Tesla Was Cash Flow Positive Last Week, CEO Musk Says • Hacker News Board

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#171

Post by hmexx » Wed, Dec 05, 2012, 11:10 PM UTC

dave1619 wrote: post #86

Tesla Motors is in great shape. I've been following the company for a while and recently drove the Model S. Amazing car in almost every way. What struck me was that it's not an incremental improvement but really a radical (might I say disruptive) improvement in terms of ride quality (super quiet), handling (low center of gravity with skateboard powertrain), electronics (17" touchscreen), cargo space (heard of the fru…

One thing in that list I'm pretty sure they won't deliver is superior reliability.

You can argue the tech has some reliability advantages, but I'm guessing it will take a decade or so to match the incumbents in all-around reliability, seeing as that's the hardest thing to get right as a newcomer.

Still, can't wait to play around with the cool tech!

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#172

Post by soperj » Wed, Dec 05, 2012, 11:22 PM UTC

njr123 wrote: post #140

endersshadow wrote: post #41

Earlier quoted context omitted.

Great question! The answer is a resounding no! Also, just because you're profitable doesn't mean you have a positive cash flow! Profit is what's called Net Income (for argument's sake, let's do EBIT--Earnings Before Income Taxes). Cash flow is simply your delta in cash from one period to the next. Lots of things go into net income, but essentially it's revenue minus costs. Because of GAAP (Generally Accepted Accounti…

Isn't EBIT 'Income before interest and taxes'?

I sincerely doubt that the E stands for income.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#173

Post by makomk » Wed, Dec 05, 2012, 11:23 PM UTC

patrickgzill wrote: post #79

nicholassmith wrote: post #23

Earlier quoted context omitted.

Governments for the most part can take long term(ish) views on things, whereas other investors might be more bullish about seeing a return a lot quicker, for better or for worse. Even traditional bank based investment wouldn't have worked, so it's unlikely something like Tesla would be able to get off the ground and get running. If Tesla does succeed the US Government gets a nice feather in the cap as well, if it goe…

Note that funding for such things used to come from individuals who could easily buy shares. Univac for instance, started in just this way, selling shares for a few dollars apiece. In these times, however, lawyers and government have strangled such bootstrap methods. Whether Tesla is a success or not, that the govt was needed indicates a failure in some other part of the system.

Lawyers and governments haven't strangled those bootstrapping methods - scammers have.

Selling a few shares at a time to individuals is a really expensive and time consuming way of raising money, so the only reason to do it is if you can't raise money from larger investors. Now, sometimes there's a non-shady reason for this, but more often than not the reason is that small-scale investors can't afford the same level of due diligence to detect scams and can't afford to take legal action if the whole thing implodes. (We saw this with the Perma-Pave ponzi recently - it took one of the larger investors investigating, finding evidence it was a ponzi, and suing for anything to happen. The smaller investors were stuck flailing around amongst misinformation from people involved in the scam.)

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#174

Post by saraid216 » Wed, Dec 05, 2012, 11:53 PM UTC

ryanhuff wrote: post #128

calinet6 wrote: post #118

Earlier quoted context omitted.

This is like saying that Sony can make an mp3 player, so the iPod isn't competitive in that market. Or that a 5GB iPod won't hold enough music, so it's just an expensive toy. Within 5-10 years the battery problem will improve, especially if there is demand. This is technology, not automotive development. We're not in Detroit anymore. They're in a different class. Tesla is set up to do it right from the start at a muc…

Its a bit presumptuous to say that Tesla is so different. Sure, they are attractive at the moment because of unique niche they are filling. If BMW, Mercedes, Audi, Lexus, Acura, etc all sold an all-electric vehicle with similar range, Tesla's differentiation becomes much less unique, and normal competitive factors come into play (scale, marketing, etc).

I thought that's exactly what he meant by "Tesla is the Apple of anything that moves".

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#175

Post by saraid216 » Thu, Dec 06, 2012, 12:01 AM UTC

temphn wrote: post #147

jbooth wrote: post #135

Earlier quoted context omitted.

I don't think Romney was necessarily giving his honest opinion on Tesla. He was running for president and environmentalists = hippie communists, so of course he's going to publicly hate on Tesla. Comparing strategic DOE loans in energy to Stalin and Mao is going a bit far, btw.

Hmmm. Russian state-owned enterprises did not end with Stalin, and Chinese state-owned enterprises did not end with Mao. Many of them continue through to the present day and are not setting the world on fire. I should note that I agree that Romney probably did not know much about Tesla besides the name. But most politicians don't know much about technology. Last I looked, I believe we have only one scientist in the e…

> But most politicians don't know much about technology. Last I looked, I believe we have only one scientist in the entire House of Representatives (Rush Holt, D-NJ?).

I wish everyone who thought, "I wish people in office were more like me" actually ran for office. That's the best way to get people like you in office. Age requirement for the House is only 25.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#176

Post by saraid216 » Thu, Dec 06, 2012, 12:05 AM UTC

temphn wrote: post #124

ikono wrote: post #116

Earlier quoted context omitted.

I don't really think you can evaluate government loans the same way you would as a private investor. The federal government has defacto senior equity in every company that is incorporated and/or operates in the US. As a private investor the only upside you get from a loan is the interest. It's not even entirely fair to use a VC type model here as the government will also reap rewards from companies that indirectly be…

I don't really think you can evaluate government loans the same way you would as a private investor. So, there are different ways to isolate a core philosophical disagreement but I think this may be one of them. In a different context you will hear people say that "the government is not a household" because the USG can print money. OK, so call that one point of view. Another point of view looks at the largest and mos…

> So, that's the point of view that says that governments should be evaluated in the same way you'd evaluate companies.

If governments should be evaluated in the same way you'd evaluate companies, then companies should be evaluated in the same way you'd evaluate governments. Otherwise you're putting down a double standard.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#177

Post by jaggederest » Thu, Dec 06, 2012, 12:09 AM UTC

hmexx wrote: post #171

dave1619 wrote: post #86

Tesla Motors is in great shape. I've been following the company for a while and recently drove the Model S. Amazing car in almost every way. What struck me was that it's not an incremental improvement but really a radical (might I say disruptive) improvement in terms of ride quality (super quiet), handling (low center of gravity with skateboard powertrain), electronics (17" touchscreen), cargo space (heard of the fru…

One thing in that list I'm pretty sure they won't deliver is superior reliability. You can argue the tech has some reliability advantages, but I'm guessing it will take a decade or so to match the incumbents in all-around reliability, seeing as that's the hardest thing to get right as a newcomer. Still, can't wait to play around with the cool tech!

The sheer moving part reduction going from a full IC engine to an AC induction motor is crazy. You're looking at maybe a hundred moving parts, minimum, down to one. And that's just in the prime mover itself, let alone the entire power train.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#178

Post by temp453463343 » Thu, Dec 06, 2012, 12:12 AM UTC

jlgreco wrote: post #132

temp453463343 wrote: post #105

Earlier quoted context omitted.

I think it's a bit of a shame that they're playing the game on the same terms as the other car companies. You're absolutely right that each model seems to target a particular "class" of cars. I think a little more adventurous designs would have been great. For instance I think it would have been perfect if they made a Tesla land-yacht in the style of 70's cars. Big, heavy (lots of room for extra batteries), nice cush…

I don't know what their European sales look like right now, but I suspect making a land-yacht would limit their potential audience a bit. ;)

I was always under the impression that Europeans love land yachts. (like those kids in Sweden that collect old US cars) It was just the crazy fuel prices that stopped them from buying them.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#179

Post by jlgreco » Thu, Dec 06, 2012, 12:15 AM UTC

temp453463343 wrote: post #178

jlgreco wrote: post #132

Earlier quoted context omitted.

I don't know what their European sales look like right now, but I suspect making a land-yacht would limit their potential audience a bit. ;)

I was always under the impression that Europeans love land yachts. (like those kids in Sweden that collect old US cars) It was just the crazy fuel prices that stopped them from buying them.

My understanding is that large cars are difficult on many of their roads, particularly in some towns/cities.

Re: Tesla Was Cash Flow Positive Last Week, CEO Musk Says

#180

Post by ProblemFactory » Thu, Dec 06, 2012, 12:22 AM UTC

TeMPOraL wrote: post #54

ChuckMcM wrote: post #39

Earlier quoted context omitted.

Being operationally cash flow positive means that on a day to day basis your bank balance is increasing. Being profitable means that all of the money comes in in greater than your total costs. So for example, if you look at HP's write down, they were operationally cash flow positive for the quarter but are 'writing off' 8+ billion dollars. So they "lost" over $8B this quarter. Aka not profitable during the quarter. S…

So to put it simply, cash flow is like a differential of profit? So you can have a profit of -1M$, but as long as the next month you get more (like -0.8M$), you're cash flow positive (+0.2M$), right? I'm having trouble parsing the examples given in this thread; the above sounds like what I more-less understood from them.

No, not at all. To put it simply, profit is cash flow over a long period.

A business might have customers on a monthly plan, paying $2000 over their entire lifetime. If it costs $1000 in sales and set-up expenses to get a customer, they are profitable. But the expenses have to be paid up front, whereas the income will trickle in over a long period.

This means that even profitable companies might need to take loans or raise financing if they need to pay for expenses now, but the income from those sales arrives in months or years down the line. A cash-flow positive company doesn't have the risk of running out of money while waiting for the profits to come in.