The only advantage that those larger companies have is the knowledge of mass production. There may be significant issues, however with their production line tooling and automation if the footprint of the vehicle varies too far. The problem these larger organizations have is how slow they move to change. Tesla is slowing down, but Rivian is still quick primarily due to private ownership and less management layers. Tesla is currently light year’s ahead of the big companies with the technology. It will be interesting when the big companies release products from a quality point of view. Those companies will probably be eating a ton (probably 9 to 10 figures) of R&D money over the next 5 to 10 years. Auto sales are very sensitive to economic changes so we will see if they can make some of that R&D money back before the winds of economic change start to blow.
You really believe Telsla is lightyears ahead of the Germans?
clt says electric suv’s Could be cool for tailgating
I have worked with both companies, and yes I do. The Germans can’t see past their own arrogance and it is no surprise that the largest BMW factory in the world is in the US. The American workers keep the Germans profitable. Tesla is moving in that direction as well so we should not expect them to be as dynamic as they were.
Will be interesting to see if the big boys start just buying some of these electric start ups.
Of course they will. That’s 'Murica. This country has repeatedly seen large companies either buy up or out compete the competition.
Do yall remember when video gaming was an industry dominated by darling companies that started the industry? Namco. Nintendo. Sega.
Now the two largest video game companies BY FAR are Microsoft and Sony. I am not even sure Tesla can survive, but they have the biggest head start in so many different ways. Spend $78k on a Rivian trimmed out nicely and then they go BK three years later? You are paying on a vehicle with no warranty, no support, no mechanics, probably no parts, and you still have two years on your five year note. That is a horrifying thought as an owner or potential owner.
Figures of speech can be exaggerated, but Tesla is light years ahead of BMW? In two light years, light travels 11,739,427,200,000 Miles. In the same, three light years equate to 17,609,140,800,000 Miles. You might be able to reason as a figure of speech that the Model T was lightyears away from the horse and buggy, but to seriously state that Tesla is Lightyears ahead of BMW? In anything? Now, if you compare Tesla’s Profit to Loss ratio over the course of its existence, now THAT is no exaggeration if you were to state that BMW is lightyears ahead of Tesla, and even perhaps that it will be lightyears before Tesla can ever get to breaking even. Henry Ford was not subsidized, but innovated a ground shaking automobile that the average person could afford (Ford did lots of evil too). Tesla, on the other hand, is moving much further away from any average consumer, while not providing sufficient innovation to keep competitors, who have plenty of cash and engineering on hand, to do almost whatever they wish.
American workers keep the Germans profitable? Are you serious? I know it helps, but give BMW the credit it has earned through years of engineering and performance. People do not buy BMW’s because American Workers make them more affordable. If American workers keep Tesla profitable, then why would Tesla sell out and move to China?
They arent moving to china, they are opening a plant there to get around the ridiculous import tariffs china imposes on foreign autos to protect their own auto industry. Theyre shopping for space in europe for a plant too.
I’m an EV fan as well as an obsessive Tesla fanboy and shareholder, so I’ve enjoyed following this thread. However there’s a lot of misinformation being tosses around. The biggest misconception I see is that Tesla is somehow a small player that is only successful right now because the big boys have not decided to go all in. Creating a profitable (yes, Tesla mskes profit off of each car they sell, unlike most every other company’s EVs) requires insane technological and battery advantages, which the other players lack.
People are aghast at the idea that major car companies, especially the German ones, could lag a small start up in any capacity. But you can’t just decide overnight to build an EV, and suddenly be the best at it simply because you’ve been making gas cars for a hundred years. EVs are a totally different animal. Tesla is at minimum 5ish years ahead of everyone else on the tech & battery front. A good way to easily see this is true is by looking at the specs on the EVs that Audi, BMW, Volvo, VW etc are promising, on their cars that aren’t supposed to hit the market for another two or three YEARS. The specs compare admirably to Teslas that are our right now. Keep in mind though that Teslas are the only cars out there that have the ability to improve AFTER you buy it, via their over the air updates. So, by the time these other highly touted “Tesla killers” finally hit the market, they are way behind the Tesla that they were designed to beat.
And aside from the tech, Tesla has vertically integrated battery research and production, which no one else has done, hence their profitable EVs while something like the Audi eTron needs to sell over 600,000 units before it breaks even.
I’m a huge proponent of EVs and look forward to the big boys attempting to catch up, but that’s exactly what they’ll be doing, catching up. They are great at manufacturing gas cars, but EVs are a software challenge, and the big boys suck at software.
CNBC: Amazon and General Motors are in talks to invest in Tesla rival Rivian.
Of course BMW is more profitable. That is an established company that already has established manufacturing centers. Tesla has built theirs from the ground in very few years. This would make any company not be profitable. In Q3 Tesla made 22.2% ratio of revenue/cost of revenue while BMW only had 14.5%.
Tesla is also starting to put more cars on the US market than BMW. But, when I said “light years ahead,” I was referring to electric cars. Tesla Model 3 sold 139,730 in 2018 while the i-3 sold 6,712 and the i-8 sold 772. Then if you throw in the Model S @ 29,660 and the Model X @ 28,290 I would say that is a huge difference. Maybe not light years, but it is a huge difference.
Now look at the technical specs of an i3 and a model 3. The i3 gives you 170HP and 0-60 in 8.0 seconds if you want the range extender model. Normally it is 7.2 seconds. So what kind of range do we get you might ask? Up to 153 miles standard and 200 miles with the range extender. So why the slower 0-60 time with the longer range? Oh wait, the range extender model is such because they have installed a twin cylinder gasoline engine in the back to act as a generator. Kind of defeats the purpose, but that makes the car heavier and slower to get started. Now the midrange Model 3 gets you 264 miles and the long range gets you to 310 miles per charge. mid-range gets 0-60 in 5.6 while the long range gets you 4.5 seconds 0-60. Performance model is 3.3 btw. The mid-range Tesla starts at $42,900 while the base model BMW starts at $44,450. Loaded the long range Tesla is $59,400 and that includes Autopilot. The fully loaded extended range BMW is $59,600, doesn’t even know what Autopilot means, and I still have to stop and put some gas in it to keep charging my limited range battery.
BMW’s Spartanburg plant is the #1 auto exporter in the US. BMW has invested $600 MM in the factory in the last 18 months. They are getting close to building 450,000 units per year from that facility. The X series made in the US account for over 50% of BMW’s auto sales in the US. Since the X series was only manufactured in the US, they couldn’t keep up with demand. Now BMW is moving some of that production to China and South Africa and reducing US exports to keep up with US demand. Their bigger X7 model which is new in 2019 will also be manufactured in the US.
I am confused. How does Tesla make a profit from every car it makes and still lose $billions? I understand that, you have to sell hotdogs to payoff a hotdog stand, but how can Tesla misrepresent being at all profitable when they lose money at insanely high rates/volumes? Confused I am. Ponzi
Theyre building multiple production lines with brand new automated technology, building out massive infrastructure across three continents (over 50% of all ev chargers in us are owned by tesla), creating autonomous driving technology, building a battery manufacturing factory that is by far the largest in the world, and designing several new car models…among other things for solar and energy storage technology. Their R&D costs are staggeringly high. One can certainly argue they are too ambitious with everything theyre trying to do all at once.
Tesla makes a profit on the cars because the cost to produce the vehicle (materials + labor + transit) is less than they sell it for. Pretty simple. The losses come from capital expenses and R&D.
They have turned profits in the last two quarters and have a lot of pent up demand for the model 3 in europe and china. The model Y and pickup are expected to be announced this year, and with that probably an influx in deposits for the vehicles.
Theyre established enough at this point that if they ever truly face bankruptcy, an automaker will snap them up.
This same situation has been seen before, such as within massive construction divisions. Many such huge construction companies have different divisions that are like spokes on a wheel. If you have enough profitable spokes, then they keep the wheeel TRUE until the bent or broken ones can be repaired or even removed forever. Sometimes all the spokes eventually go through bad cycles, but not without being balanced by other PROFITABLE spokes that keep the wheel rolling TRUE.
However, some of the biggest internal frauds and dangers in such large companies are when the leaders within a large construction division front load their projects early so that THEY receive production bonus, which will NOT be the case during the later years of the project. By that time, such a scheme depends on getting new huge projects that will generate new cash flow to be diverted toward the hemorrhages of cash in the older existing projects, while also being front loaded so that the Division leaders get their big production bonuses. Over time, it will become very clear that the fat cats getting paid so much in production bonuses, are actually leading a construction division that in a broken spoke on the wheel. If you have enough of these CASHflow games being played, then the spokes cannot keep the wheel TRUE, the wheel begins to wobble before ultimately failing because it becomes too warped and twisted to save.
In effect, you must keep buying mo bigger hotdog stands to show that any actually turn a “profit” , which requires huge injections of outside cashflow, such as from stock investors, or Billionaire Saudi Princes, or Communist China.
clt says Tesla needs to improve the door gaps. Looks like a Kia
Kinda surprised the Amazon and GM investment in Rivian story didn’t elicit more response. It speaks directly to some of the argument going on here.
I thought it was interesting, and it kind of proves my point that the big boys can’t just build an EV because they want to. To build an EV, you have to have designed your company from the bottom up to do so. I think GM probably knows that EVs are the future, and knows they don’t know how to build one profitably, so they invest in someone who does know how. With GM & Amazon money behind them, Rivian could be a big player in the EV game. Kudos to them and I hope they are successful!
I can’t remember the exact number, but the gross margins on the model 3 are somewhere in the mid 20’s percent. This blows away everyone else’s EVs.
Meanjoe, I still don’t see what about Tesla is fraudulent. Please enlighten us. And if you’re so sure of it being unprofitable and fraudulent, go ahead and short their stock. Should be very lucrative. Let us know how that goes for you.
I do not follow this topic like some here, but GM has announced that Cadillac will be its brand which leads the charge towards EVs, right? (pun intended) I think they are certainly committed to more than testing the waters, like with Volt.
Additionally, doesn’t Tesla share all of its patents so any competitor can use them? That certainly shortcuts the time it takes to catch up with them, and the big auto makers have enormous advantages with respect to engineering, manufacturing, supply chain and capital. What Tesla has accomplished is incredible, but generally cars have become commodities for many, and a Ford electric transportation appliance will be just as good as one from Tesla for much of the market.
I don’t understand the hatred that comes out of people for Tesla or this greater topic in general. Seems to stir up some real vitriole. While I’m certainly interested in the tech, Im not at fanboy levels, so it seems even more bizarre to me.
Maybe as an aside - apparently Joe Rogan bought a P100D after Elon smoked with him on air. He’s a gearhead and was bashing EVs before, but in the past two weeks of ownership, he’s done a 180. Said his Tesla is a spaceship and his Porsche RS GT3 is slow. He loves his Tesla, though his angle is definitely performance (made some jokes about never taking it out of ludicrous mode).