Featured Tesla exec tells it like it is

And the Prius was a niche car, until it wasn't.
Worldwide, Tesla has sold almost as many cars as the Leaf, even though the price point is 2-4 times as expensive.
Tesla is selling twice as many cars in the U.S. As Masarati.

Frankly, it is amazing they have done as well as they have being such a new company to the auto world.
Is the car perfect? No, no car is, but it is improving very quickly, and started out better than most.

 

It wasn't too many decades ago that GM & Ford only had a 12K mile warranty. The dealership would literally have a controlled smirk on their face if / when your car fell apart at 13K miles. If it weren't for new companies holding higher standards to the feet of the big 3, reliability /warranties might still be as pathetic as they used to be with regard to reliability. It certainly wasn't striving to be better that brought about better quality & warranties. It was the competition from the new guy. Anyone who believes that stodgy automakers' "history" is the thing that modernly makes cars better, is really fooling there self.
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No derision meant, but toyota in spite of the prius isn't saving the world.
Corporate Average Fuel Economy: How Automakers Rank - Cars.com

When you average in that 11th place for light trucks (pick up trucks, and SUVs) the first place for imported cars and forth in domestic (US or Canadian made) passenger cars doesn't put toyota top of the heep inspite of the prius. Tesla, Hyundai, and Honda are ahead on fleet averages. Not that there is anything wrong with that, toyota makes a lot more money on its light trucks than its hybrids. Toyota does make more than it looks like on the imported hybrids, as their credits can be traded to offset emissions on toyota's light trucks. Toyota seems to have a great relationship with congress.

Corporate Average Fuel Economy - Wikipedia, the free encyclopedia

There are a lot of jobs tied to making these trucks and SUVs. I don't blaime toyota for pumping them out as fast as they can. It just is we can't look to toyota or any of the big old line vehicle manufacturers to really reduce gasoline usage or ghg.

Tesla seems unique here, where they truly want to change the paradigm. If they are successful, they will force the old line manufactures to change or go out of business.

 

Little in Tesla’s behavior shows it is out to save the world. Tesla could have released a model in the price/class as the Leaf years ago. Why not? Profit. Executive words are cheap.

Love the Tesla line and wish I had one in my garage, but vehicles marketed to the 1%-ers is hardly altruistic.

 

And since you've made cars, you know for certain that building a little bit of equity first, so that you can sell the money losers is not so important? Thanks for the pearls of wisdom -
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Tesla is the new kid on the block, working on a (comparatively) shoestring budget.
They have neither the production capability nor funds to make a low margin, high quantity vehicle.

What they can do is sell vehicles to the top 10%, which allows them to grow.
This is what they did, starting with the high price, very low quantity Roadster.
Using the knowledge and funds from the Roadster, they developed the lower priced Model S. Produced in much higher numbers it has allowed them to begin to build a worldwide fast charging network, expand their sales and service centers, and design their lower cost, higher quantity Model 3 (probably hitting the market in 2018).

So if a company that started with nothing 12 years ago can do that, I think the question is, why haven't the better funded companies been able to do at least the same?

 

the answer has already been given. why the refusal to deal with reality?

 

greed?
Yea, it's easy for naysayers to bag on Elon Musk, because they forget he could have just taken the billion or so he'd already made on high-tech companies sold - and retired on a tropical island. Instead it was more important to nearly have a nervous breakdown giving birth to the auto company. Stupid Elon Musk
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refuel = refuse

Funny typo!

As for re-asking questions, that happens routinely here. Some people simply enjoy the discussions, even when they repeat.

 

That too, has been mentioned before - but, what the heck .... nothing new under the Sun

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I'm guessing iPlug simply had not seen the answer before.

 

Have you seen the cash burn on the S, X, and gigafactory.

Nope. They could have built a leaf and been out of business by now. The leaf is advancing faster than the prius did, but nissan/renault have lost too much money on it for any start up to survive.

The business plan
Roadster - proof of concept
- This is the guy that inspired the leaf and the volt
Model S - profitable car to prove the company, Let Tesla issue more equity so they can design 3
Superchargers and gigafactory - burn some of that new investment. Both important to get to the model 3
Model X - no brainer way to profit more on the S design, but .... Only tesla screw up so far. The X wing doors took longer than expected. Burned some of that cash and engineering resource.
Model 3 - mainstream car.

No little tesla won't save the world IMHO, but the big makers would not be as far as they are without it.

I don't think Musk cares if he makes another cent. He does want to change the world. Power is his game. The Kochs went to politics and evil. Gates does his stuff through charities. Musk wants solar city and tesla to change the face of the earth. Its probably hubris, but I hope he succeeds.

 

Oops, only car manufacturers entitled to discuss this topic. Thanks for the deep insight, Hill.

Oh, poor, poor, Musk. Building space faring rockets, Gigafactory, lots of taxpayer support...

Does Tesla release official stats on the median wealth or income of their customers? Certainly there are some 10%-ers by income who buy the Model S, but that's an entire years worth of after tax income for them.

Lots of anecdotal reports and some non-scientific polls noted on the internet. So to add some more anecdotal evidence from my side, n= ~10 people with the model S that I know enough of their finances, they are all in the top 1-2% of family income or wealth.

No, he just finds statements by edict to be less than compelling.

If Musk wants to run deep on R/D, capital expenses, that's his business. Doesn't prove he is or is not out to save the world. But a profit neutral vehicle available much sooner to the masses doesn't mean bankruptcy, but would suggest substance over words. He probably has a few pennies of his net worth to spare, just sayin'

Agree, and if it works out for the good of others, fantastic. Personally, even though I have doubts to his/Tesla's altruism, he/they seems to be an overall a force for good.

 

agreed, i'd love to see a net 30k 250 mile tesla hatchback!

 

I don't believe they do.
It is far easier to see who can afford it, rather than guessing at who does.
One must also consider that for most parts of the country, fueling an electric car is far less than fueling a gas car.

I'm impressed you know ten folks in the top 2%. That is about $230,000.
I have met a few in the Tesla club in the top 1%, I've also met owners below 90%.

That is the thing, buying a factory capable of producing 1 million low cost autos, then equipping it, then building enough service centers to service the cars as well as a fast charge network is cost prohibitive.

Heck, Tesla isn't making money yet with the higher margin, lower quantity production.
In addition, as Musk has said, the technology just simply wasn't there.
Batteries had to improve, and Tesla needed to learn how to be a car company.

And no, Musk didn't have a few pennies to spare. He almost went broke. SpaceX had one shot left and then they were done after two failures.
Musk went into debt at one point while trying to get Tesla growing.

Yes, Musk wants to change the world.
It is what he has stated, and from his actions, I see no reason to doubt it.

 

Oh, that's why Toyota built an electric car I wanted. Wait, they didn't.

I was fine with the Prius from 2004 to 2009. I would have been fine if the 2010 Prius added a J1772 plug aka all Trim 3 and higher Prius were PiP.

I live in flyover country and I've never even seen a PiP. Toyota sure as heck didn't produce what I was demanding.

By 2012 I was past the PiP phase and was demanding Toyota build me a pure BEV. Must be why my primary car is a Nissan Leaf and I am anxiously awaiting cheaper Teslas.





Merge.

Profit margins are relative not absolute. Tesla will get the same gross margin on the Model 3. They'll do so by mainly lowering the cost of making the Model 3.

 

Well, Elon does have his acting career to fall back on, if Tesla folds:

I don't see either happening.

I, too, am in the Leaf world waiting for an affordable Tesla. Toyota has had their chance with our stable (04 and 05 Prius over 290,000 miles between them, current PiP for my wife.) Toyota continues to fail to produce an EV in meaningful numbers. An EV Prius? are u kidding me? a no-brainer if there ever was one and they muffed it. And don't get me started on the fool-cell distraction...

I can hope that Elon and Tesla keep forcing others to build, sell, and COMPETE with their offerings. We shall see.

 

Looks like someone missed the point re suto manufacturing. Since we don't build cars, it'll be beyond presumptuous to say how someone else ought to do it when in fact we really know nothing about it -
Next - does Ford or Chevy or Toyota get your tax return before you buy a car from them? Wacky as it sounds neither does Tesla. But if you thought that happens, it might explain why you thought we all got it dialed in on how cars should be built as well as their R&D.
As for the top 1%
How close are you to the top 1%? - CNNMoney
That's great that you know people making over $400K. But the Tesla sells starting at the bottom end of 70 K - and that's before the incentives. You could pay that much & more for a dual cab diesel ¾ ton Ford pickup. It doesn't require being in the top 1%.
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Yep.

Not gonna happen. They'd have to basically be able to make the car for nothing to do that.

...Tesla is earning over $10,000 per car right off the bat, but it’s the additional options that drive Tesla’s profit margins to over 25%, or about $25,000 on every $100,000 Model S sold, $100,000 being the average transaction price.​

A Flawed Study Exaggerates The Cost Of The Tesla Model E

 

Strawman, nice. Who said how Tesla had to do it? Need to stick to the argument. To stay true to that logic, let's not talk about anything here unless we are experts working in that industry.

Right, see posts above. It does take, however, for someone in at the 10% income mark all of 1 years after tax income to buy the average Model S.