Wasn't this the struggle Musk signed up for? He said he wanted to reduce the cost of electric vehicles.. and he's doing it. Who was surprised that people would purchase a cheaper version is available?
I'm sure there are also lots of people buying one because it's finally in their budget... complaining they won't buy a more expensive version is like asking Corolla owners why they won't buy a Lexus instead.
I'm not a musk fanboy.. but I don't think Musk is surprised here. Maybe the author of this article is surprised because he wasn't paying attention. And yeah, they have some quotes from investors.. but if they were surprised by this, then maybe they shouldn't be investing in things they don't care to analyze or think about more than 5 minutes.
Tesla does not yet produce cars cheaper than their rivals.
Tesla say they do but reach this metric only by leaving out financial items that all other automakers include in unit costing. If those same items were excluded with respect to the Chevy Bolt/Volt or BMW i3, or Jaguar iPace, then those cars are also fantastically profitable as well--even more so than any Tesla model.
> If those same items were excluded with respect to the Chevy Bolt/Volt
Are you talking about the same Bolt? The one where they were estimated to lose $9000 [1] per vehicle sold?
I'm being a bit flippant, but you can't in good faith argue that everyone else is accounting for EV stuff totally normally and only Tesla is doing something different. I expect all those companies are subsidizing the EV production in some way, as they do for all their low-volume cars. The cars that make money are low production high price models (eg, the Lamborghini's and Tesla Roadsters of the world), and the high volume cars (eg all the models (or platforms) that sell 500k+ annually, from Toyota/GM/etc). Model 3 is not quite at this production level yet, though it is close. We'll see from 2Q results tomorrow what the real deal is.
> ...then those cars are also fantastically profitable as well--even more so than any Tesla model.
Not really. Those vehicles all benefit from economies of scale and have much less resistance to produce in those organizations. Beyond that they produce less of them in comparison. While it's easy to lump them into the same bucket Tesla doesn't enjoy some of the freebies the other manufacturers have for rolling pet electric projects. Beyond that none of the manufacturers disclose pure electrics to the street that I'm aware. So I'm not sure how you can make this assertion. Is there data for all three that breaks out those brands electrics P&L?
That's true.. but I'm just comparing tesla with other tesla models. If you were in the market for a leaf, you were probably never considering a model x/s.
But you make a good point.. there are now more luxury electric cars.. and those people are the same people that would buy a model x/s. Perhaps that's also part of why sales for those are lower.
Firstly they haven't been refreshed in forever and secondly they are being cannibalised by the Model 3. The problem for Tesla (and investors) is that their ARPU is now dropping at a time when they need margins.
The Model X is a profoundly stupid car that needs a redesign now. The model S is just old but still a very enjoyable car, a minor face-lift and some love and care to the interiors should do the trick.
I think pre-purchase folks "see" two model S cars, and one model X.
(yes, get more familiar with them and the model S breaks down further in regard to AP and motors and battery sizes, but buyers aren't readily familiar with the distinctions until they do quite a bit of research)
Those other EVs are halo loss-leader cars intended to assuage investors that the company is trying to stay abreast of the very chaotic changes that will be coming to the industry.
Tesla makes EVs at profit. Margins have been confirmed, and they are at scale production.
Name me another scale production EV that has been confirmed to be profitable for the company. AFAIK the Bolt and iPace and even the Taycan are/will be toe-dipping projects.
Tesla is ... mostly ... profitable, with the necessary startup investments and vertical scaling complete.
It's really the only profitable EV company, and probably still has 8-10 years of structural advantage over the ICE incumbents.
A good metal/solid state lithium battery tech will help the incumbents close the gap (I think Toyota in particular is gambling on this), and VW seems to be actually walking the walk (to avoid Dieselgate fines) for EV investment.
But it looks to me all the other CEOs are just treading water with investors and analysts to keep their jobs as long as possible, because none of them are of the kind to do the restructuring necessary to make an established brand go all-in on EV.
There are feedback loops at play here. Tesla doesn't have to produce the cheapest cars to have an impact on driving down prices. And that's the conundrum for tesla, the dissonance between the social and capitalistic missions: driving down prices means thinner margins means less profitability.
This is the "Master Plan" Elon outlined 13 years ago so it's curious that 2 articles would come out today (this and one from WSJ) with the exact same misunderstanding.
It's not really curious at all. I've been a Tesla investor since the IPO and continue to buy on the "dips". Hasn't failed me yet. Tesla has enjoyed a very solid two week bull run. The shorts are hurting, and right on queue, the very peculiar articles come out. Bloomberg has put out many Tesla articles. Same with Business Insider, who just yesterday ran an article of "Man, driving a Tesla, runs a red light. Killing two pedestrians." ... How is that news? Had it been any other vehicle, the vehicle model would not have been named and it would not be NATIONAL news.
I'm also on my second Tesla. You could offer me a Ferrari/Lambo/whatever, I'm keeping the Tesla.
If the Toyota CEO drove without hands on the wheel on national television and bragged about robotaxis and self driving, Toyotas would start joining Tesla accidents in the news, too.
Not to mention the "autopilot" is fake self driving cars to skirt regulatory enforcement to get Tesla more data to collect and be first to market etc. It's so easy to jam it and cruise around typing emails or doing your makeup etc. Word is out I know someone who practices her flute on autopilot.
Absolutely, Tesla has always had the oddest coverage, whether positive or negative, I rarely feel an article about them is unbiased - there's just too much money slushing around.
So it's unsurprising to me that people will write articles about pedestrians getting killed by a Tesla. I think that would happen even if Tesla hadn't been talking up "Autopilot", autonomous driving, etc. But with those being prominently discussed, it's guaranteed people will find Tesla crashes interesting.
Agreed. They should probably dial down the marketing a bit and get their heads down on creating more amazing things and let that do the talking. At some point, it must be too distracting at all levels.
That's my personal comfort zone, but I think it's far too late for that now. I think Musk has talked both investor and consumer expectations into the stratosphere. That has given him low cost of capital and extremely low marketing costs relative to other car producers.
But now he's in the position of Wile E. Coyote running himself on thin air over a chasm. If he keeps running, he might make it to the other side. But it not, I don't think he falls slowly.
What people don't see is that he's pretty much playing a game of starcraft (or a similar RTS).
He's not showing amazing profitability because he's pouring so much into building his tech tree.
When the competitors finally build their base and start pumping out zerglings, they might just encounter these battle cruisers coming out of the fog of war...
The news around Tesla just days before any earnings release are just fascinating to observe.
On one side, there's an narcissistic CEO who has achieved incredible things, but who also generates a Reality Distortion Field rivaling that of Steve Jobs while as the same time apparently being mortally obsessed with attention and following.
On the other side, there are a bunch of skeptics who get triggered by such a persona.
Case in point: the fact that Tesla seems to be relatively quiet at the moment might actually be a good thing. The fantastical claims made during "Autonomy Day" two days before the previous earnings release were seen by many as a crude attempt to distract from the poor quarterly results with hand-waving.
I've been following Tesla news fairly closely for maybe 18 months. This kind of misinformation-based article happens regularly. The combined forces of big oil and big auto have considerable sway over certain kinds of news organisation. Remember that Tesla spends $0 on advertising with them.
And then you have the billions invested by those who are short the stock.
That's a powerful coalition of forces going all in on discrediting Tesla any way they can.
In fairness, there's too much fanboy stuff in the opposite direction too.
But overall, from my reading, Tesla appears to have some serious structural advantages over all other comers in the expanding EV market.
The journalist who wrote this graduated two months ago.
Since then he has churned out a few negative articles about Telsa, while also being breathless with excitement and uncritical about how VW and Ford announced some future collaboration on Electric vehicles.
The manipulation on this stock is insane. Was at $350, down to $180, now back up to $260. In the span of 6 months when basically nothing material happened. They’re just executing on a known plan.
I trust these financial media companies 0%. It seems patently obvious they’re manipulating stocks. Why poison my mind? Seeking Alpha,
CNBC, Bloomberg all seem to be the stock manipulation wings of god knows what funds.
Please let's not have yet another comic book battle between the superheroes and supervillains of Teslaland. These are all the same, and because they're all the same they're all boring.
That goes for this entire subthread, not just this comment.
Have you considered just nuking all Tesla stories? Except for maybe product announcements. I think HN would be better off for it (and I'm speaking as somebody who has taken part in plenty of these comment threads).
The media might not be intentionally manipulating the stock so much as publishing information which short sellers find, package, and hand over for free. The incentive is there to create a misleading information campaign even without assuming the media is being very deliberate or coordinating.
Edit: I have no idea why I'm being so downvoted here. All I am saying is that short sellers have incentive to hand the media whatever they can to help their case (not so controversial, right?) and that the media might be taking it for free rather than, as the parent poster says, coordinating to specifically harm Tesla (is this the controversial bit?)
Right. Tesla short-sellers and media critics say all their doings are virtuous and normal actions in the context of stock markets, but I think the intensity of the feeding-frenzy makes it all a bit weird.
For example, let's say I think IBM has oversold 'Watson' AI. I would take a short position in IBM and start publishing my concerns. Fair enough. But if I start camping outside every hospital that uses Watson, badgering staff going in and out, it should at least raise eyebrows... Same with all the claims the Tesla short-sellers manage to spread by spending their lives flying planes over factories and camped out near parking lots trying to count vehicle production/sale figures, leading to mainstream media publishing vague allegations like this: https://www.nytimes.com/2018/10/01/business/tesla-cars-quest...
Nothing material happened? They had said they would be profitable all quarters going forward and then they weren't profitable in Q1. I think Musk also faced a new settlement with the SEC in that timeframe over violating a prior settlement for investor fraud (I think the prior one had terms letting them technically not admit to fraud) being violated.
They also diluted investors with a capital raise they had strongly hinted wouldn't be needed, and at the autonomy day presentation for that raise they made bold predictions about essentially level 5 autonomy by 2020 (seemed like a lie to me and the entire team was restructured a few weeks later: https://electrek.co/2019/05/10/tesla-autopilot-restructuring... ).
The only proven case of Tesla stock manipulation was when the CEO went on social media and deliberately and fraudulently made material misrepresentations about a pending acquisition of the company.
But sure, everyone else is manipulating the stock...
They act as though Tesla is the only company in the world that has stock fluctuations, short sellers, bad press etc. It's never that the company was bleeding money in a quarter, saw a significant decline in ARPU, had to borrow money again, purchased SolarCity at a massive loss and has an erratic CEO who promises the world and fails to deliver. No it's a conspiracy involving dozens of large companies.
> They act as though Tesla is the only company in the world that has stock fluctuations,
No, but the only one with a cap this big. Sure, there are tiny companies with crazy stuff happening. You have another example of another company with a two-digit billion dollar market valuation that sees anything remotely like this kind of volatility?
Tesla is also unusual in having an extremely large P/E compared to the typical S and P 500 company. That means it's being valued on future expectations, not present realities. Expectations of the future can swing much more wildly than those for present based businesses.
I'm sure there are also lots of people buying one because it's finally in their budget... complaining they won't buy a more expensive version is like asking Corolla owners why they won't buy a Lexus instead.
I'm not a musk fanboy.. but I don't think Musk is surprised here. Maybe the author of this article is surprised because he wasn't paying attention. And yeah, they have some quotes from investors.. but if they were surprised by this, then maybe they shouldn't be investing in things they don't care to analyze or think about more than 5 minutes.