Tesla Makes More Money Trading Bitcoin Than Selling Cars

> Time is more valuable than money

This is one of those "does not compute" statements that's sort of like dividing by zero. Money buys time, and time has value (https://www.investopedia.com/terms/t/timevalueofmoney.asp), which is measured in money.

It's why we try to incentivize long term investment, because without such an incentive, consumption now is better than consumption 5-10 years from now. We saw this happen before "long term" carve outs began proliferating in various states' tax codes.

> Time is more valuable than money and taxes should reflect that.

I understand the sentiment, but it literally isnt true. If it were, then noone would accept a job since they'd rather have the time instead. At the very least, there is more nuance to be observed here.

This perspective is strongly endorsed by Pikkety's work, which shows that returns on capital outperform returns on labor. Further, there is a trend for higher levels of capital to not just produce proportionately higher returns, but also higher percentage returns. E.g. Harvard's endowment fund earns a higher percentage return than the smaller endowment funds of other universities. This disparity may be because higher amounts of capital allow owners to not only employ more skilled financial resources, but also to cherry-pick investments and negotiate superior returns to an extent that is not possible for owners with less capital. The disparity in returns on capital vs labor result in a concentration of capital in fewer hands (inequality) and this is linked to reduced overall productivity. Piketty proposes a tax on capital (not just on a capital gain, but on the balance) to reverse this. This is undermined by the fact that it is regarded as an impossibility (politically), kind of like proposing that we all just learn to levitate to do away with polluting aircraft.

At least, this should be how it's done in a low interest rate environment when investors are already desperate to invest in whatever they can get an above-inflation return on.

Replace "capital" with "investment"

Or imagine the extreme, where capital gains was taxed 100%. No one would invest, we would all be essentially hunter gatherers. There would be no capital appreciation allowed so you would not be able to invest in anything in hopes of making a profit.

Capital is how you build a better future

There's probably more governing cost to labour than to virtual jobs. In NZ builders pay more towards healthcare than coders do.

What taxes favor day trading commodities over labor?

There's a whole "loss prn" subset on wsb and some crypto subreddits where people proudly show their losses, the bigger the better.

And lots of suicidal kind of messages when the whole market crashes. So I'd say losses are as vocal as wins depending on which forums you go to.

I’m often thinking about the same thing, but not only in tech.

Like why this photo filter app boy/girl is super rich + has a lot of free time, and my friend nurse has very little money and works all the time?

Making a silly app that runs a filter over a selfie is a short easy project for a medium experience dev. Making medical image processing requires way more skills and knowledge of various topics.

It has nothing to do with the market and everything to do with ease of creation.

If you can connect workers to employers in ways that wouldn't have been connected otherwise, you improve the conditions for the worker and the employer.

Don't underestimate the value and utility of CRUD apps.

Society has been like this for a long time.

Automation and economies of scale has made it much more efficient to produce necessities. Yet society has failed to convert that into allowing the low classes to have more free time. Everyone needs to do some useless job to survive even if there is nothing that needs to be done.

Imagine filing a tax report where all your housing, food, car and clothing expenses are listed as operating expenses and are thus not taxed. In addition to that, most of your income went to an Irish subsidiary and your total taxable income this year is $150, taxes at 20% because "I identify as a C-corp".

No, you are instead explicitly forfeiting substantial portions of the only life you’re ever going to get.

You’re not risking your principal but you can be risking your life. Who ever died trading on the market? My wife had a friend who died last year from COVID at 33. His last tweet was about how his dick manager at T-Mobile was forcing them to come into work despite the global pandemic. A life wasted in the name of selling cellphone plans. T-Mobile stock hit an all time high today tho.

Lack of labor should accelerate automation.

> Unpopular opinion but the central banks are the main source of inflation.

I mean, that seems obvious, there can't really be inflation if the money supply doesn't increase, can there?

If the money supply stays fixed, then some people will save/hoard money. Some people will also be more able than others to acquiring money (possibly because they already owned assets/rental property), maybe they were born rich. The amount of money that is circulating will automatically decrease. That tends to produce deflation.

The problem is that if you have deflation in your economy, it also increases the incentive for people to save/hoard money even more. Why would you spend your money today when it will be worth more later? You have a feedback loop where the amount of money circulating just keeps decreasing, and so prices automatically have to go down.

The Fed's primary concern with interest rates is the US Government going, essentially, bankrupt. The stock market is much further down the list.

4% * $50 trillion = $2 trillion in just interest per year. The US Government will be at roughly that debt level perhaps within a mere 12 years at this point (assuming one normal recession in that time).

So as you can see, the US Government can afford no meaningful climb in the average interest rate it's paying on its swelling debt. Normally as a massive borrower gets more shaky in its finances, the rate it would expect to pay would climb at an accelerating pace with its fiscal implosion. To avoid that fate, the Fed has to step in and become the primary buyer of the garbage US Government debt (which will be endlessly recycled as they will never pay any of it down now). The financing problem with the US Government is so enormous at this point that there are no other nations or private pools of capital large enough to keep up with it on a consistent annual basis, currency debasement - eating the value of anything held in dollars, including most US assets - is all that is left to fully fund the government (and the entitlement costs will only keep spiraling higher this decade and next).

The stock market is a laughably trivial concern next to that problem. Which is also why one of Biden's immediate priorities is raising taxes (if they don't, the Democrats know it'll put the welfare state & entitlement programs they've put so much effort into building over many decades into jeopardy sooner (collapsing demographics may take care of that regardless)).

>Central banks printed billions to "save" the stockmarket.

I agree with most points but that wasn't the main motivation. It was to keep the economy going in terms of people spending money when much real production was stopped due to covid. Now covid is mostly over, at least in the west, and spending is rising leading to inflation, bank printing will probably stop and the stockmarket fall. Which is not necessarily a bad thing.

It's not the same situation at all. The car industry is a known quantity in terms of sales potential, margins, costs and possible overall scale.

Tesla will never exceed today's version of Toyota or VW in terms of size. There's your cap. And that's all before the market is entirely flooded with EV competition.

AWS is a better profit machine than anything Tesla will ever produce. Tesla will never own half the automobile market, nor will they ever have AWS operating income margins (Tesla's operating income margins are typically 5-10% in a good quarter, and that's normal for the auto industry; which is half to 1/4 that of AWS). That's the reason Tesla will never have an Amazon-like result. It wasn't retail that made Amazon worth so much.

There's nothing special about electric cars, there's no magic that will expand the car market by ten fold just because they're EVs; there's no super margin jump that makes electric cars two or three times as profitable compared to selling a $45,000 BMW or Mercedes.

AWS can generate $20 to $30 billion in operating income on $100b-$120b in sales. It's very likely to get there at this point. There is almost no scenario where Tesla makes that much money selling expensive electric vehicles (and solar panels are a horrific business for generating profit, as is the battery industry). Tesla needs tens of billions of dollars in annual profit to float its market cap (and that's just to support where it's already at).

I was defending Tesla when a zillion people on HN were saying they could never mass produce the Model 3. I was right. I was defending Tesla when a zillion people on HN were claiming it was going to go bankrupt. I was right. Before that I was defending the Model S in its early days. I was right. And I'm right about this too, and it's very obvious Tesla's just going to end up as another automobile company (best case scenario). There's nothing special about being the next Mercedes, it isn't worth $500-$900 billion to be that.

To me this reads like minus credits and bitcoin, they'd have to scale down R&D in order to break event which would probably push back FSD and delivering on all of their pre-ordered promises again? Which I would assume increases the risk of people canceling and registering as negative revenue? How "normal" is their cost of revenue and sales/admin/overhead in the car industry?

seems a little goofy to put credits at the top and not in order of size like the rest of the chart, but that's my only criticism. It does a good job illustrating that the fact that profit ~= credits is largely coincidental

Tesla had a 24% gross margin in Q1. They made a massive amount of money selling cars. They also had a massive amount of R&D and capital expenditures. The emissions credits required R&D and capital expenditures in prior years so you can't say that the R&D and capital expenditures should only be charged against vehicle sales and not emissions credits.

They also spent $1,491 million on R&D. "Much" is more correct than "almost all", which implies that profit is just the leftovers once expenses are subtracted.

Profit and expenses are choices; the fact that a firm puts all its revenue into SSG&A and R&D does not mean that they can't be profitable. If Tesla's revenue decreased by $533 million, they would probably still target $300-400 million in profit by adjusting their spending. They would do that because even at a lower revenue it still benefits them to report profit, and that benefit is still there even if they spend less on other things.

If a $533 million decrease would not lead to $0 profit, then it doesn't make sense to say that their profit comes from credits. It only makes sense to say that 7% of their revenue comes from credits, and that a significant (but not all, and probably less than half) part of their profit comes from credits.

Only an issue if you're an investor. The expectation is eventually that revenue stream will dry up. The question is if Tesla will be able to build it's other revenue streams up to replace it.

I believe most of the credits so far are california credits.

Other countries round the world are designing different CO2 reduction strategies, often without the ability to trade credits.

I think that's because Wall Street believes it when a company does that much more revenue.

Those are estimated/annualized upper bounds.

It seems unlikely that the carbon cost of the transaction even slightly approaches the amount of profit they've made.

Because he’s making his stance public with the knowledge and expectation that his followers will act on it and, in acting on it, will change the price.

I think it's because no other properties of it have changed in the meantime, so one might think it's either arbitrary and irrational or manipulation and rational.

Because Tesla or him are in fact not selling their Bitcoin assets. He might as well be buying bitcoin or another crypto asset now.

I suppose you can call it moderation; it lost 1/3 of its worth (along with 1/3 of the life savings of those people.)

So simultaneously a joke and market manipulation?

People are allowed to change their mind on if they like the coin, right?

The party may or may not be over. We'll see. WSJ's sentiment on the company has been so negative for such a long time, that at some point between now and 100 years from now, they might finally be proven right. Once they finally get it, they will be looking back at 100s of billions worth of wrong financial advice that they've signaled with their negative titles.

The point I would drive home here is why trust a paper to give future guidance if their past guidance has been so spectacularly wrong? Again, the brand of the company alone was a strong signal that you never saw people write about.

It's important to state which part of Europe you're referring to, because sentiments can be quite different from one country to another. I have family in two European countries, one Western and one Eastern, and in both of those societies Teslas are even more prestigious than in the US because the charger infrastructure is not quite as developed - which means that if you have a Tesla, you likely also have an ICE car for longer trips. As you know, having two cars in Europe is quite unusual, so saying I drive a Tesla carries even more significance than in the US.

> True, it’s more akin to driving a prius than a comparably priced german car. Especially when looking at the higher end Tesla models.

I don't know the performance of the Prius you have driven, but a Model 3 is not on the same league with any Prius I've driven, and will leave any similarly priced BMW in the dust, performance-wise.

I know what you mean, but there are ways to estimate the brand value. Eg: In 2020, Coca-Cola's brand was valued at 84 billion U.S. dollars. While I couldn't find any reliable values for Tesla, the same methodology should apply here as well. It just comes to show to what extent the market has a blind spot for what certainly is a huge asset.