Really? Making money? Not even a near term Elon prediction. That's GM. Trucks and Suv's will fund GM's New AI initiatives. Tesla will be attempting to raise money in a tough bond market or from you again.
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GM -- General Motors discussion
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Reciprocity
Active Member
No cash raise needed. Didnt you hear the CC? The cash flow machine that is 10k model 3s a week will fund Y. Dont forget a couple billion in reservations from Y, Semi and Roadster as well as the coming pickup truck. What is closer to happening, Elon's profitability prediction or GM's profitability on Bolt sans Lidar and fsd hardware much less with it?
You still have no explanation for how GM is going to cut the cost of the Bolt and all the hardware required for Self driving, which they cannot even do with $100k worth of hardware. You also do not address the lack of a charging network or an actual long range EV. 230 miles is ok, but the hardware inside the car to do self driving cuts that range in half so its really a non-starter. Tesla will have a half million AP2+ on the roads by the time FSD is ready and GM will have a few thousand $100,000 bolts? I mean after 10 years of giving Lyfts, those cars might pay back, but probably not. The cost per mile with $100k worth of hardware combined with the downtime is going to be higher then the cost of gas and a driver. GM has no battery supply to create more then 20k bolts a year, which is good because if they did create more then that, they would be losing $10k x 20k or 30k or 40k or what ever amount they build and that does not include the $70k lidar and other hardware required to do roughly what Tesla does with $2500 or less worth of hardware (which customers pay for) at a take rate of about 75%+.
What happens faster.. $70 dollar lidar from $70k today, or Tesla gets Vision and NN to work for self driving? I know your answer as I think you are related to @mmd. But that question is more for those who have you on ignore already.
Hope you are not basing your investment thesis on this. How many times has this been said before? GM is a cash generating machine, They have plenty of time and money to get the product right. Tesla has neither.
They have $3.5B in the bank and only used $250M last quarter. As they have said, they are close to generating free cash flow.
Reciprocity
Active Member
Gm does not have time. And frankly, they hadn't shown they have a plan or anything else productive. What they do have is the bolt at a peak of 30k units a year at $10k/unit loss while outsourcing everything to LG. GM isn't even in Tesla's cross hairs yet. Wait till the pickup comes out with nearly infinite torque for towing. People like badarse trucks and if the BAMF semi is any indication, then GM, Ford and Dodge are in trouble.
GM F and FCA have plenty of time. Fuel prices going lower, New Trucks on the way from GM and FCA and plenty of cash to do whatever they want. Even FCA plan to be debt free by July. Don't think GM has stated their margin on the Bolt, not sure where you're are getting your numbers. GM is preparing an onslaught of product that will be more profitable and easier to build, than anything on the market. How GM Plans To Bury Tesla With Onslaught Of Electric Vehicles That Will -- Gasp! -- Make A Profit
Really? Which established industries are spreading FUD about Tesla? I think the trouble lies with a company that is not keeping their promises. Investors and fund managers see an imbalance between value and stock price. They are exploiting this imbalance to make a buck. Capitalism.
Esme Es Mejor
Member
It’s interesting you think that. GM’s net loss for 2017 was $3.9 billion, more than twice Tesla’s net loss. That’s a lot better than the $70+ billion they lost from 2007-2008 ($80+ billion from 2005-2008), but still not very good.
This was an accounting change to account for tax credit losses under Trump's tax plan. Does not effect GM's stellar finances. Consensus from the investment community: GM had a great year with aggressive guidance for '18 and '19 profits.
Menifeer
Member
From the GM Earnings Release Page dated Feb 6:
General Motors Co. (NYSE: GM) today announced full-year 2017 EBIT-adjusted of $12.8 billion, repeating record 2016 performance. Results were driven by strong performance in North America, improvement in GM International led by strong equity income in China and a return to profitability in South America, sustained growth of GM Financial and an intense focus on costs.
Esme Es Mejor
Member
From that same release:
“On a consolidated basis (including discontinued operations), GM reported a 2017 net loss of $3.9 billion, driven primarily by charges totaling $13.5 billion. These included a $7.3-billion non-cash charge related to the remeasurement of deferred tax assets due to U.S. tax reform, and a largely non-cash charge of $6.2 billion resulting from the sale of Opel/ Vauxhall.”
I know GM’s EBIT-adjusted earnings are strong, just as they were before GM lost more than $80B from 2005-2008. Their ability to trade profits now for more massive losses in the future doesn’t make them a good company or a good investment.
Esme Es Mejor
Member
That’s about half of it. The other half is losses from the sale of their European operations. And it certainly hurts their finances. They’re concentrating their sales into ICE trucks and SUVs, just like they did before their last round of massive losses.
Reciprocity
Active Member
I want to see the article on how they plan to get batteries for all those cars. I assume you havn't studied the matter. No auto makers on the planet are building giant battery factories and out side of China, there is all of a single gigafactory between the dozens of car companies coming out with hundreds of Tesla killing EV models and that capacity is planned for like 2023. What they presented is fluffy lies with no basis in reality. Everyone is waiting for someone to make batteries for them and someone will, at a very high Mark up. Because demand will be infinitely higher then supply (econ 101). So it's great that gm had endless amounts of money to burn making very only and half cars because they are going to need it to survive. At the end of the day, Tesla wants everyone making EVs. And they want then to succeed. Like they really want them to succeed so Tesla doesn't have to do all themselves.
"Cash flow from operating activities reached $510 million in Q4, achieving a new quarterly record. This was achieved mainly by improved collection of receivables, inventory reduction of finished vehicles, improved working capital from the ramp of Model 3, and growth in customer deposits." Shareholder Letter
John Murphy - Bank of America Merrill Lynch
... You did a great job with working capital in the quarter. I mean, I think some of us might kind of throw stones and say it might not be repeatable, but you did it and you got the cash in the door. So it's done and it was like that's some pretty good work here. How repeatable do you think the benefit from working capital is going forward? I mean, is this really just the benefit of negative working capital, and as you ramp up you'll get this cash inflow? And then also as we look at the customer deposits and the ZEV credits, those were two, I think, apparently large cash inflows. I mean, how repeatable do you think those are in the future as well?
Deepak Ahuja - Tesla, Inc.
Yeah. Some of those are not repeatable. We significantly reduced the finished goods inventory of S and X in Q4, which will not repeat itself going forward. And that was a huge impact on working capital. Customer deposits may not be as well, as you've pointed out. However, as the Model 3 ramp continues, the negative working capital needs for that, which essentially create extra cash for us will be repeatable. And we'll continue to keep very tight controls on our accounts receivables and everything else we do to manage cash, to make sure we are being efficient.
Free cash flow is what's left after capital expenditures. "Capital expenditures in 2018 are projected to be slightly more than 2017." 2017 Cap-Ex was reported as $3.4 billion.
IMO, there will be a capital raise before Easter and possibly another one late third quarter/early fourth quarter. The March and August capital raises in 2017 raised about $3.8 billion.
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GM has made some good moves with their acquisitions in the area of mobility, but what is their plan for:
Batteries
factory transitions
dealer networks
charging infrastructure
top and middle management buy in
They can throw money at some of these, but others will require a more complete dedication at all levels. They do not need to plan to be where Tesla is today, but where they will be tomorrow. This is why Tesla garners a higher market cap vs other metrics.
Some links to review to highlight the challenges that GM, F, and FCA will face. I am sure one or two of these companies will make the transition to electric, but I do not believe all will. Chinese competition is what they should be focused on and less Tesla, IMO.
WHY BARNES & NOBLE MAY CRUSH AMAZON SELLING BOOKS ONLINE WAS A NEAT CONCEPT. THE NATION'S LEADING BOOKSTORE IS TURNING IT INTO A CUTTHROAT BUSINESS. WHAT'S A POOR STARTUP TO DO? - September 29, 1997
Today's car makers are like Nokia — right before it was crushed by Apple, VC Marc Andreessen says
Case Study: How Nokia Lost the Smartphone Battle
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Krugerrand
Meow
And Trump is about to get a really cool haircut and become a brunette.
Krugerrand
Meow
And people accuse Tesla of creative accounting.
At this point X Yes I’ve got to believe you’re punking us, putting together a stand up routine, or are myusername’s right hand.
Good question, I'm sure they have it figured out. Under Mary Barra's leadership, GM has over delivered on product launches, production schedules, product launches and PROFITS. They allow enough time for Beta testing. They don't make unrealistic promises and suffer the wrath of the investment community.
Here's the difference: This time they are investing their massive profits in the future. They have the lead in AI, ownership in LYFT, and will soon flood the market with very competitive BEV's
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