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I've never been one of the tin foil hat $TSLA bears but can't help but notice odd things surrounding Tesla that appear highly questionable. e.g. Elon has tweet

by tempsy 7y ago

I've never been one of the tin foil hat $TSLA bears but can't help but notice odd things surrounding Tesla that appear highly questionable. e.g. Elon has tweeted the Cybertruck has 250k+ pre-orders and counting. The pre-order deposit is only $100 (vs. $1000 when the Tesla 3 came out). The fact the deposit is only $100 for a $50k+ truck makes me question whether they intentionally set it at a low price to pump pre-order numbers, knowing full well that in 2 years time the majority of these people will likely not actually purchase the truck at all. And at 250k preorders it means Tesla has raised at least $25M in interest-free loans that they can do whatever with for the 2 years. More than that they have no clear idea on how to scale production of this vehicle at present time, and considering how many Tesla 3 owners have complained about defects with a "standard" Tesla why would anyone believe that Tesla can produce high quality Cybertrucks at scale in a reasonable amount of time to fulfill legitimate preorders?

aerovistae 7y ago
Funny you sure sound like one of the tinfoil bears.
- tempsy 7y ago
  Objectively how does a $100 deposit for a $50k good to be delivered in 2+ years make logical sense? And does anyone actual think that most of these 250k people actually intend to buy the truck when it comes time to put down the $49900+?
  - cagenut 7y ago
    don't think of it as a deposit, think of it as reserving your place in line. whenever tesla gets around to being able to deliver you have to make up your mind, but at least you know you won't have to wait at the back of the line if you decide you do want it. its an option not a deposit. tesla obviously doesn't expect them all to convert, in fact they have their internal numbers on how well the model3 reservations converted so they can make a much more accurate estimate than either you or I. tell me a marketing department for a product that can't be shipped for 2 years that wouldn't kill for a list of not just warm leads, but people who had out and out handed over money! its like they managed to get the customers to pay for the marketing budget.
    - tempsy 7y ago
      Model 3 was a $1000 deposit. They dropped it to $100 for the Cybertruck despite it being more expensive. So they expect to convert fewer people than the Model 3. Likely far fewer. So if Elon knows few people will convert then why call it a "pre order" and why does he keep announcing the numbers on Twitter every few hours? Either way despite the frothy market investors don't appear to be biting at the preorder numbers anyway, but the whole preorder song and dance feels like the world's biggest Kickstarter whose main function is raising a bunch of interest free loans.
    - mdszy 7y ago
      They're still referring to them as "orders" regardless as to whether you define them as such or not.
      - greglindahl 7y ago
        The contract involved is public, so maybe the exact words used to summarize it isn't that important? There was a lot of squabbling over the words used to summarize the Model S, X, and 3 waiting lists, too. I don't think anything good came out of the discussion.
  - Nasrudith 7y ago
    You answered your own question with your previous objections you know. You complained about the supposed lack of capacity factor - now you complain about the distance of the preorder? Well that shows the utility of the preorder with lower production capacity, doesn't it? A $100 deposit is large enough that people wouldn't feel overtly locked in while confirming a rough number for scaling. As opposed to other "probably want it" who decide not to preorder for $1000. The function is mostly marketting in the "business intelligence" sense and the assumption that preorder fall throughs would be matched by non-preorder purchase demand is reasonable for anything which isn't a massive stinker.
    - tempsy 7y ago
      this is quite the mental gymnastics. this is a brand new vehicle that is unlike anything they've offered in the past. they have historical data on conversion for the Tesla 3 preorders with a $1000 deposit. now they're offering preorders on something that is more expensive and "unique" for 1/10th the preorder amount. how would a business intelligence analyst on their team even begin to predict how many of these customers actually intend to convert given the data they have? If they actually wanted a rough idea on how many people actually intend to order in order to plan how many resources they need to throw at cybertruck production then they've done everything possible to make their job harder with the preorder decisions they've made.
- hef19898 7y ago
  I think a lot of that perceived tin-foil-hat-bear thing comes from the way you look at Tesla. If you look at it the way I, and I suppose the OP does, as a car manufacturer, in deed a lot of things seem odd. Odd enough to be bearish. If you look at Tesla as a tech company, things are largely different.
mjamesaustin 7y ago
Tesla's revenue last quarter was $6.3 billion, so this amazing $25M interest-free loan is the same amount Tesla earns on average in just under 9 hours. There could be any number of reasons why Tesla lowered the deposit amount. Either way, the purpose of a preorder is likely to gauge demand and not to guarantee sales. Of course the conversion rate won't be 100%, but 250k deposits is a much more promising signal to Tesla than 100k or 25k.
- tempsy 7y ago
  Your revenue figures have little to do with whether a loan is useful to you. They have very few quarters in their history as a public company where they have had positive earnings, which means they are burning cash.
  - robbiep 7y ago
    They don’t have a huge number of quarters as a public company (well, they’re 16 years old), and for most of their history they have been in Startup mode. If most people on this forum’s startups went to cash positive in 14 years (which is basically how long it took them to get a positive quarter, and the balance for the last 8 has basically been 50:50) then I’m pretty sure everyone would be cheering
  - mlindner 7y ago
    Yes their cash burn is approximately the same as their revenue. So again, $25 million is pretty irrelevant.
  - zaroth 7y ago
    You can read their financial statements if you’d like to comment on their financial position. The pre-order deposits are not recognized as revenue and do not improve their cash flow. But in any case, Tesla has had ~$1B of positive cash flow over the last two quarters and has over $5 billion of cash on hand. The $100 deposit is definitely designed to inflate the pre-order numbers versus the $2,500 Model Y deposit, for example. I think reading into the 250k pre-orders is extremely difficult. But the refundable cash itself will sit in escrow earning approximately nothing for Tesla other than the marketing value of the pre-order count.
spectrum1234 7y ago
The deposit used to be $1k because they were short on cash. Now they are not. What is better than cash if you don't need it? An accurate predictor of demand. This is likely what the small $100 deposit is for.

by tempsy 7y ago

aerovistae 7y ago

Funny you sure sound like one of the tinfoil bears.

tempsy 7y ago
Objectively how does a $100 deposit for a $50k good to be delivered in 2+ years make logical sense? And does anyone actual think that most of these 250k people actually intend to buy the truck when it comes time to put down the $49900+?
- cagenut 7y ago
  don't think of it as a deposit, think of it as reserving your place in line. whenever tesla gets around to being able to deliver you have to make up your mind, but at least you know you won't have to wait at the back of the line if you decide you do want it. its an option not a deposit. tesla obviously doesn't expect them all to convert, in fact they have their internal numbers on how well the model3 reservations converted so they can make a much more accurate estimate than either you or I. tell me a marketing department for a product that can't be shipped for 2 years that wouldn't kill for a list of not just warm leads, but people who had out and out handed over money! its like they managed to get the customers to pay for the marketing budget.
  - tempsy 7y ago
    Model 3 was a $1000 deposit. They dropped it to $100 for the Cybertruck despite it being more expensive. So they expect to convert fewer people than the Model 3. Likely far fewer. So if Elon knows few people will convert then why call it a "pre order" and why does he keep announcing the numbers on Twitter every few hours? Either way despite the frothy market investors don't appear to be biting at the preorder numbers anyway, but the whole preorder song and dance feels like the world's biggest Kickstarter whose main function is raising a bunch of interest free loans.
  - mdszy 7y ago
    They're still referring to them as "orders" regardless as to whether you define them as such or not.
    - greglindahl 7y ago
      The contract involved is public, so maybe the exact words used to summarize it isn't that important? There was a lot of squabbling over the words used to summarize the Model S, X, and 3 waiting lists, too. I don't think anything good came out of the discussion.
- Nasrudith 7y ago
  You answered your own question with your previous objections you know. You complained about the supposed lack of capacity factor - now you complain about the distance of the preorder? Well that shows the utility of the preorder with lower production capacity, doesn't it? A $100 deposit is large enough that people wouldn't feel overtly locked in while confirming a rough number for scaling. As opposed to other "probably want it" who decide not to preorder for $1000. The function is mostly marketting in the "business intelligence" sense and the assumption that preorder fall throughs would be matched by non-preorder purchase demand is reasonable for anything which isn't a massive stinker.
  - tempsy 7y ago
    this is quite the mental gymnastics. this is a brand new vehicle that is unlike anything they've offered in the past. they have historical data on conversion for the Tesla 3 preorders with a $1000 deposit. now they're offering preorders on something that is more expensive and "unique" for 1/10th the preorder amount. how would a business intelligence analyst on their team even begin to predict how many of these customers actually intend to convert given the data they have? If they actually wanted a rough idea on how many people actually intend to order in order to plan how many resources they need to throw at cybertruck production then they've done everything possible to make their job harder with the preorder decisions they've made.
hef19898 7y ago
I think a lot of that perceived tin-foil-hat-bear thing comes from the way you look at Tesla. If you look at it the way I, and I suppose the OP does, as a car manufacturer, in deed a lot of things seem odd. Odd enough to be bearish. If you look at Tesla as a tech company, things are largely different.

mjamesaustin 7y ago

Tesla's revenue last quarter was $6.3 billion, so this amazing $25M interest-free loan is the same amount Tesla earns on average in just under 9 hours. There could be any number of reasons why Tesla lowered the deposit amount. Either way, the purpose of a preorder is likely to gauge demand and not to guarantee sales. Of course the conversion rate won't be 100%, but 250k deposits is a much more promising signal to Tesla than 100k or 25k.

tempsy 7y ago
Your revenue figures have little to do with whether a loan is useful to you. They have very few quarters in their history as a public company where they have had positive earnings, which means they are burning cash.
- robbiep 7y ago
  They don’t have a huge number of quarters as a public company (well, they’re 16 years old), and for most of their history they have been in Startup mode. If most people on this forum’s startups went to cash positive in 14 years (which is basically how long it took them to get a positive quarter, and the balance for the last 8 has basically been 50:50) then I’m pretty sure everyone would be cheering
- mlindner 7y ago
  Yes their cash burn is approximately the same as their revenue. So again, $25 million is pretty irrelevant.
- zaroth 7y ago
  You can read their financial statements if you’d like to comment on their financial position. The pre-order deposits are not recognized as revenue and do not improve their cash flow. But in any case, Tesla has had ~$1B of positive cash flow over the last two quarters and has over $5 billion of cash on hand. The $100 deposit is definitely designed to inflate the pre-order numbers versus the $2,500 Model Y deposit, for example. I think reading into the 250k pre-orders is extremely difficult. But the refundable cash itself will sit in escrow earning approximately nothing for Tesla other than the marketing value of the pre-order count.

spectrum1234 7y ago

The deposit used to be $1k because they were short on cash. Now they are not. What is better than cash if you don't need it? An accurate predictor of demand. This is likely what the small $100 deposit is for.