I've always thought that FUD regarding Tesla is mostly caused by short-sightedness and that they're not profitable because every dollar they make is going towards expansion.
Is this accurate?
Very little of their cash actually goes to expansion of manufacturing.
And is there an inactive manufacturing line gathering dust? I was under the impression it is the same line in use right now, they just cut back on automation. The rest you mention seems like pocket money compared to the company's operating expenses.
That's called Capital Expenditure. Page 9: https://ir.tesla.com/static-files/b2218d34-fbee-4f1f-ac95-05...
Q1 2019 had a CapEx of $279 Million. In contrast, Q1 2018 was a CapEx of $655 Million (Q1 2018 was during the Gigafactory "ramp up", so they needed to pay for all of the equipment as the factory became operational)
> I've always thought that FUD regarding Tesla is mostly caused by short-sightedness and that they're not profitable because every dollar they make is going towards expansion.
They posted an operating loss of $500 Million in Q1 2019.
* Revenues -- The price of the car. If someone pays $40,000 for a car, that is +$40,000 in Revenue.
* Cost of Revenue -- The price Tesla paid to make a car. Based on Q1 numbers, Tesla paid $32,561 to make a $40,000 sale.
* Operating Expenses -- The cost of service centers, sales staff, administration, research and development, etc. etc. These don't "scale" with the car like "cost of revenue" does. Tesla spent $1 Billion on OpEx in Q1 2019.
* Operating Profit/Loss: Revenues - Cost of Revenues - OpEx. Tesla lost $500 Million at this point.
* Net Loss: Don't forget the interest rate on loans: 157 Million for the quarter. Net Loss: $667 Million.
All in all a $667 Million loss.
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* CapEx -- The cost of expanding the business. Building factories, buying new equipment, etc. etc. $279 Million. "Equipment" still has value when you buy it, so this doesn't count as a cost. Theoretically, if the company were to go bankrupt, it would sell the equipment to other companies and make some amount back. So CapEx counts as an 'investment', not as a cost.
* Loans and stuff -- Various loans were paid off this past quarter. $653 Million total.
* Total cash flow out: -$1.593 Billion. (Tesla's cash dropped from $4.2 Billion to $2.6 Billion this past quarter)
All in all, you can figure it all out on page 7, 8, 9, and 10 of the paper: https://ir.tesla.com/static-files/b2218d34-fbee-4f1f-ac95-05...
Q4 2018 Inventory was $3.113 Billion. Q1 2018 Inventory was $3.836 Billion.
If the cars were truly paid for already, then the value would still be in the Assets page under "Accounts Receivable": 1.046 Billion in Q1 2019.
Tesla depreciated about $467 million in the current quarter.
Ramping up manufacturing is hard on CF, but not intrinsically hard on P&L.