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> The $1.6 billion in regulatory credits it received last year far outweighed Tesla's net income of $721 million -- meaning Tesla would have otherwise posted a
by cecilpl2 6y ago
> The $1.6 billion in regulatory credits it received last year far outweighed Tesla's net income of $721 million -- meaning Tesla would have otherwise posted a net loss in 2020.
Perhaps a better way of ending the sentence is "Tesla would have otherwise invested less in future R&D, so as not to post a loss". Whether to spend all the money you make is a business decision. See Amazon turning tiny profits for over a decade as a great example of why income doesn't matter to a growth stock.
- HenryBemis 6y agoThat is a nice strategy. They bring in a lot of revenue selling these 'credits', and by the time everyone else wakes up to the fact and starting doing 'electric', they will be far ahead in R&D, quality, experimentation, etc. They become the front runners for this industry.
- spacemanmatt 6y agoI think that depends on an assumption that existing auto makers cannot repurpose and retool their empires to produce EVs. Tesla is far behind them from that perspective.
- Ygg2 6y agoEVs seem lot less complex than ICE vehicles. What is the point of having advanced gearshift when a simple controller can achieve similar things? In other words. Their advanced tools are made for a different type of motor.
- choeger 6y agoYou still have to build suspensions, door mechanics, interior, AC, sensors, and a lot more stuff at scale. Legacy auto builders are really good at that by now. Yes, their knowledge on ICE design won't matter that much in the foreseeable future, but there's a lot of precision engineering and large-scale manufacturing to be done still to sell dozens of millions of cars (in thousands of varieties) every year.
- bryanlarsen 6y agoCar makers don't make that stuff. Bosch, Denso, Magna and Continental make that stuff.
- _ph_ 6y agoObserving how traditional auto makers handle the transition to electric cars indicates that this is not an easy step. VW was the first big automaker to introduce a pure electric platform at the end of 2020. Most other auto makers so far have only electrified existing ICE designs.
- maxerickson 6y agoThe Bolt has a specialized platform.
- hehehaha 6y agoHow’s that good for consumers? They get stuck with Tesla exercising market power and in some instances dictating implementations. As much as I find Tesla innovative, I don’t want them dictating EV infrastructure.
- jiofih 6y agoIt’s good for consumers because most of that advanced tech would not exist otherwise. By the way, Tesla has stopped patenting their tech long ago and freely share it with the industry. Their moat is the actual execution, production lines, charging infrastructure and quality of the products, not patents.
- notatoad 6y agoit's good for consumers because the it allows electric cars to exist, and consumers want electric cars. Ford or GM has the resources to make electric cars and mostly doesn't, so the regulatory system forces them to give those resources to somebody who will. that's good for consumers. and of course, what's good for the planet is good for consumers because we have to live here. but the "pro-consumer" argument always seems to ignore that.
- sliken 6y agoTesla's progress is painting a target on themselves. Just about ever stock owner in any other car brand is asking the CEO/Board things like "How are we going to compete with Tesla?" and "How quickly can we electrify our product line?"
- spacemanmatt 6y ago'member when HN was pro-capitalist and would have savaged a company for banking on regulations rather than the market?
- orange_tee 6y agoRegulations are part of the market.
- spacemanmatt 6y agoAgreed, however there is a world of difference in business plans when one depends on selling product to make a profit while the other depends on regulations.
- Vivtek 6y agoAll business plans depend on regulations.
- spacemanmatt 6y agoSome business plans accommodate regulation as a fact of life, some are crafted to exist only under the wing of very specific regulations. But I accept that some people color with such a broad brush that those seem like the same thing.
- tontonius 6y agoIt's okay to hate the game, without hating the player.