this post was submitted on 05 Apr 2024
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The decision represents an abandonment of a longstanding goal that Tesla chief Elon Musk has often characterized as its primary mission: affordable electric cars for the masses. His first “master plan”, opens new tab for the company in 2006 called for manufacturing luxury models first, then using the profits to finance a “low cost family car.”

Tesla shares were down about 3% in early afternoon trading after the Reuters report.

Musk has since repeatedly promised such a vehicle to investors and consumers. As recently as January, Musk told investors that Tesla planned to start production of the affordable model at its Texas factory in the second half of 2025, following an exclusive Reuters report detailing those plans.

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[–] stanleytweedle@lemmy.world 60 points 7 months ago (4 children)

I don't understand how the stock price doesn't crash. I thought the whole basis for the ridiculous value was the idea that eventually nearly everyone would be driving a Tesla but here they are just backing out of a massive market to focus on shitty 'luxury' EVs. I just don't get how the price hasn't caught up to reality yet.

[–] gaael@lemmy.world 30 points 7 months ago (1 children)

Share prices catching up to reality, good one 🤣🤣🤣

[–] stanleytweedle@lemmy.world 10 points 7 months ago

Yeah those two words rarely belong in the same paragraph.

[–] jmiller@lemm.ee 8 points 7 months ago (1 children)

Last year their revenue from selling cars, powerwalls, and solar tiles was around $90 million. Makes the stock price seem crazy, yes. But then they sold $1.8 billion of carbon credits to other auto manufacturers, and that costs them basically nothing. Still doesn't justify the stock price, but makes it less ridiculous. Selling carbon credits is Tesla's main business at this point, the things they make just provide the justification for it.

[–] bitchkat@lemmy.world 1 points 7 months ago

That math doesn't seem right. If you use $50k as an average price their cars sell for then $90,000,000 / $50,000 is 1800 cars. Tesla sold 1.8 million cars in 2023.

[–] golli@lemm.ee 5 points 7 months ago* (last edited 7 months ago) (2 children)

Personally I don't understand it either, but I think the thesis is/was that Tesla isn't just a car company.

So beyond just the car business you'd also have the vertical manufacturing including batteries, eventually autonomous self driving, the charging network, and even at people's homes stuff like the solar roofs.

How that ever made them more expensive than basically the rest of the car industry combined I don't know.

I could see the high evaluation if they have a lead in self driving, but they don't have any edge compared to their competitors including Google/wamyo, Mercedes and so on

[–] Alto@kbin.social 16 points 7 months ago

It's pretty simple. The market is not rational, and anyone trying to convince you otherwise is an idiot

[–] ashok36@lemmy.world 3 points 7 months ago (1 children)

In fairness, tesla is not just a car company. Batteries and solar are a significant and growing part of their business.

Their plan was always to popularize evs and then sell batteries to Ford, Chevy, and all the others.

[–] hark@lemmy.world 6 points 7 months ago (1 children)

But Tesla doesn't make their own battery cells. They put cells (made by suppliers) together as a pack, but that is something that their competitors can easily do themselves (and they do already). Their solar business doesn't seem to be significant at this point, and I can't imagine it would be considering the steep cost required to get an installation done.

[–] ashok36@lemmy.world 2 points 7 months ago (1 children)

I think you're incorrect. They, in partnership with Panasonic, make a ton of cells at their Nevada gigafactory. They have five more gigafactories where they make other components like motors, batteries, photovoltaic cells, etc...

I also think "easily" is pulling a lot of weight in your sentence there. Scaling up battery pack production to hit manufacturing goals in the next 10 or so years is going to be difficult for anyone attempting it.

All that said, fuck Musk I wish he'd take a ride to Mars already.

[–] hark@lemmy.world 1 points 7 months ago

Tesla has had a head start, but BYD is hot on their heels and is looking to surpass them soon: https://www.visualcapitalist.com/visualizing-global-electric-vehicle-sales-in-2023-by-market-share/

I think one problem for other companies is that they already have ICE vehicles that they're content with making up the vast majority of their sales. Those other companies are still only pricing EVs for the higher-end market, which don't necessitate higher unit production to make significant profits. Tesla only makes EVs and thus dedicate 100% of their manufacturing capacity to EVs. BYD is also a pure EV manufacturer and seems more capable of expanding than even Tesla. Tesla doesn't have the moat that its stock price pretends it does.

[–] AA5B@lemmy.world 2 points 7 months ago

Same here. I’ve been a huge fan of Tesla disrupting the car industry and have been one of those seeing the potential for ridiculous growth, but wtf? Where’s the growth potential for cars now?

Sure, Tesla does other things but I find it hard to believe they have the growth rate and profit margin of cars. There’s no way the company has ridiculous growth off the other stuff: it may still be big and more stable of a market but it’s much slower growth.

I glossed over the previous stock dips with reckless optimism, but I don’t see why it didn’t immediately tank this time