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What I don't understand is why Tesla has to do this - wouldn't it be better just to run at a loss for a few more years like most other tech companies do, delive
by andy_ppp 8y ago
What I don't understand is why Tesla has to do this - wouldn't it be better just to run at a loss for a few more years like most other tech companies do, deliver a better high tech car for a while and then start to reduce cost once self driving comes in?
I mean the whole premise of Uber existing is based on this idea and I see Tesla as being potentially even more profitable (and more likely to have working self driving vehicles)...
- ReptileMan 8y agoYou are run at a loss pretty easy in software company - your operational costs are negligible and payroll manageable and you have low capital expenditures. With a physical product and factories - not so easy.
- sokoloff 8y agoOnly if people will continue to lend you large sums of cash required. Run out of cash and it’s off to bankruptcy court. There’s good evidence that Tesla was weeks away from this outcome in the fall and IIRC they have a large loan payment due this spring. If they can’t meet it (from operating cash flows or further borrowing), they can’t keep operating. There, they are risking ownership and control of the whole company rather than the jobs of 1/14th of the company. Minor point, but since you included it: I wager: full self-driving is still a decade or more away.
- sortoftechguy 8y ago>There’s good evidence that Tesla was weeks away from this outcome in the fall and IIRC they have a large loan payment due this spring. Good evidence? Elon himself said it. And yet outsiders denied it then, and are still denying it. This company is in a cash-crunch.
- sokoloff 8y agoI agree that Elon said it. His credibility is not the highest, and I phrased it that way because there was additional outside correlated data and not just “because Elon said it”.
- deleted 8y ago[deleted]