Tesla unlikely to Survive (Vol. 3)

[Gone fishing]

I don’t disagree, I have a love hate relationship with the brand. I applaud the fact they changed the game, and they created an amazing supercharging network, but there’s one too many fart noises for me now and other brands have some great offering.

My eye is on a BMw iX next, although I fancied a Taycan 4S Cross Turismo, although I’d buy used as the first year depreciation is epic on both

[TheDeuce]

Gone fishing said:

I don’t disagree, I have a love hate relationship with the brand. I applaud the fact they changed the game, and they created an amazing supercharging network, but there’s one too many fart noises for me now and other brands have some great offering.

My eye is on a BMw iX next, although I fancied a Taycan 4S Cross Turismo, although I’d buy used as the first year depreciation is epic on both

These days, leasing new often costs less than the depreciation on even a used 2-3 year old decent EV, defintely cost up both options... If you happen to catch a good lease deal, they can be insanely cheap. I had brand new iPace HSE for 3 years at £500 pm, an £83k car with a load of extras.

I really can't say enough positive about BMW EV's so far. I have the i4 M50, my business partner has an iX, which she likes - as do I. Hers had a freak powertrain fault breakdown the other week which would have been annoying - had BMW not picked the car up within 30 minutes, paid for her taxi home and delivered a good spec X5 the following day with a fuel card - her inconvenience started and finished by tapping the BMW assistance button. They fixed the car in a week. Absolutely amazing service level really! And the BMW tech is now so good..

As for Tesla, perhaps being a bit hard on them. They're an American car maker/brand at the end of the day, they're all a bit sketchy when compared to the German brands. You get what you pay for and I can't argue with the range/cost/kit that they package in the model 3/Y, despite the rough edges.

[Mikebentley]

I hankered after a Tesla to replace my far from perfect Mg4 EV. I’ve gone for a Smart #1 and am extremely happy with my choice. Build quality on another level and the peace of mind that Mercedes is an established brand.

[soupdragon1]

Mikebentley said:

I hankered after a Tesla to replace my far from perfect Mg4 EV. I’ve gone for a Smart #1 and am extremely happy with my choice. Build quality on another level and the peace of mind that Mercedes is an established brand.

Financial release for Q1 is miss miss miss in all main metrics

Stock price is up on hope of the M2 release. It's not an all new product though, and shows a clear lack of confidence in their previous product roadmap. They're building it using the old production lines instead, which makes it a model 3 'lite'?

[TheDeuce]

soupdragon1 said:

Mikebentley said:

I hankered after a Tesla to replace my far from perfect Mg4 EV. I’ve gone for a Smart #1 and am extremely happy with my choice. Build quality on another level and the peace of mind that Mercedes is an established brand.

Financial release for Q1 is miss miss miss in all main metrics

Stock price is up on hope of the M2 release. It's not an all new product though, and shows a clear lack of confidence in their previous product roadmap. They're building it using the old production lines instead, which makes it a model 3 'lite'?

A model 3 lite..? It already doesn't have an interior or half the buttons that only recently we considered normal. What else is there to take away?

Perhaps they're working on a 3 wheeler

[skwdenyer]

Gone fishing said:

Tesla US sales fell in Q1 - when the price was falling.

Yes, they did. And they were expected to do so, due to the switchover to M3 Highland. It was well-reported that customers were waiting for the new model, that there were production downtimes associated with the switchover, and that pre-Highland M3 inventory was being discounted to clear. Without that impact (M3 sales Q1/2024 vs Q1/2023 were down IIRC 46%), there would have been no sales decline.

The lesson here is that Tesla took a touch too long delivering Highland, meaning they felt under pressure to tease it ahead of time, resulting in a drop-off in sales until Highland production could ramp. That's the problem of having so few models.

Gone fishing said:

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

What sort of van? Transit? Nobody wants a van with the long snout of a MY. Few van operators want to buy a van from a dealerless manufacturer. Few van operators want to invest in an untried product. Unless the value proposition was orders of magnitude better than competitor offerings, why would a van operator take a risk on being an early adopter?

In any case, the numbers are tiny. You seem to misunderstand the scale. The Ford eTransit was the best-selling electric van in the USA in 2023 - with 7k sales. They did 2.8k sales in Q1/2024. Those sort of numbers simply don't work. Would Tesla have instantly been able to open up a market of 10x that with a van? I have my doubts, but I'm open to being wrong

Gone fishing said:

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

That was rather my point. Tesla have designed a product for the US trucking market. European cabovers have in round terms little to no market in the US heavy haulage business, because length limitations are very different. Tesla haven't been shy about saying they're trying to solve a US problem with the Semi.

Tesla aren't chasing 450km range BTW; they're chasing 800km (500 miles). There's very little space to innovate in the European cabover market, because of the length restrictions. Aero efficiency is poor, there are few gains to be made, and so on. Tesla are taking it to Peterbilt and co, which nobody else was doing (except Nikola, and that's a whole other story).

Gone fishing said:

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.

That's valid. And with BMW's installed base of production capacity, those are choices that can be made in the future. But it is important to understand the difference between Tesla's approach and other manufacturers' strategies. Tesla is taking an Apple approach - a small number of models covering a large amount of sales. BMW's is a legacy approach, think Nokia pre-iPhone - strength in breadth rather than strength in depth. There are merits in both approaches, but you can't flip-flop between them.

But don't forget that BMW sold 83k units in the USA in Q1/2024 (cars and light trucks, including MINI) across a myriad of models, with all the attendant complexity and cost; Tesla outsold BMW with a couple of main models. Which is the better strategy? BMW's strategy has seen per-model sales fall considerably, the classic diversification risk. Slice-and-dice like that has a lot of risks, especially when costs of endless BIW variations start to become a major cost.

Continuing with BMW, X5 accounts for 15% of revenues from just 7.5% of sales volumes. BMW have something like 40 separate bodystyles! Tesla have 5. BMW globally sold 2.2m units in 2023; Tesla sold 1.7m. Why do you think BMW's strategy is smarter than Tesla's?!

Gone fishing said:

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...

With respect, Tesla weren't trying to compete with the BMW M3 directly. But getting those headlines caught BMW napping, and delivered a huge bump in credibility for Tesla. Job done.

Gone fishing said:

I presume you've sat in a Tesla M3 performance and marvelled at the (lack of) lateral support of the seats?

I have. And if that bothers me I'll either (a) not buy one, or (b) buy aftermarket seats. Just like I'd buy a case or other accessory for my iPhone

Gone fishing said:

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.

I understand what they're doing. It isn't a cheap shot to talk about mapped areas (I didn't specifically mention that for Merc - that was about Waymo), or speed limits (you mentioned L3 - that's what's restricted). I admire Merc for putting something out there on the L3 front, and for taking responsibility for what happens in the event of an accident. I tip my hat to them. But I don't see anything in the *way* they're doing L3 that leads me to believe they've got a linear path to proper autonomy. IMHO their approach does *not* just scale.

[skwdenyer]

Mikebentley said:

I hankered after a Tesla to replace my far from perfect Mg4 EV. I’ve gone for a Smart #1 and am extremely happy with my choice. Build quality on another level and the peace of mind that Mercedes is an established brand.

Smart is in round terms a subsidiary of Geely now. The power of marketing - the Mercedes dimension - is a great selling point. The JV terms are that Mercedes styles the cars and Geely (not Mercedes) engineers and builds them. And don't forget Geely owns nearly 10% of Mercedes-Benz Group (Daimler trucks is separate now), whilst BAIC owns another 10%.

I'm glad you're happy with your choice.

[skwdenyer]

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.

Sounds like Tesla have been listening to you on seats and suspension for the M3P: https://www.youtube.com/watch?v=52O3cYsyZMo

Active handling balance control is interesting, too - fun for those of who remember the old Racelogic traction control systems that allowed you to dial in your required level of sideways

[Chasing Potatoes]

soupdragon1 said:

Financial release for Q1 is miss miss miss in all main metrics

Stock price is up on hope of the M2 release. It's not an all new product though, and shows a clear lack of confidence in their previous product roadmap. They're building it using the old production lines instead, which makes it a model 3 'lite'?

So Reuters weren’t accurate then.

[Gone fishing]

Chasing Potatoes said:

soupdragon1 said:

Financial release for Q1 is miss miss miss in all main metrics

Stock price is up on hope of the M2 release. It's not an all new product though, and shows a clear lack of confidence in their previous product roadmap. They're building it using the old production lines instead, which makes it a model 3 'lite'?

So Reuters weren’t accurate then.

musk said:

We've updated our future vehicle lineup to accelerate the launch of new models ahead, previously mentioned start of production in the second half of 2025. So, we expect it to be more like the early 2025, if not late this year.

These new vehicles, including more affordable models, will use aspects of the next-generation platform as well as aspects of our current platforms, and we'll be able to produce on the same manufacturing lines as our current vehicle lineup.

So, it's not contingent upon any new factory or massive new production line, it will be made on our current production lines much more efficiently.

You can interpret this is a few ways.. to reuse parts of existing platforms, re jigging plans sounds like the M2 as an all new design has gone. Next generation platform… what does that mean? Completely new and not seen before or structural battery pack, one piece castings etc which have been described as next gen in the past but aren’t in widespread adoption.

I think whatever, the M2 development plan is nothing like what it was if it exists at all, and on these calls everything is talked up. You have to listen for whats not said as much as what is and no Model 2 mentioned, no Roadster mentioned that I could see. Cybertruck figures always taken out of the numbers so one might presume currently not pretty. Lots of talk of FSD 12.xxx being more like FSD 13 or even FSD 14... wtf.. are we supposed to be impressed by saying its like a bigger version number?

.

Edited by Gone fishing on Wednesday 24th April 08:57

[Chasing Potatoes]

Right - but they reported the entire thing was canned. And it doesn't appear to be. What a Model 2 looks like is another thing entirely.

[Durzel]

Bit disappointed with the new Model 3 Performance (currently have a 2020 one, was looking to change).

- Less power than the US version by 50bhp due to different battery (79kW LG vs 82kW Panasonic)
- Ridiculously more expensive, even before you factor in the incentives they get (I saw one guy post a combined $12,500 discount on top of the lower price).
- 9.6% APR on PCP lol

2.9 seconds 0-60 is obviously great but it's only 0.2 better than the outgoing model. Would have liked to have seen it have 600bhp+ and carbon wrapped motors front and back, aiming for 2.5 secs 0-60. Obviously this would encroach on the Plaid S but that's not really an option for us in the UK unless one is prepared to suffer it being a full priced LHD car.

In terms of the overall look of it, would have liked it to be a bit more flared - a bit like how different the BMW M3, etc look. Front bumper and rear diffuser is an improvement, as are the seats (my biggest issue with my previous P). Brakes are still not vented or drilled, so the track emphasis feels like lip service again.

Bah.

[Durzel]

Chasing Potatoes said:

Right - but they reported the entire thing was canned. And it doesn't appear to be. What a Model 2 looks like is another thing entirely.

Maybe it was unofficially canned if not "indefinitely postponed" before the stock tanked -40%. Reuters might have been essentially right at the time.

Also being cynical I'd echo what is said above - it's easy to say XYZ but until there's actual prototype cars on the road showing progress I'm taking anything Elon says nowadays with a bucket of salt.

[Gone fishing]

Chasing Potatoes said:

Right - but they reported the entire thing was canned. And it doesn't appear to be. What a Model 2 looks like is another thing entirely.

They've not said it hasn't been canned, they didn't mention if which would have been a golden opportunity to stick on in the eye for Reuters, why not given how Musk reacted. For all we know what they'll do is bring out software limited lower power car (like they've done in Turkey already), or smaller battery version, or a cobble together a hatch version of the Model 3. There are a lot of routes to a "lower priced more affordable car" than the Model 2 might have been.

If you've followed enough of these Tesla calls you get to see the pattern, a lot of words are spoken but very little details conveyed. Take the discussion of FSD - whats the road to to Level 4/5? - ah well we've loads of data and it will make a compelling argument and the others in this space are leading the way for us with the regulators.. erm... really? Maybe "we've opened dialogue with the regulators in a number of states about the evidence they require and criteria they want to be met, we are now working on the evidence path to fulfill that and expect to make our first submission at the end of the year". would have meant something. Oh.. and version 12,5 is so good we could have called itversion 13 - thats hardly a forensic and qualified answer.

Share price has bounced but thats typical buy on the rumour (ie before the call) and sell on the news (ie after the call) which is an saying thats been around for years.

[Chasing Potatoes]

Durzel said:

Maybe it was unofficially canned if not "indefinitely postponed" before the stock tanked -40%. Reuters might have been essentially right at the time.

Also being cynical I'd echo what is said above - it's easy to say XYZ but until there's actual prototype cars on the road showing progress I'm taking anything Elon says nowadays with a bucket of salt.

Possible - and of course I take anything Musk says with a digger full of salt.

[soupdragon1]

Chasing Potatoes said:

Durzel said:

Maybe it was unofficially canned if not "indefinitely postponed" before the stock tanked -40%. Reuters might have been essentially right at the time.

Also being cynical I'd echo what is said above - it's easy to say XYZ but until there's actual prototype cars on the road showing progress I'm taking anything Elon says nowadays with a bucket of salt.

Possible - and of course I take anything Musk says with a digger full of salt.

That the same salt that they were going to use in batteries instead of lithium, a 'profound' innovation?

[soupdragon1]

Chasing Potatoes said:

Right - but they reported the entire thing was canned. And it doesn't appear to be. What a Model 2 looks like is another thing entirely.

If anyone doesn't view this announcement as anything but 'knee jerk' then I don't know what to say.

Its quite bemusing that of all the products in the pipeline (semi truck, roadster, Model 2, Cybertruck) that only the Cybertruck gets to see the light of day. And look at that launch. They're an established business now, but still in start-up mode, which is concerning. Flip flopping on the product roadmap is a sign of poor leadership and/or lack of confidence. My underlying take is that they aren't confident that the all new M2 is the correct direction of travel, so they're going to pull a few bits from the parts bin and make a new model out of those instead. That's what we heard yesterday.

[Chasing Potatoes]

soupdragon1 said:

If anyone doesn't view this announcement as anything but 'knee jerk' then I don't know what to say.

Its quite bemusing that of all the products in the pipeline (semi truck, roadster, Model 2, Cybertruck) that only the Cybertruck gets to see the light of day. And look at that launch. They're an established business now, but still in start-up mode, which is concerning. Flip flopping on the product roadmap is a sign of poor leadership and/or lack of confidence. My underlying take is that they aren't confident that the all new M2 is the correct direction of travel, so they're going to pull a few bits from the parts bin and make a new model out of those instead. That's what we heard yesterday.

Ultimately does it matter unless you're a shareholder or owner? Companies go up and down, some succeed and some fail. Sometimes things have to change fast and sometimes they don't.

[skwdenyer]

soupdragon1 said:

Chasing Potatoes said:

Right - but they reported the entire thing was canned. And it doesn't appear to be. What a Model 2 looks like is another thing entirely.

If anyone doesn't view this announcement as anything but 'knee jerk' then I don't know what to say.

Its quite bemusing that of all the products in the pipeline (semi truck, roadster, Model 2, Cybertruck) that only the Cybertruck gets to see the light of day. And look at that launch. They're an established business now, but still in start-up mode, which is concerning. Flip flopping on the product roadmap is a sign of poor leadership and/or lack of confidence. My underlying take is that they aren't confident that the all new M2 is the correct direction of travel, so they're going to pull a few bits from the parts bin and make a new model out of those instead. That's what we heard yesterday.

Apple recently canned its car project after spending over $10bn. Is that the "flip flopping" of other than an established business? Dyson brought a car to pre-production level, spending £500m, then dropped it. Many products, projects and programmes are dropped, delayed, or recast in light of changing economic realities. In the car world, a fwe notable examples have included the Porsche 989, the Range Rover SV Coupe, the 2021 Jaguar XJ, but there are many more. Mazda prepared to launch a whole brand in the US (Amati, to compete against Infiniti, Acura and Lexus), but pulled the plug at the last minute.

Tesla doesn't have an unlimited supply of funds. It has a bit less than $30bn on hand IIRC, but its net debt has crept up quite a lot over recent months as it has been caught in a price war coupled with rapidly-expanding R&D spend. What we heard yesterday is that it is intending to offer attracting leasing deals on M3 (starting at $299 per month) in order to stimulate further demand. But the price war in China is obviously a concern for them. If you look at some of the cheap EVs coming out of China right now, it is infeasible that many are actually profitable - there's a battle for market share.

In terms of the Semi, as per yesterday's release (and as confirmed by the drone warriors), work appears to have actually started on the factory intended to produce them at scale. Of course, that's just a building - it can be repurposed if necessary. But there's actual, tangible investment happening.

What I thought more interesting from the earnings call was the de-emphasis of Tesla's own battery projects. 18 months ago, in-house 4680 production was a linchpin of future strategy. Today it (and the wider Tesla cell production) is being re-cast as a hedge against spikes in global cell prices. So now 4680 ramp is being spoken of only in terms of leading Cybertruck ramp. This does make some sense. Just as with the BEV space in general, it was arguably necessary for Tesla to get in and drive progress forward, but over time the market will be able to innovate far faster than Tesla can alone. Panasonic and LG are reportedly ramping 4680 production. But it may also be emblematic of a business biting off more than it can chew.

In terms of accelerating the product roadmap, given the regulatory and production challenges associated with getting a new model to market, it is clearly not just a question of flicking a switch and delivering a new model; recall that the workshop manual is usually the longest lead-time item on any new vehicle programme! So whatever comes down the line is going to need to be a variant of an existing model. Per yesterday, this is said to incorporate some elements of new production methods.

So the question is, what? The logical step would be to take the M3 platform, add in some gigacastings and a structural pack to reduce the BOM further. My gut instinct would be something akin to the original BMW Compact - a truncated, hatchback M3 with one or more gigacastings, and a lower starting price.

[Gone fishing]

Companies should cancel projects that are not viable, they'd be irresponsible to continue with them and arguably they don;'t do it enough, and Apple spending $10B is a lot, but then they have a lot of cash to spend, but in principal I have no problem with Tesla changing direction, I think its good if the numbers dictate its the right thing to do. I wish Musk would do more of it like decide auto wipers are never going to work.

Where Musk is looking stupid is only a month ago Reuters said the M2 programme was dead, Musk called them liars, last night Musk made zero mention of the Model 2 and talked aboujt a new approach to faster bring to market cars based on existing tech with some innovation, and using existing production lines, all very different to the previous talk of the M2.

So to call a well respected media outlet, what was it, King of the Liars or some such pathetic statement really does make Musk look like the muppet here.It's hard to argue anything other. There was a lot of credibility to the Reuters story.

Musk has now wound up the heat on the Robotaxi day saying its going to be shown.. thats going to be fun, he'll spoof some video like he's done before, some CGI element, remember the advery where somebody dressed up as a car seat and .drove the car through a drive through..just like he had humanoids which were people dressed in lycra. I can see all that and worse.

As for the share price, a big bounce is only taking it to where it was last Monday.and still 30% down on the start of the year.