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The flip side to this is that they always seem to have some sort of short-term problem going on. One quarter it’s trouble ramping up production, then it’s quali

The flip side to this is that they always seem to have some sort of short-term problem going on. One quarter it’s trouble ramping up production, then it’s quality issues, pissing off regulators, inadequate transportation, what have you. You can see this as “they are good at overcoming problems” or as “there’s always something going wrong.” I tend to see it more as the former but seeing it as the latter may be a sensible explanation for the stock movements.

adt2bt 8y ago
To some extent, that sense you have that 'they always seems to have some sort of short-term problem going on' could be driven by the unnatural level of media coverage Tesla receives. Perhaps my intuition is wrong, but I feel like other companies are also constantly tackling small problems, they just don't receive the wild eyed media coverage over those problems.
dexen 8y ago
>[or you can see this as] “there’s always something going wrong.” Which is literally the truth in any business, in any industry: there is always a major problem, and a plethora of smaller ones to boot. Whether it's the competitors gaining up, the market undergoing a fundamental shift, the economy slowing down or the costs of materials and labor going up, there's always flux. Just as well there is always some waste that could and should be improved upon. The key difference is that some companies burn through (squander?) capital and resources to paper over the problems - to signal "good health" - while other companies cut close to the wire and allocate the capital and resources to where they will the most effective, dealing with problems when and where they become pressing.
- brianpgordon 8y ago
  This seems like a view so charitable as to nearly strain credulity. Firstly, many of Tesla's problems are self-inflicted. How much time and capital was wasted on the alien dreadnought? How much damage has been caused by the constant turnover in management, or the whipsaw changes in price structure and product offerings, or the likely ill-fated decision to double down on computer vision rather than use LIDAR? One mistake we can quantify is the disastrous $2.6 billion related-party acquisition of SolarCity. And even problems which are not necessarily self-inflicted wounds, like their cashflow problems or quality issues which possibly any upstart time-constrained car manufacturer might face, are not any less problematic for that fact. As an investor it doesn't matter whether quality issues would happen to another electric car startup; they're happening to Tesla. Their competition actually does know how to build cars to spec, and they're coming out with their own electric models. And their stock comes free of childish bickering with the SEC or critically risky solvency status or desperate and deceptive PR stunts like solar roofs or underground tunnels.
  - dexen 8y ago
    >Firstly, many of Tesla's problems are self-inflicted. Fair enough. There's always the alternative angle of, “Recently, I was asked if I was going to fire an employee who made a mistake that cost the company $600,000. “No”, I replied. “I just spent $600,000 training him – why would I want somebody to hire his experience?” [0] >Their competition actually does know how to build cars to spec That's the problem: the competitors are trying to "build a car, except with electric drivetrain". This gave us Nissan Leafs and BMW i3s. There's nothing "sexy" (appealing) about those cars. Contrast them with the 2008 Tesla Roadster, and every subsequent model: due to the awe factor, people queue to buy them, in spite of the glaring manufacturing deficiencies. You essentially contrasted potential vis-a-vis actual queues of people with bundles of cash in hand. When was the last time you saw a month-long queue at your local dealership? Those manufacturers desperately need to un-learn how to build cars, to be able to build their own take on Tesla. Also, at the same time, how to ditch the dealership model[1] that's enshrined both via tight web of interdependences and also via law in multiple states. >deceptive PR stunts From cheated emission tests through crashworthiness rating that's always 4 or 5 stars, to "all new and improved" which is still 8+ seconds of 0 to 60, to meaningless MPG ratings, to the lacking security of the netowked cars, and to the over-hyped, non-delivered self-driving, and to the pervasive need to negotiate down car payments presented on misleading sheets, the car industry is built on deceptive PR stunts. -- [0] https://www.peoplehr.com/blog/2015/06/26/what-would-you-do-if-an-employee-made-a-600000-mistake/ https://www.peoplehr.com/blog/2015/06/26/what-would-you-do-i... [1] won't be profitable as-is due to much less oil changes, brake pad jobs and all that.
    - brianpgordon 8y ago
      > That's the problem: the competitors are trying to "build a car, except with electric drivetrain". The problem with Tesla is that they're trying to build an electric drivetrain and then tack on that pesky "rest of the car" on top of it as an afterthought. Everyone knows that Tesla has the best electric drivetrain out there, but they're still struggling to build cars in quantity to within quality standards and service them at scale. With respect to PR stunts, of course Big Auto is corrupt and deceptive and generally awful. But they're not the ones riding high on a tsunami of feel-good save-the-planet PR. If Tesla wants their good boy points, they need to behave and earn them.
WhompingWindows 8y ago
Where are you hearing about these short term problems? If it's in social media, anyone reading may want to examine your own media intake and potential biases inherent to any story about publicly traded companies. There are huge interests at stake on both sides of the bull/bear aisle for all these controversial tech companies. Tesla is not alone in receiving very high-level scrutiny, it's merely more of a lightning rod due to the sensational (and ultimately fatuous) behavior/personality of its CEO. As a car company/hardware company, I'd also argue Tesla is simply in a much tighter, harder to succeed-in industry than the other tech companies, who get ridiculous revenue for doing unethical practices with user data for basically zero marginal cost. Finally, keep in mind that Tesla is BEV, and there are many, many well-paid opponents of BEV in the USA and elsewhere. Tesla is purposefully disrupting the bottom lines of oil and ICE companies, that is not going to be met with fair coverage in all press outlets.
- mikeash 8y ago
  I actually get almost all of my Tesla news from Tesla fan communities.

adt2bt 8y ago

To some extent, that sense you have that 'they always seems to have some sort of short-term problem going on' could be driven by the unnatural level of media coverage Tesla receives. Perhaps my intuition is wrong, but I feel like other companies are also constantly tackling small problems, they just don't receive the wild eyed media coverage over those problems.

dexen 8y ago

>[or you can see this as] “there’s always something going wrong.” Which is literally the truth in any business, in any industry: there is always a major problem, and a plethora of smaller ones to boot. Whether it's the competitors gaining up, the market undergoing a fundamental shift, the economy slowing down or the costs of materials and labor going up, there's always flux. Just as well there is always some waste that could and should be improved upon. The key difference is that some companies burn through (squander?) capital and resources to paper over the problems - to signal "good health" - while other companies cut close to the wire and allocate the capital and resources to where they will the most effective, dealing with problems when and where they become pressing.

brianpgordon 8y ago
This seems like a view so charitable as to nearly strain credulity. Firstly, many of Tesla's problems are self-inflicted. How much time and capital was wasted on the alien dreadnought? How much damage has been caused by the constant turnover in management, or the whipsaw changes in price structure and product offerings, or the likely ill-fated decision to double down on computer vision rather than use LIDAR? One mistake we can quantify is the disastrous $2.6 billion related-party acquisition of SolarCity. And even problems which are not necessarily self-inflicted wounds, like their cashflow problems or quality issues which possibly any upstart time-constrained car manufacturer might face, are not any less problematic for that fact. As an investor it doesn't matter whether quality issues would happen to another electric car startup; they're happening to Tesla. Their competition actually does know how to build cars to spec, and they're coming out with their own electric models. And their stock comes free of childish bickering with the SEC or critically risky solvency status or desperate and deceptive PR stunts like solar roofs or underground tunnels.
- dexen 8y ago
  >Firstly, many of Tesla's problems are self-inflicted. Fair enough. There's always the alternative angle of, “Recently, I was asked if I was going to fire an employee who made a mistake that cost the company $600,000. “No”, I replied. “I just spent $600,000 training him – why would I want somebody to hire his experience?” [0] >Their competition actually does know how to build cars to spec That's the problem: the competitors are trying to "build a car, except with electric drivetrain". This gave us Nissan Leafs and BMW i3s. There's nothing "sexy" (appealing) about those cars. Contrast them with the 2008 Tesla Roadster, and every subsequent model: due to the awe factor, people queue to buy them, in spite of the glaring manufacturing deficiencies. You essentially contrasted potential vis-a-vis actual queues of people with bundles of cash in hand. When was the last time you saw a month-long queue at your local dealership? Those manufacturers desperately need to un-learn how to build cars, to be able to build their own take on Tesla. Also, at the same time, how to ditch the dealership model[1] that's enshrined both via tight web of interdependences and also via law in multiple states. >deceptive PR stunts From cheated emission tests through crashworthiness rating that's always 4 or 5 stars, to "all new and improved" which is still 8+ seconds of 0 to 60, to meaningless MPG ratings, to the lacking security of the netowked cars, and to the over-hyped, non-delivered self-driving, and to the pervasive need to negotiate down car payments presented on misleading sheets, the car industry is built on deceptive PR stunts. -- [0] https://www.peoplehr.com/blog/2015/06/26/what-would-you-do-if-an-employee-made-a-600000-mistake/ https://www.peoplehr.com/blog/2015/06/26/what-would-you-do-i... [1] won't be profitable as-is due to much less oil changes, brake pad jobs and all that.
  - brianpgordon 8y ago
    > That's the problem: the competitors are trying to "build a car, except with electric drivetrain". The problem with Tesla is that they're trying to build an electric drivetrain and then tack on that pesky "rest of the car" on top of it as an afterthought. Everyone knows that Tesla has the best electric drivetrain out there, but they're still struggling to build cars in quantity to within quality standards and service them at scale. With respect to PR stunts, of course Big Auto is corrupt and deceptive and generally awful. But they're not the ones riding high on a tsunami of feel-good save-the-planet PR. If Tesla wants their good boy points, they need to behave and earn them.

WhompingWindows 8y ago

Where are you hearing about these short term problems? If it's in social media, anyone reading may want to examine your own media intake and potential biases inherent to any story about publicly traded companies. There are huge interests at stake on both sides of the bull/bear aisle for all these controversial tech companies. Tesla is not alone in receiving very high-level scrutiny, it's merely more of a lightning rod due to the sensational (and ultimately fatuous) behavior/personality of its CEO. As a car company/hardware company, I'd also argue Tesla is simply in a much tighter, harder to succeed-in industry than the other tech companies, who get ridiculous revenue for doing unethical practices with user data for basically zero marginal cost. Finally, keep in mind that Tesla is BEV, and there are many, many well-paid opponents of BEV in the USA and elsewhere. Tesla is purposefully disrupting the bottom lines of oil and ICE companies, that is not going to be met with fair coverage in all press outlets.

mikeash 8y ago
I actually get almost all of my Tesla news from Tesla fan communities.