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My understanding was that they aren't profitable because they are sinking every penny into growth. Not because they're selling cars at a loss.
by breakyerself 7y ago
My understanding was that they aren't profitable because they are sinking every penny into growth. Not because they're selling cars at a loss.
- sunstone 7y agoYup, it's the Amazon model.
- aguyfromnb 7y agoThis comment demonstrates a lack of understanding of both company's business models. Here's the two company's R&D spend: https://ycharts.com/companies/AMZN/r_and_d_expense https://ycharts.com/companies/AMZN/r_and_d_expense https://ycharts.com/companies/TSLA/r_and_d_expense https://ycharts.com/companies/TSLA/r_and_d_expense Amazon: billions and billions. 9 Billion this quarter alone, which is more than Tesla has spent on R&D in their entire existence. Tesla? 300 million this quarter and trending down. Amazon was generating REAMS of cash flow, for 10 years before they earned a profit. Billions and billions of dollars for investment. Tesla is regularly cash flow negative, almost half a billion per quarter on average: https://ycharts.com/companies/AMZN/free_cash_flow https://ycharts.com/companies/AMZN/free_cash_flow https://ycharts.com/companies/TSLA/free_cash_flow https://ycharts.com/companies/TSLA/free_cash_flow So can you explain how these "models" are at all similar? Do you think all unprofitable companies are like Amazon?
- sunstone 7y agoYes I can.
- aguyfromnb 7y agoThat's your understanding based on what, exactly? Because I can see in their financial statements that their R&D spending is decreasing over time, and that their investment is actually below what is required to maintain plant and equipment depreciation.
- breakyerself 7y agoWhat about the new factory in China and the myriad of products being brought into production right now like the model y, semi, roadster and solar roof? Do you have any credible source that Tesla is selling cars at a loss?