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The difference in the narrative versus the financial data is stark: Quarterly revenue has not shown any growth for nearly 2 years, despite introducing more mod
by itsoktocry 6y ago
The difference in the narrative versus the financial data is stark:
Quarterly revenue has not shown any growth for nearly 2 years, despite introducing more models and expanding global deliveries. Their sales of regulatory credits this year is greater than all of the net income ever earned in their entire history.
- nickik 6y agoWhen almost ever other car company is burning money, sustaining massive investment in multiple new massive factories, launching new products, and producing cars with pretty good margin and not losing money is an pretty big accomplishment. Its not that long ago people were arguing even a small crisis would wipe out Tesla.
- itsoktocry 6y ago>producing cars with pretty good margin and not losing money is an pretty big accomplishment. If you back out the regulatory credits they've lost money on every car they've ever sold, for almost 20 years. Where do you get "good margins" from? This is an example of narrative versus financial data.
- SEJeff 6y agoTesla's first car was the Roadster, and it was released in 2008. How do you get "almost 20 years" when the first car they released was 12 years ago? Tesla was founded in 2003, but even that is not 20 years.
- deleted 6y ago[deleted]
- nickik 6y agoThe margins on the car are actually very good, this is evident in the official data and confirmed by expert breakdowns. They don't make money because they are investing lots of money all the time. People seem to miss that they only launched their first large production cars a few years ago. Its insanely difficult to start a car company and to scale it to the level Tesla is now with a product that basically nobody else can do profitable is a gigantic achievement. They are currently building 3 huge new factories.
- modeless 6y agoGross margin on cars is 25% this quarter, 17% after removing regulatory credits. What "financial data" are you using to come to the conclusion that they don't have good margins?
- itsoktocry 6y ago>Gross margin on cars is 25% this quarter You can go broke with 99% gross margins.
- modeless 6y agoYou were specifically arguing that their margins are not good.
- wyldfire 6y ago> Its not that long ago people were arguing even a small crisis would wipe out Tesla. It would be very challenging for them if the political environment changed and regulatory credits disappeared altogether.
- nickik 6y agoThat would not wipe Tesla out. The credits are nice bonus, specially in COVID times, but not having them would not get them near bankruptcy. They would maybe had to raise some more money and not invest as much.
- modeless 6y agoThey're investing aggressively in new factories and new product lines. If they wanted to show profits today they could give up building and expanding factories and stop entering new product categories. But that would be stupid.
- deleted 6y ago[deleted]
- bqe 6y agoThe parent commenter was discussing revenue and not profit. If they were aggressively expanding, I would expect that profits to remain small or negative, but I'd expect revenue to grow as a result.
- sbelskie 6y agoYea, if they are adding product lines without an increase in revenue that seems (possibly) concerning, though obviously the current economic situation makes it hard to know how to value year over year comparisons.
- H8crilA 6y agoJust to make it more clear what bqe is saying: they are selling the ~same amount of cars as 2 years ago. Both in terms of $ and in terms of #. Growth is completely flat.
- samfisher83 6y agoMost companies have shown big declines due to covid. Just being flat is good.
- H8crilA 6y agoIt was flat pre-covid too. It has been flat for 2 years.
- 6y ago
- marc__1 6y agoTesla posted positive free cash flow (CFO - capex) for 4 of the last 5 quarters (page 24) and it the only company with increase in # of deliveries among the 10 largest autos globally (page 7). Gross margins >20% is also best in class in the auto industry The list goes on in terms of growth & profitability
- almost_usual 6y agoOff of credits though right? Also isn’t Tesla considered a “tech” stock by a lot of investors? A 20% gross margin is not good for a tech stock.
- toomuchtodo 6y ago“Regulatory credits” are getting paid for making electric cars other automakers won’t make. Fiat alone must pay Tesla $2B for credits to keep selling internal combustion vehicles in Europe.
- deleted 6y ago[deleted]
- almost_usual 6y agoSo Tesla is a good investment because they get paid by other automakers to make cars they don’t want to make right now? This doesn’t seem like a good long term strategy.
- toomuchtodo 6y agoMy Tesla stock with a $17/share cost basis says otherwise. Take the the other side of the bet and short it if you doubt the long term value. The world isn’t going to suddenly stop supporting climate change mitigation through policy. It’s only going to ramp up, leaving legacy Orgs in the dust.
- itsoktocry 6y ago
- guardiangod 6y agoOne would expect a widget-manufacturer that is supply-constrained to have flat revenue until new factories are opened, unless you are talking about raising prices to increase profitability. It doesn't seem Tesla is that concerned with short-term profitability.
- mamon 6y agoIf Tesla cars were really in high demand, and supply was the problem then I would expect them to raise prices, thus increasing revenue. They haven't done that, which means Tesla's are probably not as sexy cars as they try to paint them.
- jupp0r 6y agoThey are betting on market growth driven by climate change as well as technology advancements that will drive battery prices down. Both are coming, imho.
- tuatoru 6y agoCompanies that raise prices in exceptional situations take a major reputational hit. The canonical example is snow shovels after a blizzard.
- dbsights 6y agoThis is not taking advantage of a disaster (taking advantage of people's suffering), this is supply and demand. Supposedly, Tesla's are in high demand and as a 'luxury' good they could charge as much as they wished without consequence to their reputation. Indeed, it may even increase the desirability of their cars. Which begs the question, why haven't they? Instead, they've consistently slashed prices..
- bob33212 6y agoFor traditional car makers that would be true. There are times where a civic is more expensive than an accord for example. But Tesla is not trying to maximize revenue in the short term. They are trying to convert the world to sustainable transportation.
- slg 6y ago>Quarterly revenue has not shown any growth for nearly 2 years, despite introducing more models and expanding global deliveries. Isn't this pretty easily explained by the total number of deliveries not growing? They might be expanding internationally to new markets or introducing new cars, but total deliveries have been pretty consistently around 90k for the last 2 years also. They still seem to be selling every car they produce and aren't able to produce cars fast enough to increase total deliveries. The real question is what happens when some of those new factories come online and at what point is demand saturated.
- xoxoy 6y agothat’s not true. they have a lot of inventory on their b/s
- slg 6y agoWhat specifically do you mean? On page 6 it shows that global inventory is currently lower than it has been in 3 of the last 4 quarters.
- xoxoy 6y ago17 days of inventory is on par with previous quarters except Q1...
- slg 6y agoWell yes, that is the point. Tesla's deliveries have been limited by their production capability for a while now. If the problem was a lack of demand, you would expect inventory to grow or production to slow, but neither of those have happened (beyond a slight decrease in production due to COVID related closures).
- xoxoy 6y agowell there are rumors they are shutting down parts of Fremont for “upgrades” soon. likely because their inventory is higher than they want.
- SECProto 6y ago> Quarterly revenue has not shown any growth for nearly 2 years Revenue is actually down 4% year over year. I'd say a lot of this is because their Model S/X sales were down 56% from the same quarter last year. Huge reduction in high end vehicle sales was essentially replaced with the sale of regulatory credits (8000 cars at 60,000 each is 480million, regulatory credit sales were up 317 million). Free cash flow was +418 million. Even without the regulatory credits, they would've had positive cash flow during a quarter where their factory was closed for a significant chunk of time. I actually take this as a good sign - it shows that they can be profitable without counting on high margin model S/X.
- deleted 6y ago[deleted]
- new_realist 6y agoTesla’s sales of regulatory credits allow other manufacturers to pollute more. They are essentially a compliance car manufacturer for hire. By allowing other pollution the drivers of Tesla cars don’t reduce worldwide auto pollution. Worse, Tesla’s constant inefficient expansion of factories and inefficient use of labor creates more greenhouse gases than if Tesla never existed in the first place and other auto manufacturers had to improve their cars rather than buy indulgences.
- shreyshrey 6y agoThe price of the stock is more about the future than the past. The market thinks Tesla has enough moat to obliterate the competition in the future i think.
- spectrum1234 6y agoTo get their market cap you need to factor in solar, batteries, and self driving cars. Just FYI I think you are missing these.