Tesla reports a worse than expected loss $282.3m

[d00df00d]

People need to stop thinking of Tesla Motors as a car company.

It was never intended to make money on cars in the first place. It wasn't even intended to live more than a few years. Musk himself admitted that he expected it to make a big splash, lose a bunch of money, and then flame out. The point of the company was to accelerate the industry's move toward electric vehicles, and to help justify the existence of the Gigafactory. By the time the rest of the industry catches up, it won't matter if Tesla Motors gets kicked to the curb; all those shiny new electric cars will need a LOT of batteries, and Tesla will own most of the world's battery production.

The shift toward electric cars would have happened eventually, with or without Tesla. Elon Musk's genius was to see a way to get in the driver's seat and accelerate it. Meanwhile, America gets a new industry and walks another step toward energy independence and sustainability, Musk and his co-investors make a TON of money playing the long game, and we all end up with better products. Everybody wins.

Those benefits are also the point of the subsidies that Tesla Motors has gotten. We may debate the merits of subsidies writ large, but I think it's clear that the ROI will be there in spades.

 

[Huie83]

It can sometimes take a long time to become profitable, especially with a new technology.

The company I work for ( medical device) is about 10 years old now and is just talking about becoming profitable this year. That doesn't mean the company isn't setup to do well long term or we are going under. It just takes a lot of time and money to build a good product for the long term market.

I do think Tesla will eventually pull a profit if they can build more cars the average consumer can buy. I make good money in the IT field and can't come close to buying a $90-100K Tesla. A $30K Tesla is more obtainable but it has to be a good car or it could really hurt their reputation.

 

[greenjp]

Originally Posted By: d00df00d
...and to help justify the existence of the Gigafactory. By the time the rest of the industry catches up, it won't matter if Tesla Motors gets kicked to the curb; all those shiny new electric cars will need a LOT of batteries, and Tesla will own most of the world's battery production...

This strikes me as a pretty bad long term plan. Tesla might have a large portion of the world's battery production. Might. But we're talking about what will be a commodity product, and commodity products are usually produced where they're the least expensive to make - places with access to the raw materials and low fixed costs to operate. Nevada (that's where it is right?) doesn't strike me as a great location compared to overseas options.

See the iPhone - the high value work is in the design of the phones done here in the US, but Apple pays the Chinese a pittance to actually produce the things. The value of a car is the design, engineering, and fabrication. There's a reason GM and the like outsource so many of the subcomponents.

I'm sure some US companies used to "own" the world's production of a great many things that are made in China for razor thin profit margins nowadays. And I'm pretty sure that while Panasonic is a "partner" in the project, it's not like they (and LG Chem and the rest) are just going to roll over and let Tesla take over the market.

Lots of assumptions and speculation either way, it'll be interesting to see who the winners and losers end up being.

jeff

 

[HTSS_TR]

Originally Posted By: d00df00d
People need to stop thinking of Tesla Motors as a car company.

It was never intended to make money on cars in the first place. It wasn't even intended to live more than a few years. Musk himself admitted that he expected it to make a big splash, lose a bunch of money, and then flame out. The point of the company was to accelerate the industry's move toward electric vehicles, and to help justify the existence of the Gigafactory. By the time the rest of the industry catches up, it won't matter if Tesla Motors gets kicked to the curb; all those shiny new electric cars will need a LOT of batteries, and Tesla will own most of the world's battery production.

Tesla Motors is here to stay, they may be bought or merge with another company, but they will not disappear anytime soon.

They are planning to accelerate ramp up to make 500K vehicles to 2018 instead of 2020.

Musk planned to make 500k at the end of this decade many years ago, that why he built Gigafactory 2 years ago, to make enough batteries for half million vehicles by 2020.

Originally Posted By: d00df00d
The shift toward electric cars would have happened eventually, with or without Tesla. Elon Musk's genius was to see a way to get in the driver's seat and accelerate it. Meanwhile, America gets a new industry and walks another step toward energy independence and sustainability, Musk and his co-investors make a TON of money playing the long game, and we all end up with better products. Everybody wins.

Those benefits are also the point of the subsidies that Tesla Motors has gotten. We may debate the merits of subsidies writ large, but I think it's clear that the ROI will be there in spades.

California had a plan of zero emission vehicle long before Tesla existed. Musk and Tesla founders saw an opportunity to make money and ...

All the subsidies that Tesla Motors has received over the years (and the next 15-20 years with Nevada for Gigafactory) are all legitimate and available for all other companies, regardless if they are US companies or foreign companies.

As of now a buyer of an EV could get up to $7500 Federal tax credit, be it a Tesla vehicle made in USA or BMW i3 made in Germany or Nissan Leaf made in Japan or Huyndai xxx made in South Korea ... Why nobody complaint about US subsidized German manufacture BMW for selling i3 in US ?

How about carbon credit ? Only Tesla can use the credit and no other company is allowed ?

Is it okay for German, Japanese, Korean ... to received handout from US tax payers but not US company ?

To all of you who complained about an US company received helps from US tax payers, you should compare those subsidies to foreign companies that received similar handouts.

As a taxpayer, do you want your money goes to a American company or to foreign companies ?

 

[Gasbuggy]

I'm hoping we get a President who will pull all their [censored] subsidies. See what happens to their share price after that.

 

[greenjp]

Originally Posted By: HTSS_TR
...They are planning to accelerate ramp up to make 500K vehicles to 2018 instead of 2020.

Musk planned to make 500k at the end of this decade many years ago, that why he built Gigafactory 2 years ago, to make enough batteries for half million vehicles by 2020...

Care to make a friendly wager? Just something symbolic, say a $25 donation to a charity of the winner's choice? I bet Tesla falls short of delivering 500k cars to customers in 2018.

jeff

 

[Nate1979]

^^^^Well, Musk is already backing off the production date startup of the Model 3 in a recent announcement:
http://blog.caranddriver.com/musk-tesla-model-3-production-date-will-probably-not-be-met/

So yeah, I wouldn't trust that 500k number (maybe a few years off) nor would I trust the $35k price.

 

[HTSS_TR]

Originally Posted By: Gasbuggy
I'm hoping we get a President who will pull all their [censored] subsidies. See what happens to their share price after that.

The President can't do much about budget, Congress is the one who distributes subsidies to various industries/companies.

How about state incentives ? Every large company pitting one state against another to get the most incentive. This game had been played for many decades.

Every car company had various incentives from states they open their plants there.

Honda had good kick back from Ohio, same for Toyota, BMW, MB, Hyundai ...

If anyone has any data to show that car company x opened a plant in state y didn't receive any incentive, I like to see one example.

Originally Posted By: greenjp
Originally Posted By: HTSS_TR
...They are planning to accelerate ramp up to make 500K vehicles to 2018 instead of 2020.

Musk planned to make 500k at the end of this decade many years ago, that why he built Gigafactory 2 years ago, to make enough batteries for half million vehicles by 2020...

Care to make a friendly wager? Just something symbolic, say a $25 donation to a charity of the winner's choice? I bet Tesla falls short of delivering 500k cars to customers in 2018.

jeff

That is their new plan to accommodate model 3 pre-order, the original plan was 500k by 2020 and that was very aggressive already.

They will invest heavily from now until end of 2017 to ramp up production, but I think they will miss the 500k target. They may be able to produce around 300k, may be a little less, which is very good volume from 50k in 2015 and projected 80-90k in 2016. Even at the low 300k, Tesla needs to double production in 2017 from 80k in 2016 and double again in 2018.

I take your bet of $25 donation to a charity of the winner's choice that Tesla will produce 300k or more various models(S, X and 3) in 2018.

 

[HTSS_TR]

some reports about car companies and state incentives:

Quote:
BMW received hundreds of millions of dollars in public money and tax breaks.

source: http://www.toledoblade.com/Automotive/20...tion-goals.html


Quote:
What a huge difference seven years make: That's the dominant theme thus far in the aftermath of the $158 million incentive package that Alabama put together to land Honda's $400 million, 1,500-employee plant.

The upbeat mood that's greeted the announcement stands in stark contrast to the brouhaha of 1993, when the state provided $253 million in incentives and tax breaks to land the DaimlerChrysler investment in Vance, Ala.

Source: http://siteselection.com/ssinsider/incentive/ti9906.htm


Quote:
Mississippi's $68M Incentive Package Fuels $500M, 1,300-Job
Nissan Expansion.

Source: http://siteselection.com/ssinsider/incentive/ti0207.htm

This small incentive is for expansion.

Quote:
Alabama offered Mercedes-Benz a package valued at more than the cost of the plant itself. To lure the $300 million plant, with about 1,500 jobs, the state promised to buy the site for $30 million and lease it to Mercedes for $100. Surrounding communities will contribute an additional $5 million each, and the University of Alabama will offer German language and culture classes to the children of plant employees. On top of this, the state will provide a package of tax breaks valued at more than $300 million, which will, among other things, allow the plant to be paid for with money that would have been paid to the state.

Source: https://www.stlouisfed.org/Publications/...ostly-Adventure

 

[nthach]

Toyota only expanded in Indiana/Mississippi/Texas because of tax breaks - and the decision to eventually move Lexus ES production to a new line at the Kentucky plant was partly because the ES was a model that Lexus primarily sells in the US and they also had a tax break to build a new assembly line.

Tesla was there mostly to make batteries cheaper - and Tesla is Panasonic's next biggest automotive customer next to Toyota.

 

[HTSS_TR]

Originally Posted By: Nate1979
Tesla announced earnings
http://www.ibtimes.com/tesla-motors-inc-...tes-its-2364209

Tesla Motors reported a much worse than expected loss of $282.3 million today.

Actually, the quarterly loss was less than expected.

Quote:
The company generated $1.6 billion in revenue and a narrower-than-expected adjusted loss per share of $0.57.

Tesla was expected to report a quarterly adjusted loss of $0.60 per share and revenues of $1.61 billion, according to Bloomberg.


http://www.businessinsider.com/tesla-earnings-q1-2016-2016-5

 

[Nate1979]

Did you read the article I posted or are you trying put lipstick on a t^rd? If you read the article you would see that the GAAP loss was much worse than expected. Tesla report non-GAAP wasn't and that companies are facing more pressure from regulators when they continue to use NON-GAAP reporting.

 

[Nebroch]

Originally Posted By: d00df00d
By the time the rest of the industry catches up, it won't matter if Tesla Motors gets kicked to the curb; all those shiny new electric cars will need a LOT of batteries, and Tesla will own most of the world's battery production.


How are they going to make batteries, when they have no expertise, patents, and machinery to make any? Panasonic is their sole supplier of cells, and they're supposed to build a production line for Tesla inside Musk's new "super factory".

 

[d00df00d]

Originally Posted By: Nebroch
Originally Posted By: d00df00d
By the time the rest of the industry catches up, it won't matter if Tesla Motors gets kicked to the curb; all those shiny new electric cars will need a LOT of batteries, and Tesla will own most of the world's battery production.


How are they going to make batteries, when they have no expertise, patents, and machinery to make any? Panasonic is their sole supplier of cells, and they're supposed to build a production line for Tesla inside Musk's new "super factory".

https://www.teslamotors.com/gigafactory

 

[Nebroch]

You need more than a large building to own most of the world's battery production.

 

[d00df00d]

...I don't know how to respond to that. Sorry.

 

[HTSS_TR]

Originally Posted By: Nate1979
Did you read the article I posted or are you trying put lipstick on a t^rd? If you read the article you would see that the GAAP loss was much worse than expected. Tesla report non-GAAP wasn't and that companies are facing more pressure from regulators when they continue to use NON-GAAP reporting.


This is your original post, you said that "Tesla Motors reported a much worse than expected loss of $282.3 million today[/b]

Originally Posted By: Nate1979
Tesla announced earnings
http://www.ibtimes.com/tesla-motors-inc-...tes-its-2364209

Tesla Motors reported a much worse than expected loss of $282.3 million today.


According to the article in your link of ibtimes.com, it stated clearly:

Quote:
But Tesla’s first quarter adjusted (non-GAAP) loss was $75.3 million, or 57 cents per share, wider than the $45.3 million, or, 36 cents per share in the first quarter last year. The Wall Street consensus was for a loss of $83.7 million, or 58 cents per share. (Adjusted losses remove stock-based compensation, interest on borrowing and the way the company accounts for leased cars.) The earnings beat, as it’s called, is what sent the stock price upward after the bell.


Wall Street expected a lost of 58 cents per share and actual lost was 57 cents per share.

The other report by businessinsider.com didn't care for GAAP only non-GAAP (or pro forma) figures.

http://www.businessinsider.com/tesla-earnings-q1-2016-2016-5

You need to understand which type of report investors are looking for, and that is the definition of "EXPECTED" financial report.

 

[HTSS_TR]

Originally Posted By: Nebroch
You need more than a large building to own most of the world's battery production.

The land and building don't cost more than 1 or 2 billion dollar, the total estimated cost is $5 billion dollar, the majority of this $5 billion is equipment, tool ...

If they can't produce battery in this plant they wouldn't spend $5 billion for an empty building.

 

[Nebroch]

...equipment, tool, which is supposed to come from Japan to make those cells. Panasonic has promised "up to" 1.6 billion usd for the project, and not a single kWh will be produced without this japanese company.

Tesla's PR magic in incredible. When they are one of the largest buyers of these batteries, they make it look like they are the producer.

 

[Nate1979]

I will post it again. Tesla reported a much worse than expected GAAP loss (yes, investors give expected numbers for both GAAP and non GAAP).

Quote from the link I posted:
"Tesla reported a GAAP loss of $282.3 million, or $2.13 per share, compared to a loss of $154.2 million, or $1.22 per share, in the same quarter last year. Analysts polled by Thomson Reuters ahead of the earnings release had expected a GAAP loss of $77.7 million or 86 cents per share, so the company had a huge miss there."

Not sure why you want to argue about it. Tesla lost money and depending on whether you use generally accepted accounting practices or not they either did much worse than expected or as bad as expected.