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Asymcar 32: Tesla: the Numbers

Anton Wahlman joins us as we dive into numbers, production curves and the clash between reality, vision and hubris over autonomous carsTesla’s “financial equation” merits much discussion interspersed with reflections on an EV landscape littered with government subsidies.We close with accounting, including a dissertation on variable costs and the burden of “dealerless” car sales.

Source: 5by5 | Asymcar #32: Asymcar 32: Running the Numbers

  • dm33

    Made some very interesting points, but also seemed to miss the boat on the whole idea behind Tesla in various ways that overall come off being negative about electric cars.
    There was no mention of the great spend Tesla is doing to dramatically increase production. A small car company selling 50,000 cars/yr wouldn’t invest billions in a gigafactory. Such dramatic spending ramp-up guarantees continued losses. You can debate if the losses are acceptable but ignoring the very unusual startup like spending increase is an odd oversight or maybe indicates someone who is unable to grasp a disruptive company like Tesla vs. an established large auto manufacturer.

    The comment towards the end saying the Tesla Model S interior is no Bentley. As if Bentley is good and Tesla is bad again show a lack of understanding of the market. I suggest most Model S owners would prefer the current interior to the stuffy non-tech interior of a Bentley.

    Large focus on government incentives helping sell cars. This was not balanced nor informative. Didn’t mention that the incentives will phase out as Tesla reaches 200,000 cars predicted by them within a year or two. Already the reservations are clearly not expecting any government incentive.

    • Ernest Blake

      AW is well known as a TSLA short seller, and always presents negative reports to Better serve His financial goals.

  • David Rosnow

    In terms of Tesla, I often have hear your criticism that Tesla is not disruptive because the innovation they offer could be adopted but the existing automotive industry players. If you listen to Musk, he seems aware of that. He open sourced Tesla’s patent’s for that to happen.

    What if the goal of the company is to make great products AND move the rest of the industry to a more sustainable, renewable powered direction? That might not be classically disruptive, still it might be very impactful in terms of causing a significant change to happen. Disruption theory suggests that Tesla could have that impact if the move to EV is considered sustaining and they might cause this change to happen faster than it would have otherwise.

    I realize that you are a disciple for Christensen’s disruption theory but is achieving disruption the only standard to evaluate a business, especially one that claims a social mission in addition to seeking profits?

    • http://www.asymco.com Horace Dediu

      There is nothing wrong with trying to achieve an altruistic mission but pay attention to the valuation of that dream.

      • David Rosnow

        Every business has a lifespan. Shareholder value goes up and down. Few companies can be said to revolutionize an industry or accelerate change across the entire market. Apple did that with the smartphone. After the iPhone, all smartphones started to look like iPhones. Over time we may see that Tesla is doing the same thing to cars.

        Tesla investors have no basis to complain about the current valuation. They can have a good exit if they choose to take it. New investors understand the company better and can see the strategy clearly.

        Tesla owners gush over their cars and clearly the Model 3 has had an impressive response.

        Perhaps you are right that over the long term Tesla will not be able to defend this position and will lose value. To me this approach *is* altruistic in some ways, and I don’t want that to be a bad thing, but it isn’t just that. Tesla is also building a very valuable brand in a sector where it was thought that new brands were impossible. No one doubts Musk or Tesla’s authenticity in terms of innovation, product or mission. What’s that worth?