[wnorris]

The production and delivery numbers they came out with were very good and higher than most had expected. These numbers will allow them another profitable Q4 likely higher than their Q3 numbers.

The price cuts are likely to impact margins, but is in line with what Tesla had done with the Model S and X as production efficiencies allow them to reduce manufacturing costs.

The reaction looks like a big overreaction as the market is apt to do. Seems like there is a lot of Tesla hate on the internet for some odd reason these days.

[golfer]

People are skeptical of Tesla because people are skeptical of Elon. His dozens of misleading statements and half-truths over the years have caught up with him.

[andrewtbham]

This narrative doesn't resonate with me. Forward looking statements are speculative, especially when you're innovating new technologies.

I personally trust Elon Musk and I am a large investor. I don't expect him to hit all his targets, but I trust him to only raise money on the heels of good news.

[ivraatiems]

Characterizing lying to the SEC and calling a Thai cave rescuer a "pedo" as such is stretching the definition of "forward-looking statement."

Musk has always been largely bluster, but now the bluster is hurting people, and his companies as well. He's the biggest liability Tesla has.

I don't know what he's done to earn my trust, or any investor's.

[martythemaniak]

> I don't know what he's done to earn my trust, or any investor's.

The ~20x ROI since IPO has made many people trust him. Tesla itself is a marvelous success, with no established car maker able to match them yet. It is far more likely that your personal dislike of him is making you see a distorted reality.

[ivraatiems]

> It is far more likely that your personal dislike of him is making you see a distorted reality.

Certainly possible. I personally think he's acting like a buffoon and I haven't been shy about stating it.

However, as I told another commenter in this thread, I think the relatively objective argument is that while Musk was necessary initially to get Tesla into existence and functioning, he's now more of a liability than an asset. It's not that he was never valuable or never deserved any trust - rather that he doesn't deserve it now.

Put another way: At what point does the goodwill he's earned expire?

[_ea1k]

I have always seen him as a bit like William Durant. His use expires when the company is no longer trying to grow at 2x every 3 years.

Alternatively, he could dramatically change his approach as the business matures.

[permatech]

> I think the relatively objective argument is that while Musk was necessary initially to get Tesla into existence and functioning

Martin Eberhard and Marc Tarpennin initially got Tesla into existence.

[clouddrover]

> with no established car maker able to match them yet.

The Hyundai Kona EV is cheaper, has good range, and outperforms new model Teslas in 24-hour efficiency (interestingly finishing second to the original Tesla Roadster):

https://insideevs.com/hyundai-kona-electric-gets-shockingly-...

https://electrek.co/2018/12/23/tesla-roadster-24-hour-electr...

Teslas are among the least reliable cars you can buy. If you want high reliability and low maintenance costs, you're best off with a sensible Toyota today:

https://www.consumerreports.org/media-room/press-releases/20...

Here are some currently available and soon to be available EVs from established car makers:

https://www.hyundai.co.uk/new-cars/kona-electric

https://www.kia.com/uk/new-cars/all-new-e-niro/

https://www.jaguarusa.com/all-models/i-pace/index.html

https://www.e-tron.audi/en

VW has to sell electrics to meet the new fleet emissions targets set by the EU and they're going to do it with their MEB platform:

http://fortune.com/2018/12/20/volkswagen-electric-cars-emiss...

https://electrek.co/2018/09/18/vw-meb-platform-electric-for-...

Right now the primary reason to buy a Tesla is the novelty of buying a battery electric. But when all manufacturers are producing battery electrics, why am I buying a Tesla?

[gibolt]

Kona will only be available in a small number of U.S. states and global regions, in limited quantities.

It is a compliance car, to reduce the emissions overall of the fleet they sell allowing them to sell more high profit ICE cars. They are likely losing money on each sale as well.

I think the Kona is a great start and wish it would have a better chance, but it is crippled from the beginning.

[Zarel]

The last time this came up, many people said that the primary reason to buy a Tesla was for Autopilot, which I have not yet heard of another manufacturer with an equivalent product.

I think another advantage Tesla has is the Supercharger station access.

[adamqureshi]

Do you have a list of EV direct to consumer VS Dealership / franchise model distribution? Tesla the only player in this space?

[dmode]

Tesla just sold 63K Model 3s in a single quarter. Despite availability of Leaf and Bolt [both are cheaper]. None of the vehicles you have listed are true competitors to Tesla at this time. True competition will be something like an electric 3 series or C-class

[OldFatCactus]

Match them at what?

[mav3rick]

If bluster results in the first truly desirable EV cars and the first autonomous reusable rocket then more bluster please. The rage machine against Elon here is preposterous. At the end of the day , is he making the world a better place ?. No amount of contrived answers involving Twitter can change the vehement "Yes" to that question.

[ivraatiems]

> At the end of the day, is he making the world a better place?

With rare exception, I don't subscribe to the idea of "key men" in general, and especially not in this case. Even if I did, I don't think that Musk is acting in a way that makes him an asset.

I agree that Tesla, for instance, is doing good and important work. However, I think attributing Tesla's success, and net impact on the world to Musk alone is unsupported by evidence. That's because aside from initial investment/PR, and sufficient cult of personality to inspire people to work for him at the start, I don't see what Elon Musk is contributing to the company's work at this point. In fact, I see him as a liability and I think Tesla would be better off without him.

Candidly, I also believe that if Musk was less driven by his own ego, as he appears to be, he'd see that and step aside.

[kitsunesoba]

I would say that his contribution to Tesla is mostly a sense of urgency and direction. Certainly some more “normal” CEO could come in and make the company more profitable, but it’d come with steep cost: the company would also become very stagnant and very boring. That’d be great for Wall Street but it’d bum me out pretty badly.

[_ph_]

Of course, the success of Tesla isn't based on Musk alone. There are thousands of Tesla employees contributing to it. Be it in engineering or production. However, Musk is the glue which ties all of this together. He set the direction, contributed quite a lot of his personal money in the beginning and is at the steering wheel.

[londons_explore]

I think there is another way to make this comparison:

If Musk did not exist, and Tesla as a company did not exist, then all the engineers, expertise, effort, and capital that is currently with Tesla would be placed elsewhere.

Would all those people and resources do more good with all the other companies?

[hopler]

Tesla is one of many companies making mass market electric cars. Piling on luxury touches isn't making the world a better place. Tesla's $35K car (when if ever shows shows up) isn't better than anyone else's. He's just coming down from higher price points on fancier cars while others are improving at the same price point.

[jpatokal]

Have you driven or been in a Tesla? These are manifestly not the same cars as anyone else's.

[mav3rick]

Model 3's are everywhere, especially in the Bay Area. But sure say false things to suit your narrative.

[stanfordkid]

Landing rockets on autonomous drone barges, coming out with a sedan that beats a Lamborghini Aventador in 0-60 acceleration at 1/6th the cost, thereby pushing the state of the art across the entire car industry. Seems like a guy I would trust.

[londons_explore]

My model rockets do 0 to 60 in well under a second, and I'm totally not a guy you should trust.

[dwaltrip]

You are ignoring a decade plus of very impressive results. Sure, the man has significant flaws. That is not justification for an inaccurate portrayal.

[cjhopman]

What results? Give me $30 billion dollars to waste and I can easily show you $28 billion dollars of progress.

[alexandros]

Elon has not lied to the SEC. Please provide link or other evidence. He settled a claim that he manipulated the stock without admitting guilt, in order to avoid damaging the company, but that is completely different.

[scrumbledober]

he said "funding secured" and didn't have any funding secured. The SEC was lenient in allowing the settlement without an admission of guilt, but that does not mean he was not guilty. I'm a huge fan of most of the things he has done, but this was a boneheaded move only surpassed by his embarrassing pedophilia comments.

[Agathos]

Technically he was lying to his investors, not the SEC.

Of course then in that 60 Minutes interview he all but declared he wouldn't honor his side of the settlement, but we'll see if he follows through on that.

[Riesling]

You didn't happen to have a short position on Tesla when the infamous 420 tweet happened?

[jsgo]

His pitch on the solar tiles that would cost* at or less a typical shingled roof had me incredibly sold, but it seems that has taken a back seat as of late in his endeavors. Yeah, would love an electric car, but until they hit the $35k price point, it isn't happening anytime soon for me. But a fairly priced solar setup for home? Sign me up.

* not sure if it was initial cost or cost over the life of plus the energy savings, I don't remember nor really care. Either is fine by me.

[gibolt]

It is over the life of shingles plus energy. That won't be true of the first few years of sales.

As an upside, I think the comparison is with one roof replacement, which is supposed to be done every 8-20 years. Tesla tiles should last 100 years.

[ams6110]

When I can buy a reliable $5k ICE car (which are the kind of cars I drive) I don't see an EV ever really making sense.

[beerlord]

They have them in China:

https://www.youtube.com/watch?v=kILXXaqspcI

[threeseed]

> Forward looking statements are speculative, especially when you're innovating new technologies

The innovation comes purely from the battery and associated electronics. The rest of the car is pretty standard and it's in this area where they are having problems.

There are plenty of car companies with electric cars today e.g. Jaguar, BMW, Nissan, GM and in 2019/2020 everyone else is jumping onboard e.g. Audi, Landrover etc. And they have managed to hit their targets.

[nikofeyn]

musk isn’t the only reason i dislike tesla. they are overhyped by their customer base because the cars are “cool”, but i personally find the overall design and fit and finish to be lacking. they don’t feel like the expensive cars they are. tesla also has a feature called auto-pilot, which has killed people using it in non-insane scenarios given the name and marketing. i distrust their safety ratings.

tesla also acts like they are the only game in town. they aren’t even the largest electric vehicle maker in the world.

[sandworm101]

The pot smoking and twitter insults also dont help.

[mulmen]

I don’t really see the problem with the pot smoking honestly, why is anyone wound up about that? Do you care if he drinks or smokes cigarettes? What about his workout routine?

Twitter insults aren’t impressive.

[notahacker]

I don't have a problem with drinking and am sure most CEOs drink at networking events considered part of their job, but I'd think a CEO showing off by downing a couple of shots on a comedian's podcast was a bit of a liability, even if it wasn't his idea. More so if their leadership was already under scrutiny and one of their businesses was entirely reliant on the patronage of an abstinence-obsessed government that wouldn't let their contractors' staff anywhere near their projects if they'd been known to have touched alcohol recently. And there's no defending the lame 420 joke which fits in the same bracket (the sort of joke that was a pretty pathetic way of getting lunchtime detention as a teenager, never mind a hefty fine and stripped of a measure of control of one of your companies). You can be 100% pro legalisation and in favour of CEOs smoking pot every day if it works for them and still think Musk's acted like an absolute idiot over it.

[drcross]

>I'd think a CEO showing off by downing a couple of shots on a comedian's podcast was a bit of a liability.

You need to lighten up. Musk doesn't owe anything to anyone, if anything he garnered interest for selling more cars to the 18 million people that watched that podcast. If the CEO of <any fortune 500 company> was on the same podcast, do you think it would have been anywhere close to as entertaining?

[notahacker]

> Musk doesn't owe anything to anyone, if anything he garnered interest for selling more cars to the 18 million people that watched that podcast

He owes a lot to his shareholders, and wiped 9% off the value of Tesla with that podcast. If he has to be entertaining as well as reassuring them he's also laser focused on solving production challenges - and CEO of an engineering company is definitely a job description where being dull is no disadvantage - there were certainly better ways of doing it.

[heavyset_go]

> Musk doesn't owe anything to anyone

Investors and board members definitely think otherwise.

[detaro]

More relevant to SpaceX: It was notable that the CEO of a defense contractor publicly uses drugs, since that sector is fairly strict about these things. Smoking weed is a problem for security clearances etc?

[Rebelgecko]

Even though the acts themselves aren't that different, smoking a cigarette on camera doesn't potentially cause him to lose his security clearance (which could make him less effective at his job).

[dsfyu404ed]

Regardless of how you feel about smoking pot the CEO of a publicly traded company is expected to be prudent enough to avoid doing things that are federally illegal on camera with the beforehand knowledge that the footage will be made public.

I personally don't care what Elon, or anyone does in his spare time but smoking pot on TV (or podcast, basically the same thing since both are going to be broadcast to viewers) shows a willingness to take risks with the wrong amount of upsides relative to their downsides and wall street doesn't like that.

[mulmen]

The Joe Rogan podcast is on national TV now? I thought the whole point of it was that it wasn’t a network show.

[dragonwriter]

> The Joe Rogan podcast is on national TV now?

The part of it in discussion was, because of its content.

Everything that is recorded and available outside of a narrowly controlled group is effectively national TV, in that if you do something that would be newsworthy, that's where it's going to end up.

Anyone in a PR-sensitive role, including any CEO, ought to be aware of that.

[dsfyu404ed]

I thought he did it on some evening comedy show. I'm probably wrong about that.

[londons_explore]

I wonder what wall Street would think of a company CEO going and buying a lottery ticket...

[Derek_MK]

Neither does the SEC investigation that got him for fraud

EDIT: SEO > SEC - Context switching is hard

[hourislate]

Perhaps the coke/stripper parties and Insider Trading on Wall ST would have been a better approach. I'm sure the SEC would have found that more appropriate and acceptable.

[mhermher]

They missed expectations on production and delivery.

Semi-relatedly this: https://electrek.co/2017/08/03/tesla-model-3-elon-musk-produ...

Right before a debt offering btw.

[qroshan]

At $50B Market Cap, Tesla should be delivering at least $2B Annual profits.

It's clear Tesla has run through higher margin demand. There aren't many people in the world who can afford a $50,000 car. Tesla is a niche market car, but priced as a mass market (like iPhones) product.

Expect Tesla's sustainable profit to be around $500 Mil per year and it's share price must be cut in half to justify that

[lazyjones]

> At $50B Market Cap, Tesla should be delivering at least $2B Annual profits.

When Amazon reached that mark in 2009, their annual profit was slightly over 1B... And the car industry isn't famous for particularly high margins.

> Expect Tesla's sustainable profit to be around $500 Mil per year and it's share price must be cut in half to justify that

There are no such rules for share prices, especially with this kind of revenue growth. Nobody knows where Tesla will be in 5 years but most shareholders expect easily an order of magnitude higher revenues and possibly profits.

[beatgammit]

Yeah, there are plenty of avenues for Tesla to increase profit, such as:

- new vehicle markets (def. semi trucks, perhaps boats and trains as well) - solar - military

They don't have a ton of baggage like their competitors, so they can pivot their battery business in a variety of ways without too much additional investment.

The real question is if they can stay ahead of competition as they expand.

[lazyjones]

> The real question is if they can stay ahead of competition as they expand.

So far they have not only expanded their lead (e.g. Nissan Leaf used to be a bestseller), they've also proven that they got their priorities right from the start. Look at the new Audi e-tron, the Mercedes GLC and the i-Pace: they're all suffering from horrible aerodynamics that cost them 20% or more range at freeway speeds compared to Teslas. They have no fast charging networks able to support similar sales numbers even to Model S/X. Tesla apparently did proper planning while the big car makers are just trying to produce their usual cars with electric engines. They are now making expensive mistakes that Tesla avoided altogether, so I'm confident about Tesla's leadership.

[gamblor956]

Nissan has sold nearly every Leaf it has ever made. It simply doesn't make many of them, since it was first intended to be a compliance car and a loss leader for the brand.

You can't even buy a Leaf in most of the country, so if you were to scale up sales of the Leaf to the same geographic territory as Tesla sells to, the sales would be about comparable.

Tesla apparently did proper planning while the big car makers are just trying to produce their usual cars with electric engines.

Ah, proper planning. That certainly explains the billion-dollar line collecting dust, the year-long delay on every model, and their inability to properly deliver finished cars to their customers when promised (i.e., basic logistics). The cars you've mentioned aren't meant to have maximum range at high speeds; they're meant to have X range at commuter speeds while providing a luxurious ride. You'll also have to demonstrate (with cites) that the aerodynamics will cost them 20% of posted range, since those aerodynamics have already been factored into their range as part of the federally-mandated testing.

[lazyjones]

> and their inability to properly deliver finished cars to their customers when promised (i.e., basic logistics).

What are you even talking about? I bought my Model S 2 years ago and waited the same amount of time as for the previous BMW (3 months), which didn't even come from overseas (I'm in Europe).

> The cars you've mentioned aren't meant to have maximum range at high speeds; they're meant to have X range at commuter speeds while providing a luxurious rid

And this is why they are no Tesla competitors for most people - who don't want or can't afford a second car for long distances.

> You'll also have to demonstrate (with cites) that the aerodynamics will cost them 20% of posted range

Lots of people have, it's simple physics. At higher speeds, air resistance causes most of the energy consumption. The results can be calculated easily:

https://www.ecalc.ch/evcalc.php?lang=en

130 Km/h (= 80 mph)

Model S = 22 KWh/100 Km

Mercedes EQC = 30 KWh/100 Km

i-Pace = 28,5 KWh/100 Km

[ams6110]

The fast charging network only exists in a few areas. If you happen to live there, great. But for the rest of the country, "range anxiety" is still pretty real.

[JumpCrisscross]

> At $50B Market Cap, Tesla should be delivering at least $2B Annual profits

P/E ratios aren’t effective for high-growth or quickly-declining companies. The PEG ratio attempts to compensate for this.

[qroshan]

Exactly my point. US demand growth is done. There will be International pent up demand will be done in Q1.

Q2 and Q3 will show that Tesla has pretty much plateaued. Profit growth is even lower

[JumpCrisscross]

Companies can grow in a shrinking market by stealing share. I’m no Tesla bull, but you’re casting a loose prediction with far more certainty than it merits.

[toufiqbarhamov]

It is a concern though, and as a Tesla supporter I’m a little worried. Tesla is also going to be looking at serious and sustained competition from giants like VW, so if they want to steal market share they’d better do it fast. I accept the argument that such competition is a good outcome for the planet, but I’m not so sure it’s a good outcome for Tesla the company.

[johnvanommen]

Once Jaguar, Porsche and Audi are able to produce electric cars in quantity, things are going to get interesting. For instance, I was recently looking at the Jaguar I-Pace, and was stunned by how long the wait and how high the markups are. Clearly there's a demand for a $100,000 electric car, but things are going to get difficult for Tesla once the competition arrives.

[luckydata]

Competition has been arriving for quite a while though. Having just bought a Tesla, I can tell you I'm starting to appreciate more than just intellectually the huge network of chargers and other infrastructure that company has laid out. It's not perfect but anyone else wanting to play in this market will need the same, and Jaguar is in no position to do it. I don't think anyone at Tesla is losing any sleep over Jaguar TBH but they might be looking intensely towards Toyota.

[gamblor956]

I live in a nice part of LA and I see as many iPace's as Teslas, and the iPace has only been available for about 3 months locally.

And the iPace owners are absolutely glowing in their reviews of the car in a way I've never heard Tesla owners get. Indeed--while most Tesla owners I know talk their heads off about the charging network[1], they tend to be defensive about the actual quality of the car itself in ways that luxury car buyers shouldn't be.

[1] While Tesla has a geographically large charging network, it's density is pretty horrible. In DTLA for example, you're 9 miles away from the closest Supercharger, and condo/apartment dwellers are SOL for installing their own unless they want to pay excessive fees to have one installed in their parking spot. There are a number of standard EV chargers through the downtown area, and the number of non-Tesla chargers exceeds the number of Tesla-only chargers by a factor of at least 10:1.

[luckydata]

We must be living on a different planet then if you never heard a Tesla owner go on and on about how much they love their cars. Before buying one 4 days ago I had plenty of that kind of experience.

[gamblor956]

I know quite a few Tesla owners, and they all love the idea of the car far more than the actual cars themselves. After about a week, reality sets in and the misaligned panels, haphazardly responsive touchscreen, and relatively pedestrian interior furnishings start becoming noticeable. After about 2 weeks, the Tesla owners who don't live in homes (i.e., condo/apartment dwellers) even start to get annoyed at the charging cycle, since the Superchargers in the LA area are not very convenient to get to and it's roughly $10k-$20k (per charger) to get a charger installed in their parking structure. One Tesla owner, who evangelized the car before buying it, eventually sold his Model 3 (one of the first sold to the general public) and, in his words, "upgraded" to the iPace.

Also, I've ridden in all of the Teslas (including the Roadsters, thanks to a former boss who collected cars) and the Model 3, while comfortable enough, is only roughly as comfortable as my Camry and certainly isn't as comfortable as the $65k+ cars other friends drive. IMO, this is Tesla's big problem. Their cars are expensive, but you're paying a lot of money for the brand and while that can get you started, in the auto market you eventually have to start competing based on features like comfort, etc.

[FireBeyond]

I was in a Jaguar dealership this weekend, and the iPace, though I have no intention of getting one, is a VERY nice car. Build quality. Features. Specs.

[dmode]

Tesla has the highest consumer satisfaction rating and brand loyalty of any car maker [1]

[1] https://electrek.co/2017/12/21/tesla-tsla-tops-customer-sati...

[anthonybsd]

I suspect Model 3 will change all that, unfortunately :(

[davidgould]

> While Tesla has a geographically large charging network, it's density is pretty horrible. In DTLA for example, you're 9 miles away from the closest Supercharger

That's sort of the point, the Supercharger network is designed to facilitate long distance travel. So the stations are spread out along highways. The other networks are bunched up in cities. Try using plugshare.com to plan a trip using CCS chargers vs Superchargers. Say San Francisco to Portland, or Denver to Dallas, or LA to New York.

[Rapzid]

Only path forward is to share the market. Japan and Europe will enter the market in a big way without the logistics friction Tesla is so often in the news for.

But yes... I expect Toyota to have more affordable TCO, particularly on the maintenance side where Tesla gets ripped often. The will need to adjust to be competitive outside the luxury market.

[twblalock]

Other brands have dealerships all over the country where they could install chargers. I'd say the barrier to doing that is pretty low.

For example, if every BMW or Audi dealership had some charging spots for owners of their cars, it would probably have more nationwide coverage than Tesla's Supercharger network. The dealerships are also frequently located in convenient places near major highway exits, etc.

[luckydata]

You don't go charge a car to a dealership though. I charged mine yesterday in the parking structure next to the mall in Colma while getting ice cream with my son. Sorry but no, that's not a valid suggestion.

[twblalock]

I'm assuming most electric car owners would charge their cars at home and make use of Superchargers/dealership chargers on road trips.

Being able to charge at your local shopping center is nice but it's not a necessity for electric car ownership.

[gibolt]

*Could

Even if people wanted to charge at dealerships, dealerships aren't incentivized to sell electric cars, much less charge them.

The proof is that any Chevy dealer that sells the Bolt should have a public charger already, but I'm guessing few do.

[mulmen]

I live in Seattle, east of here there is one BMW dealer on my way home and next closest BMW dealer is in Boise, Idaho. I can’t drive to my home town and visit a dealership. That means an electric BMW would need a range of 1,000-1,200 miles to be remotely comparable to an ICE car or Tesla.

Putting universal chargers at existing gas stations or buying an entire brand and converting to charging makes way more sense.

[alonmower]

Gas stations are obviously a great place for chargers because they're already properly distributed along well travelled routes. I think there's probably going to be a market for either an existing restaurant coffee chain with a lot of existing real estate (or perhaps a new chain that's a bit more upscale) to partner with Tesla and any of the other electric car manufacturers and build a concept around high quality food with quick turn around (like order ahead and eat in under the time it takes your car to charge). Gas stations as they currently exist can be pretty bleak places to spend 30 minutes

[johnvanommen]

There are five BMW dealerships in Washington, including three within 30 miles of Seattle:

* Seattle

* Bellevue

* Fife

[FireBeyond]

Except for the BMW dealership in Yakima you mean?

Or if you go via PDX.

[dmode]

Chevy Bolt was supposed to end Tesla as well. Didn't really happen, did it ?

[Green_man]

The model 3 was supposed to compete with the Bolt on price- that didn't really happy either (yet), did it?

[johnvanommen]

Today there was a discussion on HN about "Sears vs Amazon."

And comparing the Tesla Model 3 to a Chevy Bolt is very similar!

For instance, Tesla is prepared to sell their cars at a loss, to gain market share. Amazon had the same strategy twenty years ago. Sears was never willing to do that, and Chevy wasn't going to do that with the Bolt either.

I like the Bolt - it's a very nice car. But the Model 3 seems to offer so much more for the money.

[DoubleCribble]

The Volt didn't do it. The Bolt couldn't either. Perhaps they're working on the Chevy Molt? (the first car wrapped in OLED!)

[DoubleCribble]

There were big markups on the reintroduced Ford Thunderbird, too.[0] Sales tanked after the first year and it was out of production 4 years later.

[0]https://en.wikipedia.org/wiki/Ford_Thunderbird_(eleventh_gen...

[dmode]

Chevy Bolt and Leaf have been available for a long time and had zero impact on Tesla

[Nursie]

The i-Pace makes me drool far more than Tesla... but it's going to be a while before I can afford either so it's rather a moot point!

[_ph_]

As deliveries are to the US and Canada only at the moment, at worst they have cut through the higher margin demand of those two countries. Deliveries to other contries are going to start in Q1 of course with the highgest margin cars. And of course, while demand for the high margin versions might drop somewhat in the US there is no reason to assume it was completely addressed in just two quarters. This was just the demand by people who could afford to buy their car in that time frame. But that is only a fraction of the possible customer base - most people buy a new car when their old one breaks down, they have the money ready or the lease of their current car runs out. So it is not clear to me that the demand for the high end configurations is going to drop significantly at all.

[dmode]

>>At $50B Market Cap, Tesla should be delivering at least $2B Annual profits

There is no rule like that on a growth stock. You don't value growth stock on a P/E ratio, but some measure of future discounted cashflows.

[querulous]

tesla already has a market cap bigger than both ford and gm. you have to believe tesla is going to be the sole major north american car manufacturer in the near future to think tesla is a growth stock

[dmode]

While we can argue whether the $50B market cap is too much, i was only commenting on a hard rule around valuation and earnings for a company in growth mode. I mean, I haven't looked at the P/E ratios but I bet Amazon's will look out of whack compared to Walmart's

[dominotw]

Wouldn't they be used as self driving pods in future? 50k is low end for that.

[astrodust]

The future as in 2030 or the future as in 2090?

[IshKebab]

In the far future. Tesla is unlikely to be able to wait 20+ years for driverless cars to become a reality.

[btian]

> At $50B Market Cap, Tesla should be delivering at least $2B Annual profits.

LOL what?

Show me another company with $50B market cap growing at 50% a year on the top line to deliver $2B in profits.

I'll wait.

[dang]

Please don't post in the flamewar style to Hacker News. It degrades discussion, regardless of how right you are. Your comment would be fine with just the middle sentence.

https://news.ycombinator.com/newsguidelines.html

[qroshan]

Huh? Did you compare Q3 and Q4 numbers, the growth has pretty much reached steady state. 90,000 per quarter is what Tesla will be and probably 500 Million annual profit.

50% profit growth is delusional at this stage

[300bps]

Q32018: 55,800 Model 3s delivered.

Q42018: 63,100 Model 3s delivered.

That's a 13% growth rate in a single quarter which is more than 50% growth rate annualized.

[microtherion]

Yes, but during Q3, weekly production ramped up from ~2000 to ~4200. During Q4, weekly production stayed pretty much flat.

https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iqPFhpeWEIS...

Article: https://www.bloomberg.com/graphics/2018-tesla-tracker/

[zaroth]

It’s almost like the company should consider manufacturing and selling Teslas in a country other than the USA...

[gamblor956]

If Tesla was expecting 50% annualized growth, or even growth comparable to their recent historical trends, they would not have cut the price tag on every model of car they sell.

[_ea1k]

I don't follow your logic here. With the reduced tax incentive, Teslas have seen an effective increase of ~$1,750 USD.

Would you normally argue that a yearly price increase of ~3% on a car portends anything in particular about demand? I guess it implies that they expected demand to fall if the increase had been ~6% instead, but that doesn't seem like anything that would preclude 50% worldwide growth.

[mulmen]

That... isn’t how economies of scale or elasticity of demand work.

[jacobkranz]

I think OP's point is that Tesla isn't just a car company but they're also an energy storage & solar producer. While the car biz may have be leveling off (and that's not accounting for the semi & modely Y launching this year and next respectively), their energy storage is starting to take off along with the solar roofs so this provides huge growth opportunities in the future.

[csours]

> "The production and delivery numbers they came out with were very good and higher than most had expected."

Every Model 3 they are producing is relatively expensive and already has a buyer. What happens when they get to the end of the list of relatively well off buyers? Certainly there will still be demand, but it will be less profitable.

[bdhess]

What are you comparing it to when you say "relatively expensive"? I've read reviews comparing it favorably to a BMW 3 Series, which is in the same price range.

[tedivm]

The Model S was in the same price range as the BMW 3 Series but only when you take into account the tax credit which just expired. Without that tax credit there's a difference of over $7k. That's part of the reason why Tesla is dropping their prices a bit now.

[vesrah]

How was the Model S in the same price range as a 3 series? A Model S started around $70k after the tax credit was taken into account, a 3 series starts at about $40k. Do you mean the Model 3, rather than the S?

[_ea1k]

The Model S is quite a bit more expensive than a 3 Series. Perhaps you meant the Model 3, which is still competitively priced with the 3 series?

[Agathos]

From the article:

"Tesla said more than three-quarters of orders for the sedan in the year’s final three months were from new customers, rather than reservation holders. That suggests many consumers are still waiting to buy versions of the vehicle at the long-promised $35,000 sticker price."

[csours]

Compared to what most people can afford. My sister would love a Model 3 if she could get one for $20k

[hi5eyes]

>Every Model 3 they are producing is relatively expensive and already has a buyer. What happens when they get to the end of the list of relatively well off buyers? Certainly there will still be demand, but it will be less profitable

they've already run out, did you not see all the tweets about tesla stores being open up until the end of the year and the reduction in price and the extra cars? clearly they've exhausted the areas they're allowed to sell in

[toomuchtodo]

They are maximizing for profit on each unit sold. Presumably, they’ll have had a reduction in debt to service with payments made from upfront higher margin vehicles.

It’s not a problem as long as they stay ahead of the curve margin wise. Lots of market demand outside of the US, which is why vehicle manufacturing firehose is pointed at Europe and China now with the US tax credit reduction.

[jacquesm]

There is a lot more room for margin erosion when your margins are high to begin with. So even if the S and X models had reductions in manufacturing costs there was a lot of room to play with in the first place. The model 3 has much less room.

[conception]

Not sure if you're being sarcastic or not but Musk had become a liability for Tesla for certain. The once "Tony Stark" has had a serious of Twitter meltdowns and absurd business proposals.

[mulmen]

Twitter meltdowns are a very Tony Stark thing.

[wnorris]

lol...he had a spell with some poor choices no doubt, but calling him a liability is a little much. One hopes he learned from his episodes.

https://www.cnbc.com/2018/11/19/neil-degrasse-tyson-elon-mus...

[Derek_MK]

He caused the SEC investigation that probably impacted them enough to miss the targets mentioned in the article. He also has a DOJ investigation in progress against him and Tesla. He is a liability.

[djtriptych]

Tesla's product is their stock. Musk is a liability iff removing him would cause the stock price to go up. I highly doubt that.

[mulmen]

You can’t be serious, that is not how the stock market works. Tesla sells cars, cars are their product. You could make an argument they are some kind of energy company with the powerwalls and solar gear.

[tomp]

People are buying into Elon’s vision, Tesla is just a vehiclefor realizing this vision. Without Elon, Tesla is astagnating company, and people will buy whatever Elon comes up with next instead.

[ken47]

> is in line with what Tesla had done with the Model S and X as production efficiencies allow them to reduce manufacturing costs.

Straight from Tesla's press release: "we are taking steps to partially absorb the reduction of the federal EV tax credit"

So no, this price reduction is not "in line" with anything in Tesla's past.

[reaperducer]

Seems like there is a lot of Tesla hate on the internet for some odd reason these days.

In part because there is a lot of money to be made in spreading Tesla hate on the internet these days.

Think short sellers, etc...

[dqpb]

My feeling is that there is a coordinated media attack against major US tech companies.

[gamblor956]

The thing about massive conspiracies is that it only takes a single participant to leak their existence. And for a conspiracy like what you're suggesting, there would be tens of thousands of participants.

It's time to let reality back in and accept that there is no media conspiracy. The big tech companies overreached and now the roosters are coming home to roost after 2 decades of largely unearned fawning media coverage.

[Something1234]

It could also be that the US tech companies are just really good whipping boys or they subscribe to any publicity is good publicity.

[tivert]

> My feeling is that there is a coordinated media attack against major US tech companies.

Or the media has stopped looking at them through the rose-colored glasses of tech-optimism, and started seeing them as what they are: massive, powerful corporations that are capable of harm and dishonesty in addition to innovation.

[kadendogthing]

And how do you explain the past couple of years of uncritial, overly positive media coverage these companies have received? The media coverage that has created a rabid fanbase that surrounds these tech-personalities, making it near impossible to discuss the reality of the tech and finances of these companies?

Having to face consequences for your actions isn't a conspiracy. People reporting on these realities is not a conspiracy. It's long, long over due.