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Why not??? They have built a whole new line. That gets depreciated over time if the cars are built or not. No small part of the costs.
There are two parts here. Some are depreciated linearly with time and other linearly with production. Most of the Y investment is likely in tooling that gets depreciated according to production. They are not spending much on equipment, building and office.

Reasonable, but the devil is in the details. Also very likely is a drop in model 3 sales as the Y fills backlog orders doubling up your hump effect. That could easily put the company back into the RED.
Model 3 cannibalization is not a big problem - after all Y will have higher ASP and higher margin. Other way is a problem (like how S&X have been cannibalized by 3). As long as Tesla knows what mix of 3 & Y to produce, and the total # is more than what they have with 3 alone now, its fine.
 
Farming?? You are confusing a depletion deduction with depreciation-- entirely different--semantics maybe but once the valuable resource stops being extracted so does the depletion allowance. A depreciable asset can be reduced to its cost basis. Ever sell timber?
I wonder whether this will all change near the coast. If you know your house will be under water in 20 years, should the land be depreciated ? ;)
 
InsideEVs Model 3 delivery numbers post-facto adjusted by about 1k per month:

Tesla Update: Monthly Plug-In EV Sales Scorecard: September 2019

I don't fault them. They did their best.
I said a few times I thought their July Model 3 number was too high by a few thousand. IMHO they should have put the entire adjustment there instead of spreading it across all three months, but they do all the work so they get to call the shots.

I was surprised they didn't bump their September S/X numbers up ~500 each, I think that'd be more accurate.
 
Seriously, do you guys get paid by the word? Do you get docked by “disagrees?” Does ANY kind of rating/reply give you an extra kopek? Is ignoring you the best way to deny you income? I’d really like to understand.

I participated in a Paid for Post platform in the early days ( I think 2007 ish) , they have since gone private and exclusive.

If I remember correctly, the requests usually demand certain amount of words, with certain type of sentiments. Might demand a link or certain words to be mentioned.

Back in the old days, a human is used to approve the message and payout. Low effort posts less than 100 words are usually less than $1. Big in depth posts I've seen somewhere around $50 before.

Some enterprising lads used bots to generate posts. Then it didn't take long before bots start to get used to approve posts. In the end, I did the math. It is not worth it to write a human-like bots for these efforts as the income was too low.
 
Well I can tell you that when my family road trips, we stop at every Supercharger along the way, which tends to be 1 - 2 hours drive. Why? Because someone needs to pee!

4 hours without stopping, are you serious?
It also turns into a non-virtuous cycle, because what do you buy right after you pee? Giant Slurpee? 64-oz Coke? Next stop is in 45 minutes. Then 30 minutes. Then you might as well park and watch NetFlix.
 
That's probably true since no major auto maker has said they would have significant EV models until 2022 or so. So it has been true and will continue to be true until they produce the cars.

No, according to media reports I've read, a whole slew of excellent high-volume EV's are on the verge of destroying TSLA sales and coming to market in 2019, oh, wait, I mean 2020. These are from companies that know how to produce proper cars in high volumes like Audi and Jaguar. /s
 
All true.

But my main point is
- Tesla produces higher margin, high ASP trims first
- Then come the lower ASP, lower margin trims

So,
- We have blockbuster quarters at first
- Then come the down quarters

The down quarters were partly due to that effect but were greatly exacerbated by the falling tax credits. Model Y will not have to deal with that problem. It might even have the opposite - increasing margins caused by new EV tax credits. Tesla would have to raise prices (or not lower them with falling costs) to take advantage of that, but that's what automakers do - price their products to sell at the appropriate volumes.

I remember a few years ago Elon Musk said something to the effect that he could compete just fine without the existing tax credits and that they actually added new challenges to the business and he wished they weren't there at all. Sometimes he's not given enough credit for how clearly he sees the way things will play out. Because now most import EV's have advantages that put Tesla at a pricing disadvantage. Fortunately, they are getting into volumes where that effect will not be insurmountable.
 
Netflix: exists
Blockbuster: Do you not understand that you are waking me up, a sleeping giant?
Netflix: Okay.
And then, there's no "and then".

Amazon: exists
Lots of B&M only retailers: Do you not understand that you are waking us up, a lot of sleeping giants?
Amazon: Okay
And then, there's no "and then".

It should be noted that it's even more difficult for existing ICE car maker. EV is a different ball game -

1) Their expertise in ICE based power train do not apply.
2) A lot of their existing employee's expertise do not apply.
3) There are internal friction from all levels inside the company resisting change due to 1) and 2).
4) Their investments in ICE only infra needs to be sold off for a loss before they can be fully depreciated / written off.
5) C-levels need to convince shareholders in writing off their ICE assets, and making a transition to going full EV, while at the same time managing resistance from inside the company.
6) EV and ICE line up from the same company invites cannibalization. Makes too good of an EV? You kill your ICE business too fast before your EV line up can replace the existing ICE lineup in revenue and profit. Half ass effort of an EV? Why would consumer choose an inferior product to Teslas?
7) Most ICE car makers do not have the ability to vertically integrate as much like Tesla. Tesla has a serious cost advantage here.

Their best hope for survival is, believe or not, just pulling the money out, form a new company and start from scratch.
Or they can simply become the designated suppliers for countries’ civilian/military fleets. Sort of like tank manufacturers.
 
What are your thoughts on what the Model Y does for the company's financials?
I'm not a big Model Y fan - I consider it more of a 3 variant than truly separate model - but sharing so many parts between 3/Y will help financially. I see Fremont production and margins dipping in Q1/Q2 as they start and ramp the Model Y line, but margins should be great for a couple quarters after that because they'll only sell high trim Model Ys at first.

Longer term I see 3+Y combined settling into a ~500k/year sales rate. I realize that's far below Musk's 2 million/year and grounds for excommunication from this board, but that's my base case. Upside could come from:
- Norway-style incentives in larger countries
- ICE bans catching on in cities
- Large COGS reductions allowing ASPs of 40k vs. 50k
- Real FSD (i.e. sleep during your commute)​

I don't expect any of these in the next few years, but many here do. We'll see how it goes.
Can't depreciate land.
Oops, good catch. I guess they'll amortize the ground lease into automotive COGS. It's only $2.8m per year, so even at Phase 1 3k/week run rate that's less than 20 bucks per car!
I don't believe that is correct. Depreciation of capital starts as soon as it is acquired.
Page 105 of the 10-K says:
Construction in progress is primarily comprised of tooling and equipment related to the manufacturing of our vehicles and a portion of Gigafactory 1 construction. Completed assets are transferred to their respective asset classes, and depreciation begins when an asset is ready for its intended use.
Also keep in mind that expenses ramp up ahead of production. Workers are hired ahead of time to train and get the line working. Salary is not a trivial expense, so expect that to have already started in Q3 for Q4 production lite.
I believe they capitalize training expenses, but don't quote me on that.

Most carmakers don't put a line into service until they can run at a pretty high rate. They make hundreds of cars during training and manufacturing validation stages, but they don't sell those cars to the public so the expenses don't count against income. Tesla historically sells the very first cars they make, so they have a couple quarters when they have to charge full labor and depreciation expense against relatively few cars made in the period. It seems they'll do this with Shanghai, hurting Q4 results
 
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He gave up on battery swap when it didn't make sense,
Battery swapping made sense--it was a gambit to justify Tesla's claim of additional fast re-fueling ZEV credits. Once CARB fell for it, it's purpose was fulfilled and no longer necessary--CARB's regulations were subsequently revised to eliminate the fast re-fueling silliness.)

Battery swapping is a priori a logistical and financial train wreck as both Better Place and Tesla demonstrated unless it is done with light weight modules that an individual can easily lift--like GOGORO's approach