Nope. Not the way it works. I lived just outside of Hongqiao during its build-up for high speed rail, and it was fast - but highly litigious. Knowing a few people in the Chinese construction industry, it moved fairly quick but still took a LOT of time compared to other works, and the bribes were considerably higher too...
If you look at the last 4 quarters, and the last 4 years, SG&A has been pretty consistent at ~20% (Std Dev of 1.2%). It is scaling linearly, at least over the last 4+ years. They run over twice the SG&A of anyone else in the automotive industry, and is the big reason they lose money before you even consider other costs like R&D, capital expenditures, interest on debt, taxes, etc.
It is a pain in the ass... Of course, that's the whole point - and one you tried to ignore. Regulatory agencies in China are slow and inefficient - and notorious for requiring bribes to get anything done. Many times I've walked around the final inspection of a factory where the "inspector" red-tagged nearly everything (including State-issued licenses) and each time we'd stop at a tag, I'd pull off a 100 RMB note, and the red tag would come off. The building goes up in 60 days - insanely fast! Then it takes 9 months to push through the paperwork and bribes...
For AC, breaking Q1 2018 down since you are ignorant:
Revenue: $3.4 billion
Cost of Revenue: $2.95 billion
Gross Margin: $456 million
SG&A: $686.4 million
Now, take the gross margin and subtract SG&A. That's a loss of $230 million RIGHT THERE. That does not include R&D, capital expenses, interest on debt, nothing. Just the cost of making the product and selling/delivering the product. Already a loss of about $6600 per vehicle sold in Q1 2018, BEFORE any R&D, capex, interest, or taxes.
You tell me - but include the cost of harvesting 100% of the Gigafactory's required Lithium, Dysprosium, Cobalt, and other rare earth metals, and cost of recycling those batteries. At least the US, we have a completely-paid-for nuclear waste facility and a $46 billion trust fund (paid for by the nuclear power companies) that is sitting idle because of politics. We could dispose of the waste for very low cost, but alas - politics beat reason.
It's about scale. How many gigafactories will be needed to bring it up slowly? If you need one factory for 4 years for just one city for half a day, and you have hundreds of such cities, then how long do we plan to take to build out that battery infrastructure, just to run these cities for a few hours?
Do the math for, say, Germany. Each German uses about 7000 KWh per year. There are 83 million Germans. The Gigafactory can make 35 GWh of batteries per year. Do the math for say, 1 day backup (19 kWh per German). You need about 45 Gigafactory-years of output to support that. And that is just for Germany for one day.
Batteries don't make sense on a large scale at all.
So, student 15 years ago? You haven't been to China. I've been going since the mid 90s, and lived there from 2005 to 2011, and still spend about half my life there. You have ZERO experience with anything building or making in China - being a student means you didn't see squat. And China comes in 78th in the world for ease of doing business. If you actually lived in China, you would know that's not from their banking or infrastructure, it's from the regulatory side of things. Banks are open 7 days a week, 12-24 hours at a time. You can get anything you want done whenever you want (SF Express delivery pickup at 2 AM on Tuesday), but want to build something? Get ready for the red tape - and thousands of pinks for bribes....
As happens often in winter in China, you end up with still days and lots of clouds... As big as the 3 Gorges Dam is, it cannot power the Hangzhou bay area (of which Shanghai is just one city). Batteries for realistic cities might run them for a half a minute or a minute at most - but then you HAVE to switch on other power sources...
OK, let's ask! How long do those batteries work before they have to turn on gas turbines to compensate? How long can you run a city the size of Shanghai, LA, or New York or Paris on a battery? Go ahead, do the math - we'll wait for you to either come back eating crow or just not come back at all because you don't like the answers you get (HINT: the annual output of the Tesla Gigafactory would run Shanghai for about 3 hours - 365 days of output from the Gigafactory for 3 hours of uptime).
Apparently AC can't read... They lose money BEFORE costs like R&D and capital expenses. This means losing money without accounting for things like building the factory or doing the development. I rather suggest you learn to read (as I clearly posted this much) and also learn how to read a financial report. Gross margin minus SG&A is already a loss; that is before any other expenses like R&D and capital (building factory) expenses.
Where can you get electricity for $0.02/kWh? We pay about 12X that here in California, and in Germany and Denmark they pay upwards of 20X that price...
You've never been to China, let alone done business there, have you? If you had, you'd know that China is number two in the world for regulation. It's a side effect of having a dominant "socialist" central Government and a billion+ people who need to do something, which usually involves making it hard for someone else to do something, and filing and stamping paper proving you impeded the other people.
Take the entire annual output of Tesla's gigafactory. Dedicate it 100% to batteries for storage for Shanghai. Charge it completely. And you can run Shanghai for about 3 hours.
It's one thing to provide a few minutes' backup in a tiny-consumption area, it's a completely different thing to be useful in a modern large city.
It would take the entire annual output of Tesla's Gigafactory to provide enough battery for three AP1000s for 10 hours.
The Gigafactory has an annual capacity of 35 GWh worth of battery production. Each AP1000 can generate 1.117 GW output, so the gigafactory's output would be good for (35 GWh / 1.117 GW) 31 hours of storage. Three AP1000s could be "buffered" for 10 hours.
Shanghai averages around 10 GW of power consumption. We would need about 9 of the AP1000s to run just Shanghai; if we used solar and wind instead, and needed to buffer the capacity for 12 hours, we would need about 4 YEARS of 100% of the output of the gigafactory.
Battery tech is nowhere NEAR mature enough for mainline energy storage. It is off by orders of magnitude.
"Beating a self-imposed deadline, the final car rolling off the assembly line on Sunday morning, several hours after the midnight goal set by Musk, two workers at the factory told Reuters on Sunday."
Per their financials, the cost of product and SG&A (Selling, General and Administrative - costs required to have a business and sell product) already puts them negative. So yes, they lose money on every vehicle they sell - before R&D and capital expenditures and debt servicing.
Bloomberg looks at VINs as part of its estimate of the number made, but as Bloomberg points out - you apply for large blocks of VINs at one time, and distribute them over much longer time. So you need to smooth VIN applications.
Slashdot Mirror
Nope. Not the way it works. I lived just outside of Hongqiao during its build-up for high speed rail, and it was fast - but highly litigious. Knowing a few people in the Chinese construction industry, it moved fairly quick but still took a LOT of time compared to other works, and the bribes were considerably higher too...
If you look at the last 4 quarters, and the last 4 years, SG&A has been pretty consistent at ~20% (Std Dev of 1.2%). It is scaling linearly, at least over the last 4+ years. They run over twice the SG&A of anyone else in the automotive industry, and is the big reason they lose money before you even consider other costs like R&D, capital expenditures, interest on debt, taxes, etc.
It is a pain in the ass... Of course, that's the whole point - and one you tried to ignore. Regulatory agencies in China are slow and inefficient - and notorious for requiring bribes to get anything done. Many times I've walked around the final inspection of a factory where the "inspector" red-tagged nearly everything (including State-issued licenses) and each time we'd stop at a tag, I'd pull off a 100 RMB note, and the red tag would come off. The building goes up in 60 days - insanely fast! Then it takes 9 months to push through the paperwork and bribes...
For AC, breaking Q1 2018 down since you are ignorant:
Revenue: $3.4 billion
Cost of Revenue: $2.95 billion
Gross Margin: $456 million
SG&A: $686.4 million
Now, take the gross margin and subtract SG&A. That's a loss of $230 million RIGHT THERE. That does not include R&D, capital expenses, interest on debt, nothing. Just the cost of making the product and selling/delivering the product. Already a loss of about $6600 per vehicle sold in Q1 2018, BEFORE any R&D, capex, interest, or taxes.
You tell me - but include the cost of harvesting 100% of the Gigafactory's required Lithium, Dysprosium, Cobalt, and other rare earth metals, and cost of recycling those batteries. At least the US, we have a completely-paid-for nuclear waste facility and a $46 billion trust fund (paid for by the nuclear power companies) that is sitting idle because of politics. We could dispose of the waste for very low cost, but alas - politics beat reason.
It's about scale. How many gigafactories will be needed to bring it up slowly? If you need one factory for 4 years for just one city for half a day, and you have hundreds of such cities, then how long do we plan to take to build out that battery infrastructure, just to run these cities for a few hours?
Do the math for, say, Germany. Each German uses about 7000 KWh per year. There are 83 million Germans. The Gigafactory can make 35 GWh of batteries per year. Do the math for say, 1 day backup (19 kWh per German). You need about 45 Gigafactory-years of output to support that. And that is just for Germany for one day.
Batteries don't make sense on a large scale at all.
So well below 5000 per week. And per their own reports - they did NOT make 5000 in a week.
So, student 15 years ago? You haven't been to China. I've been going since the mid 90s, and lived there from 2005 to 2011, and still spend about half my life there. You have ZERO experience with anything building or making in China - being a student means you didn't see squat. And China comes in 78th in the world for ease of doing business. If you actually lived in China, you would know that's not from their banking or infrastructure, it's from the regulatory side of things. Banks are open 7 days a week, 12-24 hours at a time. You can get anything you want done whenever you want (SF Express delivery pickup at 2 AM on Tuesday), but want to build something? Get ready for the red tape - and thousands of pinks for bribes....
As happens often in winter in China, you end up with still days and lots of clouds... As big as the 3 Gorges Dam is, it cannot power the Hangzhou bay area (of which Shanghai is just one city). Batteries for realistic cities might run them for a half a minute or a minute at most - but then you HAVE to switch on other power sources...
As of 8:57 AM PST on July 2nd, it's at $337.46 and falling... Looks like the market doesn't like the report of missing their goal...
OK, let's ask! How long do those batteries work before they have to turn on gas turbines to compensate? How long can you run a city the size of Shanghai, LA, or New York or Paris on a battery? Go ahead, do the math - we'll wait for you to either come back eating crow or just not come back at all because you don't like the answers you get (HINT: the annual output of the Tesla Gigafactory would run Shanghai for about 3 hours - 365 days of output from the Gigafactory for 3 hours of uptime).
Apparently AC can't read... They lose money BEFORE costs like R&D and capital expenses. This means losing money without accounting for things like building the factory or doing the development. I rather suggest you learn to read (as I clearly posted this much) and also learn how to read a financial report. Gross margin minus SG&A is already a loss; that is before any other expenses like R&D and capital (building factory) expenses.
Where can you get electricity for $0.02/kWh? We pay about 12X that here in California, and in Germany and Denmark they pay upwards of 20X that price...
So kind of like we do for solar and wind anywhere near the same scale as a nuclear power plant?
You've never been to China, let alone done business there, have you? If you had, you'd know that China is number two in the world for regulation. It's a side effect of having a dominant "socialist" central Government and a billion+ people who need to do something, which usually involves making it hard for someone else to do something, and filing and stamping paper proving you impeded the other people.
For many governments, hydro is not renewable and is not considered green. Sad but true!
Take the entire annual output of Tesla's gigafactory. Dedicate it 100% to batteries for storage for Shanghai. Charge it completely. And you can run Shanghai for about 3 hours.
It's one thing to provide a few minutes' backup in a tiny-consumption area, it's a completely different thing to be useful in a modern large city.
It would take the entire annual output of Tesla's Gigafactory to provide enough battery for three AP1000s for 10 hours.
The Gigafactory has an annual capacity of 35 GWh worth of battery production. Each AP1000 can generate 1.117 GW output, so the gigafactory's output would be good for (35 GWh / 1.117 GW) 31 hours of storage. Three AP1000s could be "buffered" for 10 hours.
Shanghai averages around 10 GW of power consumption. We would need about 9 of the AP1000s to run just Shanghai; if we used solar and wind instead, and needed to buffer the capacity for 12 hours, we would need about 4 YEARS of 100% of the output of the gigafactory.
Battery tech is nowhere NEAR mature enough for mainline energy storage. It is off by orders of magnitude.
And of course, nuclear is pretty much always available - unlike wind and solar (which need a nuclear, or gas, or coal backup to be a viable solution).
"Beating a self-imposed deadline, the final car rolling off the assembly line on Sunday morning, several hours after the midnight goal set by Musk, two workers at the factory told Reuters on Sunday."
They didn't meet the goal.
Because people get sick, take vacation, and leave the company?
Per their financials, the cost of product and SG&A (Selling, General and Administrative - costs required to have a business and sell product) already puts them negative. So yes, they lose money on every vehicle they sell - before R&D and capital expenditures and debt servicing.
Any over/under about their losses for Q2 2018? My guess is a loss of $820MM for the quarter. What do you estimate?
Bloomberg looks at VINs as part of its estimate of the number made, but as Bloomberg points out - you apply for large blocks of VINs at one time, and distribute them over much longer time. So you need to smooth VIN applications.
Summary of the Forbes story and another report with the same conclusion. Check the graphs in the second link, especially. The data seems quite clear - the more renewables a nation deploys (particularly wind and solar), the more it pays for electricity.