Tesla existential threat?
Race Car
Joined: May 2018
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Perhaps not - time will tell - as I said, walk into an apple store and you'll find kids more excited about the colour or type of phone cover they can buy rather than the product itself.
I have no doubt lots of money is going into the valley - I'm involved with batteries and robotics and indeed have a plentiful supply of KUKAs to play with, its not a big deal. People think they are but they are actually pretty simple and reduce the time humans spend on humdrum activities and in the main manipulate large items safely. Also been involved in self driving and loading vehicles in major production facilities, again they remove humans from the equation, they are marginally more efficient and the best outcomes relate to safety and maintenance.
Do I sound excited, no.
I am more excited about the productive and predictive utilisation of "big data" not as in the case of the cynical applications of Facebook and Google but as applied to manufacturing and pharmaceuticals.
Unfortunately, Thanos is a reflection of the culture as is the end game that will unfold for Musk. Pumping more money in won't resolve the cultural issues, greed feeds on naivety and ultimately destroys honesty.
Panem et circenses
I have no doubt lots of money is going into the valley - I'm involved with batteries and robotics and indeed have a plentiful supply of KUKAs to play with, its not a big deal. People think they are but they are actually pretty simple and reduce the time humans spend on humdrum activities and in the main manipulate large items safely. Also been involved in self driving and loading vehicles in major production facilities, again they remove humans from the equation, they are marginally more efficient and the best outcomes relate to safety and maintenance.
Do I sound excited, no.
I am more excited about the productive and predictive utilisation of "big data" not as in the case of the cynical applications of Facebook and Google but as applied to manufacturing and pharmaceuticals.
Unfortunately, Thanos is a reflection of the culture as is the end game that will unfold for Musk. Pumping more money in won't resolve the cultural issues, greed feeds on naivety and ultimately destroys honesty.
Panem et circenses
Last edited by groundhog; Aug 23, 2018 at 06:21 AM.
Rennlist Member
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From: Northeast/Europe
Yep, I like to think I co-founded one.
Let me offer a little counter-perspective. The Valley has continually re-invented itself from the HP and Intel days through Apple to the dot coms, genetics, apps, social media... Currently there is a giant sucking sound: money leaving the rest of the country and moving towards the Bay Area. The house I was renting until a couple years ago- in a borderline neighborhood next to East Palo Alto, built in 1948, 1500 square feet on a 7k sq foot lot, cracked foundation. $2.5 million. Why do you think that is?
The rule is that 8 of 10 VC backed startups fail, 1 goes sideways, the last pays for all the failures plus interest. Theranos was a massive fraud and failure, but failure is a required part of the system. The glory days are not over, it just seems like it as the next wave of startups evolves both inside and outside the valley.
A.I. and robotics are about to accelerate the next revolution. The self-driving cars I dodge daily will soon begin to replace the jobs of the roughly 5 million Americans who drive for a living, funneling more dollars from other areas of the country. Digital assistants and voice recognition are already replacing secretaries, medical transcription, receptionists, etc. Combined with robotics this will hit like a hammer.
Apple has the largest US market cap ever, Amazon’s taking over the world and Google’s printing cash while leading the self-driving car revolution and buying every robotics company in sight. The glory days are not over at all, it’s simply perception and the fact that perception has turned against the Valley. Other parts of the country are waking up to the fact that they are not only getting left out of the boom, it’s actually going to hurt them. And that has them understandably concerned.
Love it or hate it the model has been hugely successful, not just for Musk but for many like him. And I still see many crying foul without fully understanding what and why. Like I said- the SEC will deal with Musk if he’s crossed the line, as they should. It’s still a diversion at the end of the day. To see past it you must first understand the big picture and ask the right questions. I don’t see much of that perspective here.
Race Director
Joined: May 2015
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Actually this article sums up Musk and his cult of personality perfectly.
https://medium.com/@parismarx/billio...t-c6ccc8b11d0b
https://medium.com/@parismarx/billio...t-c6ccc8b11d0b
Race Director
Joined: May 2015
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Unfortunately, based on what UBS found in their tear down, many of those cars are likely to have a lot of manufacturing defects. And that’s even after Tesla reported a rework rate way above industry average.
And while we debate EVs, the public is out there buying SUVs and pickups, while passenger car sales slide.
And while we debate EVs, the public is out there buying SUVs and pickups, while passenger car sales slide.
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Unfortunately, based on what UBS found in their tear down, many of those cars are likely to have a lot of manufacturing defects. And that’s even after Tesla reported a rework rate way above industry average.
And while we debate EVs, the public is out there buying SUVs and pickups, while passenger car sales slide.
And while we debate EVs, the public is out there buying SUVs and pickups, while passenger car sales slide.
Race Director
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i also think I could be wrong about all of this.
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I suspect they show 2-3 quarters of profitability then raise cash for expansion. Cardinal rule: everyone wants to give you money when you don’t need it. Their path forwards is in speed; they can’t afford to sit back and let the majors catch. Pause to show they can be profitable then show how much more profitable they could be with an extra billion or twenty. I think this quarter will be roughly profitable, so that puts the next raise in Q2 2019 is my blink.
Apple and google do the math and conclude they are overpriced, which I think they are.
Apple and google do the math and conclude they are overpriced, which I think they are.
Race Car
Joined: May 2018
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Tesla has only delivered two profitable quarters in its history (and these were followed by very big losses)................the reason Musk is desperate to take the company private is so that it doesn't have to face the music in the short term. It may be able to show a profit next quarter by massively reducing capital burn and by biting deep into various contingency stockpiles - however, doing this will simply make the following quarter worse. I haven't had a look at the current debt schedules and the possibility of bullet payments and if and when they may occur.
Irrespective of this, even if the company goes private, it needs somewhere between $USB4 and $USB8 in additional capital to fix the current issues, and provide a lifeline of working capital for the next year or so. In terms of pricing he was in a good position to put something away about ten weeks ago with minimal dilution. He didn't which was either a mistake or due to other factors e.g. the usual sources of "good" money were not on the table - this may indicate he hasn't got a strong hand with the equity capital markets e.g. he has burnt key relationships at various key instos (note he was talking to one of the Saudi sovereign wealth funds - this is telling in some ways). It could also mean there are interesting covenants in the debt facilities which either limit timing or quantum of moves. Also the depth of discount pricing may be a problem e.g. he may have had to take a big discount to raise the requisite amount which in turn would impact the price by forcing a floor.
Irrespective of this, even if the company goes private, it needs somewhere between $USB4 and $USB8 in additional capital to fix the current issues, and provide a lifeline of working capital for the next year or so. In terms of pricing he was in a good position to put something away about ten weeks ago with minimal dilution. He didn't which was either a mistake or due to other factors e.g. the usual sources of "good" money were not on the table - this may indicate he hasn't got a strong hand with the equity capital markets e.g. he has burnt key relationships at various key instos (note he was talking to one of the Saudi sovereign wealth funds - this is telling in some ways). It could also mean there are interesting covenants in the debt facilities which either limit timing or quantum of moves. Also the depth of discount pricing may be a problem e.g. he may have had to take a big discount to raise the requisite amount which in turn would impact the price by forcing a floor.
Burning Brakes
Joined: Oct 2002
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From: Northern California
My Model 3 was built in July 18. I immediately took it over to my detailer. He found a few places around the rear where the paint hadn't been perfectly polished out. If you looked at it just wrong, it looked a little 'smudgy'. Most people would never notice it. Took it to the service center where they did a high speed polish, and my detailer corrected what was left. (Then he Opticoated the car.) That is really about it.
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The main question remains: Is it easier/faster for Tesla to profitably make a car that doesn’t fall apart or for established car makers (that have been designing and making cars at scale for decades) to put a battery in their cars? For me, the likely answer has been and remains the latter.
And I disagree that without Tesla there’d be no EV’s out there. The “green”, zero-emmissions writing has been on the govt subsidy+regulatory wall for at least couple of decades on both sides of the Atlantic. With or without Tesla, zero-emmission cars have been on the drawing boards and future plans of all major car makers for a long time. There’s even been Formula E racing for years now. Musk was only among the first ones to get on the green/solar govt subsidy bandwagon and there’s nothing proprietary about it that other, much better funded car makers couldn’t replicate or do better. The wave of competing EVs is about to crash on Tesla’s shores and both investors and Musk are getting visibly antsy.
This is how I see the situation now. I could be wrong, and it could also change in the future.
And I disagree that without Tesla there’d be no EV’s out there. The “green”, zero-emmissions writing has been on the govt subsidy+regulatory wall for at least couple of decades on both sides of the Atlantic. With or without Tesla, zero-emmission cars have been on the drawing boards and future plans of all major car makers for a long time. There’s even been Formula E racing for years now. Musk was only among the first ones to get on the green/solar govt subsidy bandwagon and there’s nothing proprietary about it that other, much better funded car makers couldn’t replicate or do better. The wave of competing EVs is about to crash on Tesla’s shores and both investors and Musk are getting visibly antsy.
This is how I see the situation now. I could be wrong, and it could also change in the future.
Nordschleife Master
Joined: Jun 2011
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From: Santa Cruz, CA
The investment bank tore apart a Model 3 from Nov. 2017 and found a host of build quality issues