19 ms·

Tesla to raise prices and keep more stores open

82 points by elemeno 8y ago

phil9987 8y ago
... or maybe it would be better if we closed almost all Tesla stores to cut cost? Oh no, I have a better idea, let's only announce it and shortly afterwards undo the statement.Then we can use that moment to increase the prices of all Tesla cars. feeling smart
moron4hire 8y ago
I'm worried about whether or not Tesla will still be a company in 5 years. I think I would love to have a model S, but not having confidence in whether or not if be able to get it serviced is a huge impediment.
- giancarlostoro 8y ago
  It may be worse once we see other manufacturers producing all-electric (mostly) self-driving (capable) cars. For example I know Toyota intends to have an all electric lineup in the next few years[0]. However, I think it's possible for Tesla to remain despite all this. They seem to be quite ahead of the competition in having both all-electric and useful self-driving capabilities at least from my limited viewpoint. Disclaimer: I drive Toyota, but I don't work for any car companies. [0]: https://www.cnet.com/roadshow/news/toyota-to-introduce-10-electric-cars-by-mid-2020s/ https://www.cnet.com/roadshow/news/toyota-to-introduce-10-el...
  - moron4hire 8y ago
    Yeah, it's definitely worth waiting to see what happens in at least the next year or two.
  - Ambroos 8y ago
    Tesla has been very fast to release their self-driving capabilities (navigate on autopilot is pretty spooky), but in general the VW/Audi group shouldn't be too far off. The e-tron that was just released isn't as efficient as Tesla's because it's a traditional SUV design-wise, but a lot of the electric tech is there. On highways they even have L3 self-driving in traffic jams, in that the driver is no longer required to constantly pay attention, just being able to take over when the car indicates is enough. Looking at the Geneva Motor Show, almost every manufacturer is really moving towards EVs (Toyota being one of the slower ones to make this move). Tesla is just going to have to deal with actual competitors very soon.
    - deelowe 8y ago
      Doesn't the new x7 have self driving capabilities?
    - rcMgD2BwE72F 8y ago
      We've heard this since 2009! Nothing has changed expect that Tesla's lead is even greater. Other auto-manufacturer are all talk – except VW, these days (surprisingly). If you think one company is finally getting serious about actually making EV "en masse", look for their plans to build battery gigafactories: if there's none, then they will not have the production capacity to make the EV they're talking about (but they'll certainly green-wash consumers with big time ads)... unless we start to hear about gargantuan plans from LG, Samsung and the like. But we're still waiting.
      - Ambroos 8y ago
        VW has a massive battery order spread between Samsung, LG and CATL, but yeah, I agree Tesla will have a solid lead on battery production for a while. I wonder if Tesla/Panasonic will at some point start selling mass produced batteries to the traditional car manufacturers. Once EVs become mainstream, consumers will start expecting choice.
        rcMgD2BwE72F 8y ago
        > VW has a massive battery order spread between Samsung, LG and CATL, but yeah, I agree Tesla will have a solid lead on battery production for a while. Tesla have much bigger contracts with Panasonic, and already supplies cells from Samsung and LG for stationary storage and is inquiring CATL as the main supplier of the Shanghai factory. Since Tesla is crushing them in EV volume and should continue to do so for years to come, I don't see how VW can compete in cost and even in tech. >I wonder if Tesla/Panasonic will at some point start selling mass produced batteries to the traditional car manufacturers. Once EVs become mainstream, consumers will start expecting choice. I doubt it, at least until Tesla is demand-constrained. By then, they'll keep all the batteries for their car and energy storage business and let the competition fight for the leftover.
  - martin_drapeau 8y ago
    Comparing a Toyota to a Tesla is comparing oranges and apples. Tesla is a computer on wheels. Capabilities are delivered continuously over software updates. From self-driving capabilities to faster charging. Toyota and others do not have that capability.
    - bestnameever 8y ago
      Basically every car manufactured today can be called a computer on wheels. Whether Toyota will mimic Tesla's update process remains to be seen but I wouldn't rule it out once Toyota releases an all electric self driving vehicle.
      - TheSpiceIsLife 8y ago
        Call me old fashioned, but I think it is a mistake to allow a software update to modify the functionality of car remotely. Barring some kind of failure, whether mechanical, electrical, or electronic, I know with certainty the cars I own will perform tomorrow fairly well exactly as they did today.
    - tawaywhynot 8y ago
      >Capabilities are delivered continuously over software updates. Until your hardware is obsolete. There are severe restrictions to what can actually be improved over the air. As it stands, certain Model S and X can't use the next generation chargers. And if you believe Elon is going to upgrade all the hardware on every car for free, forever, well I have a bridge to sell you.
  - freerobby 8y ago
    Prediction: In ten years it's going to be very funny to look back at Tesla as the supposed bankruptcy risk and not Toyota. We've heard variants on the parent-comments line of thinking ever since the Model S came out in 2012. Yet, fast forward to 2019, and the gap between Tesla and traditional automakers has only widened (to name a few axes: EV sales, EV margins, rate of software improvements/OTA updates, Supercharger network, battery production). This is what should terrify big automakers: it's not that Tesla's gap is per se insurmountable; it's that the pace at which Tesla is improving and innovating is far greater than the pace at which any other automaker is doing it. Most comparative analyses between Tesla and other auto companies suffer from a fallacy that relates to this: they compare the Tesla of today to the ___ of tomorrow. Perhaps some day a traditional auto manufacturer will offer an all-electric, self-driving car. But how long is it going to take them to get there? Not to announce something, or to design a concept car, but to actually build them and sell them at scale and with positive margins? And what will Tesla offer by the time they do? My wager is that by the time Toyota offers a compelling all-electric car (by today's standards), the feature gap between a $x Tesla and a $x Toyota will be so great that the Toyota will no longer be compelling to the market. Throw in lower margins as companies build their first EVs, the baggage of dealerships, a likely recession some time in the next decade, and it's not at all clear to me how traditional manufacturers like Toyota will survive the transition.
    - TheSpiceIsLife 8y ago
      > the pace at which Tesla is improving and innovating is far greater than the pace at which any other automaker is doing it. What portion of Telsa's pace of improvements and innovation would you say is due to Telsa only recently having got started at this, 16 years ago, compared to Toyota 86 year history of automobile manufacturing, or Ford's 116 years.
      - HeadsUpHigh 8y ago
        Their ability to iterate fast for one thing. The fact that their structures are built around an all EV company. Toyota will have pressure from other departments to build and fund ICE research at the same time. Tesla is 100% focused on one thing. Plus they have the lowest cost batteries which plays a huge role. I think what the other car manufacturers are waiting for is to jump straight into solid state batteries once that train is going. That should at least reduce the advantage Tesla has right now.
- MrQuincle 8y ago
  A perfect "late majority" point of view. Just wait them out. No need to hurry. Electric cars are here to stay. I don't think you benefit in any way in jumping on the bandwagon too soon.
  - rcMgD2BwE72F 8y ago
    https://en.wikipedia.org/wiki/History_of_Nokia#Loss_of_smartphone_market_share https://en.wikipedia.org/wiki/History_of_Nokia#Loss_of_smart...
- dalbasal 8y ago
  I think you inevitably take some risk. Tesla is, and has been since founding, a risk taking company. They bet the house on whatever they're doing next, and that means they may not exist later. Also, electric cars are new, Tesla is new. So, the value of your 5 yr old tesla could (probably will) suffer more competition from newer models than an average ICE car, like the resale hit last year's model 3s just shouldered. ... Even if the companny is doing fine, servicing cars and the cars themselves age well... resale value is riskier than average. This is just the cost of being an early-ish adopter. You could lease, or buy used to limit risk, but these have implications too. The low risk, high resale value option is still (eg) an ICE toyota. You can't have everything. :)
  - moron4hire 8y ago
    There is risk, and then there is risk. A car isn't an investment. I'm a VR and AR headset early adopter, but there it is clear that A) newer, better models will come out long before my current units die, and B) I'm investing in my knowledge of VR/AR software development. I wouldn't be where I am today, with the job I have today, if I hadn't bought an Oculus Rift DK2 when they first became generally available. I don't have any skin in the game for electric cars, so an electric car purchase is not going to have the same impact on my life, it's purely a consumptive object. So the math becomes "will this save me money or give me more enjoyment than a similar purchase from another company".
    - rcMgD2BwE72F 8y ago
      >I don't have any skin in the game for electric cars Are you living on Mars already? Here on Earth, we've got something called global warming that is threatening the future of society and the biosphere in general https://en.wikipedia.org/wiki/Effects_of_global_warming#Social_systems https://en.wikipedia.org/wiki/Effects_of_global_warming#Soci...
      - moron4hire 8y ago
        My single purchase is not going to make an effect on global warming. But if I were to buy an electric car for the purpose of doing my part to stem global warming, I might want to put my money towards a company that has a chance at surviving the next decade.
- dTal 8y ago
  It's worse than that. Tesla has embraced the modern concept of embedded computers - OTA updates, constant phoning home, user prevented from even attempting to gain root. It's a valid concern as to how long a Tesla car can survive the death of its company even with perfect mechanical servicing.
- te_chris 8y ago
  They're a plum acquisition target, surely.
  - swarnie_ 8y ago
    Barely profitable, staring down growing competition from industry veterans and built around Musk's cult of personality. I love Telsa and what their doing but investing/acquiring them is such a risky move imo.
    - TheSpiceIsLife 8y ago
      If Telsa goes belly up, is it possible creditors will want to sell the business as a going concern? One of the other vehicle manufacturers make be able to buy Telsa's manufacturing facilities and branding for cents in the dollar.
      - JumpCrisscross 8y ago
        > If Telsa goes belly up, is it possible creditors will want to sell the business as a going concern? If it goes belly up, it’s no longer a going concern. Moreover, liquidation value of manufacturing facilities is pennies on the dollar. (Before legal fees, creditors’ claims, et cetera.) Supply chains are too tightly integrated; it’s expensive to swap in someone else’s kit.
        TheSpiceIsLife 8y ago
        Thanks for you response. I do apologies for my lack of understanding with regard to the correct use of financial terms. I guess what I meant was, is there a future were, say, the Volkswagen Group owns Telsa?
        dragontamer 8y ago
        Of course. Patents and other IP will be sold off to the highest bidder. The factories will be closed down, but there's still railroads and other infrastructure that have been built to support the site. A new company will inevitably purchase the old site and recycle the infrastructure.
- martin_drapeau 8y ago
  Look at the numbers to convince you otherwise. The Model 3 is the best selling mid-side luxury car (https://cleantechnica.com/2018/12/08/tesla-model-3-completely-crushing-us-luxury-car-competition-10-cleantechnica-charts/ https://cleantechnica.com/2018/12/08/tesla-model-3-completel...). The demand is there and as long as it remains, Tesla will thrive. The company is victim of its own success. It can't produce enough vehicles to supply the demand. At the same time, its trying to make it more accessible. Tesla is reinventing the car industry with their product, sales and service. Of course this is risky and creates a lot of unknowns.
  - FireBeyond 8y ago
    I'd love to see those numbers in a couple of months. All those other models are established and have churn. Tesla has a backlog of multiple years of M3 pre-orders, of course it's going to be selling at capacity. How about we take those numbers, and divide them along the lines of "how long has it been since pre-ordering"? That would look a lot less impressive (but still a very good effort).
- linuxftw 8y ago
  You're right to be worried. They're not profitable, have never been profitable, don't look like they're ever going to be profitable. Be smart with your money.
  - dragontamer 8y ago
    You are correct on a yearly basis. But Q3 and Q4 of 2018 were profitable. So TSLA has made a quarterly profit. They've never made a yearly profit. Some would argue the last two quarters of profit is a turning point for the company. Q1 2019 looks like they will lose money though. Jury is still out on whether or not 2019 will be a profitable year.
    - gamblor956 8y ago
      Tesla was not profitable in Q3 or Q4 2018 on a GAAP basis. They were profitable on a very specific "unicorn accounting" metric that eliminates most of the expenses that other auto companies include in their financial reporting metrics. GAAP (and IFRS, the international version of GAAP) is industry-specific, so please none of the arguments about how it doesn't reflect the "true" state of Tesla's financial situation. It works just fine for every other carmaker.
      - dragontamer 8y ago
        Interesting. Do you have any good links that goes into the details of this? I'm always interested in learning how to read financial sheets better. Its outside my field of computers, but I'd love to learn the skill. I've got a general idea of how GAAP works and other such cash-flow matters, but no official training in the subject. EDIT: I did some searching... and it appears that Tesla was GAAP profitable in Q3 and Q4 2018, according to their quarterly filings. I'm very curious how and why you don't consider it GAAP. Is there something in the financial statement that is a red flag to you?
      - dmode 8y ago
        Literally every company report GAAP and non-GAAP numbers. And you publish a reconciliation report. non-GAAP profitability is as valid as GAAP profitability, otherwise you will get dinged by SEC as you are publishing those numbers in your annual report.
giancarlostoro 8y ago
I suspect a good number of those stores are already in strategic locations, compared to other major car manufacturer locations which are all around major cities, I can think of at least several places I can get Toyota / Lexus cars in my city. For Tesla in my city I can only find one location and it's 58 minutes away from where I live. Let's see, I can drive 15 minutes or less to try out a Toyota, Lexus, and other cars from other manufacturers, or I can drive an hour to try a Tesla, worse yet if I can't even test drive one, how will I know I want one? This would be a problem if they closed up enough Tesla locations.
- walkingolof 8y ago
  I find it hard to believe that 40 minutes difference in travel time matters when buy an expensive thing like that
  - josefresco 8y ago
    To add to this, I only have 1 dealership within 15 min of my home. All the others are 45+ minutes away. When my family goes "car shopping" it's a half-day, or all day affair. I'm not thrilled about that, but it's pretty normal behavior in my extended family as well as friends.
    - bluedino 8y ago
      I do the same thing. We only have two brands of dealerships, and being a small town they refuse to discount, have low seelctions, etc So I go to a larger dealership 45-60 minutes away, get a better deal, have mor e brands and cars to chose from...
  - TheSpiceIsLife 8y ago
    For some people it may contribute to pushing them toward buying a non-Telsa car. If you buy a new or secondhand car from a traditional dealership, and have a problem with it, even if you move, you can be fairly confident that you can go to pretty much any authorised dealership and have a face to face interaction with someone. Continuity of service. I think this can be a huge motivating factor for some people.
Shivetya 8y ago
They should never had cut the prices to begin with. For a company in need of cash I don't understand the fascination with the price cuts. There is demand sufficient to keep them going and with the TMY coming it should open a new market. The S&X price cuts are only warranted if they don't plan to bring their interiors up to par. The TM3 price confusion seemed mostly caused by their change up in how auto pilot and full self driving were sold. With enhanced auto pilot being removed for a lesser version and FSD taking some features from EAP. Even at the new two thousand dollar price for FSD presented to existing EAP owners I wonder what the take rate is. They haven't shown significant improvement. My concern long term with Tesla is that they still don't have up to date features for the driver other than "autopilot" and that feature is quickly becoming the norm for many cars. Their blue tooth support is half baked, you cannot select music from your phone through the car's UI, you have to use the phone. Automatic wipers and high beams are both sporadic with the latter being near useless. The promised voice commands never arrived. Their energy monitoring screen is the least useful of all EVs. They are quickly turning into a two trick pony in a world where everyone else has their own stable.
- mtgx 8y ago
  I would agree. Tesla didn't really need to cut the prices until 2020/2021, when more real competition will come to market. Until then they should've taken advantage of this window to fix their finances and make sure they have enough cash for future investments. Not to mention this whole price cut thing pissed off a lot of Model 3 customers who purchased earlier. I also share your concern about Tesla/Musk's extreme focus on "self-driving features". For now I don't think self-driving is much more than a gimmick. Yes, a gimmick that attracts headlines, but nonethless a gimmick and it's only a matter of time before more people wake up and realize it is one and that full self-driving is nowhere close to being ready. In the meantime, Tesla adds a significant amount of cost to its cars by making them "self-driving ready" and whatnot, instead of focusing on capturing more EV market share by launching lower-cost EVs. And no there is no contradiction between what I said about the price cutting above and the lower-cost EVs. The lower-cost EVs don't have to be unprofitable. Tesla just needs to stop adding "useless" features such as falcon wings and "full self-driving hardware" (that doesn't even achieve its objective) and make its EVs both unprofitable but also costing more than they should.
mnemotechny 8y ago
I prefer second hand cars because it hardly matters when they get a small bump or scratch in the tiny weeny supermarket car parking spaces. I also prefer the price.
pureliquidhw 8y ago
Would hate to be an employee working for a Tesla dealership. Closing, not closing, but maybe closing. If they don't already, I'd expect most employees to have one foot out the door. Fortunately for Tesla, there is a bit of a cult surrounding their brand so maybe up-and-comer type salesmen might stick around for the "prestige" of working at a Tesla dealer?
- tivert 8y ago
  > Would hate to be an employee working for a Tesla dealership. Closing, not closing, but maybe closing. If they don't already, I'd expect most employees to have one foot out the door. There was post about the dealership employee reaction to all this, but it didn't gain much traction: https://news.ycombinator.com/item?id=19361710 https://news.ycombinator.com/item?id=19361710
CPLX 8y ago
Well I'll give them credit for being able to recognize and reverse a mistake. That's a good sign for the future. The original plan was pretty much a death sentence for them, it's impossible to compete seriously without giving people an opportunity to actually see and drive the product.
- xkjkls 8y ago
  It is still terrible and irresponsible to make corporate decisions at this scale and just whiplash back and forth. There are thousands of people employed by this company who have felt dread and uncertainty because of these decisions. They should have to upend their lives because Elon Musk chooses to zig one day and zag the next.
- brink 8y ago
  Is it though? I was a fan of the slimmed down approach. With how prolific Amazon is, most of the consumer market relies on reviews to discern which products to buy, and is better off for it. I've never had the experience of first-hand interaction with a Tesla product, but I still want one strictly due the feedback I've gotten from actual owners on Youtube. I can get a much more insightful review of the product from someone who's owned the car for 10 months, than if I were to simply sit in the car and drive it around for 10 minutes.
  - Voloskaya 8y ago
    Average price of a cart on Amazon must be around ~15$. Minimum cart price on Tesla website is 35k$, not really comparable.
    - xkjkls 8y ago
      As an interesting aside, the Tesla Model 3 is a reviewed product on Amazon: https://www.amazon.com/Tesla-2018-3/dp/B076H6WHPP https://www.amazon.com/Tesla-2018-3/dp/B076H6WHPP
  - jfk13 8y ago
    > most of the consumer market relies on reviews to discern which products to buy Leading -- almost inevitably -- to a huge market in fake reviews. This doesn't seem to be a solved problem yet.
CedarMills 8y ago
Getting to test drive all three current models, I can say that the actual test drive was what convinced me to start looking at purchasing a Tesla and making compromises/adjustments in my life (charging stations, range, etc). No amount of marketing can give you the thrill that you get when you slam the accelerator.
- technothrasher 8y ago
  Interesting. Test driving one is what killed all the hype for me. It was definitely fast but it just drives wierd and I found the interior feels cheap compared to similarly priced cars. Still, definitely more interesting than any of the other mainstream electric cars out there currently.
  - sf_rob 8y ago
    Yep, going to a showroom convinced me that a Volt was a good decision. I think they're both great cars, but I actually prefer Android Auto and the fit and finish of the Volt. That said I'd probably buy a Model 3 today since the part supply chain of the Volt will probably be drying up in the next decade (it's been discontinued).
    - MBCook 8y ago
      At this point I think it may be a serious question of how long the Tesla part supply stays around. Between uncertainty of the company’s future and just not knowing how well they support cars long term it could be an issue.
  - joejerryronnie 8y ago
    Yeah, driving a Tesla feels like driving a go-cart to me. I like to feel the rumble of the engine. Maybe it’s just because that’s what I grew up with.
    - cycrutchfield 8y ago
      Yeah, driving a Model T feels like riding a train to me. I like to feel the hoofbeats of the horses. Maybe it's just because that's what I grew up with.
godzillabrennus 8y ago
Again, follow the SilverCar model and let consumers rent a Tesla. Apply a one day rental fee toward the purchase price if they buy within 365 days of renting the car. Use this to get more people in Tesla’s experiencing them.
- r00fus 8y ago
  Once you go EV you won't go back. Teslas are the best EVs of the bunch. This would be an awesome move.
- pickle-wizard 8y ago
  I bought my last car from Hertz and they let me rent it for 3 days before I bought it. When I bought it they refunded the rental price. Much better than a 15 minute test drive. I agree Tesla should do this.
b_tterc_p 8y ago
I'm a little disappointed they're reversing but it feels to me like they're still playing with it. They're making almost all sales go online still so most of the benefits of their previous approach are still there. They're also not going to be carrying much inventory in store so it will presumably it will be cheaper than most dealerships. However, with the stores now serving such a small purpose, I do wonder if there's not a better model. Ah well.
- stcredzero 8y ago
  They're also not going to be carrying much inventory in store If I were Tesla, I would make the number zero.
  - MBCook 8y ago
    I always thought most of their ‘stores’ were actually showrooms and didn’t sell cars, they only helped you pick options and let you test drive. Do they have any ‘traditional’ dealerships that keep inventory on lot?
docker_up 8y ago
This is a company in absolute turmoil. How can a company go from closing almost all their stores, to reversing that decision in a week. How was that initial decision made in the first place? Was it Elon Musk snapping his fingers like Thanos? And then to turn it around in less than week shows a complete misread of the situation. Whoever made that initial decision should be fired, including Elon Musk. I think Elon Musk has great vision, but he is in over his head with running and growing the company. He needs to hand the reins over to something who is better at this than he is. His behavior, including calling a person a pedophile, tweeting about going private, and fighting the SEC over Twitter shows a person who is mentally unfit to be a CEO. This last decision really cements it, and the company, employees and shareholders could truly suffer going forward if he continues as CEO.
- zaroth 8y ago
  Did you call for Jeff Bezos to be fired when Amazon did an about-face on HQ2? This is a company which has outperformed every possible expectation since the day Elon showed up, and part of that formula from the beginning has been the agility to about-face and react quickly to new data. Some people say we need Elon out and “adult supervision” is required. Or maybe, “adult supervision” is where a company dead set on making the impossible a reality goes to die. We don’t know what new data has come to light since their public announcement. The landlords threatened to sue to prevent Tesla from breaking their leases. Maybe the employees were planning some action? Maybe there was some groundswell of customer feedback on the new test drive model. Maybe the announcement is the best way to truly gauge public feedback on a course of action, and a company that can quickly gauge that reaction and alter course instead of plowing ahead against the data just because they already publically committed has a huge competitive advantage. Tesla is attempted to do something entirely novel and would be the first ever to succeed at it if they pull off this sales model. Fits and starts are to be expected and calling for heads to roll because of quick adjustments in strategy I think is exactly opposite from of reaction.
  - deft 8y ago
    Instead of making fun of the commenter and replying as if you're talking to an absolute idiot, maybe comment on the content of what they have said.
whoisjuan 8y ago
Are they doing their math on a napkin? I don't understand why they make such dramatic spins on pricing and cost in less than a month. Either they have real-time data that supports the rationale of changing the model based on revenue predictions or they financial math is a joke. I'm inclined to think is the latter, simply because I really doubt they have any early indicators to compare physical floor vs online performance. But if they do, then this means that their early online performance is way way lower than they expected, which is troubling by itself.
- zawazzi 8y ago
  I actually think data is the problem. People were making their purchases online but the in store experience is what was convincing them to make the purchase in the first place. Hard to measure that kind of conversion.
  - vezycash 8y ago
    There's this article about a Google engineer who reduced the size of the player from over 1MB to less than 100KB. But the data showed that page load times increased to 2 minutes instead of reducing. They couldn't figure out why. They almost rolled back the change until someone figured out the reason. Millions of users with very slow internet couldn't even open YouTube before the change. Now, they could. Tesla probably weren't tracking store visits, and test drives in relation to online purchases. And this missing info misled them. http://blog.chriszacharias.com/page-weight-matters http://blog.chriszacharias.com/page-weight-matters Edit: Changed 20 minutes to 2 minutes. After rereading the article.
    - mandeepj 8y ago
      Can't find this article. Please share if possible
      - vezycash 8y ago
        Took over an hour of search (before ur request) - both Google and Bing were useless. Just crossed my mind that I may have upvoted it here on HN and voila! http://blog.chriszacharias.com/page-weight-matters http://blog.chriszacharias.com/page-weight-matters
zepearl 8y ago
> The company says it has a "generous return policy" to avoid the need for test drives, as would-be buyers can return a car after 1,000 miles or seven days. I wouldn't define it "generous", if I cannot test-drive the car. Concerning the rest: mmhh, the move seems suspicious after the previous statement, which was very clear => maybe the early in/direct feedbacks/indicators were more negative than expected, and/or the stock market did not react according to the expectations and/or etc..., therefore the mgmt decided to find some middle ground? And/or maybe some conflicts in the board of directors?
OscarTheGrinch 8y ago
Closing the stores made me, potential customer, worry about whether Tesla the company will be around, spare parts will be available, software I am entrusting my families life to will be debugged promptly. Can parts of their business cease to exist on a whim from The Mad King? Reversing their decision hasn't made me worry less.
- xkjkls 8y ago
  More worrying than that is the crashing Tesla resale prices: https://www.cargurus.com/Cars/price-trends/Tesla-Model-S-d2039 https://www.cargurus.com/Cars/price-trends/Tesla-Model-S-d20... Normal cars don't decline 20% in resale value in the last year.
  - MatthewMcDonald 8y ago
    I wonder how much of that is related to Model 3 availability. To me, a high-end 3 seems like a better buy than a lower-end S. If you expand your date selection farther back, it looks like the S price decline really started around July 2018.
  - justin66 8y ago
    Not unusually bad depreciation for a luxury car. Better than many.
dmode 8y ago
I am a huge Tesla fan and a Model S owner for almost 3 years. I love my car and think Tesla makes the best 21st century car, period. But, I have lost all faith on Elon at this point. These decisions and his hubris (like Falcon wing doors or Model 3 line automation) is actually costing the company at this time. Tesla needs a Tim Cook type operator to just take advantage of the car platform and stabilize the company, rake in the profits, and build a long term sustainable company. The innovations going forward mostly need to be incremental.
wurst_case 8y ago
My thoughts on this aren't really about Elon or media coverage, though I think all sides have valid points. My thoughts are that Tesla lowering prices overall was a bit strange to begin with. Not many were calling for a price reduction in model s and x. Everyone wanted the 35k model 3 because that was what was promised. So by lowering the prices of all 3, they had to close stores. Bad move IMO. Relying on online sales is putting faith in a change in consumer behavior. When i buy a new car, sure I look for the car online first but I NEVER buy a car without a full physical inspection. That would be bananas in my world. So keeping stores open is smart. Keeping the savings for just model 3 is smart. Increasing the prices of s and x back up to what they were is smart. Reversing recent decisions makes me nervous but at least I get why they're doing it. On a second note, from friends of mine who work there I hear that this kind of 'change of heart' manuevering is common from top to bottom. They'll be working on a project and then a decision will be made, often without warning and often because it's what manager think Elon wants, and they'll spend hours in overtime transitioning to the new regime. In one case I was told about, they refactored their codebase to a different language in a week and a half only to be told to refractor to yet another language half way through. They are always stressed that whatever they're working on is going to be scrapped at any moment. Not sure if anyone else has had this experience where they work but i have not.
- grey-area 8y ago
  The market is huge at 35k compared to higher price points. Musk is trying to get to that price first to grab substantial market share and brand loyalty in evs. That has always been the plan since the roadster. I agree he's not a good manager and clearly doesn't have competent and confident operations people to reign him in as he does at spacex.
pooya13 8y ago
My question to Tesla/Elon critics: How should Tesla have responded to the backlash they received for closing down their stores? Surely one of the two actions should have been positive. It is of course better if one can always make the best decision the first time around. But, failing that, isn’t it better to be open to learning from your mistakes when you receive negative feedback? It appears to me that for the Tesla bear community, Tesla is damned if they do, and damned if they don’t no matter the decision.

82 points by elemeno 8y ago

... or maybe it would be better if we closed almost all Tesla stores to cut cost? Oh no, I have a better idea, let's only announce it and shortly afterwards undo the statement.Then we can use that moment to increase the prices of all Tesla cars. feeling smart

moron4hire 8y ago

I'm worried about whether or not Tesla will still be a company in 5 years. I think I would love to have a model S, but not having confidence in whether or not if be able to get it serviced is a huge impediment.

giancarlostoro 8y ago
It may be worse once we see other manufacturers producing all-electric (mostly) self-driving (capable) cars. For example I know Toyota intends to have an all electric lineup in the next few years[0]. However, I think it's possible for Tesla to remain despite all this. They seem to be quite ahead of the competition in having both all-electric and useful self-driving capabilities at least from my limited viewpoint. Disclaimer: I drive Toyota, but I don't work for any car companies. [0]: https://www.cnet.com/roadshow/news/toyota-to-introduce-10-electric-cars-by-mid-2020s/ https://www.cnet.com/roadshow/news/toyota-to-introduce-10-el...
- moron4hire 8y ago
  Yeah, it's definitely worth waiting to see what happens in at least the next year or two.
- Ambroos 8y ago
  Tesla has been very fast to release their self-driving capabilities (navigate on autopilot is pretty spooky), but in general the VW/Audi group shouldn't be too far off. The e-tron that was just released isn't as efficient as Tesla's because it's a traditional SUV design-wise, but a lot of the electric tech is there. On highways they even have L3 self-driving in traffic jams, in that the driver is no longer required to constantly pay attention, just being able to take over when the car indicates is enough. Looking at the Geneva Motor Show, almost every manufacturer is really moving towards EVs (Toyota being one of the slower ones to make this move). Tesla is just going to have to deal with actual competitors very soon.
  - deelowe 8y ago
    Doesn't the new x7 have self driving capabilities?
  - rcMgD2BwE72F 8y ago
    We've heard this since 2009! Nothing has changed expect that Tesla's lead is even greater. Other auto-manufacturer are all talk – except VW, these days (surprisingly). If you think one company is finally getting serious about actually making EV "en masse", look for their plans to build battery gigafactories: if there's none, then they will not have the production capacity to make the EV they're talking about (but they'll certainly green-wash consumers with big time ads)... unless we start to hear about gargantuan plans from LG, Samsung and the like. But we're still waiting.
    - Ambroos 8y ago
      VW has a massive battery order spread between Samsung, LG and CATL, but yeah, I agree Tesla will have a solid lead on battery production for a while. I wonder if Tesla/Panasonic will at some point start selling mass produced batteries to the traditional car manufacturers. Once EVs become mainstream, consumers will start expecting choice.
      - rcMgD2BwE72F 8y ago
        > VW has a massive battery order spread between Samsung, LG and CATL, but yeah, I agree Tesla will have a solid lead on battery production for a while. Tesla have much bigger contracts with Panasonic, and already supplies cells from Samsung and LG for stationary storage and is inquiring CATL as the main supplier of the Shanghai factory. Since Tesla is crushing them in EV volume and should continue to do so for years to come, I don't see how VW can compete in cost and even in tech. >I wonder if Tesla/Panasonic will at some point start selling mass produced batteries to the traditional car manufacturers. Once EVs become mainstream, consumers will start expecting choice. I doubt it, at least until Tesla is demand-constrained. By then, they'll keep all the batteries for their car and energy storage business and let the competition fight for the leftover.
- martin_drapeau 8y ago
  Comparing a Toyota to a Tesla is comparing oranges and apples. Tesla is a computer on wheels. Capabilities are delivered continuously over software updates. From self-driving capabilities to faster charging. Toyota and others do not have that capability.
  - bestnameever 8y ago
    Basically every car manufactured today can be called a computer on wheels. Whether Toyota will mimic Tesla's update process remains to be seen but I wouldn't rule it out once Toyota releases an all electric self driving vehicle.
    - TheSpiceIsLife 8y ago
      Call me old fashioned, but I think it is a mistake to allow a software update to modify the functionality of car remotely. Barring some kind of failure, whether mechanical, electrical, or electronic, I know with certainty the cars I own will perform tomorrow fairly well exactly as they did today.
  - tawaywhynot 8y ago
    >Capabilities are delivered continuously over software updates. Until your hardware is obsolete. There are severe restrictions to what can actually be improved over the air. As it stands, certain Model S and X can't use the next generation chargers. And if you believe Elon is going to upgrade all the hardware on every car for free, forever, well I have a bridge to sell you.
- freerobby 8y ago
  Prediction: In ten years it's going to be very funny to look back at Tesla as the supposed bankruptcy risk and not Toyota. We've heard variants on the parent-comments line of thinking ever since the Model S came out in 2012. Yet, fast forward to 2019, and the gap between Tesla and traditional automakers has only widened (to name a few axes: EV sales, EV margins, rate of software improvements/OTA updates, Supercharger network, battery production). This is what should terrify big automakers: it's not that Tesla's gap is per se insurmountable; it's that the pace at which Tesla is improving and innovating is far greater than the pace at which any other automaker is doing it. Most comparative analyses between Tesla and other auto companies suffer from a fallacy that relates to this: they compare the Tesla of today to the ___ of tomorrow. Perhaps some day a traditional auto manufacturer will offer an all-electric, self-driving car. But how long is it going to take them to get there? Not to announce something, or to design a concept car, but to actually build them and sell them at scale and with positive margins? And what will Tesla offer by the time they do? My wager is that by the time Toyota offers a compelling all-electric car (by today's standards), the feature gap between a $x Tesla and a $x Toyota will be so great that the Toyota will no longer be compelling to the market. Throw in lower margins as companies build their first EVs, the baggage of dealerships, a likely recession some time in the next decade, and it's not at all clear to me how traditional manufacturers like Toyota will survive the transition.
  - TheSpiceIsLife 8y ago
    > the pace at which Tesla is improving and innovating is far greater than the pace at which any other automaker is doing it. What portion of Telsa's pace of improvements and innovation would you say is due to Telsa only recently having got started at this, 16 years ago, compared to Toyota 86 year history of automobile manufacturing, or Ford's 116 years.
    - HeadsUpHigh 8y ago
      Their ability to iterate fast for one thing. The fact that their structures are built around an all EV company. Toyota will have pressure from other departments to build and fund ICE research at the same time. Tesla is 100% focused on one thing. Plus they have the lowest cost batteries which plays a huge role. I think what the other car manufacturers are waiting for is to jump straight into solid state batteries once that train is going. That should at least reduce the advantage Tesla has right now.
MrQuincle 8y ago
A perfect "late majority" point of view. Just wait them out. No need to hurry. Electric cars are here to stay. I don't think you benefit in any way in jumping on the bandwagon too soon.
- rcMgD2BwE72F 8y ago
  https://en.wikipedia.org/wiki/History_of_Nokia#Loss_of_smartphone_market_share https://en.wikipedia.org/wiki/History_of_Nokia#Loss_of_smart...
dalbasal 8y ago
I think you inevitably take some risk. Tesla is, and has been since founding, a risk taking company. They bet the house on whatever they're doing next, and that means they may not exist later. Also, electric cars are new, Tesla is new. So, the value of your 5 yr old tesla could (probably will) suffer more competition from newer models than an average ICE car, like the resale hit last year's model 3s just shouldered. ... Even if the companny is doing fine, servicing cars and the cars themselves age well... resale value is riskier than average. This is just the cost of being an early-ish adopter. You could lease, or buy used to limit risk, but these have implications too. The low risk, high resale value option is still (eg) an ICE toyota. You can't have everything. :)
- moron4hire 8y ago
  There is risk, and then there is risk. A car isn't an investment. I'm a VR and AR headset early adopter, but there it is clear that A) newer, better models will come out long before my current units die, and B) I'm investing in my knowledge of VR/AR software development. I wouldn't be where I am today, with the job I have today, if I hadn't bought an Oculus Rift DK2 when they first became generally available. I don't have any skin in the game for electric cars, so an electric car purchase is not going to have the same impact on my life, it's purely a consumptive object. So the math becomes "will this save me money or give me more enjoyment than a similar purchase from another company".
  - rcMgD2BwE72F 8y ago
    >I don't have any skin in the game for electric cars Are you living on Mars already? Here on Earth, we've got something called global warming that is threatening the future of society and the biosphere in general https://en.wikipedia.org/wiki/Effects_of_global_warming#Social_systems https://en.wikipedia.org/wiki/Effects_of_global_warming#Soci...
    - moron4hire 8y ago
      My single purchase is not going to make an effect on global warming. But if I were to buy an electric car for the purpose of doing my part to stem global warming, I might want to put my money towards a company that has a chance at surviving the next decade.
dTal 8y ago
It's worse than that. Tesla has embraced the modern concept of embedded computers - OTA updates, constant phoning home, user prevented from even attempting to gain root. It's a valid concern as to how long a Tesla car can survive the death of its company even with perfect mechanical servicing.
te_chris 8y ago
They're a plum acquisition target, surely.
- swarnie_ 8y ago
  Barely profitable, staring down growing competition from industry veterans and built around Musk's cult of personality. I love Telsa and what their doing but investing/acquiring them is such a risky move imo.
  - TheSpiceIsLife 8y ago
    If Telsa goes belly up, is it possible creditors will want to sell the business as a going concern? One of the other vehicle manufacturers make be able to buy Telsa's manufacturing facilities and branding for cents in the dollar.
    - JumpCrisscross 8y ago
      > If Telsa goes belly up, is it possible creditors will want to sell the business as a going concern? If it goes belly up, it’s no longer a going concern. Moreover, liquidation value of manufacturing facilities is pennies on the dollar. (Before legal fees, creditors’ claims, et cetera.) Supply chains are too tightly integrated; it’s expensive to swap in someone else’s kit.
      - TheSpiceIsLife 8y ago
        Thanks for you response. I do apologies for my lack of understanding with regard to the correct use of financial terms. I guess what I meant was, is there a future were, say, the Volkswagen Group owns Telsa?
        dragontamer 8y ago
        Of course. Patents and other IP will be sold off to the highest bidder. The factories will be closed down, but there's still railroads and other infrastructure that have been built to support the site. A new company will inevitably purchase the old site and recycle the infrastructure.
martin_drapeau 8y ago
Look at the numbers to convince you otherwise. The Model 3 is the best selling mid-side luxury car (https://cleantechnica.com/2018/12/08/tesla-model-3-completely-crushing-us-luxury-car-competition-10-cleantechnica-charts/ https://cleantechnica.com/2018/12/08/tesla-model-3-completel...). The demand is there and as long as it remains, Tesla will thrive. The company is victim of its own success. It can't produce enough vehicles to supply the demand. At the same time, its trying to make it more accessible. Tesla is reinventing the car industry with their product, sales and service. Of course this is risky and creates a lot of unknowns.
- FireBeyond 8y ago
  I'd love to see those numbers in a couple of months. All those other models are established and have churn. Tesla has a backlog of multiple years of M3 pre-orders, of course it's going to be selling at capacity. How about we take those numbers, and divide them along the lines of "how long has it been since pre-ordering"? That would look a lot less impressive (but still a very good effort).
linuxftw 8y ago
You're right to be worried. They're not profitable, have never been profitable, don't look like they're ever going to be profitable. Be smart with your money.
- dragontamer 8y ago
  You are correct on a yearly basis. But Q3 and Q4 of 2018 were profitable. So TSLA has made a quarterly profit. They've never made a yearly profit. Some would argue the last two quarters of profit is a turning point for the company. Q1 2019 looks like they will lose money though. Jury is still out on whether or not 2019 will be a profitable year.
  - gamblor956 8y ago
    Tesla was not profitable in Q3 or Q4 2018 on a GAAP basis. They were profitable on a very specific "unicorn accounting" metric that eliminates most of the expenses that other auto companies include in their financial reporting metrics. GAAP (and IFRS, the international version of GAAP) is industry-specific, so please none of the arguments about how it doesn't reflect the "true" state of Tesla's financial situation. It works just fine for every other carmaker.
    - dragontamer 8y ago
      Interesting. Do you have any good links that goes into the details of this? I'm always interested in learning how to read financial sheets better. Its outside my field of computers, but I'd love to learn the skill. I've got a general idea of how GAAP works and other such cash-flow matters, but no official training in the subject. EDIT: I did some searching... and it appears that Tesla was GAAP profitable in Q3 and Q4 2018, according to their quarterly filings. I'm very curious how and why you don't consider it GAAP. Is there something in the financial statement that is a red flag to you?
    - dmode 8y ago
      Literally every company report GAAP and non-GAAP numbers. And you publish a reconciliation report. non-GAAP profitability is as valid as GAAP profitability, otherwise you will get dinged by SEC as you are publishing those numbers in your annual report.

giancarlostoro 8y ago

I suspect a good number of those stores are already in strategic locations, compared to other major car manufacturer locations which are all around major cities, I can think of at least several places I can get Toyota / Lexus cars in my city. For Tesla in my city I can only find one location and it's 58 minutes away from where I live. Let's see, I can drive 15 minutes or less to try out a Toyota, Lexus, and other cars from other manufacturers, or I can drive an hour to try a Tesla, worse yet if I can't even test drive one, how will I know I want one? This would be a problem if they closed up enough Tesla locations.

walkingolof 8y ago
I find it hard to believe that 40 minutes difference in travel time matters when buy an expensive thing like that
- josefresco 8y ago
  To add to this, I only have 1 dealership within 15 min of my home. All the others are 45+ minutes away. When my family goes "car shopping" it's a half-day, or all day affair. I'm not thrilled about that, but it's pretty normal behavior in my extended family as well as friends.
  - bluedino 8y ago
    I do the same thing. We only have two brands of dealerships, and being a small town they refuse to discount, have low seelctions, etc So I go to a larger dealership 45-60 minutes away, get a better deal, have mor e brands and cars to chose from...
- TheSpiceIsLife 8y ago
  For some people it may contribute to pushing them toward buying a non-Telsa car. If you buy a new or secondhand car from a traditional dealership, and have a problem with it, even if you move, you can be fairly confident that you can go to pretty much any authorised dealership and have a face to face interaction with someone. Continuity of service. I think this can be a huge motivating factor for some people.

Shivetya 8y ago

They should never had cut the prices to begin with. For a company in need of cash I don't understand the fascination with the price cuts. There is demand sufficient to keep them going and with the TMY coming it should open a new market. The S&X price cuts are only warranted if they don't plan to bring their interiors up to par. The TM3 price confusion seemed mostly caused by their change up in how auto pilot and full self driving were sold. With enhanced auto pilot being removed for a lesser version and FSD taking some features from EAP. Even at the new two thousand dollar price for FSD presented to existing EAP owners I wonder what the take rate is. They haven't shown significant improvement. My concern long term with Tesla is that they still don't have up to date features for the driver other than "autopilot" and that feature is quickly becoming the norm for many cars. Their blue tooth support is half baked, you cannot select music from your phone through the car's UI, you have to use the phone. Automatic wipers and high beams are both sporadic with the latter being near useless. The promised voice commands never arrived. Their energy monitoring screen is the least useful of all EVs. They are quickly turning into a two trick pony in a world where everyone else has their own stable.

mtgx 8y ago
I would agree. Tesla didn't really need to cut the prices until 2020/2021, when more real competition will come to market. Until then they should've taken advantage of this window to fix their finances and make sure they have enough cash for future investments. Not to mention this whole price cut thing pissed off a lot of Model 3 customers who purchased earlier. I also share your concern about Tesla/Musk's extreme focus on "self-driving features". For now I don't think self-driving is much more than a gimmick. Yes, a gimmick that attracts headlines, but nonethless a gimmick and it's only a matter of time before more people wake up and realize it is one and that full self-driving is nowhere close to being ready. In the meantime, Tesla adds a significant amount of cost to its cars by making them "self-driving ready" and whatnot, instead of focusing on capturing more EV market share by launching lower-cost EVs. And no there is no contradiction between what I said about the price cutting above and the lower-cost EVs. The lower-cost EVs don't have to be unprofitable. Tesla just needs to stop adding "useless" features such as falcon wings and "full self-driving hardware" (that doesn't even achieve its objective) and make its EVs both unprofitable but also costing more than they should.

mnemotechny 8y ago

I prefer second hand cars because it hardly matters when they get a small bump or scratch in the tiny weeny supermarket car parking spaces. I also prefer the price.

pureliquidhw 8y ago

Would hate to be an employee working for a Tesla dealership. Closing, not closing, but maybe closing. If they don't already, I'd expect most employees to have one foot out the door. Fortunately for Tesla, there is a bit of a cult surrounding their brand so maybe up-and-comer type salesmen might stick around for the "prestige" of working at a Tesla dealer?

tivert 8y ago
> Would hate to be an employee working for a Tesla dealership. Closing, not closing, but maybe closing. If they don't already, I'd expect most employees to have one foot out the door. There was post about the dealership employee reaction to all this, but it didn't gain much traction: https://news.ycombinator.com/item?id=19361710 https://news.ycombinator.com/item?id=19361710

CPLX 8y ago

Well I'll give them credit for being able to recognize and reverse a mistake. That's a good sign for the future. The original plan was pretty much a death sentence for them, it's impossible to compete seriously without giving people an opportunity to actually see and drive the product.

xkjkls 8y ago
It is still terrible and irresponsible to make corporate decisions at this scale and just whiplash back and forth. There are thousands of people employed by this company who have felt dread and uncertainty because of these decisions. They should have to upend their lives because Elon Musk chooses to zig one day and zag the next.
brink 8y ago
Is it though? I was a fan of the slimmed down approach. With how prolific Amazon is, most of the consumer market relies on reviews to discern which products to buy, and is better off for it. I've never had the experience of first-hand interaction with a Tesla product, but I still want one strictly due the feedback I've gotten from actual owners on Youtube. I can get a much more insightful review of the product from someone who's owned the car for 10 months, than if I were to simply sit in the car and drive it around for 10 minutes.
- Voloskaya 8y ago
  Average price of a cart on Amazon must be around ~15$. Minimum cart price on Tesla website is 35k$, not really comparable.
  - xkjkls 8y ago
    As an interesting aside, the Tesla Model 3 is a reviewed product on Amazon: https://www.amazon.com/Tesla-2018-3/dp/B076H6WHPP https://www.amazon.com/Tesla-2018-3/dp/B076H6WHPP
- jfk13 8y ago
  > most of the consumer market relies on reviews to discern which products to buy Leading -- almost inevitably -- to a huge market in fake reviews. This doesn't seem to be a solved problem yet.

CedarMills 8y ago

Getting to test drive all three current models, I can say that the actual test drive was what convinced me to start looking at purchasing a Tesla and making compromises/adjustments in my life (charging stations, range, etc). No amount of marketing can give you the thrill that you get when you slam the accelerator.

technothrasher 8y ago
Interesting. Test driving one is what killed all the hype for me. It was definitely fast but it just drives wierd and I found the interior feels cheap compared to similarly priced cars. Still, definitely more interesting than any of the other mainstream electric cars out there currently.
- sf_rob 8y ago
  Yep, going to a showroom convinced me that a Volt was a good decision. I think they're both great cars, but I actually prefer Android Auto and the fit and finish of the Volt. That said I'd probably buy a Model 3 today since the part supply chain of the Volt will probably be drying up in the next decade (it's been discontinued).
  - MBCook 8y ago
    At this point I think it may be a serious question of how long the Tesla part supply stays around. Between uncertainty of the company’s future and just not knowing how well they support cars long term it could be an issue.
- joejerryronnie 8y ago
  Yeah, driving a Tesla feels like driving a go-cart to me. I like to feel the rumble of the engine. Maybe it’s just because that’s what I grew up with.
  - cycrutchfield 8y ago
    Yeah, driving a Model T feels like riding a train to me. I like to feel the hoofbeats of the horses. Maybe it's just because that's what I grew up with.

godzillabrennus 8y ago

Again, follow the SilverCar model and let consumers rent a Tesla. Apply a one day rental fee toward the purchase price if they buy within 365 days of renting the car. Use this to get more people in Tesla’s experiencing them.

r00fus 8y ago
Once you go EV you won't go back. Teslas are the best EVs of the bunch. This would be an awesome move.
pickle-wizard 8y ago
I bought my last car from Hertz and they let me rent it for 3 days before I bought it. When I bought it they refunded the rental price. Much better than a 15 minute test drive. I agree Tesla should do this.

b_tterc_p 8y ago

I'm a little disappointed they're reversing but it feels to me like they're still playing with it. They're making almost all sales go online still so most of the benefits of their previous approach are still there. They're also not going to be carrying much inventory in store so it will presumably it will be cheaper than most dealerships. However, with the stores now serving such a small purpose, I do wonder if there's not a better model. Ah well.

stcredzero 8y ago
They're also not going to be carrying much inventory in store If I were Tesla, I would make the number zero.
- MBCook 8y ago
  I always thought most of their ‘stores’ were actually showrooms and didn’t sell cars, they only helped you pick options and let you test drive. Do they have any ‘traditional’ dealerships that keep inventory on lot?

docker_up 8y ago

This is a company in absolute turmoil. How can a company go from closing almost all their stores, to reversing that decision in a week. How was that initial decision made in the first place? Was it Elon Musk snapping his fingers like Thanos? And then to turn it around in less than week shows a complete misread of the situation. Whoever made that initial decision should be fired, including Elon Musk. I think Elon Musk has great vision, but he is in over his head with running and growing the company. He needs to hand the reins over to something who is better at this than he is. His behavior, including calling a person a pedophile, tweeting about going private, and fighting the SEC over Twitter shows a person who is mentally unfit to be a CEO. This last decision really cements it, and the company, employees and shareholders could truly suffer going forward if he continues as CEO.

zaroth 8y ago
Did you call for Jeff Bezos to be fired when Amazon did an about-face on HQ2? This is a company which has outperformed every possible expectation since the day Elon showed up, and part of that formula from the beginning has been the agility to about-face and react quickly to new data. Some people say we need Elon out and “adult supervision” is required. Or maybe, “adult supervision” is where a company dead set on making the impossible a reality goes to die. We don’t know what new data has come to light since their public announcement. The landlords threatened to sue to prevent Tesla from breaking their leases. Maybe the employees were planning some action? Maybe there was some groundswell of customer feedback on the new test drive model. Maybe the announcement is the best way to truly gauge public feedback on a course of action, and a company that can quickly gauge that reaction and alter course instead of plowing ahead against the data just because they already publically committed has a huge competitive advantage. Tesla is attempted to do something entirely novel and would be the first ever to succeed at it if they pull off this sales model. Fits and starts are to be expected and calling for heads to roll because of quick adjustments in strategy I think is exactly opposite from of reaction.
- deft 8y ago
  Instead of making fun of the commenter and replying as if you're talking to an absolute idiot, maybe comment on the content of what they have said.

whoisjuan 8y ago

Are they doing their math on a napkin? I don't understand why they make such dramatic spins on pricing and cost in less than a month. Either they have real-time data that supports the rationale of changing the model based on revenue predictions or they financial math is a joke. I'm inclined to think is the latter, simply because I really doubt they have any early indicators to compare physical floor vs online performance. But if they do, then this means that their early online performance is way way lower than they expected, which is troubling by itself.

zawazzi 8y ago
I actually think data is the problem. People were making their purchases online but the in store experience is what was convincing them to make the purchase in the first place. Hard to measure that kind of conversion.
- vezycash 8y ago
  There's this article about a Google engineer who reduced the size of the player from over 1MB to less than 100KB. But the data showed that page load times increased to 2 minutes instead of reducing. They couldn't figure out why. They almost rolled back the change until someone figured out the reason. Millions of users with very slow internet couldn't even open YouTube before the change. Now, they could. Tesla probably weren't tracking store visits, and test drives in relation to online purchases. And this missing info misled them. http://blog.chriszacharias.com/page-weight-matters http://blog.chriszacharias.com/page-weight-matters Edit: Changed 20 minutes to 2 minutes. After rereading the article.
  - mandeepj 8y ago
    Can't find this article. Please share if possible
    - vezycash 8y ago
      Took over an hour of search (before ur request) - both Google and Bing were useless. Just crossed my mind that I may have upvoted it here on HN and voila! http://blog.chriszacharias.com/page-weight-matters http://blog.chriszacharias.com/page-weight-matters

zepearl 8y ago

> The company says it has a "generous return policy" to avoid the need for test drives, as would-be buyers can return a car after 1,000 miles or seven days. I wouldn't define it "generous", if I cannot test-drive the car. Concerning the rest: mmhh, the move seems suspicious after the previous statement, which was very clear => maybe the early in/direct feedbacks/indicators were more negative than expected, and/or the stock market did not react according to the expectations and/or etc..., therefore the mgmt decided to find some middle ground? And/or maybe some conflicts in the board of directors?

OscarTheGrinch 8y ago

Closing the stores made me, potential customer, worry about whether Tesla the company will be around, spare parts will be available, software I am entrusting my families life to will be debugged promptly. Can parts of their business cease to exist on a whim from The Mad King? Reversing their decision hasn't made me worry less.

xkjkls 8y ago
More worrying than that is the crashing Tesla resale prices: https://www.cargurus.com/Cars/price-trends/Tesla-Model-S-d2039 https://www.cargurus.com/Cars/price-trends/Tesla-Model-S-d20... Normal cars don't decline 20% in resale value in the last year.
- MatthewMcDonald 8y ago
  I wonder how much of that is related to Model 3 availability. To me, a high-end 3 seems like a better buy than a lower-end S. If you expand your date selection farther back, it looks like the S price decline really started around July 2018.
- justin66 8y ago
  Not unusually bad depreciation for a luxury car. Better than many.

dmode 8y ago

I am a huge Tesla fan and a Model S owner for almost 3 years. I love my car and think Tesla makes the best 21st century car, period. But, I have lost all faith on Elon at this point. These decisions and his hubris (like Falcon wing doors or Model 3 line automation) is actually costing the company at this time. Tesla needs a Tim Cook type operator to just take advantage of the car platform and stabilize the company, rake in the profits, and build a long term sustainable company. The innovations going forward mostly need to be incremental.

wurst_case 8y ago

My thoughts on this aren't really about Elon or media coverage, though I think all sides have valid points. My thoughts are that Tesla lowering prices overall was a bit strange to begin with. Not many were calling for a price reduction in model s and x. Everyone wanted the 35k model 3 because that was what was promised. So by lowering the prices of all 3, they had to close stores. Bad move IMO. Relying on online sales is putting faith in a change in consumer behavior. When i buy a new car, sure I look for the car online first but I NEVER buy a car without a full physical inspection. That would be bananas in my world. So keeping stores open is smart. Keeping the savings for just model 3 is smart. Increasing the prices of s and x back up to what they were is smart. Reversing recent decisions makes me nervous but at least I get why they're doing it. On a second note, from friends of mine who work there I hear that this kind of 'change of heart' manuevering is common from top to bottom. They'll be working on a project and then a decision will be made, often without warning and often because it's what manager think Elon wants, and they'll spend hours in overtime transitioning to the new regime. In one case I was told about, they refactored their codebase to a different language in a week and a half only to be told to refractor to yet another language half way through. They are always stressed that whatever they're working on is going to be scrapped at any moment. Not sure if anyone else has had this experience where they work but i have not.

grey-area 8y ago
The market is huge at 35k compared to higher price points. Musk is trying to get to that price first to grab substantial market share and brand loyalty in evs. That has always been the plan since the roadster. I agree he's not a good manager and clearly doesn't have competent and confident operations people to reign him in as he does at spacex.

pooya13 8y ago

My question to Tesla/Elon critics: How should Tesla have responded to the backlash they received for closing down their stores? Surely one of the two actions should have been positive. It is of course better if one can always make the best decision the first time around. But, failing that, isn’t it better to be open to learning from your mistakes when you receive negative feedback? It appears to me that for the Tesla bear community, Tesla is damned if they do, and damned if they don’t no matter the decision.