As a point of comparison, the big car companies make close to 200,000 cars a week.
But that's what makes these misses so important. Elon Musk originally promised exponential growth with 20,000 cars a month by Dec 2017. But that's a miss. He pushed it to 5000/week by Q3 2018, and now it seems like that's a miss as well.
So Tesla, as a growing company, is nearly a year late on its rampup plans. As such, it may not have enough profits to pay down its first major $1-billionish loan due March 2019.
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That's what people need to be watching: how does Tesla plan to pay off $1 Billion loan (its also a convertible bond, so if the Stock Market raises the price of Tesla to $360, they can give stock instead of paying off the loan.)
THAT's why it was important to get 5000/week by December 2017 as Elon Musk originally tweeted: https://twitter.com/elonmusk/status/881757617416056832
The runway has run-out. Elon Musk needs to raise capital to pay off the 2019 Billion $$ loan now.
In short, I'm not impressed by gross profits (Revenue - COGS), but I agree with the Tesla Bulls that operating-profits (Revenue - COGS - SG&A - CapEx - R&D) is too strict.
My definition of Tesla sustainability is (Revenue - COGS - SG&A). EDIT: Seems like this value is called "Operating Income".
That is explicitly what would please me. SG&A (Sales, General, and Administrative) costs MUST be accounted for because Tesla decided to avoid dealerships. So all sales staff employed by Tesla need to be accounted, if you are planning to build a sustainable company at a sustainable price.
> It is time for Tesla skeptics to admit that they were wrong and recognize the sheer audacity of Tesla's achievements. It is time to admit defeat.
As soon as Tesla reaches positive "Operating Income" (Revenue - COGS - SG&A) for more than one quarter, I'll gladly admit that I was wrong. Sound fair?
Edit: GM in 1908 is the actual correct answer.
Which really begs the question - why did Tesla scoff at outside help from the big car companies? They've figured things out already...
How many times did they manufacture 200k Volts or i3 EVs? Where is their serious battery production? Anything even 1/2 as big as the current gigafactory (which is about 30% finished and is still the aggregate battery capacity of almost every battery factory in the world in 2016).
It reminds me of Chipotle famously scoffing at McDonald's attempt to teach supply chain management and more... and then Chipotle routinely having shortages of food items, quality and consistency issues, or suffering from nation-wide food-safety outbreaks. Turns out they could have leaned a thing or two...
(I also don't believe the forces were so great that no seat could be bought or made by another company... some of the Tesla models have good performance... but they aren't alone in that arena)
The seat is a flagship example of NIH Syndrome - the same syndrome that has led to bloated costs, reduced profitability and poor quality and craftsmanship of Tesla vehicles. Tesla is figuring out how to do things for the first time - solving problems that have already been solved, and solved well by others. Looking towards the heavy-weights in the field and learning a few things could go a long way...
Also, they've had a lot of executive turnover... we've all heard the stories about what it's like to work for Mr. Musk...
Gotta say, as a Model 3 owner, I don't see any build quality or poor craftsmanship in the vehicle and I took a very long time doing final inspection at the service center before taking delivery. I'm not saying it has the same build quality as say a high end Mercedes or BMW (the model 3 isn't in that category of vehicle), but it is the nicest car I've ever driven as a daily driver. He is trying to do something differently, and he very well might do it slower as a result, but vertical integration will definitely lead to lower costs in the long run as there is simply less of the middle tier. When it comes to the guts, there is nothing but quality, and tesla easily stands alone in that regard: https://cleantechnica.com/2018/02/19/tesla-model-3-stuns-ger...
TL;DNR: People have been hating on Elon since he said that banking could be online (when he founded x.com that became most of what is now paypal), and when he said he would found a rocket company, and when he said his rockets would be reusable by landing on boats, etc. He'll get it eventually, or die trying.
GM, Chrysler, Jeep, and others were founded after Ford. Dodge didn't start making cars until 1914.
Dodge: 1900
Ford: 1903
GM - 1908
Chevrolet - Formally "Chevrolet Division of General Motors Company" is a division of GM founded in 1911
Jeep - not a car company but a division of FCA founded in 1943
Chrysler - "Fiat Chrysler America" aka FCA, was a division of Fiat founded in 1925
A huge amount of WW2 inventory rolled off the Ford production line with Ford and not the government finding the capital and the land for the factory. The war in Europe would have been very different without Ford supplied planes and other materiel.
Compared to other war time suppliers Ford 'aced it'. Yet despite the amazing things the original Henry Ford and Edsel did you don't get the impression that today's Ford has that same dynamism. The more out there ideas Ford had went with him. The company had shareholders in the stock market after Ford died and from then on the brakes were on as far as speculative, massively vertically integrated investments.
Ford may have a 100 year head start but it is 75 or so years since their 'Elon grade' founder left them.
An even bigger problem is to toss out all that existing edge with ICEs to start afresh with EVs.
The problem at the most basic level is MBAs have to compete with current era Henry Ford(Elon Musk). Most of them will quit when faced with even 1/100th the pressure Musk is in now.
That's more of a disadvantage when faced with paradigm changing trends.
Its always easy to do something new from scratch.
Throwing away decades worth assets, IP, patents, product lines to compete is more or less impossible. You have tear down the whole company for this.
If anything, Tesla shouldn't have too much trouble beating the Fords, GMs, and Toyotas of the world in production -- they're just putting together batteries and electric motors, which is a good bit simpler than engineering an entire ICE drivetrain and getting it out the door successfully.
https://en.wikipedia.org/wiki/Luxury_vehicle > Model S is listed there, is that a coincidence?
The S and X are clearly in the luxury segment. Some people pay a very high premium for the pleasure to drive a quick electric luxury sedan. Which is completely unnecessary for their needs.
All the owners I know are clearly in the luxury segment (coming from luxury ICEs). What you find desirable isn't everyone's pleasure.
Maybe Tesla is just reinventing/killing the luxury segment, but that's another debate.
Or this: https://youtu.be/yq9IvgfLFgk?t=360
The (Honda / Acura) or (Volkswagen / Audi) splits covers normal vs luxury brands by the same company. So a new luxury car segment starts around 35k even if you can pay more than that for a Honda Accord you still go to the Honda dealerships etc.
What you're noticing is that everyone who can't afford a Bentley or Rolls-Royce would prefer to call their Audi a luxury car ;-).