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Discussion in 'Bad Dog Cafe' started by drf64, Sep 7, 2018.
But Elon believes his own story
You're getting some bad info. Losses have increased every quarter over the past year. At current margins, they won't be profitable until they double their revenue.
Poor comparison. Amazon is not capital intensive. Auto manufacturing is not a business that can sustain long term operational loses.
It’ll be interesting to see what the results of Q3 will be. They were predicting to show a profit and the pundits seem to think it’s possible. It should be simple to analyze their profit/loss and figure it out. I hope they do. Obviously it’s just a matter of time before we switch to all electric. Even members of my family have plugin hybrids and are reporting good experiences. In town they use electricity and on long trips it’s a mix.
I test drove the top Tesla. Pricey
The thing runs on a pile of mobile phone batteries. We all know they fade after 2 years so I asked the salesgirl about what it cost to replace the batteries
She said you get them free when they wash out over the first 10 years, but when you have to buy them yourself they are 12k
The cars will depreciate in a funny way. And they are full of tech hardware you cannot upgrade easy
Happy to rent one. Unhappy to own
Up here depreciating in a funny way means that they hold their value pretty well. Used Tesla Model S’s are listed for anywhere from $90,000 - $125,000 (Canadian Dollars). Depending on the year. The least expensive one I saw used was $88,000 and that an earlier model.
He stands to make a killing in Europe with his electric Semi & pick up trucks! It's just been announced that in the next ten years a 1/3 of all trucks on European roads, heavy freight/pick up trucks etc will have to be zero emission BEV's.
Of course Amazon is capital intensive or was in start up mode. I recall the Amazon story as it was detailed in the tech newsletters I used to get every Friday. Amazon hemorrhaged money for 4 years and if I recall correctly they were profitable in year 5.
Also, Tesla has had profitable quarters. It’s not much but I believe they’ve had 2 profitable quarters, they just haven’t been able to keep being profitable as they shake the bugs out of their production. They’ve also taken on a great deal of debt because they’re building an infrastructure for manufacturing the Model 3 and Trucks and perhaps other projects. They are close to profitable. Sure the loss of almost 2 billion seems large but they’re transacting in hundreds of billions so with losses of just under $3 per share, they’re actually pretty close to being profitable and share prices are up which means the market is confident in the company.
I don’t expect Tesla will be wildly profitable for a while because they are still doing a lot of R&D and planning to build more plants and manufacturing hubs.
They are still rare and heavily subsidised. When the Audi R7 came out here you would pay a premium to buy a used one. For a period
When the market settles and the maths unwind the 12k battery replacement will be a killer. Imagine if a 10 year old Ford needed a 12k part on it
The level of tech hardware in it also means it will eventually be like driving a 2008 iPhone. People who say software will be remotely updated are missing the point I am making
Tesla’s are not rare up here.
Vancouver is the most unaffordable city in North America and attracts families with teenagers who own an R8, a Maserati and their grocery getter is a BMW M4. True story, my best friend’s son learned to drive stick on a Maserati and then got to borrow the M4 for a few months because his buddy lost his license. It’s not uncommon to see a McLaren parked at the end of the block and I don’t live in a remotely ritzy area.
If you met me for coffee in say Park Royal, which is close to me, you would park between Ferrari’s and R8’s and you might see the odd custom painted hot pink Lamborghini. Mercedes, BMW and Porsche are pedestrian. It’s truly surreal and I’m so used to seeing all of the exotics they don’t even phase me anymore. The only time I notice is when I go travelling and see normal cars and the lack of exotics. When I was a kid an exotic car was a Porsche 911, today in Vancouver they’re a nice car when you’re on a budget. I don’t roll in those circles.
Capital intensive does not mean you had big losses. Amazon was never very capital intensive, especially early in their life.
No, they are not close to being profitable.
The pundits seem to be partaking in Elon's blunt.
You seem pretty confident that they are going to turn a profit this quarter. You've obviously put some thought into this. Take a puff of Elon's blunt and show me the production and financial numbers that you think will make them profitable at the end of Q3.
Let's start from Q2
net profit -$717M
How does this $717M loss over the previous quarter become a profit this latest quarter?
I can't speak of Vancouver: just the law of gravity in markets. I know a lot of premium car owners in the uk, as my family are motor traders. Ferrari don't do a 30k mass market car to dilute their brand. Ferrari restrict output to keep prices high
Tech gets loads better and early adopters wind up with things quickly obselete
Once there are hundreds of thousands in the used market and a few recalls the used price will be found
The one I drove did not have the standard of finish of an elite marque, but they were asking 140k for it, which is a massive sum for a car here
The 30k car, when 10 years old needing 12k of phone batteries in it, will be scrap. The experience of driving one is to be immersed in tech. Who wants a 10 year old iPhone?
To be clear, I am not opposed to electric. Clean energy stored well and used efficiently has yo be the goal. I just don't think Elon is the messiah. He is a Brunel type: leading the way in engineering, but a lot of money around him will probably be cheese for the second mouse
Well, I haven't thought about trying to get the thing to market, I started with wanting to make a house with as small a carbon footprint as I could(fortified compressed earth blocks, using earth from my site) then as energy efficient as i could(superinsulating, heat exchangers on fresh air intakes, dehumidifying the air with a liquid desiccant system to lower the need for air conditioning) and designed some passive solar ideas into it(trombe wall, window/building shading with roof overhangs for summer that don't shade in winter), then I started looking at power ideas and one idea led me to another and another until there is a thing to generate power and then I thought about storing energy which brought me to the battery.
I only mentioned it here because of this thread about Musk as he's someone who supposedly wants to be environmentally friendly and could pull off producing and selling something like this.
Whoever would have to have deep enough pockets to fund researching patents, getting patents, getting the prototype made and so forth and enough money and power to get it by opposition that I'm sure it would encounter.
500k won't be enough to do that
I know people who fund this kind of stuff but it is a hard path
They did the guy who invented quantum dots being made cheap
I went with one guy to see them with some tech and they asked my guy what he wanted out of the process
He said he already had enough money and just wanted to have a better world for everyone
Yeah, I actually know a few millionaires, but they aren't 10+ millionaires, so I'd never even go there with them.
I was just pumped up mad that someone like Musk who could probably do something about our dirty energy isn't(at least not fast).
I'll probably make my device without patents and red tape and have fun and feel good that I make my own green electricity and am sending some into the grid.
And I don't know if it's already been done and shelved, so there's that.
I have a lot of good ideas, too. Maybe if the government fronted me a few million, I could hire some smart people to make those ideas a reality.
Elon Musk is a con man.
Tesla is not on track to be profitable. Worse, its cash burn is incredible and it will run out by the end of next year barring a miracle. IMHO it will never be profitable.
Yes, it' my opinion that Musk is a fraud. Even if he's not charged with stock manipulation fraud, I predict he'll be gone within a year.
I wouldn’t be surprised if his stock privatizing twitter spasm doesn’t get him in trouble but unless the markets crash, Tesla will not be gone any time soon. I’ll be interested to see if Tesla manages to make a profit in Q3/Q4 as they predicted.
so is Tesla Gibson, Guitar Center, Cold Fusion, or the early days of Amazon?
I suspect that's what CPAs call an "accounting loss." Oversimplifying: when you remove depreciation expense and other tax perks they may very well be generating a positive cash flow.
Someone taking a good look at the books could tell us better, but I would not look at those numbers in a void and assume Tesla is on the way out.