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Comment by Animats | Hacker News Reader

The real problem for Tesla is that their destiny is probably to be the next BMW - a good midrange luxury car maker, about #12 in the world on volume. That would be fine except for the excessive market cap. Tesla's market cap exceeded GM's at one point. The stock has to come down a lot if Tesla ends up at BMW's scale. Even with Tesla's most optimistic production estimates, Tesla will make far fewer cars than BMW in the next few years.

Silicon Valley has a few other companies like that, Uber and Twitter being the most prominent.

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The market cap is a bit of a mystery, but they've got some options for making money even if they stay around BMW levels in terms of auto production volume. There's no reason they can't compete well against in the automotive space against LG Chem, who makes batteries for cars like the Nissan Leaf and makes batteries, the entire powertrain, and the infotainment system for the Chevy Bolt. In the event their autonomous tech is ever any good, they could sell that. (today they could offer a steep discount and just sell big microprocessor-controlled guillotines or something)

Superior tech can really kill Tesla, though, if they don't get with it. Little cylindrical batteries aren't necessarily the future in that space, it is definitely not a given that their autonomous tech will be a big winner, and BMW's inexpensive carbon fiber is a thing of awe and wonder that Tesla has no answer for. And there's always the outside chance that Toyota is onto something about fuel cells...

> and BMW's inexpensive carbon fiber is a thing of awe and wonder that Tesla has no answer for.

BWM appears to be going all-in on 3D printing--which makes sense given their volumes. At practically every conference where non-hobby 3D printers appear, BMW is always a real customer of those companies.

To my mind, BMW is the most dangerous company to Tesla.

If Tesla ends up as the next BMW I would consider that an absolutely astounding success.

> bought shares under valuation based on GMs market share

> doesn't grasp how smaller is the luxury market share

this is the investors tesla scam depends on. this and a million people thinking they could flip a model3 reservation for a profit.

>The real problem for Tesla is that their destiny is probably to be the next BMW - a good midrange luxury car maker, about #12 in the world on volume

I think this is dead on. People are expecting Tesla to be the GM of EV's but that's never going to happen. GM will be the GM of EV's. Bolt and Nissan Leaf have both far outsold all Tesla models combined, and that's not even a fraction of the worldwide EV fleet that exists now. There are over a dozen competitors to Model 3 at this point.

> Bolt and Nissan Leaf have both far outsold all Tesla models combined, and that's not even a fraction of the worldwide EV fleet that exists now.

And Android phones are for more numerous than iPhones. My point here is just that pure number of units sold does not determine a company's value.

> The real problem for Tesla is that their destiny is probably to be the next BMW - a good midrange luxury car maker

Tesla doesn't do well at the things a non-novelty luxury car maker needs to do well, and EVs are only luxury cars now due to novelty.

I wouldn’t call the Nissan Leaf or GM Bolt+Volt luxury cars at any stretch - thought I appreciate they’re priced $10k more than they should be. I’m still convinced GM and BMW are deliberately trying to delay, if not sabotage, the mass adoption of BEV cars.

>I wouldn’t call the Nissan Leaf or GM Bolt+Volt luxury cars at any stretch - thought I appreciate they’re priced $10k more than they should be.

Agreed. I own a Leaf and absolutely love it to death, but it just is not a $35,000 car. I'd have never bought mine for full MSRP, even with all the money in the world. However once these cheap little EV's with 20-30kWh batteries drop to the range of ~$15k new (which I have no doubt will be within 5 years, based on battery price forecasts) it's going to become a no-brainer for most urban people.

You are not GM’s customer, dealerships are. If dealers don’t want to sell BEVs (for whatever reason) GM can’t do much.

> I’m still convinced GM and BMW are deliberately trying to delay, if not sabotage, the mass adoption of BEV cars.

Interesting.

Can you explain both their (presumed) reasoning, and the indicators you see?

BMW's market cap exceeds GM's today, so that all seems to check out. Tesla's valuation assumed high future value; their stock could stay stagnant as they grow to BMW production numbers and they'd be doing great. Just growing into their shoes.

I agree with your first paragraph, but I don't think it's fair to compare Tesla to Uber and Twitter.

the cars are a product demo. selling batteries by the gigawatt is the real biz. GE not GM.

People are already paying this price without it even being a certainty, that's speculation.

Then you should back Panasonic, not Tesla, because they're the ones with the tech.

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