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Tesla reports first quarterly profit in more than three years

reuters.com

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Re: Tesla reports first quarterly profit in more than three years

#61

Post by mwfunk »

patrickk wrote: post #26
shasheene wrote: post #19

The Economist recently did a good article on the financing of Elon Musk's companies that flew under the radar of Hacker News that probably warranted further discussion [1] [2]. (Though the author of that piece completely misses the relative importance of each company to Musk, suggesting "he could try to sell [...] SpaceX, through gritted teeth, to a defence firm") It's unfortunate there's a bit of a reality distortio…

> Maybe because everyone wants his companies to succeed... Surely the only ones who don't want dramatically cheaper space launches, cheaper, widely available solar PV installations and attractive, affordable electric vehicles are deeply entrenched incumbents whose continued profitability involves polluting the planet, or those who really hate the environment for whatever reason. There are valid criticisms you can lev…

I don't think that's the only reason someone might express skepticism of Musk at this point. They might want Musk to succeed at these things very, very much, but fear that his sketchier tendencies might lead to failure.

Re: Tesla reports first quarterly profit in more than three years

#62

Post by eanzenberg »

tw04 wrote: post #58
usaphp wrote: post #34

Earlier quoted context omitted.

> "I also happen to know a lot of the people who bought a heavily discounted Tesla in Q3 feel kind of burned that right at the beginning of Q4 Tesla announced the new Autopilot hardware (that isn't retrotfitable on old vehicles). " Wow I guess this is the best proof of how Tesla is really changing the way auto owners think, this is something that wasn't unthinkable before Tesla and their over the air updates. Can you…

No, but I can imagine a BMW owner complaining that the 2016 model came out 3 weeks after he bought his 2015, with no notice from BMW, the sales guy, or the press. And that the 2016 model came with a bunch of new features he really wanted and would've been willing to pay for.

You sure? Cause in this analogy, the 2015 model was at a serious discount while the 2016 has no discount at all.

Re: Tesla reports first quarterly profit in more than three years

#63

Post by danhak »

ceterum_censeo wrote: post #60
11thEarlOfMar wrote: post #51

The biggest news in this release is gross margin. Gross Margin Jumped from 26.7% in Q2 to 33.2% in Q3. For reference, MRQ, GM gross margin: 13.9% Toyota: 23.6% VW: 19.9% Granted, those are not luxury auto makers, but Tesla is more profitable on a gross margin basis. That margin fuels everything from cash flow to R&D spending. 33% for an automaker is huge.

Is the federal EV tax credit a component of the margin calculations?

No, the EV tax credit never goes to Tesla it goes to the consumer. The figures also exclude the CARB ZEV credits.

Re: Tesla reports first quarterly profit in more than three years

#65

Post by cortesoft »

fweespeech wrote: post #40
enimodas wrote: post #35

Earlier quoted context omitted.

How do significant discounts create more profitability? Isn't that like "we lose money on every sale, but make it up in volume."?

Per-unit margin goes down (but is still profitable per unit) but you make up in volume to create a profit. Tesla's main costs aren't the cost per unit but the engineer/software costs iirc.

If they make more profit by selling more units at a lower price... then why don't they always just do that?

Re: Tesla reports first quarterly profit in more than three years

#66

Post by karmelapple »

mwfunk wrote: post #61
patrickk wrote: post #26

Earlier quoted context omitted.

> Maybe because everyone wants his companies to succeed... Surely the only ones who don't want dramatically cheaper space launches, cheaper, widely available solar PV installations and attractive, affordable electric vehicles are deeply entrenched incumbents whose continued profitability involves polluting the planet, or those who really hate the environment for whatever reason. There are valid criticisms you can lev…

I don't think that's the only reason someone might express skepticism of Musk at this point. They might want Musk to succeed at these things very, very much, but fear that his sketchier tendencies might lead to failure.

I'm curious - what sketchier tendencies do you mean?

Re: Tesla reports first quarterly profit in more than three years

#67

Post by mehwoot »

albertTJames wrote: post #64

"Of 20 analysts covering the company, seven have a "sell" rating on the stock, four rate it "buy" or higher and nine have a "hold", according to Thomson Reuters data." === proof that something is very wrong with a world defined by speculators

How is a company with a market cap of $32 billion making a $20 million quarterly profit proof that something is wrong with people who think that company might be overvalued? Stock ratings are not about how a company is doing but about how a company is doing relative to its price.

Re: Tesla reports first quarterly profit in more than three years

#68

Post by tw04 »

eanzenberg wrote: post #62
tw04 wrote: post #58

Earlier quoted context omitted.

No, but I can imagine a BMW owner complaining that the 2016 model came out 3 weeks after he bought his 2015, with no notice from BMW, the sales guy, or the press. And that the 2016 model came with a bunch of new features he really wanted and would've been willing to pay for.

You sure? Cause in this analogy, the 2015 model was at a serious discount while the 2016 has no discount at all.

I'm sure. It's one thing to be told "Hey, there's a new model right around the corner. But we have this guy on a steep discount to clear out inventory."

vs. "Hey, we have this great sale going on. What, new model? Naww, we are just having a sale!!"

The incumbent MFG's literally have "new inventory" sales on their last-years model to clear out inventory. They let you know well in advance that a new car is coming with new features so you can make an informed decision.

Re: Tesla reports first quarterly profit in more than three years

#69

Post by jacquesm »

enimodas wrote: post #35
mitchellh wrote: post #23

Really great news! But something that shouldn't be overlooked is the discounts they gave in Q3 to push deliveries up. First, those that know me know that I am a Tesla FANATIC. My girlfriend once challenged me to not talk about Tesla (motors, energy, something) for a 24 hour period. I dunno if I've ever done that honestly. I'm also an owner (no surprise given my fanaticism, lucky to be able to afford one). And I also…

How do significant discounts create more profitability? Isn't that like "we lose money on every sale, but make it up in volume."?

It may move volume up enough for a brief period to display profitability, but the catch is that if the quarter following it does not have a very special attraction of its own that you will likely see the quarter after it substantially lower. Essentially it moves sales from the next quarter to the current one.

Tesla likely reasoned that they would have a huge up in Q4 and instead of having one quarter with profitability (Q4) they could spread it out and show two consecutive profitable quarters with even higher profits in Q4.

This may indicate they will be attempting to raise more money early next year, it's the kind of 'good news' that investors like to see.

Re: Tesla reports first quarterly profit in more than three years

#70

Post by ceterum_censeo »

danhak wrote: post #63
ceterum_censeo wrote: post #60

Earlier quoted context omitted.

Is the federal EV tax credit a component of the margin calculations?

No, the EV tax credit never goes to Tesla it goes to the consumer. The figures also exclude the CARB ZEV credits.

Doesn't the credit go to Tesla when it is leased?
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