To paraphrase Peter Thiel:
"We wanted hyperloop trains, instead we got music matching algorithms."
Or as we all know, software is cheaper than hardware.
Tesla might turn tastemaker, CEO Elon Musk let slip yesterday at the annual shareholders meeting, suggesting that the company may move into music "matching algorithms". "I think it's very hard to find a good playlist with good matching algorithms," Musk rambled as he tried to field questions from Twitter users. "We have …
They guy who invented PayPal, brought us the only decent electric vehicle way ahead of the motor industry and has totally disrupted them, and brought down the costs of space launch and successfully reused rocket stages.
Plus remember he has opened up all his Tesla patents to the world and they still haven't brought out a vehicle as good.
What makes you so much better !? I very much doubt Musk would work for you - but I'd deffo work for him !
Why do I feel like Elon's inspiration levels are running a little low?
Cheap online fanancial shenanigans (Paypal), Cheap reusable rockets (Space X), Electric Cars (Tesla), Crazy experimental maglev in tube trains (Hyperloop), cheap underground tunnel digging (Boring company), a better music playlist... hmmm... not quite on the same level is it?
I suspect he was dribbling on about in car entertainment primarily because there's no news that he can reveal. Although the latest results were well received, the losses are growing, and that's with zero credible competition for electric cars (certainly in the segments Tesla have products). Making cars in high volume, and delivering spares, support, servicing and charging are all a lot harder than churning out the first 100,000 vehicles.
I agree, Elon should sell Tesla is to someone who knows the motor business inside out, someone like Toyota. And lets face it, a Tesla is way more cool than a Prius - so this would be win - win for both parties.
Toyota already had a large shareholding in Tesla (3% I believe), which they bought way back. They had a plan at the time to co-operate share some of the technology, which is why they bought it. I heard recently that they have now sold that stake, because the co-operation deal has ended and they don't have plans to continue with it.
One thing is for sure: Toyota will have made a massive profit on those shares.
I agree, Elon should sell Tesla is to someone who knows the motor business inside out
I suspect this is inevitable.
Despite Tesla's undeserved market capitalisation, and attractive, innovative cars, the reality is that they're a low volume, loss making car producer, tied to a solar PV business that has no synergies with car making. To remediate existing problems in spares and service there's a need for more investment with limited returns, and big management distractions with things they've not previously had to worry about like accident repairs, insurance costs, aftermarket parts logistics. To grow even to become a mid-sized car maker, there's huge capital demands to build new car and battery factories (and reprocessing facilities for the batteries). And although Tesla investors and the equity analysts might believe that the volume car makers are dong too little too late, they're wrong - those companies are doing a hell of a lot of development to ensure that when they launch their products, they will be mass-market ready. When that happens over the next few years, even with the likely exponential growth of EV demand, Tesla go from having almost 100% market share in their target niches, to having a much lower share. And customers (in Europe, certainly) certainly won't keep buying poorly assembled Teslas if there's comparable products from companies that can build cars properly. Even in the US, Consumer Reports rated Tesla as 25 out of 28 on brand reliability.
I don't know if a sale (probably wrapped up as a merger) is Elon's game plan, but in my view if he doesn't do this in the next three years he'll find that the commercial tide turns against Tesla, and he'll be forced to sell out for less. With all the R&D there's probably a strong IP play that can be made for Tesla, but actual making, selling and supporting cars: I don't see a long term future as a standalone car maker. If nothing else, the real volume car makers own entire stables of brands that can share parts and development costs, whereas Tesla are struggling to get three different models on the market. I think Tesla cars are innovative, attractive, desirable, and I'd love to have one, but simply making a better mousetrap has rarely been a business model in its own right.
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