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I'm not sure that is a goal though. Plenty of businesses are run at a loss intentionally nowadays for tax reasons. And unlike a lot of its software competitors,
by SuoDuanDao 7y ago
I'm not sure that is a goal though. Plenty of businesses are run at a loss intentionally nowadays for tax reasons. And unlike a lot of its software competitors, Tesla is in a capital-intensive business where investing in increased manufacturing capacity puts a nonspeculative asset on its books.
- gruez 7y ago>Plenty of businesses are run at a loss intentionally nowadays for tax reasons Please clarify this. I don't know of any tax regime where it pays to deliberately lose money (eg. setting money on fire).
- SuoDuanDao 7y agoobviously it's a loss on paper. When R&D investment counts against income for tax purposes; where T is the tax rate, R is the expected return made on R&D and I is interest paid on money to fund R&D, it makes sense to borrow enough money to offset all revenue while I-R<T and a lot of tech companies go nuts as a result with ridiculous acquisitions. In that sense, Tesla has a relative advantage because a factory's value is unlikely to go to zero.
- mruts 7y agoHow does this makes sense? There's no kind of existing taxes or math to make losing money more profitable than making money.