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Tesla Posts Biggest Quarterly Loss, Slashes Production of Model X and Model S (yahoo.com)
Tesla has reported the largest quarterly loss in its history, and said it was cutting production of its Model S and Model X vehicles. Here are the key third-quarter numbers with expectations via Bloomberg: Adjusted loss per share: -$2.92 (-$2.23 expected); Revenue: $2.98 billion ($2.39 billion expected); Free cash flow: -$1.4 billion (-$1.2 billion (expected). Yahoo News reports: The company said it plans to produce 10% fewer units of its Model S and Model X models in the fourth quarter and reallocate resources to the Model 3, its newest. Tesla expects to hit a Model 3 production rate of 5,000 vehicles per week by late Q1 2018. "While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp such as this makes it difficult to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear," Tesla said in its statement. Tesla said in October that it produced only 260 vehicles, well below its target of 1,500. CEO Elon Musk said the Model 3 was "deep in production hell."
As Mark Twain said, it is difficult to make predictions, particularly about the future.
Their junk bond offering of just 3 months ago is now trading at 95 cents on the dollar, effectively wiping out their yield. The only way Tesla is going to get the cash to keep going is a massively diluting equity raise.
Longs, get out while you can.
I'm one of them and hope that he delivers.
Got my Model S in 3/2014 and hope to trade it in for a Model 3 with similar battery size in a couple years.
80k miles on mine so far and still loving it. Battery acts just like it did on day one. I had two proper services so far and took the car in for two other minor issues (a tail light went out once, and the wind shield wiper fluid didn't eject once). Original brake pads but third set of tires (both of the first two sets got changed under tire warranty at my local BJs).
Does great in the snow so far (in North East Pennsylvania) on standard all-weather tires. It's rear wheel drive. Wondering how much better the four wheel drive models could possibly be.
I never had range anxiety and my wife got over it within six months of owning the car. We take it everywhere and she only takes her SUV when my car is unavailable.
Help! I'm a slashdot refugee.
Many companies spend more money than they make starting out and reinvest more money than they make as they ramp up operations. That's pretty typical (take a good look at Amazon).
The Amazon comparison again... Amazon had free cash flow early on and put it back into the company. In their entire public existence, Amazon went to the capital markets just once. Tesla constantly needs other people's money just to keep the lights on.
Tesla != Amazon
I hope it ramps back up soon! So many pessimists in this crowd, when Elon is our best shot at an EV future.
Making cars is expensive. Making high tech cars is more expensive.
Tesla isn't magic. Look at the sales numbers the big three have and how often they turn out new programs (that aren't really an entirely new product). The math is pretty simple. Tesla doesn't make enough money in their product line and is turning out a new program when the old ones aren't paying for themselves.
It's a stock market thing, really. Look at the stock prices of the automakers. They continue to make successful products but their stock price doesn't increase. Yet a company like Apple hasn't put out a really innovative product in years, is getting destroyed by Samsung..... but continues to be a stock market darling.
Welcome to the irrational world.
Note that I know Volt and Leaf owners, all of them have a similarly positive experience (battery life strong after 180k miles, regenerative breaking making the brakes last a long time, and no mechanical issues with the motors to speak of).
So if it should come to pass that the financials tank Tesla, *hopefully* other vendors shall provide.
My biggest worry is so much of the world pinning all their electric vehicle viewpoint on Tesla, and if it fails at executing on the more mundane facets of running a large automotive company discouraging the rest of the market.
XML is like violence. If it doesn't solve the problem, use more.
Be the first is to lead the market, which requires huge investment, is risky, but can lead to lots of cash in the bank.
The second is to follow the leader, making products that fit the newly exposed demand - not cutting edge, but fit for purpose at a reasonable cost with reduced risk.
Add into the mix that cars are notoriously hard to get right (Tesla reportedly has lots of niggles that established car manufacturers have already solved) and now that vehicles like Volvo's Polestar and the ilk are on the horizon, from a brand reputed for reliability (albeit manufactured in China), and that Germany are building their own battery gigafactory -
Musk should be worried. The only way he'll make money is cashing in on that first wave, and it's already being spread out.
biopowered.co.uk - catalytically cracking triglycerides for home automotive use since 2008. Just say no to big oil!
Making cars is expensive. Making high tech cars is more expensive.
Tesla isn't magic. Look at the sales numbers the big three have and how often they turn out new programs (that aren't really an entirely new product). The math is pretty simple. Tesla doesn't make enough money in their product line and is turning out a new program when the old ones aren't paying for themselves.
It's a stock market thing, really. Look at the stock prices of the automakers. They continue to make successful products but their stock price doesn't increase. Yet a company like Apple hasn't put out a really innovative product in years, is getting destroyed by Samsung..... but continues to be a stock market darling.
Welcome to the irrational world.
The company said it plans to produce 10% fewer units of its Model S and Model X models in the fourth quarter
Is it just me or does that sound like a small reduction, not really qualifying as "slashes production" at all?
Shouldn't there be a journalistic rule for when something qualifies as slashing, say maybe over 50%?
Lets not get too melodramatic with the headlines.
If I had a DeLorean... I would probably only drive it from time to time.
Sure, making so-called high-tech cars is not super easy, it's really hard to make any money selling cars when you cannot produce enough.
Also, since when are Tesla's cars "high tech". They are just reliability-riddled electric cars with fancy computers. More technology has been developed for the "run-of-the-mill" cars made by companies like Ford and Toyota than Tesla has. That tech, though, is just unappreciated, overlooked, and made to look easy by consummate automotive professionals that know what they are doing.
https://news.slashdot.org/comm...
I'm waiting for Rei to post, too. Two weeks ago, he told me to put my money where my mouth is and short Tesla. I'd like to thank him for the stock tip.
You're right, they should've said Tesla was decimating production levels, not slashing.
There are shills on slashdot. Apparently, I'm one of them.
Apparently the vendor that was building the power packs in the Gigafactory had an automation system that didn't work. Tesla had to hand-build the modules after firing them, and it will take time to ramp up.
None of this stuff is really a surprise. Tesla expects a break-even status on the Model 3 in Q4, with margins improving in 2018. Yeah... it might push back a quarter... judging by history. At the same time, they are stabilizing the PV business and growing the energy storage business significantly, which now represent 20% of revenue.
They will start 2018 with about $2.3B in cash, and likely be positive cashflow soon after.
"Profit is irrelevant."
Sounds like something a Bord-assimilated Ferengi would say.
#DeleteFacebook
But... but ...MUSK!
If you do not agree with the Muskovites your are a hater.
New Zealanders are well balanced with a chip on each shoulder. One represents Australia, the other the rest of the world
Uh.... Actually he didn't post that. I did. Which is very curious as to how it ended up under his ID.
1) After their ridiculous stock valuation drops to a reasonable amount, they get scooped up by a real automaker as a premium badge.
2) They remain a niche premium car maker.
3) They become a battery company.
They don't have the infrastructure to compete on a world wide scale with the big automakers.
As soon as electrics are well accepted by the public and hit critical mass, the big automakers are going to destroy Tesla.. because unlike Tesla they can actually build cars. Lots of them. They haven't been doing nothing and being disrupted by Tesla. They've been waiting until it makes sense economically.
It's that simple to forget when you have multiple /. accounts.
https://imgflip.com/i/vm4t4
Tesla must really be in trouble. Shills are shilling so hard that this one posted the same comment twice from two different accounts
https://news.slashdot.org/comm...
It's not a shill, the second one BeauHD+(Home+UID), looks to be some kind of bot re-posting other people's comments.
Not sure what the tactic is, maybe once the account gets enough karma it will add a link into its sig or something.
To be honest I've always wondered how /. avoids bot abuse.
I stole this Sig
Meanwhile GM does about a million a month. But it's totally rational that the two have the same market cap.
The only reason why GM does more than ZERO a month is because they had $100 billion in liabilities wiped clean & a giant frickin' loan to keep the lights on.
What is a Bord?
It's when a bunch of top level managers get together only to end up assimilated into the collective. A Borg-board, or Bord.
Thankfully the lack of mental power means that even with a collective mind there's not enough mental capacity for the super-organism to live long. If you find yourself attacked by a Bord then give it a logic puzzle that will overwhelm it. Most any shampoo bottle will do. The organism will get stuck in a "Lather. Rinse. Repeat." loop and stop the attack. This will also speed it's inevitable death as it starves from a lack of knowing when to stop for food.
I am armed because I am free. I am free because I am armed.
Nothing? what would qualify as "high tech" to you?
That said, detailed videos of the model 3 are appearing and it's still a stylish, well designed, technologically advanced vehicle. After tens of thousands of cars have rolled off the production line and their owners have beta tested the bugs out it, I think it will become a classic.
his phone on the top shelf
"The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
Don't be a jackass. Every manufacturer has flaws & things that slip through quality control.
Difference is that GM would go ahead and manufacture it, defect and all.
If the recall costs them too much? They just go to Washington for another handout...
No sig today...
Battery powered cars aren't the future. Hydrogen combustion engines, and if made safe nuclear cars. https://www.cnet.com/roadshow/...
This does seem to be a common thing for Elon - he's stretched very thin, and he takes on unnecessary risk.
I can't imagine trying to run Tesla and SpaceX at the same time. SpaceX seems to be doing pretty well, though I don't follow it as closely as Tesla. But Tesla... geez, I shake my head at some of the decisions they've made.
On the subject of unnecessary risk, I think it made sense for Tesla to not use dealerships. They would have had the same problem that Apple had trying to sell through third parties who had no interest in selling their products. I well remember trying to buy Apple gear at Circuit City only to finally leave after the salesperson kept trying to talk me out of an Apple and into a PC. Very similar to what Tesla would have experienced if they tried to sell through dealers. So, yeah, necessary risk.
So, 2 unique things, Electric Cars + No Dealers.
Then Elon has to do self driving... I'm not sure why he found that necessary? Why not wait until the other manufacturers were offering it? I would have been happy to buy a nice BEV without self driving. Not only is it a distraction for Tesla from just trying to sell BEVs, but it's a huge risk - how many hugely expensive lawsuits will Tesla find itself in over this technology? Why did Elon think it was necessary? I'm not saying that Tesla owners don't love it, but why add risk to an already very risky proposition of trying to deliver BEVs that people want?
So then, same thing with Falcon Wing doors... Yes they're cool, but I would never buy a vehicle with them. Too complicated, too expensive to repair once the warrantee is over, and again, if everybody else can do an SUV with regular doors, would it really be so bad to have just delivered regular doors on a BEV that people would love?
So then, the whole thing with the schedule of the Model 3. I think it's an unwise risk to try to do an accelerated program to get it onto the road. I can see a couple reasons why Tesla probably thinks they need to. One is that they probably don't have the cash to take a couple years to get production going. They don't have lots of other car production to prop up the business the way the more traditional companies do. And of course, the other companies are catching up quick. If they take too long to get the Model 3 out, they'll have lost their lead against all the other companies. But maybe that would would have been the point to innovate on other stuff like self driving cars? Tesla certainly seems to be more agile than the other companies, and they're in a great location to get some of the best talent in the world, but I worry that by trying to shortcut the ramp up to manufacturing in production quantities that they might kill themselves. Why not start the Model 3 as a low production line, placed midway between $35,000 and the Model S? And then as you get higher production rates going drive the price down to $35,000? I would have bought a $50,000 Model 3. It would have been price competitive with the BMW i3 and a whole lot more desirable.
I get that some of the things Elon does is probably more about investors and Wall Street than it is about simply producing a well engineered BEV. And I have to give him credit, the fact that almost every car company is now working furiously to produce electrified cars is almost all because of Tesla. In a few years, everybody will be producing electric vehicles and the failure of Tesla won't matter. But right now, if Tesla should implode in the next year or two or three I think there is still time for the other manufacturers to back off from BEVs and that would be a real shame for the planet.
I wish Tesla nothing but good luck, and I hope to buy a Model 3 in a couple years if they're still around (and the quality is good).
Someone up above says that Nissan is doing as well in the EV business as Tesla. In 4 years I've put 29K miles on my LEAF and I commute in it nearly every day. It's a fine car, but it's still something made by the old-guard car manufacturers. It's controls were slow and dated when I bought in 3 years ago (they are all effectively unchanged since originally designed in 2010). The radio/nav is terrible. Remote access to it is so unreliable Nissan decided to never charge for it (not to mention that the 3G module drains the 12V battery because it gets "stuck"). Thankfully mine is not affected, but Nissan has had some terrible battery issues (both the first 24kWh battery in the 2011/2012 and the first 30kWh battery in the 2016 models have serious high deterioration rates). This says to be very wary of the 40kWh battery coming in the 2018 model.
The LEAF just wanes in comparison to my Model S. In 7 months I've put 13K miles on the S (almost all highway miles on trips trips of 200-600 miles on-way). There's no surprise since the S costs almost 3x the LEAF: it should be better. But the S is a marvel. The tech level in the car is amazing, and the OTA updates of the interface software mean that things get fixed or improved.
As an aside, I think the S is too big a car for my tastes, but I didn't want to wait any longer for a long-range EV. I still have a 3 reservation (to replace the LEAF), but I may cancel it and just keep the LEAF. Also, my S had a minor issue with the driver's door panel that I needed to bring it in to service for 3 times to get fixed correctly. But hey, when I got the LEAF, it had a issue with the heater leaking that had it sitting at the dealer for almost a month while they waited for parts. This things happen.