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Tesla Reports Third-Quarter Profit That Beats Market Expectations (cnbc.com)
Rei writes: When Tesla announced late last year that it was targeting sustained profitability in the second half of 2018, reaffirming this target throughout the year, the markets reacted with skepticism. Indeed, despite repeated insistence that the company had no need for a capital round, news analysts have treated the concept of Tesla dilution to raise more capital as inevitable and urgent to pay off convertible bonds next spring, even suggesting insidious theories that the reason it hadn't was that it "couldn't."
Well, today Tesla put the doubts to rest with a blockbuster Q3 report -- not simply eking out a profit and small free cash flow growth, but $2.92 per-share profit and $881 million free cash flow -- almost raising the entire value of their convertible bond debt in a single quarter. While many were skeptical about Tesla's claims that it would go from near zero profit margin on Model 3s to their claimed target of 15%, Tesla instead hit a 20% margin on the Model 3 (now the highest-revenue car in the U.S.), with a 25.8% overall automotive gross margin. This was all achieved with only $52 million worth of zero-emission vehicle credits claimed this quarter. While Tesla bears will likely claim that this quarter was a one-off that won't be repeated, Tesla reiterates guidance for sustained profitability from herein, barring a force majeure event.
Well, today Tesla put the doubts to rest with a blockbuster Q3 report -- not simply eking out a profit and small free cash flow growth, but $2.92 per-share profit and $881 million free cash flow -- almost raising the entire value of their convertible bond debt in a single quarter. While many were skeptical about Tesla's claims that it would go from near zero profit margin on Model 3s to their claimed target of 15%, Tesla instead hit a 20% margin on the Model 3 (now the highest-revenue car in the U.S.), with a 25.8% overall automotive gross margin. This was all achieved with only $52 million worth of zero-emission vehicle credits claimed this quarter. While Tesla bears will likely claim that this quarter was a one-off that won't be repeated, Tesla reiterates guidance for sustained profitability from herein, barring a force majeure event.
I'm waiting to hear how Tesla is losing money on each car it sells, such as some people have been saying around here (FALSELY) for months. If they lose money on each car they sell, how did they wildly beat all the analysts by selling more of them?
When everyone is telling you that you are wrong, sometimes it's a good idea to gain a little objectivity and at least examine the possibility that you actually are wrong.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
To all the shorts, I say suck a fat dick.
they make it up on volume.
Some drink at the fountain of knowledge. Others just gargle.
I am a big Tesla fan. But we should acknowledge that there are still some problems. Mainly that the spare-parts supply chain hasn't caught up with manufacturing, leaving cars inoperable for months while Tesla's own shops wait for parts. If you want right-to-repair, Tesla hasn't caught up to that by making diagnostic tools available or parts available to non-partner shops and end-users.
Bruce Perens.
I actually pay attention to all the Tesla/Musk/Tesla/Musk critics out there and follow their arguments about how the company is going to crash and burn and Musk is delusional and the technology won't work and the production can't work and the quality is crap gasoline is actually greener and cheaper and and the major automakers are going to bury them and the workers have reverted to savagery and yadda yadda.
I have been following all that for, what, five years now? How many portentous pronouncements of Tesla and/or Musk's demise has there been? I have lost count.
A few days ago my e-trade board delivered this little news nugget:
Citron Research, which has previously advocated short positions on Tesla, says it has changed course, and that the electric car maker is "destroying the competition, as Citron makes the case for why it's taking a long-term view.
So apparently there are short sellers out there will actually fold up the tent for another from-scratch assessment. Granted, they were wrong before so they could be wrong again. Tesla could still crash and burn or at least hit a major bump in the road. But if it does it will have nothing to do with what the chronic naysayers that post here say.
Claiming to not be convinced by overwhelming evidence is not a particularly effective way to prove that evidence wrong.
Well, shit. Looks like LynwoodRooster is going to have to come up with a whole new series of anti-Tesla rants to copy & paste into Slashdot Tesla stories.
Slashdot: providing anti-social weirdos a soapbox, since 1997.
Am eagerly awaiting delivery of my new Model 3 !
Come again?
Elon also said "I begged the other companies to invest in battery capacity and charging networks" according to some live blogging site. And some thing along the lines of if they make an adapter he will let them use Tesla super chargers. Not sure if he really said that or these guys are putting words in his mouth.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
The bears have to make a hard choice. They were hoping a cash crunch of debt payment in Q4 2018 and Q1 2019 of about 1.5 billion will choke the company. It was already burning through cash at some prodigal rate in Q1 and Q2. They seem to have miscalculated. Last reports from S3 Partners was that there was some 32 million shares outstanding. Wondering how many covered when the price crashed to 250 and got out with some profits. How many are still holding out waiting for Tesla to go bankrupt.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Standard short conspiracy theories.
1) Tesla only delivered about 2 1/2 thousand more vehicles than they produced this quarter (due to issues related to timing the tax credit expiry). Doesn't even remotely come close to the profit this quarter. Furthermore, they were lower ASP vehicles than the ones held up in delivery delays this quarter.
2) Tesla, like all companies, has had varying disputes with suppliers. The grand total in Q3 was, if I recall correctly, around $8m. I mean, stop the presses.
3) Tesla's loaner fleet is still very much intact. It periodically sells off older vehicles and replaces them with newer ones.
4) "They haven't made a profit" - Hmm, what's that river in Egypt....
5) "They will lose money when their debt payments come due" - Yeah, they made that much free cash this quarter alone.
"What is the difference between a Ponzi Scheme and an Investment Bank?" -- Jon Stewart
Tesla deliberately held off shipping (and, by GAAP rules, recognizing revenue) in Q2 in order to make Q3 numbers look good.
I'm pretty sure your post is the part of the Hitler video near the beginning where he's waving hands and saying "This quarter doesn't matter because there's no way they can make next quarter because they deliberately held off shipping" and then the generals correct him, and he clears the room...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
False. Tesla has $157M due in December, and another $920M due in March.
Meanwhile, production keeps rising. If you're betting on a "Christmas slowdown" to save you, keep dreaming.
This is only just starting. Fremont scales to at least 7k without new lines (confirmed not just by Tesla, but also analysts who've toured Fremont). Model 3 is designed for 25% margin at its full range of variants. I mean, what exactly did you all think would happen to margin over time? Shorts kept complaining about high scrap rates and excess labour requirements - did you think it would remain that way forever? It takes a long time to get those things down (Tesla is still slowly reducing production costs on the Model S), and reducing them equals margin. With the introduction of the MR, margin improvements will get eaten up by a lower ASP in Q4, but in Q1 you not only get further margin improvements, but also a higher ASP due to the start of high-end sales in Europe.
Seriously, what exactly did you all expect was going to happen?
"What is the difference between a Ponzi Scheme and an Investment Bank?" -- Jon Stewart
TSLA longs lost over 17%
While they may be DOWN by that much (but are not, see aftermarket) by definition "longs" have lost nothing... because if they are long, they are holding not selling.
I bought some shares in the middle of the year but I have "lost" nothing because why on earth would I sell? The end game is way north of $400, by the end I will have made quite a lot on TSLA (and some of it I bought longer ago when it was a lot cheaper).
As a long investor what I do is pick stocks that I think have lots of potential, put money into them, and maybe look a few times a year to see how things are going. That's how you long, not bailing out at the first sign of any dip. If you choose well the dips fade away and you have mostly growth across a portfolio. Maybe someone doing day trading is making more but I'm pretty sure I'm leading a less stressful life.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
For many years, Steve Jobs and Apple had die-hard fans who perplexed and annoyed me. It was genuine, and in hindsight, there's no disputing they had a point.
ED: Correction, that should be $230M this quarter, not $157M.
"What is the difference between a Ponzi Scheme and an Investment Bank?" -- Jon Stewart
The figures and math wouldn't work out to be as significant as you're insinuating even if the slander were true. Oh wait, you don't have figures nor math. Medium-talent FUD.
The profit number also completely ignores 2 and 3.
2) Not paying vendors doesn't mean you don't account for the bill, it simply means it may adjust in the future.
3) Selling a loaner fleet is revenue neutral it's trading asset for cash, if there was profit in it it just means the loaner fleet was undervalued before, it's still legitimate profit.
The 2.5k cars does dramatically shift the numbers, but not enough to tank the company (2.5k * 60k is about half of the profit), also, there could be sins hiding in that huge cashflow (or it could be 2 and 3 from the list).
All and all, I do tend to think this completely turns around my outlook on Tesla, I was certain they'd succeed, but then started getting worried this year and last with all the missed M3 goals.
I also have concerns about Musk's health, he can't possibly be a net positive for the company again until he takes a nap (just my opinion from the outside).
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
TLDR the financial report but if the 25.8% gross margin on M3s is much above car maker standards, does it make M3s overpriced?
Does this profit margin include R&D and other operational overhead is it it just based on BOM and mfg?
4wdloop
So I was completely right about $1.15B.
TSLA stock is terrible because while they sold more cars than expected, both the price and profit per vehicle were much higher than the third party nay Sayers predicted on the 35k model.
This record setting, near billion dollar cash flow quarter can't be sustained forever because they have flooded the market. Also their market share is less than 1% of all vehicles so they don't really have an accomplishment.
TSLA shorts would bitch about Elon Musk missing a deadline on expanding his basement because the world's largest ingot of gold was discovered there, slowing the excavation.
Enjoy watching Friday for the real run up, ya shorts.
"False. Tesla has $157M due in December, and another $920M due in March."
You're wrong about $157M, it's actually $230M.
The trigger point for the $920M is actually in December, but the payment is not due to March.
"If you're betting on a "Christmas slowdown" to save you"
You're thinking about production only. Car sales, including Telsa (Look at their previous Q4 reports, vs Q3 and Q1) slow around Christmas. Somewhat because of consumer spending in the lead up to Christmas, but also because early Q1 is peak time for real estate transactions. Less people buy new cars prior to property transactions. Tesla will need a bumper Q4 and an above average Q1 to get the capital that they need if they want to pay their bonds, make a profit and tap into the much larger Chinese market. This is expecting quite a lot.
Margin over time tends to increase through the production of the *same model*. However Tesla have been pushing out their high-margin production first, which means their average margin per unit is expected to reduce as the number of lower margin products increasingly make up total production.
Also, I don't need to be saved. Unlike you, I have no financial involvement in Tesla.
"Model 3 is designed for 25% margin at its full range of variants."
That's fancy at this point. They claim to be making around 25% on the current high priced variants, but it's not clear if that includes the medium range version which starts at $46k, but even if they do, this means they claim to make $11.5k per MR car. They'd have to lose their entire profit margin to sell it for $35k. Even with cost reductions and lower spec parts they'd have to be able to make the $35k version for $26.25k which is simply not credible at this point.
"but also a higher ASP due to the start of high-end sales in Europe."
They seem to be assuming that they'll see similar sales volume in Europe, but completely ignore the increase in competition and loss of subsidies. It's also quite a large car, which generally don't sell in large numbers in Europe. We'll see.
I think they'll likely push through the current orders on the books and then see a sales slump as hype meets reality.
Don't think this is happening then look what Ford has done lately. Like what happened with the Apple iPhone and Samsung going with the same trendy design, Ford Motors did the same bullshit with the Tesla model s. If you look carefully at a 2009 Tesla model s and compare it to a 2009 Ford fusion you see that they are different animals altogether and have little in common style wise.
Then suddenly the look and idea of no petrol with a Tesla s got sexy and Ford essentially cloned the look of a Tesla model s in the later designs of their crapola low end Fusion line of sedans.
This is the real problem with the once great American auto corporations, they are no longer leaders they are followers. You can bet that a shit load of the negative crap against Tesla is coming from them. Musk, though he is not helping the situation especially on Wall Street, is being afforded the same treatment as Tucker by the US auto corps and their shills in Washington and on Wall Street. As far as I am concerned I hope the assholes running the petroleum industry who get blow jobs from the key board members at GM and Ford, choke on it as Tesla, Nissan and the like minded up and comers in the Orient eat them for breakfast. While the Ford, GM and Chrysler gas and diesel guzzling behemoths rust on the dealer lots and wind up worth more as scap metal after a few years of service.
You're forgetting about the carpool sticker laws that were recently introduced. For cars bought beginning this year, the expiration date for California carpool stickers will be on January 1st of the fourth year after you obtain the stickers.
In terms of maximizing the benefits of that sticker, that means the optimal time to take delivery is December, so that you will get your license plate by early January and can apply for stickers at the start of the new year, thus giving you almost four years of carpool lane use without having to wait until the next calendar year to apply.
Check out my sci-fi/humor trilogy at PatriotsBooks.
You can't cut yourself from the grid by only using Powerwall, you simply won't have enough buffer to ride through cloudy days. You can use Powerwall to shift your consumption into off-peak hours, but that's about it.
"If you're betting on a "Christmas slowdown" to save you"
You're thinking about production only."
are you considering the thousands they have on back order? Any sales over teh slower christmas will generally go to the back of the queue. It might be a "problem" if their order book was empty.
"The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
I'm really happy about all this, not because Tesla as a company, but about what good electric cars can do. Can't wait to have normal, usable electric cars that don't look ugly as hell to show the finger to the whole middle east. At the minute, because of petrol, the whole world is funding people who are genuinely nasty, barbaric and actually feel comfortable with ISIS and the like.
The sooner they go bankrupt, the better.
Who cares about consumer spending when they're still working on an enormous backlog of around 400,000 preorders? The only thing limiting their sales right now is their ability to produce cars quickly enough.
No matter what is presented, it will all be claimed by you to be "making my point again" even though it refutes it clearly and explicitly.
You're an asshole, then.
I also saw that Musk announced a Model Y crossover vehicle now. I'm almost surprised to not see that listed as a news story on here. While not being an automotive site, I'd almost expect news on a new model of EV vs just saying an EV company made more money than expected.
I'd thought the Model X was a crossover, but I guess it just looks like one rather than being the size of one. At this point I want to see Tesla make a motorcycle for some reason. Have it look like something from Tron.
Also this now makes 3 profitable quarters out of 31 since becoming a public company, let's see if they can make a sustainable profit. Bit early to be jubilant.
But they are at least cash flow positive. That's a nice change, and does help them substantially - whether it's enough to cover the near term commitments is less important than the confidence it will give the people they might approach for further loans or investment.
What? They flooded the market, at the same time as only having 1% of the market?
Come again?
No. 1.15B in two quarters.
You know a quarter is only 3 months right? And there are 6 months between October and March, inclusive?
This isn't hard fucking math, but you keep shutting the bed on it.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
I'm waiting to hear how Tesla is losing money on each car it sells, such as some people have been saying around here (FALSELY) for months.
Tesla HAS been losing money on each car they sell. That is a factual statement. But it doesn't mean what some people think it means. People here keep confusing gross margin with net margin and haven't a clue what free cash flow is or fixed costs or variable costs.
It's absolutely normal for a new product to lose money on the first units they produce because they haven't produced enough units to amortize the fixed costs over. Here's a oversimplified totally-made-up example. I spend $1,000,000 making an assembly line - one time cost never to be repeated. It also costs $500,000 per year to operate the assembly line no matter how many units I make whether it be 1 or 100,000. So before I make a single unit I have $1.5 million in operating costs. Let's say I'm selling a car for $50,000 and my actual cost of labor and materials in that car is $40,000 so I have a gross profit of $10,000 per vehicle. That means the first 150 vehicles I make are going to be sold at a loss. I also have to sell a minimum of 50 vehicles every year just to cover the fixed costs of operation.
Tesla is in that exact situation, just with much larger numbers. The have the added wrinkle that they also have a lot of debt to service (around $11 billion reportedly) which can be treated as an additional fixed cost.
Q2 Automotive gross margin increased to 20.6% GAAP and 21.0% non-GAAP. Thats their profit margin.
Gross margin is NOT profit margin. Those are different things and you need to understand the difference. Gross margin does not consider sales, administration, interest, taxes, and other overhead like engineering etc. Gross margin is just revenue minus cost of goods sold which is just direct costs of materials and labor. Gross margin is NOT profit and should not be confused with profit. You can easily have a 20% gross margin but a negative profit margin and if that remains the case long enough the company will eventually go bankrupt. Software companies often have gross margins in the 60-80% range because cost of production is very tiny - most of their costs are in engineering, sales and marketing. Manufacturing companies usually have gross margins in the 15-40% range depending on the product being made but that does not mean they are profitable.
Also, FYI, you book revenue when you ship, not produce. So having 13k vehicles in inventory is a drag on their balance sheet, not a boost.
How revenue is booked is unfortunately FAR more complicated and to a significant degree is an arbitrary decision. It's perfectly legitimate to book a sale when you sign a contract but before the product is delivered. Many companies do this. Other companies book the sale when the product is sent to a distributor (like an auto dealer) but not actually sold to the end customer. Other companies only book a sale when the end customer has received the product. You can even book a sale when cash is received for the product. All of these approaches are perfectly valid under GAAP. From what I understand Tesla somewhat conservatively books sales only when the customer takes delivery of the car. This is unusual in the industry. Most of the big auto makers book "sales" when the ship a car to a dealer even if it hasn't actually been sold to an end customer. They are treating the dealer as the customer of the product.
As I pointed out previously when you asked for a citation, the important date for the convertibles is Dec 31 where the covenants require a set level of cash.
(Btw, has to be said that the Citron manipulation was a very nice addition to the usual pre-earnings pump, didn't expect that at all. Usually only play 10% otm calls going into earnings. But in this case will be adding some common on top this morning because the poo stew of accounting is so delicious this quarter.)
Fuck the cars, high end electric vehicles are a limited market.
All markets are limited markets. That said the market for luxury vehicles is a very big market and Tesla is doing rather well in it sales wise. I don't think you would argue that BMW or Mercedes are tiny companies and Tesla is apparently out selling them. That's nothing to sneeze at.
The big Tesla market, something the hedge fund shorts absolutely do not want to discuss, the home electric power systems, panels, batteries and control gear a far bigger market, probably something like 100 times the size of the vehicle market, each unit worth similar to a low end car and far more profitable, with numbers in the hundreds of millions.
Possibly true but if Tesla doesn't get their car company scaled up they aren't going to have the finances to try to tackle the power generation market. They have to crawl before they run and the energy generation market is likely going to be even trickier than the car market to figure out.
Tesla home power systems, cut your house from the grid, invest in a higher return than bank interest, far higher and fuel your Tesla vehicle from home.
That remains to be seen.
No, but they are long term issues that affect customer loyalty. There are rumblings amongst Tesla owners about service issues. In-warranty service is slow. Out-of-warranty is slow AND super expensive. Like $900 to fix a door handle. Dealerships are known for stiff markups, but $900 to fix a door latch is usury.
https://forums.tesla.com/forum...
My Other Computer Is A Data General Nova III.
Those aren't pre orders...they are just reservations which does not translate to orders or sales
Actually, I believe that both GM and Ford will bankrupt. Again (and yes, when you are obtaining massive loans from the gov, then you bankrupted).
The problem is that W/O did all the wrong things. We SHOULD bail them out again, BUT, this time, break these companies up. IOW, rather than having 2 car companies, we should break them up and have 8-10. That way, it will not happen again.
I prefer the "u" in honour as it seems to be missing these days.
Not a lot of landlords are going to be interested in investing tons of money on home storage. However, lots of renters may be interested in an EV. (If they can figure out how to charge it.)
Once there are enough EVs out there it's just a business opportunity for landlords. Provide the charging stations next to where they park and have them pay some sort of markup to use them. Any landlord with a brain in their skull would be stupid not to make EV charging into a profit making opportunity.
And you add home power systems to your home once in a lifetime.
I don't think the business model here is going to be one time installs, especially since the cost of the solar panels and battery will be tens of thousands of dollars. Probably will be some sort of rental or lease arrangement kind of like how people finance their cars.
As others have pointed out before it can definitely be unethical. The ethical issues arise when people with a vested interest in the stock price attempt to manipulate the price usually via FUD, although the same can also be done by trying to pump and dump. The harm in these kinds of actions is that a companies ability to borrow money and get favorable financial terms from suppliers and such is directly affected by the stock price. That kind of instability can wreck a company that would otherwise be just fine.
Even many smaller businesses don't operate on a daily balancing of the books with suppliers. For example a restaurant may find a supplier of fresh produce and agree to pay for daily deliveries on a weekly or monthly basis. If the supplier has high confidence in the ability of the restaurant to pay the bill on time then they are likely to allow the bill to go longer between settling up and not charge as much of a premium. If however the supplier doesn't have any confidence in the restaurant then they might demand cash on delivery or even when the order is placed, and the price is more likely to reflect the instability of the relationship as well. Even if your business is magically cash flush and can pay in full for everything as you need it the prices you pay will be higher and the associated costs of the constant transactions will cut into your profitability, which increase the likelihood of the business failing.
Shorting is essentially antithetical to investing. Investing means to put something of yours into an entity hoping that its value will increase. In shorting you borrow an investment from someone else, sell it immediately and hope to buy it back later at a discount so you can return it to the party it was borrowed from while keeping the difference in cash. By definition the only time a short seller holds any investment in the company they are shorting is at the beginning and end.
Actually, I believe that both GM and Ford will bankrupt. Again (and yes, when you are obtaining massive loans from the gov, then you bankrupted).
Ford didn't need the loan. GM did. GM bankrupted, Ford didn't. GM has been spending its time, money and effort over the decades building synergies and then throwing them away. e.g. Detroit Diesel and Allison.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Ford did not technically bankrupt.
However, they would not have survived without it, while other companies were getting their handouts.
The ONLY company that was not bailed out, but was working in America, was Tesla.
I prefer the "u" in honour as it seems to be missing these days.
Cost to fix a Cadillac Escalade door handle (and latch mechanism) $430:
https://www.cadillacforums.com...
My Other Computer Is A Data General Nova III.
Tesla absolutely was bailed out by the federal government. They were on the verge of bankruptcy in 2009 and only survived due to a fed-backed $465M loan from the Department of Energy. The loan program was not meant to bail out companies, but without it, Tesla most likely would not have survived 2009.
I don't always use unix-like operating systems; but when I do, I prefer FreeBSD.
Where is that fucker anyway? I haven't see one damned post from that shithead in this entire thread. No even a -1 post. Bitches hate being told THEY WERE WRONG!
You are clueless as ever. GM was bankrupt, Ford was not, but if the government is handing out $$$ like Halloween candy, Ford would be stupid not to take some.
How many European and Japanese car companies were bailed out...
Just more US govt handouts to support dying industries to buy votes.
Learn to grammar some more, then your trolls will blend in a bit better.
will bankrupt = not English
FORD will bankrupt who?
you bankrupted = not English
you bankrupted who?
Maybe it's different in Russian?
Nice try, but no. "Tesla is still losing money" might mean what you describe.
I'm among other things a certified accountant and my specialty is corporate cost accounting in manufacturing. There is no "might" qualifier here. I described exactly what is happening with Tesla from a big picture perspective. It's nothing unusual. My company has exactly the same situation of every product we sell albeit on a much smaller scale. The company you work for does too.
But "on each car they sell" is clearly referring to the per-car production cost versus the per-car price.
Per car production costs are not a fixed number and it's a mistake to think they are. You cannot simply take the cost of the labor for the guys on the assembly line and the cost of the materials as the "per-car price" (the gross margin) and call it a day. If it were that easy there would be no need for accountants. Even if we ignore the cost of building the assembly line for the sake of argument (and we shouldn't), there are lots of day to day expenses that directly affect the cost of the product but cannot be easily or tidily allocated directly to the product. Any number you see for per-unit costs is an estimate with an army of assumptions underlying that number. It might be a pretty good and useful estimate but it's an estimate all the same. There is a saying among accountants that it's better to be approximately correct than precisely wrong.
Let's use an example. Running an auto assembly plant requires a lot of water. Equipment needs cooling, people need to drink, toilets need flushing, etc. It's self evident that at least some of the water used is a direct cost of manufacturing but there is a problem. There is no tidy way to assign a fixed and unchanging number for the amount of water used to produce each car. Some of it is clearly used in production and you can allocate it across the number of vehicles produced but it's not a linear function. It is FAR too expensive to try to measure all water usage for every purpose. If you change the number of units produced the amount of water required doesn't change by a matching amount so the costs don't match neatly either. And worse any allocation algorithm you can come up with will almost certainly not accurately allocate the costs for any non-trivial case. And there are countless other costs that are either impractical or impossible to neatly allocate. How much of an engineers salary should be allocated to a given product or component if you aren't tracking their time to a ridiculously expensive degree?
If you have a clean and cost effective solution to this problem please publish it in a peer reviewed journal and collect your Nobel Prize in Economics. Seriously, it's that important and difficult of a problem.
By the way, there is no fact when things are badly defined.
The problem is NOT that things are badly defined. All these terms are very well defined despite a lot of people here on slashdot being uneducated as to their meaning. Seriously a shocking amount of effort goes into defining these terms. I'm not being critical - I didn't used to know their meaning either which is why I'm trying to educate here. No, the problem is that clear definitions of terms does not result in clean solutions to the problems. Go research fixed and variable costs. Learn about direct and indirect costs. Study Activity Based Costing. These are issues that real world accounts have to deal with every day and they are often very difficult and messy problems. The terms are well defined but the solutions are anything but tidy in a lot of cases for two primary reasons:
1) A shocking amount of accounting really comes down to opinion and there is no obvious way to change that. Stuff like defining when a sale occurs can be defined a variety of different ways and the best solution can vary from company to company or
They are reservations each backed by a $1,000 down payment. 20% have cancelled. That's still 320,000 cars, with deposits already paid, with customers waiting for them to be produced. Even if half of those left were to cancel (no signs of this happening) and Tesla ups their build volume to 7K per month, that's still nearly two years of backorders. Each Model 3 that is up for sale this December would have 1 customer and 22 backup customers if money was tight for the first few.
That's a worst case scenario. With current demand and production rates, every Model 3 that will be up for sale in December has 58 customers waiting. One of them will be able to afford it.
It's difficult to find, but with painstaking research, I managed to type "model 3 nhtsa" into a search engine and click the first result.
Rumor has it that going the the NHTSA website and typing "Model 3" into their search box returns the same result, but I don't believe such wild speculation.
https://www.nhtsa.gov/vehicle/2018/TESLA/MODEL%2525203/4%252520DR/RWD
It's difficult to find
I can see that from the dead link you provided.
36 hours later and posting AC tops it all off.
Seriously Rei, where on the NHTSA website does the Tesla Model 3 achieved these words: "Lowest Probability of Injury"?
Plus this Microsoft Paint bar graph with what appears to be 5.7%(M3), 6.4%(MS), 6.5%(MX) probabilities?
Did the NHTSA crashed 1000 Model 3 and found that 57 passengers had injuries?