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Tesla's fourth-quarter loss doubles, even as revenue surges | Technology | Los Angeles Times
Tesla's fourth-quarter loss doubles, even as revenue surges | Technology | Los Angeles Times
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Are you also investing in Tesla?
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JRP3
Hyperactive Member
benji4
Roadster 2.5 #0476
That's just not true, a lot of investors really are convinced there is plenty of substance behind the razzle-dazzle. Also, the substantial loss was totally expected and the losses will continue to increase until Model S hits the road.
Losing $50 million a quarter and won't ship the Model S for another 18 months, so if they continue to run at that rate that's another $300 million in losses before they ship. How much profit can they make on the Model S? I don't know what normal margins are on a car, but it sounds like they're maybe going to build 4-5k in 2012 (given the statement in the Boston Tech Talk thread that people reserving now could expect a Q1 2013 delivery). So we're looking at another 6 months from initial shipments before they really have the ability to run at 20k a year? How much more loss during that 6 month ramp up, 50 million?
And they're planning for 50 stores as they approach launch? That's a big expense tacked on.
I'm rooting for Tesla, but that seems like a boat load of money, far more than the IPO generated so that's digging pretty far into the DOE loan.
And they're planning for 50 stores as they approach launch? That's a big expense tacked on.
I'm rooting for Tesla, but that seems like a boat load of money, far more than the IPO generated so that's digging pretty far into the DOE loan.
Todd Burch
14-Year Member
IIRC, I've read from a couple of sources claiming a break even point of 10-20k Model S'. So Tesla would be operating at a profit by the end of 2013. Assuming there arent any delays, they can acheive the margins they're claiming, and there is enough demand (I dont think they'll be able to keep up with demand, imho) they should be doing okay.
I think the losses will diminish signifcantly as they were tied to the r&d costs of the Model S. Most of the r&d has completed on the Model S has been completed and Tesla will now concentrate on new store development.
I don't see them reducing R&D costs though as they're already talking about the Model X. You don't hire all those talented folks then lay them off for 6 months, it just doesn't work that way. I don't see anything that would indicate their expenses are going to go down.
An engineering friend of mine who works at the Tesla Plant in Hawthorne is worried about his job (he works on front end components). The R&D necessary to develop the Model X will not nearly be the undertaking that the Model S was.
benji4
Roadster 2.5 #0476
Overall costs are just not going down -- Tesla is continuing to hire engineers, build out its store network, and at the same time ramping up for production of the Model S, etc. This is the plan, however, and it shouldn't surprise anybody that the losses are growing and that most of the cash will be used up by the time the Model S launches. This is just the way Elon does things, he likes to push things to limit and with what he is trying to accomplish, I think that's the only way to do it. Either Tesla wins big or it fails and another car maker picks up some amazing technology at a discount (in that case funded by US taxpayers!)
rolosrevenge
Dr. EVS
There is also all of the additional deposits that they will start to receive as the Model S gets closer to launch, that might be the cash that gets them through.
JRP3
Hyperactive Member
I assume you meant 9%. I have to say I'm a bit disappointed. I was hoping for slightly worse numbers and drop in stock price so I could buy more.
rolosrevenge
Dr. EVS
I don't think a 5,000 deposit is going to help much. Even if they have 10,000 preorders that's 50 million. Well, more like 35 million since they already have something like 3700 preorders. The preorder down payment I think is mostly about ensuring preorders are from reasonably committed buyers.
benji4
Roadster 2.5 #0476
Another problem with the preorders is that is $5,000 per car that they won't get when they actually sell the cars.....
Yea, but there's just a few hundred of those. And, as benji4 mentioned, it's money Telsa won't get later. It helps pad the cash on hand until then, but if they're so close to the edge they need that relatively small cash on hand then I'd be worried.
From an investment point of view, I would guess just after the 2011 earnings would be the investment time. They'd have had another year of huge losses and no Model S delivered yet. Elon has said Tesla has about 50% more available (counting the DOE load) than they need to bring the Model S to market. I'd think the low point would be just before the Model S production starts.
As an aside, don't get me wrong, I'm as as psyched about my Model S as I've ever been in 20 years of owning cars. I'm hope, hope, hope Telsa makes it work. I just don't want them to cut it so close to the bone that I'm wondering if there will be a company to support my Model S a year later.
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