# Is Tesla the next Nortel?



## Saintor (Dec 14, 2002)

There are so many similarities. Huge numbers, a lot of hype (specially the stock value) but no money is made; it is getting worse.










Although the YTD sales are higher than last year, thanks to international, they are actually in decline for the US market.

I worked at Nortel and I feel the same scenario again.


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## Autoputzer (Mar 16, 2014)

They have new models coming, SUV's, etc. Right now, they're a one-trick-pony, city-only cars that are pushing $100k. I suspect that BMW's i8 is putting a dent in Tesla sales, too.


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## canesfins (Dec 24, 2014)

Tesla is a very nice car. They need to last the technology price adjustment downward. At 60-70k it's a no brainier.


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## stylinexpat (May 23, 2004)

They are nice cars but for $100K they are not cheap.


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## Michael Schott (Dec 7, 2007)

Autoputzer said:


> They have new models coming, SUV's, etc. Right now, they're a one-trick-pony, city-only cars that are pushing $100k. I suspect that BMW's i8 is putting a dent in Tesla sales, too.


Tesla sells 20,000-30,000 cars in the US, world wide sales of the i8 are about 10,000. These cars serve different markets so I would guess the impact of the i8 on Tesla sales is not that significant.


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## the_phew (Mar 4, 2014)

Tesla gets something like $25k worth of carbon credits for every sale, which they are currently hoarding. When you buy a Tahoe, Tesla makes more money off that sale than GM does. Brilliant! 

Elon's business model is to extract revenue from the artificial carbon credit marketplace created by CARB. Then the supercharger stations are a profitable way to sell stored energy back to the grid during peak hours. The cars are just a means to an end.


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## Autoputzer (Mar 16, 2014)

Michael Schott said:


> Tesla sells 20,000-30,000 cars in the US, world wide sales of the i8 are about 10,000. These cars serve different markets so I would guess the impact of the i8 on Tesla sales is not that significant.


I contend that all $20k cars compete with all other $20k cars, all $100k cars compete with all other $100k cars. My short list for my last car was a X5d, 535i, or M3/4, all vastly different, but all around the $75k -$85k segment. Using that logic, the i8 is taking a 25 to 33% bite out of Tesla sales. They're both "luxury-green" vehicles.

the_phew makes a very good point. Tesla's profits are largely from various government green subsidies.


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## gkr778 (Feb 8, 2013)

Autoputzer said:


> the_phew makes a very good point. Tesla's profits are largely from various government green subsidies.


That makes Saintor's comparison to the former Nortel quite apt. About a decade ago, Nortel was known (and criticized) for its heavy reliance on government support via Export Development Canada.


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## the_phew (Mar 4, 2014)

gkr778 said:


> That makes Saintor's comparison to the former Nortel quite apt. About a decade ago, Nortel was known (and criticized) for its heavy reliance on government support via Export Development Canada.


Indeed. But CARB probably isn't going anywhere, short of some Supreme Court ruling or something. Even the Federal Government can't do much about them.


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## mark_m5 (Sep 16, 2006)

the_phew said:


> Elon's business model is to extract revenue from the artificial carbon credit marketplace created by CARB. Then the supercharger stations are a profitable way to sell stored energy back to the grid during peak hours. The cars are just a means to an end.


The Supercharger stations are FREE to Tesla owners.



Autoputzer said:


> I contend that all $20k cars compete with all other $20k cars, all $100k cars compete with all other $100k cars. My short list for my last car was a X5d, 535i, or M3/4, all vastly different, but all around the $75k -$85k segment. Using that logic, the i8 is taking a 25 to 33% bite out of Tesla sales. They're both "luxury-green" vehicles.
> 
> the_phew makes a very good point. Tesla's profits are largely from various government green subsidies.


Have you seen the videos of the Tesla Model S P85D racing against a Lamborghini Aventador or a Ferrari 458 Italia? I have a ton of respect for a car that can beat BOTH of those cars that cost 2-4 times as much in the first 1/8th mile.

When comparing i8 to Tesla, the Tesla is superior in every category. So I would say that the i8 is the one that's overpriced. Or maybe the Tesla is underpriced.


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## the_phew (Mar 4, 2014)

mark_m5 said:


> The Supercharger stations are FREE to Tesla owners.


I didn't say the superchargers were designed to extract revenue from Tesla owners, but from utilities. They are incorporating energy storage at the superchargers, so they can buy electricity off-peak and sell it back to the grid on-peak at a premium.

http://www.greencarreports.com/news...rid-storage-as-part-of-supercharger-expansion


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## 3581512 (Feb 23, 2013)

A year ago I would've said no, Tesla is in a good spot.

But after seeing what the major car manufacturers are doing, it will be hard for them to keep up. 

For example, look at BMW they have the resources to develop fully electric cars, produce lightweight carbon fiber parts, and have a huge worldwide network to sell these vehicles, and they're just getting started. They've already announced a fully electric 3 series, Mercedes has announced the same for the C-Class

Tesla got to where they are now because they were, in someways, the first to do the electric car right and took advantage of having little competition. Once the major players start throwing their weight into the electric car market, I think it will be hard to persuade buyers to go for a Tesla over a Toyota, Honda, BMW, Mercedes Etc.


The talk of Tesla producing an electric car for $30,000 before rebates sounds promising, but I know if I had to choose between a BMW or Tesla, same price range, same performance, I would probably be more inclined to go with BMW

The battle for electric car market share won't be decided by who can produce the best 1/4 mile times and 0-60 numbers... it'll be whoever can convince the average "beige" car buyer to go for an electric instead of getting another accord/camry/ etc


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## mark_m5 (Sep 16, 2006)

3581512 said:


> A year ago I would've said no, Tesla is in a good spot.
> 
> But after seeing what the major car manufacturers are doing, it will be hard for them to keep up.
> 
> ...


I think you're underestimating Tesla and over-estimating their competition. The reason Mercedes is in the game at all is because they formed a partnership with Tesla. Tesla got some cool Daimler-Benz tech for their cars and MB got battery tech from Tesla.

Tesla produces the most advanced electric cars on the market, with the most forward-thinking and the least corporate BS to overcome.

The Model S P85D is the fastest electric car on the market. The Model S P85D has the longest range of any electric car on the market. 
It's also faster than a Lamborghini Aventador up to freeway speeds.
...And seats 5-7 people.
...And recharging is FREE.
No other car can compete with that.

The BMW i3 looks like a pathetic piece of junk.

It will take years for the big auto-makers to catch up to where Tesla is NOW. By then, they will have moved on.


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## Saintor (Dec 14, 2002)

Tesla is already facing dark clouds.

http://www.bloomberg.com/news/2015-...september-as-musk-cites-china-sales-drop.html



> Tesla Falls After CEO Elon Musk Cites Declining Sales in China


2014 US Tesla sales are DOWN compared to 2013.

There can't be profitable producing high volumes (60-70K units is high for this segment mind you), and now they expect to make money on 30K$ cars? I have only one thought; pink glasses.


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## mark_m5 (Sep 16, 2006)

They're investing in infrastructure. Have you seen the plans on their website for the expansion of the Supercharger station program? That costs money. But apparently each station is a money-maker also, according to the_phew.


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## the_phew (Mar 4, 2014)

mark_m5 said:


> But apparently each station is a money-maker also, according to the_phew.


Well not yet, but that's the plan.

Personally, I don't invest in Tesla (or any automaker for that matter) because the industry is too volatile. I can think of several scenarios that could bankrupt Tesla very quickly (a successful Supreme Court challenge of CARB's carbon credit marketplace would do it nearly overnight).


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## patchelect (Dec 16, 2014)

Tesla is intriguing. Elon Musk is making a ton of money using other peoples money to build his business model. The market for 100% electric cars will probably never get that large, especially with this interlude of cheap gasoline. And with the ever increasing MPG ratings of the fossil fuel powered vehicles, full electrics with their serious limitations, are going to be less desirable to most buyers. The other day I was on a drive from my home on Long Island to my Condo in the Berkshires and I was thinking about the practicality of a Tesla. In REAL world usage, a Tesla may not make the trip without a recharge. I travel about 200 miles in mixed traffic with mixed weather. A Tesla with its base battery pack is rated at 265 miles. That makes many assumptions, just like the MPG ratings. If I leave on a cold snowy day my range will be seriously diminished because I'm going to want some creature comforts like heat, windshield wipers, and a defroster. I can see the battery giving up the ghost while I'm on route 22 outside of Austerlitz. If I'm driving a fossil power vehicle I can pull into the next Shell station and get a splash, although I already know that I can make that trip hands down without needing any extra fuel in any of my vehicles. Until and unless battery technology improves AND the price of pure electrics drops to a realistic level, John Q Public won't be buying a Tesla any time soon. And while John Q isn't the guy who keeps Ferrari in business, I kind of doubt that Tesla will find enough enamored drivers who will keep his operation afloat. 

And tell me again what a Tesla in need of a battery pack is actually worth?


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## mr_clueless (Nov 13, 2009)

Depends on how long we're in ZIRP. If interest rates go up significantly, a lot of companies will go belly up.


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## LucM (Mar 3, 2015)

patchelect said:


> Tesla is intriguing. Elon Musk is making a ton of money using other peoples money to build his business model. The market for 100% electric cars will probably never get that large, especially with this interlude of cheap gasoline. And with the ever increasing MPG ratings of the fossil fuel powered vehicles, full electrics with their serious limitations, are going to be less desirable to most buyers. The other day I was on a drive from my home on Long Island to my Condo in the Berkshires and I was thinking about the practicality of a Tesla. In REAL world usage, a Tesla may not make the trip without a recharge. I travel about 200 miles in mixed traffic with mixed weather. A Tesla with its base battery pack is rated at 265 miles. That makes many assumptions, just like the MPG ratings. If I leave on a cold snowy day my range will be seriously diminished because I'm going to want some creature comforts like heat, windshield wipers, and a defroster. I can see the battery giving up the ghost while I'm on route 22 outside of Austerlitz. If I'm driving a fossil power vehicle I can pull into the next Shell station and get a splash, although I already know that I can make that trip hands down without needing any extra fuel in any of my vehicles. Until and unless battery technology improves AND the price of pure electrics drops to a realistic level, John Q Public won't be buying a Tesla any time soon. And while John Q isn't the guy who keeps Ferrari in business, I kind of doubt that Tesla will find enough enamored drivers who will keep his operation afloat.
> 
> And tell me again what a Tesla in need of a battery pack is actually worth?


You would of probably made it, and if not, you would of probably had to stop for 10-15 minutes to get enough electrons to get home. Not like you have to fill it up again. You can do that when you get into your garage. Such a hardship, especially when you consider the convenience of having a full tank of electrons every day when you wake up vs looking at your gas gauge wondering when you have to fill up.


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