WSJ How Tesla Leaves its Rivals Playing Catch Up

This isn’t about profit and loss but industry leadership.

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Oh really Mr. Reporter? Did you look at Tesla's stock over the last days?

There have been countless of examples in history where the company of the better product went bankrupt, because it was not profitable.

Spidy said:

Oh really Mr. Reporter? Did you look at Tesla's stock over the last days?

There have been countless of examples in history where the company of the better product went bankrupt, because it was not profitable.

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Stock price has nothing to do with industry leadership or financial viability. I don't believe Amazon is profitable yet either.

TexasEV said:

Stock price has nothing to do with industry leadership or financial viability. I don't believe Amazon is profitable yet either.

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Great example Texas EV.

For the longest times the Germans (for that matter probably all ICE manufacturers) looked at TM as the 'crazy uncle' that came to the party. He is harmless and easy to make fun of....however, the crazy uncle's zany ideas sometimes catch on. We are past that 'crazy uncle' stage with TM. IMO, we are at the, 'Let us look at the possibility he might be right and say the right things but still think he will fail' stage. So, open up some R and D on EVs and show a prototype just in case. If TM can pull off the model3 at the price point they claim we will enter the 'Holy S**t' stage'. It will not be too late for all of them but some ICE manufacturers won't survive. Proclaiming the end of the 'ICE age' within the next 20 years is not possible but the scales will have tipped by then and everyone will see the inevitable.

Spidy said:

Oh really Mr. Reporter? Did you look at Tesla's stock over the last days?

There have been countless of examples in history where the company of the better product went bankrupt, because it was not profitable.

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So true! I worked for Janus mutual funds in the 90's. They regularly held fund manger meetings with the phone reps (so they could accurately answer questions and describe their products). One of the most illustrating points made was from Scott Schoelzel (Janus 20 fund). I asked him about the challenge of picking great investments and this was his response. There have been times when I did my research but invested thinking "these guys have the only widget like this, they've gotta be successful". Lost investor's $ more times than I care to admit. But you know when I found great management, that knew their field, their competitors and knew how to run a company, I made $ just about every time. Even when competition was tight, great company management almost always made them come out on top.

I do own Tesla stock but some of Elon's moves do scare me. E.g. I wonder how much of the delays on the MX were for stupid stuff that he felt he had to have e.g. that air filter. Great if you live in a big Chinese city with really bad pollution but for every car and all markets? Of course I don't know if this caused any delay. I think his cavaliere attitude toward production delays will have much more catastrophic on the gen III. I do understand that there were supplier challenges but he has admitted numerous times that he was holding back until it was perfect. There are times when this is appropriate and times when it is not. Obviously we can't tell squat from the outside.

BTW, I just finished reading his book. Very insightful and scary. So many Steve Jobs parallels. Musk's treatment of people is especially frightening. I'm actually rethinking my long term strategy regarding this investment. I won't sell right now but not sure this will be a 10, 20 hold.

Cal1 said:

..But you know when I found great management, that knew their field, their competitors and knew how to run a company, I made $ just about every time. Even when competition was tight, great company management almost always made them come out on top.

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"Someone that knows their field and their competitors." That definitely sounds like Elon to me. Time will tell how well Elon runs his companies.

Cal1 said:

I do own Tesla stock but some of Elon's moves do scare me. E.g. I wonder how much of the delays on the MX were for stupid stuff that he felt he had to have e.g. that air filter. Great if you live in a big Chinese city with really bad pollution but for every car and all markets? Of course I don't know if this caused any delay. I think his cavaliere attitude toward production delays will have much more catastrophic on the gen III. I do understand that there were supplier challenges but he has admitted numerous times that he was holding back until it was perfect. There are times when this is appropriate and times when it is not. Obviously we can't tell squat from the outside.

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There were major upsets in Tesla (company & stock) this past year because the Model S did not do as well as expected China. I think this was in the forefront of Elon's mind for the X release. Plus, he genuinely does care about mankind, and having cities that kill people due to smog, is something to be concerned about. It is really simple to make a better air filter, just source Hepa filters from suppliers that supply hospitals, you don't need to invent anything new. So I doubt that was holding up the car.

He is an admitted a perfectionist, and that can slow things down, but this is still a relatively small and relatively new company, and lots of people in the oil/gas/auto industries want Tesla to fail. If Tesla releases a product that isn't good, after holding reservationists money for so many years, it could be the end of the company.

I'm NOT talking about the people that rightfully cancelled order when they saw the features/specs didn't meet there needs. I am thinking of the number of engineering, "errors" (I'll call them this to be polite) that have cause senseless deaths with Toyota accelerators, GM's ignition, etc. Engineering like this would be the finish a new struggling auto company that is trying to change everything.

Larger companies just weather the lawsuits, Tesla would be done. Also Elan has said in at least one interview, his family & friends ride in his cars, if he didn't focus on safety he would feel personally responsible if someone got hurt or killed and there was something he knew he could have done to prevent it.

Markets have momentum. You can't just make a new product good enough. To change from an gas/oil economy you can't just be "as good" as other cars you have to be better. So as much as I hate that it took so long for the X to get out, I'd rather him delay then rush and release a shoddy product.

Cal1 said:

BTW, I just finished reading his book. Very insightful and scary. So many Steve Jobs parallels. Musk's treatment of people is especially frightening. I'm actually rethinking my long term strategy regarding this investment. I won't sell right now but not sure this will be a 10, 20 hold.

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I agree, he is probably very difficult to work for, but the parallels to Steve Jobs is EXACTLY what makes me hold my stock. Someone else running Tesla might give up and settle for 'just good enough' and therefore not succeed. Or worse, decide to change the companies goals and just make cars that make money instead of looking at the long term strategy of changing the world. That's why I am a buy and hold girl.

Delay of X did not hurt Tesla, because they sold every S they could make. Perhaps same is true with S3X in 2017.

Cal1 said:

BTW, I just finished reading his book. Very insightful and scary. So many Steve Jobs parallels. Musk's treatment of people is especially frightening. .

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A couple of comments about Musk's treatment of people - after spending more than 30 years in auto industry, I can say that very severe treatment of people (especially in middle management) often is the rule, rather than the exception. The CEO is not a social worker; the CEO focuses on business and product. This is the only way a company like this can be successful. If you work for a company like this and get some very tough stuff from your bosses, you have to remember that "that's what you signed up for," a phrase I heard a number of times at Daimler and GM. It gets the best performance out of people (up to when they burn out, anyway).