Article: It's becoming increasingly clear Tesla is just another car company -- agree / disagree?

[Crissa]

You're cherry-picking...

No. Literally pointing out some single example why they're not like the rest of carmakers is all I need to prove my point.

You haven't really countered this, either.

So, how about I cherry-pick that they're undergoing the greatest growth of any automaker? Unseen since Ford was basically without competition.

-Crissa

Apparently four billion isn't substantial to you. Or the growth of the energy storage division or that they've just opened their ability to sell electricity on multiple grids last year...

 

[BradSomrak]

No. Literally pointing out some single example why they're not like the rest of carmakers is all I need to prove my point.

Does Toyota get to claim that it’s not just another auto maker if its cumulative net profits are better than every one else? To me, Toyota is precisely just another auto maker.

So, how about I cherry-pick that they're undergoing the greatest growth of any automaker? Unseen since Ford was basically without competition.

Tesla does a great job selling cars. This is why I hold the belief they are elite.

Apparently four billion isn't substantial to you. Or the growth of the energy storage division or that they've just opened their ability to sell electricity on multiple grids last year...

This is fair, and perhaps it’s time for me to reeval my opinion on this. To date, I’ve wanted to see more profit from non car sales before I move Tesla into “not a car company” designation. Of all the auto manufacturers, they are the only one that is clearly in range of being a tech company.

My concern is what is the threshold for that designation. If Rivian licenses….I don’t know, it’s gear guard software (humor me here), and starts making millions of dollars on that license, is it no longer a car company? And, if so, what’s the threshold for car company versus more-than-car company? Does Rivian have to get to a billion for gear guard sales and then its a tech company?

Tesla may be there already. Perhaps you’re right. I just don’t see a clear line of differentiating “car company” versus “car company plus tech company.” But perhaps I’m just hung up on the language. It’s entirely possible.

 

[Crissa]

Does Toyota get to claim that it’s not just another auto maker if its cumulative net profits are better than every one else? To me, Toyota is precisely just another auto maker.

Cumulative?

Toyota's total profits last year were about what Tesla's were. Despite selling many times more cars.

Hyundai or Mitsubishi can say they not just another car company because a large portion of their revenue come from heavy or light machinery. But, there are other companies like them.

Ford and GM (and most motorcycle manufacturers) make more money on the financing side than the manufacturing side. Just like other automakers with dealer networks. Tesla doesn't do this (yet).

There are just so many things which make Tesla different from other automakers. I only needed one, but I have shown four so far.

-Crissa

 

[Arctic_White]

Tesla is still the most profitable, per car delivered, of any carmaker.
It's also the one increasing its units build/sold the most.
And the only one with structural batteries.
Also the only one with in-house cell production, one of the few with in-house battery production...

And Panasonic may run the machines in the cell factory in Nevada, Tesla owns the factory and all the output.

So it's kinda hard to say it's like other manufacturers at all.

-Crissa

I watched a few Sandy Munroe's videos when they tore down vehicles.

Basically, Tesla's manufacturing advantage is so large that no other manufacturer comes even close. The way Tesla continues to advance is just phenomenal. Unfortunately, legacy autos are royally screwed because they don't have that innovative culture/mentality.

This manufacturing advantage will help Tesla produce cars at 2x the efficiency which directly leads to a decrease in cost thus a decrease in price to consumers.

Who in their right mind would pay more for an inferior product (less range, performance, safety, tech)?

 

[BradSomrak]

There are just so many things which make Tesla different from other automakers. I only needed one, but I have shown four so far.

I’m not claiming Tesla is identical to every other car manufacturer. I agree with you entirely that Tesla does a lot of things different (read: better) than other brands.

Perhaps my issues is the phrase “just another car company,“ overall, and I’m conflating issues.

To the extent the original author uses “just another car company“ to suggest Tesla is exactly like Toyota, Honda, etc., I completely disagree with that premise. And, in that scenario, I agree with you entirely.

Using that phrase, or something like it, also implies that Tesla is a car company, first and foremost. That is the position that I think has some merit.

But you need not ”prove” that Tesla does things differently than other manufacturers. That is pretty inarguable.

 

[Arctic_White]

You're cherry-picking per car profit as your chosen metric because, obviously, it's the most favorable to your position. But profitability on a per car basis is only part of the overall analysis, not the end all, be all. If Ferrari makes an ultra expensive car that turns a higher per-car profit than Tesla, does Ferrari get to claim it is superior to Tesla as a manufacturer because of per car profitability? I would say no, personally, because scale and other things matter. Other manufacturers make more in total net profit, of course, through higher volume and lower per-car profits. Do they get to cite a greater cumulative net profit as evidence they are more than "just another car company?" At that point, the assessment devolves into what metrics you want to use to cite why Car Company X is better than Y. Then you're simply debating the merits of a bunch of car companies.

The premise of the "Tesla is more than a car company" belief necessarily requires revenue and substantial profits beyond......selling cars. And that hasn't come to fruition, yet. As you noted, though, the tech they have is relatively new, and let's see what they do with it. It's entirely possible, if not likely, they they do become more than a car company. I think it is fair to say that has not yet happened, though, even if you fundamentally believe it is coming. The headline of the article is clickbait, of course, but the overarching premise is kind of fair, IMO.

I am of the opinion Tesla is - at present - simultaneously an elite car company and "just another car company."

Umm... didn't Tesla earn more net profits than both GM & Ford combined in 2022?

And Tesla only had 4 models vs. GM and Ford's combined 70 models.

And Telsa only sold 1/10 of the cars than both GM And Ford combined.

Now imagine Tesla's profits when they sell 10M vehicles per year. Their operating margins is phenomenal and continues to improve at a scale that we haven't seen in a long time.

 

[Cybertruckee]

Again for the nth time and the premise of the headline statement of the thread.

It's not the profitability nor the quantity, it's Tesla still being unable to leverage it's software capabilities into revenue stream.

You can promise for them all you want until you are blue in the face that they will soon do it, but until then, they are a car company (although that's nothing to be embarrassed about).

Same analogy that Apple is not just a phone or a company producing Mac.

Arguing that they are more profitable per car only strengthen the viewpoint that they are a car company.

 

[Arctic_White]

No. Literally pointing out some single example why they're not like the rest of carmakers is all I need to prove my point.

You haven't really countered this, either.

So, how about I cherry-pick that they're undergoing the greatest growth of any automaker? Unseen since Ford was basically without competition.

-Crissa

Apparently four billion isn't substantial to you. Or the growth of the energy storage division or that they've just opened their ability to sell electricity on multiple grids last year...

100%.

We have never seen a mega-cap company grow at this pace in history. Never. And here is the kicker: Tesla is just starting their growth.

I fully expect Tesla to be the largest AI company in the world, within a decade. A lot of folks are sleeping on what FSD can do, not to mention Tesla's advantage in batteries, megapacks, etc. which itself will be worth more than their EV business.

 

[Arctic_White]

Does Toyota get to claim that it’s not just another auto maker if its cumulative net profits are better than every one else? To me, Toyota is precisely just another auto maker.



Tesla does a great job selling cars. This is why I hold the belief they are elite.



This is fair, and perhaps it’s time for me to reeval my opinion on this. To date, I’ve wanted to see more profit from non car sales before I move Tesla into “not a car company” designation. Of all the auto manufacturers, they are the only one that is clearly in range of being a tech company.

My concern is what is the threshold for that designation. If Rivian licenses….I don’t know, it’s gear guard software (humor me here), and starts making millions of dollars on that license, is it no longer a car company? And, if so, what’s the threshold for car company versus more-than-car company? Does Rivian have to get to a billion for gear guard sales and then its a tech company?

Tesla may be there already. Perhaps you’re right. I just don’t see a clear line of differentiating “car company” versus “car company plus tech company.” But perhaps I’m just hung up on the language. It’s entirely possible.

That's a very valid point. And this is the reason why Tesla's market cap is still only 0.6 Trillion vs. what it could (should?) be once everyone realizes what Tesla is about to do.

The market still thinks of Tesla as just a car company, albeit as an elite one. I say give it some time (say 5 years) and be pleasantly surprised.

 

[BradSomrak]

Umm... didn't Tesla earn more net profits than both GM & Ford combined in 2022?

And Tesla only had 4 models vs. GM and Ford's combined 70 models.

And Telsa only sold 1/10 of the cars than both GM And Ford combined.

Now imagine Tesla's profits when they sell 10M vehicles per year. Their operating margins is phenomenal and continues to improve at a scale that we haven't seen in a long time.

I kind of responded to this above, but just for clarity’s sake.

I did a poor job clarifying that I find the phrase “just another car company” to carry multiple interpretations.

The premise of the phrase as used in the article is that Tesla is just like Ford, GM, Toyota, etc. And they are clearly not. They run their operation in a much more advanced and efficient way, and thus see the enormous profit margins you noted. I completely agree that Tesla is not just “another” car company in that regard.

The headlined phrase also carries the implication that Tesla is a car manufacturer, first and foremost. I think that has some merit, even if you think they are as much a tech company as a car company. It’s arguable, in my opinion.

I probably should have parsed out my response better, so that it did not seem I was suggesting Tesla and Ford are the same. Bad job by me.

 

[Arctic_White]

I kind of responded to this above, but just for clarity’s sake.

I did a poor job clarifying that I find the phrase “just another car company” to carry multiple interpretations.

The premise of the phrase as used in the article is that Tesla is just like Ford, GM, Toyota, etc. And they are clearly not. They run their operation in a much more advanced and efficient way, and thus see the enormous profit margins you noted. I completely agree that Tesla is not just “another” car company in that regard.

The headlined phrase also carries the implication that Tesla is a car manufacturer, first and foremost. I think that has some merit, even if you think they are as much a tech company as a car company. It’s arguable, in my opinion.

I probably should have parsed out my response better, so that it did not seem I was suggesting Tesla and Ford are the same. Bad job by me.

So lets take this a bit further: why do you think their operating margins are so much higher than other manufacturers?

It's because of their capabilities in software, which allowed them to design and then build the machine that builds machines (aka cars in this case).

That is what everyone seems to be missing. If Tesla didn't have this huge lead in their software, they certainly would be another car company and would have actually failed IMO.

 

[BradSomrak]

So lets take this a bit further: why do you think their operating margins are so much higher than other manufacturers?

It's because of their capabilities in software, which allowed them to design and then build the machine that builds machines (aka cars in this case).

That is what everyone seems to be missing. If Tesla didn't have this huge lead in their software, they certainly would be another car company and would have actually failed IMO.

That’s where I think it gets tricky, though, and why I used Rivian as an example. If Rivian moves forward with its e-bike plans, and starts generating, say, 5% of its annual profits on bikes and licensed, in-house software, are they more than just a car company?

Perhaps the answer is “yes, they are a tech company.” (Rivian, in the above example). Perhaps Tesla is more tech company right now than car manufacturer. I’m acknowledging it’s possible. I just think it’s a more grey area, is all.

 

[Cybertruckee]

So lets take this a bit further: why do you think their operating margins are so much higher than other manufacturers?

It's because of their capabilities in software, which allowed them to design and then build the machine that builds machines (aka cars in this case).

That is what everyone seems to be missing. If Tesla didn't have this huge lead in their software, they certainly would be another car company and would have actually failed IMO.

No, the robotics that assemble Tesla's cars are not in-house. It's made in South Korea.

 

[Crissa]

No, the robotics that assemble Tesla's cars are not in-house. It's made in South Korea.

But they're programmed in-house.

-Crissa

 

[Cybertruckee]

But they're programmed in-house.

-Crissa

And??? How would that move the needle to your argument that Tesla is not just another car company when every other car company customize those robots for their own assembly line configuration?