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Have Tesla's goals changed?

5K views 78 replies 13 participants last post by  JasonF 
#1 ·
Similar to how he invested in Tesla to get EVs into the mass market (market being anyone making at least six figures).
:rolleyes: Enough with the innuendo.
What do you actually believe was his motivation for starting Tesla, if not for the reasons he stated?
 
#2 · (Edited)
Similar to how he invested in Tesla to get EVs into the mass market (market being anyone making at least six figures).
This is not just something Elon does - this is something that seems to infect anyone who is moderately to extremely rich for some reason: They get a warped idea of what middle class and average income is.

I think that happens because as they become extremely rich, they get a new class of friends, and the poorest people they know are making $500k/yr. So they start to consider those people “average” and “middle class”, and the concept of people who make less than that becomes a myth. And then they price their products accordingly.

Politicians do it, too. Remember before the pandemic lockdowns when politicians everywhere were telling us that the average American has the savings to pay 6 months to a year worth of bills without getting a paycheck? That’s why. Those politicians don’t know anyone who makes less than mid six figures, think of those people as average, and the concept of anyone who makes less than that is a myth.

EDIT: After I posted this, I realized that you can see this kind of evolution occur in real time with car youtubers! Their earlier videos were often about buying cars on a budget, but as they start to make some real money, suddenly they’re buying exotics and blinging them up with expensive wheels. The Out of Spec channels became so far out of hand with that, Kyle recently realized it and started a series on affordable and used EV’s to compensate.
 
#3 ·
“However, some readers may not be aware of the fact that our long term plan is to build a wide range of models, including affordably priced family cars.”

How’s that working out when someone ordering a SR/LR gets pushed back because someone orders a perf model months after them!?

“The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model.”

They LITERALLY are doing the opposite. Offered lower priced EVs initially (remember that short lived $35k 3) and are now driving the market UP (well beyond inflation rates).

“When someone buys the Tesla Roadster sports car, they are actually helping pay for development of the low cost family car.”

So what has the 3/Y been paying for the last few years? The semi!?

There’s a difference between having goals, and staying true to them.

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#4 · (Edited)
How’s that working out when someone ordering a SR/LR gets pushed back because someone orders a perf model months after them!?
Heck, Tesla used to sell the Model S for $57k. And people who ordered that version got "pushed back" in favor of people who bought Signature editions for $96k. You seem to think that this is because Tesla abandoned their goal. It's not. The SR isn't the "final say" in affordability, just as the $57k Model S was not. They have to make money and be successful in order to continue this pursuit of driving down EV prices.

Tesla is currently burning money trying to get two new production plants (Austin & Berlin) up to speed. They're concentrating on higher-profit vehicles right now so that they can afford that ramp up. Tesla is still trying to engineer ways to make their vehicles more affordable. Battery Day in particular outlined some huge engineering changes that they are pursuing in order to drive down costs much further. You seem to be ignoring the business side of this. If Tesla just sells SRs they won't be able to afford to stay in business.
 
#13 ·
Some of us old fuddy-duddies (me) still believe that the primary business of business is to maximize long-term profit. As long as it's done in a legal, responsible, and ethical way it's actually their responsibility to shareholders.
 
#14 ·
Yep, and at the heart of it, Tesla is no different. To argue that Elon is running Tesla any different makes no sense.
 
#38 ·
Wow. We need Tesla to be a highly profitable company to be able to invest big $$$ to create huge manufacturing capacity and do the massive R&D needed to design and manufacture cars that will appeal to drivers to such a degree that they will switch from ICE to EV in massive number. It is going to take a ton of money to do that.
 
#49 ·
I only skimmed this thread, but it seems to me it's demonstrating that Tesla is communicating its goals and plans poorly. That's not a necessary part of being a business; they just choose to obfuscate.

I think back to the early "plans" for the order in which they would deliver Model 3s to reservations holders. They ended up doing nothing like what they said they would do. The FSB beta roll-out has been a bit like that too. Sure, plans change, but these "plans" change at the drop of a hat--they don't seem like they're real to begin with.

And that then adds to confusion about their big goals. If they repeatedly say one thing and do another, it's really hard to take anything they say seriously, whether it's a short-term promise or a long-term goal. That just leaves us all trying to read tea leaves.
 
#51 ·
You don't start a market by coming out with the cheapest solution first.

Look at the first cassette players, CD players,televisions, etc. You normally start near the top and create a market that others want into. Then move in to mass production and reduce the cost. Look at cars, even buggies. The poor didn't have them for many years after the market started.
 
#52 ·
Look at the first cassette players, CD players,televisions, etc. You normally start near the top and create a market that others want into. Then move in to mass production and reduce the cost. Look at cars, even buggies. The poor didn't have them for many years after the market started.
The big difference in what we're talking about here though is this is not a new product looking for a niche. With casette players, CD players, TV's, etc, people have to justify buying one because of the cost vs their very limited usefulness. Even when cars or buggies were new, everyone walked everywhere, nobody but the wealthy lived far enough away to need them.

The only parallel really is that compared directly to gas cars, nobody really needs EV's. The manufacturers can just go on making gas cars until the last drop of harvestable oil is consumed, and then society collapses and has to restructure without any cars. That doesn't bode well for car manufacturer's futures, but they're all focused on quarterly profits and margins, and that future is someone else's problem.

I know it's a bit extreme to use the example of "if oil ran out tomorrow", but it's an example that also works with gas prices going out of reach of the poor and eventually middle class due to supply issues, war, whatever, forcing them to give up their gas cars, and the same collapse occurs.

And right now it looks like that collapse is coming during our lifetimes, sooner than we could imagine. But it's also looking like EV's, which could prevent that from occurring, will not become fully mainstream in time to prevent that transportaiton collapse, solely because almost no automakers take them seriously enough.
 
#58 ·
To be clear. I could care less about a transition to EVs. I drive an EV because for the money it's the best performing, most interesting, and exciting car I've ever driven. I looked at the Bolt way back when, but it was too boring and ugly to tempt me. Then I test-drove a Model S in 2013 and was hooked. You seem to believe that the only way to hook the mainstream is with a low-end product. I think you're way off. Pay attention to the drivers in those Mercedes, BMWs, Camaros, Chargers, and other speed demons that you pass on the highway every day. I'd venture to say that more than half are spending as much per month on their car payment as they are on their house/rent payment. I'm not saying that buyers should behave this way, but I am saying that they do.

So, if there's any truth in what I'm saying, what's Tesla's responsibility? To provide what the market doesn't want at a loss or smaller profit? Or to produce a larger profit by providing a product that the market desires? Shouldn't a business be allowed to pivot, based upon the market, and change their objectives to remain profitable or even maximally profitable?

I've said it before. The primary business of business is profit. Maximum profit. They owe it to me as a stockholder, and they owe it to you as an owner. The last thing either you or I want is to own a vehicle produced by the company formerly known as Tesla.
 
#59 ·
To be clear. I could care less about a transition to EVs.
I've said it before. The primary business of business is profit. Maximum profit. They owe it to me as a stockholder, and they owe it to you as an owner. The last thing either you or I want is to own a vehicle produced by the company formerly known as Tesla.
But we eventually will, if Tesla's purpose is to sell cars only to the most wealthy people at the highest price and margin possible. Because eventually Tesla will run out of those people to sell to, or worse yet, fashion will change - maybe those people will start buying from Lucid instead because Tesla hasn't had a major redesign since 2017. Or maybe they will go to brands they are more familiar and comfortable with, that have plusher interiors, and more hands-on concierge like service. If Tesla's purpose is selling high-end luxury vehicles to the rich, but it can't do that anymore, that can sink the company faster than any expansion can.
 
#63 ·
Ok. Seeing headlines about potential for Tesla stock but back. That would not be in line with using profits for R&D and infrastructure.

It would instead argue for Tesla being a regular corporate entity with a big focus on shareholder returns. Will be curious to see if it happens.
 
#72 ·
So much for a stock buy back. :p
This explains why the shares have been dropping like a rock lately.

 
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