His response, after reading about the Tesla was: “glorified golf cart for $92k? You gotta be kidding me. It will never work and if it does these holywood celebrities are even more stupid than I think.”

This conversation took place 1 year ago.

I think the argument can be made that it hasn’t yet made it out of the prototype stage, it’s undergone a couple major revisions already.

The company is taking a long time to get their cars out on the road to customers so the delay is making the margins thinner on the cars. This isn’t oversight but a company floundering in the water. If they were to delay anymore in such a capital intensive market they’d be done.

The first cars are always much more expensive to make, the amortization of the costs of tooling will take a long time to show profits.

Musk did this also because he knows customers now get a tax break. They are just swallowing the federal tax break for themselves.

The audit doesn’t mean they were stupid going in, just that they were slow to realize that costs add up and margins thinned when you’re slow to get to market.

Based on logic and reason (and an analysis of management), the Tesla should not have gotten beyond the prototype stage. But symbolic value is a powerful rose-tinted lens through which the most polished turd can seem very appealing to a greenwashed market, despite all odds.

Criticizing is easy.

They hired seasoned pros from Detroit to show ‘em how to make ‘em after they ran into trouble.

Yes, yes, yes, go ahead and laugh. it’s still true.

It seems the government loves funding Elon-toys that cost more than thought, are years late, and don’t quite live up to what was advertised.

How do you get in on this kind of racket? I’m in the wrong line of work, obviously.

If you read between the lines, what Tesla is saying is that they completely made up the cost of the car, without having actually priced the materials or parts. They DESERVE to fail.

For the merely well off there is the Elise.

Anyway, as a customer if Tesla goes under before you get your car you are an unsecured creditor to the tune of $50K, and if it goes under afterward you have no parts or re-sale value.

However, things like:

“The body supplier was also switched out from a little company that was charging us nutty money and had a max production of three per week to Sotira, who supplies high paint quality body panels to Lotus, Aston Martin and others.”

make me wonder what kind of idiots are running the company. Really, despite your claims to the contrary you’re really making an electric Lotus Elise, you didn’t think that starting with the Lotus body panel supplier would be a good idea?

That sums it up nicely. And I, for one, have no problem with the market deciding one way or the other. The nickname I have chosen tells what I predict for Tesla. But I may be wrong. If so, more power to Tesla.

My hope, though, is that the government does not step in. Then the market does not decide, government regulators do. I fear that Elon Musk will get his money from the Department of Energy and we’ll all be paying for Tesla’s cars.

Worked for Elon Musk’s Space X. It’s funded by NASA.

One of the reasons consumers spend a premium for luxury goods is the treatment they receive for being a customer. People who ruitinely spend >$100k on cars aren’t used to having their time wasted or being jerked around over $6k.

Walking home last night I saw 2, yes TWO Tesla roadsters with license plates parked across the street within 30 yard of each other. The $6k increase won’t bother people buying it as a status symbol (primary market). Still a bargain compared to say, an F430 (which saw it’s sales cannibalized by the california since most buyers only wanted the cheapest ferrari – noted by TTAC).

By the time real consumers are interested (fozone, was that you parked on San Vicente last night?) the bad press of screwing a few LA millionaires will be forgotten or the company will have folded.

I have to imagine that the economic situation has already resulted in a lot of deposit refunds… even wealthy Silicon Valley “friends of Elon” have to prioritize their spending in tough times.

The name changes, but the song remains the same…. Remember DeLorean built 8,500 cars before he tripped over the white lines.

http://eightiesclub.tripod.com/id305.htm

The farm however, was a foreign concept to him, DOH!

What he is saying is not that the company will fold if they don’t jack up prices… but that he would have to get more investment. IE, he would either have to pony up the cash himself, or hit up his existing investors and/or find new ones. That is, he would have to dilute his existing investors.

As a consumer of his product, I don’t give a crap about his wealthy investors being diluted. It is not my problem. They can put on their big-boy pants and plunk down a little more (unless, of course, they think it is a poor investment and that the company is a sinkhole.)

Have we become so beaten-down as consumers that this point no longer resonates?

Only if you believe Musk’s spin of the day.

His successes has been at separating people from their money. By that measure, most drug lords and mob bosses are successful too.

You are right that Elon Musk does not have any integrity. He has stabbed people in the back many times at Zip2, PayPal, Space X, Solar City and now Tesla.

But Musk has also been very successful. One of his strengths is that he tells it like it is and does the dirty work that most will shy away from. As HeBeGB says, a lot of other CEOs have trouble with that.

If they are losing $31K per unit, how does the $6.5K price increase discussed yesterday help them? If these production cost improvements save them $25K then I guess they will be breaking even.

Integrity, remember that word?

And their solution is to try to cheat their existing customers out of $6000, which won’t come close to the extra $40,000 they are losing per car?

Tesla’s death is near.