Place YOUR Bets! Has Tesla ROUNDED The Corner OR Is The Bad News JUST Getting Started?

As noted in a thread I put up yesterday, I am spending the long weekend in San Francisco, more specifically, Marin County. I just love it out here.

And, boy, I will tell you: There's a TON of Model 3s flooding the area.

Quite literally I am seeing them everywhere I go and they all are new deliveries — all have Tesla placards where the license plates go. It's very, very impressive. Especially when you consider these are all cars loaded to the gills.

In the past several weeks, it seems that the media has turned on its darling though, Elon Musk. Musk is starting to get a taste of a turning tide and, frankly, it's very clear he doesn't like it. In an interesting move this week, he even started saying how he'd like to start an all-new website called Pravda where users rank publications, journalists and their editors credibility.

Given the current climate, I think this would take off. Granted, this would be completely colored by people's perception versus reality. Some pundits, for example, are lauded when they're telling the truth.

Over the past month or so I've started to think a lot about Tesla. And while the Model 3 isn't shipping nearly as many units as it should of been per the original forecasts, the company has ramped up production in a big way.

It leads me to wonder: Has Tesla has finally turned the corner? With the media is getting out its pitchforks and torches, is the bad news just getting started?

Two things are true ...

1. The media is flawed:

• The media sometimes gets things wrong, it has a penchant for drama and controversy, and it is incentivized to establish narratives that don't always account for the complexities and nuance of business, politics or culture.

2. Musk is humiliating himself:

• He is using his vast power and influence to undermine journalists simply because he's miffed by negative coverage. The attacks have invited comparisons to Donald Trump.

Read Article

TheSteve - 5/27/2018 12:15:35 AM

+11 Boost

My bet: I'll be surprised if Tesla Motors motors is still around in a decade... without being bought out, or a bail-out to circumvent bankruptcy, or something similar.

They're STILL operating on a non-sustainable business model that depends on regular and huge (over $1B) cash infusions to keep the lights on. Those infusions come in the form of tapping capital markets or junk bond offerings (which was under water within weeks). They'll need to do it again, before the calendar year-end.

As long as there are enough Tesla Faithful to scoop up new stock or bond offers, Tesla can continue to do business this way. But once The Faithful start losing their faith, it'll quickly look like a collapsing House Of Cards, and TSLA stock will take a sharp trip south to reflect this.

Remember, Blackberry (AKA Research In Motion) was once the king of the hill, and looked unstoppable. Anyone remember Nortel Networks, Siebel Systems, and Enron? Again, giants whose stock value skyrocketed... and then at one point, collapsed and never recovered. To think Tesla is a "special case," and is immune, is magical thinking.

SanJoseDriver - 5/27/2018 1:36:49 AM

-7 Boost

Tesla is the disruptor while Blackberry was the old guard that was too slow to evolve. In tech the company that can innovate faster usually wins and right now no one is moving faster than Tesla.

TheSteve - 5/27/2018 2:36:27 AM

+9 Boost

SanJoseDriver wrote"...right now no one is moving faster than Tesla..."

Really? In what way? Other EV's (Nissan Leaf) outsell the best-selling Tesla model. Everyone and their uncle is jumping on the EV bandwagon; companies with proven track records of production and ramp-up rates.

Tesla excels at two things:
1) PR/public mindshare (which has not translated to profit or unit sales domination)
2) Constantly tapping capital markets to keep the lights on.

It's likely that the established firms will leave Tesla in the EV dust over the next 5 years. At least that's the way I see things unfolding.

SanJoseDriver - 5/30/2018 2:50:04 AM

-10 Boost

In terms of business agility. There are no model years, if an improvement can be made--they make it. It's the difference between waterfall and agile software development--any software company still on waterfall will get creamed. I'm pretty sure they are the only car company doing continuous deployment right now to hardware. It has some big downsides as well, but they will be able to correct mistakes and out-innovate other companies if they can find a way to do it while keeping quality high. They brake issue is an example of something that Tesla was able to resolve quickly and painlessly.

TheSteve - 6/1/2018 12:39:16 AM

+1 Boost

@SanJoseDriver: If Musk delivered on his self-imposed targets, I'd agree with you about "Tesla Agility." But Tesla misses every time. They simply don't live up to the hype of colossal sales, rapid ramp-ups, converting Model 3 orders into sales in a timely manner, becoming profitable, and even becoming financially stable. Remember when Musk proclaimed TSLA would not have to go to capital markets, but the analysts said (paraphrased) "they will, within the next quarter or two," and the analysts were right?

In less than 5 years, I believe we'll see signs of Tesla eating others' dust. BMW is (allegedly) just two years away from a totally revised assembly line in which they can shift virtually on the fly between their offer propulsion systems (ICE, gas/electric PHEV, pure EV). That means if EV orders jump suddenly in a particular month, they'll be able to meet them, without "teething pains."

In my view, manufacturers with proven production capability will be eating Tesla's lunch within a few years, with better cars (fewer initial defects, fewer failures, better prices, more luxurious, better fit and finish, and profitable) than Tesla's.

Nissan is already eating the bottom end. Porsche and BMW are going hot and heavy at the top end.

Keep your eyes peeled. This will be interesting, for sure.

carloslassiter - 5/27/2018 12:24:05 AM

-6 Boost

In 10 years, with no additional government bailouts, GM is more likely to be bankrupt than Tesla.

TheSteve - 5/27/2018 1:18:55 AM

-1 Boost

@carloslassiter: I won't argue about who's more likely, but I agree with you that GM is a good candidate for another round of bailouts.

SanJoseDriver - 5/27/2018 1:40:31 AM

-7 Boost

My record is seeing 11 Model 3s in a single commute from work to home. There are so many people still waiting for their cars in Silicon Valley as well (0 of my coworkers have gotten them yet). I think this is the year where the pieces of the puzzle will fall into play for Tesla. If they can end the year at a run rate of over 350k cars per year while being profitable, other manufacturers should be very afraid.

TomM - 5/28/2018 12:49:54 AM

+13 Boost

The problem is - they cannot maintain that level of production AND be profitable. Elan has already admitted that the lower priced versions of the product would NOT be profitable - and that is why they are only producing HIGH content versions. Without the lower priced versions - the demand will simply NOT BE THERE to cover 350K production. The fact is - the Model 3 should probably have been priced at least $5000 more - but Elan chose to stick with previous statements. They will have to RAISE prices substantially in order to survive.

However - I have also finally driven a Model 3 - and the problem is - it is not a $50,000 car - it simply does not belong in that price category- the Quality was suspect - and the car itself did not impress as being in the near premium category. Frankly - I though the car looked CHEAP to me.

So - the problem is NOT production - it is profitability - and the longer Tesla takes to actually get its act together - which must include raising the Model 3 Prices - the more likely they will face competition from other manufacturers.

SanJoseDriver - 5/30/2018 2:53:16 AM

-10 Boost

He admitted they would not be profitable if built first. The solution is simple, delay the $35k version until it can be made profitably. Which is pretty much exactly what is happening. Based on past surveys to the Tesla community, a very small percentage of reservation holders are getting the base car. More were in line for the AWD variant than the base one.

MrEE - 5/27/2018 8:06:42 AM

+12 Boost

To truly turn the corner they need to start turning a profit and showing they can produce different configurations without slowing production. It will be key to address any early problems vehicles, like others manufacturers routinely do. Not sure a $35k version Model 3 will ever be available in volume, maybe will need to be made in China. I am sure the customers getting the max tax incentives in California are fine paying up for long range and premium interior.

The next question is who is losing the most in sales to Tesla?

MDarringer - 5/27/2018 9:31:34 AM

+5 Boost

The $35K Model 3 is the same bait-and-switch tactic VW uses with the $20K Golf that doesn't exist.

Who is losing out to Tesla in sales? The answer is NO ONE. The market research shows that most people who buy Teslas buy it NOT as their only car but as their 2nd, 3rd, or 4th car. Thus, Teslas are bought "in addition to".

SanJoseDriver - 5/30/2018 2:54:30 AM

-10 Boost

That's not the case in Silicon Valley, don't know anyone that has a Tesla as a secondary or 3rd car.

MDarringer - 5/27/2018 9:28:31 AM

+9 Boost

Vette71 - 5/27/2018 11:07:18 AM

+11 Boost

A big question is can Tesla move beyond the top 10% earners? There is a huge concentration of those folks in the Bay Area where this article was focused. Likewise Seattle, LA etc. Those are also areas where governments generously subsidize the sales of EVs. Take those two factors out of the equation and the picture changes. In the Boston area where there are also lots of high earners but little state subsidy the number of Teslas is far less.

carloslassiter - 5/27/2018 11:32:32 AM

-6 Boost

In the Boston area where there are also lots of high earners but little state subsidy the number of Teslas is far less.
-------------------------------------------------------------------------
Nonsense. Model Ss are everywhere in Boston.

MDarringer - 5/27/2018 12:17:46 PM

+1 Boost

So you're everywhere all at once now?

Vette71 - 5/27/2018 7:46:00 PM

+2 Boost

In the last 5 days I have done 2 round trips to Boston, a round trip to Providence RI and one round trip to Cape Cod, each round trip 100+ miles. Saw 5 Model S, no X and maybe a Model 3. That's a hell of lot fewer than SJ saw in one commute! When I'm in Seattle see 10 or more in one day. Another Boston factor, electricity is $.21/kwh with no off hours discount. Seattle is $.08/kwh.

carloslassiter - 5/27/2018 11:38:55 AM

-7 Boost

When the major manufacturers start introducing EVs over the next few months to two years, Tesla will have its IV in for the lethal injection. I'd rather have an Audi "A7" EV than a Model S or a MissionE from Porsche.

Tesla will lose because it will no longer be the only game on the market.

Tesla will lose because the real manufacturers will have far better quality control.
-------------------------------------------------------------------------
To most of the market Tesla = high end electric cars. Everyone else is either a theory, a wannabe or a copycat.

And you are comparing what other companies might do in the next couple years to where Tesla is now? Tesla will continue to innovate, refine and improve during that same period and will be miles ahead of most of their competitors in product and in share of mind when a viable competitor actually arrives.

MDarringer - 5/27/2018 12:16:58 PM

+6 Boost

The Audis and Porsches are imminent and most decidedly do not fall into the "might do" realm.

Tesla hasn't innovated anything. Their technology is no more advanced than the Leaf or the Bolt, so that assertion falls flat.

The fact that Tesla has horrific issues with build quality and reliability that are well documented does not bode well for their future.

Being a Tesla suck boy will only be trendy for another 2-3 minutes.

SanJoseDriver - 5/30/2018 2:59:38 AM

-10 Boost

You really don't know Tesla at all if you think it is the same as a Leaf or Bolt. I actually do hope they have solid competition. That will elevate the market for everyone and lower costs to consumer. However, right now only the Mission E and the iPace are potentially threats and only to the S/X. They will be low volume until 2020 at best. Also, the last promo for the Mission E featured a prototype nowhere near what the production model will look like (unfortunately, I love the prototype).

carloslassiter - 5/27/2018 2:27:43 PM

-8 Boost

Being a Tesla suck boy will only be trendy for another 2-3 minutes.
------------------------------------------------------------------------
You'd have more credibility if you hadn't been posting these same "the sky is falling" predictions since 2012.

MDarringer - 5/27/2018 2:38:06 PM

+5 Boost

Tesla has YET to be successful in turning and sustaining profit, so my credibility is spot on. Yours however as the breathless cheerleader is making you look a bit used and discarded.

carloslassiter - 5/27/2018 2:30:04 PM

-8 Boost

So you're everywhere all at once now?
-----------------------------------------------------------------
I travel quite a bit for my business.

You should try it sometime - you might discover that there is entire world outside of your small, safe, lily white cocoon.

MDarringer - 5/27/2018 2:34:27 PM

+5 Boost

Why do you assume I'm white?

carloslassiter - 5/27/2018 4:24:38 PM

-8 Boost

Good God man - I would hope a Trump supporting bigot like yourself is a white guy or you are even dumber than I thought.

MDarringer - 5/27/2018 6:16:56 PM

+8 Boost

Yes because a person of color cannot be smart enough to realize that Trump is better for them economically and for national security???? #bigot #hypocrite #racist

CANADIANCOMMENTS - 5/27/2018 4:37:09 PM

+1 Boost

@MD I would love to see that research. Tesla's are daily driven as they are not Corvette's etc. Every Tesla in my area, X's and S's and now I am seeing 3's are driven by a Dad each day to work and picking up kids from school, to the grocery store etc. Most have 2 cars (some have 3) and the other is an SUV for the kept wife to run around during the day or the working wife to take herself to the office. They are not 4th cars from what I see in the Toronto area.

MDarringer - 5/27/2018 5:21:17 PM

+1 Boost

If you have access to demographic research done for customer profiles of the type of people who buy premium cars, you'd see it's true. In fact, MOST premium cars share a garage with other cars. It's just the nature of the buyer. Yes, some are their only car, but many are a part of several.

carloslassiter - 5/27/2018 4:42:54 PM

-7 Boost

Look, I don't own a Tesla, and I don't own any Tesla stock. I do think they have done some amazing things in a short period of time and I believe they are just getting started.

Of course the detractors have some valid points, but it does seem like a lot of the most vocal anti-Telsa crowd here are afraid of anything new and different, or sell Kias for a living and are scared to death of the competition.

In either case, it's pretty clear that Tesla gets more publicity and articles on this site than all other makers combined, and that any negative headlines draw traffic to this site and are good for the AutoSpies business.

MDarringer - 5/27/2018 6:08:31 PM

0 Boost

Some even drive Kias.

CANADIANCOMMENTS - 5/27/2018 6:42:25 PM

+1 Boost

@MD. No doubt it has some solid data. I think the difference will come down to those who are working rich (well-off) in my area and those with real honest to goodness wealth with a fleet of cars and likely more than one residence. An E-Class buyer is very different from an S-Class buyer (all things considered) and would also likely fit in with what I see in my area and what your studies show about car buying habits on the whole.

MDarringer - 5/27/2018 8:28:41 PM

+1 Boost

My point was to suggest that cars like this are more discretionary that necessary...more fun than frugality. Extensive research was done by Lincoln as to how to sell a Continental in a Model S world for example. So the Model S and X have had an impact on how to sell a premium vehicle. I think a Continental EV with styling reminding us of a 1961 and with the suicide doors priced like a Model S would be a hands down success.

MrEE - 5/27/2018 6:57:53 PM

-1 Boost

Top Gear BBC and Motor Week have recent reviews and given good reviews even comparing the Model 3 to BMW 3. Likely the new German brand EVs coming to market will sell poorly compared to Tesla, just like their current EVs and hybrids.

SanJoseDriver - 5/30/2018 3:04:51 AM

-9 Boost

I wouldn't count on it.

senft - 5/28/2018 7:51:40 AM

+3 Boost

Have yet to see my first Model 3 here in the NYC metro area.

SanJoseDriver - 5/30/2018 3:04:17 AM

-9 Boost

I find that shocking, that should be it's 3rd largest US market after the Bay Area and LA.