Tesla unlikely to Survive (Vol. 3)
Discussion
Gone fishing said:
As for comparing to Apple, what are we calling recent? YTD, Tesla down 40%, Apple down 10%
Perhaps Tesla should become a car company after all, BMW YTD is up 3.5%
As for the directors leaving
IIRC, one was head of battery and powertrain - not a lot has happened really on that front for a while, the 4680 cells aren't mainstream, the structrueal battery pack seems to make no difference if they use it at all, it didn't seem to make it into the M3, the Pain had a new trick motor but the M3 Performance appears to be delayed with its trick motor. In fairness, they'e probably got to a point of already close to as good as it can get unless youy look for a significant change in technology, so his job was largely done
The other was policy and business development - well if sales fell under his control he was a dead man walking. And he seems to be as on the ball as your average politician on Self driving and technology talking up the European timescales and then having to talk them back down again.
The vote on Musks pay package is going to be a vote of confidence in him - they're effectively voting for the best part of a 10% share value dilution if share holders give it to him, or I imagine he'll be gone within months it they don't, but he's effectively bullying them - give me the big wedge to keep my interests high and by the way I'm knicking all your AI people for another company I own so imagine what I'll do if you don't give me what I want... Those types of people need to be shown the door pretty quickly as it only gets worse
The shareholders have already approved this deal once. There’s no new dilution.Perhaps Tesla should become a car company after all, BMW YTD is up 3.5%
As for the directors leaving
IIRC, one was head of battery and powertrain - not a lot has happened really on that front for a while, the 4680 cells aren't mainstream, the structrueal battery pack seems to make no difference if they use it at all, it didn't seem to make it into the M3, the Pain had a new trick motor but the M3 Performance appears to be delayed with its trick motor. In fairness, they'e probably got to a point of already close to as good as it can get unless youy look for a significant change in technology, so his job was largely done
The other was policy and business development - well if sales fell under his control he was a dead man walking. And he seems to be as on the ball as your average politician on Self driving and technology talking up the European timescales and then having to talk them back down again.
The vote on Musks pay package is going to be a vote of confidence in him - they're effectively voting for the best part of a 10% share value dilution if share holders give it to him, or I imagine he'll be gone within months it they don't, but he's effectively bullying them - give me the big wedge to keep my interests high and by the way I'm knicking all your AI people for another company I own so imagine what I'll do if you don't give me what I want... Those types of people need to be shown the door pretty quickly as it only gets worse
Imagine approving a bumper pay deal for a CEO who is barely present, and has overseen a 40%+ (so far) drop in the stock price YTD?
If the pay deal IS approved, which seems likely in upside down world, there's nothing in it that obliges Musk to spend more (or in fact any) additional time on Tesla.
Given that, does anyone seriously think that he'll spend more time on the company vs continuing to perpetuate the dog whistle culture wars on Twitter? The guy is completely broke brained.
If the pay deal IS approved, which seems likely in upside down world, there's nothing in it that obliges Musk to spend more (or in fact any) additional time on Tesla.
Given that, does anyone seriously think that he'll spend more time on the company vs continuing to perpetuate the dog whistle culture wars on Twitter? The guy is completely broke brained.
Durzel said:
Imagine approving a bumper pay deal for a CEO who is barely present, and has overseen a 40%+ (so far) drop in the stock price YTD?
If the pay deal IS approved, which seems likely in upside down world, there's nothing in it that obliges Musk to spend more (or in fact any) additional time on Tesla.
Given that, does anyone seriously think that he'll spend more time on the company vs continuing to perpetuate the dog whistle culture wars on Twitter? The guy is completely broke brained.
The pay deal only rewards him if the share price rebounds, doesn’t it?If the pay deal IS approved, which seems likely in upside down world, there's nothing in it that obliges Musk to spend more (or in fact any) additional time on Tesla.
Given that, does anyone seriously think that he'll spend more time on the company vs continuing to perpetuate the dog whistle culture wars on Twitter? The guy is completely broke brained.
skwdenyer said:
Durzel said:
Imagine approving a bumper pay deal for a CEO who is barely present, and has overseen a 40%+ (so far) drop in the stock price YTD?
If the pay deal IS approved, which seems likely in upside down world, there's nothing in it that obliges Musk to spend more (or in fact any) additional time on Tesla.
Given that, does anyone seriously think that he'll spend more time on the company vs continuing to perpetuate the dog whistle culture wars on Twitter? The guy is completely broke brained.
The pay deal only rewards him if the share price rebounds, doesn’t it?If the pay deal IS approved, which seems likely in upside down world, there's nothing in it that obliges Musk to spend more (or in fact any) additional time on Tesla.
Given that, does anyone seriously think that he'll spend more time on the company vs continuing to perpetuate the dog whistle culture wars on Twitter? The guy is completely broke brained.
skwdenyer said:
The shareholders have already approved this deal once. There’s no new dilution.
Makes no difference really - vote yes and billions of shares are issued diluting the value or vote no and billions of pounds worth of shares get cancelled if they have been issued. If he gets the deal there will be more shares in circulation than if he doesn’t, and if there’s more shares, each is worth a smaller fraction of the company Gone fishing said:
skwdenyer said:
The shareholders have already approved this deal once. There’s no new dilution.
Makes no difference really - vote yes and billions of shares are issued diluting the value or vote no and billions of pounds worth of shares get cancelled if they have been issued. If he gets the deal there will be more shares in circulation than if he doesn’t, and if there’s more shares, each is worth a smaller fraction of the company The 2018 plan involved a dozen targets, each $50 billion more than the next, starting at $100 billion, then $150 billion, then $200 billion and so on, all the way to a market value of $650 billion. In addition, the company set a dozen revenue and adjusted profit goals.
Musk would receive shares based on performance, not just because.
In 2018 when the deal was negotiated, Musk agreed to stay on as CEO for 10 years in return for the deal. The market cap was about $50bn. Most observers thought a $650bn market cap was insane.
By the end of 2023, Tesla’s market cap was $790bn. An investor buying stock in 2018, and approving Musk’s pay deal, and selling even today at today’s stock level, would have achieved a compound annual return on investment of 50%.
If Musk were simply to cash out at this stage, for $80bn or so, I cannot see how that would be in the best interests of shareholders. He might have some trouble refinancing the loans on Twitter / X, but I suspect he’d be just fine.
skwdenyer said:
Well that’s one way of looking at it.
The 2018 plan involved a dozen targets, each $50 billion more than the next, starting at $100 billion, then $150 billion, then $200 billion and so on, all the way to a market value of $650 billion. In addition, the company set a dozen revenue and adjusted profit goals.
Musk would receive shares based on performance, not just because.
In 2018 when the deal was negotiated, Musk agreed to stay on as CEO for 10 years in return for the deal. The market cap was about $50bn. Most observers thought a $650bn market cap was insane.
By the end of 2023, Tesla’s market cap was $790bn. An investor buying stock in 2018, and approving Musk’s pay deal, and selling even today at today’s stock level, would have achieved a compound annual return on investment of 50%.
If Musk were simply to cash out at this stage, for $80bn or so, I cannot see how that would be in the best interests of shareholders. He might have some trouble refinancing the loans on Twitter / X, but I suspect he’d be just fine.
The judge ruled the bonus was unreasonable because many of the targets were all but done deals - there seems a massive disconnect between that and what some claim (nobody believed it was was possible). It doesn’t matter much, Musk is already half out the door, he’s spending more time away from the business, he is taking away AI staff which is his cornerstone to future valuations and his decision making is starting to badly hurt the brand. The deals was ruled illegal, the shareholders can honour it if they want, but I very much doubt Musk old honour it if anybody else was in his shoes even if for a fraction of the amount. I wonder how many of the 10% he’s made redundant lost out on bonus payments which might have been awarded at the end of the month? To all intents and purposes they could use this as an opportunity to finally get him out and save the shareholders billions. Musk won’t go hungry and I personally believe the share price will be stronger The 2018 plan involved a dozen targets, each $50 billion more than the next, starting at $100 billion, then $150 billion, then $200 billion and so on, all the way to a market value of $650 billion. In addition, the company set a dozen revenue and adjusted profit goals.
Musk would receive shares based on performance, not just because.
In 2018 when the deal was negotiated, Musk agreed to stay on as CEO for 10 years in return for the deal. The market cap was about $50bn. Most observers thought a $650bn market cap was insane.
By the end of 2023, Tesla’s market cap was $790bn. An investor buying stock in 2018, and approving Musk’s pay deal, and selling even today at today’s stock level, would have achieved a compound annual return on investment of 50%.
If Musk were simply to cash out at this stage, for $80bn or so, I cannot see how that would be in the best interests of shareholders. He might have some trouble refinancing the loans on Twitter / X, but I suspect he’d be just fine.
All fair points. But I’m obviously in the minority who think that Tesla without Musk would be much the poorer. There may be many things he’s done that others would not have done - but many of those things are how the company got to where it is now.
None of the decisive steps taken by Tesla to innovate were closed to other manufacturers. But none of them had the wit, the insight or - if we’re talking about the pay package, the financial incentive - to take those innovative steps. It is Tesla’s ability to innovate its manufacturing processes that’s where so much of the value in the business lies. And I very much doubt that would have happened, or can continue to happen, without Musk’s continued presence.
It is terribly easy to criticise Tesla and Musk. But the number of bootstrapped manufacturers of vehicles of any kind is not large. The number who can produce a best-selling car with a wholly disruptive powertrain is essentially zero.
None of the decisive steps taken by Tesla to innovate were closed to other manufacturers. But none of them had the wit, the insight or - if we’re talking about the pay package, the financial incentive - to take those innovative steps. It is Tesla’s ability to innovate its manufacturing processes that’s where so much of the value in the business lies. And I very much doubt that would have happened, or can continue to happen, without Musk’s continued presence.
It is terribly easy to criticise Tesla and Musk. But the number of bootstrapped manufacturers of vehicles of any kind is not large. The number who can produce a best-selling car with a wholly disruptive powertrain is essentially zero.
skwdenyer said:
All fair points. But I’m obviously in the minority who think that Tesla without Musk would be much the poorer. There may be many things he’s done that others would not have done - but many of those things are how the company got to where it is now.
None of the decisive steps taken by Tesla to innovate were closed to other manufacturers. But none of them had the wit, the insight or - if we’re talking about the pay package, the financial incentive - to take those innovative steps. It is Tesla’s ability to innovate its manufacturing processes that’s where so much of the value in the business lies. And I very much doubt that would have happened, or can continue to happen, without Musk’s continued presence.
It is terribly easy to criticise Tesla and Musk. But the number of bootstrapped manufacturers of vehicles of any kind is not large. The number who can produce a best-selling car with a wholly disruptive powertrain is essentially zero.
Oh I agree the company wouldn’t exist if it wasn’t for him, at least not to its scale, but strategic decisions since the MY went into production have been very poor and that’s starting to show through.None of the decisive steps taken by Tesla to innovate were closed to other manufacturers. But none of them had the wit, the insight or - if we’re talking about the pay package, the financial incentive - to take those innovative steps. It is Tesla’s ability to innovate its manufacturing processes that’s where so much of the value in the business lies. And I very much doubt that would have happened, or can continue to happen, without Musk’s continued presence.
It is terribly easy to criticise Tesla and Musk. But the number of bootstrapped manufacturers of vehicles of any kind is not large. The number who can produce a best-selling car with a wholly disruptive powertrain is essentially zero.
The semi was strange, he could have gone down the van route, one based on the MY platform and maybe a stretched larger version, instead others have taken that space. The roadster is daft, why still chase obscene specs which will make people sick when a coupe body on the model s (or even model 3) would have opened up that market and been far quicker. If you’re going to invest in performance, why not the model 3, and while the new m3 p is likely to be announced today as part of the earnings call to try and deflect, it’ should have had better seats, steering and suspension years ago.
Tech wise, his FSD route is flawed, I just can’t see it getting sanctioned when you consider Waymo is doing it now and have done for years but still not commercially available. The Merc and BMW L3 approach to slowly introduce eyes off driving in a cautious, steady as she goes approach widening the operating envelope over time feels intuitively more palatable to regulators, insurers, the judiciary etc.
Removal of parking sensors and indicator stalks puts people off, irrespective of whether you think that’s rational or not, and wipers are still, 8 years after he removed the rain sensor, a joke, made worse by automatically turning them to auto when you engage AP.
Pricing is a farce, to change the list price up and down 3 or 4 times in 2 months in the US just looks stupid.
Only thing I’ll give the company is Adaptive headlights aren’t too bad on their first attempt and their cars are efficient.
Musk will talk about robots and FSD and Robotaxi and blame world economies and interest rates, but if they can’t sell enough model y for under $30k in the US given the current tax incentives, it’s not price that’s stopping people buying them, or the economy, it’s something else.. the brand image of musk.
skwdenyer said:
All fair points. But I’m obviously in the minority who think that Tesla without Musk would be much the poorer. There may be many things he’s done that others would not have done - but many of those things are how the company got to where it is now.
None of the decisive steps taken by Tesla to innovate were closed to other manufacturers. But none of them had the wit, the insight or - if we’re talking about the pay package, the financial incentive - to take those innovative steps. It is Tesla’s ability to innovate its manufacturing processes that’s where so much of the value in the business lies. And I very much doubt that would have happened, or can continue to happen, without Musk’s continued presence.
It is terribly easy to criticise Tesla and Musk. But the number of bootstrapped manufacturers of vehicles of any kind is not large. The number who can produce a best-selling car with a wholly disruptive powertrain is essentially zero.
All very valid and I'm in agreement with all of it.None of the decisive steps taken by Tesla to innovate were closed to other manufacturers. But none of them had the wit, the insight or - if we’re talking about the pay package, the financial incentive - to take those innovative steps. It is Tesla’s ability to innovate its manufacturing processes that’s where so much of the value in the business lies. And I very much doubt that would have happened, or can continue to happen, without Musk’s continued presence.
It is terribly easy to criticise Tesla and Musk. But the number of bootstrapped manufacturers of vehicles of any kind is not large. The number who can produce a best-selling car with a wholly disruptive powertrain is essentially zero.
I would couch it though by saying that the entrepreneurial spirit seems to have disappeared, or is at least significantly diminished. Nowadays he seems to be just an extremely online, unsympathetic billionaire with manifestly right leaning views. What has he done for Tesla in recent memory? The semi exists but is hardly something that is being manufactured at any scale, and the Cybertruck was forced through - I'd argue - at the cost of a Model 2 or a more sensible Model Y/X derived truck platform. The Cybertruck has become symbollic of Tesla & Musks failures - a vanity project that is notoriously difficult and expensive to manufacture, that failed to meet any of its promised specs, and is failing in novel ways in the field for all the world to see.
I feel like Tesla the company needs a Tim Cook at the helm at this point. It needs someone who can make mundane decisions that are going to lead to serious growth, and in turn provide Musk with the warchest to do more bonkers things - without it compromising the company.
I also happen to think Robitaxis is a bad idea too. I would guess that a Model 2 car is just not appealing to Musk, as an idea, therefore he's not interested in it. Then again he seems only perfunctorily motivated to work for Tesla anyway nowadays. Twitter/X seems to be his singular focus, both personally and professionally (again, broke brained).
Edited by Durzel on Tuesday 23 April 09:52
Gone fishing said:
Oh I agree the company wouldn’t exist if it wasn’t for him, at least not to its scale, but strategic decisions since the MY went into production have been very poor and that’s starting to show through.
The semi was strange, he could have gone down the van route, one based on the MY platform and maybe a stretched larger version, instead others have taken that space. The roadster is daft, why still chase obscene specs which will make people sick when a coupe body on the model s (or even model 3) would have opened up that market and been far quicker. If you’re going to invest in performance, why not the model 3, and while the new m3 p is likely to be announced today as part of the earnings call to try and deflect, it’ should have had better seats, steering and suspension years ago.
Tech wise, his FSD route is flawed, I just can’t see it getting sanctioned when you consider Waymo is doing it now and have done for years but still not commercially available. The Merc and BMW L3 approach to slowly introduce eyes off driving in a cautious, steady as she goes approach widening the operating envelope over time feels intuitively more palatable to regulators, insurers, the judiciary etc.
Removal of parking sensors and indicator stalks puts people off, irrespective of whether you think that’s rational or not, and wipers are still, 8 years after he removed the rain sensor, a joke, made worse by automatically turning them to auto when you engage AP.
Pricing is a farce, to change the list price up and down 3 or 4 times in 2 months in the US just looks stupid.
Only thing I’ll give the company is Adaptive headlights aren’t too bad on their first attempt and their cars are efficient.
Musk will talk about robots and FSD and Robotaxi and blame world economies and interest rates, but if they can’t sell enough model y for under $30k in the US given the current tax incentives, it’s not price that’s stopping people buying them, or the economy, it’s something else.. the brand image of musk.
Have to disagree about the headlights. Imo adaptive lights are generally a pain for other road-users with some brands worse than others, Tesla in particular. It will be interesting to see what comes out of the review of regs now in progress (iirc an article on Autocar).The semi was strange, he could have gone down the van route, one based on the MY platform and maybe a stretched larger version, instead others have taken that space. The roadster is daft, why still chase obscene specs which will make people sick when a coupe body on the model s (or even model 3) would have opened up that market and been far quicker. If you’re going to invest in performance, why not the model 3, and while the new m3 p is likely to be announced today as part of the earnings call to try and deflect, it’ should have had better seats, steering and suspension years ago.
Tech wise, his FSD route is flawed, I just can’t see it getting sanctioned when you consider Waymo is doing it now and have done for years but still not commercially available. The Merc and BMW L3 approach to slowly introduce eyes off driving in a cautious, steady as she goes approach widening the operating envelope over time feels intuitively more palatable to regulators, insurers, the judiciary etc.
Removal of parking sensors and indicator stalks puts people off, irrespective of whether you think that’s rational or not, and wipers are still, 8 years after he removed the rain sensor, a joke, made worse by automatically turning them to auto when you engage AP.
Pricing is a farce, to change the list price up and down 3 or 4 times in 2 months in the US just looks stupid.
Only thing I’ll give the company is Adaptive headlights aren’t too bad on their first attempt and their cars are efficient.
Musk will talk about robots and FSD and Robotaxi and blame world economies and interest rates, but if they can’t sell enough model y for under $30k in the US given the current tax incentives, it’s not price that’s stopping people buying them, or the economy, it’s something else.. the brand image of musk.
Gone fishing said:
Oh I agree the company wouldn’t exist if it wasn’t for him, at least not to its scale, but strategic decisions since the MY went into production have been very poor and that’s starting to show through.
The semi was strange, he could have gone down the van route, one based on the MY platform and maybe a stretched larger version, instead others have taken that space.
He could have done a van. Arrival have gone bang. Canoo has no market. Rivian have one customer who are also a primary investor with an exclusivity clause. GM walked away from their deal with Rivian. Do you really think Tesla could have pitched a premium-priced van against incumbents? I can’t see how that would have been viable. Who is getting traction in EV vans right now? The Chinese. Big, basic tin boxes with batteries and motors. Where would Tesla's path to improving that model be? You can't combine functions and optimise features when there aren't any to start with The semi was strange, he could have gone down the van route, one based on the MY platform and maybe a stretched larger version, instead others have taken that space.
Semi is smart. Nobody else was trying to do it, in part because nobody else had a hope of infrastructure, and most other people (Nikola perhaps excluded) had a lot of legacy to carry around. Just like with every other Tesla model, Semi is aiming to disrupt rather than offering a me-too product. Obviously we'll have to see how the hydrogen vs EV model works out, but Tesla have aimed high and disruptive; their offering seems to have a lower cost of operation and greater efficiency than the hydrogen offerings. Their problem *seems* to be in ramping batteries, but other players (e.g. Benz's eCascadia, which is an electrified regular truck with much lower range) are proving the case for electric haulage. So long as Tesla can shift up a gear in delivering Semis in 2024, I think this is a very useful and valuable market for them.
Gone fishing said:
The roadster is daft, why still chase obscene specs which will make people sick when a coupe body on the model s (or even model 3) would have opened up that market and been far quicker.
Diversifying on the 3 platform would have been difficult to differentiate. You can’t lower the H point. Saloon-derived coupes have a long history of making no money in the market. You’re gearing up for a mass market BIW without any mass market. Tesla doesn't need more volume to generate sufficient demand for its volume platform - at least not yet.Becoming more agile in filling market niches is where a lot of the innovation in Cybertruck comes in - that's getting further to the point of a software-defined vehicle, the drive-by-wire kit opening up opportunities for considerable differentiation, the 48V architecture cutting down further on the BOM, and so on. In the past we used to talk about a common "skateboard" (remember the GM Hy-Wire with notionally-interchangeable bodies?), and of course Citroën's "Skate" concept is another step along that road. With their structural pack and large castings, Tesla have arguably gone a step beyond the "skateboard" (with its built-in structural inefficiencies and weight penalties in meeting modern crash requirements), and into the realms of truly modular design.
Expanding that further, you could take the gigacastings and the structural pack, the drivetrain, and so on, and put a range of simplified bodies-in-white on top of them without having to redo all the development from scratch.
Roadster has a role as a halo. It worked well for Tesla originally, and hasn’t done Rimac any harm
The work required to get the sort of power density envisaged for the Tesla is important for them just as Rimac have used their experience in a similar space to become valuable experts. Is Porsche mad for doing the Taycan?Gone fishing said:
If you’re going to invest in performance, why not the model 3, and while the new m3 p is likely to be announced today as part of the earnings call to try and deflect, it’ should have had better seats, steering and suspension years ago.
Review after review scored the TM3 ahead of the BMW M3 of the time. There was no point in Tesla going earlier whilst everyone else played catch up in the minds of customers. You are, I would argue, falling into the trap of misunderstanding the objectives. Tesla so far has been standing up production capacity as fast as sensibly possible, and has had the product roadmap to support that growth.Is it possible that the strategic roadmap has failed to maintain demand? Perhaps, but I cannot see that an earlier M3P would have changed that equation.
Gone fishing said:
Tech wise, his FSD route is flawed, I just can’t see it getting sanctioned when you consider Waymo is doing it now and have done for years but still not commercially available.
I don’t think TFSD compares to Waymo. The latter is still highly reliant upon detailed mapping. It has a minuscule data collection fleet, and is essentially trying to brute force self-driving, armed with a major sensor suite.Tesla is trying to solve the generalised problem. It is wildly ambitious, and relies upon truly unprecedented scale effects from the installed base of Tesla vehicles.
Now it turns out MobilEye may have been doing something similar - sucking data from vast numbers of vehicles - but I’m unclear about that. The *only* way to solve the general problem is the Tesla approach IMHO - autonomous vehicles have to interact and coexist with human drivers. Solving for cameras only sounds mad, but actually helps in this regard - there’s a real risk of falling into the trap of sucking in vast amounts of sensor data, only to find your model will never converge.
Will Tesla crack it? I hope so. But they may not. That's the risk, and everybody knows it. But if Tesla does succeed, they'll own the IP - and the profitability - rather than being simply another integrator of Tier 1 subsystems.
Gone fishing said:
The Merc and BMW L3 approach to slowly introduce eyes off driving in a cautious, steady as she goes approach widening the operating envelope over time feels intuitively more palatable to regulators, insurers, the judiciary etc.
It may intuitively feel more palatable. But Tesla isn’t trying to build a car brand by bolting together Tier 1 supplier modules. Tesla is differentiating at every level through tech innovation and IP. BMW & Mercedes are saying “we’re not going to compete with each other on autonomy” which is an approach entirely anathema to Tesla. And, since we’re taking share price, if Tesla’s P/E sank to Mercedes or BMW levels I guess investors would be even more pissed off If Tesla doesn’t stand for generational leaps in tech, it rapidly loses its position. Innovation is tough. Of course Tesla hoped to be further along, but look at the monumental money Apple have apparently written off in this space.
In terms of the Merc / BMW approach, there’s no evidence their L3 capability is a stepping stone to anything much. L3 at < 60kph is a nice trick, and does some good in terms of softening up the market and regulators, but development in this space isn’t incremental. Tesla’s hunch is IMHO right: if you want to crack generalised autonomy, you have to crack generalised autonomy; starting with a core capability and attempting to expand is precisely the brick wall Tesla and others ran into.
Gone fishing said:
Removal of parking sensors and indicator stalks puts people off, irrespective of whether you think that’s rational or not, and wipers are still, 8 years after he removed the rain sensor, a joke, made worse by automatically turning them to auto when you engage AP.
They may. M3 still has delivery waits, whereas MY is available for immediate delivery. That may or may not tell us anything 
I can’t comment about auto wipers. I find auto wipers a bad and often dangerous joke on every car I’ve driven for a decade. I turn them off for my safety. I’d prefer they were scrapped entirely
I have eyes and a finger to determine how my screen should be wiped. Inherently I trust Tesla’s vision-based approach to get it right in the end, whereas current rain sensors have broadly hit their development peak.Gone fishing said:
Pricing is a farce, to change the list price up and down 3 or 4 times in 2 months in the US just looks stupid.
That’s what people said in 2022, before the MY became a runaway success Dynamic pricing applies to everything else we buy in life. In a credit-dominated market, it is the monthlies that drive sales. Every car gets discounted at different times of year. What I don’t understand about views like yours is they imply you’d prefer *some* customers to get the best prices (“shrewd negotiators” coupled with dealer incentives) rather than all customers. Why? The extent of Tesla incentives are in the variable interest rates offered by model.Gone fishing said:
Only thing I’ll give the company is Adaptive headlights aren’t too bad on their first attempt and their cars are efficient.
Musk will talk about robots and FSD and Robotaxi and blame world economies and interest rates, but if they can’t sell enough model y for under $30k in the US given the current tax incentives, it’s not price that’s stopping people buying them, or the economy, it’s something else.. the brand image of musk.
LOL. I think you may have mis-read the data. One third of all EVs sold in the US were Tesla Model Ys in Q1 2024. One third. Such market dominance is unprecedented. Everyone said other manufacturers would eat Tesla for breakfast; that hasn’t happened.Musk will talk about robots and FSD and Robotaxi and blame world economies and interest rates, but if they can’t sell enough model y for under $30k in the US given the current tax incentives, it’s not price that’s stopping people buying them, or the economy, it’s something else.. the brand image of musk.
MY US deliveries grew 1.4% YoY. There’s been a slowing of growth trajectory in the wider EV market (up only 2.4% YoY), but Tesla is *the* dominant brand right now there.
Tesla’s problems in Q1 weren’t in the USA selling MY. M3 US sales dropped in line with both market trends away from small sedans and in line with the switch to the new Highland model. New orders today are subject to a delay, suggesting demand for the refreshed model is strong.
Tesla’s primary US problem is that established ICE manufacturers are pushing hard to shift their wares, introducing hybrids that they can incentivise strongly to shift (leveraging their installed base or manufacturing capability). MY has been such a runaway success that it really requires the EV market itself to grow faster to expand demand.
Tesla is clearly envisaging the further commoditisation of cars. It’s huge bets on production technology and innovation are clearly aimed at getting the bill of materials and production costs down to a level unreachable or unprofitable for other manufacturers (at least outside of China). That’s been a huge bet, but so far it has panned out. Cybertruck’s subsystems and core techniques are important pathfinders for the next generation of savings; once again Tesla’s not dependent upon waiting for Tier 1 suppliers to offer something.
It isn’t all great. I think removing parking sensors was a mistake. Sure, Tesla don’t want to use them for FSD (an approach I’m happy with, as above); but drivers have (sadly?) come to rely upon them.
So what about the Model 2? The problem with that project is it will only work if there’s a further major shift in the manufacturing tech. It requires compromises not every buyer will accept. See the Fisker PEAR concept for some refreshing ideas on how to do that with the BIW. But such a model needs really big volumes to work, and there’s a major threat from Chinese manufacturers seemingly dumping to but market share, something no doubt Musk is keen to fix at a political level.
I don’t know how good Franz von Holzhausen and his team really are; whether they can truly innovate in the Model 2 space. Ironically Henrik Fisker was IIRC the early choice for Tesla on the Model S, and arguably he has some fresh ideas deserving of better production and capitalisation.
What I do know is that Tesla’s approach has been proven pretty sound so far, in pursuit of a pretty obvious set of goals. To me the biggest risk is Musk getting pissed off with the courts and shareholders.
As I said above, it is of course easy for us to all sit on the sidelines and critique what's happened. Tesla is a really high-growth business. It has stood up production facilities very quickly. It has done a great job of raising debt (until about 2019 in the form of low-coupon convertible bonds, delivering 800% returns for investors, and along the way becoming a textbook case of how to use convertibles well) and managing its interest burden (its 2017 $1.8bn Aug 2025 5.3% was redeemed early, for instance).
This is the hidden element to the pricing and headcount moves we're seeing. Tesla's total long term debt dropped from $12bn in 2020 to just $1.5bn in 2021. The major expenditure on building out more production capacity, delivering Cybertruck, and so on has brought long-term debt back up to just under $5bn today (which is about the same level as Rivian, for instance). There's a cyclical need to take all that investment and turn it into cash - and using sales incentives and headcount reductions to achieve that is a very common tech company way of working.
Edited to remove copy/paste madness
Edited by skwdenyer on Tuesday 23 April 13:13
Durzel said:
All very valid and I'm in agreement with all of it.
I would couch it though by saying that the entrepreneurial spirit seems to have disappeared, or is at least significantly diminished. Nowadays he seems to be just an extremely online, unsympathetic billionaire with manifestly right leaning views. What has he done for Tesla in recent memory? The semi exists but is hardly something that is being manufactured at any scale, and the Cybertruck was forced through - I'd argue - at the cost of a Model 2 or a more sensible Model Y/X derived truck platform. The Cybertruck has become symbollic of Tesla & Musks failures - a vanity project that is notoriously difficult and expensive to manufacture, that failed to meet any of its promised specs, and is failing in novel ways in the field for all the world to see.
I feel like Tesla the company needs a Tim Cook at the helm at this point. It needs someone who can make mundane decisions that are going to lead to serious growth, and in turn provide Musk with the warchest to do more bonkers things - without it compromising the company.
I also happen to think Robitaxis is a bad idea too. I would guess that a Model 2 car is just not appealing to Musk, as an idea, therefore he's not interested in it. Then again he seems only perfunctorily motivated to work for Tesla anyway nowadays. Twitter/X seems to be his singular focus, both personally and professionally (again, broke brained).
If Tesla had pushed ahead with a Model 2, ready to launch in, say, Q2 2024, would that have fixed the flat-lining EV growth in the US? How much bigger would Tesla's debt pile be now, and how good (or not) would the prospects be for that model or the company?I would couch it though by saying that the entrepreneurial spirit seems to have disappeared, or is at least significantly diminished. Nowadays he seems to be just an extremely online, unsympathetic billionaire with manifestly right leaning views. What has he done for Tesla in recent memory? The semi exists but is hardly something that is being manufactured at any scale, and the Cybertruck was forced through - I'd argue - at the cost of a Model 2 or a more sensible Model Y/X derived truck platform. The Cybertruck has become symbollic of Tesla & Musks failures - a vanity project that is notoriously difficult and expensive to manufacture, that failed to meet any of its promised specs, and is failing in novel ways in the field for all the world to see.
I feel like Tesla the company needs a Tim Cook at the helm at this point. It needs someone who can make mundane decisions that are going to lead to serious growth, and in turn provide Musk with the warchest to do more bonkers things - without it compromising the company.
I also happen to think Robitaxis is a bad idea too. I would guess that a Model 2 car is just not appealing to Musk, as an idea, therefore he's not interested in it. Then again he seems only perfunctorily motivated to work for Tesla anyway nowadays. Twitter/X seems to be his singular focus, both personally and professionally (again, broke brained).
Edited by Durzel on Tuesday 23 April 09:52
Right now, Tesla need to concentrate on profitability whilst cracking their next generation of production engineering to take much further bites out of the build and development costs.
People get obsessed about metrics that don't matter. For instance, Tesla had nearly 80% of the US BEV marked in 2021, today it is only 33%, so that's a huge loss. Nonsense! There was no universe in which Tesla were going to hold on to that market share. Any other manufacturer would crawl over broken glass to reach 33% of a market. When you're the dominant player in a market, competition is good - it opens up the market, normalising it for others.
Tesla's big US problem is that that isn't happening right now; the market isn't growing. And the reasons the BEV market isn't growing have a great deal to do with the wider economy, and the financing incentives other companies are willing to throw at their products. In the US, many manufacturers were down in Q1 vs LY in volume terms:
GM -1%
Hyundai Kia -1%
Stellantis - FCA -1%
Tesla -1%
And who was up?
Toyota +20%
Ford +9%
Honda +17%
Nissan +7%
VW Group +2%
Given that we know Tesla's MY numbers were (IIRC) up 1.4%, the fall-off is primarily attributable to the switch over to M3 Highland, which was a known and inevitable event.
Now, some context. Tesla outsold all of the following in the USA in Q1 2024:
VW Group, BMW Group, Mercedes Group, Mazda, Subaru, Volvo, etc. People talk of Rivian (e.g. vans) - they delivered just 7.5% of Tesla's volume in Q1 2024 - they're not in remotely the same game.
Tesla did 30% of Ford's entire volume with (mostly) 1 model...
So what have Toyota and Honda done that is so different this year? Primarily, because of hybrids. This is still important news for Tesla. The hybrid market has been a significant leading indicator for the BEV market. Tesla's done a great job of selling to the already / easily converted; it needs the next wave of buyers to make the jump.
The problem for Tesla here is that the average length of new-vehicle ownership in the USA is 8.4 years (vs ~4 years in the UK). Those owner-drives of new hybrids are going to take years to trade out of their vehicles. Tesla needs to win new converts rather than just relying upon market dynamics.
This is why Cybertruck is so important. Rivian have done the "me too" truck (conventional styling) and failed completely to make a major dent. Ford has just reversed price rises on the F150 Lightning, knocking up to 7.5% off, having previously done the same to the Mach-E (which shifted just under 10k units in Q1 2024, vs the TMY's 97k sales - the Mach-E is number 2 in that segment!!), but Ford can't even beat Rivian in the e-pickup market right now, even at the latter's small volumes.
Cybertruck is an important statement. Sure its controversial, just as the original Tesla Roadster was, just as the Model X was, just as many Tesla decisions are. But controversial gets attention, influencers, conversations and column inches. Even the pretty mainstream motor trend ranked the CT ahead of the F150. The CT exists to keep Tesla positioned at the cutting edge of attention. Its cost of development will ultimately not have been at all as expensive as one might imagine, because (a) it is a tech pathfinder, and (b) it replaces in part expensive media buys.
Media buys? Ford sold 500k US units in Q1 2024. Its US ad spend is north of $1.4bn pa, i.e. $350m per quarter. Every unit sold cost at least $700 in ad costs. Tesla spends in round terms nothing - Ford would have spent $105m in Q1 2024 on a pro-rata basis for the volumes. So long as US Cybertruck sales don't lose Tesla more than $420m per year to produce and sell, it is revenue neutral vs the conventional car companies (and given its global profile, the effect is much-magnified).
(and, yes, Tesla did spend some money on media buys - about $6.4m in 2023)
And what about that Model 2, and the suggestion Tesla hasn't been behind it? Tesla spent $4bn in FY2023 on R&D, up from $3bn in 2022 and $2.6bn in 2021. That's more on R&D than any other car maker. Cumulatively it will have spent over $10bn on self-driving development in total. For all the complaints about CT, its basic tooling costs will have been a fraction of those for regular vehicles - as much as $500m by some estimates, depending upon volume. You can buy a lot of R&D for that money.
The question is, where does the Model 2 sell? China is the biggest problem for Tesla right now, not the US. How can Tesla feasibly compete with homegrown units selling at comically low (arguably well below-cost) prices? The EU has launched an anti-subsidy investigation against Chinese EV manufacturers (including, importantly, BYD), and the US might chime in, too. But that's not going to do any good in places like China, Thailand, Malaysia, etc. BYD's GPM in 2023 was around 20%, compared to Tesla's 17% - both on paper have the grunt to duke it out with price cuts for a while.
Those GPMs are still good, but Tesla is no longer the standout superstar on the GPM front it once was. Its bets on price positioning depend upon the continuing development of its production processes, especially now that the price premium buyers are prepared to pay for an EV has declined to near-zero. It is why I spend so much time considering how they build and develop cars, rather than comparing them to legacy manufacturers with significant non-EV product mixes.
In terms of "Tim Cook" and "mundane decisions that lead to serious growth" I'm not really sure why you think there is such a person, or the role exists in that way. Apple attained a market-leading position under Steve Jobs; Tim Cook has taken that position and built upon it. Is Tesla in quite the same position? Clearly not. When Jobs got it right, he took major percentage of an entire market (iPods, iPhones, and so on). As people here regularly point out, the market that matters is the car market, not the BEV market. Whilst Tesla might have a great BEV position, that doesn't matter if they can't persuade more non-BEV buyers to make the switch.
Tesla's entire growth has been based upon its continuing ability to make noise and waves. When you've built your business around never advertising, you can't just switch to a model reliant upon good old fashioned advertising and promotions. There's no dealer network for a start - the entire business is outside of the normal channels (and that's why a Tesla van was a no-go - commercial users aren't going to love a no-dealer model of backup). Tesla have to keep going as they are - which means Musk or some variant - otherwise I simply can't see how they can make it over the top.
Tesla US sales fell in Q1 - when the price was falling.
The Van - he'd have had a competitive advantage because he could have reused components such as battery packs and motors, even the front end of the MY if he wanted to so his price point would have been favourable
The Semi - what do you mean nobody was doing it? Volvo first launched a truck in 2018
https://www.volvogroup.com/en/news-and-media/news/...
and last year they updated it with a 450km range
https://www.volvotrucks.com/en-en/news-stories/pre...
DAF have a range of trucks
Scania have electric trucks
I'm sure others are too
The Tesla truck appears designed only for the US market
BMW model 3 and 4 are heavily based on the same platform, the 4 series being the coupe, convertible and 4 door hatch/coupe - and guess what - in 2023 the 4 series "coupe" cars sold 51k units in the US, and the 3 series saloon/estate sold 34k - so maybe taking the saloon and turning it into a hatch and couple and maybe even a convertible would have been a better seller.
The M3 Performance used to, sometimes, win against the old RWD BMW M4, but most reviews when compared to the current 4wd M4 and its a different story. And as for the old comparison, I think it was topgear that piched them head to head around a track and the Tesla span out the first few times before eventually pipping the BMW - don't know about you but if the cars spinning out that often with a capable driver its not very predictable on the limit.
https://www.carmagazine.co.uk/car-reviews/comparis...
I presume you've sat in a Tesla M3 performance and marvelled at the (lack of) lateral support of the seats?
FSD - the reason why Merc are taking the approach they are is to be cautious and gain confidence. The merc system is perfectly capable of doing a lot more when on Level 2, it's only when it takes that not insignificant step of switching to L3 does it reign itself in and operate with a tight envelope. Its a cheap shot to talk about mapped areas and low speed limits and following cars when its a, by design and agreement with the regulators and b, the first L3, eyes off, publically available system anywhere in the world.
The Van - he'd have had a competitive advantage because he could have reused components such as battery packs and motors, even the front end of the MY if he wanted to so his price point would have been favourable
The Semi - what do you mean nobody was doing it? Volvo first launched a truck in 2018
https://www.volvogroup.com/en/news-and-media/news/...
and last year they updated it with a 450km range
https://www.volvotrucks.com/en-en/news-stories/pre...
DAF have a range of trucks
Scania have electric trucks
I'm sure others are too
The Tesla truck appears designed only for the US market
BMW model 3 and 4 are heavily based on the same platform, the 4 series being the coupe, convertible and 4 door hatch/coupe - and guess what - in 2023 the 4 series "coupe" cars sold 51k units in the US, and the 3 series saloon/estate sold 34k - so maybe taking the saloon and turning it into a hatch and couple and maybe even a convertible would have been a better seller.
The M3 Performance used to, sometimes, win against the old RWD BMW M4, but most reviews when compared to the current 4wd M4 and its a different story. And as for the old comparison, I think it was topgear that piched them head to head around a track and the Tesla span out the first few times before eventually pipping the BMW - don't know about you but if the cars spinning out that often with a capable driver its not very predictable on the limit.
https://www.carmagazine.co.uk/car-reviews/comparis...
I presume you've sat in a Tesla M3 performance and marvelled at the (lack of) lateral support of the seats?
FSD - the reason why Merc are taking the approach they are is to be cautious and gain confidence. The merc system is perfectly capable of doing a lot more when on Level 2, it's only when it takes that not insignificant step of switching to L3 does it reign itself in and operate with a tight envelope. Its a cheap shot to talk about mapped areas and low speed limits and following cars when its a, by design and agreement with the regulators and b, the first L3, eyes off, publically available system anywhere in the world.
Mikehig said:
Have to disagree about the headlights. Imo adaptive lights are generally a pain for other road-users with some brands worse than others, Tesla in particular. It will be interesting to see what comes out of the review of regs now in progress (iirc an article on Autocar).
Fair point, I did say it was good for them on a first attempt I think I lkow why you say what you say, and its the colour temperature of the lights they use which causes them to appear extremely bright close to the car plus a lot of high light bleed. If you skip to about 9:30 of the way through this video you can see the Tesla system compared to a BMW which shows it quite clearly
https://www.youtube.com/watch?v=M3oTr1_HozA
Gone fishing said:
Mikehig said:
Have to disagree about the headlights. Imo adaptive lights are generally a pain for other road-users with some brands worse than others, Tesla in particular. It will be interesting to see what comes out of the review of regs now in progress (iirc an article on Autocar).
Fair point, I did say it was good for them on a first attempt I think I lkow why you say what you say, and its the colour temperature of the lights they use which causes them to appear extremely bright close to the car plus a lot of high light bleed. If you skip to about 9:30 of the way through this video you can see the Tesla system compared to a BMW which shows it quite clearly
https://www.youtube.com/watch?v=M3oTr1_HozA
At places you can clearly see the dark box in the light beam appears to one side of the car in front instead of over it and the car must be getting dazzled to an extent.
How come everyone keeps saying they're so good? It looks like they shouldn't even be allowed - unless that video is putting them in a bad light (pun...)
TheDeuce said:
I've heard a lot of Tesla chatter about (finally) getting laser adaptive headlights - but that video makes them look pretty awful compared to what BMW have, and also the ones I had in my old iPace.
At places you can clearly see the dark box in the light beam appears to one side of the car in front instead of over it and the car must be getting dazzled to an extent.
How come everyone keeps saying they're so good? It looks like they shouldn't even be allowed - unless that video is putting them in a bad light (pun...)
I think it's possibly because expectations were so low! At places you can clearly see the dark box in the light beam appears to one side of the car in front instead of over it and the car must be getting dazzled to an extent.
How come everyone keeps saying they're so good? It looks like they shouldn't even be allowed - unless that video is putting them in a bad light (pun...)
I actually don't mind them and they work better than the old auto high beam, but for me its the glare which I guess to someone else is "look how amazingly bright they are"
Gone fishing said:
TheDeuce said:
I've heard a lot of Tesla chatter about (finally) getting laser adaptive headlights - but that video makes them look pretty awful compared to what BMW have, and also the ones I had in my old iPace.
At places you can clearly see the dark box in the light beam appears to one side of the car in front instead of over it and the car must be getting dazzled to an extent.
How come everyone keeps saying they're so good? It looks like they shouldn't even be allowed - unless that video is putting them in a bad light (pun...)
I think it's possibly because expectations were so low! At places you can clearly see the dark box in the light beam appears to one side of the car in front instead of over it and the car must be getting dazzled to an extent.
How come everyone keeps saying they're so good? It looks like they shouldn't even be allowed - unless that video is putting them in a bad light (pun...)
I actually don't mind them and they work better than the old auto high beam, but for me its the glare which I guess to someone else is "look how amazingly bright they are"
I don't understand why they don't have 360 degree surround cam. No adaptive or air suspension on even the model y? It's a powerful SUV, you kind of want that sort tech at least as an option.
I get the feeling the tech that is offered isn't often great, and is released in a state many other car makers would probably have held back from. My BMW can't officially do half the stuff Tesla FSD can do, but it actually does do nearly all of it, they just don't advertise the fact - I doubt they will until it's actually able to do it all very reliably.
The rear wheel steering on the CT seems to be a great example of something released ahead of being perfected - I've watched a few reviews and testers get in a right mess trying to compensate for the rear swing of the car in tight spaces - i'd have though the cars have enough sensors to work out if the rear wheels turning is actually helpful in a given situation, I'm sure that must be possible - but whatever, they've released it 'as is', sod it.
I'm not anti Tesla, in so many ways the cars are great value and very practical - but I detect a trend of over promising, under-delivering and often underwhelming and rushed out results.
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