Tesla’s ‘Anemic’ High-Margin Model Sales Extends Profit Struggle
bloomberg.com
bloomberg.com
I'm sure there are also lots of people buying one because it's finally in their budget... complaining they won't buy a more expensive version is like asking Corolla owners why they won't buy a Lexus instead.
I'm not a musk fanboy.. but I don't think Musk is surprised here. Maybe the author of this article is surprised because he wasn't paying attention. And yeah, they have some quotes from investors.. but if they were surprised by this, then maybe they shouldn't be investing in things they don't care to analyze or think about more than 5 minutes.
Tesla say they do but reach this metric only by leaving out financial items that all other automakers include in unit costing. If those same items were excluded with respect to the Chevy Bolt/Volt or BMW i3, or Jaguar iPace, then those cars are also fantastically profitable as well--even more so than any Tesla model.
But you make a good point.. there are now more luxury electric cars.. and those people are the same people that would buy a model x/s. Perhaps that's also part of why sales for those are lower.
Firstly they haven't been refreshed in forever and secondly they are being cannibalised by the Model 3. The problem for Tesla (and investors) is that their ARPU is now dropping at a time when they need margins.
(yes, get more familiar with them and the model S breaks down further in regard to AP and motors and battery sizes, but buyers aren't readily familiar with the distinctions until they do quite a bit of research)
Not really. Those vehicles all benefit from economies of scale and have much less resistance to produce in those organizations. Beyond that they produce less of them in comparison. While it's easy to lump them into the same bucket Tesla doesn't enjoy some of the freebies the other manufacturers have for rolling pet electric projects. Beyond that none of the manufacturers disclose pure electrics to the street that I'm aware. So I'm not sure how you can make this assertion. Is there data for all three that breaks out those brands electrics P&L?
Are you talking about the same Bolt? The one where they were estimated to lose $9000 [1] per vehicle sold?
I'm being a bit flippant, but you can't in good faith argue that everyone else is accounting for EV stuff totally normally and only Tesla is doing something different. I expect all those companies are subsidizing the EV production in some way, as they do for all their low-volume cars. The cars that make money are low production high price models (eg, the Lamborghini's and Tesla Roadsters of the world), and the high volume cars (eg all the models (or platforms) that sell 500k+ annually, from Toyota/GM/etc). Model 3 is not quite at this production level yet, though it is close. We'll see from 2Q results tomorrow what the real deal is.
[1] https://www.inverse.com/article/32239-why-gm-loses-money-che...
As far as we know Tesla includes all the same costs in its unit costing including warranty reserves, etc. What are you referring to?
Tesla makes EVs at profit. Margins have been confirmed, and they are at scale production.
Name me another scale production EV that has been confirmed to be profitable for the company. AFAIK the Bolt and iPace and even the Taycan are/will be toe-dipping projects.
Tesla is ... mostly ... profitable, with the necessary startup investments and vertical scaling complete.
It's really the only profitable EV company, and probably still has 8-10 years of structural advantage over the ICE incumbents.
A good metal/solid state lithium battery tech will help the incumbents close the gap (I think Toyota in particular is gambling on this), and VW seems to be actually walking the walk (to avoid Dieselgate fines) for EV investment.
But it looks to me all the other CEOs are just treading water with investors and analysts to keep their jobs as long as possible, because none of them are of the kind to do the restructuring necessary to make an established brand go all-in on EV.
https://www.tesla.com/blog/secret-tesla-motors-master-plan-j...
I'm also on my second Tesla. You could offer me a Ferrari/Lambo/whatever, I'm keeping the Tesla.
So it's unsurprising to me that people will write articles about pedestrians getting killed by a Tesla. I think that would happen even if Tesla hadn't been talking up "Autopilot", autonomous driving, etc. But with those being prominently discussed, it's guaranteed people will find Tesla crashes interesting.
But now he's in the position of Wile E. Coyote running himself on thin air over a chasm. If he keeps running, he might make it to the other side. But it not, I don't think he falls slowly.
He's not showing amazing profitability because he's pouring so much into building his tech tree.
When the competitors finally build their base and start pumping out zerglings, they might just encounter these battle cruisers coming out of the fog of war...
On one side, there's an narcissistic CEO who has achieved incredible things, but who also generates a Reality Distortion Field rivaling that of Steve Jobs while as the same time apparently being mortally obsessed with attention and following.
On the other side, there are a bunch of skeptics who get triggered by such a persona.
Case in point: the fact that Tesla seems to be relatively quiet at the moment might actually be a good thing. The fantastical claims made during "Autonomy Day" two days before the previous earnings release were seen by many as a crude attempt to distract from the poor quarterly results with hand-waving.
And then you have the billions invested by those who are short the stock.
That's a powerful coalition of forces going all in on discrediting Tesla any way they can.
In fairness, there's too much fanboy stuff in the opposite direction too.
But overall, from my reading, Tesla appears to have some serious structural advantages over all other comers in the expanding EV market.
Okay, prove it. Show your evidence that Bloomberg has been swayed by Big Auto.
Since then he has churned out a few negative articles about Telsa, while also being breathless with excitement and uncritical about how VW and Ford announced some future collaboration on Electric vehicles.
Tesla is sitting on two upgrades for the Model S battery wise: 2170 cells, and improved chemistry.
The Model S would have a 600+ mile pack with those two techs combined, which is probably where the Roadster 620 mile range came from.
Not sure if this includes the improvements from the maxwell technologies acquisition, or the Model 3 motor efficiency gain.
Throw as much feces on the company quick! Keep that share price down!
I trust these financial media companies 0%. It seems patently obvious they’re manipulating stocks. Why poison my mind? Seeking Alpha, CNBC, Bloomberg all seem to be the stock manipulation wings of god knows what funds.
Why should we take them seriously?
Still waiting for the supermicro retraction or proof of claims. At this point, it simply looks like stock manipulation.
The company has financial irregularities and all sorts of problems. It seems strange that they wouldn’t push back.
But sure, everyone else is manipulating the stock...
Edit: I have no idea why I'm being so downvoted here. All I am saying is that short sellers have incentive to hand the media whatever they can to help their case (not so controversial, right?) and that the media might be taking it for free rather than, as the parent poster says, coordinating to specifically harm Tesla (is this the controversial bit?)
For example, let's say I think IBM has oversold 'Watson' AI. I would take a short position in IBM and start publishing my concerns. Fair enough. But if I start camping outside every hospital that uses Watson, badgering staff going in and out, it should at least raise eyebrows... Same with all the claims the Tesla short-sellers manage to spread by spending their lives flying planes over factories and camped out near parking lots trying to count vehicle production/sale figures, leading to mainstream media publishing vague allegations like this: https://www.nytimes.com/2018/10/01/business/tesla-cars-quest...
They also diluted investors with a capital raise they had strongly hinted wouldn't be needed, and at the autonomy day presentation for that raise they made bold predictions about essentially level 5 autonomy by 2020 (seemed like a lie to me and the entire team was restructured a few weeks later: https://electrek.co/2019/05/10/tesla-autopilot-restructuring... ).
They act as though Tesla is the only company in the world that has stock fluctuations, short sellers, bad press etc. It's never that the company was bleeding money in a quarter, saw a significant decline in ARPU, had to borrow money again, purchased SolarCity at a massive loss and has an erratic CEO who promises the world and fails to deliver. No it's a conspiracy involving dozens of large companies.
No, but the only one with a cap this big. Sure, there are tiny companies with crazy stuff happening. You have another example of another company with a two-digit billion dollar market valuation that sees anything remotely like this kind of volatility?
Tesla is also unusual in having an extremely large P/E compared to the typical S and P 500 company. That means it's being valued on future expectations, not present realities. Expectations of the future can swing much more wildly than those for present based businesses.
That goes for this entire subthread, not just this comment.