my point was Tesla does not hire economists... having a degree in economics is different in my mind
this is an economist
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
this is an economist
That economist is so cringy everytime he's on CNBS, always seems to have doom and gloom on his agenda.
This is 100% the way to go.
1. When the market (EV) is new and growing, you need to capture market share first.
2. In a high fixed cost industry such as auto manufacturing, cost depends heavily on scale. You need to keep producing to keep cost down.
3. If the end game is selling service (FSD, robotaxi), you need to propagate your platform as quickly as possible.
4. When the primary concern of the consumer, apart from affordability, is charging infrastructure, scale allows you to grow the infrastructure which in turn helps you sell more products.
5. The more people see your products around them, the more likely they are to buy your products. Peer validation and word of mouth are the most effective marketing tactics - even better if they come free.
This is pretty simple business logic. What is incredible is that a company is able to scale for hypergrowth while making a profit. What is unprecedented is that the profit margin that company is making is already higher than that of any player in the industry it's replacing.
I literally don't follow you on this. I think I do know a care bear when I see one. I ignore care bears...
My Econ prof always illustrated supply and demand in beer and pizza. Went out with he and his wife for beer and pizza one night... damn did I feel elastic the next morning.
There are self-healing wraps similar to this self-healing PPF:-
Everything You Need to Know About Self-Healing PPF
What is self-healing paint protection film (PPF) and how does it work? The industry experts at American Wrap Co. answer your questions.
americanwrapco.com
The point on the color range is valid, but I think the range of colors could be extended via additional semi-clear layers
Simplest of all would be a top clear layer with the option of gloss or matt, with matt being slightly less transparent and darkening the underlying color.
Beside that top coat option Tesla might not support many more colors than they do with paint, the customer always has the option of a bare metal car and getting painting / wrapping done by a 3rd-party.
IMO if Tesla goes down the route of using wraps rather than paint, the car body metal is good enough to drive around without any surface covering. The different options merely decide how good that "bare metal" car looks and what it costs. I would go with the cheapest bare metal car, and wrap it, a single matt top wrap might be enough to make the bare metal car look slightly better.
It is possibly a step forward on today where cars are painted even when the customer intends to wrap them
Obviously Tesla has to test how long the wraps last, how good any "self healing" technology is, and seek to improve those areas.
Managing inventory is more challenging, even if the number of color combinations is only 2X today, but these cars will be made and sold in higher volumes. Inventory misallocations happen for all sorts of reasons and are usually temporary.
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Not unprecedented, but certainly not common. The photo film industry was wiped out by consumer digital cameras, which were then wiped out by smartphones. ICE are in the process of being wiped out by EVs, but it'll take longer.
People keep using the phrase "at the current burn rate" when discussing both Lucid and Rivian, but these companies will not burning at the current rate for a long time. The burn rate will come down, and their increased revenue will offset and soften the cash burn. Tesla also went through this when they were ramping up Giga Nevada.
Recommended watch.
handy price change chart from Rob:
Edited to emphasize the change since beginning of 21:
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They'll never sell a regular steel bodied car bare of a protective coating. Even if they did a factory wrap, there would be some sort of coating, whether it be a galvanizing dip or clear coat or primer of some sort.
Go read the latest quarterly report for Rivian. It is abundantly clear they will not be able to stop the cash burn with their existing factory and are now advising profitabiltiy wont be possible until their next generation cheaper vehicle factory is running (so years away). It doesnt look good for them.
If you haven't noticed, their burn rate is accelerating as they are delivering more cars. Why? Because they have a massive negative gross margin, something Tesla didn't have. As you scale production, every car you sell at a loss just multiply more while the operating expenses scales up as well.
As I have mentioned before, the most Tesla have ever loss in a Ebitda bases in 1 year was less than half a billion dollars. Rivian is at -5 billion plus. Tesla has managed cost like a boss. When Tesla made 20k deliveries in 2013 and had the same marketcap as Rivian, tesla lost 6.2 million in free cash flow. Rivian lost 6.4 BILLION. YES, NOT A TYPO! 1000X!
This is not a problem "they will make it up with scale" can solve. Restructuring, laying off massive amounts of people, redesigning their entire production line, need another 5-10B in cash injection, and holding their engineers as hostages until they can figure out how to break even in a gross margin standpoint delivering under 5-10k car are their ONLY HOPE.
Warren did a nice video today as a frame of reference. He still believes in Rivian but with those numbers, I don't know what kind of hopium these people have.
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Some bare metal options are:- Stainless steel, Aluminium, Galvanized Steel.
Regular steel more or less has to be painted.
Galvanized Steel is better than raw steel + galvanizing dip.
Very nice video with a slow walk through of the whole factory.
It was funny that the lady that is interviewing knows almost all the details of production herself, and so she makes a long statement with all the facts and numbers in it, and then ends it with, "is that right?", "Correct?". All the other person has to do is, simply say "yes that is correct".
Wow! I knew it was a devastating comparison with Tesla, but didn't think it was that bad!
And Rivian last year and Tesla 2013 is a good comparison. They both bought large factories at a great price. Rivian made the mistake of tooling it to produce a far larger number of vehicles before they were ready. Tesla only tooled to a reasonable number (20K for first full year of production).
Back in early 2021, employees were telling RJ that their costs were completely out of whack with their announced pricing. Rather than try to fix costing issues (by like better design and stripping out features), they decided to go to market at negative gross margins.
Companies that sell products at negative gross margins aren’t businesses, they are charities.
Very nice video with a slow walk through of the whole factory.
It was funny that the lady that is interviewing knows almost all the details of production herself, and so she makes a long statement with all the facts and numbers in it, and then ends it with, "is that right?", "Correct?". All the other person has to do is, simply say "yes that is correct".
Yeah, that YouTube channel is obviously a propaganda outlet for showing how great China is (That’s why it is in English). Nothing wrong with that per se, but it makes for a funny video. The scenes they showed us were interesting nonetheless.
I’d much rather see RIVN and LCID survive than legacy auto (which seems conflicted and heel-dragging their way to cleaner air). But reality has to kick in at some point…. Don’t see how either of them make it through this year given a bad combination of Fed tightening, soft consumer and Tesla’s pricing advantage.
Well, according to the NYT and Jalopnik, there will never be either a Cybertruck, or stainless steel vehicles. Apparently the DeLorean DMC-12 wasn't a real car.
KBF
Model X owner (formerly Cdn Signature Model S)
Personally, seeing state-run media talk up how beneficial Tesla is for China's international reputation ("See, China can make high quality goods that the world wants; Shanghai is helping the other gigafactories; we are picking up the slack and supplying Europe, too" etc) helps ease my concerns about potential political conflicts (at least partially). Tesla won't likely be a mere pawn in any games, at least (maybe a rook?).
I was on the board of a company operating in China, and they do want to be seen as a leader in green tech and were generally quite supportive (our company was involved in regenerative agriculture in Xinjiang until they stopped renewing Westerners' visas during their Uyghur crackdown...).
I'll still breathe easier once they have more GF's spread across the world - you never know when there'll be a political or natural disaster...
Artful Dodger
"Neko no me"
Are you sure you're up to date:
- Tesla increases non-refundable order deposit in Canada and US | Drive Tesla (Aug 19, 2021)
- Tesla more than doubles its non-refundable order fee | Electrek (Aug 20 2021)
This deposit policy change has been in effect for awhile in Canada and U.S. as far as I can tell. When I last talked to Tesla about it, the sales associate referred to it as an "order fee", not a "deposit". The fee is extra to the amount paid on delivery.
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