Tesla still lost $800 million this year and has never had a profitable year, on both record car sales and record regulatory credit sales. What about that indicates sustainability?
From that document in the FINANCIAL SUMMARY section there are these quarterly profit/loss number:
Income (loss) from operations
Q1-2019 Q2-2019 Q3-2019 Q4-2019
-522 -167 261 359
But for the whole year that was only a loss of 69 million dollars.
I think what the market likes is the Tesla cash position.
If you look at those it would appear Tesla is no longer burning cash.
Cash and cash equivalents
Q4-2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 QoQ YoY
3,686 2,198 4,955 5,338 6,268 17% 70%
How does this stack up to last year, and forecasts for next year? If they were in the hole $120MM last year and now only 69, with forecasts for ~20MM or less next year then there is a clear road to profitability and I might be willing to do the Long thing.
As to subsidies, governments are pushing ev's harder and harder. The EU has continually-increasing fleet standards that can be met only by adding more ev's, and China has continually increasing ev production standards. Ev sales are going to keep increasing, and Tesla makes the best ev's. Sales, revenues and profits are going to keep going up.
Companies are rarely production constrained. Many claim they are, but the fact that Tesla sales in their two largest markets declined doesn’t indicate to me that production is their number one issue.
The nice thing about this disagreement we are having is it will be settled by what happens in the next year. I say Tesla's sales will go up strongly now that it has another factory. I take it you think they won't, and all that new capacity will go unsold.
And I would say Tesla’s revenue growth will start to flatline, yes, as the last two quarters have shown.
Their capital efficiency has markedly increased.
To put it less glamorously, they burned boatloads of money chasing “alien dreadnaught” style fully automated production, and after recognizing that failure (better late than never) they now find they are able to build out new production lines at a fraction of the first line’s cost.
But more to the point, what exactly do you think Tesla should have been spending its money on that it didn't?
And let add to my original comment that Tesla also has the Semi going into production later this year, and recently brought out a greatly improved version of its solar roof, and is working like crazy on self-driving.
But back to my question: what should it have been spending its money on that it didn't?
Capital Expenditures are what a company spends on land, buildings, equipment -- all of those sort of long term assets. Depreciation is how much the value of those assets decline over time with usage and would eventually require maintenance or repair costs.
Usually, when depreciation exceeds CapEx, it means the company isn't spending enough to maintain their current assets, and this will eventually catch up to them. For growing companies investing in the future, CapEx is usually a great deal more than depreciation, since there will be a large amount spent on future assets.
> But more to the point, what exactly do you think Tesla should have been spending its money on that it didn't?
> And let add to my original comment that Tesla also has the Semi going into production later this year, and recently brought out a greatly improved version of its solar roof, and is working like crazy on self-driving.
> But back to my question: what should it have been spending its money on that it didn't?
My point is that the PR statements that Tesla releases don't match the financials. It's easy to announce that a factory is being built or a new car is going into production, but we should be extremely skeptical of these statements when they aren't backed up by audited financial information.
Generally when investing in a company you should look at their financials first, as they are going to be the most honest, and PR statements/rumors last, as they will be the least honest.
Oh dear, are you saying that Tesla did not actually recently open a new factory in Shanghai, or start a new one outside Berlin? In spite of all the news stories and announcements by the governments in each of the countries. And ditto it has not been developing the Y in spite of all the reported sightings? Or that the new version of the solar roof did not go into production, in spite of all the reviews of it, and all the people who have said they have ordered one? It is all an extremely elaborate hoax? And even when their latest quarterly report discusses all this?
You know, when someone is so far gone into conspiracy theories as you appear to be, there is no reasoning them.
Companies exaggerate in their PR statements. It’s very easy to claim a factory is complete but not have meaningful production. It’s very easy to claim that the Model Y is just around the corner. It’s apparently very easy to bilk investors that solar roofs are beyond a concept phase for three plus years. That doesn’t mean they are.
It’s not a conspiracy theory to want a company to produce audited financials that show that they have done the complete investment in all of these projects and they aren’t vaporware.