Tesla unlikely to Survive (Vol. 3)

[skwdenyer]

soupdragon1 said:

Listened to Teslas earnings call last night

Musk talking about 3 years of hell with the M3 getting it ramped up, brand new way of building cars but finally happy with where they got to after 3 years. With 1.2m sales of MY last year, out of total 1.8m, that must mean 0.5m model 3 sales?

Maybe the penny will drop that all this investment in building cars this way and the difficulty of building cars in a way thats completely bespoke to Tesla, that by the time you get your production right, people are already bored with your cars. 0.5m M3 sales isn't very many and by all accounts, seems like the M3 highland is getting a lukewarm reception.

Are they going to do this all over again with their compact car?

What happens when people are bored of the MY? Giga casting doesn't allow for wholesale changes, only cosmetic tweaks. Maybe the MY and M3 casting machines are ready for scrap not long after they get production right, unless Tesla are going to try and flog the same car over and over without a proper MKII coming to market? Seems a crazy strategy if that's the case.

Is it a misjudgement from Tesla to put so much effort into their style of construction that their hands are tied and they can't evolve their model line up properly?

M3 sales have been level. All the changes are about:

(a) making it more profitable (something legacy manufacturers used to do by de-contenting along with running changes to manufacture)

(b) proving the tech for use in MY and other models (this baking in a margin benefit over many other manufacturers)



For M3 sales to have held up this well despite the age of the design is actually rather impressive.

The gigapresses aren’t a dead end IMHO. Changing the tooling is easier than changing sheet metal, re-factoring a BIW line, re-proving the new design, and so on. And frankly there’s an awful lot that can change in a new model without having to touch those castings.

Getting Cybertruck out was important. With the huge level of pre-orders, there’s a pretty secure sales pipeline in place. And again CT proves key new tech at lower volume before using it in higher-volume vehicles.

I agree that in an ideal world the “M2” would be out by now. But as usual I think writing Tesla off is to rather underplay what they’ve achieved.

(Edited to add: this BIW flexibility is a really big deal. Think about all the different operations required to patch together a BIW from pieces of sheet metal. If you make a change, potentially a very large number of steps need to be changed / added / deleted. If you change a large casting, the chances are the same other stuff is going to attach to it. The changes to the BIW line can be much smaller - never mind the reduction in overall manufacturing steps, robots, failure points, and so on.

Also don't underestimate the impact of structural packs slung between large castings.

And, yes, I know M3 Highland doesn't have a structural pack. But each change Tesla make to their processes (refining M3, then the new approach for CT, and so on) incrementally moves the game on for them, proving each new step along the way. If you take all the steps along the M3-MY-CT pathway and project forward, you can see where a profitable "M2" sits in a way that didn't make all that much sense before.)

Edited by skwdenyer on Thursday 25th January 15:49

[James6112]

Post #1

Wednesday 25th October 2017

“Great article in The Economist this week, showing how Tesla has a 75% to 99.9% chance of failure, due to its gigantic debt load.

History suggests companies with big debt and big losses, over multiple years, like Tesla and Uber, rarely thrive or survive.

Such firms have charismatic leaders just winging it on debt.

Tesla and Uber are statistically doomed...“

We’ll, that was a great prediction wasn’t it

[Durzel]

True, but also trite.

It ended up being an incorrect assertion, but that’s not to say that companies who have defied expectations in the past can’t ultimately fail.

The landscape is much different now than it was in 2017. Perhaps people weren’t taking EVs etc seriously back then, whereas Tesla were - and they benefitted greatly. Nowadays every serious manufacturer sees EVs as their future, and most already have model(s) out.

[TheDeuce]

Durzel said:

True, but also trite.

It ended up being an incorrect assertion, but that’s not to say that companies who have defied expectations in the past can’t ultimately fail.

The landscape is much different now than it was in 2017. Perhaps people weren’t taking EVs etc seriously back then, whereas Tesla were - and they benefitted greatly. Nowadays every serious manufacturer sees EVs as their future, and most already have model(s) out.

So... Basically if Tesla fail, ever, at any point in time... The first post of this thread from 7 years ago becomes accurate

Personally I think Tesla is at least as safe as legacy manufacturers. They're safer than most legacy manufacturers when the growing pressure of new Chinese and Korean brands is applied as:

A) Tesla don't have to worry about the cost of transition and huge emission fines during the period of transition.

B) Tesla can and will sell their credits to legacy manufacturers, weakening their competitors as they do

C) If Tesla can survive long enough to see any legacy manufacturers suffer or fail first, then that increases the market share they can adopt.

[TheRainMaker]

What would actually happen if Tesla did collapse?

Would all the cars just stop? We already know most of the remote functionality, etc, won't work.

Has anyone got a Tesla Model 3 with no internet access?

[soupdragon1]

James6112 said:

Post #1

Wednesday 25th October 2017

“Great article in The Economist this week, showing how Tesla has a 75% to 99.9% chance of failure, due to its gigantic debt load.

History suggests companies with big debt and big losses, over multiple years, like Tesla and Uber, rarely thrive or survive.

Such firms have charismatic leaders just winging it on debt.

Tesla and Uber are statistically doomed...“

We’ll, that was a great prediction wasn’t it

"You can be in new york and summon your car to come to you from Los Angeles. Probably next year."

"these cars are appreciating assets"

"I'm taking Tesla private"

"We were weeks away from bankruptcy"

Just a few quotes from the CEO. So apart from securities fraud, a huge dose of BS and multiple share dilutions, it was fairly accurate. Without committing a little bit of fraud, they could easily have went under.

Don't forget, Mercedes owned 10% of Tesla and obviously would have had a good view of the balance sheets (not those fictitious balance sheets they release to the city, the raw data ones) and Mercedes bailed.

[TheDeuce]

TheRainMaker said:

What would actually happen if Tesla did collapse?

Would all the cars just stop? We already know most of the remote functionality, etc, won't work.

Has anyone got a Tesla Model 3 with no internet access?

The company would be broken up, someone would pick up the brand and find ways of supporting the existing cars to avoid damage to the brand moving forwards.

There's no reason the cars would lose internet access though..

[page3]

TheRainMaker said:

Has anyone got a Tesla Model 3 with no internet access?

Most of us for the last month or so, until Tesla/EE fix the connectivity bug.

[soupdragon1]

Tesla sales have collapsed quarter on quarter. Only 387k cars sold vs 484k the previous quarter.

https://uk.finance.yahoo.com/news/tesla-q1-auto-de...

[Gone fishing]

They’ve tried to blame production weakness due to slow ramp and factory closures, but it’s a new record in excess production with 50k more made than sold.

Personally I think it’s down to thr Model Y needing a facelift

[EddieSteadyGo]

Gone fishing said:

They’ve tried to blame production weakness due to slow ramp and factory closures, but it’s a new record in excess production with 50k more made than sold.

Personally I think it’s down to thr Model Y needing a facelift

They have cut production in Shanghai, so there is clearly a demand element to this. Model Y refresh is due (fairly) soon. I think the underlying profit margin figures which we will see later this month will be ok though (so after excluding tooling costs of Cybertruck, investment for production of the new Model 3 etc.)

[NDA]

soupdragon1 said:

Tesla sales have collapsed quarter on quarter. Only 387k cars sold vs 484k the previous quarter.

https://uk.finance.yahoo.com/news/tesla-q1-auto-de...

BYD are down 43% - I think many in the automotive sector are struggling.

[soupdragon1]

NDA said:

soupdragon1 said:

Tesla sales have collapsed quarter on quarter. Only 387k cars sold vs 484k the previous quarter.

https://uk.finance.yahoo.com/news/tesla-q1-auto-de...

BYD are down 43% - I think many in the automotive sector are struggling.

Yes, EV's are a hard sell right now. Toyota looking strong, seeing great growth in the US, with hybrids being an easier sell.

[skwdenyer]

soupdragon1 said:

NDA said:

soupdragon1 said:

Tesla sales have collapsed quarter on quarter. Only 387k cars sold vs 484k the previous quarter.

https://uk.finance.yahoo.com/news/tesla-q1-auto-de...

BYD are down 43% - I think many in the automotive sector are struggling.

Yes, EV's are a hard sell right now. Toyota looking strong, seeing great growth in the US, with hybrids being an easier sell.

But I think Musk's apparent endorsement of the hard right is also causing major problems at home. Teslas were a natural fit for centrist and liberal folk; Musk (right now) is not.

Whereas Musk might previously have been seen as an eccentric trying to save humanity, he now seems to be an eccentric trying to smight the woke and prove how free enterprise (ah-hem) is the path to salvation. Since many of his customers would consider woke as a badge of honour, that seems like a poor strategy for a business founded on word of mouth and reputation (and not, famously, conventional advertising or PR).

This is making the news, too: https://uk.finance.yahoo.com/news/elon-musk-blamed...

[EddieSteadyGo]

skwdenyer said:

But I think Musk's apparent endorsement of the hard right is also causing major problems at home. Teslas were a natural fit for centrist and liberal folk; Musk (right now) is not.

Whereas Musk might previously have been seen as an eccentric trying to save humanity, he now seems to be an eccentric trying to smight the woke and prove how free enterprise (ah-hem) is the path to salvation. Since many of his customers would consider woke as a badge of honour, that seems like a poor strategy for a business founded on word of mouth and reputation (and not, famously, conventional advertising or PR).

This is making the news, too: https://uk.finance.yahoo.com/news/elon-musk-blamed...

I think this is a comforting narrative to those who don't agree with Musk's politics, but it doesn't fit the facts.

Musk's 'Republican-lite' tweets have been there for a long time. Everyone has known about Musk's politics for ages.

If Musk was really toxic, why was Q4 2023 a record in terms of their highest-ever quarterly production and deliveries?

And why would so many 'celebs' be desperate to post pictures of themselves on Instagram driving their new Tesla Cybertruck?

And are we going to attribute BYD's 43% decline from last quarter to Musk being toxic?

Whilst Musk's political views certainly don't align with a big chunk of the population, I think the evidence shows, when people are spending their own money, they pick what they believe is the best overall car, regardless whether or not they like the CEO.

[TheDeuce]

skwdenyer said:

soupdragon1 said:

NDA said:

soupdragon1 said:

Tesla sales have collapsed quarter on quarter. Only 387k cars sold vs 484k the previous quarter.

https://uk.finance.yahoo.com/news/tesla-q1-auto-de...

BYD are down 43% - I think many in the automotive sector are struggling.

Yes, EV's are a hard sell right now. Toyota looking strong, seeing great growth in the US, with hybrids being an easier sell.

But I think Musk's apparent endorsement of the hard right is also causing major problems at home. Teslas were a natural fit for centrist and liberal folk; Musk (right now) is not.

Whereas Musk might previously have been seen as an eccentric trying to save humanity, he now seems to be an eccentric trying to smight the woke and prove how free enterprise (ah-hem) is the path to salvation. Since many of his customers would consider woke as a badge of honour, that seems like a poor strategy for a business founded on word of mouth and reputation (and not, famously, conventional advertising or PR).

This is making the news, too: https://uk.finance.yahoo.com/news/elon-musk-blamed...

I'm always very sceptical of this sort of thing.. Sure, its easy enough to find people that have a Tesla or have short listed one who will state that Musk puts them off it to an extent. But ultimately, the majority of punters will buy the car which suits their needs and budget best - even if they don't like the politics of who makes it. Note; people buy Chinese and Korean cars too!

I think by far the biggest problem Tesla now face is:

a) Significant new competition for comparable EV's at lower prices

b) Their own affordable EV offering is in theory not that far away from launching, some people will be waiting for that. The model Y buyer is similarly likely waiting for the updated model Y.


And also the 'Tesla effect' has probably started to wane in general now. When they were the worlds only significant EV car manufacturer, they were seen as an incredibly exciting company - EV meant 'Tesla' for many. Now, an awful lot of people that bought a Tesla in the last decade now have a plenty of choice elsewhere.

Tesla were never going to be able to maintain their significant early market share. Nor are they capable of being a new, cool and exclusive 'club' for their drivers forevermore. Now, they're pretty much just another car company, facing a lot of competition.

Musk being a tit sometimes probably doesn't help! But I think that increased competition and the promise of a new more affordable Tesla 'coming soon' are far more significant factors, commercially speaking.

[NDA]

It will be interesting to see what impact the monthly subscription of £200 for FSD will have.

It's an interesting business model. They have around 5m cars on the road at the moment.

[CoolHands]

Sales maybe down cos the number of nice middle classes that can afford and want and have a driveway for ev cars are dwindling. Those that can, have - so rather small pool of buyers left?

[RichardM5]

NDA said:

It will be interesting to see what impact the monthly subscription of £200 for FSD will have.

It's an interesting business model. They have around 5m cars on the road at the moment.

A sonic would say none at all, as it does not work. And I say that as a FSD owner for the last 4 1/2 years.

[TheDeuce]

CoolHands said:

Sales maybe down cos the number of nice middle classes that can afford and want and have a driveway for ev cars are dwindling. Those that can, have - so rather small pool of buyers left?

I doubt it. They're not buying the cars, they're leasing them - they'll need a new one every 2-3 years.

That aside, the majority of households in the UK can charge at home, an even larger majority of all those households that contain people that can actually drive and want to have a car. The entire number of EV's on the road today would only put one on every 15th driveway.

This is not a saturated market.