
Musk to review all of Tesla's expenses in new cost cutting plan - hef19898
https://www.reuters.com/article/us-tesla-cost-cuts/musk-to-review-all-of-teslas-expenses-in-new-cost-cutting-plan-idUSKCN1SM2SS
======
proee
I worked for a company that had a similar take on spending. The company was
extremely profitable and brought in greater than 1 billion dollar in revenue.
Yet any PO that was greater than $100 needed approval by the CEO. Not only
that, the PO had to be typed on a manual typewriter (this is 2007) using
carbon paper, and hand-delivered to a number of people to start moving up the
chain. The process intentionally took MONTHS for the approval to go through.

This resulted in engineers that would purchase their own equipment and
bringing it to work to use because they couldn't wait a month for a $200 piece
of equipment. It was common to have lab benches full of used equipment from
ebay that engineers purchased to get their jobs done. This created an
interested dynamic in the lab when it came to sharing equipment (most of it
was not shared). Also, scary to know that since a lot of used equipment was
being relied on, a large portion was not calibrated and could be outside spec.

There is a lot of value in creating a thrifty company culture, but sometimes
it goes too far and hinders the ability for engineers to do their job. In the
end, everyone is responsible for ensuring the purchase they make are wise and
necessary for the success of the company.

~~~
clouddrover
> _This resulted in engineers that would purchase their own equipment and
> bringing it to work to use because they couldn 't wait a month for a $200
> piece of equipment._

That's a mistake. You should never pay other people's costs. If the company
wants to put itself in a position where work is delayed by a month for the
sake of $200 then that is the company's cost to pay.

~~~
TaylorAlexander
It’s a mistake if the company is healthy. But if individual workers are in a
position to get a performance bonus or impress their boss, it may be worth it
for them to spend some money to ensure that would happen. It would also be a
bad work environment.

~~~
clouddrover
It won't impress anyone. All it will do is incentivize them to see what else
they can get out of you for free. They won't respect you if you don't respect
yourself.

~~~
ksec
And yet if you don't get the job done due to slow company approval process you
get the blame for it, and possibly at the cost of your Job. It is rather
unfortunate that this isn't a minority but _many_ of today's company, from SME
to Fortune 500 operate in a similar fashion.

------
dd36
[https://www.reddit.com/r/teslamotors/comments/bq50s8/elons_a...](https://www.reddit.com/r/teslamotors/comments/bq50s8/elons_actual_cost_cutting_letter_for_tesla/)

~~~
whyenot
Your link is to what is represented as the authentic text of the memo. If
genuine, to me, this seem like the most important bit:

"It is important to bear in mind that we lost $700 million in the first
quarter this year, which is over $200 million per month. Investors nonetheless
were supportive of our efforts and agreed to give us $2.4 billion (our net
proceeds) to show that we can be financially sustainable.

That is a lot of money, but actually only gives us approximately ten months at
the first-quarter burn rate to achieve breakeven. It’s vital that we respect
the faith investors have shown in Tesla, but it will require great effort to
do so."

With relatively low gas prices at the moment, decreasing federal subsidies for
electric cars, and more players entering the market, it seems like Tesla is in
a pretty tough spot.

~~~
charlesdm
> With relatively low gas prices at the moment, decreasing federal subsidies
> for electric cars, and more players entering the market, it seems like Tesla
> is in a pretty tough spot.

Nothing you couldn't see coming 5 years ago, however.

~~~
asaph
To be fair, the current competition is largely a reaction to Tesla's
accomplishments.

~~~
rayiner
I question that CW. If that were true, the competitors would be making sporty
sedans like Tesla. But almost none are. The competitors—the Bolt, Kona, etc.,
are all totally different form factors.

The alternative, potentially better, theory is that everyone is reacting to
the same incentives and market structures. Governments are pushing electric
vehicles through subsidies and mandates. Meanwhile, exploding use of portable
electronics has led to massive improvements lithium ion battery technology.
Tesla has targeted a flashy niche market, expensive sports sedans, but has
largely avoided trying to compete in the markets where the sales really are:
crossovers and SUVs. (Every year, Toyota sells as many RAV4s as all the
vehicles Tesla has ever sold.)

~~~
trimbo
> Governments are pushing electric vehicles through subsidies and mandates

Specifically, isn't this because of CAFE[1]? Gas mileage compliance is
calculated per manufacturer. So BMW can keep selling 17mpg M3s as long as
they're selling enough of those i3s[2]

[1] -
[https://en.wikipedia.org/wiki/Corporate_average_fuel_econom](https://en.wikipedia.org/wiki/Corporate_average_fuel_econom)

[2] - Which sell for $50K but are like $15K used!

~~~
eropple
You can find an i3 for $15K used? Where? Carfax has like $24K at minimum for a
2017.

Edit: NM, had to widen my search params. I dunno if I'd want to trust a 2015
electric car, though. ;)

~~~
trimbo
FWIW there were at least 2 <$20K at my local dealer when I checked it out in
the winter or fall. Maybe people have caught onto the cheap i3 thing.

------
gamblor956
In the letter, Elon stated they have burned through over $200m/month this year
_after_ the cost reductions from last year and January and again in March.
(That's net $200m _lost_ each month, not $200m _spent_ each month.)

They raised $2.4 billion a few weeks ago, about half of which must go toward
servicing existing debt, and had about $900m in the bank before the offering,
leaving them about $2.1billion in cash.

Or in other words, 10 months of cash based on the trend established by the
first 3 months of the year if they do not either cut losses, dramatically
increase sales, or both.

~~~
omgwtfbyobbq
Based on the burn rate as of 2018Q2 (~$720 million per quarter), they should
already be bankrupt.

[https://ir.tesla.com/static-
files/7235e525-db16-470c-8dce-9e...](https://ir.tesla.com/static-
files/7235e525-db16-470c-8dce-9ecac0ad7712)

They aren't because things change and the burn rate for 2018Q2 didn't
represent 2018Q3/Q4.

~~~
gamblor956
Context matters, as does reading comprehension. $200m/month =
$600m/quarter...after 3 rounds of expense cutting.

That's $200m/month in net losses during a purely operational stage. It doesn't
even include the costs of a planned Model Y launch or self-driving network.

~~~
omgwtfbyobbq
Speaking of reading comprehension, of the $600 million/quarter you're
referencing, nearly $200 million was from non-recurring items.

>In Q1, we experienced non-recurring items that negatively impacted our net
loss by $188 million.

[https://ir.tesla.com/static-
files/b2218d34-fbee-4f1f-ac95-05...](https://ir.tesla.com/static-
files/b2218d34-fbee-4f1f-ac95-050eb29dd42f)

The drop in S/X deliveries from the updates to their production lines,
discontinuation of the 75kWh pack, and the pull-forward from Q4 of last year
due to the reduction in the US tax credit also reduced profits by ~$300-400
million.

Like I said, a single data point doesn't make a trend.

------
bondolo
A friend who worked on the charging system for the Model S reported that a few
weeks before the vehicle shipped they were way behind schedule for building
vehicles and falling further behind as the release date approached.

One Sunday morning the entire engineering team was on the manufacturing floor
helping the struggling manufacturing team build vehicles and Elon appeared
trailing a gaggle of execs. They started poking about and work started to
grind to a halt. The engineering lead went over and asked what was up. Elon
said that they were wanting to see first hand what was holding up production.

The engineering lead loudly told Elon to get the fuck off the manufacturing
floor if he wanted any vehicles finished that day, that the engineering team
didn't come in on a Sunday to dick about with execs and they would walk out if
the execs didn't leave. If they wanted to talk they could schedule a meeting
for Monday morning. Elon shut up and left and the team went back to building
vehicles.

The engineering lead left the company several months after the Model S shipped
as did most of the powertrain group. Tesla continues to burn through
engineering talent, but like Apple, has a still continuous stream of bright
eyed naive true believers willing to sign up.

~~~
zaroth
I believe the last paragraph. The original powertrain in the Model S was an
epic failure.

By comparison, Elon claims the drivetrain in the Model 3 is the same unit that
they are putting in the Semi, and that they test it to 1 million miles.

~~~
hef19898
The Semi is their truck, isn't it? Why would someone put a small sedan
drivetrain into a towing truck?

~~~
zaroth
It’s simple, scalable, powerful, and modular. They put four of them in the
Semi.

Connects with 4 bolts and 3 wires. Drops out for easy service, it’s an
extremely impressive piece of tech;

[https://youtu.be/m4eQ7nN_Lwo](https://youtu.be/m4eQ7nN_Lwo)

[https://www.teslarati.com/tesla-model-3-drivetrain-design-
el...](https://www.teslarati.com/tesla-model-3-drivetrain-design-elon-musk-
master-plan/)

~~~
hef19898
In that case it makes absolutely sense!

------
confiscate
sounds like a misleading headline

The original letter says the 2.4 billion raised a few weeks ago, would be used
up in 10 months at current burn rate.

It's for the money recently raised, not the entire company's bank account.
Headline is misleading

~~~
gamblor956
No, the headline is accurate.

Of the $2.4 billion raised, about half must go toward servicing existing debt,
and with the money they already had in the bank (about $900m), they have about
$2.1b liquid cash to see them through the next 10 months, assuming the same
burn rate (losing $200m/month).

~~~
mikeash
Isn’t that double counting the debt service payments?

~~~
new_realist
No, they have two large balloon payments due in 2019 from prior debt.

~~~
confiscate
I thought they had 2B in the bank before the raise.

Granted, I am sure Elon exaggerates numbers, but shouldn't that be factored
in?

~~~
trca
Tesla had ~$2.5B in the bank before the capital raise, and are going to be
receiving a multi-hundred million to $1B payment from Fiat Chrysler
([https://www.ft.com/content/7a3c8d9a-57bb-11e9-a3db-1fe89bedc...](https://www.ft.com/content/7a3c8d9a-57bb-11e9-a3db-1fe89bedc16e))
to offset their emissions. They have plenty of money in the bank for the
foreseeable future, but they won't if they don't cut their expenses or
increase sales. To me, this just looks like a company exiting startup wild-
west spending and maturing into a full-fledged company with hard-set processes
for company expenses.

------
navigatesol
> _On Jan. 30, Musk told investors he thought Tesla would continue making
> money after finally turning its first back-to-back profits during the third
> and fourth quarters of last year, fulfilling his previous forecast that
> Tesla would become “sustainably profitable” from the third quarter of 2018
> onward._

Followed by a massive quarterly loss of $700MM and the pronouncement that the
company has less than 10 months of cash after raising money (which we were
also told would never be needed again). Can someone explain how that happens?

~~~
jmpman
It’s because I didn’t buy a Model 3, as I wasn’t offered a $35k version along
with the $7500 federal rebate as I was planning on. Suspect a few tens of
thousands of others made the same decision. Congress needs to pass the $7000
electric car tax credit or Tesla has a long bumpy road ahead.

~~~
xeromal
You just have to call in to get the 35k version

~~~
jmpman
Sure... I was planning on buying the $27,500 (after rebate) version. As the
rebates have expired, that theoretically priced Model 3 no longer exists. At
$27,500 it was an amazing deal - better than an Accord or Camry.

~~~
zaroth
A Tesla Model 3 at $27,500 would have been such an absurdly sweet deal the
demand would be ludicrous.

If they could have snapped their fingers and manufactured as many as they
needed, I would guess based on passenger vehicle sales numbers, they could
have sold 300,000 in a single quarter at that price. They barely build that
many in a year.

I’m sorry, you were never going to see a Model 3 for $27,500. With the way the
credit phases out, they could never have built up the capacity to fulfill $35k
orders under the full credit, just to have the price then spike as the credit
phased out and be left with huge excess capacity as it came back to full
price.

~~~
jmpman
I was certainly in the top few people placing my reservation. High enough that
if they were delivered in order of reservation, I’d have my $27,500 Model 3.
They opted to maximize their revenue by delivering the expensive versions
first. A Tesla won’t be my next purchase.

~~~
zaroth
Elon was pretty clear that they weren’t going to fulfill in order or
reservation or provide the $35k configuration at the beginning.

You may have missed out on the deal of the century. Sorry to hear you are
missing out on the car of the century because of it!

Mind me asking what EV you would get in its place?

~~~
jmpman
A 2012-2014 Toyota RAV4EV. They have a range of around 100 miles, get me in
the HOV lane for the commute, and are a Tesla under the covers.

~~~
xeromal
I need to check that out. Had no idea the RAV4EV had autopilot. I love Toyota.

------
jancsika
Suppose you buy a Tesla and in 10 months they fold.

Who then maintains the proprietary software that keeps the vehicle running?

~~~
stabbles
Are there historical examples of this happening in other companies? It's scary
to think the answer to ops question is not immediately obvious.

~~~
twblalock
This sort of happened to Saab, but since they were basically badge-engineered
GM cars at that time it is still easy to get parts.

------
ksec
We have conflicting information, One is that Tesla only has $900M Net Cash
before the $2.4B raised, and how it needs to use half the $2.4 to service debt
that they previously hold, and assuming the recent burn rate of ~$200M per
month they will only have 10 months left.

Another is Tesla had ~$2B Cash before the raised, ~$2B Receivables, and newly
$2.4B Cash raised. Not sure on Net total, and he $200M / month burn rate is
only last quarter figurer and not a representative trend.

I don't know which one is right or which one is wrong, I don't have time to
dig out figures either. But this proves even basic numbers that are wrong (
Assuming one of them are ) could easily be spread out.

------
Waterluvian
Am I right to assume that if Tesla files for bankruptcy protection, all car
deposits basically vanish? I assume there's miles of higher priority creditors
lined up than consumers who paid a deposit. Do we have any sense of how many
outstanding deposits there are still?

~~~
ajross
No. Bankruptcy isn't debt forgiveness. Buyers and the lawyers representing the
class action suit would have a seat at the hearing and would be able to get in
line for whatever is left.

That said: come on, people, Tesla isn't filing for bankruptcy. There are
hundreds to thousands of perfectly normal financing options available to run a
company with revenues like this that will stretch a cash shortfall into a
decades-long decline. And that's assuming that their revenue won't continue to
grow.

This is a story you cite if you want to "prove" that Tesla won't take over the
world or is eventually going to be passed by Toyota or whoever. Large
corporations just don't die like this.

I still don't understand the community of people who... really, desperately
want Tesla to fail. Is this a politics thing about EVs? A reverse cult of
personality around Musk? Hipster group think? It's really unsightly.

~~~
Aeolun
I think it’s more that I think there’s something fundamentally wrong about a
company existing for 7+ years, spending billions and having yet to turn a
profit.

It doesn’t really matter whether it is Tesla or Uber.

~~~
pbreit
Tesla is 12 years old and has turned quarterly profits.

------
twblalock
At this point the Tesla brand is so valuable that the company is unlikely to
die. A more likely outcome is that Tesla will be partially or fully acquired
by another company.

The Ford-Mazda partnership that ended around 2015 is one possible model.

~~~
2819b
A bankruptcy rarely means a company actually "dies"...but it would be quite
the wake-up call for SV.

~~~
Robotbeat
It'd be a wake-up call for the "technology alone, no policy needed" strain
green optimism.

I'm more and more convinced that we need strong, supportive policy to
transition to a carbonfree future in time to avoid the worst effects of
climate change, and that the current political situation looks incredibly grim
from that perspective. It's pretty common for states nowadays to pass punitive
taxes on EVs as "compensation" for lost gas taxes, universally over-estimating
the number of miles an EV driver typically does in a year:
[https://www2.greencarreports.com/news/1123069_1000-illinois-...](https://www2.greencarreports.com/news/1123069_1000-illinois-
fee-state-fees-credits-can-make-or-break-ev-sales)
[https://cleantechnica.com/2019/05/17/whos-behind-the-war-
on-...](https://cleantechnica.com/2019/05/17/whos-behind-the-war-on-electric-
cars/)

China has incredibly supportive policy for EVs right now. From a purely
industrial policy standpoint, we're close to strangling our own nascent EV
industry with the sunsetting of the EV tax credit and all these new punitive
state-level EV taxes. (Few Bolts are made, the Volt was recently canceled, and
Tesla is struggling after having to deal with roughly a $3750 impact on their
car price, soon to be increased to $5625 and then $7500... many of the rest
are compliance cars or are available only in extremely limited quantities.)

If things don't change soon on the political front, it could be really bad.
For the US and the world.

------
pascalxus
If he's really serious about making a dent in expenses, he should definitely
consider hiring outside of Fremont, CA. There's much more cost effective labor
outside the bay area, up to 1/3 cheaper in the rest of the US and even cheaper
outside the US. I understand, factory jobs can't be outsourced since people
have to use the factory in Fremont, but software engineers, web designers
should be remotable.

------
spicymaki
I love how straight and to the point Reuters reporting is.

~~~
_sword
Agreed. I primarily use Reuters and Bloomberg as my news sources and this is
core to why I chose those.

------
_ph_
The headline is misleading. Elon was just stating that the cash burn rate of
the first quarter would eat up the newly invested capital in 10 months. He did
nowhere say, that he expects the cash burn rate to stay constant, even without
the savings he plans to implement. Q1 was a quarter with low deliveries -
while more M3 were made than in Q4, less of them reached their buyers before
the quarter end and thus a lot of them couldn't be accounted as a sale yet.
All indications are, that in Q2 the total amount of delivered/sold cars will
be quite a bit higher than in Q1, which also would improve the finances
accordingly. Probably not enough to break even, hence the saving money
initiative.

------
sergiotapia
What happens to Tesla cars on the road if Tesla the company is gone? Who do
the cars phone home to? Who can perform maintenance and repairs?

Edit: Why did people downvote this question lol

~~~
nathanaldensr
What happens to online-connected video games when the servers go down?

~~~
pests
Except the game has a single player mode that always works and will never be
taken offline. You just lose access to new maps and updates.

Seriously though the car will still be a car even in 100 years. It will drive.

~~~
wasdfff
A car isn’t a video game where the worst thing that a bug does is ctd.
Sometimes cars are recalled years later because they burst into flames due to
a poorly designed component. Who handles teslas recalls after tesla? And who
repairs your tesla when the only people approved to repair teslas is tesla?
Who keeps making oem parts? This is a lot more complex than call of duty 4
losing dedicated servers.

------
tomasz207
Seems reasonable, until reviewing every single expense starts slowing down the
procurement process and results in inevitable delays and charges.

~~~
navigatesol
> _Seems reasonable_

You think it's reasonable that the CEO of 3? 4? Multi-billion dollar companies
is personally signing off on company expenses? It's unfathomable to me.

~~~
natch
Some expenses. Seems like it’s a special one-time push. And Elon specializes
in doing the unfathomable.

------
pascalxus
Why is everyone so worried about a Tesla not surviving? Their stock price
(although a little down), is still way above it's initial IPO price.

~~~
wasdfff
Because they are on track to run out of money in 10 months.

------
omarforgotpwd
This is not true. What he says in the memo is "it would take us 10 months to
burn through the $2.3 billion we just raised at our Q1 burn rate"

They've guided for a "significantly smaller" loss in Q2, and positive cash
flow in Q3 and Q4.

With $2.4 billion raised, $2.2 billion in the bank, and $2 billion worth of
payments coming from Fiat Chrysler cash is not as much of a concern as the
headline would suggest.

~~~
dang
The headline used to be "Tesla Has 10 Months of Cash to Burn Before Dying Out"
before we changed it. That's because the article was originally a different
one—see
[https://news.ycombinator.com/item?id=19950431](https://news.ycombinator.com/item?id=19950431).

~~~
omarforgotpwd
good work stopping misinformation

------
dang
Url changed from [https://carbuzz.com/news/tesla-has-10-months-of-cash-to-
burn...](https://carbuzz.com/news/tesla-has-10-months-of-cash-to-burn-before-
dying-out), which points to this.

------
rolaloker
The batteries were not faulty that is just how they react to stress, and the
older they get the more susceptible they become, 20 years from now i would bet
they become the most common cause of house fire while being charged.

------
scythe
Sell to Panasonic?

------
TheM00se
If you own tesla stock: SELL, Sell, Sell today!

------
Causality1
As far as I know Tesla is still stuck in the rut of trying to over-automate
their production while spending more money for worse outcomes than just hiring
human assemblers.

~~~
unforeseen9991
If they weren't already spread thin this would be a good investment, as they
are learning and pushing the envelope. That's a valuable asset and could make
a huge difference in long term.

------
aortega
Traditional car companies must be damn scared to have to publish this FUD.

Tesla cannot be possibly dying out. Don't you see Tesla cars everywhere in the
US? yes they are spending money, buying things to grow as they are so
incredibly successful they cannot satisfy demand. Dying out? you make me
laugh.

If you spend 10M dollars buying equipment that in a year is worth 100M
dollars, you are not dying out.

~~~
marcinzm
> Don't you see Tesla cars everywhere in the US?

No I don't, might see one once a week or month. They're common in Silicon
Valley but that's a small fraction of the US.

edit: Tesla has sold something like 300k cars in the US which comes out to
under 0.15% of all cars in the US. So basically, negligible. And a third to a
half of that seems to have been in California. So in most of the US you'd need
to look at on average 2000 cars before you see a Tesla.

~~~
madengr
I live near Kansas City, and see probably a dozen a day. They seem to be very
popular, but there is a good charging infrastructure in this area. I'm cheap
though, and bought a used Leaf.

------
paulsutter
Please Elon focus on SpaceX and Boring Company. Tesla has already succeeded.
You’ve made gasoline cars uncool and all the major car companies are coming
out with electric models. Tesla is just a giant drain in your time now.

~~~
patrick5415
Eh, I still think a v8 with a flowmaster is pretty cool.

------
sliken
Seems like what Tesla should do is convert two of the four model 3 lines to
the model Y. They are very similar cars, so it should help their time to
market. If the model 3 gets a bit rarer (and the average selling price raises)
all the better.

------
kisstheblade
I don't get whats so special about Tesla anymore. Eg. you can get cars like
this from mainstream car producers
[https://www.youtube.com/watch?v=aP7of0p-GGU](https://www.youtube.com/watch?v=aP7of0p-GGU)

And on the lower end a friend has a Renault Zoe. An excellent car on all
accounts. I saw a base level black model 3 the other day parked and I tought
what a cheap looking car, it was truly underwhelming (where I live there
aren't many Teslas). Then I saw that it was a Tesla which costs about 50000$
here...

I don't care about model S ludicrous mode acceleration, nobody actually needs
that kind of acceleration from traffic lights. Well maybe if you have low self
esteem and try to compensate for something?

------
SlowRobotAhead
1\. I don't know if that math is entirely solid. They got 2.4 billion and in
the past quarter ran though 200 a month, thus 10 months before they're empty.
But that's not exactly how it works, for all I or anyone knows the last
quarter was very tooling heavy and they chose to pay costs all upfront instead
of amortize costs. IDK.

2\. I work in automotive. I was a the room with 3 VPs from a BIG 3. They
weren't threatened by Tesla (right or wrong), they merely agreed that some day
soon Tesla was going to learn _" how hard it is to build a real car"_. Knowing
the backend, and understanding the difference between acceptable failure rates
on say a McLaren 570 vs a Toyota Corolla. What they meant was it's one thing
to ship a few cars, it's another to get where Tesla seems they need to be to
get profitable. Just an anecdote.

~~~
gamblor956
_for all I or anyone knows the last quarter was very tooling heavy and they
chose to pay costs all upfront instead of amortize costs. IDK._

Many people do know...Depreciation is subject to specific tax and accounting
rules. While for tax purposes some (but not all) of Tesla's spending is
immediately depreciable, for accounting purposes, none of it is, so their
tooling costs must be depreciated over the useful life of the equipment.
Depreciation also isn't relevant to a discussion of _cash flow_ , as
depreciation is merely an abstract number representing estimated wear and
tear.

~~~
SlowRobotAhead
I said amortization and tooling. Not depreciation.

And the point is, it’s foolish to assume that what happened last quarter is
what will happen this quarter. If you don’t think so, please show me the
billions you’ve made in the stock market.

~~~
gamblor956
Amortization is simply depreciation of intangible assets...

And with Tesla and Elon Musk especially, it's extremely foolish to assume that
Tesla will meet any of the benchmarks that Elon has ever set...since they
never have.

Right now, Elon is saying they have 10 months until cash runs out. And knowing
Elon, that's almost certainly an overly optimistic prediction since it doesn't
take into account the _increased burn rates_ necessary to launch the Model Y
or the self-driving taxi fleet, so less than 10 months. If Tesla doesn't raise
additional capital by the end of 2019, they won't see the end of 2020 as a
going concern.

------
bob33212
"when you are weak, the enemy should think you are strong, when you are strong
the enemy should think you are weak" -The Art of War

~~~
falcor84
Who is the enemy in this situation? I don't see how this applies to publicly
traded companies.

~~~
Jach
So much this... There are texts written with military contexts in mind from
which you can extrapolate non militaristic lessons (The Book of Five Rings,
for instance). The Art of War is not one of them. It's not surprising to see
it quoted a lot though. I'll leave with a quote from Naggum; whether one
thinks it's fair to Gates matters less in this context than if there's
agreement that the outlined problem exists:

"the problem I see is not that Bill Gates has shaped the world of useless
trinkets in software, but has also managed to spread his competitiveness and
his personal fear of losing to imaginary competitors to businesses and homes
everywhere, so now everybody is _afraid_ of losing some battle which isn't
happening, instead of getting about their own lives."

[https://www.xach.com/naggum/articles/3141310154691952@naggum...](https://www.xach.com/naggum/articles/3141310154691952@naggum.no.html)

~~~
bob33212
Sure, it isn't exactly the same situation as a war, where one country is
fighting his neighbor country to the death. But to say that the art of war has
no lessons to teach those of us who are not literally in a war is ignorant.

~~~
Jach
Perhaps I am ignorant. I've only gone through one translation of The Art of
War, perhaps others are better, but for all such texts there are always
motivated translators purposefully not capturing what was originally written
in order to make it seem more broadly applicable.

This discussion has reminded me that your oft-quoted "quote" doesn't seem to
originate from any actual translation, but is a rephrasing of a bit of chapter
1, where it says "Therefore, when able, seem to be unable;" followed by a lot
of other things. It's also worth pointing out what immediately precedes the
'therefore', which is: "Warfare is the art of deceit."

That simple line left out of the version you quoted is crucial. Context
matters, and applies for quotes even when the original is in English (see the
full context of Knuth's premature optimization quote for instance). The
context here is about deception in war. At best you could extrapolate it to
situations where deception against your foes is needed in general, but even
that is stretching things, and certainly doesn't apply all that much to
publicly traded companies like Tesla. The closest analog for them is guarding
trade secrets. Besides, deception is usually frowned upon outside of armed
conflict, and if a public company deceives the wrong people about the wrong
things, and gets called on it, then the company and its higher ups aren't
going to have a good time. For example, cooking the books to 'appear strong'
would be a rather egregious deception.

Some forms of deception can have a more legitimate purpose in certain business
dealings, it's true, as I'm now reminded of Gates' love of poker and some of
his great bluffs in MS's early days. Though the consequences of failure
wouldn't have been beheading. I'll quote the rest of the paragraph from my
translation though and let you decide if Sun Tzu has anything to say about
this narrow form at the poker table or when trying to arrange multi-party
business dealings promising future deliveries:

"when nearby, seem far away; and when far away, seem near. If the enemy seeks
some advantage, entice him with it. If he is in disorder, attack him and take
him. If he is formidable, prepare against him. If he is strong, evade him. If
he is incensed, provoke him. If he is humble, encourage his arrogance. If he
is rested, wear him down. If he is internally harmonious, sow divisiveness in
his ranks. Attack where he is not prepared; go by way of places where it would
never occur to him you would go. These are the military strategist's
calculations for victory--they cannot be settled in advance."

------
threeseed
Definitely less than 10 months.

Demand is dropping off as (a) serious competitors come onto the market e.g.
Mercedes EQC, (b) the time between a model refresh increases e.g. S and X
models and (c) the concerns over customer service increase.

And I still believe that the Model 3 was a mistake to release at this time. It
is cannibalising their higher priced models and squeezing the company's
overall gross margins at at time when they need money.

~~~
djanogo
I think Porsche Taycan is a bigger threat as it will target Tesla's high
profit margin cars. I would assume people who spend 80-120k for cars would
prefer Porsche dealerships and service, while Tesla sales and service centers
are inundated with $40k buyers issues.

I checked EQC, it still felt like a compliance/test vehicle compared to
Taycan, which Porsche has been testing in several continents under extreme
weather conditions for over a year now.

~~~
madengr
A 4 door Porsche is an abomination, along with that stupid SUV.

~~~
dingaling
That stupid SUV is what keeps Porsche alive.

Personally I view any Porsche bigger than a Cayman as an abomination, but that
doesn't fit with the demand for the company to constantly grow.

------
negamax
Few thoughts

1\. Is anyone still buying car? May be it's a huge necessessity in US but most
of the cities are fairly packed and have good public transport and _improving_

2\. Idea of self driving car will indeed be a big selling point. Still people
will pool those and cost of transport in general will come down because of
Uber's fleet. Self ownership will still not go up significantly unless idea is
to buy for long distance travel (not city travel)

3\. The rumors this could be beginning of Tesla being taken private by EM has
merits, considering his recent spat with SEC

~~~
gambiting
>>1\. Is anyone still buying car? May be it's a huge necessessity in US but
most of the cities are fairly packed and have good public transport and
improving

Is this like....a joke? I mean I get it - I used to live in a big city where
owning a car just seemed stupid and wasteful. But once you live outside of the
metropolis, where yes, there is public transport(in a form of a bus or two
going every two hours), and you have kids and things to do, then yes, cars are
still a necessity.

~~~
base698
Even without kids, lots of hobbies require going to far away places with
equipment. Lots of those places may not have Uber.

Kids today just aren't imaginative anymore.

