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Tesla Posts 13th Straight Loss, Says On Track For Second-Half Deliveries (reuters.com) 177

An anonymous reader quotes a report from Reuters: Tesla Motors Inc reported its 13th straight quarterly loss as a rise in sales of its Model S and Model X electric cars failed to make up for the huge cost of ramping up production. The company, run by Silicon Valley entrepreneur Elon Musk, said on Wednesday it was on track to deliver about 50,000 new Model S and Model X vehicles during the second half of 2016. Shares of Tesla, which has offered to buy solar panel installer SolarCity Corp for $2.6 billion, were volatile in after-hours trading. They were last up 1 percent. Tesla delivered 14,402 vehicles in the second quarter, missing its goal of 17,000. It delivered 14,810 vehicles in the first quarter, which was also less than its expectations. Tesla said its net loss widened to $293.2 million, or $2.09 per share, in the second quarter, from $184.2 million, or $1.45 per share, a year earlier. Total revenue rose 33 percent to $1.27 billion in the quarter ended June 30. In addition to acquiring SolarCity, Tesla has unveiled its massive $5 billion Gigafactory in Nevada last week and announced its "Master Plan, Part Deux" not too long before that, which includes manufacturing electric trucks and buses, as well as a ride-sharing program.
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Tesla Posts 13th Straight Loss, Says On Track For Second-Half Deliveries

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  • by npslider ( 4555045 ) on Wednesday August 03, 2016 @06:27PM (#52639883)

    They really need to take Charge of their profits. Things are looking very Negative for them. The Current situation is dire. These losses are simply reVolting. They need to Amp up production and eliminate all Resistance. It's coming down to the wire, time to think Positive.

  • doesn't look good for the home team.
  • by TexasTroy ( 1701144 ) on Wednesday August 03, 2016 @06:46PM (#52640031)
    When asked how the company can survive by selling each unit at a loss, Elon Musk responded "Although Tesla sells each vehicle below the cost to manufacture, we will attain profitability by selling in volume".
    • I know that a negative (number) multiplied by a (negative) number equals a positive number, but I don't think a million negatives add up to a positive. Must be that new math.

      • It's pretty old math. It used to be such a common folly that it spawned a well-known joke,

        Today it's an actual strategy where you need to generate sales/revenue in order to gain enough type to secure more $$$ from idiot investors or secure a ridiculously overpriced buyout from some retard like Marissa Mayer who thinks they can "leverage" your IP/assets/customers, further "monetize" your existing products by jacking up the price and splitting them out into different SKUs/services/etc., and possibly "pivot"

        • So, it's just a ponzi scheme? Get more and more people to "invest" until either Profit! or the bottom falls out.

        • Its not necessarily a folly at all.

          Take an example from the aviation industry - you have a lot of up front investment to design an aircraft, build the test aircraft and carry out the testing.

          You are typically north of $15Billion in debt on the program before the first aircraft has been delivered.

          The problem is, that first aircraft delivered adds to the debt, it doesn't decrease it. Woah, I hear you say, why would you hand an aircraft over that costs you more to make than a customer buys it for? Simple rea

          • by rch7 ( 4086979 )

            Accounting for dummies: You still need to sell at a price that is more than manufacturing costs and any costs per plane/car for this to work. In case of Tesla they sell at less. Multiplying negative number by whatever big positive number just increase your losses. Just don't start on Tesla gross margins, they are artificially inflated and not comparable with other automaker accounting.

      • It's the difference between net margin and gross margin.

        Simplified: The net margin is difference between the sum of all revenue and the sum of all expenditures. The gross margin is the difference between just incremental revenue for an incremental amount expended.

        The gross margin for Tesla last quarter was +21.9%. That means that to earn $1 additional revenue it would cost them only 78.1 cents. Additional work adds revenue faster that it adds costs, so if you add enough work you can offset the fixed costs a

    • by DogDude ( 805747 )
      It works for Amazon...
    • by rch7 ( 4086979 )

      True believers don't care about stinky math or money.

  • I ask myself, when I see numbers like these, "How does a company survive with losses all the way down?

    As it turns out, businesses are like the governments in that you can't reconcile their economies in the same manner as your personal budgeting.

    The leading number? That's Elon Musk's salary from Tesla, and I believe he is making California's minimum wage with that. Folks who can afford to roll with that kind of backstory play by different rules, too.

    • Re:$37,584.00 (Score:5, Interesting)

      by MrBigInThePants ( 624986 ) on Wednesday August 03, 2016 @07:37PM (#52640361)
      Investors, at least the smart ones, are not primarily interested in profits.

      They are interested in growth. A company that has zero growth potential and a stable profit paid in dividends can be far less attractive than a company posting losses with massive potential growth potential. Especially when capital gains taxes are a factor as they are in the US.
      This is not always the case depending on your circumstances but most often is.

      Remember the finance 101 law that states share price increases are always better than dividends because with share increases you can choose to sell some of your shares and get the same effect as dividends should you want it.

      Also remember that, theoretically, share price is a combination of current company value with future growth potential and risk factored in. (hence why most stocks are valued far in excess of their book value) Risk is mitigated by investors across their portfolios (unless they are idiots) and in fact they would WANT them to take risks for the potential gains.

      So yes, government and company books are nothing like personal accounts.

      With government books it is wise to save during booms and spend like crazy during crashes to help smooth the economic cycle and prevent depressions. Completely counter intuitive to personal spending.
      • Investors, at least the smart ones, are not primarily interested in profits.

        Quite right. The biggest payoffs for investors seems to be when a promising company is taken public, or when the stock of a fledgling enterprise multiplies like a field mouse. Tesla stock, currently about US$225.00, could be had in January 2013 for under $33.00 a share.

        FD: I'm rooting for Elon in all his ventures, including Tesla. He's made the electric car cool and brought attention to it that has spurred development by other manufacturers. At this point, though, I would wager new investments in Tesla are

      • by houghi ( 78078 )

        True. How many years was Amazon operating at a loss?

    • It really is like your personal budgeting, except access to loans is quite a bit easier.

      What Tesla is doing is borrowing money to invest in product development and increased production capacity. It looks like a loss on the books because they are currently spending more money on expansion than they are selling in product. But this occurs fairly frequently in healthy rapid growth companies where demand for their product greatly exceeds their ability to supply it. The idea is that as the production rates gr

      • Except virtually no business includes capital expenses in profit and loss (unless they are writing down a failed investment).

        The numbers including new factories would be much worse.

        Startups never include cap costs in P&L.

    • You know how people complain about businesses being short-sighted, they're only interested in profits for the next quarter? Actually, Tesla (and many other technology companies) are interested in long-term profits.

      If they just wanted to make profits over the short term, they wouldn't be spending so much money to expand their company.

  • by WindBourne ( 631190 ) on Wednesday August 03, 2016 @08:51PM (#52640767) Journal
    While orders for nearly all other car makers are slowing down, Tesla continues to grow faster. In fact, it has always been ahead of supply.
    And upon looking at competitors to Model X, we can see that they are also slowing down FASTER than the average.
  • One third.

    Let's remember that they are still a small company. More important is getting the company structure right and people to deal with future growth.

    It's easy to see that once they break even the other car manufacturers will be knocking down their doors just to do collaboration deals since they will be so far behind. If they produced 200,000 vehicles a year they wouldn't be a threat.

    It's all about the batteries. It's the most expensive part of the car. And the new gigafactories by 2020 will drive cost

    • Well, they did announce they are working on all the vehicles you've mentioned.
      Personally I'm more curious about Elon's Machine-that-builds-the-machine stuff, improvements in manufacturing density and efficiency.
      And I was wondering, even before the Solar City merger plans, if in fifteen years we'll even think of Tesla a mainly a car manufacturer.

Fear is the greatest salesman. -- Robert Klein