[laurent123456]

I didn't short the stock but I can understand why someone would.

They are expected to generate over 90% of their value after 2020 [0]. There's the expectation that Elon Musk will definitely deliver, that Tesla market share will not be eaten up by other carmakers when they seriously start releasing electric vehicles. The expectation that electric and not another form of energy, such as hydrogen, will dominate, etc.

There's a lot that could go wrong and a lot of unknown variables. Then again everything might turn out fine, the point is that no-one know for sure.

[0] https://webcache.googleusercontent.com/search?q=cache:UBQtFu...

[spyspy]

> when they seriously start releasing electric vehicles

They've been "serious" for a long time. Chevy has been selling the Volt since 2010. If they were going to muscle out Tesla they would have done it by now. And it's not just about technology. Tesla has the customer reputation that companies like GM will never have again.

[Robotbeat]

I own a Volt. Best car I've ever driven. GM doesn't care much for it. The only advertising they really do for it basically is trying to steal EV customers from Nissan's Leaf. Really dumb. And the dealers don't like it because 1) they don't know how to service them and especially 2) they almost never need servicing. If you run almost exclusively on electric, you only need like 4-5 oil changes in the entire life of the car. And the brakes last forever, too.

[vvanders]

Yup, which is why any entrenched player is going to have to both build an incredible car and fight against their dealerships to sell it.

[timr]

Actually, the reason GM "doesn't care" about the Volt (I'm exaggerating here; they obviously care a little bit) is because they're rational: electric cars are not popular with mass-market consumers, and it's far from clear that they're going to become popular.

GM is investing in what sells, and right now (i.e. for the last decade or two), that's SUVs and light trucks. Which doesn't bode well for Tesla, at least in the near term.

You can certainly argue that fuel prices are going to go up and make electric cars popular. The question is: does it happen before Tesla goes broke?

(Edit: downvoting doesn't change facts. From GM's own 2017 outlook [1]: "Ten all-new or recently redesigned crossovers are expected to drive GM’s sales and share higher in 2017, including the Chevrolet Equinox and GMC Terrain, which will compete in the industry’s largest segment." And they're not joking about that last part. As of February 2017, SUVs and Trucks dominate the list of most-popular vehicles sold in the USA [2].)

[1] https://www.gm.com/investors/sales/us-sales-production.html

[2] https://www.cars.com/articles/top-10-best-selling-cars-febru...

[mikeash]

EVs are unpopular because cheap ones aren't very good yet. You have to choose between almost unusably short range, or a very high price. Something like the LEAF is affordable, but only useful as a city car. A Model S is a great car, but extremely expensive.

The cost is coming down. Chevy is now selling the Bolt, which has pretty good range, for under $40,000. Tesla's Model 3 is coming soon. More will follow. The high cost comes from the batteries, which are getting cheaper all the time.

I'm not sure that "unpopular" is quite the right word. A lot of people really like Teslas. Most of them can't afford them. The desire is there, the means is not (yet).

It's smart to invest in what sells right now... until things change and that's no longer what sells. GM is investing in what sells today. Tesla is investing in what might sell in a decade or two. Tesla's approach isn't certain but if they're right then GM is going to relive their experience of the 1970s where they take way too long to react to a changing market.

[hacktothefuture]

100% agree but they have to be careful with the idea that "It's smart to invest in what sells right now... "!

The story is so reminiscent of Kodak. Huge 'titanic' of a ship that saw the writing on the wall, actually released digital cameras but the bulk of their infrastructure, employees and expenditures were in traditional film cameras. Once the industry fully shifted they still couldn't change course and died a slow agonizing death as taking pictures became a commodity that came 'free' with your cellphone.

[paganel]

I've had the exact same discussion with somebody else today on /r/futurology, more exactly I told him that "under $40,000" it's still pretty damn expensive for a small hatchback. My 1.4l European small hatchback costs around 13,000 euros new, you just can't expect people to not take into consideration the huge difference between the 2 prices.

[elihu]

> GM is investing in what sells today. Tesla is investing in what might sell in a decade or two.

It seems to me that the Bolt and Model 3 should be pretty similar in terms of cost, range, and price. The main difference is the Tesla brand / visual design and probably more self-driving tech in the Model 3. Am I missing something?

[beamatronic]

How hot is the market for a used Model S? It seems you can get a decent one for under $50,000. Is this generally regarded as a good deal? I know an "early adopter" who has had a Model S for many years, and I've lost count of the number of times it has left him and his family stranded.

[rootusrootus]

I am very interested to see how this plays out. Gas prices drive interest in electrics, and electrics drive down gas prices. Maybe the future of the consumer car market is going to split largely between gas-powered pickups and electric-powered sedans/crossovers.

This of course completely ignores the potential effect of self-driving cars. I'm still skeptical we'll see large scale automated driving for at least 10-20 years.

[Digit-Al]

Here's a couple of questions for those out there with more knowledge of the subject than me. Firstly, how long do you think it will be before there is a thriving second hand market in EVs? Secondly, do EVs currently hold their value better than traditional vehicles?

I think you can only say EVs are a success when a used market is thriving. Many people can't afford new after all.

[Robotbeat]

The whole point of advertising is to make something popular that isn't already or to maintain popularity for something that would otherwise decline in popularity. As long as all GM is doing is sniping at other electric cars while doing general broad-based advertising of their fossil fuel powered vehicles, they're not lifting a finger to expand the EV market.

I wouldn't worry about Tesla, anyway. Tesla has huge brand clout and advertises by making really awesome, inspiring vehicles. You want the fastest production sedan? There's only the Model S. And Model X is, after all, an SUV/crossover. And Model 3, which isn't, will be the basis for the Model Y, which /will/ be a crossover and/or light truck. Again, Tesla will be perfectly fine on the demand front.

[timr]

"The whole point of advertising is to make something popular that isn't already or to maintain popularity for something that would otherwise decline in popularity."

You can't push on a string. Consumers buy bigger cars when gas prices are low, and more efficient cars when gas prices are high. It's why Toyota (which has built a brand identity around fuel efficiency) does worse when fuel prices go down.

Marketing can influence consumers' affinity for brands and perception of product quality. It can't change economics.

"Tesla will be perfectly fine on the demand front."

I'm sure there's a market. After all, Lamborghini is "perfectly fine on the demand front", too. But will the demand for electric vehicles justify a valuation on par with General Motors? That's the rub.

[afuchs]

By what definition is the Model S the fastest production sedan? Its top speed is limited to 155 MPH (249 km/h) 155 mph (249 km/h). Compare that to the Aston Martin Rapide S at 203 MPH (326 km/h), or the more affordable Dodge Charger SRT Hellcat, who's top speed as given by the manufacturer is 204 MPH (328 km/h).

[chrishacken]

Close to 200,000 Prius's are sold each year. While that's no where near the "best selling" car, their Camry (400,000 cars a year), that's substantial.

[timr]

Ford sold 66,000 F-Series pickups in February 2017, alone. Small car sales are declining, across the board.

https://www.cars.com/articles/top-10-best-selling-cars-febru...

[sremani]

I am an Volt owner and I approve your comments. GM with BoltEV and Volt has demonstrated they are up with the EV tech, did they make miscues? Yes, no doubt. But the market needs to educated and for now Tesla is the Apple of Cars and the only brand Customers are willing to be educated from. Nissan Leaf had a decent start, but they cut too many corners, and I do not recommend Leaf. i3 is too limited.

Even though I whole-heatedly recommend Volt esp. Gen2. The market is not ready yet, and GM is doing what an established Car company does. Tesla's life depends on pushing EVs, so they are who they are.

[vvanders]

You're getting downvoted because you missed the argument that I presented.

It's not about what market segment that sells, it's that dealers have no incentives to sell electric vehicles since there's no margin on services and maintenance.

[caminante]

(Assuming non-material edits by the parent,) IMHO, he didn't miss your argument.

The topic's GM and GM dealerships. You said GM has to fight the GM dealerships due to conflicting interests, whereas, he's saying GM and the GM dealerships don't want "non" mass-markets customers to begin with (i.e. no conflict).

[erikpukinskis]

> GM is investing in what sells, and right now (i.e. for the last decade or two)

Yup. They haven't adopted the Andy Grove/Bill Gates/Larry Ellison philosophy of "Only The Paranoid Survive," yet. They are banking on the expectation that if/when consumer interest spikes they'll be able to use their influence to jump to the front of the line, like they did with past ICE competitors.

The question is... will the electric car market be more like the ICE market where paranoia is (apparently) unnecessary, or the semiconductor/software markets where it is (apparently) quite important.

[greglindahl]

I'm having a hard time connecting the facts with the discussion. Are you saying that GM should have made a crossover instead of the Volt/Bolt? Are you saying that Tesla doesn't have a crossover?

[timr]

"I'm having a hard time connecting the facts with the discussion. Are you saying that GM should have made a crossover instead of the Volt/Bolt? Are you saying that Tesla doesn't have a crossover?"

GM already has a crossover line. In fact, it has a bunch, and they sell really well:

http://www.gmfleet.com/vehicle-search/by-body-style/suvs-cro...

Point out Tesla's crossover SUV with the range of a gasoline vehicle and the price point of a Chevy Equinox ($25k). I'll wait.

[hockley]

This kind of proves the thesis. EV is a hobby for the legacy guys that competes with much more powerful (by revenue) business units in the company. It's like expecting Kodak to compete and win with their own digital camera.

[sremani]

Every one does not start with a blank slate, that is a luxury Tesla has as an upstart. GM is "saved" to save jobs by US government. GM has paid back, but its operational reality depends on selling "profit-making" vehicles, which are SUVs and Trucks, pair it with cheap gas prices, there is a strategy for GM to be profitable.

Tesla on the other hand, lives and dies by its EV performance, and their approach to the market at higher end kept them alive along with loans from US with few strings attached (for various reasons).

Tesla did not "break through" any thing. If any thing, existence of BoltEV and Volt does demonstrate couple of things, a legacy car company when there are profits are going to turn on dime and make shit ton of EVs, if that is what market wants.

Tesla has brand recognition behind it, but again as some one pointed out when the market for EVs in high demand and profitable, from BMW to GM, you will have them roll EVs in millions.

[cmrdporcupine]

I'm about to buy a Volt as soon as VW buys my dieselgate car back from me. I have had to go through a few different dealers to find someone who is serious about selling the thing.

The platform looks amazing. It boggles my mind in all the years this vehicle has existed that they haven't made more vehicles based on it.

[Robotbeat]

Agreed. A pickup based on the Volt technology would be fantastic. Electric can allow crazy good torque. And you have a nice big battery, backed by a quiet and efficient built-in generator that only needs to run occasionally, to run power tools off of.

[cmrdporcupine]

I'm a small minority market, but I'd love an electric replacement for my 30hp diesel small compact utility tractor.

It's a natural fit. The extra weight is a positive not a negative. The tractor is already a hydrostatic transmission in order to get continuous torque across RPMs and some in this market already use an electric motor for hydraulics (powered from a generator via the engine). It's only used for short bursts of activity so doesn't need a particularly huge battery even.

But such a product doesn't exist yet :-(

[radix07]

It is coming soon! Here is a Hybrid ZTR prototype my company has been working on. https://www.youtube.com/watch?v=J34KU9OG9M8

[michel-slm]

I'm on a work visa here in the US, and I couldn't get financing on a Volt because GM Financial insisted on doing > 30 months lease on their hybrid cars (and my work visa expires before then, though it's likely to be renewed anyway).

Go figure. It's not like I can't afford the monthly payments.

[chiph]

Did you talk to an independent leasing company? You don't have to lease via the automaker.

http://www.marketwatch.com/story/the-greatest-auto-lease-dea...

[michel-slm]

Will bear that in mind for next time, thanks! My other consideration is I am still trying to build a credit history, and don't really want more hard hits on my file than necessary...

[FireBeyond]

Sheesh. When I bought a Prius (admittedly, 2007), I was here on a fiancee visa. Toyota Financial had no problem okaying a three year lease even though my visa was (technically) three months (but available for extension).

[michel-slm]

Ah, interesting. A colleague had a similar experience to me getting an Audi (his lease doesn't extend beyond the H-1B expiration) so I wonder if the regulation is tightened up by now.

Then again, maybe statistically people on fiancee visas are more likely to end up with permanent residency than people on H1B?

[jcfrei]

Very interesting points. So as the other comment has pointed out, traditional automakers will have difficulties selling through their dealerships. Do any of the established players have any plans for their own dealerships / showrooms?

[voidmain0001]

Yes. https://www.thestar.com/business/2016/04/19/cinespace-sells-... GM Canada purchased land in downtown Toronto and made the announcement for a corporate campus with a dealership/showroom. The challenge will be with the existing franchise dealerships that will balk at GM taking a bite out of their market share. edit - The GM official announcements specifically refers to the sale and service of electric vehicles. http://media.gm.com/media/ca/en/gm/home.detail.html/content/...

[koolba]

They can't as the rights to having local dealerships has already been split out. They'd have to buy out their dealers and probably change a bit of State law to accommodate that.

[zild3d]

Is there something special about the brakes? Less maintenance needed makes sense, but I would have thought the brakes are no different than gasoline cars?

[btian]

When people claim "best X I've used", they should list all models of X that they have used.

[Robotbeat]

Granted. :)

[nwhatt]

GM isn't a threat to tesla unless Cadillac starts selling something to compete with the model S. As a Tesla shareholder what keeps me up at night are Mercedes, BMW, and Lexus.

[SEJeff]

If you get scared easily, or aren't in it for the long term, TSLA might not be the stock for you.

Disclaimer: I'm long TSLA and Solar City Solar Bonds.

[beamatronic]

Have you seen the 2016 Cadillac ELR? [ 1 ]

As it turns out, it's already discontinued?

[1] http://www.cadillac.com/legacy-vehicles.html

[chiph]

People didn't want to pay $65k+ for a rebodied Volt.

[rhino369]

Isn't a large part of Telsa's value that it will eventually move into the Camry/malibu/Taurus field?

[laurent123456]

> Tesla has the customer reputation that companies like GM will never have again.

Tesla is more like a luxury brand so its biggest potential competitors will be the big 3 in Germany and possibly Lexus (which all have a pretty good reputation), and currently none of them propose that many options.

Audi and Lexus have none. BMW has two, but only one of them can sort of compete with Tesla (can't go far with the i5 battery). Mercedes only has one (if I'm not mistaken). It really feels like they're only getting started, and if/when they start releasing really compelling models, it will be something more to deal with for Tesla.

[hangonhn]

Oh there's a very good reason why the German carmakers are only now just getting started:

http://www.spiegel.de/international/business/german-governme...

In short, German carmakers' historical expertise in designing good internal combustion engines are worthless if electric cars take over. The auto industry is ripe for some serious disruption.

[merb]

btw. mercedes buys the batteries from asia and their engine did come from tesla, however they broke up and now they have a new partnership which helps them. german manufacturers have no interest in selling electric vehicles to the masses.

[gutnor]

Before automaker were only focusing on the fully urban, second car. The like of Nissan Leaf, Renault Zoe, even BMW i3.

Tesla has opened up a slice of the market the traditional maker didn't expect would work: primary car. This has a feel of Apple with iPhone in 2007.

Even if Tesla ramp up tremendously and try getting in every car segment simultaneously, they will not have the capacity to provide all the cars that people are looking for, so the rest of the companies will likely continue to provide the bulk of the car market. Which is not a negative for Tesla, the market is simply enormous: it would take Tesla to produce over 2 million cars per quarter to even get over the single digit market share.

The biggest risk now for Tesla is not being able to reach critical mass fast enough. I can understand their valuation and their need for cash. I can understand the shorters too, unlike the smartphone market, car purchase has at least a 4 years cycle and even in the first world, a car purchase is one of the biggest investment.

[heygrady]

> another form of energy, such as hydrogen

Hydrogen is unlikely to win, it's fair to say that it has already lost [1]. The hydrogen economy was mostly a myth [2]. 95% of hydrogen is made from natural gas [3].

[1] http://www.salon.com/2016/11/19/who-killed-the-hydrogen-car-...

[2] http://www.triplepundit.com/2010/02/hydrogen-is-not-the-fuel...

[3] https://energy.gov/eere/fuelcells/hydrogen-production-natura...

[artursapek]

> ...that Tesla market share will not be eaten up by other carmakers when they seriously start releasing electric vehicles

Tesla has been around long enough that it can no longer be replaced by a large company that just throws a ton of money and talent at it. They're too far ahead. There's no substitute for the raw amount of time Tesla has spent developing its product.

[SEJeff]

Which is often summed up (I'm paraphrasing) from The Mythical Man Month, "No matter how hard you try, nine women can't make a baby in a single month".

[artursapek]

Exactly! I love this saying.

[srtjstjsj]

ahead of who? There are several low-end electric cars already on the market (Chevy, Nissan, BMW), and one high-end (Tesla). They are meeting in the middle

[kybernetikos]

I think that a surprising number of people buy stock based on how they feel about the company rather than how they feel about the company compared against the current price.

[mathattack]

They are expected to generate over 90% of their value after 2020

This is true of many startups, especially in a low rate environment. It's the "Terminal Value" in the calculation that drives value. Of course the Terminal Value also is extremely volatile, and changes a lot to small changes in inputs.

[Consultant32452]

I have a small investment in TSLA stock. What I'm betting on is that in addition to being a car manufacturer on the scale of Ford/GM that TSLA will also be the world leader in AI/driverless cars. I don't have a huge position, but intend to hold onto it forever.

[shostack]

If there were a significant economic downturn, I wonder how much that might impact their initial wave of buyers.

[samstave]

The year is 2051, SpaceX has made significant progress on building out infrastructure on mars. In the last 25 years we have seen the explosion of Musk's empire across the solar system. Starting with the seed efforts on earth, robotic rockets have been flowing to Mars in droves. The exceptional thing is how they have delivered the infrastructure to the planet once there.

These rockets are far superior to their ancestors. With orbital factories around earth, and regular deliveries of colonization supplies, the network is vast, complex and efficient.

Starting with battery manufacturing on earth, all the colonization components required of earth are delivered to the orbital factories where humans and robots work in a beautiful synchronized effort to prepare each packet to Mars. Batteries and other components are delivered to orbit. They are then constructed into the various machines to be delivered to mars on the massive Falcon-33s that will haul them to Mars.

The autonomous Tesla Landers are quite complex, they have impressive batteries, but its their job which is more impressive.

Once orbiting Mars, the payload shall be unpacked and deployed to the surface, where they will continue the construction of the massive solar arrays which already have a large contingent of batteries to slurp up the solar energy and store it for all the other needs of the build-out.

The project has been going on for decades, but we are starting to see some serious results in this phase...

The original idea was laughed at, but it was all backed by sound science and a simple phased approach:

* Develop seed infra at home; Batteries, rockets, robots

* Consumerize these to fund later phases

* Proof-out orbital autonomous delivery services via the ISS

* Commoditize space tourism, popularize it with celebrities

* Exploratory missions to Mars

* Develop orbital manufacturing capabilities, where supplies can be delivered autonomously

* Build Ultra-heavies in orbit, modularly to avoid launch costs from surface (required tethering technology to be developed)

* Deploy communication relay probes between spatial bodies

* Deliver initial robots to surface of Mars, they prep for solar install

* initial solar install to feed robot population already on surface

* Add batteries

* further infrastructure to follow, but with a working autonomous robot service group ready to build out

We are now at the deployed battery stage, the Organization is now preparing the life support systems for long-term human colonization, and within the next 25 years, we will have a permanent Human Civilization2 on the planet Mars... perhaps, Again?

[olivermarks]

aah, there's nothing like utopian geek idealism...

[Eerie]

Much better than the hollow cynicism of your post, though...

[olivermarks]

"In the last 25 years we have seen the explosion of Musk's empire across the solar system. " - you have to admit that is pretty funny...

[Arizhel]

Funny, but silly. Why would people want to live in other places in the solar system? Earth, the Moon, and Mars are the only places that really make any sense at all. Even Mars is iffy because the gravity is rather low, it's far from Earth, the atmosphere is barely there, it's cold, and there's no radiation protection without going underground. The Moon is even worse, but at least it's close to Earth so it'd be really useful for mining or offworld/low-g manufacturing, and it's close enough for quick trips back to Earth.

Venus is far too hot to be useful for anything besides dirigible cities, and what are you going to do there except sightsee the yellow clouds? Maybe it could be terraformed to something livable, but that would take a long time. If that could be done though, it'd be a great place, since it's close to Earth's size and gravity.

Mercury is too close to the Sun and too hot. You could put a city on the dark side, but the city would have to move constantly to stay on the dark side.

The asteroid belt might be useful for mining, as would other places farther beyond, but anything that far out is going to be very cold, because it's so far from the Sun. Also, the Moons of Jupiter are bombarded with massive amounts of radiation from their planet. And all those places have horribly low gravity too, which probably won't work well with human biology, unless perhaps we genetically engineer ourselves to fix that.

Space exploration is great for science and maybe resource extraction, but I just don't see the point of colonization except for a couple of somewhat-convenient places, at least not in this star system. I really can't imagine an "empire" across this solar system. Now it would be really cool if we could explore the TRAPPIST system and maybe find livable worlds there.

[robbiep]

Why leave town? why jump on a ship and sail to unknown horizons? why get out of bed in the morning? Some people like the idea of adventure and the unknown. Practical realities be damned

[nickjarboe]

Political freedom has often been the primary motivation for groups of people to emigrate. Hypothetical sea-steading aside, moving somewhere with no existing political system in place is not possible on Earth. Wealthy patrons might sponsor the pioneers. This was how much of early New England was settled by Europeans.

[cat199]

you hollow cynic!