
Tesla Looked Like the Future, Now Some Ask If It Has One - tysone
https://www.nytimes.com/2018/03/29/business/tesla-elon-musk.html
======
otalp
Tesla has Apple-like brand value without the Apple-like manufacturing
efficiency or profit margin. For Tesla's stock price to be worth the current
value they need to at some point be making industry-high profit on every car
sold - so far they're barely breaking even on the model 3s.

They've _always_ fought against the odds and always looked like a bad bet if
you only looked at numbers. The thing is nobody knows how far that brand value
- which maybe only 2 or 3 other companies have, can take you: it's the
confounding factor when it comes to 'Tesla predictions'. Fans probably buy
into the Musk brand while skeptics underestimate just how far brand can take a
company.

Funding shouldn't be problem for Tesla for the next couple of years, and
neither should selling cars that they've made. But the so called production
ramp up has been postponed for a year now.

If they face two or three more 'unexpected hurdles' in manufacturing and have
an autopilot scandal or two, they are in trouble once Merc/BMW/Lexus/Audi
start coming up with electric cars by 2020ish. That's the real danger. If they
can mass produce model 3s by 2020, they should be fine.

~~~
Consultant32452
>They've _always_ fought against the odds and always looked like a bad bet if
you only looked at numbers.

To quote Peter Thiel, "Never bet against Elon Musk."

~~~
buvanshak
>"Never bet against Elon Musk."

You can fool all the people some of the time, and some of the people all the
time, but you cannot fool all the people all the time. - Abraham Lincoln

Elon musk is on phase 2...and it can go on for a while..it seems..

~~~
Mononokay
He's not particularly fooling anyone - he's achieving what he says he will,
just a bit off schedule for the most part.

~~~
danielwang
Smells like a cult. I would love Tesla to succeed, but schedule is everything.
I can claim I will cure the cancer, but if the deliver is 2000 years later. It
means nothing.

------
ucaetano
It is clear that Tesla is failing to deliver any competitive advantage besides
its early start.

It has failed to achieve what is the standard baseline for mass production of
cars today, a sustained production rate within controlled quality parameters,
and failed to differentiate in other areas, falling behind most other
automakers (and non-automakers) in innovation (especially autonomous driving).

There is still hope that it will solve the Model 3 problems, but at this point
(including the desperate "volunteers to prove the haters wrong" email) it
seems more and more unlikely.

~~~
tytytytytytytyt
> and failed to differentiate in other areas, falling behind most other
> automakers (and non-automakers) in innovation (especially autonomous
> driving).

What other car has better autonomous driving?

~~~
linsomniac
As someone who spent $8K on Enhanced Autopilot 15 months ago, I'd say that
pretty much everyone has better autonamous driving. My brother-in-law got a
new Honda Accord a few months ago, and says on the highway he can just take
his hands off the wheel and let it do it's thing.

My fancy-schmancy Tesla Models S meanwhile can do an ok job of following lanes
as long as you keep your hands on the wheel and pay attention to ensure that
whenever it doesn't detect your hands on the wheel that you give it a little
tug.

I love my Model S, but they really bit off more than they can chew in the
"writing our own software" department.

~~~
dkoston
Do you have 2018.10.4 or above? It drove me through 220 miles of rain
including torrential downpours yesterday with ease. Up until that update, I’d
agree that AP2 was sub par but the new update has dramatically improved EAP.

~~~
smt88
> _It drove me through 220 miles of rain including torrential downpours
> yesterday_

This sounds terrifying. Why did you trust it enough to experiment with your
life?

~~~
jacquesm
And the lives of everybody else on that road.

------
kwelstr
Tesla high valuation is the only thing that has prevented it getting bought by
one of the big car companies, and that's a good thing. GM used to buy smaller
competitors to take them off the market and just keep the name as a token of
the brand. Hundreds of players from the first half of the 20th century got
swallowed into a few brands.

Tesla has pushed the car industry forward decades in a few years. The big
players were just competing in price and size of vehicles and never taking
risks. Elon Musk has the vision and charisma to execute and move Tesla to the
forefront of innovation, keeping everybody else in its toes trying to catch
up. I don't think the market cap will fall anytime soon for this company.

~~~
Mononokay
> Tesla high valuation is the only thing that has prevented it getting bought
> by one of the big car companies

I don't think so. Musk doesn't seem like the type of person to compromise on a
vision for a (relatively) small buyout. He'd have probably declined if given
an offer.

~~~
femidav
It's not like he can decide that alone, he has ca. 20% of Tesla's shares.

------
mattsfrey
I think at the end of the day they are solving a really hard problem and being
one of the few players in the space actually innovating. There is a lot of
appreciation and I think customers and fans of Musk and the brand will HODL.
They need to get through the hiccups and learn as they go, but ultimately it's
a space that has a future.

~~~
avs733
It's a space that has a future, sure. But the thing that kills more companies
than anything else is failure to execute effectively.

Tesla is failing at manufacturing. They have been for a while but they got
away with it because their innovation was perceived as far enough ahead. With
Nissan, GM, Jaguar, BMW, Porsche, etc. now in the EV space and Uber, GM,
Waymo, etc. in the SDC space they have meaningful competition.

They have survived on innovative products for a while...they are trying to
continue that with the Semi and with the power wall, time will tell if they
can actually build them - which is a precursor to just about everything else.

~~~
smt88
> _Tesla is failing at manufacturing_

This is especially confusing because, of all industries, the general public
knows the most about manufacturing excellence when it comes to cars. There
have been tons of books written about Toyota, and we've even seen the
birthplace of auto manufacturing crushed by that manufacturing prowess. It's
practically a religion.

Why didn't Musk learn from all that history?

~~~
avs733
The drive to disrupt is strong, it's a religion too. Sometimes that is good,
sometimes all you are doing is tilting at windmills.

------
qaq
The mood on this site is funny you never worked on software project that
delivered late? Did it mean that your company with multi-billion market cap
was immediately doomed? The challenge they face now is big but on this road
they already faced many challenges.

~~~
Nokinside
Technology is not the only space where Tesla is innovating. Tesla has also
very innovative financing and they are really starting to stretching it.

Tesla made financial bet that they deliver high volumes of Model 3. It does
not matter if Model 3 is good car and customers love it. Tesla must ramp up
their production very fast or Tesla runs out of cheap money.

Tesla has no problems with customers. They love the car with passion. It's the
investors who will choke Musk to death later this year if he has to ask more
money to continue with struggling production. He will get the money but it
will have high interest rate and Tesla stock will come down 30-50 percent.
Currently Tesla is producing 20% of it's target. Their production curve is not
growing steeply enough. In fact it's slowing down.

[https://www.bloomberg.com/graphics/2018-tesla-
tracker/](https://www.bloomberg.com/graphics/2018-tesla-tracker/)

ps. High flying arguments that don't look into details of each case, like
"Never bet against Musk" or others have solved technical difficulties too, are
not really useful for investor.

~~~
qaq
No doubt that's a possible scenario and yet does not mean it will not recover.

~~~
Nokinside
It absolutely means that.

Tesla is not going to financially recover if Model 3 fails to deliver within a
year. Musk is taking huge risks and so far it has paid out. That's a thing to
admire in him.

But the risk taking means that there is no fallback. Model 3 will either make
or break Tesla. They have to deliver Model 3 in large volumes or it's game
over. They have no time or money to try again or fall back into the small
volume luxury car business where they have time to develop the technology.

Clock is ticking.

~~~
qaq
"Tesla is not going to financially recover if Model 3 fails to deliver within
a year" again define deliver if they are at 50% of the planned rate by the end
of the year but on a good trajectory to reach 100% within 4 month or whatever
else situation might be it's a scale.

~~~
Nokinside
They are not in the planned trajectory. They are in a trajectory of constantly
revising their plans downward while hemorrhaging several billions per year.

Over 1058 per week is not half of the 2500 per week is not the 5000 per week
is not 10,000 per week that was the plan.

The issue is that their spending grows much faster than their plans for
delivery and they will end up diluting their stock.

~~~
qaq
Sure there is a difference between "diluting their stock" an going belly up
though.

------
Analemma_
To everyone saying “they’re just about to ramp up production, then they’ll be
fine”, keep in mind that might be “out of the frying pan and into the fire”.
There are already some serious questions about quality control at Tesla, and a
lot of suggestions that they are cutting corners to meet these production
deadlines, which will come back to hurt.

~~~
curtis
> _There are already some serious questions about quality control at Tesla,_

Quality control specifically for the Model 3 or quality control for the Model
S? Clearly the Model 3 quality isn't good enough right now, but it seems quite
likely that given time they should be able to bring it up to Model S levels. I
don't know if that's good enough, but I think it might be. Will Tesla have
time to reach that quality level? I think they probably will, but they may
have to raise more money to pull it off. And they may have to raise that money
at a less than favorable valuation. However, the idea that they won't be able
to raise money at all seems unfounded to me, just like the implied notion that
they can't fix the quality problems.

There's a big difference between "Tesla is struggling" (yes they are, and it's
not even the first time) and "Tesla is going to fail".

~~~
MBCook
I still seem to see reports of problems with brand new model S cars off the
line, so while moving up to S quality would be an improvement for the three
it’s still a pretty low bar.

Why aren’t they where Ford/Toyota/GM/Honda/Kia/anyone else is?

I thought one of the big ideas behind the model S was that they would use it
to learn higher volume manufacturing (relative to the roadster) so that when
the model three came they be ready.

We are not seeing that at all.

------
omarforgotpwd
I think they will be okay. It's crunch time for sure, but I think they will
deliver on Model 3. I am getting mine within a few weeks, and buying TSLA.

~~~
adventured
A year has hardly gone by over the last seven or eight, where the crowd hasn't
largely proclaimed Tesla would die, and die very soon. Analysts were
overwhelmingly bearish at every step. Competitors said none of what Tesla has
accomplished could be done, including the Model S period.

I keep seeing people say that Tesla is dead in three months. They have ~$3
billion in cash with the ability to dilute at will. The irrational, negative
emotionalism that's being directed at Tesla right now is incredible. I can't
imagine where it's coming from or why. There's almost a lust for them to fail.
Nobody cheered for the death of Fiat or Jaguar like this.

~~~
omarforgotpwd
Irrational negative emotionalism is all the rage right now. A product of the
clickbait driven digital media economy.

------
danielfoster
When does the NYT have something positive to say about a tech company?

~~~
wpasc
"If it bleeds, it leads." News media will rarely say something positive about
any tech company, probably even worse so than the general bias towards
negativity

~~~
smt88
If you think that's true, you should check out all the glowing write-ups of
Theranos, Amazon (specifically Bezos), and Microsoft (specifically Nadella).
The coverage isn't/wasn't universally good, but I think we do get a pretty
good picture of most tech companies from mainstream media.

------
arthurofbabylon
A big issue around Tesla is hype. Don’t get me wrong - FOR Tesla it’s great
(boosts demand, brings in investment money) - but for those of us watching, it
makes it hard to see what’s going on.

To be honest with y’all, I have no clue how amazing or horrible Tesla is
doing. Headline after headline just pumps the hype and makes connecting the
dots and fitting real performance into a context harder and harder. I do get
value from others’ speculation as it helps me see things from new
perspectives, however each new hyped story seems to obfuscate what’s really
happening.

------
Zigurd
Obits for Tesla are premature. The model 3 won't have any direct competition
for two or three years. Other EVs on the market are a generation behind, and
have production numbers that are a fraction of today's Model 3 numbers.

On the other hand, to be worth its valuation, Tesla probably needs more than a
year of uncontested dominance. So even if Tesla retains all the pre-sold Model
3 customers and is on track to fulfill those orders, "too late" could come
sometime later this year.

~~~
opencl
The Bolt isn't a Model 3 competitor and the 652K EVs sold in China in 2017 are
a fraction of today's Model 3 numbers?

[https://www.greencarreports.com/news/1114853_china-plug-
in-e...](https://www.greencarreports.com/news/1114853_china-plug-in-electric-
vehicle-sales-in-2017-almost-four-times-those-in-the-u-s)

~~~
Zigurd
The Bolt is exactly what I mean by a generation behind and with low
production. China EVs interesting, and potentially much more disruptive if
they turn out to demonstrate that entering the EV business is cheap and easy.

------
jaimex2
Interesting that the Tesla doom and gloom article isn't pay walled.

~~~
carlivar
NYTimes doesn't truly paywall anything. You get a finite number of articles
each month but easy to get around that with incognito mode. That being said,
I'll probably subscribe soon.

------
imh
>And it was Autopilot that set off a race to develop advanced driver-
assistance systems that can guide cars under certain circumstances and
actively prevent collisions — though Tesla’s technology appears to have been
surpassed by the self-driving systems from other companies, including G.M. and
the Google spinoff Waymo.

Is this in any way true? My understanding was that Waymo, or even the DARPA
grand challenges, were what kicked self driving cars off, and the driver
assist features were picking up steam before Tesla.

~~~
BariumBlue
A bit of both; there were self-driving cars before Tesla, but Tesla was the
first to commercially field any kind of "autopilot" feature, spurring on the
existing competition

~~~
imh
What was new about their autopilot? My googling is uninformative :-\

~~~
BariumBlue
Just that it was actually commercially fielded, rather than in some test
environment somewhere

~~~
imh
Sorry, I was unclear. I meant, new relative to the other things commercially
fielded. That's the part I had thought others had.

------
smt88
It's a lot harder for a company to die than people think. Aol is still around.
Bankruptcy is, by design, not a death sentence, and Tesla can always use that
escape route if they need to.

For now it seems that investors will continue to pour money into them and they
won't need to.

~~~
carlivar
Bankruptcy is a death sentence if you rely on suppliers that won't sell you
the supplies you need because they fear they won't get paid for them. This is
what happened to Toys R Us.

You're right that it's not a death sentence because the brand/trademarks have
value and are part of the bankruptcy process. But many companies that still
exist in name aren't "really" the original companies. Such as Pabst Blue
Ribbon beer, Blockbuster Video, or Atari, to name a few.

------
kisstheblade
Seriously. I bought a Renault Zoe (in europe). What the F has Tesla to offer
to maintain that kind of valuation? I can find zero compelling reasons to by a
Tesla compared to the Renault. Oh and also, I can't buy a Tesla at this date
at that price.

~~~
rcMgD2BwE72F
I drive an Autolib. What does Ferrari have to offer to justify their
valuation?

------
linsomniac
I don't know about Tesla, so many people are saying how it's going to fall
apart, but I'm fairly optimistic. But, maybe that's because I'm both a Tesla
owner and stock holder?

I feel like Tesla is spending money like it's going out of style, because it's
building a new industry. They have a great network of charging stations and
are expanding it extensively. A year ago when I got a Model S I drove it 2K
miles each way to the family's place (CO to NC). And honestly it went fairly
smoothly. Since then the charging network has expanded dramatically.

When I first got the Model S, my fiance thought about taking a road trip from
CO to Nebraska, but because I got the cheap model, I could make it to Nebraska
because it was downhill, but I couldn't make it back uphill. But, they've
dramatically enhanced the I-80 superchargers.

Ok, so if you are building a new infrastructure, how much money spend is too
much? How do you know if spending money like it's going out of style isn't
going to end up in returns later? Tesla is building out a great infrastructure
for charging, nationwide. One of Tesla's products, and one of it's determiners
for success, is the charging network. When I got my car, Dec 2016, we started
on a trip cross country with the kids, and I was like "I only give us a 50%
chance of success". Between not knowing how charging was going to work, and
not knowing if the kids were going to get into a fight because of being
cramped in the back. I expected we wouldn't event make it out of Colorado
before something turned us back. But, we made it there and back fairly
smoothly. Had to learn some things about electric cars, but it worked great.

I'm really a car guy, and I love the sound of a V8. But, the Tesla is amazing.
Could I have gotten something better from Audi for $75K (about my spend after
incentives)? Probably. Do they have better self driving? Probably. But, with
the maintenance on my A8 that the Tesla replaced, it's cheaper to run the
Tesla than it was my Audi. Which, honestly, isn't a high bar to reach. My 2008
Audi A8 was a better car in many ways, as far as toys. But, the Tesla I've put
over 20K miles on, with $0 for maintenance.

 _I_ think Tesla is building the infrastructure of the future, and they are
spending money now to make something of huge value in the future.

How much is too much to build the future?

~~~
meddlepal
Exactly what "new industry" are they building? They're just selling people
movers that get you from A to B. They're an EV Mercedes of the 21st century...
The implementation is interesting, but the idea is old and tired.

~~~
linsomniac
They aren't building people movers. They are building the whole
infrastructure: Solar, national chain of "gas stations", people movers, long
haul thing movers, technology for self driving, industrial and home power
infrastructure. They are competing with the car companies, the petrol
industry, and they are starting to compete with convenience stores.

On top of that, their platform is a rolling data gathering system. Images,
temperature, time, speed, density of vehicles around it, battery charge level.
Do you want to know if it makes sense to build a hotel in a new area? Tesla
has data that can be useful in making that decision.

Tesla is way more than just a new incarnation of the struggling auto industry.

------
jaimex2
\- Make a great affordable electric car

\- Mass produce it without flaws

\- Dont run out of cash.

Pick two.

