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Sun Oct 28, 2018, 05:43 PM

Guess What? Everyone Was Wrong About Tesla

Pretty much everything has been said about Tesla: it was selling vehicles at a loss and would never be able to make them under the right conditions and fast enough, that its founder was crazy and would lead the company to ruin, while one industry veteran acclaimed the Model S, calling on car collectors to buy one ďbefore the company goes belly up.Ē But this quarter, Tesla has not only made tons of money, boosting its share price and giving the NASDAQ its best day in months, but has also fulfilled its production and distribution objectives, showing every sign of staying in the black, at least until it has to pay interest on loans in the first quarter of next year.

For once, this third quarter does not seem to be the exception: everything indicates the company has found a stable way to generate profits. Whatís more, Tesla is no longer an industry quirk: many have laughed at its production difficulties, grossly underestimating the achievement of moving from a standing start to mass producing 80,000 vehicles per quarter, but the company is now outselling Porsche, Mercedes Benz and BMW, making it the best-selling domestically-made car in the United States, and whatís more with a model that while expensive, is more advanced technologically, as well as cheaper and much safer to run that its internal combustion powered competitors.

This quarterís spectacular results have confounded the analystsí forecasts, proving what some of us have been saying for a while now, that few in the motor industry and its so-called experts few understand the strategic vision of a company prepared to take risks to change the world. Virtually everyone was wrong about Teslaís finances and its future, and many analysts are now scratching their heads trying to understand what happened while still making recommendations of questionable credibility. For one thing, most analysts simply canít get their head round the idea that a companyís customers would volunteer to help distribute its vehicles, contributing to a project they consider themselves part of. Elon Musk will doubtless be basking in the warm glow of his ďI told you soĒ triumph, because he does understand that people want to be part of a project that is not about selling cars, but changing the world.

Understanding a business model like Teslaís means understanding that the biggest difficulties arenít necessarily the ones you imagine. Tesla has shown that difficult challenges can be overcome, as many other companies have done before. It has shown that itís possible to design long-term strategies and implement them successfully, even if that means having to listen to baseless nonsense from people who donít understand what itís are doing. For example, that the company was wrong not to locate in China, that its production costs were unsustainable and would drive it out of business. Yet Teslaís assembly line is now making progressive savings as production increases, and next year, depending on global demand, it could even consider moving a part of its manufacturing to China: now, not before.

https://www.forbes.com/sites/enriquedans/2018/10/28/guess-what-everyone-was-wrong-about-tesla

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Response to Zorro (Original post)

Sun Oct 28, 2018, 05:55 PM

1. The big picture: cleaner electric cars are off and running

Whether Tesla makes profits or not is secondary. The goal is to get people willing to buy them. Musk has succeeded. Hopefully others will do even better.

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Response to Zorro (Original post)

Sun Oct 28, 2018, 06:07 PM

2. Remind me again how much their cars cost?

How many Honda Fits (what I currently drive) could I purchase instead of one Tesla?

What I've paid for all of the cars I've owned in my life probably would not add up to one Tesla. Once the company starts making cars that cost less than 20k they will make sense for the average person. Until them, it's still a luxury item to be owned by a very few.

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Response to PoindexterOglethorpe (Reply #2)

Mon Oct 29, 2018, 09:08 AM

12. They are getting there....Bolt @ 37k, Kona @ 39k minus Tax credits

puts them around 30K...Soon, I'm waiting also for 20k-ish.

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Response to masmdu (Reply #12)

Mon Oct 29, 2018, 09:58 AM

13. Even 30k is nearly twice what I'm willing to pay for a car.

I suspect that Tesla will continue to keep the price high because people who pay that much (and most Teslas are vastly more expensive) one aren't very price sensitive and two take a lot of joy out of owning an expensive car.

Honda, and others, make a hybrid. That's not what I bought, but if I live long enough and continue to buy cars, I will eventually own a hybrid or an all-electric car.

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Response to PoindexterOglethorpe (Reply #13)

Wed Oct 31, 2018, 12:11 AM

14. There are precious few new cars out there under 20K these days

Even a basic Honda Fit starts at $18,000.

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Response to NickB79 (Reply #14)

Wed Oct 31, 2018, 01:40 AM

15. Of course, a two or three year old car can easily be less than 20k.

A month ago I bought a 2017 Honda Fit with 13k miles for under 20k.

And there's a huge gap from 20k to 70k which is the STARTING price of a new Tesla. Trust me, until Teslas get down to the price of an entry level Honda or some such similarly low-priced car, they will remain (70k???!!) a luxury car for the few.

The starting prices for each and every Tesla is NOT in anything anyone can remotely call affordable. Unless you're in the 1%, in which case your notion of affordable is quite different from mine.

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Response to PoindexterOglethorpe (Reply #15)

Wed Oct 31, 2018, 05:39 PM

16. Used cars are a great way to go

I picked up a 2012 Prius V this winter with 75K miles for $12,000, and average 44 mpg combined, love it. New it's a $30,000 car.

That said, good used cars are only available at good prices so long as there's a large enough pool of people willing to buy them new in the first place. And right now, the price of used cars is on the rise: https://www.usatoday.com/story/money/cars/2018/06/30/small-used-car-prices-rising-again/737878002/

Also, a Tesla 3 starts around $40K right now, not $70K. A friend of mine just got one (put his name on the waiting list the week it was announced) and says he loves it.

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Response to NickB79 (Reply #16)

Wed Oct 31, 2018, 07:02 PM

17. For me 40k is mindboggling and

far more than I'm willing or able to pay.

I have been buying used cars for some time now and I'm very happy. I happen to be very fond of Hondas.

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Response to Zorro (Original post)

Sun Oct 28, 2018, 06:12 PM

3. Is this article from Forbes or the Tesla PR department?

Whoever wrote it needs an editor:
"even if that means having to listen to baseless nonsense from people who donít understand what itís are doing."

I admit I don't understand what it's are doing, or even what "it's" are.

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Response to Bradshaw3 (Reply #3)

Sun Oct 28, 2018, 06:17 PM

4. He the entire sentence

The whole sentence!

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Response to htuttle (Reply #4)

Sun Oct 28, 2018, 08:54 PM

7. "He the entire sentence"?



Not sure what you meant but if you're saying to include the entire sentence, here it is:

"It has shown that itís possible to design long-term strategies and implement them successfully, even if that means having to listen to baseless nonsense from people who donít understand what itís are doing."

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Response to Bradshaw3 (Reply #7)

Sun Oct 28, 2018, 09:05 PM

8. Sorry -- it was a badly delivered meme reference

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Response to htuttle (Reply #8)

Sun Oct 28, 2018, 09:46 PM

9. A sportswriter friend of mine accidentally left out a verb in one of his stories

I read it out loud to him and he started laughing (he could laugh at himself) and said, "I like for readers to conjugate their own verbs."

Well I learned something from your link. Thanks.

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Response to Zorro (Original post)

Sun Oct 28, 2018, 06:45 PM

5. new tech is always pricey til it matures and trickles down price wise nt

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Response to Zorro (Original post)

Sun Oct 28, 2018, 07:58 PM

6. From a "gearheads" point of view,

One of the reasons these are selling so well is that they are Crazy Fast!
In Ludacris Mode (Yes there is a Ludacris Mode button on the dashboard) the Model S Sedan will move as fast as a Dodge Challenger Hellcat, has more power than a Chrysler 392 c.i. Hemi and is more eco friendly than any fuel powered car diesel or gas.

Electric cars are the future and as the technology becomes more common they will get less expensive.

Here's a goody for you 1/4 mile fans...


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Response to Zorro (Original post)

Sun Oct 28, 2018, 11:52 PM

10. Sorry, I Don't Buy It. Recommend Shorting the Stock and Its Blowhard Founder!

 

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Response to DoctorJoJo (Reply #10)

Mon Oct 29, 2018, 12:19 AM

11. Go for it!

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