7 ms·

Elon Musk admits Tesla's math was wrong

67 points by hornbaker 13y ago

lolcraft 13y ago
You know, there's a possibility that it would suck if investors got itchy and pulled out of TSLA after these news. I mean, it would be very understandable, but from a game-theoretical point of view, there's the question of what you want to signal as an investor. If it's too costly to make mistakes, or worse, if you inadvertently signal it's fine to err given the company doesn't ever admit it publicly, then there's a variety of possible outcomes. The least worst is you end up with glorified, electrified, GM stock. The worst is, you end up with Enron. Which, incidentally, Wikipedia says was too "one of the most innovative companies" back then. Of course, you probably already know that.
- cantankerous 13y ago
  Tesla actually has gotten to the point of making real things. Enron at its height, was, erm, uh. Yeah. I think given what we know about Enron now it's pretty easy to draw up a direct comparison. Tesla might be doing a bit of a shell game with the pricing, but as far as comparing it to Enron, I think that's a bit overboard.
  - mkhpalm 13y ago
    You're insinuating that Enron did nothing? What would you do with a Model S if companies just like Enron didn't exist?
    - hnriot 13y ago
      Well, since Enron was an oil company, and since the model S is an electric vehicle, I'd say the model s is just fine without Enron around...
      - makomk 13y ago
        Enron were also in the business of selling and trading electricity and owned a number of large power plants. A lot of the fraud was actually in the electricity part of their business.
        cantankerous 13y ago
        Yeah I'd venture to guess if Enron still existed it'd be MORE expensive, not less, to own a model S.
      - mkhpalm 13y ago
        Enron was a lot of things but I wouldn't go so far as to call them an oil company.
      - biot 13y ago
        You're thinking of Exxon.
- drivebyacct2 13y ago
  Some marketing math makes Tesla as bad as Enron? o_0 I feel like I'm missing a piece of the story or something.
barista 13y ago
First they did it with the roadtrip range calculations and now this one. Credibility is hard earned easily lost you know.
- monsterix 13y ago
  > Credibility is hard earned easily lost you know. That said, an accomplished CEO admitting to a mistake earns 'em more karma and credibility than not. Times have changed no? Traditional mantras need a revisit. Internet.
  - niggler 13y ago
    "an accomplished CEO admitting to a mistake earns 'em more karma and credibility than not." To you, maybe. To investors? Absolutely not.
    - monsterix 13y ago
      As long as the company is making waves in media, great sales, good engagement and having a good rapport with its customers, the investors would be happy even though board meetings could get hot. It's not about me or you, so it goes...
    - jacquesm 13y ago
      Are you a Tesla investor?
      - toomuchtodo 13y ago
        I am. I don't own a lot of TSLA, but its definitely in the high five figures. I'm extremely satisfied with out Musk has been handling all of this.
deleted 13y ago
[deleted]
uvdiv 13y ago
Under the new deal, Tesla owners should be able to get their payments down to about $580 a month just factoring in gasoline savings alone, Tesla said. Is he subtracting fuel savings from the car price? I recall there was an HN thread complaining about this but I can't find it... Here's the calculator. They claim an "effective cost" of $579/month (default choices), which it seems means $917/month in actual payments, plus negative $261/month in fuel savings: http://www.teslamotors.com/true-cost-of-ownership http://www.teslamotors.com/true-cost-of-ownership
- ricardobeat 13y ago
  It makes perfect sense. You can either add the gasoline to the others or subtract from the Tesla. Ex: A Mercedes C300 might cost $420/month, but the effective price is $800/month considering fuel & maintenance. Is that also problematic? Most people will initially compare the Model S'$60k price tag vs $40k for a Mercedes, but the total ownership cost figures tell a different story.
  - kirk21 13y ago
    It is weird that they don't stress the reduced maintenance costs. When something breaks down it is always extremely expensive (or they are overcharging you). Consider the life cycle of a car and there is something expensive that will break down.
    - ams6110 13y ago
      Most cars these days don't "break down." There are maintenance costs which may well be lower on the Tesla (though some new car deals include free scheduled maintenance), but bottom line, if you can afford a Tesla or another car in its price range, maintenance and gasoline are not costs that are going to be significant in your budget.
      - ricardobeat 13y ago
        Maintenance and repairs easily add 10% or more to the total ownership cost, and gasoline over 20%. $200/month adds up to almost $10k over 4 years.
emp_zealoth 13y ago
Bit of a tongue in cheek question. Is the math for Falcon done in the same fashion? Yes, I'm a Skylon fan.
arcatek 13y ago
I hate that someone called an enterprise "Tesla". Knowing nothing about Elon Musk (well, at least now I know), my first thought when I saw that title was that Tesla (the man)'s math were wrong.
revelation 13y ago
This is a bizarre article. Are we going to see "Verizon/AT&Ts math is wrong" articles because they are marketing smartphones at a price tag of 0$?
jsilence 13y ago
My first thought reading the headline was: "No way! Nikola Tesla can't have been wrong. He was a genius!" Then, reading the article, I realized it was about a car manufacturer.
Emanuel6009 13y ago
It doesn't matter really, he admitted his mistake and the price is still within the price range I would pay to take this world another step in what I consider to be the right direction.
robomartin 13y ago
"Honey, look, a Tesla is only going to cost us $580 per month" "No dear, the actual payment is closer to $900" "No. Look here, it says the effective payment is $580." "Sure, sure. You still have to send them a check for $900." "What? How do we get to $580 then." "Well, they are saying an electric car is going to save you over $300 a month in fuel and proposing you take that into account." "Wait a minute. I don't get it. That can't be true. Can I put the $300 per month in the bank and save-up for a nice vacation?" "Nope. That money goes to Tesla. The real payment is about $900." "That can't be right." "Look, go to that neat cost-of-ownership calculator and set the annual mileage to zero. Let's pretend you are going to buy the car and put it in a museum, never to be driven. What's the monthly payment? About 900 right?" "Let me see... Crap! That's bullshit." "Yup."
- nijk 13y ago
  Fuel is part of TCO. The problem in the ad was in claiming the business deduction and the hourly wage for not gas pumping
- ricardobeat 13y ago
  No one factors in gas costs to their monthly payments. Tesla is trying to get you to do just that, which is totally fair.
  - bradleyland 13y ago
    That's a fair enough argument, but the fuel expense figures Tesla uses are far too generous. This is the kind of disingenuous marketing that turns people off. If I go to their True Cost of Ownership page right now, the "Electricity vs Gasoline" section defaults to a savings of $261/month. According to Mint, I spend $116.75/month (average) on gasoline. The little graph shows the national average is somewhere between $165 and $220. The graph is small, but the bar is about halfway between. Being generous, that'd put the national average at around $200/month on gas. So Tesla is giving themselves a benefit of around $60 above the national average. It seems like a minor point, but "fudging the numbers" doesn't seem consistent with the character that Tesla is trying to build for itself.
coloneltcb 13y ago
Horrible mea culpa. "We appreciate the feedback from a number of journalists and customers that the first version of our financing product wasn’t quite right,” It wasn't that they were doing really complex calculations that they made an error on, they were being intentionally misleading. That is what they should be sorry for, not that the math was not "quite right"
andrewtbham 13y ago
There has not been a very big media backlash like there was to the first $500/month story. The lack of media backlash may seem to validate the second announcement to consumers. Tesla is proving skilled at neutralizing bad press.
nijk 13y ago
And their solution is to extend the loan term so you pay the monthly payment longer than you possess the car! I don't see what they hope to gain by lying about price to wealthy customers who presumably got their wealth through the application of something exceeding5th grade arithmetic

67 points by hornbaker 13y ago

You know, there's a possibility that it would suck if investors got itchy and pulled out of TSLA after these news. I mean, it would be very understandable, but from a game-theoretical point of view, there's the question of what you want to signal as an investor. If it's too costly to make mistakes, or worse, if you inadvertently signal it's fine to err given the company doesn't ever admit it publicly, then there's a variety of possible outcomes. The least worst is you end up with glorified, electrified, GM stock. The worst is, you end up with Enron. Which, incidentally, Wikipedia says was too "one of the most innovative companies" back then. Of course, you probably already know that.

cantankerous 13y ago
Tesla actually has gotten to the point of making real things. Enron at its height, was, erm, uh. Yeah. I think given what we know about Enron now it's pretty easy to draw up a direct comparison. Tesla might be doing a bit of a shell game with the pricing, but as far as comparing it to Enron, I think that's a bit overboard.
- mkhpalm 13y ago
  You're insinuating that Enron did nothing? What would you do with a Model S if companies just like Enron didn't exist?
  - hnriot 13y ago
    Well, since Enron was an oil company, and since the model S is an electric vehicle, I'd say the model s is just fine without Enron around...
    - makomk 13y ago
      Enron were also in the business of selling and trading electricity and owned a number of large power plants. A lot of the fraud was actually in the electricity part of their business.
      - cantankerous 13y ago
        Yeah I'd venture to guess if Enron still existed it'd be MORE expensive, not less, to own a model S.
    - mkhpalm 13y ago
      Enron was a lot of things but I wouldn't go so far as to call them an oil company.
    - biot 13y ago
      You're thinking of Exxon.
drivebyacct2 13y ago
Some marketing math makes Tesla as bad as Enron? o_0 I feel like I'm missing a piece of the story or something.

barista 13y ago

First they did it with the roadtrip range calculations and now this one. Credibility is hard earned easily lost you know.

monsterix 13y ago
> Credibility is hard earned easily lost you know. That said, an accomplished CEO admitting to a mistake earns 'em more karma and credibility than not. Times have changed no? Traditional mantras need a revisit. Internet.
- niggler 13y ago
  "an accomplished CEO admitting to a mistake earns 'em more karma and credibility than not." To you, maybe. To investors? Absolutely not.
  - monsterix 13y ago
    As long as the company is making waves in media, great sales, good engagement and having a good rapport with its customers, the investors would be happy even though board meetings could get hot. It's not about me or you, so it goes...
  - jacquesm 13y ago
    Are you a Tesla investor?
    - toomuchtodo 13y ago
      I am. I don't own a lot of TSLA, but its definitely in the high five figures. I'm extremely satisfied with out Musk has been handling all of this.

deleted 13y ago

[deleted]

uvdiv 13y ago

Under the new deal, Tesla owners should be able to get their payments down to about $580 a month just factoring in gasoline savings alone, Tesla said. Is he subtracting fuel savings from the car price? I recall there was an HN thread complaining about this but I can't find it... Here's the calculator. They claim an "effective cost" of $579/month (default choices), which it seems means $917/month in actual payments, plus negative $261/month in fuel savings: http://www.teslamotors.com/true-cost-of-ownership http://www.teslamotors.com/true-cost-of-ownership

ricardobeat 13y ago
It makes perfect sense. You can either add the gasoline to the others or subtract from the Tesla. Ex: A Mercedes C300 might cost $420/month, but the effective price is $800/month considering fuel & maintenance. Is that also problematic? Most people will initially compare the Model S'$60k price tag vs $40k for a Mercedes, but the total ownership cost figures tell a different story.
- kirk21 13y ago
  It is weird that they don't stress the reduced maintenance costs. When something breaks down it is always extremely expensive (or they are overcharging you). Consider the life cycle of a car and there is something expensive that will break down.
  - ams6110 13y ago
    Most cars these days don't "break down." There are maintenance costs which may well be lower on the Tesla (though some new car deals include free scheduled maintenance), but bottom line, if you can afford a Tesla or another car in its price range, maintenance and gasoline are not costs that are going to be significant in your budget.
    - ricardobeat 13y ago
      Maintenance and repairs easily add 10% or more to the total ownership cost, and gasoline over 20%. $200/month adds up to almost $10k over 4 years.

emp_zealoth 13y ago

Bit of a tongue in cheek question. Is the math for Falcon done in the same fashion? Yes, I'm a Skylon fan.

arcatek 13y ago

I hate that someone called an enterprise "Tesla". Knowing nothing about Elon Musk (well, at least now I know), my first thought when I saw that title was that Tesla (the man)'s math were wrong.

revelation 13y ago

This is a bizarre article. Are we going to see "Verizon/AT&Ts math is wrong" articles because they are marketing smartphones at a price tag of 0$?

jsilence 13y ago

My first thought reading the headline was: "No way! Nikola Tesla can't have been wrong. He was a genius!" Then, reading the article, I realized it was about a car manufacturer.

Emanuel6009 13y ago

It doesn't matter really, he admitted his mistake and the price is still within the price range I would pay to take this world another step in what I consider to be the right direction.

robomartin 13y ago

"Honey, look, a Tesla is only going to cost us $580 per month" "No dear, the actual payment is closer to $900" "No. Look here, it says the effective payment is $580." "Sure, sure. You still have to send them a check for $900." "What? How do we get to $580 then." "Well, they are saying an electric car is going to save you over $300 a month in fuel and proposing you take that into account." "Wait a minute. I don't get it. That can't be true. Can I put the $300 per month in the bank and save-up for a nice vacation?" "Nope. That money goes to Tesla. The real payment is about $900." "That can't be right." "Look, go to that neat cost-of-ownership calculator and set the annual mileage to zero. Let's pretend you are going to buy the car and put it in a museum, never to be driven. What's the monthly payment? About 900 right?" "Let me see... Crap! That's bullshit." "Yup."

nijk 13y ago
Fuel is part of TCO. The problem in the ad was in claiming the business deduction and the hourly wage for not gas pumping
ricardobeat 13y ago
No one factors in gas costs to their monthly payments. Tesla is trying to get you to do just that, which is totally fair.
- bradleyland 13y ago
  That's a fair enough argument, but the fuel expense figures Tesla uses are far too generous. This is the kind of disingenuous marketing that turns people off. If I go to their True Cost of Ownership page right now, the "Electricity vs Gasoline" section defaults to a savings of $261/month. According to Mint, I spend $116.75/month (average) on gasoline. The little graph shows the national average is somewhere between $165 and $220. The graph is small, but the bar is about halfway between. Being generous, that'd put the national average at around $200/month on gas. So Tesla is giving themselves a benefit of around $60 above the national average. It seems like a minor point, but "fudging the numbers" doesn't seem consistent with the character that Tesla is trying to build for itself.

coloneltcb 13y ago

Horrible mea culpa. "We appreciate the feedback from a number of journalists and customers that the first version of our financing product wasn’t quite right,” It wasn't that they were doing really complex calculations that they made an error on, they were being intentionally misleading. That is what they should be sorry for, not that the math was not "quite right"

andrewtbham 13y ago

There has not been a very big media backlash like there was to the first $500/month story. The lack of media backlash may seem to validate the second announcement to consumers. Tesla is proving skilled at neutralizing bad press.

nijk 13y ago

And their solution is to extend the loan term so you pay the monthly payment longer than you possess the car! I don't see what they hope to gain by lying about price to wealthy customers who presumably got their wealth through the application of something exceeding5th grade arithmetic