Tesla's Growing Inventory-Problem or No?

Investment Analysis Clubs Macro Economic Trends and Risks
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You might notice the other half of the name: “phone”. People buy it because it’s a really enabled phone, not because it replaces a desktop, generates code for an Apollo mission, or can run a business on Excel. Those are accoutrements and add significant value, but honestly, nobody is buying a pocket computer that can’t communicate.

Well, after you write the software, which is expensive. Otherwise Microsoft would have had 100% profit, which it obviously didn’t.

Sure. That’s why I bristle when Musk says he can give away the car and make it up on software sales. You can’t cream skim the good part of the business without noting that it takes the lower margin part to make that happen, at least in today’s world. (Perhaps there will be automakers stupid enough to give control of the software component to a third party, as IBM did with DOS, but I think most everyone has learned that lesson.)

Oh, OK. Current trend is blazing away from that prediction at almost light speed, but whatever. There are now more EVs produced by more manufacturers offering more options in more configurations than at any time in history, but sure, we’re all converging on toasters.

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I think you’re just making that up. On the most recent earnings call Musk said “Tesla is in a uniquely strong strategic position, because we’re the only ones making cars that technically we could sell for zero profit, for now, and then yield actually tremendous economics in the future”, but I never heard anything like what you’re claiming.

Find a reliable source or you’re just “bristling” at your own fantasies.

And yet they’re mostly on their way to merger or bankruptcy because they aren’t doing so at a profit. Same thing happened at the dawn of the age of the automobile. When the dust settles, not many will remain.

-IGU-

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There is certainly a cost to maintain software applications. Besides feature enhancements, all of these things are needed

  • 24/7/365 monitoring
  • bug fixes
  • changes in underlying data needs (type, storage, movement)
  • storage, compute, network capacity and other infrastructure changes and upgrades
  • security
  • regulation-driven changes

In the latest quarter, Microsoft made $18.3b net income on $52.9b revenue for a 34.5% margin, not bad. (Microsoft isn’t exclusively software, but a good example as any)

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Add note keeper, lists, banking, brokerage, CHAT device, and more.
I’m considering adding the virtual credit card function.

That’s 95% of what this device in my hand does for me.

5%

You might use your bling as 90% a phone. Ie YMMV.

For me, it’s a work horse.

Y’all all trying to shoehorn everybody else’s experience into your own bitterly narrow definition of what this device is.
Ok. :hugs:

As for FSD EV being a computer, ie doing computer stuff that my laptop does for me…
If I’m not driving, I will be “on the computer, doing computer activities” - journaling, catching my spreadsheets up, talking via the phone function, reading or audible booking, movie, etc.
And letting the FSD function of the truly expensive computer INSIDE WHICH I’m SITTING, do that function.

I’m wanting that “service”.
:hugs::hugs: all around :hugs::hugs:
ralph

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Words absolutely matter, but I don’t think that’s the issue here. The issue is whether a device can be described in more than one way. I think it can, while a lot of folks here apparently think it can’t. Goofy insists that a smartphone can only be thought of as a communication device. I say that since people use smartphones for lots of computer functions, from navigating to calculating tip to looking up definitions, that it can also be thought of as a computer.

This isn’t just a semantic issue because I go further and say that the computer aspect of the smartphone significantly constrains its design and is far more important than the
communication aspect in determining production cost and therefore selling price. In short, from the perspective of business, economics, and engineering the smartphone is most usefully described as a computer specialized for mobile communication. But a computer first.

The same is happening with cars. The parts that allow a computer to control car functions are rapidly becoming the most significant elements dictating how cars are designed and produced. That trend will only accelerate as cars are being asked to do more and more of the driving. We are demanding cars to process enormous amounts of data in order to fulfill its transportation function. So much so that the computer part of the car will soon become the most important consideration for car design and marketing. It is therefore most useful for engineers, businessmen, and economists to see a car as a specialized computer with a transportation function.

Goofy and you seem to define stuff by personal preference. That’s fine, but not particularly relevant to this board. I am defining cars and smartphones by what I think is most relevant to their business and economics. The economics of the smartphone is dictated by chips and software, not the speaker and microphone. That’s computer stuff, not communication stuff. Therefore if you are doing due diligence about investing in smartphones you should think of it as a specialized computer. I am saying the same will soon be true with electric vehicles.

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Of course things can be described in more than one way.

Just curious, if you misplace your device, do you ask “Has anyone seen my computer?”

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No, but then technological progress often causes the meanings of words to become modified. The phrase “updating the software on your phone” would have been nonsensical in 1975. But it is meaningful today because phones have become specialized computers.

This is such an odd controversy. Certainly, one major function of a smart phone is to communicate. But it is constructed like a computer. It is marketed like a computer. It is frequently used as a computer. The computer part is why it costs so much and why it is so attractive. Yet you don’t want to call it a computer. Weird.

Oh well. Once the debate becomes a battle of semantics it is time to call it a day. I would only say that if you are unable to conceive of the car as a computer, I would not make any long-term investments in the auto industry.

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Google has had this right all along, your car will be your computer.

You folks are not seeing it. As you sit in your FSD car you will be on your computer.

Musk will add a fully functional PC to his car very easily when it is FSD.

I can see Musk challenging Google, MSFT, Amazon and Aapl at that point by controlling the OS, home screen and search portal of your car’s PC/server.

As Google said when investing in FSD cars, we want to have more of your time driving spent shopping and surfing the web.

You will buy an EV which is a car but you will also buy a PC inside. The profit is in the PC.

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I think my FSD car is going to be a bar on wheels. You can keep your computer :rofl: :rofl:

Andy

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Andy,

You will need a FSDJ to get by in life.

Full Self Driving Job!

:rofl: :rofl: :rofl:

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I think they call that a bartender :joy: :joy:

Andy

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They frown at the meetings if I drink.

I wont know.

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Yeah, impressive. How do you suppose those numbers would have been impacted if they also have to provide all the hardware that carried their OS? Oh, much lower? Quell surprise.

You have some sort of data that demonstrate this? Which ones of these are marked for extinction?

  1. Toyota, 2. Volkswagen Group, 3. Hyundai-Kia, 4. General Motors ,5. Ford, 6. Honda, 7. Nissan ,8. BMW Group, 9. Mercedes-Benz (Daimler AG) ,10. FCA (Fiat Chrysler Automobiles), 11. SAIC Motor, 12. Subaru Corporation, 13. Renault Group, 14. Groupe PSA (Peugeot SA and Citroën), 15. Geely Auto Group, 16. Suzuki Motor Corporation, 17. Tata Motors, 18. Mazda Motor Corporation, 19. Changan Automobile Group, 20. BYD Auto

Thanks.

Now you’re just making stuff up. I never said that, and I resent you making such a gross characterization. What is said it IS a communication device, and one which does many other things as well. It is connection to friends, to news, to Facebook and similar, to text messaging, to telephone calls, to instant messaging, and yes, a wide assortment of other things like games, productivity apps, and so on. It is still, at core, a communication device. A phone. Get it?

When you have to start insulting people with your faux superiority, you have lost. You know what? You have lost.

So curious. I have 40 years of marketing, research of disparate consumer groups dining wants and needs, segregating by use, hiring firms from Gallup to Nielsen, from Scarborough Perceptual and others to find exactly what people want, not what I think they should want. I have a degree in marketing, coursework at Wharton, and decades of buying paid advertising and public relations in an effort to reach consumers on their many and various levels.

You, by contrast, insist everyone think your way, that cars are becoming computers, and that we will all ride around in toasters. Seriously, dude, you are so far off base here it’s embarrassing for you.

Everything a smartphone does can be viewed or heard because it is an information delivery device. Everything about automobiles is a delivery system for people and cargo. The only crossover is internal and largely invisible, just as there is with microwaves and washing machines, but really, my 84 cycle washing machine with steam option and permanent press cool down cycle is not a computer. It’s a device to clean clothes. No matter how many chips they put in it, people will buy it on the ability to wash things.

No. The biggest purchase in someone’s life is generally a house, and it involves a range of consumer emotions, from “home to live” but including “self” and “image.” The second largest purchase is generally cars, and even more of the latter characteristics are involved. People buy them to project themselves on a larger canvas. (No, not every single buyers. There are lots of Corollas out there.) But Corvette, Mercedes, Rolls-Royce, Beetle, and my lord, a flat-bed Ford - those are all “image” which a side helping of transportation.

You really know nothing about the industry,.

Et tu, amigo. .

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I’m sorry I offended you Goofy.
That was not my intention.
:pensive:
ralph

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This piece is a pretty decent analysis.

As I’m sure you know, good data is hard to come by as companies are rather zealous about guarding any information about how bad things are going. But the truth is that there is no mass market battery electric vehicle yet produced by legacy big auto, and if they aren’t producing a mass market vehicle at mass market volumes then you pretty much know they’re losing money.

-IGU-

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More likely, the inside of a self-driving car will be an entertainment center for each passenger. As it will have Internet access (separate from the self-driving system–security reasons), this is the computer in the car. Whether people would want to work in the car would depend if the car is one or multiple individual(s) getting a ride at the same time. Companies would not like to have their internal info available to anyone, so it would not make the data available outside their own relatively secure network. Working on a laptop during a commute could work (obviously not that secure).

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That is how it is currently done on air planes for the passengers and it costs money.

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Maybe because they didn’t start until a couple years ago?

Tesla started in 2003. Musk joined in 2004. They didn’t produce their first car until 2008. They didn’t have their first profitable quarter until 2013, and that was on the heels of proposing combining with Google to the tune of $11B. Their first profitable year was 2020.

Why demand that other companies be profitable in two years when it took Tesla 17?

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Agreed. But how long did it take for Tesla to turn a profit? Seventeen years or something right? I wouldn’t read too much into legacy automakers taking a loss on EVs now in order to profit in the future.

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The Nissan Leaf entered the US market in 2011 along with the Chevy Volt. The Chevy Bolt beat the Model 3 to market. VW has been periodically making all electric prototypes since 1972. The Renault Zoe came out in 2016. And legacy companies have been making hybrids for quite some time that some folks classify as EVs.

Here’s the problem as I see it. It was thought that the immense ICE production infrastructure of the OEMs could be easily converted to making BEVs, which would give them a huge advantage over startups like Tesla.

Apparently there is no advantage. Apparently BEV production facilities that are efficient enough to compete with Tesla and the Chinese have to be built from scratch. This means that all that ICE infrastructure is an albatross around the necks (mixed metaphor?) of the OEMs that will actually hinder their conversion to the all electric future. It also means that over the next couple of years when BYD and Tesla are focused on revving up production and having price wars to grab market share, the OEMs will still be developing their BEV production facilities and supply lines while simultaneously winding down their ICE production.

Now one didn’t worry much when Apple didn’t come out with the first of something, because the assumption was that Apple would eventually make the better product. See the iPod as an example. So it would be one thing if when the OEMs finally do start mass producing BEVs they will be much better at it than Tesla and the Chinese. Sure doesn’t look that way though. They all seem to be playing catch up rather than innovating new technology.

Just want to add that Ford appears to have recognized what a drag the ICE business is to its development of EVs. In response they created two divisions, Ford Model e for EV development and Ford Blue for its ICE products that Ford says will run as distinct businesses. Perhaps the best way for an OEM to compete with startups is to create an entity that acts like a startup.

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