5 Massive Ways Tesla Can Fail (and the possible silver linings)

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They can't get cars to production... Well, I mean, they can't.

Watching the delays in entering and ramping production of the Model S was painful, and the difficulties with Model X weren't much better, but those were still the early days. Model 3 ramp was similarly painful too. The Model Y was released ahead of schedule and had fewer parts in common with the Model 3 than expected. Surely they've got it all sorted out by now, right?

Reservation holders of the Roadster and Semi would disagree, and so would those still awaiting their solar roofs and residential powerpacks.

The refreshed Model S was expected to reach customers in January after a 3-week shutdown for retooling, but it now looks like it may not be until May or June at the earliest.

Seeing how quickly Ford can go from unveiling to delivery of the Mach E, as well as Porsche with their Taycan, and all the other legacy companies with their assorted offerings, suggests the problem isn't that it's an EV.

They can't get batteries to production. Giga Nevada still hasn't reached half its intended footprint, but that's not a bad thing since they found ways to optimize the space to get more production from less factory space. The bad thing is that Battery Day was over 7-months ago, and we have seen no evidence that the 4680 is any closer to mass production, and further, there's no reason to think the breakthrough dry electrode technology is coming along at the expected pace either.

If they can master these, and in the ways, and at the prices expected, this will represent a huge upside for Tesla, but at this point, that's still a very big IF.

They can't get FSD to market. Or at least they haven't yet. Will they? That's the big question. Google aka Waymo appeared a year or two from commercial viability seven years ago, but they're still only operating in very limited areas, and with absurdly severe restrictions. They've lost their CEO and their head of Semi Truck Autonomy has recently left as well.

Uber and Lyft both invested a billion or three in the endeavor before selling their divisions to other companies at a loss, suggesting they're no closer than than Waymo. So far this remains an impossible feat. A lot of things we consider routine today were impossible until they weren't, like landing and re-using an orbital class rocket, so maybe this breakthrough really is right around the corner.

Regulatory credits won't last forever. This is absolutely true, but it's a double-edged sword. If we're going to discount the revenue from Tesla's books, we should also be discounting the savings companies like Fiat-Chrysler, Honda, and now even VW in China are saving by giving the money to Tesla instead of paying even larger fines. You can waive these off as imaginary dollars, but the dollars transferred are both real and permanently moved. These companies are paying Tesla millions of dollars per day to build new factories to continue eating their lunch.

Many companies have only sold EVs as compliance cars, in limited numbers, and at steep losses. Who cares if you lose money on 10,000 cars when you're making a profit on a million cars, right? That isn't sustainable. And while some argue that Tesla only makes money when accounting for ZEV or regulatory credits, that's not the whole picture. If Tesla did not enjoy the benefit of those credits, those competitors would be losing more money, and Tesla would just likely grow at a slower pace, which would improve short-term profitability. Plus Elon's stock compensation would likely vest more slowly, which would similarly add to the bottom line. So let's talk about that CEO pay.

CEO pay is off the charts. It's massive, sure, but it's not off the charts. You just need a bigger chart. Over the past few years, it's hit the earnings reports hard. Paying out $100-300 million in stock compensation to the CEO really batters the financials, but we're only 3 years in and 5-6 years of compensation has been accounted for. This mega-hits to the report can only show up a few more times before they're all done for good.

There is no golden parachute for Elon Musk. If the company fails, or even just fails to grow, he gets nothing. He can't even sell his stock for five years after the options vest, so the incentive to pump it up is effectively eliminated.

So those are the five big headwinds facing Tesla. What am I missing here? What other double-edged swords does Tesla have to contend with in the future? What's a downside today that's both real and valid, sorry conspiracy theorists, that could come back to bite Tesla is the butt, or could make them a mint if they actually achieve it?

Видео 5 Massive Ways Tesla Can Fail (and the possible silver linings) канала FutureAZA (formerly MyTeslaWeekend)