Tesla and Uber Unlikely to Survive (Vol. 2)

[Tuna]

off_again said:

So what the hell is going on with this 100,000 unit deal from Hertz for the Tesla M3?

https://www.engadget.com/uber-rents-tesla-evs-to-d...

So is it 100k cars? Or is it 50k with an option for 50k? Or is this a part funded detail from Uber to setup some sort of rental leasing deal? I am guessing Hertz comes out well on this, but why does this have to be so weird?

That's hilarious.

[TameBritishMuslim]

Tesla isn't demand constrained but supply constrained and I think this is possibly a good relationship to build for the future with respect to autonomy.

My understanding is that rather that Uber buying the cars themselves, they will 'get' them from Hertz whose long term ambition is to be a leader in fleet EV management (inc. autonomy). Perhaps the reason Uber are doing it this way is because drivers are not their direct employees and so it fits in with that engagement model. If things go well, I suspect it will be at least 100k cars but likely double that amount in the medium term.

Interestingly, Hertz CEO is a former Ford CEO and now believes that Tesla is the only manufacturer that can currently produce and deliver that many EVs at scale.

Edited by TameBritishMuslim on Friday 29th October 11:05

[Burwood]

TameBritishMuslim said:

Burwood said:

You have every reason to be so. It's BS, Back on topic

You're just jealous but that's okay

The word would be envious and I'm not-bet you anything you want to find out .

[TameBritishMuslim]

Burwood said:

TameBritishMuslim said:

Burwood said:

You have every reason to be so. It's BS, Back on topic

You're just jealous but that's okay

The word would be envious and I'm not-bet you anything you want to find out .

I still think it's jealousy.

Sure, show me.

[limpsfield]

Don't mind me - I'm just here for a Friday fix of PH wallet-waving.

[Tuna]

TameBritishMuslim said:

Tesla isn't demand constrained but supply constrained and I think this is possibly a good relationship to build for the future with respect to autonomy.

My understanding is that rather that Uber buying the cars themselves, they will 'get' them from Hertz whose long term ambition is to be a leader in fleet EV management (inc. autonomy). Perhaps the reason Uber are doing it this way is because drivers are not their direct employees and so it fits in with that engagement model. If things go well, I suspect it will be at least 100k cars but likely double that amount in the medium term.

Interestingly, Hertz CEO is a former Ford CEO and now believes that Tesla is the only manufacturer that can currently produce and deliver that many EVs at scale.

I think you're reading way too much into this. Uber want to decrease costs and lock in their 'independent' drivers - what better way than to offer cheap access to a taxi-friendly vehicle?

At the same time, Uber *don't* want to end up with the headache of fleet maintenance. What better way than to partner with a company that already does that? Buy the cars through them so everyone's books look amazing and it's trebles all round.

I don't think it's any more complicated than that - Uber lock in their drivers (and skim more income off them), Hertz looks like it's back in the game and Tesla sell a bunch of cars.

[RobDickinson]

off_again said:

So what the hell is going on with this 100,000 unit deal from Hertz for the Tesla M3?

https://www.engadget.com/uber-rents-tesla-evs-to-d...

So is it 100k cars? Or is it 50k with an option for 50k? Or is this a part funded detail from Uber to setup some sort of rental leasing deal? I am guessing Hertz comes out well on this, but why does this have to be so weird?

Afik it's 100,000 sr+ cars at $4.2bn

But you're right we don't know if that includes the 50k for uber lease, I suspect it does.

It's weekly rental from 2023 on, most uber drivers own their car so probably not a big thing but who knows

[NDNDNDND]

Interesting non-fanboy test-'drive' of FSD beta 10.3.1.

https://m.youtube.com/watch?v=0-dwhwoeL6Y

Quote: "how can anybody say this is good?"

[off_again]

RobDickinson said:

Afik it's 100,000 sr+ cars at $4.2bn

But you're right we don't know if that includes the 50k for uber lease, I suspect it does.

It's weekly rental from 2023 on, most uber drivers own their car so probably not a big thing but who knows

I get that its good for Tesla and probably very good for Hertz, but I worry about the Uber part. Uber got busted for predatory behavior around this type of thing in the past, effectively locking in drivers to work exclusively for them. The 'deal' was far from good and got sued, and lost badly. Now, I believe that a M3 would be classified as a premium car, and hence they can charge more, but I worry that not many Uber drivers will go down this route - its tough enough to make money at the moment, never mind when you have a long term rental to pay for!

And while the current Federal incentives have run out for Tesla, it does look like there will be new ones coming. Hertz gets to take advantage of these (if and when they come) but the end customer doesnt. Mmmm, sniffs of a we win, you dont situation. Again, its good for Tesla, because I am sure there is a commitment contract in place, so they get to make and sell the cars.

[RobDickinson]

It's not really anything to do with uber the company, they won't own, lease or operate the cars it's just for their drivers.

They politically don't want to own cars at all.

The ~10 that do lease cars so a far higher amount of driving.

[TameBritishMuslim]

Tuna said:

TameBritishMuslim said:

Tesla isn't demand constrained but supply constrained and I think this is possibly a good relationship to build for the future with respect to autonomy.

My understanding is that rather that Uber buying the cars themselves, they will 'get' them from Hertz whose long term ambition is to be a leader in fleet EV management (inc. autonomy). Perhaps the reason Uber are doing it this way is because drivers are not their direct employees and so it fits in with that engagement model. If things go well, I suspect it will be at least 100k cars but likely double that amount in the medium term.

Interestingly, Hertz CEO is a former Ford CEO and now believes that Tesla is the only manufacturer that can currently produce and deliver that many EVs at scale.

I think you're reading way too much into this. Uber want to decrease costs and lock in their 'independent' drivers - what better way than to offer cheap access to a taxi-friendly vehicle?

At the same time, Uber *don't* want to end up with the headache of fleet maintenance. What better way than to partner with a company that already does that? Buy the cars through them so everyone's books look amazing and it's trebles all round.

I don't think it's any more complicated than that - Uber lock in their drivers (and skim more income off them), Hertz looks like it's back in the game and Tesla sell a bunch of cars.

Possibly, so whilst the above is mostly just my thoughts, it's important to keep in mind that Tesla already sell every car they make, so at the very least they have some free advertising with Hertz/Tom Brady and through people hiring the cars and then being 'converted' to buy them and/or pass on how good they by word-of-mouth.

[Tuna]

TameBritishMuslim said:

Possibly, so whilst the above is mostly just my thoughts, it's important to keep in mind that Tesla already sell every car they make, so at the very least they have some free advertising with Hertz/Tom Brady and through people hiring the cars and then being 'converted' to buy them and/or pass on how good they by word-of-mouth.

Sure - the same reason you can get Mercedes taxis, and so many families own Skodas. Tesla shouldn't need any word of mouth at this stage though. If you've not heard of Telsa in America by now, you're probably not likely to ever buy one.

All in all, I think this looks like mildly predatory practices by Uber, a great opportunity for Hertz and a minor distraction for Tesla.

[hyphen]

TameBritishMuslim said:

Interestingly, Hertz CEO is a former Ford CEO and now believes that Tesla is the only manufacturer that can currently produce and deliver that many EVs at scale.

As Tesla are finding in Germany, the biggest issue with creating factories is the planning permission, so as ev demand rises, the existing manufacturers will just be converting production lines over in their many existing factories.

The main difference between Tesla manufacturing and everyone else appears to be the Gigapresses, but I'm not sure how much of an advantage it is. What would you say?

[hyphen]

RobDickinson said:

Afik it's 100,000 sr+ cars at $4.2bn

Is that list price, or did Hertz get a discount?

[off_again]

hyphen said:

RobDickinson said:

Afik it's 100,000 sr+ cars at $4.2bn

Is that list price, or did Hertz get a discount?

Musk has claimed it was at list price (there was a tweet to suggest that). But believe that if you want. Personally, I dont trust a single thing that man says....

And I cannot for a second believe that a rental car company, one that specializes in the acquisition, use and disposal of vehicle fleets, would buy ANYTHING at list price unless there was something major in it for them. Maybe its co-marketing? Or maybe its carbon credits in some markets? Maybe its on some fantastic finance deal? Who knows.

Personally, I have to think its a call-off contract. Commitment to purchase a total number, but over a period of time (I wonder how long it takes to build 100,000 cars?). And probably some sort of escalating charges if you cancel parts of the order. And there is probably something the other way too - as in if Tesla fail to deliver at particular times, they have to pay penalty fees. This is all common and to be expected. Not quite the same thing, but thats what you do when you buy aircraft and truck fleets.....

[Smiljan]

Another Tesla board member has just made $200 million dumping stock options. Nice work if you can get it!

[Flooble]

hyphen said:

As Tesla are finding in Germany, the biggest issue with creating factories is the planning permission, so as ev demand rises, the existing manufacturers will just be converting production lines over in their many existing factories.

The main difference between Tesla manufacturing and everyone else appears to be the Gigapresses, but I'm not sure how much of an advantage it is. What would you say?

I think a lot of the issues in Germany are specific to Germany though. Musk isn't one for bureaucracy and sets a culture of pushing the limits. That won't work well in Germany.

If you look at someone like Nissan, who had a CEO that really wanted electrification, their first few models were very ICE-specific. The way the motor/inverter/charger was installed in a Leaf was just like an ICE being dropped in.

I don't have specialist knowledge but I think converting the production lines is harder than it appears from the outside and there's a real temptation to do a half-baked job. It's really hard to tell as a non-engineer whether the VW MEB platform is as "slick" as the Tesla one (or vice versa) but I wouldn't be surprised if the Tesla production lines are better designed, after a decade and a half building electric cars from a blank sheet and not having any pressure to try and re-use equipment, tooling, processes or staff skills.

[Tuna]

Flooble said:

I don't have specialist knowledge but I think converting the production lines is harder than it appears from the outside and there's a real temptation to do a half-baked job. It's really hard to tell as a non-engineer whether the VW MEB platform is as "slick" as the Tesla one (or vice versa) but I wouldn't be surprised if the Tesla production lines are better designed, after a decade and a half building electric cars from a blank sheet and not having any pressure to try and re-use equipment, tooling, processes or staff skills.

I'm sure this is true. VW design platforms shared across the group, used in a range of cars and getting cost savings as a result of very high volumes.

Tesla has a couple of mainstream models (optimistically) that sell in relatively low volumes.

As a consequence, they design cars very differently, and have different expectations of production lines. I'm not sure how much of a real-world advantage that gives either of them. VW would struggle to make the margins Tesla does if they were producing at that lower scale. Tesla would struggle to manage production at the scale that VW does.

People like to treat them as direct competitors, as though only one can exist in the marketplace, but this is really not the case - or maybe we should start a "VW unlikely to survive" thread where Tesla fans can short VW stock.

[TameBritishMuslim]

Tuna said:

TameBritishMuslim said:

Possibly, so whilst the above is mostly just my thoughts, it's important to keep in mind that Tesla already sell every car they make, so at the very least they have some free advertising with Hertz/Tom Brady and through people hiring the cars and then being 'converted' to buy them and/or pass on how good they by word-of-mouth.

Sure - the same reason you can get Mercedes taxis, and so many families own Skodas. Tesla shouldn't need any word of mouth at this stage though. If you've not heard of Telsa in America by now, you're probably not likely to ever buy one.

All in all, I think this looks like mildly predatory practices by Uber, a great opportunity for Hertz and a minor distraction for Tesla.

Why didn't Hertz order 100k ICE vehicles for any other manufacturer? They've just come back from bankcruptcy and their ex-Ford CEO knows the future is electric and no one else can supply electric vehicles at this scale. Heck, Ford used to own Hertz! Since the deal was announced, Hertz' share prices has gone up over 50%.

It's an embarassment for ICE vehicles (and one could argue, for other electric manufacturers), once again, led by Tesla and now consumers get to drive and be driven in Teslas without needing to buy one.

To my knowledge, Tesla have never advertised and whilst some say they should, these strategic partnerships offer far more than a TV advert.

[TameBritishMuslim]

hyphen said:

TameBritishMuslim said:

Interestingly, Hertz CEO is a former Ford CEO and now believes that Tesla is the only manufacturer that can currently produce and deliver that many EVs at scale.

As Tesla are finding in Germany, the biggest issue with creating factories is the planning permission, so as ev demand rises, the existing manufacturers will just be converting production lines over in their many existing factories.

The main difference between Tesla manufacturing and everyone else appears to be the Gigapresses, but I'm not sure how much of an advantage it is. What would you say?

They have still put up/are putting up the factory in German-auto's back-yard in record time, despite the bureaucracy. It will likely be producing cars next month.

'Just converting production lines over' isn't that easy as VW CEO Herbert Deiss is trying to implore their Board to understand. You have 100+ years of specialising in engines and associated components, whereas now, different skill sets and components are needed.

Tesla has many advantages but ultimately, Elon wants their competitive advantage to be computing/AI/data (and all that opens up such as insurance, FSD, etc.), battery chemistry, vertical integration and manufacturing. The same VW CEO states that Tesla produce a Model Y in 10 hours versus 30 hours for a ID 4. Gigapressess are a huge part of that along with the introduction of custom alloys to facilitate their use and constant small improvements through the life of the car.