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Comment by orky56 | Hacker News Reader

Spot on. MBA's aren't meant for 0 to 1. They're meant to optimize and sustain business models with the foundation of innovation and revolutionary ideas. Companies that only stick to one or the other are doomed, or require their industry to be that much more technical or business focused.

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I would say MBAs are excellent at extracting value, rather than sustaining value generation. Actually producing value is clearly not a priority in MBA culture.

Worth looking at it from the viewpoint of the Multi-Armed Bandit problem as well, or in other words, companies sometimes shift their focus from "exploration" to "exploitation," and it can be a challenge for the company to learn to shift back to "exploration."

https://en.wikipedia.org/wiki/Multi-armed_bandit

How is this working for other car makers, who are full of MBAs? Elon comes along and takes their market share.

Is e.g. Toyota MBA-driven? (I have no idea.)

Japanese companies generally aren’t.

I feel like Toyota is where MBA concepts originate, it's a good blend of where management is a science or as close as possible

Electric cars are 2.6% of cars sold, and Tesla is 18% of that EV market. That's not really any proof that the MBA's are "ruining" other car markers, is it?

1 - https://www.iea.org/reports/global-ev-outlook-2020 2 - https://electrek.co/2020/10/30/tesla-tsla-market-share-globa...

It is if you consider the stock market to be reality

The stock market is not reality. Especially TSLA.

EV cars will be 95% of all cars sold within 20 years. Most likely much faster.

Lack of early, large and decisive investment in EV shows a stunning lack of foresight from all ICE car CEOs. Suicide by inaction.

18% is more market share than the biggest ICE car companies (VW and Toyota have ~10% market share).

This shows that Musk handily outperforms all ICE car makers in his sub-market (EV cars). It's not like Tesla lacks competition in EV market (NIO, BYD, XPeng, Nissan, GM, Hunday, Renault, Rivian, Lucid...)

Oh so that's where the market cap comes from. It's valued forward at 2030-2040 valuation where it owns +18% of the vehicle market.

In theory....the share price is the discounted cash flow of Tesla in all future years. Using a discount rate of 8-10% means the annual cash flows for the next 20 years or so are important (any further than that has very negligible effect on the share price). So the share price is counting on explosive growth.

Now, considering Tesla doesn't pay dividends ... what's really the "cash flow" for investors?

This is why it's mostly a theory...human beings don't behave like Excel spreadsheets.

Elon isn't taking their market share. He's banking on the future and stealing their market cap. What people are missing is that every car company is a fast follower and Elon's head start and subsequent lead is disappearing as Porsche (VW) and others are stealing the limelight and performance ranks. Similar to Apple, Elon is thinking in terms of profitability and long-term strategy and wants to focus on taking that over all else.

How is Porsche stealing the limelight? With the Taycan? Which starts at >$100k, with half the range and slower 0-60 numbers than a lumbering $70k base model Model S? (I know they're not direct competitors, I expect the Porsche to have significantly better fit/finish and handling, and the Taycan doesn't really sit 5 comfortably). At the top end, it looks a bit better, but then it's priced in the range of the 2021 Roadster, which seems likely to be a monster.

VW's offerings are obviously more affordable, but they don't seem to offer the same range per buck that Tesla does?

> How is Porsche stealing the limelight?

With consistently better performance. The Taycan is a sports car:

https://www.youtube.com/watch?v=vcKz1OGZ7_I

> but they don't seem to offer the same range per buck that Tesla does?

The VW ID.3 has similar WLTP range figures to the Tesla Model 3 and the ID.3 is cheaper.

Yep, the Model S is a large family sedan, that's why it's a bit absurd for it to win. My point was that a sports car from Porsche should be winning, and not by a little.

That video is comparing the Turbo S (the $185k version of the Taycan) to the $92k version of the Model S. The $140k version is significantly faster, let alone the 2021 Roadster.

The ID.3 seems to have a stated range of ~200 miles?

Performance is more than just drag racing. The Taycan out performs the Model S on track as well. It's just a better car and, yes, that costs money.

> The ID.3 seems to have a stated range of ~200 miles?

There are 3 usable battery sizes for 3 different range figures: 48kWh (205 miles WLTP), 58kWh (261 miles), and 77kWh (342 miles).

Alright, how much range do you get in an ID.3 that’s the same price as the base Model 3?

EDIT: Also, WLTP vs. EPA range isn't apples to apples, EPA is something like 10-20% more conservative, and that's what Tesla quotes, at least on their US site. I can't seem to find EPA range results for ID.3, maybe because it's not available in the US yet? And to be clear, I'm really happy that VW appears to be pushing into EVs in a bigger way than most of the big car companies. I wish they all would. But I think they're a ways from taking the limelight.

> Alright, how much range do you get in an ID.3 that’s the same price as the base Model 3?

340 miles.

> that's what Tesla quotes, at least on their US site

Tesla quotes WLTP ranges on their European sites.

> But I think they're a ways from taking the limelight.

Renault and VW BEVs outsell Tesla in Europe. The limelight has nothing to do with it. It's just business.

Ah nice, sounds like they're doing quite well, then! Looks like Model 3s are significantly more expensive in Europe than in the US (the base model in France is 51k Euros/61k USD vs $38k USD in the US, before tax rebates, which can knock off a significant chunk of it). Which is also part of why the quoted prices for the ID.3 seem so expensive to us in the US (49k Euros/59k USD for the 340 mile version in France). That's a lot to pay for either of those cars.

On track? Which one? Care to share the video evidence?

All I've seen are 1/4 mile drag races that show that yes, indeed, the Taycann has a 2 speed gearbox. There isn't really a big advantage outside of that.

> On track? Which one?

Any track:

https://www.thedrive.com/news/5207/this-video-reminds-us-tha...

I don't see any mention of the Taycann on that link...

I wouldn't worry about the Taycan. The Model S needs to race against something more in its league.

Here's a Model S being beaten by a Nissan Leaf:

https://insideevs.com/news/359903/video-nissan-leaf-beats-te...

The allure of Tesla is that their DNA and proposed vision is all-electric performance without compromise. They've forgone the luxury market and gone all-in with performance. The 3, Y, and even X rely on the nostalgia of the Roadster and soon the S. Despite the fanfare of the S, Tesla hasn't been able to convince the average consumer with multiple cars to own multiple Teslas nor the PR firm that their other models deserve to be on the Top 10s, etc. I'm never going to bet against Tesla. I've seen my $500 TSLA purchase go up 15,000% to $75k in just a few years. That being said there's a lot more work to be done for Elon to get to the top and stay there.

Tesla isn't about performance, that's just a by-product of making EV suitable for everyday use. Teslas are about adequate range (400+ Km, 250+ miles), fast charging and a charging network that enables long-distance journeys, as well as getting as close to self-driving as possible. That's why 1 million or so people chose a Tesla over other EV and gasoline cars.

How do you know the reasons why someone chose a Tesla?

I own one myself and talk to other owners occasionally. People get chatty during those Supercharger breaks.

Sorry if this sounds combative, but how can you extrapolate a couple of dozen casual conversations to a complex decision from over a million people?

> What people are missing is that every car company is a fast follower

I don't know if it can be considered "fast" when Daimler copies the Model S vertical touchscreen after 8 years and puts it in the S class. They seem to be slow followers in an industry that wasn't moving fast for decades and has now picked up a pace.

They are in decline. They need MBAs to manage their pensions and health care liabilities. Elon Musk wouldn’t last a week at any of them. He needs to be in a growth company.

Pretty well. The large car companies are prioritizing the markets with the strictest emissions standards. Renault and Volkswagen EVs outsell Tesla in Europe. Toyota's already in a good position for fleet emissions because it's been selling hybrids for so long.

EVs are still only a small percentage of the overall car market. The world's biggest car companies won't stop being the world's biggest car companies. They'll just start selling more EVs.

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