Chevy Volt a Failure - GM to Layoff 1,300

Tesla will sell about 50,000 cars this year. BMW will sell close to 2 million cars. We're not comparing niche models of cars. We are comparing car companies if you want to have the discussion I was having -- about Tesla's BUSINESS. ... its cash burn rate (it is living on debt and promises), it's profitability (or lack of it) and its future viability.

Second, Tesla isn't trying to be Maserati. It is trying to compete with Audi and BMW. It is selling a luxury sedan. Not a niche Italian sports car. Either way, Maserati is very profitable at what it does. Tesla bleeds cash doing what it does.

Third, in regard to what I think you were suggesting. Musk hasn't positioned -- or financed - the company to be a niche player like Maserati. So it's a misplaced comparison.

And investors in the equity markets haven't valued it that way. Tesla has a market cap that is more than 2/3 of GM's. The difference is that GM will sell about 10 million cars this year and will have positive cash flow to the tune of more than $2 billion.. Tesla can't even deliver the 55,000 cars it projected, and it has negative cash flow.

 

You aren't "refuting" what I said -- all I posted were tangible things about the company's balance sheet.

You are refuting your own mischaracterization of what I posted. It's one thing that bugs me about these threads. People are so invested in how they want things to be (in the face of someone pointing out a reality they don't want) -- that they create an argument when there shouldn't be one.

Reread my post. I posted that they have sold fewer than 80,000 cars over last few years (and a chunk of those to other countries) in response to someone saying they were "everywhere" in LA. So I said that is a perception thing, but it can't be a reality -- they haven't sold THAT many cars in the U.S. since they rolled out the Model S. I didn't say, "80,000 cars. ... the company isn't successful" the phantom words you just put in my mouth.

What I THEN posted was about Tesla's debt and negative cash flow, and suggested THAT at least is be a tangible measure of the company's success or failure.

Second, and again, Tesla has not positioned itself as a niche company, like Maseratti. It's just a wrong comparison -- no matter how much you try to force it. The cars are not only not comparable to Italian sports cars as products! ... the Carnival Barker in Chief hasn't put forward a plan to be a niche company making small numbers of toys. Investors have the company valued with a current market cap greater than $30 billion -- on Musk's hype about it being a mass producer of vehicles at some point in the future.

YOU can call Tesla a niche company, But it's only a niche company because it hasn't sold a lot of cars. It isn't TRYING TO BE a niche company. If I start a car company, fund it with endless debt, and I only manage to sell and deliver fewer than 100,000 cars over several years, does that make Maseratti a good comparison for my company? Or is it possible I might not have a product that the market really wants at the price I sell it at?

Tesla is a company that has (and has always had) a plan to sell a hell of a lot more cars than Maserati sells. Tesla's plan with the Model S was to sell the millions of cars that BMW or Audi sells. It doesn't do that. ... yet at least. But the carnival barker in chief says it will. OK. He says LOTS of things. All I am doing is removing the hype and looking at what he actually has been able to deliver.

The ONLY reasonable argument anyone can make about Tesla being a "success" to date, is in terms of a subjective opinion about its car. Car reviewers largely loved the Model S. The relatively few number of people who own one, largely seem to love the car.

That doesn't change the fact that they haven't had a huge market for the cars, and they haven't even been able to deliver the relatively small numbers they said they would -- so far, at least.

And of course I can look at the balance sheet and point pretty out factually that all the company has TODAY is a valuation based on promises and hype. It's a company that loses money and is swimming in debt.

 

Even with generous subsidization to try to give it a leg up. ... Tesla LOSES MONEY selling the Model S. It is NOT a market success. No matter how you try to dice it up. Those random models of cars you are trying to compare it to. ... They are sold profitably!

I can't believe we are still having this discussion -- when I pointed all of this out years ago on this thread and got the hostile responses. The Model S was supposed to be that mass market vehicle! And somehow the goal posts got shifted again? The Model S was not MEANT to be a niche product. But the cost of the battery technology kept Tesla from being able to get it down to an affordable price point -- at least with a battery that had any kind of capacity to allow you to drive any amount of distance. When it finally had to acknowledge that reality, it scrapped the cheapest version (what everyone was telling me made the car so affordable at one point on here!), which didn't have the high-capacity battery, and made itself into a niche company.

Go back through this thread. Over and over again, I posted that was the problem EVs were facing, including Tesla. People take that reality so personally.

Even with the subsidies to try to force the cars into the marketplace -- they are STILL too expensive to make sense for the masses, especially if it is car with range limitations, such as the Chevy Volt. It was the case 3 years ago and it's no different today. Tesla has a high-capacity battery that makes it a more practical car than the Chevy Volt or Nissan Leaf. But the cost of that battery makes it impossible to price a car in a range MOST people are able to afford. Which is why it sells $105,000 cars, not $30,000 cars.

The Model 3 is a pipe dream. It's essentially what he promised with the Model S. Except now the hype and promises incorporate a fictional factory that doesn't exist, producing batteries at a price point that doesn't exist, going into a pipe dream car that doesn't yet exist. But just you wait and see!

The Model 3 will cost 80 percent of what it costs to produce the Model S, according to what they have put out there. Yet, he is somehow going to sell it for less than half of what the Model S costs -- never mind the fact that the Model S has NO MARGINS where they price it! Maybe he can perform miracle, and I just don't recognize Merlin the Magician when I see him. But it doesn't take a great deal of skepticism to point out how silly it all sounds.

In a few years, he sold cars (in the 10s of thousands -- it's not like they are producing or selling very many cars!) to stock market millionaires riding a bubble economy and buying up expensive toys. He wasn't even able to do it profitably -- the company runs on escalating debt (and selling government tax credits), not car sales! As soon as the asset bubble pops (and it will -- it may already be; ask all those potential Chinese nouveau riche he was going to sell cars to -- how do you think that is going to work out now that their paper wealth is dissipating by the day?), will the company even have THAT market -- let alone the half a million in mass market car sales by 2020 that has been the stated goal of the company all along?

But yeah, Elon Musk just moved the target for an affordable car with mass appeal out even farther -- with yet more hype about a new miracle. Just you wait and see.

OK.