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Tesla Burns Through Record Cash to Bring the Model 3 to Market

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Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#141

Post by mrtron »

11thEarlOfMar wrote: post #10
simonsarris wrote: post #7

> “He’s going to need capital,” said Ross Gerber, chief executive officer of Gerber Kawasaki Wealth & Investment Management, which holds Tesla shares. “That’s the one part of the financials that are a little bit troubling. To underestimate the cash burn over the next six months will be a mistake.” It's not that troubling. Even massive companies (AMZN in 2014) need to raise big capital. When you have something you wan…

Yes, I learned this fact painfully. I bailed on my IPO AMZN shares because they kept taking on massive debt. Just didn't have the stomach for it. Of course, that was 2004, about 1/20 of today's price.

For a few select few companies, I see the constant investment (and increasing debt) as an opportunity. The general market will undervalue the performance of the company. AMZN was undervalued for years, and potentially still is, for this reason.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#142

Post by zamalek »

awkwarddaturtle wrote: post #93
tpolischuk wrote: post #90

Earlier quoted context omitted.

Is he wrong? Did Tesla not prove to the rest of the auto industry that electric cars are not only viable but also profitable and inevitable? Would we have the Bolt, Spark, Fiat e500, eGolf without Tesla?

> Is he wrong? Did Tesla not prove to the rest of the auto industry that electric cars are not only viable but also profitable and inevitable? From your "context": "What are the accumulated losses so far? $5-10B?" $5-10B Losses doesn't translate into "profitable". > Would we have the Bolt, Spark, Fiat e500, eGolf without Tesla? Maybe? Electric cars existed before TSLA and electric cars will exist after TSLA. What is…

Tesla is polarizing and, as always, both camps are making equally absurd statements:

> $5-10B Losses

$5-10B expenditure.

Which has not yet been shown to be a profitable decision, but unless the product flops it's not a loss either. $5-10B is merely a number that we're uncomfortable with - it is likely a necessary number because Tesla is now racing to grow in the EV market before bigger players (BMW, Toyota, etc.) enter it.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#143

Post by toomuchtodo »

dkrich wrote: post #138
toomuchtodo wrote: post #130

Earlier quoted context omitted.

GM: 8.4% Sad!

Seems like you're missing the point. If a set of parts costs you X, and you can sell it as one product for 2X and as a different product for 3X, which one yields better profits?

We're not talking past each other. A Cadillac and a Chevy are much closer to parity than a Model 3 and a Model S/X (considering both parts and manufacturing techniques). I don't know what the Model 3 margins are yet, but I'm confident they're going to be above 15%.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#144

Post by jessaustin »

dkrich wrote: post #35
bflesch wrote: post #18

Earlier quoted context omitted.

Most people will be driving either a Tesla or a Chinese-made electric car in a couple of years, and like with the iPhone vs. cheap Androids there is a good chance that people will prefer Teslas for their familiar UI, American design, or some other reason we currently don't even have on our radar.

Why are people so sure of this, especially given the recent plummet in oil prices? Car sales are at all time highs. Why do people assume that there's going to be a mass exodus to Tesla and EV's in the next few years?

The plummet in oil prices might be anticipating that future?

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#145

Post by clock_tower »

ramphastidae wrote: post #47
meddlepal wrote: post #25

Earlier quoted context omitted.

I really doubt the other car companies will let that happen. Either they'll work out the battery and motor tech themselves OR they'll push for hydrogen. The automotive industry isn't going to let a company like Tesla bully them around.

Just like how BlackBerry, Palm and Nokia held off Apple, right?

More like how IBM held off Sun Microsystems.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#146

Post by adamlett »

shalmanese wrote: post #118
simonsarris wrote: post #7

> “He’s going to need capital,” said Ross Gerber, chief executive officer of Gerber Kawasaki Wealth & Investment Management, which holds Tesla shares. “That’s the one part of the financials that are a little bit troubling. To underestimate the cash burn over the next six months will be a mistake.” It's not that troubling. Even massive companies (AMZN in 2014) need to raise big capital. When you have something you wan…

People misunderstand corporate debt because they analogize it to household debt but the analogy doesn't work because most household spending is consumption whereas most business spending is investment. When a business makes $1 of profit, it's that business saying "we couldn't find a single project across our entire organization that we believe would have given us a higher expected return than that dollar sitting in a…

That's oversimplified. Expected return is not the only factor to consider when deciding whether to invest or not. There is also risk to consider. A 51% chance to to either double up or lose your investment has a positive expected return, but if losing could mean catastrophe, it would be foolish to make that investment.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#147

Post by pyoung »

reallydontask wrote: post #106
j7ake wrote: post #80

Earlier quoted context omitted.

So what has been the net reduction of CO2 usage because of tesla to date?

I'm going to venture that it's not even a rounding error. In fact, in places it will likely have increased the CO2 emissions, again rounding error figures, due to the electricity generation mix and associated losses with generating that electricity (30-60% efficiency), plus transport losses (0.5 - 10%), plus charging loses, plus the efficiency of the motor itself.

If Tesla was actively working to prop up our fossil fuel based electricity grid, than I think this would be a fair argument. But they are not. Instead they are actively engaged in the solar+storage market, and they have stated multiple times that they believe the grid can be 100% renewable.

In the short term, yes, folks will need to rely on existing fossil fuel technologies to build factories, transport materials, and power the grid. That is because there is no other economically viable option. To expect the entire clean energy industry to bootstrap itself only using clean energy is a fallacy. In 20-30 years when the grid is more green and clean transportation is widely available, then arguments like these would be valid.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#148

Post by dkrich »

mikeash wrote: post #131
dkrich wrote: post #129

Earlier quoted context omitted.

one wireless carrier, support for CDMA networks, GPS, third-party apps, hardware keyboard, user-swappable battery, decent camera, FM radio tuner, multitasking, and removable storage I don't know about you, but my clamshell Samsung flip phone didn't support any of that except a user-swappable batter and removable storage, both of which I would argue are not net positives, but negatives as they increase the form factor…

Why are you comparing to your clamshell Samsung flip phone specifically? You said "The iPhone on pretty much every metric was demonstrably better than every other phone on the market" so I'm comparing to every other phone on the market, not one specific low-end model. Every feature I mentioned there existed in contemporary smartphones. I even looked them up! The iPhone got a ton of criticism at the time for missing t…

Right, on pretty much every metric. So do you think that the Motorola Razr was a better product than the iPhone because you could buy an extra battery and swap it out? I remember well when the first iPhone came out and people waited in line for hours to be able to buy one. It was just so different than any other phone available at the time. I don't really feel that applies to Tesla, and I think most consumers (not people who read and report for Bloomberg News, but the silent majority of people who are actually buying cars and keeping these companies in business) would agree. Yeah, it's cool and it's battery-powered. I get it. But pretty much every new car now is loaded with technology and can reliably get you from point A to point B. So the main differentiator is that it runs on a battery. Is that enough to get people to move en masse to Tesla?

65k cancelled reservations out of over half a million total, with net reservations increasing rapidly... what of them?

I think that's the question I posed to you. Doesn't seem like there's a good answer for it.

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#149

Post by dkrich »

tokipin wrote: post #123
dkrich wrote: post #28

Earlier quoted context omitted.

This is where I disagree with most people who are bullish on Tesla. I think there's a huge risk for Tesla that most people don't factor in- that it's very possible that most car buyers simply don't want one . The interesting thing about that is that most people seem to assume that making them at enormous scale and meeting the overwhelming demand is the only risk. What a century of observing the auto industry has taug…

> I think there's a huge risk for Tesla that most people don't factor in- that it's very possible that most car buyers simply don't want one. This is a legit worry, but well-designed electric cars are better than gas cars by a large margin, without question. Ultimately this is the only requirement, and it's one of the reasons Tesla is so extreme in its design aspirations. So this risk is not a risk at all in the case…

Why is it not a risk for Tesla but a risk for Chevrolet?

Re: Tesla Burns Through Record Cash to Bring the Model 3 to Market

#150

Post by partingshots »

dkrich wrote: post #35
bflesch wrote: post #18

Earlier quoted context omitted.

Most people will be driving either a Tesla or a Chinese-made electric car in a couple of years, and like with the iPhone vs. cheap Androids there is a good chance that people will prefer Teslas for their familiar UI, American design, or some other reason we currently don't even have on our radar.

Why are people so sure of this, especially given the recent plummet in oil prices? Car sales are at all time highs. Why do people assume that there's going to be a mass exodus to Tesla and EV's in the next few years?

Electricity will be cheaper than oil in 5-10 years. For many applications, it already is now actually.
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