Thread

Tesla takes on $30B in credit as it approaches unprofitability

161 points · 221 comments · ciconia

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. yodsanklai · 1790748443 · focus · HN ↗
  Do they still care about cars though or they're chasing some new things after losing to the Chinese.
  1. fooker · 1790751746 · focus · HN ↗
    >after losing to the Chinese
    The total market cap of all the Chinese car companies combined is about 300B.
    Tesla alone is worth ~5x that, because the market rewards this behavior of chasing new things.
    If Tesla suddenly pivoted to 'caring about cars' and tried their best to produce low cost reliable EVs, the market is going to punish them by valuing them at less than 300B. That is, if they succeed at that. If they fail, which would be more plausible, they go bankrupt.
    Why would they voluntarily do that?
    We could do that by changing public opinion or regulating what public companies must do/report, but that seems somewhat unlikely. It's so much easier to claim that autonomous driving will be solved in six months :)
    alphabeta3r56 · 1790757504 · focus · HN ↗
    BYD had revenue of 110B while tesla had 96B and both have around 4B dollar of profits. BYD also has better credit line (from Chinese govt), which is the whole point of market cap. I dont think official market cap value reflrct this reality.
    schiffern · 1790758376 · focus · HN ↗
    Did BYD stop losing money on EVs yet?
    Last I checked they (still) never release their EV profit alone, always bundling the numbers with plug-in hybrids and high-margin battery sales to other companies. If BYD made money on EVs there'd be no need for shenanigans.
    surgical_fire · 1790759867 · focus · HN ↗
    Wasn't Tesla unprofitable until as late as 2020? And I mean, fully unprofitable, with no shenanigans to save it.
    Why for US companies is it okay to be unprofitable while they grow, but for Chinese companies it is shenanigans?
    Also, if they actually sell things such as high-margin batteries, is it even shenanigans? Using a profitable division to finance the growth of another division sounds like excellent business strategy to me. Better than promising bullshit FSD to artificially inflate the stock price.
    schiffern · 1790824279 · focus · HN ↗
    >Why for US companies is it okay to be unprofitable while they grow, but for Chinese companies it is shenanigans
    If the narrative is "China won EVs" then "they didn't do the R&D to make EVs a net economic win, and it's been a predatory loss-leader the whole time" is a pretty big caveat.
    Predatory pricing is nothing new. Walmart did the same thing, but (of course) they raised prices as soon as the local competition was dead. China is merely doing the same, so their "winning" in the economic market is a temporary illusion.
    "Turns out communists make great capitalists" is still true.
    surgical_fire · 1790847077 · focus · HN ↗
    That's a fair point, but US companies do that all the time, especially startups.
    What annoys me is that when this discussion is about US companies it is taken as just "that's how business is done" and accepted as a perfectly voable strategy but when it is companies elsewhere it is suddenly evil, icky, and predatory.
    schiffern · 1790898813 · focus · HN ↗
    My point isn't to say it's evil and icky.
    My point is China hasn't "won" this technology race, despite what the seemingly competitive product offerings and pricing would otherwise imply.

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