Tesla makes plenty of money on the S and X. It's just that they are investing that money on bringing up the Model 3 and other projects.
That's not the case at all. Money for the Model 3 is coming from investors and loans.
According to their Q4 report, their gross profit is $438 million a quarter. Of that, $146 million goes towards paying interest on their loans. Another $1 billion goes to other expenses, including R&D, marketing and administrative. Notice how they're already $600 million the red before we even get to the $786 million in capital expenditures (aka. factory construction).
So they paying for all this with loans, which is not really sustainable.
To get in the black, they'll need a combination of several things:
- Drastically increase gross profit.
- Cut R&D, marketing and administrative spending.
- Reduce interest costs.
- Stop building new factories.
I personally don't think any of those are viable. Their margin is relatively high at 19% right now because they're selling luxury models. But the Model 3 will have a much lower margin, perhaps only 10% (which is what Ford is working with). Even if they can sell their target 5,000 Model 3's a week, we're still looking at only $200 million in additional gross profit for the quarter. The other $400 million loss will have to be made up with cost cuts.
Maybe they can kill R&D ($350 million) at the cost of future competitiveness, but marketing and administrative expenses can't be cut without affecting sales or production.
Not much can be done about interest costs, since it's the banks that set the rates. They also need the money right now, so paying the loans off is not an option.
As for capital expenditures, well, they're definitely not going to make enough sales to save them if they don't have factories for the production volume.
All in all a pretty bleak picture. But they have the backings of millions of fanboys and more importantly, investors, so they'll be ok until something bad happens to Musk. Even if they did get out of this hole though, I still don't see them turning into the next Apple or Amazon.
Right. I'd challenge any average office worker of today to go run a farm...not to make money, just to feed themselves. I'd wager they'd starve in a year.
Given that I've managed to grow more fruits than I can eat in my 3000 sqft. backyard by doing nothing more than going to Home Depot, digging a hole and putting in the tree... it's really not that hard. I also planted beans on 40 sqft. of it, and during the harvest season (which lasts about 2 months) I had one meal's worth of beans every other day. If I had 10 acres I'd have no trouble at all.
Beyond just putting things in the ground, there's a lot that can be done to increase yields and fight pests. But even for that all you need is knowing how to Google. Just type in "how to grow X" and there's all the information you'll ever need.
Maybe nukes are the way to go, but your calculations aren't very convincing.
A standard American W78 warhead has a mass of ~ 350 kg and a blast of ~ 320 kT,
or 1.5e18 joules.
That's 1.3e15 Joules.
The same mass with a delta-V of 10000 m/s, used as a ram, would deliver 1.75e10 joules.
New Horizons was 16.6 km/s and 480 kg. Why would we do worse than that with the entire world on the line? The asteroid will be moving too, so impact velocity will be much higher.
So an explosion would deliver 10 million times as much energy, and eject far more inertial mass from the surface of the asteroid.
20 thousand times. Also, the calculation that matters is momentum, not energy. You're trying to move the asteroid, not vaporize the whole thing.
from experience, the "up to" parts are generous on their part
Ah, one of the most ingenious inventions in marketing. "Up to" just means "less than or equal to". The only thing "prevents growth up to 1 year" is promising is that it will most definitely not last longer than 1 year. Meanwhile, if it faded out in 2 minutes, that would be perfectly acceptable.
America has 5% of the world's population, but creates about 60% of all new drugs and medical devices.
If I recall correctly, American life expectancy is still way below first world average. What's the point of the new drugs if people are still dying left and right, and paying more for the privilege?
Not to mention the rest of the world has access to those new drugs anyways, and they pay less for it. Why are we footing the bill when they don't have to? No drug exports should be sold for less overseas than in the US.
Why would you use per-capita GDP? The US has a highly skewed wealth distribution, which means most people will not see anywhere close to their share of GDP as disposable income. The bottom 50% only has 15% of the nation's income, so if you're in that bucket, you can immediately ignore 85% of the GDP since you won't ever see any of it in your hands.
The metric that really matters for the average Joe is disposable median income adjusted for purchasing power parity, because that's how much buying power at least half of the population will have. By that measure, the US is still near the top, but about the same as many other first-world countries such as Germany and Australia.
So your company decided that instead of letting people not be there for a few weeks in a year, it's better not to have them at all? Or is there some other reason to have a bunch of open positions, like getting over the H1B legal hurdle?
By your rationale, camping would be a minor disaster.
That's not a great comparison. The only reason camping is usually not is because people prepare for it. If I tossed you into the middle of the Rocky Mountains without warning, you'd be in a life-or-death situation by nightfall.
I don't know exactly how much the modern supply chain relies on the internet, but if it was out for more than a couple of days, I think we will start seeing empty shelves in the grocery stores. Banks also use it extensively, so unless you have a whole lot of cash under your mattress, money's going to be a problem too. I doubt many people will die, but calling it "minor disaster" does seem appropriate.
If you want to talk P/E ratio, you can find unreasonable numbers everywhere. Just look at Caterpillar with a P/E ratio of 123 or Coca-Cola at 151. They're about as non-Sillicon Valley as companies can be.
That is the point there: "most times" it works. Except when it doesn't. That is why you need humans, and unless there is some magic technology that is coming along we will always need humans for those times that aren't "most times". The last 20% of anything is hard to do.
Yes, so we keep the 20% of the workers and the other 80% can be laid off.
If you don't see how this will cause unemployment, you're delusional.
I take it you've never been to a conveyer-belt sushi restaurant. You can take whatever you want from the conveyer, and when you're done, they charge you by the number of plates you took. It's even more convenient than a fast food joint.
The point of an experiment is to gather information. If you stop it the moment you start seeing results contrary to what you wanted, then you weren't really running an experiment at all.
You cannot find out in advance how much everything will cost... Here is a short and incomplete list of things you won't know in advance:
You can make a reasonable estimate for most of them. And if you did, you'd know it's not going to work unless your end product is cocaine.
1) Cost of real estate
Have you ever heard of Zillow? City land prices are 10x rural prices so right off the bat your crops are going to be 10x more expensive.
2) Cost of capital equipment
What equipment can't you get a price for? Pipes? Nozzles? LEDs? Go to Home Depot and whatever price there is going to be your worst case.
3) Cost of labor
Go to a restaurant near your future farm, ask the cooks how much they make. You'll be paying a similar amount.
4) Efficiency of labor
Ok, I'll give you this one. You'll need to run a small scale experiment, but you don't really need $200 million for that.
5) Crop yields
You can get this from the small experiment too, but there's also existing literature. Aeroponics? Hydroponics? Plenty of research exists for how efficient those systems are for different crops.
6) Energy costs
Get a quote from PG&E? Your farm uses less energy than a typical office so you're not going to be negotiating bulk pricing.
I've never seen a business plan where that actually happened and I've seen a LOT of business plans.
It sounds like you've been investing in a lot of idiots. Ok, maybe not all of them. A business plan is not meant to be as accurate as possible, it's there to sell the idea, and unfortunately, wildly optimistic numbers is what's going to get them the investment.
Unclear if it will be possible to make it competitive but it's arguably a worthwhile gamble.
I don't see why it needs to be a gamble. You can find out how much everything costs and do some basic math. If your best case cost of an indoor farm is 10x more than a traditional farm, then you might have some problems.
It always impresses me how these people can soak up so much investor funding.
There's a number of possible advantages:
- Land is expensive, by increasing the density we can reduce land usage (maybe keeping more land wild).
Land is only expensive in a city. A house in San Francisco with a 3000 sqft. lot (0.07 acre) is $1.2 million, but a 20-acre plot in the not-so-distant Central Valley is $2 million. Even if you could build the multi-story indoor farm for free, it's still 10x more costly for the same amount of arable land. Now I'm not sure how such a farm will be taxed in SF, but I imagine the property tax on it will be much higher as well.
- Transportation is polluting, being closer to cities can save a lot of transportation costs
Not really. This replaces the problem of shipping food into the city with the problem of shipping fertilizers, laborers and water into the city. Besides, we already have efficient transport in the form of railroads, but they've been neglected for too long and can't keep up with the capacity. A concerted effort there would yield much better results.
- Harvesting is also polluting, you might be able to do that more efficiently
Not sure how being indoors makes a difference here. You still need some machinery to do the harvest and the machinery still needs energy.
- Eliminating/reducing pests cuts down on nasty pesticides.
Yes, but traditional farms can use bug nets too, they just don't because pesticides are cheaper and safe enough.
Hitting an ice patch just means that when traction returns, cruise control tries to bring the vehicle back up to cruise speed. That's not a failing of cruise control. Its job is to keep the vehicle moving at the given speed. Steering is still the driver's job. The fact that driving too fast on icy roads makes it impossible to steer is not the cruise control's problem. Nor is failing to turn it off when the driver no longer wants it to drive at that speed (having discovered ice on the road).
That said, it's still a dangerous situation and manufacturers have came up with improvements and recommended against using it in bad weather, which is completely reasonable.
Comparing it to cruise control is stupid. Cruise control maintains your speed extremely well and doesn't ever fail catastrophically. In hilly terrain it might go slightly too slow or too fast, but it doesn't put you in a dangerous situation. Autopilot on the other hand is supposed to keep you in the lane, but as this case demonstrates, it's actually not very good at it, and when it fails, you're in a life-and-death situation.
Fuck me! Is that all? Are you saying that the USA people actually drive with that little level of training? Hell I had to do 100 hours of driving with a trainer to get a provisional drivers license, part of it in bad weather, part of it at night.
Which country are you from and is that a commercial license?
In the US, the requirements varies by state. Many have no dual-instruction requirements for adults, so you can just drive a few times with family and go for the tests. And at least in my experience, both knowledge and practical tests are laughably easy.
They certainly do depress wages for tech jobs, as your own citation states:
By contrast, there are many examples of jobs where H1B workers usually earn less than U.S. workers — despite legal requirements that employers pay “prevailing wages” to H1B workers. Four examples of these types of jobs are shown in the table below: data scientist, financial analyst, programmer analyst, and software engineer. In these cases, H1B workers usually earn less than otherwise similar U.S. workers.
For example, among software engineers, H1B workers earned less than or equal to U.S. workers in every city we examined, ranging from equal median salaries in Seattle to -17 percent less in Chicago. Similarly, H1B salaries for programmer analysts were lower in nine of the 10 cities we examined, ranging from -1 percent in Atlanta to -28 percent in Chicago and Washington, D.C. (H1B pay for programmer analysts was 7 percent higher in one city: Philadelphia).
The difference between Tesla and Uber is that Uber is testing it and not selling it. Uber could've tried harder to work out the problems before putting their test cars on a real road, but at some point in the development cycle, they'll have to do it. On the other hand, Tesla doesn't need to put Autopilot in the hands of the public. It's just there to make them more money.
In the long run, self driving cars will save lives, which is why testing them makes sense even if some of those tests are going to fail catastrophically.
Learning to operate something with an "autopilot" requires non-pilots to learn that "autopilot" is not "perfection" or "needs no monitoring", just like learning to drive a car with an "autopilot" requires the same.
Sure. If you want to take the aviation approach, then let's require Autopilot users to be trained and tested on its proper operation before they're allowed to operate a vehicle with it installed.
Slashdot Mirror
I'd say both. They increased long-term debt from $5.9 billion to $9.4 billion last year.
Tesla makes plenty of money on the S and X. It's just that they are investing that money on bringing up the Model 3 and other projects.
That's not the case at all. Money for the Model 3 is coming from investors and loans.
According to their Q4 report, their gross profit is $438 million a quarter. Of that, $146 million goes towards paying interest on their loans. Another $1 billion goes to other expenses, including R&D, marketing and administrative. Notice how they're already $600 million the red before we even get to the $786 million in capital expenditures (aka. factory construction).
So they paying for all this with loans, which is not really sustainable.
To get in the black, they'll need a combination of several things:
- Drastically increase gross profit.
- Cut R&D, marketing and administrative spending.
- Reduce interest costs.
- Stop building new factories.
I personally don't think any of those are viable. Their margin is relatively high at 19% right now because they're selling luxury models. But the Model 3 will have a much lower margin, perhaps only 10% (which is what Ford is working with). Even if they can sell their target 5,000 Model 3's a week, we're still looking at only $200 million in additional gross profit for the quarter. The other $400 million loss will have to be made up with cost cuts.
Maybe they can kill R&D ($350 million) at the cost of future competitiveness, but marketing and administrative expenses can't be cut without affecting sales or production.
Not much can be done about interest costs, since it's the banks that set the rates. They also need the money right now, so paying the loans off is not an option.
As for capital expenditures, well, they're definitely not going to make enough sales to save them if they don't have factories for the production volume.
All in all a pretty bleak picture. But they have the backings of millions of fanboys and more importantly, investors, so they'll be ok until something bad happens to Musk. Even if they did get out of this hole though, I still don't see them turning into the next Apple or Amazon.
Right. I'd challenge any average office worker of today to go run a farm...not to make money, just to feed themselves. I'd wager they'd starve in a year.
Given that I've managed to grow more fruits than I can eat in my 3000 sqft. backyard by doing nothing more than going to Home Depot, digging a hole and putting in the tree... it's really not that hard. I also planted beans on 40 sqft. of it, and during the harvest season (which lasts about 2 months) I had one meal's worth of beans every other day. If I had 10 acres I'd have no trouble at all.
Beyond just putting things in the ground, there's a lot that can be done to increase yields and fight pests. But even for that all you need is knowing how to Google. Just type in "how to grow X" and there's all the information you'll ever need.
A standard American W78 warhead has a mass of ~ 350 kg and a blast of ~ 320 kT, or 1.5e18 joules.
That's 1.3e15 Joules.
The same mass with a delta-V of 10000 m/s, used as a ram, would deliver 1.75e10 joules.
New Horizons was 16.6 km/s and 480 kg. Why would we do worse than that with the entire world on the line? The asteroid will be moving too, so impact velocity will be much higher.
So an explosion would deliver 10 million times as much energy, and eject far more inertial mass from the surface of the asteroid.
20 thousand times. Also, the calculation that matters is momentum, not energy. You're trying to move the asteroid, not vaporize the whole thing.
US keeps leading the world pharma innovation... reality is that [the US] keeps outperforming any other system on most serious metrics.
Do you include "life expectancy" or "cost" in any of those "serious metrics"?
from experience, the "up to" parts are generous on their part
Ah, one of the most ingenious inventions in marketing. "Up to" just means "less than or equal to". The only thing "prevents growth up to 1 year" is promising is that it will most definitely not last longer than 1 year. Meanwhile, if it faded out in 2 minutes, that would be perfectly acceptable.
America has 5% of the world's population, but creates about 60% of all new drugs and medical devices.
If I recall correctly, American life expectancy is still way below first world average. What's the point of the new drugs if people are still dying left and right, and paying more for the privilege?
Not to mention the rest of the world has access to those new drugs anyways, and they pay less for it. Why are we footing the bill when they don't have to? No drug exports should be sold for less overseas than in the US.
The joke~~
Your head
Be glad you're not in India, even a 7-day work week is too short for them!
Why would you use per-capita GDP? The US has a highly skewed wealth distribution, which means most people will not see anywhere close to their share of GDP as disposable income. The bottom 50% only has 15% of the nation's income, so if you're in that bucket, you can immediately ignore 85% of the GDP since you won't ever see any of it in your hands.
The metric that really matters for the average Joe is disposable median income adjusted for purchasing power parity, because that's how much buying power at least half of the population will have. By that measure, the US is still near the top, but about the same as many other first-world countries such as Germany and Australia.
So your company decided that instead of letting people not be there for a few weeks in a year, it's better not to have them at all? Or is there some other reason to have a bunch of open positions, like getting over the H1B legal hurdle?
By your rationale, camping would be a minor disaster.
That's not a great comparison. The only reason camping is usually not is because people prepare for it. If I tossed you into the middle of the Rocky Mountains without warning, you'd be in a life-or-death situation by nightfall.
I don't know exactly how much the modern supply chain relies on the internet, but if it was out for more than a couple of days, I think we will start seeing empty shelves in the grocery stores. Banks also use it extensively, so unless you have a whole lot of cash under your mattress, money's going to be a problem too. I doubt many people will die, but calling it "minor disaster" does seem appropriate.
If you want to talk P/E ratio, you can find unreasonable numbers everywhere. Just look at Caterpillar with a P/E ratio of 123 or Coca-Cola at 151. They're about as non-Sillicon Valley as companies can be.
That is the point there: "most times" it works. Except when it doesn't. That is why you need humans, and unless there is some magic technology that is coming along we will always need humans for those times that aren't "most times". The last 20% of anything is hard to do.
Yes, so we keep the 20% of the workers and the other 80% can be laid off.
If you don't see how this will cause unemployment, you're delusional.
I take it you've never been to a conveyer-belt sushi restaurant. You can take whatever you want from the conveyer, and when you're done, they charge you by the number of plates you took. It's even more convenient than a fast food joint.
The point of an experiment is to gather information. If you stop it the moment you start seeing results contrary to what you wanted, then you weren't really running an experiment at all.
You cannot find out in advance how much everything will cost... Here is a short and incomplete list of things you won't know in advance:
You can make a reasonable estimate for most of them. And if you did, you'd know it's not going to work unless your end product is cocaine.
1) Cost of real estate
Have you ever heard of Zillow? City land prices are 10x rural prices so right off the bat your crops are going to be 10x more expensive.
2) Cost of capital equipment
What equipment can't you get a price for? Pipes? Nozzles? LEDs? Go to Home Depot and whatever price there is going to be your worst case.
3) Cost of labor
Go to a restaurant near your future farm, ask the cooks how much they make. You'll be paying a similar amount.
4) Efficiency of labor
Ok, I'll give you this one. You'll need to run a small scale experiment, but you don't really need $200 million for that.
5) Crop yields
You can get this from the small experiment too, but there's also existing literature. Aeroponics? Hydroponics? Plenty of research exists for how efficient those systems are for different crops.
6) Energy costs
Get a quote from PG&E? Your farm uses less energy than a typical office so you're not going to be negotiating bulk pricing.
I've never seen a business plan where that actually happened and I've seen a LOT of business plans.
It sounds like you've been investing in a lot of idiots. Ok, maybe not all of them. A business plan is not meant to be as accurate as possible, it's there to sell the idea, and unfortunately, wildly optimistic numbers is what's going to get them the investment.
Unclear if it will be possible to make it competitive but it's arguably a worthwhile gamble.
I don't see why it needs to be a gamble. You can find out how much everything costs and do some basic math. If your best case cost of an indoor farm is 10x more than a traditional farm, then you might have some problems.
It always impresses me how these people can soak up so much investor funding.
There's a number of possible advantages: - Land is expensive, by increasing the density we can reduce land usage (maybe keeping more land wild).
Land is only expensive in a city. A house in San Francisco with a 3000 sqft. lot (0.07 acre) is $1.2 million, but a 20-acre plot in the not-so-distant Central Valley is $2 million. Even if you could build the multi-story indoor farm for free, it's still 10x more costly for the same amount of arable land. Now I'm not sure how such a farm will be taxed in SF, but I imagine the property tax on it will be much higher as well.
- Transportation is polluting, being closer to cities can save a lot of transportation costs
Not really. This replaces the problem of shipping food into the city with the problem of shipping fertilizers, laborers and water into the city. Besides, we already have efficient transport in the form of railroads, but they've been neglected for too long and can't keep up with the capacity. A concerted effort there would yield much better results.
- Harvesting is also polluting, you might be able to do that more efficiently
Not sure how being indoors makes a difference here. You still need some machinery to do the harvest and the machinery still needs energy.
- Eliminating/reducing pests cuts down on nasty pesticides.
Yes, but traditional farms can use bug nets too, they just don't because pesticides are cheaper and safe enough.
- People are even more expensive
Not sure how this is an advantage.
Hitting an ice patch just means that when traction returns, cruise control tries to bring the vehicle back up to cruise speed. That's not a failing of cruise control. Its job is to keep the vehicle moving at the given speed. Steering is still the driver's job. The fact that driving too fast on icy roads makes it impossible to steer is not the cruise control's problem. Nor is failing to turn it off when the driver no longer wants it to drive at that speed (having discovered ice on the road).
That said, it's still a dangerous situation and manufacturers have came up with improvements and recommended against using it in bad weather, which is completely reasonable.
Comparing it to cruise control is stupid. Cruise control maintains your speed extremely well and doesn't ever fail catastrophically. In hilly terrain it might go slightly too slow or too fast, but it doesn't put you in a dangerous situation. Autopilot on the other hand is supposed to keep you in the lane, but as this case demonstrates, it's actually not very good at it, and when it fails, you're in a life-and-death situation.
Fuck me! Is that all? Are you saying that the USA people actually drive with that little level of training? Hell I had to do 100 hours of driving with a trainer to get a provisional drivers license, part of it in bad weather, part of it at night.
Which country are you from and is that a commercial license?
In the US, the requirements varies by state. Many have no dual-instruction requirements for adults, so you can just drive a few times with family and go for the tests. And at least in my experience, both knowledge and practical tests are laughably easy.
According to the same source as TFA, H1B workers don't depress native wages. In fact, they are on average paid slightly above market rate.
https://www.glassdoor.com/rese...
They certainly do depress wages for tech jobs, as your own citation states:
By contrast, there are many examples of jobs where H1B workers usually earn less than U.S. workers — despite legal requirements that employers pay “prevailing wages” to H1B workers. Four examples of these types of jobs are shown in the table below: data scientist, financial analyst, programmer analyst, and software engineer. In these cases, H1B workers usually earn less than otherwise similar U.S. workers. For example, among software engineers, H1B workers earned less than or equal to U.S. workers in every city we examined, ranging from equal median salaries in Seattle to -17 percent less in Chicago. Similarly, H1B salaries for programmer analysts were lower in nine of the 10 cities we examined, ranging from -1 percent in Atlanta to -28 percent in Chicago and Washington, D.C. (H1B pay for programmer analysts was 7 percent higher in one city: Philadelphia).
The difference between Tesla and Uber is that Uber is testing it and not selling it. Uber could've tried harder to work out the problems before putting their test cars on a real road, but at some point in the development cycle, they'll have to do it. On the other hand, Tesla doesn't need to put Autopilot in the hands of the public. It's just there to make them more money.
In the long run, self driving cars will save lives, which is why testing them makes sense even if some of those tests are going to fail catastrophically.
Learning to operate something with an "autopilot" requires non-pilots to learn that "autopilot" is not "perfection" or "needs no monitoring", just like learning to drive a car with an "autopilot" requires the same.
Sure. If you want to take the aviation approach, then let's require Autopilot users to be trained and tested on its proper operation before they're allowed to operate a vehicle with it installed.