Thread

1. rgmerk · 1790747861 · focus · HN ↗

   Look, I get that Elon wants to chase AI, but why not do relatively simple, low-cost things like build a proper 7-seat SUV that uses the Cybertruck platform - or even a properly stretched Model Y platform (rather than the six-seater L)? Or how about a delivery van on a stretched Y platform?

   Tesla's product line is narrow and aging rapidly.

   1. fooker · 1790748992 · focus · HN ↗

      This will get TSLA valued as a car company.

      They want to be valued as a ~~scifi~~ tech company.

      Which is fair, given that the market (and by extension we) chose to brutally punish boring car companies that make reliable high volume cars.

      1. Gud · 1790751876 · focus · HN ↗

         And by punish you mean fairly value?

         1. DickieStarshine · 1790752350 · focus · HN ↗

            So, in comparison, punish.
         2. fooker · 1790753161 · focus · HN ↗

            I think you missed my point.

            I'm arguing that the fair value of boring companies making reliable things should be much higher. We don't do that, you have to promise hot air based growth to prevent your valuation from crashing.

            The behavior we incentivize is the one we'll get.

            1. jjav · 1790759950 · focus · HN ↗

               > I'm arguing that the fair value of boring companies making reliable things should be much higher.

               In theory (occasionally in practice) when you purchase a stock you are purchasing a piece of the future cash flow of that company. For a company which operates in a known environment and we can roughly predict how their revenue will grow (i.e. boring companies), the correct fair value of the stock can be easily computed.

               So, no, those predictable companies should not be valued much higher, they are already valued correctly because the are no big surprises in their future, the profits and revenue are predictable.

               This logic breaks down with companies where the growth can't be predicted to any reasonable accuracy. So in those you're just buying the hype, which sometimes turns out to be real, sometimes not.

               Unfortunately this also incentivizes some companies to pump themselves purely on hype so they never get valued on actual revenue and profit. Tesla is a prime example of this. If you value them as a car company we can easily compute a fair value, but that number is very low. So, instead, robots! AI! self-driving! Space! That keeps the fair value an unknown, so it can ride the wave of hype for a long time.

               1. jasomill · 1790770588 · focus · HN ↗

                  Did I miss something? Tesla is developing spacecraft?

                  1. bryanlarsen · 1790783281 · focus · HN ↗

                     Rumors of a merger with SpaceX is one of the things pushing up TSLA.

                     1. ASalazarMX · 1790797508 · focus · HN ↗

                        SPCX is the teat from where all other Elon's side projects feed (or will feed), it seems. I hope he doesn't ruin it.

                        1. bryanlarsen · 1790805106 · focus · HN ↗

                           Starship and Starlink are prerequisites for the silly Starmind, so I don't think they'll quite as badly destroy their core competency as they are doing at Tesla.
         3. cyanydeez · 1790768628 · focus · HN ↗

            yes, you've discovered the plight of the bigot: equality feels like punishment.

            1. fooker · 1790787399 · focus · HN ↗

               Of course equality is a punishment when you have more to lose than others.

               If the world's wealth was equally distributed, it would be pretty punishing for everyone who is commenting on this platform.

               1. cyanydeez · 1790792879 · focus · HN ↗

                  which is the philsophical/moral point of view which asks: If you had to randomly be born in anywhere in the world, how would you prefer the world work?

                  Very few people would choose the one where there's a slight chance they're in the wealth classes currently.

                  Not moving towards equality is just a selfish choicel.

                  1. fooker · 1790794987 · focus · HN ↗

                     > Not moving towards equality is just a selfish choicel.

                     It is. People are selfish.

                     Companies even more so.

         4. cainxinth · 1790773877 · focus · HN ↗

            There was an HN post recently about “startup anti-patterns” [0]. And the broad takeaway was that most failures stem from preventing facts on the ground from reaching you, i.e., the company plows ahead with a strategy that misses or actively ignores countervailing data.

            [0] <a href="https:&#x2F;&#x2F;www.itamarnovick.com&#x2F;intro-to-startup-anti-pattern-series&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.itamarnovick.com&#x2F;intro-to-startup-anti-pattern-s...

         5. Zigurd · 1790776975 · focus · HN ↗

            Yes, that would be the punishment. It&#x27;s also why Elon is irreplaceable. You might think the long-term health of Tesla would be well served by leadership that would build on the remarkable initial success of creating a viable mass market electric car company. As many on the thread pointed out, there are many plausible ways to formulate a product that would do exactly that.

            But that would be a massacre of shareholder value. One more quarter of a ridonculous valuation is worth more than having a product that will keep Tesla viable as a car company. The idea that Grok could become a first tier AI product is more valuable than a mass market SUV, because that untested idea keeps the share price up.

            Until it doesn&#x27;t. If you can predict the day that happens, I want to subscribe to your newsletter.

            1. danny_codes · 1790781189 · focus · HN ↗

               Grok isn’t part of Tesla.

               1. sshine · 1790794518 · focus · HN ↗

                  Right, it&#x27;s part of SpaceX.

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