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Comment by pmorici | Hacker News Reader

Maybe Musk will be proven right in time but having followed Tesla for a long time and having recently purchased a Model 3 (It's an incredible car). The Solar City purchase is the one thing that never made a lot of sense to me.

Even if you start from the premise that it makes sense for Tesla to be in the solar business, it's hard to rationalize that the best way to break into that market was to buy a debt laden solar panel installer.

I don't buy the short's narrative that this is anything like an Enron style fraud but the only point that the Tesla short sellers are a little bit right on, among the mounds of BS they publish, is that the Solar City acquisition was a shitty deal and Tesla would be better of today had it not happened. That said I don't think it is going to sink the company the Model 3 is just too good.

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As a Tesla owner would you be more likely to consider SolarCity if you wanted to install solar? Are there any enticements, integrations, or efficiencies in doing so?

The Tesla app allows you to manage all Tesla products, like the Powerwall and Solar panels, but that's as far as the ecosystem goes right now. I don't see any incentives on their website.

Electric cars are not much greener than normal cars if they use electricity produced in coal plants. I think it makes a lot of sense to push for solar power when you are in the electric car business. Without renewable energy they are really not that green after all.

Who cares, I didn’t buy it to be “green”. If it becomes economically viable power suppliers will transition to solar or whatever replaces coal eventually. It’s just a matter of when and what.

AFAICT they are still losing money on every Model 3 though?

Doesn't matter that your cars are really good if you're not profitable. Just look at Saab.

> AFAICT they are still losing money on every Model 3 though?

Citation needed...

They're not losing $ on every Model 3.

All of Tesla’s models have a healthy gross margin, meaning that their economics get healthier with every car they sell.

Tesla as a whole still operates at a loss, but that’s to be expected with the massive expansion of production capacity they’ve been continuously doing since 2012.

OK, I should rephrase that. They are not losing money on every car. But they are still far from being profitable selling hundreds of thousands of $35k cars.

According to the letter Musk himself posted in early January of 2019, he said they can squeeze out a tiny profit when selling the top end Model 3s at $45k+. And that they have a big effort ahead to make a profit selling $35k cars. This is a far cry away from a healthy gross margin.

https://www.tesla.com/blog/tesla-company-update?redirect=no

There is a healthy margin on every car they sell. They just invested so much that they are still not making a profit. The way I'm reading it is that they can make a profit if they sell them at 45k, but they rather sell them at 35k to sell MORE. Expansion has a cost, and it's the reason why they're not making a profit.

No, the point is they are currently not selling any at $35k. They are filling the high-end orders first, hoping that they can do $35k profitably in the end.

You can walk in to a Tesla store and buy the $35k car today. It's just not for sale on their web site.

Their reported ASP last quarter, Q2, on the model 3 was 50k.

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