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R&D isn’t even meeting depreciation though. Either these factories are some how never before seen in accounting history or this company is underinvesting in its
by xkjkls 7y ago
R&D isn’t even meeting depreciation though. Either these factories are some how never before seen in accounting history or this company is underinvesting in its futures
- zaroth 7y agoActually there’s a third option which has been discussed on their financial calls. Their capital efficiency has markedly increased. To put it less glamorously, they burned boatloads of money chasing “alien dreadnaught” style fully automated production, and after recognizing that failure (better late than never) they now find they are able to build out new production lines at a fraction of the first line’s cost.
- xkjkls 7y agoMaybe. My bet is that they have been underinvesting in order to meet financial results, and that that will catch up to them. Looking at other financial statement history, this seems like a safe bet.
- optimiz3 7y agoOur TSLA brokerage accounts thank you and your /r/RealTesla brethren for your sacrifice.
- xkjkls 7y agoWell, let's check back next year. The bears are already 1-0 against Elon Musk, given that a large percentage of Tesla bears were originally short SolarCity.
- optimiz3 7y agoBears are down over 5B in mark to market losses. Sure, call that 1-0.
- dang 7y agoPlease don't post unsubstantive and/or flamewar comments. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- woodandsteel 7y agoIt is really hard to say they are underinvesting when they just opened a new factory and have a new vehicle, the Y, that just started production.
- xkjkls 7y agoIt’s really hard to ever say a company is properly investing if their CapEx on their income statements exceeds their depreciation. Can you name other fast growing companies that is true for?
- woodandsteel 7y agoI don't understand enough about financials to understand what you are saying. But more to the point, what exactly do you think Tesla should have been spending its money on that it didn't? And let add to my original comment that Tesla also has the Semi going into production later this year, and recently brought out a greatly improved version of its solar roof, and is working like crazy on self-driving. But back to my question: what should it have been spending its money on that it didn't?
- xkjkls 7y ago> I don't understand enough about financials to understand what you are saying. Capital Expenditures are what a company spends on land, buildings, equipment -- all of those sort of long term assets. Depreciation is how much the value of those assets decline over time with usage and would eventually require maintenance or repair costs. Usually, when depreciation exceeds CapEx, it means the company isn't spending enough to maintain their current assets, and this will eventually catch up to them. For growing companies investing in the future, CapEx is usually a great deal more than depreciation, since there will be a large amount spent on future assets. > But more to the point, what exactly do you think Tesla should have been spending its money on that it didn't? > And let add to my original comment that Tesla also has the Semi going into production later this year, and recently brought out a greatly improved version of its solar roof, and is working like crazy on self-driving. > But back to my question: what should it have been spending its money on that it didn't? My point is that the PR statements that Tesla releases don't match the financials. It's easy to announce that a factory is being built or a new car is going into production, but we should be extremely skeptical of these statements when they aren't backed up by audited financial information. Generally when investing in a company you should look at their financials first, as they are going to be the most honest, and PR statements/rumors last, as they will be the least honest.
- DarmokJalad1701 7y agoIf you look at their letter you can see a comparison between the layouts of their California and Shanghai factories. Massive difference in efficiency. They learned a lot from their initial debacle of Model 3 ramp-up. Cap-ex per unit was announced as being 65% lower in the China factory.
- QuantumGood 7y ago65% lower cap-ex per unit in China is astonishing. Elon's "machine that builds the machine" vision really created a lot of misprioritization.