Electric Cars now more profitable than ICE cars

[101101]

Munroe estimates 36% profit for the Model 3 and that may be the lower side. This trend will only continue. How many GM cars have that kind of margin. Very, very likely 0. But have to keep in mind ICE may never have been profitable as it ran on part of the radically subsidized structurally bankrupt petrol logistical chain.

So this is what they were were on about about with profit and sustainability was about. They knew that unsubsidized electric would prove cheaper and more profitable so they were trying to inoculate the public mindset against this reality. Moronic.

The UAW is the most disgusting. I couldn't be more liberal but they got in bed with industry back in 1978 with the captured union rulings because both capital and labor knew as of 1970 that labor and hence capital and capitalism were over so they married one and other.

Here is what the otherwise long useless UAW can do to work on its problems through a two pronged path.

First focus on high permanently indexed guaranteed annual incomes that make work genuinely optional- no more trying to control people with money- reduce it to a medium of exchange only. Money oriented agreements have to be essentially voluntary- get rid of the rent seeking. High indexed GAI plus getting rid of rental situations for housing etc.

Second, is have its employees buy their firms, then fire the management and eject the remaining public stock holders taking the firms back private. They can keep the unions on and any management should be barred from holding stock per the charter. Then they should begin squeezing the remaining value out of the firms shedding all the jobs taking them fully automated. They can start with automating out the management- management is generally worthless to begin with - management is crime in essence. UPS should do the same. All those driver jobs are going away and UPS is about to strike. Take over the firm before it is too late. That is what Unions should have done long ago. We could have got rid of the idiocy of in-bread inherited wealth focused on producing destabilizing inequity.

Finally Unions can stop their idiot commentary about Tesla, wouldn't surprise me if at some point Tesla purges the public and goes wholly employee owned and then transcends even that model to become purely membership based and finally an open commons collaborative. No one is more aggressive about flat than Musk. I'd like to see it develop real time blinded decision making systems.

 

[David Green]

Munroe estimates 36% profit for the Model 3 and that may be the lower side. This trend will only continue. How many GM cars have that kind of margin. Very, very likely 0. But have to keep in mind ICE may never have been profitable as it ran on part of the radically subsidized structurally bankrupt petrol logistical chain.

So this is what they were were on about about with profit and sustainability was about. They knew that unsubsidized electric would prove cheaper and more profitable so they were trying to inoculate the public mindset against this reality. Moronic.

The UAW is the most disgusting. I couldn't be more liberal but they got in bed with industry back in 1978 with the captured union rulings because both capital and labor knew as of 1970 that labor and hence capital and capitalism were over so they married one and other.

Here is what the otherwise long useless UAW can do to work on its problems through a two pronged path.

First focus on high permanently indexed guaranteed annual incomes that make work genuinely optional- no more trying to control people with money- reduce it to a medium of exchange only. Money oriented agreements have to be essentially voluntary- get rid of the rent seeking. High indexed GAI plus getting rid of rental situations for housing etc.

Second, is have its employees buy their firms, then fire the management and eject the remaining public stock holders taking the firms back private. They can keep the unions on and any management should be barred from holding stock per the charter. Then they should begin squeezing the remaining value out of the firms shedding all the jobs taking them fully automated. They can start with automating out the management- management is generally worthless to begin with - management is crime in essence. UPS should do the same. All those driver jobs are going away and UPS is about to strike. Take over the firm before it is too late. That is what Unions should have done long ago. We could have got rid of the idiocy of in-bread inherited wealth focused on producing destabilizing inequity.

Finally Unions can stop their idiot commentary about Tesla, wouldn't surprise me if at some point Tesla purges the public and goes wholly employee owned and then transcends even that model to become purely membership based and finally an open commons collaborative. No one is more aggressive about flat than Musk. I'd like to see it develop real time blinded decision making systems.

GM full size pickups and SUV's have a well over 30% gross margin, for GMC and Cadillac, I would speculate over 40% gross margin. Also the crossovers made at Spring Hill, have sizable margins as do Corvettes. GM also have much lower operation expenses per vehicle then Tesla, so the net profit is fantastic on those vehicles. In the last 4 years GM spent over $8B updating their factories for these vehicles, with all new paint shops, and body shops utilizing the latest tech in efficiency, and environmental systems. I know Ft Wayne plant is now capable of 1500 tucks a day on 2 shifts... Thats pretty amazing with only 3900 Employees total on all shifts and management.

http://www.gkcorp.com/project-portfolio/
https://media.gm.com/media/us/en/gm/company_info/facilities/assembly/ftw.html

 

[101101]

Yeah that is all bull sht from you as usual. Lets break it down. Average return for a business in US is about 13%. Autos are known to be lean despite a huge subsidy chain for being part of the petrol scam. Lean relative to 13% is less than 13% ala GM margins at best. Munro pointed out that there were vehicles more profitable than 30% but such vehicles were apparently quite rare and surely quite high end possibly Rolls Royce etc., which is going to preclude GM completely. Cadillac- what a joke look at their sales and market share and the trends on their share- sounds highly profitable. Forbes did an article not long ago about how Ford and GM are structurally bankrupt, sure sounds like real high actual margins. Sure shows in Ford's stock price but of course GM given its BS business dynamics suddenly went fully bankrupt at the end of the most pro petrol admin in history the W. Admin and it blamed it workers for that. And it managed to do this when there is a 25% tariff on trucks from Japan and a cap/quota on cars from Japan (less on Japan branded cars made here,) but it still pulled of this bankruptcy after Toyota tried to teach it to make cars a NUMMI. You're also getting confused about automation, as a mere parts integrator all GM does is assemble major component products other firms already produced- slight exception for some power train elements- and GM design bs how much is that worth really(?) When was the last time a major foreign automaker went under? When its not mere parts integrator or whining about its workers (implying they are overpaid and lazy- when they actually get paid next to nothing compared to their German counter parts) when its not doing this its playing marketing games in the stock market where they for instance plan to bend over for Waymo or if they're really, really lucky get purchased by Waymo but in the mean time make a bunch of noisy and stupid overtures to prop a stock price when they really just plan to re-brand Waymo stuff and not actually pursue self driving. What they do last time with their phony profit, oh right they did dividends and stock buybacks instead of trying to compete or do more than fail convincingly compliance electric cars. The one smart thing they've done is Maven but does anyone think they would let that go where it can- they'll be bankrupt first.

Saw something recently saying Tesla needs a Mary Bara. In reality 1000 or 1000,000 Mary Baras wouldn't replace one Elon Musk and that's coming from someone who thinks the great leader or great person theories are utter BS designed to serve as elite loss leaders for non contributing oppressors.

 

[David Green]

You live in an alternate universe... GM has huge profits on the trucks...

Cadillac is a joke? Still sells a lot more cars then Tesla... so what is Tesla?

You claim the union did not hurt GM, then why is Musk so afraid of the Union at Fremont...

 

[Pushmi-Pullyu]

GM also have much lower operation expenses per vehicle then Tesla, so the net profit is fantastic on those vehicles.

GM has farmed out a lot of expenses, like sales and service, to their dealerships. But they have to split their profits with the dealers.

Tesla has cut out the middleman. It's true that by doing so they have to bear the cost of sales and service, but I don't think there's any question that this is a better business model for making profit. Other auto makers are almost certainly going to follow Tesla's business model in the future.

Net profit for large auto makers is very far from "fantastic". It's pretty thin, like less than 10% on average. If you want to see a "fantastic" profit margin, look at Apple.

Hey, David, how is your Tesla "short" investment doing these days? With all your active Tesla bashing, I'm guessing it must be doing rather poorly.

​

 

[David Green]

GM has farmed out a lot of expenses, like sales and service, to their dealerships. But they have to split their profits with the dealers.

Tesla has cut out the middleman. It's true that by doing so they have to bear the cost of sales and service, but I don't think there's any question that this is a better business model for making profit. Other auto makers are almost certainly going to follow Tesla's business model in the future.

Net profit for large auto makers is very far from "fantastic". It's pretty thin, like less than 10% on average. If you want to see a "fantastic" profit margin, look at Apple.

Hey, David, how is your Tesla "short" investment doing these days? With all your active Tesla bashing, I'm guessing it must be doing rather poorly.

​

Like usual you are comparing apples with oranges... GM net profit is less then 10%, but we were talking about gross profit in this conversation... If you had any business acumen you would know the difference. GM generates huge gross profit on some programs. and losses on others. GM also spent more then 8B on plant CapEx in the last few years and has now modernized all of their main manufacturing plants (Arlington body shop is not finished yet).

Yes, Apple profit is amazing, so is Microsoft... Wow! they are real tech companies, and both in my long term portfolio. You should give up on the Tesla short chatter. I have never owned Tesla stock long or short, and have actually never shorted any stock. I am a conservative investor, my version of risk stocks are like BYD, and Magna. I follow Tesla for the same reason people watch a weekly sitcom, Tesla is the ultimate reality show.

Interesting that you mention Tesla, how was their net profit last qtr? Ummm... (650M) on 3.4B in revenue is a net loss of 18% + or - (not sure their business model is working) Maybe Q2 will be better, but I doubt it as the SEC, and Staurt Meissner are going to be going over that 2018 Q2 10Q with a fine toothed comb to make sure all is legit... My guess is Tesla will be very slow to file the 10Q this time around. Meissner has even been poking Elon on twitter every day, I think the earnings call is going to be fun, grab the popcorn... Hey, at least Tesla made good, and paid the "Farting Unicorn" guy... Better late then never!

 

[101101]

Interesting point that you make David though it reminds of that big 3 scam on pick ups. They wanted protection from the Japanese (claim that Japan's Gov was dumping) but in addition to a hard cap on overall Japanese import vehicles (it wasn't just that the Japanese makes could put the Big 3 out of business at will- also that Japan was protectionist about its own market compounded by the big 3 being unwilling to make vehicles for Japan's market)... so in addition to the hard cap of Japanese imports the Big 3 got a 25% tariff on Japanese pick up trucks. Japan moved production here (quality suffered- J door sill versions of their vehicles hold value much better) but survived to the point that Toyota became 1# globally. But point is Big 3 started internally transferring value to an area (pickups) protected by their political protectionist mote through the equivalent of an internal subsidy for bigger heavier friction lined truck vehicles that would need more gas because they also wanted to push more petrol (their real mission) and scam emissions standards diesel gate style (they need a retro-active carbon tax applied to them.) So today they are still pulling the same BS post bankruptcy, mommy coddled GM has a few loss leader niches it points to claim overall that its is profitable and does idiotic dividends (let them eat cakes style) while it is really just another structurally bankrupt (like Ford) petrol pusher that couldn't survive without its fat subsides and protections that protect the scammers not workers or the public or ordinary people.

There is a difference with Tesla. Mission oriented to the max. Products have few points of failure as very few moving parts. Really made out of stuff a cheap as sand, also super efficient (protects their customer's interests instead of raping them with rent seeking- really protects them to the point of cord and pump cutting) and will be more automated than an Intel factory- best way to cut costs. And founder is clear about need for guaranteed annual incomes and actually understands technology and the trends and is activist against in ways that protect people whereas GM is still trying to figure how to screw its workers and dealers and figure out how to use them as a cushion and scapegoat for its next fall while trying to get its self sold off concubine style to Waymo. While GM workers still have the money they should buy that firm, take it private, eject the management (form an internal union) and bar in the new charter managers (if the even kept them and don't automate them out from ever holding shares,) and then liquidate the firm themselves with all of the proceeds going to them and not the rent seeker shareholders or concubine managers or turn it into solid means for their own support even if fully automated.

 

[David Green]

Interesting point that you make David though it reminds of that big 3 scam on pick ups. They wanted protection from the Japanese (claim that Japan's Gov was dumping) but in addition to a hard cap on overall Japanese import vehicles (it wasn't just that the Japanese makes could put the Big 3 out of business at will- also that Japan was protectionist about its own market compounded by the big 3 being unwilling to make vehicles for Japan's market)... so in addition to the hard cap of Japanese imports the Big 3 got a 25% tariff on Japanese pick up trucks. Japan moved production here (quality suffered- J door sill versions of their vehicles hold value much better) but survived to the point that Toyota became 1# globally. But point is Big 3 started internally transferring value to an area (pickups) protected by their political protectionist mote through the equivalent of an internal subsidy for bigger heavier friction lined truck vehicles that would need more gas because they also wanted to push more petrol (their real mission) and scam emissions standards diesel gate style (they need a retro-active carbon tax applied to them.) So today they are still pulling the same BS post bankruptcy, mommy coddled GM has a few loss leader niches it points to claim overall that its is profitable and does idiotic dividends (let them eat cakes style) while it is really just another structurally bankrupt (like Ford) petrol pusher that couldn't survive without its fat subsides and protections that protect the scammers not workers or the public or ordinary people.

There is a difference with Tesla. Mission oriented to the max. Products have few points of failure as very few moving parts. Really made out of stuff a cheap as sand, also super efficient (protects their customer's interests instead of raping them with rent seeking- really protects them to the point of cord and pump cutting) and will be more automated than an Intel factory- best way to cut costs. And founder is clear about need for guaranteed annual incomes and actually understands technology and the trends and is activist against in ways that protect people whereas GM is still trying to figure how to screw its workers and dealers and figure out how to use them as a cushion and scapegoat for its next fall while trying to get its self sold off concubine style to Waymo. While GM workers still have the money they should buy that firm, take it private, eject the management (form an internal union) and bar in the new charter managers (if the even kept them and don't automate them out from ever holding shares,) and then liquidate the firm themselves with all of the proceeds going to them and not the rent seeker shareholders or concubine managers or turn it into solid means for their own support even if fully automated.

Another of your rants that is all over the place... Slow down big guy... The larger Japanese makers make trucks here and get the same manufacturing subsidies as anyone building new manufacturing capacity in the USA. Toyota, Nissan, and to a much smaller extent Honda have not done well impacting GM, Ford, Or Ram sales. Those three trucks makers are running their plants "balls to the walls" to even remotely keep up with demand. GM just completely rebuilt all 3 pickup plants to increase efficiency, environmental friendliness, and production. GM is also purchasing mostly green power, has installed several solar arrays, and most of their plants are landfill free meaning 100% recycle. So you can say what you want about GM, but their plants are new, and modern, they are profitable, and they pay back investors. GM also is more committed then Tesla to green energy, where is the solar array at Tesla sites? Come on even Audi covered the E-Tron factory in Solar panels. For me, Talk is cheap... Elon talks about caring for the environment, but their operations show something different.

 

[Pushmi-Pullyu]

GM net profit is less then 10%, but we were talking about gross profit in this conversation... If you had any business acumen you would know the difference.

So... when you said...

GM also have much lower operation expenses per vehicle then Tesla, so the net profit is fantastic on those vehicles.

...you actually meant "gross profit" when you wrote "net profit".

Got it.

I have never owned Tesla stock long or short, and have actually never shorted any stock... I follow Tesla for the same reason people watch a weekly sitcom, Tesla is the ultimate reality show.

Just like the little boy in the story of "The Boy Who Cried Wolf", you don't seem to understand that if you keep lying over and over and over again, sooner or later nobody will believe you.

You claim to have no financial interest in Tesla, but then you turn around and post:

The selloff of Tesla stock yesterday and today is not individual investors, it is institutional investors, look at the volume yesterday, and in the first hour this morning… This is institutional… they were not impressed with the deliveries, and all the spin in the press release. [citation: https://insideevs.com/tesla-production-deliveries-graphed-q2-2018/#comment-1490148 ]​

...and:

Profit taking does not dump 5M shares in the first 30 minutes of trading… How many Tesla shares are controlled by individuals? 20M total? I am guessing, so that means 25% sold at low prices this AM? I do not think so…. Profit taking happened late last week, shorts increased at the same time… what is happing since yesterday is a more of a dump… The data Tesla released is disappointing. Wall Street caught wind there was another factory shutdown that was not publicly scheduled. Sunday and Monday this week, no production… [citation: https://insideevs.com/tesla-production-deliveries-graphed-q2-2018/#comment-1490286 ]​

Even someone like me, who spends a lot of time reading about Tesla and posting comments about it, doesn't have even remotely this level of deep interest in granular details of Tesla's finances. These comments quite clearly show your deep financial interest in Tesla. An interest which can only come from investing in Tesla, either long or short.

As they say: "If it looks like a duck, walks like a duck, and quacks like a duck, then it's a duck."

Well, Mr. Green, I spent some months reading Tesla related posts on Seeking Alpha on a daily basis. I'm quite thoroughly familiar with the pattern shown by short-selling serial anti-Tesla FUD dispensers there. Your posts betray the same pattern, and I do mean exactly the same, of serially posting FUD, conspiracy theories, "concern troll" posts, and attempts to twist every single bit of news into the most negative possible interpretation. Exactly the same pattern we see on a daily basis from so many short-sellers on Seeking Alpha. In fact, I'd bet money that you copy much of the content of your Tesla bashing posts from Seeking Alpha.

You may claim to be a Black Swan, Mr. Green, but you sure look like a duck to everyone else!

 

[David Green]

So... when you said...



...you actually meant "gross profit" when you wrote "net profit".

Got it.



Just like the little boy in the story of "The Boy Who Cried Wolf", you don't seem to understand that if you keep lying over and over and over again, sooner or later nobody will believe you.

You claim to have no financial interest in Tesla, but then you turn around and post:

The selloff of Tesla stock yesterday and today is not individual investors, it is institutional investors, look at the volume yesterday, and in the first hour this morning… This is institutional… they were not impressed with the deliveries, and all the spin in the press release. [citation: https://insideevs.com/tesla-production-deliveries-graphed-q2-2018/#comment-1490148 ]​

...and:

Profit taking does not dump 5M shares in the first 30 minutes of trading… How many Tesla shares are controlled by individuals? 20M total? I am guessing, so that means 25% sold at low prices this AM? I do not think so…. Profit taking happened late last week, shorts increased at the same time… what is happing since yesterday is a more of a dump… The data Tesla released is disappointing. Wall Street caught wind there was another factory shutdown that was not publicly scheduled. Sunday and Monday this week, no production… [citation: https://insideevs.com/tesla-production-deliveries-graphed-q2-2018/#comment-1490286 ]​

Even someone like me, who spends a lot of time reading about Tesla and posting comments about it, doesn't have even remotely this level of deep interest in granular details of Tesla's finances. These comments quite clearly show your deep financial interest in Tesla. An interest which can only come from investing in Tesla, either long or short.

As they say: "If it looks like a duck, walks like a duck, and quacks like a duck, then it's a duck."

Well, Mr. Green, I spent some months reading Tesla related posts on Seeking Alpha on a daily basis. I'm quite thoroughly familiar with the pattern shown by short-selling serial anti-Tesla FUD dispensers there. Your posts betray the same pattern, and I do mean exactly the same, of serially posting FUD, conspiracy theories, "concern troll" posts, and attempts to twist every single bit of news into the most negative possible interpretation. Exactly the same pattern we see on a daily basis from so many short-sellers on Seeking Alpha. In fact, I'd bet money that you copy much of the content of your Tesla bashing posts from Seeking Alpha.

You may claim to be a Black Swan, Mr. Green, but you sure look like a duck to everyone else!

haha! I do not claim to be a black swan, or to be able to predict what is happening in the stock market, but I have been around long enough to know how to read a stock chart and make assumptions based on the information. Heck even the stock ticker on my iPhone shows up to the minute volumes, and I can see that when a stock has incredibly high trading volume after an announcement that is institutional buying or selling. Tesla has investors pretty perplexed right now, so many are right on the sell side fence, one bad news story will cause increased sales. Even the WSJ writer who got to tour the factory the other day gave a glowing review of the Model 3P, but said the factory is the Kobe beef of lean manufacturing (it was not his first auto factory tour). Just in case you old guys do not know what Kobe beef is, I will post one of my own pictures to show you.. To use Kobe beef and lean in the same statement is like the ultimate insult, A5 waygu is so fat, if you cook it past rare it will simply melt away and disappear.

 

[Pushmi-Pullyu]

Even the WSJ writer who got to tour the factory the other day gave a glowing review of the Model 3P, but said the factory is the Kobe beef of lean manufacturing (it was not his first auto factory tour).
[snippage]
To use Kobe beef and lean in the same statement is like the ultimate insult, A5 waygu is so fat...

And now you're repeating the one bit of anti-Tesla FUD which actually fooled me, the first time I encountered it when reading Tesla bashing posts on Desperately Seeking FUDsters Seeking Alpha: That Tesla is "inefficient" compared to other auto makers, because their employees-to-cars-produced ratio is higher than others. Hey, gotta hand it to the FUDsters; they managed to fool me. Score one for the habitual liars!

Fortunately, even on DSF, there are a minority of Tesla "longs" making some effort to refute the truckloads of anti-Tesla FUD posted there every day. One of them kindly explained to me that Tesla makes a lot of its parts and subassemblies in-house, which significantly drives down the ratio of cars produced per worker.

But of course, since you're a disinformation-monger, David, you will always try to hide that Truth.

​

 

[David Green]

And now you're repeating the one bit of anti-Tesla FUD which actually fooled me, the first time I encountered it when reading Tesla bashing posts on Desperately Seeking FUDsters Seeking Alpha: That Tesla is "inefficient" compared to other auto makers, because their employees-to-cars-produced ratio is higher than others. Hey, gotta hand it to the FUDsters; they managed to fool me. Score one for the habitual liars!

Fortunately, even on DSF, there are a minority of Tesla "longs" making some effort to refute the truckloads of anti-Tesla FUD posted there every day. One of them kindly explained to me that Tesla makes a lot of its parts and subassemblies in-house, which significantly drives down the ratio of cars produced per worker.

But of course, since you're a disinformation-monger, David, you will always try to hide that Truth.

​

The WSJ writer wrote about the fat factory, and went on to say he has experience touring other automakers factories and detail what he saw... Thats not FUD, that is his opinion...

https://www.wsj.com/articles/first-...formance-a-thrilling-modern-marvel-1532022533

 

[101101]

When you think about why captured consolidated media exists you realize that its job is to protect inequity. And the most basic and fundamental inequity or the heart of it at this time and for many many decades prior has been petrol and the finance stemming from it. You also realize that the point is to control people through telling lies and lies that always make it easier to control people through money.

Tesla is an entity for which its very existence is pointed at the heart of the whole lie making apparatus and the reason for its existence.
But what is behind Tesla is an inevitability its a realization and idea whose time has come. Telling more lies won't keep the denial from falling.
All the captured media ever does is discredit itself against Tesla.

New low water mark was News Week (think about its capture master) putting out a headline calling for violence against Musk. Hoping in the next financial report Musk takes no questions from idiot paid for analysts- just put the facts out or let Ahuja answer if that stupid format some how seems necessary, if possible do cut off and trash the fake analysts again- no questions from firms whose businesses will fail over petrol derivative collapse (inevitable) triggered by Tesla's success.

 

[David Green]

When you think about why captured consolidated media exists you realize that its job is to protect inequity. And the most basic and fundamental inequity or the heart of it at this time and for many many decades prior has been petrol and the finance stemming from it. You also realize that the point is to control people through telling lies and lies that always make it easier to control people through money.

Tesla is an entity for which its very existence is pointed at the heart of the whole lie making apparatus and the reason for its existence.
But what is behind Tesla is an inevitability its a realization and idea whose time has come. Telling more lies won't keep the denial from falling.
All the captured media ever does is discredit itself against Tesla.

New low water mark was News Week (think about its capture master) putting out a headline calling for violence against Musk. Hoping in the next financial report Musk takes no questions from idiot paid for analysts- just put the facts out or let Ahuja answer if that stupid format some how seems necessary, if possible do cut off and trash the fake analysts again- no questions from firms whose businesses will fail over petrol derivative collapse (inevitable) triggered by Tesla's success.

Now Tesla is begging suppliers for kickbacks to make a profit... hahahahahhahaha! Good Luck with that!

 

[bwilson4web]

Fortunately, even on DSF, there are a minority of Tesla "longs" making some effort to refute the truckloads of anti-Tesla FUD posted there every day. One of them kindly explained to me that Tesla makes a lot of its parts and subassemblies in-house, which significantly drives down the ratio of cars produced per worker.

The term is "vertical integration." Take for example, seats. Elon ran into Model S delivery problems when the seat subcontractor failed to deliver on time. So he built an automated, seat production line. Elon is in one respect the modern Henry Ford who ran everything from the foundary and rubber plantations to cars rolling out the other end.

Elon went to Russia to buy some rockets and they turned him down. On the return flight, he laid out SpaceX. In effect, he doesn't trust suppliers for good reason.

Bob Wilson

 

[Pushmi-Pullyu]

The term is "vertical integration." Take for example, seats. Elon ran into Model S delivery problems when the seat subcontractor failed to deliver on time. So he built an automated, seat production line. Elon is in one respect the modern Henry Ford who ran everything from the foundary and rubber plantations to cars rolling out the other end.

Yup, vertical integration, which as you say the Ford Motor Co. took to an extreme in its River Rouge industrial complex.

But Ford had to do that; the industry of automotive parts suppliers was virtually nonexistant exist back then, or at least was wholly inadequate for the high volume of parts Ford needed for the Model T. As has been pointed out, Ford abandoned most of the River Rouge complex in later years, as it proved more cost-effective to buy many or perhaps most parts from suppliers. But that was only after the auto parts supplier industry grew tremendously, so I think those who argue that building the River Rouge complex was a mistake on Ford's part, are flat wrong.

Obviously there are logical arguments for both sides; both for making things in-house and for farming them out. I think it's safe to say that no general rule is going to apply to every part. We can say with certainty that it makes no sense for any auto maker to make its own common fasteners. And most ICEV makers make their own engines, so that suggests it's better to keep that core competency in-house. Whether that translates to EV makers making their own motors is debatable. I note that Tesla at different times has made its own motors and has used outside suppliers.

Looking at the entire picture, I think we can make a good argument that the truth must lie somewhere in between; that it makes financial sense for an auto maker to make some parts in-house, but not others. Just how much or how little... well, I don't think I have have an informed opinion, so I'm content to watch others argue over whether or not Tesla is making too many parts in-house. So long as it's only the serial Tesla bashers arguing Tesla is doing it wrong, it looks like just their bias talking, rather than an argument based on facts, logic, and evidence. So as far as I'm concerned, the question is very much up in the air.

I think it's also safe to say that the WSJ reporter who David Green quoted is woefully clueless on this subject. At least I have some idea of how little I know about the issue! Him... apparently not so much.

 

[David Green]

The term is "vertical integration." Take for example, seats. Elon ran into Model S delivery problems when the seat subcontractor failed to deliver on time. So he built an automated, seat production line. Elon is in one respect the modern Henry Ford who ran everything from the foundary and rubber plantations to cars rolling out the other end.

Elon went to Russia to buy some rockets and they turned him down. On the return flight, he laid out SpaceX. In effect, he doesn't trust suppliers for good reason.

Bob Wilson

Bob, you live in a fairytale world with your views of Elon Musk... Elon is no Henry Ford, he has spent billions upon billions of investors money, and now the investors hopes lie in a tent in the parking lot. On the seats, a source of many Tesla customers complaints, Tesla is not saving any money, and they are really not very comfortable.

SpaceX is doing well.... even better when Elon stays away, and tries to save Tesla, which has become his full time job. Pre Market trading not looking too good this morning.

 

[Pushmi-Pullyu]

...now the investors hopes lie in a tent in the parking lot.

Surely there is a support group for those Tesla bashers who have started believing their own falsehoods?

"Hello, my name is David and I'm a serial Tesla basher!

"WELCOME, DAVID!"

 

[David Green]

Surely there is a support group for those Tesla bashers who have started believing their own falsehoods?

"Hello, my name is David and I'm a serial Tesla basher!

"WELCOME, DAVID!"

Do you have any facts to back up what you say? I am not bashing Tesla, I am only pointing out my opinion of the details of their business. You are constantly bashing me... I am sticking to the business... no time for personal insults. If you try to state your propaganda directly to me I am going to shoot you down with facts. BTW, hows the Tesla share price doing since Elon last threatened the bears? Heading for 20% down as of today...

 

[bwilson4web]

But Ford had to do that; the industry of automotive parts suppliers was virtually nonexistant exist back then, or at least was wholly inadequate for the high volume of parts Ford needed for the Model T. As has been pointed out, Ford abandoned most of the River Rouge complex in later years, as it proved more cost-effective to buy many or perhaps most parts from suppliers. But that was only after the auto parts supplier industry grew tremendously, so I think those who argue that building the River Rouge complex was a mistake on Ford's part, are flat wrong.

Today we use a 'trade study' which measures requirements and suppliers versus price. These are not trivial but certainly feasible. But imagine a world where parts come from vendors who also supply your honorable competition. That is exactly the world Tesla and Elon Musk live in. For example seats.

The seat supplier(s) for the Model S is exhibit #1:
https://www.reuters.com/article/us-...-goes-against-the-grain-for-now-idUSKBN1CV0DS

The seats on Tesla Inc’s (TSLA.O) new Model X SUV were a mess. An outside contractor was having trouble executing the complicated design, spurring frustration and finger-pointing between Tesla and its supplier.

How would Tesla ever pull off mass production of the upcoming Model 3, the car intended to catapult the niche automaker into the big leagues, if it could not deliver on something as fundamental as a seat?
. . .​

Tesla FUDsters have jobs and businesses. Imagine if one of them got a contract to build an important subassembly or facility or operate a delivery vehicle. Given their pathological behavior, they would burn down Tesla given a chance. It is a real risk and examples are common enough.

Bob Wilson