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Comment by philipodonnell | Hacker News Reader

> with the final car rolling off the assembly line on Sunday morning, several hours after the midnight goal set by Chief Executive Elon Musk

No, they missed the deadline, twice now. Lot of Muskites in these comments, remember, Tesla failed to meet the same deadline in January and pushed it to June. (EDIT: I've been told they missed this 3 times now, the 5K/wk figure was originally Dec '17, then Jan '18 then Jun '18).

When it was clear they would miss again, they put up a third production line in a canvas tent, which the NYT quoted as "never heard anything like this ever" using what Musk tweeted as "scrap we had in warehouses" to build the cars. And even then, and running all three lines 24/7 striving to hit that goal for just 7 consecutive days with the whole world watching... they still came up 150 cars short.

(5k/wk / 168 hrs/week = 30/hr * missing the deadline by 5 hours = 150 cars short)

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Imagine that today is July 1, 2020. Looking back I see three scenarios.

1) It's clear now that the company is a sham and Musk is a snake-oil salesman. It's all smoke, mirrors, bubblegum and baling wire. After hitting 5000 cars per week one time, they never reached that level again. The company had to do a punishingly dilutive capital raise just to get 6 months more runway, and the company's market cap is now $6 billion (down 90% from 2018).

2) The company has continued to stumble from failure to failure with just enough successes to delay the day of reckoning. Musk is still sleeping in the factory trying to iron out kinks in the manufacturing process and automation. They're producing 3000 cars per week, but the quality is so poor that 30% of cars must be returned to the factory for rework. Competitors are likely to match Tesla's battery technology in the next 3 years, and the company's market cap is down by 50% from 2018.

3) After many delays and billions of dollars of cost overruns, Tesla has perfected the "machine that builds the machine". It's producing 40,000 cars per week in three factories in the US, Europe and China, and a fourth factory in South Korea opens next year. Tesla is cash-flow positive and the company's market cap is $600B (up 10x from 2018). In hindsight, all the delays people anguished about in 2018 proved to be nothing but amusing anecdotes in the company's history.

I assign probabilities of 10%, 50% and 40% to these scenarios, which equates to an expected market cap of $250B in two years. At $60B today, it looks like a bargain.

Musk's future compensation directly hinges on your third scenario (well market cap of $650 billion, but close enough!):

http://fortune.com/2018/03/22/elon-musk-compensation-tesla/

You think there is a 10% chance that Musk is snake-oil salesman and a sham?

Is that too high or too low?

There's a 0 percent chance he's a snake oil salesman. There a reasonable chance his company won't succeed because of a problem making the cars cheap enough. But still they are awesome cars. Pretty soon they will be the only company in the US that has sold enough EVs that the tax credit runs out. That will really piss off the tesla haters who will have one less reason to claim it's all a gyp or whatever.

Assuming the standard meaning of the phrase "snake-oil salesman", I think the odds that this is all an elaborate sham to knowingly dupe people into buying a product that doesn't exist converge on zero.

But, the case can certainly be made that he is prone to hyperbole and "exuberant optimism".

He's not a snake oil salesman, but he could be over his head in this one.

Why should Tesla be worth 600B if they produce 2 million cars a year? Toyota makes 10M cars per year and has a market cap of less than 300B.

Future growth is already baked into Tesla's current valuation of 60B. They're not making any money today (in fact they're losing billions) but they have a high market cap because they might become profitable years from now. Once (if) they become a mature car manufacturer their valuation multiple will go way down. They'll be judged on their profit margin and FCF like any other car manufacturer.

Your best case scenario of Tesla growing their market cap by 550B in the next 2 years is completely unrealistic. Even Facebook didn't grow that quickly, and their profit margin is second to none.

Tesla's best case scenario is much more than an automaker. They also have hopes of being an energy company, a battery company, a transportation company, and a logistics company. There is still a lot of debate whether any of those will actually become profitable (and I think 2020 is a very aggressive timeline for any of this to happen), but there are huge potential revenue streams for Tesla that simply don't exist for other automakers like Toyota.

Toyota or Ford or any other car company can enter any of those fields, either directly or through investment. That they choose not to probably indicates that the risk/reward doesn't make sense for them, and they probably aren't worth that much if Tesla manages to pivot. They chose not to play in EVs until recently, for example, because the market appetite wasn't there

You gotta hand it to Elon for stirring the appetite for EVs though. What makes you think he can't do similar things in other markets?

Because he is overcapitalised with his existing projects.

Simple as that really.

I am not convinced he really changed the market's desire for EVs. He made a halo car, and now he is selling the baby version for Average Joe. I think the success of the Model 3 has a lot more to do with the brand than it does with it being an EV.

Have to admit I agree with this. He didn't change the appetite he just recognized that it was better to make a $120k EV than a $20k EV.

It's simply ignoring reality to not acknowledge Tesla's center role in popularizing EVs. It's not even a question.

Tesla has vastly changed public perception of EVs, changing demand & enabling current production ramp up of cheaper models.

By the way, why do you think the brand is popular if not for their EVs?

I am surprised to see this type of argument on HN of all places. One of the primary goals of any start up is to either create a new market or to serve a market that an incumbent is failing to properly serve. You can't just assume that because a company like Toyota hasn't done any of these things yet that there is no potential to gain from them. There are countless reasons why traditional powers fail to innovate and are eventually challenged by more forward thinking companies. I have no idea if Tesla will be that company long term. But the potential is there and that potential is what is fueling the hype.

GM/Toyota have the resources to start operating in the same markets that Tesla has ambitions for. And they are certainly keeping an eye on Tesla's actions.

After watching what Tesla is doing, they have chosen not to invest those resources even though if they did, they would beat Tesla at its own game quite easily because they eclipse it both in capital and experience.

Either their analysts are wrong and failing to see a winning strategy here, or there is no winning strategy. One of these two statements must be true. I've put my money on option #2, but I'm aware that large competitors aren't idiots and there is a risk here.

Elon Musk has also publicly stated that he wants the other big players to compete with Tesla. He doesn't actually care if Tesla is ever profitable or not, he just wants to force the world to transition off fossil fuels by dispelling the myths sown by the oil industry with concrete examples of success. It is stupid to ignore Musk's stance on this matter as an investor.

Using this logic every start up would fail as soon as they showed their business model could lead to success and a bigger company swooped in a with their overwhelming capital and experience.

Many do, for that exact reason.

If you ever pitch your startup idea to a VC, you're expected to explain how you're going to deal with this risk.

>Many do, for that exact reason.

Sure, and many don't.

>If you ever pitch your startup idea to a VC, you're expected to explain how you're going to deal with this risk.

And that is exactly my point. Tesla certainly has strategies to respond if GM/Toyota enter their markets. You and TAForObvReasons are responding as if those companies will easily beat Tesla as soon as they make that decision.

GM already entered Tesla's market with the Bolt. How's that working out for GM?

> Tesla certainly has strategies to respond if GM/Toyota enter their markets.

Elon Musk's stated purpose for Tesla is to kill the fossil fuel industry, not to create a profitable enterprise. And he is tracking well towards that stated purpose. He actually wants those much bigger companies to start doing what Tesla is doing at scales that they can achieve and Tesla can't. He said this very clearly in an interview with DiCaprio. I don't know why people keep thinking there's some master plan to be profitable when the guy steering the ship has repeatedly said the plan is orthogonal to profitability.

As an investor, I am well aware of this. I'm also well aware that the profits of SpaceX eclipse what Tesla could achieve even in its best case scenario, so he probably really doesn't give a shit about making profit via Tesla.

Right the argument isn't sound. It basically boils down to if big company x hasn't done it already, it's because it's not worth doing it. We know this isn't true because small players make improvements in their fields all the time. Big players aren't perfect, don't have unlimited resources, are prescient, and most of all, are ruled by people.

You have very skewed perception of how a company like GM operates. The incentives for managers are pretty short term they have 0 incentive to do a project that might pay off 5 years from now. In deciding on how to allocate capital there is 0 chance they will allocate it to doing high risk long term project vs doing a bigger truck now that they will sell next month at some ungodly margin.

>Once (if) they become a mature car manufacturer their valuation multiple will go way down.

Somewhat answered your own question . It's if the market values Tesla as a mature company or a continues to value it as a growth company. When have we seen Elon rest with a successful product? Tesla is more than just cars. And Elon's answer to Gali (hyperchange YouTube channel) question during earnings about moats states his mindset clearly. He's about innovation. Innovate faster than competitor always. If Tesla can be cash positive, Elon will do what Bezos does. Demand that as much money as possible is reinvested. They're not going to be like Apple with tons of money sitting on the side.

I suspect that investors are looking at Tesla to be highly automated and have a high return on capital. There's also the hype so it keeps on going up looking for the last fool that buys before the stock's true value is found. It's easier to buy the stock than to figure out its future value.

I think Tesla won't be just a car company. Eventually, they will be a company with multiple branches in the same idea as Alphabet. But that's way in the future. First, they have to survive to profitability.

Musk himself said they made mistakes in trying to automate everything when manual approaches work better. And all cars made today are highly automated anyway so not sure why this is a unique advantage.

More and more Tesla is looking like a traditional car company. Especially as the traditional car makers are moving aggressively into EV.

Because the op makes stuff out of their ass

The third scenario seems 40% until you realize that 2 million Model 3s per year @ average price of 45K are being sold.

I am not a car market place expert, $45K cars do not usually move in those numbers.

edit: For reference, check the number of cars moved. https://www.statista.com/statistics/276419/best-selling-cars...

If these $45k cars are fully automatic (a big if for sure), then $45k will be a bargain price and would probably capture at least half the new car market.

They're not. They have the same lane keeping and autimatic cruise control as the average $45k car.

Possibly worse given the accidents.

Or what you can get from Honda for around $20-25k.

This is frankly delusional thinking.

(a) Tesla aren't the leaders in the self driving car space. Waymo arguably is, (b) almost all of the car makers have self driving car programs and most importantly (c) why would the traditional car makers just sit back, do nothing and allow Tesla to eat up the entire market ?

I think Tesla is not the leader, they probably made a crucial mistake in not using the expensive lidar. But they have be far the most cars on the road with early versions of this tech that has worked pretty well in my car for 4 years.

If Tesla can make it work without lidar, and that’s a huge “if”, they have a massive head start in training data. From a conference panel a few years ago that had Tesla, Waymo and some others on stage at the same time, Tesla was getting as much data in a week as Google was in months. That type of training data asymmetry is ripe for blowing past others. Again though that’s all conditioned on not needing lidar and I remain far from convinced their approach works for a true self-driving system.

Waymo's cars are connected to Waymo's servers with, I guess, gigabit ethernet (after they go back to base for the night), Tesla's cars are connected by mobile data, they'd have to pay billions to cell phone networks to get as much data.

> I assign probabilities of 10%, 50% and 40% to these scenarios

Well, the devil is in the details. Where did these numbers come from?

Rear end

Also it isn't even their battery tech, right? It's Panasonic's.

A mining company mines raw materials.

Panasonic takes those and makes battery cells. Think AA battery. That part is done as a joint venture between Panasonic and Tesla which means Tesla contributes to the design e.g. Tesla employs people doing research into battery chemistry i.e. cell level R&D. (and so does Panasonic, to be clear).

Tesla takes those battery cells and packages them into a battery modules, which they also design. That part is all Tesla.

That description doesn't adequately describes how much technology and work goes into making battery modules. Cells are an important component but it's also inverters, multiple electronics boards, software to control it all.

You can see e.g. https://www.youtube.com/watch?v=bNd-yJtRPhk

TL;DR: it would be grossly misleading to say that "battery tech is Panasonic". Battery cells are important but battery packs are designed and manufactured by Tesla.

Your world view is too narrow. That 5000 figure is important, but it's not really meaningful in the grand scheme of things.

There is a 4th or 5th scenario, where

4. other car makers trail behind Tesla more and more in terms of technology. Remember, all these car makers had DECADES of head start developing EVs before Tesla was even born. Tesla was supposed to trail them in tech, not the other way around.

It's easy to assume that because a company is bigger, and have more resources and manufacturing experience, that they can move fast in developing tech. It's easy to judge a book by it's cover. Incumbents move slow ALWAYS. If moving fast was so easy, they would of done it before Tesla was born.

5. solar panels from SolarCity come into play.

Tesla has already deployed Solar grids in Australia. It's not just "smoke and mirrors", it's actually in production.

While the competitors are still trying to "match Tesla", Tesla has already moved on to find other areas to grow in tech advancement.

Right now, solar panels are considered a "toy". It's not even on any of the car makers' radar. It's like how Tesla's first Roadster cars were not on any of the car maker's radars 5 years ago. It's a "toy" until one day, it becomes a reality, and you tout your ability to "catch up" with your "vast experience"

5 years from now, folks like you will write another article, about how GM will be able to produce solar panels to "catch up to Tesla in just one or 2 years"

I don’t understand why solar panels would necessarily go with car manufacturers? They don’t seem intrinsically related at all.

The batteries are what connect them. No one else will be making batteries at that rate, at least for a pretty long time. Tesla has the cheaper batteries and related tech to use them in solar power along with cars.

I'd assume that the Chinese electric car and bus manufacturers, who make far more vehicles than Tesla, are making batteries at a much greater rate (or at least their suppliers are).

> 4. other car makers trail behind Tesla more and more in terms of technology. Remember, all these car makers had DECADES of head start developing EVs before Tesla was even born. Tesla was supposed to trail them in tech, not the other way around.

> It's easy to assume that because a company is bigger, and have more resources and manufacturing experience, that they can move fast in developing tech. It's easy to judge a book by it's cover. Incumbents move slow ALWAYS. If moving fast was so easy, they would of done it before Tesla was born.

This isn't silicon valley. There is years of design and manufacturing experience that Tesla simply does not have. This isn't a software project where someone in a garage can make it and scale it. Tesla can build luxury cars because budget constraints are significantly less. Now they're struggling with the constraints like everyone else.

Other car makers are just as competitive now. The reality is the Chevy Bolt is a great start and will only be improved upon. Elon Musk has no monopoly on technology. There are competitors in almost every sector. Many great engineers are elsewhere.

And the reality is - most people don't care about EV right now. Sedans are struggling mightily. Americans are buying SUVs and crossovers right now. General car manufacturers are able to easily switch production when the market shifts. Tesla can't even make a budget friendly car. Their model 3 will be out of most of the market's price range. Meanwhile GM can still make a Sonic and Cruze or a pickup truck.

> Right now, solar panels are considered a "toy". It's not even on any of the car makers' radar. It's like how Tesla's first Roadster cars were not on any of the car maker's radars 5 years ago. It's a "toy" until one day, it becomes a reality, and you tout your ability to "catch up" with your "vast experience" 5 years from now, folks like you will write another article, about how GM will be able to produce solar panels to "catch up to Tesla in just one or 2 years"

Gee why didn't GM buy FirstEnergy or Duke Energy! They're so behind in the energy industry...This argument isn't even worth debating. GM is not a power company. They do not want to be.

> most people don't care about EV right now > Americans are buying SUVs and crossovers right now

Tesla is building SUV EVs. Other makers are planning to.

They currently build a luxury SUV, yes.

Tell me when they make one people can actually afford.

As the price of oil continues to climb, EVs become more affordable than internal combustion vehicles. Seems like a poor time to drop your sedan production in favor of SUVs with oil prices climbing, considering Americans are already changing their behavior due to existing price momentum at the pump.

As it continues to? Please look at oil prices over the last 20 years. You will see a lot of fluctuation.

> Seems like a poor time to drop your sedan production in favor of SUVs with oil prices climbing,

GM can do this. They can change production so quickly that when oil is cheap and people want SUVs (aka now) they can do that. And when it is not, they can change production back to sedans and EV. Much more flexibility.

https://www.nytimes.com/2018/03/03/climate/suv-sales-global-...

Please. GM has nowhere near the EV manufacturing capacity of Tesla. They also have a dealer network that is not interested in pushing EVs over internal combustion vehicles.

And yet GM has an available EV car and Tesla does not.

And yet Tesla will not be able to deliver the cheap model 3 and GM has been doing it.

That's a substantial claim - without any evidence. No surprise though - it's easy to be pulled into the Musk hype.

What? Tesla is pumping out electric cars in lots and are only expanding production with the Model 3.

The Bolt has been selling at between 1.5 and 1k per month while the production of the supply-limited model 3 is approaching 5k per week.

I guess I'm crazy and got pulled into the Musk hype.

> Tesla will not be able to deliver the cheap model 3 and GM has been doing it.

I'm guessing they will. Right now though, you have a point there, the model 3 is more expensive than the Bolt.

In a few years.

An "SUV" is a luxury good anyway and many of them are absurdly priced (imagine what that'd get you in a real car!).

> GM is not a power company

GE is.. why are they separate companies?

I don't know, why are General Mills and General Motors separate companies? Not quite sure I understand your point.

That's exactly the point I am making.

It has nothing to do with Silicon Valley. The geography is meaningless. The only thing that matters is staying ahead of the curve. It's always going to be hard for GM to do that, because it's focus is always going to be on incremental improvements of the same way of doing things. The "years of design and manufacturing experience" you mention.

Look at their $1B acquisition in Cruise Automation. Like you said, GM is not a power company, its' a car company. Its' business is cars. GM should have developed self-driving tech internally, and not had to buy it. Cars is GM's job. But GM missed that boat entirely, because everyone in GM is focused on incremental improvements on manufacturing.

Even your comment mentions that "most people don't care about EV right now." EV is not a big focus for GM. Sure it has the Chevy Bolt, but that only began development 10 years after Tesla started. GM does not care about EVs right now. It's focus is still on manufacturing traditional cars, and will continue to be this way until someone else forces them to change.

> The only thing that matters is staying ahead of the curve. It's always going to be hard for GM to do that, because it's focus is always going to be on incremental improvements of the same way of doing things. The "years of design and manufacturing experience" you mention.

This isn't true. They can continue to make their general automotive improvements while also upskilling in EV - the Bolt is a prime example of that. Frankly, they beat tesla to the punch there.

> Look at their $1B acquisition in Cruise Automation. Like you said, GM is not a power company, its' a car company. Its' business is cars. GM should have developed self-driving tech internally, and not had to buy it. Cars is GM's job. But GM missed that boat entirely, because everyone in GM is focused on incremental improvements on manufacturing.

Hmm, you mean like Tesla bought the solar manufacturer for Solar City? Is that not acceptable to you? You bring up an argument against your point. GM can easily purchase anyone. If they slightly miss something a purchase is all that's needed.

> Even your comment mentions that "most people don't care about EV right now." EV is not a big focus for GM. Sure it has the Chevy Bolt, but that only began development 10 years after Tesla started. GM does not care about EVs right now. It's focus is still on manufacturing traditional cars, and will continue to be this way until someone else forces them to change.

EV is a big deal to GM because they know where the future is heading. They also are not hemorrhaging money and burning runway because they also have a sustainable business now. So they can do both.

Meanwhile Tesla can't even scale a 35K car. They're a luxury brand. period.

Amazon should buy Tesla. That would blow minds.

Not to be rude, but these scenarios and percentages are all really random as is your valuation. Its far more likely they continue to do the same thing they have for the last year or two: limp through their slowly escalating production targets until the Model 3 is just one of several electric sedans available and there is no way to justify their multiples.

600B is insanity.

There’s also option 4, which I would say is most likely; Tesla is gone; the brand is owned by someone else. In practice, 1 and 2 would likely lead to this scenario.

OK, sure, but call it 4850 of 5000 when everyone says there wasn't a prayer of making it is pretty remarkable. Call it 97% of the way. The fact that they built out a tent and hustled 24/7 to hit the goal is impressive to me.

Overall it's pretty classic Tesla/Musk. Predict the absolutely impossible, get 97% of the way there, and regardless of how you slice it the only thing that's not impressive is the facxt that they didn't meet the arbitrary guideline. They still crushed everything that anyone else thought was possible, so IMO it's a victory just a hollow one.

Will they be able to repeat this sustainably? Probably not unless they figure some other things out, but the point is that it's within striking distance. The company has a shot at profitability in the near future, and I see Teslas everywhere now.

In the past they missed it drastically; the number is important because if they can figure out a way to get to that level of production they have the chance to become cashflow positive relatively quickly.

>I see Teslas everywhere now.

Meaning you live in one of 4 coastal cities. Teslas are exceedingly rare everywhere but the wealthiest cities.

I see them all over in Utah. In the coastal cities it feels like 1/4 of the cars on the road.

I see them quite often in New Zealand, but saw my first Lamborghini in the flesh the other day!

Don't Lambos cost slightly more than even the fanciest Tesla?

I live in a small state University town in South Georgia and there are at least 3 model S and a model x running around time.

I saw dozens of them on a recent trip to Paris. They were mostly taxis

Teslas are exceedingly rare everywhere but the wealthiest cities.

...recent trip to Paris.

Yeah... a notably wealthy city.

I see them often in north florida. They aren't as common as other luxury sedans, but I see them about as often as Pontiacs, which is to say not everywhere but a lot.

You do realize that there aren't many Pontiacs on the road, and fewer every day? They closed over 9 years ago.

Anyway I live near Philly. I've seen a few dozen Model S in my life, one X and no 3s yet.

I see a lot in Colorado and have been seeing them for a couple of years

Even in Dallas i saw them over and over again.

I’ve seen a couple in New Orleans, and we are by no means wealthy.

Yeah agree, I see no difference between 4850 and 5000 - people are so hung up in other comments on calling this a failure. It shows it’s possible, the rocket just missed the landing a bunch of times, nobody cares about that now.

Yeah, but this is sort of like if SpaceX said their goal was to ship a big chunk of rock to the moon on two rockets within a week. But no matter how hard they tried, they just couldn't get it all on two rockets, so as time was running out they built a third rocket out of spare parts from the first and launched them so they would land just in time and claim their goal. "See, we have shown that it is possible!" they would exclaim.

Except, I might say, you said you could do it with two indoor assembly lines but you needed a third outdoor line at full capacity, so you didn't show anything. We have no time to build more indoor space and we can't just keep building assembly lines in tents out of spare parts, man, they break down, it has to work with two indoor assembly lines so they will work long-term. You still need a 50% improvement in your assembly speed before you can take down that tent!

Plus, even though you had an third rocket when you assured us 2 was plenty, one of the rockets was 5 hours late. A whole extra rocket and still late?

It's not the number. It's the fact that people can't count on what the company says. So it's always a case of over promise and under deliver. So it's easy to focus on that fact and call the company and its founder flaky. Few companies can survive that.

But the reality is that they eventually deliver and Musk can keep investors engaged which keeps the company going with more cash. Even reaching 4850 is a big deal.

The real stretch goal is reaching profitability. I hope that happens soon.

If company promises to make me a car on a date and misses it by 3% of a year (1 day?) I don't care. If they miss it by 6 months or a year I care.

If they almost got to that rate of 5k it's just as good. There's nothing magical about that number. Musk sets high goals and usually gets close, but it takes longer than he said it would. Reusable rockets, impossible, took years - but now we have them.

I can't understand the people that think he's a charlatan. They have sold approaching 200k electric vehicles. They are great cars, I have one. But separate from that, they always had a plan to increase production and sell more of cheaper cars, ramping up from first selling expensive ones. The latest ones are going to need a lot more volume before they can make them cheap enough to sell at 35k, such as higher battery production. They will lose money until they make them at high volume. It's not crazy to say they'll have a lot more money coming in as they raise production, that's like any business. The open question is will they actually make a profit. We can't know what the numbers are until they come out. Based on history, I think they'll get close to profitable but won't quite make it, but they'll clearly be headed in that direction as the early hurdles of increasing production are met. Again - it won't matter exactly when they are profitable if they are close. Just like the 5k/week number.

His goal was 20000/mo with less than a quarter of the current manual labor that he's using. We're now twice as far along as the original goal, and he can't even make 5000 in a week when rushing cars through as fast and shittily as possible.

Building 5000/w is nothing if you're just willing to throw more and more money at it. The point of the original goal was that it was actually going to be a sustainable, profitable approach.

Musk is certainly a self-promoter in the vein of P.T. Barnum. It's gotten to the point of irritation. But you can't deny he's changed the car industry.

A company's true function is to benefit society. Tesla has done that, so he gets a win from me. He's done it by taking chances and thinking outside the box. The tent is an example. Most companies would have given up but they did not.

20 years from now Tesla might not be alive but we will see its impact on the car industry. Very cool, Musk.

> A company's true function is to benefit society.

Could you elaborate on how did you come to said conclusion?

Sure, at its basics, society has needs, known or unknown, good or bad so companies are created to fill the needs. Companies survive if they reach enough people with their solution.

Sure there are ways to manipulate needs but at its basics companies are supposed to benefit society by filling those needs.

We are fed the idea that companies are created to profit the investors but profits are a side effect of meeting needs.

More specifically, profits are a side effect of meeting sufficient numbers of individuals' needs. It does not necessarily follow that meeting the needs of those individuals benefits society at large.

Profits are also a side effect of meeting needs today. It does not necessarily follow that meeting needs today benefits society in a meaningful way in the longer term.

For what it's worth, I think your implication is true. Clearly most companies create wealth and deliver benefit to society, it's that aggregate effect that makes capitalism the most successful system we know of under which to run a society.

But the reality is that it's entirely the other way around: companies do exist to profit their investors and it's the benefit to society that's the (usual, aggregate) side effect. It's not good, or bad, it's just a fact.

Profits are also a side effect of grabbing surplus value from their workers. Just sayin'

No, not really. If only it were that simple.

It's trivially true. A worker produces something and gets a fraction of their value paid back to them. They would not have been hired if it were not so.

That part is true, but that's not what you said. Getting profit from that surplus is something else entirely.

> profits are a side effect of meeting needs

It's the other way around.

What about a company that happily sells guns and bombs to both sides in a Civil War? They are filling the needs of individuals to decimate society.

On angle on that is we have societies have created the concept of an entity that is not a person who can assume debt, and has certain speech rights. So that entity is supposed to advance society more than alternative, which would be something like owners being personally liable for its debts and faults.

It's pretty much the justification for granting corporations limited liability, that the benefits of increased investment outweigh the harms of the limited liability.

Oh my god, come on. I'm a Tesla bear, and I don't really see a massive different between a rate of 4,850 cars and 5,000 cars....

52 * 150 * 35,000 = 273M in revenue.

assuming Tesla can't find a way to boost production by just 3% over those 52 weeks, it will take less than two weeks to make those additional cars.

Their revenue isn't supply driven anyway, it is demand driven. Two weeks of delay will not result in 273M in lost sales. It will just result in delayed sales.

It will just result in delayed sales.

I know two people who withdrew their Tesla Model 3 reservations due to them failing to meet a deadline. Their reasoning was that they'd like to buy a Tesla, but if they need to wait years for it, they prefer to get a nice car to drive in the meantime. The longer the delays are, the more people will give up.

Yeah I agree with you, but we're talking about a delay of two weeks, not years. That's how long it will take to make up the shortfall.

Anyway, Teslas are overpriced and of questionable quality.

The original deadline for 5k production was in December. It's more than 2 weeks.

The delay for the people who placed order are not same as delay to get to 5K target.

If I am 100,000 in queue, then car should have originally taken 20 weeks at 5000 cars per week. Now it will take 20.62 weeks at 4850 per week.

That is a delay of few days.

52 * 4750 * 35,000 = $8.6B in revenue.

You're quibbling over a rounding error.

3% is not a rounding error. There are industries with smaller profit margins than that.

And this is a case with production that doubled in a quarter. So, again, how big is 3%?

If it wasn't that big of a deal, they would have hit the target before 5am the day after they were supposed to.

I actually thought he was underpromising, and that Tesla would surprise the world by blowing past 5K weeks early. That they pulled out all the stops in the final weeks and still missed the deadline feels like a bad sign.

It's not the one time performance that matters, it's the rate of flow as time continues.

Also recall that band //width// can be increased for a cost while latency has hard upper bounds.

For anyone complaining about profit margins, think per unit profits rather than hitting some round base10 number.

> When it was clear they would miss again, they put up a third production line in a canvas tent, which the NYT quoted as "never heard anything like this ever" using what Musk tweeted as "scrap we had in warehouses" to build the cars.

I'm a software guy. Can somebody explain to me how you can build a high-tech auto production line from "scrap"?

I saw a drone video inside the tent, it looks mostly like service bays inside like you'd find at a small local car place that uses hand jacks. A mix of lift + non lift bays is common in any factory at the end of the line.

That fits with my analysis from a few days ago: https://news.ycombinator.com/item?id=17397505

Interesting analysis, thanks for sharing!

You can't. GP is completely misrepresenting everything about this situation: not a tent, not canvas, not scrap. Musk's tweet about scrap in a tent was very clearly a joke.

I can't link NYT because I get the paper version and lost my login, but I'm quoting from the paper in front of me:

> A tent, about 50 feet high, its taut grey canvas membrane supported by aluminum columns.

I don't think it was a joke. The tweet was specifically in the context of trying to convince investors that the cost of that tent production wasn't substantial and by "scrap" he meant equipment they had discarded from their main production lines because they are constantly upgrading them. You can't have it both ways. It was either discarded "scrap" machines they had lying around and he was not joking or machines they bought and he was lying (a.k.a "joking") about it. I'm giving him the benefit of the doubt that they really had all that equipment in a warehouse because its been reported they have re-tooled the line several times.

The quote not withstanding, a cursory glance at the website of the manufacturer of the structure (Sprung[1]) would show that the exterior is not canvas. Further, Sprung even lists manufacturing as an application of their structures.

Repeating false statements doesn't make them true.

[1] http://www.sprung.com/building-components/performance-archit...

The journalist is conveying a thing they saw using words they are familiar with. cf: Cameleopard vs giraffe, and first sightings of kangaroo or platypus.

It probably refers to working equipment they replaced on the main production lines because they wanted something smaller/faster/shinier, but hadn't yet thrown out.

So when musk just tweeted 7000 cars in 7 days, you’re saying you have information proving he’s committing some form of fraud? Could you elaborate? This is going to be a huge story and it looks like you’ll be the one to break it, which is pretty exciting.

They're also building Model S Cars

When you miss a deadline to produce 5000 cars of a specific model I guess the other thing you can do is brag about producing 7000 cars and include all your models in that number.

It's not much of a story that the company that people think will go out of business and promised to make 5k cars a week only made 4800 or something, and is raising production goals to 6k for the next month. This might matter if say a bank was going to end their credit line if they didn't make that number. That's not the situation.

If you look at SpaceX launch schedules, many are delayed for several weeks/months. Yet it has a better public image than Tesla. I think missing deadline isnt that unexpected, it happens in many projects. If the goal is still achieved at a reasonable time after the deadline, it is still a success imho. It means the project is now a reality, and that's awesome.

Missing a launch in rocketry is a normal and expected part of life in the industry, and no matter who is launching it happens. Missing targets for producing a car isn’t. This is what people mean when they say “comparing apples and oranges.”

> Missing targets for producing a car isn’t.

Why should we trust you on that fact? Do you have all the documents required to prove that all the previous car models of all manufacturers in the world were built and sell on time? In my experience (not about car manufacturing), several projects didn't meet the deadlines, and still succeed at the end.

This reads like the film "Gung Ho" made reality.

What about "Tucker?"

That too would work.

Your comment reminded me about this article "The War on Tesla, Musk, and the Fight for the Future"

https://www.dailykos.com/stories/2018/5/29/1767826/-The-War-...

They built almost $250M worth of cars in a week, which is a pretty large number (assuming avg selling price is 50k).

> Elon Musk continues to kill the game

Tesla is most overpriced startup currently on the market. It will crash in a spectacular way in near future. They are constatly missing deadlines, have quality issues, troubles to manufacture spare parts in sufficient quantity and have terrible work environment yet everybody are coming up with excuses for them. This will end at some point and that even beside the fact that electric car in reality create more pollution in vast majority of the world more than modern engines.

>This will end at some point and that even beside the fact that electric car in reality create more pollution in vast majority of the world more than modern engines.

Is this thread being linked to by some Tesla short seller blog of what?

Surely this kind of misinformation isn’t organic to HN.

I'm sorry but I think your facts are not true. Only people with an agenda to support the oil companies or something come out with claims that evs are terrible polluters. First, regular ice cars have pollution in their manufacture, and the production of gasoline has a lot of inefficiences, it must be transported physically. ICE engines are vastly less efficient in use of energy. Coal is a decreasing amount of power generation. It's just a silly argument that evs are terrible polluters. Of course there is some pollution in their creation, like any object on earth.

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