If one gets news about Tesla only from HN then it does seem Tesla is ridiculous, because only negative stories tend to get upvoted and positive ones buried.
It's great that they can sell same model massively (so they can cut many costs for designing vehicle/factory/warehouse), but why don't you compare entire vehicle sales count? The article is too biased as it's electrek. Even if they compared entire sales count, it's growing.
The fact they seem to be custom manufacturing silicon carbide FET's.... While everyone else is using off the shelf components.
Those custom FET's haven't yet publically been torn down. But I'd guess they enable more efficient motor inverters. More efficiency means smaller battery, and less cooling. Less cooling means the whole heatpump system can be downsized, reducing weight. Reduced weight means smaller battery. Smaller battery means less weight... Which means an even smaller battery... And a smaller battery in a lighter car means more profit margins.
Because of the recursive nature of this, even small efficiency gains on the FET's have a pretty massive impact on profit margins.
Fets are pretty low risk... Worst case, you lose a motor. They have the explosive fuse to prevent a bunch of shorted fets causing massive braking, and I've never heard of that fuse being activated.
Even with that 5 year lead, I would rather buy an EV from any other "mainstream" automaker. The build quality even on a 2023 manufactured Tesla is just insulting. If I buy a BMW I'm also being ripped off but at least the door panel won't fall off if I slam the door, and BMW will repair faults within days and not months.
5 years headstart means very little advantage in car industry unless you are developing ICEs.
I don't know if people realize how expensive it is to engineer an engine. Mercedes spent 4B $ to develop their diesel OM654. 4 billions of R&D to build an engine!
EVs don't have the same complexity, barrier of entry is much lower which is why Chinese are doing so well in them, even though they didn't with ICEs.
Auto industry will never be one where margins are good for long, doesn't matter who you are, it's a very expensive, risky low margin business if Tesla inverstors think thei company is immune they are in for a very harsh reality.
Is this even a lead? Seems like Tesla is just bearing the R&D that any other auto manufacturer can decide to implement if it makes sense for margins. There's no secret sauce when a competitor can get a hold of your product and see how it works. Its why in past wars doing things like scuttling vehicles was important to prevent competition.
Because maybe there's some advantage to be had by reducing dependencies when you can afford to? And maybe they value SOC expertise, since they do other tech besides cars?
And when they outsource it people will say they're just focusing on core competencies. The great thing is businesses can use a magic 8-ball to make business decisions and someone will laud the results as a good move.
Vertical integration has many benefits. It’s the same reason Apple started making their own chips and ditched intel. The SOCs will be cheaper and better optimized for Tesla’s use case.
Every Nvidia GPU I’m aware of ships with both CUDA cores and Tensor cores. For a pure ML application those CUDA cores are almost useless. Tesla would be paying Nvidia’s premium for transistors that aren’t optimized for ML inference.
A Tesla designed chip can be 100% dedicated to tensor multiplication. You’re paying less per transistor and every transistor is utilized to the fullest extent.
Very simple, the market valuation is based on two things:
- Tesla's track record of rapid growth and their credible/plausible plan for growing volumes by about at least 10x And that's just cars. They have a few other rapidly growing business that are already billion dollar businesses. Some of which could outgrow their car market. Even when you consider the expected growth. It's only inflated if you don't believe they can do all of this. The reason the valuation is so high is that lots of investors seem to not agree with that.
- The underwhelming performance of essentially all their competitors; i.e. the next 5 manufacturers that you refer to. With the exception perhaps of Asian companies like BYD that have similar proven track records as Tesla to ship decent EV products in large volumes profitably. These new manufacturers other manufacturers are short term going to cause a lot of headaches for the (former, let's just call that out) top 5. The prospect of millions of dirt cheap good quality Chinese EVs undercutting cheap ICE cars has a high risk of decimating the market shares of the likes of Toyota, GM, etc. that are very dependent on sales of cheap, unremarkable ICE cars. They make most of their money selling products that are rapidly becoming a combination of obsolete, expensive, and undesirable.
Most of the former incumbents like GM, Ford, VW, Toyota, etc. of course have EV strategies of their own but they will need many years more before they match current production volumes and cost levels of their new competitors.
In short, they'll be struggling to catch up for years to come even under the most optimistic scenarios. The more pessimistic scenario is actually that a few of these companies might not survive the transition at all and that the remaining ones might find themselves vastly reduced in size. Tesla and several other new manufacturers certainly seem well positioned to continue to make life miserable for these companies for years to come. Whatever they do, Tesla et al. will be able to do it faster, better, cheaper, and in larger volumes for some time to come.
Along with what everyone else has said about Teslas being good electric cars with a high profit margin, Tesla (the company) continues to enjoy a high growth rate in terms of units delivered per year.
Also, Tesla seems to have mostly successfully shrugged off the dealer model and avoided pension based compensation.
If they can maintain a reasonable level of satisfaction when offering service, they get to scoop up the 20% margins the dealerships take, as well as avoid the sentiment hit every other dealer has to take by forcing people to buy new cars through that truly awful process.
Part hype, part perceived future value. Tesla's market cap is not as a car company but as a robot manufacturing company. Investors believe Tesla has a lot of room to grow beyond just selling EVs.
They keep pushing cost of manufacturing down while maintaining great profit margins. Reliability is good enough people are buying Teslas instead of Toyotas. Service techs can come to your home to fix most problems.
If consumers save measurable time and effort by owning an electric vehicle, whoever makes it the cheapest vehicle to own time-wise wins.
No other company/CEO can make as grandiose announcements. Their future product pipeline is worth trillions and every year there's something else they will deliver very soon that will revolutionize the world. If you've read about it in a scifi book, Tesla will announce they are working on it first.
Yikes, yeah- on second thought it does seem sarcastic.
It's just so difficult to tell with Tesla because it certainly does have a certain portion of the population that would have posted the original comment entirely unironically.
