> “Full autonomy is going to come a hell of a lot faster than anyone thinks it will,” he said. “And I think what we’ve got under development is going to blow people’s minds. Blows my mind.”
That's the money quote.
I still think the Model 3 will be fully autonomous without a traditional steering wheel. It will probably have some ability to take over very rarely.
That's a really silly idea, starting with how self-driving systems that can even theoretically handle the worst of New England winters don't actually exist yet.
Agreed. When theres 3 inches of snow on the road (before the plows have hit your neighborhood) and/or snow blowing there's zero chance of an autonomous car being able to decide where the lanes are.
> there's zero chance of an autonomous car being able to decide where the lanes are
Let alone the seemingly indefinite construction zones that have become commonplace across America - often with the lane markers missing or going off in directions that do not exist anymore (old lanes now blocked, etc...).
I wouldn't say recently... it's a symptom of how the roads and highways were built in the US. They are essentially in a constant state of construction due to repaving needs, growing traffic congestion, etc.
What sort of "source" do you expect would exist for this? It's just the day-to-day job of DOT.
The drawback with that approach is that it requires the road to have been previously scanned. So all roads would have to be scanned and added to a database, much like Streetview.
So it just needs to be driven in the summer first, then. Seriously, how do people navigate in whiteout conditions if they don't already know the terrain?
It is something that puzzles me that there is no-one talking about making lane markers reflective on a radio frequency that passes through water (liquid and frozen) without too much trouble and put a radar on those frquencies on the car. Is it because there is no such frequency (I doubt)? Or would that be for whatever reason prohitively expensive? Or something else, like difficulties in getting good enough resolution from radar or that there exist no such material that reflects those frequencies well enough?
Laying down some RF reflective paint/markers on the road wouldn't be nearly as expensive as other proposals (like embedding electronics or special wire underneath the road surface), it would be similar in expense to pavement markers[0] that are applied to some roads today, plus with a HUD it could even help human drivers in snow environments. Lots of places make special modifications to the road specifically for snow, and especially for snowplows.
Many localities can't even be bothered to maintain their paint. It's been speculated that this is one reason why Tesla's Autopilot is so much better than Mercedes' supposedly equivalent system: Mercedes is testing their system on German roads with perfect markings everywhere, Tesla is testing theirs on California roads that haven't been painted since the Reagan administration.
I believe that should be solved with improvements in computer vision. We are probably decade or two away from parsing realtime 2x100 megapixel streams.
> I still think the Model 3 will be fully autonomous without a traditional steering wheel...
That seems highly unlikely; most regulators thus far have been (unsurprisingly) unwilling to let autonomous cars on the road without some form of manual control. Given how early we are in the technological development cycle for autonomous cars, this seems prudent and logical.
Plus their target date for initial Model 3 shipments is barely more than a year away. The hardware design is probably almost finalized right now. The software end needs to be production-worthy by about this time next year. They aren't even willing to remove the "beta" label from the Model S's autosteer functionality. I would not be surprised if the Model 3 ships with much more advanced autonomous driving features, but I can't imagine it shipping without a steering wheel.
Tesla is pushing hard to get the Model 3 out the door on time. They may not succeed, but they're going to do everything they can to try. Requiring the Model 3 to incorporate full autonomy from day one would be an enormous and unnecessary risk to their ship date.
They're also pushing hard to convert Model 3 reservations into Model S purchases. I don't think they'd be doing that if they were going to release a revolutionary increase in AP in only a year.
Musk has basically said it's mostly a software problem at this point. And if new Model S's aren't already getting the Autopilot 2.0 hardware yet, they will be very shortly.
They're pushing reservation conversions because the more cashflow they can have now the better terms they'll be able to get financing as they move down their roadmap.
A bug was just discovered (a glaring blindspot, literally) in existing Model S. The workaround was to disable that feature until a solution is found. That workaround involves a steering wheel. If another bug is found that is similar to this one than those cars without a wheel will sit in driveways until the both the NTSB and NHTSA are satisfied. These investigations can take years and Tesla owners will not be happy about it.
I assumed the hands-free driving was disabled. I haven't driven a Model S but from what I can gather the autopilot is comprised of many autonomous systems aboard. I'd assume Tesla has either told drivers or made some form of firmware update to limit people from doing handsfree driving?
No, there hasn't been any change on this front lately. They've been tinkering with the various thresholds since the initial release last October, but the overall theme has remained the same: you can take your hands off the wheel for long stretches as long as the car is confident of its own ability, and once the car loses confidence beyond a certain point it will ask you to "reassure" it by holding the wheel.
There was a period for a few months where part of that algorithm seemed to include a timer, such that the car would always lose confidence after 3-5 minutes hands-free. But that was long before the current media fluff, and they changed it back to be more dynamic.
Wow. That is reassuring. I'm used to boat and plane autopilots. They disengage quite abruptly and usually after the situation has degraded. Leaving the pilot to figure out why and then take action.
Yeah, that's not good. Tesla's usually does a good job of gently encouraging you to help before things get bad. And with practice, you can learn the situations where it's likely to have trouble and take over preventively or just be ready to.
I really can't believe that. Imagine you've ordered a model-3 and instead of a car that you know how to use you get something entirely different of which it remains to be seen if it will work in your situation.
I think the Model 3 will not be fully autonomous, and it will have a traditional steering wheel.
Model 3 will certainly have a steering wheel. Musk is on record multiple times saying people should be able to continue to drive themselves, should they choose to, for the foreseeable future.
I don't think they'll get rid of the steering wheel just yet -- even in a fully autonomous car. It'll take some years of prevalence of autonomous vehicles until the steering goes away.
In the same conference call[1] Musk mentions that the Model 3 factory, aka Alien Dreadnought v1.0 (their internal name for "the machine that builds the machine") will be fully automated, running more like a high speed bottling plant or an automated pick-and-place machine than a traditional car factory.
Their stated rationale is that as soon as humans are involved with the actual assembly, it has to slow down to human speeds. There will still be plenty of people working in the factory, they'll just be maintaining on the machines, doing continuous improvement, dealing with anomalies, etc.
sorry, I just don't see the "autopilots" or such being that good that soon. they can't even distinguish plastic bags from rocks at times. They certainly aren't doing the driving when its most needed; bad weather like heavy rain at night or similar. I really don't see it happening unless roads have features applied that are guaranteed to be there so the cars can navigate properly.
then comes the next phase, the car knows the speed limit, so who is liable for the speeding ticket? After all we are here for safety so why would we accept "self driving" cars breaking driving laws? Also, motortrend demonstrated that all such current implementations tail gate, some with barely more than a second of difference.
I would be happy if the 3 comes in quantity before 2020 but I doubt even that. I would never bet on it not having a steering wheel or more advanced driving capabilities than the S
It certainly was interesting to see reactions to Tesla's announcement of last quarter's production and sales numbers. They had the best production numbers yet, thanks to massively accelerated production in the last few weeks of the quarter. But that meant that many cars were in still in transit at the end of the quarter, which don't count as sales yet, even though they pretty much all had a customer's name on them. Thus sales were down for the quarter, and even though it's obvious that this was just because of when the end of the quarter happened to be, the press was full of "Tesla sales are down, they're so doomed" stories.
I can never decide whether the people who write these stories can't be bothered to do even the most minimal digging past the first number they see, or if they're doing this on purpose. Probably a mix, I guess.
Tesla produced over 18,000 cars. They had around 4,000 in transit at the end of the quarter, so they only sold about 14,000. Which is to say, they didn't fall short on production, their production numbers were just biased toward the end of the period in question, making for a large difference between production and sales numbers.
Edit: see below for slightly more accurate numbers, 4,000 in transit is not entirely correct.
But that only assumes they had 0 cars in transit at the end of the previous quarter right? Otherwise any cars that were in transit at the end of last quarter are considered in this quarter's 14k sold.
The delta was about 2,500 cars. Adding cars in transit from Q1 to the Q2 production numbers, then subtracting sales and cars in transit, there are about 1,400 missing cars. I'm not sure exactly what those would be, perhaps filling out their Model X loaner and showroom fleet or something.
Tesla can do no wrong with the SV crowd, as evidenced by your statement of fact being down-voted.
If you step away from the hype for a second, Tesla are building some great products, but they play a little fast and loose with their numbers. That's why the Street is skeptical. First it's all about deliveries. Then deliveries falter a bit, so the focus moves to production. Then those numbers are low, so the focus moves to the fact that cars are in transit.
If there was some consistency with how Tesla represented their financials maybe there would be less scrutiny and skepticism. We hear about things (battery swamp, PowerWall), then they are hardly mentioned. But I think the Tesla fans consider this "sticking it to the man" (Wall Street), even though Tesla and some major banks are tight.
They projected 17,000 deliveries, but in fact delivered 14,000.
Up to this point their emphasis has always been on deliveries. But, since that missed, the focus turns to production numbers, which they just happened to outperform on (after a big miss in Q1 on the same metric).
What numbers matter, then? They promote whatever "looks best". It's not unusual, but it induces skepticism.
That's not what the comment above said. So, again, characterizing it as a "statement of fact" does not seem entirely accurate.
They roughly doubled their production rate near the end of the quarter. They have a product that takes weeks or months to ship to the customer. What happened is exactly what you'd expect.
Historically, Tesla has been constrained by production, not demand. The numbers show that production has substantially improved, and demand has not weakened, so it's good news all around. Why should that induce skepticism? Just because of what they "promote"? If you're skeptical just based on what they emphasize, are you not allowing your thinking to be controlled by them just as much as the mindless fanboy who parrots their lines without thinking?
They missed delivery expectations. Most of those cars in transit are already reserved by a customer and just need to be delivered to the person who ordered them so Tesla can collect their money.
Tesla doesn't build many cars without a buyer already lined up. They build a few for showrooms and service center loaners, but it's not a big number.
You might say that demand is falling off and Tesla is just producing a bunch of cars without corresponding orders to try to hide that fact, or whatever. But that's a rather conspiratorial interpretation, and would directly contradict Tesla's statement that the delivery miss was due to the sudden increase in production rates near the end of the quarter and resulting large number of cars still in transit.
Did they finish producing the forecasted number of cars given the definition of 'finished' they gave when making the forecast? It sounds like you're comparing two different things, but I may just be confused.
As far as I know, the 18,345 number indicates cars that are out of the factory, tested, and ready to be driven. I was not aware that there were even different definitions of "finish" to be played with. I don't see what goalposts you think I'm shifting.
That does indeed say 20,000. They actually produced 18,345, for a miss of about 8%. They ramped up production from about 1,000 cars/week to 2,000 cars/week, so being short 1,655 indicates that their production ramp-up was delayed by about 10 days. Doesn't seem like a very big deal to me, and a slight miss of estimated production increases is way different from the "sales are down, Tesla is doomed" that got reported.
Tesla added an additional assembly line at the Fremont plant.[1] This doubled production capacity. Cost about $100M. They already run two 9-hour shifts and six days a week.
Good point. Do they have more final assembly lines now, or what? The info two years ago indicates the final assembly lines were maxed out.
Here's a long video of the assembly process in 2015.[1] This is useful, rather than the usual quick montage of cool robot scenes. There was a surprising amount of manual assembly in areas where other manufacturers are automated.
Just to clarify, and this mistake is repeated by almost every publication, sales are up by 67%. It is deliveries that "fell short of expectations". There are no demand issues, but rather manufacturing issues. The key thing to look for is cars produced by week, and it seems that they are up to 2000 cars/week by end of the quarter.
A lot of it is that many investors and media covering the market only care about the fundamentals of the company and quarterly earnings, and can't understand how a company that constantly dilutes its stock and mostly misses expectations/predictions and isn't turning a profit has such a high valuation.
Because its sales volume is constantly raising. About 50% year to year. Also, a lot of the money gets used for building the production infrastructure. Tesla owns now a car manufacturing plant in Freemont and the Gigafactory in Nevada just had its opening party. These are real values Tesla owns.
But then, I cannot understand how Whats App could be valued 19 billion...
Right, investors won't bat an eye at Instagram, Whatsapp, Airbnb, or Pintrest valuations, but can't possibly see how Tesla is worth $30b.
I suppose that is slightly unfair since I happen to think Tesla is fairly well valued, maybe slightly undervalued currently, and obviously investors are the ones supporting that price. It seems like it is mostly a few institutional investors and the general public propping them up right now though, not the sell side firms that can dominate coverage and mentality sometimes.
All those companies can pretend that they are part of the "new economy" where valuations are not bound by mere fundamentals like revenue and profit.
Tesla, on the other hand, can't do that. They manufacture a tangible product and have a lot of established competition to which they can be easily compared.
Currently Tesla's market cap is 150% that of Renault's. A company that sells millions of vehicles, has factories all around the world and makes a very healthy profit for its shareholders.
So, Tesla, instead of trading at a discount to reflect the risk involved, is traded as if it's already a successful company 1.5 times the size of Renault. So, if you think Tesla is valued "fairly" now, please, tell me what should be its market cap when it actually starts making profit? $300B? $3T?
If Tesla is successful in their vision, the entire transportation(and potentially energy) industry will be completely different and hence incomparable with existing car company valuations, since they will have created a completely new slice of pie to eat from. If they are not successful and only end up as a middling premium electric car company they are probably extremely overvalued.
You're comparing the valuation of horse and buggy companies in the 1910s to Ford.
> You're comparing the valuation of horse and buggy companies in the 1910s to Ford.
You mean there are no other companies selling electric vehicles? And clearly, if, say, Mercedes, doesn't have electric model now, it's absolutely impossible that they have one in 5 years, just like a horse & buggy company, right?
But forget about Mercedes, how about Nissan Leaf, which exists now and is the world's best selling electric car? Shouldn't Nissan be valued at similarly crazy valuations? Or they won't be part of this new brave world and don't get to eat from the "new slice of pie"?
You're right, Tesla should just pack it in right now. They have no competitive advantage or product that anyone wants, and Nissan has far better prospects than Tesla ever had.
That's just snarky and completely misses the point. No-one said that.
But you -did- say that Tesla is working this "completely new slice of the pie". Which they're not. Unless you artificially constrain it to a segment where only Tesla exists. Whilst the current Tesla models might well be "luxury electric", the upcoming stuff is entirely in the same segment as Nissan, hence the reply to you.
Tesla is not just a car company. They are going to be the largest li-ion battery manufacturer, distributed energy provider(with the solarcity acquisition), energy storage provider, supply grid stabilization services(important when more of the generation is not base-load), and compete in the autonomous car sector.
Its fine with me if people don't think those other areas are going to be profitable for Tesla, but thinking of them as just a car manufacturer is kind of missing the point. And those other areas I mentioned do make up a largely untapped pie that Tesla is poised to tap into.
How is battery manufacturing an untapped pie?
How is solar power an untapped pie?
Energy storage provider is "battery at a bigger scale", similar with supply grid stabilization. And as far as I am aware the PowerWall has been a commercial failure, even among Tesla owners. I'm not sure how that will magically do a 180 now that Musk is going from "influential adviser" to "owner".
You are correct that the Powerwall isn't doing that well currently. The Powerwall is the home product, and its usefulness is directly tied to solar panels. The tie-in with SolarCity there should help with demand.
There is the other side of Tesla Energy, which is the Powerpack. The Powerpack is the commercial/utility-scale product, available in quantities suitable for grid-level storage. They had over $1b worth of orders[1] for the Powerpack as of late last year, far more than they are capable of manufacturing currently. The Gigafactory opened slightly early to start producing those packs using Samsung cells, but eventually those will move to Panasonic cells as well. There is huge untapped demand just in batteries here that is only starting to surface and be fulfilled.
Grid supply stabilization has more to do with smart grids/smart inverters applied to solar panel + battery installs. SolarCity has detailed it in some of their more recent town halls[2].
Nissan, Mercedes and co haven't been able to shift the market for the last 10 years. They don't get it. They don't get that the global warming needs a resolution within 10 years. They may take a part of the electric car cake, but only Tesla knows what it's doing. And concerning the next steps, it's safe to assume that only Tesla will take the right anticipations. The world is unsustainable on carbon emissions. We need to ditch the old cars and the petroleum industry altogether. It's a matter of emergency, every year now sets new global warming records. Now Tesla can leverage most of the world and lobby against legacy car makes. Volkswagen criminals first.
Tesla has just changed the world, whether you realize it or not, and tables have turned against the petrol industry. The other brands have long bet the electric cars were impossible, they belong in history books together with our other guilty actions like inquisition, native americans and slavery.
Tesla cars are powered by coal, gas, and nuclear, in varying parts depending on location. Is there evidence that they produce lower emissions than other cars?
Sure, washington state power is mostly not from coal, and you can pay a slight extra amount to use only non-renewable sources, like I do. So my ev has 0% coal, gas, nuclear. Search for green power. It costs about $10 extra per month. It's easier here, almost 50% of power uses renewable for all customers. So you pay a little extra.
Anyway, there's the obvious notion that capturing pollution from one central energy source (a coal or gas plant) is far more likely to reduce pollution than trying to reduce pollution from every car.
That's kind of the point. People (investors) think that in the not-so-distant future Tesla will be much bigger than Renault, and are extremely confident in this. It doesn't really matter to investors where Tesla is right now except as a mechanism to build extrapolations. If you are extremely confident that in 10 years Tesla will be twice the size of Renault, then you need to buy buy buy right now before other people realize it.
Renault's size isn't expected to change significantly over the next decade. Tesla's is. This means that if you own Tesla shares now, 10 years later they are going to be worth a massive amount because Tesla will be much bigger than Renault, so the price naturally rises to that expectation, only abetted by the possibility that Tesla collapses.
It isn't about where the company is at the moment. It is about where you think the company will be in "the future" (at whatever point that is relevant to you) reduced by the probability that you think they will fail (and most people think that chance is tiny). So when Tesla starts making a profit, its market cap probably won't have grown that much, because it was expected behavior priced into today's valuation.
If I think something will be worth $100 in 10 years I won't be paying $100 for it today. That's not how finance works. There is a risk and interest premium. Sure, if you think the risk is zero, then yes, Tesla may not be overvalued. But that's exactly my point - the risk is not zero. Neither for Tesla, nor for any other company.
Yes but that's a strawman. You also won't be paying the current value. You'll pay something between what it's worth now and what the market thinks it will be worth one day. That will be discounted for risk and for the delayed gratification.
> You'll pay something between what it's worth now and what the market thinks it will be worth one day
That sentence doesn't make sense. I think you're conflating worth/value (subjective measures) with price (objective). I can't pay more for an item than what's it worth to me
The current market valuation IS what people expects Tesla to be worth when/if it makes a profit in the future -- at least according to the efficient market theorem. Right? So unless new information comes along, the current valuation already encompasses the market's expectations of success and failure.
According to the EMH, the current market valuation is what people expect it to be worth today, if it makes a profit in the future. But if you assume the EMH, discussing valuations is kind of pointless, isn't it?
I realize that only care about the fundamentals is turn of phrase/jargon, but the above discussion of shipments vs recognized sales is fundamental to understanding the company.
I guess a more accurate thing to say would be that the group you are talking about is obsessed with scheduled reports.
I don't have a problem with people trying to understand the quarter-by-quarter performance of a company. That data is legally required to be published by the SEC for a reason.
In Tesla's case, so much of their value is discounted into the future, and if the company was purely valued on quarterly results, would not be worth very much at all. Obviously a lot of the investing world disagrees with that and chooses to value Tesla a bit more highly based on the investment they are undertaking and demand they have demonstrated. Their stock is modestly up today after these results and news of the solarcity merger(also reported as disastrous in the media). Their quarterly results would generally be accepted by most methods of valuing companies as disastrous, and is being reported like so by most of the financial media. Maybe the shorts will win out eventually, but lots of people seem to be willing to finance Tesla despite their constant fundraising, unprofitably, and missed expectations. I wonder if the reasons might not be reflected in their 10-qs?
The difference between produced and delivered vehicles points to why quarterly numbers have to be taken with a huge grain of salt. Did you miss numbers because you had a bad quarter, or did you miss numbers because some sales slip by a week or two? The first might be meaningful, but the second usually is not - quite the contrary, for the overall business its often better to slip a few weeks, than to artificially "make" the quarter numbers.
They explicitly stated that the difference between production and delivery was due to a sudden production increase near the end of the quarter resulting in many more cars still in transit to their buyers.
They had about 2,500 more cars in transit at the end of Q2 than at the end of Q1. They were producing about 1,000 more cars per week at the end of Q2 than at the end of Q1. If it takes their cars an average of 2.5 weeks to be delivered from the factory (which is a reasonable number) then everything lines up. I don't see any need for a grain of salt or thinking it's mysterious.
Sorry, if I was not clear - in the Tesla case its obvious that the "missed" numbers are the cars still in transit. But most media reports about Tesla do not seem to take this under considerations. So, yes, Tesla is a bit late, which isn't good news, but neither especially bad news, but I have seen media reports where people make "Tesla can't sell all the cars they make" out of it.
To give the other perspective, I think investors and writers fairly expect that Tesla should be able to give accurate predictions 90 days ahead of time. Tesla tells the market how many cars they will deliver to customers. And they get it wrong. It's not really about whether or not their reasons are legitimate. All of their reasons are within their control, vs say an outside shock. I don't know if they're being lazy or just saying "Yeah, but what does it tell us about your business acumen that you can't hit your own numbers?"
If the stories were "Tesla missed expectations" then I wouldn't bat an eye.
But the stories I saw were, "Tesla sales are down, Tesla demand is falling off, Tesla is dying." Which is not remotely supported by the numbers, missed expectations or not.
To be clear, they missed their sales goal. So sales were down. The challenge with Tesla is they do not have a good history of being open and honest about what his happening inside Tesla. So perhaps they missed their sales goals because it was all operational as they say. Or perhaps sales are softening. They have been reducing pricing from what I've heard. But either way, stop lamenting the press when it really starts and stops with Tesla doing what they say they will do or not. Every public company has the same parameters. why don't they just under promise and over achieve if they have uncertainty in exactly how well they control their production?
It's not the "sales were down" part that I object to, it's the incorrect conclusions they draw from it.
Tesla explicitly stated the reason for the missed deliveries. The published production and delivery numbers match the explanation. I suppose they could be lying, but I haven't seen anybody go so far as to accuse them of that here.
I'm not lamenting the press for criticizing Tesla for missing expectations. I'm lamenting the press for taking a number that clearly indicated a slightly delayed production ramp and publishing articles talking about how the company is doomed because people aren't buying their product anymore.
How does missing a goal much larger than your previous goal, but still making and selling more than ever equate to "sales were down". It looks like sales were up, but not as high as predicted.
Sales were down from the previous quarter, which in turn was down from the quarter before that. If you look at the big picture, that fact is misleading because it doesn't account for cars in transit, but "sales were down" is true on its own.
>why don't they just under promise and over achieve
I can answer this one!
Because when you underpromise, you are undervalued, and if you are undervalued, then you often won't receive needed investment/trust/means/etc. Meaning that while underpromising and overdelivering is a GREAT plan for an individual most of the time, if you do it habitually as a company, you can wedge yourself into a situation where, for example, your product is THE BEST, but you've underpromised enough that you only get 15 million bucks to hire new engineers, buy up hardware/cloud virtualization space, etc., and that isn't enough - you run out of money early and go broke! Where your competitor, who overpromised, got 30 million in investment and while their product wasn't intially as good as yours, they invest time and money into it, and then they just buy you and your team at a fire-sale price when you go broke.
The market is inept at these optimization functions overall, but it is still tuned to TRY and get them right- to take promises, expected performance, indicators, and all that and rough out a risk vs. reward equation and then plug funds into it. Underpromising and overdelivering is a method by which you can sometimes 'hack' the power of the market to 'price' your efforts, but it can backfire hilariously if you use it in the wrong space, against the wrong opponents.
>> Every public company has the same parameters. why don't they just under promise and over achieve
Because that is illegal. You cannot just pump out bad numbers then surprise the market. Those bad numbers are a lie. Deliberately lowering expectations, driving down stocks, is the first step of an insider trading fiasco.
A company that cannot properly keep shareholders informed is an unpredictable company. Maybe that is tesla. But deliberately keeping shareholders in the dark is criminal.
They did not miss their sales goal, but their delivery goal. Tesla cars are sold when they are produced, but they only book them, if they are delivered. Which takes time, as the car has to be physically moved. If they are moved outside of the US, several weeks of transport times add to it.
I assume you're probably referring to me with this comment. I didn't say it wasn't a miss, merely that the common interpretation of "demand is down, Tesla is dying" is completely silly once you look at all of the numbers.
Some perspective... Tesla posted a loss of approx $1 per share. With a budget of $19.3B, I pay NASA $55/yr (assuming 350M taxpayers of uniform means) in "losses."
As a tesla shareholder (forget upside and commercial value), that's a small price to pay for funding a sci-fi future.
Maybe Musk should do what Steve Jobs did and say "If you're not a long-term investor, we don't want you."
The stock price would probably drop a bit after that, but it may be for the company's best interest in the long term. Tesla needs visionary investors, too.
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[ 2.7 ms ] story [ 187 ms ] threadThat's the money quote.
I still think the Model 3 will be fully autonomous without a traditional steering wheel. It will probably have some ability to take over very rarely.
That's a really silly idea, starting with how self-driving systems that can even theoretically handle the worst of New England winters don't actually exist yet.
Let alone the seemingly indefinite construction zones that have become commonplace across America - often with the lane markers missing or going off in directions that do not exist anymore (old lanes now blocked, etc...).
I had not heard about that but that sounds interesting and I would love to learn more. Any sources you can point me at?
What sort of "source" do you expect would exist for this? It's just the day-to-day job of DOT.
Laying down some RF reflective paint/markers on the road wouldn't be nearly as expensive as other proposals (like embedding electronics or special wire underneath the road surface), it would be similar in expense to pavement markers[0] that are applied to some roads today, plus with a HUD it could even help human drivers in snow environments. Lots of places make special modifications to the road specifically for snow, and especially for snowplows.
[0]: http://www.highway-markers.com/pavement-reflectors/PM290.htm...
If you can get your car to self drive here, I assure you, your car will run anywhere on earth.
That seems highly unlikely; most regulators thus far have been (unsurprisingly) unwilling to let autonomous cars on the road without some form of manual control. Given how early we are in the technological development cycle for autonomous cars, this seems prudent and logical.
Tesla is pushing hard to get the Model 3 out the door on time. They may not succeed, but they're going to do everything they can to try. Requiring the Model 3 to incorporate full autonomy from day one would be an enormous and unnecessary risk to their ship date.
They're pushing reservation conversions because the more cashflow they can have now the better terms they'll be able to get financing as they move down their roadmap.
A bug was just discovered (a glaring blindspot, literally) in existing Model S. The workaround was to disable that feature until a solution is found. That workaround involves a steering wheel. If another bug is found that is similar to this one than those cars without a wheel will sit in driveways until the both the NTSB and NHTSA are satisfied. These investigations can take years and Tesla owners will not be happy about it.
There was a period for a few months where part of that algorithm seemed to include a timer, such that the car would always lose confidence after 3-5 minutes hands-free. But that was long before the current media fluff, and they changed it back to be more dynamic.
I think the Model 3 will not be fully autonomous, and it will have a traditional steering wheel.
In the same conference call[1] Musk mentions that the Model 3 factory, aka Alien Dreadnought v1.0 (their internal name for "the machine that builds the machine") will be fully automated, running more like a high speed bottling plant or an automated pick-and-place machine than a traditional car factory.
Their stated rationale is that as soon as humans are involved with the actual assembly, it has to slow down to human speeds. There will still be plenty of people working in the factory, they'll just be maintaining on the machines, doing continuous improvement, dealing with anomalies, etc.
[1] http://ir.tesla.com/eventdetail.cfm?EventID=174610
then comes the next phase, the car knows the speed limit, so who is liable for the speeding ticket? After all we are here for safety so why would we accept "self driving" cars breaking driving laws? Also, motortrend demonstrated that all such current implementations tail gate, some with barely more than a second of difference.
I would be happy if the 3 comes in quantity before 2020 but I doubt even that. I would never bet on it not having a steering wheel or more advanced driving capabilities than the S
I can never decide whether the people who write these stories can't be bothered to do even the most minimal digging past the first number they see, or if they're doing this on purpose. Probably a mix, I guess.
Edit: see below for slightly more accurate numbers, 4,000 in transit is not entirely correct.
https://en.wikipedia.org/wiki/Tesla_Motors#Production_and_sa...
The delta was about 2,500 cars. Adding cars in transit from Q1 to the Q2 production numbers, then subtracting sales and cars in transit, there are about 1,400 missing cars. I'm not sure exactly what those would be, perhaps filling out their Model X loaner and showroom fleet or something.
Tesla can do no wrong with the SV crowd, as evidenced by your statement of fact being down-voted.
If you step away from the hype for a second, Tesla are building some great products, but they play a little fast and loose with their numbers. That's why the Street is skeptical. First it's all about deliveries. Then deliveries falter a bit, so the focus moves to production. Then those numbers are low, so the focus moves to the fact that cars are in transit.
If there was some consistency with how Tesla represented their financials maybe there would be less scrutiny and skepticism. We hear about things (battery swamp, PowerWall), then they are hardly mentioned. But I think the Tesla fans consider this "sticking it to the man" (Wall Street), even though Tesla and some major banks are tight.
Up to this point their emphasis has always been on deliveries. But, since that missed, the focus turns to production numbers, which they just happened to outperform on (after a big miss in Q1 on the same metric).
What numbers matter, then? They promote whatever "looks best". It's not unusual, but it induces skepticism.
They roughly doubled their production rate near the end of the quarter. They have a product that takes weeks or months to ship to the customer. What happened is exactly what you'd expect.
Historically, Tesla has been constrained by production, not demand. The numbers show that production has substantially improved, and demand has not weakened, so it's good news all around. Why should that induce skepticism? Just because of what they "promote"? If you're skeptical just based on what they emphasize, are you not allowing your thinking to be controlled by them just as much as the mindless fanboy who parrots their lines without thinking?
What metric are you basing this off of? Did they not miss sales expectations?
Tesla doesn't build many cars without a buyer already lined up. They build a few for showrooms and service center loaners, but it's not a big number.
You might say that demand is falling off and Tesla is just producing a bunch of cars without corresponding orders to try to hide that fact, or whatever. But that's a rather conspiratorial interpretation, and would directly contradict Tesla's statement that the delivery miss was due to the sudden increase in production rates near the end of the quarter and resulting large number of cars still in transit.
Source: http://ir.tesla.com/common/download/download.cfm?companyid=A...
Edit: fixed link to correct source, as pointed out below. In this pdf, it's on bottom of page 3, under "Outlook".
Edit: I guess you mean this one: http://files.shareholder.com/downloads/ABEA-4CW8X0/200707627...
That does indeed say 20,000. They actually produced 18,345, for a miss of about 8%. They ramped up production from about 1,000 cars/week to 2,000 cars/week, so being short 1,655 indicates that their production ramp-up was delayed by about 10 days. Doesn't seem like a very big deal to me, and a slight miss of estimated production increases is way different from the "sales are down, Tesla is doomed" that got reported.
[1] http://insideevs.com/teslas-2nd-production-line-capable-pump...
Here's a long video of the assembly process in 2015.[1] This is useful, rather than the usual quick montage of cool robot scenes. There was a surprising amount of manual assembly in areas where other manufacturers are automated.
[1] https://www.youtube.com/watch?v=AVCCroN7vS0
But then, I cannot understand how Whats App could be valued 19 billion...
I suppose that is slightly unfair since I happen to think Tesla is fairly well valued, maybe slightly undervalued currently, and obviously investors are the ones supporting that price. It seems like it is mostly a few institutional investors and the general public propping them up right now though, not the sell side firms that can dominate coverage and mentality sometimes.
Tesla, on the other hand, can't do that. They manufacture a tangible product and have a lot of established competition to which they can be easily compared.
Currently Tesla's market cap is 150% that of Renault's. A company that sells millions of vehicles, has factories all around the world and makes a very healthy profit for its shareholders.
So, Tesla, instead of trading at a discount to reflect the risk involved, is traded as if it's already a successful company 1.5 times the size of Renault. So, if you think Tesla is valued "fairly" now, please, tell me what should be its market cap when it actually starts making profit? $300B? $3T?
You're comparing the valuation of horse and buggy companies in the 1910s to Ford.
You mean there are no other companies selling electric vehicles? And clearly, if, say, Mercedes, doesn't have electric model now, it's absolutely impossible that they have one in 5 years, just like a horse & buggy company, right? But forget about Mercedes, how about Nissan Leaf, which exists now and is the world's best selling electric car? Shouldn't Nissan be valued at similarly crazy valuations? Or they won't be part of this new brave world and don't get to eat from the "new slice of pie"?
But you -did- say that Tesla is working this "completely new slice of the pie". Which they're not. Unless you artificially constrain it to a segment where only Tesla exists. Whilst the current Tesla models might well be "luxury electric", the upcoming stuff is entirely in the same segment as Nissan, hence the reply to you.
Tesla is not just a car company. They are going to be the largest li-ion battery manufacturer, distributed energy provider(with the solarcity acquisition), energy storage provider, supply grid stabilization services(important when more of the generation is not base-load), and compete in the autonomous car sector.
Its fine with me if people don't think those other areas are going to be profitable for Tesla, but thinking of them as just a car manufacturer is kind of missing the point. And those other areas I mentioned do make up a largely untapped pie that Tesla is poised to tap into.
Energy storage provider is "battery at a bigger scale", similar with supply grid stabilization. And as far as I am aware the PowerWall has been a commercial failure, even among Tesla owners. I'm not sure how that will magically do a 180 now that Musk is going from "influential adviser" to "owner".
There is the other side of Tesla Energy, which is the Powerpack. The Powerpack is the commercial/utility-scale product, available in quantities suitable for grid-level storage. They had over $1b worth of orders[1] for the Powerpack as of late last year, far more than they are capable of manufacturing currently. The Gigafactory opened slightly early to start producing those packs using Samsung cells, but eventually those will move to Panasonic cells as well. There is huge untapped demand just in batteries here that is only starting to surface and be fulfilled.
Grid supply stabilization has more to do with smart grids/smart inverters applied to solar panel + battery installs. SolarCity has detailed it in some of their more recent town halls[2].
1. http://fortune.com/2015/08/10/tesla-grid-battery/ 2. http://www.ustream.tv/recorded/87401050
Tesla has just changed the world, whether you realize it or not, and tables have turned against the petrol industry. The other brands have long bet the electric cars were impossible, they belong in history books together with our other guilty actions like inquisition, native americans and slavery.
Anyway, there's the obvious notion that capturing pollution from one central energy source (a coal or gas plant) is far more likely to reduce pollution than trying to reduce pollution from every car.
Renault's size isn't expected to change significantly over the next decade. Tesla's is. This means that if you own Tesla shares now, 10 years later they are going to be worth a massive amount because Tesla will be much bigger than Renault, so the price naturally rises to that expectation, only abetted by the possibility that Tesla collapses.
It isn't about where the company is at the moment. It is about where you think the company will be in "the future" (at whatever point that is relevant to you) reduced by the probability that you think they will fail (and most people think that chance is tiny). So when Tesla starts making a profit, its market cap probably won't have grown that much, because it was expected behavior priced into today's valuation.
That sentence doesn't make sense. I think you're conflating worth/value (subjective measures) with price (objective). I can't pay more for an item than what's it worth to me
Over a billion monthly users... Not exactly small potatoes.
Wierd. Someone should do a study...
I guess a more accurate thing to say would be that the group you are talking about is obsessed with scheduled reports.
In Tesla's case, so much of their value is discounted into the future, and if the company was purely valued on quarterly results, would not be worth very much at all. Obviously a lot of the investing world disagrees with that and chooses to value Tesla a bit more highly based on the investment they are undertaking and demand they have demonstrated. Their stock is modestly up today after these results and news of the solarcity merger(also reported as disastrous in the media). Their quarterly results would generally be accepted by most methods of valuing companies as disastrous, and is being reported like so by most of the financial media. Maybe the shorts will win out eventually, but lots of people seem to be willing to finance Tesla despite their constant fundraising, unprofitably, and missed expectations. I wonder if the reasons might not be reflected in their 10-qs?
They had about 2,500 more cars in transit at the end of Q2 than at the end of Q1. They were producing about 1,000 more cars per week at the end of Q2 than at the end of Q1. If it takes their cars an average of 2.5 weeks to be delivered from the factory (which is a reasonable number) then everything lines up. I don't see any need for a grain of salt or thinking it's mysterious.
But the stories I saw were, "Tesla sales are down, Tesla demand is falling off, Tesla is dying." Which is not remotely supported by the numbers, missed expectations or not.
Tesla explicitly stated the reason for the missed deliveries. The published production and delivery numbers match the explanation. I suppose they could be lying, but I haven't seen anybody go so far as to accuse them of that here.
I'm not lamenting the press for criticizing Tesla for missing expectations. I'm lamenting the press for taking a number that clearly indicated a slightly delayed production ramp and publishing articles talking about how the company is doomed because people aren't buying their product anymore.
Look at the IR first page, paragraph 5. They missed their "delivery goals".
I can answer this one!
Because when you underpromise, you are undervalued, and if you are undervalued, then you often won't receive needed investment/trust/means/etc. Meaning that while underpromising and overdelivering is a GREAT plan for an individual most of the time, if you do it habitually as a company, you can wedge yourself into a situation where, for example, your product is THE BEST, but you've underpromised enough that you only get 15 million bucks to hire new engineers, buy up hardware/cloud virtualization space, etc., and that isn't enough - you run out of money early and go broke! Where your competitor, who overpromised, got 30 million in investment and while their product wasn't intially as good as yours, they invest time and money into it, and then they just buy you and your team at a fire-sale price when you go broke.
The market is inept at these optimization functions overall, but it is still tuned to TRY and get them right- to take promises, expected performance, indicators, and all that and rough out a risk vs. reward equation and then plug funds into it. Underpromising and overdelivering is a method by which you can sometimes 'hack' the power of the market to 'price' your efforts, but it can backfire hilariously if you use it in the wrong space, against the wrong opponents.
Because that is illegal. You cannot just pump out bad numbers then surprise the market. Those bad numbers are a lie. Deliberately lowering expectations, driving down stocks, is the first step of an insider trading fiasco.
A company that cannot properly keep shareholders informed is an unpredictable company. Maybe that is tesla. But deliberately keeping shareholders in the dark is criminal.
What's the motivation here? Are people talking their book, or is it idolatry of Musk?
As a tesla shareholder (forget upside and commercial value), that's a small price to pay for funding a sci-fi future.
Not everything needs to be about ROI.
The stock price would probably drop a bit after that, but it may be for the company's best interest in the long term. Tesla needs visionary investors, too.
https://www.theguardian.com/environment/2014/mar/03/tim-cook...
http://youtu.be/Oo07tHQe-y0
Sounds like he is quite pleased with the progress of their autonomous driving algorithms.