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This is a timely announcement following chatter about Tesla's cash flow problems[1][2]. [1] http://www.scmp.com/business/companies/article/1846965/tesla-shares

• kome 11y ago
  Re-reading the self-delusion of the fanboys is almost funny now.
• dmfdmf 11y ago
  Why was that thread "flagged"? What does that mean?
  • gamblor956 11y ago
    The thread was flagged because the pro-Tesla crowd on HN felt that the article was inaccurate regarding the amount of money Tesla lost on each car, and flagged it over wording. Tesla makes money on each car it sells (sales exceeds cost of goods sold), but once fixed costs and other expenses like R&D and capital investments are included, it has an enormous loss, so on average it loses about $4000 to $17000 per car (depending on whether you use Unicorn Accounting or Generally Accepted Accounting Practices). The article reported this as Tesla losing $4000 per car, which is accurate in a general/layman's sense but is technically inaccurate.
    • matthewmcg 11y ago
      I'm going to have to start using the "unicorn accounting" phrase (vs. GAAP). Love it.
      • _yosefk 11y ago
        It's nice but it kinda hints that GAAP is "the right thing", which is a bit too optimistic IMO.
        • angstrom 11y ago
          Particularly when you look at any company which is growing very fast. SolarCity would be an example where the company is growing exponentially, but the returns are spread over 20 years instead of being realized quarterly.
          • _yosefk 11y ago
            Well, accounting is not supposed to tell how valuable a company is, just what its balance sheet is, right? That people then take the balance sheet and invent ways to mechanically arrive at a valuation based on that is not GAAP's or any other accounting rules' fault. The trouble with any accounting rules is that it's hard to convert everything on the balance sheet into the same unit. If you don't convert it all, it's really hard to compare balance sheets. If you do convert it all, this conversion may be unfair to one balance sheet more than another. Or at least that's how I understand it... One example is pricing stock option grants so that you can then add them up with other expenses. I'm sincerely not sure how I'd do that. Here's a critique of what GAAP mandates: http://www.cypress.com/documentation/ceo-articles/dr-rodgers-speech-silicon-valley-rally-supporting-employee-equity-let-our?source=search&keywords=options%20go http://www.cypress.com/documentation/ceo-articles/dr-rodgers...
      • peterfirefly 11y ago
        In this case it is a bit unfair. The difference is mainly about leasing agreements for Tesla cars and how much such a lease is worth to Tesla. GAAP was/is definitely too pessimistic. Tesla's own accounting may be too optimistic. I believe Tesla's guess is pretty good. We'll see.
      • conistonwater 11y ago
        Needs more symmetry, I think: Unicorn Accounting Principles (UAP), by analogy with Generally Accepted Accounting Principles (GAAP). There should also be UFRS (for IFRS).
    • vvanders 11y ago
      Not to re-hash the argument again but it's not quite an accurate representation since for each car that Tesla sells that $4k number goes down. They've broken out the per-unit cost for a Model S and they're posted ~22% profit(feel free to fact-check me on this, I might be a tad off) excluding ZEV credits. So if Tesla wasn't production constrained(and building out the Gigafactory) they'd be turning a profit by the same logic.
      • andrewtbham 11y ago
        From the Shareholder letter: "Total Q2 gross margin was 23.4% on a non-GAAP basis and 22.3% on a GAAP basis." http://files.shareholder.com/downloads/ABEA-4CW8X0/522530778x0x843991/DCDCCFDA-0709-405B-931A-B2F48A224CE8/Tesla_Q2_2015_Shareholder_Letter.pdf http://files.shareholder.com/downloads/ABEA-4CW8X0/522530778...
        • vvanders 11y ago
          Thanks, that's the number I was trying to find and had seen before.
        • gamblor956 11y ago
          Gross margin is the income from sales less cost of goods sold, before items like R&D, salaries, capital improvements, etc., are considered. As I said above, Tesla has a positive gross margin, but a major net loss. When that net loss is averaged to units sold (which is a common metric for measuring financial performance in the automotive industry), Tesla has a loss of approximately $4000 to $17000 per car. This doesn't mean that Tesla is actually losing money each time a car is sold, it simply means that Tesla isn't selling enough cars to achieve net profitability. If Tesla were to sell more cars, its average loss per car would go down (and eventually become average profit per car). Unfortunately, Tesla announced that it's cutting production and sales estimates for the remainder of the year, so that's not going to happen in 2015.
          • boomzilla 11y ago
            Do you know if that's because Tesla is not selling enough cars, or the market demand is just not there? China used to be thought of as the big market eventually but with everything going on there, it seems that's not a good assumption anymore. The utility of a hybrid is just much higher. You get the gas saving in city drives, and the range on the odd weekend trips. The latest Prius can be charged too: http://www.toyota.com/prius-plug-in-hybrid/ http://www.toyota.com/prius-plug-in-hybrid/ and it cost less than 50% of the cheapest Tesla. The only thing you don't get in these Prius is the look factor, though they look cool enough for many people.
    • mey 11y ago
      What does Unicorn Accounting mean? A general term for bullshit accounting? Ala Groupon calling it's sales team's salary a capital expense in it's IPO filing?
      • Animats 11y ago
        The classic phrase is "EBITDA", or "earnings before interest, taxes, depreciation, and amortization". This is sometimes referred to as "earnings before all the bad stuff". Then there are "extraordinary items", which somehow are always in the direction that makes the balance sheet look better. In the days when AOL sent out disks with their program, it came out years later that they were treating that marketing effort as a capital expense and amortizing those throwaway disks over many years. AOL actually became profitable about six years after it said it did. I used to have a system which tried to analyze financial statements automatically. I have a database of several hundred euphemisms for "net loss". ("Net income after extraordinary item", etc.) It's embarrassing. The SEC's standardization on XBRL has helped a little with that. Tesla is an industrial company, and accounting for industrial companies is well understood. This includes growing industrial companies. Upfront expenditures for an industrial company result in real assets, which can be valued. I look forward to reading the prospectus for the IPO.
        • TheIronYuppie 11y ago
          That's not really correct. EBITDA is not earnings before bad stuff - that stuff is all % of your income and/or write downs that have no impact to the business, so financial folks like to exclude it as noise (since all it really does is reduce your taxes). Examples: - You bought a company and now it's worthless - You made money and now you have to pay taxes on it - You bought a bunch of computers and now they're three years old and worth less than when you bought them - You bought something 10 years ago, and, instead of paying for it all up front, you paid over time
  • angersock 11y ago
    Hivemind members who have accumulated sufficient PG funbucks (karma) can "flag" a story. This causes it to be moved down in rankings, and if enough people flag it, killed and locked--at least, that's my understanding.