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I'm more interested in your financial analysis. Cash flow is not profit. How much of that cash is in China, unable to be repatriated? How much increase is due

I'm more interested in your financial analysis. Cash flow is not profit. How much of that cash is in China, unable to be repatriated? How much increase is due to more debt? What are the "cash equivalents", and are they marked properly? How much is due to subsidies, which I'm fine with, but could disappear tomorrow? This company is not a financial juggernaut, there are still many risks.

toomuchtodo 3y ago
There are always risks. Every US automaker has gone bankrupt at some point except Ford and Tesla. Success is not assured, and there is substantial peril ahead. Regardless, Tesla is not fighting for it's life like it was 5-10 years ago. They are on firm footing, through a combination of insatiable demand for energy storage products, robust EV subsides to get off of fossil fuels (which I refuse to debate the merits of, that is wasted time), and a brand that is popular. Tesla may still die, but we must get to the point where it is immaterial if they do, where there is no going back to combustion for mobility. The financials I reference are public in EDGAR, I currently do not have access to material non public information and would not share if I did.
- itsoktocry 3y ago
  >The financials I reference are public in EDGAR. Yes, I know, I follow their finances closely. "They have $25B in cash according to their balance sheet" is practically meaningless. I understand this might be a difficult concept to grasp for some mental models, but there are many historical analogs to look at why that's the case. They'll produce whatever numbers simple minded analysts will post on Twitter. Look at the discourse around their decrease in COGS. Many metrics are trending down. Of course, I'm not a "they're going bankrupt" person; I just believe they'll be a much smaller company than most imagine.
  - toomuchtodo 3y ago
    I have nothing more to offer you. If you're a sophisticated capital market participant, place your bet. I have no current exposure to TSLA or any of their debt offerings. I do not care about the stock price. I care about a material movement in climate change outcome.
    - itsoktocry 3y ago
      You jumped into this thread with a comment similar to "all that matters is that they have $25B in cash." I'm asking questions about why you think that's all that matters.
- btilly 3y ago
  The "no going back to combustion for mobility" is already passed, and Tesla only sped the transition up slightly. The real cause is a 7%/year improvement in battery tech. Don't believe me? Pick up https://www.amazon.com/Innovators-Dilemma-Revolutionary-Change-Business/dp/0062060244 https://www.amazon.com/Innovators-Dilemma-Revolutionary-Chan..., and read the chapter on electric cars. Starting with the first edition back in the 1990s, it correctly stated that 2020 would be about when mass market electric vehicles would start to make economic sense, and the transition would be inevitable a few years after that. Tesla was only slightly early to that party, and now basically every car company has acknowledged that electric is the future.
  - toomuchtodo 3y ago
    And yet, no automaker building them in volume except BYD and Tesla. Again, to be clear, not a fanboy. Show me the volume, that's it. I disagree we are at the inflection point where an EV future is assured (although I would agree we are close). Further dismantling of existing combustion assembly supply chain must occur before this can be stated as fact (imho). Until this is done, lazy humans will walk back their commitments. You must lock the future in. https://europe.autonews.com/automakers/uk-pushes-2030-combustion-engine-ban-2035-matching-eu-target https://europe.autonews.com/automakers/uk-pushes-2030-combus...
    - btilly 3y ago
      The exact same book predicted that we'd see hybrids, and traditional automakers would try to sell them, would fail to find the market, and would wind up being wiped out. As https://www.canalys.com/newsroom/global-ev-sales-2022 https://www.canalys.com/newsroom/global-ev-sales-2022 says, if you want to find the mass market for electric cars, go to China. Don't forget. The main driver of this transition in the long run is that batteries still improve at about 7% per year for the same price point, while ICE engines barely budge. The lifetime cost of ownership for electric cars is below ICE right now. And the cost of initial purchase is falling. As long as the battery tech is there, someone will figure out how to sell it. But it won't be anyone who has dealers whose business model centers on no longer needed maintenance.
nickik 3y ago
You need to view things in perspective. I cant give a full finacial analysis in on comment but a few things to note Tesla has exeptionally low debt, ist almost hilarously low compaired to other car makers. Tesla cash isnt even remotly an important problem right now. Subsidies means lots of things in different context. Regulatory credits, arguable not subsidies, are a small part of the overall buissness bur this quarter is a fair bit of the profit as they went up and profit was down. Removing tax credit would actually help Tesla as they are in a far far better postion to relative to the rest. Other need the subdidies and credits desperatly to not lose even more money. Tesla is having profit and cash flow while doing upgrades accross their factories, massive investment in service, charging, new factories, data centers, robots, lithium refineries and many other things. Tesle has its own battery factories with its own battery designs, something only BYD has. A huge advantage that people still don't appriciate. While their are short term issues in the EV market the long term trend is still clear. And Tesla continues to be in a good position to ride that wave up. US is only 8% penetration of EV. Plus for all Tesla problems, looking at the wider market is advised. Ford has opened their EV finacials, and they are horrible. GM just moved back many EV product and reduced their volume forcadt further (after horribly missing their forcast from a few years ago). Some people point out Tesla inhouse battery production isnt growing as fast as claimed, meanwhile GM factory with a reputable battery partner is even worse. Honda/Toyoto have barly realized EVs even exist. Other western car makers are massivly struggling in China. VW the company everybody thought would roll over Tesla has massice issues there and also has issues in Europe. Not running plants at capabity and having to fire people, plus delaying prodicts and other factories. The comming 5 years will be even harder on the automotive industry them the last 5. At some point profitable ICE sales wont be able to compensate for selling EV at non existant markets. The reality is, right now in the US outside of Tesla prett much nobody is operating profitably and they all desperatly wont more scale but because so many companies try the same plan with the same prodycts and issues. Dealers continue to be a huge problem. I also would mention Tesla energy buissness is growing really well and is profitiable. And that looks good grow quicky as the demand for grid stabalisation and home energy story is hardly gone slow down. So Tesla isnt a finacial juggernaut but they are in a hell of a good position in two large and growing markets. With lots of competitors not executing very well. Their position isnt very riscy and the have plenty of cash. The biggest risk for Tesla is China really makeing a big move into Europe and later the US. But again Tesla is more likely to compete in that market them legacy OEM who are struggling against Tesla already. It takes years for that to really happen and poleticians are already moving against it. It will take more years for China companies to build up local factories, because just like Tesla they will have to do that.

toomuchtodo 3y ago

There are always risks. Every US automaker has gone bankrupt at some point except Ford and Tesla. Success is not assured, and there is substantial peril ahead. Regardless, Tesla is not fighting for it's life like it was 5-10 years ago. They are on firm footing, through a combination of insatiable demand for energy storage products, robust EV subsides to get off of fossil fuels (which I refuse to debate the merits of, that is wasted time), and a brand that is popular. Tesla may still die, but we must get to the point where it is immaterial if they do, where there is no going back to combustion for mobility. The financials I reference are public in EDGAR, I currently do not have access to material non public information and would not share if I did.

itsoktocry 3y ago
>The financials I reference are public in EDGAR. Yes, I know, I follow their finances closely. "They have $25B in cash according to their balance sheet" is practically meaningless. I understand this might be a difficult concept to grasp for some mental models, but there are many historical analogs to look at why that's the case. They'll produce whatever numbers simple minded analysts will post on Twitter. Look at the discourse around their decrease in COGS. Many metrics are trending down. Of course, I'm not a "they're going bankrupt" person; I just believe they'll be a much smaller company than most imagine.
- toomuchtodo 3y ago
  I have nothing more to offer you. If you're a sophisticated capital market participant, place your bet. I have no current exposure to TSLA or any of their debt offerings. I do not care about the stock price. I care about a material movement in climate change outcome.
  - itsoktocry 3y ago
    You jumped into this thread with a comment similar to "all that matters is that they have $25B in cash." I'm asking questions about why you think that's all that matters.
btilly 3y ago
The "no going back to combustion for mobility" is already passed, and Tesla only sped the transition up slightly. The real cause is a 7%/year improvement in battery tech. Don't believe me? Pick up https://www.amazon.com/Innovators-Dilemma-Revolutionary-Change-Business/dp/0062060244 https://www.amazon.com/Innovators-Dilemma-Revolutionary-Chan..., and read the chapter on electric cars. Starting with the first edition back in the 1990s, it correctly stated that 2020 would be about when mass market electric vehicles would start to make economic sense, and the transition would be inevitable a few years after that. Tesla was only slightly early to that party, and now basically every car company has acknowledged that electric is the future.
- toomuchtodo 3y ago
  And yet, no automaker building them in volume except BYD and Tesla. Again, to be clear, not a fanboy. Show me the volume, that's it. I disagree we are at the inflection point where an EV future is assured (although I would agree we are close). Further dismantling of existing combustion assembly supply chain must occur before this can be stated as fact (imho). Until this is done, lazy humans will walk back their commitments. You must lock the future in. https://europe.autonews.com/automakers/uk-pushes-2030-combustion-engine-ban-2035-matching-eu-target https://europe.autonews.com/automakers/uk-pushes-2030-combus...
  - btilly 3y ago
    The exact same book predicted that we'd see hybrids, and traditional automakers would try to sell them, would fail to find the market, and would wind up being wiped out. As https://www.canalys.com/newsroom/global-ev-sales-2022 https://www.canalys.com/newsroom/global-ev-sales-2022 says, if you want to find the mass market for electric cars, go to China. Don't forget. The main driver of this transition in the long run is that batteries still improve at about 7% per year for the same price point, while ICE engines barely budge. The lifetime cost of ownership for electric cars is below ICE right now. And the cost of initial purchase is falling. As long as the battery tech is there, someone will figure out how to sell it. But it won't be anyone who has dealers whose business model centers on no longer needed maintenance.

nickik 3y ago

You need to view things in perspective. I cant give a full finacial analysis in on comment but a few things to note Tesla has exeptionally low debt, ist almost hilarously low compaired to other car makers. Tesla cash isnt even remotly an important problem right now. Subsidies means lots of things in different context. Regulatory credits, arguable not subsidies, are a small part of the overall buissness bur this quarter is a fair bit of the profit as they went up and profit was down. Removing tax credit would actually help Tesla as they are in a far far better postion to relative to the rest. Other need the subdidies and credits desperatly to not lose even more money. Tesla is having profit and cash flow while doing upgrades accross their factories, massive investment in service, charging, new factories, data centers, robots, lithium refineries and many other things. Tesle has its own battery factories with its own battery designs, something only BYD has. A huge advantage that people still don't appriciate. While their are short term issues in the EV market the long term trend is still clear. And Tesla continues to be in a good position to ride that wave up. US is only 8% penetration of EV. Plus for all Tesla problems, looking at the wider market is advised. Ford has opened their EV finacials, and they are horrible. GM just moved back many EV product and reduced their volume forcadt further (after horribly missing their forcast from a few years ago). Some people point out Tesla inhouse battery production isnt growing as fast as claimed, meanwhile GM factory with a reputable battery partner is even worse. Honda/Toyoto have barly realized EVs even exist. Other western car makers are massivly struggling in China. VW the company everybody thought would roll over Tesla has massice issues there and also has issues in Europe. Not running plants at capabity and having to fire people, plus delaying prodicts and other factories. The comming 5 years will be even harder on the automotive industry them the last 5. At some point profitable ICE sales wont be able to compensate for selling EV at non existant markets. The reality is, right now in the US outside of Tesla prett much nobody is operating profitably and they all desperatly wont more scale but because so many companies try the same plan with the same prodycts and issues. Dealers continue to be a huge problem. I also would mention Tesla energy buissness is growing really well and is profitiable. And that looks good grow quicky as the demand for grid stabalisation and home energy story is hardly gone slow down. So Tesla isnt a finacial juggernaut but they are in a hell of a good position in two large and growing markets. With lots of competitors not executing very well. Their position isnt very riscy and the have plenty of cash. The biggest risk for Tesla is China really makeing a big move into Europe and later the US. But again Tesla is more likely to compete in that market them legacy OEM who are struggling against Tesla already. It takes years for that to really happen and poleticians are already moving against it. It will take more years for China companies to build up local factories, because just like Tesla they will have to do that.