I have a Tesla and I also hold a short position on TSLA. My Tesla is a great car. The best car that I've ever driven but I'm not sure if it has anything that other car manufacturers can't replicate. I think Apple can make an even better car than Tesla if they build the hardware and software like their phones and computers.
The idea that Autopilot has some magic sauce that nobody else can replicate is laughable.
Actually after having tested a couple of other cars, for instance the Renault Megane, the BMW i4 and the Mercedes EQE have better enhanced drive assistance than Tesla. For instance:
* when in full-auto on a single lane road, when there's an exit on the right the Tesla 3 almost always slightly swerve towards the exit before coming back in its lane. None of the Megane, the EQE or the BMW i4 do that.
* To overtake a slower vehicle, the Megane and i4 are better : simply push the left blinker, then the car switch lanes and accelerates BEFORE having entirely switched lane, like a human driver would do.
* The mapping and charge planning on the BMW and particularly the EQE/EQS are arguably slightly superior now to Tesla (though Tesla is still a bit easier). Renault is very close, and Kia/Hyundai isn't far behind either.
The difference seems to be that Tesla was 5-10 years ahead on everything: Minimalistic interiors, modern infotainment, mobile app performance, and of course they lead the way in making electric cars viable by showing that they can both look good and blast off in record time. But you're right that other automakers see Tesla as a threat and are catching up; for example, the range and charging curve improvements on models like the EV6 / Ioniq 5 look great, assuming the charger work [in the cold].
> I have a Tesla and I also hold a short position on TSLA. My Tesla is a great car.
This shouldn't have to be a position that requires any kind of defense or explanation. There's nothing contradictory about believing that:
1) A company makes a great product
2) The quality of that product and its total addressable market justifies the company's value at $X
3) The market cap of that company is far, far higher than $X
> The idea that Autopilot has some magic sauce that nobody else can replicate is laughable.
Apparently GM's Supercruise is better, and cheaper.
I got enhanced autopilot in my first Tesla. Except for changing lanes, things like summon and autopark are just toys. The auto lane chance is so glitchy I decided I was better off saving seven grand on my second Tesla.
But if Enhanced Autopilot was 1-2 grand, I'd have bought it without regrets.
What is laughable is thinking that Apple (or anyone else) can just walk into a multi-trillion dollar industry with zero prior experience and displace existing players. Heck they have even tried to build a car/self driving tech for many years now and constantly failed at it.
Not sure what the general consensus on Tesla in Norway. Sure, they are great cars during the summer, but during the winter they severely lack the robustness of the traditional car manufacturers. One of them being able to open the car door!
Autopilot [FSD] is a boondoggle that is a distraction from their core mission. They have wasted time and resources on it, when by now they should have a cheaper mass market car and a full suite of commercial vehicles (small vans to large trucks).
"carmaker" != "electric carmaker" , all other carmakers DO NOT make profitable EV's and require heavy subsidies to be in parity. Tesla has better margins because it is vertically integrated . Apple will NEVER make a car , cars require a totally different supply chain not as simple as moving a low mass objects like phones and PC's , ie cant move them multiple times across different continents. other car makers will have to make significant investments while having losses and being dependent on ICE to break even all the while EV's grow and the ICE mkt share reduces (less profits) . They will probably never catch tesla in building a tech platform "infotainment" , how long would it take for any other car maker to ship steam games and have 60 fps gaming on the car.
> The idea that Autopilot has some magic sauce that nobody else can replicate is laughable.
Openpilot by comma is very equivalent to autopilot (not FSD) and can be added on to a boring cheap car (depending on that car's compatibility) like a prius, corolla, or sonata, all for just about $2,000 dollars. Granted, it's a "dev-kit", requires a bit of research to install, but if you can pass the barrier it's really equivalent to autopilot and available to consumers at a price point that Tesla is not.
And if you don't want the latest and greatest (comma 3) you can get a used comma 2 or a comma knock-off "Mr One" for a few hundred dollars and still have an excellent experience for basic level 2 functionality (automated highway navigation, essentially)
>I think Apple can make an even better car than Tesla if they build the hardware and software like their phones and computers.
OK but we don't even officially know if Apple is trying to make a car?
>The idea that Autopilot has some magic sauce that nobody else can replicate is laughable.
The idea that a very difficult, innovative software problem can't be just replicated by legacy auto manufacturers who lack software engineering expertise is not laughable at all. The legacy auto manufacturers will really have to prove themselves here and so far they have not.
Paying a premium for Apple smartphones hardware and software is a thing, paying same percentage premium for a car is a lot different, it's a lot more money.
It appears so far that the good UI/UX Tesla offers is something other makers could replicate, but stubbornly refuse to.
Still... that doesn't mean the stock is infinitely valuable. Presumably the market will shake out and TSLA will end up with a valuation kinda high for a car company, but not in tech-company range.
That's just it. I see it as follows. Back in the 2000s, the iPhone came out. Especially with the 3G, it was miles ahead of the competition, and it took Android manufacturers five years to catch up and overtake it.
I believe Tesla holds - or, held - a similar position. They had a head start in many areas, but they could not keep it up.
One big difference is quality; Apple phones have great build quality, always have - although they had issues with bending and holding the phone a certain way iirc. Nothing like that in recent years though. But Teslas are known for poor build quality, mainly in the bodywork - expensive construction methods, poor and inconsistent spacings, etc.
Tesla hasn't innovated in recent years. Their last 'big' one was announcing the semi, cybertruck and a new Roadster, but it went radio silent for all of those for years after the announcement until recently when they finally started delivering the first semis.
Apple on the other hand has consistently released a new phone every year since the iphone 1, and more models and innovation to boot.
Tesla had so much money but they don't seem to have invested it efficiently. They also failed to advance their self-driving much further, which seemed to be the USP they were pushing for for a while.
Its owner messing around with the stock price by announcing a privatization, then buying Twitter on what seemed like a whim was another big issue of course. He lost a lot of credibility over the years.
I think Tesla will pivot from a car manufacturer to a battery manufacturer, and that its long-term strategy is its Turbocharger network. Electric cars are here to stay, and whoever owns the charger network now will benefit for a long, long time - like the oil industry has for a hundred years on fuel.
I would think the most valuable part of tesla is the network of loading stations that the own. At least in the US. In Europe the EU is setting a standard which is good for competition, but maybe less good for innovation.
This is true for so many "tech" darlings: Should Uber be priced like a tech company, or a cab company? Is Amazon a tech company or a retailer? Are ecommerce outlets like Warby Parker and Away tech companies, or just retailers with good CSS?
It continues to amaze me how investors seem bamboozled by the appearance of "tech company-ness", by businesses which are obviously in markets that don't support the high price to earnings of "tech companies"--valuations which are premised on strong network effects (present, to a degree, with Telsa, in the form of the charging network--but they will open that up to other carmakers, I guess?) and low unit costs (um, not for cars), and which fundamentally make no sense for things like retail (high unit costs, no network effects) or scooter rentals (high capital costs, high unit costs, limited network effects).
But investors--showing the wisdom of crowds, I guess--seem frequently unable to look past the shiny CSS and the fact that the founder/CEO wears a turtleneck and the headquarters office has a beer tap.
As someone who has beat the market (S&P500) for the past 17 years, I agree that there is a problem with people not understanding markets/technologies. But a bigger issue is that A LOT of people are looking for short term gains. Just look at crypto, even the most serious/nonscammy people in the space believe it will take many years to reach it's true potential, but if you look that the message boards and twitter, they are full of people talking about daily/monthly or even hourly gains.
These people don't actually care if PLTR hits 500B in revenue in 2035, they just want their stock price to go up 10x this year.
Why do investors price so highly these gambles over things that are already generating demonstrable value for real human beings?
Like, why do these cultural signifiers make them salivate to be parted from their funds given the track record of tech (20% fail in year 1, 1% become unicorns, 18% of first-time founders generate a company that can even tread water)?
Tesla, and even more Uber, were priced as if self driving cars are almost here. The idea that services like Uber without the drivers would make car ownership obsolete drove those valuations. Now that self driving cars are many decades away, instead of less than one decade away, is bring stock prices down. I always questions how fast we would see self driving cars, not because of the technology, but because of consumer demand. There was a survey a few years ago of how much more people would be willing to pay for cars that could drive themself, and the median answer was $0. This is because quite a few people gave a negative number, that is, they would pay extra for a car that could not drive itself.
I believe the reason is much simpler - 2017-2019 was a peak of hopes for Tesla. New models, scaling up, Roadster, Semi, Cybertruck announced, the competition was weak and sky was the limit. FSD / Robotaxi was promised to be ready in matter of weeks/months.
The shares were around $20-25 (today's worth, taking in account the splits). I do not see any reason why it would be worth more than that.
- Roadster and Cybertruck are not only late, they were even removed from their landing page. DOA. Ford, Rivian and even GM brought solid product (pickups) to the market and the fat cake is being eaten.
- Semi was very late and doesn't look too promising.
- FSD turned from an advantage to a huge liability. I believe it has now a negative value (current and potential future lawsuits).
- competitors started producing comparable or better cars at better prices (VW ID3, Mercedes EQE, any EVs from Hyundai/Kia)
- there's a strong perception of Elon being bored with Tesla. We've got a billion dollar ship with no captain.
I do not believe in Elon's political involvement having such a great impact, other than taking his attention away.
I'm not sure you can say that when the market cap is still 10x car companies that deliver orders of magnitude more cars than them. Even a high growth car company wouldn't justify that valuation.
No, Tesla is still very overpriced for a car company based on hype.
Yea having test driven the Mach E, Ioniq 5, and XC40 Recharge there is no way I’d buy a Tesla either. We liked all of those better than Model Y and Model 3. Going with the Volvo, it just feels nicer to actually drive, and has built in Google Maps with Google voice controls.
Right. Tesla's problems are car-company problems. Build quality. Production backlog. Delayed new models. Repair parts stocking. Repair center operations. Cost growth. All the dull and boring stuff they have to fix, or their market cap shrinks to what their production output justifies.
Well, they have those problems AND a CEO that (at best) can be called divisive, and who staked a lot of his stock in a separate company that is also (at best) divisive.
What happened in 2020 that made investors think Tesla was a tech company instead of a car company? Based on the graph in TFA, it seems like investors maybe used to price the valuation right. (Caveat: I have no idea if they did, but the valuation used to be in line with other car companies, I guess?)
Not sure of the exact timeline here, but for a while Musk was explicitly promising that within a few years, true FSD would be a reality. He said you'd have to be insane not to buy a Tesla, because your car would be out there making money for you as an autonomous taxi when you're not using it. A car that pays for itself and then some would be a true paradigm shift, but as we can see now, his predictions were hot air.
I think this is really the answer. We've entered into a scary scenario for the US economy: it lives and dies on cheap credit supplied by the Fed. When the Fed drops rates, people chase yield and you get stuff like NFTs and valuations that are detached from fundamentals. When interest rates go up, the market just waits for them to go down again...
From the perspective of addressable market opportunity, personal vehicles are a steady size and satisfied market. There are cars that you can buy from $500 junkers to $500k monstrosities, and there is little opportunity to 10x the addressable market size.
Electrification of cars, while critically important for the climate, does not open an entirely new modality of life in the way that cars initially did. It's not transformative as a business model.
Therefore, unless they cause a major behavioral switch that is monetizable, EVs will just eventually replace the current car market. Tesla's potential growth as an EV maker is directly proportional to traditional automakers' car market loss, to the extent that happens. Does that justify a 10 or 20x valuation? Only if you think they will reach dominant global market share of all cars. To do so they would have to have an non-replicable comparative advantage, which they have failed to demonstrate.
Grid storage might eventually be a major business for Tesla but I doubt that it will drive huge profits. They don't have any unique sustainable competitive advantage and the customers are extremely price sensitive, so I expect long term profit margins to be low.
Even if the market can remain irrational for a while, in the end it very much remains driven by expectations of growth and revenue.
"tech" as it's called benefits from a non-linear scale factor: serving one more person does not directly correlate to a static increase in cost, it's more derivative in nature (cost increases onefold with each order of magnitude). Add to that globalisation for free. That's how you can expect more growth and revenue from a "tech" company than from traditional industries. Service has an almost 1:1 relationship, manufacturing is kind of in the middle, where you benefit from scale but still need to purchase matter, and time from people to build stuff.
In that way tesla is not a tech company. To build an additional tesla you need more people and more robots. You need to purchase steel, lithium, leather, etc. You need to ship that Tesla. Growth doesn't come to them at a derivative cost.
As an investor you might judge that they might have better software, or better cars, and ride a wave of electrification that other manufacturers don't, which justified a higher price because their potential for growth is higher. That's not entirely true anymore, everyone else is producing electric cars now, at prices that are often cheaper, so their advantage is not that big anymore.
Manias, panics and crashes - nothing new under the sun.
But actually no, in the age of 24/7 viral digital titilation, manias have been upgraded to hysterias.
Once the dust of this cycle settles the tangible "tech" advances booked will actually quite meager and people will not believe how many got so excited about so little.
Entire theses and books will be written about how general STEM illiteracy and FOMO coupled with unprecedented liquidity create fertile soil for all sorts of bizarre collective phenomena.
So does this mean investors can't create new catergories and must think in absolute terms and existing boxes? How would could we, humans who know boxed thinking leads to fallacies and know the world is made of continuums in many (infinte?) dimension, use that to beat the market...?
My opinion is that Tesla wanted to be a tech company, wanted to lead the game with autopilot and other tech features, and eventually stop making cars and license out the tech. Turns out, its not that "hard" to get to the point they are at
[+] [-] msoad|3 years ago|reply
The idea that Autopilot has some magic sauce that nobody else can replicate is laughable.
[+] [-] wazoox|3 years ago|reply
* when in full-auto on a single lane road, when there's an exit on the right the Tesla 3 almost always slightly swerve towards the exit before coming back in its lane. None of the Megane, the EQE or the BMW i4 do that.
* To overtake a slower vehicle, the Megane and i4 are better : simply push the left blinker, then the car switch lanes and accelerates BEFORE having entirely switched lane, like a human driver would do.
* The mapping and charge planning on the BMW and particularly the EQE/EQS are arguably slightly superior now to Tesla (though Tesla is still a bit easier). Renault is very close, and Kia/Hyundai isn't far behind either.
[+] [-] judge2020|3 years ago|reply
[+] [-] Octoth0rpe|3 years ago|reply
This shouldn't have to be a position that requires any kind of defense or explanation. There's nothing contradictory about believing that:
1) A company makes a great product 2) The quality of that product and its total addressable market justifies the company's value at $X 3) The market cap of that company is far, far higher than $X
[+] [-] gwbas1c|3 years ago|reply
Apparently GM's Supercruise is better, and cheaper.
I got enhanced autopilot in my first Tesla. Except for changing lanes, things like summon and autopark are just toys. The auto lane chance is so glitchy I decided I was better off saving seven grand on my second Tesla.
But if Enhanced Autopilot was 1-2 grand, I'd have bought it without regrets.
[+] [-] paxys|3 years ago|reply
[+] [-] fenrisbear|3 years ago|reply
[+] [-] samwillis|3 years ago|reply
Edit: yes meant FSD
[+] [-] moonchrome|3 years ago|reply
I'm not sure outsourcing manufacturing and focusing on design works in auto industry - but could be wrong.
[+] [-] elisharobinson|3 years ago|reply
[+] [-] helen___keller|3 years ago|reply
Openpilot by comma is very equivalent to autopilot (not FSD) and can be added on to a boring cheap car (depending on that car's compatibility) like a prius, corolla, or sonata, all for just about $2,000 dollars. Granted, it's a "dev-kit", requires a bit of research to install, but if you can pass the barrier it's really equivalent to autopilot and available to consumers at a price point that Tesla is not.
And if you don't want the latest and greatest (comma 3) you can get a used comma 2 or a comma knock-off "Mr One" for a few hundred dollars and still have an excellent experience for basic level 2 functionality (automated highway navigation, essentially)
[+] [-] leesec|3 years ago|reply
OK but we don't even officially know if Apple is trying to make a car?
>The idea that Autopilot has some magic sauce that nobody else can replicate is laughable.
The idea that a very difficult, innovative software problem can't be just replicated by legacy auto manufacturers who lack software engineering expertise is not laughable at all. The legacy auto manufacturers will really have to prove themselves here and so far they have not.
[+] [-] albertopv|3 years ago|reply
Paying a premium for Apple smartphones hardware and software is a thing, paying same percentage premium for a car is a lot different, it's a lot more money.
[+] [-] kylecordes|3 years ago|reply
Still... that doesn't mean the stock is infinitely valuable. Presumably the market will shake out and TSLA will end up with a valuation kinda high for a car company, but not in tech-company range.
[+] [-] Cthulhu_|3 years ago|reply
I believe Tesla holds - or, held - a similar position. They had a head start in many areas, but they could not keep it up.
One big difference is quality; Apple phones have great build quality, always have - although they had issues with bending and holding the phone a certain way iirc. Nothing like that in recent years though. But Teslas are known for poor build quality, mainly in the bodywork - expensive construction methods, poor and inconsistent spacings, etc.
Tesla hasn't innovated in recent years. Their last 'big' one was announcing the semi, cybertruck and a new Roadster, but it went radio silent for all of those for years after the announcement until recently when they finally started delivering the first semis.
Apple on the other hand has consistently released a new phone every year since the iphone 1, and more models and innovation to boot.
Tesla had so much money but they don't seem to have invested it efficiently. They also failed to advance their self-driving much further, which seemed to be the USP they were pushing for for a while.
Its owner messing around with the stock price by announcing a privatization, then buying Twitter on what seemed like a whim was another big issue of course. He lost a lot of credibility over the years.
I think Tesla will pivot from a car manufacturer to a battery manufacturer, and that its long-term strategy is its Turbocharger network. Electric cars are here to stay, and whoever owns the charger network now will benefit for a long, long time - like the oil industry has for a hundred years on fuel.
[+] [-] macco|3 years ago|reply
[+] [-] jpeter|3 years ago|reply
[+] [-] md_|3 years ago|reply
It continues to amaze me how investors seem bamboozled by the appearance of "tech company-ness", by businesses which are obviously in markets that don't support the high price to earnings of "tech companies"--valuations which are premised on strong network effects (present, to a degree, with Telsa, in the form of the charging network--but they will open that up to other carmakers, I guess?) and low unit costs (um, not for cars), and which fundamentally make no sense for things like retail (high unit costs, no network effects) or scooter rentals (high capital costs, high unit costs, limited network effects).
But investors--showing the wisdom of crowds, I guess--seem frequently unable to look past the shiny CSS and the fact that the founder/CEO wears a turtleneck and the headquarters office has a beer tap.
[+] [-] j16sdiz|3 years ago|reply
[+] [-] gitfan86|3 years ago|reply
These people don't actually care if PLTR hits 500B in revenue in 2035, they just want their stock price to go up 10x this year.
[+] [-] miragecraft|3 years ago|reply
They’re not like the other companies listed.
[+] [-] shadowgovt|3 years ago|reply
Why do investors price so highly these gambles over things that are already generating demonstrable value for real human beings?
Like, why do these cultural signifiers make them salivate to be parted from their funds given the track record of tech (20% fail in year 1, 1% become unicorns, 18% of first-time founders generate a company that can even tread water)?
[+] [-] philipov|3 years ago|reply
[+] [-] UIUC_06|3 years ago|reply
[+] [-] pjdemers|3 years ago|reply
[+] [-] michpoch|3 years ago|reply
The shares were around $20-25 (today's worth, taking in account the splits). I do not see any reason why it would be worth more than that.
- Roadster and Cybertruck are not only late, they were even removed from their landing page. DOA. Ford, Rivian and even GM brought solid product (pickups) to the market and the fat cake is being eaten. - Semi was very late and doesn't look too promising. - FSD turned from an advantage to a huge liability. I believe it has now a negative value (current and potential future lawsuits). - competitors started producing comparable or better cars at better prices (VW ID3, Mercedes EQE, any EVs from Hyundai/Kia) - there's a strong perception of Elon being bored with Tesla. We've got a billion dollar ship with no captain.
I do not believe in Elon's political involvement having such a great impact, other than taking his attention away.
[+] [-] _uhtu|3 years ago|reply
No, Tesla is still very overpriced for a car company based on hype.
[+] [-] fassssst|3 years ago|reply
[+] [-] opdahl|3 years ago|reply
[+] [-] simonebrunozzi|3 years ago|reply
[+] [-] Animats|3 years ago|reply
[+] [-] TheCleric|3 years ago|reply
[+] [-] checkyoursudo|3 years ago|reply
[+] [-] trefoiled|3 years ago|reply
[+] [-] seydor|3 years ago|reply
[+] [-] ragnot|3 years ago|reply
[+] [-] danans|3 years ago|reply
Electrification of cars, while critically important for the climate, does not open an entirely new modality of life in the way that cars initially did. It's not transformative as a business model.
Therefore, unless they cause a major behavioral switch that is monetizable, EVs will just eventually replace the current car market. Tesla's potential growth as an EV maker is directly proportional to traditional automakers' car market loss, to the extent that happens. Does that justify a 10 or 20x valuation? Only if you think they will reach dominant global market share of all cars. To do so they would have to have an non-replicable comparative advantage, which they have failed to demonstrate.
[+] [-] crypot|3 years ago|reply
[+] [-] Tempest1981|3 years ago|reply
[+] [-] gwbas1c|3 years ago|reply
I think the bigger question we should ask ourselves is, "What is a tech company?"
[+] [-] samwillis|3 years ago|reply
[+] [-] nradov|3 years ago|reply
https://www.cnbc.com/2022/09/20/tesla-megapack-battery-caugh...
Grid storage might eventually be a major business for Tesla but I doubt that it will drive huge profits. They don't have any unique sustainable competitive advantage and the customers are extremely price sensitive, so I expect long term profit margins to be low.
[+] [-] charles_f|3 years ago|reply
"tech" as it's called benefits from a non-linear scale factor: serving one more person does not directly correlate to a static increase in cost, it's more derivative in nature (cost increases onefold with each order of magnitude). Add to that globalisation for free. That's how you can expect more growth and revenue from a "tech" company than from traditional industries. Service has an almost 1:1 relationship, manufacturing is kind of in the middle, where you benefit from scale but still need to purchase matter, and time from people to build stuff.
In that way tesla is not a tech company. To build an additional tesla you need more people and more robots. You need to purchase steel, lithium, leather, etc. You need to ship that Tesla. Growth doesn't come to them at a derivative cost.
As an investor you might judge that they might have better software, or better cars, and ride a wave of electrification that other manufacturers don't, which justified a higher price because their potential for growth is higher. That's not entirely true anymore, everyone else is producing electric cars now, at prices that are often cheaper, so their advantage is not that big anymore.
[+] [-] college_physics|3 years ago|reply
But actually no, in the age of 24/7 viral digital titilation, manias have been upgraded to hysterias.
Once the dust of this cycle settles the tangible "tech" advances booked will actually quite meager and people will not believe how many got so excited about so little.
Entire theses and books will be written about how general STEM illiteracy and FOMO coupled with unprecedented liquidity create fertile soil for all sorts of bizarre collective phenomena.
[+] [-] arcticbull|3 years ago|reply
[+] [-] Maledictus|3 years ago|reply
[+] [-] teekert|3 years ago|reply
[+] [-] moomin|3 years ago|reply
[+] [-] sithlord|3 years ago|reply
[+] [-] unknown|3 years ago|reply
[deleted]