Tesla Q3 Financial Results
ir.tesla.com
ir.tesla.com
"Tesla shares soar after crushing third-quarter earnings" CNBC
"Tesla's Quarterly Profit Drops 54%" WSJ
"Tesla returns to profitability and tops Wall Street's third-quarter earnings" Business Insider
"Tesla ekes out a profit as all eyes turn to its China Gigafactory" The Verge
I get that financials are prone to much speculation, interpretation, etc. But it seems that the news is so agenda driven today that we're twisting facts to fit some narrative rather than the other way around.
When the narratives being pushed at us by news organizations are so polarized around concrete numbers being reported at regular intervals in a heavily regulated manner, how can we hope to interpret more nuanced news appropriately?
Sorry, rant over. This is exciting news for Tesla! Or maybe the beginning of the end.
I think the YoY EPS is the least interesting and more erratic headline personally.
They had one prior profitable quarter which happened to be Q3 2018. That was under a full subsidy regime only selling the highest ASP Model 3s while there was still higher volume X/S sales to boot.
All eyes are definitely on G3. Tesla spent 2019 improving process efficiency and returning to profitability but have been seriously production limited the last two quarters.
G3 production coming online for China, also by the way just in time to avoid a steep rise in import tariffs, is hugely critical for Tesla, and China as a long term EV market is absolutely massive. Getting China excited about a locally built Tesla is super important, and G3 production of 3k units/wk by the end of the year should be a massive boost to their bottom line, because those should be higher margin units even if they are somewhat lower ASP than their global average.
It’s definitely not the beginning of the end for Tesla and I don’t think anyone should come away from this particular report feeling more pessimistic about TSLA than they were going into it.
Both Q3 and Q4 2018 were profitable, and so was Q3 2016, and Q1 2013.
March, 2013 - $ 11.5M
September, 2016 - $ 21.88M
September, 2018 - $311M
December, 2018 - $139M
September, 2019 - $143MFor example, the first two don't say much; the third is much more significant and probably difficult to fake.
Personally, I think the most important is whether they can follow their game plan: make a lot of debt for car n, pay all off plus make a little; restart for car n+1. Also, n+1 should sell more units than n.
Yes. Elon literally said, "Profits from here on out!" the last time they made profits. Then, Tesla proceeeded to lose 700MM the next quarter.
> While the number of Model 3 vehicles produced should increase sequentially in Q1, deliveries in North America during Q1 will be lower than the prior quarter as we start delivering cars in Europe and China for the first time. As a result of the start of Model 3 expansion into Europe and China, deliveries will be lower than production by about 10,000 units due to vehicle transit times to these markets.
What actually happened was that production rate fell by ~10,000 from 86.5k to 77.1k and they also had deliveries fall behind production by 15,000 instead of their expected 10k;
> In Q4 2018, Tesla produced a total of 86,555 vehicles, and delivered 90,700 vehicles. In Q1 2019, Tesla produced 77,100 vehicles and delivered 63,000 .
I'd have to research the cause of the production drop, but that combined with a larger than expected delivery lag (compared to the prior quarter where they actually over-delivered vs. their production rate) is why they had such a tremendous loss. On top of all that I'm pretty sure gross margins also fell, and the S/X/3 mix became significantly more 3 dominant as the tax credit dropped.
So while I would not dispute that there are tricks that can be pulled, mostly in this case that would come down to the level of CapEx, which for Tesla is now below their depreciation. That's a metric which typically shows a slowing growth company, but in the case of Tesla could just be more reflective of how wasteful their spending actually was in the past (e.g. trying to fully automate production al la "alien dreadnought" and failing).
But in the case of Q4 2018 vs. Q1 2019 really what happened is they had significant issues with production, deliveries, and margins all at once driving down revenue well past anything they could correct by controlling spending.
Not to carry on about it, but any company can decide how much they want to invest in future growth, and if they will raise money to finance that, or if they will constrain their expenses based on their revenue and margins. That's not financial engineering or an accounting trick, that's just basic risk management and calibrating your spending based on your growth opportunity versus your cost of capital.
What we've seen in 2019, I think, is a focus on aligning the company for profit before the next push. I would not expect Tesla to have increasingly large profits each quarter, because it would be strange for them to sit on an increasing cash hoard ($5B+) when they have so many good ideas on how to spend it. Namely, building more factories for Model 3 & Y, getting into battery cell production, and whole new lines needed for the upcoming truck, and Semi production.
>What we've seen in 2019, I think, is a focus on aligning the company for profit before the next push.
They are not profitable. They achieved profitability this quarter, but have lost money every year for their entire existence. Is this different from Q3'18?
>because it would be strange for them to sit on an increasing cash hoard ($5B+)
I'm not sure they have a "cash hoard" for any longer than the 10 minutes of their quarterly report. Drawing on debt debt to increase cash balance doesn't affect the balance sheet.
>Namely, building more factories for Model 3 & Y
Where did building more factories, and staffing them, show up in the financial reports? How can all of the labour and capital expenses stay the same (or fall) while this occurs? It's confusing that a company can essentially double its productive capacity without it being seen in the numbers. Can you shed light on that?
Despite what some of the conspiracy theorists on this site say, I may be...anti-Tesla? But only because I think it's such a compelling story. I don't short it (I don't short anything), and I don't talk about it outside of this site (where I talk about it too much). I really don't get it: the financials are a mess, Elon is, imho, a jerk, and yet...
And this makes profit irrelevant how exactly?
But last year there were more tax credits, which front-loaded a lot of sales into a year ago, and they haven't released a new model this year. So this YoY decline wasn't that this quarter was unusually bad, it was that this quarter a year ago was unusually good.
What I see with the revenue decline, and if you look at sales patterns by the countries they have entered is a company whose number one vehicle, the Model 3, has peaked in demand. I don't see many levers for them to really increase that, and many of the company releases, like the Model Y, will only cannibalize more of that demand.
Focusing on net income was meant to keep inexperienced reporters from being bamboozled by IR/PR departments that sometimes went to crazy lengths to find something positive in the midst of a crummy report. (One tech company with dwindling sales, profit and market share liked to talk about its strong cash position.)
Of course, that was in the days before up-to-the-second updates on after-hours trading. So now reporters know the market's verdict within a few minutes of the earnings release. That leads to financial-results stories that hunt for something (earnings? revenue? next quarter outlook?) that explains the stock movement. In this environment, different metrics get different levels of prominence all the time.
I wouldn't burn up a lot of energy coming up with conspiratorial reasons why reporters pick different numbers. Inexperience and confusion usually are the simple reasons for 90% of strange decisions. This is probably true in a lot of areas.
If people would ignore fake news, we wouldn't have so much misinformation issues, people biting the onion and flat earthers.
If you want entertainment, read the interpretation given by a news organization with your preferred bias.
If you want real insight, read articles with conflicting agendas. I suggest Barrons and WSJ as the obvious conservative-agenda choices, and Bloomberg and Financial Times as liberal-agenda choices.
I think this is a good rule of thumb, but for famously volatile securities (Tesla, Bitcoin, etcetera) you are really just swimming in a sea of irrational exuberance and nobody knows how it's going to end. Maybe Tesla will be the world's richest company in 10 years. Maybe Tesla will go bankrupt in 2. I don't know, but looking at Tesla stock trends doesn't tell you anything other than how unstable it is.
YOU: Tesla doesn't have problems like other stocks.
How is this relevant?
> The firm also reported an unexpected profit of $143m (£110.7m) for the three months to 30 September. That beat forecasts, but was down more than 50% from a year earlier.
That’s why it’s so important to not passively intake information but be aware of and actively introspect when doing so.
If whole country pushes certain narrative would it make the truth due to sheer number of supporters?
PS: I'm not saying that WASP news are unbiased.
This is not correct. There are many market news items that can be directly attributed to another event. Boeing's numbers this week are directly attributable to the Max fiasco. The company and analysts agree on this. Why would you assert that it's "pure speculation."
I'm more thinking of the "Markets are down 1% today because of uncertainty associated with the China trade"-style reports.
GAAP Gross Margin 18.9%. That is before G3 comes online which will, I believe, have an upward case for margins. That is the big news here today. And that is really great news for Tesla.
Over $5.3B cash on hand. TSLA is in an amazing position going into Q4 and 2020.
Highly confident of exceeding 360k deliveries for 2019.
Just an amazing run up to the end of the quarter.
For added inspiration, check out a flyover video of G3 with the loading docks starting to fill up:
Full Disclosure: Long TSLA. No plans to sell in the next 9 years. I told my kids either the shares will pay for their college, or they may need some scholarships.
Flip the bozo bit xor conman bit on anyone using the former.
Assuming they are teens and old enough to think for themselves. I wonder if they felt safe and happily going out to play or working their ass off trying to get Scholarships.
I vaguely remember Tesla discussion on HN not long ago of it being cash strapped and was on the verge of bankrupt. ( Or something similar ). It is truly amazing how they managed to crush all naysayers and sceptics.
That is called fud. They omitted the part about Tesla being able to raise capital very cheaply and easily and about how Tesla is cash-flow positive. I think his kids will be fine. If Tesla were truly in dire straits as the media said it was, the stock price would have reflected that (single digits or low double-digits instead of $200-300/share) and Tesla would not have been able to raise money on such favorable terms.
I disagree that college is a scam. I went many years ago when it wasn't that expensive, I had a job and also scholarships, was able to pay as I went with some parental help. But it was nothing like today, where it costs 30k a year at a reasonable state school. My generation has not met our responsibilities to maintain our countries infrastructure including educational infrastructure. It doesn't help that much that I have argued and voted against the direction of making education ever more expensive (in part because of lack of state funding).
Probably not the best strategy to put essential money into a growth stock during an unprecedented bull run and expect the growth to continue for another 9 years. The likes of TSLA being at a higher price than today in 20-30 years are decent, but in 9 years? Very uncertain. See: every growth stock that hit a peak in 2000, and what happened in the following 9 years.
At the very least, it's probably not the best idea to tell your kids that this is what you're doing.
Musk got in trouble for tweeting that he’d hit 500,000 this year.
“Barring unexpected challenges with Gigafactory Shanghai, we are targeting annualized Model 3 output in excess of 500,000 units sometime between Q4 of 2019 and Q2 of 2020.”
Musk later tweeted he thought it would come in at the earlier Q4 side of the guidance.
500k annualized is 9,600/wk. They past 7k/wk with Fremont and want to be at 3k/wk in GF3 by the end of the year.
I think they will guide a range of 600-750k units in 2020. It depends how quickly they can get GF3 up to 5k/wk and how much additional capacity they will bring on for Model Y in Summer 2020.
Also,Tesla can raise debt so cheaply and so easily, that its stock actually went up when it did a secondary offer. Let that sink in: Tesla stock went up despite diluting itself, which virtually never happens. That’s like being paid to borrow money, which give you an idea of how advantageous of a position Tesla is in. Tesla is possibly the only company in existence that gains value when it takes on debt. Just goes to show how media keeps being wrong about Tesla running out money being a concern. In theory they can raise as much money as they want and the price won’t go down.
Ford and GM need to spend billion on adverting a year to make people aware their new models exist, let alone want to buy them. Tesla gets free PR though its spokesperson and CEO , Elon Musk, and his Twitter account and its captive audience of millions of followers, which is way better than some crappy, million-dollar TV ad that 99.999% of viewers will fast-forward, forget, or ignore. And then the media is glued to Musk's twitter account, so anything Musk tweets out is amplified, all for free.
Tesla is going to go much higher. I think $1000 share within 4 years is easily doable.
Their market share can only go down. All of the car companies have or are releasing cars this year/next and are significantly more capitalised. Some of these cars are superior to Tesla e.g. Porsche Taycan and their ability to share platforms between brands helps to amortise costs.
As we've seen with Summon their FSD program does not look like coming out anytime soon and their inability to be profitable means they can't invest in it or even fundamentals like product refreshes.
Depends on your metrics. IMO, the Model 3 Performance is the superior car. Half the price, quicker, longer range, and has access to the largest fast-charging network in the country.
EDIT: Found this article:
https://insideevs.com/news/367599/video-tesla-model-3-track-...
So it is doing significantly better than what I originally stated, although apparently you're only going to get about 30 minutes of driving before you have to recharge. That takes a few minutes with gasoline, and a few hours with electric (at 80% you won't even last the 30 minutes).
There are some interesting comments on that article, someone calculates the car will only last about 15 minutes on a really demanding track.
Track mode pre-cools the batteries when you enable it (among other things), which allows you to go for longer, but it only delays the inevitable.
I'm interested to see if the Model S Plaid edition and Roadster 2.0 have better cooling to make them better on a track.
https://batteryuniversity.com/learn/article/types_of_lithium...
The problem with NCA is it is more volatile, and if it overheats it literally explodes violently. I am not saying this is insurmountable, but looking at the progress Tesla is making versus the reality of how long you can drive the cars hard, I think Teslas might never be great track vehicles.
Although every EV car will have this problem to some extent, so it's not limited to Tesla. If Porsche can't figure out how to cool an EV well, then it's a long way away because they are famous for their engine cooling technology.
The Tuscan also quickly runs out of charge at top speed and then be forced into a car or battery swap.
PS: At the extreme Indy cars average 1.92 MPG, batteries are just a poor fit for any kind of endurance racing.
OP said the Model 3 was a superior vehicle, I was stating why it might not be.
> The Tuscan also quickly runs out of charge at top speed and then be forced into a car or battery swap.
The meat of my comment was about batteries overheating, not being drained. We have no idea how well Porsche will cool their batteries in their car until someone has had a chance to test it.
> PS: At the extreme Indy cars average 1.92 MPG, batteries are just a poor fit for any kind of endurance racing.
This is a disingenuous comparison. We are talking about street vehicles you or I can buy and drive on public roads, not track-only vehicles that cost more than a house anywhere but the Bay Area.
I also think it's disingenuous to call a half hour of racing an endurance run. I think it's more accurate to say batteries are a poor fit for racing with the exception of drag races.
(the Volkswagen 2018 full drive)
No, that is definitely not the hope. The Taycan weighs over 5000 pounds. It will not be a track car.
The hope is that the build quality will be typical Porsche. Whereas the build quality and ergonomics of a Tesla, well hasn't been seen for 30 or even 40 years, at least not in the West.
On the other hand Porshe is still luxury brand, so I can imagine the interior being more elegant.
The fact that "near 2020" is now "this year or next" doesn't change the rest of the prediction. I would therefore be willing to take a bet that most traditional car companies will be out of the car business in not very many years. This means that there is a giant market share to be captured by new car brands.
Tesla is the best known here. But I would also suggest keeping an eye on the many Chinese brands. I consider, for example, SAIC more of a competitive threat to Telsla than Porsche.
I do think it will take a long time for the big 3 to die, they will probably go all trucks and big SUVs (as Ford has essentially done already), and leave the car market to EVs.
However, I do not think that Tesla will be the big winner. They will be much like Apple and prosper, but Nissan with the Leaf (also Renault with the Zoe in Europe) and now Kia and Hyundai with their small electric SUVs are perfectly placed. They have the big manufacturer experience and millions of miles on their solid EV platforms. They could create an EV Camry/Accord-killer tomorrow--actually, I'm surprised they haven't already.
Edited to add: this is buried in the Taycan thread, and I wanted to comment on that too. The Taycan is an awesome car and will give Tesla's model S performance a run for their money. But that's it. Porsche is a niche car-maker, and track enthusiasts a niche of that niche. I suppose that being owned by VW (or is it the other way around) just means the technology and know-how will trickle down into the mass market, but that hasn't happened yet, and Tesla is already there with the Model 3.
The fact that they haven’t tried is the root of the problem. And, I suspect, the problem that will continue to plague them for at least a few more critical years.
Tesla was very careful to not have dealerships, and fought several legal battles over the issue. But the traditional manufacturers have no such choice.
The only way that could be true is if they had 100% of the market.
Which is far from the case. Most cars in the global fleet aren't even electric yet, let alone Tesla.
But I agree that, as an investment, Tesla stock prices are something the company has to grow into not something that is reflective of in hand performance - and there is always risk there.
When you currently hold less than 2% of the market, this is far from a certain statement. Their share is as likely to increase as their competitors, though the rate of increase is certainly open to debate.
> As we've seen with Summon their FSD program does not look like coming out anytime soon and their inability to be profitable means they can't invest in it or even fundamentals like product refreshes.
Considering that both S and X are getting a major drivetrain and battery refresh next year, I don't see how you can say that they aren't investing in product refreshes.
I do not have a positive opinion on their FSD efforts, however, I will say one positive thing about their approach. They seem to be accomplishing at least as much as some of their competitors (for example, Ford) with far less capital investment. I see no reason why that trend won't continue.
Why don't Tesla's current cars destroy the Taycan? I think it's fair to say that at this time Tesla's a year behind Porsche in the performance EV stakes. Here are some of the Taycan's performance test results which Tesla has so far been unable to match:
- 24 hour endurance run. 3,425 kms covered in 24 hours: https://www.youtube.com/watch?v=4jSG_10_JRg
- Onboard video of their 7:42 run at the Nurburgring: https://www.youtube.com/watch?v=8m31EgQkswg
- Acceleration and handling comparison to the Model S P100D: https://www.thedrive.com/news/30467/watch-a-porsche-taycan-t...
- Model S Plaid's Nurburgring results: https://www.thedrive.com/news/29946/porsche-taycan-laps-brok...
And no onboard video yet from any of Tesla's Nurburgring runs unfortunately. It's also disappointing that Tesla isn't bringing any of its current cars to the Nurburgring.
> the new roadster will literally lap it
That seems unlikely. To literally lap the Taycan the new Roadster will need to achieve a 3:50 lap time.
The current electric lap record is 6:05 held by the Volkswagen ID.R: https://www.youtube.com/watch?v=c3w3fVS-SgQ
And the overall record is 5:19 held by the Porsche 919 Evo: https://www.youtube.com/watch?v=PQmSUHhP3ug
The Taycan is a performance sports car. Why are you surprised that they emphasize its performance and the repeatability of that performance? It's what the car is built to do:
A completely unimportant toy.
They did all right.
I’m not a huge Tesla fan, but the idea that they might become an enormously profitable company without turning into one of those conglomerates that sells cars at every price point seems reasonable, especially in an age where the margins will be in tech and services rather than in selling steel bent into the shape of a car.
Are you going to ignore the fact that the market size can only go up?
Also, they just turned a profit. Did you write this comment before they reported?
If anything, Tesla would win on non-performance factors like autopilot. The whole point is that Porsche made an electric car for their performance-focused clients who otherwise didn't want a Tesla.
That isn't the practical reality:
https://www.thedrive.com/news/30467/watch-a-porsche-taycan-t...
https://www.thedrive.com/news/29946/porsche-taycan-laps-brok...
A Nissan Leaf can also hunt down the Model S on track:
https://insideevs.com/news/359903/video-nissan-leaf-beats-te...
A modified, race prepped, brand new 2019 Leaf beat an old, stock Model S of unspecified mileage. Given how quickly TSLA has been advancing their powertrain and battery tech, leaving those details out is misleading at best.
What were the magic modifications that made the Leaf such a monster on track?
> Given how quickly TSLA has been advancing their powertrain and battery tech
Ah. The car is "old", Tesla is advancing so fast, and the "old tech" no longer matters.
So which models and model years of Tesla vehicles are now garbage old tech and should be avoided? Everything prior to 2019?
https://www.carscoops.com/2019/10/teslas-smart-summon-doesnt...
It all comes down to timing when you incur/pay expenses and when you record sales. Tesla has openly engaged in this in prior quarters, which is why their stellar quarters are usually followed by abysmal quarters.
Cooking the books would involve changing the actual numbers. Not many people are alleging this.
When do I book this x million of parts? I could book it even we reserve the shipment (accelerate expense) or when we receive the invoice (standard) or when we pay it several months late (defer the expense).
And that's just one transaction that feeds into one line item. There are a lot more opportunities to play with the financial numbers.
Cash flow and cash on hand can be easily manipulated by not paying bills.
Net Income can be manipulated one-time items.
This will all come out in the 10Q, but in the meantime, Elon realiszed that people will not lend money to cash-burning "startups", so we get another "profit".
I didn't use the term "cooking", but I agree, which is why I don't take the numbers at face value.
Also, why does Elon get a pass with the China stuff? Here we are in a trade war with this country, who consistently attacks our IT, economy and culture, who are commiting atrocities in their own country, and yet Musk is given kudos for building factories and raising money over there from the "save the planet" crowd. Astonishing.
TSLA is one of my few "emotional investments" of companies I've invested in because I want it to succeed. IMO its share price is highly speculatively priced, but I expect they'll eventually be able to maintain profitability to justify it as they're best positioned to benefit from an EV (+ renewable energy) future.
I'm long TSLA and didn't expect them to achieve profitability before Shanghai Gigafactory (+ Model Y) is in full production, so this earnings release was a welcomed surprise. Happy to see them continue to grow and further invest in the future.
BMW 1: 173” x 69”
Model 3: 184” x 72.8”
The BMW 1 series and of course the best-selling VW Golf are both quite a bit smaller than a Model 3, still set up to 5 and also driven at high speeds exceeding 200kp/h over here. So there would be some market for a more compact Tesla.
But I think Tesla has currently enough on their plate and enough upcoming models, going into smaller (and cheaper) models will make sense only when they have perfectioned their manufacturing chain as the margins will be smaller.
I was going over the sizes of the S and 3 with my Dad in Australia, and it turns out the 3 is the same size as the most recent Ford Falcon, one of the biggest Sedans in Australia!
The 3 is NOT small in every country in the world except America.
Note that interior cabin cubic feet and total storage cubic feet will tend to be significantly higher in an EV for the same exterior footprint.
An example is https://en.wikipedia.org/wiki/I-35W_Saint_Anthony_Falls_Brid..., in which they were able to skip the typical three year timeframe and condense it down to a bit over one year from collapse to opening. For a 10 lane, 1,200 foot bridge with a 500 foot main span, that's not bad!
When https://en.wikipedia.org/wiki/Interstate_85_bridge_collapse happened, six sections of road were replaced in 43 days, likely a lot shorter than it would have been otherwie.
In normal circumstances (e.g. when it's not an emergency), no, and that's by design. If we needed to, it could absolutely be done.
Or it might just be that most of our growth isn't in things we build, and instead in intangible services.
Probably both.
But I also often come to think: It's just the power of never ending supply of cheap, un-unionizable labor [1], with no political self-determination and thus close to zero binding building restrictions nor environmental ones.
[1] of course, in a socialist state there is a union. One, and only one, that is working for the government.
https://en.wikipedia.org/wiki/Foxconn%27s_Wisconsin_plant
Even the Chinese can't build anything in America.
There's been substantial uncertainty in Foxconn's genuine commitment to the project.
It's been heavily reported on that Foxconn is notorious for failing to follow through on its promises.
e.g. https://www.cnbc.com/2017/07/27/heres-whats-worrisome-about-...
There's been some great podcasts on the topic. Last I heard Foxconn kept changing their plans of what would actually be manufactured in WI. Initially it was high-tech state of the art stuff, last I heard their plans had shifted to manufacturing somewhat legacy flat panel display technology. I stopped following the story sometime last year though, at the time it sounded like Foxconn was really shafting WI.
It benefits Foxconn to drag their feet in executing on what amounts to nothing more than a handshake deal. The more WI invests in that project the stronger Foxconn's position becomes.
For example, they're in the process of purchasing a property in Eau Claire, have delayed their plans for madison and green bay, and have a stated goal of a 2020 opening for the data center portion for the mount pleasant office building:
https://www.datacenterknowledge.com/north-america/foxconn-s-...
Of course, they're getting a lot more in tax breaks per job created in WI than the original plan was (along with fewer total jobs expected), and it's taking longer, so people are understandably upset.
I'm wondering if the new plans- datacenter, plus "innovation centers" and basically white collar service jobs- aren't a better long term deal for WI anyway. We tend to lose a lot of those types to Chicago and Minneapolis / St. Paul, and if they actually pan out might slow that drain. The 13k manufacturing jobs certainly would have been nice, nonetheless.
https://reason.com/2019/10/24/wisconsins-massive-foxconn-boo...
How did Tesla cut fixed and variable costs so much? I want more details than this. This is extremely impressive!
And what is an example "higher fixed cost absorption" in this context? Seems like most of the fixed costs here would be the already established factory and other fixed costs would be minimal.
Its also surprising there was such a big opportunity for variable cost savings over a short time period of 1 quarter. Presumably this is from less manufacturing waste, higher quality output, and slightly higher production rates.
Tesla is certainly a rare company that can find ways to increase margin this much, but its extremely impressive to see this happen over 1 quarter instead of 1-2 years as I was expecting.
$143M GAAP Net Income (vs $74M loss expected)
Trial production started at Shanghai Gigafactory
Model Y production moved forward to Summer 2020
Sorry. meant model 3.
Consistently biased information is even better... it contains exactly the same data as unbiased information.
I mostly mean: why are people saying "He bumped up the Model Y launch a couple months" when both deadlines were sort of irrelevant. They are years behind on others.
If you compare to the Model X ramp, which was delayed by what, 2+ years, they have gotten much better at predictable ramps.
So the takeaway from the after hours trading is not necessarily these results are good in a vacuum, it is that people were surprised that the results were as good (or perhaps not as bad) as they are.
Disclosure: I hold no TSLA, and don't own any of their cars. I just like dogged persistence in the face of impossible odds.
Amen.
I think it's on page 24, but I don't know how to read it.
Ycharts says 13B - https://ycharts.com/companies/TSLA/total_long_term_debt
As of the end of June, 2019, they had $12.159 Billion in long term debt, not including vehicle leasing.
You can view the debt individually with interest rates and maturity date on page 23 of my attached document
+ Adjust earnings per share of $1.86 vs. expected losses of 42 cents per share (major reason)
If you went to their website, you saw that they were planning to have a $35,000 vehicle for sale by 2018, with rapid charging stations set up across the country (forming a corridor for coast-to-coast travel), where Tesla owners would be able to charge for free. And furthermore, the leadership - Musk - had shown his worth when he put his last dimes into PayPal just a few years earlier.
I said it was a good company to go long on for a three year timeline. (They didn't listen, I was only 17 and had never invested in my life).
It might be time to give them another examination.
Never forget opportunity cost while investing!
That definitely grinds my gears a bit when it comes to Tesla. The cars are fantastic, but the equity isn't quite the product. You can dismiss the haters, but that volatility is pretty intrinsic to Tesla.
They're doing a lot of great things, but that alone does not a great investment make, and I think that doesn't get discussed very honestly. One thing it does have going for it, very low correlation.
Yeah we have the benefit of hindsight, but that's what we're talking about. If you're just evaluating past performance starting from any point in 2015, Tesla generated average returns, was pretty uncorrelated (which is great), and was way more volatile than the S&P. That's not thrilling.
Established players tend to have the upper hand for sustaining innovation. Sustaining innovation can start at the top of a market and work down.
Disruptive innovation favors the upstart. However, disruptive innovation starts at the bottom of a market and moves up.
The more I see what Tesla and other car companies are doing with EVs, the more it seems that the electric car is actually a sustaining innovation.
hopefully they'll prove me wrong, and come out with a $15k car next year or something.
in the meantime i'm holding my hopes up for the upcoming crop of ev's with sub-tesla prices from all the usual suspects.
The production of cars like the Hyundai Kona EV or Jaguar i-Pace was seriously constrained by the lack of proper li-ion battery manufacturing capability.
>We also expect to gradually release nearly $500M of accumulated deferred revenue tied to Autopilot and Full Self Driving features.
In case anybody has been watching the Tesla Smart Summon demolition derby videos on YouTube and is wondering what on earth Tesla was thinking when they pushed the feature out in its current state.
I've read through the financial statement. They're fine, but I'm scratching my head over why it warrants 20% jump? Anyone have a good explanation?
TSLA is particularly volatile because they run the risk (and many analysts believe) that they will run out of cash before they can achieve profitability, so their share price have carried a lot of risk that have hampered its price from its $400's highs. This surprising profit effectively significantly weakens the risk giving investors more confidence they'll continue to be around for the long term to dominate the EV market.
They have a 'headwind' in that they're selling less expensive cars, leasing more, and continuing large expansions in manufacturing (gig 3) and service.
Nevertheless, they've reigned in costs and are putting up disciplined profits just the same. Their results are aggressive, but calculated. It's a far different situation from the 'bet the company' roll-out of the Model 3. They weathered the storm, and are doing what they can to provide confidence to investors.
The last earning report was their first indication of being 'through the woods'. This more-or-less confirms the trend, so you can start looking ahead. Tesla has several very interesting projects going forward, and now it looks like they have the core business they need to sustain that.
It's very easy to read this as an inflection point.
The last inflection was the Model 3 announcement. Things were looking optimistic, and share prices reflected that. But the Model 3 launch was anything but smooth, and there was a reasonable argument to be made that Tesla would fall, not merely stumble.
My guess; reasonable numbers from China will drive a new ATH.
I, for one, wish there was an option for a cheaper Tesla without all the self-driving capabilities, much of which is useless now and will, I expect, become obsolete before any actual self-driving is commonplace.
Also increased deliveries is a good thing. Guess I have to read the whole thing tomorrow in detail.
That's a great idea for several reasons:
1) Of all parts of the car (ignoring autonomy-related stuff), Tesla is best at the battery and powertrain. They have a sizable efficiency advantage compared to almost anyone else. By supplying this key part, they should be able to maximize the value of this advantage. Other carmakers are probably better at super high luxury interiors or low cost interiors (although Tesla has interesting ideas and a nice aesthetic--which is subjective and thus could limit their demand, which this move avoids).
2) It indirectly gives them access to more EV credits. Tesla's credits are all but expired in the US. They will be all gone after Q4. So they'd be at a huge disadvantage to a company like VW who owns a bunch of "manufacturers" which each have access to their own set of EV credits but could use a common powertrain platform. By providing powertrains to other car companies, they can indirectly pull kind of the same trick.
3) It means they can make them compatible with the Supercharger network, thus spreading the cost of developing and expanding that network over more companies and giving them an economy of scale. At a large enough scale and serving other carmakers, they could actually make some money this way.
4) It allows them to focus on automating this aspect of electric car manufacturing. Their sizable R&D budget for powertrain can now access tens of millions of vehicles per year instead of just a few hundred thousand vehicles. It also maximizes the benefit of streamlining cell production and bringing it in-house (although I think it's possible Tesla may keep the higher performance cells for their own vehicles and use Panasonic or LG Chem cells for 3rd party vehicles, like they've done with Powerwall and are doing with Shanghai Model 3). Fully automating production of the powertrain/battery would become far more plausible at two orders of magnitude greater scale.
5) Allows them to make the biggest impact on climate emissions as fast as possible. Scaling up carmaking is hard. Focusing on the battery and powertrain is something they're already good at and can significantly help reduce global emissions.
6) Allows them to decarbonize their service vehicles and other logistics vehicles (perhaps even mining equipment), making a better argument about how their embodied emissions are actually very low (and falling).
7) It also helps other carmakers which helps Tesla curry social and political support (instead of the "Tesla vs the World" status they currently seem to have).
They provided powertrains/batteries to other companies in the past, like the Smart car or Toyota's electric Rav4. Back when it looked like Tesla might be in financial trouble, I considered this strategy as a significant backstop in case things went south. But deploying it now is probably an even better idea, now that they've scaled up to the point that they've used up all their EV credits.
That's all we need to know. It's time for Tesla to move into more countries.
Except for the complexity involving taxes and fees, if your money sits in Tesla shares for a long time and the stock stays flat, then you've lost money. Both in terms of opportunity cost and through inflation.
And this is irrespective of when you bought them.