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Tesla Has Failed Massively as a Public Company

19 points by AndrewBissell 7y ago

mcv 7y ago
I'd like to know how these numbers compare to Amazon's early years. Amazon also took forever before it made a profit. As the article points out, Tesla has been expanding enormously. As long as there is demand for their cars (and it seems there is), I don't see why it would start making a profit once the company focuses on profit rather than expansion.
- somerandomness 7y ago
  There's a difference in not having a profit due to (a) reinvestment; (b) poor unit economics. (a) is much less worrying for an investor, e.g. Amazon (b) suggests a bad business model, e.g. Uber/Lyft, Tesla
  - jmpman 7y ago
    Is it possible that Tesla is driving down the cost curve faster than any other electric vehicle manufacturer, and once they hit a tipping point, they will disrupt the entire automotive industry and be worth 10x their current price? I may not believe Musk’s self driving car vision is attainable in the gritty real world in under 10 years, so I’ll discount that... but driving down battery cost, while making a better electric vehicle than Audi/Mercedes/Porsche.. that’s exciting.
  - mcv 7y ago
    But Tesla is reinvesting a lot. And it's growing the market for electric cars, setting up infrastructure, etc. He might be selling at a loss initially in order to create the volume that will eventually drive down the cost so he can generate a profit. From what I understand, the big reason he keeps losing money on selling cars is that by the time the previous car starts making a profit, he's already already started selling the next one at greater volume, creating new loss that drowns the fresh profit from that previous car.
    - somerandomness 7y ago
      That was true with model S but not with model 3. The latter is the main product, bread and butter, whose purpose is not funding other future products.
- deleted 7y ago
  [deleted]
SmileyRedBall 7y ago
Would being continously shorted by Wall Street have anything to do with this? For example, take yet another short position in Tesla and then trash it in the financial press, like this article is doing. It is curious that since 2013 Tesla sales have jumped from approx 20,000 per year to approx 30,000 per month and yet the stock price hasn't shown an equivalent increase. If I were of a cynical nature I would suspect the rest of the US car industry (what's left of it) of punishing Musk for being sucessfull. Despite this, an increase of 1,889 percent on an initial investment in the IPO in 2010 is not too bad.
- AndrewBissell 7y ago
  The financial press has gone very easy on Tesla & Musk. They will routinely write "Elon Musk says" articles which are little more than stenographic regurgitation of some statement by Musk or Tesla. Longs and Tesla touts like Ron Baron, Cathie Wood, Gene Munster, and even the utterly inexperienced Galileo Russell are routinely given long CNBC segments to hold forth with their bullish theses. And even if it can temporarily push the stock price one direction or another, press coverage has little to nothing to do with their audited financial results. Netflix attracted a ton of short interest back when the stock was around $100. Somehow that didn't, in and of itself, hold back the company at all. > It is curious that since 2013 Tesla sales have jumped from approx 20,000 per year to approx 30,000 per month and yet the stock price hasn't shown an equivalent increase. Yes, it's almost as though the company has a complete lack of operating leverage and is losing more money the more cars it sells.
- jkachmar 7y ago
  > It is curious that since 2013 Tesla sales have jumped from approx 20,000 per year to approx 30,000 per month and yet the stock price hasn't shown an equivalent increase. For the Nth time that this conversation has to be had on the internet: That’s Not How The Market Works. Tesla’s stock has been _very_ optimistically valued for quite some time because the market collectively determined that the company was likely to do very well. If a company does well and that performance isn’t surprising then there wasn’t an inefficiency and the market doesn’t need to correct for it. Likewise, if a collection of market participants believes that Tesla’s valuation is overly optimistic then the can short the company. In doing so, they will be incentivized to show evidence that the valuation isn’t realistic and hopefully validate their short position. There is an argument to be had over which incentives may or may not be good for society here, but that is completely orthogonal to the discussion of market valuation and short/long positions.
cellular 7y ago
At least it's doing better than my kickstarter: https://www.kickstarter.com/projects/poly-wants-a-cracker/poly-wants-a-cracker-robot-controller-for-bricks https://www.kickstarter.com/projects/poly-wants-a-cracker/po...
mikewarot 7y ago
Consider this: Every day that Tesla, and the electric car/solar future is delayed, is another $5 Billion of revenue for the oil and gas industry. There is a strong incentive to spread every possible bad news item about Tesla for all the people in that industry which comprises 2-3 percent of the world's GDP.
- csb6 7y ago
  Or maybe - just maybe - Tesla is actually a poorly run business that objectively has seen a dip over time in stock price and tremendously wasteful spending (see nearly empty Buffalo gigafactory or the highly automated assembly line for Model 3’s that was abandoned after who knows how many tens of millions spent on it). I agree that corporations have undue influence on media, but come on. Tesla isn’t making their critics’ jobs very hard. Reporting the truth sounds pretty bad already. But sure, maybe it is all a conspiracy by clandestine cells of writers recruited by Big Oil. And they’re doing a great job, since multiple electric vehicles are coming to market more and more each year across all brands.
  - deleted 7y ago
    [deleted]
- corodra 7y ago
  You know, I read that and went "No they don't. That's not possible. That industry doesn't make that much in a day." And I was right, it's actually ~$239 billion a day. Like... wow. And even that, by other sources is considered a low estimate. So yea. You're wrong. But... yea...

19 points by AndrewBissell 7y ago

mcv 7y ago

I'd like to know how these numbers compare to Amazon's early years. Amazon also took forever before it made a profit. As the article points out, Tesla has been expanding enormously. As long as there is demand for their cars (and it seems there is), I don't see why it would start making a profit once the company focuses on profit rather than expansion.

somerandomness 7y ago
There's a difference in not having a profit due to (a) reinvestment; (b) poor unit economics. (a) is much less worrying for an investor, e.g. Amazon (b) suggests a bad business model, e.g. Uber/Lyft, Tesla
- jmpman 7y ago
  Is it possible that Tesla is driving down the cost curve faster than any other electric vehicle manufacturer, and once they hit a tipping point, they will disrupt the entire automotive industry and be worth 10x their current price? I may not believe Musk’s self driving car vision is attainable in the gritty real world in under 10 years, so I’ll discount that... but driving down battery cost, while making a better electric vehicle than Audi/Mercedes/Porsche.. that’s exciting.
- mcv 7y ago
  But Tesla is reinvesting a lot. And it's growing the market for electric cars, setting up infrastructure, etc. He might be selling at a loss initially in order to create the volume that will eventually drive down the cost so he can generate a profit. From what I understand, the big reason he keeps losing money on selling cars is that by the time the previous car starts making a profit, he's already already started selling the next one at greater volume, creating new loss that drowns the fresh profit from that previous car.
  - somerandomness 7y ago
    That was true with model S but not with model 3. The latter is the main product, bread and butter, whose purpose is not funding other future products.
deleted 7y ago
[deleted]

SmileyRedBall 7y ago

Would being continously shorted by Wall Street have anything to do with this? For example, take yet another short position in Tesla and then trash it in the financial press, like this article is doing. It is curious that since 2013 Tesla sales have jumped from approx 20,000 per year to approx 30,000 per month and yet the stock price hasn't shown an equivalent increase. If I were of a cynical nature I would suspect the rest of the US car industry (what's left of it) of punishing Musk for being sucessfull. Despite this, an increase of 1,889 percent on an initial investment in the IPO in 2010 is not too bad.

AndrewBissell 7y ago
The financial press has gone very easy on Tesla & Musk. They will routinely write "Elon Musk says" articles which are little more than stenographic regurgitation of some statement by Musk or Tesla. Longs and Tesla touts like Ron Baron, Cathie Wood, Gene Munster, and even the utterly inexperienced Galileo Russell are routinely given long CNBC segments to hold forth with their bullish theses. And even if it can temporarily push the stock price one direction or another, press coverage has little to nothing to do with their audited financial results. Netflix attracted a ton of short interest back when the stock was around $100. Somehow that didn't, in and of itself, hold back the company at all. > It is curious that since 2013 Tesla sales have jumped from approx 20,000 per year to approx 30,000 per month and yet the stock price hasn't shown an equivalent increase. Yes, it's almost as though the company has a complete lack of operating leverage and is losing more money the more cars it sells.
jkachmar 7y ago
> It is curious that since 2013 Tesla sales have jumped from approx 20,000 per year to approx 30,000 per month and yet the stock price hasn't shown an equivalent increase. For the Nth time that this conversation has to be had on the internet: That’s Not How The Market Works. Tesla’s stock has been _very_ optimistically valued for quite some time because the market collectively determined that the company was likely to do very well. If a company does well and that performance isn’t surprising then there wasn’t an inefficiency and the market doesn’t need to correct for it. Likewise, if a collection of market participants believes that Tesla’s valuation is overly optimistic then the can short the company. In doing so, they will be incentivized to show evidence that the valuation isn’t realistic and hopefully validate their short position. There is an argument to be had over which incentives may or may not be good for society here, but that is completely orthogonal to the discussion of market valuation and short/long positions.

cellular 7y ago

At least it's doing better than my kickstarter: https://www.kickstarter.com/projects/poly-wants-a-cracker/poly-wants-a-cracker-robot-controller-for-bricks https://www.kickstarter.com/projects/poly-wants-a-cracker/po...

mikewarot 7y ago

Consider this: Every day that Tesla, and the electric car/solar future is delayed, is another $5 Billion of revenue for the oil and gas industry. There is a strong incentive to spread every possible bad news item about Tesla for all the people in that industry which comprises 2-3 percent of the world's GDP.

csb6 7y ago
Or maybe - just maybe - Tesla is actually a poorly run business that objectively has seen a dip over time in stock price and tremendously wasteful spending (see nearly empty Buffalo gigafactory or the highly automated assembly line for Model 3’s that was abandoned after who knows how many tens of millions spent on it). I agree that corporations have undue influence on media, but come on. Tesla isn’t making their critics’ jobs very hard. Reporting the truth sounds pretty bad already. But sure, maybe it is all a conspiracy by clandestine cells of writers recruited by Big Oil. And they’re doing a great job, since multiple electric vehicles are coming to market more and more each year across all brands.
- deleted 7y ago
  [deleted]
corodra 7y ago
You know, I read that and went "No they don't. That's not possible. That industry doesn't make that much in a day." And I was right, it's actually ~$239 billion a day. Like... wow. And even that, by other sources is considered a low estimate. So yea. You're wrong. But... yea...