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You’re missing costs in this equation. Without the sale of the credits they would not have been able to post a profit for the quarter. They may have had $31.5B

You’re missing costs in this equation. Without the sale of the credits they would not have been able to post a profit for the quarter. They may have had $31.5B in revenue but the cost of that revenue was greater. If I sold a $1 can of coke for $0.70. I can report $0.70 of revenue but i still lost $0.30 on the transaction.

xyzzy123 6y ago
Related thread: https://news.ycombinator.com/item?id=25981497 https://news.ycombinator.com/item?id=25981497 The consensus over there seems to be that they have decent unit economics and the impact of subsidy removal is that they'd probably have to convince the market to accept negative net income, or grow slower. I̶ ̶d̶o̶n̶'̶t̶ ̶t̶h̶i̶n̶k̶ ̶a̶n̶y̶ ̶s̶e̶n̶s̶i̶b̶l̶e̶ ̶i̶n̶v̶e̶s̶t̶o̶r̶ ̶w̶a̶n̶t̶s̶ ̶t̶h̶e̶m̶ ̶t̶o̶ ̶g̶r̶o̶w̶ ̶s̶l̶o̶w̶e̶r̶. G̶o̶i̶n̶g̶ ̶t̶o̶ ̶b̶a̶c̶k̶ ̶t̶o̶ ̶y̶o̶u̶r̶ ̶a̶n̶a̶l̶o̶g̶y̶ ̶t̶h̶e̶y̶'̶r̶e̶ ̶s̶e̶l̶l̶i̶n̶g̶ ̶c̶o̶k̶e̶s̶ ̶f̶o̶r̶ ̶$̶1̶ ̶t̶h̶a̶t̶ ̶c̶o̶s̶t̶ ̶$̶.̶8̶5̶ ̶t̶o̶ ̶m̶a̶k̶e̶.̶.̶.̶ ̶b̶u̶t̶ ̶t̶h̶e̶y̶'̶r̶e̶ ̶a̶l̶s̶o̶ ̶g̶e̶t̶t̶i̶n̶g̶ ̶s̶u̶b̶s̶i̶d̶i̶e̶s̶ ̶a̶n̶d̶ ̶b̶a̶r̶e̶l̶y̶ ̶b̶r̶e̶a̶k̶i̶n̶g̶ ̶e̶v̶e̶n̶ ̶b̶e̶c̶a̶u̶s̶e̶ ̶t̶h̶e̶y̶ ̶a̶r̶e̶ ̶s̶p̶e̶n̶d̶i̶n̶g̶ ̶s̶o̶ ̶m̶u̶c̶h̶ ̶o̶n̶ ̶n̶e̶w̶ ̶c̶o̶l̶a̶ ̶f̶a̶c̶t̶o̶r̶i̶e̶s̶.̶
- itsoktocry 6y ago
  Here we go again: building factories does not come off the income line. They are selling cars at a loss. Whether they manage to change that with increased scale is yet to be seen, but they are selling more cars and making less money.
  - xyzzy123 6y ago
    Thanks for the correction.
  - Farfignoggen 6y ago
    That's why the Credits are there to help increase the viability of electric Car/Truck production! That's just not good reporting to try and spin that as a negative and Ignore the needed viability of that EV market. The Air Pollution impact on the health of the population and a reduction in the respiratory illness/other heath impacts must be figured in as part of the equation regardless of who is helped by the credits. The Credits will indirectly help to reduce pollution especially in crowded urban areas and reduce the overall rates of sickness related to ICE Pollution! That ICE pollution also takes its toll on Building facades and statuary and even has an affect on roads and bridges so that's another reason to have the credits until the EV production can become viable on its own without the need of any credits/assistance.
    - itsoktocry 6y ago
      >hat's just not good reporting to try and spin that as a negative and Ignore the needed viability of that EV market. There's nothing wrong with Tesla receiving credits, or even "counting" the credit dollars as profit. It's real cash coming in. But when you are trying to analyze the financials of the company to determine a valuation, noticing that without the credits (whose accounting is opaque and which won't last forever) they lose money, is important.
      - Farfignoggen 6y ago
        But the energy Credits where not Hidden in the Tesla Filing so what was Nefarious. There's no Secret there and that's why the credits are there to Help Tesla/Other EV makers become Viable and reduce pollution that's very costly to society in the form of health related costs related to Air Pollution!
njarboe 6y ago
Tesla has many avenues of action available to them and many goals. One goal recently, I think, was to get 4 quarters of profitability to get listed on the S&P 500, among other reasons. These credits exist, so they factored that in to what they needed to do to show a profit. If they did not exist then Tesla (Elon Musk) could have altered what they were doing some to get to profitability. Maybe get there a quarter later, push up short term production trading off R&D, etc. I am not a CEO but this is what they do.

xyzzy123 6y ago

Related thread: https://news.ycombinator.com/item?id=25981497 https://news.ycombinator.com/item?id=25981497 The consensus over there seems to be that they have decent unit economics and the impact of subsidy removal is that they'd probably have to convince the market to accept negative net income, or grow slower. I̶ ̶d̶o̶n̶'̶t̶ ̶t̶h̶i̶n̶k̶ ̶a̶n̶y̶ ̶s̶e̶n̶s̶i̶b̶l̶e̶ ̶i̶n̶v̶e̶s̶t̶o̶r̶ ̶w̶a̶n̶t̶s̶ ̶t̶h̶e̶m̶ ̶t̶o̶ ̶g̶r̶o̶w̶ ̶s̶l̶o̶w̶e̶r̶. G̶o̶i̶n̶g̶ ̶t̶o̶ ̶b̶a̶c̶k̶ ̶t̶o̶ ̶y̶o̶u̶r̶ ̶a̶n̶a̶l̶o̶g̶y̶ ̶t̶h̶e̶y̶'̶r̶e̶ ̶s̶e̶l̶l̶i̶n̶g̶ ̶c̶o̶k̶e̶s̶ ̶f̶o̶r̶ ̶$̶1̶ ̶t̶h̶a̶t̶ ̶c̶o̶s̶t̶ ̶$̶.̶8̶5̶ ̶t̶o̶ ̶m̶a̶k̶e̶.̶.̶.̶ ̶b̶u̶t̶ ̶t̶h̶e̶y̶'̶r̶e̶ ̶a̶l̶s̶o̶ ̶g̶e̶t̶t̶i̶n̶g̶ ̶s̶u̶b̶s̶i̶d̶i̶e̶s̶ ̶a̶n̶d̶ ̶b̶a̶r̶e̶l̶y̶ ̶b̶r̶e̶a̶k̶i̶n̶g̶ ̶e̶v̶e̶n̶ ̶b̶e̶c̶a̶u̶s̶e̶ ̶t̶h̶e̶y̶ ̶a̶r̶e̶ ̶s̶p̶e̶n̶d̶i̶n̶g̶ ̶s̶o̶ ̶m̶u̶c̶h̶ ̶o̶n̶ ̶n̶e̶w̶ ̶c̶o̶l̶a̶ ̶f̶a̶c̶t̶o̶r̶i̶e̶s̶.̶

itsoktocry 6y ago
Here we go again: building factories does not come off the income line. They are selling cars at a loss. Whether they manage to change that with increased scale is yet to be seen, but they are selling more cars and making less money.
- xyzzy123 6y ago
  Thanks for the correction.
- Farfignoggen 6y ago
  That's why the Credits are there to help increase the viability of electric Car/Truck production! That's just not good reporting to try and spin that as a negative and Ignore the needed viability of that EV market. The Air Pollution impact on the health of the population and a reduction in the respiratory illness/other heath impacts must be figured in as part of the equation regardless of who is helped by the credits. The Credits will indirectly help to reduce pollution especially in crowded urban areas and reduce the overall rates of sickness related to ICE Pollution! That ICE pollution also takes its toll on Building facades and statuary and even has an affect on roads and bridges so that's another reason to have the credits until the EV production can become viable on its own without the need of any credits/assistance.
  - itsoktocry 6y ago
    >hat's just not good reporting to try and spin that as a negative and Ignore the needed viability of that EV market. There's nothing wrong with Tesla receiving credits, or even "counting" the credit dollars as profit. It's real cash coming in. But when you are trying to analyze the financials of the company to determine a valuation, noticing that without the credits (whose accounting is opaque and which won't last forever) they lose money, is important.
    - Farfignoggen 6y ago
      But the energy Credits where not Hidden in the Tesla Filing so what was Nefarious. There's no Secret there and that's why the credits are there to Help Tesla/Other EV makers become Viable and reduce pollution that's very costly to society in the form of health related costs related to Air Pollution!

njarboe 6y ago

Tesla has many avenues of action available to them and many goals. One goal recently, I think, was to get 4 quarters of profitability to get listed on the S&P 500, among other reasons. These credits exist, so they factored that in to what they needed to do to show a profit. If they did not exist then Tesla (Elon Musk) could have altered what they were doing some to get to profitability. Maybe get there a quarter later, push up short term production trading off R&D, etc. I am not a CEO but this is what they do.