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Author Topic: How hard is it to do what Tesla has achieved?  (Read 530 times)
dan_b
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« on: November 07, 2019, 10:02:21 AM »

https://cleantechnica.com/2019/11/06/how-hard-is-it-to-do-what-tesla-has-done-very/

Stands back and lights the touchpaper
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dickster
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« Reply #1 on: November 07, 2019, 10:33:08 AM »

Bait taken...

I've followed Tesla's development for maybe the last 4 years and researched back to their inception. Impressed enough to buy a Powerwall and some shares. Notwithstanding the innovation and high quality engineering, what really impresses is the size of testicles required to conceptualize the whole thing before you start and then actually turn your master plan into reality, covering all major aspects by spending a ton of money on something that may or may not work out.

With a blank sheet of paper, significant amounts of money and an Elon Musk, it seems that this can be done.

If you are already an automaker, you paper is not blank and you are somewhat hobbled by your own existence. I'm not sure why VW etc haven't set up sister companies to start from scratch (maybe call it VWE, for instance), to at least have a blank sheet of paper. Then find yourself an Elon and then hope your income can sustain development through to success.

In final answer to your question, I think it's hard.
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biff
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« Reply #2 on: November 07, 2019, 11:47:40 AM »

I am not a fan of the man,
                            But I have to admire his single mindedness, persistence and vision. There is a large amount of the Howard Hughes involved.
   I was a very big fan of Hughes and read a stack of stuff about him. I think that when these men get to a certain level of genius, They lose track of themselves and persecute themselves .
  Not everybody can be a Marcellus Jacob who after an incredible career which started in a barn on the family farm, built and installed the best domestic Wind Turbines the world ever seen, then went on to a career in teaching the Military how to put things together and help his country,s war effort.
    When Marcellus, and his brothers Joe and Fred started out, There was nothing outside their house for miles and miles, apart from hens scratching in the dirt street and the family barns. There was no Wicks, No Plumb Centre ,,Nothing,,Just grass and the odd farm as far as the eye could see. Yet somehow, they managed to create some of the most reliable designs of Wind Turbines of all time.. They grew a very successful business and years later when Marcellus was among an audience at a wind turbine lecture. He got up out of his chair, uninvited and went up and cut through all the Nonsense that was being spouted. They did not even know who he was. He was 70+ at the time. They soon found out. I would imagine Marcellus would have had a much happier active life right into his 80s.
    Marcellus stopped building Wind Turbines in 1956. If any of you wind turbine flyers or anyone interested, have the time, Maybe You could take 15 minutes and read the Plowboy/ Marcellus Jacobs interview. I have read it a few times but always pick up something new every time i read it. Just google it and it pops up. Brilliant stuff, Marcellus was also chairman of the Corrosion Board  Grin and that is no joke.
                          Biff
                                       
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stannn
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« Reply #3 on: November 07, 2019, 12:25:48 PM »

This https://www.motherearthnews.com/renewable-energy/wind-power-history-zmaz73ndzraw
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RIT
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« Reply #4 on: November 07, 2019, 02:33:19 PM »


If you are already an automaker, you paper is not blank and you are somewhat hobbled by your own existence. I'm not sure why VW etc haven't set up sister companies to start from scratch (maybe call it VWE, for instance), to at least have a blank sheet of paper. Then find yourself an Elon and then hope your income can sustain development through to success.


The problem for all the major IEC companies is that they have to divert funding from other projects or shareholder dividends/share buybacks while having to also justify such funding for many years, Tesla for many years has been funded by high risk investors. At the same time finding an Elon would not work - can you imagine the damage a company like VW would suffer if it had anyone with the ego and twitter account like Elon in its management structure Smiley

Don't forget that while they have not been doing much in terms of car production they have been doing direct R&D and indirectly funding other small companies. This allows them to build-up things like patents, which in future allows them to enter the market when it is more established. At some point, we will see reports of all the large companies swapping patent rights so that they can get on with EV production. Such exchanges will also allow them to get access to much of the patented work done by companies like Tesla.
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Fintray
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« Reply #5 on: November 07, 2019, 04:22:33 PM »


At the same time finding an Elon would not work - can you imagine the damage a company like VW would suffer if it had anyone with the ego and twitter account like Elon in its management structure Smiley


Could it be worse than the damage caused by them cheating the emissions tests?

Perhaps they should have called them the omissions tests...
« Last Edit: November 07, 2019, 04:24:14 PM by Fintray » Logged

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RIT
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« Reply #6 on: November 07, 2019, 11:59:25 PM »


At the same time finding an Elon would not work - can you imagine the damage a company like VW would suffer if it had anyone with the ego and twitter account like Elon in its management structure Smiley


Could it be worse than the damage caused by them cheating the emissions tests?

Perhaps they should have called them the omissions tests...

I would think so as it would be a yearly thing on top of all the issues that their ICE business has caused.
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pdf27
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« Reply #7 on: November 08, 2019, 07:06:41 AM »

The problem for all the major IEC companies is that they have to divert funding from other projects or shareholder dividends/share buybacks while having to also justify such funding for many years, Tesla for many years has been funded by high risk investors. At the same time finding an Elon would not work - can you imagine the damage a company like VW would suffer if it had anyone with the ego and twitter account like Elon in its management structure Smiley
So far Tesla has burned through something like $11 billion in cash - pretty decent for a car company, considering that the smaller car companies like Peugeot or Fiat have market capitalisations in the region of $20bn. That sort of ignores whatever value people assign to Tesla shares, but such a huge fraction of them are being shorted at the moment that the market capitalisation has got next to nothing to do with the value of the company...
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phoooby
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« Reply #8 on: November 08, 2019, 08:06:09 PM »

"So far Tesla has burned through something like $11 billion in cash"

or built 3 factories to mass produce EV's and batteries, built a global showroom network, built a fast charge network from scratch that is far superior to any of the competition. developed 3 cars BEV's and sold over half a million of them, developed grid sized batteries and at one point had the largest grid battery install. 50k + domestic batteries installed globally. Product pipeline including a pickup soon to be announced (largest market segment in the US), and an HGV. Not insignificant achievements. 

Burning implies it was wasted. Any money the legacy manufacturers have spent developing ICE tech over the past 5 years was more of a burn of cash. Peak ICE car numbers have been and gone so they are now fighting over an ever diminishing market.
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« Reply #9 on: November 10, 2019, 09:49:41 PM »

To be fair, in business, you have to make a profit - that is what it is all about. What Tesla has done is very high risk - which does seem to have worked, but it is still not consistently profitable. It may well be, but it may well not be.
So it is a bit early to tell.
The other thning is that it is cashflow, or lack of it, that kills companies. It's only that there is so much cheap money sloshing about that Tesla has access to all the funding. It has burned $11bn.

FWIW, I think it will be a "success" -in the sense it will be a viable business, but the big boys are getting there as well.
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« Reply #10 on: November 11, 2019, 07:02:59 AM »

To be fair, in business, you have to make a profit - that is what it is all about. What Tesla has done is very high risk - which does seem to have worked, but it is still not consistently profitable. It may well be, but it may well not be.
So it is a bit early to tell.
The other thning is that it is cashflow, or lack of it, that kills companies. It's only that there is so much cheap money sloshing about that Tesla has access to all the funding. It has burned $11bn.

FWIW, I think it will be a "success" -in the sense it will be a viable business, but the big boys are getting there as well.

But Tesla has been consistently profitable!

They made a profit after the ramp up of the TMS, then again after the ramp up of the TMX, and again after the ramp up of the TM3. After each profit, they have only made a 'loss' due to expending monies again on more CAPEX for the next vehicle launch and ramp up. We've seen the same again after they went profitable with the TM3 as they invested (CAPEX) in the TMY production line and the Shanghai factory, so it's really a myth that they aren't/haven't been profitable.

As for cashflow, they have a really good cashflow already, and I think ~5bn in the bank. I'm also not sure that they have no problems whatsoever raising investment in the past due to cheap money sloshing around, in reality, each time they've raised funds it has been relatively 'easy' due to the large fact that the company seems like a good bet, and has a lot of support.

I appreciate that there is an enormous amount of FUD out there about Tesla, but little of it stands up to the smallest amount of scrutiny.

Looking forward I'm not sure if they will keep making a profit in the short term, though they seem semi-confident, as they need to invest in the both the Tesla Semi, and the pickup (launch event on the 21st Nov), and of course the ramp up of the TMY, but Tesla/Elon seem to believe that this might now be possible from quarterly revenues, but we'll have to see.
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« Reply #11 on: November 11, 2019, 01:52:28 PM »

The phrase "cash burn" is a little misleading I think.  It's usually used more appropriately in start-up companies that are still doing R&D - they're burning their investor's cash trying to bring a product to market (or at least get it to the point where it can be bought out by a bigger competitor) before running out of cash completely - ie they have no income.

Tesla is not in that position - they actually make, and sell, product. 400,000 car sales, plus all those Tesla PowerWalls and PowerPacks is a lot of sales income as well. Yes they're using their investment cash for R&D but also for manufacturing expansion to improve their economies of scale .   

Apparently there is a 25% profit margin on the TM3 as it currently stands - so I assume if they can continue to expand the numbers they can build and sell, plus bring in the Model Y into that mix, they will be making profit on a regular basis.
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« Reply #12 on: November 11, 2019, 04:27:32 PM »

The likes of BMW used to make about 6% NP i think whereas most are in the 3% however with current changes in the market place i would not be surprised if its close to zero.
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pdf27
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« Reply #13 on: November 11, 2019, 10:13:18 PM »

The phrase "cash burn" is a little misleading I think.  It's usually used more appropriately in start-up companies that are still doing R&D - they're burning their investor's cash trying to bring a product to market (or at least get it to the point where it can be bought out by a bigger competitor) before running out of cash completely - ie they have no income.

Tesla is not in that position - they actually make, and sell, product. 400,000 car sales, plus all those Tesla PowerWalls and PowerPacks is a lot of sales income as well. Yes they're using their investment cash for R&D but also for manufacturing expansion to improve their economies of scale .   

Apparently there is a 25% profit margin on the TM3 as it currently stands - so I assume if they can continue to expand the numbers they can build and sell, plus bring in the Model Y into that mix, they will be making profit on a regular basis.
It's an odd one. If Tesla were behaving like a mature company they would be fine - they're making an operating profit and have supportive long-term shareholders. They aren't however - pretty much all the money they can scrape together is being reinvested into the company. Essentially they're gambling with the company - if they can continue to grow they're in a position to make a massive return on the initial investment, if something goes wrong they're in a position to lose the lot.
This also feeds into the share price - Tesla is priced as a rapidly growing company/silicon valley start-up (well, by the bulls anyway) in terms of Price/Earnings, but can only justify this by ploughing all their income back into the company. If they were to start acting like a mature company, they would start being priced in more conventional terms and the share price might well crash to a more normal multiple of sales since they would no longer have the growth prospects.
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« Reply #14 on: November 12, 2019, 08:49:56 AM »

To be fair, in business, you have to make a profit - that is what it is all about.

For many entrepreneurs, profit is only one of the things it is about. An important objective, but not the only one.

Quote
What Tesla has done is very high risk - which does seem to have worked

It has worked in the most important regard; and whether the company survives or not, won't change that: it's hugely boosted the image of BEVs, accelerated their take-up, and forced the big manufacturers to temper their complacency and actually do something novel. The Tesla Roadster changed the image completely; and the mass-produced Teslas that followed, changed the market.

Fifteen years ago, some people (not everyone) still thought there was competition between BEVs and hydrogen vehicles; governments were reluctant to pick winners; and the non-fossil cars that were available, were simply not appealing alternatives to the fossil cars available. The 2006 revealing of the first Tesla Roadster put a flag down, and we haven't looked back since.

Globally, governments have been far too slow, and far too weak, on the energy transition. Tesla have gone full speed, blazing new territory, changing everything they touch. The world should be grateful. (Even if Musk is a total jerk)
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