuance in the lead-up to the large expenditures required to begin Model 3 production. As a consequence of this, analysts rightly discounted TSLA's stock price to account for the tremendous amount of risk he was taking by operating with little-to-no room for error. The fact that he was able to operate inside of that slim margin does not indicate that he should have. Elon himself was so flustered by the consequences of his poor cash management (and resulting discount in the stock price) that he ended up plainly manipulating the stock price and nearly got himself banned as a D&O of a publicly-held company. I'm tired of all of this hero-worship, and the smug "this is what it takes to change the world" discussion around his insane actions. The innovation and change brought about by the Model 3 is not a good excuse for Elon nearly killing the company to maintain his pride. Last, the fact that raising money to ensure the financial stability of the company is seen as a pride-diminishing act by Elon is in itself worrying.
- ajross 8y ago
  > As a consequence of this, analysts rightly discounted TSLA's stock price TIL some of the wildest, most speculative short selling in history is "rightly discounting" a stock price. That's revisionist. I mean, yes, you're right that they could have operated more in line with traditional accounting. But that's not why their stock price was held incorrectly low.
  - calabin 8y ago
    There were plenty of reasonably thought-out cases to short Tesla, and there may still be. The company has had numerous recent instances where they've failed to pay vendors and their runway was shortening at a concerning pace. These are legitimate reasons to short a company's stock if you find them persuasive. I don't disagree that there was some wild speculation, sensationalistic articles, etc., but that doesn't make all short sellers wrong for believing that the price is inflated. Last, who's to say that the price was incorrectly low? Was it incorrectly high before? Is today's price the right price? I do not believe that there was some conspiracy to artificially depress the price of the stock if that is what you mean.
ryanmarsh 8y ago
I can't be too specific but the conversations I've had with Tesla's competitors show they're terrified. No matter what competitors say in the press, Tesla is transforming the auto industry in two fundamental ways that traditional car companies cannot adopt quickly. As easy as everyone makes electric cars and online ordering seem, Tesla's competitors are finding this challenging. The auto manufacturers must build a really great electric car and, at the same time, cut out the dealerships. The next ten years is going to be very interesting.
- deleted 8y ago
  [deleted]
- QuantumGood 8y ago
  Clearly you're being downvoted because of lacking source or specifics, but also, there are public statements of terror and confusion from competitors you could be referencing.
so_tired 8y ago
> [.. tesla has .. ] 60% of world wide lithium battery capacity This is completely untrue [1]. You are also making this claim in other comments. Lets root for Tesla, EVs and world peace, but stick to the facts. [1] https://www.economist.com/graphic-detail/2017/08/14/the-growth-of-lithium-ion-battery-power https://www.economist.com/graphic-detail/2017/08/14/the-grow...
- InTheArena 8y ago
  The source here was the Tesla call yesterday... I suspect they overstated it - meant more then half of world wide car batter capacity?
nationcrafting 8y ago
>You can see this in how ArianneSpace and ULA are trying to get to their next generation of vehicles (which won't be competitive in terms of re-usability) Arianespace is a company run by bureaucrats. Incredibly frustrating environment. If you ever thought space was exciting, Arianespace will suck the life out of you. Even the areas where the top management know they need deep and impactful change, they'll bring in an outsider or two to bring "a new vision", then tell the outsider to keep working with all the old people who've built their mini-empire around methods that make no sense and keep them in a perpetual state of "irreplaceable ball and chain" on the company.

petre 8y ago

> hyperbolic VW statements about "delivering a car as good as any Tesla at half the cost" this morning. This while launching yet another compact SUV, based on the Polo platform w/o 4wd and the the base model using a three-cylinder one liter engne. Give me a break VW.

zhte415 8y ago
So, another Polo model then. Is it called an SUV, interested to see.
- petre 8y ago
  It's called T-Cross and it's probably intended as competition for the Citroen C3 Aircross. It's not a real SUV anyway, but more like the Seat Arona 2wd raised platform.

jklinger410 8y ago

Musk plays fast and loose like he's almost asking for failure. The amount of blog posts and confused short-sellers because of this one fact have been truly entertaining/infuriating to watch. Like when everyone thought they had won by removing him from the board of Tesla. Musk could eat Ramen in a 400sq ft apartment without a cent to his name, scheming on his next startup, and still be happy. They are fighting a strawman to death. You can't win against this guy until you prove him wrong. Either they can't or aren't incentivized to do so, so he still wins.

balabaster 8y ago
The problem is that he plays like he has nothing to lose. He has a vision and a plan and he is willing to put everything on the line and sacrifice it all in the pursuit of that objective. He's a problem solver. He's not scared of being unpredictable. He's creative as fuck. He will do whatever he has to do to achieve his vision. He didn't make his plan haphazardly or on a whim. He made it having observed millions of other people play this game and seeing how the market reacted to their playbooks. He developed his own playbook based on what he's seen win and lose thousands of times in the past 50 years. If anyone thinks he didn't study every other car manufacturer intensely before he decided he could do a better job, they're foolish. Musk is an intelligent man. He doesn't go off half cocked just because he's an arrogant fucker (although, I'm not arguing that he isn't), he sees a path that nobody else is seeing and he's steering his companies along that path to greatness and profit by changing the world for the better. "It’s one of the characteristics of a leader that he not doubt for one moment the capacity of the people he’s leading to realize whatever he’s dreaming." - Benjamin Zander You cannot fight and win with someone like that. That's the kind of mentality that will either change the world for the better or destroy it. You'd better hope he's on your side.
- randomsearch 8y ago
  From one POV, Musk really has nothing to lose. Even if all his companies crash and burn, he has taken a lot of resources and spent them on things that matter: space exploration, combating global warming, etc No matter what happens, all that engineering talent will continue to exist. All that experience gained still exists. And some of the giant infrastructure that he’s built will inevitably be reused if his companies don’t work out. I feel like he’s exploiting the capitalist system to get stuff done, and I think he is prepared for everything to collapse because much of what he has created will survive no matter what. Who cares about the numbers on some balance sheet now that we can reuse spacecraft and build great electric cars? Those numbers are a drop in the ocean anyhows.

kreetx 8y ago

I'm no expert on Tesla's economics, but on the "running close to the edge" point I would think it's not about being forced to be there, it's just the leadership trying to innovate as much as possible for each of its products -- the result of which being close to the edge is. In other words: they could have spent much less -- but why not do as much as possible if you know you'll survive. This strategy might, of course, back-fire if you fly too close to the sun but thus far it apparently hasn't. And now is payoff time I guess :)

thewhitetulip 8y ago
They are lucky and capable enough to pull this ou5 that's why it is a good time for them. If even one thing had gone wrong they'd be in big trouble.
- kreetx 8y ago
  I don't really agree with you. I think there were a million things to do, and in how many you can try something new and untested depends on how much buffer you have. Some of these new things come in batches, like the automation thing they tried with Model 3 that didn't work out and was reverted. And even this was probably a calculated risk.
  - thewhitetulip 8y ago
    Wasn't it my point? They took a big risk and they are lucky it worked out well for them!

ryandrake 8y ago

I'd love to see Tesla succeed, but cynical part of me thinks that old stogy BigAuto is simply watching them and taking notes. Waiting for Tesla to take all the arrows and blaze the trail, and then they'll swoop in and copy once Tesla's done all the hard work for them. They're not creative enough to do a Model 3, but once the formula looks sound, they can slap together a half-assed version and flood the market with it.

Retric 8y ago
Tesla is already ~2% of US car sales based on their current rate. BigAuto does not have that much room to swoop in and they don't have much time as they need vast infrastructure for battery manufacturing or a charging network among other things. My guess is we are going to see a round of car companies fail as not all are going to make the jump. Considering they don't sell pickup trucks, vans, etc things look even worse for existing companies. Who also have legacy concerns like dealerships and pension obligations dragging things down. PS: ~30k/month * 12 months / (0.02) = 18 million per year. (Though not all these sales are in the US.)
InTheArena 8y ago
I heard the same arguments about SpaceX though. Building new cars are large, complex engineering projects, that have insane complexity around operations, manufacturing and technology. Plus things like Brand awareness and identity. So image that GM wants to really compete with Tesla. They want to go Electric only. How do they: 1) Deal with dealers - which aare independent, and have their own view as to the product mix? 2) Develop efficient batteries and capacities - Tesla has a insane percentage of this capacity right now. 3) Deal with their unions, who definitely have a opinion about things, and are not going to let the company try anything new without their blessing and buy in? 4) Change their marketing image / brand identity? 5) Develop a electric drive-chain that is as efficient as what Tesla has? 6) Develop a network of chargers? All without taking their current business model? Note, VW really is trying to do it this way, and I am very skeptical. There are already a lot of signals that their plans are foundering despite a lot of hype around their battery contracts for example, they had to change tact yesterday and announce their own Giga-factory. Nevermind that VW's brand in the US is just slightly north of Enron's.

Certhas 8y ago

I'm not convinced about the multi year advantage. Everyone else has EVs out. They are not pushing them, probably because they are reaping the profits on past ICE investments, but the next tech platforms under development for years now at VW/Mercedes/BMW are electric. VW is planning to get to 10 million EVs by 2022. I'd give credit to Musk and Tesla for bringing forward this point by several years, but it would be silly to write that goal off as empty bluster. (After all they have been selling a well reviewed plug in electric vehicle since 2014, even if no one ever heard about it, and it was priced relatively high. Maybe so as to not interfere with ICE profits).

notaki 8y ago
But no one else is mass producing EV's. VW is just starting to talk about building a gigafactory. Everyone is doing a lot of talking, but they are all years behind Tesla. And even if they stop talking and start doing, they'll need to build a more compelling product than Tesla. That will be very very difficult. Tesla FTW.
- Certhas 8y ago
  "Chinese sales of domestically-built new energy vehicles in 2017 totaled 777,000 units" To first approximation none of these were Teslas. EVs are being mass produced. Mass producing a car might be difficult. But the others manufacturers are already doing that. They need to figure out how to mass produce electronic drive trains (vastly simpler than what they are building now) and batteries. Batterys are more complex, but most of battery production coming online in the next years is Chinese. Tesla is a fraction of what the Chinese are bringing online. I don't see any reason why Teslas long term potential should be higher than, say BMWs. Mind you, creating a BMW size company from scratch while driving the electric transition and a pace faster than we otherwise could have hoped for are amazing achievements.
  - adventured 8y ago
    > Chinese sales of domestically-built new energy vehicles in 2017 totaled 777,000 units Those are gasoline electric hybrids, no more impressive than a Prius technologically from a decade ago that has been brought down in price. China is not mass producing EVs, which is why it's 777,000 "new energy vehicles." That phrasing is the give-away. Otherwise we could just pretend the Prius was the first mass produced EV, when it was not.

calabin 8y ago

Responsible cash management and investor relations are not mutually exclusive with innovation. There is absolutely no reason that TSLA shouldn't have raised cash with a relatively inexpensive bond issuance or moderate share issuance in the lead-up to the large expenditures required to begin Model 3 production. As a consequence of this, analysts rightly discounted TSLA's stock price to account for the tremendous amount of risk he was taking by operating with little-to-no room for error. The fact that he was able to operate inside of that slim margin does not indicate that he should have. Elon himself was so flustered by the consequences of his poor cash management (and resulting discount in the stock price) that he ended up plainly manipulating the stock price and nearly got himself banned as a D&O of a publicly-held company. I'm tired of all of this hero-worship, and the smug "this is what it takes to change the world" discussion around his insane actions. The innovation and change brought about by the Model 3 is not a good excuse for Elon nearly killing the company to maintain his pride. Last, the fact that raising money to ensure the financial stability of the company is seen as a pride-diminishing act by Elon is in itself worrying.

ajross 8y ago
> As a consequence of this, analysts rightly discounted TSLA's stock price TIL some of the wildest, most speculative short selling in history is "rightly discounting" a stock price. That's revisionist. I mean, yes, you're right that they could have operated more in line with traditional accounting. But that's not why their stock price was held incorrectly low.
- calabin 8y ago
  There were plenty of reasonably thought-out cases to short Tesla, and there may still be. The company has had numerous recent instances where they've failed to pay vendors and their runway was shortening at a concerning pace. These are legitimate reasons to short a company's stock if you find them persuasive. I don't disagree that there was some wild speculation, sensationalistic articles, etc., but that doesn't make all short sellers wrong for believing that the price is inflated. Last, who's to say that the price was incorrectly low? Was it incorrectly high before? Is today's price the right price? I do not believe that there was some conspiracy to artificially depress the price of the stock if that is what you mean.

ryanmarsh 8y ago

I can't be too specific but the conversations I've had with Tesla's competitors show they're terrified. No matter what competitors say in the press, Tesla is transforming the auto industry in two fundamental ways that traditional car companies cannot adopt quickly. As easy as everyone makes electric cars and online ordering seem, Tesla's competitors are finding this challenging. The auto manufacturers must build a really great electric car and, at the same time, cut out the dealerships. The next ten years is going to be very interesting.

deleted 8y ago
[deleted]
QuantumGood 8y ago
Clearly you're being downvoted because of lacking source or specifics, but also, there are public statements of terror and confusion from competitors you could be referencing.

so_tired 8y ago

> [.. tesla has .. ] 60% of world wide lithium battery capacity This is completely untrue [1]. You are also making this claim in other comments. Lets root for Tesla, EVs and world peace, but stick to the facts. [1] https://www.economist.com/graphic-detail/2017/08/14/the-growth-of-lithium-ion-battery-power https://www.economist.com/graphic-detail/2017/08/14/the-grow...

InTheArena 8y ago
The source here was the Tesla call yesterday... I suspect they overstated it - meant more then half of world wide car batter capacity?

nationcrafting 8y ago

>You can see this in how ArianneSpace and ULA are trying to get to their next generation of vehicles (which won't be competitive in terms of re-usability) Arianespace is a company run by bureaucrats. Incredibly frustrating environment. If you ever thought space was exciting, Arianespace will suck the life out of you. Even the areas where the top management know they need deep and impactful change, they'll bring in an outsider or two to bring "a new vision", then tell the outsider to keep working with all the old people who've built their mini-empire around methods that make no sense and keep them in a perpetual state of "irreplaceable ball and chain" on the company.