6 ms·

Luxury vehicles with limited market, Hertz dumping them due to ROI problems, asshole running PR, new product is a $70k MAGA hat / rusty coffin, geopolitical mes

by cjk2 2y ago

Luxury vehicles with limited market, Hertz dumping them due to ROI problems, asshole running PR, new product is a $70k MAGA hat / rusty coffin, geopolitical mess going on. Inevitable really. I know a couple of "faithful" investors who put money on late last year who are still telling themselves it's only temporary.

youngtaff 2y ago
Luxury prices but compared to the finish of the competition are they really luxury vehicles?
- deleted 2y ago
  [deleted]
- globular-toast 2y ago
  Nobody cares about "finish" apart from weird car enthusiasts (think like people who run homelabs, but for cars). It's all about the brand.
  - onion2k 2y ago
    The brand is the effectively the sum of what the company does though, and that includes building cars with a good finish. BMW, Merc, Audi, Lexus etc have strong brands because they're well known for make cars that are always well built. In the case of Tesla they could fix all the build problems and their brand would continue to suffer because they have a reputation for poor quality. That takes years to repair.
    - Rinzler89 2y ago
      Pretty much. Japanese and Germans have built those strong brands on the build quality, fit and finish, ride quality, noise insulation, etc. Tesla customers were willing to overlook that due to the focus on software and cutting edge tech at the expense of quality but people later realized quality also matters in a object you sit in and your life depends on it, since a car is more than an iPad.
    - acdha 2y ago
      I would especially add that there is not much of a shortcut around that, either, because a lot of that reputation is based on older vehicles holding up well, not being noisy, etc. People think Mercedes is a luxury brand because they’re thinking about how their grandparents had one that was still in good shape after years of use, not just the day they bought it. Not coming from that kind of family background personally this was somewhat of a surprise to me when a friend first explained how they were expecting a vehicle to hold its value.
  - ano-ther 2y ago
    Just went by taxi one way in a Mercedes, back with a Tesla. Similar mileage. The Tesla’s seats were already worn down so I could feel the steel tubes beneath the upholstery. The Benz was still fine. That’s better finish which I would care about without being a car enthusiast.
    - cm2187 2y ago
      Same. The suspensions also make quite a different experience. Plus I don’t like cars where I need to figure out how to open a door.
  - cjk2 2y ago
    Nah I just want something that doesn't fall to bits. My Model S (yes I did own one) had worse finish than the ass end Citroen I had. The model S had paint runs and the drivers door didn't shut properly.
  - OJFord 2y ago
    Maybe we have different definitions, but I think they absolutely do, I would say things like insisting on Apple CarPlay, or the UX of the self-driving software, the vibrance of the RGB dash/door lighting (...) etc. is caring about finish. Your car enthusiast might care to a different sort of extreme or niche (like wanting real leather not PU; or not wanting leather because the '66 never came with leather) but it's still caring about finish IMO, just different aspects.
  - alistairSH 2y ago
    Of course they do. The brand is the sum of all the design and engineering decisions and marketing over time. I absolutely bought a Lexus because I perceived it as high quality - reliable, assembled properly, good finishes. Same for my BMW, though it’s almost certainly less reliable. My Honda truck, I expect reliable utility, not luxury.
  - kstrauser 2y ago
    WTF. I was a kid out looking at cars with my dad. He was looking at Lincolns, saw one he otherwise liked, and noticed that the gap between the driver’s door and the back seat door was wider at the top than the bottom. The salesman tried to have the shop adjust the door so that it was aligned, but then it was misaligned in other ways (like the edge of the driver’s window was higher than the back seat’s window). He never looked at another Lincoln, ever. Choice quote: “I’d never be able to look at it without seeing that skewy door and it’d make me mad every time.” Fit and finish are absolutely things that non-geeks care tremendously about.
  - Ekaros 2y ago
    Lot of people care about fit. And feeling. A car should at least look right that means gaps in different places look same and there is no obvious problem. After all they are paying tens of thousands for something, that is absolute minimum you can expect for that price.
- cjk2 2y ago
  Well that is sort of the point. The pricing reflects luxury but the quality does not reflect the pricing.
- bryanlarsen 2y ago
  Lease for $299/month isn't luxury pricing any more.
rvnx 2y ago
Removing stalks and replacing them with turn signal controls to the same side of the steering wheel and arranging them in a reversed order did not help (many people think “Left” first, then only “Right” due to Western reading convention)
- Ekaros 2y ago
  How are they arranged? Should Left be well on the left side? Like button being closer to side where action happens. Now I need to think about window switches too...
  - Mawr 2y ago
    Can see them here: https://youtu.be/52O3cYsyZMo?t=482 https://youtu.be/52O3cYsyZMo?t=482
    - LaSombra 2y ago
      This is quite astonishing...
Dalewyn 2y ago
9% drop in revenue leading to a 54% drop in income, this suggests the main factor for the income reduction is an increase in costs/loss moreso than the drop in revenue.
- AnthonyMouse 2y ago
  Could also just be reversion to the mean. COVID issues restricted the supply of new cars in general, resulting in higher prices/margins. Now that they're getting sorted out, prices return to normal and margins go back down.
- Tuna-Fish 2y ago
  No. Their gross margin only fell by 0.2%, and operating expenses only increased by 151 million, neither of which explains more than a small fraction of what happened. The problem is simply that because they are so vertically integrated, they have high fixed costs, and so a relatively small drop in revenue means a huge loss in profit. Another 9% less revenue and they will be making a loss, unless they fire a lot of people.
- Stranger43 2y ago
  Tesla failed at the monopoly grab that most VC funded tech companies depend on for their "valuation" and super-normal profits. Cars have no network effect as the roads are open standard accessible to any vendor and Tesla never had any secret sauce that kept well funded competitors from competing. Once the big traditional manufacturers started taking electric cars with diver assist features seriously they had the skill and money to match(and in some cases exceed) Tesla and that means Tesla will have to price their cars competitively.
  - red-iron-pine 2y ago
    network effects and the broader value network are the big ones. without creating and then exploring that network, you're just a hot new product until someone else catches up. put another way, it's not just making cars, it's making the ecosystem. every phone after the iphone was trying to be the iphone, for example. for Tesla, it would have been something like getting charging stations everywhere, and getting the 3 price so low that they become ubiquitous. then the Hertz buy might have made sense, you'd see taxis everywhere switching (and they kind of did in some cities), and stronger adoption outside of tech-bro cities.
cm2187 2y ago
Also a lacklustre demand for electric cars in general. Other manufacturers also impacted and probably the primary driver.
- bryanlarsen 2y ago
  EV's grew 31% in 2023 and will likely do a similar amount in 2024. The issue is that the number of available vehicles grew more than 31%; expectations were for around 50% growth. I don't think you can call 31% growth lacklustre.
- acdha 2y ago
  Lackluster demand for very expensive vehicles is down across the board, and Tesla has only been serving the higher-end market. A lot of manufacturers were banking on interest rates staying low but there was no way that could last forever - the average ICE last year cost more than the US median income, at a time when many other prices were also rising. Based on the people I know who’ve bought recently, an EV targeting Camry pricing and quality would sell a lot better than the massive bling-tanks they had sitting in stock.
rapsey 2y ago
> Luxury vehicles with limited market Models 3/Y are literally one of the cheapest EVs available in EU/US? > Hertz dumping them due to ROI problems Hertz frankly had a pretty terrible strategy going in. Buying a ton of cars without any infrastructure for them (Hertz locations without chargers).
- Hamuko 2y ago
  >Models 3/Y are literally one of the cheapest EVs available in EU/US? BYD Dolphin is 34 990 € and a Tesla Model 3 is 41 990 €. And both are pretty high up there in comparison to like a hybrid Toyota Corolla.
- constantcrying 2y ago
  What? That is total nonsense. The ID.3 is much cheaper, even ignoring VW picking up the government subsidies. With the subsidies it costs about as much as an ID.5. Of course prices get much lower, with actual low end EVs which started to hit the market. Tesla is anything but the cheapest EV.
- dutchbrit 2y ago
  > Models 3/Y are literally one of the cheapest EVs available in EU/US? They aren't (in EU)? Dacia Spring, Citroën e-C3, Fiat 500e, BYD Dolphin, ID.3 & Peugeot e-208 to name a few are quite a bit cheaper.
- tnolet 2y ago
  > Models 3/Y are literally one of the cheapest EVs available in EU/US? Er, no. Peugeot, Renault, Volkswagen etc. all make (way) cheaper models. Heck, even Volvo now has an EV (the EX30) that is ~EUR 8k cheaper than a Model y. Not even mentioning the Asian brand like Hyundai etc.
  - pvaldes 2y ago
    Shh... I'll tell you a secret. For years and years a lot of the electric vehicles in lots of brands, weren't meant to be sold. The public were even advised by the car dealers not to buy them, and they were made so unattractive as possible. In part because the carmakers were probably unsure about its long term performance with a totally new technology, but the main reason was other. It just happens that the environmental emissions of a car maker fleet was calculated as the average of emissions from all their models in the current market. Those tiny, squared EV that looked like toys were built with the only purpose to decrease the brand average value. Thus they could have models contaminating more in the upper categories. (Plus painting the brand in green for PR purposes). All of this changed after Tesla started to show its claws and to be taken seriously.
deleted 2y ago
[deleted]

by cjk2 2y ago

youngtaff 2y ago

Luxury prices but compared to the finish of the competition are they really luxury vehicles?

deleted 2y ago
[deleted]
globular-toast 2y ago
Nobody cares about "finish" apart from weird car enthusiasts (think like people who run homelabs, but for cars). It's all about the brand.
- onion2k 2y ago
  The brand is the effectively the sum of what the company does though, and that includes building cars with a good finish. BMW, Merc, Audi, Lexus etc have strong brands because they're well known for make cars that are always well built. In the case of Tesla they could fix all the build problems and their brand would continue to suffer because they have a reputation for poor quality. That takes years to repair.
  - Rinzler89 2y ago
    Pretty much. Japanese and Germans have built those strong brands on the build quality, fit and finish, ride quality, noise insulation, etc. Tesla customers were willing to overlook that due to the focus on software and cutting edge tech at the expense of quality but people later realized quality also matters in a object you sit in and your life depends on it, since a car is more than an iPad.
  - acdha 2y ago
    I would especially add that there is not much of a shortcut around that, either, because a lot of that reputation is based on older vehicles holding up well, not being noisy, etc. People think Mercedes is a luxury brand because they’re thinking about how their grandparents had one that was still in good shape after years of use, not just the day they bought it. Not coming from that kind of family background personally this was somewhat of a surprise to me when a friend first explained how they were expecting a vehicle to hold its value.
- ano-ther 2y ago
  Just went by taxi one way in a Mercedes, back with a Tesla. Similar mileage. The Tesla’s seats were already worn down so I could feel the steel tubes beneath the upholstery. The Benz was still fine. That’s better finish which I would care about without being a car enthusiast.
  - cm2187 2y ago
    Same. The suspensions also make quite a different experience. Plus I don’t like cars where I need to figure out how to open a door.
- cjk2 2y ago
  Nah I just want something that doesn't fall to bits. My Model S (yes I did own one) had worse finish than the ass end Citroen I had. The model S had paint runs and the drivers door didn't shut properly.
- OJFord 2y ago
  Maybe we have different definitions, but I think they absolutely do, I would say things like insisting on Apple CarPlay, or the UX of the self-driving software, the vibrance of the RGB dash/door lighting (...) etc. is caring about finish. Your car enthusiast might care to a different sort of extreme or niche (like wanting real leather not PU; or not wanting leather because the '66 never came with leather) but it's still caring about finish IMO, just different aspects.
- alistairSH 2y ago
  Of course they do. The brand is the sum of all the design and engineering decisions and marketing over time. I absolutely bought a Lexus because I perceived it as high quality - reliable, assembled properly, good finishes. Same for my BMW, though it’s almost certainly less reliable. My Honda truck, I expect reliable utility, not luxury.
- kstrauser 2y ago
  WTF. I was a kid out looking at cars with my dad. He was looking at Lincolns, saw one he otherwise liked, and noticed that the gap between the driver’s door and the back seat door was wider at the top than the bottom. The salesman tried to have the shop adjust the door so that it was aligned, but then it was misaligned in other ways (like the edge of the driver’s window was higher than the back seat’s window). He never looked at another Lincoln, ever. Choice quote: “I’d never be able to look at it without seeing that skewy door and it’d make me mad every time.” Fit and finish are absolutely things that non-geeks care tremendously about.
- Ekaros 2y ago
  Lot of people care about fit. And feeling. A car should at least look right that means gaps in different places look same and there is no obvious problem. After all they are paying tens of thousands for something, that is absolute minimum you can expect for that price.
cjk2 2y ago
Well that is sort of the point. The pricing reflects luxury but the quality does not reflect the pricing.
bryanlarsen 2y ago
Lease for $299/month isn't luxury pricing any more.

rvnx 2y ago

Removing stalks and replacing them with turn signal controls to the same side of the steering wheel and arranging them in a reversed order did not help (many people think “Left” first, then only “Right” due to Western reading convention)

Ekaros 2y ago
How are they arranged? Should Left be well on the left side? Like button being closer to side where action happens. Now I need to think about window switches too...
- Mawr 2y ago
  Can see them here: https://youtu.be/52O3cYsyZMo?t=482 https://youtu.be/52O3cYsyZMo?t=482
  - LaSombra 2y ago
    This is quite astonishing...

Dalewyn 2y ago

9% drop in revenue leading to a 54% drop in income, this suggests the main factor for the income reduction is an increase in costs/loss moreso than the drop in revenue.

AnthonyMouse 2y ago
Could also just be reversion to the mean. COVID issues restricted the supply of new cars in general, resulting in higher prices/margins. Now that they're getting sorted out, prices return to normal and margins go back down.
Tuna-Fish 2y ago
No. Their gross margin only fell by 0.2%, and operating expenses only increased by 151 million, neither of which explains more than a small fraction of what happened. The problem is simply that because they are so vertically integrated, they have high fixed costs, and so a relatively small drop in revenue means a huge loss in profit. Another 9% less revenue and they will be making a loss, unless they fire a lot of people.
Stranger43 2y ago
Tesla failed at the monopoly grab that most VC funded tech companies depend on for their "valuation" and super-normal profits. Cars have no network effect as the roads are open standard accessible to any vendor and Tesla never had any secret sauce that kept well funded competitors from competing. Once the big traditional manufacturers started taking electric cars with diver assist features seriously they had the skill and money to match(and in some cases exceed) Tesla and that means Tesla will have to price their cars competitively.
- red-iron-pine 2y ago
  network effects and the broader value network are the big ones. without creating and then exploring that network, you're just a hot new product until someone else catches up. put another way, it's not just making cars, it's making the ecosystem. every phone after the iphone was trying to be the iphone, for example. for Tesla, it would have been something like getting charging stations everywhere, and getting the 3 price so low that they become ubiquitous. then the Hertz buy might have made sense, you'd see taxis everywhere switching (and they kind of did in some cities), and stronger adoption outside of tech-bro cities.

cm2187 2y ago

Also a lacklustre demand for electric cars in general. Other manufacturers also impacted and probably the primary driver.

bryanlarsen 2y ago
EV's grew 31% in 2023 and will likely do a similar amount in 2024. The issue is that the number of available vehicles grew more than 31%; expectations were for around 50% growth. I don't think you can call 31% growth lacklustre.
acdha 2y ago
Lackluster demand for very expensive vehicles is down across the board, and Tesla has only been serving the higher-end market. A lot of manufacturers were banking on interest rates staying low but there was no way that could last forever - the average ICE last year cost more than the US median income, at a time when many other prices were also rising. Based on the people I know who’ve bought recently, an EV targeting Camry pricing and quality would sell a lot better than the massive bling-tanks they had sitting in stock.

rapsey 2y ago

> Luxury vehicles with limited market Models 3/Y are literally one of the cheapest EVs available in EU/US? > Hertz dumping them due to ROI problems Hertz frankly had a pretty terrible strategy going in. Buying a ton of cars without any infrastructure for them (Hertz locations without chargers).

Hamuko 2y ago
>Models 3/Y are literally one of the cheapest EVs available in EU/US? BYD Dolphin is 34 990 € and a Tesla Model 3 is 41 990 €. And both are pretty high up there in comparison to like a hybrid Toyota Corolla.
constantcrying 2y ago
What? That is total nonsense. The ID.3 is much cheaper, even ignoring VW picking up the government subsidies. With the subsidies it costs about as much as an ID.5. Of course prices get much lower, with actual low end EVs which started to hit the market. Tesla is anything but the cheapest EV.
dutchbrit 2y ago
> Models 3/Y are literally one of the cheapest EVs available in EU/US? They aren't (in EU)? Dacia Spring, Citroën e-C3, Fiat 500e, BYD Dolphin, ID.3 & Peugeot e-208 to name a few are quite a bit cheaper.
tnolet 2y ago
> Models 3/Y are literally one of the cheapest EVs available in EU/US? Er, no. Peugeot, Renault, Volkswagen etc. all make (way) cheaper models. Heck, even Volvo now has an EV (the EX30) that is ~EUR 8k cheaper than a Model y. Not even mentioning the Asian brand like Hyundai etc.
- pvaldes 2y ago
  Shh... I'll tell you a secret. For years and years a lot of the electric vehicles in lots of brands, weren't meant to be sold. The public were even advised by the car dealers not to buy them, and they were made so unattractive as possible. In part because the carmakers were probably unsure about its long term performance with a totally new technology, but the main reason was other. It just happens that the environmental emissions of a car maker fleet was calculated as the average of emissions from all their models in the current market. Those tiny, squared EV that looked like toys were built with the only purpose to decrease the brand average value. Thus they could have models contaminating more in the upper categories. (Plus painting the brand in green for PR purposes). All of this changed after Tesla started to show its claws and to be taken seriously.

deleted 2y ago

[deleted]