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Tesla seems to have the advantage that investors are willing to supply it with endless amounts of cash to fuel it's unprofitable operations year after year. In

Tesla seems to have the advantage that investors are willing to supply it with endless amounts of cash to fuel it's unprofitable operations year after year. In its 16 year history, it has never turned an annual profit. It has lost billions and billions of dollars. Tesla just received another $2 billion lifeline infusion earlier this year. Other automakers have to play by more sane financial rules.

lowdose 7y ago
That's exactly what the same people also said about Amazon.
- Avshalom 7y ago
  yes and being able to run at a loss for decades was also an advantage for Amazon.
  - green-eclipse 7y ago
    Amazon was breakeven by year 7 of its existence (2003). They never went "decades" losing money.
- kgwgk 7y ago
  > In its 16 year history, it has never turned an annual profit. I don’t think that’s something that could be said about Amazon.
- tryitnow 7y ago
  My understanding is that amazon was basically cash flow positive, but ran GAAP losses and never really "struggled" financially. Whereas Tesla does indeed have some systemic financial issues. In other words Amazon could have been "profitable" on a GAAP accounting basis fairly early on, but Tesla would struggle to do that.
  - amyjess 7y ago
    Specifically, Amazon was cash-flow positive but deliberately chose to reinvest all their profits into the company instead of paying out dividends, so that appears on the books as a loss but it really isn't.
  - psychrometer 7y ago
    Tesla makes a profit on every car that they sell[0]. There are more people wanting to buy Tesla's than they can currently produce[1]. Telsa needs to spend more money to increase production. They make money on each car sold and they can sell a lot more than they currently do. Tesla being in the red in order to increase production is the same scenario that Amazon was in. [0] https://www.fool.com/investing/2019/07/26/tesla-management-talks-model-3-gross-margin-demand.aspx https://www.fool.com/investing/2019/07/26/tesla-management-t... [1] https://electrek.co/2018/07/03/tesla-model-3-long-backlog-reservations-production-rate/ https://electrek.co/2018/07/03/tesla-model-3-long-backlog-re...
- green-eclipse 7y ago
  That's a nice story, but the numbers don't support the narrative. Tesla's been reporting revenue for 13 years (that I can find). So I took the first 13 years of both Tesla and Amazon financials. Amazon was breakeven by year 7. Telsa is just losing more money as time goes on. (Apologies for bad HN formatting). Here's the data: Tesla annual net income, in millions: Year 1: -$78 Year 2: -$82 Year 3: -$56 Year 4: -$154 Year 5: -$254 Year 6: -$396 Year 7: -$74 Year 8: -$294 Year 9: -$889 Year 10: -$675 Year 11: -$1,961 Year 12: -$976 Q1+Q2 Year 13: -$1110 Amazon annual net income, in millions (rounded): Year 1: $0 Year 2: -$100 Year 3: -$700 Year 4: -$1400 Year 5: -$600 Year 6: -$100 Year 7: $0 Year 8: $600 Year 9: $400 Year 10: $200 Year 11: $500 Year 12: $600 Year 13: $900

lowdose 7y ago

That's exactly what the same people also said about Amazon.

Avshalom 7y ago
yes and being able to run at a loss for decades was also an advantage for Amazon.
- green-eclipse 7y ago
  Amazon was breakeven by year 7 of its existence (2003). They never went "decades" losing money.
kgwgk 7y ago
> In its 16 year history, it has never turned an annual profit. I don’t think that’s something that could be said about Amazon.
tryitnow 7y ago
My understanding is that amazon was basically cash flow positive, but ran GAAP losses and never really "struggled" financially. Whereas Tesla does indeed have some systemic financial issues. In other words Amazon could have been "profitable" on a GAAP accounting basis fairly early on, but Tesla would struggle to do that.
- amyjess 7y ago
  Specifically, Amazon was cash-flow positive but deliberately chose to reinvest all their profits into the company instead of paying out dividends, so that appears on the books as a loss but it really isn't.
- psychrometer 7y ago
  Tesla makes a profit on every car that they sell[0]. There are more people wanting to buy Tesla's than they can currently produce[1]. Telsa needs to spend more money to increase production. They make money on each car sold and they can sell a lot more than they currently do. Tesla being in the red in order to increase production is the same scenario that Amazon was in. [0] https://www.fool.com/investing/2019/07/26/tesla-management-talks-model-3-gross-margin-demand.aspx https://www.fool.com/investing/2019/07/26/tesla-management-t... [1] https://electrek.co/2018/07/03/tesla-model-3-long-backlog-reservations-production-rate/ https://electrek.co/2018/07/03/tesla-model-3-long-backlog-re...
green-eclipse 7y ago
That's a nice story, but the numbers don't support the narrative. Tesla's been reporting revenue for 13 years (that I can find). So I took the first 13 years of both Tesla and Amazon financials. Amazon was breakeven by year 7. Telsa is just losing more money as time goes on. (Apologies for bad HN formatting). Here's the data: Tesla annual net income, in millions: Year 1: -$78 Year 2: -$82 Year 3: -$56 Year 4: -$154 Year 5: -$254 Year 6: -$396 Year 7: -$74 Year 8: -$294 Year 9: -$889 Year 10: -$675 Year 11: -$1,961 Year 12: -$976 Q1+Q2 Year 13: -$1110 Amazon annual net income, in millions (rounded): Year 1: $0 Year 2: -$100 Year 3: -$700 Year 4: -$1400 Year 5: -$600 Year 6: -$100 Year 7: $0 Year 8: $600 Year 9: $400 Year 10: $200 Year 11: $500 Year 12: $600 Year 13: $900