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Should Tesla Make Batteries Instead of Electric Cars?

Posted by Soulskill on from the batteries-aren't-as-fun-to-drive dept.

cartechboy writes: "Tesla seems to be doing quite well these days, but one bond trader thinks the company should quit making electric cars and focus efforts on making batteries instead. Bond manager Jeffrey Gundlach says he's already tried to meet with Elon Musk to persuade him to take the battery-only route. Speaking to Bloomberg, he said Tesla could be 'wildly transformational' in the same way electricity and electromagnets were at the advent of their discovery. Enough people are interested in Tesla's vehicles that Musk probably won't take Gundlach's advice. Should he?"

13 of 362 comments (clear)

  1. They've been pushing this angle for a while by Anonymous Coward · · Score: 5, Insightful

    The analysts are pessimistic that a newbie can outperform the established automakers. I disagree. What better way to make a market for your battery factory than proving the technology that they will be used for? This is the type of thinking that kills companies traded on Wall Street.

    1. Re:They've been pushing this angle for a while by GameboyRMH · · Score: 5, Insightful

      They've also been doing a great job of building the cars themselves, making it even more baffling. It's not like they were putting good batteries in crappy cars.

      --
      "When information is power, privacy is freedom" - Jah-Wren Ryel
    2. Re:They've been pushing this angle for a while by AndrewBuck · · Score: 5, Interesting

      Yeah, this is pretty laughable. I don't remember the exact figure but his battery factory (not built yet but planned) is estimated to be something like 25 to 50 percent of the current world output for these batteries; and it is expected that the battery factory will sell almost entirely, if not exclusively to his electric car operation. So this "genius" of a bond investor thinks to himself "gee, if there is such a big market for batteries he should just sell the batteries". Only problem with this line of thinking, if he quits making cars then the battery market dries up. With people like this running our economy it is little surpirse that we fell into an economic collapse, and are probably setting up the next one as we speak. Explain to me again why people like this deserve to be paid millions a year.

      -AndrewBuck

    3. Re:They've been pushing this angle for a while by hsmith · · Score: 5, Informative

      Or he could just do both, build cars and sell batteries. Plenty of car manufactures sell tech and parts to other car manufactures. So many car parts are outsourced in a vehicle it is absurd.

      He is doing all right pushing his cars so far and advancing his tech, why stop doing something that is working?

    4. Re:They've been pushing this angle for a while by plover · · Score: 5, Funny

      Absolutely. It's a mistake to assume that just because 99% of lawyers are corrupt scumbags, that all lawyers are corrupt scumbags. For example, some stopped taking bribes after their funerals.

      --
      John
    5. Re:They've been pushing this angle for a while by MozeeToby · · Score: 5, Insightful

      Yeah, but manufacturing is only one piece (admittedly a big piece once you start moving tens of thousands of cars per year). What doesn't make any sense is how Tesla has innovated in car design outside of the electric aspects. Anyone could have put a huge glass cockpit in their luxury car. They could have negotiated lifetime data plans with cellular carriers. They could have auto-retracting door handles. They could have done OTA updates to fix SW updatable components of the car. They could have designed gullwing doors for SUVs that take just a few inches to open.

      No one ever did. The major automakers got lazy, they stopped even trying to innovate decades ago.

    6. Re:They've been pushing this angle for a while by lgw · · Score: 5, Insightful

      They certainly could and should have let GM die, though. The biggest flaw in Americas take on capitalism is bailouts. Companies like GM need to die and be replaced by companies like Tesla. I've had quite enough "government propping up failed business models" for one lifetime, thanks.

      --
      Socialism: a lie told by totalitarians and believed by fools.
  2. Bad idea by Animats · · Score: 5, Interesting

    Manufacturing auto batteries should be a low-margin business. They're a commodity. Others can enter the business. Over time, margins will decrease. There's not much brand value. (Who made the battery in your phone?)

  3. No by Fulminata · · Score: 5, Insightful

    This is an example of why listening to "investors" is a terrible idea. It's like listening to a gambler advise you on how to coach a sports team.

  4. Yo Gillette by rolfwind · · Score: 5, Insightful

    Stop making those stupid low margin shaving handles and FOCUS SOLELY on cartridges!!!!

  5. Re:Why can't it be both? by michelcolman · · Score: 5, Funny

    I actually understand his point. If Tesla just makes batteries for other companies, then they don't see Tesla as competition. If Tesla's also producing cars, then they are far less likely to do business with them regardless of how good their batteries are.

    Yeah, that would be like Apple buying chips from, say, Samsung. Ain't gonna happen.

  6. WELL THANK GOODNESS... by Anonymous Coward · · Score: 5, Funny

    .. finally, some fucking "bond manager" had to come out and tell Elon Musk what HAS to happen.

  7. Re:Why can't it be both? by Ranbot · · Score: 5, Funny

    Bingo. Last time I heard, he also owns a company that makes rockets too.

    Clearly, SpaceX should stop building rockets and just sell rocket fuel.