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Tesla Earnings Show Record Revenues With Record Losses (techcrunch.com)
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.
and disappointments for the present.
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.
Signature deleted by lameness filter.
https://ycharts.com/companies/GM/
Revenue: $36.1 billion
Net income: $1.05 billion
Yet GM has a *lower* market cap.
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.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Difference is Amazon was forging into unexplored territory. Nobody had built an Internet-based store of that scale before. Everything was new, so it was imperative for Amazon to burn lots of cash to search the solution space to quickly figure out the optimal way to organize the store, website, warehouses, and delivery before competitors could figure it out and grab market share. If Amazon found a better solution first, it won. If it didn't find a better solution, as long as competitors hadn't found a better solution, it didn't lose ground. It would only be a loss if your new solution isn't better AND competitors find a better solution.
The solution space for building cars is well-explored. Has been for nearly a century. Musk gambled that a high level of automation would yield a better solution, allowing him to produce cars for cheaper than other automakers. He turned out to be wrong. In this case, because of the existence of well-established competitors, if your new solution isn't better than theirs, then you automatically lose.
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....
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.
-=This sig has nothing to do with my comment. Move along now=-
Once Fords, GMs, Toyotas seriously push electric then Tesla will be a niche player ... or purchased by one of the aforementioned in a liquidation sale
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.
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.
"WANTED: Sinking ship seeks rats."
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 underwrite it.
Calling someone a "hater" only means you can not rationally rebut their argument.
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%.
"WANTED: Sinking ship seeks rats."
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.
"WANTED: Sinking ship seeks rats."
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.
"WANTED: Sinking ship seeks rats."
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.
GM has brought EVs to market - most notably the Bolt (and Ford has done compliance cars). They have not proven competitive in the marketplace. People were more willing to wait on Tesla's waiting list than buy a Bolt.
And 18-24 months? You realize that even with the delays, Tesla went from start of tooling to sales of the Model 3 in 15 months (April 2016 to July 2017), and hit 10k produced in the time it took GM to hit 1k? But please, go on and lecture about how major automakers can mass produce quickly and Tesla can't.
Yes, because building a gigantic battery factory is totally something you can do overnight. On pocket change, too.
And beyond this, even if their strategy was to be a "fast follower", this would be an inherently losing strategy. Targeting where Tesla is today, rather than where they'll be several years later when your vehicles come on the market, is a good way to guarantee that your vehicles will be a flop. The market is not going to become relatively static for quiet a long time.
But all of this is tangential. The real issue is that success in the EV market follows the money. Years after the money gets spent. And until the pocketbooks open up, there will be no success. And when they do, the success will come several years after the fact.
"WANTED: Sinking ship seeks rats."
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.
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
"WANTED: Sinking ship seeks rats."