Largest concern about buying a model 3

[MXWing]

I’m going to have 3 cars “go unsupported” if Tesla goes belly up and I’ve spent 1/10,000 the amount of time worrying about the issue as @Pkeet99 has.

Op will have a lot of miserable company if he wants to jump on this “sinking ship”.

Also, added shares at 235. Wish me luck!

 

[Tron 3]

Regarding the company's solvency, the assets of multiple gigafactories, globe spanning charging networks, and other manufacturing facilities are not going to dry up and blow away. The company is acting very aggressively to achieve their vision, running apparently a little too close to the edge for the comfort of many analysts, who's function it is to speculate.

The company has a track record of a decade, and what is not speculation is within that time Tesla has disrupted the auto industry world-wide. Every major manufacturer has rushed to emulate them. Tesla has succeeded in penetrating the largest automobile market on Earth, China. The Chairman awarded him with honorary citizenship.
Construction of that gigafactory is going to set a world record for how fast a major manufacturing facility is constructed.

I am personally amazed at what Musk has accomplished. He is a catalyst to every industry he touches. Banking, solar, batteries, automotive, and aerospace. Any one of those accomplishments would be the crowning achievement of an entire career. He has done them all - and I'm guessing he isn't finished.

I understand your apprehension, I had it too - right up to the moment I drove this car. We placed our deposit over two years ago with the intent of buying the $35,000 M3, but ended up with a loaded $60,000 car in the garage... and no regrets. Nothing but rainbows and unicorns.

This is just my opinion, but for a professional objective opinion I recommend you search YouTube for Sandy Muro and his take on the model 3. For a deeper insight into Elon Musk I recommend you read his biography.

 

[N5329K]

For all of Tesla's many, many achievements, there is a non-zero chance that they will go belly up. You can argue how big that risk is, but it's not zero. For myself, I think the risk is real and the needle has risen of late. Not because they've failed at designing a superb EV. And not because they've failed at building that superb EV. But because they have not shown an ability to service their (rapidly growing) fleet, nor can they build the promised base model their challenging growth strategy depends upon. Design your entire company around producing a car in large numbers, and you are obliged to find a way to continue selling them in large numbers and servicing them in large numbers (because despite the "EV's require less service" that has not been true for Teslas). OTA fixes are great and count as one of Tesla's signature achievements. But you can't OTA away cracks, flickers, intermittent module failures, rattles, tears, scratches and dents. You can't OTA away flaws in construction that should never have gotten by Fremont QC, or happen during transportation.
As for sales, falling back on "we just don't see orders for base models" is pretty much spin for "we're upselling base customers to more expensive cars" which, to give Tesla its due, makes good short-term financial sense. It may even be absolutely necessary. But in the medium and long term, it's an existential threat You are either a niche manufacturer building, selling and servicing in niche numbers, or a mass manufacturer building, selling and servicing in mass numbers. You can't bring a lean, niche approach to mass production and keep enough people happy. In this way, Tesla kind of has one foot on the dock and one foot in the canoe. And so it could end up in the drink. Again, for myself, I don't think this is actually likely. They're clever enough to realize where their deficiencies are and solve them, so long as noticing them and fixing them is allowed. The same is true for any automaker, of course. What happens after one goes BK is open for debate (and is largely a political discussion). The German government is not going to let VW go down the drain. But Bugatti could. The Japanese government can't let Toyota fail. But Daihatsu could go away.
Tesla is a lot more vulnerable. And I would not expect any Washington bailout from this administration, and only self-serving, gleeful tweets.
Would I let this get in the way of buying a new Model 3? Not by itself, no. But combined with manufacturing and service issues, and the fact that I don't really need to replace a car right now, I am holding back (even though I have a NEMA 14-50 waiting in the garage for something to use it).
Sorry for the long post. Lots of people here in California see it differently. Coming home from SFO yesterday, I counted 42 Model 3's on the stretch of 101 from the airport to the Monterey Peninsula.
Robin

 

[mswlogo]

Regarding the company's solvency, the assets of multiple gigafactories, globe spanning charging networks, and other manufacturing facilities are not going to dry up and blow away. The company is acting very aggressively to achieve their vision, running apparently a little too close to the edge for the comfort of many analysts, who's function it is to speculate.

The company has a track record of a decade, and what is not speculation is within that time Tesla has disrupted the auto industry world-wide. Every major manufacturer has rushed to emulate them. Tesla has succeeded in penetrating the largest automobile market on Earth, China. The Chairman awarded him with honorary citizenship.
Construction of that gigafactory is going to set a world record for how fast a major manufacturing facility is constructed.

I am personally amazed at what Musk has accomplished. He is a catalyst to every industry he touches. Banking, solar, batteries, automotive, and aerospace. Any one of those accomplishments would be the crowning achievement of an entire career. He has done them all - and I'm guessing he isn't finished.

I understand your apprehension, I had it too - right up to the moment I drove this car. We placed our deposit over two years ago with the intent of buying the $35,000 M3, but ended up with a loaded $60,000 car in the garage... and no regrets. Nothing but rainbows and unicorns.

This is just my opinion, but for a professional objective opinion I recommend you search YouTube for Sandy Muro and his take on the model 3. For a deeper insight into Elon Musk I recommend you read his biography.

I agree. I think if Elon only wanted to make $$$ and only focus on short term gains he could probably be in better shape today but with more difficult long term prospects. He has correctly addressed the whole problem with a long term plan in mind from the beginning. And it may even take another decade to really pay off. But I think he is on track such that nobody can catch him.

Look how long it took Amazon to change retail.

 

[Triplett]

I love the "collapse of tesla" people now that I don't see the preachers with "the world will end on Saturday" standing on the street corners anymore.....I'm glad they got retraining.

 

[MXWing]

there is a non-zero chance that they will go belly up. You can argue how big that risk is, but it's not zero. For myself, I think the risk is real

There is a non zero risk of

-Not waking up when you go to sleep.
-A contractor taking your money and running.
-GM going bankrupt a SECOND TIME.

Nonsensical arguments.

As far as "real" - I'd probably think Model X launch was far riskier than what is happening with the 3. Or before the first Roadster launched.

and the fact that I don't really need to replace a car right now, I am holding back (even though I have a NEMA 14-50 waiting in the garage for something to use it).

This is the crux of where all of your your *sugar* talking is coming from.

You HAVE to buy a car tomorrow and what you've ear marked for a Model 3 you are going to get
-A Bolt?
-A iPace?
-A 3 Series?

Not a bold move on your part to "hold back" since you are not needing to replace a car.

 

[N5329K]

There is a non zero risk of

-Not waking up when you go to sleep.
-A contractor taking your money and running.
-GM going bankrupt a SECOND TIME.

Nonsensical arguments.

As far as "real" - I'd probably think Model X launch was far riskier than what is happening with the 3. Or before the first Roadster launched.



This is the crux of where all of your your *sugar* talking is coming from.

You HAVE to buy a car tomorrow and what you've ear marked for a Model 3 you are going to get
-A Bolt?
-A iPace?
-A 3 Series?

Not a bold move on your part to "hold back" since you are not needing to replace a car.

Don't really look to a car to be a bold move any more than I look to a car to be a fashion statement. Is it affordable? Does it fit my mission? Is it beautiful and well-designed? Is it reliable? Will owning it be satisfying experience or a PITA? Those are more my go/no-go criteria. When the time comes to replace a car I'll see what's available and make my choice. It might be a Model 3 by then (if production and service issues are addressed). But it might not. Can't really tell since every manufacturer is promising real competition next year, and has for years. In the meantime, I'd say you and I are both happy with our decisions.
Robin

 

[hcdavis3]

This is my bottom line, too. Outside of Tesla, some automakers have finally jumped on the EV bandwagon, but others are dragging their heels. As EVs gain in popularity, Tesla's intellectual property (that is, the designs for their cars, as well as patents and whatnot) will become extremely valuable to the laggards. So if Tesla were to hit serious problems soon (say, if the next three or four quarters were really bad), a company like Ford might snap them up. A non-automotive buyer like Apple or Google is also a possibility, as is a relatively new and unknown Chinese automaker. The Supercharger network might or might not go with the rest of the company, but it, too, is a big asset to the right buyer.

The biggest risk, IMHO, is to a short-term (a few weeks or months) disruption, during which time Superchargers might not charge, we'd see no software updates, and it might become impossible to get replacement parts. That could be a real problem if you happen to get into an accident, or if your car breaks, at the wrong time; but I'd be surprised if such problems weren't resolved in a month or two at the most. There's also the likelihood of third-party suppliers stepping in to provide spare parts, at least for some components and for the more common Model 3.

Keep in mind that, even as Q4 2018 ended, Tesla warned that Q1 2019 would not be profitable. It's true that the losses were greater than most analysts were predicting, but it was a "perfect storm" of issues, and the next few quarters don't seem likely to reproduce such issues. Thus, I don't think it's likely that Tesla will go bankrupt in the next year or two.

How about Toyota as a possible buyer. They are late to the party and are still staking their future on hybrid technology. Buying Tesla would give them an immediate leg up on EVs. Just my 2 kWh.

 

[diamond.g]

How about Toyota as a possible buyer. They are late to the party and are still staking their future on hybrid technology. Buying Tesla would give them an immediate leg up on EVs. Just my 2 kWh.

I would be worried they would change the move fast culture (Toyota is super conservative).

 

[Sherlo]

As someone else mentioned, BK isn’t the end. Here’s the BK history of N. America manufactures

https://www.quora.com/What-car-companies-have-never-gone-bankrupt-Is-it-really-only-Ford-and-Tesla

 

[srs5694]

How about Toyota as a possible buyer. They are late to the party and are still staking their future on hybrid technology. Buying Tesla would give them an immediate leg up on EVs. Just my 2 kWh.

IMHO, it might happen if Tesla were to go bankrupt in two or three (or more) years, but not now. Toyota's too devoted to hydrogen fuel cells right now to be interested in buying an EV manufacturer. If EVs start taking over the market and Toyota is behind the times, they might be interested in such a purchase, but not now. Of course, if EVs take off in that way, Tesla is likely to ride that tide (they're arguably the biggest force creating it right now).

 

[hcdavis3]

This is perhaps the most cogent thesis on the state of Tesla I’ve read. It’s long but worth the read.

Tesla’s Autonomy Day, the Stock, Short Sellers and More

 

[N5329K]

This is perhaps the most cogent thesis on the state of Tesla I’ve read. It’s long but worth the read.

Tesla’s Autonomy Day, the Stock, Short Sellers and More

Excellent article. Thanks.
Robin

 

[Pkeet99]

I’m going to have 3 cars “go unsupported” if Tesla goes belly up and I’ve spent 1/10,000 the amount of time worrying about the issue as @Pkeet99 has.

Op will have a lot of miserable company if he wants to jump on this “sinking ship”.

Also, added shares at 235. Wish me luck!

I am a worrier that is for sure

 

[Pkeet99]

Go lease an Nissan Leaf or BMW i3 then!
If $35-65K is too much to digest for your budget, both of the above can be had for < $300/month.
Lease might a remedy for Tesla commitment fears as well!

Lease is a 2-/3-year engagement, so if you have a fear of commitment to a given vehicle, a lease gives you a firm way out in a relatively near future.

Your fears are irrational to others, but very real to yourself.
I can't council you out of those, so best if you work around them.

HTH,
a

Unfortunately leasing is not an option with my commute, I live in West Michigan so a 20 mile commute only takes 20 minutes but that translates to 15k+ miles a year. Good idea though, and I appreciate your comments on fears.

 

[dww12]

My head says maybe but my heart, which has wanted an electric car since I was a child building solar powered golf carts with my dad, says no. So trying to convince my rational head.

Sounds like you need a test drive. BTW Zero chance Tesla goes under now.

 

[Pkeet99]

It's hard not to forget that these wall street analysts have their portfolios heavily invested in ICE manufacturers, and would rather see Tesla go away so the traditional manufacturers don't have to invest dollars in BEVs. With so many countries (sorry to say our own right now isn't one of them) realizing the need to clean their air, it's kind of hard to see BEVs and their manufacturers going away at this point. Like it or not the light has been seen by even the European car manufacturers. I think Tesla with it's expansion in China and having other products working to come on line is going through a rough patch. Tesla's quarterly filing with the SEC indicated their intention to possibly seek outside financing during the coming months for expansion. I think the Chinese would snap up Tesla if they could but other foreign and domestic companies would be there fighting for a share of it too. Their battery tech, drivetrain, and so much more of the car is so advanced above what others currently have to offer.

As others have said, and we own two Teslas now, it's a great car. I've never enjoyed any other car like I do the ones we have now and plan to keep them for a while. As with many here, our previous cars were much less expensive (Toyota Avalon and Camry, prior to that Honda Accords), so we do get the hesitancy to commit to a car above what you've previously spent. No regrets though and really won't go back to an ICE vehicle. We consider Tesla to be the very best of what's out there now.

I know part of it is the amount, it’s a lot of money, even if I go for an SR. And I do like the car the test drive was fun.

 

[Tron 3]

That is a good article, I recommend the OP read that.

 

[Az_Rael]

Unfortunately leasing is not an option with my commute, I live in West Michigan so a 20 mile commute only takes 20 minutes but that translates to 15k+ miles a year. Good idea though, and I appreciate your comments on fears.

I would be more worried about servicing the car in Michigan than Tesla going under. The cars are not rock solid reliability-wise, so you will most likely need a few trips to a service center during your ownership. That could be a hassle depending on how much you can get done via mobile service and how many times you have to actually take the car in.

 

[MXWing]

I am a worrier that is for sure

I honestly loathe to entertain discussions of Tesla bankruptcy but I’ll take your concerns at face value and try to help.

GM when they reorganized, they honored all warranties. Tesla is so iconic and so influential that they just disappear as if the never existed.
Any financial maneuverings even if they shed debt - shedding obligations to consumers is off the table.

Tesla has a lot of things they can shed if they truly want to care about solvency vs hyper growth.

The current SR/SR+ is such a stupid good deal, you would be a fool not to take it. Value is not what you pay but what you get.

Lastly, if everyone felt as you did, it would be a self fulfilling prophecy and there would be no Model 3 or future Tesla’s.

Having actually driven a Model 3, you know you wouldn’t want to put that 35K anywhere else.

Good luck. I made the plunge 3 times and do not regret it one bit.