Tesla's dirty little secret.

[Jimrpa]

That fuel tank would never have burst into flames if the idiot hadn't used a rag as a gas cap.

Actually, I thought there actually WAS a design defect in the original Pinto’s that caused a piece of metal structure to either puncture the fuel tank or sever the neck of the fuel filler and allow fuel to drip down onto hot exhaust system components, causing the fuel to ignite and burn? If I remember, the “scandal” was that Ford engineers caught the scenario very late in design, and an actuarial calculation was made, leading to the decision not to go through a costly retooling, redesign and product launch delay, and instead to accept the risk that the failure could occur and the resulting cost (liability) from that failure. Very sadly, juries place a much higher cost on photos of burned human remains than the actuarials calculated. They also didn’t account for the massive loss in goodwill that the incident caused. My dad had a 1978 pinto station wagon (not a model impacted) and it was a pretty decent car for the era. By today’s standards, it was very primitive.

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[guyofthesky]

Actually, I thought there actually WAS a design defect in the original Pinto’s that caused a piece of metal structure to either puncture the fuel tank or sever the neck of the fuel filler and allow fuel to drip down onto hot exhaust system components, causing the fuel to ignite and burn? If I remember, the “scandal” was that Ford engineers caught the scenario very late in design, and an actuarial calculation was made, leading to the decision not to go through a costly retooling, redesign and product launch delay, and instead to accept the risk that the failure could occur and the resulting cost (liability) from that failure. Very sadly, juries place a much higher cost on photos of burned human remains than the actuarials calculated. They also didn’t account for the massive loss in goodwill that the incident caused. My dad had a 1978 pinto station wagon (not a model impacted) and it was a pretty decent car for the era. By today’s standards, it was very primitive.

I agree with your recollection that Ford knew of the design defect, which was real, but possibly resulted in relatively small numbers of fires. The infamous "pinto memo" was what got them into trouble, and I think there was also a book written which explored how corporate group-think on the issue was different than the individuals involved--that good,, decent family men (they were mostly men back then) decided collectively in a way that they wouldn't have individually.

 

[theo1000]

I believe the fix cost like $1.48 cents per car or some similar absurd number but Ford chose not to do it.

The odd thing is the car sold Great! Over half million copies first year and many years after that. Even after the issues were revealed it sold well and also the infamous Mustang version.

 

[Fat Mach]

Welp. A lot of comments predicting Tesla slow-downs or being the subject of acquisitions, or worse certainly haven't aged well.

From this week's earnings numbers. Some misses here, but not by a lot.

• Revenue was a record $21.45BN, up 55% Y/Y, which however missed the est. of $22.09BN; The company blamed the strong dollar (FX resulted in -$250MM hit), as well as production and delivery bottlenecks. It was TSLA's first revenue miss since Q3 2021.
• Adj EPS $1.05, beating the median est. $1.01 and up 69% Y/Y (GAAP EPS $0.95, up 98%)
• Free cash flow $3.3BN, beating the estimate of 2.89$ million
• Automotive Gross Margin 27.9%, missing est. 28.4%
• Gross Margin 25.1% missing est. 26.6%, and down from 26.6% Y/Y
• Adjusted EBITDA $4.97BN, up 55% Y/Y
• Cash and cash equivalents $21.107billion, +31% y/y, missing the estimate of $21.79 billion
• CapEx was $1.80 billion, less than the exp. $1.92BN: quarterly capex first broke $1 billion in the third quarter of 2020, and it’s been trending higher ever since as Musk launched construction of two new assembly plants in Austin and Berlin.
• Tesla still sees 50% avg annual growth in vehicle deliveries

Musk said: “To be frank, we’re very pedal to the metal come rain or shine. We are not reducing our production in any meaningful way, recession or not recession.”

 

[Jimrpa]

Welp. A lot of comments predicting Tesla slow-downs or being the subject of acquisitions, or worse certainly haven't aged well.

From this week's earnings numbers. Some misses here, but not by a lot.

• Revenue was a record $21.45BN, up 55% Y/Y, which however missed the est. of $22.09BN; The company blamed the strong dollar (FX resulted in -$250MM hit), as well as production and delivery bottlenecks. It was TSLA's first revenue miss since Q3 2021.
• Adj EPS $1.05, beating the median est. $1.01 and up 69% Y/Y (GAAP EPS $0.95, up 98%)
• Free cash flow $3.3BN, beating the estimate of 2.89$ million
• Automotive Gross Margin 27.9%, missing est. 28.4%
• Gross Margin 25.1% missing est. 26.6%, and down from 26.6% Y/Y
• Adjusted EBITDA $4.97BN, up 55% Y/Y
• Cash and cash equivalents $21.107billion, +31% y/y, missing the estimate of $21.79 billion
• CapEx was $1.80 billion, less than the exp. $1.92BN: quarterly capex first broke $1 billion in the third quarter of 2020, and it’s been trending higher ever since as Musk launched construction of two new assembly plants in Austin and Berlin.
• Tesla still sees 50% avg annual growth in vehicle deliveries

Musk said: “To be frank, we’re very pedal to the metal come rain or shine. We are not reducing our production in any meaningful way, recession or not recession.”

Didn’t St. Elon also say that he was going to exceed the market cap of Apple and Saudi Aramco combined next year?

 

[Fat Mach]

Didn’t St. Elon also say that he was going to exceed the market cap of Apple and Saudi Aramco combined next year?

I don't think he said next year, but he might have. I learned a long time ago not to doubt the man. But, phones are a grand or two now. His cars a lot more money per. It's not unreasonable to think that the stock outperformance will continue. Over the past five years AAPL is up about 270%, and TSLA is up over 800%, despite being 50% off its highs.

 

[newmme]

Didn’t St. Elon also say that he was going to exceed the market cap of Apple and Saudi Aramco combined next year?

Funny you mention this. Fun to read the below article from 2016 where Elon said Tesla would be larger than Apple's 2016 market cap by 2025. Fast forward from 2016 -> 2022 and he was right (a few years early actually). Tesla is now bigger than Apple was in 2016.

https://www.forbes.com/sites/peterc...sla-be-worth-more-than-apple/?sh=53f2e7287876

A few snippets that are kind of cool from 6 years ago. Doubts Tesla could grow from 30B to 700B, Superchargres are key for adoption, 500k deliveries by 2020, etc.

 

[roamtheworld]

Tesla's success rests directly on it's use of Agile methodologies (https://cleantechnica.com/2018/09/0...ware-development-to-automotive-manufacturing/). Fast iterations and utilizing this across everything they build. It applies to software, chips, Manufacturing process, Batteries, Space X, and robotics. The current car manufacturing process has followed Toyotas Just-in-Time (https://marketrealist.com/2016/05/toyotas-just-time-method-critical-success/) and outsourcing model for 25+ years and that has built an ecosystem around the automotive market but companies can loose control over many aspects of the business.
Being flexible and quickly adapting to challenges have led to Tesla's success. They even allow staff to float from company to company allowing new ideas to flow across multiple lines of business.

 

[Ghost Ryder]

Honest question. Why is there an intense Tesla hate and hope that Tesla will fail?
Being a Ford forum, life long ford owners would want Ford to succeed, and do better than their competition, but deep down, I don't think Ford owners want GM or Dodge to fail. The market would be worse off if there were less competition.

Even if you hate Tesla, you have to acknowledge that:
1) Tesla employ thousands of Americans, have factories here in the US. Would those workers be better off if Tesla was to fold?
2) Tesla is innovative and changed the industry. Such as OTA updates, Superchargers, and Direct sales (debatable depends on your stance of dealer networks).

I get that some may not like Musk's Politics, or that he's active one twitter and weigh in on multiple topics. But how do you know if the CEO of Ford, GM, etc. not have similar views, just that they keep to themselves?

Honestly, what have Musk ever said or more importantly done that was so offensive that you would want Tesla to shut down resulting in thousands of people losing jobs?

 

[Kamuelaflyer]

Even if you hate Tesla, you have to acknowledge that:
1) Tesla employ thousands of Americans, have factories here in the US. Would those workers be better off if Tesla was to fold?
2) Tesla is innovative and changed the industry. Such as OTA updates, Superchargers, and Direct sales (debatable depends on your stance of dealer networks).

I rather dislike Tesla because every one I've ever seen has glaring quality control issues and somewhat suspect paint. I also rather dislike the styling they have.

Employment: The employment situation in Fremont has been in favor of employees for quite some time. The mere fact they have U.S. employees does not excuse their conduct towards their employees.

Direct Sales: This is a legislated matter in many states. The legal effect is punishing long-time automakers for being here first.

I neither wish Tesla ill nor wish them well. I quite literally couldn't possibly care less about what they do or don't do.

 

[Ghost Ryder]

I rather dislike Tesla because every one I've ever seen has glaring quality control issues and somewhat suspect paint. I also rather dislike the styling they have.

Employment: The employment situation in Fremont has been in favor of employees for quite some time. The mere fact they have U.S. employees does not excuse their conduct towards their employees.

Direct Sales: This is a legislated matter in many states. The legal effect is punishing long-time automakers for being here first.

I neither wish Tesla ill nor wish them well. I quite literally couldn't possibly care less about what they do or don't do.

I can attest to the fit and finish of Tesla. I had a MY LR and now a MYP. Both needed to have the realigned because the gap was bigger on one side then the other. But the process was simple, I made an appointment on the app, took it in and had it fixed in a day or two. One time a got a loaner, the other time a got an uber voucher for $100 per day. As far as paint, I didn't notice any difference between their quality and other vehicles that I had. Maybe I'm not as picky. Just wish they had more options. The color pallet is boring.

As far as looks, its subjective. I think the Model X is ugly, the S is understated by handsome, the 3 from most angles is good looking, the nose is passable, but not any worse than other automakers out there (I'm looking at you, Lexus and BMW). The Y, from some angles, the side and rear are avg to good, the front not so much due to the taller Y compare to the 3. The Mache in GT trim, is definitely better looking. I have a problem with the Mustache look of the regular MME.

As far as Employment, they're the only Auto manufacture in California. That says something that they're still there. I don't suspect that they are a worst company to work for than other big auto manufacturer in the US. What's the turnover rate compare to other auto manufacturer?

Direct sales: Yes other manufacturers were there first, but does it mean that we should continue with this model even if its a detriment to the consumer? Who do the legislatures work for? The dealerships or the consumers?

 

[Socalsp3]

ing process, Batteries, Space X, and robotics. The current car manufacturing process has followed Toyotas J

It's not really a secret as their filings have to list their income sources, but it does make one wonder why wall street continues to value their stock so highly - and with such a ludicrous market cap.


Unfortunately this is very true, at least in the short term. Eventually analysts and investors alike will wake up to the fact that Tesla is unable to scale production anywhere near to the level required to justify the expectations. It's just another Enron, tulipmania, Madoff LLC, etc.

they make good profit on every car sold. the expenses are high right now because they are building new factories to scale up. seems they are taking the long view and they're smart enough to not be surviving on carbon credits from other companies.

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