Issues of concern to people who live in the west: property rights, water rights, endangered species, livestock grazing, energy production, wilderness and western agriculture. Plus a few items on western history, western literature and the sport of rodeo... Frank DuBois served as the NM Secretary of Agriculture from 1988 to 2003. DuBois is a former legislative assistant to a U.S. Senator, a Deputy Assistant Secretary of Interior, and is the founder of the DuBois Rodeo Scholarship.
Monday, November 02, 2015
Is Tesla Doomed?
Tesla's showing all the signs of a company in trouble: bleeding cash,
securitized assets, and mounting inventory. It's the trifecta of doom
for any automaker, and anyone paying attention probably saw this coming a
mile away. Like most big puzzles, the company's woes don't have just
one source. It's true that the world may be running light on
buyers who will spring for a big-dollar electric vehicle that can't make
the hike from Detroit to Chicago without stopping for a long charge.
And cheap gasoline isn't helping Tesla's case. Right now, prices around
the country are hovering close to $2 a gallon. If that's bad news for
the Prius and the Volt, it's worse for the Model S. In
addition, there's never been any secret sauce to the company's battery
technology. The automakers that bought into Tesla's tech early did so to
avoid having to pony up development dollars on first-generation battery
packs of their own. Now that Audi has announced it's getting into the
EV game, Tesla should be even more concerned. I think Tesla CEO Elon Musk figured that if factory stores work for
Apple, they'll work for Tesla. But the fixed costs for an Apple store
are next to nothing compared with a car dealership's. Smartphones and
laptops don't need anything beyond a mall storefront and a staff of
kids. A car dealership is very different. It sits on multiple acres. You
need a big building with service bays, chargers, and a trained sales
force, plus all the necessary finance and accounting people. It ties up a
staggering amount of capital, especially when you factor in inventory.
Under a traditional franchise arrangement, the factory never has to
carry that burden. Right now, Tesla does...more
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