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Tesla Model 3

  1. #91

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    Saw this in a newsletter I subscribe to.

    “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest,” wrote Adam Smith, but it can’t hurt to ask:

    “We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages,” continued Smith, about the butchers and so forth, but perhaps with tire and windshield and suspension manufacturers talking of one’s own necessities goes over better?

    I think if I ran an auto-parts supplier I would not be all that keen on helping a $50 billion company run by an eccentric billionaire become profitable. Like, right now the situation is that the suppliers are profitable (I hope!) but not $50 billion companies run by billionaires, and Tesla is unprofitable but a $50 billion company. Who really deserves whose charity?

    If the suppliers sacrifice their profitability and give it to Tesla, I do not see Tesla sacrificing its market cap and giving it to the suppliers.
    Have a GeoExpat related problem - please create a support ticket.

  2. #92

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    I think if I ran an auto-parts supplier I would ask, what is the money for? More subs that get submerged in swimming pools? Or another Tesla that gets send into orbit? That dude lacks focus.


    https://www.theverge.com/2018/2/6/16...elon-musk-mars


  3. #93

  4. #94

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    Quote Originally Posted by TheBrit
    It doesn't have a fantastic record of profitability or scale production though. I wonder how long they can continue to burn cash. I don't think Tesla is like Amazon, in that they're going to create a market then can dominate. The auto industry is far too fragmented, and there are strong national champions with implicit or explicit Government support. The Germans and Japanese in particular have excellent engineers, plenty of cash and strong brand loyalty... AND a history of making cars people together with profitable production. They will be formidable competitors.

    I don't really see the end game for Tesla as a company. I think they are great innovators, great engineers and of course customers are going to love a product largely paid for by someone else.
    And so it is playing out... Tesla is beset by falling demand, is STILL unprofitable and already looking less like a going concern and more like a looming bankruptcy... They've just raised even more cash to burn - how long are investors going to give Musk before realising than he is on a fools errand?

    The endgame is becoming clearer now, Tesla will be bought by Ford or GM for a few billion dollars so they get the brand name and battery factory... That's how i think this ends. Teslas market cap is still an order of magnitude too high even after the precipitous fall.
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  5. #95

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    Quote Originally Posted by TheBrit
    And so it is playing out... Tesla is beset by falling demand, is STILL unprofitable and already looking less like a going concern and more like a looming bankruptcy... They've just raised even more cash to burn - how long are investors going to give Musk before realising than he is on a fools errand?

    The endgame is becoming clearer now, Tesla will be bought by Ford or GM for a few billion dollars so they get the brand name and battery factory... That's how i think this ends. Teslas market cap is still an order of magnitude too high even after the precipitous fall.
    Agree with your observations. However, I'm a bit disappointed that you didn't mention how much better a Japanese company would have dealt with the situation.

  6. #96

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    Panasonic have hitched themselves to the Tesla bandwagon with the Gigafactory, in a deal that is probably very poor economics for them. Unfortunately they don't disclose the terms but I doubt they're making much of a return on their investment.


  7. #97

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    Quote Originally Posted by TheBrit
    And so it is playing out... Tesla is beset by falling demand, is STILL unprofitable and already looking less like a going concern and more like a looming bankruptcy... They've just raised even more cash to burn - how long are investors going to give Musk before realising than he is on a fools errand?

    The endgame is becoming clearer now, Tesla will be bought by Ford or GM for a few billion dollars so they get the brand name and battery factory... That's how i think this ends. Teslas market cap is still an order of magnitude too high even after the precipitous fall.
    I think, Matsushita Electric, Chrysler Daimler and Toyota Motor Corporation, logically, will just increase their present interests in Tesla, should the opportunity present itself. I wouldn't count on FoMoCo or General Motors.

  8. #98

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    Quote Originally Posted by Skyhook
    I think, Matsushita Electric, Chrysler Daimler and Toyota Motor Corporation, logically, will just increase their present interests in Tesla, should the opportunity present itself. I wouldn't count on FoMoCo or General Motors.
    Panasonic have zero interest in buying a car company, and I doubt Toyota need anything Tesla has. They're still pushing FCV's rather than committing to electric battery cars.

  9. #99

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    I would think one of the 3 A's (Apple, Alphabet or Alibaba) would be in a better position to turn things around for Tesla.

    That will free Musk to focus on the only thing he is good at, rockets.


  10. #100

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    Quote Originally Posted by emx
    I would think one of the 3 A's (Apple, Alphabet or Alibaba) would be in a better position to turn things around for Tesla.

    That will free Musk to focus on the only thing he is good at, rockets.
    Tesla needs to be able to manufacture cars cheaply, reliably and at scale. None of the three A's have any experience of that, and as Tesla is finding out, this isn't something you just show up and master.

    Musk has done a brilliant job designing the Tesla platform, no doubt about it but the advantage is transient and he has come unstuck trying to scale up.
    Skyhook likes this.

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