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Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates

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Re: Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates

#221

Post by refurb »

mstachowiak wrote: post #94
refurb wrote: post #60

Earlier quoted context omitted.

That doesn't necessarily mean shorting a company just because it uses non-GAAP numbers is a good idea though. That would be an interesting investing thesis to test. You are correct, non-GAAP numbers don't mean a company is hiding something, but it does make you ask why they felt the need to use non-standard accounting principles (the answer is it makes them look better).

In Tesla case, it's because the non-GAAP numbers represent how they view and make decisions about their business internally. It makes them look better in some dimensions and worse in others. They report on it because it gives insights into how they think about things.

Based on the analyses I've read, it looks like a big driver of the non-GAAP difference is Tesla completely ignoring the cost of acquiring SolarCity. Is that a fair analysis? It depends. Those non-GAAP numbers suggest the car manufacturing business is doing well, but hide how Tesla is doing overall (including cash flow) as a result of SolarCity.

Re: Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates

#222

Post by idiot_stick »

mtgx wrote: post #196

I hope Model 3 can beat the Bolt in range. That would be a nice surprise. I wouldn't say it's necessary , but the Bolt has already gotten a lot of press, with some even saying it's what's making EVs "mainstream", even though they're only selling like hundreds of them at a time right now, and that probably won't change anytime soon considering GM loses $9,000 for each unit sold. Plus, I hear all the time how the deale…

>I hope Model 3 can beat the Bolt in range. That would be a nice surprise.

Why do you care whether Tesla has a good car or GM has a good car, rather than, overall, we have many good cars to choose from?

>I know Musk has already mentioned that Model Y will be cheaper, but we don't know just how much cheaper. Hopefully, it will be like $25,000.

We haven't even seen the M3, or heard the price. But we're already talking about the next, cheaper model?

Re: Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates

#223

Post by drzaiusapelord »

paulpauper wrote: post #20

People who lose money shorting Tesla are losing their shirts for the same reason as those who shorted Amazon: cash flow + growth matters more than profitability, PE ratios, or EPS. Tesla's car business is cash flow positive but the quarterly losses are due to infrastructure investments. This is how finance can be more subtle than meets the eye. Tesla's car business is very profitable: Tesla also reported an automotiv…

Maybe but Amazon really is the only Amazon, while Tesla has at scale competitors. The Model 3 certainly looks good, but so does the Bolt, Leaf, i3, fiat 500e, kia soul ev, ford focus electric, etc.

The big difference is I can buy those cars today, and for almost all of that last the past couple years, while the Model 3 is still waiting release. I don't think most Tesla fans realize how behind Tesla is in delivering the sub $40,000 EV. We've had them in the market for quite some time. If anything, Tesla is the last major player in this space.

Amazon was the opposite of this. It had all the products and stores while its competitors had less, not more, available product. I have no idea if shorting them is wise right now, but the idea that they're in the same position as Amazon is a bit generous.

Re: Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates

#224

Post by NickM »

mdasen wrote: post #97
paulpauper wrote: post #20

People who lose money shorting Tesla are losing their shirts for the same reason as those who shorted Amazon: cash flow + growth matters more than profitability, PE ratios, or EPS. Tesla's car business is cash flow positive but the quarterly losses are due to infrastructure investments. This is how finance can be more subtle than meets the eye. Tesla's car business is very profitable: Tesla also reported an automotiv…

Shorting seems to often be about the short-term prospects of the stock. Long term, Tesla looks like it will be a reasonable company. But will it justify its stock price? Tesla is a $45B company right now. Toyota is $188B (4.1x more valuable), VW is $78B (1.7x), GM is $58B (1.3x), Ford is $51B (1.1x), Nissan is $42B (0.9x), Fiat Chrysler is $17B (0.4x), Honda is $58B (1.3x), BMW is $56B (1.2x), Daimler is $79B (1.8x),…

I think the patent-sharing thing is an interesting point, because I agree that it suggests a certain amount of altruism, but at the same time I think it's still the right business choice for Tesla.

Instead of looking at the situation through the lens of "Tesla vs other car companies", let's take a step back and look at the battle of "electric vs gasoline". The better EVs do, the more charging infrastructure gets built, and the more receptive people are to buying EVs in general. These kinds of effects disproportionately help Tesla; their whole business is electric cars, whereas EVs are only a tiny slice of the pie for every other established car company.

Because there is so much room for growth in the EV market, we're also not necessarily dealing with a zero-sum game right now. Helping other companies sell more electric cars does not necessarily mean Tesla will suffer reduced demand; it may actually have the opposite effect. Even simple lack of awareness is still a big obstacle for EVs: https://electrek.co/2017/01/03/electric-vehicle-adoption-awa...

Re: Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates

#225

Post by mikeash »

applecore wrote: post #93
mabbo wrote: post #5

People get upset by the 'superhero' status of Elon Musk. Nerds everywhere worship the guy, buy his cars, watch his SpaceX launches. But honestly, let him have it, I say. He's earning it. He's taking huge risks and succeeding where others weren't willing to try.

Elon Musk's businesses have benefited from billions in federal and state government subsidies and low-interest loan programs over the years. He's taking huge risks because other people are footing the bill.

Traditional car companies have benefitted from trillions in subsidies by being allowed to poison the population without paying for the costs.

I'd much rather have a car company take some of my money in taxes than take my health by polluting.

Remember leaded gasoline? That's only been fully banned in the US for about two decades. Entire generations were damaged, like Flint, MI on a national scale.

But ooh noo, Elon Musk takes some of our taxes, the horror.

Re: Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates

#226

Post by mikeash »

idiot_stick wrote: post #222
mtgx wrote: post #196

I hope Model 3 can beat the Bolt in range. That would be a nice surprise. I wouldn't say it's necessary , but the Bolt has already gotten a lot of press, with some even saying it's what's making EVs "mainstream", even though they're only selling like hundreds of them at a time right now, and that probably won't change anytime soon considering GM loses $9,000 for each unit sold. Plus, I hear all the time how the deale…

> I hope Model 3 can beat the Bolt in range. That would be a nice surprise. Why do you care whether Tesla has a good car or GM has a good car, rather than, overall, we have many good cars to choose from? > I know Musk has already mentioned that Model Y will be cheaper, but we don't know just how much cheaper. Hopefully, it will be like $25,000. We haven't even seen the M3, or heard the price. But we're already talkin…

I care because the Model 3 is almost certainly going to be a much better car overall (better performance, far superior driver assistance technology, vastly better charging infrastructure) and it would be a shame if its success were hobbled due to one relatively small factor that gets blown out of proportion.

Of course I'd love to have many good cars to choose from, but there's no sign of that happening any time soon.

Re: Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates

#227

Post by mikeash »

ZeroGravitas wrote: post #202
mtgx wrote: post #196

I hope Model 3 can beat the Bolt in range. That would be a nice surprise. I wouldn't say it's necessary , but the Bolt has already gotten a lot of press, with some even saying it's what's making EVs "mainstream", even though they're only selling like hundreds of them at a time right now, and that probably won't change anytime soon considering GM loses $9,000 for each unit sold. Plus, I hear all the time how the deale…

"GM loses $9,000 for each unit sold." I'd be careful with figures like this. It's possible they are investing with the idea to ramp up production and get to profitability with scale, or with predicted reductions in battery price. It's also possible that the way CAFE rules calculate an average over a manufacturers entire fleet mean that by taking a loss in one place they can earn or save money in another.

I recall this sort of figure being thrown around for the Volt, and it was calculated by taking the full cost of R&D and allocating it equally to each unit sold so far, which is idiotic. But a lot of people hate alternative fuel cars and so it got a lot of traction.

Re: Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates

#228

Post by JoeAltmaier »

ZeroGravitas wrote: post #202
mtgx wrote: post #196

I hope Model 3 can beat the Bolt in range. That would be a nice surprise. I wouldn't say it's necessary , but the Bolt has already gotten a lot of press, with some even saying it's what's making EVs "mainstream", even though they're only selling like hundreds of them at a time right now, and that probably won't change anytime soon considering GM loses $9,000 for each unit sold. Plus, I hear all the time how the deale…

"GM loses $9,000 for each unit sold." I'd be careful with figures like this. It's possible they are investing with the idea to ramp up production and get to profitability with scale, or with predicted reductions in battery price. It's also possible that the way CAFE rules calculate an average over a manufacturers entire fleet mean that by taking a loss in one place they can earn or save money in another.

Right, its important to calculate profit/loss differently from 'marginal profit' or the money made by each unit over cost of manufacture. Sell enough units, you can cover the fixed (development) costs. Sell too few, and you can claim "They lost money on every unit" which is sort-of correct.

Re: Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates

#229

Post by Retric »

ralfd wrote: post #195
mdasen wrote: post #97

Earlier quoted context omitted.

Shorting seems to often be about the short-term prospects of the stock. Long term, Tesla looks like it will be a reasonable company. But will it justify its stock price? Tesla is a $45B company right now. Toyota is $188B (4.1x more valuable), VW is $78B (1.7x), GM is $58B (1.3x), Ford is $51B (1.1x), Nissan is $42B (0.9x), Fiat Chrysler is $17B (0.4x), Honda is $58B (1.3x), BMW is $56B (1.2x), Daimler is $79B (1.8x),…

> Tesla is a $45B company right now. ... BMW is $56B (1.2x) What's the likelihood that Tesla is the next BMW? It's low. This here. BMW makes more in profit than Tesla is earning in revenue. BMW sells 2.5 million cars a year, 25 times as many as Tesla. And both companies are valued roughly the same? How? Totally overvalued. If Tesla catches up to BMW 25x output (and this is a big If) would it then be worth a trillion…

The car industry is about more than just the big car companies as suppliers are huge. Takata, BMW's airbag manufacture among other things is also worth 45B in part from a slice of those BMW sales.

Tesla is like BMW + some BMW suppliers. In that way Tesla is really 4 companies right now, a car company, a component supplier to Toyota and others, a battery company, and a solar company. Energizer is worth 3.3B and has 5,000 workers. Solar city is 'worth' ~$6 billion.

Thus, directly comparing Tesla to BMW is missing the boat.

Re: Tesla Says Model 3 on Track as Quarterly Loss Beats Estimates

#230

Post by johnward »

drzaiusapelord wrote: post #223
paulpauper wrote: post #20

People who lose money shorting Tesla are losing their shirts for the same reason as those who shorted Amazon: cash flow + growth matters more than profitability, PE ratios, or EPS. Tesla's car business is cash flow positive but the quarterly losses are due to infrastructure investments. This is how finance can be more subtle than meets the eye. Tesla's car business is very profitable: Tesla also reported an automotiv…

Maybe but Amazon really is the only Amazon, while Tesla has at scale competitors. The Model 3 certainly looks good, but so does the Bolt, Leaf, i3, fiat 500e, kia soul ev, ford focus electric, etc. The big difference is I can buy those cars today, and for almost all of that last the past couple years, while the Model 3 is still waiting release. I don't think most Tesla fans realize how behind Tesla is in delivering t…

Out of that list, only the Bolt is even close to being the same class and that's based on range alone. If they weren't EVs we wouldn't mention them in the same sentence.
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