If Tesla Investor Day was about exciting investors then boy did it fail

Yesterday's four-hour Tesla PR marathon, rather than exciting investors as it was supposed to, ended up a snoozefest. For an indicator of how poorly it went, just look at Tesla's stock prices after the market closed. It started falling as Musk and company took to the stage and hasn't really looked back – TSLA dropped nearly 8 …

[Anonymous Coward]

4/5 of Tesla owners I know bought them because they were cost effective, and actually available to buy. The cars are "good enough"

(1 is a true believer, and if Elon released a Reliant Robin, he'd buy it).

Making sure you have control of your lithium and other critical materials supply, and re-engineering the underlying parts for lower cost, less critical materials, and faster, simpler manufacturing, is likely what it takes to remain cost-competitive and available to buy. Successfully bringing factories into full mass production quickly is also remarkable.

Personally, if I were an investor, a lack of froth would be a very good thing.

[Anonymous Coward]

RE: re-engineering the underlying parts for lower cost

I s all very well and good but those mega castings are making repairability a thing of the past. Have a small prang and your Tesla Mobile will be written off. This leads to giant increases in insurance premiums for ALL of us.

Tesla has signaled this for years by refusing to sell spares even to owners.

Buy a Lord Elon' 'The Magnificent' Mobile at your peril. Personally, I would not buy a Tesla even if I won the lottery which I don't play.

As for the 'Investor Day'... The Cult members were all worked up about a Model 2 and much more... Then nothing happened. They are not pleased with their 'Dear Leader'.

[Anonymous Coward]

Re: RE: re-engineering the underlying parts for lower cost

Repairability of Teslas is not good, and not just because cast alumin(i)um is a swine to repair. There's also this insistence that it's all bought new from Tesla instead of recycling parts of other Teslas that have been for instance, in an accident. That pretty much pulls the rug from underneath any sustainability of 'good for the planet" claims they are so happy to spout.

Add to that increasing competition in the car market as well as the HGV market where they tried to have a play despite apparently not employing anyone with common sense or at least some HGV driving experience and I'm not surprised reception was at best lukewarm, also because the cyber truck is, well, the less is said about that the better.

If we then also take into account that FSD was overpromised and then underdelivered to the point of causing enough accident/incidents to spark multiple investigations and I'm amazed the stock only dipped so much. There is no longer any real oomph behind the company.

[IGotOut]

Re: RE: re-engineering the underlying parts for lower cost

"not just because cast alumin(i)um is a swine to repair."

It's no different to die cast or pressed. You smack it and weld it. Laser welding is an option on machined surfaces

I know, we do it day in day out. Hundreds of parts a week.

Cast Iron, now that's a bitch.

[Anonymous Coward]

Re: RE: re-engineering the underlying parts for lower cost

". You smack it and weld it. "

You can't. Or, specifially, it's not allowed to fix cast aluminum parts in body or suspension even if you could, in cars.

You aren't allowed to weld suspension parts even if they're steel and trivial to weld. At least by EU regulations, no idea what it is in US.

Which means you either replace it or scrap whole car. Naturally, the 'explanation' is 'safety'. As usual.

[Anonymous Coward]

Re: RE: re-engineering the underlying parts for lower cost

The last 3 rear-endings I had resulted in the cars being written off. I could have easily fixed two of them myself, but a crinkle in the floor pan is now deemed to have weakened it fatally, and the insurers wrote it off.

So not sure if a Tesla is any worse than a Suzuki these days. We might be just be pretending to live in a past where you fixed things.

[IGotOut]

Re: RE: re-engineering the underlying parts for lower cost

The issue is actually there are very few body shops left, the majority are just panel swappers and paint shops

An insurance company tried to write off a car because the dink in the rear meant a replacement rear window wouldn't fit. They said it was to expensive to replace glass, boot and get a respray. We argued it was crazy and they eventually found a proper body shop that took out the dink, dropped in the glass, and touched up the paint.

£2000 saved.

That's one example why insurance is so expensive.

I bought a couple of cars back from the insurance before and had them back up and running in a few hours.

[Anonymous Coward]

Re: RE: re-engineering the underlying parts for lower cost

I was in a multi vehicle collision and the insurance company told me I was 25% responsible for it (so I'd have to pay 25% of my car's repair cost)

I chose to instead receive the budgeted value (75% of it, minus VAT) and send the car to an independent body shop - it ended costing about half of the original budget, so in the end I even made some money!

[Dabooka]

Re: RE: re-engineering the underlying parts for lower cost

This.

I don't know enough about Tesla components but the comparisons need to remain on point to hold validity. Most moderns are written off for all sorts of things, I guess it's just breakers are able to salvage and reuse parts (depending ion the category of write off of course, at least in the UK) which for whatever reason Tesla can't / won't allow.

The fact is cars are less likely to be killed by rust nowadays than a component failure. It's an issue for all manufacturers going back a number of years although it certainly appears Tesla is worse.

I'm struggling to get one of mine back on the road because of a bloody fuel pump off all things.

[Anonymous Coward]

re: (1 is a true believer, and if Elon released a Reliant Robin, he'd buy it).

1 is also OP judging by the amount of shine you're trying to get on that particular turd.

[Anonymous Coward]

Re: re: (1 is a true believer, and if Elon released a Reliant Robin, he'd buy it).

Nope, wouldn't touch one with a 10' barge pole myself, as I regard them as being just about as far from what I require in a car as you can get,

But many of the competitors are now infested with the same issues: Customer hostility, impractical design, clunky to use touchscreen and button controls.

I was driving a Hyundai electric this week, and while the electric car drive train platform itself was absolutely superb, the controls, steering , touchscreen UI, beeping, cabin design, back hatch design i.e. everything about the usability, was completely crap.

[Andy 73]

Musk's great promises falling flat

It's been his party trick from day one - promise a world changing mission that people can invest in, emotionally and financially - then build something far less world changing than the grand claims implied.

Solar panels imported from China, a niche premium car brand, robots that are frankly embarrassing and a city on Mars that doesn't survive a moment's serious analysis.

Even if you believe he's serious about those goals, the failure to translate an early lead in car manufacture to a range of cars (Tesla essentially has one model that it sells in any numbers, the 3/Y), the failure to reduce the high cost, the steady erosion of the lofty margins, the disaster that is FSD (we're on version 4 of the hardware) and the rapid improvements from the 'dinosaur' mainstream manufacturers all mean that the run road for Tesla is a lot shorter than it was five years ago.

Good job he's not focussed on a half-baked social media platform when he's got so much to do...

[Anonymous Coward]

Re: Musk's great promises falling flat

In many ways like Clive Sinclair on steroids. Tesla personal transporter anyone?

[Roland6]

Re: Musk's great promises falling flat

Did Tesla announce a C5 ?

[NoneSuch]

Re: Musk's great promises falling flat

"Did Tesla announce a C5 ?"

That's the issue. The promise a lot and deliver very little.

[Blank Reg]

Re: Musk's great promises falling flat

Even what they do deliver is poorly designed and poorly built. The big boys will take over his market in no time with better built vehicles with wide variety of price points, features and designs

[Anonymous Coward]

Re: Musk's great promises falling flat

They already are, although I had to laugh at the idea of a Hummer EV because the people who tried it discovered that the US is a tad short of chargers that can heave the required amount of power into a cable. It's not good news if your charger essentially advises you to come back tomorrow :).

Somehow people forget that physics still apply, also to EVs..

[Anonymous Coward]

Re: Musk's great promises falling flat

isn't the Hummer big enough to have its own nuclear power plant?

[Anonymous Coward]

Re: Musk's great promises falling flat

No, but apparently it needs it.

:)

[Anonymous Coward]

Re: Musk's great promises falling flat

"The big boys will take over his market in no time with better built vehicles with wide variety of price points, features and designs"

Yea, right. As if they had any better built vehicles, especially in USA. Cheap bulk is what they make and then sell it at 'variety of price points', as you say.

"Wide variety" is possible, *upwards*: Tesla is made as cheaply as you can make an electric car and they've a factory optimized for it. You could press the price down with bulk production, but hasn't happened in USA yet: There's profit to be made, so why bother.

"Features and designs" by a commitee won't cut the cake in new markets, not a chance. See US cars in mid-70s: That's the *best* "big boys" can achieve and that's not much. I do agree that Tesla isn't high quality by any means but it's on par with all the other US cars, so that won't be an advantage to others.

Also, there's the problem that anything interesting is designed in EU/Japan/Korea. Still very, very expensive.

[simonlb]

Re: Musk's great promises falling flat

Monorail Hyperloop anyone?

[Anonymous Coward]

you're all idiots

This is so bad. You people have no context to be making the apocalyptic claims you're making. Tesla is the most profitable company in the manufacturing world by far. "ever eroding margins" is not a concern when your "competition" struggles to even reach double digits. There were early issues with getting parts, but now there are independent repair shops. If a traditional car is damaged to the extend that it would comparably compromise the one piece casting on m3/y it would also be written off. takes surprisingly little structural damage to get the insurance company to write vehicles off. what a ridiculous point to make. nobody would repair such significant damage.

idk why you think elon pissed into your cereal or whatever that you must drag tesla down. maybe you're all jealous lotus engineers left little england to make tesla cool in california?

recently tesla model y was torn down by none other than toyota and they remarked it was a "work of art" ... but what do they know about cars? better consult the crab apples on register's comment section.

[Roland6]

Re: you're all idiots

New and successful companies tend to have a better profitability and margin until they become established and come off the rapid growth curve.

[NoneSuch]

Re: you're all idiots

"Tesla is the most profitable company in the manufacturing world by far."

Profits drive share price and theirs just dropped 8 percent IN A DAY.

[Anonymous Coward]

Re: you're all idiots

No they don't.

Share price growth drives share price growth.

There is a fair bit of research on the topic of share price, and for companies that don't pay dividends, there is quite weak correlation with profit.

This is unsurprising as you buy a non-dividend stock only so you can sell it for more later. It is only the perception of the probability that the share price will rise, i.e. that the company will become more valuable, that makes you do that.

While a company can become more valuable by making (and retaining) a profit, this is generally at a far slower growth rate than the share price makes, and thus doesn't correlate strongly.

[Anonymous Coward]

Re: you're all idiots

" for companies that don't pay dividends, there is quite weak correlation with profit."

For obvious reasons too. Profits and dividends are taxed, pumping share price with same money is not taxed at all.

" It is only the perception of the probability that the share price will rise, i.e. that the company will become more valuable, that makes you do that."

Technically true, but when company uses potential profit to buy stock back, showing no profit in books, probability of share price going up is ~1. And fast.

Untaxed income, what is there not to like.

[Throatwarbler Mangrove]

Re: you're all idiots

1. What do you mean, "you people"? </snark>

2. Visualize using proper spelling and punctuation; doing so will improve your credibility.

3. Last but not least, Tesla has been having ongoing reliability issues, although they apparently are ahead of the EV pack in this regard, with most brands of EVs also having battery pack issues.

Don't get me wrong, I think Tesla single-handedly made EVs popular in the US, building a cachet brand around the concept like Apple around early personal computers, and no one can take that away from them. Just like Apple, however, Tesla has made significant missteps and is not helped out by the hubris of the CEO. Jobs eventually found a modicum of humility; perhaps Musk will as well.

Flame icon because, you know, battery packs.

[Anonymous Coward]

Re: you're all idiots

Elon, is that you?

[BartyFartFast]

Re: you're all idiots

*sniffs*

That's a very Musky Eau de Colon, I bet I can guess how you got it.

[Charlie Clark]

Re: you're all idiots

Nobody is making apocalyptic claims. To see justification in Tesla's share price falling and its P/E ratio normalising is hardly unwanted savagery.

Falling margins are indicative of a maturing market and greater competition. And the competition is getter stronger, not least in Tesla's biggest market: China. BYD et al. have some great technology that they developed themselves and massive scale. Outside China, EVs from other manufacturers are becoming more common and can make use of existing dealer networks, something that Tesla is having to do. The idea is that he could use investor day to announce some significant new developments. He failed to do this and the share price fell, though no one should read too much into that, either.

[Anonymous Coward]

Re: you're all idiots

I think you can summarise this as Tesla losing its first mover advantage.

Now, in general companies will make mistakes, Tesla is no exception. However, it depends on the leadership if lessons are learned and Musk makes it very hard to assume that Tesla does.

Hubris only gets you so far..

[bananape4l]

Re: you're all idiots

the only hubris was speculator value. you're watching this unwind. it is bumpy up and down. tesla's business is sound and they aren't missing any beats. the price cuts were all normalizing from the price hike of the pandemic. don't cry for them. i am not. they are strong. nobody else is expanding in this way. please let's cheer north america's premier manufacturer rather than denigrate it. it's difficult enough building massive capital goods in first world countries, i.e. without relying on china/mexico that this should be lauded rather than sitting here and fretting about the arguably ridiculous one man show marketing strategy. that's all i'm trying to convey.

carry on. i do like you all otherwise.

[Anonymous Coward]

Re: you're all idiots

no these takes are all wrong. the stock is propped up by speculation, that's why there's random swings in value. other than the hype, the other reason it got so overvalued in the first place was because it sucked all the air out of the manufacturing space because it is the only large scale manufacturer with double digit margins. even luxury price mercedes can't break 10 percent let alone 25 percent. remember, tesla is the one building new factories, a big capital expense that its competition by and large doesn't have to match. can you show me another manufacturer that is expanding output like this and also claiming 20%+ margins? i'll wait ... forever.

[Strahd Ivarius]

Re: you're all idiots

"work of art"...

according to modernists, a banana stuck on a wall is a "work of art".

[Anonymous Coward]

Re: you're all idiots

*Rotten* banana, to be exact.

[Anonymous Coward]

Re: you're all idiots

recently tesla model y was torn down by none other than toyota and they remarked it was a "work of art" ... but what do they know about cars?

You do realise they did that in order to compete, no? And, as you have indicated yourself, they're very good at making cars - in VERY large volumes - and they DO learn.

Again, NOT good for Tesla's long term prospects.

[Anonymous Coward]

Re: you're all idiots

I suspect it's behind a paywall, but this article could be helpful to you:

https://www.nytimes.com/2023/03/04/opinion/ford-tesla-bluecruise-self-driving-remote-work.html.

A couple of quotes (I hope NYT doesn't mind):

"Ford also tends to make good on its promises, an area that’s become increasingly fraught for Tesla. Ford said it would offer a hands-free driver assist system, and now it does, with BlueCruise; you can take your hands off the steering wheel when it is engaged on premapped sections of highway. Tesla’s Full Self-Driving system is not hands-free in any situation, despite its name, and Tesla charges customers $15,000 for the feature on the promise that someday it will make the huge leap to full autonomous driving.

If you want to pay $15,000 for a feature that’s currently subject to a National Highway Traffic Safety Administration recall whose filing is titled “Full Self-Driving Software May Cause Crash,” don’t let me stop you, but a Tesla engineer also recently testified that a company video purporting to show the system in flawless action was faked. This makes sense, given all the other very real videos of Full Self-Driving doing things like steering into oncoming traffic or braking to a complete stop on a busy street for no reason. Tesla’s own website warns, “The currently enabled features require a fully attentive driver, who has their hands on the wheel and is prepared to take over at any moment.” So, full self-driving, except for that."

"Maybe predictability isn’t trendy, but if you buy a new car you’d probably like to think that its manufacturer won’t cut the price by $13,000 the next week, thus destroying your car’s resale value. And you might hope that features you pay for work on the day you pay for them, and not at some unspecified future date. Maybe you want a car from a company whose C.E.O. isn’t indelibly associated with the product."

As I have said before, Tesla had first mover advantage. Musk squandered that, and even more so now he's wasting time at Twitter to basically try to save his ego, as that appears more important to him than the companies that need him, even if just for investor and client confidence. I cannot call that "genius" in any way, shape or form.

It's business, not religion.

[Anonymous Coward]

Re: you're all idiots

"Tesla is the most profitable company in the manufacturing world by far"

Really? ... Let us see: "Operating profit, 2022: $12B ... which is not bad, but then the reality: GM $156B, VAG 22B € and PSA 15B €.

Percentages are irrelevant when your company is pea sized.

[Steve Hersey]

Ooh, yet another Very Bad Idea.

"Tesla owners would be able to add their cars to a shared Tesla fleet that would allow them to be used as self-driving taxis when not in use."

So I can have persons unknown put ciggy burns and unmentionable stains on my expensive car seats while exposing my vehicle to additional road hazards and buggy FSD software? What a concept. And if the FSD decides to prang it, whose auto insurance rates will go up? Oh, wait, my insurance won't cover driving-for-hire at all, and Tesla won't pay either.

[Steve Davies 3]

Re: allow them to be used as self-driving taxis when not in use

Don't forget the public liability insurance... (if you can get it that is)

Don't forget that the TaxMan will want a significant part of that income

Never mind, the Cultists will love it and that will be enough for the Emperor who seemed short of some new clothes this week

[Colin Bain]

Re: Ooh, yet another Very Bad Idea.

Tesla driver I have observed are very similar to BMW drivers. Road hogging, road weaving and selfish. I can hardly see these folks allowing their status symbols being used by anyone else, including their won family members!

In terms of profitabilty, share price is not directly related to actual profitability. Share are a rich mans lottery and subject to other influences than strictly business and accounting. Operating profits may be somewhat favourable, however that does not take into account previous investment. If Tesla was to close tomorrow, paying off debts, would likely leave a massive loss, although we don't exactly know since as has been pointed out, Tesla is a private company.

Indeed most of the larger tech companies are in a similar position. Wind up Amazon and there would be little left. Its a rich mans world since all these business activities are engines to provide a flow of cash which they owners cream off the top, leaving little behind and contributing even less to the quality of life of their workers.

[Anonymous Coward]

Full Self Delusion

Get yours today!

Stocks are limited.

Investors are lining up.

Don’t miss out.

Etc.

[Anonymous Coward]

So much criticism for a company literally trying to save civilisation!

[Anonymous Coward]

I am not entirely sure if losing Musk to a one way Mars trip would not be more beneficial for mankind.

Especially when accompanied by other heroes of the 21st century such as Trump, Murdoch..

[Anonymous Coward]

"So much criticism for a company literally trying to save civilisation!"

If you actually believe that, you've no idea about anything. Electric cars are an environmental disaster and won't save the civilization. At least in their current form.

Not only they cause emissions of 2 ordinary cars at manufacturing phase, but the electricity they use, is generated with (mostly) coal, thus total emissions are *higher* than diesel or petrol-engined cars. Fuel just *appears* like that, you don't need to *make* it first.

Making electricity, in large scale, is messy job and transfer/conversion losses are typically several percentages, at every phase. Coal -> steam ~20% loss, turbine 5%,transfer electricity from 5% to 30%, depending on the distance. Battery charge/discharge another 10% and motor/wheels 10%. Total ~50%. That's not much.

Coal -> heat -> steam -> rotating turbine -> electricity -> transfer electricity -> charge battery -> discharge battery -> rotating motor -> rotating wheels.

Burning coal, surprisingly, produces *a lot* of CO2. Funny thing is that every electric car lifetime emission calculation assumes that electricity is a) free and b) comes from the wall socket.

Here in Europe power company was asking 60 euro cents/kWh in January, as 3 month average (VAT+transfer included). 12e/100km *just* for fuel, ~6l of gas, with EU taxes. Not difficult to achieve with a modern petrol car, easy with diesel. With half of the price of the car.

But even if you assume zero emissions from electricity generation, you can drive ~10 years before difference at manufacturing phase is compensated.

Lifetime emissions *are* important to cut through BS around electric cars.