Tesla Real Problem: Mass-Producing Its Cars ?

[Vikas]

So did Google and so does Amazon i.e. losing money year after year.

 

[HTSS_TR]

So did UPS, Fedex, Southwest airline ... Most start up companies lost money and had negative cash flow many amny years before they became profitable. If you know a billion dollar company that made a profit(any amount) the first 2-3 years after start up please post.

As of now Amazon didn't have a full year profit after more than 10-15 years in business, they are still expanding so the cost of doing business is more than revenue, but their market value is in hundreds billions.

For the Tesla haters, read/research before posting false information.

The problem that Tesla facing is efficient manufacture, how to make quality cars with minimum cost to have reasonable profit margin. The other problem is how to get suppliers supply parts consistently at the quality they demand and on time.

Everything Tesla had been done was legal and moral. They had carbon tax credit and they used it to offset the price of model S and X and probably model 3 too. Any car company making zero emission vehicle can claim carbon tax credit, if a car company don't have zero emission vehicle then either they buy carbon tax credit from companies that have excess credit like Tesla or pay fines to Federal and/or state government(s).

Tesla had government bailed out money some years ago but they paid all back with interest last year, not like GM that Federal government lost some billions dollars bailing them out.

If Tesla is a fraud why investors value their company at more than 20 billion dollar ?

 

[hattaresguy]

Originally Posted By: A_Harman
Originally Posted By: hattaresguy
Tesla's in trouble?

Since when do 50%-100% increases in sales year after year mean trouble?

Trouble like in they need to hire some manufacturing talent to set up an efficient assembly line in that massive factory they already occupy? To me as a business owner that seems like a fairly straight foreword operations issue to be solved.

Car manufacturing is not a secret.


There is probably a real limit to demand for a high-end electric car. Then what to do after that demand is satisfied? Tesla could probably exist for decades niche-marketing the Model S to true-believing customers; ones who don't demand perfection in $85,000 cars and having the occasional beta-test kind of a glitch. But once Tesla tries to go mass-market and sell a car to people who expect it to be as useful and reliable as a regular IC car, there is a bigger risk. People in that market don't tolerate quality and reliability problems. A failure rate of one in a hundred-thousand can lead to financial disaster if a recall is necessary. How much trouble has GM gotten into over the ignition-switch recall? So far they have paid about 140 ignition switch settlements on 28 million cars. That's a failure rate of 1 in 200,000.


Tesla's entire business is geared toward eventual mass market production. They didn't buy that massive factory to build 50k Model S's a year in (best selling car in its class BTW).

They are simply experiencing growing pains. I am sure they hired the proper talent to beat up their supply chain to get it moving smoothly.

FYI buyers in the $60k-$100k where the model S operates are more picky than your average Camry buyer, they tolerate far less.

 

[hattaresguy]

Originally Posted By: Nate1979
Originally Posted By: hattaresguy
Tesla's in trouble?

Since when do 50%-100% increases in sales year after year mean trouble?

Trouble like in they need to hire some manufacturing talent to set up an efficient assembly line in that massive factory they already occupy? To me as a business owner that seems like a fairly straight foreword operations issue to be solved.

Car manufacturing is not a secret.


They are in trouble when year after year they lose money. The question is do they have enough money to fund the next new model.


Of course they are going to lose money their capital costs are high and Tesla is not, and was never built as a company that could survive on a low production high end car.


The more likely than not will not turn a profit until the Model 3, I suspect that's been the plan all along.

 

[HTSS_TR]

I think Tesla will turn profit only several years after Model 3 is in production. The first or second year of production the volume of Model 3 will not be at the goal of around 400-500k per year, it will take them more than a year or 2 to get to that level.

They are expanding now and still for several more years, they plan to have local manufactures in Asia and Europe for local markets.

The pickiness of customers in a low to mid level cars is no so high, it goes up at higher price level and they are very picky about every detail of a car in the price range of $90-100k or higher.

 

[super20dan]

building the useless sports 2 seater roadster was a huge mistake. should have started with a 4 door sedan and or a suv. who needs a 100,000 $ 2 seat elect car-no one

 

[philipp10]

Originally Posted By: hattaresguy
Tesla's in trouble?

Since when do 50%-100% increases in sales year after year mean trouble?

Trouble like in they need to hire some manufacturing talent to set up an efficient assembly line in that massive factory they already occupy? To me as a business owner that seems like a fairly straight foreword operations issue to be solved.

Car manufacturing is not a secret.


Tesla is in trouble because they lose $4000 on every car they sell, and thats with government tax breaks. Their only hope is to lower the manufacturing costs....and its not in the car, but the battery where the costs are.

And I might add, I don't agree with Tesla's second car, the Model X with it's difficult to manufacture doors. KISS (keep it simple stupid).