Some friends bought a Model X about six months ago, spending over $100k — that’s down from the almost $150k that Tesla was demanding a couple years ago when we bought one (and both were fairly fully loaded).
First, my experience 2 years ago was the A/C compressor was so loud that during summer with cooling running at maximum, you couldn’t hold a conversation in the cabin because of the noise. Tesla investigated and eventually said “looks fine to us, there isn’t designed to be any additional noise abatement on the firewall between the front and the passenger space”. We had issues with our Falcon Wing doors, and we eventually sold the vehicle after a year.
Now, our friends Model X, that’s had ~6 non-trivial maintenance problems in six months, including the Falcon Wing doors failing three times, and they’re in the process of trying to get a refund through Lemon Laws.
Other acquaintances who own Teslas also have service issues on their Model X, the Cybertruck looks like an even worse mess, so I concluded over a span of multiple years, quality still isn’t a strong suit of Tesla, thus I’m not shocked to see there’s limited brand loyaly, and with increasingly viable competition, demand is falling?
I now have a Rivian R1S and we are incredibly happy with that vehicle, having put about 6000 miles on it. Mercedes EQS also seems like a reasonable choice in 2024, depending on what you want.
One of my coworkers bought a Model S. At first he was always going on about how amazing it was. Then within the first year he started having all kinds of problems with it. He's now in the middle of a lawsuit trying to get a refund on it.
Could it be that Musk's inflammatory language and behaviors are a turn off for potential buyers? They are a turn off for me. I like the vehicles but I'd never get one.
"Lot of smart people who see where this is going"...uh huh.
The smart people left years ago and started working at Lucid and elsewhere. All the people who had talent got sick of Musk's shit, saw the company stagnating, and left for functional, non-toxic workplaces.
Tesla has spent the last ~5 years resting on its laurels, aside from (eventually) producing a pavement-queen meme vehicle that breaks down on even the simplest off-roading tests and gets stuck on beaches. Oh, and slightly tweaking the Model 3's looks, I guess that's...something.
Your cars have completely stagnant styling, terrible reliability (matched with even worse parts availability!), the worst interiors in their class, the worst build quality, and they're no longer kings in anything - not efficiency, range, performance, or charging speed.
Your company was at the forefront of removing physical switches and moving to screen-based and capacitive-touch controls, both reviled by the public and coming under increasing scrutiny by regulators.
Your cars have the highest crash rate of any automaker.
Tesla's "autopilot" has been surpassed by several manufacturers whose systems don't randomly slam on the brakes (or, for that matter, into the backs of police cruisers.)
Your cars are still stuck on 400V (sorry, "480") architecture while years ago other companies went to 800v. VW/Audi/Porsche, Hyundai/Kia, GM, and Lucid are all on 800v. And while "V4" stations have been deployed, they're all still 400v 'under the hood'. 800v CCS has been slow to roll out, but it's actually been
If you're all so smart, why are your cars on fire sale and still selling like dogshit?
"Disastrous" seems like a significant overstatement.
To me this looks more like "unsurprising". Tesla has some additional business lines which might eventually prove quite valuable, but in the short to medium term it is mostly a car company. The whole car industry is dealing with the results of higher interest rates. It would be much more surprising if Tesla somehow turned out to be immune to that.
It’s below estimates, so it’s by definition “surprising” relative to the people whose business it is to predict these things.
Disastrous may be going too far unless it portends further drops going forward.
But disastrous may also be the right word because Tesla’s valuation is based entirely on massive growth. So even if this means Tesla will start growing fairly normally as opposed to rapidly, that’s bad for Tesla stock.
It was literally under target. That’s the definition of surprising.
It comes as no surprises that the rest of your comment either looks for positives or places the blame on conditions affecting the auto industry at large.
Any reaction to bad news for Elon Musk businesses are outsized for the amount of hate people have for him. I'd say the hate is pretty well-deserved but I also value SpaceX and Tesla tremendously and I hope they continue taking us into the future.
Maybe we're getting to saturation in early adopter market? Looking around, there are a lot of folks who could not easily live with a BEV, i.e. live in apartment buildings or don't have an easy way to install L2 charging at home.
I built www.letselectrify.org as a side project to make it easier for people in multifamily buildings (condos, apartments, and HOAs) to get their own dedicated EV chargers.
In multifamily buildings, such as my 85-unit condo, there isn’t any at-home charging. At best, there is one shared charger for the community to use.
This sucks for several reasons: 1. You have to remember to move your car when it’s done charging, 2. The HOA is stuck paying the bill for all the electricity, and 3. As more and more people get electric cars, shared chargers don’t scale.
The most common Homeowner Association (HOA) objections to adding more charging: 1. It costs too much, and 2. Nobody wants this.
HOAs are generally risk-averse and don’t want to spend money on discretionary things like EV charging. This means that the only way for residents to conveniently own an electric car is to pay out of pocket (sometimes up to $20k) to install a single charger, which usually also requires the HOA to approve on a case-by-case basis.
Instead of all these one-off installs, letselectrify.org combines everyone that wants a charger into one campaign and lets them split the cost of installation, which ends up being much cheaper.
Even people for whom home charging is not an issue aren't going to abandon their existing gas cars to get an EV that performs the exact same function for a lot more money. Having an EV is not transformational.
Even with a $7,500 discount, there's still a wide gap between the value of the ten-year old gas car in the driveway and the cost of a brand new EV. Not going to a gas station is just not that beneficial to most.
I agree this is part of it. There are still many parts of the USA where charging is a real concern, as is the need to drive beyond the vehicle's range (I do that several times a month, and would worry about charging along the way or at my destination).
I'm a recent first time buyer of a (used) EV and use the L1 120v charger that came with the vehicle. The daily commute use is low enough that it charges to full overnight.
Before I purchased I thought I'd need to pay for a L2 charger and hire an electrician to install a 240v circuit in the driveway. Turned it that I just needed a short 10ga extension cord from an existing 120v receptacle.
I think the apartment issue is really more of a non-issue, assuming there are fast chargers near you. Can apartment dwellers like myself really not go charge for 10-30 minutes every couple of days? A trip to the gas station is typically ~5 minutes.
At least that is how I rationalize potential EV ownership.
Interest rates and vehicle prices too high, must come down to expand TAM. Future benchmark rate cuts should improve affordability (most people finance and buy a payment), but Tesla will need to navigate burn rate until central bank pivots.
I think it'd be a mistake to also underestimate the impact of actual competition showing up with far fewer quirks. Tesla's interiors were already spartan to say the least, and with each interior update the cost cutting gets even more obvious and more compromising (eg, replacing turn signal stalks with buttons on the steering wheel).
Meanwhile you've got things like the Ioniq 5 that have fun styling, way better interiors, and don't really cost that much more. They're still selling a lot fewer in total numbers than Tesla, but Ioniq 5 + EV6 is around 53,000 vehicles in 2023. Given the shape of the EV landscape and EV sales in general, that's probably a lot of lost sales from Tesla specifically. BMW also started showing up, and they're responsible for another 47,000 sales in 2023.
And then at the high end it looks like the Model X + S sold 17,027 total, which yeah. At that price point those vehicles are just one-trick ponies. They go fast, and that's about it. Meanwhile you've got Lucid Air, Porsche Taycan, Audio e-Tron GT, etc... Taycan + eTron GT sales in the US add up to around 10,000. Lucid only had 6,000 delivers in 2023, but it also only offers a Model S competitor atm.
> Interest rates and vehicle prices too high, must come down
I'm still a bit surprised how many people, even professionals in the lending space, hold this view that "interest rates must fall!"
We're still relatively low for federal interest rate[0]. Near zero interest rates are not sustainable long term and have lead to a tremendous asset bubble we're still just figuring out the consequences of.
It's a bit frightening that the only solution most companies have to improving their future out look boils down to "wait for rates to drop".
I suspect even if rates do drop again, it will be only for a brief while before it becomes clear that "print free money!" is not a long term viable economic strategy.
FWIW they had some insane discounts toward the end of March, to the extent that I'm not sure high prices is the problem. I bought a new long-range AWD Model Y myself a couple weeks ago because between the discounts and tax credits I ended up paying under $40k (would've been around $36k but even after sales tax and fees and stuff it was still only around $39k).
At those prices I'm not sure how they aren't selling more cars. For the amount of range and functionality you get, that kind of deal blows the competition out of the water; no other EV I'm aware of comes close. (That said, I have no idea if they still made much of a profit off that car or if they were just desperate to clear out space.)
Tesla are still producing cars which have the same design elements as the Model S did in 2012. I'm amazed they have pulled that off but maybe the lack of "freshness" is also hurting their bottom line?
Anecdotal, but this is absolutely the case for me. The widely reported fit-and-finish issues would have made me hesitant regardless, but as long as it's Elon's company I will not be buying a Tesla regardless of improvements in quality. Bought a Prius plug-in hybrid instead (which I'm very happy with).
Prior to Elon taking the mask off I was really excited about the idea of getting a Tesla, and I'm squarely in what I imagine must be the main target demographic.
Is there any evidence that the best-fit portions of the market are getting saturated. There are plenty of places in the USA where an ICE vehicle is just a better fit, given usage patterns, lack of charging facilities etc.
Well, it's a specialty item that can substitute for a very popular mainstream one in a number of popular use cases.
And come close to substituting in a number of cases that might still lead to a bit of rapid adoption.
More ideal as an incremental acquisition for many of those who already possess the mainstream merchandise. Not so much desirability for those that would have to choose one or the other. So that's a smaller subset of the niche.
Then there are those who find the novel solution is superior for their particular needs, an even smaller subset, but more enthusiastic.
Seems like the behavior would be to fly off the shelf until the subsets of the mainstream have been saturated, then plateau at the rate that the mainstream becomes amenable to replacement.
At the smallest of scale, like with handcrafted items, it can occasionally be easy to do well financially as long as you can sell all you can make. This can happen when they're "flying off the shelf" so there can be relentless pressure to just make more, and the pressure can seem unending when there is a multi-year timeline for any scale-up activities.
If the market matures at a less-giga-than-anticipated level, and you end up in the process of building more than you can sell on an ongoing basis, you have reversed the financial opportunity that was supposed to accrue by building more to begin with.
One day when you wake up and can no longer sell all you can make for some reason, it's a whole different ball game.
Not sure how it will affect things going forward, but the Model 3 may help. Jay Leno did an excellent segment about it a few weeks back, with a pair of Tesla engineers:
Until Tesla changes their Model 3 sourcing to be eligible for the $7500 tax credit, I don’t understand who would buy one over the Model Y even with the “highland” improvements.
I could see this coming weeks ago: My local dealer was cold-calling existing owners to try to get them to buy the updated model 3, which isn't a very significant update at all. They had a bunch on the lot that weren't selling.
We can also see the promotion of a free trial for self-driving as a response to this too: Hoping some people bite after trying it out. Whether that happens, or we just see more videos of failed self-driving is another story.
Either way, Tesla hasn't done much to improve their normal models in 2 years. The cybertruck is barely in production, and it's hard to see it as having massive demand. Elon's cultural alignment with people that at the same time are being told that electric vehicles will be bad for America is probably not great for sales on either side of the cultural divide. Add high interest rates, and it's unsurprising to see trouble. But does anyone have enough shares to try to force Tesla to make significant changes in diection? Unlikely.
Lots of talk about how Musk's controversies are hurting the company (agree!) but I think a bigger problem may be his tendency to hyper-focus on things. Many tesla models have not received significant updates or styling changes in years. Tesla is no longer brand new, the oldest production Model S'es are ~12 years old. Many of their changes have been along the line of company-wide changes or upgrades (which are also good) but people like having their new car look new, not like one from a decade ago. It feels like Musks companies suffer from hyperfocus, probably because effort is directed by the his attention, but car companies can't work like that.
Tesla has the Cybertruck now (is it shipping yet?). People love trucks, so this might work out great for TSLA.
But they don't really have an SUV, which is by far the most popular form factor. The Model Y is closest but it's still a bit car-ish.
Interest rates are up.
Their chairman is going through a very public ...episode.
They'll definitely overcome the headwinds: they still have superfans despite the Musk antics; they have lower leverage than GM/F [0]; there's a lot of regulatory pressure coming down the pipes over the next 10-30 years to phase out ICE engines.
Not surprising. They are experiencing serious scaling difficulties with the new "Highland" Model 3. The community [0] thinks that there are supply chain issues with several components in the Long Range variant of these cars, the white seats being especially bottlenecked.
Others are gaining market share fast, especially on S/X vs. German luxury EVs. But the whole industry is far behind where they thought total vehicle sales would be in 2023-2024, the cause being high loan/lease payments in the US, and weak Chinese consumer demand overall. So part of this is unique to Tesla, but part is an industry that was expecting 2023-4 to be much better than it has been so far.
[+] [-] nixgeek|1 year ago|reply
First, my experience 2 years ago was the A/C compressor was so loud that during summer with cooling running at maximum, you couldn’t hold a conversation in the cabin because of the noise. Tesla investigated and eventually said “looks fine to us, there isn’t designed to be any additional noise abatement on the firewall between the front and the passenger space”. We had issues with our Falcon Wing doors, and we eventually sold the vehicle after a year.
Now, our friends Model X, that’s had ~6 non-trivial maintenance problems in six months, including the Falcon Wing doors failing three times, and they’re in the process of trying to get a refund through Lemon Laws.
Other acquaintances who own Teslas also have service issues on their Model X, the Cybertruck looks like an even worse mess, so I concluded over a span of multiple years, quality still isn’t a strong suit of Tesla, thus I’m not shocked to see there’s limited brand loyaly, and with increasingly viable competition, demand is falling?
I now have a Rivian R1S and we are incredibly happy with that vehicle, having put about 6000 miles on it. Mercedes EQS also seems like a reasonable choice in 2024, depending on what you want.
[+] [-] ChumpGPT|1 year ago|reply
[+] [-] bigtunacan|1 year ago|reply
[+] [-] dzhiurgis|1 year ago|reply
[+] [-] MrMan|1 year ago|reply
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[+] [-] misiti3780|1 year ago|reply
[+] [-] hn72774|1 year ago|reply
[+] [-] ddoolin|1 year ago|reply
[+] [-] testbf|1 year ago|reply
[+] [-] bethekind|1 year ago|reply
[+] [-] leosanchez|1 year ago|reply
[+] [-] KennyBlanken|1 year ago|reply
The smart people left years ago and started working at Lucid and elsewhere. All the people who had talent got sick of Musk's shit, saw the company stagnating, and left for functional, non-toxic workplaces.
Tesla has spent the last ~5 years resting on its laurels, aside from (eventually) producing a pavement-queen meme vehicle that breaks down on even the simplest off-roading tests and gets stuck on beaches. Oh, and slightly tweaking the Model 3's looks, I guess that's...something.
Your cars have completely stagnant styling, terrible reliability (matched with even worse parts availability!), the worst interiors in their class, the worst build quality, and they're no longer kings in anything - not efficiency, range, performance, or charging speed.
Your company was at the forefront of removing physical switches and moving to screen-based and capacitive-touch controls, both reviled by the public and coming under increasing scrutiny by regulators.
Your cars have the highest crash rate of any automaker.
Tesla's "autopilot" has been surpassed by several manufacturers whose systems don't randomly slam on the brakes (or, for that matter, into the backs of police cruisers.)
Here's a 2008 blog post about V2G: https://www.tesla.com/blog/smarter-charging ...and sixteen years later your cars still can't do it. Hyundais and Kias can...
Your cars are still stuck on 400V (sorry, "480") architecture while years ago other companies went to 800v. VW/Audi/Porsche, Hyundai/Kia, GM, and Lucid are all on 800v. And while "V4" stations have been deployed, they're all still 400v 'under the hood'. 800v CCS has been slow to roll out, but it's actually been
If you're all so smart, why are your cars on fire sale and still selling like dogshit?
[+] [-] kylecordes|1 year ago|reply
To me this looks more like "unsurprising". Tesla has some additional business lines which might eventually prove quite valuable, but in the short to medium term it is mostly a car company. The whole car industry is dealing with the results of higher interest rates. It would be much more surprising if Tesla somehow turned out to be immune to that.
[+] [-] addicted|1 year ago|reply
Disastrous may be going too far unless it portends further drops going forward.
But disastrous may also be the right word because Tesla’s valuation is based entirely on massive growth. So even if this means Tesla will start growing fairly normally as opposed to rapidly, that’s bad for Tesla stock.
[+] [-] NovemberWhiskey|1 year ago|reply
[+] [-] cqqxo4zV46cp|1 year ago|reply
It comes as no surprises that the rest of your comment either looks for positives or places the blame on conditions affecting the auto industry at large.
Can Tesla do no wrong?
[+] [-] r00fus|1 year ago|reply
Tesla has confirmed what most it's not a tech company, but an auto manufacturer. And if it's repeated, the stock will never recover.
[+] [-] xeromal|1 year ago|reply
[+] [-] foobarian|1 year ago|reply
[+] [-] akouri|1 year ago|reply
In multifamily buildings, such as my 85-unit condo, there isn’t any at-home charging. At best, there is one shared charger for the community to use.
This sucks for several reasons: 1. You have to remember to move your car when it’s done charging, 2. The HOA is stuck paying the bill for all the electricity, and 3. As more and more people get electric cars, shared chargers don’t scale.
The most common Homeowner Association (HOA) objections to adding more charging: 1. It costs too much, and 2. Nobody wants this.
HOAs are generally risk-averse and don’t want to spend money on discretionary things like EV charging. This means that the only way for residents to conveniently own an electric car is to pay out of pocket (sometimes up to $20k) to install a single charger, which usually also requires the HOA to approve on a case-by-case basis.
Instead of all these one-off installs, letselectrify.org combines everyone that wants a charger into one campaign and lets them split the cost of installation, which ends up being much cheaper.
[+] [-] jerlam|1 year ago|reply
Even with a $7,500 discount, there's still a wide gap between the value of the ten-year old gas car in the driveway and the cost of a brand new EV. Not going to a gas station is just not that beneficial to most.
[+] [-] SoftTalker|1 year ago|reply
[+] [-] hn72774|1 year ago|reply
Before I purchased I thought I'd need to pay for a L2 charger and hire an electrician to install a 240v circuit in the driveway. Turned it that I just needed a short 10ga extension cord from an existing 120v receptacle.
Our household have a second ICE for longer trips.
I live in a house though, not an apartment.
[+] [-] tristan957|1 year ago|reply
At least that is how I rationalize potential EV ownership.
[+] [-] toomuchtodo|1 year ago|reply
[+] [-] kllrnohj|1 year ago|reply
Meanwhile you've got things like the Ioniq 5 that have fun styling, way better interiors, and don't really cost that much more. They're still selling a lot fewer in total numbers than Tesla, but Ioniq 5 + EV6 is around 53,000 vehicles in 2023. Given the shape of the EV landscape and EV sales in general, that's probably a lot of lost sales from Tesla specifically. BMW also started showing up, and they're responsible for another 47,000 sales in 2023.
And then at the high end it looks like the Model X + S sold 17,027 total, which yeah. At that price point those vehicles are just one-trick ponies. They go fast, and that's about it. Meanwhile you've got Lucid Air, Porsche Taycan, Audio e-Tron GT, etc... Taycan + eTron GT sales in the US add up to around 10,000. Lucid only had 6,000 delivers in 2023, but it also only offers a Model S competitor atm.
[+] [-] PheonixPharts|1 year ago|reply
I'm still a bit surprised how many people, even professionals in the lending space, hold this view that "interest rates must fall!"
We're still relatively low for federal interest rate[0]. Near zero interest rates are not sustainable long term and have lead to a tremendous asset bubble we're still just figuring out the consequences of.
It's a bit frightening that the only solution most companies have to improving their future out look boils down to "wait for rates to drop".
I suspect even if rates do drop again, it will be only for a brief while before it becomes clear that "print free money!" is not a long term viable economic strategy.
0. https://fred.stlouisfed.org/series/FEDFUNDS
[+] [-] NickM|1 year ago|reply
At those prices I'm not sure how they aren't selling more cars. For the amount of range and functionality you get, that kind of deal blows the competition out of the water; no other EV I'm aware of comes close. (That said, I have no idea if they still made much of a profit off that car or if they were just desperate to clear out space.)
[+] [-] alephnerd|1 year ago|reply
[0] - https://www.reuters.com/business/autos-transportation/byd-ma...
[+] [-] VBprogrammer|1 year ago|reply
[+] [-] unknown|1 year ago|reply
[deleted]
[+] [-] akmarinov|1 year ago|reply
[+] [-] ayan|1 year ago|reply
[+] [-] mplanchard|1 year ago|reply
Prior to Elon taking the mask off I was really excited about the idea of getting a Tesla, and I'm squarely in what I imagine must be the main target demographic.
[+] [-] kstrauser|1 year ago|reply
It’s not great when your customers are embarrassed to be seen driving the car you made.
[+] [-] ddoolin|1 year ago|reply
[+] [-] shrubble|1 year ago|reply
[+] [-] fuzzfactor|1 year ago|reply
And come close to substituting in a number of cases that might still lead to a bit of rapid adoption.
More ideal as an incremental acquisition for many of those who already possess the mainstream merchandise. Not so much desirability for those that would have to choose one or the other. So that's a smaller subset of the niche.
Then there are those who find the novel solution is superior for their particular needs, an even smaller subset, but more enthusiastic.
Seems like the behavior would be to fly off the shelf until the subsets of the mainstream have been saturated, then plateau at the rate that the mainstream becomes amenable to replacement.
At the smallest of scale, like with handcrafted items, it can occasionally be easy to do well financially as long as you can sell all you can make. This can happen when they're "flying off the shelf" so there can be relentless pressure to just make more, and the pressure can seem unending when there is a multi-year timeline for any scale-up activities.
If the market matures at a less-giga-than-anticipated level, and you end up in the process of building more than you can sell on an ongoing basis, you have reversed the financial opportunity that was supposed to accrue by building more to begin with.
One day when you wake up and can no longer sell all you can make for some reason, it's a whole different ball game.
[+] [-] ta8645|1 year ago|reply
https://youtu.be/WLMalLy_3JU
[+] [-] onion2k|1 year ago|reply
[+] [-] sf_rob|1 year ago|reply
[+] [-] hnburnsy|1 year ago|reply
As of Q3 2022, Tesla’s profit margins stand out significantly compared to its competitors:
Gross profit per car: $15,653 Net profit per car: $9,574
In comparison, other major automakers have lower profit margins:
General Motors (GM): Gross profit per car of $3,818 and net profit per car of $2,150.
Toyota: Gross profit per car of $3,925 and net profit per car of $1,197.
Volkswagen (VW): Gross profit per car of $6,034 and net profit per car of $973.
Hyundai: Gross profit per car of $5,362 and net profit per car of $927.
[+] [-] hibikir|1 year ago|reply
We can also see the promotion of a free trial for self-driving as a response to this too: Hoping some people bite after trying it out. Whether that happens, or we just see more videos of failed self-driving is another story.
Either way, Tesla hasn't done much to improve their normal models in 2 years. The cybertruck is barely in production, and it's hard to see it as having massive demand. Elon's cultural alignment with people that at the same time are being told that electric vehicles will be bad for America is probably not great for sales on either side of the cultural divide. Add high interest rates, and it's unsurprising to see trouble. But does anyone have enough shares to try to force Tesla to make significant changes in diection? Unlikely.
[+] [-] aeturnum|1 year ago|reply
[+] [-] FredPret|1 year ago|reply
But they don't really have an SUV, which is by far the most popular form factor. The Model Y is closest but it's still a bit car-ish.
Interest rates are up.
Their chairman is going through a very public ...episode.
They'll definitely overcome the headwinds: they still have superfans despite the Musk antics; they have lower leverage than GM/F [0]; there's a lot of regulatory pressure coming down the pipes over the next 10-30 years to phase out ICE engines.
[0]: https://valustox.com/GM
https://valustox.com/F
https://valustox.com/TSLA
[+] [-] unknown|1 year ago|reply
[deleted]
[+] [-] nunez|1 year ago|reply
[0] https://teslamotorsclub.com/tmc/threads/model-3-highland-us-...
[+] [-] TradingPlaces|1 year ago|reply
[+] [-] JeremyNT|1 year ago|reply
[0] https://www.reuters.com/business/autos-transportation/teslas...
[+] [-] matthewfelgate|1 year ago|reply
I'm not convinced that electric cars are going to be mainstream, apart at the high end, for a few decades.