6 ms·

I mean don’t they still make a loss on every car. They have been alive for the duration of the stock market bull run. being sceptical of their chances in a rece

by rapsey 7y ago

I mean don’t they still make a loss on every car. They have been alive for the duration of the stock market bull run. being sceptical of their chances in a recession is normal.

jurmous 7y ago
The cars are not produced at a loss. Each car is profit. The negative cash flow is created by investing heavily in factory expansion like the model 3/Y production line and the record time construction of gigafactory 3. More about profit margins in second quarter report. It seems it is currently 19% per car. https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-696a7c517959 https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-69...
- gamblor956 7y ago
  The cars are not produced at a loss. Each car is profit. Only under magical unicorn fantasy accounting. Under the same accounting standards every other car maker uses (GAAP), Tesla still loses money on each car. From Tesla's own financial report: "excluding regulatory credit revenue, automotive gross margin improved by ~200bp (compared to a decrease of 125bp on a GAAP basis). [emphasis added]
  - bryanlarsen 7y ago
    "Fantasy" number is 19% gross margin. GAAP number is 15% gross margin. Still positive.
  - deleted 7y ago
    [deleted]
  - danhak 7y ago
    Totally false on both counts. 1) Tesla's GAAP gross margin was (positive) 14.5% for the most recent quarter [https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-696a7c517959 https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-69...] 2) Breaking out GAAP and non-GAAP figures is totally standard and commonplace among publicly traded companies. Take a look at Ford's Q2 letter, for example, which has a whole page describing why they use Non-GAAP financial measures to supplement GAAP figures [https://s22.q4cdn.com/857684434/files/doc_financials/2019/q2/updated/2Q19-Financial-Release.pdf https://s22.q4cdn.com/857684434/files/doc_financials/2019/q2...]
erulabs 7y ago
As of August 2018 that appears to not be the case: Tesla says that the Model 3’s gross margin “should grow significantly” to approximately 15 percent in the third quarter and 20 percent in fourth quarter, thanks to “continued reduction in manufacturing costs and to some extent an improving mix.” From here on out, CEO Elon said during a call with analysts Wednesday evening, “the goal is to be profitable and cash flow positive every quarter going forward.” Source: https://www.theverge.com/2018/8/1/17639588/tesla-earning-q2-2018-model-3-production https://www.theverge.com/2018/8/1/17639588/tesla-earning-q2-...
- bryanlarsen 7y ago
  Last quarter's gross margin was 15%. Given that the small number of Model S and X's probably have much better margins, the Model 3 margin is below 15%, but probably not much below. https://ycharts.com/companies/TSLA/gross_profit_margin https://ycharts.com/companies/TSLA/gross_profit_margin
- eatbitseveryday 7y ago
  >Tesla says that the Model 3’s gross margin “should grow significantly” to approximately 15 percent in the third quarter and 20 percent in fourth quarter, thanks to “continued reduction in manufacturing costs and to some extent an improving mix.” From here on out, CEO Elon said during a call with analysts Wednesday evening, “the goal is to be profitable and cash flow positive every quarter going forward.” Please do not quote by using a code box. Use italics (put an asterisk on either end) or a carrot > to indicate a quote, rather than creating a endlessly long sideways scroller.
- gamblor956 7y ago
  Important caveat: this is under Tesla's made-up accounting rubric. Under GAAP accounting (i.e., the standardized accounting methods everyone else uses) they lose money on each car, i.e., they have a negative gross margin.
  - rainyMammoth 7y ago
    This should be upvoted to the top of the page. I'm not rooting against or for Tesla, but they are extra shady regarding accounting. They are losing money on each car. There is so much misinformation around this pushed by Tesla fans and the company itself though that you might easily believe they are profitable, but they are not!
bryanlarsen 7y ago
Tesla's Gross Margin is 15%, the same as Ford's. They make a sizable profit on every car. R&D etc is what turns that profit into a loss.
ChrisClark 7y ago
Yeah, that keeps getting repeated by the anti-Tesla crowd. But they make a great profit on every car, and have consistently keep growing in sales. Right now they just can't manufacture the cars fast enough for the demand. They'll have to keep building factories which takes a big chunk from their cash.

by rapsey 7y ago

I mean don’t they still make a loss on every car. They have been alive for the duration of the stock market bull run. being sceptical of their chances in a recession is normal.

jurmous 7y ago

The cars are not produced at a loss. Each car is profit. The negative cash flow is created by investing heavily in factory expansion like the model 3/Y production line and the record time construction of gigafactory 3. More about profit margins in second quarter report. It seems it is currently 19% per car. https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-696a7c517959 https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-69...

gamblor956 7y ago
The cars are not produced at a loss. Each car is profit. Only under magical unicorn fantasy accounting. Under the same accounting standards every other car maker uses (GAAP), Tesla still loses money on each car. From Tesla's own financial report: "excluding regulatory credit revenue, automotive gross margin improved by ~200bp (compared to a decrease of 125bp on a GAAP basis). [emphasis added]
- bryanlarsen 7y ago
  "Fantasy" number is 19% gross margin. GAAP number is 15% gross margin. Still positive.
- deleted 7y ago
  [deleted]
- danhak 7y ago
  Totally false on both counts. 1) Tesla's GAAP gross margin was (positive) 14.5% for the most recent quarter [https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-696a7c517959 https://ir.tesla.com/static-files/1e70a30c-20a7-48b3-a1f6-69...] 2) Breaking out GAAP and non-GAAP figures is totally standard and commonplace among publicly traded companies. Take a look at Ford's Q2 letter, for example, which has a whole page describing why they use Non-GAAP financial measures to supplement GAAP figures [https://s22.q4cdn.com/857684434/files/doc_financials/2019/q2/updated/2Q19-Financial-Release.pdf https://s22.q4cdn.com/857684434/files/doc_financials/2019/q2...]

erulabs 7y ago

As of August 2018 that appears to not be the case: Tesla says that the Model 3’s gross margin “should grow significantly” to approximately 15 percent in the third quarter and 20 percent in fourth quarter, thanks to “continued reduction in manufacturing costs and to some extent an improving mix.” From here on out, CEO Elon said during a call with analysts Wednesday evening, “the goal is to be profitable and cash flow positive every quarter going forward.” Source: https://www.theverge.com/2018/8/1/17639588/tesla-earning-q2-2018-model-3-production https://www.theverge.com/2018/8/1/17639588/tesla-earning-q2-...

bryanlarsen 7y ago
Last quarter's gross margin was 15%. Given that the small number of Model S and X's probably have much better margins, the Model 3 margin is below 15%, but probably not much below. https://ycharts.com/companies/TSLA/gross_profit_margin https://ycharts.com/companies/TSLA/gross_profit_margin
eatbitseveryday 7y ago
>Tesla says that the Model 3’s gross margin “should grow significantly” to approximately 15 percent in the third quarter and 20 percent in fourth quarter, thanks to “continued reduction in manufacturing costs and to some extent an improving mix.” From here on out, CEO Elon said during a call with analysts Wednesday evening, “the goal is to be profitable and cash flow positive every quarter going forward.” Please do not quote by using a code box. Use italics (put an asterisk on either end) or a carrot > to indicate a quote, rather than creating a endlessly long sideways scroller.
gamblor956 7y ago
Important caveat: this is under Tesla's made-up accounting rubric. Under GAAP accounting (i.e., the standardized accounting methods everyone else uses) they lose money on each car, i.e., they have a negative gross margin.
- rainyMammoth 7y ago
  This should be upvoted to the top of the page. I'm not rooting against or for Tesla, but they are extra shady regarding accounting. They are losing money on each car. There is so much misinformation around this pushed by Tesla fans and the company itself though that you might easily believe they are profitable, but they are not!

bryanlarsen 7y ago

Tesla's Gross Margin is 15%, the same as Ford's. They make a sizable profit on every car. R&D etc is what turns that profit into a loss.

ChrisClark 7y ago

Yeah, that keeps getting repeated by the anti-Tesla crowd. But they make a great profit on every car, and have consistently keep growing in sales. Right now they just can't manufacture the cars fast enough for the demand. They'll have to keep building factories which takes a big chunk from their cash.