[Steverino]

The auto industry admires Tesla, envies Tesla, and ultimately wants Tesla to succeed. But the Model 3 proves that something the wider industry always suspected is true: Elon Musk is the greatest car salesman who has ever lived — but Tesla is currently one of the least capable automakers on Earth.



Tesla is spending as much as General Motors every quarter — about $1 billion — to produce and sell a fraction of the vehicles that GM does. GM is also turning that invested capital into steady profits, while Tesla in the third-quarter of 2017 posted the biggest loss in its history. GM has a $25-billion war chest. Tesla only has enough cash to operate through 2018.



http://www.businessinsider.com/tesla-model-3-problems-threaten-company-future-musks-job-2018-1

 

[scottf200]

Yes, that seems like a perfectly reasonable and sound comparison. Both businesses are at the exact same lifecycle in their growth. As well it's the same type of vehicle and infrastructure needed to support it. /s

 

[scottf200]

And, of course, Tesla only makes cars /s

**** Utility and large business level powerpacks ****

**** Home level powerwalls ****

 

[DonC]

Elon Musk is the greatest car salesman who has ever lived — but Tesla is currently one of the least capable automakers on Earth.

I think he sells stock, not cars or any other product.

And, of course, Tesla only makes cars

Are you suggesting that Tesla can lose tons of money selling things other than cars?

I actually priced out a couple of home battery systems. Tesla did have a nice looking unit (not the best but second best) and the best price, but not by the amount you're suggesting. IIRC there was an install cost for the Tesla system and the install for the LG Chem system was lower.

 

[bro1999]

And, of course, Tesla only makes cars /s

**** Utility and large business level powerpacks ****

**** Home level powerwalls ****

How's the profit on those non-auto lines of business

 

[Volterado]

...a fraction of...

"a fraction of" is quite the understatement. GM sold ~10 MILLION vehicles. Tesla sold ~0.1 MILLION, or 1/100th!

 

[Steverino]

From the article:

To make matters worse, Tesla is striving and failing to build a pretty simple vehicle. The Model 3 is basically an electric Honda Accord. And Honda without noticeable effort builds and sells over 100,000 of those every single month in the US alone.



Of course, the game plan from Musk's perspective with the Model 3 is to pioneer a third revolution in auto manufacturing. Henry Ford created the first, with the mass-production assembly line. Toyota delivered the second, with its widely imitated, quality-obsessed production system in the 1970s and 1980s.



Musk's dream is to massively automate the Model 3 assembly and take advantage of the simpler engineering requirements of electric vehicles. It's a noble dream. Tesla should continue to pursue it. But at this point Musk is asking all those Model 3 reservation holders to patiently await Tesla's ability to reinvent manufacturing — they've become unwitting participants in a science project.

I'm not sure if the reservation holders are "unwitting". I think many are willing to wait years. I have seen a number basically say as much.

For several years, Tesla has said that it would deliver 500,000 vehicles in 2018 and a million by 2020. Assuming that the company can repeat it 100,000 Model S and Model X totals in 2018, to hit the half-million mark would require 400,000 Model 3s, an impossibility at this juncture.

Others may argue that Tesla will surprise everyone and it will produce 400,000 Model 3's in 2018. That would require producing 7700 per week starting this week. But Tesla also pushed back its production plans for the Model 3 and is now saying a 5,000-unit weekly run-rate won't be achieved until July of 2018. Of course, Tesla has never been reliable in it's production forecasts, so who knows?

 

[PrivatePilot]

Tesla only has enough cash to operate through 2018.

I'm still amazed that people keep ignoring this fact.

 

[scottf200]

Others may argue that Tesla will surprise everyone and it will produce 400,000 Model 3's in 2018. That would require producing 7700 per week starting this week. But Tesla also pushed back its production plans for the Model 3 and is now saying a 5,000-unit weekly run-rate won't be achieved until July of 2018. Of course, Tesla has never been reliable in it's production forecasts, so who knows?

How do you think Tesla sales of the Model 3 will be compared to the Bolt? The difference is people are clamoring for the Model 3.

What if Tesla only does 200K or 300K while the Bolt sells 20K or 30K (with LEAF2 and TM3 out). Is that still a fail?

What if Tesla is 6 or 9 or 12 months off their projects but are proven to be ramping up and get there in that time? I am driving at **6** year old Volt and GM has failed to ramp up to a major electric car sales in 72 *months*. Is that a fail?

The X and S were known to be high end limited sales. The 'master plan' subsequent Model 3 is supposed to be for the masses. https://www.tesla.com/blog/master-plan-part-deux

This is all very amusing how it gets framed and what goal post are used to describe failures.

Yes, Tesla's Powerwall and Powerpacks are a large part of the company ... so they are bigger than the electric car but that seems too obvious on how it all fits together and people love to ignore that

 

[PrivatePilot]

The difference is people are clamoring for the Model 3.

In lots of areas of north america people are falling over themselves for the Bolt as well. The difference is that GM, in their apparent infinite stupidity this last summer, was happy to stockpile cars in places where they weren't moving, whilst starving areas where they are in such hot demand that people were waiting MONTHS to even get anything that showed up on the lot.

To this day, send a Bolt to pretty much anywhere in Canada and it won't survive but a few days on the lot. Most are sold before they even get there. People at local dealerships are still waiting between 4 to 6 months if they want anything custom.

People in Quebec (where EV penetration is very high) can't wait to get their hands on them.

But alas, for some reason, GM still wants to stockpile them in lots in California instead of shipping them to places with high demand.

Now, it seems they've pretty much achieved their 30,000/year target and are looking to ramp up production.

 

[scottf200]

... But alas, for some reason, GM still wants to stockpile them in lots in California instead of shipping them to places with high demand.

hmm ... yes for some reason ... certainly they knew what they were doing. In the USA there are advantages for selling in certain states

Now, it seems they've pretty much achieved their 30,000/year target and are looking to ramp up production.

It will be interesting to see all the numbers when competition is out (LEAF2 and TM3) as well as now that we know the USA EV tax credit will continue into 2018 (vs bigger 4Q sales in the USA when there was a question of it going away).

2018 is going to be a great year for EVs in general for all manufacturers and that is what we all want.

 

[DonC]

How do you think Tesla sales of the Model 3 will be compared to the Bolt? The difference is people are clamoring for the Model 3.

What if Tesla only does 200K or 300K while the Bolt sells 20K or 30K (with LEAF2 and TM3 out). Is that still a fail?

I can see your point here but the issue is whether Tesla can sell the Model 3 and stay in business. Last quarter Tesla lost something like $28K on every vehicle is delivered. If GM took even $20K off the price of the Bolt how many do you think it could sell? That's not to say the Model 3 costs a lot more than the Bolt EV to build. It won't. But the models Tesla will be selling won't be $35K with a $7500 tax credit. And how many of those "clamoring" for what has been marketed as a smaller version of a Model S for $35K will still be clamoring when they see what they get for $50K. This isn't a problem for Tesla alone. For GM and Tesla and every other auto manufacturer the problem is that BEVs are too expensive given the alternatives.

So to answer your question: I don't think Tesla will sell 200K or 300K Model 3s a year, both because it won't be able to make that many and because the demand won't be there. Demand for the Model S and Model X is not exactly going through the roof. These models, especially the Model S, had a nice run, but Tesla is looking at steady or even declining demand. How many small sedans for $50K do all manufacturers combined sell in the US? (The US is the relevant market because Tesla's business in Europe is "Meh" and in China it's downright lousy).

A journalist for the WSJ and NYTimes once remarked that, for technology companies, "it seems that it's the true believers who sometimes don't get something very basic -- addition and subtraction".

 

[DonC]

To this day, send a Bolt to pretty much anywhere in Canada and it won't survive but a few days on the lot. Most are sold before they even get there. People at local dealerships are still waiting between 4 to 6 months if they want anything custom.

People in Quebec (where EV penetration is very high) can't wait to get their hands on them.

Generally speaking, Canadians are more practical than Americans. The Bolt EV is a very practical vehicle; the Model 3 is a Veblen vehicle. That would make a difference.

As for getting Canada more allocation, that's easy: REQUIRE ZEV CREDITS.

 

[PrivatePilot]

As for getting Canada more allocation, that's easy: REQUIRE ZEV CREDITS.

Don't think there's anything that incentivizes manufacturers at this point, but here in Ontario a full (New, not used) BEV or PHEV with a big enough battery (Volt sized or larger, basically) gets a $14,000 rebate back from the provincial government. They'll also pay for 50% of the cost of a qualifying EVSE and installation up to $1500 or something like that.

So, the government incentives are there, no question, it's just stock that's a problem. I have a big discussion at a different non EV forum that's ballooned to about 100 pages (2000 replies, and 60,000 views) where I documented my EV adventure from the initial musing, through our first Volt purchase, and to current day with 2 of them.

By my last count about 6 others in the thread have since jumped on the EV bandwagon and bought their own because of the discussion, and seeing the real facts vs the usual media/facebook rhetoric.

That said, actually FINDING cars has been a challenge. One guy stumbled across a Bolt that I think he said was only available because the deal with the initial seller fell through. Another few bought used Volts like I did. One fellow wanted an EGolf but was told it was a months long wait, so he bought a Kia EV instead and seems to be loving it.

But actually FINDING them up here is the issue.

There's another guy who's more or less been relentlessly trashing EV's in that thread who now brags he has a reservation on a Model3, but that's another story LOL.

 

[Upper5Percent]

How do you think Tesla sales of the Model 3 will be compared to the Bolt? The difference is people are clamoring for the Model 3.

What if Tesla only does 200K or 300K while the Bolt sells 20K or 30K (with LEAF2 and TM3 out). Is that still a fail?

What if Tesla is 6 or 9 or 12 months off their projects but are proven to be ramping up and get there in that time? I am driving at **6** year old Volt and GM has failed to ramp up to a major electric car sales in 72 *months*. Is that a fail?

The X and S were known to be high end limited sales. The 'master plan' subsequent Model 3 is supposed to be for the masses. https://www.tesla.com/blog/master-plan-part-deux

This is all very amusing how it gets framed and what goal post are used to describe failures.

Yes, Tesla's Powerwall and Powerpacks are a large part of the company ... so they are bigger than the electric car but that seems too obvious on how it all fits together and people love to ignore that

A MAJOR failure of Tesla might be running out of money...Chapter 11 reorganization would probably put them on the road to success...however the current stock holders might not see THAT as a success...

 

[Voltster2017]

Tesla is a tech company not a car company. Anyone remember when Michael Dell told Steve Jobs to liquidate Apple and give the money back to the stock holders? Hype + good Tech can = amazing products. I have a volt and love it, Do I have loyalty to GM? Not at all. my next car will be made by whoever makes the best one at that time.

 

[Steverino]

What if Tesla only does 200K or 300K .... Is that still a fail?

Not for me. Compared to the Musk hype machine claims, yes a fail.

Assuming 1,000/week for 12 weeks, 2,500/week for 12 weeks, 5,000/week for 12 weeks and 7,500/week for 16 weeks Tesla could achieve 222k Model 3's in 2018. Whether they will is still an open question.

I think it would be cool if they actually pull off the "3rd" auto revolution by having a hands-free "machine building a machine" production line. Whether they can? I have no idea, but kudos for trying. If they succeed, the majors will follow suit just like they did with the previous 2 revolutions. Everyone would benefit I think.

 

[sosmerc]

Is there any other EV car maker out there that has a "waiting list" of potential buyers that have actually put down deposits? Tesla is not your grandfather's car company. Tesla's plan is truly "out of the box" and can not be judged by the standards of the past. Time will tell just how successful they will be, but they are making progress and I would not count them out. Amazing what they have actually accomplished in such a relatively short period of time....Elon Musk does not rest on the past......he just keeps looking forward.

 

[Upper5Percent]

Is there any other EV car maker out there that has a "waiting list" of potential buyers that have actually put down deposits? Tesla is not your grandfather's car company. Tesla's plan is truly "out of the box" and can not be judged by the standards of the past. Time will tell just how successful they will be, but they are making progress and I would not count them out. Amazing what they have actually accomplished in such a relatively short period of time....Elon Musk does not rest on the past......he just keeps looking forward.

Most companies that accept deposits for future product put those deposits in escrow and do NOT spend them to operate...Tesla is NOT one of those companies...

An interesting question would be if Tesla does go through bankruptcy organization...are those deposits "Gone with the Wind" as Margaret Mitchell might say...

 

[PrivatePilot]

Is there any other EV car maker out there that has a "waiting list" of potential buyers that have actually put down deposits?

Lots of dealers ask for deposits on factory order cars. This isn't abnormal. And (at least here in Ontario) that money is insured against loss if the dealer goes bankrupt or tries to rip you off.

It seems only Tesla buyers are fanatical enough to be willing to shell out unsecured deposits without an actual realistic data on which they may actually take delivery of their vehicle. At this point I suspect many people signing up on the waiting list today are looking at 2020 delivery.