Is Tesla a good investment?

[NorCal]

A 9% decline in deliveries for the quarter is a disaster for a company that's still priced like a growth stock.  My back-of-the envelope math is that's a $1.5B to $2.0B revenue hit when compared to Q1 of last year.

I'd still give Tesla a bit of a premium compared with traditional automakers, as their 17% margins are still much better than the Ford/GM 9%-10% margins.  But the growth story is done for.  Particularly since they just launched Cybertruck, but don't consider that a growth engine. 

These are rough numbers, but should be a reasonable guide.

GM trades at a P/E of 6 and Ford trades at a P/E of 15.

This gives Tesla a fair value of $71/share at a PE of 15 and $95/share at PE 20.  However, that's before this Q1 revenue decline, which means fair value is probably quite a bit lower.  This stock still has a long ways to fall before falling below fair value. 

There's a price that the shares will make sense again.  But we're not there yet.

PE is a useless metric for this comparison. Ford lost $67k per EV they made in 2023. Tesla had a 17% margin on pure EV sales. Ford, GM, and Stellantis, after going all in on EVs and announcing ambitious plans just a few years ago, have drastically scaled back their EV plans to stop the cash hemorrhaging. Problem there is they are only delaying the pain. The only way to get to profitability on EVs is to rapidly increase scale. But they can’t rapidly increase scale because they have a vast and complex supply chain with little to no interest in EVs and they failed to secure an adequate battery supply to support profitable mass production. So, their solution is to try and convince consumers what they really want and need is a hybrid. I don’t see this strategy working either. They’re basically screwed.

The only way an investment in Ford, GM or Stellantis (or Honda, Toyota, etc.) makes any sense is if you think EVs are going away and aren’t the future. Reduced deliveries and production isn’t good news for Tesla, but this slowdown in Q1 was industry wide and not a Tesla phenom.

Your post also ignores the fact that Tesla is not just a car company. It ignores energy storage YOY growth of 50% and increasing margins and profitability for energy storage. This side of the business will exceed the car business in coming years. It ignores the AI development, computing capabilities (DOJO), and the massive revenue potential of FSD and/or Optimus. It ignores the fact that Tesla has cornered the supercharging market in NA and has secured a high margin and steadily growing subscription based service revenue stream. You also miss that Apple has given up on making EVs or autonomous car software. GM canceled their Blue Cruise program. Only Waymo remains as a competitor. I predict other car companies will soon be licensing Tesla’s FSD software the same way they were forced to latch on to Tesla’s supercharger network after failing to create their own charging networks.

Perhaps most importantly, your reliance on PE, misses the advantage Tesla has in engineering prowess. It is a highly desirable destination for the best engineering talent in the world. At the end of the day it’s the people that make the company. The pace of innovation at Tesla is staggering and Tesla is not stuck in an outdated ICE culture trying to serve two incompatible purposes at once (maintain profitable for now ICE sales AND grow EV business). Not to mention union labor and pension obligations...

Tesla is also expanding into new markets, most recently Malaysia, that can bring in new demand. A deal is nearing completion with India that will provide Tesla access to sell cars with reduced on no import tariffs in exchange for building a gigafactory in India.

Focusing on one quarter of results and PE ratios is a poor way to evaluate the company’s performance IMO. The lost production time at Fremont, Berlin, and Shanghai did affect deliveries. It takes weeks to ship cars by cargo ship, which means cars not produced mid-quarter didn’t make on ships in time for delivery in Q1. There was a story yesterday about thousands of Tesla vehicles parked at the Shanghai dock waiting to be loaded onto ships. This doesn’t account for the entire drop in deliveries, but can account for a significant portion. The remainder is from poor car sales in a slumping Chinese economy that affected all car sales in China (see BYD QOQ numbers in China) and lower than expected car sales for all makes and models in the US. These conditions are not specific to Tesla or EVs, but Tesla faired as good or better than any other EV maker under these macro conditions.

There's plenty of room to criticize PE, or any non-DCF valuation method. 

What valuation method to you prefer, and where does that put fair value for the stock in your mind?

Wall Street, supposedly the best minds in the investing world, totally missed on Tesla despite their spreadsheets and complex valuation models. It’s a fool's errand, especially for a retail investor. I make it my business to know every bit of publicly available information about the company and track progress or lack thereof on a daily basis. What I don’t do is treat every quarterly result like it’s life or death. In reality quarterly results have little to no bearing on the company’s long-term prospects. I’ve had the same investment thesis since 2013.

Are EVs, renewable energy and energy storage the future? Is Tesla the leader in EVs and energy storage?

I’ll stay long for as long as the answer to both questions is ‘yes'. Notice this does not include supercharger, service, dojo, FSD or Optimus as growing/potential revenue streams. If I had listened to every expert with a valuation spreadsheet I would have missed out on 20X gains and sold long ago. I’d be willing to look at your non-PE based valuation model for Tesla, since you seem to be into valuations.

In the broadest terms, I have a sense for when the SP is outpacing performance/progress and when the SP is behind performance/progress with respect to the company’s mission and guidance. The last run up was overheated for sure. The stock is currently undervalued now IMO.

That's a fascinating investment methodology..  I take it as sort of similar to investing in Cisco around 1999.  They had about $12B in revenue at the time and are now at $57B in revenue.  They've grown massively, have been highly innovative over the years, dominate many of the markets they participate in, and locked down market share.

[ColoradoTribe]

A 9% decline in deliveries for the quarter is a disaster for a company that's still priced like a growth stock.  My back-of-the envelope math is that's a $1.5B to $2.0B revenue hit when compared to Q1 of last year.

I'd still give Tesla a bit of a premium compared with traditional automakers, as their 17% margins are still much better than the Ford/GM 9%-10% margins.  But the growth story is done for.  Particularly since they just launched Cybertruck, but don't consider that a growth engine. 

These are rough numbers, but should be a reasonable guide.

GM trades at a P/E of 6 and Ford trades at a P/E of 15.

This gives Tesla a fair value of $71/share at a PE of 15 and $95/share at PE 20.  However, that's before this Q1 revenue decline, which means fair value is probably quite a bit lower.  This stock still has a long ways to fall before falling below fair value. 

There's a price that the shares will make sense again.  But we're not there yet.

PE is a useless metric for this comparison. Ford lost $67k per EV they made in 2023. Tesla had a 17% margin on pure EV sales. Ford, GM, and Stellantis, after going all in on EVs and announcing ambitious plans just a few years ago, have drastically scaled back their EV plans to stop the cash hemorrhaging. Problem there is they are only delaying the pain. The only way to get to profitability on EVs is to rapidly increase scale. But they can’t rapidly increase scale because they have a vast and complex supply chain with little to no interest in EVs and they failed to secure an adequate battery supply to support profitable mass production. So, their solution is to try and convince consumers what they really want and need is a hybrid. I don’t see this strategy working either. They’re basically screwed.

The only way an investment in Ford, GM or Stellantis (or Honda, Toyota, etc.) makes any sense is if you think EVs are going away and aren’t the future. Reduced deliveries and production isn’t good news for Tesla, but this slowdown in Q1 was industry wide and not a Tesla phenom.

Your post also ignores the fact that Tesla is not just a car company. It ignores energy storage YOY growth of 50% and increasing margins and profitability for energy storage. This side of the business will exceed the car business in coming years. It ignores the AI development, computing capabilities (DOJO), and the massive revenue potential of FSD and/or Optimus. It ignores the fact that Tesla has cornered the supercharging market in NA and has secured a high margin and steadily growing subscription based service revenue stream. You also miss that Apple has given up on making EVs or autonomous car software. GM canceled their Blue Cruise program. Only Waymo remains as a competitor. I predict other car companies will soon be licensing Tesla’s FSD software the same way they were forced to latch on to Tesla’s supercharger network after failing to create their own charging networks.

Perhaps most importantly, your reliance on PE, misses the advantage Tesla has in engineering prowess. It is a highly desirable destination for the best engineering talent in the world. At the end of the day it’s the people that make the company. The pace of innovation at Tesla is staggering and Tesla is not stuck in an outdated ICE culture trying to serve two incompatible purposes at once (maintain profitable for now ICE sales AND grow EV business). Not to mention union labor and pension obligations...

Tesla is also expanding into new markets, most recently Malaysia, that can bring in new demand. A deal is nearing completion with India that will provide Tesla access to sell cars with reduced on no import tariffs in exchange for building a gigafactory in India.

Focusing on one quarter of results and PE ratios is a poor way to evaluate the company’s performance IMO. The lost production time at Fremont, Berlin, and Shanghai did affect deliveries. It takes weeks to ship cars by cargo ship, which means cars not produced mid-quarter didn’t make on ships in time for delivery in Q1. There was a story yesterday about thousands of Tesla vehicles parked at the Shanghai dock waiting to be loaded onto ships. This doesn’t account for the entire drop in deliveries, but can account for a significant portion. The remainder is from poor car sales in a slumping Chinese economy that affected all car sales in China (see BYD QOQ numbers in China) and lower than expected car sales for all makes and models in the US. These conditions are not specific to Tesla or EVs, but Tesla faired as good or better than any other EV maker under these macro conditions.

There's plenty of room to criticize PE, or any non-DCF valuation method. 

What valuation method to you prefer, and where does that put fair value for the stock in your mind?

Wall Street, supposedly the best minds in the investing world, totally missed on Tesla despite their spreadsheets and complex valuation models. It’s a fool's errand, especially for a retail investor. I make it my business to know every bit of publicly available information about the company and track progress or lack thereof on a daily basis. What I don’t do is treat every quarterly result like it’s life or death. In reality quarterly results have little to no bearing on the company’s long-term prospects. I’ve had the same investment thesis since 2013.

Are EVs, renewable energy and energy storage the future? Is Tesla the leader in EVs and energy storage?

I’ll stay long for as long as the answer to both questions is ‘yes'. Notice this does not include supercharger, service, dojo, FSD or Optimus as growing/potential revenue streams. If I had listened to every expert with a valuation spreadsheet I would have missed out on 20X gains and sold long ago. I’d be willing to look at your non-PE based valuation model for Tesla, since you seem to be into valuations.

In the broadest terms, I have a sense for when the SP is outpacing performance/progress and when the SP is behind performance/progress with respect to the company’s mission and guidance. The last run up was overheated for sure. The stock is currently undervalued now IMO.

That's a fascinating investment methodology..  I take it as sort of similar to investing in Cisco around 1999.  They had about $12B in revenue at the time and are now at $57B in revenue.  They've grown massively, have been highly innovative over the years, dominate many of the markets they participate in, and locked down market share.

So, I take it you’re not going to share your Tesla valuation model that you used to make the decision not to invest in Tesla at this price (or any price)? 

[NorCal]

A 9% decline in deliveries for the quarter is a disaster for a company that's still priced like a growth stock.  My back-of-the envelope math is that's a $1.5B to $2.0B revenue hit when compared to Q1 of last year.

I'd still give Tesla a bit of a premium compared with traditional automakers, as their 17% margins are still much better than the Ford/GM 9%-10% margins.  But the growth story is done for.  Particularly since they just launched Cybertruck, but don't consider that a growth engine. 

These are rough numbers, but should be a reasonable guide.

GM trades at a P/E of 6 and Ford trades at a P/E of 15.

This gives Tesla a fair value of $71/share at a PE of 15 and $95/share at PE 20.  However, that's before this Q1 revenue decline, which means fair value is probably quite a bit lower.  This stock still has a long ways to fall before falling below fair value. 

There's a price that the shares will make sense again.  But we're not there yet.

PE is a useless metric for this comparison. Ford lost $67k per EV they made in 2023. Tesla had a 17% margin on pure EV sales. Ford, GM, and Stellantis, after going all in on EVs and announcing ambitious plans just a few years ago, have drastically scaled back their EV plans to stop the cash hemorrhaging. Problem there is they are only delaying the pain. The only way to get to profitability on EVs is to rapidly increase scale. But they can’t rapidly increase scale because they have a vast and complex supply chain with little to no interest in EVs and they failed to secure an adequate battery supply to support profitable mass production. So, their solution is to try and convince consumers what they really want and need is a hybrid. I don’t see this strategy working either. They’re basically screwed.

The only way an investment in Ford, GM or Stellantis (or Honda, Toyota, etc.) makes any sense is if you think EVs are going away and aren’t the future. Reduced deliveries and production isn’t good news for Tesla, but this slowdown in Q1 was industry wide and not a Tesla phenom.

Your post also ignores the fact that Tesla is not just a car company. It ignores energy storage YOY growth of 50% and increasing margins and profitability for energy storage. This side of the business will exceed the car business in coming years. It ignores the AI development, computing capabilities (DOJO), and the massive revenue potential of FSD and/or Optimus. It ignores the fact that Tesla has cornered the supercharging market in NA and has secured a high margin and steadily growing subscription based service revenue stream. You also miss that Apple has given up on making EVs or autonomous car software. GM canceled their Blue Cruise program. Only Waymo remains as a competitor. I predict other car companies will soon be licensing Tesla’s FSD software the same way they were forced to latch on to Tesla’s supercharger network after failing to create their own charging networks.

Perhaps most importantly, your reliance on PE, misses the advantage Tesla has in engineering prowess. It is a highly desirable destination for the best engineering talent in the world. At the end of the day it’s the people that make the company. The pace of innovation at Tesla is staggering and Tesla is not stuck in an outdated ICE culture trying to serve two incompatible purposes at once (maintain profitable for now ICE sales AND grow EV business). Not to mention union labor and pension obligations...

Tesla is also expanding into new markets, most recently Malaysia, that can bring in new demand. A deal is nearing completion with India that will provide Tesla access to sell cars with reduced on no import tariffs in exchange for building a gigafactory in India.

Focusing on one quarter of results and PE ratios is a poor way to evaluate the company’s performance IMO. The lost production time at Fremont, Berlin, and Shanghai did affect deliveries. It takes weeks to ship cars by cargo ship, which means cars not produced mid-quarter didn’t make on ships in time for delivery in Q1. There was a story yesterday about thousands of Tesla vehicles parked at the Shanghai dock waiting to be loaded onto ships. This doesn’t account for the entire drop in deliveries, but can account for a significant portion. The remainder is from poor car sales in a slumping Chinese economy that affected all car sales in China (see BYD QOQ numbers in China) and lower than expected car sales for all makes and models in the US. These conditions are not specific to Tesla or EVs, but Tesla faired as good or better than any other EV maker under these macro conditions.

There's plenty of room to criticize PE, or any non-DCF valuation method. 

What valuation method to you prefer, and where does that put fair value for the stock in your mind?

Wall Street, supposedly the best minds in the investing world, totally missed on Tesla despite their spreadsheets and complex valuation models. It’s a fool's errand, especially for a retail investor. I make it my business to know every bit of publicly available information about the company and track progress or lack thereof on a daily basis. What I don’t do is treat every quarterly result like it’s life or death. In reality quarterly results have little to no bearing on the company’s long-term prospects. I’ve had the same investment thesis since 2013.

Are EVs, renewable energy and energy storage the future? Is Tesla the leader in EVs and energy storage?

I’ll stay long for as long as the answer to both questions is ‘yes'. Notice this does not include supercharger, service, dojo, FSD or Optimus as growing/potential revenue streams. If I had listened to every expert with a valuation spreadsheet I would have missed out on 20X gains and sold long ago. I’d be willing to look at your non-PE based valuation model for Tesla, since you seem to be into valuations.

In the broadest terms, I have a sense for when the SP is outpacing performance/progress and when the SP is behind performance/progress with respect to the company’s mission and guidance. The last run up was overheated for sure. The stock is currently undervalued now IMO.

That's a fascinating investment methodology..  I take it as sort of similar to investing in Cisco around 1999.  They had about $12B in revenue at the time and are now at $57B in revenue.  They've grown massively, have been highly innovative over the years, dominate many of the markets they participate in, and locked down market share.

So, I take it you’re not going to share your Tesla valuation model that you used to make the decision not to invest in Tesla at this price (or any price)?

What I shared above is enough information for me to know I'm not interested in owning shares.  I'd consider doing a deeper dive if shares started trading below $90.  Although I don't trade individual stocks much anymore anyways. 

If I were to do it, I would pro-forma forward earnings for the next year for Tesla and a few competitors.  I wouldn't go for the highest-value stock by any means, but the valuation at least has to have a basis in competitive reality.  I'd also have to believe the growth story.  I personally see a declining sales story for at least a year or two, and a valuation that supports the opposite of that.  Maybe you'll prove me wrong, and I hope you do. 

[ColoradoTribe]

A 9% decline in deliveries for the quarter is a disaster for a company that's still priced like a growth stock.  My back-of-the envelope math is that's a $1.5B to $2.0B revenue hit when compared to Q1 of last year.

I'd still give Tesla a bit of a premium compared with traditional automakers, as their 17% margins are still much better than the Ford/GM 9%-10% margins.  But the growth story is done for.  Particularly since they just launched Cybertruck, but don't consider that a growth engine. 

These are rough numbers, but should be a reasonable guide.

GM trades at a P/E of 6 and Ford trades at a P/E of 15.

This gives Tesla a fair value of $71/share at a PE of 15 and $95/share at PE 20.  However, that's before this Q1 revenue decline, which means fair value is probably quite a bit lower.  This stock still has a long ways to fall before falling below fair value. 

There's a price that the shares will make sense again.  But we're not there yet.

PE is a useless metric for this comparison. Ford lost $67k per EV they made in 2023. Tesla had a 17% margin on pure EV sales. Ford, GM, and Stellantis, after going all in on EVs and announcing ambitious plans just a few years ago, have drastically scaled back their EV plans to stop the cash hemorrhaging. Problem there is they are only delaying the pain. The only way to get to profitability on EVs is to rapidly increase scale. But they can’t rapidly increase scale because they have a vast and complex supply chain with little to no interest in EVs and they failed to secure an adequate battery supply to support profitable mass production. So, their solution is to try and convince consumers what they really want and need is a hybrid. I don’t see this strategy working either. They’re basically screwed.

The only way an investment in Ford, GM or Stellantis (or Honda, Toyota, etc.) makes any sense is if you think EVs are going away and aren’t the future. Reduced deliveries and production isn’t good news for Tesla, but this slowdown in Q1 was industry wide and not a Tesla phenom.

Your post also ignores the fact that Tesla is not just a car company. It ignores energy storage YOY growth of 50% and increasing margins and profitability for energy storage. This side of the business will exceed the car business in coming years. It ignores the AI development, computing capabilities (DOJO), and the massive revenue potential of FSD and/or Optimus. It ignores the fact that Tesla has cornered the supercharging market in NA and has secured a high margin and steadily growing subscription based service revenue stream. You also miss that Apple has given up on making EVs or autonomous car software. GM canceled their Blue Cruise program. Only Waymo remains as a competitor. I predict other car companies will soon be licensing Tesla’s FSD software the same way they were forced to latch on to Tesla’s supercharger network after failing to create their own charging networks.

Perhaps most importantly, your reliance on PE, misses the advantage Tesla has in engineering prowess. It is a highly desirable destination for the best engineering talent in the world. At the end of the day it’s the people that make the company. The pace of innovation at Tesla is staggering and Tesla is not stuck in an outdated ICE culture trying to serve two incompatible purposes at once (maintain profitable for now ICE sales AND grow EV business). Not to mention union labor and pension obligations...

Tesla is also expanding into new markets, most recently Malaysia, that can bring in new demand. A deal is nearing completion with India that will provide Tesla access to sell cars with reduced on no import tariffs in exchange for building a gigafactory in India.

Focusing on one quarter of results and PE ratios is a poor way to evaluate the company’s performance IMO. The lost production time at Fremont, Berlin, and Shanghai did affect deliveries. It takes weeks to ship cars by cargo ship, which means cars not produced mid-quarter didn’t make on ships in time for delivery in Q1. There was a story yesterday about thousands of Tesla vehicles parked at the Shanghai dock waiting to be loaded onto ships. This doesn’t account for the entire drop in deliveries, but can account for a significant portion. The remainder is from poor car sales in a slumping Chinese economy that affected all car sales in China (see BYD QOQ numbers in China) and lower than expected car sales for all makes and models in the US. These conditions are not specific to Tesla or EVs, but Tesla faired as good or better than any other EV maker under these macro conditions.

There's plenty of room to criticize PE, or any non-DCF valuation method. 

What valuation method to you prefer, and where does that put fair value for the stock in your mind?

Wall Street, supposedly the best minds in the investing world, totally missed on Tesla despite their spreadsheets and complex valuation models. It’s a fool's errand, especially for a retail investor. I make it my business to know every bit of publicly available information about the company and track progress or lack thereof on a daily basis. What I don’t do is treat every quarterly result like it’s life or death. In reality quarterly results have little to no bearing on the company’s long-term prospects. I’ve had the same investment thesis since 2013.

Are EVs, renewable energy and energy storage the future? Is Tesla the leader in EVs and energy storage?

I’ll stay long for as long as the answer to both questions is ‘yes'. Notice this does not include supercharger, service, dojo, FSD or Optimus as growing/potential revenue streams. If I had listened to every expert with a valuation spreadsheet I would have missed out on 20X gains and sold long ago. I’d be willing to look at your non-PE based valuation model for Tesla, since you seem to be into valuations.

In the broadest terms, I have a sense for when the SP is outpacing performance/progress and when the SP is behind performance/progress with respect to the company’s mission and guidance. The last run up was overheated for sure. The stock is currently undervalued now IMO.

That's a fascinating investment methodology..  I take it as sort of similar to investing in Cisco around 1999.  They had about $12B in revenue at the time and are now at $57B in revenue.  They've grown massively, have been highly innovative over the years, dominate many of the markets they participate in, and locked down market share.

So, I take it you’re not going to share your Tesla valuation model that you used to make the decision not to invest in Tesla at this price (or any price)?

What I shared above is enough information for me to know I'm not interested in owning shares.  I'd consider doing a deeper dive if shares started trading below $90.  Although I don't trade individual stocks much anymore anyways. 

If I were to do it, I would pro-forma forward earnings for the next year for Tesla and a few competitors.  I wouldn't go for the highest-value stock by any means, but the valuation at least has to have a basis in competitive reality.  I'd also have to believe the growth story.  I personally see a declining sales story for at least a year or two, and a valuation that supports the opposite of that.  Maybe you'll prove me wrong, and I hope you do.

Fair enough. However, it seems a bit odd that you question my purchasing shares without having completed some sort of numerical valuation model, but then you say you don’t need a valuation to know its not worth owning the stock? Seems its fair to say we are both comfortable with our respective decisions.

[AdrianC]

You’d be surprised how many people have no idea about Tesla’s range, supercharger network, and lower pricing. New Tesla Model Y for less than $30k after federal tax credit.

I was surprised at your claim of Tesla's lower pricing...I know you're a True Believer, but why that?

Cheapest Model Y:
Rear-Wheel Drive
Your Model Y $46,630
After Federal Tax Credit $39,130

As of this posting, I just went to Tesla.com. The cheapest RWD Tesla Model Y in my area is offered at $39,470. That’s before $12,500 in state and federal EV tax credits, which puts the price at $26,970 before taxes, but also before factoring gas and maintenance savings.

So, no need to ascribe religious “true believer” blind faith to what can be proven with 30 seconds of internet sleuthing and a dedication to understanding ones investments inside and out.

You wrote: "New Tesla Model Y for less than $30k after federal tax credit. Under $25k for those of us in Colorado."

That isn't correct. Above I posted the price for an ordered car.

As of this posting, I just went to Tesla.com, and the cheapest RWD Tesla Model Y in my area for an inventory car is this:
Vehicle Price $44,990
Price Adjustment -$3,150
Destination fee $1,390
Order Fee $250
Your Model Y $43,480
After Federal Tax Credit $35,980

Not "under $30k", obviously.

Your example in Colorado isn't "under $25k", and you're forgetting the Destination fee and Order Fee.

I'm about 3/4 way through Elon (the biography). It's really good, recommended.

[ChpBstrd]

Tesla scraps low-cost car plans amid fierce Chinese EV competition
https://www.cnbc.com/2024/04/05/tesla-scraps-low-cost-car-plans-amid-fierce-chinese-ev-competition-reuters.html

So there will be no model 2. Tesla will remain a niche luxury car company and will instead try to build robotic taxis.

IMO this is the much riskier path, dependent upon not-yet-existent and not-yet-approve tech, but Tesla can no longer assume they'll be able to build in China and sell in the U.S. so here we are.

While Tesla spent years developing its highly experimental Cybertruck, a pricey electric pickup, Chinese automakers have raced ahead on affordable EVs, grabbing market share, gaining economies of scale and offering consumers bargain prices that Western automakers are struggling to match.

[FINate]

Whoa, if true scrapping the 2 is big news. Reuters is pretty trustworthy and looks like they've done their homework.

The 2 would have been on our short list of options when we're in the market for an EV.

A shift to expensive niche markets helps explain Cybertruck.

[ChpBstrd]

Musk xeeted that Reuters was "lying (again)" but was not 100% specific what he meant they were lying about. Reuters had cited several anonymous sources inside the company.

The model 2 was supposed to be Tesla's robotaxi platform too, so perhaps some words were taken out of context. Perhaps the design of model 2 must now prioritize the taxi role, or perhaps we won't see a model 2 until FSD is completely developed and approved?

TSLA was still down -3.63% after Musk's denial, on a day when the Nasdaq gained +1.24%. If the model 2 is tied to the eternally frustrating quest to attain FSD, which has seemed just a few years away for the last 10 years, then earnings from such a car won't be appearing anytime soon. Maybe as investors looked into why Tesla would make such a decision, they realized how far Tesla is behind BYD on bringing the cost of EVs down. A $25k Tesla model 2 might not make sense in a world of $18k equivalent BYDs. It might not even make sense in a world with the $26,500 Chevy Bolt.

In any case the 2 has probably been de-prioritized. Tesla's decision to de-prioritize the 2 looks a lot like the legacy automakers' whiplash decisions to pivot toward hybrids after investing tens of billions into BEVs just a couple years before. Whereas the legacies see no reason to make another model 3, Tesla sees no reason to compete on the same field as BYD. If FSD is Tesla's best hope to avoid becoming China's highest-cost auto manufacturer, then it probably makes strategic sense to focus on that rather than the 2.

Yet it leaves consumers in the US with fewer good choices.

Again, what a waste spending years and billions of dollars to develop the niche and probably unprofitable cyberturd. Whose bingo card 12 months ago had Toyota stock up +68% and TSLA down -14%, amid a 138% increase in Prius sales? Inflation-squeezed consumers are asking for economical transportation, not what Tesla is selling.

[ColoradoTribe]

Musk xeeted that Reuters was "lying (again)" but was not 100% specific what he meant they were lying about. Reuters had cited several anonymous sources inside the company.

The model 2 was supposed to be Tesla's robotaxi platform too, so perhaps some words were taken out of context. Perhaps the design of model 2 must now prioritize the taxi role, or perhaps we won't see a model 2 until FSD is completely developed and approved?

TSLA was still down -3.63% after Musk's denial, on a day when the Nasdaq gained +1.24%. If the model 2 is tied to the eternally frustrating quest to attain FSD, which has seemed just a few years away for the last 10 years, then earnings from such a car won't be appearing anytime soon. Maybe as investors looked into why Tesla would make such a decision, they realized how far Tesla is behind BYD on bringing the cost of EVs down. A $25k Tesla model 2 might not make sense in a world of $18k equivalent BYDs. It might not even make sense in a world with the $26,500 Chevy Bolt.

In any case the 2 has probably been de-prioritized. Tesla's decision to de-prioritize the 2 looks a lot like the legacy automakers' whiplash decisions to pivot toward hybrids after investing tens of billions into BEVs just a couple years before. Whereas the legacies see no reason to make another model 3, Tesla sees no reason to compete on the same field as BYD. If FSD is Tesla's best hope to avoid becoming China's highest-cost auto manufacturer, then it probably makes strategic sense to focus on that rather than the 2.

Yet it leaves consumers in the US with fewer good choices.

Again, what a waste spending years and billions of dollars to develop the niche and probably unprofitable cyberturd. Whose bingo card 12 months ago had Toyota stock up +68% and TSLA down -14%, amid a 138% increase in Prius sales? Inflation-squeezed consumers are asking for economical transportation, not what Tesla is selling.

So, Tesla didn’t scrap the Model 2 according to Musk and the stock price recovered all its lost ground in after hours when it was announced Tesla will reveal the RT prototype in August.. Best guess, production of Model 2 final configuration will depend on FSD progress. So, either Tesla produces a $25Kish EV for private ownership OR the world's first truly autonomous robotaxi. Sounds like a win-win to me.

Having driven the latest versions of FSD the last three days I can say it is getting close.

[waltworks]

Or neither, though. Musk announces stuff all the time. His track record isn't great, however.

-W

[FINate]

Yeah, color me skeptical. Musk has a history of over promising and under delivering in an attempt to control the narrative.

Sure, it's possible Tesla is close to solving all the technical and regulatory issues around robotaxis and we'll all be blown away 8/8.

More likely is a highly choreographed dog and pony show highlighting the capabilities of the next FSD release and an approximate 2 year time frame to when robotaxis will really be ready for prime time (for realsies this time, we promise!). Oh, and current Tesla owners can FSD right now for the low low price of just $200/month. In other words, more of the same.

[bacchi]

Yeah, color me skeptical. Musk has a history of over promising and under delivering in an attempt to control the narrative.

Sure, it's possible Tesla is close to solving all the technical and regulatory issues around robotaxis and we'll all be blown away 8/8.

More likely is a highly choreographed dog and pony show highlighting the capabilities of the next FSD release and an approximate 2 year time frame to when robotaxis will really be ready for prime time (for realsies this time, we promise!). Oh, and current Tesla owners can FSD right now for the low low price of just $200/month. In other words, more of the same.

Yeah, his announcements also seem to arrive when there's bad news from Tesla numbers. This is fairly consistent and, if there's an announcement released before the quarterly sales or earnings, is a pretty good indicator that there will be a miss.

Ignore the declining profit margin, we're releasing the Cybertruck!

Ignore the sales miss and record excess inventory, the Robotaxi is on its way! (Prediction: Q1 earnings will be a disaster.)

[maizefolk]

Sure, it's possible Tesla is close to solving all the technical and regulatory issues around robotaxis and we'll all be blown away 8/8.

I don't know about the regulatory side, but Tesla just gave out a free one month trial of the latest version of FSD to a bunch of owners and it is impressive.

Drove me from my parents house in one state to my house in another state across surface streets and highways. The only times I was in control of the car* was backing out of their driveway, pulling into and out of the parking lot of a charging station, and turning into my own driveway.

*Rather than watching and keeping a hand on the wheel to avoid having the video monitoring and wheel resistance safety checks decide I wasn't ready to take over.

[FINate]

Sure, it's possible Tesla is close to solving all the technical and regulatory issues around robotaxis and we'll all be blown away 8/8.

I don't know about the regulatory side, but Tesla just gave out a free one month trial of the latest version of FSD to a bunch of owners and it is impressive.

Drove me from my parents house in one state to my house in another state across surface streets and highways. The only times I was in control of the car* was backing out of their driveway, pulling into and out of the parking lot of a charging station, and turning into my own driveway.

*Rather than watching and keeping a hand on the wheel to avoid having the video monitoring and wheel resistance safety checks decide I wasn't ready to take over.

Musk will use the perceived closeness to completion to pump the stock and sell FSD subscriptions. And in that sense it may actually work for Telsa if it gets a bunch of people to fork over more cash.

Everyone in this industry has learned the problem domain gets exponentially more difficult the closer they get to full automation. The last 1% is more like 50% of the investment, and a lot of this is regulatory. I'm not even sure it's a solvable problem because there are an infinite number of potential edge cases, whereas AI is trained on existing datasets.

I could be wrong about this, and if Tesla surprises everyone with Level-5 autonomous driving* in August please ping this thread and I'll eat some humble pie. In fact, I would be very glad to admit being wrong on this because I would love love love a world of truly autonomous vehicles.

*Like, real level 5, with zero ability for human intervention and Tesla assumes all liability for the actions of its driving system.

[maizefolk]

I agree with you in that I'm absolutely sure this month's free trial is an attempt to sell a bunch more FSD subscriptions. My guess is that it will probably work, although not for me. $200/month is a bit too steep for a "wow that's cool!" feature which still (legally and because Tesla's built in safety checks) requires me to pay just as much attention as I would driving myself. ...I might pay it for a level 4 system though.

I would also be shocked if Tesla was able to pull a level 5 system out of their hats in August. But I don't think it's outside the realm of possibility they could at least announce the regulatory approvals they'd need to match Waymo's current self driving taxi deployments (which probably qualify as a level 4 technology). Was in SF a couple of weeks ago and it was wild seeing those cars driving around with people in the passenger seat but no driver.

It'll be harder for Tesla to do the same thing as Waymo without LIDAR from a technology standpoint, but Waymo shows it isn't necessarily impossible from a regulatory standpoint.

[ColoradoTribe]

Sure, it's possible Tesla is close to solving all the technical and regulatory issues around robotaxis and we'll all be blown away 8/8.

I don't know about the regulatory side, but Tesla just gave out a free one month trial of the latest version of FSD to a bunch of owners and it is impressive.

Drove me from my parents house in one state to my house in another state across surface streets and highways. The only times I was in control of the car* was backing out of their driveway, pulling into and out of the parking lot of a charging station, and turning into my own driveway.

*Rather than watching and keeping a hand on the wheel to avoid having the video monitoring and wheel resistance safety checks decide I wasn't ready to take over.

Musk will use the perceived closeness to completion to pump the stock and sell FSD subscriptions. And in that sense it may actually work for Telsa if it gets a bunch of people to fork over more cash.

Everyone in this industry has learned the problem domain gets exponentially more difficult the closer they get to full automation. The last 1% is more like 50% of the investment, and a lot of this is regulatory. I'm not even sure it's a solvable problem because there are an infinite number of potential edge cases, whereas AI is trained on existing datasets.

I could be wrong about this, and if Tesla surprises everyone with Level-5 autonomous driving* in August please ping this thread and I'll eat some humble pie. In fact, I would be very glad to admit being wrong on this because I would love love love a world of truly autonomous vehicles.

*Like, real level 5, with zero ability for human intervention and Tesla assumes all liability for the actions of its driving system.

FINRate, have you been a “driver” or passenger in a Tesla operating under Tesla’s latest version of FSD (12.3.3)? Maizefolk and I have both shared our firsthand experiences with this new version in recent days, which is based on a new approach (vision + neural net) instead of lines of code. This approach has led to rapid progress and iterative improvements and fewer disengagements. I’ve never been one to say Tesla was “close” to solving FSD before. I still wouldn’t hazard a guess on time until an actual robotaxi operating on our streets, but for the first time ever I’m convinced Tesla will get there and its possible in the not too distant future.

[FINate]

Sure, it's possible Tesla is close to solving all the technical and regulatory issues around robotaxis and we'll all be blown away 8/8.

I don't know about the regulatory side, but Tesla just gave out a free one month trial of the latest version of FSD to a bunch of owners and it is impressive.

Drove me from my parents house in one state to my house in another state across surface streets and highways. The only times I was in control of the car* was backing out of their driveway, pulling into and out of the parking lot of a charging station, and turning into my own driveway.

*Rather than watching and keeping a hand on the wheel to avoid having the video monitoring and wheel resistance safety checks decide I wasn't ready to take over.

Musk will use the perceived closeness to completion to pump the stock and sell FSD subscriptions. And in that sense it may actually work for Telsa if it gets a bunch of people to fork over more cash.

Everyone in this industry has learned the problem domain gets exponentially more difficult the closer they get to full automation. The last 1% is more like 50% of the investment, and a lot of this is regulatory. I'm not even sure it's a solvable problem because there are an infinite number of potential edge cases, whereas AI is trained on existing datasets.

I could be wrong about this, and if Tesla surprises everyone with Level-5 autonomous driving* in August please ping this thread and I'll eat some humble pie. In fact, I would be very glad to admit being wrong on this because I would love love love a world of truly autonomous vehicles.

*Like, real level 5, with zero ability for human intervention and Tesla assumes all liability for the actions of its driving system.

FINRate, have you been a “driver” or passenger in a Tesla operating under Tesla’s latest version of FSD (12.3.3)? Maizefolk and I have both shared our firsthand experiences with this new version in recent days, which is based on a new approach (vision + neural net) instead of lines of code. This approach has led to rapid progress and iterative improvements and fewer disengagements. I’ve never been one to say Tesla was “close” to solving FSD before. I still wouldn’t hazard a guess on time until an actual robotaxi operating on our streets, but for the first time ever I’m convinced Tesla will get there and its possible in the not too distant future.

I have! A friend has it and I rode with him the other day. It is indeed much improved. But it doesn't change my assessment. It's still level-2 automation. I'll say it again, getting that last 1% or even 0.5% fo full level-5 in all situations is the hard part.

I'll stick my neck out and elaborate on my prediction for what will happen on 8/8. Elon will stand on a stage before adoring fans and a vehicle based on what the Model 2 platform would have been will drive onto stage. When the "driver" door opens it will reveal no driver and no steering wheel. It will use some variation of steer-by-wire from CT. Videos will show RoboTaxi/CyberTaxi/xTaxi (or whatever it's called) navigating various situations w/o a human driver. And Musk will say the first models will be available mid 2025 with ramp up 2026. But it will all be highly curated and regulatory issues will ultimately be blamed for continuing delays.

[mistymoney]

I agree with you in that I'm absolutely sure this month's free trial is an attempt to sell a bunch more FSD subscriptions. My guess is that it will probably work, although not for me. $200/month is a bit too steep for a "wow that's cool!" feature which still (legally and because Tesla's built in safety checks) requires me to pay just as much attention as I would driving myself. ...I might pay it for a level 4 system though.

I would also be shocked if Tesla was able to pull a level 5 system out of their hats in August. But I don't think it's outside the realm of possibility they could at least announce the regulatory approvals they'd need to match Waymo's current self driving taxi deployments (which probably qualify as a level 4 technology). Was in SF a couple of weeks ago and it was wild seeing those cars driving around with people in the passenger seat but no driver.

It'll be harder for Tesla to do the same thing as Waymo without LIDAR from a technology standpoint, but Waymo shows it isn't necessarily impossible from a regulatory standpoint.

or maybe needed just a wee bit more data?

[maizefolk]

mistymoney, that's certainly possible. But I would be shocked if what was it. The Tesla folks have to be drowning in data of equivalent or better quality from all the people who already bought or subscribe to FSD.


(Source is Tesla's twitter feed so take with a grain of salt.)

[GuitarStv]

Tesla just settled out of court in the case where autopilot killed Walter Huang.  I wonder if this will send a message to all the other lawsuits against Tesla autopilot caused accidents that the company is willing to settle.

"We will never surrender/settle an unjust case against us, even if we will probably lose." - Elon Musk, 2022

[bacchi]

Tesla just settled out of court in the case where autopilot killed Walter Huang.  I wonder if this will send a message to all the other lawsuits against Tesla autopilot caused accidents that the company is willing to settle.

"We will never surrender/settle an unjust case against us, even if we will probably lose." - Elon Musk, 2022

Well, it could've been a just case.

[GuitarStv]

Tesla just settled out of court in the case where autopilot killed Walter Huang.  I wonder if this will send a message to all the other lawsuits against Tesla autopilot caused accidents that the company is willing to settle.

"We will never surrender/settle an unjust case against us, even if we will probably lose." - Elon Musk, 2022

Well, it could've been a just case.

Totally possible.  :P

My suspicion is that it has more to do with Tesla's 'Full Self Driving' sales push.  FSD doesn't sell as well if there's a lawsuit about it killing someone.

[reeshau]

The full quote, from a 2021 tweet, is: “Tesla policy is never to give in to false claims, even if we would lose, and never to fight true claims, even if we would win.” 

So a settlement firmly...muddles that position?

[dividendman]

The full quote, from a 2021 tweet, is: “Tesla policy is never to give in to false claims, even if we would lose, and never to fight true claims, even if we would win.”

So a settlement firmly...muddles that position?

It's about... a billion times easier to say something than to do it.

[GuitarStv]

The full quote, from a 2021 tweet, is: “Tesla policy is never to give in to false claims, even if we would lose, and never to fight true claims, even if we would win.”

So a settlement firmly...muddles that position?

He might have made a similar but different claim in the past?  The 2022 one I was referencing:

My commitment:

- We will never seek victory in a just case against us, even if we will probably win.

- We will never surrender/settle an unjust case against us, even if we will probably lose.

- https://twitter.com/elonmusk/status/1527749734668050433

[ColoradoTribe]

The full quote, from a 2021 tweet, is: “Tesla policy is never to give in to false claims, even if we would lose, and never to fight true claims, even if we would win.”

So a settlement firmly...muddles that position?

He might have made a similar but different claim in the past?  The 2022 one I was referencing:

My commitment:

- We will never seek victory in a just case against us, even if we will probably win.

- We will never surrender/settle an unjust case against us, even if we will probably lose.

- https://twitter.com/elonmusk/status/1527749734668050433

Huang’s hands were not on the wheel in the 6 seconds prior to the crash. Huang made no attempt to brake or steer the vehicle immediately before the crash. Tesla policy since the beginning of FSD has required the Driver to keep hands on the wheel at ALL times. Hard to blame Tesla when Huang clearly was violating FSD terms of use and was clearly distracted at the time of the accident.

Also contributing to his death, the concrete divider’s protective barrier had been crushed by a previous accident (presumably not a Tesla) and had not been replaced. Huang likely walks away or at least survives it the protection is in place.

We don’t know the terms of the settlement, but if Tesla admits no fault then I don’t see how that violates the above quote. Without admitting fault it becomes a financial decision and a decision on how best to spend precious time and energy for both sides.

Cars are deadly in the hands of anyone who misuses them or drives distracted. I can set my cruise control and try to text someone. If I crash into the car in front of me that’s not the car’s fault. It’s my responsibility to keep my eyes on the road and disengage cruise if needed.

FSD has driven over a billion miles and the crash rate for Tesla vehicles operating under FSD is way below the national average for accidents per miles driven. FSD is saving lives.

[reeshau]

We don’t know the terms of the settlement, but if Tesla admits no fault then I don’t see how that violates the above quote. Without admitting fault it becomes a financial decision and a decision on how best to spend precious time and energy for both sides.

The part of the story that muddles the clear intent of Elon's statement is:

"Tesla has reached a settlement with the family of a driver who died in a 2018 crash involving the company’s driver-assistance technology Autopilot, days before attorneys were poised to deliver opening statements." ( bolding mine)

Why push the case until close to trial date to settle? That smacks of someone judging their ability to win, not determining the merits of the case.

[GuitarStv]

The full quote, from a 2021 tweet, is: “Tesla policy is never to give in to false claims, even if we would lose, and never to fight true claims, even if we would win.”

So a settlement firmly...muddles that position?

He might have made a similar but different claim in the past?  The 2022 one I was referencing:

My commitment:

- We will never seek victory in a just case against us, even if we will probably win.

- We will never surrender/settle an unjust case against us, even if we will probably lose.

- https://twitter.com/elonmusk/status/1527749734668050433

Huang’s hands were not on the wheel in the 6 seconds prior to the crash. Huang made no attempt to brake or steer the vehicle immediately before the crash. Tesla policy since the beginning of FSD has required the Driver to keep hands on the wheel at ALL times. Hard to blame Tesla when Huang clearly was violating FSD terms of use and was clearly distracted at the time of the accident.

Also contributing to his death, the concrete divider’s protective barrier had been crushed by a previous accident (presumably not a Tesla) and had not been replaced. Huang likely walks away or at least survives it the protection is in place.

We don’t know the terms of the settlement, but if Tesla admits no fault then I don’t see how that violates the above quote. Without admitting fault it becomes a financial decision and a decision on how best to spend precious time and energy for both sides.

Cars are deadly in the hands of anyone who misuses them or drives distracted. I can set my cruise control and try to text someone. If I crash into the car in front of me that’s not the car’s fault. It’s my responsibility to keep my eyes on the road and disengage cruise if needed.

FSD has driven over a billion miles and the crash rate for Tesla vehicles operating under FSD is way below the national average for accidents per miles driven. FSD is saving lives.

Cruise control is control of the speed that the vehicle cruises along at.  There is no confusion there.

Tesla calls their feature "Full Self Driving".  That's purposely misleading.  If it doesn't do full self driving, then that name should certainly be changed to something that describes what it does.  In this case, a more apt name would be "Unpredictable machine driving that requires constant user monitoring to avoid crash".

[maizefolk]

A quick note on terminology:

Huang's Tesla crashed in 2018 while autopilot was engaged. Autopilot is just autosteer to remain in your lane + adaptive cruise control, something a large number of car companies provide to drivers these days.

The very first beta version of full self driving, which did things like recognize stop signs and stop lights and make turns, wasn't released to anyone until 2020, well after the incident we're discussing.

[Paper Chaser]

The full quote, from a 2021 tweet, is: “Tesla policy is never to give in to false claims, even if we would lose, and never to fight true claims, even if we would win.”

So a settlement firmly...muddles that position?

He might have made a similar but different claim in the past?  The 2022 one I was referencing:

My commitment:

- We will never seek victory in a just case against us, even if we will probably win.

- We will never surrender/settle an unjust case against us, even if we will probably lose.

- https://twitter.com/elonmusk/status/1527749734668050433

Huang’s hands were not on the wheel in the 6 seconds prior to the crash. Huang made no attempt to brake or steer the vehicle immediately before the crash. Tesla policy since the beginning of FSD has required the Driver to keep hands on the wheel at ALL times. Hard to blame Tesla when Huang clearly was violating FSD terms of use and was clearly distracted at the time of the accident.

Seems like other manufacturers with similar driving aids have figured out ways to avoid misuse like this.

[ChpBstrd]

The full quote, from a 2021 tweet, is: “Tesla policy is never to give in to false claims, even if we would lose, and never to fight true claims, even if we would win.”

So a settlement firmly...muddles that position?

He might have made a similar but different claim in the past?  The 2022 one I was referencing:

My commitment:

- We will never seek victory in a just case against us, even if we will probably win.

- We will never surrender/settle an unjust case against us, even if we will probably lose.

- https://twitter.com/elonmusk/status/1527749734668050433

Huang’s hands were not on the wheel in the 6 seconds prior to the crash. Huang made no attempt to brake or steer the vehicle immediately before the crash. Tesla policy since the beginning of FSD has required the Driver to keep hands on the wheel at ALL times. Hard to blame Tesla when Huang clearly was violating FSD terms of use and was clearly distracted at the time of the accident.

Seems like other manufacturers with similar driving aids have figured out ways to avoid misuse like this.

... by less aggressively over-promising technologies that aren't yet mature

[GuitarStv]

The full quote, from a 2021 tweet, is: “Tesla policy is never to give in to false claims, even if we would lose, and never to fight true claims, even if we would win.”

So a settlement firmly...muddles that position?

He might have made a similar but different claim in the past?  The 2022 one I was referencing:

My commitment:

- We will never seek victory in a just case against us, even if we will probably win.

- We will never surrender/settle an unjust case against us, even if we will probably lose.

- https://twitter.com/elonmusk/status/1527749734668050433

Huang’s hands were not on the wheel in the 6 seconds prior to the crash. Huang made no attempt to brake or steer the vehicle immediately before the crash. Tesla policy since the beginning of FSD has required the Driver to keep hands on the wheel at ALL times. Hard to blame Tesla when Huang clearly was violating FSD terms of use and was clearly distracted at the time of the accident.

Seems like other manufacturers with similar driving aids have figured out ways to avoid misuse like this.

... by less aggressively over-promising technologies that aren't yet mature

Specific over-promises that Tesla is being sued over using:
- "Full Self-Driving Capability"
- "The system is designed to be able to conduct short and long-distance
trips with no action required by the person in the driver's seat."
-  "From Home - All you will need to do is get in and tell your car where
to go. If you don't say anlthing, your car will look at your calendar and take you
there as the assumed destination. Your Tesla will figure out the optimal route,
navigating urban streets, complex intersections and freeways.
To your Destination - When you arrive at your destination, simply step out at the entrance and your car
will enter park seek mode, automatically search for a spot and park itself. A tap on
your phone summons it back to you."

And also mentioned that:

Tesla has published disclaimers including one observed June 28,2022, stating in part: "The currently
enabled features require active driver supervision and do not make the vehicle autonomous."
However, the disclaimer contradicts the original untrue or misleading labels and claims, which
is misleading, and does not cure the violation.

  - https://s3.documentcloud.org/documents/22128017/california-dmv-complaint-against-tesla-2.pdf



There's also the other lawsuit by shareholders against Tesla for making false claims about the capabilities and safety of and Full Self-Driving:

Specifically, Defendants made false and/or misleading statements and/or failed to disclose that:
(i) Defendants had significantly overstated the efficacy, viability, and safety of the Company's Autopilot and FSD technologies;
(ii) contrary to Defendants' representations, Tesla's Autopilot and FSD technologies created a serious risk of accident and injury associated with the operation of Tesla vehicles;

  - https://storage.courtlistener.com/recap/gov.uscourts.cand.408922/gov.uscourts.cand.408922.1.0.pdf

[FINate]

Tesla just laid off 10% of its global workforce.

Everyone was expecting rough Q1 financials, and such cuts are often done as a sacrifice to appease stockholders. Yet interesting that the stock has declined on the news. Maybe it will recover once the market digests the news and looks to higher profits. On the other hand, maybe this move contradicts the growth narrative.

[GuitarStv]

See also: https://x.com/garageklub/status/1779571445930324456 (video of flimsy pedal covers)

Holy crap, that's dangerous!

[NorCal]

Tesla just laid off 10% of its global workforce.

Everyone was expecting rough Q1 financials, and such cuts are often done as a sacrifice to appease stockholders. Yet interesting that the stock has declined on the news. Maybe it will recover once the market digests the news and looks to higher profits. On the other hand, maybe this move contradicts the growth narrative.

While I try not to read too much into day-to-day stock moves, I'd really expect this to give the stock a reasonable bump on the news.  This should theoretically be giving investors confidence in bottom-line growth, even if top-line growth stalled out.  I'm struggling to find a compelling story for being valued like a growth company at this point.   

And this isn't just a comparative statement to other automakers.  Pretty much all non-Tesla, non-Chinese companies are incinerating cash in their EV business.  They've mostly invested billions to the point of making "bet the company" type decisions on the EV transition.  And the market isn't scaling fast enough to recoup the cost of those investments.  Looking at automaker companies right now is looking at who is going to survive and who isn't.  I don't think there's a compelling case for earnings growth in the bunch. 

To say this is disappointing is an understatement.  Climate change is an existential threat to our national security and to the world's habitability.  De-carbonizing the world (or not) is probably the most important thing our generation will be remembered for.  I want to see the EV transition take hold.  We need to figure out how to make it work.  But right now, the math is saying that we're mostly going to be vaporizing billions of dollars in capital, only to see a few automakers survive the carnage. 

[AdrianC]

Cruise control is control of the speed that the vehicle cruises along at.  There is no confusion there.

Tesla calls their feature "Full Self Driving".  That's purposely misleading.  If it doesn't do full self driving, then that name should certainly be changed to something that describes what it does.  In this case, a more apt name would be "Unpredictable machine driving that requires constant user monitoring to avoid crash".

In some places they are now calling it "Full Self-Driving (Supervised)".
https://www.tesla.com/support/articles/30-day-fsd-trial

On the car page ordering it's still "Full Self-Driving Capability"

"Receive one month trial of Full-Self Driving Capability with a new vehicle purchase.
Your car will be able to drive itself almost anywhere with minimal driver intervention and will continuously improve."

Misleading, but surely by now anyone with a Tesla or contemplating purchase knows that it can't actually be trusted drive itself.

Oh, and the price has gone up. Now the cheapest RWD Y for me is:
Your Model Y $45,510
After Federal Tax Credit* $38,010

Not "less than $30k" yet. Maybe in a few months.

[GuitarStv]

Can someone explain to me the benefit of having a vehicle drive itself around if you have to:
- Constantly watch and second guess every decision that the vehicle makes
- Constantly have your foot ready to hit the brake
- Constantly have your hands ready to take control of the wheel

It seems like you would have all the boredom, attention stealing, and discomfort of regular driving.  What's the selling point?  All I can come up with is that a large percentage of people are using Tesla's Full Self Driving software as though it was ready for Full Self Driving and not doing those things.

[Retire-Canada]

Can someone explain to me the benefit of having a vehicle drive itself around if you have to:

I have not figured that out. Smart cruise control makes sense and then after that more capability it seems pointless until you get to a car that can fully autonomously drive itself safely. Now of course to get to full autonomous mode you need a shit ton of alpha and beta testing. If you can get consumers to pay to be beta testers that is a good thing for the car company. Not so sure what's in it for the consumer.

[maizefolk]

I think a lot of the benefit comes from realizing I (and I'm guessing most humans) are not a perfectly attentive driver all the time. On long highway drives my attention can wander and having a second set of silicon eyes makes me feel safer. In addition when navigating to strange locations, I can focus just on whether the car is driving safely without trying to multitask worrying "Did I just miss my turn? Or when the maps app said turn right in 500 feet does that mean the next one?" The car also seems to do a better job of noticing and stopping for people waiting to cross in unprotected crosswalks than I do myself.

Two weeks into the trial and, after getting comfortable the first day, the only time I've intervened was when the car made a left turn and was following a car that turned into the same lane from the opposite direction more closely than I was comfortable with.

[NorCal]

I'm also on the FSD free trial, although my wife mostly drives the car.

It's novel, and it performs much better than my low expectations.  I was pretty impressed at how it performed, and I say that as someone who can't stand Tesla's hyperbole.

But would I pay for it?  No.  I could maybe see it if I had a very long stop-and-go commute.  It's really a novelty beyond that. 

[vand]

threads like this just won't die will they?

Despite that the OP is a silly question - of course it depends on the price if its a good investment or not.  At the current price I think its still very risky given that the growth story has hit the rocks. 

Remember people were trying to justify the valuations near peak when its market cap was greater than the rest of the car manufacturing industry put together... and Cathie Wood is still a fan.. which means you probably shouldn't go near it with a barge pole.

[FINate]

Lost in the layoff story is the departure of two more executives. The loss of Baglino is particularly concerning. Unclear if he left of his own or was asked to leave.

https://www.cnbc.com/2024/04/15/tesla-execs-drew-baglino-and-rohan-patel-depart-amid-steep-layoffs.html

[GuitarStv]

I think a lot of the benefit comes from realizing I (and I'm guessing most humans) are not a perfectly attentive driver all the time. On long highway drives my attention can wander and having a second set of silicon eyes makes me feel safer.

So you find it useful when you do what Tesla has said cannot and should not be done by their drivers?  :P

In addition when navigating to strange locations, I can focus just on whether the car is driving safely without trying to multitask worrying "Did I just miss my turn? Or when the maps app said turn right in 500 feet does that mean the next one?"

This seems like a pretty great benefit actually.  Navigation to new places can be really tricky.  I could see it being a huge boon to a taxi driver or someone who ubers a lot.

[Tigerpine]

Might be more useful is some places than others.

[reeshau]

Funny picture!  Neither of them hold a candle to Mumbai, though.

When will Tesla start an FSD pilot program here?

[vand]

Lost in the layoff story is the departure of two more executives. The loss of Baglino is particularly concerning. Unclear if he left of his own or was asked to leave.

https://www.cnbc.com/2024/04/15/tesla-execs-drew-baglino-and-rohan-patel-depart-amid-steep-layoffs.html

Has clearly become just as toxic a place to work as anywhere. It's well known that TSLA underpay their engineers compared to big Tech, while expecting more of them. 

[achvfi]

Lost in the layoff story is the departure of two more executives. The loss of Baglino is particularly concerning. Unclear if he left of his own or was asked to leave.

https://www.cnbc.com/2024/04/15/tesla-execs-drew-baglino-and-rohan-patel-depart-amid-steep-layoffs.html

Has clearly become just as toxic a place to work as anywhere. It's well known that TSLA underpay their engineers compared to big Tech, while expecting more of them. 

I think it has been a toxic place for a while now. Layoffs will make morale worse.

I was interviewed for a role at Tesla a while back. Person interviewing me was doing similar as what I do but at Tesla and wanted to hire someone to help him. The guy was asking me how my work is done in a large organization like where I was at. I explained to him and mentioned we have a team employees working together to accomplish our work. He was clearly frustrated to hear that. It seemed to me he alone was to do entire teams worth of work, seemed overworked and exploited at Tesla..

I don't do very well with toxic bosses or environments. I knew right away that role was not for me

[GuitarStv]

Sounds like the Elon touch of excellence that you're describing there.

[AdrianC]

I think it has been a toxic place for a while now. Layoffs will make morale worse.

I was interviewed for a role at Tesla a while back. Person interviewing me was doing similar as what I do but at Tesla and wanted to hire someone to help him. The guy was asking me how my work is done in a large organization like where I was at. I explained to him and mentioned we have a team employees working together to accomplish our work. He was clearly frustrated to hear that. It seemed to me he alone was to do entire teams worth of work, seemed overworked and exploited at Tesla..

I don't do very well with toxic bosses or environments. I knew right away that role was not for me

I recommend the Elon biography by Isaacson. It's a good read. Musk is incredibly demanding, impulsive, unpredictable and unfair. A flawed genius, no doubt.

Working at Tesla doesn't sound all that far off from my own experience when I first came to the USA. It was great for a young, single, hungry engineer, willing to put work first and go where they sent me at a moment's notice. Tesla could be like that, only with far better tech. It would be great experience. Yes, you might get fired so save like a fiend, which won't be too difficult because you'll have no time to spend money anyway.

I wouldn't do it now. I would advise my kid to try it, or Space X preferably.

[ChpBstrd]

I think it has been a toxic place for a while now. Layoffs will make morale worse.

I was interviewed for a role at Tesla a while back. Person interviewing me was doing similar as what I do but at Tesla and wanted to hire someone to help him. The guy was asking me how my work is done in a large organization like where I was at. I explained to him and mentioned we have a team employees working together to accomplish our work. He was clearly frustrated to hear that. It seemed to me he alone was to do entire teams worth of work, seemed overworked and exploited at Tesla..

I don't do very well with toxic bosses or environments. I knew right away that role was not for me

I recommend the Elon biography by Isaacson. It's a good read. Musk is incredibly demanding, impulsive, unpredictable and unfair. A flawed genius, no doubt.

Working at Tesla doesn't sound all that far off from my own experience when I first came to the USA. It was great for a young, single, hungry engineer, willing to put work first and go where they sent me at a moment's notice. Tesla could be like that, only with far better tech. It would be great experience. Yes, you might get fired so save like a fiend, which won't be too difficult because you'll have no time to spend money anyway.

I wouldn't do it now. I would advise my kid to try it, or Space X preferably.

Seems like the people willing to sacrifice years of their early lives on the alter of work might be better off as entrepreneurs.

The people getting shitcanned at Tesla are left with nothing. The people keeping their jobs - also get no significant equity in a business. Entrepreneurs at least have a chance of owning a growing business, and the ones who fail are often no worse off than the laid-off employee workaholics.