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Re: THE Tesla Thread Pt. 2 (merged)

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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby tita » Sat 05 Oct 2019, 08:04:53

asg70 wrote:I have to admit that I have stopped watching every move with Tesla. I thought they were near death when all of its executive started fleeing and its stock tanked but they seem to be able to limp onward like a zombie.


There was quite a slowdown this year, but Tesla managed to keep sales numbers up, introducing gradually cheaper variants and lowering prices of the more expensive variants. Anyway, Model S/X sales plunged while Model 3 sales increased. Also, Tesla cut costs wherever they could.

Each quarter seems like a challenge. Now, Tesla must reach 106k deliveries in Q4 to reach lower guidance. So far, Tesla lost $1.1 billions in the first two quarters and is expected to show a loss in Q3.

The major things this year was the fundraising of over $2 billions and the financing of the Shanghai Factory by Chinese lendors.

As long as investors throw money, there is no reason for Tesla to fail.
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby Outcast_Searcher » Sat 05 Oct 2019, 11:56:06

tita wrote:
asg70 wrote:I have to admit that I have stopped watching every move with Tesla. I thought they were near death when all of its executive started fleeing and its stock tanked but they seem to be able to limp onward like a zombie.


There was quite a slowdown this year, but Tesla managed to keep sales numbers up, introducing gradually cheaper variants and lowering prices of the more expensive variants. Anyway, Model S/X sales plunged while Model 3 sales increased. Also, Tesla cut costs wherever they could.

Each quarter seems like a challenge. Now, Tesla must reach 106k deliveries in Q4 to reach lower guidance. So far, Tesla lost $1.1 billions in the first two quarters and is expected to show a loss in Q3.

The major things this year was the fundraising of over $2 billions and the financing of the Shanghai Factory by Chinese lendors.

As long as investors throw money, there is no reason for Tesla to fail.

From my analysis and watching on places like Seeking Alpha, that's all absolutely right.

The real question is (IMO), "In the face of all the financial issues like all the debt and ongoing interest expense, and in the face of the growing competition, is there any realistic path to sustained meaningful profitability for Tesla in a reasonable timeframe?'

Because if there's not, then it's just more debt, more interest expense, more capital raises, and at some point, even Tesla fanbois aren't going to want to keep throwing money at the cash burning furnace.

One issue I can't ignore is that in order to CLAIM positive cash flow, Tesla has taken to paring CAPEX to the bone. Well, that works on the accounting statements, but in a company relying on high growth, innovation, and the introduction of lots of new products (which take a lot of research and capital), how realistic is that?

One thing the new competition arriving in '20 and '21 will almost certainly do is continue to drive ASP (average selling prices), and thus gross margins lower. That seems to apparently eat up any cost savings that the bulls are counting on as the means to profitability, at least thus far. Oh, and it won't help the growth story any, which is already radically slowing.

Of course, there's the Shanghai plant, which will likely produce 100,000+ cars in 2020, and there's the Model Y, both of which bulls tout as the next "promised land" for Tesla.

We'll see I guess. I think the Shanghai plant will help with margins. Far less sure about quality. But I think the Model Y will just heavily cannibalize the Model 3 (it's a sedan, not an SUV).

So it's an interesting show to watch. I enjoy my popcorn. My bets, re the success of the EV industry overall are with the competition, their experience, quality, service, know-how, reputation, etc. vs. Tesla's clown-car antics, but that's just me.

However, I do NOT agree with the shorts who keep claiming Tesla is about to go bankrupt short term. Even if they keep losing lots of money, they could potentially keep the show going for quite a few years with fundraising. And while I'm not buying the bull arguments of exponential growth and profits forever, Shanghai COULD get them near parity re profits over time -- which buys them time.

Oh, and the other wild card, IMO, is the regulators and all Tesla's quality and safety problems and accounting issues (think solar roofs, etc) might well start hitting a lot harder re lawsuits, recalls, etc. It would be ironic for the bulls if Tesla would reach operational profitability, but keep piling up debt by dealing with the fallout of all of THAT.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby EdwinSm » Thu 17 Oct 2019, 04:21:35

I guess this is good news for the beleaguered company, if they can reach the numbers hoped for.

BBC wrote:Tesla has been added to the Chinese government's list of approved car manufacturers according to a list published by the ministry of industry and information technology.

The electric carmaker intends to produce at least 1,000 Model 3s a week from its Shanghai factory by the end of this year.


[The quote was from the "Live Business report" so any link might be old by the time you read this]
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby Outcast_Searcher » Thu 17 Oct 2019, 13:41:01

EdwinSm wrote:I guess this is good news for the beleaguered company, if they can reach the numbers hoped for.

BBC wrote:Tesla has been added to the Chinese government's list of approved car manufacturers according to a list published by the ministry of industry and information technology.

The electric carmaker intends to produce at least 1,000 Model 3s a week from its Shanghai factory by the end of this year.


[The quote was from the "Live Business report" so any link might be old by the time you read this]

This isn't really new news for those who have been watching Tesla. It's an expected event confirmed. Else, Tesla wouldn't have agreed to build the Tesla factory in the first place. If anything, this is confirmation that the plant is actually more or less complete.

What will be interesting to see is how quickly meaningful production actually gets ramped up there, given Tesla's extremely slow and sketchy history with ramping up new production, especially vs. Musk's projections.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby asg70 » Fri 18 Oct 2019, 09:44:54

I think the competition right now is equivalent to nipping at Tesla's heels. It's going to take a while for the competition to reach critical mass, with VW group being the biggest contender.

Volvo has a new XC40 EV coming out as well which has the overall guts of Polestar 2. I don't know the dimensions of it but it doesn't look a hell of a lot bigger than the Kona but it takes 78kwh to achieve 200+ mile range. Poor efficiency, but it has twice the HP and a frunk, faster DC charging, google onboard and ota updates. Overall it looks like a competent vehicle but all the offerings at present have their pros and cons. I do think Hyundai and Kia did a great job achieving the efficiency they did on the Kona and Niro despite their conventional shape. This XC40 and Audi eTron are the equivalent of gas-guzzlers in comparison.

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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby Outcast_Searcher » Fri 18 Oct 2019, 14:31:52

asg70 wrote:I think the competition right now is equivalent to nipping at Tesla's heels. It's going to take a while for the competition to reach critical mass, with VW group being the biggest contender.

Volvo has a new XC40 EV coming out as well which has the overall guts of Polestar 2. I don't know the dimensions of it but it doesn't look a hell of a lot bigger than the Kona but it takes 78kwh to achieve 200+ mile range. Poor efficiency, but it has twice the HP and a frunk, faster DC charging, google onboard and ota updates. Overall it looks like a competent vehicle but all the offerings at present have their pros and cons. I do think Hyundai and Kia did a great job achieving the efficiency they did on the Kona and Niro despite their conventional shape. This XC40 and Audi eTron are the equivalent of gas-guzzlers in comparison.

Just like with ICE's and HEV's, there are a variety of trade-offs between things like efficiency and size and comfort and amenities and cost. Markets are pretty good at sorting that out. Government is pretty good at coming up with standards via input from various sources, and then reporting on efficiency, relative to that standard.

To me, the more competent competition the better. Consumers having choices will FORCE the EV industry to improve its offerings and keep profits "reasonable".

I still think most consumers are going to care far more about things like quality and service than minor differences in efficiency, especially when the fuel is relatively cheap. It will take some time, but again, the market will certainly tell us.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby EdwinSm » Wed 23 Oct 2019, 23:55:25

Tesla shares surge after unexpected* profit
A lot of that is down to cost cutting. Although Tesla has not managed to make an annual profit yet, this is the third quarter (last two in 2018) when it has turned a quarterly profit.

Maybe it will live to fight on a bit more. But it is certainly quieter, news wise, now that Musk has had to reign in his comments...

Tesla shares have surged to their highest levels since February, after it told investors that manufacturing at its Chinese factory and plans for its next model were ahead of schedule.

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.

Shares in the electric carmaker jumped by more than 17% in after-hours trade to about $300 apiece.

Tesla has struggled with years of losses, fuelling investor doubts and casting a shadow over the shares in recent years.

The firm has yet to turn an annual profit, although it recorded positive results in the final two quarters of 2018.
https://www.bbc.com/news/business-50159963

* Since professional watchers keep getting it wrong, I don't worry about some of my guesses going wrong either :P
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby tita » Thu 24 Oct 2019, 02:55:36

Impressive results, considered that revenue was lower sequentially from Q2.

The question is, what were these costs reduction exactly? It's quite astonishing to have such improvement suddenly.
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby Plantagenet » Thu 24 Oct 2019, 09:43:44

I wouldn’t be surprised to see TESLA issue more stock, now that they have reported a good quarter.

Thats been their pattern for the last several years. The company loses huge amounts of money quarter after quarter until their cash reserves run low ——— then they report a sudden huge shift to the upside ——- then they issue billions in new stock ———- then when the new issue is sold out they go back to losing money and teetering towards disaster again

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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby kublikhan » Thu 24 Oct 2019, 15:47:07

Tesla appears to have engineered a profitable quarter with accounting tricks and delaying capex. Meanwhile it's fundamentals are detertiorating: Falling top and bottom lines, growing debt, and falling y/y margins with it's largest markets in the US and China cutting subsidies. I don't see how they are going to keep capex low going forward with so much on the board: Shanghai factory, model Y, semi truck production, European factory, etc. My guess is we will see first half of 2020 showing more red ink, just like this year. Perhaps with a surge in sales in Q4 this year to take advantage of the last gasp of US tax subsidies before they expire permanently on Jan 1, 2020.

* On Oct. 23, Tesla reported a surprise profit for the third quarter of 2019.

* The profit was largely attributed to efficiency gains and cost reductions, but the scale of the sequential change looks improbable.

* A deeper dive into the financials shows that the profit came thanks to a mix of deferred revenue recognition, elevated regulatory credit sales, throttled-back capex, and stretched payables.

* Tesla showed year-over-year declines to auto margins, revenues, and net income; that is not a healthy trend for a company priced for growth.

* It appears that Tesla pulled out all the stops to engineer a profitable quarter, but the underlying problems facing the business remain; sustainable profitability remains very much in doubt.

On the surface, it appears that Tesla bulls have much to crow about. Virtually no one expected a profit, after all. However, upon a closer inspection of the financial results reported in Tesla's Q3 update letter, it is clear that the profit was largely ephemeral. Indeed, Tesla appears to be far from "financially self-sustaining", despite CEO Elon Musk's latest boasts.

However, the rosy profit picture starts to wilt almost immediately upon deeper inspection. Consider the top line: Tesla brought in $6.3 billion in revenue, which was a sequential decline from Q2, in addition to falling below analysts' expectations. But, if the top line did not grow, how did Tesla make a profit?

Diving Deeper
by stretching payables and expanding accrued liabilities, Tesla was able to keep more than $200 million in negative cash flow from trickling into its other financial statements. Netting out just this maneuver would see Tesla's GAAP positive income turn into a loss. Moreover, virtually all of Tesla's expanded cash balance can be accounted for by its growing debt.

Coming Up for Air
At this point, it is abundantly clear that Tesla has manufactured another "miracle quarter" in much the same fashion that it did in Q3 and Q4 of 2018. Stretching payables, slashing capex, adjusting depreciation, recognizing deferred revenue, and cashing in piles of regulator credits can help create the appearance of profitability. However, they are not sustainable maneuvers. Tesla has suffered a significant year-over-year decline on both top and bottom lines.

That is the real crux of the challenge facing Tesla. Though the company has managed to engineer another profit thanks to a number of accounting gimmicks and one-off maneuvers, it could not come anywhere near its performance of the same period last year. That is a very bad sign for a company with a market capitalization of about $50 billion.

Investor's Eye View
The market is not valuing Tesla as an automaker with wafer-thin margins and occasional profitability; it is valuing Tesla on the basis of massive top line and bottom line growth over the next few years. That Q3 profit does not look too great when viewed in this light.

Investors hoping for Tesla to grow into its already-eye-watering valuation must ask themselves how it can achieve its promised growth goals in light of year-over-year declines to top and bottom lines, sequential decline in revenues, and the visible absence of any meaningful growth capex.
Tesla's Surprise Profit Conceals Deteriorating Fundamentals
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby Outcast_Searcher » Thu 24 Oct 2019, 15:49:45

Plantagenet wrote:I wouldn’t be surprised to see TESLA issue more stock, now that they have reported a good quarter.

Thats been their pattern for the last several years. The company loses huge amounts of money quarter after quarter until their cash reserves run low ——— then they report a sudden huge shift to the upside ——- then they issue billions in new stock ———- then when the new issue is sold out they go back to losing money and teetering towards disaster again

Cheers

Yeah. People won't be able to gauge the quality of the earnings until the financials come out in a couple/few weeks. Many are suspicious that the real change is true cost cutting vs. playing games with accounts payable, taking a lot more tax credits, taking revenue from things like the (laughable) "smart" summon, etc.

I've never bought the short story about fast bankruptcy OR the bull story about financial nirvana and huge stock prices real soon now. If they can avoid consistent large annual losses, it certainly buys them TIME. Then the question shifts to how they measure up to all the competition coming on-stream in the BEV space in 2020 and beyond.

For me, the stock is just too damn dangerous (volatile) and way too short of transparency, to be worth investing in. Specuation yes -- investing no. Just IMO.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby Outcast_Searcher » Thu 24 Oct 2019, 15:57:18

kublikhan wrote:Tesla appears to have engineered a profitable quarter with accounting tricks and delaying capex.

Sorry Kub. I responded to Plant re possible accounting games before I saw your post. I read that article earlier today and it seems to sum up the overall bear case re the accounting speculation pretty well, from what I've read places like Seeking Alpha today.

Given all the stories Musk has told over the past several years, and how far they often deviate from reality re Tesla results, I think anything the company says or projects has to be viewed with a healthy dose of skepticism. (Example: FSD "functionally complete" by year end, given how poorly the "Smart" Summon performs at only creeping speeds. And even more ludicrous, the "giant Tesla Robo-taxi FSD Level 5 Fleet in 2020, earning Tesla owners tens of thousands of dollars AND causing wildly appreciating Tesla car values.) I can forgive somewhat overoptimistic predictions re volumes, but nonsense like that is flat out fraud in my book.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby StarvingLion » Sat 26 Oct 2019, 11:27:23

You hapless clowns are so pathetic that you haven't even figured out that,

Tesla Motors is a Military Contractor and Elon Musk is a Military Dictator.

Financials have never mattered to this mafia scam and Musk obviously can never be ousted. By 2023 he'll probably be in military fatigues...hahahahaha.

Since the Jet Fighters, Tanks, and ships are bankrupt , the Robot Vehicles are Martial Law Vehicles which will eventually be used to annihilate you. Its the successor to the Modern Tank.

Have fun in your Tech "Paradise"...hahahaha.
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby AdamB » Sat 26 Oct 2019, 14:09:04

StarvingLion wrote:You hapless clowns are so pathetic that you haven't even figured out that,

Tesla Motors is a Military Contractor and Elon Musk is a Military Dictator.


And money is still worthless SL?.

Still a riot SL, still a riot.
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby Outcast_Searcher » Sun 27 Oct 2019, 12:01:32

StarvingLion wrote:You hapless clowns are so pathetic that you haven't even figured out that,

Tesla Motors is a Military Contractor and Elon Musk is a Military Dictator.

Financials have never mattered to this mafia scam and Musk obviously can never be ousted. By 2023 he'll probably be in military fatigues...hahahahaha.

Since the Jet Fighters, Tanks, and ships are bankrupt , the Robot Vehicles are Martial Law Vehicles which will eventually be used to annihilate you. Its the successor to the Modern Tank.

Have fun in your Tech "Paradise"...hahahaha.

As usual for folks like you, shorty, and armageddon, if only childish name calling and spewing endless FUD, generally without good citations (and often very distorted) were signs of credibility, you'd be awesome.

As it is: What color is the sky in your world?
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby EdwinSm » Wed 13 Nov 2019, 04:36:55

Tesla to build first European factory in Berlin

Tesla's chief executive, Elon Musk, has said Berlin will be the site of its first European factory as the carmaker's expansion plans power ahead.

Mr Musk said the firm would also build an engineering and design centre in the German capital.

Tesla previously said it aimed to start production in Europe in 2021.

The moves come as the firm, which has also invested heavily in a Chinese factory, faces intensifying competition in the electric vehicle industry.
https://www.bbc.com/news/business-50400068

This is a welcomed step towards more electronic vehicles. The question is will Tesla make a profit from it, or will the factory have to be sold to the likes of VW or BMW if the debts pile up too high.
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Re: THE Tesla Thread Pt. 2 (merged)

Unread postby asg70 » Wed 13 Nov 2019, 22:12:37

EdwinSm wrote:The question is will Tesla make a profit from it, or will the factory have to be sold to the likes of VW or BMW if the debts pile up too high.


I really don't know how they're servicing their debt as it is. I know they got a huge amount of help from China for the gigafactory over there, otherwise they probably wouldn't have been able to build it. Sales in the US are going down right now and they are only being floated by overseas sales.

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-Short welched on a bet and should be shunned.
-Frequent-flyers should not cry crocodile-tears over climate-change.
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