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Q2 2020 Update

ir.tesla.com

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Re: Q2 2020 Update

#81

Post by xoxoy »

modeless wrote: post #20
itsoktocry wrote: post #6

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.

They'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.

huh? they’ve had four quarters of profits.

Re: Q2 2020 Update

#82

Post by grecy »

sbahr001 wrote: post #43
AgloeDreams wrote: post #5

Positive financial results, one surprise to be seen here is a massive reduction in model S builds, more than 60% drop-off QoQ Presumably due to COVID, but maybe not?

I would argue that the model S/X should be updated for their respective costs; They pretty much sell a 6 year old interior that was "space age" at the time. Since then their have been minor interior/exterior and looks extremely dated as the competition has "caught" up and the cheaper models surpass it. The only main changes to the car have been better battery and performance, the latter doesn't improve the day to day…

> When your spending 100k on a car you expect Mercedes type of luxury

This is the old way of thinking, and it illistrates perfectly why the other auto manufacturers have been caught flat footed re EVs.

For many decades what you said held true - more money on a car meant a higher quality interior.

Now things have changed dramatically, because what we thought of as a "car" has changed so much.

You can now spend 100k to get a car that never emits a single toxic chemical while being used. A vehicle that much cheaper to drive and own. A vehicle that requires significantly less maintenance, a vehicle that is silent and less fatiguing to drive, etc. etc.

This are all the reasons besides "I got a more luxury interior", and they're the kind of reasons that make an EV compelling.

Re: Q2 2020 Update

#83

Post by slg »

xoxoy wrote: post #77
slg wrote: post #71

Earlier quoted context omitted.

What 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.

17 days of inventory is on par with previous quarters except Q1...

Well 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).

Re: Q2 2020 Update

#84

Post by sacred_numbers »

jennyyang wrote: post #42
danhak wrote: post #24

Earlier quoted context omitted.

You realize their factory was shut down for much of this period, right? Comparing YOY quarterly figures here is very disingenuous.

Their stock price rose 8x. There's nothing in these numbers that justifies this type of meteoric rise exception pure, unadulterated speculation. They wouldn't have even been profitable if they couldn't sell their regulatory credits. How is that justifiable for an 8x YoY increase?

The potential upside for Tesla is huge. If they can become the Apple of electric cars and if electric cars become standard, they could be worth trillions. The reason their valuation was not in the trillions is because there is a risk that they will go bankrupt, that other companies will take the lead in EVs, or that EVs will not be where the market is headed in the foreseeable future. The reason for the jump in valuation is that those risks are being steadily reduced. EV competition is scarce, Tesla's cash reserves and consistent free cash flow hugely reduce the risk of bankruptcy, and the market is continuing to demonstrate that it wants electric cars (at least Tesla electric cars, that is), even during a pandemic. There is certainly an element of speculation and retail investor FOMO, but if Tesla's institutional investors didn't think this valuation could be justified at all they probably would have sold by now. Time will tell how reasonable the valuation really is, but betting against Tesla has not worked out very well so far.

Re: Q2 2020 Update

#85

Post by xoxoy »

duncanawoods wrote: post #56
danhak wrote: post #24

Earlier quoted context omitted.

You realize their factory was shut down for much of this period, right? Comparing YOY quarterly figures here is very disingenuous.

They now have two factories...

and yet their costs never went up after adding a second factory

Re: Q2 2020 Update

#86

Post by ProAm »

jennyyang wrote: post #42
danhak wrote: post #24

Earlier quoted context omitted.

You realize their factory was shut down for much of this period, right? Comparing YOY quarterly figures here is very disingenuous.

Their stock price rose 8x. There's nothing in these numbers that justifies this type of meteoric rise exception pure, unadulterated speculation. They wouldn't have even been profitable if they couldn't sell their regulatory credits. How is that justifiable for an 8x YoY increase?

stock price is always speculation, it just depends if its short term or long term.

Re: Q2 2020 Update

#87

Post by itsoktocry »

toomuchtodo wrote: post #51
almost_usual wrote: post #47

Earlier quoted context omitted.

So 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.

My 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.

>My Tesla stock with a $17/share cost basis says otherwise.

Tesla's IPO price was $17. So you got in right on the lowest price the stock has ever been and never bought another share since? Amazing.

Re: Q2 2020 Update

#88

Post by mamon »

guardiangod wrote: post #57
itsoktocry wrote: post #6

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.

One 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.

If 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.

Re: Q2 2020 Update

#89

Post by ckastner »

marc__1 wrote: post #28
itsoktocry wrote: post #6

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.

Tesla 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

> "The list goes on in terms of growth & profitability"

It better. Tesla has a market cap of 4x that of VW, a car maker with €256bn revenue and ~€17bn profit in 2019.

It is beyond me why anyone would buy this stock over VW, let alone pay 4x the price for it. Even if Tesla could put out 900K cars in a quarter instead of the current 90K, they'd still not come even close to the competition is terms of financial success.

Tesla would need to utterly dominate the car market to live up to its current valuation. Dominate as in market share, not relative quarter-to-quarter growth.

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