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But they are bleeding lots of money every day. Don’t know how much longer they can stary afloat. Gasoline is still cheap and large SUVs and pickups are the new sedans in this country.
Q3 will be a telling quarter for them. They will deliver at least 50k Model 3s and probably around 25k of S/X. Agree they have a lot of debt, but so has many technology companies early in their history.
But they are bleeding lots of money every day. Don’t know how much longer they can stary afloat. Gasoline is still cheap and large SUVs and pickups are the new sedans in this country.
Niche vehicles dont usually last long. No matter what new technology they may have. They started with 3 strikes against them to begin with. New company start up, not cheap. New technology with little support. Over the top pricing.
To me a big unknown will be how they handle the new generation S and when it will come out. Rumors are 2021 or 2022...will they make that timeline? What kind of improvements will be made? That will be interesting to see.
Time will tell, but I think you are wrong on the Model 3. It is already the most popular EV in the US and they still have around 100k reservations to fill in the US alone. And thats not counting all the people ordering this thing without a reservation now. Once they open to world markets, the skies the limit.
Will it ever get up to Camry numbers? Of course not. But if it opens traditional automakers eyes that there is a good segment of the population that want these cars, they will build more EVs. Just like the Prius opened the door for hybrids (and now PHEVs). Competition is not a bad thing for Tesla. They need people to want an EV in their garage, and the more people see them on the street, the less they will think they are weird eco-cars and consider them more mainstream.
Trends in automobile sales are cyclical. We've seen ups and downs with SUV popularity over the past 20 year, so to say that passenger cars are a dead segment forever is pretty shortsighted. SUVs, even the electric ones, are pretty inefficient and if gas prices ever get up to where they were 7-8 years ago, they will be stones in dealer lots.
It's the most popular EV because there isn't really any competition aside from lame compliance cars. That's not much of an achievement. The Model 3 has to get up to Camry numbers to pay off it's debt. Remember Elon had to finance giant gigafactories, fully automated assembly lines that later got ripped out, massive overhead (contractors, overtime, expedited shipping arraignments, etc.) for excessive ramp up rates that were completely unnecessary. Elon's goal was 500-1M cars per year. Their current valuation is competing with manufacturers that make 9 million cars per year. Only making 200K cars per year would crash the stock price which is required to be high to finance semi trucks, roadsters, battery plants, etc. The Model S and X are going to be pretty long in the tooth by the time real competition starts, so those will need an overhaul as well to remain trendy and popular. Competition is by far a bad thing for Tesla. Tesla has a large EV market share and still struggle to make a profit. That only gets worse as market share shrinks. Ask any successful CEO if they want more competition or less.
Prius open the doors for hybrids. 20 years later hybrids still only make up less than 3% market share.
Trends are cyclical, however those ups and downs with SUVs should tell you something. SUVs are inefficient yet people still buy them. What does that tell you? The only dip in SUV sales was during high gas price run ups, which then get popular again as gas prices stabilize. As history has shown us, gas prices don't perpetually go up. If you told somebody 8 years ago that gas prices would be around $2.40 in 2018 they would have thought you were crazy. Shoot gas prices up to $5 a gallon and you might see people abandon SUVs, however the more EVs on the road means lower demand of gas, meaning lower gas prices.
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Originally Posted by aus1ander
Some said the same thing about Amazon many years ago. Look at where they are now. People who are long TSLA have a long term outlook. Will it work out for the company? Who knows? But I don't view TSLA as a car company. They are a technology and energy company.
I noticed everybody likes to compare Tesla to Amazon, but you don't see anybody comparing Tesla to Blackberry. Talk about a glass half full. Amazon is one of the few success stories in the tech world in a sea of failures yet everybody things Tesla will follow Amazon's path, while having none of Amazon's advantages or business model. See it as a tech company if you want to, but it's a car company with car company problems like union issues, high overhead, material cost fluctuations, supplier issues, shifting consumer taste, etc. You can pretend it's a video game company if it makes you feel better.
I love reading posts by those who are praying for a business to fail. What an attitude.
It's called spotting a bubble and trying to keep it from getting bigger. Otherwise you end up with every other economic crash over the past 100 years.
If Tesla fails, people will realize running massive debts for pie in the sky optimistic promises, from mentally incompetent CEOs is a bad investment and stick to more stable and sustainable investment strategies sparing the rest of the country an economic collapse.
It's the most popular EV because there isn't really any competition aside from lame compliance cars. That's not much of an achievement.
I'm not going to argue with you about Tesla's future because you make entirely valid points about their progress to today. We will see where Tesla is as a company 5-10 years from now. There's only really two outcomes: (1) they will be bankrupt and out of business or (2) they will be a leader in clean energy technology and many times larger than they are today. I personally hope they survive because I see a bright future for their technology (battery storage, EV and self-driving technology, solar) and I believe they will be a leader in the residential and commercial clean energy industry.
But to call the Model 3 "not much of an achievement" is pretty ridiculous. This is a car that racked up 400,000 pre-orders two years before it was even sold -- sight unseen and without test drives. They have sold close to 100k units in North America at an average selling price of $60k in Q3! And this is with the vast majority of customers never seeing the car in person until the day they picked it up! This is unheard of in the automotive industry.
It's called spotting a bubble and trying to keep it from getting bigger. Otherwise you end up with every other economic crash over the past 100 years.
If Tesla fails, people will realize running massive debts for pie in the sky optimistic promises, from mentally incompetent CEOs is a bad investment and stick to more stable and sustainable investment strategies sparing the rest of the country an economic collapse.
Or if Tesla succeeds, people will realize that it's okay to reach for the stars and try to disrupt established industries. Calling Elon Musk "mentally incompetent" is pretty ballsy considering he is a hell of a lot more successful than you or I.
Last edited by aus1ander; 09-11-2018 at 11:59 AM..
I'm not going to argue with you about Tesla's future because you make entirely valid points about their progress to today. We will see where Tesla is as a company 5-10 years from now. There's only really two outcomes: (1) they will be bankrupt and out of business or (2) they will be a leader in clean energy technology and many times larger than they are today. I personally hope they survive because I see a bright future for their technology (battery storage, EV and self-driving technology, solar) and I believe they will be a leader in the residential and commercial clean energy industry.
But to call the Model 3 "not much of an achievement" is pretty ridiculous. This is a car that racked up 400,000 pre-orders two years before it was even sold -- sight unseen and without test drives. They have sold close to 100k units in North America at an average selling price of $60k in Q3! And this is with the vast majority of customers never seeing the car in person until the day they picked it up! This is unheard of in the automotive industry.
The automotive industry doesn't presell vehicles years before they introduce them, so comparing preorders at this point is meaningless. There was and is a backlog of Tesla enthusiast who wanted a Tesla but couldn't afford one. That is where the pent up demand is coming from and it honestly wouldn't have mattered what the build quality or even looks in general would have been. Expanding beyond that however, is like assuming more people will buy the latest Harley because they see it in person. Outside the enthusiast world it essentially does not exist.
Battery storage is proving to be one of the lowest margins of any of Tesla's projects. For one it doesn't create energy it just stores it. That's hard to compete with natural gas which is already stored underground for free.
In terms of self driving technology it's no longer the industry leader. https://arstechnica.com/cars/2018/01...less-car-race/
Elon has pretty much killed off Solar City https://www.fool.com/investing/2018/...sla-solar.aspx
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