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Company Update (tesla.com)
207 points by lultimouomo 36 days ago | hide | past | web | favorite | 196 comments

While I know I could never make someone redundant personally, I do think the idea that you're owed a job at a company forever is wrong. As someone on the spectrum, it's not always been easy for me to find work, and I have been made redundant in a similar manner to this in the past which wasn't an enjoyable experience. Still, at the time all I could do was express my appreciation that for a few years that company wanted my services enough to pay me a decent wage and that I thoroughly enjoyed my time working for said company. I understood my job was a risk to the company going forward and I held no hard feelings about the decision made to let me go.

In a perfect world things like this wouldn't happen. Top employees would never leave for a better paying job, and you'd never have to let employees go to remain competitive. But this isn't a perfect world. We must prepare for the worst and hope for best while remembering to treat each other with as much respect, kindness, and understanding as possible.

Whether or not these specific cuts were needed or sensible, I don't know. What I do know is that Tesla is a young company in a highly competitive space. Were I personally to take a job at Tesla I wouldn't expect to be there longer than a year - especially if I was a temp worker or contractor. Anyone who's worked at small, early stage startup in the past would know how this story goes. You often work harder and longer than you would at a more established slower moving company, you don't get the perks, and you're constantly worrying about whether or not you'll have a job next month. But it can also be very rewarding when things go well. These are the decisions you must weigh up as an employee when looking for work.

I think for a company the size of Tesla it would actually be beneficial to have a well-organized worker council and union through which the employees could negotiate with the board of directors when things like this happen. Often this results in a better solution for everyone.

When the recession hit Germany in 2008 most large automotive companies were also faced with a massive decline in orders and were forced to aggressively cut costs. As employees in these companies are heavily unionized they of course protested against this and the worker council started negotiating with the board of directors. They found a solution by reducing the work hours for a large percentage of their workers (with an accompanied pay cut) instead of firing a smaller percentage of them, which allowed them to retain almost everyone and at the same time reduce costs. When the economy sped up again they were able to just increase the working hours again. This was great for the employees (as they didn't lose their jobs) but also for the companies, because they didn't have to find and train new employees after the crisis was over.

I'm wondering why Tesla isn't considering something like this as I imagine there's a lot of training involved in many jobs at their factory, and it's probably very costly to rehire and retrain new employees when the growth picks up again. Just my 2 cents.

One of the reasons why shortened work (Kurzarbeit) worked for Germany is that the government subsidizes it by paying the workers back some of their lost income, on the rationale that it's better to subsidize them for a short time rather than for them to become unemployed for a potentially long time.

The maximum duration of this Kurzarbeitergeld was gradually extended through the 2007-2009 crisis from 12 months up to 24 months.

Health Care also plays into this. In the US, most companies are paying for their employees health care. You can cut hours, but that doesn't dent the health care premium per employee.

In the rest of the modern world, health care is the problem of the government, so cutting back on hours is a more useful strategy.

Things I don't understand about the US ... why does not most advanced western nation not have a socially fair health care system.

E.g. in germany, the price of health care is proportional to income.

The US does make some adjustments based on income. The Affordable Care Act introduced the Premium Tax Credit which does this.

The way it works is the government subsidizes the cost of buying insurance. The money is given to you as a credit against income taxes you would otherwise have owed. (With most tax credits, you wouldn't receive the credit until after the tax year is over, but this credit has a special provision to receive monthly payments in advance.)

The amount of the credit is based on the cost of insurance (which varies by age and location) and it is also based on your income level and size of household.

The credit is for people just above poverty through the lower part of middle class. It phases out as income gets higher, and people with a comfortable middle class income receive little to no credit. At certain income levels, the credit is pretty substantial (as it has to be to cover the high cost of insurance).

More info: https://en.wikipedia.org/wiki/Premium_tax_credit

Ideology is part of it. Some Americans believe socialized health care is unjust:


It's a position that doesn't make much sense in practical terms. Australia has universal public health care. Australia spends half as much per capita on health care than the US does and Australians have a longer life expectancy than Americans.

Australia's paying half as much for better health outcomes. For me, universal public health care isn't socialism as much as it is a better business model.

Just addressing the Australia vs. US healthcare thing for a moment, I need to vigorously disagree with you on the implied superiority of the Australian system. I would argue that:

1. Quality of care is better in the US

(totally subjective, but in the US we're waiting less and getting better treatment with less runaround/referrals/arguments; if you have insurance, you'll get whatever you want without a fight)

2. Cost is about on par with Australia

(AUD3000/year for private health, plus 1000-3000 for Medicare supplement, plus whatever you pay in taxes; in terms of raw cash paid it's actually very close. But Australian PHI doesn't cover anything of value until you're hospitalised; urgent but non-life-threatening stuff is basically paid out of pocket. US has HSAs and practically everything is covered.)

3. US healthcare spend is measured in monopoly money and, assuming you have insurance, real costs are not easily comparable.

I don't have any hard data on these, though, and so am very happy to be educated.

>in the US we're waiting less and getting better treatment with less runaround/referrals/arguments; if you have insurance, you'll get whatever you want without a fight

Stating this as fact basically means you've never been to an American doctor, or are extremely lucky in your local hospitals. Waiting months for an appointment just so you can be told to see someone else is par for the course if you don't have a "normal" health condition in America. And after all the playing around trying to find someone actually willing to diagnose you with something, you then get to play the fun game of paying the bills. Remember, no matter the discounts the insurance company has with the hospital, they still benefit by denying you coverage through whatever fine print they can manage. They get paid regardless

> Stating this as fact

Uh, I pretty clearly stated it as personal experience.

I did overstate the 'get whatever you want' part, though. I'm making the point that in Australia, insurance is both compulsory and useless. In practice, all it offers is slightly higher priority treatment than non-insured patients should you go to hospital. Should you need a specialist, you'll usually pay them out of pocket -- insurance will (at best) cover a small percentage of the fees, and usually nothing.

> Waiting months for an appointment just so you can be told to see someone else is par for the course

This is also the case in Australia.

> we're waiting less

I had a ligament injury after a car accident. Without traveling more than hour (and I live in a major populated area), I could not get physical therapy for '8-10 weeks').

> urgent but non-life-threatening stuff is basically paid out of pocket. US has HSAs and practically everything is covered

As someone who lived in AU for 20 years, and in the US for 12, huh? I never paid more than $20 for urgent care in Australia. IF you have a HSA here, sure, you can pay your co-pay, which would be $20-40 anyway, with that, but most people don't have the luxury of a HSA. And if you're uninsured, urgent care here will charge you $200-300.

Healthcare is still a small percentage of the overall cost of having an employee. Salary and other cash-equivalent compensation is by far the #1 cost, followed by employment taxes at #2.

This depends heavily on the age and wage of the employee. For a typical 20-something developer making $100k, the monthly cost for a good HMO might be peanuts at ~$300/mo., a mere 4% overhead.

But for the 60-year-old hourly line worker making $40k, whose wife and two kids are also covered by the plan (thanks union!), a good HMO might cost upwards of $2000/mo., an almost 50% overhead. [0]

For a PPO, the numbers would be even higher.

[0]: https://www.calchoice.com/FormPdfStreamer.aspx?FormId=6601&E...

I will admit that I am definitely skewing this towards the HN demographic, and that it's different in other industries as you point out.

Health insurance costs are split 50/50 between employers and employees in Germany.

But they're a percentage of income, not a fixed premium. So a reduction in pay also reduces associated benefit cost.

The US has temporarily passed longer term unemployment benefits as well. We could easily do something similar.

Musk mentions in the letter that Tesla isn't able to provide a work-life balance on par with their competitors. I take that to mean that they expect you to work overtime. It probably isn't a good starting point for the sort of deal you describe.

Making everyone take a cut instead of firing the lowest performers in your company is a bad idea. It hurts your top performers, and makes it more likely they will leave. I've been through this during the bust and top performers leaving is guaranteed to happen if they know they're getting a pay cut.

> They found a solution by reducing the work hours for a large percentage of their workers (with an accompanied pay cut) instead of firing a smaller percentage of them, which allowed them to retain almost everyone and at the same time reduce costs.

More companies don't do this because it's not in labor's favor, in aggregate. Regardless of economic conditions, companies always have an interest in paying their workers less, as this cuts costs and improves profit margins. In aggregate, companies can't continually cut wages because workers would leave for employers who would pay them market rate, and so employers are forced to lay off employees to cut costs - precisely because, in a low-trust environment, it's the only way to convince labor that the cost cutting is actually necessary, because the layoff hurts the company too by way of lost productivity. The upwards pressure is called "sticky wages", and it's one of the reasons why economies need at least a small amount of inflation to be healthy.

German auto manufacturers could do it because a) they have much better labor relations on the ground and b) the 2008 recession was a real phenomenon that everyone knew about. Their trust allowed them to come to a more ideal solution, but for most companies around the world, real people and realpolitik get in the way of the ideal solution.

Elon HATES unions. He's a hard core Ayn Rand fan.

This is a very German solution. A British union would have rather destroyed the company with a series of strikes ultimately costing everyone their jobs. That is why unions have a very bad reputation, but it’s not inherent to all unions, that’s what people don’t understand. It’s just specific to the UK, and that’s why we don’t have a domestic car industry anymore.

If we ever unionised in tech it would have to be along German lines.

You probably thought the UK miners' strike was their fault, too, huh? https://en.wikipedia.org/wiki/UK_miners%27_strike_(1984%E2%8...

You know, the mines were making a loss and Scargill could have said, sell them to us for £1 and we’ll run them as a collective and prove to you they’re a viable business and more importantly provide an income and dignity for the Workers.

But he did not do that. He betrayed the Workers for his own political delusions. He just wanted to be the one who brought down a government, he didn’t give a stuff about the People. Why do you think the DUM split off from the NUM? That’s why he can never be forgiven.

By the way the previous government to Thatcher had closed twice as many mines as she did, and not a squeak from Scargill. Doesn’t that strike you as a bit odd?

I’m wondering why Tesla isn’t considering something like this

I’m thinking it’s because they aren’t firing people at random. They’re letting go their weakest performers. This is very common and has been encouraged in business for decades:


That would imply that they're able to correctly identify their "weakest performers" with sufficient accuracy to do that.

From what I've seen of large corp. performance appraisal systems, that's very rarely the case.

Those systems tend to reward people who are good at self-promotion, not necessarily people who are good at their jobs.

In principle I agree that companies should always get rid of people who are not working up to some defined standard. I disagree that a company should stack rank and get rid of the lowest performers for no other reason than 'because'. Hiring and firing is hard, and very disruptive. If the whole team is better than the standard set by the company, the company should consider itself lucky and not screw it up.

With that said, in large companies it can be very hard to determine just who is below whatever standard is set. Instead it becomes more of a game to be liked by your manager or claim credit for work.

By the way, part of working at or above a standard also includes not being an asshole.

I also think stack-ranking is hard or even impossible to get right. The criteria often favor those people that produce visible work and tend to disfavor people that enable said work (think: producing new features vs. maintenance, writing high-profile code vs. doing the review for those, producing visible output vs. mentoring, ...)

So stack ranking (or any kind of ranking by criteria) tends to nudge people into "let's do what the standard expects us to do" instead of "let's do what makes the team, company and product improve."

This is very common and has been encouraged in business for decades:


It's a short article so maybe a little leeway should be given, but it is nuts the way the author equates reviewing employees and firing employees:

You don't have to a rigid rule, such as fire the bottom 10% every year, but you do want to be reviewing your entire workforce (at the very least) once a year, with an eye toward constantly improving it.

You should be reviewing your employees a lot more often than once a year and it doesn't need to result in anyone getting fired. Reviews are a more effective process - especially in the small company environment the author is talking about - if nobody ever approaches them like that (with the expectation that people will be fired).

That's not how it usually works at large layoffs. They lay off whole departments regardless of performance.

> They’re letting go their weakest performers. This is very common and has been encouraged in business for decades.

Not in places that I have worked. Weak performers still have jobs years later, yet decent performers have been sacked quickly at other companies when they were struggling with money.

Because positions are made redundant, not people.

Not in the last case I was thinking about. But then management were pretty clueless about tech...

Kinda off topic, but I'm interested in learning more about your struggle to find work due to being on the spectrum. My team recently had someone with autism join us and beforehand we had a mini workshop where we learned about autism in general, and the challenges faced in the workplace by people with autism. The one fact that really stood out to me was that the majority of autistic people are unable to find full time employment.

I'm usually a lurker on HN and don't see a way to send a private message, but if you're up for it, I'd love to exchange emails and learn more about your personal journey and challenges.

Keeping some people even if they're "redundant" for some time can also be considered an investment in your workforce. You keep those people's experience so when activity go back up they're already there. And if you demonstrate some loyalty to your people you may get some in return.

Knowledge tranfer, getting people up to speed and hiring people also cost money

> I do think the idea that you're owed a job at a company forever is wrong.

Forever, sure that is wrong. However, there is some expectation of constancy. Simply because people tend to make choices based on the status quo.

What makes things worse is that signaling that lay-offs are coming, either for specific people or in general, really harms productivity. This is because people start infighting and lose morale.

Hence, companies have reasons to announce these things late. This means it becomes harder to trust statements by employers about job security.

When firing happens, this distrust is amplified.

I was an early investor in Tesla (I cashed out a few years ago). I believe in their mission. I wish their success.

But this is hard, simultaneously telling your workforce:

    1) We need to you work harder, better, and faster.
    2) To help you achieve this, we will be reducing your headcount (and thus resources) by 7%.
    3) By the way, if you fail, the company fails.
…But keep your heads up, it's for the planet! At some point these thousands of folks that remain are going to start asking "Is it worth it?" That coupled with legitimate competition from their "entrenched" competitors, 2019 looks to be a very difficult year for Tesla.

I still hope they succeed; I just hope the real, human costs are worth it.

I don't believe Tesla will do any good for the planet overall. The only way we can do good is if we sell less individual cars, not more, whether electric or not. Nowhere in Tesla's vision can I see a plan for more electric buses and trains. The USA desperately need a viable train network for the 21st century.

It sure seems like Tesla is the foremost reason car manufacturers have started to fully acknowledge electric is the near(& medium/long term)-future and not just some check box/compliance car to satisfy "well meaning bureaucrats".

Existing European/Japanese/US car manufacturers were happy enough to trundle along with existing ICE cars as it required less effort & gave better profits.

They & Chinese (electric) car/bus makers are the reason our planet is going to improve - ~0 air pollution in populated areas and massive reduction in nuisance engine noises.

The most popular selling electric car is a Nissan leaf, has been on the market for 8 years, and it costs half of a model 3 (ignoring specs)

Leaf didn't change anything.

What changed the general attitude was half a milion people that pre-ordered Model3 with $1000 cash advance, in a matter of days, without knowing almost anything about it (other than "it's a Tesla").

[edit] Why the downvote? That event was obviously a huge wake-up call that proved to everyone there is real customer demand for electric cars, and that existing manufacturers are risking their future if they don't jump on the bandwagon.

> Leaf didn't change anything.

Citation needed.

Nissan has sold 400,000 of them to date.

I believe that once the initial backorder is addressed and Model 3's get some miles under their belts we will see the various subpar engineering & manufacturing issues highlighted in the teardowns come back to bite.


The model 3 excels where the SV talent was brought to bear but it's long term durability is clearly suspect; too many parts, too many fasteners on too heavy a frame. And that will have serious consequences for the brand over time.

Most people in the industry will concede that Tesla forced everyone else to up their game. Tesla were unreasonably ambitious, but that ambition lit a fire under the established players.

Between 2010 and 2015, the Leaf had a 24kWh battery. They added a 30kWh option in 2016, then launched an all-new model in 2017 with a 40kWh battery. At this year's CES, Nissan announced a 64kWh model. There's a clear inflection point that coincides with the announcement of the Model 3, which is matched by several other manufacturers. The huge amount of media attention and customer interest convinced the motor industry that there is a substantial latent demand for affordable EVs with >200mi range.

It's perfectly reasonable to argue that established manufacturers are making better EVs because the technology improved, but Tesla drove a lot of that improvement. They were the first manufacturer to grasp the significance of battery thermal management, something that Nissan is still struggling with. They were the first to demonstrate the improvements in interior capacity and comfort that come from a purpose-built EV platform rather than retrofitting electric propulsion to an ICE platform. The threat posed by the Gigafactory persuaded/forced LG, Samsung and Panasonic to seriously ramp up production of 21700 cells.

Tesla aren't a great car company in my opinion, I think they're hugely over-valued, I think there's a real chance that they'll be bankrupt within the next five years, but they did something very important by taking a moonshot on a truly modern EV.

Let me rephrase: I can't name a single market development that I can convincingly argue was significantly influenced by the launch (or success) of Nissan Leaf.

Nissan is way more effective than Tesla at mass-production, yes. But there's not one single market where Leaf is their most successful model (certainly true for 2017, I suspect for 2018 htat's also true).

[edit] Maybe that's true; I'm not saying that Tesla will win the market long term.

To make an analogy: you can say Tesla is Blackberry, not Apple. Maybe they don't "own" the smartphone market, and maybe in the end they day - BUT, they left their mark. Thay have had decisive influence in the industry.

The Nissan Leaf? From where I stand, it looks like a Nokia Communicator - or worse. A product that does sell, true - but mostly because of the parent company; eventually it doesn't leave a lasting mark.

I daily drive a LEAF for 4 years now. It's not the most technically advanced electric car (for sure!). It doesn't have the longest range. What it does have is "incredibly cheap (among new cars)" "widely available" and "very low maintenance (mine has literally only needed wiper blades and has never darkened the service bay of the dealership since delivery)". Price is a feature.

I suspect the LEAF has done a lot more to drive Chargepoint network adoption, as just one example of a market development where the LEAF is more influential than Tesla.

The Leaf is by far Nissans most successful model in Norway. It's actually the most sold car in Norway. Nissan sold 3 times as many Leafs as Tesla sold Model X (the most sold Tesla in Norway last year).

Nissan breaks their revenue by " Japan/ China / North America / Europe / Other Markets ". Norway is part of Europe, and in Europe Qashqai sold better.


No, the Leaf is like the AK-74 and Tesla is a Steyr AUG.

It may have been news to the general public, but chances are car manufacturers didn’t really need awake up, as they already had drawn conclusions from the sales figures of the Leaf. Chances are, too, that they thought “if we offered a car below cost, we also could rake in orders”.

I think it will be years before we know whether Tesla’s gamble will pay of for the company.

No its not. Leaf led in 2014, but not since then.

Re-read my comment. It has sold more units that any other electric car.

Right, so its most popular when viewed over a long timeframe because it was one of the first decent ones.

I don't know where you are getting your numbers, but the top selling electric car is the Tesla Model 3.



You are aware there a whole bunch of other parts of the planet?

Total worldwide sales of the leaf are north of 400,000 units.


"Global sales totaled over 380,000 Leafs by December 2018, making the Leaf the world's all-time best-selling highway-capable electric car."

I've been looking for a while: Can you furnish a link for worldwide sales of Leafs for 2018 (or at least several months). I've seen several estimates of 7K per month, which would be 84K units, but no actual figures.

Updated my parent comment. I took my numbers from wikipedia. My understanding is that Leaf sales have declined as better cars have come on the market.

That said, I was providing a counterpoint to the OP's statement that Japanese manufacturers weren't doing anything, when the facts clearly indicate otherwise.

Your fact is that a (singular) Japanese manufacturer made an electric car which was ~popular. Even if it was the most popular selling electric car, it's dwarfed by sales of every other type of car (on every continent). Despite being on sale for ~8 years in Europe, it's still a novelty seeing one on the road. The Leaf wasn't the kick up the arse that other manufacturers needed, the Tesla 3 arguably was.

This is in spite of Europe being a massive consumer of Japanese cars in general(Nissan & Toyota in particular).

Assuming Tesla 3 doesn't get down to sub €35k price in the next year, Hynudai Kona seems like it will be the best selling EV in Europe in 2019 (provided the end dealers don't mess it up)

Some other Japanese manufacturers:

Toyota, Honda, Daihatsu, Suzuki, Mazda, Mitsubishi, Subaru, Isuzu

Barring Toyota who at least made some effort with the Prius. What have the rest of those industry players done for EV adoption/advancement? Nothing. Some (even in 2019) still haven't made inroads into EV.

As I live in Japan, I can help you with this. Mitsubishi has an electric vehicle and also partners with Nissan to maintain the charging infrastructure. Here's a Wikipedia link to Mitsubishi's vehicle: https://en.wikipedia.org/wiki/Mitsubishi_i-MiEV It's not as popular as the leaf, but I see a fair number of them around here.

Toyota and Mazda have made a joint venture for electric vehicles. They will be releasing their first vehicles in 2020. I'm not sure why they waited this long. I think the main reason for Toyota was that the Prius has been absolutely dominating the Japanese market for years, thanks in part to rebates from the government. I think it's the normal desire of a big company to avoid cannibalizing their successful sales. As for Mazda, they bet big on their turbine engine and I think they didn't have enough money to invest in R&D -- you will note that they never made a hybrid.

I have no idea what Honda is doing. At one point they claimed that all of their cars were going to have electric drive trains. However, they put all of their eggs in the hydrogen infrastructure that almost certainly isn't going to pan out. They have stopped production of the hybrid Insight in Japan, so I don't really know what their next move is. Apparently they have the Clarity (a plug in hybrid) which I've never seen in Japan. However, I would not discount them as, like I said, they've seen the electric writing on the wall for a long time.

I was just about to say that I would be surprised if Suzuki puts out an electric vehicle. The main office is literally down the street from my mother in laws place and I know lots of people who work there. However, I just did a google search and it appears that Suzuki has joined Toyota and Mazda in their joint venture and will release an EV in 2020 (however, reading between the lines, I think it might be a plugin hybrid aimed at continental Asian markets).

As for Daihatsu, they have made some concept EV cars. I've got an article from 2010 where they made an EV version of the Mira. Keep in mind that Daihatsu has been experimenting with EV for a long time. They did the EV1 in 1973! They also have a whole range of commercial "cars" (more like golf carts, really) that you frequently see on Japanese roads. Basically one-seaters used for delivering things. I don't actually expect them to enter into the market seriously for at least 5 years, though, because they don't make expensive cars. Although the prices have risen a bit recently, the main thing about Daihatsu has been that you can buy a decent car for ~$10K. It's just not feasible to build EVs at that price point without going the golf cart route, I think.

Subaru used to sell an EV in Japan. It didn't do very well and I've probably only seen it once or twice on the road. I think they are currently out of the market, but apparently have plans to re-enter in 2021.

I don't know anything about Isuzu (except that they make a shit ton of kei-tra - ubiquitous white light "pickup" truck - that every single farmer in Japan owns). Apparently they have an electric truck, but it is quite big -- for hauling containers, etc. For consumer vehicles, I think they are in the same boat as Daihatsu -- their bread an butter is dirt cheap trucks that just aren't going to be feasible in EV forms for a while.

One of the things that might surprise you is that I've never, ever seen a Tesla on the road in Japan. Probably they don't sell them here. Nor have I seen a Chevy volt. In fact I have not seen a single EV that isn't Japanese. If I didn't read HN, I would have the impression that Japanese manufacturers were the only companies making EVs. Of course, we know that's not true, but it's easy to get a strange perspective when you only experience things in one country.

Having said that, I'll be curious to see if Toyota's decision to wait before making an EV will pay off. I tend to think that Nissan and Mitsubishi (having had EVs on the road for 8 years now) will have an advantage. However, it occurs to me that Nissan and Mitsubishi can't have been making much (if any) profit on their EV program, while Toyota has been making buckets off of the Prius. Also, Toyota, Mazda and apparently Suzuki are pooling their resources, which will reduce their initial cost to market, so it might actually pay off. Only time will tell.

But this is just to say that Japanese manufacturers have not been sitting on their hands (with the possible exception of Honda -- I have no idea what they are doing).

Ah. From the same page I can generate the results I wanted. Total global sales until 2017 was 303,678. As the quote that Wikipedia has is "more than 380K" up to December 2018, we can probably assume at least 80K units for all of 2018.

Wikipedia is telling me that Tesla delivered over 240K cars in 2018, which surprises me greatly.

Yes, Musk saw that there was need for the uber-wealthy (who produce the vast majority of carbon emissions) to signal their views on climate change via luxury sportscars, and, regardless of how badly he's exploiting workers, you can't deny that he's achieved lukewarm success. I mean, wow, less than 4% profit off of all your employees working 80 hour workweeks? Truly earth-shattering stuff right there.

They already did good for the planet (as well as humanity).

Any time somebody already planned to replace their car and chooses electric over ICE is a win for the planet. It's also a health improvement for humans living in urban environments.

Tesla might not be selling that many cars, but they are the major reason why established brands like Volkswagen feel pressure to "catch up" and massively invest in new EV lineups. Once those companies have caught up in terms of technology and lineup they will massively outsell anything Tesla is capable of, helping reduce our impact on the climate and our health.

Of course public transport would be even better, but don't let the perfect be the enemy of the good

> Tesla might not be selling that many cars, but they are the major reason why established brands like Volkswagen feel pressure to "catch up" and massively invest in new EV lineups.

No. While Tesla is a factor, the major reason for the EV investment is new legislation and regulations being introduced in the EU, China, and the US.

Germany, for example, is talking about banning new ICE car sales by 2030: https://www.reuters.com/article/us-autos-emissions-germany-i...

Paris is talking about banning ICE cars from the city by 2030 and even banning diesel cars by 2024 (not very fair on diesel owners): http://fortune.com/2017/10/12/paris-combustion-engine-ban/

As part of Volkswagen's settlement agreement for the emissions scandal, VW is required to build an EV supercharger network in the US (Electrify America). VW's attitude is that since they need to build it they may as well make use of it: https://www.greencarreports.com/news/1116375_electrify-ameri...

I think Volkswagen will be the biggest producer of EVs within the next 3 years.

Toyota might overhaul them in the long run purely because Toyota is the world's biggest car company. But Toyota seems to be behind in their EV program. It'll be interesting to see how much ground (if any) Toyota will have lost to Volkswagen 10 years from now.

If no car makers were producing EVs in volume, banning ICE sales would be infeasible. No politician would enforce such a ban if it amounted to a new car ban - and car makers would know as much, and could call the politicians' bluff by refusing to build EVs.

Indeed, according to [1] in the 1990s a Californian attempt to push ICE makers to produce EVs and "an alliance of the major automakers litigated [...] permitting the companies to produce super-low-emissions vehicles, natural gas vehicles, and hybrid cars in place of pure electrics." So demonstrably, ICE makers fight back when politicians try to force them to make EVs.

It is only because we have the Volt and the Leaf and the Kona the E-pace and the i3 and the e-golf and the Tesla that an ICE ban is on the table.

It's hard to say if we'd have that many EV options on the market without Tesla, or if the Toyota Prius would still be the pinnacle of EV technology.

[1] https://en.wikipedia.org/wiki/General_Motors_EV1

> banning ICE sales would be infeasible.

It's feasible because batteries got better. If it had turned out that batteries couldn't be made better for some reason then the push would have been for hydrogen fuel cell cars in particular rather than electric vehicles in general. Hyundai makes a good hydrogen fuel cell car:


> car makers would know as much, and could call the politicians' bluff by refusing to build EVs

That would fail and the car makers would have been fined. Volkswagen's outcomes after the emissions test cheating is the practical demonstration of this. They were required to meet a standard which they failed to meet and so there have been fines, jail time, and the company has consequently changed course.

> Any time somebody already planned to replace their car and chooses electric over ICE is a win for the planet.

This is sadly not really true, especially in China, the biggest electric vehicle market, where most of the electricity is coal-generated. You end up with a car requiring more energy (e.g. more fossil fuels) to produce AND to run.

The situation is not very pretty in the USA yet either, but if you are hopeful in the next decade that the USA will decarbonate their electricity, then maybe you will get a positive return on GHG emissions over your car lifetime.

Electric cars as a means to reduce GHG emissions todaly only make real sense in specific countries with a low-emissions electricity profile, such as France and northern Europe (Sweden etc).

Not having the byproduct waste of energy production pumped into populated areas is a _massive_ gain(regardless of whether there is overall increase in usage of GHG).

Waste from coal powered electricity isn't emitted by every consumer in populated areas. It's emitted in a plant which

a) generally has more advanced particular matter capture technology &

b) to reduce emission further, only the place emitting the emissions needs to be upgraded(not the vehicle of every end consumer of that energy) &

c) is more readily replaceable by a cleaner source with minimal disruption.

But electricity has the advantage of being easy to convert to. Cars last on average 20 years. If all your cars are electric but your electricity is dirty, you can legislate that electricity needs to be cleaner, affecting only a few players, rather than having to convince millions of car owner.

Look at what happened in France when the government changed its mind on which carburant is cleaner and tried to force millions of consumer via taxes.

Also, keep in mind that China is trying to get cleaner electricity as shown by the giant damns they are building.

Even in the US, it really depends where you live.

In Northern California, you are looking at 0 to 30% of electricity coming from fossil fuels, of which is almost entirely natural gas. An EV in NorCal is almost certainly polluting a lot less than an ICE car.

>Any time somebody already planned to replace their car

I highly doubt that the process of replacing a car does not result in a huge negative impact on the planet that has to be "paid off" over time through the gains of switching to an electric car.

Basically, don't you start in the negatives when replacing a car with an electric one?

Cars are replaced anyways, and for climate and environment the effects over one year matter a lot less than the effects over a decade.

Do you really think people buying a Tesla today will still drive the same car in 10 years?

Do you think that if they'd bought a BMW, the answer would be different?

People who regularly change their cars regularly change their cars ...

Yes. That's exactly my point. The argument "people are saving the planet by just changing to electric" is not quite correct.

The point is, that the people who're buying an electric car are reducing their impact.

Yes, they still have an impact, but it's less than the impact they'd have had if they bought an equivalent petrol/diesel vehicle.

I see. That makes sense. Thanks.

You're not entirely wrong, but that's still a cynical point of view. Electric cars are a huge win over combustion and don't require us to rebuild the infrastructure of the entire world. Just saying "it won't save the world, so it sucks" is the wrong attitude. It's an improvement. And we're going to need a lot of improvements to add up while we work towards a moon shot solution that may not appear for 50 or 100 years.

I disagree. The power consumption of electric cars is enough to transform entire cities. If everybody drove electric right now, the current power grids would just collapse.

With the right pricing incentives, there's still a lot of slack during lower demand periods (overnight). The grid must be able to handle peak demand during the day but after say 10pm demand falls sharply. Offer discounts on overnight electrical usage and you can smooth out demand throughout the 24 hour day. We still would need to invest in upgrading the power grid but that investment is long overdue anyway.

That's not even what I'm talking about. People will want to load their cars at the supermarket or at work. That's when power demand is very high anyways, so the grid will be under a lot of stress.

And you missed my point. If it costs $10 to charge at work and only $1 to charge at home, people will charge at home overnight. The worst electric vehicles easily go 100 miles on a charge in cold weather. The number of people doing commutes greater than 50 miles each way is statistical noise.

Tesla's full vision of self-driving cars that form a ridesharing network would indeed dramatically reduce the number of cars. Most cars sit around unused, taking up space. When idle time for cars drops, then demand for cars will drop.

This also means we'll have much less need for parking lots, etc. Parking infrastructure consumes a huge portion of prime urban land. Curbside parking alone is sometimes estimated at 10%.

Thus, it would also reduce sprawl, and thereby reduce both commute times and the amount of energy required to commute.

All of those things would be eco-friendly, if we can move in that direction. Particularly once we shut down all the coal plants.

The main benefit to owning your own car is instant access. To retain that a significant portion of these cars will be sitting in parking lots just the same as if their owners had drove them.

Queuing theory forms a mathematical basis for analyzing the problem. So far its been heavily analyzed and applied towards dynamic pricing models. But if you want to replace cars people need to feel confident they are going to have a ride available in a short amount of time and not be price gouged.

Urbanization has been continuing apace, and in urban environments ridesharing apps generally can have a car at your doorstep in minutes. Sometimes as little as 1 minute. Generally not more than 7.

When you factor in not needing to find parking, and no need to walk to and from your parking spot, it absolutely saves time.

With even a glance at the public transport statement in other countries it becomes clear to me that trains and buses have minimal utility to the swaths of Americans (and Canadians, as well as possibly others) living in sparsely populated suburbs. Most homes in the suburbs and exurbs are about as accessible to a viable train or bus stop as homes in villages in a place like Switzerland, where I currently live. It simply doesn't make sense to have bus stops within a walkable distance (which is necessary for people to transition entirely to public transit) if far fewer people live around each bus stop. In a select few US cities, it works well enough, but many cities and nearly all suburbs are simply not practical cases for buses and trains without other assistive modes of transit.

Electric scooters and e-bikes provide hope of fixing this last mile problem, but they're not yet universal enough.

I think we should laud Tesla and other similar companies for providing a no-compromises solution that results in immediate positive effects on the environment.

Most people in America live in places with comparable density to places in Europe with good public transport. The idea that America is so sparsely populated is only sustained because of the vast areas with really low density but also low total population.

California, for example, is only slightly less densely populated than France. Nevada is slightly less dense than Norway, but 2.2m of the 3m population live in the Las Vegas Valley, that makes up less than a percent of the total land area, so most of the population live in an area more than dense enough for successful public transit.

There are certainly really low density areas where trains and buses have less utility, but most people don't live there, or they wouldn't have been so low density.

And this is after a century of neglecting public transport. If there was more investment in public transport in the denser areas, density would likely increase further, because public transport hubs tends to drive up footfall to businesses nearby.

I agree that density would increase with better public transit. However, this is still a chicken-and-egg problem.

Anecdotally, I would claim that a lot more places in Europe with similar density have their density organized around existing city centers, plazas/squares, and other focus points, which makes public transit far more effective. The overall density may be similar (for instance, I live in a major European city and there's farmland next to me) but housing is more concentrated around specific points. Destinations such as grocery stores seem more conveniently located, at least in Switzerland, where every train station and major bus stop seems to have a selection of stores in the immediate vicinity as well as a large amount of housing centered around it, with density decreasing as one moves farther from the transit point.

It doesn't seem like that's the case in the vast majority of the US. While the density of California may be similar to that of France, it seems like people occupy much more of the land.

Here's an article I found that happens to illustrate what I mean, but it unfortunately only has data for a few places: https://www.citylab.com/life/2018/02/theres-a-better-way-to-...

I grew up near Oslo. There used to forests between where I lived and the nearby tiny town and between that town and the next one, before you got close to continuous urban settlements near Oslo. My brother was in the scouts. I still tease him about the time they got lost in the forest for 6-8 hours before they found their way out near one of the suburbs of Oslo.

Yet we still had perfectly functioning public transit.

Sure, there are definitive advantages that arise over time once you already have it, such as clustering of shops near transit hubs instead of spread out all over the place, but it still works.

It boils down to willingness to invest. You need to commit to ensuring sufficient frequency and routes for years to change habits even if it operates at a loss.

This is the real problem. You need to be prepared to put the service in before the demand is sufficient to really justify it, because the long term social impact justifies it. Do that, and it shapes the landscape. I mean, the train did that in the US too when it first arrived: entire towns sprung up around access to transit. The convenience of cars would make it harder to cause a reversal, but it's just a matter of which benefits you need to create.

So it's down to political will and lack of public support. The density is a red herring.

I believe I agree. Density doesn't justify inaction or continuing along the path of inefficient individualized transit, so it shouldn't be used as a red herring, but it's an important consideration that affects how people will use public transit. Regardless, there should be far more investment in transportation, because places in the US (among other places) that could be practically served by public transit still aren't, and you're right that investment begets clustering around transit hubs so it is necessary even before it seems ideal.

As I said, there are quite a few more options nowadays for the last-mile: shared bikes, electric scooters/bicycles, or even Uber/Lyft/rideshare. This should further increase the viability of public transit even in areas of the US in which it wasn't previously viable.

I've heard this excuse many times but it doesn't make sense to me. Zürich (with excellent public transport) for example has a densitiy of 4700/km2[1] and many areas / cities in US have an even higher density[2].

[1]: https://en.wikipedia.org/wiki/Z%C3%BCrich [2]: https://en.wikipedia.org/wiki/List_of_United_States_cities_b...

See my other reply, which I think applies here as well: https://news.ycombinator.com/edit?id=18939178

Removing the need for every household to have their own dedicated car is part of Tesla's vision. Elon has referred to self-driving functionality as a "shared electric autonomy".


I've tried short term car rental services where you can rent a car for a few hours. Half the time it worked well, the other half of the time it was a hassle.

Some problems I had were that sometimes the car wasn't where it was supposed to be, a couple of times the car was double booked, and quite often the cars had other people's rubbish in them. One time the car was full of sand (clearly someone had been to the beach).

I think in my case I'd always prefer to have my own car.

Some problems I had were that sometimes the car wasn't where it was supposed to be, a couple of times the car was double booked, and quite often the cars had other people's rubbish in them. One time the car was full of sand (clearly someone had been to the beach).

These are not things that Elon will ever personally experience.

People who advocate this line of thought imagine a density of cars so high that if a car is dirty, you reject it and a replacement is 2 minutes away; and if you need a child seat and a bike rack, a car with both fitted is only 2 minutes away, and so on. They imagine a street like [1] but with every yellow cab an instant-hire robot car.

Obviously, it's difficult to square that theory with the "Public transit won't work in America as the population density is too low" line of thought so you probably have to choose one or the other.

[1] https://www.alamy.com/stock-photo-busy-street-scene-in-city-...

Your comment requires readers to dive head-first into the train fantasy myth, which has been debunked numerous times. Trains will not happen in the very sparsely populated USA, from Amtrak to NYC to Cali high speed rail, we are seeing evidence that trains are extremely hard to accomplish even in high-density areas. We must move forward amazingly fast for climate change if we are to avoid trillions in damage, and we simply can not do so if we don't include massive amounts of batteries into our energy system.

On cars, I agree with you, people are very irrational when it comes to cars. I'd be in favor of a massive vehicle miles traveled tax, to repair our roads and to tax emissions from transit. But the simple fact is people love being in their own car and there's no other viable option for most people.

Furthermore, even if you magic a train system into existence, you still don't solve the battery/energy storage situation with trains (which will never have the will or funding or political backing to ever be built, as we are seeing over and over). Without batteries or nuclear (another two train-like near-impossible task), we'll still need natural gas peakers, and we won't solve climate change. Batteries are the only area we're moving forward, and that's why Tesla is doing amazing good for the planet.

I have no idea why is this downvoted (greyed out).

It seems that trains (intercity) can work in some countries (Japan for example), but in most countries these days it is more expensive to take a train than a flight (the UK, Germany for example)!

And these are densely populated areas. I can only imagine how ridiculous that would be in the US which is sparsely populated.

A note on peak energies is spot on as well - if it is difficult to balance a network with a varying consumption that would be even a bigger challenge when production is nondeterministic (solar, wind) as well.

While I definitely support battery storage development, the truth is that fossil-based plants are going to be needed for another few decades so the operators could balance the network. For example, the recently installed battery in Australia could provide electricity to San Francisco just for 9 minutes (if I did my math correctly) which is probably not even enough time to start another plant.

EDIT: 11 minutes : https://www.wolframalpha.com/input/?i=129MWh+%2F+(5740+GWh+%...)

the onus can't be on Tesla to save the world. They're doing their part, we need more companies who aim for good instead of profits. The only way incumbent companies will change is through market pressure. Tesla's doing that for cars, but who's doing it for other forms of manufacturing? And who's pressuring town and city governance to improve public transport and urban planning? There's movements springing up to improve public transit through activism (like https://www.theguardian.com/cities/2018/jul/05/meet-the-numt...) but companies who exist to make markets green will be essential.

That's what Uber is working at. Seriously though - taxi prices and usability before the advent of taxi app were nowhere near the level that would allow me or my peers to regularly take a cab from home to work. Now it's trivial.

Indeed Uber's mission is more promising - not only taxi availability but also car pool, and push for AI driving. These are great solutions to reduce the need for individual cars in areas where public transit is not a viable solution.

The US has the largest rail network in the world [1]. Its used for freight, not passengers, which is a more sensible use since rail can more large amounts of heavy stuff cheaply. Moving a few passengers at high speed is extremely expensive, and better done by aircraft or autonomous cars.


Tesla is doing the best for planet Earth of any company on the planet. Without them we would not be seeing traditional autos move away from fossil fuel vehicles - the margins and established knowledge would have been too good to just abandon it.

The US is just too low density to solve mobility problems without a mix of electric autonomous vehicles and transit

People moving to more dense locations would solve that.

> The only way we can do good is if we sell less individual cars, not more, whether electric or not.

Obviously, you have a sound argument(s) to support your claim, right?

I think I'm about to say something that might be met with displeasure but I feel like it's a question I'd like to toss around anyways:

Is there really anything that bad about this message to the workforce? I feel like 95% of what was said is implied at other places and when that's the reality but it's never spoken of it would probably create an even higher level of anxiety? Maybe the more extended life of bigger and more dug in companies offer some sort of incentives or worker's rights that alleviate some of those anxieties?

I guess I feel like what's being said isn't surprising nor is it that remarkable, to me. What would be surprising or remarkable is if the message was: You don't have to work so hard, we're hiring 7% more people because we feel like it's a nice thing to do and regardless of our performance the failures of this company or the products we make will never be your (the workers) fault.

I'm sure everything I just said is stupid but, even if the message from Tesla rubs people the wrong way I somehow feel like the harsh truth might just be an OK pill to swallow compared to the, "Aren't you going at least buy me dinner before you... " type message / ethos that I see and have felt in corporate environments for decades?

The harsh truth is that the company is offering a particular compensation package for a particular expectation of work. If an employee doesn’t like the trade, he can and should leave. That’s not what the letter says. It pretends that we are all in this together to save the world.

> Is there really anything that bad about this message to the workforce?

No—there's nothing wrong with it. The results might be bad, though.

2019 will be hard for Tesla and its workforce. When things are hard, people start asking the question "Is it worth it?"

This could very well have been the very best way to handle the business necessity of reducing the workforce by 7%; it just might have some bad consequences that were unavoidable when the available business options are: be unprofitable or layoff workers.

My comment was aimed at the realities (2019 will be hard for Tesla and employees)—not a moral comment on the action of laying off people.

I've agreed with everything you said not only in this comment I'm replying to but also your original top level one -- it's just that it spurred the thought in my mind to ask the questions I did and say what I said. Hope it didn't come off otherwise.

Nope. :) Just clarifying my parent comment in case it was misunderstood in context of the response. I agreed with your comment, as well.

Having seen layoffs in my own company, and having survived them myself, what I found in our case was that as important as they were, the impact was significantly more negative than if things had continued the way they were. To put more perspective, the company was very profitable but had bad margins. The only thing the lay-off managed was a short term increase in margins, followed by years of stalled growth because immediately after the layoffs the best people quit as soon as they found another opportunity, and being the best people, they found opportunities extremely easily. I suspect the margin improvement was less than the lost profits at the older lower margins due to the stalled growth (the company had been growing rapidly before. Arguably, that’s why it became bloated).

I am curious if there is a better way to right size a company after it has become more bloated than it needs to be than a blunt instrument like layoffs.

The other reality for a lot of people is going to a established company that has an admirable mission, but doesn't actually take it seriously and is more for appearing like a force for good than actually doing good. Same could be argued for Tesla, but it doesn't make Tesla unique in any case. They are putting out the product they said was the change needed and they have.

In a very cynical way, I've always loved when a company tells it's employees "Last year was our best", and then follows it up with "By the way, you're all taking a haircut"

Are Tesla employees compensated with some kind of shares?

For such a harsh reality the message was well delivered.

Reading this I ask myself why does one chooses to work in such a work environment? Are people working there doing it because they feel they're part of a bigger dream? Seems to me like it's very hard to feel this way when you're so replaceable. At the end of the day I guess the work is similar to working in many other car brands, just harder, more hectic and managed more poorly. Are there any special benefits that I'm missing? (I'm really wondering, not trying to put anyone down)

I don't work at Tesla. Here is why I would:

I'm on team humanity. In spite all our failings, I want humanity to succeed and reach for the stars. Success means having a livable planet. For idealists like me who are also realists, the only way to get everyone working toward this future is to put it in their self-interest. Anything else just. won't. work.

To dedicate yourself in a practical way to the future of humanity, Tesla's one of the few games around.

EVs don't solve the CO2 footprint of cars, the improvement is too small. We must drastically reduce the low-occupancy car miles driven and reverse the car growth trend in developing countries.

Your comment makes A LOT of assumptions - in both ways e.g.:

- you are ignoring the benefits that EVs could bring, as well as synergies with future technology improvements. Radically better battery technology coupled with cheap, affordable solar might be a game changer of unprecedented scale.

- On the other hand, there's no proof that "drastically reducing the low-occupancy car miles driven" or "reversing the car growth trend" is either feasible or beneficial (how do you achieve the goal? Any measure is likely to have side-effects. I haven't seen any realistic proposal that doesn't have potentially horrible side-effects).

Lastly, let me just tell you that I love it when people living in developed countries know what developing countries should do (which is typically "stay poor", but delivered in a more politically-correct way)

> I haven't seen any realistic proposal that doesn't have potentially horrible side-effects.

What are the horrible side effects of car pools?

Car pools are "desired effects", maybe - for sure they aren't "realistic proposals".

There are no horrible side effects to "a healthier population"; however, the prohibition showed us that there may indeed be bad side-effects to banning alcohol consumption & distribution (which could be argued as a measure that leads to a healthier population).

It isn't just CO2 though.

As a city dweller I look forward to a future with less air and noise pollution.

Less air polution for sure, but most of the noise from cars isn't from the engines. It's mostly the noise of tires traveling over pavement.

Depends on speed. In cities, most noise tends to be from engines (esp trucks, buses etc). On motorways, engine noise plays little role.

Where I live it's definitely the engines. Cars aren't so bad, but buses and motorcycles (which have removed the muffler) are horrendous.

I don't have much faith that laws can solve the problem, so the spread of electric technology is my best hope.


50% is hardly a small improvement. In some areas you are looking at a 70+% improvement.

Asking people to swallow standard of living deductions is a lot harder than them getting a slightly different type of car.

If you add in solar and batteries with continual improvement, the improvement is just fine.

> We must drastically reduce the low-occupancy car miles driven and reverse the car growth trend in developing countries.

Any solution that ignores self-interest at the personal and state level is not a solution that can be banked on to work.

Not everyone lives in a big city where this is even a realistic goal.

Sure but most Americans (and Europeans) do. Don't let perfect be the enemy of good. Just because a solution doesn't solve every use case doesn't mean it's not worth pursuing.

I applaud your ideals and attitude. I shared a similar ideals and attitude as well. But I also feel that a for-profit company is not doing our planet and humanity any favours if making a profit is priority number one. At least that is the message I am getting when I read the company update.

I don't think anything other than a for-profit company can ever get the funds needed to aggressively expand, which is what is needed to get to a scale where change can be affected.

A nonprofit would depend on goodwill, not self interest, and to my mind, only one of those things is reliable.

I would be drawn by a combination of the challenge of high expectations, and the fact that the company works towards a meaningful cause. Of course, there's a huge difference between the challenge being innovating all the time and straining your cognitive and physical abilities, and the challenge of trying to keep your partner and have some semblance of a personal life despite working 12 hours a day, 7 days a week. It seems like Tesla PR implies the former, but the reality is the latter. If reports are to be believed, the company structure and management is still very much a Taylorian command-and-control hierarchy which is a huge barrier to real innovation.

I think fulfillment is a big part of it. Knowing that your work actually means something, that you're not just making people click more of your companies manipulating & intrusive ads and that you're not just implementing a done ad nauseam CRUD app or whatever, but instead contributing to something new & potentially revolutionizing can be a big incentive.

This note honestly made me consider looking at their job board! Folks want to be part of a mission they can really get behind.

Used to know a guy: brilliant young man, excelling in the fields of physics and mathematics, and not a slouch in many others – at an amateur level driven by curiousity, but with an intelligence base nevertheless.

He had an older brother, who was, by the younger brother's own admission, a notch above himself in the intelligence department. The older brother was said to have been bored working at Google.

My suspicion is: someone in dire need of intellectual engagement might want to work at Tesla simply because of the opportunity to exercise one's mental capacity in a challenge of equivalent magnitude. (Not Tesla specifically: I suspect any company with similarly-driven heavily-pushed technical production would suffice, for a person with the knowledge of that sphere.)

Imagine Einstein or Hawking sorting paper in an office. How do you think their minds would feel in such an uncreative, unproductive environment? I'd wager they'd suffocate soon without an opportunity to express their intellect in a meaningful way. Same story, I suspect, happens with the brilliant engineers and designers at Tesla.

(Which isn't to say that the nightmare-ish conditions they're being put through are necessarily worth it, or that they can't find an outlet for their capacities elsewhere. Working for a company is simpler, in that one doesn't need to make as many choices as an independent entrepreneur would have to. It's also prestigious – since the company has a big name – which may or may not play its role.)

> Imagine Einstein or Hawking sorting paper in an office. How do you think their minds would feel in such an uncreative, unproductive environment?

Einstein is the perfect counterexample: Had he not worked at a boring paperwork job in the patent office, he wouldn't have had enough mental capacity to devise his theories.

>Had he not worked at a boring paperwork job in the patent office

That job was not as boring as commonly understood. He had to examine patents about time synchronization devices that used light signals between trains. That led him to think about what would later become relativity.

> My suspicion is: someone in dire need of intellectual engagement might want to work at Tesla simply because of the opportunity to exercise one's mental capacity in a challenge of equivalent magnitude. (Not Tesla specifically: I suspect any company with similarly-driven heavily-pushed technical production would suffice, for a person with the knowledge of that sphere.)

I feel like you're over selling this by a lot, especially the Hawkings and paper comparison. Someone moving from Google to Tesla because of "boredom" is likely due to the industry more than the intellectual challenge. People go to work at Tesla because they believe in Musk's "vision" of a better world.

I think you're right. Nobody lets themselves be worked into dust just so they could R&D in wider capacity.

From what I understand (comparing my knowledge of the younger brother and the younger brother's gushing over the older's intellect), the older brother was a real big head. I know people get bored when their intellectual capacity has not met a worthy rival of a problem. I extrapolated.

I could see someone moving from basic front-end/back-end engineering into more challenging roles like AI/ML, autonomous driving, etc. Chances are though if you're at the upper tier of work already it's just coming down to solving problems at the industry. Spoke with someone the other day who moved from building game engines, to helping build engines for photo/video tools. Similar technological challenges, just a totally different industry.

I see what you mean.

Do those two areas provide similar technological challenges? Obviously, they're both about coding the backbone of the product, and I understand that visuals are, often, a big part of a game engine, which could translate to visual editing. Is that what you meant?

> Is that what you meant?

Yep, exactly. You're shifting your knowledge and skill of computational related programming into another field just to have more of a challenge.

At my own place I've seen engineers internally transfer to take on new challenges. Not surprisingly the trend of this is front-end -> back-end/ops -> video.

Remember things like this when you’re thinking of leaving your job for greener pastures and want to stay out of a sense of loyalty. Your company is not loyal to you and that we drop you the second you’re no longer useful to them.

Loyalty is an HR tool to get some psychological advantage. It's all show. In the end nobody cares.

> Your company is not loyal to you and that we drop you the second you’re no longer useful to them.

Of course it will.

Why would/should/could it do any differently?

Because the inverse seldom seems to be true. Employees are usually expected to be loyal to the corporate cause (or at least give some appearance of loyalty).

During one assessment many years ago I was accused of not being sufficiently "loyal", and I (ah, youth!) responded, "You want loyalty? Get a dog."

Needless to say it didn't go well for a little while until a higher-up manager squashed the whole thing because he agreed with my point of view.

> During one assessment many years ago I was accused of not being sufficiently "loyal", and I (ah, youth!) responded, "You want loyalty? Get a dog."

Never grow up, I'd say.

> not being sufficiently "loyal"

25% yearly raise is what I quote for 'loyalty'

There are ways to cut costs without layoffs and some companies choose to go that route. I think the point you are trying to make is that your employer will need to do what’s necessary to remain solvent. But that doesn’t automatically mean layoffs.

For example:

“We have a very skilled and competent work force and the last thing we want to do is lose them when we’re assuming this economy is going to come back,” said Craig Reider


Because most of those companies ask you for things in return that only a loyal person would do, like "work overtime with little or no OT pay" and stuff like that.

These cuts seem much more like an unplanned event and an indication of things not going according to plan than the cuts in the middle of last year. Those seemed like a good way to readjust to the realities of high volume production and get rid of redundancies.

I wonder in which areas of production they've experienced slower progress than what they'd anticipated last year.

Cutting the worst 7% of your workforce isn’t a terrible outcome. With that much hiring you are bound to find some employees that aren’t as good as others.

When you announce you're doing significant cuts and that you hope, maybe, to get a tiny profit for next quarter, and then after that things will be even worse, I think you're also going to lose some of the best of you workforce, as they'll start looking around.

Depends if they believe in the mission or not. I feel a lot of people that are Tesla people think they are changing the world. They aren't quitting cuz profit margin is "low". They could have already worked for Bank of America doing boring backoff programming if they wanted a stable and profitable job.

However, identifying the worst 7% is the real task.

Gotta explain low numbers in earnings call somehow /s.

Stock is -8.15% on pre-market trading.

Normally layoffs are viewed as positive or neutral event, but this paragraph -- " In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3. This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit" does not instill much confidence, I guess.

Layoffs are viewed as positive for companies with a declining business (or at least on the bad part of the cycle). But when the company is growing and the stock is close to the all time high they are not so understandable.

The layoffs are presumably in the press release to soften the blow of the profit miss. Maybe without them the stock would be down even more.

It is not much of a problem if Q4 is better than Q4 of the previous year. That is actually a more meaningful comparison than Q3 to Q4, each quarter will be affected by different issues (end of financial year, college opening, winter, summer etc) whereas across years, the influences on each quarter are similar.

Not in Tesla’s case.

Not sure where you found that figure, I see 0.36% up and no major change in the past 10 days.

I show closing trade yesterday of 347.31, currently bid 322.93 by ask 323.59.


It entered at -8% at opening and now it´s about at -10%.

We will have a lot more work in 2019 so we must downsize our workforce definitely rings counterintuitive to me.

It’s because the financial pressure is increasing. High margin car demand is going to come down. Tesla made a small profit on those. Now comes the low margin cars. If Tesla wants to be profitable on those, costs will need to be cut.

Not if the company is as poorly run as Tesla.

It's not 1919 anymore. Moving forward there will be a lot more work done with a lot less people. Get used to it.

Key point is towards the end:

"As a result of the above, we unfortunately have no choice but to reduce full-time employee headcount by approximately 7%"

If you are experienced with media messages enough, you always start reading such messages from the end. I most cases introduction is totally meaningless and is used to make the message polite.

Why would you grow staff by 30% just to fire 7% of people next year?

Rank and Yank. Hire lots of people and get rid of the people that aren't performing.

Its great when you're a high performing company that everyone wants to work for, doesn't work if you aren't doing well and people have an extra reason to avoid you (see GE, GS right now)

Poor planning which necessitated pulling back a lot of planned automation, followed by gradually making the whole operation more efficient. (as well as lack of a union, willingness to put employees through the overtime wringer, etc.)

To meet short-term growth goals via human work. Everyone had a close eye on the number of cars produced. Now they're improving their efficiency and thus fewer people can achieve the same numbers.

First 10% of SpaceX, and now 7% of Tesla. Wonder how much of those 7% are SolarCity folks.

Hopefully a lot? The SolarCity acquisition seemed shoddy to begin with.

I don't know how SolarCity makes any money. The last time I looked into purchasing panels from them, it was 20 years to break even on your purchase. What a joke.

Where’s the joke in that? You buy the installation on a 30 year fixed loan and reducere your power Bill tomorrow.

To compare, what is the “break even” point of buying a property and renting it out?

The interesting tradeoff seems to be investments in future models & infrastructure vs. expense of current workforce. Tesla is investing in developing 4 new models, production capacity for model Y, building 2 more gigafactories, building 1,000s of superchargers globally, building capacity for solar roof production, and I don't know where they are with powerwall.

Once to 10k is out, we can size it up, but my guess is that all that capital spend is greater than the cost of employing the 7%. Would be interesting to see the math that went behind the decision.

>Tesla is investing in developing 4 new models, production capacity for model Y, building 2 more gigafactories, building 1,000s of superchargers globally, building capacity for solar roof production

Tesla claims to be doing all this, but the financials say different. Their CapEx has not increased in many quarters (it actually decreased at one point recently). So can you explain to us how you think they are doing all this? Where does the money come from?

Exactly. I'm really worried about the service and supercharging infrastructure. In the last year (to q3-18, q4 stats aren't out), we've gone from one service center per ~800 cars to one service center ~1200 cars. We've gone from a supercharger per ~30 cars, to a supercharger per ~40 cars.

What I don't understand is why Tesla has to do this - wouldn't it be better just to run at a loss for a few more years like most other tech companies do, deliver a better high tech car for a while and then start to reduce cost once self driving comes in?

I mean the whole premise of Uber existing is based on this idea and I see Tesla as being potentially even more profitable (and more likely to have working self driving vehicles)...

Only if people will continue to lend you large sums of cash required. Run out of cash and it’s off to bankruptcy court.

There’s good evidence that Tesla was weeks away from this outcome in the fall and IIRC they have a large loan payment due this spring.

If they can’t meet it (from operating cash flows or further borrowing), they can’t keep operating. There, they are risking ownership and control of the whole company rather than the jobs of 1/14th of the company.

Minor point, but since you included it: I wager: full self-driving is still a decade or more away.

>There’s good evidence that Tesla was weeks away from this outcome in the fall and IIRC they have a large loan payment due this spring.

Good evidence? Elon himself said it.

And yet outsiders denied it then, and are still denying it. This company is in a cash-crunch.

I agree that Elon said it. His credibility is not the highest, and I phrased it that way because there was additional outside correlated data and not just “because Elon said it”.

You are run at a loss pretty easy in software company - your operational costs are negligible and payroll manageable and you have low capital expenditures.

With a physical product and factories - not so easy.

Tesla starts building Gigafactory in China, expects to begin production in the second half in 2019. Also they start for hiring locals[1]. Is this related?


>Tesla starts building Gigafactory in China

Tesla didn't start to build anything. The Chinese government put them on notice because there was no work done. So, of course, Elon flies by himself to China to put on a grand opening show and says they'll start production in a year.

How is it this community, who prides itself on being so smart, can fall for this?

No car factory has ever been built that fast. How can it be in production in less than a year? Where is the money coming from? After the disastrous Model 3 launch, are there still people on the planet that think Musk knows more than the incumbents about building a factory? Remember 3D assembly lines and robots so fast you'll need a strobe light to see them?

It's astonishing that people are still buying into this story.

The lay-off is small in context. It’s less than a quarter of their prior year headcount growth, and much lower than what Detroit Auto has experienced. Auto companies routinely let broad swaths of employees go. Big doesn’t mean safe.

It still is terrible for people who have everything to Tesla over then past few years. At least they are leaving for a hot job market.

>Auto companies routinely let broad swaths of employees go

This is the second round of layoffs in less than a year. Growing companies with infinite demand don't need to lay people off.

> At least they are leaving for a hot job market.

Auto workers in Northern California?

Lots of autonomous startups, and auto divisions in larger tech companies. Most mainstream auto companies have a presence here.

Knew from the start that there were some cuts coming, but then it was really hopeful until the 7% figure dropped.

I wish people laid off good luck.

They're not profitable. With different leadership tesla itself could be maybe. What a shitshow though

Retained earnings are in the many negative billions.

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