Tesla 3 - The Undoing of Elon? [external link]

[Drivin]

Not to sound like a conspiracy theorist, but the writer is using the name 'Tobak', so probably a lobbyist from a certain cancer-inducing industry, with a new employer...

LOL.
You could click on his name and get his profile and get to his website in another click. Two clicks. So much work.

But maybe you are right! That is all a ruse and in fact he works for the Bilderberg and the Buildabear groups and his spouse works for the Trilateral Commission and that entire site was build years ago since they needed to be prepared for when the Model 3 is announced.

 

[Vitold]

LOL.
You could click on his name and get his profile and get to his website in another click. Two clicks. So much work.

But maybe you are right! That is all a ruse and in fact he works for the Bilderberg and the Buildabear groups and his spouse works for the Trilateral Commission and that entire site was build years ago since they needed to be prepared for when the Model 3 is announced.

He is a motivational speaker. His job is to sound convincing while not necessary making sense - I think he is pretty good at that.

 

[Drivin]

He is a motivational speaker. His job is to sound convincing while not necessary making sense - I think he is pretty good at that.

If by "motivational speaker" you actually meant to say "a management consultant, columnist, former senior executive and author. As managing partner of Silicon Valley-based Invisor Consulting, he advises business leaders on strategic matters."

then I agree.

He makes his money now advising companies - I doubt he could make that living by "not necessarily making sense".
Unlike people on this forum who advise Tesla in their posts, criticize people who dare say something negative for being in the pocket of big oil, and don't make a dime doing so. LOL.

 

[HookBill]

When the topic comes up questioning Tesla and Elon"s vision and whether or not it is too ambitious, I always go back to this former president's speech in the early 60's:

We choose to go to the Moon! ... We choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard; because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one we intend to win

 

[Vitold]

If by "motivational speaker" you actually meant to say "a management consultant, columnist, former senior executive and author. As managing partner of Silicon Valley-based Invisor Consulting, he advises business leaders on strategic matters."

then I agree.

He makes his money now advising companies - I doubt he could make that living by "not necessarily making sense".
Unlike people on this forum who advise Tesla in their posts, criticize people who dare say something negative for being in the pocket of big oil, and don't make a dime doing so. LOL.

Like I said - he needs to sound convincing - when it does not make sense some listener/readers will think that they are dumb and only he knows what he is talking about.

Often-times he repeats common truths or sets up failed premises such as this:

The notion that all those issues are magically going to disappear as it attempts to grow 10x while cutting prices by 60% is simply ludicrous.

What he writes is true but no one claims that issues will magincally disappear. In fact EM admitted there are issues and will strive not to repeat them in the future (hence they hired Audi exec and let go so many people- that author argues is bad). LOL.

I'd be willing to bet that this article was written just to mention Tesla and include this sentence:

I’m simply a management consultant and former senior executive who has been around Silicon Valley for decades

Someone, probably from an established company with plenty of executives and middle management, please, hire him.

 

[N5329K]

I think the article is years late. Tesla already made a successful transition from innovative startup (that would be under Martin Eberhard and Marc Tarpenning) to a manufacturing-heavy company run by a guy with the focus and drive to execute that vision and turn it into product. Musk is doing that across several companies and he may not succeed in all of them, but he knows what he needs to do. It's my hope he also knows when he needs to do it.
Robin

 

[PtG62901]

It took 5 years to build 2500 Roadsters, what's the chance that they'll ever be able to build 10,000 Model S per year?

Fairly good, if you think about it? The Roadsters were made by humans, in a temporary space, with experimental technology. Now, if you ask if they can build 100,000 Model 3's in 2017, that is the rub. 10,000 Model S's should be fairly easy.

 

[ecarfan]

Faux News.

 

[Grendal]

My comment on the article:

I find it highly amusing when someone says that the major manufacturers will step in and take Tesla's business away from them. They don't understand what that means. They forget to ask the following question: Where will the other manufacturers get the batteries to put in their electric vehicles? Tesla is having to build a battery factory that will more than double the entire world's production of batteries just to make 500K vehicles. It isn't possible to compete with Tesla unless you are willing to do the same.

These people that write these articles and naysayers always seem to forget this critical point. The batteries needed aren't going to appear out of thin air. GM will have this issue with the Bolt. If they suddenly get enormous response and 150K people want one per year, GM would have to renegotiate with LG to get those batteries and battery packs. It isn't going to happen.

 

[EinSV]

If the author wants to use the Model S as the benchmark for whether the Model 3 launch will be a success he should get his facts straight, or at least attempt an apples-to-apples comparison.

When Tesla went public in June 2010, it had only one alpha prototype of the Model S but brashly predicted it would launch the Model S in 2012 with an ultimate production goal of "up to approximately 20,000 cars per year." TESLA MOTORS INC (Form: 424B4, Received: 06/29/2010 06:12:24)

Tesla did not even have the Fremont factory in hand until the fall of 2010 (although they had entered into an agreement with Toyota to buy it at the time of the IPO).

Practically everyone in the automotive business predicted Tesla would fail, but it launched the Model S in 2012 essentially as predicted in the June 2010 IPO. By the end of 2013 -- a little more than one year into production -- Tesla was already exceeding the 20,000 vehicle per year run rate. They are now producing several times that number. And there is no real competitive threat to the Model S anywhere on the horizon even though it has been on the market for four years.

In other words, once Tesla had adequate funding from the IPO and a factory to build the Model S, it was off to the races.

Tesla has both Fremont and the Gigafactory, and has already raised $1.7B in capital to build the Model 3 (and Panasonic is raising $3.9B primarily to fund the Gigafactory). So if the author wants to use the Model S as a benchmark, that would mean the Model 3 is launched sometime in the fall 2017, with Tesla exiting 2018 exceeding the 500,000 Model 3 per year production run rate Elon has predicted and producing over 1,000,000 Model 3s per year within a couple years after that. And with no meaningful competition until some time after 2020.

That sounds pretty good to me. And, coincidentally, is a pretty fair forecast of how things will likely play out IMO.

 

[RobStark]

Plain and simple, the 3 has to equal a Civic in initial quality to sell in the numbers proposed.

No, it does not.

It has equal a 3 Series/ C Class/ A4 in initial quality to sell in the numbers proposed.

About 80M people buy new cars every year that have lower initial quality than a Civic.

 

[WarpedOne]

It has equal a 3 Series/ C Class/ A4 in initial quality to sell in the numbers proposed.

Nope, it does not.
400.000 people have the option to go buy 3/C/4 and drive it home the same day. They choose to wait a year or two for their tesla.
Everysingoleoneofthose400k people have a three other guys around him that want to have that car but didn't manage to do the walk to actually reserve it yet.

All this talk how M3 should be this or that is thin air. There is NO competition from 3/C/4. Those are ice automobiles, M3 is the car.

 

[RobStark]

Nope, it does not.
400.000 people have the option to go buy 3/C/4 and drive it home the same day. They choose to wait a year or two for their tesla.
Everysingoleoneofthose400k people have a three other guys around him that want to have that car but didn't manage to do the walk to actually reserve it yet.

All this talk how M3 should be this or that is thin air. There is NO competition from 3/C/4. Those are ice automobiles, M3 is the car.

Yes it does.

No one will buy the M3 if turns out to be an unreliable POS. They will buy A4 3 Series Class and even Corolla and Civic if Model 3 has the reliability of a 1971 Chevy Vega.

They chose to wait and not buy 3 Series/C Class/A4 because they believe it will have at least acceptable reliability (3 Series C Class A4) along with the most advanced BEV powertrain ,autonomous capabilities and some unexpected goodies yet to be revealed.

 

[22522]

This is a funny article: "In my opinion, the Model 3 will be his and Tesla’s undoing."

The Model 3 is Tesla's, and most of the employees who work there's, purpose.

 

[wdolson]

The author of the piece lost a lot of credibility with this "I’m simply a management consultant and former senior executive". Basically what he's saying is he's a bean counter who specializes in also being a con man.

Back in the 1980s my sister showed me an article in the Oil and Gas Journal which is a trade publican in the oil business (she's a Geologist). It was about the three phases of an oil related company, but I've found it applies to any company, especially any tech company. The three phases are:
1) Entrepreneurial phase
2) Engineering phase
3) Bean counter phase

In the first phase, the people who start the company have great ideas, but often aren't the best at running a business and a lot of start ups fail because of it. It's a dynamic time with lots of flexibility and high energy where ideas flow freely and growth can be fantastic.

In the second phase, usually the founders step down or step aside and someone who is more of an engineer takes over. The new CEO is often someone who has come up through the ranks and knows what the company does intimately. Companies rarely fail in this phase. Growth slows, to a steady predictable pace. The company gets more calm and less dynamic, but it is also very stable and usually well run.

In the third phase people take over who don't know and don't care about what the company does. All they want to do is maximize profits, often at the cost of innovation. The company stagnates and slowly deteriorates while the bean counters make themselves rich milking the carcass.

Tesla is in that second phase and while Elon is a Physicist by training, he thinks like an engineer and he knows the business inside and out. He prides himself on being able to do any person's job if he needed to. Tesla got an engineer at the helm early when Elon forced out the founder who was running the company into the ground through mismanagement.

Basically the article is written by a bean counter telling an engineer he isn't running the company the way he would.

 

[ItsNotAboutTheMoney]

This is a funny article: "In my opinion, the Model 3 will be his and Tesla’s undoing."

The Model 3 is Tesla's, and most of the employees who work there's, purpose.

That's the thing: all of these challenges were already coming. The X failures have simply made them greater.

 

[PeterK]

This is a funny article: "In my opinion, the Model 3 will be his and Tesla’s undoing."

The Model 3 is Tesla's, and most of the employees who work there's, purpose.

Agreed. And that sense of purpose/mission is extremely strong at Tesla, created and driven by Elon. I believe he released the Master Plan Part Deux not so much for investors (though I am sure the initial negative reaction to the SolarCity bid was a driver), but for employees and future employees. With the Model 3 coming to reality next year, they needed a clear view of what comes next - and those already working on the Semi, minibus, etc. needed to see how their work fit into the corporate mission and have it publicly acknowledged. Working in a skunkworks is exciting, but it's tough when you can't tell anyone about it.

There is nothing stronger than a clear, aligned sense of purpose to drive corporate success - or that of any team. Add to that the points others have made about limited battery supply, lack of a Supercharger network, reliance on dealers who make their money on service, and the inherent conflict of interest in trying to introduce EVs without significant limitations while maintaining the momentum of their core ICE businesses on which their revenues, profits and asset values depend. The next decade will be challenging for the auto industry, and I expect multiple players will disappear.

One other point: Tobak and many industry commentators point to the initial quality problems as one of Tesla's biggest challenges. But Tesla has the advantage of a very strong feedback loop to iterate and improve designs, based on direct customer relationships, in-house service incented to fix root causes rather than milk warranty repairs, direct data feeds from the cars, and OTA software updates. No existing competitor comes close on any of these, let alone all.

 

[PtG62901]

I read the Master Plan part Deux and ordered a Model S. If you are going to save the planet from Man Made Global Warming, it is a good time to help Tesla by buying a super car.

 

[sandpiper]

One thing for sure... Tesla is still dropping all of the chips on the table with each roll: first roadster, then the S/X and now the 3. I think, the way that they see it, either they succeed or the thing fails in a spectacular collapse. They're not going to fail in a small way.

Elon said (but not at the time) that he only gave it a 10% chance of success. I wonder what number he would assign to it now? But in any case it doesn't matter as much. Tesla is now too large to simply go away. They would be bought out, the cars would continue in some form as part of another company and the battery plant would continue on. Tesla's big issue is going to be debt, and not technology. The first problem is solveable; in the worst case the shareholders get a haircut. But the technology will march on.