The long term future of Tesla is a battery manufacturer and a charging network. Those are the two things they are good at. The cars themselves are quickly being beaten out by the larger players.
My wife drives a Tesla and I drive newish rental cars on a reasonably frequent basis. So I have a basis for comparison. They are definitely not being beaten by larger players. At least not at this stage.
Their software is top notch compared to the mish-mash of home grown and Car Play on other vehicles. And the implementation of AutoSteer (free cut down version of self driving) is far superior to what I've seen in other cars.
I can see other automakers catching up in 2-3 years, but that is not the case right now.
I've never seen "software" (by which I assume you mean the consumer facing stuff in the cabin) that made me want to buy a car. Yes, I've seen Tesla's. It looks fine. So does a radio with 6 buttons.
If I want anything, I have a cellphone. It's impossible to compete with "put that UX through better speakers/mic/screen"
So much this. I was ecstatic to hear the articles a few months ago saying that car manufacturers are going back to buttons. I prefer my car to have essentially no software. It needs to have a modestly sized screen and then whatever is necessary to display my navigation app and media app from my phone. Climate control and media control should both be physical buttons.
I recently bought an EV and a secondary concern (as in, not one of the primary concerns of size, range, charging speed, and price), was the control interface. I went with a model that has nearly all physical controls. Had the choice between otherwise equivalent vehicles been available, I'd have paid a non-trivial sum to get a button interface option.
From my Tesla-owning friends, I hear that their software is the "best", which seems to be like being the tallest dwarf. I literally can't imagine a pure software/touch interface being better than a physical button interface for the most important driving controls.
I’ve personally enjoyed auto steer on every car I’ve driven not a Tesla. Some let you keep your hands off the wheel, and none of them phantom break every couple hundred miles, which is the ultimate deal breaker.
> I’ve personally enjoyed auto steer on every car I’ve driven not a Tesla. Some let you keep your hands off the wheel, and none of them phantom break every couple hundred miles, which is the ultimate deal breaker.
I'm actually curious what systems you're using. I have very limited experience, I have a M3 and a 21 Corolla with Toyota's version.
My M3 has never once just given up on the lanes and stopped steering, but it's a very common occurrence on the Toyota. It just gives up and suddenly you're back to controlling it with no real rhyme or reason to it that I can find.
I don't mind it happening, after all they are just assistants like you said, it's just the zero warning "I give up" that it seems to have. At least with Tesla's version it attempts to keep going while screaming at you to take over. The Toyota version just gives a small beep and by the time you figure out what the beep was it's given up completely and if you were unprepared (having your hands off the wheel[bad thing to do anyways, but a lot of people do it], only slightly following the road) you may be sliding into an adjacent lane.
I've used Hyundai's adaptive cruse control on an older model. It doesn't do anything with the steering wheel, but it beeps when you leave the lane without using a turn signal. As far as tracking the speed of the cars in front of you and coming to a complete stop in traffic, it works great. I've never had a phantom braking incident with many thousands of miles driven on that mode. But that's not auto-steering at all.
I've used Blue Cruise a good bit which supports hands-off modes. This system works very well on highways hands-free. It seems to want me to put my hands back on the wheel when approaching the toll gantries and goes back to hands-free a few seconds after the toll gantry, but otherwise I've been able to go well over 100 miles at a time without touching the wheel or brakes. I've never had any kind of phantom braking situation or slow downs, it works well in stop and go traffic, and has overall been a great experience.
i only ever want CarPlay. i want my own apps that i already have, my own settings, integration into my calendar without leaking data to some random third party.
on my smart tv i use apple tv, and never their own ui. i trust apple for privacy and dont want to log in or configure 20 apps on my car. i want my iPhone and its features, period.
I'm happy to consider a non-Tesla (mostly because I'd really prefer a more traditional gauge cluster and more physical controls), but have struggled to find anything that beats the price for performance of the Model 3 Performance. And yes, I realize I'm a niche buyer.
> "A few years ago there was no good option besides tesla, but in another couple years tesla will have fallen behind the competition"
Much of the competition still struggles with software. Sure you can use Apple CarPlay or whatever for the basics, but as far as the full software suite goes, there isn't yet much that comes close to Tesla's performance, ease-of-use, UX, functionality, hardware integration, automatic over-the-air updates, etc...
This is my point. Tesla is good at a small handful of things, and making cars is not one of them.
They could sell batteries, charging infra, software, and whatever else to the companies that are competent at building (and fixing!!) cars. They aren't going to remain competitive on the cars themselves
> "Tesla is good at a small handful of things, and making cars is not one of them."
Tesla is manufacturing EVs at much greater volumes than almost anyone else, and doing so very profitably. They also score consistently high on customer satisfaction. Seems like making cars is exactly what Tesla has become very good at in recent years?
Sure, Tesla may not make the most luxurious, nor the cheapest cars on the market. But right now they seem to be very successfully hitting a sweet spot in the middle.
I still cannot figure out what Car People mean when they say Tesla is bad at making cars. What are you looking at that normal people don't see? The one thing I agree about is the yoke steering wheel, but that's on a high-end car nobody seems to actually buy.
I'm not a Car Person (I hate cars, electric ones included), but what I often hear said is that they feel very cheaply made, in terms of fit and finish, both interior and exterior. Panel gaps, water leaking into the trunk, squeaks and rattles. Mostly not very serious (not powertrain issues or anything), but nevertheless, not something you want to see on a car you're paying as much for as a Tesla.
I had heard the same things. And then I actually rented a Model 3 for a week (twice actually). Aside from panel gaps (the Trunk lid was slightly misaligned on one of the cars I rented), I think the whole “Tesla is bad at cars” is promulgated by people who have never actually sat in a Tesla.
Everyone loves to complain about panel gaps and that's usually what drives them mad. lol. I've never cared for panel gaps or minimalists interiors though.
BMW in my circles has the reputation as being a brand you buy when you can afford to have a car in the shop most of the time. Most American brands have reputation as just being really poorly built and bad value props. Not sure how either of those two options overcomes that view.
Outrageously expensive to repair sure (though which car isn’t these days, my corrolla got into a fender bender and fixing the bumper was north of $1000), but I’m talking about always in the shop due to shoddy construction. Afaik that doesn’t really apply to teslas.
>a brand you buy when you can afford to have a car in the shop most of the time
TBF, unless you are in a Niche market (off roading a land rover) - it's generally hard to buy a bad car today.
Is a Camry more reliable than a 3 series? Yes. But you're talking 4 9s vs 5 under warranty; being near a good dealership with good service is markedly more important than brand reputation. If my Audi/BMW/Volvo are in the shop for a week every other year and they easily give a loaner to cover, does it really matter? At that point, the cup holder being 5% better placed for convenient access matters more.
Once you’re out of warranty BMW tend to “implode” like everything breaks at once. But even in warranty dealing with going to the dealership and getting the repair is a huge hassle vs just having a car that stays out of your way.
Time is our most valuable asset and giving it up to stupid things like waiting in dealership waiting rooms, regardless of how much free coffee and popcorn they have just isn’t my idea of time well spent.
We had a first-year X1. Starter went after ~10,000 miles. Dealership was garbage (hence my comments above), but still towed us home and dropped off a loaner-car for the ~week it took to fix. Annoying, wasted ~hour waiting for toe truck to pick us up; but overall not a horrendous experience (despite piling 3 adults and 2 dogs into toe truck).
I had a 2010 Impreza, ~first month or two of ownership - dashboard went nuts and i pulled over. Car got towed to dealership - they found nothing wrong. Lost an evening and no loaner car in the ~48h it took them to determine 'nothing wrong'. Two 'new' cars - vastly better experience with one than the other.
Anecdotal of course; but
> even in warranty dealing with going to the dealership and getting the repair is a huge
You get that with any car - my Tacoma was indestructible and still had multiple recalls I had to drop it off for.
You are correct if you're talking driving a car into the ground though - I'd vastly rather have a 10 y/o v6 Taco than an 8 y/o supercharged Dakota.
> The cars themselves are quickly being beaten out by the larger players
Based on what exactly?
Tesla cars are wildly popular in their segments. They have elite efficiency, high margin, they lead in costumer loyalty and costumer satisfaction ratings. Model Y is literally the most sold car in the world.
What actual evidence are you basing these claims on?
Tesla is making a huge amount of money because of vertical integration, why would they give that up to be a contract manufacturer or sell batteries.
Keep in mind it was extremely common on HN to proclaim Tesla was going to go bankrupt, that the Model S would never be manufactured at any scale, that the Model 3 would fail and would also never be manufactured at great scale.
Sure Tesla has plenty of flaws and always have, and yet they remain ahead of the competition in what's going to be a multi-trillion dollar market (EVs) segment.
Tesla's primary business problem is that they only have one killer product, the Model 3 (meaning they're too easy to cripple if sales fall out from under that one thing). They massively screwed up on the truck, when they should have just made a normal EV truck with some Tesla touches (Elon's ego on Cybertruck cost them hundreds of billions of dollars in sales over the next decade; it will go down as one of the dumbest business mistakes in recorded history). The truck should have been their key diversification, especially in the huge US market for trucks. The truck segment should have been mainstream and borderline boring, yielding tens of billions of dollars in annual global sales. Instead it's going to be a mocked niche product that trails off rapidly in sales after the initial splash (assuming they actually bring the Cybertruck to market).
But if Tesla knew what they were doing, they would have bought a large chunk of Ford while the valuations were at peak mismatch (or all of it, via their hyper overvalued stock; de facto bribe the Ford family with a huge number to take the acquisition offer), electrified Ford's truck lineup in a long-term partnership, and yielded epic scale profit from it for decades to come.
> Tesla's primary business problem is that they only have one killer product, the Model 3
Their killer product is the Model Y.
> meaning they're too easy to cripple if sales fall out from under that one thing
Common car platforms like Civic or F150 stay pretty can stay pretty consistant for decades.
And Tesla is actively working on other things.
Also remember, they make money from car service, that will increase over the years. They also do grid storage both large and small and that business is already big and growing fast.
They have other products already developed, like the Semi. And are currently building a factory for a 'Model 2' in Mexico.
> They massively screwed up on the truck
I would disagree. People now just assert that Cybertruck is bad. But the reason they went with that are still valid and it still has a lot of preorders and a lot of interest. In the long run that architecture could save them lots of money and be very profitable.
> Elon's ego on Cybertruck cost them hundreds of billions of dollars in sales
That's just an opinion. And if the really need to they could just design a normal truck and put it on the Cybertruck platform. They would cost a few billion but it wouldn't be that bad.
> it will go down as one of the dumbest business mistakes in recorded history
Or it will go down as one of the best. You clearly don't like the vehicle, but its numbers in terms of interest, people searching for it, preorders and so on are very good.
Remember when nobody was gone follow threw on their Model 3 preorders?
> But if Tesla knew what they were doing
Growing 50% over almost 20 decades and being one of the most profitable car companies in the world while still growing fast for the next couple years but they are apparently idiots.
> they would have bought a large chunk of Ford while the valuations were at peak mismatch
That's a terrible idea for so many reason. That like Compaq buying DEC.
> electrified Ford's truck lineup in a long-term partnership, and yielded epic scale profit from it for decades to come.
They can have epic sales profit without Ford. They can make something called the E150 and make it look like the F150 and sell just as well without taking on all the legacy.
I remember when everybody said 'Tesla should just let a contract manufacture build their cars' and that just as bad an idea.
Not a big fan of Tesla myself, but surely if they figure out self driving that’ll make their cars relevant for the forseeable future? On top of that they seem to be able to make cars cheaper and more quickly than most of the incumbents.
Musk absolutely underestimated the difficulty of full self driving. He's still doing it today. FSD is one of those techs that makes for awesome demos but it has thousands of edge cases that are hard to test for even with millions of vehicle miles recorded in their big AI datacenter.
The tell for me is Hyperloop. That is an optimal environment for FSD, a closed and contained track that has only identical vehicles on it, and yet they still use a human driver.
I only wonder how long it will take before Elon becomes disillusioned, maybe it will never happen. Maybe they'll pull a rabbit out of their hat and actually get it to work. I'm still skeptical.
However I wouldn't d pay attention to the hyperloop thing. It would be trivial to "hardcode" a car to drive at least the tunnel part. It's almost certainly that the FSD team doesn't want to waste time with that.
Musk said, in 2015: "Self-piloting cars are a solved problem." "I view it as a solved problem. We know exactly what we need to do and we will be there in a few years."
Last year, though, he was backpedaling: "Our focus is on solving the problem."
My driveway is windy and gravel. I live at the end of a windy, gravel road with a steep drop off on one side. The road it connects to is a back country road with NO lane markings at all. Deer are prone to watching you approach, then jumping out at the last minute. You need to slow down when you first see them, not when they start moving.
I doubt FSD will get to the point I would ever fully trust it outside of a freeway or city, and almost certainly never for the 2-3 miles closest to my house.
Now, if they can get the cars cheap enough that I can actually afford one, I might be interested. There are 4-6 trips I take a year in the 250-400 mile range, with zero public transport available inbetween (rural-ish to rural-ish areas), and not paying for the gas would be nice.
Just look up the margins on Tesla’s cars vs EVs from other manufacturers. For example, Tesla’s net profit margin in Q1 2023 was 13%, meanwhile Ford is hoping that their electric vehicle division can get to 8% net profit by 2026 (they currently lose money on them)
For sure. But that’s an absolutely massive “if”. Almost guaranteed we’ll be transitioning to EVs (I mean, we already are at a small scale) before full self driving is reliable.
The big players are just late to the game, but have been making cars for decades. They will easily overtake Tesla on number of EVs built as they transition.
Tesla isn’t good at making cars. And every year my confidence in full self driving goes down. They are good at charging though and will print money doing that.
Tesla is now closing in on run rates of 1.5-2 million. They are on bath to overtake companies like BMW in total sales. They are already far more profitable.
You seem to still think of Tesla as some small fish. Tesla is the biggest BEV producer in the world by a large margin. They produce more EV then all of the major German producers put together and at better margins.
Volkswagen is the 2nd largest car company in the world and they have been all in on EV for many years now, and Tesla is highly competitive with them and actually makes far higher profits.
A high level Toyota engineer said of the Model Y 'its a piece of art' (and that was not even the newest generation). Volkswagen CEO said that Tesla is beating them on production efficiency.
If you want a reality check, go look at Toyota first EV and compare it to Model Y. They are not even in the same class, Tesla beats it on literally every metric.
If you still think large car companies can just easily spin up millions of EV per year, you are deluding yourself. You are even more optimistic then the car companies own incredibly optimistic predictions. Ford and GM have even stopped saying they will catch Tesla, its now a race for Nr.2.
> Tesla isn’t good at making cars.
Based on what? Your subjective insights?
Tesla cars have very high margin and are cheaper then competitors in the same class. But they suck at building cars?
Tesla cars have high costumer loyalty and high consumer satisfaction in every survey? But they suck at making cars?
Are you sure your not mixing up your personal feeling with the real world.
> And every year my confidence in full self driving goes down.
They don't need self driving to be highly profitable.
> They are good at charging though and will print money doing that.
Actually charging doesn't make much money, its a terrible business.
If you include PHEV, Tesla is second behind BYD. Even if you look at EV only, the margin is not insurmountably large. When the big automakers (Ford, GM) truly change over they will dwarf Tesla.
But I'm not including PHEV as those are a very different supply chain.
> the margin is not insurmountably large
Mhh sorry what?
Look at how tiny Ford is. And you have to understand that Ford was very, very late at doing battery partnership. Their battery factories are very late. So they will not scale very fast the next 3-5 years because of battery constraints.
At the same time, GM on this diagram looks way larger then it is in reality. The reason GM looks big is because of one tiny China only micro-car that yields almost no profit and will never be exported (and sales have gone down this year already). Their actual Ultium sales are barley existing.
You keep thinking these companies are so much bigger then Tesla, they are not. Ford and GM have less then 2x the revenue of Tesla. Tesla has faster growth and less debt and less aging infrastructure (they have brand new factories) and now legacy business. In terms of available capital Tesla can actually deploy far more, and raise money far more then Ford or GM.
Let me give you an example, Volkswagen. The ID.3 is comparable to the Model 3 and it came out in 2019. It was part of their MEB platform, something they had majority invested years before that. In 2018 they said they would invest 50 billion $ and have since increased that. Clearly they matched Tesla in spending for the last 8 years or so. And yet look at the chart, they have half the BEV sales of Tesla. And Volkswagen is consider very successful in the EV world.
You vastly underestimate how hard it is to transition to EV. Just because Ford, GM, Honda and so on are bigger then Tesla, does not magically mean they can just start mass producing EV. Go at actually look at how hard it is to scale, even for large companies with huge ability to invest.
> (Ford, GM) truly change
Have you looked at Ford and GM own predictions. Because you seem to have a higher opinion on these companies then they themselves have.
Ford just talked about how they would be losing money for many more years and then only just match what Tesla is doing just now.
Large companies often over promise what they can do. But you actually go beyond that and claim that they under promised and will do significantly better then they themselves believe.
Of course GM just learn a hard lessen with their initial battery factory, scaling is hard and that why Ultium had almost no sales in Q1.
Sometimes I feel like people live in a different universe than me. Do you know how many electric vehicles Tesla is likely to deliver in 2023? 2 million.
Do you know how many GM is hoping to deliver? 150,000. Do you know how many they have delivered YTD? 40,000. And they're ahead of Ford, Rivian, and all other US EV manufacturers. Only cheap Chinese only EV brands have a similar volume.
"Easily overtaking" Tesla is not happening at this point. It will be a real fight to ramp production up to Tesla numbers. Did you know that the Tesla model Y was the best selling car in the world thus far in 2023? Not EV, car. It beat out the gas powered Toyota Corolla.
The big incumbents (US, EU, Japanese) have high cost bases and may struggle to compete on price with Tesla, as well as emerging Chinese competition.
The real "secret sauce" behind Tesla right now is that they've figured out how to produce affordable, desirable EVs at scale while maintaining industry-leading margins.
I wouldn't call the established players "late to the game" vis-a-vis self-driving. They've been dumping plenty into research and acquisition and are probably near parity with Telsa.
The perception of the larger players as laggards comes from the fact that they aren't as keen to lie consumers and investors. Their leadership doesn't enjoy the same privileges as Musk does.
I think the vast vast majority of people (non HN techies) at this stage don't care that nearly as much about self driving as they do about having an electric/Hybrid/PHEV car that's just a great total package of a car - something that the existing car manufacturers are far, far better at than Tesla.
Even manufacturers like Chevy and Ford can run circles around Tesla in terms of overall quality.
Anecdotally in LA which has tons of electric cars, people that originally had interest in the status symbolism of Tesla jumped back to Mercedes, BMW, and Volvo(Polestar) the instant those manufacturers had viable electric options.
People are banging down Toyota's doors for the plugin hybrids. Those people are not buying a Tesla in the meantime. People are just waiting for their existing trusted manufacturers to produce enough capacity.
it would be amazing if more people realized that keeping the car you have is still the most environmentally friendly solution.
I'm going to keep my ICE car until it is unreasonably old or impractical for me, which is probably at least 8 more years.
At that point who knows what the electric car landscape will look like, but certainly production will be massively more ramped up.
PHEVs will be the perfect car for most people. It will do 99.9% of people's trips on pure electric, and not have any compromises on long road trips either.
> The long term future of Tesla is a battery manufacturer and a charging network. Those are the two things they are good at.
Agree 100%.
At present, Tesla really feels like a bit of a "Jack of all trades, master of none" job.
I'm certainly no Elon fanboi, but I will happily state that there are clearly a number of things they do well (certain core components and the charging network).
But the cars themselves as a whole. They feel like what they are. Cheaply built, but sold at a premium price.
Tesla would do well if they became the OEM's OEM.
You know, a bit like how Dell, HP and everyone else ship servers with Seagate drives. Tesla should become the Seagate and leave the outer shell bit to others.
> At present, Tesla really feels like a bit of a "Jack of all trades, master of none" job.
That's an odd take. Model Y is the best selling vehicle in the world, and the second best selling vehicle in the US after the Ford F-150. It outsells the Corolla, Camry, Rav4, Civic, etc. Look at Mercedes, BMW and Audi sales, they've been plummeting because everyone is buying a Tesla instead.
They're also the leading battery storage company and their battery storage business has been growing like crazy.
> But the cars themselves as a whole. They feel like what they are. Cheaply built, but sold at a premium price.
This has become such a meme that I think anyone who says it has never driven a Tesla for more than a few hours. The interior quality is not on par with Mercedes/BMW and maybe there's a few panel gaps, but every other part of the car is significantly better. The handling, infotainment system, performance, efficiency, autopilot, maintenance, etc. A $50k Model Y competes with $70-80k cars, but has the interior of a $35k car. Most people are more than happy with that trade off and that's why it sells so well.
According to the 2022 numbers I was able to find, the Model Y was number 9 in the US, behind the Tacoma, CR-7, Sierra, Camry, Rav4, Ram, Silverado, F-150.
And the numbers on most non-Teslas seemed down because of chip supply.
I don't think it's controversial to say that cars have been supply constrained in the past few years.
I guess I should have been specific that I'm referring to the last quarter. Tesla's sales growth has been ~50% YoY so comparing to 2022 numbers won't be so accurate going forwards.
I wasn't referring to the cells, but the products themselves. CATL produces cells, and yes Tesla uses cells from many of those companies. But a battery storage system is more than just the cells. I was specifically referring to Tesla's PowerWall & PowerPack/Megapack products, which has been growing at a fast rate. Just in the last ~3 weeks there were two several hundred million dollar battery storage projects announced that use Tesla Megapack[1][2].
In terms of cell technology, it's really hard to say whether those press releases announcing major break throughs actually matter or not. Tesla is also producing its own cells, but they'll happily buy whatever cells are available since at this point they're constrained by cells.
I've had a Tesla (Model S) since early 2020 and once the initial allure wore offI've missed driving a BMW and once the i5 is here I'll be backing to driving BMW. The supercharger network is by far the reason I've stuck with the Tesla this long, but there's enough options now. The build quality, the drive quality, service quality, all of it is subpar. The Model 3 is a zippy car but the lack of an instrument cluster is a deal breaker for me.
Tesla deserve all the credit for getting everyone else to wake up. But they are so so at making a car I actually want to drive.
That means they have no future of consequence. Charging networks will be a mediocre low margin business and they'll be hyper plentiful with little to no serious moat. It'll be like owning gas pumps as a convenience store (yielding pennies on the dollar; the money will be in generation there, as it's in oil/gasoline in gas pumps). Batteries are and always will be a horrific business with low margins (just ask eg Panasonic and all the other players what their battery businesses are worth, especially compared to what Tesla has been making from automobiles).
I sometimes suspect what's really going on with Tesla is that they want to become the world's manufacturer of EVs of all sorts, utility-scale energy storage systems, and software for EVs including ADAS.
Musk has said it: "the factory is the product." I kinda wonder if the real goal is, as the legacy OEMs quake, rattle, flail around begging for government handouts, and start to fail, Tesla knocks on their door and says "hey we can build your cars for you, with your brand on them, using our charging standard, our batteries, and our software. Just sign here."
Tesla is working with those companies. But Tesla also has its own batteries, their own battery IP, their own manufacturing lines and so on. They even manufacture some of their own manufacturing equipment.
The have factories in Germany and Canada building dedicated battery manufacturing equipment.
They have their own battery factory in California, in Texas and in Berlin. Model Y are already being sold with these batteries in it.
And Tesla own batteries are very innovative specially in terms of their manufacturing.
