johnlocke said:
gcrouse said:
I think at the end of the day - the crux of someone's outlook on Tesla is whether or not you view Tesla as a automaker or a tech company.
Based on the reaction to Tesla's earnings call - there's less buy in on the idea that Tesla is more tech company than automaker.
For a company that per Musk's statements is just around the corner from cracking Level 4 autonomy, and promised a million robo-taxis on the road previously - it's rather interesting that one competitor Waymo is already doing Robo-taxis in Phoenix and Cruise just started robo-taxi rides, but Tesla is apparently unable to with their current tech. Tesla is either underreporting the capabilities for legally dubious and unethical reasons surrounding testing (https://www.jurist.org/commentary/2021/09/william-widen-philip-koopman-autonomous-vehicles/)
or they have a largely vaporware product with a testing process that doesn't appear at face value to have much value. (https://www.autoevolution.com/news/tesla-owners-face-it-you-are-not-testing-full-self-driving-177109.html).
Time will tell, but given Musk's grandiose promises of "next year" since 2014 - I think other companies are going to make more progress and create a lot of scrutiny on those FSD claims if Tesla can't produce the product they've been charging $8-12k for. (and not crediting it towards trade in value at that).
As the market starts to get crowded this year and in the future and Tesla continues to A) focus on Enron-esque products they don't have the capability to make like Tesla-bot, and B) fail to release new models it will end up creating an adverse effect on the demand for their products - especially if they continue with their current quality control issues. It will hit the point their small service center footprint won't be able to handle the demand for fixing things that ought to have been caught at the factory. Checker and AMC are cautionary tales of keeping the same product too long and having too many misses with new products. I don't think OTA updates, no matter how innovative are enough - especially when other companies are starting to do the same.
The gleam of Cybertruck is already gone now that other companies are making pickup trucks and delivering them and eventually people are going to want those deposits back while they purchase products that exist. Similarly, Semi is a lot less revolutionary once you learn that Freightliner and Peterbilt are already delivering trucks and companies like TuSimple are demonstrating actual tests where they have autonomous class 8 trucks driving down the highway.
Tesla has a sizable lead that's theirs to lose if they don't focus on the fundamentals and chase vaporware products rather than doubling down on quality and product roll-outs.
You're right in that I view Tesla as a tech company first, Auto Maker second. We'll find out shortly whether Tesla opens up two new factories and sells every car they can make or if they reach market saturation and can't sell as many cars as they thought. In the first case, whatever products are in the pipeline are secondary thoughts. In the second case, Cybertruck and the $25K car become important products to fill in the gaps. Personally, I'm betting on Tesla opening several more plants in the next couple of years. The Cybertruck will get built when the supply issues clear up. Model Y's will have the lowest build cost and best ROI as long as they can sell them as fast as they can make them. It makes sense to concentrate on the Y and then modify the 3 to use as much of the Y parts as possible.
In terms of short term outlook - I'm pretty certain the new factories coming online will be great for them and have no problem selling everything they can make and the profits off them won't be the issue per se - it'll be the possibility of warranty costs and service center backlogs that will hurt them if they don't fix the build quality. I think the prime example is the best pump issue which so far hasn't been easily addressed by OTA fixes. The build quality alone won't dampen enthusiasm but build quality in conjunction with more reliable quality from competition as others introduce more models at the same price point has a very real possibility of putting Tesla in a place where they will have more production capability than demand.
Tesla certainly approaches their development process more like a tech company - but I'd agree with their former quality VP that the approach isn't best for them long-term (https://www.autoevolution.com/news/tesla-tackled-mass-production-for-car-as-if-they-were-software-and-thats-biting-it-back-179558.html).
I see it as a mixed bag - for sure it makes the company more agile in terms of bringing innovative updates to it's cars but as other companies also start doing OTA updates as well - that part loses it's luster and with more competition - Tesla becomes less of an exciting proposition if you can buy a similarly capable car without quality issues at the same price point.
I often compare them to AMC since they have a decent amount of commonalities.
1. AMC introduced the Rambler and started marketing the fuel efficiency of the cars before most of the pubic cared about economy vs the hottest V8.
2. AMC and Tesla both occupy the underdog positions in market share and both are/were rather agile companies compared to their competition with AMC introducing stuff like standard A/C on some of their models.
Notwithstanding the 70s and 80s decline of the auto industry in general - AMC eventually ended up coming out with some severe misses with introducing new models that put them in a bad economic spot despite the profitable AM General arm and then eventual acquisition.
In the auto industry you can occupy a niche for a few decades with the same models like Checker - and that's essentially how I see Tesla going if their innovative ability stalls too long. I think it's fair to say a lot of Tesla's valuation is caught up in the perception of Tesla being a tech company - but as analysts put Tesla in last place for automation as competitors move ahead (https://www.reddit.com/r/teslamotors/comments/parpg3/according_to_guidehouse_insights_tesla_has_been/) it starts to raise serious doubts about whether or not it's a sustainable valuation if they can't deliver on FSD before or around the same time as other companies.
As for the Tesla not, I'm pretty skeptical about Tesla delivering on a generalized purpose robot despite never building one before (keep in mind regulatory credits and a massive amount of fundraising kept Tesla afloat for about a decade before they started really moving cars.) To me that doesn't paint a bright picture for the future of such a product when successful robotic companies are focusing on specialized applications (Miso Robotics for the fast food industry, Boston Dynamics which has had a steady stream of DARPA money and just rolled out some K9 inspired robots along the border after decades of funding).
For me - when I got $100 of free cash from stash for contributing $5 - i ended up deciding against Tesla as an investment due to my concerns about Tesla's ability to deliver FSD and build quality and opted for
1. Nissan - since they took a blow from another post Ghosn compensation scandal and i think that their plan for solid state batteries with a 2028 target date is feasible albeit not exciting with potential for slow and less volatile growth.
2. Rivian - Trucks and SUVs are the biggest market in the US and I think being first to the market is a good start with the possibility of stealing customers from Jeep due to their slowness in introducing full electric models and Rivian's off road capability.
3. EvGo since there's been gobs of cash recently thrown at charging station build out and their focus on partnership deals.
4. ArcherDanielsMidland - an Agriculture giant who behind the scenes probably distills more alcohol in a month than Jack Daniels does in a year and quietly sells it to A LOT of companies making alcoholic beverages (neutral grain spirits).
In terms of risk - Tesla's latest earnings call shows some growing up as a company but i have some strong concerns about their ability to deliver on FSD which they have a lot riding on and the build quality issues as the market for EVs floods with competition from companies with better quality control.
FWIW, i think that's part of why Musk is so against further tax credits since a lot of the latecomers like Mazda and Honda (and to an extent even now Hyundai and Kia) are going to derive a substantial advantage from that. On a broader level - it will be interesting to see what will happen to the market if/when Chinese companies start meaningfully importing vehicles at the magic price points that put EVs more in the hands of lower middle class folks and entry level vehicles - but given Kandi noted that no Chinese company has the ability to produce US spec air bags currently and some of their NEVs are having battery failures within warranty that aren't being addressed - I think the $25k and less car is more of a 2030 issue.
