Teslagate

| No Comments

An interesting (and well researched) post about Tesla Motors and how what they claim does not match up with what they do. Business practices, numbers and rebates from the California taxpayers.

Check out: Whopperpedia: the Ultimate Guide to Teslagate

WHOPPER #1: "WE'RE PRODUCTION-CONSTRAINED"
Tesla maintains that it makes as many cars as it can. Production-constrained, then, means that demand exceeds capacity (or production, or supply if you prefer to call it that). They have used this mantra from the moment the Model S started production (June 2012) to the latest earnings report, which covers January-March 2014.

How anybody with any business knowledge can believe this bullshit is beyond me.

a) If demand exceeds capacity then you simply increase capacity and/or price
Of course, in the real world demand usually outpaces capacity for a short period of time; in such case the company will be reluctant to raise prices for fear of killing momentum. This happens not so much because a product is popular (the iPhone doesn't sell out) as when it's more popular than expected, as happened to the Wii and PS4. Surprises do happen, and sometimes a product is in fact low on stock for a year or so (as with the aforementioned Wii). But to the best of my knowledge it's unprecedented for a product to remain supply-constrained for nearly three years.

Oh, and there may be occasional sell-outs later in a product's cycle. As in, the Wii sold out first at launch and three years later with New Super Mario Bros. Most of the time in the middle it wasn't sold out. The same has happened with the Galaxy S, Nespresso coffee machines or any other product you may think of: occasional sell-outs here and there, available 98% of the time at 98% of the stores.

A quick google search reveals how rare these "constraints" are: Tesla is virtually the only company using the production-constrained mantra, while supply-constrained is mostly used in economics, natural resources and occasionally by Tesla too.

Capacity rises to meet demand, whether it's in oil, diamonds or massages. Of course, some demand may simply be unprofitable; Sony may be reluctant to launch operations in Chad even if some people there want to buy a PS4. This is not a demand constraint but a logistics/operational one. In fact, it is an indication that there is not enough demand for the PS4 in Chad for Sony to bother, i.e. a sign of weakness rather than strength.

Of course, the use of this term in natural resources has an explanation: it may be difficult to increase production for physical reasons, and this situation can persist far longer than in manufacturing, food retail, etc; the oil run of 2004-2014 is a good example, as it took several years for producers to increase supply in response to high-and-growing prices. Looking at it the other way, if demand exceeds capacity and capacity is fixed for the time being, the price will rise.

So can't Tesla raise prices, just like the Saudis?

The author develops this WHOPPER #1 with five more chapters and then goes on with 19 more WHOPPERS

They conclude with a bunch of quotes from Elon Musk, misleading statements and numbers as well as potential frauds. A long and interesting read. I would love a reliable electric car but they are still waaay off in the future. We simply do not have the battery technology available.

Leave a comment

October 2022

Sun Mon Tue Wed Thu Fri Sat
            1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31          

Environment and Climate
AccuWeather
Cliff Mass Weather Blog
Climate Depot
Ice Age Now
ICECAP
Jennifer Marohasy
Solar Cycle 24
Space Weather
Watts Up With That?


Science and Medicine
Junk Science
Life in the Fast Lane
Luboš Motl
Medgadget
Next Big Future
PhysOrg.com


Geek Stuff
Ars Technica
Boing Boing
Don Lancaster's Guru's Lair
Evil Mad Scientist Laboratories
FAIL Blog
Hack a Day
Kevin Kelly - Cool Tools
Neatorama
Slashdot: News for nerds
The Register
The Daily WTF


Comics
Achewood
The Argyle Sweater
Chip Bok
Broadside Cartoons
Day by Day
Dilbert
Medium Large
Michael Ramirez
Prickly City
Tundra
User Friendly
Vexarr
What The Duck
Wondermark
xkcd


NO WAI! WTF?¿?¿
Awkward Family Photos
Cake Wrecks
Not Always Right
Sober in a Nightclub
You Drive What?


Business and Economics
The Austrian Economists
Carpe Diem
Coyote Blog


Photography and Art
Digital Photography Review
DIYPhotography
James Gurney
Joe McNally's Blog
PetaPixel
photo.net
Shorpy
Strobist
The Online Photographer


Blogrolling
A Western Heart
AMCGLTD.COM
American Digest
The AnarchAngel
Anti-Idiotarian Rottweiler
Babalu Blog
Belmont Club
Bayou Renaissance Man
Classical Values
Cobb
Cold Fury
David Limbaugh
Defense Technology
Doug Ross @ Journal
Grouchy Old Cripple
Instapundit
iowahawk
Irons in the Fire
James Lileks
Lowering the Bar
Maggie's Farm
Marginal Revolution
Michael J. Totten
Mostly Cajun
Neanderpundit
neo-neocon
Power Line
ProfessorBainbridge.com
Questions and Observations
Rachel Lucas
Roger L. Simon
Samizdata.net
Sense of Events
Sound Politics
The Strata-Sphere
The Smallest Minority
The Volokh Conspiracy
Tim Blair
Velociworld
Weasel Zippers
WILLisms.com
Wizbang


Gone but not Forgotten...
A Coyote at the Dog Show
Bad Eagle
Steven DenBeste
democrats give conservatives indigestion
Allah
BigPictureSmallOffice
Cox and Forkum
The Diplomad
Priorities & Frivolities
Gut Rumbles
Mean Mr. Mustard 2.0
MegaPundit
Masamune
Neptunus Lex
Other Side of Kim
Publicola
Ramblings' Journal
Sgt. Stryker
shining full plate and a good broadsword
A Physicist's Perspective
The Daily Demarche
Wayne's Online Newsletter

About this Entry

This page contains a single entry by DaveH published on May 28, 2015 10:13 AM.

Aaaand the other shoe drops... was the previous entry in this blog.

A quiet day at the farm and then a trip into town is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.

Monthly Archives

Pages

OpenID accepted here Learn more about OpenID
Powered by Movable Type 5.2.9