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Toyota president: Tesla has 'not created a real business in the real world yet'

17 points by mbaytas 6y ago

allears 6y ago
Tesla is awfully profitable for not being a "real business."
- chmaynard 6y ago
  Equity and profits are different. Tesla has a huge pile of investor money to play with, but are their various business units actually profitable?
  - AtlasBarfed 6y ago
    Third party analysis/teardown of Tesla cars has predicted solid margins for 5+ years now, and there are still a decade of significant year-on-year improvements coming in the pipeline. If Tesla achieves the promise of battery investor day (which really is the average year-on-year double-digit cost improvement in batteries that has been going on in the industry), and does the same with its unibody molding and other components in a vertically integrated market, Tesla will do really well.
- smt88 6y ago
  Quarterly profitability isn't important if your company overall hasn't become profitable yet. If you got $100B in investment and profit $1B every quarter, that's not great. Disclaimer: don't know actual numbers for Tesla and not in a position to look them up right this second.
- thedrbrian 6y ago
  Take the carbon credits out and they’re back in the red https://insideevs.com/news/438345/tesla-428-million-carbon-credits-q2-2020/ https://insideevs.com/news/438345/tesla-428-million-carbon-c...
  - deleted 6y ago
    [deleted]
  - Benmcdonald__ 6y ago
    Take out the fact no companies pay for their CO2 pollution and the world is in the red
  - aeternum 6y ago
    Just cancel one of their expansion gigafactories and they're back in the green.
mtgx 6y ago
Reminds me of Nokia laughing at Apple's 1% smartphone market share in 2008. To me it was obvious the moment I saw a review of the iPhone on YouTube after launch that everything else was just made obsolete. It didn't matter how many more phones all the other companies were selling compared to Apple - they were all about to become obsolete. It took Blackberry like another 4-5 years to realize this, too, because they were still seeing a lot of growth in other countries where the iPhone and Android devices weren't selling yet or people hadn't heard much about them.
chris5745 6y ago
I want a small, economic, non-flashy electric car for daily commuting. I don’t need the self driving feature or any other bells and whistles. Tesla doesn’t exactly fit that bill.
- Hasz 6y ago
  Chevrolet Bolt. 250 miles of range, can be had for <20k with a Costco membership.
- smt88 6y ago
  Tons of those available today. Nissan Leaf is under $10k used with time left on the battery warranty (or was in January). Hyundai Kona Electric is another.
  - dzhiurgis 6y ago
    Kona is an SUV and even Leaf is quite large by European city standards. If you are after something really small - Renault Zoe, Kia Niro and VW Up are small, but not super cheap yet.
    - chris5745 6y ago
      I’ll look into these. I live in the US suburbs on a bit of a budget, and there’s a sweet spot for pricing that IMO hasn’t quite happened yet with most EV. I think the number for me is $25k for a new base model with average range. I hope my next car will be an EV, but we’ll see.
      - smt88 6y ago
        With tax subsidies, many models are in that range now. if you don't have the income or the desire to take advantage of the tax subsidies yourself, you can still get them through very generous leasing programs that most manufacturers are offering for electric vehicles.
        6y ago
AtlasBarfed 6y ago
Japanese mega-corporations are notoriously conservative/slow to react. While they'll survive at a minimum due to JDM dominance, and it may be plausible to ignore Tesla due to low volume numbers, GM and Volkswagen are credibly sized companies with substantial lead times over Toyota. They've already blown their solid-state prediction for the Tokyo Olympics, Hydrogen is (at minimum) ten years from any significant consumer usage, and no EV vehicles of any technical significance aside from slapdash compliance vehicles. Seems like head-in-the-sand behavior.
leoh 6y ago
I hope Toyota wins this. They have sound manufacturing principles and have demonstrated them for decades and caused radical shifts in the way cars are made across the world — including in the US and in Europe. Much of what Western carmakers learned from them is articulated in the exceptional book "The Machine That Changed the World" — which Musk has almost certainly read, despite being written in 1990 (there are clear sections that seem to incredibly presciently predict Tesla's strategy — exceptional entertainment value in the car, self-driving capabilities, and electric engines). Toyota employs far more people, produces cars that are incredibly low-key yet functional, and is backed by robust teams that work incredibly well together, as opposed to Tesla, which is generally functioning okay, but operates largely at the whims of Musk, much as Ford did back in the day. Which works for a while, but is not a sustainable mode for innovation. Apple is a semi-notable exception to this rule, of course, so we'll see what happens. But again, rooting for Toyota.
- chmaynard 6y ago
  Back before the Model 3 was announced, I was hoping that Tesla and Toyota would form a partnership to build and service a mass-market EV. From a purely business point of view, I think this would have been a huge win for both companies. Despite the success of the Prius, Toyota made a decision to focus exclusively on fuel cell technology and wasted ten precious years. After Toyota lost that bet, Tesla's superior EV technology could have helped Toyota catch up with the competition. Tesla had no experience with the formidable supply chain and production issues involved in building high-quality cars on a large scale. This is one of Toyota's great strengths. Unfortunately, there seemed to be bad blood between Toyota and Tesla management. I suspect this may have prevented consideration of such a partnership.
  - bob29 6y ago
    There was a Toyota and Tesla partnership in 2010, producing a small number of RAV4 EVs, combining Tesla's battery pack and electric drivetain with Toyota's chassis. I haven't found many details outside of wikipedia, not sure the nature of the partnership. If it was about Toyota getting tax credits, Tesla testing an EV drivetrain without having to engineer an entire vehicle platform, or something else.
alblue 6y ago
I’ve been driving Toyota cars exclusively over the past 30 years. I’ve been driving a Prius for the last 18. I had really hoped that Toyota would come up with an electric only vehicle, but they’ve rolled out their hybrid drive train across their entire fleet now. They have a fuel cell vehicle which runs on hydrogen only, but there’s a small handful of stations in the UK which means it’s pointless. I now have an electric car in order which isn’t a Toyota and I don’t think I’m going back.
- 72deluxe 6y ago
  Out of interest, what electric car have you ordered? A VW ID3 or something? I was wondering about the ID3 because the batteries are built into the floor and seem to only have a 100k miles lifetime, which is nothing for a VW and will destroy the secondhand market in the name of "progress" and saving the environment (but with non recyclable battery tech to do so).
ericmay 6y ago
How many goal posts will they move before they realize Tesla is playing a different game?
Gravityloss 6y ago
It could have been Toyota but it seems it's going to be VW that's going to bring EV:s to the masses. Around here, a Tesla Model 3 costs 50,000, Hyundai Kona 45,000 and VW id3 40,000.
- dzhiurgis 6y ago
  Skoda's new SUV is around 35k euro or something like 23k less than Model Y. Of course it's not going to be as sexy, but most people don't care.
BluePen8 6y ago
I think his words are being mischaracterized here a bit, he admitted they are having success, but is simply taking issue with their absurd valuation relative to their actual success. That being said, given Toyota's tendency to shy away from innovation lately I can see why he's getting flak. He should be, and not just because of Tesla. I'm a diehard Toyota fanboy, because I believe in things being built to last. It's good for the environment, and good for consumers. Nothing frustrates me more cars designed to last only as long as the warranty or lease term. I had a BMW 3 series that I loved driving which broke down far more than a non-performance variant had any right to, so the Lexus equivalent I bought afterwards was a welcome change that I've loved driving ever since. But Toyota has hidden behind their "reliability" moniker for so long, their offerings aren't really competitive in any segments anymore. For pickup trucks, both the Tundra and Tacoma have weak inefficient engines, with the Tacoma having a dog of a transmission. For luxury sedans, Lexus has no performance variants anymore, and their mid-performance variants have fallen woefully behind the competition (the 2021 IS350 has gained 5hp since it's debut in 2006). My wife wants an EV so her next car is looking to be a BMW i3 (despite how much I swore I'd never buy another), and I want a reliable performance car so it seems like my next car will be a used Porsche (with maybe a mid-step at an IS-F, a car Lexus hasn't produced since 2014). They haven't just missed the boat on EVs, their ICEs are falling terribly behind as well, what are they doing over there? Reliability doesn't matter if you're not producing anything people want.
ch_sm 6y ago
„PC guys are not just going to walk in“ etc.
remir 6y ago
Tesla's business is not just selling cars; it's their mission to "accelerate the world's transition to sustainable energy". That is why they're successful. That's why they invest in R&D for battery tech, solar panels, software. It's all about the mission, in the end. Tesla made the electric car desirable to the masses. That is no small feat. Toyota could have done it years or even decades ago, but they didn't. Other traditional car makers could have done it, but chose not to. Now they're all on a race to compete against Tesla. But ultimately, the goal shouldn't be to have everybody drive an electric car instead of an ICE car. It should be about having less cars on the road, period. It should be about consuming less resources, wasting less resources, period.
- kaba0 6y ago
  I deeply agree with your last paragraph, but the first one is quite naive. It is simply their PR “mission”, their only real mission is the good ol’ dollar, nothing more.
fomine3 6y ago
Toyota has some PHEV models but they stopped selling some models like RAV4 EV (in Japan) due to battery shortage. BEV uses dozens of times battery than PHEV. So currently for Toyota, selling some amount of PHEV/HEV is practical than selling a little EV on limited battery supply situation. Next problem: Why Toyota won't build Li-On terafactory? Possibly they bet solid state battery.
rawgabbit 6y ago
Toyota actually has plans to compete with Tesla. They announced that last year. They already have working prototype car with solid state battery which they had planned to debut at the now postponed Tokyo Olympics. https://www.caranddriver.com/news/a27887943/toyota-ev-rollout-plans/ https://www.caranddriver.com/news/a27887943/toyota-ev-rollou...
lancewiggs 6y ago
500,000 vehicles from Tesla versus 7.5 million for Toyota projected for this financial year. Anyone reading this should understand what is happening. One disruptive company is growing in leaps and bounds (50% up Y/Y Q/Q for Tesla) using intrinsically cheaper and better technology, and taking a much wider view of the market by including power generation supply and storage. The other switched to hybrid powered vehicles fast but stopped there, and thereupon lost value. Toyota sold 10 million cars in CY2019 and forecasts a COVID affected 7.5m for the year ended March 21. Sadly they don't even make electric utes (light trucks) for use in underground mines, let alone EVs for taxis and so on.
ohiovr 6y ago
Tesla has a terrific business selling stock

17 points by mbaytas 6y ago

allears 6y ago

Tesla is awfully profitable for not being a "real business."

chmaynard 6y ago
Equity and profits are different. Tesla has a huge pile of investor money to play with, but are their various business units actually profitable?
- AtlasBarfed 6y ago
  Third party analysis/teardown of Tesla cars has predicted solid margins for 5+ years now, and there are still a decade of significant year-on-year improvements coming in the pipeline. If Tesla achieves the promise of battery investor day (which really is the average year-on-year double-digit cost improvement in batteries that has been going on in the industry), and does the same with its unibody molding and other components in a vertically integrated market, Tesla will do really well.
smt88 6y ago
Quarterly profitability isn't important if your company overall hasn't become profitable yet. If you got $100B in investment and profit $1B every quarter, that's not great. Disclaimer: don't know actual numbers for Tesla and not in a position to look them up right this second.
thedrbrian 6y ago
Take the carbon credits out and they’re back in the red https://insideevs.com/news/438345/tesla-428-million-carbon-credits-q2-2020/ https://insideevs.com/news/438345/tesla-428-million-carbon-c...
- deleted 6y ago
  [deleted]
- Benmcdonald__ 6y ago
  Take out the fact no companies pay for their CO2 pollution and the world is in the red
- aeternum 6y ago
  Just cancel one of their expansion gigafactories and they're back in the green.

mtgx 6y ago

Reminds me of Nokia laughing at Apple's 1% smartphone market share in 2008. To me it was obvious the moment I saw a review of the iPhone on YouTube after launch that everything else was just made obsolete. It didn't matter how many more phones all the other companies were selling compared to Apple - they were all about to become obsolete. It took Blackberry like another 4-5 years to realize this, too, because they were still seeing a lot of growth in other countries where the iPhone and Android devices weren't selling yet or people hadn't heard much about them.

chris5745 6y ago

I want a small, economic, non-flashy electric car for daily commuting. I don’t need the self driving feature or any other bells and whistles. Tesla doesn’t exactly fit that bill.

Hasz 6y ago
Chevrolet Bolt. 250 miles of range, can be had for <20k with a Costco membership.
smt88 6y ago
Tons of those available today. Nissan Leaf is under $10k used with time left on the battery warranty (or was in January). Hyundai Kona Electric is another.
- dzhiurgis 6y ago
  Kona is an SUV and even Leaf is quite large by European city standards. If you are after something really small - Renault Zoe, Kia Niro and VW Up are small, but not super cheap yet.
  - chris5745 6y ago
    I’ll look into these. I live in the US suburbs on a bit of a budget, and there’s a sweet spot for pricing that IMO hasn’t quite happened yet with most EV. I think the number for me is $25k for a new base model with average range. I hope my next car will be an EV, but we’ll see.
    - smt88 6y ago
      With tax subsidies, many models are in that range now. if you don't have the income or the desire to take advantage of the tax subsidies yourself, you can still get them through very generous leasing programs that most manufacturers are offering for electric vehicles.
      - 6y ago

AtlasBarfed 6y ago

Japanese mega-corporations are notoriously conservative/slow to react. While they'll survive at a minimum due to JDM dominance, and it may be plausible to ignore Tesla due to low volume numbers, GM and Volkswagen are credibly sized companies with substantial lead times over Toyota. They've already blown their solid-state prediction for the Tokyo Olympics, Hydrogen is (at minimum) ten years from any significant consumer usage, and no EV vehicles of any technical significance aside from slapdash compliance vehicles. Seems like head-in-the-sand behavior.

leoh 6y ago

I hope Toyota wins this. They have sound manufacturing principles and have demonstrated them for decades and caused radical shifts in the way cars are made across the world — including in the US and in Europe. Much of what Western carmakers learned from them is articulated in the exceptional book "The Machine That Changed the World" — which Musk has almost certainly read, despite being written in 1990 (there are clear sections that seem to incredibly presciently predict Tesla's strategy — exceptional entertainment value in the car, self-driving capabilities, and electric engines). Toyota employs far more people, produces cars that are incredibly low-key yet functional, and is backed by robust teams that work incredibly well together, as opposed to Tesla, which is generally functioning okay, but operates largely at the whims of Musk, much as Ford did back in the day. Which works for a while, but is not a sustainable mode for innovation. Apple is a semi-notable exception to this rule, of course, so we'll see what happens. But again, rooting for Toyota.

chmaynard 6y ago
Back before the Model 3 was announced, I was hoping that Tesla and Toyota would form a partnership to build and service a mass-market EV. From a purely business point of view, I think this would have been a huge win for both companies. Despite the success of the Prius, Toyota made a decision to focus exclusively on fuel cell technology and wasted ten precious years. After Toyota lost that bet, Tesla's superior EV technology could have helped Toyota catch up with the competition. Tesla had no experience with the formidable supply chain and production issues involved in building high-quality cars on a large scale. This is one of Toyota's great strengths. Unfortunately, there seemed to be bad blood between Toyota and Tesla management. I suspect this may have prevented consideration of such a partnership.
- bob29 6y ago
  There was a Toyota and Tesla partnership in 2010, producing a small number of RAV4 EVs, combining Tesla's battery pack and electric drivetain with Toyota's chassis. I haven't found many details outside of wikipedia, not sure the nature of the partnership. If it was about Toyota getting tax credits, Tesla testing an EV drivetrain without having to engineer an entire vehicle platform, or something else.

alblue 6y ago

I’ve been driving Toyota cars exclusively over the past 30 years. I’ve been driving a Prius for the last 18. I had really hoped that Toyota would come up with an electric only vehicle, but they’ve rolled out their hybrid drive train across their entire fleet now. They have a fuel cell vehicle which runs on hydrogen only, but there’s a small handful of stations in the UK which means it’s pointless. I now have an electric car in order which isn’t a Toyota and I don’t think I’m going back.

72deluxe 6y ago
Out of interest, what electric car have you ordered? A VW ID3 or something? I was wondering about the ID3 because the batteries are built into the floor and seem to only have a 100k miles lifetime, which is nothing for a VW and will destroy the secondhand market in the name of "progress" and saving the environment (but with non recyclable battery tech to do so).

ericmay 6y ago

How many goal posts will they move before they realize Tesla is playing a different game?

Gravityloss 6y ago

It could have been Toyota but it seems it's going to be VW that's going to bring EV:s to the masses. Around here, a Tesla Model 3 costs 50,000, Hyundai Kona 45,000 and VW id3 40,000.

dzhiurgis 6y ago
Skoda's new SUV is around 35k euro or something like 23k less than Model Y. Of course it's not going to be as sexy, but most people don't care.

BluePen8 6y ago

I think his words are being mischaracterized here a bit, he admitted they are having success, but is simply taking issue with their absurd valuation relative to their actual success. That being said, given Toyota's tendency to shy away from innovation lately I can see why he's getting flak. He should be, and not just because of Tesla. I'm a diehard Toyota fanboy, because I believe in things being built to last. It's good for the environment, and good for consumers. Nothing frustrates me more cars designed to last only as long as the warranty or lease term. I had a BMW 3 series that I loved driving which broke down far more than a non-performance variant had any right to, so the Lexus equivalent I bought afterwards was a welcome change that I've loved driving ever since. But Toyota has hidden behind their "reliability" moniker for so long, their offerings aren't really competitive in any segments anymore. For pickup trucks, both the Tundra and Tacoma have weak inefficient engines, with the Tacoma having a dog of a transmission. For luxury sedans, Lexus has no performance variants anymore, and their mid-performance variants have fallen woefully behind the competition (the 2021 IS350 has gained 5hp since it's debut in 2006). My wife wants an EV so her next car is looking to be a BMW i3 (despite how much I swore I'd never buy another), and I want a reliable performance car so it seems like my next car will be a used Porsche (with maybe a mid-step at an IS-F, a car Lexus hasn't produced since 2014). They haven't just missed the boat on EVs, their ICEs are falling terribly behind as well, what are they doing over there? Reliability doesn't matter if you're not producing anything people want.

ch_sm 6y ago

„PC guys are not just going to walk in“ etc.

remir 6y ago

Tesla's business is not just selling cars; it's their mission to "accelerate the world's transition to sustainable energy". That is why they're successful. That's why they invest in R&D for battery tech, solar panels, software. It's all about the mission, in the end. Tesla made the electric car desirable to the masses. That is no small feat. Toyota could have done it years or even decades ago, but they didn't. Other traditional car makers could have done it, but chose not to. Now they're all on a race to compete against Tesla. But ultimately, the goal shouldn't be to have everybody drive an electric car instead of an ICE car. It should be about having less cars on the road, period. It should be about consuming less resources, wasting less resources, period.

kaba0 6y ago
I deeply agree with your last paragraph, but the first one is quite naive. It is simply their PR “mission”, their only real mission is the good ol’ dollar, nothing more.

fomine3 6y ago

Toyota has some PHEV models but they stopped selling some models like RAV4 EV (in Japan) due to battery shortage. BEV uses dozens of times battery than PHEV. So currently for Toyota, selling some amount of PHEV/HEV is practical than selling a little EV on limited battery supply situation. Next problem: Why Toyota won't build Li-On terafactory? Possibly they bet solid state battery.

rawgabbit 6y ago

Toyota actually has plans to compete with Tesla. They announced that last year. They already have working prototype car with solid state battery which they had planned to debut at the now postponed Tokyo Olympics. https://www.caranddriver.com/news/a27887943/toyota-ev-rollout-plans/ https://www.caranddriver.com/news/a27887943/toyota-ev-rollou...

lancewiggs 6y ago

500,000 vehicles from Tesla versus 7.5 million for Toyota projected for this financial year. Anyone reading this should understand what is happening. One disruptive company is growing in leaps and bounds (50% up Y/Y Q/Q for Tesla) using intrinsically cheaper and better technology, and taking a much wider view of the market by including power generation supply and storage. The other switched to hybrid powered vehicles fast but stopped there, and thereupon lost value. Toyota sold 10 million cars in CY2019 and forecasts a COVID affected 7.5m for the year ended March 21. Sadly they don't even make electric utes (light trucks) for use in underground mines, let alone EVs for taxis and so on.

ohiovr 6y ago

Tesla has a terrific business selling stock