Fiat can do it in 12!

[Thomas Allen]

ICE manufacturers and big oil have been laughing all the way to the bank for years and they are afraid to let that go. Comments like these show their clock is ticking....

The is the Kodak story, except it's the automotive sector. Kodak was fat and sassy selling film, and they thought it would never end. I expect GM, Fiat, Ford and most of the other ICE manufacturers to meet the same fate. They're all wearing blinders.

 

[Twiglett]

Haven't FCA announced they're canning the Dodge 200 to concentrate on trucks?
Fiat still thinks that Tesla is just selling cars, just like most of the others. I think some of the german companies have just figured it out.
A Tesla car is a combination of car, software, charging network and innovative company all integrated together.
With the Model 3, Tesla will have the largest fleet in existence of input devices into a single autonomy matrix.
They will be getting billions of miles of input every few months - all to fine tune the entire fleet into becoming the world leader in autonomous vehicles.

 

[sandpiper]

Haven't FCA announced they're canning the Dodge 200 to concentrate on trucks?
Fiat still thinks that Tesla is just selling cars, just like most of the others. I think some of the german companies have just figured it out.
A Tesla car is a combination of car, software, charging network and innovative company all integrated together.
With the Model 3, Tesla will have the largest fleet in existence of input devices into a single autonomy matrix.
They will be getting billions of miles of input every few months - all to fine tune the entire fleet into becoming the world leader in autonomous vehicles.

The ICE makers got a big eye opener when they saw 400,000 paid reservations and counting.

First they ignore you, then they laugh at you, then they fight you, and then you win. Fiat is clearly at stage 2. GM's recent comments indicate that they're still there as well. I'm suspicious that, within the big automakers, there is a low level panic, now realizing that large numbers of people actually want these things. You can laugh at 50,000 very costly cars, but not half a million. For the smarter automakers, this is the start of stage 3.

I genuinely hope that they adapt. It would be a huge economic disruption to the country to kill the big ICE makers. Kodak didn't employ 10s of millions.

 

[Drivin]

Isn't this basically the point of Tesla? To show that electric cars can be done affordably with a high demand?

How exactly did Tesla demonstrate that with the X?
When they seemingly have trouble with the quality of a 130k car, does make one wonder about how they will demonstrate mass market quality and profitable production of a car that is 1/4th the price.

 

[Canuck]

How exactly did Tesla demonstrate that with the X?
When they seemingly have trouble with the quality of a 130k car, does make one wonder about how they will demonstrate mass market quality and profitable production of a car that is 1/4th the price.

That's the $64,000 question....revised to $35,000 plus options.

The thing is, building a company today is not at all like it was in the past. Now, you start with an idea, raise capital, sell shares, have huge valuations, and not turn a profit. Your valuation is based on potential. Tesla is HUGE when it comes to potential and it's proven potential, which is the first really tough hurdle to get over. Of course, it's way overvalued -- Elon Musk has even has admitted this:

Elon Musk: Tesla's stock price is higher than we deserve

So you really can't look at the first batch of even 400k model 3's and run the profit numbers. That gigafactory will be there for decades to come. So will the plants they build. It's going to take years and years, and then, if all goes as planned, things will be humming along nicely, Tesla will turning massive profits, and ruling the automobile world. Then, as always happens, another upstart will come along, perhaps with patented fusion power technology, and knock them off their perch, into the dustbin of history. I think it goes something like that.

 

[kaj102wiu]

The is the Kodak story, except it's the automotive sector. Kodak was fat and sassy selling film, and they thought it would never end. I expect GM, Fiat, Ford and most of the other ICE manufacturers to meet the same fate. They're all wearing blinders.

I don't think they are wearing blinders. I think they realize it's a threat. But I think they drastically underestimated how quickly it would be adopted and accepted and now it's on the verge of being too late to compete. So they are left to try and fight it. The ones that adapt quickly and accept it will survive

 

[kaj102wiu]

That's the $64,000 question....revised to $35,000 plus options.

The thing is, building a company today is not at all like it was in the past. Now, you start with an idea, raise capital, sell shares, have huge valuations, and not turn a profit. Your valuation is based on potential. Tesla is HUGE when it comes to potential and it's proven potential, which is the first really tough hurdle to get over. Of course, it's way overvalued -- Elon Musk has even has admitted this:

Elon Musk: Tesla's stock price is higher than we deserve

So you really can't look at the first batch of even 400k model 3's and run the profit numbers. That gigafactory will be there for decades to come. So will the plants they build. It's going to take years and years, and then, if all goes as planned, things will be humming along nicely, Tesla will turning massive profits, and ruling the automobile world. Then, as always happens, another upstart will come along, perhaps with patented fusion power technology, and knock them off their perch, into the dustbin of history. I think it goes something like that.

This.. It's a foundation to build upon. Many many opportunitys will exist in the future to profit off of. Some we cannot even imagine or understand yet. But the foundation exists and it's the fact that those possibilities will exist in the futur to profit off of is what matters.

 

[kaj102wiu]

Nice. I also thought of Mahatma Gandhi:

First they ignore you, then they ridicule you, then they fight you, and then you win.

By that metric, I guess they have reached stage two, with a few preparing for stage three.

Yeah.. Its a fairly predictable response and I'm sure Tesla expected this type of reaction from certain players. It will be interesting to see if Tesla is/was prepared for any bargaining or collaboration opportunities that may happen shortly and if they have a strategic response. Or maybe they will ignore them and push forward by themselves to distance themselves further

Based on Tesla's mission statement they do want the other automakers to adopt EV's as quickly as possible. But they also know that if the big auto makers succede that also means Tesla succeeds. And they probably succede more so than the others. It's a rather brilliant position/strategy. The "Nexus" approach that google takes... kind of?

 

[Caligula]

I've seen the new Fiats. He can keep his Italian styling on that side of the ocean, thanks.

 

[lklundin]

He can keep his Italian styling on that side of the ocean, thanks.

I have seen quite a bit of Italian workmanship and I have a lot of respect for it. But it is true that they typically take a couple of millennia to get it just right. For example, in ceramics, bread and wine they are second to none.

 

[Red Sage]

Let's see if Tesla is able to turn consistent profits (high or not) once Model 3 production is up at a healthy clip. If not, I don't think apologists and fanboys will have any more excuses about investment for R&D, future products, capital investment, etc. ALL major automakers do this ALL the time (and have WAY more models and product lines) and aren't standing still, yet they can and do turn profits.

The demand for Model ☰ shows that Tesla Motors should not cut back on research, development, or expansion any time... 'SOON' (18-to-24 months)... or even for 'A WHILE' (around 5 years)... So, it is likely to be... 'A LONG TIME' (10, 15, 20 years) before your parameters for profitability are satisfied. I don't care. Because if it doesn't split, and the expansion continues as I expect, TSLA will be around $2,500 per share a decade from now. Who needs dividends at that rate of growth?

Oh, and when was the last time that Ford, General Motors, Volkswagen, or Toyota increased their annual sales by at least 50% per year, year-over-year, for three years straight? I'd be very interested to know. Because that is not something that happens 'ALL the time'. I would be very surprised if any of them did it at all, and certainly within the past fifty years. Seems to me those companies turn a profit by selling the same old thing as 'NEW' in a different suit of clothes every four or five years. Tesla Motors can't afford that type of stagnation. It costs money to make real advancements.

 

[Caligula]

I have seen quite a bit of Italian workmanship and I have a lot of respect for it. But it is true that they typically take a couple of millennia to get it just right. For example, in ceramics, bread and wine they are second to none.

Remember though, we're talking Fiat not Ferrari.

 

[Red Sage]

The thing is, building a company today is not at all like it was in the past. Now, you start with an idea, raise capital, sell shares, have huge valuations, and not turn a profit. Your valuation is based on potential.

Yadda, yadda, yadda... Back in my day... Blah, blah, blah...

You sound like the guys who want the US Dollar to go back on the Gold Standard.

If BRK-A can be worth $225,000 per share, then surely TSLA is OK at 1/1000th of that, give or take. Some ANALysts, like Jim Cramer and Corey Johnson, think TSLA is overvalued at 1/10,000th of BRK-A. To [HECK] with those guys. I expect both their heads will explode when TSLA reaches 1/100th of BRK-A some day. No need for dividends at pennies per share when selling 1/10th of your holdings nets you more than your entire initial investment.

The stock market has NOTHING to do with what a company does. It is simply another way to gamble on one's personal beliefs. Check to see how F, GM, HMC, and VOW3 are doing compared to TM these days. Is it reflective of how the companies are performing, or just speculative guesstimation in effect?

 

[taigebu]

Remember though, we're talking Fiat not Ferrari.

Fiat still owns Maserati and Alfa Romeo

 

[Bangor Bob]

I've seen the new Fiats. He can keep his Italian styling on that side of the ocean, thanks.

FIAT design language is all about punishing you for buying the cheap brand. The recent Alfa Romeos though... Those are an entirely different story.

 

[AUSinator]

I don't think they are wearing blinders. I think they realize it's a threat. But I think they drastically underestimated how quickly it would be adopted and accepted and now it's on the verge of being too late to compete. So they are left to try and fight it. The ones that adapt quickly and accept it will survive

To me what he said is more denial. It also gave us insight what to expect from Nissan in the next 5 years which is not much on the EV front. You we probably see a 200 miles leaf in poorer quality, better design and lower quanity than Tesla's M3 and not much more.

 

[Frenchfryphil]

Sergio Marchionne is an idiot. His reply just shows how stupid he really is. First of all he is in charge of companies that produce some of the worst vehicles on the face of the earth. He can make Tata Motors look good. Chrysler was better before he came into the picture. For him to even suggest he could copy Tesla in 12 months is absolute buffoonery!
Yet his type are the exact reason people like Musk are so successful. Like his (Tesla) cars or not, Musk is putting his money where his mouth is. GM is the only other player right now but again, no consciously breathing person with any sense of reason could ever compare the two (Model 3 vs Chevy Bolt).
The Model 3 will reach 500,000 reservations before Musk shows us "part 2". Expect 750,000 to 1 million orders before the car starts rolling off the line. My reservation number is 50,000...and I can wait as long as it takes to get mine.
The car and the company are that good. Its the first "american" car I have considered in 30 years.
I can assure you every other car company in the world is in their "war room" trying to figure out how to steal the fire from Tesla.
American ingenuity is back...

 

[BillO]

I think you guys are taking Sergio too literally, and I don't think he is that stupid. Look, everyone knows FCA couldn't copy Tesla in 12 months, and he knows it too. Basically he is saying the chances that Tesla will ever make a profit are as good as FCA being able to copy Tesla in 12 months. So yeah, if Tesla can make a profit, then they will just copy them within 12 months and be making big profits too...

 

[cwerdna]

Ford is managing to turn a profit while growing 3% a year. To paraphrase Elon, Tesla plans on "growing production 50% a year as far into the future as he can reasonably project." It would take about 137 years of 3% growth to match 10 years of 50% growth.

Ford sold 6.6 million vehicles worldwide in 2015. I'm not sure you how expect them to suddenly grow that 50% in a year.

In comparison, Tesla has only produced a little north of ~120K vehicles in its lifetime.

How can Tesla possibly be expected to turn consistent profits while growing that fast? New production lines and new factories take time and money to build and there won't be an immediate payoff.

So, that's the excuse now? How much longer will they continue to lose money? How much longer can they afford to do so?

It's not like Tesla is "losing money, but trying to make it up on volume."

They're losing money. I don't know about making it up on volume, but with the volumes they're selling and the high prices, they're still losing it.

 

[Model 3]

Fiat Chrysler is really in trouble if their CEO is so clueless. In order to "copy him" he has to (1) build a battery giga factory to make the most expensive part of the vehicle affordable; and (2) build out a supercharger network so you actually use the car other than around town. He's going to do that and "copy him".... "within 12 months"?! Is he Superman?

Did he say that they would produce/sell as many copies as Tesla sells of the Model 3? When Tesla shows profit, all he has to do is make one Italian-styled Model 3 copy, and sell it at $35k. Then he can say they lost money on that production run, and drop the project. No need for at GF to produce one BEV But yes, I think we all clearly can see witch car company that will be the first to go under in this transformation from ICE to BEV production... (If it survive even that long).