Q2 2020 Update • Hacker News Board

Re: Q2 2020 Update

#281

Post by CydeWeys » Thu, Jul 23, 2020, 4:19 PM UTC

notJim wrote: post #238

jliptzin wrote: post #193

Earlier quoted context omitted.

You need 300 mile rated range bare minimum or you are going to be in for a lot of headaches. That range is only actually 300 miles when the climate is good (not too cold) and you are driving like a grandma. If you're in a cold climate or you want to do 80 on the highway or a lot of quick accelerating/stopping or elevation changes that range goes down. On top of that, you really don't want to drive the car down to 0%…

Not if you have 2 cars (or are willing to rent) and a short commute (covid? why buy a car at all?). I rarely drive more than like 25 miles in a day. Even most of the close hikes I do are within about 30 miles of my house.

I could see the e-Golf being a good second car for a couple, and then use the longer range car for longer weekend trips, but as an only car, no. That range is just too limiting, and if I owned a car I would be driving around on an average of at least one drive per month that the e-Golf wouldn't be capable of doing without a recharge but that the Model 3 can. We're talking vacations, going hiking, visiting family who live several states away, etc. I definitely would not remotely consider, as an only car, having one so limiting that I'd be renting another car every month for longer trips. That just doesn't make sense.

Re: Q2 2020 Update

#282

Post by iddqd » Thu, Jul 23, 2020, 4:24 PM UTC

thecopy wrote: post #129

qeternity wrote: post #116

Earlier quoted context omitted.

For bulls, TSLA isn’t a car company. It’s the climate change company. They are the best bet right now to upend the entire power mix. I’m not saying I agree with this. Even if achieved, the amount of future success being priced in today is extraordinary. Combine that with a stock that’s become “cool” to own with retail, and the huge short interest...and well it starts to make sense. TSLA price action at the moment is…

>It’s the climate change company What does this mean? ELI5 pls

Their mission statement is “to accelerate the world's transition to sustainable energy”, not “make nice cars”.

Re: Q2 2020 Update

#283

Post by [deleted] » Thu, Jul 23, 2020, 4:28 PM UTC

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.

[deleted]

Re: Q2 2020 Update

#284

Post by labcomputer » Thu, Jul 23, 2020, 4:29 PM UTC

mamon wrote: post #88

guardiangod wrote: post #57

Earlier quoted context omitted.

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.

An alternate hypothesis is that they are trying to justify the inflated share price by gutting all other EV makers and gobbling up marketshare.

Tesla already has better margins on EV sales than any other automaker. If Tesla price their cars at a level that forces everyone else to lose money on EVs, it makes everyone else's transition from ICE to EV that much harder.

The much-lauded ID.3 (which is a bet-the-company project for VW) was supposed to undercut the Model 3, but the price has been slowly creeping up (and VW has had to massively de-content the base model to hit their price targets). If Tesla forces VW to take a loss on every ID.3, VAG's shares are going to start looking over-valued pretty quickly.

Re: Q2 2020 Update

#285

Post by labcomputer » Thu, Jul 23, 2020, 4:42 PM UTC

H8crilA wrote: post #65

samfisher83 wrote: post #61

Earlier quoted context omitted.

Most companies have shown big declines due to covid. Just being flat is good.

It was flat pre-covid too. It has been flat for 2 years.

Referencing your other comment, this claim really starts to fall apart.

* You're cherry-picking 2018Q3. So it's not exactly 2 years, it's actually 1.75 years (2018Q3 - 2020Q2).

* But now you're saying pre-covid too, so now it's actually 1.25 years (2018Q3 - 2019Q4).

That period in question is the time after Tesla finished ramping Model 3 production (using a tent!) at Fremont in 2018Q3, and before they finished building the factory in Shanghai in 2020Q1.

So... doesn't it seem reasonable that production gains would be a bit "lumpy"? They go up every time a new factory is finished, and they stay flat until the next one.

Re: Q2 2020 Update

#286

Post by ShamelessC » Thu, Jul 23, 2020, 5:12 PM UTC

xoxoy wrote: post #30

So many red flags Profit is all regulatory credits, actual auto sales flat to down, accounts receivable balance is now 1.4B or >20% of revenue, interest income is $8M (down -20%) even though global interest rates were cut to near 0 in Q2, R&D and service spending down despite dozens of projects the company claims to be working on.

Not a finance person, so forgive my ignorance, but why is it "bad" that their profits come from credits? Considering they're specifically in the EV market and will continue to receive those sorts of credits so long as the policies remain in place, isn't this a totally valid way to make profits for them?

Re: Q2 2020 Update

#287

Post by jedberg » Thu, Jul 23, 2020, 5:13 PM UTC

DanCarvajal wrote: post #277

jedberg wrote: post #252

Earlier quoted context omitted.

They designed the batteries that Panasonic makes exclusively for them and they are building their own cells in Fremont.

Neither of these things are true, they're at best modified off the shelf cells. They don't make cells at Fremont, at best the pack them into packs. There's no regulatory filings for cell production at Fremont. The whole argument is that they could use off the shelf materials at scale to attain profitability, since that hasn't happened the goalposts keep being moved by Musk, rumors, and myths.

https://electrek.co/2020/02/11/tesla-building-pilot-battery-...

"Now we’ve learned that Tesla is building a battery cell pilot production line in Fremont"

"Tesla currently buy cells from Panasonic made in Japan for Model S and Model X, as well as cells made by Panasonic at Tesla’s Gigafactory 1 in Nevada for Model 3.

The automaker used those cells, which they help design, to make their own modules and battery packs, but they have never produced their own cells."

Re: Q2 2020 Update

#288

Post by michaelmior » Thu, Jul 23, 2020, 6:01 PM UTC

Lendal wrote: post #92

michaelmior wrote: post #49

Earlier quoted context omitted.

Interesting! I wasn't aware of this credit. How it's structured is fascinating in that they essentially have to pay their competitors for not meeting the quota. (Of course the markets for EV vs ICE is somewhat different, but not disjoint.)

No, according to other commenters they would be paying it to the government anyway, if they weren't paying it to Tesla.

I don't understand your point. I was commenting that the fact that funds are going to their competitors is an interesting incentive structure.

Re: Q2 2020 Update

#289

Post by philwelch » Thu, Jul 23, 2020, 7:03 PM UTC

brianwawok wrote: post #199

philwelch wrote: post #119

Earlier quoted context omitted.

> The better answer is that nobody should buy VW either. Their business has zero potential upside and a huge downside risk in the transition to EVs VW is an EV manufacturer and is investing heavily in the transition to EVs themselves. And they’re already at a much larger scale than Tesla in terms of distribution and manufacturing the rest of the car.

To some extent, the 1900s distribution model of dealerships is a burden. When you buy a tesla, tesla gets 100% of the revenue. When you buy a VW or a ford, what % cut does the dealership take? How much does it cost to have 800 cars sitting on a lot, vs order on demand? Auto industry is ripe for innovation, glad we have someone innovating. I will hopefully never need to talk to a car salesmen or do the dealership thin…

Tesla also has to operate local showrooms and sales outlets throughout the world. In order to match a full scale manufacturer, they would need outlets in every medium-sized rural town in the US. It’s not an issue for Tesla now because they have outlets in big city tech hubs, but that won’t be sufficient unless they’re content staying a high end luxury brand. Dealerships run on lower and lower margins these days so there isn’t really that much to gain. It’s effectively the same reason that restaurant and fast food chains almost universally adopt a franchise model.

Re: Q2 2020 Update

#290

Post by philwelch » Thu, Jul 23, 2020, 7:28 PM UTC

protastus wrote: post #217

philwelch wrote: post #119

Earlier quoted context omitted.

> The better answer is that nobody should buy VW either. Their business has zero potential upside and a huge downside risk in the transition to EVs VW is an EV manufacturer and is investing heavily in the transition to EVs themselves. And they’re already at a much larger scale than Tesla in terms of distribution and manufacturing the rest of the car.

Too many automakers have claimed to be investing in EVs yet delivered nothing of merit or long-term value. Tesla's market cap is crazy, but is a reflection of having actual products.

VW is going all-in and is converting over their existing factories for EV’s, and since electric drivetrains are simpler than diesel or gasoline, having existing manufacturing that can be converted might give them a leg up compared to a company that needs to build out that capacity from scratch. And they’re well on their way in Europe.