lorenfb
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Re: Official Tesla Model 3 thread

Thu Oct 05, 2017 9:13 am

webb14leafs wrote:
lorenfb wrote:
Dooglas wrote:Actually, I thought the big news was that Tesla is on track to deliver 100,000 model S and model X vehicles in 2017. That sounds to me that Tesla has figured out how to manufacture cars in substantial numbers. Now, two big questions remain. Can Tesla build 100s of thousands of model 3s at a profit, and can Tesla support (parts, warranty repairs, etc) a user base as it grows to many 100s of thousands of owners? We'll see.
Producing unprofitable vehicles at a 100K per year run rate hardly qualifies as a viable and long term
automotive company!
Are you stating that the current cash burn rate is 100K per produced car per year? If so, what numbers are you using?
No, re-read. It states that Tesla is now producing about 100K Model S & Model X per year and losing money.
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hyperionmark
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Re: Official Tesla Model 3 thread

Thu Oct 05, 2017 10:20 am

lorenfb wrote:
hyperionmark wrote:
lorenfb wrote:
Please clarify your question.
Please show me a source showing that they are losing money on each car they produce.
Please just read any Tesla quarterly financial statement. Yes, their GP (gross profit) per vehicle is positive but
when the other costs (besides direct costs - parts & labor), e.g. sales & R&D, Tesla loses money. A viable business
in the long run can't continually float debt and issue stock to fund operations. Apple's GP per iPhone is much greater
than Tesla's and they are very profitable on the "bottom line" too.

Furthermore, now with the M3, they'll probably lose more money as the M3 will cannibalize sales of the MS.
Many new Tesla buyers will see little value in an MS for the additional cost versus a M3 and will buy the M3
resulting in less GP per vehicle for Tesla. Yes, the M3 is smaller but most who buy the MS rarely buy the
MS as a family vehicle like a CUV and are older buyers. Besides, why buy a MS with about the same range
and carry another 500+ lbs with a MS. Also, the M3 can be ordered with many of the same features as a MS.
You must not know very much about business if you think that isn't very common with new companies, especially ones like Tesla. You do realize that factories have to be built and that costs money right? How do you expect a company to show a profit with capital expenditures as big as what Tesla has had?
Amazon "lost" money hand over fist for years and years before making a profit. I'm guessing you shorted them as well? How did that go for you?

cwerdna
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Re: Official Tesla Model 3 thread

Thu Oct 05, 2017 11:35 am

hyperionmark wrote: You must not know very much about business if you think that isn't very common with new companies, especially ones like Tesla. You do realize that factories have to be built and that costs money right? How do you expect a company to show a profit with capital expenditures as big as what Tesla has had?
Capital expenditures are barely a blip in Tesla's P&L and are already included in their cost of revenues.

We went over this before:
http://www.mynissanleaf.com/viewtopic.p ... ry#p498759
http://www.mynissanleaf.com/viewtopic.p ... 96#p494496

The depreciation expense for capex is part of the cost of revenues, which has a positive gross profit. Problem is, they have a a bunch of other expenses like R&D, SG&A and interest that takes them into the red.

See pages 5, 34 and 35 of http://ir.tesla.com/secfiling.cfm?filin ... IK=1318605.

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Re: Official Tesla Model 3 thread

Thu Oct 05, 2017 11:49 am

Furthermore, now with the M3, they'll probably lose more money as the M3 will cannibalize sales of the MS.
Many new Tesla buyers will see little value in an MS for the additional cost versus a M3 and will buy the M3
resulting in less GP per vehicle for Tesla. Yes, the M3 is smaller but most who buy the MS rarely buy the
MS as a family vehicle like a CUV and are older buyers. Besides, why buy a MS with about the same range
and carry another 500+ lbs with a MS. Also, the M3 can be ordered with many of the same features as a MS.
This point is a very interesting conversation. I thought the same thing, but someone pointed out that it has been a successfull model for other luxury car manufacturers and shows that rich people will buy anything as long as it's expensive.

It seems logical that the 5-series BMW would cannibalize the 7-series, and the 3 the 5, but they don't. Each model represents a slight bump in trim-level, size and horsepower. Also, each one can be optioned out in a way that makes it more expensive than the next level base model. Makes no sense to me, but apparently it does to people who buy such cars.

Anyway, not saying you're off base at all - we'll have to see how it plays out - but there's a precedent for it succeeding.

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Re: Official Tesla Model 3 thread

Thu Oct 05, 2017 12:54 pm

The cannibalization may be worse in the case of Tesla as it has been pretty well understood many of their buyers don't normally spend in that price range for a vehicle. As with most things though that won't happen in isolation; higher volumes bring increased brand awareness and validation, all of which further fuels the desire for a larger number of people to have something better than the next guy.
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lorenfb
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Re: Official Tesla Model 3 thread

Thu Oct 05, 2017 1:45 pm

webb14leafs wrote:
Furthermore, now with the M3, they'll probably lose more money as the M3 will cannibalize sales of the MS.
Many new Tesla buyers will see little value in an MS for the additional cost versus a M3 and will buy the M3
resulting in less GP per vehicle for Tesla. Yes, the M3 is smaller but most who buy the MS rarely buy the
MS as a family vehicle like a CUV and are older buyers. Besides, why buy a MS with about the same range
and carry another 500+ lbs with a MS. Also, the M3 can be ordered with many of the same features as a MS.
This point is a very interesting conversation. I thought the same thing, but someone pointed out that it has been a successfull model for other luxury car manufacturers and shows that rich people will buy anything as long as it's expensive.

It seems logical that the 5-series BMW would cannibalize the 7-series, and the 3 the 5, but they don't. Each model represents a slight bump in trim-level, size and horsepower. Also, each one can be optioned out in a way that makes it more expensive than the next level base model. Makes no sense to me, but apparently it does to people who buy such cars.

Anyway, not saying you're off base at all - we'll have to see how it plays out - but there's a precedent for it succeeding.
It was never implied that total cannibalization will occur. Surely you'd have to agree that some cannibalization will occur,
i.e. not all potential MS buyers need another 'Rolex watch' - a Timex will do as long as the features meet one's needs.
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Re: Official Tesla Model 3 thread

Thu Oct 05, 2017 3:51 pm

There was considerable discussion back around page 100 et. seq, about the comparative safety of touchscreen and voice command systems versus physical controls, and how to test them. At the beginning of a long post giving examples, I replied as follows:
GRA wrote:
SageBrush wrote:
GRA wrote: As to resistance to change, please point to anyone here who is resistant to change which demonstrably improves functionality, safety and/or reliability, or else reduces cost while maintaining the same level of functionality/safety/reliability.
How would you like "demonstrably" to occur ?

Will a well powered, randomized, double blinded study of monkeys suffice ?
Adequate statistical data for safety and reliability, combined with comparative tests by a broad spectrum of users, both experienced and inexperienced, and with starting attitudes towards the different methods varying from one extreme to the other, plus those who have no initial opinion either way. Pretty much the same as any other human factors interface is tested. But anyone can start by comparing the time it takes to do the same function while timing it with a stopwatch (most cell phones probably come with this app), first sitting in a parked car,and then repeating it on the road, on first acquaintance and then after you have familiarity. Consumer Reports has done such tests of many car control interfaces, and the results vary considerably. . . .
The AAA Foundation for Traffic Safety has had the University of Utah do another such study, testing auditory/vocal, visual/manual and cognitive demands, the effect of control locations, and implementations by different manufacturers on 30 different vehicles:
Visual and
Cognitive Demands
of Using In-Vehicle
Infotainment Systems
which I've quoted from and linked to here: http://www.mynissanleaf.com/viewtopic.p ... 61#p507361

Some of the more important conclusions:
Univ. of Utah study finds many infotainment systems too distracting to be used when vehicle in motion. . . .

The researchers found drivers using features such as voice-based and touch-screen technology took their hands, eyes and mind off the road for more than 24 seconds to complete tasks.

Previous research from the National Highway Traffic Safety Administration found that the risk of a crash doubles when a driver takes his or her eyes off the road for two seconds. . . .

In the new study, programming navigation was the most distracting task—taking drivers on average 40 seconds to complete. When driving at 25 mph, a driver can travel the length of four football fields during the time it could take to enter a destination in navigation—all while distracted from the important task of driving.

Text messaging was the second most distracting task; audio entertainment and calling and dialing were the easiest to perform and did not significantly differ in overall demand. . . .

Second, we found that the overall workload associated with each mode of IVIS interaction was
greater than the high workload referent. Interactions using the center stack were significantly less
demanding than auditory vocal interactions, which were less demanding than center console
interactions
. Interestingly, using voice-based commands to control IVIS functions resulted in lower
levels of visual demand than the SuRT task. However, the benefits of reduced visual demand were
offset by longer interaction times. Auditory vocal interactions took significantly longer than any other
IVIS interaction (an average of 30 seconds in our testing)
. . . .
The Model S was one of the vehicles tested, and along with 10 other vehicles came in almost exactly average, while 7 of the 30 vehicles in the test came in well below average (i.e. a better than average score) and 12 well above average (a worse score).

I strongly advise anyone who is interested in/concerned about the safety of using various types of controls while driving to read the study.
Last edited by GRA on Thu Oct 05, 2017 4:20 pm, edited 3 times in total.
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Re: Official Tesla Model 3 thread

Thu Oct 05, 2017 4:03 pm

The limitations to the Utah study are obvious -- they are only able to to track eye movement away from the road. While that is one form of distraction, others exist that do not require eye deviation. E.g. drug intoxication. Or talking on the phone.

A useful study would have to quantitate the *effects* from distractions
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Re: Official Tesla Model 3 thread

Thu Oct 05, 2017 5:57 pm

LTL
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webb14leafs
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Re: Official Tesla Model 3 thread

Fri Oct 06, 2017 6:15 am

It was never implied that total cannibalization will occur. Surely you'd have to agree that some cannibalization will occur,
i.e. not all potential MS buyers need another 'Rolex watch' - a Timex will do as long as the features meet one's needs.
I understand what you were implying and totally agree that some cannibalization will occur. I just wanted to keep the discussion going, because I think it's an interesting one.

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