The biggest mistake made is after the Y not bringing new models to market as quickly as possible.
You can’t take a big chunk of the 80 million vehicles sold every year with two models.
A more “conventional” looking truck would have got similar reservations as the cybertruck and could have been available a year or two before the cybertruck.
In parallel a smaller cheaper vehicle should have been designed and be available now.
(Elon didn’t even want to make it because he went all in on robotaxi and franz had to convince him to use the same platform)
The next mistake was not continuing to increase production of existing battery’s whilst the 4680s are being developed.
I watched battery day and didn’t understand half the technical content but I thought what’s the plan in case this doesn’t work or takes longer to mass produce?
Turns out they didn’t have a plan for this scenario.
As a result we now have at least a year, if not three years of flat or small growth in overall sales.
The existing lineups sales are not helped by many factors some of which are under the companies control.
You mention advertising, many people have been pleading for this for a long time, the leader made this decision late. Targeted advertising should have started before as soon as management knew inventories are increasing.
Another factor is doing silly things to existing models.
Like getting rid of the rear view camera and not having an adequate replacement in place.
Or getting rid of stalks. Before they did this nobody thought I won’t buy a Tesla if it has stalks. After this was done for x number people this is a deal breaker.
All these sorts of decisions result in less sales and right now every sale is needed.
The final area which is a major weakness is repairs and not increasing the number of service centres to take into account the increase in the overall vehicles and the number of vehicles out of warranty that need timely repairs.
Right now these can be expensive and time consuming.
Millions of people outside the US drive vehicles that are more than 10 years old. If Tesla’s have a reputation for expensive, time consuming repairs ( never mind the possibility of buying a car where the battery fails the day after) then second hand values will be much lower resulting in more people being unwilling to buy newer cars, dealers not buying used Tesla’s etc.
This will have a knock on effect on new sales if as well as the normal depreciation another large hit occurs to one outside warranty.
When Hertz made the announcement I remembered the story of a European taxi company getting rid of it’s Tesla’s because Tesla’s service was rubbish and I wondered if it had improved and could handle the numbers hertz would buy.
Turns out it hadn’t.
The result is no more large fleet buys, a fire sale which is great for people who get a bargain but not for Tesla which loses sales overall.
The bigger problem I see that Elon is good at long shots and start ups but when a company is a mixture of multiple start ups and a mature company, the aspects of mature company management isn’t as good.
Like he found top notch engineers for spacex and Franz for Tesla he needs to find people who can run the bread and butter of a company selling millions of vehicles a year and in time having tens of millions of vehicles on the road.
He also has a habit of unrealistic timetables and announcing products before they are ready. I notice the solar roof and the roadster aren’t on the list.
As for everything else mentioned that’s great but the problem is it’s not available right now in sufficient quantities to increase sales and profits.
Just because someone has done great in the past does not mean they will continue to do well in the future or they they are infallible which is why the board needs some truly independent people who can give Elon advice, like spacex has Gwynne Shotwell.
Executive Summary:
“Conventional” can be low innovation, hence same as everyone else, hence low margins..
Tesla has made some mistakes the past Model X and Production Hell usually they learn from their mistakes.
Model X and Cybertruck are unique, hard to copy vehicles, which are versatile and contribute to brand image. Unique and hard to copy means it is very unlikely that a competitor will have a similar product. An intending customer can only buy it from Tesla. More choice is always a good thing.
More inventory doesn't necessarily mean (permanent) lower demand, we will find out Q2, or perhaps get some clues in the earnings call.
Low share price doesn't necessarily mean Tesla is making mistakes, different investors have different expectations and different timelines. I've never seen anything that leads me to believe Wall Street has a good understanding of what Tesla is trying to do, and why they are doing particular things.
Quarterly earnings reports are the tip of the iceberg, sometimes the tip can be ugly but the iceberg is in fine shape, Times when the iceberg were not in good shape are Model X ramp and Production Hell.
Detail:
It may have been possible to make a “conventional” looking Cybertruck with a lot of innovation under the covers, but Tesla didn't choose that route. Change the specs, you change the timeline, features and performance and cost of manufacture.
if we consider how “conventional” looking EV pickups are going, Ford F150 Lightning customers are happy with their truck, ,but Ford is loosing money on every truck, they are wound back production plans and are laying off 2/3 of the workforce.
Similarly Rivian make great products but as far as we know are not making money on those products. Rivian is at Gen1 and is trying to get to Gen2, that means facing their own version of "Production Hell". Companies like Rivian can poach staff from Tesla with experience in "Production Hell" and can poach experienced staff from legacy auto, especially staff that have been laid off, or have seen a pivot away from EVs at their workplace.
But the bottom line is Rivian Gen2 will be competing with well established BYD Gen2 and Tesla Gen3, I am confident Tesla Gen3 can compete with BYD Gen2.
The key component of the Gen3 process is the "unboxed' method of production and it is at least a 50/50 bet that some part of that idea came from attempting to build the Cybertruck. Lot of aspects of the Cybertruck are probably at least a partial rehearsal for Gen3. especially 48V parts. This shows the real value of doing new and difficult things, staff are forced to innovate, and often the lessons learned can be applied to other products.
But it isn't all risk , initially building Model Y and Berlin and Austin was a very safe way to start those factories, and that is part of what has been happening the last few years.
Why is Cybertruck so versatile?
- It is a truck that drives like a car in terms of ride comfort, steering and handling.
- it is good on road and off road.
- It is the Tesla that is best able to handle hauling and towing because it was designed for those purposes.
Currently we are at Gen1 Cybertruck with Gen2 4680s many more Gens to come for both.
My rating of the ramps:-
- Model X - 2/10
- Model 3 Production Hell - 1/10
- 4680 - 7/10
- Cybertruck - 10/10
Generally Tesla is improving, but improvement is never perfection.
Most legacy auto are still at Gen1, or more accurately have realised that they were losing money on Gen1 cars, and have mostly pivoted to hybrids and/or delayed their EV plans. When you are tailing badly in a race, having a rest in the middle usually does not increase your chances of catching up.
