Tesla and Uber Unlikely to Survive...

Tesla and Uber Unlikely to Survive...

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Yipper

Original Poster:

5,964 posts

35 months

Wednesday 25th October 2017
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J4CKO said:
Sometimes I get the impression, the anti EV bandwagon grabs any negative article, or makes some up like that picture of a vast open cast Copper mine that was allegedly a Lithium mine.

A lot of what I read has a subtext of "But I love Engines"

Its like when Jim Jefferies sums up all the various and tenuous arguments from the US gun lobby as "But I love guns".
The article is about business. Not about tech, or some distant pipedream.

And the business case for Tesla is shaky. History shows that companies with big debt and big losses over many years (like Tesla and Uber) rarely survive in the long run.

In business terms, they are a mess.

CS Garth

2,005 posts

50 months

Wednesday 25th October 2017
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Todd Bonzalez said:
Does anyone know why people give Musk so much credit for stuff? I find it slightly cultish and weird. Seems to only exist in car companies that are stuff to do with the "tech world." Dyson and Jobs are two other notable ones that spring to mind. In reality, they're generally good capitalists who throw other people's money at the right people sometimes and just force through things that are not necessarily brilliant.

I've been working in this industry for the past decade and it's so odd to see it happening. It also seems to be a hugely Western phenomenon and I don't recall it happening with NextEV/Nio, Faraday and Lynk & co etc. Is it just celebrity culture now becoming part of everything and us needing false idols?

Been wondering for a while. Fully expect people to blindly defend the CEOs ITT and find it really interesting.
I think a lot of people think Musk set up Tesla and don't understand the history behind it


havoc

24,512 posts

180 months

Wednesday 25th October 2017
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gangzoom said:
If you get excited about news stories predicting Teslas imminent demise you must have been living under a rock for most of the last decade smile

https://jalopnik.com/5887265/tesla-motors-devastat...
I've heard that petrol and diesel engines require owners to do this radical thing on a regular basis called "checking the oil level", as if the car runs too low on oil the engine needs to be replaced at a cost of several thousand pounds (or more...).

Not exactly sure how that article is different...does look to be owners fundamentally midunderstanding how some batteries work.

SonicShadow

2,423 posts

99 months

Wednesday 25th October 2017
quotequote all
Wait Here Until Green Light Shows said:
Space-X - dunno but it seems too good to be true at the moment. Just wait till one goes pop and it's game over.
Already happened over a year ago with someone elses satellite onboard: https://www.theguardian.com/us-news/2016/sep/01/sp...

They've still got a waiting list on launches.

boz1

391 posts

123 months

Wednesday 25th October 2017
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Yipper said:
History suggests companies with big debt and big losses, over multiple years, like Tesla and Uber, rarely thrive or survive.
This entirely misses the point. What it should say is:
  • Companies with big debt and big losses, over multiple years, will fail if they have bad products or business models, or even if they have good products and business models but are unable to sustain a unique competitive advantage.
  • Companies with big debt and big losses, over multiple years, often (but not always) succeed if they have outstanding products or business models which cannot easily be replicated.
  • Companies with big debt and big losses, over multiple years, relatively rarely have truly outstanding products or business models which cannot easily be replicated. Hence, they mostly fail.
This is what the dot com bust showed.

So, Tesla's and Uber's chances of survival are not a roll of the dice. They are conditional on the facts of their businesses. They are very different companies providing very different products. There is no real reason to connect an assessment of one to an assessment of the other.

Tesla have been first to market with a really good, desirable premium electric car. They have some great tech. I'm not sure how much of it is patented, but there are big (cost) barriers to developing a competing product, but some of their competitors (the major global automobile manufacturers and tech firms) also have deep pockets. They have a great image and reputation. They may be about to be first to market with with a really good, desirable mainstream electric car. So the jury's out. My feeling is that they might hold on.

Uber have been first to market with a really good, desirable, ride hailing app. They have some great tech. But it can easily be replicated. They benefit from some network externalities, but these can easily be overcome. They have an awful corporate reputation. They are running into regulatory issues around the world. A number of competitors already exist.

The only way I'll be using Uber (if any ride hailing app at all) in even two years time is if our pathetic government continues to allow TfL to egregiously stifle innovation and bring our capital to its knees in a thick smog of diesel fumes emitted from ancient cabs driven by unskilled labourers who think they're entitled to live like kings.

shakotan

10,400 posts

141 months

Wednesday 25th October 2017
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Welshbeef said:
Has game changing ideas, the mars challenge the trains
Not all game changing, the Hyperloop concept is bunkem, it literally won't work.

AW111

4,878 posts

78 months

Wednesday 25th October 2017
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shakotan said:
Not all game changing, the Hyperloop concept is bunkem, it literally won't work.
True, but SpaceX's reusable rockets are game changing, and very very cool.

shakotan

10,400 posts

141 months

Wednesday 25th October 2017
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AW111 said:
shakotan said:
Not all game changing, the Hyperloop concept is bunkem, it literally won't work.
True, but SpaceX's reusable rockets are game changing, and very very cool.
Agreed.

Knock_knock

428 posts

121 months

Wednesday 25th October 2017
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Wait Here Until Green Light Shows said:
Space-X - dunno but it seems too good to be true at the moment. Just wait till one goes pop and it's game over.
A few "pops" here smile

https://youtu.be/p9FzWPObsWA

"You can't make an omelette without breaking some eggs?"

But they seem to have a pretty solid skill base now!

oop north

991 posts

73 months

Wednesday 25th October 2017
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I have no very strong opinion on Tesla’s likely success. But my experience of having a test drive of a model S and (1) there being a set of price changes the day before it which the salesman knew nothing about and (2) there being another set of price changes on the next working day led me to believe that they don’t know what they are doing. That might be a false impression but it’s pretty basic in business to know what you are gong to charge for your product.

Tesla has yet to show that it can make cars in large numbers to a good quality standard. Or at all. That’s a big question mark.

The other thing is I am not convinced that Tesla have “apple cool”. The model S is not I think designed and finished to look gorgeous - the model X definitely is not. I think they just miss the mark, somehow. As well as being crazily expensive

qube_TA

8,383 posts

190 months

Wednesday 25th October 2017
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People are always ready to slag off / undermine success

such as this article - http://business.financialpost.com/opinion/lawrence...

But regardless I'd really like most his ventures to work as they could bring about a real positive shift in the way people travel and the quality of the air we breathe. There are so many problems in the world that there is an engineering solution available but your average politician or man on the street has little understanding of.

At least there is an environment for people like Musk to realise their ambitions, not really the UK as usual but I think we may all benefit.


rxe

2,556 posts

48 months

Wednesday 25th October 2017
quotequote all
oop north said:
I have no very strong opinion on Tesla’s likely success. But my experience of having a test drive of a model S and (1) there being a set of price changes the day before it which the salesman knew nothing about and (2) there being another set of price changes on the next working day led me to believe that they don’t know what they are doing. That might be a false impression but it’s pretty basic in business to know what you are gong to charge for your product.

Tesla has yet to show that it can make cars in large numbers to a good quality standard. Or at all. That’s a big question mark.

The other thing is I am not convinced that Tesla have “apple cool”. The model S is not I think designed and finished to look gorgeous - the model X definitely is not. I think they just miss the mark, somehow. As well as being crazily expensive
The “cars in large numbers” is really important. Every car manufacturer out there knows exactly how to do that. Mercedes have been doing it for decades. Tesla may have wonderful batteries and motors, but they’re having trouble welding metal at the moment. Not with the science of welding, but welding thousands of parts consistently and reliably. They’ll get it eventually, but it is the simple mechanics of making cars that they are struggling with right now.

The second aspect is that they need to make money on selling cars. They don’t appear to be doing that at the moment. They are spending investors money to make cars that they sell at a loss to punters. That’s far from sustainable.

Finally the other manufactuers are bringing out electric cars. They’ll sell boat loads of hybrids in the meantime, for good money, and then when they think their customers are ready for it, they’ll bring out EVs with real interior quality etc. They’ll make money on those too.

I remember a very good analyst comment “we’re in the very definition of bubble madness when the CEO says ‘we’re going to Mars’ and the share price goes up”.

babatunde

736 posts

135 months

Thursday 26th October 2017
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mcbook said:
The Economist is good for politics and macro-economics but analysis of the auto industry is not their forte.

I'd be more inclined to look at the opinions of sector-specific equity analysts which, on balance, recommend buying Tesla.
Back in the 80's i used to subscribe to the economist, back in the 80s, nowadays I don't think they are good at anything.


babatunde

736 posts

135 months

Thursday 26th October 2017
quotequote all
oop north said:
I have no very strong opinion on Tesla’s likely success. But my experience of having a test drive of a model S and (1) there being a set of price changes the day before it which the salesman knew nothing about and (2) there being another set of price changes on the next working day led me to believe that they don’t know what they are doing. That might be a false impression but it’s pretty basic in business to know what you are gong to charge for your product.

Tesla has yet to show that it can make cars in large numbers to a good quality standard. Or at all. That’s a big question mark.

The other thing is I am not convinced that Tesla have “apple cool”. The model S is not I think designed and finished to look gorgeous - the model X definitely is not. I think they just miss the mark, somehow. As well as being crazily expensive
Forgetting the money aspect for a sec, how did you find the test drive?

granada203028

1,178 posts

142 months

Thursday 26th October 2017
quotequote all
CABC said:
for that to happen they'd need to be priced quite keenly. Tesla can't repay the debt on that margin.
Innovation survives, most innovating companies don't.
We still have the channel tunnel to use though.
The channel tunnel is an interesting one. Usual mega project cost overrun meant it's initial revenue was hopelessly short of servicing it's debt. Not the case now where interest rates have dropped to near zero and built assets soared in value. So it should be giving a good return now.

Western economies both house holds and governments addicted to debt so massive borrowing the norm.

havoc

24,512 posts

180 months

Thursday 26th October 2017
quotequote all
granada203028 said:
The channel tunnel is an interesting one. Usual mega project cost overrun meant it's initial revenue was hopelessly short of servicing it's debt. Not the case now where interest rates have dropped to near zero and built assets soared in value. So it should be giving a good return now.

Western economies both house holds and governments addicted to debt so massive borrowing the norm.
Thing is, long-term infrastructure projects SHOULD be funded by government debt - that's the whole premise. Farming them out to private equity makes no sense to anyone except the corrupt and the corruptible, as they will either (a) need bailing out if they fail, at taxpayer cost; or (b) take excess profits if they succeed, at consumer/taxpayer cost (depending on who the paying customer is).

egomeister

4,997 posts

208 months

Thursday 26th October 2017
quotequote all
ORD said:
Not sure that is right. I see the advent of electronic and autonomous cars as largely spelling the end of the car industry as we know it.

Why in the name of blod would anyone spend £100k on a Porsche autobox rather than £20k on a Ford autobox?

Cars will become like fridges - not much room for differentiation (at least for 99% of the market). It is thoroughly depressing if you like cars and/or driving, but the future is blandness and a race to the bottom in terms of engineering cost and a race to the top in terms of interior plastics and fancy gadgets.
Exactly this...(and hopefully it takes long enough for me to get to retirement!)

I see massive consolidation/failure within the industry in the coming years. Manufacturers will be hugely reliant on their alliances with autonomous car sharing services and product ranges will become simplified as it simply won't be necessary to appeal to niches in the way cars are marketed at the moment.

We will lose major manufacturers and probably see new ones grow, perhaps Tesla, or perhaps from China.

I have a great deal of respect for Musk. Whilst questions can be raised about how the business models will play out, taking on multiple complex problems in the physical domain rather than digital is an unbelievable challenge and the progress he has made so far is astounding.

ntiz

860 posts

81 months

Friday 27th October 2017
quotequote all
From my understanding I don't think he is actually that bothered if over time Tesla disappears or if he sells it. I always thought the main point of Tesla was to give the motor industry a big shake up and make them start developing EVs properly instead of permanently having concepts and talking about it being the future one day.

Thats why there is no patents on there tech so that the motor industry can use it with the long term plan to sell them all his batteries from is HUGE giga factory he has built/building making the largest supplier of batteries in the world.

It's actually genius to create a market then withdraw from the difficult part and make your self the biggest supplier to the massive market you have created. However the fly in the ointment is that China has decided they want to be world leaders in tech and are ploughing money into companies that want to produce batteries etc. I might be wrong but I think I read somewhere that there is already a company in China looking to produce batteries much cheaper than Tesla so he could find himself in a price war although I guess this was inevitable.

I find this stage in the industry incredibly interesting in that my father has grown up with the ICE car watching it develop from a pretty simple box with an engine to the modern car as we know it now. My generation (i'm 26) and my sons are watching the beginning of EVs and it's going to be incredibly interesting where we will end up with it all and I'm quite privileged to have one of the first truly usable EVs the Tesla even if I do complain about it a bit to much sometimes.


REALIST123

11,768 posts

98 months

Friday 27th October 2017
quotequote all
ntiz said:
From my understanding I don't think he is actually that bothered if over time Tesla disappears or if he sells it. I always thought the main point of Tesla was to give the motor industry a big shake up and make them start developing EVs properly instead of permanently having concepts and talking about it being the future one day.

Thats why there is no patents on there tech so that the motor industry can use it with the long term plan to sell them all his batteries from is HUGE giga factory he has built/building making the largest supplier of batteries in the world.

It's actually genius to create a market then withdraw from the difficult part and make your self the biggest supplier to the massive market you have created. However the fly in the ointment is that China has decided they want to be world leaders in tech and are ploughing money into companies that want to produce batteries etc. I might be wrong but I think I read somewhere that there is already a company in China looking to produce batteries much cheaper than Tesla so he could find himself in a price war although I guess this was inevitable.

I find this stage in the industry incredibly interesting in that my father has grown up with the ICE car watching it develop from a pretty simple box with an engine to the modern car as we know it now. My generation (i'm 26) and my sons are watching the beginning of EVs and it's going to be incredibly interesting where we will end up with it all and I'm quite privileged to have one of the first truly usable EVs the Tesla even if I do complain about it a bit to much sometimes.
Tesla have many patents on their technology. At the moment they choose not to enforce them but they have in the past and could well do so in the future.

As you say, this could be a brilliant plan to let others develop the technology and then to feed off them. Time will tell.

rscott

9,161 posts

136 months

Friday 27th October 2017
quotequote all
REALIST123 said:
ntiz said:
From my understanding I don't think he is actually that bothered if over time Tesla disappears or if he sells it. I always thought the main point of Tesla was to give the motor industry a big shake up and make them start developing EVs properly instead of permanently having concepts and talking about it being the future one day.

Thats why there is no patents on there tech so that the motor industry can use it with the long term plan to sell them all his batteries from is HUGE giga factory he has built/building making the largest supplier of batteries in the world.

It's actually genius to create a market then withdraw from the difficult part and make your self the biggest supplier to the massive market you have created. However the fly in the ointment is that China has decided they want to be world leaders in tech and are ploughing money into companies that want to produce batteries etc. I might be wrong but I think I read somewhere that there is already a company in China looking to produce batteries much cheaper than Tesla so he could find himself in a price war although I guess this was inevitable.

I find this stage in the industry incredibly interesting in that my father has grown up with the ICE car watching it develop from a pretty simple box with an engine to the modern car as we know it now. My generation (i'm 26) and my sons are watching the beginning of EVs and it's going to be incredibly interesting where we will end up with it all and I'm quite privileged to have one of the first truly usable EVs the Tesla even if I do complain about it a bit to much sometimes.
Tesla have many patents on their technology. At the moment they choose not to enforce them but they have in the past and could well do so in the future.

As you say, this could be a brilliant plan to let others develop the technology and then to feed off them. Time will tell.
Except that they have publicly stated they will not enforce them if anyone is using them in good faith - https://www.tesla.com/en_GB/blog/all-our-patent-ar...