'Recession-resilient' Tesla misses Q3 expectations, slows Mexico expansion Tesla's Q3 2023 earnings missed Wall Street expectations, sending stocks tumbling after-hours, but hey – we finally have a Cybertruck delivery date. Analysts expected Tesla to report earnings per share of around $0.73 and revenue at $24.1 billion, but the company failed on both counts, earning just $0.66 per share and making $ …
Almost nothing on that truck, or any other,should be made to that accuracy (1/2 mil, where mil = 0.001 inches = 12.5 microns) outside of the bearings, motors (ICE or E) and a few other parts of the drive train. Aside from the fact that sheet metal parts are not even close to that, there's no advantage to manufacturing most of the parts on a vehicle to that tolerance even if you wanted to spend the money. I presently work for a company that makes high-precision laser optics including beam steering that can accurately aim at a golf ball-sized target at 15 miles, and accurately aim at over a thousand of them per second. Very little of our parts need that kind of machining accuracy. But that's because we know how to design stuff, and do what is called a tolerance analysis, so only the parts that it makes a difference are made to high accuracy (in our case, the highest is about a hundred nanometers). Only an idiot would assign a very tight tolerance as the global default.
Funny, but a chip counts as only one part (and that is internal to the PCB its on, which is probably what Tesla considers a "part" recieved from outside) and mechanically it's not very high precision. The fact that it's lithography might be 4nm node is pretty irrelevant to the package tolerancing,
He's an idiot.
Sure you could build a truck with all it's parts made to that precision.. If you didn't mind that each one would take a decade to manufacture with an average scrap-to-use ratio of about 9999:1 for all the sheetmetal, welded or molded parts.
I don't even bother to try to hit that kind of accuracy on machined parts unless it's absolutely required. It's simply not cost effective to scrap parts that would work perfectly well. That's why tolerances exist in the first place, you don't just spec a welded tube frame 3 meters long to the same accuracy as a machine-ground bearing fit 5cm in diameter.
"I wonder how dent resistant the cyber truck panels will be. Anyone with stainless appliances will know how awful dents look as a small dent warps reflections over a noticeably large area."
The fun part is elon said they were going for an exoskeleton design approach so that ding in the back is going to ripple the side.
It's completely crazy to read that Tesla still doesn't seem to have its own financing options and is relying on external providers or even credit card debt. Literally every larger car manufacturer out there has its own bank(s). The Volkswagen Bank has a higher revenue than the car manufacturing branch.
If Elon had any sense, or listened to the people around him (who have no doubt pointed this out) he wouldn't just focus on a stupid online payment service. He would add a proper bank to his empire that handles credits for Tesla car buyers, online payments and much more. This bank would then have hundreds of thousands of customers from day one (Tesla buyers), people who all have to use his "everything app" (when does that one even start to make n appearance?) to manage their credits and might then be inclined to use it for payments, stock trading etc.
The man has zero creativity. There is just always SO much potential that stays behind.
Indeed. I remember reading a few years ago that GMAC (General Motors Acceptance Corp, now re-branded as Ally) was responsible for essentially all of GM's profits over a multi-year timeframe. They broke even on the cars and trucks, and made their money from the loans. From a financial perspective, the only reason they built cars and trucks at all was to generate loans.
It's completely crazy to read that Tesla still doesn't seem to have its own financing options and is relying on external providers or even credit card debt. Literally every larger car manufacturer out there has its own bank(s). The Volkswagen Bank has a higher revenue than the car manufacturing branch.
But running a bank requires capital. The likes of VAG, Mercedes, BMW etc can manage this by borrowing billions from the ECB to buy cars from the manufacturing arms and then rent to suckers. This allows German automakers to keep churning out cars.. Except when there's fewer suckers willing to rent them, interest rates rise and so do production costs. Somehow, I doubt a Telsa bank would meet capital requirements, let alone all the other banking regs.
But also auto manufacturers aren't allowed to buy banks in the US
But.. when is a bank not a bank? I'm thinking back to my experiences with PFI and some large telecomms projects. Plus bank-like entities like GE Capital. Big industrial making capital intensive stuff for customers and sitting on large piles of cash. Why have the customer borrow from a bank and let the bank make money when GE could do it themselves? Ok, so GE arguably diversified too much, but there's a whole range of vendor or 'non-bank' financing options for the right kind of deals. Assuming sharp treasury and finance types who can make sure those deals work. Oops, BT Global.
So kinda curious why US automakers couldn't do this, especially as some already appear to do so, ie Ford & GM finance. Difference I guess is maturity, risk and capital, but looking at the accounts of a lot of the auto business, many seem to be finance houses rather than automakers. They make more financing cars than selling them. Plus the US would be at a disadvantage to the EU, ie when the ECB decided to buy corporate debt, it accumulated billions in bonds from companies like BMW and Mercedes finance. But that's also risky, ie market changes, people can't afford their lease payments, lots of repos appear in the used car market and used car prices crash.
Which I guess would be the problem for Telsa. It's already heavily indebted, it doesn't have large amounts of free cash, it's vehicles and thus lease payments would be high and depreciation/residual values on EVs are lousy.. and interest rates have risen.
Why to borrow from ECB? There are enough banks in Europe.
Because it keeps the German car industry productive. It's one of those odd things. They didn't borrow directly from the ECB, the ECB just bought billions in bonds/debt issued by automakers.. Which perhaps the traditional bond market wouldn't have wanted to buy.
Well, he's exploring new territory at the moment on model longevity, with the ageing Model S (largely unchanged since the prototype of 2009), the Model X eleven years old, and the Model 3 some seven years since unveiling. Most established makers understand the fickleness of buyers, the movement of technology, and the need to start planning the subsequent one before the next one is even launched, and the fact you really need to have complete model change around seven years.
If I were betting who'll be selling cars in 10 years time, I'd choose VW, Mercedes or even JLR over Tesla. I suspect the Tesla badge will live on in some format, but as an integrated car maker, nope. We'll see a fake "merger of equals" with somebody, Musk butt out, EV technology become commoditised, and Tesla will be fondly remembered as a pioneer that never quite made it. Maybe Tesla will end up like Ghia, declining from greatness to eventually becoming no more than a trim level on mass produced cars for pensioners.
Indeed... even the established big ones like Volkswagen might fall to the shear scale of BYD and others. BYD has been doing EV for yonks in China with their multiple Gigafactories and building public transport products like buses. Their passenger vehicle market is new-ish to them, but they have the tech down pat and they can come in at very decent (stock) trim, feature and quality levels. And given their sheer size and production capacity, deliver that product significantly cheaper.
As some EV reviewers asked "Is BYD going to be the Vokswagen (People's Car) of the EV age?"
"Another nail hit squarely on the head. Western car manufacturers are still in the phase of treating EVs as expensive luxury models with all the trim and extras. Few are building "no frills" models for the masses yet."
I've noticed that as well and the upper end of the EV market is tapped out. What's lacking in the US are EV's without all of the faff and only designed to be solid transportation. I can think of a bunch of models from various makers that would make a great EV by just swapping the power plant. At one point I wanted a VW Jetta wagon TDI. It was a good form factor for my needs, no problem to tow a small trailer and 50+mpg. There was a Wolfsburg edition with a 25gal fuel tank. That would be amazing on a really long road trip.
Looks like Volkswagon are going to launch an Ev Beetle/Bug. I wonder if they will remember their roots as the "Peoples Car" and do a no frills mass market versions? From that link, it looks unlikely. They seem to be aiming at the "fun, sporty" market with high power motor(s), fast acceleration and only two seats in that announcement.
"Tesla will be fondly remembered as a pioneer that never quite made it."
Yeah, I think you pretty much nailed it with that comment. Tesla will get deserved credit for kickstarting the EV market where the incumbents were dragging their heels, but they've been surpassed by the incumbents due to real and actual capital and decades of experience in how to build cars and selling better, cheaper cars.
Most Tesla buyers are fairly well off - upper middle class at least. The interest rate is not going to be an obstacle for someone who wants to buy one.
He's just making excuses because deep down he knows HE is specifically the reason for Tesla's problems. Since he's made it clear recently who he really is, it turns out he's not someone that many of the 'coastal elite liberals' who care about the environment that have been Tesla's primary customer base want to give their money to.
The MAGA crowd that loves him now doesn't believe in global warming and doesn't have any affinity for EVs. Many are actively against the idea and will say in surveys that will "never" consider an EV.
"Most Tesla buyers are fairly well off - upper middle class at least. The interest rate is not going to be an obstacle for someone who wants to buy one."
True for the S, not true for the Model 3, and that raises another problem Tesla have - they've not really sorted out the sort of common platforms and multiple brands that say VW have, they've not built alliances with other makers to share development costs, and despite strong growth I suspect car buyers will soon tire of the over-similarly looking S, 3 and X, and the origami truck isn't going to make up for that. Mercedes Benz have a similar scale in sales and have about eight current models and another 5 in or near launch. If Musk thinks that the 3 will keep on appealing to the masses when they're common as muck, and as established makers bring EV products to market, he's in for a surprise. Buyers are far more fickle than Tesla can rely on - Tesla have enjoyed near enough first mover advantage in the competent EV niche for a good few years, but that lack of competition is ending, and selling branding irons, toy cars and blankets isn't going to make up for that.
Musk thought building cars was easy, so did it his way. He's since found out the hard way stuff that the established car markers have known for decades, like that production and logistics is difficult and important, like that good build quality is difficult and important, that aftermarket logistics and service are difficult and important. He's yet to find that model renewal is difficult and important, and that having a broad range that keeps costs down without cannibalising sales is difficult and important.
None of this matters for current "buyers" as they're all doing a 3-4 year lease. But when the lease ends, and there's competing products that are every bit as capable, will they want another look-alike Tesla?
I have a split opinion on this. I'm pondering whether we're actually heading for a world where people stop caring as much about cars as to-be-owned. ICE vehicles have a certain visceral quality to them that appeal to out primal/mechanical natures. EV's are much more "civilised", quieter and less ostentatious. Does that mean people are less likely to want to own and just fall back to their pure functional uitlity and change to a pat-per-use model, i.e. ZipCar, e-hauling, weekend rental or Robotaxis?
Has anyone seen stats on how many first-mover Tesla buyers became second buyers, i.e. did those first generation buyers replace their cars with a newer version of the same? Did they upgrade/crossgrade/downgrade to a newer/different, also Tesla, model? What happened/is happening to Teslas in the aftersales market? Is there demand or has Tesla ended up in the Apple space, i.e. it's an aspirational/brand product and everyone who wants one, now already had one. And other people aren't interested in secondhand/hand-me-down ones, because secondhand doesn't have the same cache?
Software updates will only get you so far when, after a few years, iffy build quality results in rattles, shakes and leaks.
I think younger people tend to view cars as a utility, and don't care as much about impressing people with their car's looks or brand name as older generations did when they were younger. I have friends who have a couple teenagers, and they handed down their minivans to both of them rather than selling them and buying them another car. This wasn't something they forced on their teens, it was THEIR suggestion - they said they knew those cars were reliable while buying something else might not be. When I was a teenager I would have rather walked to school uphill in a blizzard both ways every day than to be seen driving a fucking minivan there!
I mentioned that to their son and he laughed and said if you go to the high school's parking lot you'd see a lot of minivans there. He said no one cares what kind of car you drive. I suppose it makes sense - cars used to be a very important part of a younger person's identity because they were necessary for a social life. They represented freedom to get away from your parents and become an individual. Teen culture was centered on it, with things like drive in movies, and even when those were mostly gone by the time I was a teen you still needed a car to get to whatever party was going on or to meet your friends for a movie. You didn't want to be the person who always needed a ride, and becoming one of the people who picked them up instead of needing a ride was an increase in social status.
Now a teen's social life is centered around their phone, and the importance of driving the "right" car has been replaced with owning the "right" phone. When I was a teen everyone had their "dream car" they planned to get when they were older and could afford it (though life gets in the way for most and your wife wouldn't let you buy it even when you could afford it and it wasn't practical with kids) If my friend's kids (and apparently the others who go to their school) are typical, I doubt very many teens have car posters in their bedroom these days like we all had when I was 17. They aren't dreaming about getting a Corvette, a Mustang, or a Tesla with the "Plaid" option. A car is just a necessary thing to have to get you from point A to point B, but what brand it is or what it looks like appears to have little importance to them.
"When I was a teenager I would have rather walked to school uphill in a blizzard both ways every day than to be seen driving a fucking minivan there!"
I had a hand-me-down VW bus. I could load my friends, surfboards, skis (yes, the same day) and have fun. I could take it on a camping trip. There was also plenty of room for other "activities". My entire drum kit and some of the PA would fit inside. If I took the front wheel off, I could take my Bultaco out for a day of riding trials. A small van that doesn't hoover up gobs of fuel to go anywhere can be a great deal.
I don't really understand why minivans aren't more popular. In high school I'd sometimes get to drive my mother's minivan, a Toyota. It was absolutely great, I could haul stuff and people. In college I had my own, a Ford Aerostar. It was a party van, a hauler, good for sleeping on long trips - the back seat would fold down into a bed, and I could even fit my Honda Silverwing inside, didn't even have to take a wheel off.
But you just don't see them much any more, it's all SUVs now. I'd love to have a reasonably fast electric minivan.
Lots of "RC" Cybertrucks are out and about and they're not looking good. The original retro sci-fi polygon lines are starting to look more like "garage project." They also have major rework on them, which makes me think this is a Musky public relations stunt using old prototypes.
If people are still asking pesky questions after the CyberTruck announcement, Twitler will just mouth off on Twitter and get everyone talking about that instead of how he is failing as an executive. Even with turning a blind eye to racists, sexual assaults, endangering people's lives by making them work during a pandemic, doing everything possible to cheat workers out of proper healthcare when injured, making them work ridiculous hours, and all the other things Tesla does to try to boost productivity, it's still not enough. I'm also guessing most of the profits are from selling carbon offsets, not cars.
Side note: Had to take a lyft ride the other day, and happened to be in a Tesla. I always thought there was at least some small driver's side dash display, even if the main focus was obviously the fondleslab in the middle, but apparently not this model. Just one giant air vent. Everything from telling you what gear you're in, to how fast you're going, to which turn signal is active... all of it is on the central fondleslab. I do not know how they managed to get away with that from a safety perspective. At least if you're looking down at a dash display you still have some peripheral vision watching the road and alerting you to anything that may need your attention. It also doesn't make you prone to turning the wheel along with your head. Admittedly there were a couple interesting ideas, like how when driving down a residential street it'd sort of indicate how close you were to parked cars on the side of the road, but still seems ridiculously dangerous to have all that crucial driver data on the central fondleslab. Oh, and the fact that to open the rear doors from the inside is an electronic lock, instead of a mechanical lever, just seems like a great way to get people trapped in their cars if they run out of power. Didn't see if it applies to the font seats. I'd already ruled out ever buying a Tesla, but now I have several additional reasons not to ever buy one. I'm hoping Toyota's solid state battery tech is even half as good as they claim. It would make for a big improvement over what's on offer today.
all of it is on the central fondleslab
Oddly enough, the original Mini - Issigonis' real one, not the BMW pastiche - had the instrument cluster in the centre of the dash. I think the reasons were to do with simplifying left hand drive versions... but the performance models put the dials where they should be.
Personally, I think the idea of the touch screen might go down well with those who live on their phones, but it strikes me as an ergonomic disaster. (Mind you, I complain about a car radio which has two buttons to the left of the channel select, indistinguishable by touch and bloody annoying when you hit one by mistake).
I haven't had a chance to look it up myself, but I have seen comments that the region being talked about in Mexico for a new Tesla facility doesn't have good access to water. If it's a struggle to supply the people that are there now, what will it be like if several thousand more people move there along with a large factory? That's not even considering Tesla's Chinese suppliers that are also looking to locate nearby.
Imagine a situation where a company needs to be profitable but doesn't need to meet targets imposed by financial analyists. A company that's free to invest as much as that profit as they need in, say, product development rather than, say, paying it out to banks and other parasites.
This is acutally how a lot of smaller busniesses work but being small they tend to slip under the radar. Typically as they grow the owners cash out by going public or being bought out and so taken over. But then one slips through the net. The resulting distortion of financial structure has a devastating effect on the competition since the latter are hobbled by those financial targets -- they have to meet them no matter what or suffer devastating consequences for their stock prices. They get forced into business decisions that make sense to Wall Street but could well have a bad effect on the long term health of their business.
This is no joke because financial engineering is at the heart of all public corporations. The actual business takes a back seat to manipulating money. The result is hugely inefficient because a continually increasing proportion of productive effort goes towards feeding parasites. While there's a de-facto monopoly, maybe a quietly managed cartel involving just a handful of players to give the appearance of competition, all is stable. But if anyone disrupts this then they either have to be absorbed into the system or taken down. If the competition is overseas where our financial reach can't deal with it then we use state power to try to fix the issue -- we're a great fan of the "Rules Based World Order" since we make the rules!
Most of Tesla's production is overseas. We can play all we want with stock prices and shorting but I don't think its going to affect the business in the long term. It just illustrated that taking Wall Street's money is a death sentence for any business.
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