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.
I'm Shocked! (Score:5, Funny)
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.
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Yes, a place where we will all be punished.
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There is a battery of cells reserved.
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Usually cars work better in Drive, but Neutral may be more efficient.
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Where do I submit my resume?
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Perhaps a position in Marketing...
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Dude, did you forget your lithium today?
You know Tesla isn't in this for the long haul, they don't have the range. Their batteries are dead all too soon. You see it's a chemistry problem, a weighty issue of inefficiency coupled with a departure from a stable power source. They don't use enough oil, but leach their energy from the outside and try to store enough to get by but they fail. Too soon they die, stop working and come to a stop, left in need of power from outside, occupants stranded to walk.
Fix
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So, short of getting 1.21 GigaWatts every mile, they are screwed?
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Not me Marty.. The car!
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Your'e saying Tesla's next model...this things going to be nuclear!?
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No, I heard the original "woosh"... Actually I've heard two to your one at this point, though the second was obviously not as loud..
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Shocking disconnect from the high capacity of Elon's funds.
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There must be an open circuit somewhere...
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That would be an impedance to their progress. Some people could get really wound up. What could induce such a change?
0-13 (Score:2)
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Maybe lucky 14 will be the charm?
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Two big plays and they're back in the game!
They'll profit by selling in volume (Score:4, Funny)
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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.
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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"
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So, it's just a ponzi scheme? Get more and more people to "invest" until either Profit! or the bottom falls out.
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Well gee, he went from 0 to selling well over 50,000 fully electric cars per year and an order book for an order of magnitude more. That's real hardware rolling around the streets not vapour-software sitting on a computer not being used.
Re:They'll profit by selling in volume (Score:4, Insightful)
That's not a Ponzi scheme. A Ponzi scheme promises great immediate returns, and uses investors money to pay off other investors to fool people into thinking they are. Nobody is buying into Tesla to make a quick buck. I doubt people invested large sums because they expected every car to be electric by 2020.
They are sold at a loss because it takes continued R&D to bring the costs down. To short sighted people like yourself, R&D is a considered a waste of money. However refining the world's most advanced car manufacturing plant, developing and integrating the software and battery technologies, all takes time and money. In the mean time building up a significant patent portfolio. See the sale of the patent portfolios of Motorola or Nokia to see how much this can be worth.
Starting from scratch is expensive. We all hope they can make it. Mobile phones were sold at a loss for a long time after they came out, but I wouldn't like to be without mine now.
Phillip.
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It is sold at loss because it is not the main business. Main business is to sell shares.
R&D is unavoidable in any new product. It is not going anywhere. R&D will be here 10 years later the same as it is here today. Old R&D investment depreciates and becomes useless. You don't sell exactly the same car model for 10 years.
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Have you really never heard of an investment J-curve?
http://www.investopedia.com/te... [investopedia.com]
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So basically Musk is the Trump of technologies? It's a smart move that makes him millions of dollars and it isn't illegal.
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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
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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.
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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
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True believers don't care about stinky math or money.
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Study a little finance before lecturing.
Cap costs aren't in profit and loss. They are reporting the carrying costs of the loan to build the gigafactory, not the cost of the gigafactory.
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Hard to tell if that is successful comedy or failed microeconomics. These days the only law is Poe's Law.
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This reply is in the wrong place in the comment tree. Please ignore.
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Sorry, got the wrong reply link in the comment tree. Ignore that other reply that should be making no sense to you.
$37,584.00 (Score:2)
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)
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.
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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
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There is theory, maths and evidence backing it also.
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It is more complicated than that.
Accumulating debt for expansion can increase the value of the company and thus the stock price. (buy new factory for new sales which increases sales by more than total cost of loan)
It can also be neutral. (buy plant with debt that roughly equates to value added or pay back a loan)
It can also be a disaster. (invest heavily in something that does not work out)
Decisions can be good and bad.
Not sure how to make this more obvious or simpler so I will no
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I took pains to describe in my previous post this was NOT A THEORY but an insight into WHAT ACTUALLY GOES ON for most investors evaluating ANY stock. Whether YOU or I think Musk deserves it or not is entirely irrelevant to the discussion - the stock price will dictate that.
Holy Christ...beating your head against a brick wall really hurts...
Also...if you are an investor and think that "faith" (FFS!) is
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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
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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.
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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.
what is missing is that orders continue to rise (Score:3)
And upon looking at competitors to Model X, we can see that they are also slowing down FASTER than the average.
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Tesla could produce 1M cars TODAY AND WOULD STILL BE BEHIND. Why? Because they are a wanted quantity. Simple as that.
They are not missing their goals by much. In addition, NOBODY since Henry ford 100 years ago, has ever grown as fast as they have.
And to make the clean that you will get your T3 in 10 years, means that you have not even taken note of the fact that they will be at 100,000 cars at year end.
And at this time, I suspe
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1) replacing 3rd party suppliers with in-house production.
2) adding massive numbers of Super Chargers
3) adding massive numbers of service and show rooms.
4) R&Ding T3. 5) R&Ding a new bus, new Semi, new Truck, and new Roadster.
6) R&Ding a new factory line for T3.
7) R&Ding a new battery manufacturing plant.
8) R&Ding a new ba
All I can say is look at the revenue growth (Score:2)
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
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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.
Re:Meanwhile..... (Score:5, Informative)
http://online.wsj.com/mdc/public/page/2_3022-autosales.html [wsj.com]
The truth of the matter is that at the prices they're being sold for, most people want a Ford or GM far more than they want a Tesla.
Re:Meanwhile..... (Score:5, Insightful)
And when Tesla announces a model at a price people do want, they do 325,000 pre-orders in a week. At $1000 per, that is $325M in deposits in a week.
http://www.theverge.com/2016/4/7/11385146/tesla-model-3-preorders-375000-elon-musk
So the truth is there is a demand for a low cost Tesla, now we wait and see if Elon and Co can deliver.
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I'm waiting to see what the real battery life of these low cost electric cars is... not just range when new, but miles driven until that range has deteriorated to something unacceptable.
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"but miles driven until that range has deteriorated to something unacceptable"
What range would be unacceptable?
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I won't hazard a guess as to what is unacceptable to him, but if our scarecrow model is Average American that's about 25.5 miles, times 2 (one to go, one to come back). We may have fantasies about our weekends, but on average that's also about as much as we drive on weekends too based on the model I have.
I will admit, I wouldn't buy another Ford if I were paid to do so.
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Haven't driven a Ford in a LONG time; had a Tempo that I'll would have happily put a bumper sticker on that read "my other car is a Trabant"
Drove a Volvo station wagon for a summer about 20 years ago that was a great car - lots of capacity, respectable power and surprisingly good handling.
Had a VW Golf that was just fantastic and was considering a Volt until the GM ignition fiasco came to light.
So if I don't go with Tesla, I'll be looking for another new (to me). Perhaps I'll finally go Japanese although I
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FWIW my Honda's have been pretty good. I've heard quality on the newer models has declined, but my 2006 accord hybrid is still going strong with less problems in 10 years than either of my Ford's had their first 3.
But I do want a Tesla, I'm just not ready to throw my money at something sight unseen.
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They're the same batteries that are used in the current Tesla, just less of them. How are the current cars doing in your opinion?
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And, I live and drive in Florida... most days less than 30 miles, but on weekends we do actually travel more than 120 miles in a single trip at least one time a month.
When ambient temp is over 100F, and the temperature on the black asphalt can reach 130F easily, I'd be quite concerned if the batteries aren't actively thermally managed.
So, if that range capacity drops to less than 120 miles at 60mph, it's going to hurt our common weekend plans.
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Not sure the carbon-balance is there, ice costs quite a bit of energy to make.
Personally, I like the "cool seats", but most of those are air-circulators - which don't seem like they're going to have really good longevity.
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And when Tesla announces a model at a price people do want, they do 325,000 pre-orders in a week.
Yes, sort of. Tesla announces a free car because there is absolutely zero commitment to buy the car. That free price is pivotable. Who know how many people would have put down a non-refundable $1000 deposit. The number of pre-orders would have been lower, and probably much lower.
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I'd also argue that the Model 3 is far from being "low cost" or sold at "a price people do want". At US$35,000 base, there are 564 new vehicle types (that's models and trim levels together) li
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Yes, but many, or perhaps most of those 564 types don't attract a $7,500 subsidy from the federal government, which probably about half the model 3s' buyers will get.
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Yes, but many, or perhaps most of those 564 types don't attract a $7,500 subsidy from the federal government, which probably about half the model 3s' buyers will get.
Half of the initial pre-order list, but none after that. Which is one of the reasons for the pre-order list rush.
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You also don't have to pay sales tax on the rebate amount, which I'm guessing most folks will have to do (since the sales tax on the rebate wil
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I think you should account for the significant savings in energy and maintenance cost though.
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It's worth noting that preorders -- even with a meager deposit -- are not the same thing as orders. Just how many of those preorders are speculative in the hopes of turning around and selling immediately at a profit? I'd wager the answer is "many of them", and many more will likely never be turned into actual orders.
I'd also argue that the Model 3 is far from being "low cost" or sold at "a price people do want". At US$35,000 base, there are 564 new vehicle types (that's models and trim levels together) listed on Edmunds.com which are less expensive (I ruled out 11 vehicles that were almost $35k, accepting only anything sub-$34.5k.) And as of late last year, the average new car sale price in the US market was $33,500.
The Model 3 is, by most people's standards, still an expensive car.
Average passenger car is something like $26k. $33k+ includes trucks and SUVs.
And no way you will get usable Model 3 for $35k in 2017 or 2018, as second quarter report shows Capex investment for production and service stalled and highly unlikely to reach more than half of 2.25 billion target for this year. Sorry guys, urgent SolarCity bailout is priority now.
Just quick charging access will cost you some thousands extra above base price, and most likely you will not be able to use standard chargers like every
Happened with Internal Combustion cars, too. (Score:4, Insightful)
The truth of the matter is that at the prices they're being sold for, most people want a Ford or GM far more than they want a Tesla.
Early adopter costs are high. Then, production of commodity items ramps up and they're sold at a more reasonable price. There are intermediate steps along the way with progressively larger prouction, lower cost, less flashy models.
This isn't just a modern high-tech phenomenon. The internal combustion automobiles went through it, too. They started as rich-people's playthings/status symbols and worked down through things like country-doctor housecall vehicles before Ford's commodity "A" and "T" vehicles put them within reach of the mass of the population. Why should new-tech battery-electric cars be any different?
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This trend has also held true in modern electronics. DVD players were once for the rich, now they are at dollar stores.
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LiFe batteries and steel cage bodies are going to keep the cost of electric cars rather high for a long time.
What made DVD players cheap was that the components required are teeny tiny, the cost of complexity drops much faster than the cost of bulk raw materials and energy required to process the materials into usable form.
Re:Happened with Internal Combustion cars, too. (Score:4, Informative)
Battery prices have been falling very quickly for years. They were estimated to be ~$600 per kWh in 2012 and expected to reach $200 per kWh by 2020 and $160 by 2025
http://www.plugincars.com/lith... [plugincars.com]
We may already be at the $200 level or getting close and *should* beat that $160 level by 2019.
Steel cage bodies?? EVs aren't the only ones requiring those.
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$200 to $150 isn't exactly the bottom falling out of the price, the way DVD players went from $200 to $20 in the space of 5 years.
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"$200 to $150 isn't exactly the bottom falling out of the price"
A 25% drop in something that will last 7-15 years is a big deal at the corporate / industrial / institutional / utility level, especially when it's *already* seen a +40% drop in just the 4 previous years.
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We're already several years ahead of that curve.
From QUARTZ [qz.com]:
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Why are battery cars so expensive then? They don't need that complicated engine, just slap cheap* battery and electric motor that is already well perfected technology used in hybrids.
$150/kWh * 60 kWh = $9000. Plus margin, warranty costs, cooling system, etc. It is close to automaker's manufacturing cost for a complete economy gas car.
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I believe that was the best-case *cell* cost for LG Chem but there are still substantial costs to assembling hundreds into a managed pack with active cooling
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LiFe batteries and steel cage bodies are going to keep the cost of electric cars rather high for a long time.
Drastically raising production and slashing cost of automobile batteries IS what Tesla's $5 billion "Gigafactory" in Nevada is about.
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Part of the reason for locating in Nevada was the availability of lithium ore.
IMHO it was also because, with the plant in Nevada, the metals can be mined and processed into finished batteries entirely in a state with legal structures built around its history of mining - in primarily desert areas - as its cash-cow.
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It doesn't change anything. Panasonic didn't invented any new "giga" technology. It will be using mostly the same technology, slightly different form factor with some extra silicone to improve specific energy a bit. And by the way, current piece of "giga" factory is even smaller than old Panasonic battery factory in Japan. If you believe in all the miracles Musk is talking about before every share sale, you may as well go buy some cold fusion device, it will make miracles too.
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Tesla has never used LiFe batteries. Their chemistry has much higher energy density and also seems to have very good longevity. I have over 43K miles on my 3+ year old P85 and haven't noticed any significant drop in range. In terms of cost per kwh, Tesla is at the bottom, having the lowest price per kwh. Their gigafactory should significantly reduce that further.
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The truth of the matter is that at the prices they're being sold for, most people want a Ford or GM far more than they want a Tesla.
The actual truth of the matter is most people can't afford a Tesla.
I'm not sure why that was so hard to say for you, since the reality here is what consumers want has fuck-all to do with what they can afford.
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I didn't say it because unlike my statement, which is grounded in fact, yours attempts to imply a desire which is not in any way backed up by the evidence. Sure, most people *might* want a Tesla they can't afford, but equally most people *might* have no interest in that Tesla even if they could afford it. I'm not in the habit of making statements with no grounding in fact; perhaps you are.
The lower-end Tesla price tag today is around $75,000. It's not hard to argue the fact that most people don't have that lying about in cash, so let's talk about what happens after the bank evaluates your income and debt.
The lease due-at-signing cost is over $7500. Then you get to settle in and enjoy a $900+/month car payment.
There's really no point in running the numbers to buy one. It doesn't get much better.
My original statement now stands with Common F. Sense; most people can't afford a Tesla.
As far a
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OK, so you're a fanboi. Fair enough.
Fanbois usually own the thing they're crazy about. I drive what I can afford.
And I really don't care who you are. From corporate suit to drag strip junkie, this technology is impressive, and I give credit where it is due.
And when someone else steps up to the plate and presents a product that crushes Teslas numbers, I'll be impressed then too. Likely so would Elon.
That link is screwy (Score:2)
Tesla sold >50K cars in 2015 and is on track to sell >80K cars in 2016. The WSJ reports ~10K in 2015 for some reason.
Tesla sells cars as fast as they can make them; they already sell a lot of cars, and they are increasing production by >1.5x per year. Extrapolate out a few years and GM & Ford are very worried.
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Accounting for dummies: This year investment doesn't affect profit. Or loss in this case. It may only affect next year through depreciation.
Re: Meanwhile..... (Score:4, Insightful)
Yes, but as an anonymous coward, you are nobody in particular.
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I like my 2015 Mustang Ecoboost convertible... Fair price, great car, very good mileage, a hoot to drive.
IME Fords are generally quite reliable; I own a 2005 Ford Mondeo [wikipedia.org] with 300000km on it with only 3 non-service repairs in its life. Also own a 1992 Ford Sierra [wikipedia.org] with god only knows how many miles on it (I'm not the first owner). Both cars are used daily by my wife and myself, no problems.
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Exactly. Tesla could be profitable any time they wanted to, but it would be a death sentence in the long term. They're spending a lot of money tooling up for new products which require large capital expenditures. It cost a lot of money to build a new production line and even more to build the massive battery factory. Long term, though, these expenditures will increase profits by allowing them to mass-produce vehicles. A lot has also spent on R&D.
The model S, for example, is very profitable with a profit
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If you think current oil prices has anything to do with crushing Tesla you're a moron. While part of the reason the oil prices are low is the changing demand side dynamics, the current prices isn't to crush that change but rather as a reaction to it.
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A lot of troll posts here, wonder if they are by the same person? Possibly as they show a basic grasp of fundamentals.
Phillip.