A pretty damning read on Tesla

Investment Analysis Clubs Macro Economic Trends and Risks
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Which I haven’t done. But that’s OK, you go on to make a bunch of other statements at odds with what I have said or believe. Like:

Wrong on almost every count. There is clearly a future for autonomous driving. It’s happening now. Robotaxis? Sure. To the point where people are going to give up their cars? Don’t make me laugh. Do I discount the important of software? Not really, but it’s not so important that it will make marketing, styling, production, and distribution unimportant, which is what I keep hearing from “cars are becoming computers”, because of course, they’re not.

AI is currently over-rated, yes, but will become important, perhaps quickly. That doesn’t mean the “AI” syndrome isn’t going through the same phase as companies adding “dot-com” to their names in the 90’s, or “blockchain” a few years ago.

And the biggest laffer, that I believe auto status quo is the cat’s meow, which is arrant nonsense. Cars are much better now than just a decade ago. There are more hybrids. Satellite radio. Electric windows for all my friends! Less rubber in tires. GPS. Crash resistant chassis design. Side and overhead airbags. Fuel economy. Emissions control. Voice commands. Display screens. Self parking. Audio inputs/CarPlay. Tire pressure and other self-monitoring. OnStar and similar. And obviously, the introduction of EVs and EV technology.

However I also understand that it takes time for these things to ripple through to the general population, which is when the richest rewards come. That’s why Amazon (to use your example) started off with a hope and a bang, and then flatlined for so long until the business actually became a business. Others, like Google, were a great business from day 1. Still others, say, Apple, came and went, even as Microsoft mostly prospered.

Tesla, it seems to me, has a chance to be a big player, or if poorly managed could wind up being the MySpace of car companies. It made some astonishingly good moves early/mid: desirable products, charging infrastructure, etc. It has made some equally bad decisions lately, the truck and the other distractions being some of those.

I guess they better get going. Instead they are going for giga-casting, which makes changing models more difficult, not less. It is said to make them less expensive, too, so that’s a management decision that may have far reaching effects. I’m one who prefers styling (I find the Tesla interior terribly clunky), but that’s just me; obviously there’s a place for inexpensive cars, too.

As for your long list of GM engines, so what? GM has a dozen brands around the world, each with multiples of models. Those come and go as consumer tastes change, and yes, they change. It doesn’t take long for things to come and go: tail fins, minivans, push button transmissions, bucket seats, muscle cars, pick up trucks as status, and so on. BYD has shown the ability to move quickly. In spite of your ever rosy view, I don’t see that Tesla has, at least not yet.

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And you completely forgot to mention SpaceX, which is arguably the best performing of his multiple business ventures.

I have no data, but my gut feeling is that Tesla is merely a way to make money for the rocket business, which is his ticket to Mars, where he can be the planet-wide dictator he wants to be.

—Peter

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If someone doesn’t beat him to it first…

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Interestingly, that’s one of the reasons the judge denied his Tesla compensation package. Musk said he needed far more money than any CEO in history (BTW, number two was Musk’s previous compensation package) because he need money to go to Mars.

The judge felt that didn’t explain how he was going to add value to Tesla shareholders.

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Maybe a bit ahead of it’s time, place…

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Something

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That’s because there is no definition for what constitutes a “model”. It is whatever the manufacturer decides. For example, there are three different Corvettes, the Stingray, the Z, and the E-ray. These are each called models that are primarily differentiated by their engines. https://www.penskechevy.com/chevrolet-research/corvette-models/

So why bother making so many models? The Toyota brand marketed 21 car, suv, and truck models in the US in 2023 for $1.9M in sales. Six models (Corolla, Camry, Rav4, Highlander, Tacoma, and Tundra) accounted for 77% of those sales. Toyota America could save a lot in production costs by just making a small and large sedan, SUV, and pickup and probably be equally profitable because of higher margins. 2023 (Full Year) USA: Toyota and Lexus US Car Sales by Model - Car Sales Statistics

Here is what people seem to forget. BYD doesn’t have to make a profit on its BEVs because it is subsidized by the Chinese Government and can live for awhile on its gas car revenues. In fact, there is no evidence that any company is consistently making a profit selling BEVs other than Tesla.

If Tesla is moving slower than expectations it is because what it is trying to do, make a profitable BEV that outsells the gas competition, has never been done by anyone else before. Tesla has to essentially invent the wheel while all the other hybrid makers can just copy Toyota.

The so what is that the reason GM made so many different engines is that this was one of the primary ways to market car variants, call them models or trims or whatever. Don’t need to do that with electrics as electric motors perform better than internal combustion engines (except with respect to making loud noises and fumes). This greatly reduces the need to create so many models or trims or whatever.

The Tesla energy storage business will be larger than SpaceX.

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Just don’t wash that Cybertruck!!

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Got me there. Toyota only has sales of a quarter trillion dollars a year and is the largest automaker on the planet. But sounds like you could straighten them out on a few their misconceptions about how the car business works.

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Anyone remember The Fear of Flying despite being safer than driving?

https://www.google.com/search?q=the+fear+of+flying%3F&newwindow=1&client=safari&sca_esv=e94c6552adb81b09&rls=en&sxsrf=ACQVn0_cbxF23xPTGlLaa-Ix0WSBvmN6Ag%3A1713422800316&ei=0MEgZsDtEr2lkdUPtP6u4Aw&oq=The+Fear+of+Flying%3F&gs_lp=Egxnd3Mtd2l6LXNlcnAiE1RoZSBGZWFyIG9mIEZseWluZz8qAggAMgcQIxiwAxgnMgoQABiwAxjWBBhHMgoQABiwAxjWBBhHMgoQABiwAxjWBBhHMgoQABiwAxjWBBhHMgoQABiwAxjWBBhHMgoQABiwAxjWBBhHMgoQABiwAxjWBBhHMgoQABiwAxjWBBhHSPYmUABYAHABeAGQAQCYAQCgAQCqAQC4AQHIAQCYAgGgAgqYAwCIBgGQBgmSBwExoAcA&sclient=gws-wiz-serp

The Captain

o o o o o o o o o o o o o o o o o o o o

After having flow since age six (Switzerland to Paris, NYC to Caracas, 1946) I developed a panic level fear of flying after three unrelated but concurrent incidents around 1955.

  1. On arrival to Caracas by cruise ship there was a lot cry and wailing at the dock. Lots of passengers had family on the plane from NYC that had crashed shortly before we arrived. I could have been on that plane.
  2. My cousin, José, my childhood idol in aviator glasses, had recently got his license to fly the Convair turboprop and he was lost at sea on a DC3 cargo flight to Costa Rica. Never found.
  3. My grandfather died

I got over it some twelve years later after seeing Dr. Vega, a Canadian psychologist. I knew I was over it when i boarded a plane after news that an acquaintance had died in a plane crash. Some time later I made multi-stop trip to the USA where I flew on every model of passenger jet current in America at the time. The last leg was to Caracas. As the plane approached the airport it flew into a cloud cutting out all visibility. I got the distinct feeling that it was going to fly into the same mountain that claimed the above mentioned arrival. I said to myself, “All that therapy wasted to die in an airplane crash. Oh, well.” Moments later the plane came out of the cloud on the perfect glide-path to the CCS airport. I said to myself, “You sure do like to BS yourself!”

The funny thing about my fear of flying, even before seeing Dr. Vega, the panic the night before a flight was so great I could not sleep, breaking out in a sweat. Once the plane took off I became totally calm, there was not a darn thing I could do about the plane crashing so why worry?

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Even the best shouldn’t be immune from criticism, or are you a big believer in hydrogen cars?

Speaking of Toyota, here is the 2015 Camry:

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Here is the 2024 Camry:
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Apparently Toyota has the same philosophy as Tesla when it comes to updating the looks of their best selling models. Yet Tesla is criticized for never changing their look.

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The main reason is the obvious one - they’d rather not lose ~23% of their sales. In a competitive industry with lots of choices, you have to partially meet the consumer where they are. Even if the consumers’ preferences don’t maximize your production efficiency. It’s the same reason that cars come in colors other than black, even though only offering one color would be more efficient (and therefore a higher profit margin) for the manufacturer. So if there are consumers who want something different than “small sedan and large sedan,” you either meet their needs or lose their business - which is why Toyota offers a compact car and a two-door coupe and a host of luxury sedans (large and small) under their Lexus brand.

There are other reasons. Having a breadth of models protects you if consumer sentiment changes. If, for example, interest rates rise and there’s a shift in consumer preferences towards less expensive cars, Toyota’s got the Yaris already there. Also, Toyota’s a global company - while some models might be light sellers in the U.S., they’re stronger sellers in other markets. So again, the Camry’s their best seller in the U.S., but the Yaris is their best seller in Europe. Also, customers exhibit brand loyalty and “stickiness,” so making sure you have a product that meets their needs at one point in time helps you sell them cars when their needs change - so that young person who buys a Yaris or a coupe is more likely to buy the Camry or Rav4 when they want/need a bigger car later in life.

These many models are distinguished not just by their engines - the cars are very different, to meet different needs.

Yeah, I think not:

Back when these types of batteries were niche and new, and Tesla was leading the charge with their in-house battery development and innovation, that might have been plausible. Now that the market has matured, and these batteries are getting commoditized, there’s not as much value-add for Tesla anymore. The most likely outcome is that large-scale batteries go the way of solar panels - commodities that end up being produced almost entirely by lowest-cost (for any given level of quality) Chinese producers. Their Megapack already uses CATL cells, so CATL entering the market to provide those batteries directly to consumers in their own storage product is going to really put the brakes on Tesla’s ability to grow that segment.

Again, probably a factor in Baglino leaving. Tesla was an energy company leading the transition from fossil fuels to renewables (that happened to make cars). Now it’s a robotics/AI company (that happens to make cars). I wouldn’t look to energy to be the future of the company going forward, since that’s probably not where Musk is going to want to put his focus. Large-scale batteries for EV’s and storage is now a solved problem, and I don’t think Musk is nterested in the business of solved problems - regardless of whether they would be very lucrative business opportunities for his publicly traded company.

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Got it. There’s no dispute that ADAS+human can often be safer than human alone. The question for robotaxis is whether an AV driver alone is safer than humans, on average.

We’re not yet there, perhaps not anywhere close. Tesla has suggested, though, that we are - because the accident rates when AP/FSD is engaged are lower than average accident rates. Tesla has intimated that this means that the AV “driver” is safer than a human driver - but because they’re not controlling for the differences between the AP/FSD scenario and all driving, that comparison is flawed. We don’t have any really strong evidence yet that AV drivers are safer than human drivers. Sure, AV drivers never get tired or drunk - but they also don’t have brains and nervous systems optimized for pattern recognition by millions and millions of years of evolution. So they’ll never plow into the back of a parked emergency vehicle or drag a pedestrian because they’re driving stoned, but they might because they don’t recognize the situation.

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Agreed. I myself have serious doubts about full autonomy. But I already have assisted driving with my Accord in the form of adaptive cruise control (which I love, usually), lane keep assist, and emergency braking. But here is another edge case example that makes me think full autonomy is too far away. From a friend of mine this morning:

I saw a video yesterday of a guy following a gardener’s truck with a Tesla. The truck was covered in branches and leaves that were just trimmed. The autopilot didn’t see the truck at all because of this.

I think I am going to get a stop decal and put in the back of my car to see how many Teslas crash behind me

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I have the same features in my Accord. Driving signs, like a stop sign or speed limit, also pop upon my dashboard as an alert. My favorite feature is the wide-angle rear camera so I don’t have to spin my head like a possessed Linda Blair when backing out of a parking spot.

If auto manufacturers really cared about safety, why wouldn’t all FSD makers have an accident exchange/clearinghouse so when one accident happens they all learn from it rather than each developer having to learn from each type of accident on their own?

You may say that I’m a dreamer.

I enjoy this back and forth about Tesla, but I think there is one thing we can all agree about when it comes to Tesla cars. They’re the safest vehicle if you’re planning to drive off a cliff.

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Regarding the multiple models of vehicles. It’s true that it often used to be based on engine size and/or type. But nowadays, most vehicles have only one or two engine sizes/types and instead they change the name based on trim levels. I just looked at the 2025 Camry yesterday and it comes in 4 models - Camry LE, Camry SE, Camry XLE, and Camry SXE. They all have the same hybrid engine but have different levels of trim. And it looks like all wheel drive is an option for all of them. In previous years, the LE and SE would probably have been a 4 cylinder standard engine and the XLE and SXE would have been 6 cylinder more powerful engine. Today they all use the same exact 4 cylinder hybrid engine with 225 hp.

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You going to give us a wired up Tesla charger home garage count?

It is missing so far.

No matter how many charges Tesla is a car company. Makes no never mind.

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We will hear from the insurance companies when that happens.

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As much as I am enjoying this topic, I am curious to read what Tesla advocates think would be a good entry point (and perhaps we have achieved it) to speculate on Tesla.

Note, not a buy and hold purchase but purely a speculative play. Tesla is now trading at nearly a 37% loss from 3 years ago while the S&P 500 is up about 20% over that same time period.

Not trying to catch a falling knife here - and perhaps it is not quite oversold yet (P/E is still close to 50) but I would have to think we are getting close to a good time to catch it before a bounce - even if it is a Dead Cat bounce. There has been almost virtually no recovery on this stock all year (the best was a short lived 10% recovery). Even today with all major indicies up, Tesla continues to fall.

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The tide is going out.

This is seasonal. It is late in the season. Maybe next year seasonality will come earlier.

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I think it’s helpful to distinguish between different models and different trims. The trims are mostly variations within the same size and design of vehicle based on finishes and options, while models differ from each other in more fundamental ways.

Most dominant global automakers will offer a wide variety of models: subcompact/city car, compact sedan, coupe, midsize sedan, large sedan, crossover/compact SUV, small SUV, midsize SUV, large SUV, small van, large van, Brands in the U.S. market will also have small pickup and large pickup. The dominant global automakers usually also offer both a mass-market and luxury version of most of those models, often under a different mark - so Toyota will have mass-market midsize sedans (Camry) and luxury midsize sedans (Lexus ES).

The goal is to offer the consumer a vehicle at a wide variety of price points and sizes and body styles, so that whatever their needs are, you’re in a position to sell them a vehicle. Tesla eschewed that strategy, and in the nascent period of EV’s it did not appear to have limited their sales growth - they were getting plenty of takers with just four models. Some observers expected that Tesla would extend their model reach with a smaller-than-a-3 model, but apparently that’s not going to happen anytime soon (if ever).

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