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Care to share where you saw the model 3 not being profitable? I'm not being combative. I'm genuinely curious as I own one. I know they were pretty break even ea

Care to share where you saw the model 3 not being profitable? I'm not being combative. I'm genuinely curious as I own one. I know they were pretty break even early on but has that not changed at all?!

dragontamer 7y ago
> Care to share where you saw the model 3 not being profitable? https://ir.tesla.com/node/19496/html https://ir.tesla.com/node/19496/html The above 10k reports a $976 Million loss for 2018. If you want to "Ctrl-F" something, try "Net Loss", which should bring you to the $976 Million loss in the financial sheets. Or search for "(976,091)", which is the precise number in that 10k for their Net Loss. -------- The 10Q reports (quarterly) for 2019 aren't much better. Q1 2019 reports a $702 Million loss (in ONE quarter!!): https://ir.tesla.com/node/19771/html https://ir.tesla.com/node/19771/html Q2 2019 reports a $389 Million loss: https://ir.tesla.com/node/20111/html https://ir.tesla.com/node/20111/html H1 2019 has lost $1.09 Billion loss, and there's 2 quarters left in this year. Even if Q3 2019 ends up profitable (and I find that unlikely), there's basically no chance for 2019 to be profitable either. Tesla has bet it all (again) on Shanghai Gigafactory 3. The Model 3 rollout to the USA has been wildly unprofitable, Tesla needs to sell significantly more vehicles at significantly higher prices. Gigafactory Shanghai will arguably help, but that's another $5 Billion bet, and Gigafactory 1 isn't even paid off yet. (Gigafactory 1 was paid with debt due 2019 and 2022. The 2019 debt was rolled over to 2014, and 2022 isn't looking too hot IMO). Tesla has time to turn things around before 2022. Although, maybe Musk can pull a Musk again and convince everybody that the company is worthwhile and all the bondholders offer another $Billion loan. Clearly it worked for rolling over the 2019 debt, but I have my doubts that it will keep working. -------- EDIT: Elon Musk likes to confuse the issue by talking about "Gross Profits". Yes, Tesla has a "gross profit", but most people don't actually know what that means. When people talk about "profits / loss", they typically mean "net profit". The TL;DR is that financial sheets talk about 4 kinds of money: Revenue, Gross, Operating, and finally Net. "Net" is the bottom line, while "Revenue" is every dollar that ever came into the company (usually sales). Gross (aka "Gross Profits") subtracts "COGS", cost of goods sold. Operating (aka: Operating Profits or EBITDA) subtracts marketing / sales / other costs, and finally "Net" subtracts out debt and taxes. So Musk confuses the issue because he talks "Gross Profits" when most CEOs really talk about "Net Profits".
- xeromal 7y ago
  Thanks so much! I have some lunchtime reading.
  - dragontamer 7y ago
    10k are almost their own language. If you have any questions, feel free to ping me. It took me a long time to learn to decode their language. The three sheets of importance are: 1. Balance sheets -- Assets vs Liabilities. A listing of all of the debt, factories, cash, etc. etc. and an estimated dollar value on everything. Add everything together, and you have the rough value of the company, the so called "Equity". 2. Income Statement -- Calculates Profits (or in this case, a loss), which is roughly a "Change in Balance Sheets". "Net Profits" means balance sheets are more towards +Assets, while "Net loss" is balance sheet had more +Liabilities. 3. Cash Flow -- How much money is in the bank. Start with the Income Statement and "reverses" the calculation to get to actual $$ flowing in or out of their bank. ------- When a business-folk says "profits", they talk about #2 being positive. But when colloquial people mean "profits", they typically mean #3. Understanding the difference between colloquial "Profits" (which is really Cash Flow) vs "Business profits" requires a good bit of study. If Tesla pays for a $5 Billion factory (ex: Gigafactory Shanghai), you'll have -$5 Billion Cash Flow, but $0 in income. Because -$5 Billion cash becomes +$5 Billion factory in the asset sheets.

dragontamer 7y ago

> Care to share where you saw the model 3 not being profitable? https://ir.tesla.com/node/19496/html https://ir.tesla.com/node/19496/html The above 10k reports a $976 Million loss for 2018. If you want to "Ctrl-F" something, try "Net Loss", which should bring you to the $976 Million loss in the financial sheets. Or search for "(976,091)", which is the precise number in that 10k for their Net Loss. -------- The 10Q reports (quarterly) for 2019 aren't much better. Q1 2019 reports a $702 Million loss (in ONE quarter!!): https://ir.tesla.com/node/19771/html https://ir.tesla.com/node/19771/html Q2 2019 reports a $389 Million loss: https://ir.tesla.com/node/20111/html https://ir.tesla.com/node/20111/html H1 2019 has lost $1.09 Billion loss, and there's 2 quarters left in this year. Even if Q3 2019 ends up profitable (and I find that unlikely), there's basically no chance for 2019 to be profitable either. Tesla has bet it all (again) on Shanghai Gigafactory 3. The Model 3 rollout to the USA has been wildly unprofitable, Tesla needs to sell significantly more vehicles at significantly higher prices. Gigafactory Shanghai will arguably help, but that's another $5 Billion bet, and Gigafactory 1 isn't even paid off yet. (Gigafactory 1 was paid with debt due 2019 and 2022. The 2019 debt was rolled over to 2014, and 2022 isn't looking too hot IMO). Tesla has time to turn things around before 2022. Although, maybe Musk can pull a Musk again and convince everybody that the company is worthwhile and all the bondholders offer another $Billion loan. Clearly it worked for rolling over the 2019 debt, but I have my doubts that it will keep working. -------- EDIT: Elon Musk likes to confuse the issue by talking about "Gross Profits". Yes, Tesla has a "gross profit", but most people don't actually know what that means. When people talk about "profits / loss", they typically mean "net profit". The TL;DR is that financial sheets talk about 4 kinds of money: Revenue, Gross, Operating, and finally Net. "Net" is the bottom line, while "Revenue" is every dollar that ever came into the company (usually sales). Gross (aka "Gross Profits") subtracts "COGS", cost of goods sold. Operating (aka: Operating Profits or EBITDA) subtracts marketing / sales / other costs, and finally "Net" subtracts out debt and taxes. So Musk confuses the issue because he talks "Gross Profits" when most CEOs really talk about "Net Profits".

xeromal 7y ago
Thanks so much! I have some lunchtime reading.
- dragontamer 7y ago
  10k are almost their own language. If you have any questions, feel free to ping me. It took me a long time to learn to decode their language. The three sheets of importance are: 1. Balance sheets -- Assets vs Liabilities. A listing of all of the debt, factories, cash, etc. etc. and an estimated dollar value on everything. Add everything together, and you have the rough value of the company, the so called "Equity". 2. Income Statement -- Calculates Profits (or in this case, a loss), which is roughly a "Change in Balance Sheets". "Net Profits" means balance sheets are more towards +Assets, while "Net loss" is balance sheet had more +Liabilities. 3. Cash Flow -- How much money is in the bank. Start with the Income Statement and "reverses" the calculation to get to actual $$ flowing in or out of their bank. ------- When a business-folk says "profits", they talk about #2 being positive. But when colloquial people mean "profits", they typically mean #3. Understanding the difference between colloquial "Profits" (which is really Cash Flow) vs "Business profits" requires a good bit of study. If Tesla pays for a $5 Billion factory (ex: Gigafactory Shanghai), you'll have -$5 Billion Cash Flow, but $0 in income. Because -$5 Billion cash becomes +$5 Billion factory in the asset sheets.