Tesla Earnings Show Record Revenues With Record Losses (techcrunch.com) 268
TechCrunch reports of Tesla's recent Q1 2018 earnings: Tesla reported its Q1 2018 earnings today, posting adjusted losses of $3.35 per share with revenues on $3.4 billion. This is technically a beat, as analysts expected Tesla to report a loss of $3.48 a share with revenues of $3.22 billion, up from $2.7 billion a year ago. Tesla also ended Q1 with $2.7 billion in cash, down from $3.4 billion in cash at the beginning of the year. This quarter, Tesla's net losses were a record $784.6 million ($4.19 per share). So, while it's revenue was higher than ever before, it also reported record losses. At market close today, Tesla was trading at $301.15. In after-hours, Tesla is trading around $287. In its letter to investors, Tesla provided some updates to its Model 3 production, noting it hit 2,270 cars produced per week for three straight weeks in April. Tesla said demand for the Model S and Model X is still quite strong as it hit its highest order number in Q1. "Tesla said it produced 24,728 Model S cars and X vehicles, while delivering a total of 21,815 of them," reports TechCrunch. Tesla also went on to say that they expect to be profitable in Q3 once they reach their 5,000 Model 3 cars produced per week goal.
CEO Elon Musk said the automaker will launch production of the Tesla Model Y crossover in 24 months, which Musk claims to be a "manufacturing revolution." Additionally, Musk said Tesla will publish quarterly reports about the safety of its Autopilot driver assistant feature following a high-profile Autopilot crash in March.
CEO Elon Musk said the automaker will launch production of the Tesla Model Y crossover in 24 months, which Musk claims to be a "manufacturing revolution." Additionally, Musk said Tesla will publish quarterly reports about the safety of its Autopilot driver assistant feature following a high-profile Autopilot crash in March.
As usual promises for the future (Score:5, Informative)
Keep in mind that currently only the more expensive Model 3 is produced, which is supposed to yield in higher profit (or lower loss in Tesla's case) than the base model, which most people want.
And the model Y will be a manufacturing revolution? I would be more inclined to believe that it if Tesla got their shít together on producing the Model 3.
Finally Musk's behaviour on the phone conference was more than awkward. The pressure seems to be leaving marks on him.
Re: As usual promises for the future (Score:2, Insightful)
Only a fucking moron would be disappointed by 3.5 years of pre-ordered backlog, demonstrated profitability, a sustained business model with no expected future borrowing, and a new vehicle announcement.
You, sir, are a fucking moron of the highest caliber.
You have been predicting Tesla failure for years, any day now, and the only consistency is that you are constantly wrong. Over and over and over.
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Only a fucking moron would be disappointed by 3.5 years of pre-ordered backlog, demonstrated profitability, a sustained business model with no expected future borrowing, and a new vehicle announcement.
I'm not sure how more than $700 million lost for the quarter is "demonstrated profitability", especially in light of the fact that this quarter and last quarter are the two largest losses it's ever had. Tesla's had some people waiting more than two years for the cars they placed deposits for, and one can cou
Re: As usual promises for the future (Score:5, Informative)
First off, it would have been only $400M, except they had $120Ms more inventory backlogged due to transit delays than last quarter and a $169M hit on accounts receivable due to production skyrocketing at the end of the quarter (aka, more expenses but the revenue doesn't come until delivery). That money rolled into April.
The simple fact is that at Tesla's Q1 burn rate it would have plenty of quarters left to achieve profitability (the only debt due this year is $200M in November). But it doesn't need plenty of quarters. Almost all of Q1 was spent at ~1000/wk Model 3 production, but it jumped to 2k/wk - sustained - right at the end of the quarter. Now Gigafactory is running at 3k/wk sustained, with bursts already up to the Q2 target of 5k/wk. Most of Fremont is up to 3k/wk except general assembly and the paint shop.
There's a reason that Tesla is so confident that they've resumed expanding Gigafactory [youtube.com].
And? The number of reservation holders was confirmed to be over 450k.
Yes, welcome to the world of growth stocks. If you don't like growth stocks, stay out of the water. Growing a company from "nothing" to "one of the largest in the world" takes monstrous amounts of capex, which gets spent well ahead of the revenue that it returns.
Yes, you've been saying this for two years now. How's this hypothesis been working out?
Yes, some people have, but they've been more than replaced by new reservation holders - and the majority have not. Why? Because - hype notwithstanding - the competition is a joke. The "competition" literally takes twice as long to charge on a road trip, from an inferior network, and gives you a lot less vehicle for your money, with far less interesting options packages. Yes, some people disagree, but the vast majority demonstrably do not. Look at the number of people buying Bolts, for example, vs. those waiting in line for a Model 3.
Why is it that the hype from competitors never plays out as a serious threat? We're back to capex. Making good, profitable EVs takes vast amounts of capex, both in R&D, and in production. And at present, Tesla is the only company that's been doing that. Some companies are - finally, and I'm glad - talking about majorly upping their EV capex, and I cheer that. But the benefits of that will take years to materialize. Without a major capex spend, you either have to make a worse vehicle at a given price point, or subsidize it. And they certainly can subsidize it, but if they do so, they can only afford to make it available in limited markets. Either way, it becomes "not a threat".
Example: most companies today are working on "next generation" li-ions for EVs with cathodes at an 8:1:1 ratio of nickel:cobalt:manganese-or-alumium. You want to keep the cobalt down because it's the most expensive part. Tesla today already has the highest energy density cells in the industry and they're better than 8:1:1 already. Mercedes, when they heard about Tesla's Semi plans, said they "break the laws of physics". No, they just have better batteries than you. That's 500 miles with their current cells; they think they may be up to 600 by then. Batteries are just one component, mind you; capex affects everything.
Re: As usual promises for the future (Score:5, Informative)
Other things we learned yesterday, while we're at it:
1) 5k is targeted at the end of Q2 (actually 6k, but that's to make sure they can at least get to 5k). From the newsletter: "After achieving a production rate of 5,000 per week, we will begin offering new options such as all-wheel-drive and the base model with a standard-sized battery pack."
2) Concerning the FUD that Tesla is "giving up" on factory automation, Tesla is actually doubling down on it. What they were getting rid of was a small number of specific systems that were cases of serious automation overreach. One that Musk couldn't restrain himself from self-deprecating laughter on was "FluffBot". Part of the battery pack assembly process involves careful placement of a "fluff", and they designed a robot to do it. "Fluff" being one of the hardest things you could think of for a robot to have to handle. And they had to make this elaborate computer vision system for it, and it still kept coming up with new, interesting ways to either fail to pick up the foam or to place it in unexpected places. They were paying a lot more on engineers to try to keep FluffBot working and correct its constant problems than it would have cost just to pay people to place the fluff, so of course they scrapped it.
3) GAAP automotive gross margins en route back up 25% after being dragged down by the 3 - now up to 19,7%. S and X gross margins *over* 25%. But Model 3 margins still negative in Q1. Non-GAAP automotive margins (without ZEV credits) saw a nearly 5% boost.
4) Bosch is on the hook for the S recall - as expected, but which lots of people here were making a storm in a teacup about.
5) Both solar and energy storage are expecting a major ramp in Q3-Q4. Musk hinted at a 1GWh battery project in the works, dwarfing the Australia one.
6) Before the downtime near the end of Q1 that boosted production, it took 7 hours to assemble a battery pack. It's now 17 minutes.
7) Model 3 is now nearly the best selling sedan in its class. Not "electric sedan" - all sedans in its class. This month it should take the lead, and by the end of the year take almost half the market.
8) The per-unit depreciation on the production system is around $2k per vehicle, well below its competitors.
9) Based on their results so far, Tesla expects to be able to continue to reduce the cobalt, to "almost nothing".
10) While Musk didn't care much for the question, when asked about integration of SpaceX broadband into Tesla vehicles, his answer was about three years for that.
11) Model Y capex is not to become significant until 2019, with production starting in 2020 ("about 24 months from now"). But the unveiling will be this summer. Production will not be at Fremont.
12) Model 3 gross margin is expected at 20% by the end of Q4, hitting 25% early next year.
13) Tesla has no near-term plan to go to 350kW for cars. Their perspective is that it's a dumb idea to go to higher C-rate cells, which come with lower energy densities; Musk compared it to having a phone that charges quickly but only lasts a few hours; it doesn't make a good product. Tesla prefers to go to more cells per vehicle to boost net charging speeds than higher density cells. Thinks 350kW starts to make sense around 200kWh (unsaid: the new Tesla Roadster is expected to have around 200kWh)
14) Repeated that they would like for other automakers to support supercharging, and they'd be glad to let them onto the network, so long as the designers accepted the Tesla plug and the owners paid the cost of charging. No other automaker has expressed an interest. "Moats are lame. They're nice and sort of quaint in a vestigial way, but if your only defense against invading armies is a moat, you won't last long. Pace of innovation is your only defense. "
15) Expects Semi to hurt rail's margins - just from the reduced trucking cost to begin with, but in particular after platooning comes in. Rail is efficient, but suffers from major "last leg" problems for most go
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Good summary. Tesla seems to be getting a number of things right, and well poised to be a major player moving forward.
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Did you miss the articles about the delivery delays when they happened? Particularly in Europe there were a lot of issues with a shortage of available transportation in important markets (part of it was due to a port strike in Norway, making cargo have to be shipped in over greater distances and overloading the other ports). Tesla ended up having to hire some "second tier" services that use a lot of eastern European drivers in outdated trucks, but after a number of broken down vehicles and one accident, Te
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2) Concerning the FUD that Tesla is "giving up" on factory automation, Tesla is actually doubling down on it. What they were getting rid of was a small number of specific systems that were cases of serious automation overreach. One that Musk couldn't restrain himself from self-deprecating laughter on was "FluffBot".
That's ass-backwards, though. You don't start with automation. You start with hand assembly, and you add automation as it becomes clear that particular jobs are particularly automatable.
4) Bosch is on the hook for the S recall - as expected, but which lots of people here were making a storm in a teacup about.
Bosch has been going steeply downhill for years, and choosing to use them is a bad move. They are nothing like they were in the eighties. It's not just car parts, either. Literally everything they make is junk now.
15) Expects Semi to hurt rail's margins - just from the reduced trucking cost to begin with,
I thought he was trying to make the world a better place. Moving more freight from rail to trucks will do the op
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Except, there was a lot that seems to be contradicted by other things Musk said. For example:
Except Musk also said they changed the battery design to no longer accommodate all wheel drive to raise the production numbers
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You link to a post of yours and then credit it to me? What on Earth is wrong with you?
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First off, it would have been only $400M, except they had $120Ms more inventory backlogged
Actually the loss was more than $700M, they played some accounting games by "excluding certain expenses" and booking some revenue differently this quarter to make the numbers look less bad.
Fast follower (Score:2)
Why is it that the hype from competitors never plays out as a serious threat? We're back to capex. Making good, profitable EVs takes vast amounts of capex, both in R&D, and in production. And at present, Tesla is the only company that's been doing that.
No they are definitely not the only company doing that. The big auto makers are making big investments in EV tech but largely in R&D rather than production. Why? Because for them the production is actually the easy part. They have plenty of cash and experience building cars. Right now the EV market is too small to justify production for them so they are letting Tesla do the heavy lifting of building and proving the market. But Ford, GM, etc could bring an EV to market within 18-24 months. They do
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But Ford, GM, etc could bring an EV to market within 18-24 months
GM sold over 20,000 Bolts last year. For now they're holding back on production, but they'll ramp up marketing and production at the time of their choosing.
GM's total production averages over 57,000 vehicles per week and does so with a nice profit margin.
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Unfortunately, GM lacks two things on the Bolt: a profit margin, and a market. Apart from that, a great car, really.
The lack of a profit margin is why GM hasn't made the Bolt available in more markets - for example, the Opel Ampera-E (Bolt) is ostensibly available in Europe, but very difficult to get ahold of. But even with the limited production, there's few people waiting for a Bolt, while Tesla has half a million people waiting for the Model 3.
Re:Fast follower (Score:4, Insightful)
there's few people waiting for a Bolt, while Tesla has half a million people waiting for the Model 3.
GM sold all the Bolts they chose to make last year, an order of magnitude more than Tesla sold Model 3's.
GM is still in what Musk likes to call the "capex" phase of electric car production, that's true.They won't ramp up production until the cost of production justifies it.
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Tesla's GAAP margin is over 19% (up a percent from last quarter) and non-GAAP margin is over 18% (up 5% from last quarter).
Don't confuse capex and pre-scaled SG&A with margins.
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They're just not investing that much period.
It's not an issue of "easy or hard", it's an issue of are you paying for it.
Yes, because EV tech is totally the same thing as building ICEs.
Re:Different strategies for different size compani (Score:5, Informative)
Read my other posts elsewhere in this thread, where I've discussed their investments. I think it's great that some of them have finally, recently started making (frequently backloaded) capex investments of appropriate scale. But these won't pay off for several years. I really look forward to seeing real competition several years from now. But pretending that this is equivalent to the short term market is wishful thinking.
Developing technology that works in a real world, mass-manufacturing environment, while simultaneously securing market share and real-world data collection, is in no way "spending money just to spend money". Weak EV R&D spending and weak production volumes just do not compete; they guarantee you fall behind.
Actually, EV chassis are generally quite different from ICE chassis, at least in design. The battery pack functions as a stiffening element, and the loadbearing needs and available space are totally different. Real-world driving data shows how effectively your designs play out in practice.
Given that even well-known Tesla hater Sandy Munroe has referred to the Model 3's new suspension design as amazing and among the components that other automakers ignore at their own peril, and its handling has received glowing reviews, you could have picked a better example. No, it's not EV specific, but since you bring it up... (and actually, being an EV does affect suspension because of the lower weight distribution)
The "dinosaur technology" is something any company - including Tesla - can hire countless existing people from the existing auto industry all around the world to fill its ranks with. That's a meaningless issue. The problem is that the rest of the auto industry can't do the reverse, at least not nearly to the same extent. They can leach random Tesla talent, and do from time to time, but there's just not enough people with EV component experience to go around. And not nearly as much EV tech is public and well established knowledge.
EV tech is the core of the vehicle. You start with the batteries, which are in turn a composite of cathode, anode, electrolyte, separator and structural tech elements and their integration thereof into an efficient mass manufacturing process. I know your plan is just "hire an existing batterymaker". Sure, if you've got years and billions in capex, go ahead. But that's precisely the point: these things don't happen overnight or without massive investments.
Cells are of course just a small part of the picture. From the cells you make batteries, which are far more complex beasts than most people give them credit for, in regards to charge management, heat management (between different vehicle subsystems), fire protection, structural integrity, etc. The charger's costs need to be kept down and the power kept up. Motor tech is a particularly complex research field with many fronts advancing simultaneously, and Tesla's PMSRM work is at the forefront. Again, motor tech determines cost, weight, power, and efficiency, and thus other factors like range and handling.
Then you have the broader infrastructure developed alongside the EV powertrain. For example, Tesla has already migrated the Model 3 to a hub-based communication and power system, cutting the wiring harness in half compared to a typical car (both connections and weight). Model Y is looking to take it even further and upgrade to a HV wiring harness, eliminating most of the 1
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Because - hype notwithstanding - the competition is a joke.
While I think Tesla stock is overvalued, I generally agree with you that it is still a solid company with a lot of promise. But don't get confused into thinking Tesla's only competition is other EVs. Plenty of people, myself included, still compare Tesla to BMW, Lexus, Mercedes Benz, etc. when making a car purchase. Being an EV is a factor but for many people it isn't the largest factor driving the purchase.
For instance the Tesla 3 has plenty of competition from cars like BMW 4 series, the Audi S4, and simi
Re: As usual promises for the future (Score:5, Informative)
Boeing had a 7 year backlog on the 787-8, and isn't going to make a single penny in profit on any of them because of the level they fucked up - the current forecast for the entire 787 program (787-8, -9 and -10) is for it to start being profitable sometime next decade.
After a 1000 aircraft has been delivered.
Boeing only just stopped adding to its debt pile on the 787 last year - a decade after it was first supposed to fly.
So no, there's no real reason to get excited about the backlog, because a massive backlog does not automatically equate to a success.
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Boeing only just stopped adding to its debt pile on the 787 last year - a decade after it was first supposed to fly.
So no, there's no real reason to get excited about the backlog, because a massive backlog does not automatically equate to a success.
Yep, the 787 "squeezeliner" is incredibly unpopular with passengers. I'm far from the only one who's willing to pay extra to avoid flying on one. You cant count on orders you haven't filled and can be cancelled for profitability. Sadly Airbus I believe is doing the same thing.
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So no, there's no real reason to get excited about the backlog, because a massive backlog does not automatically equate to a success.
You are talking about two different things to come up with your conclusion. Success financially and success in demand. Boeing fucked up the former. Tesla so far hasn't. Their losses have not been due to Model 3 mistakes, but due to continuing hemoraging of money based on their growth aspirations and constant spending.
Telsa is surviving on its backlog, it's in demand, cheap, and keeping the company floating with prospects.
Boeing can be sunk by its backlog, given its production rate and the ability to quickly
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The 787 is poised to be the most profitable widebody in Boeing’s history. While the roll-out and ramp up were nothing to be praised, they have taken control of the process, are producing at unprecedented rates, and have a very solid future even on the -8, which was being written off just 12 months ago by some industry experts.
(If Tesla used program accounting, I wonder where they would be...)
Re: As usual promises for the future (Score:3)
Re: As usual promises for the future (Score:2)
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So you're telling us that there were delays in the Model 3 production schedule? No way! Tell us more!
Tesla's accelerated "15 months from the start of tooling" production schedule was insanely fast by automaker standards. The current timeline is actually closer to the original timeline (before they realized how many orders they were going to need to fill and tried to accelerate the schedule), and still a very good rate at bringing a new model line up.
BTW, have you ever looked at who the "stupid people" dum
Re:As usual promises for the future (Score:4, Interesting)
Unfortunately, they're already in a bad spot, so they really need a big change to keep it afloat. Production numbers are still low at 2500 per week. Better than before, but not nearly enough. Their margin is not bad at 19%, but that's all coming from Model S and X. Even if Model 3 could reach that level, selling 5000 per week still only comes out to $344 million in gross profit. They would have to produce and sell triple that number to be in the black.
They didn't have any stock offerings this time, so most of the losses were covered by new debt. The remainder came from their enormous pile of $2 billion in cash.
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Tesla's Free Cash Flow [arstechnica.net]
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They burn cash until production ramps up, then they actually make money for a quarter before the plow it all back into R&D for the next vehicle.
What you're saying is that they will never be profitable as a company. Way to go then...
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So, then, there will no longer be a market, just a big Tesla monopoly? A huge, too-big-to-fail single source? That certainly is an interesting path to profitability.
Why do people who cheer this on hate cars so much?
Well, we could have a government committee design the cars and production methods and license a set of manufacturers to perform the work. That would assure no single company could out-innovate the others and capture "too much" of the market.
They could call it the "Lada".
Strat
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"They have a plan to reach 5000 week, and a goal of over 25% margin"
25% margin on a mass market sedan? HOW??
Re:As usual promises for the future (Score:4, Informative)
It's not really a mass-market sedan at $35k starting price, with lots of ways to option it out. It's a small entry-level sports sedan, akin to a BMW 3-series or Audi A4. Now, its TCO may be mass market, but its purchase price isn't. BMW's margins are usually around 20%.
Also, Tesla is a lot more vertically integrated than most manufacturers. Auto parts suppliers have higher margins than automakers. Lastly, Tesla has a number of very popular software options. They're almost entirely profit. If there was no margin at all on the base model, autopilot alone (no FSD) would push it up to a 14% margin.
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As for margin, they have a negative profit margin on the Model 3 right now. But even at 25% margin, 5000 cars a week is "only" $525 million. They still need twice that to cover cost of sale and operating costs.
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Still, Musk's reaction on the phone conference was a bit unusual even by his standards and I suspect he already regrets acting like that.
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A bit unusual? I guess it was odd for a CEO to give a "No Stock For You!" answer to a questioner, it's not often you hear a CEO in an earnings call telling someone to sell their stock and not buy anymore. But I actually agree with his point - catering to the whims of day traders is dumb. And I also agree that the question that he got bored with earlier was a stupid question (there's no effect at all of the ratio of people who want a first-production vehicle vs want later config options), and by switching
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The question he didn't answer was about the ratio of people who chose an early config vs. a later config with more options available. In what way is that "holding his feet to the fire over the horrible numbers"? And to reiterate, the numbers beat market expectations. In general, the mood of the call (which I can only presume you were
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"The current Model 3 being produced is the middle cost variant, NOT the more expensive one. The more expensive one comes in the July/August time frame when they start producing the dual motor / air suspension variant"
Which would put it up in Model S territory for pricing.and would take sales away from Tesla's more profitable sedan.
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Dual motor and air suspension won't add much to the price (they didn't for S/X, and won't for 3 either). Performance package on the other hand, surely will. Obviously they won't let it outperform a P100D, but I wouldn't be surprised if it outperforms a base S.
Performance package adds a lot of profit regardless of what model line you put it on, so I don't think Tesla will hesitate to put it on the 3. I'd actually expect a surprising number of high end buyers to buy both a 3-performance and a P100D, because
Meanwhile at a REAL car manufacturer... (Score:2, Insightful)
https://ycharts.com/companies/GM/
Revenue: $36.1 billion
Net income: $1.05 billion
Yet GM has a *lower* market cap.
Re:Meanwhile at a REAL car manufacturer... (Score:4, Insightful)
Which is totally a reasonable point, because stock is totally priced based on companies current revenue and profit, right?
Better tell that to all of the naive dupes that own Tesla's stock. Here, I'll give you a list of the biggest ones: Fidelity owns nearly 10% of Tesla, in its OTC portfolio, which is in turn mainly owned by Apple, Amazon and Alphabet. The next biggest dupe is Harbor Capital. Followed by those morons over at JP Morgan. Vanguard is next on the suckers list.
Clearly the smart money is on the short-selling echo chamber over at Seeking Alpha, rather than the rubes at major investment firms.
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Umm... way to try to sneak Apple, Amazon and Alphabet in as investors. But Fidelity and JP Morgan have never been wrong before - with exceptions for being heavily invested in mortgages in 2008 and internet stocks in 2001, and stuff from last millennium.
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https://ycharts.com/companies/GM/
Revenue: $36.1 billion
Net income: $1.05 billion
Yet GM has a *lower* market cap.
Let's not forget that after 100 years in business GM's debt exceeded their total assets by $90 billion and they're only alive because they were bailed out lock, stock and barrel
Re: Meanwhile at a REAL car manufacturer... (Score:2)
Re: Meanwhile at a REAL car manufacturer... (Score:2)
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Re:long term. (Score:4, Informative)
Amazon forged into semi-explored territory: Everyone wants to buy stuff, the question was how much and how willingly they'd do it online.
Tesla is forging into semi-explored territory: Everyone wants to have cars, the question is how willingly they'll buy electric cars with a reasonably high degree of automation.
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Amazon forged into semi-explored territory: Everyone wants to buy stuff, the question was how much and how willingly they'd do it online.
Tesla is forging into semi-explored territory: Everyone wants to have cars, the question is how willingly they'll buy electric cars with a reasonably high degree of automation.
Amazon had a plan for profitability. They were on target to make it by 1998, but decided to expand instead and became profitable in 2001. Amazon followed a predictable curve of increasing revenue and decreasing costs.
Tesla does not seem to be doing the same... Uber is in the completely wrong direction.
However Tesla Inc. is not underwritten by VC's or external investors like Uber and Amazon were, Musk and the other founders put up the cash so Tesla can run at a loss for as long as Musk is willing to
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Amazon was exactly the Sears, Roebuck catalog order model circa 1890, except with a dial-up modem in place of a mailbox. And at the time a much less capable distribution network than Sears'.
Re: long term. (Score:2)
Re:long term. (Score:4, Insightful)
Meanwhile in the real world, even with the delays, from the start of tooling, Tesla made its first 10k vehicles faster than GM made the first 1k Bolts.
Tesla sets absurdly fast timelines for itself relative to normal product development timelines. That they frequently miss those timelines doesn't mean that they've done a bad job, it means that the company's employees aren't magicians.
Re: long term. (Score:2)
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Musk is not in it for the miney.
Holy shit, how far up his ass do you have to be to believe that a multi-billionaire capitalist and CEO of a corporation worth (allegedly) $50 billion isn't "in it for the money"?
If the investors propping up this money-toilet believed for a second that he wasn't "in it for the money" Musk would be bankrupt and on the street by lunchtime.
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But Musk doesn't own the whole company. Other shareholders are in it for the money and they'll sell if Tesla fails to deliver, especially as Tesla is significantly overvalued at the moment.
However, there is nothing to worry about. Musk only has to announce a new car [carsflow.com] and people flock to put $50k down for it even though it won't be in production for at least two years. Or they'll pay $3k up front for a fully autonomous driving system that may never exist.
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And Musk is not in it for the miney. People keep forgetting that, probably because they do not understand that.
Musk may not be in it for the money but the shareholders and investors whose cash he's burning through most definitely are and at some point they're going to be fed up of continuing to feed a money pit and then Musk is truly in trouble.
Re: long term. (Score:5, Insightful)
Wow, a guy worth 20 billion dollars spending $700 million on himself, with the rest tied up in change-the-world type companies. What a selfish prick.
Meanwhile, Sergei Brin is having a one of the largest airships ever made built for him, to serve as his private flying yacht.
Model Y (Score:2)
Model Y crossover? Isn't the X a crossover already?
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Y is to X as 3 is to S (model Y is a cheaper crossover for the mid-price market).
Several big players have huge short positions (Score:5, Interesting)
And they are pushing negative news all over the place. I see it show up in my Yahoo feed.
If Tesla doesn't fail, they will take huge losses.
I'm rooting for Tesla.
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And judging by the numbers disclosed by Tesla the shorters might actually be on to something.
Re: Several big players have huge short positions (Score:2)
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Actually, they don't need Tesla to fail, they just need its share price to readjust to the point where it is a fair valuation.
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Re: Several big players have huge short positions (Score:2)
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Right. Tesla is the most shorted company in the US, with a third of its stock held by short positions, making for a massive risk of a short squeeze if the stock goes up by even relatively small amounts - people losing potentially tens of billions of dollars if the stock goes up. But clearly they're not going to wage anti-tesla PR - I mean, why would they?
Also, it's not like UAW would spend half a million dollars on an anti-Tesla PR campaign oh wait they already did.
Re: Several big players have huge short positions (Score:3)
Re: And all of them are right. (Score:2)
Actually losing money (Score:3, Interesting)
Until now I've been shrugging off much of the criticism of Tesla "losing" money as it has been recording gross profits on each vehicle sold, but overall "losing" money because it has been spending a lot on capital plant and equipment.
The latest results though show that Tesla is selling each Model 3 at a loss. While the company states that it expects to break-even in Q2 and start making money in 2H, the only version of the Model 3 that it is currently selling is the high-spec one which should be more profitable.
Ramping up production and selling at a loss (negative gross margin) isn't exactly a recipe for corporate longevity....
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What exactly do you expect when you have to pay for labour and depreciation on a line designed for 5k/wk but only getting the revenue from 1k vehicles/wk off of it, like they were through all but the end of Q1?
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Production rate dictates profit as fixed costs are spread over multiple units; you se it in other products from other manufacturers as well. The business case was predicated on a production rate of X, and it takes time to achieve that rate.
If S and X are making >25% margins at equal combined output to the 3, and total margin is ~19%, it is easy to see the path to profitability.
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The latest results though show that Tesla is selling each Model 3 at a loss.
Explain. As you do also break down the differences between variable costs and fixed costs.
Once Fords, GMs, Toyotas seriously push electric (Score:3, Insightful)
Re: Once Fords, GMs, Toyotas seriously push electr (Score:2)
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Who gives a damn about what GM or Ford do any more? Call me when Volkswagen, Renault-Nissan and Hyundai [...]
I certainly do, because they have volume, in the same way that the groups you mentioned are very large and cover most market segments.
I'm based in the UK and the media here has an expectation that the Vauxhall/Opel Corsa will have a battery model in 2020. As a GM group member, these guys have sold a LOT of these cars, and now they are part of the PSA group they should still sell a lot. Here's a chart [statista.com].
It's all very nice there are 10 different models in the "over $50K and over 300bhp" market segment, but it's
Re:Once Fords, GMs, Toyotas seriously push electri (Score:4, Insightful)
The reason that EVs have been more common at taking over the higher end has nothing to do with "who's producing them". It's because - opposite of gasoline cars - adding range is expensive but adding power is cheap. You need a roughly constant amount of batteries whether you're going for the high end or the low end, and those batteries cost money that makes it hard to compete at the low end. So you might as well start at the high end and work your way down.
And capital costs do not stem from "who's making it". They stem from "how much you invest in making it". Historically, Tesla has invested far more in capex than the major automakers, and that puts the latter in a competitive disadvantage from an economics situation - either having to make less competitive vehicles, or having to subsidize them (and thus limit total production to keep costs down).
This situation looks to be changing (e.g. VW's capital plans are no slack, for example), and I look forward to a more competitive market a few years from now. But you can't make up this sort of deficit overnight.
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Yep, agreed. The current strategies roll out the new tech gradually because of battery density and manufacturing constraints runs in parallel with wanting to avoid cannibalisation of ICE sales. This slow uptake makes a lot of sense as you point out, but the whole situation is really bad for reduction of emissions.
One thing I'm guessing that could be different in the BEV world is that existing market segments and performance expectations do not correlate with range.
If Ford made lots of Fiestas with 150miles
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And Nissan only spends $16k per car in incentives to move them. The leaf has sold ~310k units since 2010, and the Model S ~230k since 2012... at very different price points.
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Exactly. The market space for a nearly-six-figures car is vastly smaller than for a $30k car. The fact that Tesla has sold nearly as many Ss as Nissan has sold Leafs (in 2 more years) is not a comparison to the Leaf's favour.
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What about this isn't plain English?
"The market space for a nearly-six-figures car is vastly smaller than for a $30k car."
There are two orders of magnitude more people who can afford a Leaf than an S. Yet the S sells nearly as many as the Leaf. That's not to the Leaf's credit.
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Before you get your hopes up too much about Jaguar... [model3ownersclub.com]
It's not an "American problem", it's a capex problem. Until other manufacturers start throwing the sort of capex at EVs that Tesla has, they'll struggle to compete. They can make price/feature uncompetitive models and mass produce them, or they can make price/feature competitive models via subsidy and then limit the supply. But they can't mass produce and subsidize, and rob from their gasoline sales at the same time. It's capex that reduces your per-un
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Re: Once Fords, GMs, Toyotas seriously push electr (Score:2)
Re:Once Fords, GMs, Toyotas seriously push electri (Score:4, Insightful)
Maybe where you live. But even in Europe, in 2017 while 10,5% of European BEV sales were i3s, 11,5% were Model S. Nissan was barely ahead of Model S, at 12,9% (Zoe had the lead at 22,7%), which I'll never understand.
As for the UK specifically, in 2017, 41,1% of BEV sales were Leafs, but Model S was #2 at 17,9%. i3 was 5th place at 8,3%.
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BMW is the current EV king with their I3. For ever Tesla I see on the road, I see 5 or 6 I3's.
Not in Northern California. For every i3 I see, I see about a dozen Teslas. Range is a problem up here.
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BMW is the current EV king with their I3. For ever Tesla I see on the road, I see 5 or 6 I3's.
Not in Northern California. For every i3 I see, I see about a dozen Teslas. Range is a problem up here.
Cali is usually one of the first to adopt the worst motoring trends... they popularised the Prius.
The I3's range is a problem here in the UK too. If you wanted to go from London to a pub in Newquay to see Rodger Daltrey playing, you may as well take the train because an I3 wont make it. Honestly a Tesla would struggle as well as its about 280 miles. My M240i does about 400 miles on a tank (combination of a powerful engine and tiny fuel thimble). Jokes aside, some people in the UK commute 300 miles a day
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Cali is usually one of the first to adopt the worst motoring trends... they popularised the Prius.
The Prius is great. Not only is it fuel efficient, but when I see one, I know that there is about a 99% chance that the driver is a bastard.
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Re: Once Fords, GMs, Toyotas seriously push electr (Score:2)
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Didn't you hear Ford plans to have sixteen electric vehicles (including hybrids, plug-in hybrids and full EVs) by 2022?
http://www.hybridcars.com/ford... [hybridcars.com]
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Didn't you hear Ford plans to have sixteen electric vehicles (including hybrids, plug-in hybrids and full EVs) by 2022?
And Kodak had a line of digital cameras.
We'll lose money on every sale (Score:2)
It's revenue (Score:2)
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S3XYR?
Re: Let's wait for its resale price (Score:2)
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Model Ss depreciate slower than its gasoline competitors, and Model 3's battery chemistry should be even more stable.
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they still have 2.7B in cash according to the earnings report
Which dropped by $1Bn in just one quarter. At the rate of burn that $2.7Bn cash could be $0 by Christmas.