Elon reveals Cybertruck details / production expectations on Q3 2023 call

[Arctic_White]

The Ford Lightning (and the F-250) cannot sell in greater volumes at current prices. They are priced high because Ford is insanely inefficient at manufacturing when compared to Tesla. When you have to price that high (for what you get) it's a given that you cannot keep expanding production and sales. F-series trucks have been gradually falling in sales for years if you apply a little smoothing to the sales numbers to take out shocks to the system like COVID.

Tesla wants to price the Cybertruck low (for what you get)so they can ramp production higher every year until they are selling huge volumes. That requires figuring out how to build them for a low price (without cheapening them up and making them undesirable, even at a low price).

Tesla has a huge pool of reservations and everyone that reserved before they removed pricing and ranges deserves to pay the same price because they are all in the same pool of early reservations. It would look pretty bad if Tesla tried to soak it to the early deliveries and lower the lower the price to scoop up more sales from the same reservation pool.

Even though the Cybertruck will offer the most value in the EV truck market, there will still be plenty of people who cancel their reservations because they are not ready to buy a new truck when their number comes up. That's just a given and the reasons will run the gamut, from high interest rates, to inflation, to loss of job, to medical bills, to a change of heart.

But here's the thing, the new reservations will almost certainly outnumber cancellations, just like they did on the Model 3.

You're one of the very few folks who actually appreciates how insane Tesla is at manufacturing. They have some very big-brained folks who have figured out different ways to make production more efficient.

We used to follow the Kaizen model when I worked at a manufacturing company, the same model that the Japanese pioneered. When Toyota, a very large Japanese manufacturer, tore down the Model Y last year, they thought it's a work of art.

Little did they know that Tesla had already made three further iterations of model Y and this doesn't even include what Tesla is about to with their next-gen platform!

And now every automaker is trying to copy what Tesla did (Giga Casting, for example). LOL.

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[cvalue13]

Lost in all of your arguments is the fact that Tesla still remains the only EV company that makes any money selling its EVs.

See, you just code-shifted again

it’s not lost in *my* argument, it’s lost in *yours*

Apples-to-apples, Tesla “lost” money on every EV it made (in the same way others are now) for the first 10+ years of its existence

saying “Tesla is the only one who is making money today” *should* be an obvious fallacy to anyone applying any rigorous and consistent thought.

you don’t even get to the relevant point: who “lost” money better. That is where valid arguments exist for Tesla’s strengths.

not these regurgitated fanboi quips that get passed around like a boy scout manual

And since *my* point was that you’re not comparing apples-to-apples, it’s you who just responded with apples-to-oranges

Pick a test. Apply it consistently.

 

[cvalue13]

If you think Tesla is struggling

*I’m* not saying it’s *struggling*

I’m saying you’re not saying anything

 

[HaulingAss]

You're one of the very few folks who actually appreciates how insane Tesla is at manufacturing. They have some very big-brained folks who have figured out different ways to make production more efficient.

We used to follow the Kaizen model when I worked at a manufacturing company, the same model that the Japanese pioneered. When Toyota, a very large Japanese manufacturer, tore down the Model Y last year, they thought it's a work of art.

Little did they know that Tesla had already made three further iterations of model Y and this doesn't even include what Tesla is about to with their next-gen platform!

And now every automaker is trying to copy what Tesla did (Giga Casting, for example). LOL.

True. And Tesla's efficiencies go beyond manufacturing, to every aspect of their business because Elon knows that the new vehicle buyers ends up paying for all those inefficiencies. One way consumers pay for inefficiencies is by taking delivery of vehicles with inferior quality components, cheap seats, cheap stereos, cheap steering wheels, cheap wheels, cheap brakes, cheap wheel bearings, cheap shock absorbers, cheap suspensions cheap climate control, etc. This is what OEMs do to try to keep their inefficient asses competitive, sometimes the cheap item is only 5 cents cheaper that the good item. It's a race to the bottom.

Tesla loves cutting costs too, but I'm constantly impressed on how they keep component quality high, relative to the competition. Tesla tries to figure out ways to give people high quality cars with the features they want, while simultaneously figuring out was to build them quicker and more efficiently. They fine-tune their supply chains to minimize shipping costs, they have a robust and automated inventory and order system (software designed in house) to minimize mistakes and human input while avoiding the need to pay a software vendor many millions of dollars to install an inferior system, the list is long and varied. OEM's just keep doing things the same way because no one wants to be responsible for making a change that might not work out. Elon tells his employees that if they are not failing very often, they are not trying hard enough to make improvements.

No one can even come close to replicating the efficiency of Tesla in so many different areas of the corporation. You would have better luck teaching your cat how to swim in olive oil. Not that there would be any point in doing that, but everyone can appreciate getting more for your money.

 

[firsttruck]

funny, don’t remember you keeping that in mind when speaking of Ford’s margins

ford’s spent more in R&D each of the last 10 years than Tesla has in the last 10 years of its existence

meanwhile, all but the prior two years Tesla has made any net profit only in virtue of selling Bitcoin and carbon credits - then this quarter it’s profits go down 44%

.....

It is not just spending a lot of money on R&D it is what you spend that money on and what return you likely make.

Ford & GM spend huge amounts of money for tiny improvement to ICE engines and need for continually more stringent ( and expensive) emission controls. There will be very little long term return on that.


Really, huge amount amount of money designing a new generation ICE that will be produced in low volumes.

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Published: Jan 23, 2023
GM Spending $854 Million to Build New Small-Block V-8
By Chris Perkins
https://www.roadandtrack.com/news/a42618499/gm-gen-vi-small-block/

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[cvalue13]

It is not just spending a lot of money on R&D it is what you spend that money on and what return you likely make.

no doubt! It’s a good and valid critique

on the other hand, one could reasonably respond several dozen relevant details, eg:

(1) witness a mature industry in the tail end of the graph of the law of diminishing returns, while BEV’s are in the fat sweet-spot, but their day will come, too

(2) witness the effects of regulations that have been designed to ratchet up the pressure and force R&D spend on products with small market uptake (as you point out, but as if an inherent fault?)

(3) witness carbon credits, but for receiving which Tesla would have bankrupt each of its first ~10 years of its early product development, every dollar coming from the balance sheets of ICE OEMs

Etc etc etc

which all the above (and the attendant counter-points) and surely dozens of others (including some mentioned in earlier posts) add up to a complexity that makes at the actual work: it’s near meaningless to utter “Tesla is the only manufacturer who makes money on a BEV vehicle today”

 

[HaulingAss]

If you think Tesla is struggling, then the remaining automakers are hurting bad. It's just that they have ICE vehicles that will carry them forward, but once that gravy train is done, watch out.

Yup. And those who want to actually understand what we are about to witness, right before our eyes, need to stop buying into false and misleading narratives perpetrated through the media.

The biggest one being that ICE sales will collapse because various government mandates prevent the sale of ICE cars beyond 2035 (or whatever date may be the case). ICE sales will collapse before most of those mandates take effect for economic reasons, people will no longer buy ICE because they cost too much to purchase and maintain and will no longer make financial sense. ICE cars are getting more expensive while EV's are becoming less and less expensive, and increasingly numerous every year as production expands.

Sure, I'm not going to argue about the last 10%-20% of ICE sales because when ICE volumes have dropped that low due to consumer behavior, the only remaining ICE sales will be high-priced due to lack of volume efficiencies and a collapsing supply chain of ICE specific components. There will be other drivers related to consumer behavior, the "herd" effect, collapsing prices for used ICE vehicles, social pressures to conform, etc., but price for what you get will always be the main driver.

There will always be a small level of demand for something traditional that is non-EV and people willing to pay the premium for reasons that are more emotional than rational. A certain small percentage of people are rebels without a (real) cause, they will resist to their dying days. Mandates may very well put the kabosh on these sales, or, perhaps more likely, a special tax will be paid by people with money to burn in order to allow them under special exemptions (but options will be limited and expensive). Classic cars are not affected by these mandates because the mandates target new car sales. Further into the future there will be regulations against entering municipalities or certain zones in any ICE vehicle without special exemptions. The tail end of ICE usage will drag on for decades, I am talking about new car sales when I forecast the imminent collapse of ICE sales.

I'm not very interested in edge cases; I care about the primary driver of the wide adoption of EVs. That's not going to be new or existing government mandates, it will be market forces creating a domino effect. Subsidies for EVs will likely accelerate the timeline a bit, but they are already largely unnecessary. Of course, none of this will prevent self-serving politicians from taking credit for the amazing transformation, but those who understand the underlying mechanics of the EV disruption will not be fooled, because they understand economics is a powerful force and you cannot stop an idea whose time has come.

 

[HaulingAss]

It is not just spending a lot of money on R&D it is what you spend that money on and what return you likely make.

Ford & GM spend huge amounts of money for tiny improvement to ICE engines and need for continually more stringent ( and expensive) emission controls. There will be very little long term return on that.


Really, huge amount amount of money designing a new generation ICE that will be produced in low volumes.

--------------------------------------

Published: Jan 23, 2023
GM Spending $854 Million to Build New Small-Block V-8
By Chris Perkins
https://www.roadandtrack.com/news/a42618499/gm-gen-vi-small-block/

--------------------------------------

Exactly. Investing a billion dollars on a new V-8, even if it's (arguably) slightly better than existing engines, is a miscalculation on the part of GM, a lack of ability to really believe what is happening right before their eyes. Kodak suffered a terrible fate due to the same effect. Their grandiose self-identity obscures the reality on the ground.

The article you provide a link to opens with one of the false narratives I've been talking about that the media propogates about the EV disruption. The first sentence of the article is:

GM might be pushing hard into electrification, but it's not done with internal combustion yet.

A more accurate way to open this article would be:

GM might be good at creating the appearance it's pushing hard into electrification, but it's not done with internal combustion yet.

 

[cvalue13]

Exactly. Investing a billion dollars on a new V-8, even if it's (arguably) slightly better than existing engines, is a miscalculation on the part of GM, a lack of ability to really believe what is happening right before their eyes.

and what exactly are they supposed to do instead?

Walk in tomorrow, declare “we’ve seen the light, starting tomorrow we’re shutting down the business to the extent it relates to ICE product development, calling Elon Musk, begging for forgiveness, then folding up shop”?

It’s never clear what your point is beside venting some overly-simplistic dogma with an unjustifiably proud float on your face

it’s like kindergarteners asked to write a business plan - keep it simple, and it just might sound convincing

if only business was simple

 

[CyberGus]

Today's margins are today's margins. If you want to speculate about future margins, that's a different conversation, but today's R&D expenditures do not predictably track to future profit growth.

 

[Deleted member 17810]

and what exactly are they supposed to do instead?

Walk in tomorrow, declare “we’ve seen the light, starting tomorrow we’re shutting down the business to the extent it relates to ICE product development, calling Elon Musk, begging for forgiveness, then folding up shop”?

It’s never clear what your point is beside venting some overly-simplistic dogma with an unjustifiably proud float on your face

it’s like kindergarteners asked to write a business plan - keep it simple, and it just might sound convincing

if only business was simple

I haven't been keeping up with this convo, cause ugh, and also cause I accidentally put you on ignore.

But to the hypothetical of shutting down investment in ice engines. Yes, that's actually a viable strategy. That's sort of what ford did with one of their ceos five/ten years ago?

I think what's frustrating is that most of these companies already have R&D for this electric stuff, just not the impetus.

 

[cvalue13]

But to the hypothetical of shutting down investment in ice engines. Yes, that's actually a viable strategy. That's sort of what ford did with one of their ceos five/ten years ago?

Yeah and I’m personally all for double-clicking on those convos with any intellectual honesty

I‘m just (unreasonably) tired of pot-shot platitudes along the lines of “Tesla is a 10-foot tall flawless god who sees around every corner, and all others are so dumb they can’t see the easy fiX in front of them”

said not even realizing the contradiction in the attitude: which is it, Tesla does miracles, or it merely does what’s obvious and easy?

 

[Arctic_White]

True. And Tesla's efficiencies go beyond manufacturing, to every aspect of their business because Elon knows that the new vehicle buyers ends up paying for all those inefficiencies. One way consumers pay for inefficiencies is by taking delivery of vehicles with inferior quality components, cheap seats, cheap stereos, cheap steering wheels, cheap wheels, cheap brakes, cheap wheel bearings, cheap shock absorbers, cheap suspensions cheap climate control, etc. This is what OEMs do to try to keep their inefficient asses competitive, sometimes the cheap item is only 5 cents cheaper that the good item. It's a race to the bottom.

Tesla loves cutting costs too, but I'm constantly impressed on how they keep component quality high, relative to the competition. Tesla tries to figure out ways to give people high quality cars with the features they want, while simultaneously figuring out was to build them quicker and more efficiently. They fine-tune their supply chains to minimize shipping costs, they have a robust and automated inventory and order system (software designed in house) to minimize mistakes and human input while avoiding the need to pay a software vendor many millions of dollars to install an inferior system, the list is long and varied. OEM's just keep doing things the same way because no one wants to be responsible for making a change that might not work out. Elon tells his employees that if they are not failing very often, they are not trying hard enough to make improvements.

No one can even come close to replicating the efficiency of Tesla in so many different areas of the corporation. You would have better luck teaching your cat how to swim in olive oil. Not that there would be any point in doing that, but everyone can appreciate getting more for your money.

And we still have people who think of Tesla as just a car company. ?

What turns me off about legacy automakers is their dealership network. That alone makes buying Tesla, Rivian, and Polestar so much better. The experience is so much nicer.

If I can help it, I would never step another foot in a dealership.

Your last bolded part is very apt and funny as heck!

 

[Arctic_White]

See, you just code-shifted again

it’s not lost in *my* argument, it’s lost in *yours*

Apples-to-apples, Tesla “lost” money on every EV it made (in the same way others are now) for the first 10+ years of its existence

saying “Tesla is the only one who is making money today” *should* be an obvious fallacy to anyone applying any rigorous and consistent thought.

you don’t even get to the relevant point: who “lost” money better. That is where valid arguments exist for Tesla’s strengths.

not these regurgitated fanboi quips that get passed around like a boy scout manual

And since *my* point was that you’re not comparing apples-to-apples, it’s you who just responded with apples-to-oranges

Pick a test. Apply it consistently.

Sorry but what's your point again?

You were the one who said that Tesla's current net profit is "wild" and way worse than the other legacy automaker. I'm merely pointing out that it is you who is comparing apples to oranges as the legacy current is milking its ICE division to shore up their profits, and their BEV division is losing billions.

I guess let me make my point very clear: the legacy automakers are truly facked. VM, GM, Ford, Stellantis are all dead man walking.

BMW, Mercedes, and some Japanese automakers have a chance to survivie.

Chinese automakers will certainly survive.

But the current legacy automakers, as you know them, will be either bankrupt or a shell of themselves within 10 years. Let's see what Tesla's net profit margin in coe 2033 vs. GM, Ford, VW, and Stellantis. Shall we?

 

[Arctic_White]

Yeah and I’m personally all for double-clicking on those convos with any intellectual honesty

I‘m just (unreasonably) tired of pot-shot platitudes along the lines of “Tesla is a 10-foot tall flawless god who sees around every corner, and all others are so dumb they can’t see the easy fiX in front of them”

said not even realizing the contradiction in the attitude: which is it, Tesla does miracles, or it merely does what’s obvious and easy?

Ahh your posts now make sense.

What Tesla has done and accomplished can't easily be replicated.

We already have evidence: Tesla's supercharging network. Soon, we will see major OEM signing up to license FSD. If FSD and supercharging network was so easy, why would these automakers sign with Tesla rather than doing it their own?

My point bears repeating: no one is able to compete with Tesla and the fact that most folks don't see that is amazing for us small retail investors.

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