Tesla Beats Delivery Forecast with 52% Quarterly Surge
bloomberg.com
bloomberg.com
They are cheaper than Maseratis, which I've also been seeing a lot of lately. When looked at this way, people are willing to take the risk on the cheaper car. Even so, if car sales are a zero-sum game, I think BMW is the one being hurt by them the most.
I was under the impression that they have less service costs due to fewer moving parts. Or maybe it comes out all the same since there's less to service, but when something does need servicing it's more expensive than usual.
Tesla does not have a transmission, so there's one thing. Also no muffler / exhaust system.
Tesla does not have an IC engine, but what's likely to fail on an IC engine? A bunch of things that fail often are cheap ($100 - $200): starter battery, ignition coils. Some wear items are often more expensive because difficult to replace: timing belt, water pump, alternator. It's possible but rare that you could have something really go wrong: cracked cylinder head: maybe $2000.
Now what does Tesla have? Electric motor- maybe same failure rate as an alternator? High power electronics- maybe same failure rate as something like an ignition coil? Battery- very expensive wear item.
What's likely to be cheaper is long-term repair costs. No muffler replacements, no leaking head gaskets, no timing belts making an attempt at freedom.... But whether that actually works out remains to be seen.
When he took the Model S in they added that metal plate to the bottom (from that one crash that got a lot of press), swapped out all the door handles for new ones because people online complained that in rain sometimes the old ones wouldn't retreat into the car and changed a few other things I'm forgetting (at no cost).
I can't really think of another car company that proactively adds a bunch of stuff to the car for free as a part of routine maintenance. Of course this is in addition to all of the over the air software updates too.
Adding backup lines to the backup display, on the other hand, to 2 year old cars, that was unusual. It was purely a software upgrade.
FWIW I've only ever changed the oil on my 2006 Ford Focus.
You better change at least the timing belt, transmission oil and sparks plugs if you hope it to keep running well into the future.
I live in the Netherlands; for lease cars, you as an employee need to add a percentage of the car's value every year as income (because the company pays for your lease car, so it's part of your wage, etc). For regular gasoline cars, that percentage can go up to 25%; for purely electric cars, it's 0% (or used to be anyway, I'm not up to date on current laws). Doing all the maths, a Tesla can be half as expensive - or even less - than a similarly-priced petrol car.
While the subsidies aren't nearly as extensive here, you do get a credit. There's also free charging stations in most of the suburbs, so electrical cost is near nill if you plug in all day at work, and your car is pretty much always fully charged.
But all that is dwarfed by the opportunity cost of the time highly paid professionals were sitting in traffic.
Instantaneous torque from startup also makes it feel blazing fast (the torque-curve is very different in IC vs. electric engines.)
The tax exempt for the electric cars is ending this year though and will not be renewed in its current form.
I went for a test drive and while in terms of ride quality Tesla is not far behind BMW but in terms of interior comfort and quality BMW is miles ahead, Tesla inside looks and feels like a Toyota or Nissan, I doubt anybody who likes Bimmers or Mercs for their interior quality will go with a Tesla, nevermind Maserati, and if Tesla decides to make interior better - it will certainly raise the price a lot which will make it even less comparible.
I think it's unfair to compare Tesla to Maserati (Ghibli), BMW or Mercs, I think Tesla is not for somebody who otherwise would have purchased Maserati or bimmer, but for those who otherwise would have purchased Toyota or Lexus and saved up a bit and went with Tesla instead.
Well, I've also seen plenty of BMW electric cars on roads these days. I believe it is their i-series of cars. http://www.bmwusa.com/bmw/BMWi
Tesla are on a mission to solve massive problems for humankind while taking into account modern humans' lack of commitment to solving those problems in a way that would feel like a step back, or that would create discomfort. Tesla's existence as a market solution to the oil and pollution problems is evidence that you don't always need political coercion to solve problems like externalities: Tesla's cars are not only electric cars - i.e. the answer to a problem that could potentially destroy civilisation as we know it - they are also great cars, by any "petrolhead" standard.
As a company and an investment, Tesla's long term mission, its strategy and its step-by-step tactics have been presented in a way that is extremely rare for a company. Most of the work I do for brands this size involves working with a 5-year plan that is nowhere near as clear as Tesla's, and the plans are 5-years because that's when the owners' exit plan kicks in. Tesla's strategy set a clear path for 15 years at least.
So what's not's not to like? I think many investors feel they may have missed the boat on the next great world company. It's quite normal to sit on the edge for a while, to miss out on the opportunity, and to then find a dozen reasons to tell oneself it was good to pass on it.
Just trolling, I agree with your points. I'm just saying that any posts about publicly traded companies should be taken with a grain of salt.
I agree, and specifically I think of the confusion between gross profit margin and net operating cashflow. Tesla makes money on every car sold (as they actually have a gross profit) but have been spending cash really fast (as they have a negative cashflow). All this really tells you is that Tesla is investing a lot of money, which is to be expected for a company that is trying to spearhead a paradigm shift within the entire automotive industry.
Also, since one big weakness in Tesla is whether it relies on government subsidies and loans for its continued survival. Thats something I don't understand and if I had a horse in this race, I'd be weary of a company that relies on the whims of political support in order to survive.
Regarding subsidies, the "good" news there is that at least in the US, there isn't much in the way of uncertainty, because the US federal subsidy starts to drop off at 200,000 units per manufacturer and is unlikely to be expanded. Given how quickly they're moving, they'll probably hit that within the next few years and one way or another they'll have to learn to do without. But at least they won't be waiting for politicians to drop the knife on them.
You knock people for financial ignorance, then say this?
You realize that gross margin is sales less cost of goods sold? And that cost of goods does not include things like paying your employees, interest on debt used to expand, the cost of running the factories, etc etc?
I come from a retail environment where our gross margin is typically 25-35%, while our profit margin is about 2-4%. So saying that Tesla "makes money on every car sold" simply because they have "gross profit" is about as fast and loose with "profit" as you can get. Of course, nobody in the finance world would think that...
That said, the reason he's polarizing may be because of other information that's readily available due to a concerted effort by short-sellers.
Oh, brother. This article is from a massive, mainstream financial news site, and is reposted all over the internet. But the short-sellers come here, to a niche tech site, to try to influence people to...what exactly?
Buy / sell Tesla stocks; the general audience here is the hip Silicon Valley startup crowd, of which some are 20-some year old instant-millionaires whose hip startup was bought by Google/Facebook/Paypal/etc, or who are making over 100K a year. You probably shouldn't underestimate the net worth and expendable income of the crowd here, or how easily they're influenced. It doesn't take much to get a stock to travel in an upwards direction, and even the slightest increase will cause some people or organizations to make a lot of money.
If I had the right circumstances to make it feasible, I wouldn't hesitate getting a Model S.
I'm really really hungry for competence in both manufacturing and design, which is something that is sorely lacking in the current large US car companies. Based on their current track record, Tesla has a much better chance of delivering than Ford or GM.
I think it's more a matter of being shortsighted. If the ads from this season of the Startup podcast are any indication, they are so busy focusing on small pieces of the experience (such as having designing wear suits to simulate feeling old, etc) that they are missing the major advances. It's somewhat understandable, the major automakers have been making basically interchangeable cars for a few years, so spending time to enhance the entire experience in many small ways seems to make sense. That is, until some upstart shows up with something radically better.
Like a lot of legacy systems, right? Tesla has an advantage of starting from scratch, sure.
"This is not something that MBA-type management can buy their way out of, because they have no competence,"
No competence? These are century old companies that have created vast amounts of global wealth and emply hundreds of thousnads of people in what are still well-paying jobs. Yeah, no competence whatsoever.
Of course, I suppose if you knew that Tesla has hired engineers and managers from some of these companies that have "no competence"...
With that in mind, I doubt it'll happen, but I'd still be curious what Apple could do if they made a car's display/OS (not counting Apple Carplay, of course).
Not sure why you're talking about engineers when I'm clearly talking about management. Also, today's management is not the management that built the companies or their wealth, so it's specious to suggest that that has any relevance on the evaluation of the current management. And finally, Tesla hiring the few competent managers is not a sign that those that remain at the current car companies are, as a whole, competent. While there are certainly individual managers that are competent in GM or Ford, the structure as a whole does not make good decisions, in my opinion.
Please, elaborate on all the design stupidity that the Tesla solves.
I've test driven a Tesla. It's awesome, thanks to the amazing torque delivery that comes from electric motors. It's a paradigm shift for a long time car guy, and has to be experienced to be understood.
..but, other than that...it's just a luxury car. What exactly has it "solved" that every other car company is still doing "stupidly"?
It may have a luxury price and technically it is very impressive but the interior quality is ridiculously poor for a car this expensive. I've sat in Hyundai and Daewoos that had better quality finishes and leathers.
When it is, I'll happily drop the majors for a Tesla.
Because of the physics involved, rockets operate at the very edge of the capabilities of the rocket. Modern auto's don't have this issue: you can drive at highway speeds all day long without stressing the materials in your engine anywhere close to the edge of the operating envelope. In short, from an engineering perspective car's aren't hard any longer.
Any car company growing this rapidly would lose money. Any car company this small designing a new model would lose money.
I know why so many financial commenters harp on and on about Tesla losing money. What mystifies me is why so many HN commenters do the same, given that most of us are startup people. Many startups lose money for the same reasons.
It's clear that Elon is going for the long haul on this.
Doesn't he always?
When you're developing a new car you have to do a lot of general R&D and a lot of car-specific R&D. What gets charged against the car and what are considered general? Who gets to decide? Why would they decide in a particular way?
It's not super obvious to me where you'd bill things even if they're ostensibly just for the Model S because in another year or two they might release a Model S2 with not a lot of R&D because they just stole parts from the Model S, Model X and Model 3.
Not saying it will happen, but it could. Then the R&D costs would be too low on that car and they'd have to go back and adjust their gross margin back as far as they've been selling the other cars and then the whole thing is a nightmare since I'm pretty sure the SEC won't let you do that.
Analyzing an investment in Tesla according to the rules you use for GM or Daimler is going to lose you a lot of money. Or realistically already has -- most people whining are whining because they didn't get in on the Tesla boom and are looking for reasons to prove it's a bubble.
Please don't be personally rude on HN. This comment would be fine with just the first sentence.
Another way that Tesla is different is that they don't announce monthly sales numbers. That means that a fair number of analysts ignore them; here's an example [1].
http://www.nytimes.com/2015/07/02/business/us-monthly-auto-s...
No they don't. Net operating cashflow has been hugely negative for their entire existence and there is no conceivable path to profitability.
Tesla is a taxpayer subsidized wall street scam that is going to blow up sooner or later.
Sure they do. They're just always spending it elsewhere, like Amazon. Amazon doesn't sell products at a loss, their prices have become much less competitive over the years.
But the lack of profitability at Amazon isn't because the various business units are all operating at a loss. It's because the older units which make a profit finance the new ones that are starting up and not profitable yet.
Telsa may well be taxpayer subsidized and it may blow up. But on 2014 revenue of 3.2b the odds that they're cooking the books are vanishingly small.
Here is Q4 2014 - http://www.bloomberg.com/research/stocks/financials/financia...
$3.2B total revenue $2.3B COGS $0.4B R&D
$0.5B gross profit including R&D
Their net income for Q4 2014 was -$0.3B, so they're not nearly as far off from profitability as you make it sound.
As opposed to any car that runs on petroleum? That's not taxpayer-subsidized at all, I suppose.
That's not a dig against Tesla, but it's P/E is way off the charts for a car company.
There's no indication that will happen in the next 10 years. Certainly not quickly. Any shift away from gas will be gradual and give automakers plenty of time to react.
Tesla is a boutique manufacturer. Their stock price is entirely based on dreams of future earnings, just as Amazon's price has been unnaturally elevated for 15 years despite never turning a profit worth writing home about.
If making a $500 million loan that not only gets paid back but produces a valuable and productive American company is the worst thing my government did today, I'd count us all extremely lucky.
http://www.slate.com/articles/business/moneybox/2013/05/tesl...
Edit: I am a big fan of Tesla, SpaceX, and the feats Elon Musk has accomplished, but I don't think that means one can't be critical of him, his companies, or the way taxpayer money might have been spent to prop them up. It's undeniable that if the US govt had received some equity stake taxpayers could have more equally shared in Tesla's success, and I don't think there would have been anything unreasonable about that.
Please describe how I implied Tesla was the only company who benefits from government largess.
Looking purely at interest earned on a government loan misses half the picture since the government gets to essentially double-dip on all the success stories.
Government just should not be making loans like this to private entities at all.
Look at this way: It's your money. Literally. Would you, as a VC, or as a kickstarter-type group, give $500M to a company, with no equity stake, but Elon telling you, "Hey, it's risky I know, but it's a great investment because it will kick off all this other economic activity that will benefit you in the long run, so you don't really need equity; you will reap the benefits indirectly in greater magnitude." Of course not. It's only acceptable because it's a cause many HNers believe in, and the money does not seem "real" since it's abstracted out through tax collection and distribution.
How much of a pay cut would you accept being forced on you to pursue these dreams? Might be the next dream, you don't agree with (like a trillion dollar war).
I guess what I'm saying is, if it's going to be a concept car, make it so outlandish that no one will believe it will be production.
Model X will tell us whether Tesla can pull it off again, or whether the Model S was just a fluke. I think/hope they can, but it's probably fair to say that the company is riding on it at the moment.
It's out of reach of general consumer and when it comes to saving planet by consuming electricity, not gas in US I am skeptical. What I want to find out is a green house effect from 1 mile per gallon of gas vs. 1 mile per kWh off produced electricity. Considering US electricity is produced by coal burning plants, which are considered primary green gas effect contributors.
Negative comments about Tesla will be down voted upon detection.
Exciting, confusing, non-specific.
"Wow a 52% quarterly surge, Tesla's on fire!"
I thought that meant they sold 52% more cars than Q1.
But what they really are saying is "Tesla sold 52% more cars in Q2 2015 than Q2 2014"
And they are still less than halfway through year end's target 2 quarters in which analysts feel certain they will not hit without the Model X release (2)
With all the discussion around the Unicorns preferring to stay private how much of a factor must avoiding the colossal pain in the ass of having to engineer this kind of financial-speak every quarter on top of just trying to run your business.
(1) http://www.ibtimes.com/tesla-motors-inc-tsla-likely-miss-201...
As always, dig deeper. Tesla isn't out of the woods yet.
Your statement about the Model X confuses me. Of course analysts think that they need Model X shipments to meet their year-end target, because that's exactly what the company itself has said.