15 ms·
“China's Tesla” NIO slashes thousands of jobs as losses mount
- baybal2 7y agoI once wrote about them here. I questioned their rationale of trying to "beat" Tesla when Tesla itself was deep in red. Were they took the enormous amount amount of money they got from investors, and put it into making electric Suzuki Alto lookalikes, they would've been bathing in cash now. But no, those guys not only did not recognise Tesla's failure, but they doubled down on it, and ran a car company as if it was some Internet dotcom.
- nickik 7y agoTesla has not failed and is clearly not a failure.
- rainyMammoth 7y agoLet's wait a couple more quarters before being able to say it is clearly not a failure. The only reason they are still alive is the hype around Elon Musk.
- toomuchtodo 7y agoI wouldn’t discount hundreds of millions of dollars in free cash flow. They have a product that is in heavy demand. I’ve been hearing about the death of Tesla for almost 10 years. It’s getting old.
- rapsey 7y agoI mean don’t they still make a loss on every car. They have been alive for the duration of the stock market bull run. being sceptical of their chances in a recession is normal.
- jurmous 7y agoThe cars are not produced at a loss. Each car is profit. The negative cash flow is created by investing heavily in factory expansion like the model 3/Y production line and the record time construction of gigafactory 3. More about profit margins in second quarter report. It seems it is currently 19% per car. https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-696a7c517959 https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-69...
- gamblor956 7y agoThe cars are not produced at a loss. Each car is profit. Only under magical unicorn fantasy accounting. Under the same accounting standards every other car maker uses (GAAP), Tesla still loses money on each car. From Tesla's own financial report: "excluding regulatory credit revenue, automotive gross margin improved by ~200bp (compared to a decrease of 125bp on a GAAP basis). [emphasis added]
- bryanlarsen 7y ago"Fantasy" number is 19% gross margin. GAAP number is 15% gross margin. Still positive.
- deleted 7y ago[deleted]
- danhak 7y agoTotally false on both counts. 1) Tesla's GAAP gross margin was (positive) 14.5% for the most recent quarter [https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-696a7c517959 https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-69...] 2) Breaking out GAAP and non-GAAP figures is totally standard and commonplace among publicly traded companies. Take a look at Ford's Q2 letter, for example, which has a whole page describing why they use Non-GAAP financial measures to supplement GAAP figures [https://s22.q4cdn.com/857684434/files/doc_financials/2019/q2/updated/2Q19-Financial-Release.pdf https://s22.q4cdn.com/857684434/files/doc_financials/2019/q2...]
- 7y ago
- dmode 7y agoI have been waiting for Tesla’s failure for 10 years. Tesla naysayers have been asking us to wait for couple of quarters for a decade now
- nickik 7y agoThe person was makeing a factually false statment. I corrected it. What your opinion about the future of the company is doesn't matter about what current situation is. People have been saying Tesla will fail 'soon' for a long time. Once they actually do fail, then we can say they have failed. Before then its just personal opinions.
- option 7y agopeople wait in lines and put deposits to buy Tesla’s product
- Robotbeat 7y agoI don't know why you're down-voted. Tesla's brand is super valuable; their electric car tech (particularly their efficiency and energy density and charging technology--not just raw rate, but the form factor of their charging tech) is heads above their competitors. If they ran into serious trouble, someone would buy them up so hard. Electric cars (heck, automotive manufacturing in general) are a tough business. Tesla is now competing at a (soon) $7500 disadvantage in the US compared to most of their competitors due to the phase out of the EV credit. Gas prices are incredibly, ridiculously low. And yet they're still in very high demand, outselling everyone else in the US in raw unit sales and globally in revenue. That's no guarantee that things couldn't get worse, but Tesla has outlived many of its detractors before, and it's not just because of Elon Musk.
- rainyMammoth 7y agoSorry but WHAT? That's not how it works. The 7500$ is a huge advantage for Tesla today that was pushed through a lot of lobbying. It literally means that everyone's tax money is subsidizing luxury cars for the rich. Once this gets phased out, they will have to compete with regular prices against normal car and their high price point will make it way less attractive. It is true that soon competitors will still get the 7500$ tax cut while Tesla exhausted theirs. That's simply because they use all their credits and now need to come to a price point that makes sense without subsidies.
- Robotbeat 7y agoIt IS how it works. The $7500 credit is all but completely phased out already for Tesla (it's only $1,875 right now). And yet they're STILL outcompeting the other Plug-in electric cars in the US by a large margin (13,150 Model 3s in August versus 2500 Prius Prime, the next most-sold plug-in vehicle). That is my point. It's an advantage to conventional carmakers who wait to the last minute to invest in electrification, after someone else has done all the hard work, and just integrate some off the shelf electric drivetrain. It puts those who actually invest in a full, cleansheet efficient electric drivetrain domestically in the US (like Tesla and GM) at a big disadvantage versus foreign firms or for multinational corporations like the Volkswagen group who have multiple subsidiaries like Audi, VW, Porsche who each get their own group of credits (even though the Volkswagen Group's MEB platform will be available to all their subsidiaries). It makes no sense and incentivizes the wrong behavior: advantages foreign firms above domestic. Advantages latecomers over those with the foresight to invest early (Tesla and GM, for example). There either should be one big pot of credits, or the credits should be sunsetted on a global timeline (instead of by number). And until conventional cars are paying for their full externalities from carbon emissions (and others), they are being implicitly subsidized and an EV credit of some sort (although imperfect) will be needed to level the playing field.
- SuoDuanDao 7y ago>The only reason they are still alive is the hype around Elon Musk. The same was true of Apple and Steve Jobs, once upon a time.
- sixQuarks 7y agoPeople that think Tesla is a failure at this point are classified in the same category as anti-vaxxers and flat-earthers in my opinion. That being said, Tesla has shown how difficult it is to start a successful car manufacturing company. Elon says it's way harder than SpaceX. Let that sink in for a minute. Tesla's long-term success is not guaranteed, but even if they fail long-term, they're a success in my book. They literally built a better vehicle and have ignited other manufacturers to go electric. When I see the difficulties Tesla had in ramping up large-scale manufacturing, I really don't see how companies like Rivian and NIO are going to make it. The only way is if they stay as a small boutique manufacturer.
- magashna 7y agoI think one of the best things they did was make electric cars cool. For so long Prius had the rep of a dorky car for hippies.
- merpnderp 7y agoI'm not so sure this latest battery innovation hasn't guaranteed their success. As I'd happily pay their premium for an ultra safe car and my only real concern, battery life, completely alleviated. A battery that outlives the frame will market itself. The safety, cheap operation, and less stressful augmented driving are just frosting at that point.
- jason0597 7y ago>but even if they fail long-term, they're a success in my book. >People that think Tesla is a failure at this point are classified in the same category as anti-vaxxers and flat-earthers in my opinion. Some people don't have the same definitions for words as you do, so you can't put them in the same category as flat-earthers.
- mdorazio 7y agoHonestly, players like Rivian and NIO shouldn't try to manufacture their own cars - they should contract that out to someone who knows what they're doing and already has the capital invested in production tooling (ex. Magna). Rivian/NIO & co. are best suited to design and engineering until they reach a market threshold where it actually makes sense to spin up a dedicated factory.
- neogodless 7y agoI think Tesla is making the best electric cars you can buy, although they are still a little too expensive for the mainstream. But as a company, they still have to find a way to make money, and that is not a given at this point. https://qz.com/1674199/teslas-losses-are-piling-up-despite-record-sales/ https://qz.com/1674199/teslas-losses-are-piling-up-despite-r... You cannot say they have failed, because they haven't yet closed the doors. But I don't see how they are "clearly not a failure" if you include "profitable business" in their list of goals.
- natch 7y agoA $40k Tesla is on equal footing with a $25k ICE car in terms of TCO so I’m not sure why you think they are still expensive. They have come down a lot. And many people who walk onto a car sales lot with $25k in mind end up getting talked into a $35k car, so with all the savings Tesla really can be the cheaper option. With Tesla if you get talked into the $50k+ stealth performance you’re still on equal footing with the $35k car until you add future self driving.
- ndiscussion 7y agoWhere can I find a breakdown of the TCO like this? Is there any source? I would think that Tesla TCO would be through the roof once the cars start aging. It's one thing to have the dealership fix every little thing under warranty - quite another to pay $5,000 to have your sunroof fixed because it requires a special encryption chip.
- neogodless 7y ago
- gibolt 7y agoIt seems to me like China wants the electric car manufacturing revolution to mainly be under their control/borders. My guess is that the reason they allowed Tesla so willingly is that Nio and other local companies had already started crashing hard and BYD with their tiny battery packs were unlikely to drive sufficient adoption, especially for export. The only way to grab the market was to lure in the best and drive more internal competition.
- natch 7y agoMakes sense. I think there’s also a bit of the killer being killed by Tesla here, because people want Teslas more.
- d2161 7y agoYeah maybe. Pretty sure Nio will tank though. Building car owner club houses despite their losses is weird. I don't understand why they don't spend money on improving their product.
- toinetoine 7y agoBYD with their tiny battery packs My friend bought a BYD sedan last year for 100k RMB ($15k) and it gets ~300km per charge.
- ivalm 7y ago186 miles is not a lot... model 3 is 220-325 depending on config.
- josefresco 7y agoFor $15K?!? Let's compare apples to apples.
- radiorental 7y agoApples to apples here. My '16 leaf was 15K after generous incentives and it only gets 120 miles on a very good day.
- ivankolev 7y agoSomewhat tangential, I just visited a Polestar 2 booth set-up downtown Toronto, it's designed by Volvo but will be manufactured in China, it is really impressive vehicle, both looks and specs.
- cpursley 7y agoWhile I agree the Polestars are neat from a performance perspective, Volvos are some of the most unreliable vehicles that you can buy. But Luxury && Performance != Quality.
- skyyler 7y agoIs this an opinion or is your position supported by evidence? The only thing I think of when I hear "Volvo" is safety. Not luxury, not performance, not quality, not reliability, not anything but safety. I would be very surprised if they were less reliable than most sports cars.
- neogodless 7y agohttps://www.businessinsider.com/car-brands-least-reliable-2018-2018-10 https://www.businessinsider.com/car-brands-least-reliable-20... This is just one data point, sourced from Consumer Reports. They put Volvo last behind Cadillac and Tesla. Then I look here... https://www.jdpower.com/Cars/Ratings https://www.jdpower.com/Cars/Ratings And Cadillac is on top. But I'd personally trust Consumer Reports over JD Power.
- djd20 7y ago"Consumer Reports said multiple Volvo vehicles, including the XC60 and XC90 SUVs and the S90 sedan, were reported to have issues with their display screens and infotainment systems, including freezes and a failure to display. The publication said issues had also been reported with the XC60's climate system along with rattles inside its cabin, while the S90 also had problems reported relating to engine knocking or pinging. Of the three Volvo models it analyzed, Consumer Reports rated the XC60 as Volvo's most reliable vehicle and the S90 as the brand's least reliable vehicle." Really? The infotainment system makes it rank low? edit: and looking at the _actual_ report https://www.consumerreports.org/car-reliability-owner-satisfaction/10-least-reliable-cars/ https://www.consumerreports.org/car-reliability-owner-satisf... - no volvo's on the list?
- Leary 7y agoIt took Tesla 16 years to become profitable, does Nio have enough cash to last another 12?
- DSingularity 7y agoDo you mean does China have enough cash?
- objektif 7y agoThat is also questionable these days with trade wars and China slow down, not sure even the communist party is willing to fund such companies.
- seppin 7y agoThe entire Belt and Road is not profitable. Most of their "investments" are deep underwater with no signs of turning around.
- contingencies 7y agoB&R is cheap and smart vs. US military expenditure.
- seppin 7y agoUS military expenditure buys weapons from US companies at market rates. B&R is a set of buyoffs and boondoggles that will never see any kind of return, and the political benefit is questionable. edit read your bio, so you're 100% bought in and ready to defend China in every way? How do you feel about their concentration camps? Not your problem?
- contingencies 7y agoSigh. Straw man. Actually I'm a student of ancient history and have many concerns about China, but love living here as it's a fascinating place and a great environment for hardware technology development, macro-level progressive, plus if you place any credence in Musk a glimpse of the future. The point is, if you look at any long living empire, saber-rattling doesn't expand as fast or leave the same legacy as cultural expansion and integration. China's got the upper hand there. One should view B&R as a diplomatic move toward influence expansion. Whereas, I've read that US's stated goal is to be viewed as an irrational military actor as a 'force multiplier', with rapid global military strike capability. US imprisons a huge percentage of its population, China just shoot them. Neither are great options. Of course, if the world were to adopt a scientifically supported penal strategy of rehab like Scandinavia, we could be happy little capers on one big open sandwich. Then get eaten. I really think China is the future, very impressive. - Elon Musk (2019)
- sremani 7y agoChina has around 25 electric car manufacturers not too unlike Detroit in its hay-day in 1920s. Sooner or later many will crash and burn and some merge to become bigger players. Long story short, industries with heavy CapEx sooner or later end up being handful of players. BYD buses and ABQ rapid transit saga is an interesting one. Most of the Chinese electrics are not up to the snuff and so Albuquerque decided not to order any new buses and send back the ones delivered.
- duxup 7y agoYeah there are some good articles noting how many manufacturers there are and they basically expect a large % to fall by the wayside dude to being behind with tech, funding, connections, etc. My understanding is there are maybe a handful at most that investors and analysts think have nearly enough of what is needed to make a good longer term run at it.
- gamblor956 7y agoSame with LA Metro's BYD order. Their buses are some of the newest in the fleet but have the same quantity and severity of maintenance issues as the oldest operational buses in the fleet.
- lukasm 7y agoThey should have ordered Solaris instead of BYD. My city was considering BYD but they were handling low temperature well.
- reaperducer 7y agoSadly, the people in ABQ I know blame their city government for this fiasco, and not the manufacturer. They're still sore about the empty bus-only lanes running down some main streets that were built for this.
- Avshalom 7y agoto be fair the buses are/were just one in a long line ART fiascos
- akhilcacharya 7y agoHas an "X" Killer company or product ever actually Killed X?
- rnhmjoj 7y agoMozilla comes to mind.
- Miraste 7y agoWhat has Mozilla ever killed? If you're about to say Internet Explorer--Google did that.
- deleted 7y ago[deleted]
- Apocryphon 7y agoBlackberry, iPhone
- akhilcacharya 7y agoI heard the idea that the Blackberry devices circa 2008 were iPhone killers more than the other way around
- yalogin 7y agoWell the problem with cars is they cost a lot to make and the leeway for do overs is very less. China can co-opt IP but getting things right is very different with cars compared to consumer electronics, where they can iterate and improve.
- xvector 7y agoI am convinced that everyone prefixing headlines with "China's Tesla" is trying to short Tesla.
- navigatesol 7y agoYes, everyone criticizing the company is a short seller making up lies to earn a few bucks. The lawsuits, fraudulent buyouts, sketchy accounting, executive overturn, ridiculous promises, lousy financials... It's all made up. A giant conspiracy of short sellers.
- xvector 7y agoYou deliberately misinterpreted me. Criticizing Tesla or NIO is fine. Using headlines like this is intentionally misleading, carefully crafted to get ROI when the news hits the public (and when it hits the bots). Tesla stock is down almost 8% today. Wonder why?
- dayaz36 7y ago"China's Tesla" IS Tesla