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Comment by somerandomness | Hacker News Reader

There's a difference in not having a profit due to (a) reinvestment; (b) poor unit economics.

(a) is much less worrying for an investor, e.g. Amazon (b) suggests a bad business model, e.g. Uber/Lyft, Tesla

But Tesla is reinvesting a lot. And it's growing the market for electric cars, setting up infrastructure, etc. He might be selling at a loss initially in order to create the volume that will eventually drive down the cost so he can generate a profit. From what I understand, the big reason he keeps losing money on selling cars is that by the time the previous car starts making a profit, he's already already started selling the next one at greater volume, creating new loss that drowns the fresh profit from that previous car.

That was true with model S but not with model 3. The latter is the main product, bread and butter, whose purpose is not funding other future products.

Is it possible that Tesla is driving down the cost curve faster than any other electric vehicle manufacturer, and once they hit a tipping point, they will disrupt the entire automotive industry and be worth 10x their current price? I may not believe Musk’s self driving car vision is attainable in the gritty real world in under 10 years, so I’ll discount that... but driving down battery cost, while making a better electric vehicle than Audi/Mercedes/Porsche.. that’s exciting.

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