Is Elon Musk Setting Himself Up For An Epic Failure?

Megalith

Megalith

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I think there may be a long waiting game that will piss potential buyers off, but I wouldn’t call that an epic failure unless the new Tesla has fatality-causing defects.

Tesla's, which delivered about 50,000 vehicles last year, is aiming to deliver 500,000 in 2018. The production target isn't new, but the timeline is. Tesla had previously said it would build half a million cars a year by 2020. Prompting this change was the 400,000 pre-orders that Tesla has taken for the Model 3 mass-market vehicle, set to be priced at $35,000 and due to arrive in 2017. At $1,000 a pop, these pre-order represent a nice no-interest loan for Tesla, but also a daunting challenge for a company that barely managed to deliver 50,000 vehicles in 2015.
 
Be interesting to see if he can ramp up that quickly.

The Tesla plant is the old NUMMI factory (GM/Toyota). That factory could produce roughly 400k cars a year. That number is with the Union labor and not the automation that Tesla has, so Tesla's number could be higher.

The major issue is that the gigafactory isn't online until 2017 with full capacity by 2020 - it's estimated that full capacity can produce 500k car batteries a year. So that's a metric shit-ton of batteries to source. Not sure if Tesla is still using the 18650 battery cells, if they are, that amount of production might drive costs up as supply gets squeezed until their own plant comes online. Which isn't good, because that cell is used in a ton of products.
 
Or epic success. The car business is tough, so maybe failure is more probable.

While *not* catering to the mass market, and all the problems that has, Tesla still lost $280 million last quarter. I can't imagine what a big defect would do to the company. A Model 3 flop could be a quick end to the company.
 
Spidey329 said:
Be interesting to see if he can ramp up that quickly.

The Tesla plant is the old NUMMI factory (GM/Toyota). That factory could produce roughly 400k cars a year. That number is with the Union labor and not the automation that Tesla has, so Tesla's number could be higher.
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But that was also with Toyota manufacturing know-how, ability to hit deadlines and supplier managment.
 
Musk has a commercial business in space that NASA bailed out awhile back, and is becoming viable, and developing a lot of things.

I'd personally rather have him running for POTUS than another guy, but he's busy not being a complete dick head.
 
SLee said:
But that was also with Toyota manufacturing know-how, ability to hit deadlines and supplier managment.
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And decades of experience with Toyota knowing how to design a manufacturable car.
 
pxc said:
Or epic success. The car business is tough, so maybe failure is more probable.

While *not* catering to the mass market, and all the problems that has, Tesla still lost $280 million last quarter. I can't imagine what a big defect would do to the company. A Model 3 flop could be a quick end to the company.
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Explain to me how a company can lose 280 MILLION and not be in bankruptcy?
 
Private_Ops said:
Explain to me how a company can lose 280 MILLION and not be in bankruptcy?
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Cash reserves. Loans. Inflated stock. Etc

SLee said:
But that was also with Toyota manufacturing know-how, ability to hit deadlines and supplier managment.
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Let's not forget that Tesla doesn't necessarily need to manufacture these vehicles. They could be made by another manufacturer. Say GM, Toyota, Ford, Etc. The vehicles could also be made in another country like Japan, Canada, Mexico, even China. Tesla isn't limited to producing vehicles themselves and in the United States.
 
Private_Ops said:
Explain to me how a company can lose 280 MILLION and not be in bankruptcy?
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"Bankrupt" technically means that your liabilities (money you've borrowed) is greater than your assets (cash, a factory, that sort of thing). If you start off with a net worth of $1Billion and lose $280 million, you're not bankrupt. Even if you *are* bankrupt, that doesn't mean you're in bankruptcy. Bankruptcy typically happens when a company says "we can't cover our debts, so we're going to default on our loans." The creditors (the ones who lent the money to the company) take ownership of the company's assets, or more typically, the assets are sold to another company and that money is used to partially pay off the creditors. For example (and I am grossy simplifying here), Chrysler went through bankruptcy. Its assets were sold to Fiat, and Fiat's money was used to pay Chrysler's bondholders and unions some fraction of what they were owed.
 
People who put a grand in Tesla's hands for a car in two years are suckers. I'm sure it will be good, but suckers none the less.
 
britjh22 said:
People who put a grand in Tesla's hands for a car in two years are suckers. I'm sure it will be good, but suckers none the less.
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I'm with you on this. The concept looks cool. The car looked nice. But, you are essentially giving Tesla an interest free loan. What if the car is crap?
It's generally a safe idea not to buy "version 1.0" of most things. There will be bugs and kinks to work out. How long are the batteries supposed to last?
The idea is cool and this actually looks like a practical electric car. I could easily use one with my commute pattern. Even if I switched jobs and had to drive further, I'd be in ok shape in my area (and not having to worry about charging all day - haven't seen many charge ports in this area.)
 
Spidey329 said:
Be interesting to see if he can ramp up that quickly.

The Tesla plant is the old NUMMI factory (GM/Toyota). That factory could produce roughly 400k cars a year. That number is with the Union labor and not the automation that Tesla has, so Tesla's number could be higher.

The major issue is that the gigafactory isn't online until 2017 with full capacity by 2020 - it's estimated that full capacity can produce 500k car batteries a year. So that's a metric shit-ton of batteries to source. Not sure if Tesla is still using the 18650 battery cells, if they are, that amount of production might drive costs up as supply gets squeezed until their own plant comes online. Which isn't good, because that cell is used in a ton of products.
Click to expand...

Elon said the Gigafactory is already operational.
 
steakman1971 said:
I'm with you on this. The concept looks cool. The car looked nice. But, you are essentially giving Tesla an interest free loan. What if the car is crap?
It's generally a safe idea not to buy "version 1.0" of most things. There will be bugs and kinks to work out. How long are the batteries supposed to last?
The idea is cool and this actually looks like a practical electric car. I could easily use one with my commute pattern. Even if I switched jobs and had to drive further, I'd be in ok shape in my area (and not having to worry about charging all day - haven't seen many charge ports in this area.)
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On the plus side it could be worse....
Imagine some EA directors working there :)
That version 1 would probably have 3 wheels, with the fourth being an optional extra, starts only occasionally, various faults that make it unusable, etc
Well thank goodness for the AAA business to keep them out of such things :)
Cheers
 
britjh22 said:
People who put a grand in Tesla's hands for a car in two years are suckers. I'm sure it will be good, but suckers none the less.
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Many of those people won't get their cars until 2020, or 2021. Assuming they are legit preorders.
 
How many battery powered cars will we be able to put on the road before Chinese diggers start popping up out of gopher holes in my backyard?

abc_wn_extra_china_101108_wg.jpg
 
CSI_PC said:
On the plus side it could be worse....
Imagine some EA directors working there :)
That version 1 would probably have 3 wheels, with the fourth being an optional extra, starts only occasionally, various faults that make it unusable, etc
Well thank goodness for the AAA business to keep them out of such things :)
Cheers
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Their target is the BMW 3 series, so expect the price to easily double with options.
 
Kwaz said:
Cash reserves. Loans. Inflated stock. Etc




Let's not forget that Tesla doesn't necessarily need to manufacture these vehicles. They could be made by another manufacturer. Say GM, Toyota, Ford, Etc. The vehicles could also be made in another country like Japan, Canada, Mexico, even China. Tesla isn't limited to producing vehicles themselves and in the United States.
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If tesla made the majority of their cars out of the US I bet they would lose alot of appeal, and sales.
 
lostinseganet said:
If tesla made the majority of their cars out of the US I bet they would lose alot of appeal, and sales.
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I seriously doubt that. If they made cars in China, probably. In Canada, I don't think so. And Japan is synonymous with quality.
 
jpm100 said:
1982 called and want their automotive cliche's back.
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Go look at the Model S reliability issues. Tesla has problems making a car that can last a few years, there is nothing to indicate the cars won't be falling apart in 10 years.
 
Ocellaris said:
Go look at the Model S reliability issues. Tesla has problems making a car that can last a few years, there is nothing to indicate the cars won't be falling apart in 10 years.
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But Elon assured us that absurd prices for EVs will be ok because they will last 40 years.

Tesla is turning into a cluster fuck. Not because it is doomed to failure, but because their game plan is increasingly at odds with reality. The gigafactory sounded fool proof, but LG has already brought that kind of capacity on line. So the only way it isn't furting market prices is if component materials get scarce, which fucks it, or massive market demand comes on line, which fucks it (well if it is all EVs, it fucks tesla cars vs. tesla batteries). As a car company, they can't manage to build a profitable car with a price tag to support a good margin, then they want to jump to 500k vehicles a year. They basically want to go from being Porsche to being Subaru in less than 2 years. While they are losing key employees. Using a facility GM and Toyota found to be economically nonviable. While planning to put out more vehicles than GM/toyota managed to crank out of said facility.
 
steakman1971 said:
I'm with you on this. The concept looks cool. The car looked nice. But, you are essentially giving Tesla an interest free loan. What if the car is crap?
It's generally a safe idea not to buy "version 1.0" of most things. There will be bugs and kinks to work out. How long are the batteries supposed to last?
The idea is cool and this actually looks like a practical electric car. I could easily use one with my commute pattern. Even if I switched jobs and had to drive further, I'd be in ok shape in my area (and not having to worry about charging all day - haven't seen many charge ports in this area.)
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Just so you know, if you want to cancel your preorder, they give you your money back. The $1000 just gets you in line ahead of the those who would rather wait and see.

Also, is it really an epic failure if they are shy of their goal? They are still delivering the car of the future.. Well before the majority of car manufacturers even have an EV in the works.
 
LatexRat said:
Also, is it really an epic failure if they are shy of their goal? They are still delivering the car of the future.. Well before the majority of car manufacturers even have an EV in the works.
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Shooting for the stars doesn't mean that if you don't get there you end up at the moon, it more than likely means that you end up face first into the ground.

Scaling up production by nearly a magnitude in a couple of years requires thousands of additional workers at the factory, extremely well managed supply chains, massive increases in retail stores, service centers and charging sites.

It could very well be that Tesla runs out of money before it can reap the benefits of increased production.
 
SLee said:
Shooting for the stars doesn't mean that if you don't get there you end up at the moon, it more than likely means that you end up face first into the ground.
Scaling up production by nearly a magnitude in a couple of years requires thousands of additional workers at the factory, extremely well managed supply chains, massive increases in retail stores, service centers and charging sites.
It could very well be that Tesla runs out of money before it can reap the benefits of increased production.
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Musk and company always has a long list of doubters. Every car they produce is worth $34000... with 400,000 pre-ordered. Feel free to worry about it, but based on what these guys have done so far.. I wouldn't.
 
LatexRat said:
Musk and company always has a long list of doubters. Every car they produce is worth $34000... with 400,000 pre-ordered. Feel free to worry about it, but based on what these guys have done so far.. I wouldn't.
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What has tesla done so far besides lose other people's money???
 
Verge said:
What has tesla done so far besides lose other people's money???
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They are the reason the Nissan Leaf and Volt exist (inspiration).. and they have been slowly getting states to allow direct manufacturer auto sales (huge). Their goal has always been to increase the availability of electric vehicles and speed up transition to them.. Mission accomplished even if they folded tomorrow.
 
LatexRat said:
They are the reason the Nissan Leaf and Volt exist (inspiration).. and they have been slowly getting states to allow direct manufacturer auto sales (huge). Their goal has always been to increase the availability of electric vehicles and speed up transition to them.. Mission accomplished even if they folded tomorrow.
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Ell oh fucking ell


The design process of a car lasts years, probably started 10 years before they were available to the public. That simply isn't true, watch more CNBC or Bloomberg. You have no idea what goes into making a car.
 
Verge said:
Ell oh fucking ell
The design process of a car lasts years, probably started 10 years before they were available to the public. That simply isn't true, watch more CNBC or Bloomberg. You have no idea what goes into making a car.
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Exist may have been the wrong word. Nissan has been working on electric cars for years... but the reason you can actually buy one.. Tesla proved there was demand... Even before they had a product. I guarantee after manufacturers heard the model 3 presale numbers.. they all ramped up electric car development. If not, they will be left in the dust.
 
LatexRat said:
Exist may have been the wrong word. Nissan has been working on electric cars for years... but the reason you can actually buy one.. Tesla proved there was demand... Even before they had a product. I guarantee after manufacturers heard the model 3 presale numbers.. they all ramped up electric car development. If not, they will be left in the dust.
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Refundable deposit isn't really a pre sale. The car isn't even done yet, no word on any type of pricing. This thing launches at 50k and with the subsidy running out, 80% will get refunds, the other 20 fanboys will be waiting till 2020 to get their cars.

It was cute how Elon warned against shorting tesla, right before it drops 20 percent. Genius!
 
Verge said:
Refundable deposit isn't really a pre sale. The car isn't even done yet, no word on any type of pricing. This thing launches at 50k and with the subsidy running out, 80% will get refunds, the other 20 fanboys will be waiting till 2020 to get their cars.
It was cute how Elon warned against shorting tesla, right before it drops 20 percent. Genius!
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Cute story ;) Base price was announced at launch 35k. As more people experience electric cars.. even more people will jump in. Faster, quieter, no exhaust! Your projection of 2020 would be well worth the wait.
 
LatexRat said:
Cute story ;) Base price was announced at launch 35k. As more people experience electric cars.. even more people will jump in. Faster, quieter, no exhaust! Your projection of 2020 would be well worth the wait.
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That's the projected price, the car isn't even finished yet. They don't know what the pricing structure will be like, transitively, YOU don't know what the pricing structure will be like.


Here's his other side project... rough day Elon?

SCTY Stock News - SolarCity Corp. Stock
 
Verge said:
That's the projected price, the car isn't even finished yet. They don't know what the pricing structure will be like, transitively, YOU don't know what the pricing structure will be like.
Here's his other side project... rough day Elon?
SCTY Stock News - SolarCity Corp. Stock
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Again, you are telling a story you made up. This is the Tesla Model 3, coming in 2017 for $35,000

The car was built to the 35,000 price point.. and that was the plan since the beginning of Tesla. Not sure why you really want these companies to fail. Solar and Electric Cars = Cheaper Cleaner Energy.
 
LatexRat said:
Again, you are telling a story you made up. This is the Tesla Model 3, coming in 2017 for $35,000

The car was built to the 35,000 price point.. and that was the plan since the beginning of Tesla. Not sure why you really want these companies to fail. Solar and Electric Cars = Cheaper Cleaner Energy.
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From your article " that's a bold claim, and an important one for Tesla to meet." The price isn't set till they hit the showrooms, and no, the car isn't done yet.

Let me guess, college student?
 
Verge said:
From your article " that's a bold claim, and an important one for Tesla to meet." The price isn't set till they hit the showrooms, and no, the car isn't done yet.
Let me guess, college student?
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The website hosting the article was named after you ;)
I would argue that the bold claim was that it would have over a 200 mile range at $35,000 as well as not being able to buy a better car for that price. Keep in mind that the Nissan Leaf is $35,000. Electric cars can be less complex than ancient tech. I'll return to this thread when the car ships to apologize to you for being wrong if indeed you were right.
 
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LatexRat said:
The website hosting the article was named after you ;)
I would argue that the bold claim was that it would have over a 200 mile range at $35,000 as well as not being able to buy a better car for that price. Keep in mind that the Nissan Leaf is $35,000. Electric cars can be less complex than ancient tech. I'll return to this thread when the car ships to apologize to you for being wrong if indeed you were right.
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What will I be wrong about? I've made no pricing claims other than it isn't set yet. You are making the claims, and then implying things I haven't said.
 
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