Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[ZeApelido]

A Path to S&P Inclusion ....NOW:
@Fact Checking - your comment above was related to the potential that Tesla's Call options gains could bring sufficient GAAP profits in Q4 to ensure S&P inclusion with the Q4 filing. In a separate post I commented that the gains would not likely be counted as income.
However:
There is an obscure item on Tesla's Balance Sheet that could bring huge upside to Q4....enough to achieve full year 2019 GAAP Profits and inclusion into the S&P. I have hesitated to bring this up in the past because it could easily be a big Nothing Burger and also because it is a very technical tax accounting issue. But since this is the weekend and your post touched on early S&P inclusion, I thought I would share it.

TL;DR: Tesla has deferred the recognition of $1.8B in tax benefits on the P&L because they could not conclude it was likely that they would have income in the future to take advantage of these benefits. Once profitability is likely (and supported by the auditors), this $1.8B (or a portion thereof) gets recognized immediately to GAAP profits. If Tesla concludes now that profitability is likely in 2020 and thereafter, $1.8B (or a portion) gets included in Q4 profits.

The Long Version
When a company incurs a loss, they record a tax benefit because they can reduce taxes in the future by offsetting future tax income with these tax losses. It's called a "Net Operating Loss Carryforward" (a Tax Asset).
So you would typically see a P&L as such:

$(100,000) - Pretax Income (Loss)
$ 30,000 - Tax Benefit (Expense)
$ (70,000) - Net Income (Loss)

However, the accounting rules state that you can only record this benefit if "it is more likely than not" that you will be able to use this benefit (tax asset) in the future.
Tesla has not recognized any of these benefits over the past 15 years because they could not confidently conclude and support to the auditors that profitably in the future was "more likely than not".
Here is Tesla's wording from the 2018 10K:

As of December 31, 2018, we recorded a valuation allowance of $1.81 billion for the portion of the deferred tax asset that we do not expect to be realized.....Management believes that based on the available information, it is more likely than not that the U.S. deferred tax assets will not be realized, such that a full valuation allowance is required against all U.S. deferred tax assets.​

You can see this deferred benefit (valuation allowance) on their deferred tax asset schedule from the 2018 10K below:
View attachment 501942

Tesla's position on this tax accounting is correct.

Here is the important point: As soon as Tesla can support to the auditors, that "it is more likely than not", that profitability will be achieved in 2020 and beyond, this tax benefit comes back to earnings immediately. If not all of the $1.8B a substantial amount would.

Points Against Recognition in Q4

• Since Tesla has never had a full year profit in its history, they and their auditors may take a conservative approach and deem future profits unlikely.
• Despite 2 profitable Qtrs in 2018, Telsa still concluded (as seen in the 2018 10K) that it was "more likely than not" they would not be able to recognize the tax benefits with future profits.

Points For Recognition in Q4

• Tesla has been profitable in 4 of the last 6 Qtrs
• With Model 3 fully ramped, GF3 producing vehicles and Model Y entry assured for 2020, profitability is "more likely than not".
• Elon will likely state during the Q4 earnings call that Tesla expects a full year profit in 2020. Telsa can't state this publicly while simultaneously stating in the 2019 10K that future profits cannot be assured for taking the tax benefits.
• Generally Accepted Accounting Principles (GAAP) needs to be applied consistently. You can't take the position: "profits are more likely than not but let's not take the earnings benefit just to be conservative". Profits are either "more likely than not" or they're "more unlikely than not". If it is the former, you take the benefit to earnings.

I'm not sure which way this will go. If the huge benefit is not taken in Q4 2019, it's certain we'll see it in 2020.
My brain tells me that they will take the huge benefit in Q4 2019 but my gut says they won't.

TeslaQ has been all over the Balance Sheet pushing questions on Warranty Reserves, Accounts Receivables, etc.......but they're not talking about this one.

Let's see how this plays out.

Twas a quiet January night until The Accountant waltzed by and dropped catnip on a clowder of feral cats...

 

[Green Pete]

Ok either this entire forum walked into an opium den for the last 24 hours or somehow one of the most high profile companies in the world hid some incredible *sugar* in plain sight and nobody in TESLAQ or here noticed until last night? How is this possible?

 

[ZeApelido]

A Path to S&P Inclusion ....NOW:
@Fact Checking - your comment above was related to the potential that Tesla's Call options gains could bring sufficient GAAP profits in Q4 to ensure S&P inclusion with the Q4 filing. In a separate post I commented that the gains would not likely be counted as income.
However:
There is an obscure item on Tesla's Balance Sheet that could bring huge upside to Q4....enough to achieve full year 2019 GAAP Profits and inclusion into the S&P. I have hesitated to bring this up in the past because it could easily be a big Nothing Burger and also because it is a very technical tax accounting issue. But since this is the weekend and your post touched on early S&P inclusion, I thought I would share it.

TL;DR: Tesla has deferred the recognition of $1.8B in tax benefits on the P&L because they could not conclude it was likely that they would have income in the future to take advantage of these benefits. Once profitability is likely (and supported by the auditors), this $1.8B (or a portion thereof) gets recognized immediately to GAAP profits. If Tesla concludes now that profitability is likely in 2020 and thereafter, $1.8B (or a portion) gets included in Q4 profits.

The Long Version
When a company incurs a loss, they record a tax benefit because they can reduce taxes in the future by offsetting future tax income with these tax losses. It's called a "Net Operating Loss Carryforward" (a Tax Asset).
So you would typically see a P&L as such:

$(100,000) - Pretax Income (Loss)
$ 30,000 - Tax Benefit (Expense)
$ (70,000) - Net Income (Loss)

However, the accounting rules state that you can only record this benefit if "it is more likely than not" that you will be able to use this benefit (tax asset) in the future.
Tesla has not recognized any of these benefits over the past 15 years because they could not confidently conclude and support to the auditors that profitably in the future was "more likely than not".
Here is Tesla's wording from the 2018 10K:

As of December 31, 2018, we recorded a valuation allowance of $1.81 billion for the portion of the deferred tax asset that we do not expect to be realized.....Management believes that based on the available information, it is more likely than not that the U.S. deferred tax assets will not be realized, such that a full valuation allowance is required against all U.S. deferred tax assets.​

You can see this deferred benefit (valuation allowance) on their deferred tax asset schedule from the 2018 10K below:
View attachment 501942

Tesla's position on this tax accounting is correct.

Here is the important point: As soon as Tesla can support to the auditors, that "it is more likely than not", that profitability will be achieved in 2020 and beyond, this tax benefit comes back to earnings immediately. If not all of the $1.8B a substantial amount would.

Points Against Recognition in Q4

• Since Tesla has never had a full year profit in its history, they and their auditors may take a conservative approach and deem future profits unlikely.
• Despite 2 profitable Qtrs in 2018, Telsa still concluded (as seen in the 2018 10K) that it was "more likely than not" they would not be able to recognize the tax benefits with future profits.

Points For Recognition in Q4

• Tesla has been profitable in 4 of the last 6 Qtrs
• With Model 3 fully ramped, GF3 producing vehicles and Model Y entry assured for 2020, profitability is "more likely than not".
• Elon will likely state during the Q4 earnings call that Tesla expects a full year profit in 2020. Telsa can't state this publicly while simultaneously stating in the 2019 10K that future profits cannot be assured for taking the tax benefits.
• Generally Accepted Accounting Principles (GAAP) needs to be applied consistently. You can't take the position: "profits are more likely than not but let's not take the earnings benefit just to be conservative". Profits are either "more likely than not" or they're "more unlikely than not". If it is the former, you take the benefit to earnings.

I'm not sure which way this will go. If the huge benefit is not taken in Q4 2019, it's certain we'll see it in 2020.
My brain tells me that they will take the huge benefit in Q4 2019 but my gut says they won't.

TeslaQ has been all over the Balance Sheet pushing questions on Warranty Reserves, Accounts Receivables, etc.......but they're not talking about this one.

Let's see how this plays out.

I'm trying to rectify how this analysis means this forum really messed up a year ago. How could Elon say they were going to be profitable every quarter going forward, if they weren't confident in realizing these tax benefits? We didn't see that.

 

[FrankSG]

You're completely missing the opportunity for TE. It's in grid scale storage, like the mega-projects in S.Australia and now at PG&E in California (a $1B scale project).

TE has the inside info on their cost structure. Using a IEA or other 3rd party to estimate the growth and costs of batteriesby 2040 is just silly.

Every SINGLE NG PEAKER plant in the US, Europe and China is at risk economically because of Tesla's currently shipping product, the MEGAPACK. Do you think Tesla will acheive ZERO improvement in technical specs or costs between now and 2040?

This isn't just a bigger opportunity than Auto, its bigger than THE ENTIRE ELECTRICAL grid, since it can literally provide an alternative for customers. There's a reason Elon's starting with Islands and working up: MICROGRIDS the size of continents/continents broken down into a series of connected microgrids.

It's gonna get a 1 TWhr per year energy infusion from Tesla right quick. Have your run the numbers as to how that scales when deployed to replace NG peakers? If you do, I think you'll realize how big an opportunity this is. The S. Australia public utilities commission has made some interesting info publicly available. There last decision was to DOUBLE the size of the Tesla battery at the Hornsdale Power Reserve near Adelaide.

Cheers!

The 2040 forecast that I relied upon does estimate 122x energy storage growth from where we are at today.

I briefly looked into trying to calculate the potential of energy storage by calculating the amount we'd need to transfer the world to renewable energy, but I couldn't really figure it out, so I stuck with that number from the 2040 forecast.

You're right though that forecasts like that are often conservative (like the McKinsey EV forecast), so maybe I'm wrong in that automotive will always be bigger than energy (although if you include autonomy and Tesla Network, I am certain there will be no comparison).

I do understand the potential of TE though, but based on the numbers I've seen it looks like a slightly smaller opportunity than Automotive.

 

[StealthP3D]

A Path to S&P Inclusion ....NOW:

• @Fact Checking - your comment above was related to the potential that Tesla's Call options gains could bring sufficient GAAP profits in Q4 to ensure S&P inclusion with the Q4 filing. In a separate post I commented that the gains would not likely be counted as income.
  However:
  There is an obscure item on Tesla's Balance Sheet that could bring huge upside to Q4....enough to achieve full year 2019 GAAP Profits and inclusion into the S&P. I have hesitated to bring this up in the past because it could easily be a big Nothing Burger and also because it is a very technical tax accounting issue. But since this is the weekend and your post touched on early S&P inclusion, I thought I would share it.
  
  TL;DR: Tesla has deferred the recognition of $1.8B in tax benefits on the P&L because they could not conclude it was likely that they would have income in the future to take advantage of these benefits. Once profitability is likely (and supported by the auditors), this $1.8B (or a portion thereof) gets recognized immediately to GAAP profits. If Tesla concludes now that profitability is likely in 2020 and thereafter, $1.8B (or a portion) gets included in Q4 profits.
  
  The Long Version
  When a company incurs a loss, they record a tax benefit because they can reduce taxes in the future by offsetting future tax income with these tax losses. It's called a "Net Operating Loss Carryforward" (a Tax Asset).
  So you would typically see a P&L as such:
  
  $(100,000) - Pretax Income (Loss)
  $ 30,000 - Tax Benefit (Expense)
  $ (70,000) - Net Income (Loss)
  
  However, the accounting rules state that you can only record this benefit if "it is more likely than not" that you will be able to use this benefit (tax asset) in the future.
  Tesla has not recognized any of these benefits over the past 15 years because they could not confidently conclude and support to the auditors that profitably in the future was "more likely than not".
  Here is Tesla's wording from the 2018 10K:
  
  As of December 31, 2018, we recorded a valuation allowance of $1.81 billion for the portion of the deferred tax asset that we do not expect to be realized.....Management believes that based on the available information, it is more likely than not that the U.S. deferred tax assets will not be realized, such that a full valuation allowance is required against all U.S. deferred tax assets.​
  
  You can see this deferred benefit (valuation allowance) on their deferred tax asset schedule from the 2018 10K below:
  View attachment 501942
  
  Tesla's position on this tax accounting is correct.
  
  Here is the important point: As soon as Tesla can support to the auditors, that "it is more likely than not", that profitability will be achieved in 2020 and beyond, this tax benefit comes back to earnings immediately. If not all of the $1.8B a substantial amount would.
  
  Points Against Recognition in Q4
  • Since Tesla has never had a full year profit in its history, they and their auditors may take a conservative approach and deem future profits unlikely.
  • Despite 2 profitable Qtrs in 2018, Telsa still concluded (as seen in the 2018 10K) that it was "more likely than not" they would not be able to recognize the tax benefits with future profits.
  Points For Recognition in Q4
  • Tesla has been profitable in 4 of the last 6 Qtrs
  • With Model 3 fully ramped, GF3 producing vehicles and Model Y entry assured for 2020, profitability is "more likely than not".
  • Elon will likely state during the Q4 earnings call that Tesla expects a full year profit in 2020. Telsa can't state this publicly while simultaneously stating in the 2019 10K that future profits cannot be assured for taking the tax benefits.
  • Generally Accepted Accounting Principles (GAAP) needs to be applied consistently. You can't take the position: "profits are more likely than not but let's not take the earnings benefit just to be conservative". Profits are either "more likely than not" or they're "more unlikely than not". If it is the former, you take the benefit to earnings.
  I'm not sure which way this will go. If the huge benefit is not taken in Q4 2019, it's certain we'll see it in 2020.
  My brain tells me that they will take the huge benefit in Q4 2019 but my gut says they won't.
  
  TeslaQ has been all over the Balance Sheet pushing questions on Warranty Reserves, Accounts Receivables, etc.......but they're not talking about this one.
  
  Let's see how this plays out.

Accounting rules often seem odd to me (as a non-accountant). What would happen to a company in the following scenario:

The quarter in which a company determines the Operating Loss Carryforward will be more likely than not to be used (in future quarters) happens to be the last quarter of a long string of quarterly losses and it was a break-even quarter? The company is hanging on by a shoestring, heavy with debt, but the future looks bright. After the long string of losses they have a HUGE Operating Loss Carryforward to recognize in that quarter. This gives them a HUGE GAAP profit but no money with which to pay the taxes. It doesn't seem to make a lot of sense.

 

[Buckminster]

 

[PeterJA]

...In order for 80% of Tesla owners to put their car on a Robotaxi network (which I see in your chart for 2030), there would have to be an almost unfathomable change in attitude toward vehicles. If you ask any 100 people "how would you feel about strangers riding in your car" (you know, hot sex in the back seat, hopping a Robotaxi at last call and vomiting in the car, just being an angry kid and slashing the seats, even just swimming in a muddy creek and then hopping a Robotaxi, let your imagination run wild) -- I can't see 80% of people agreeing....

I wrote about this awhile ago

The first movies were essentially filmed stage-plays with the camera fixed in a long shot like a playgoer sitting in the audience. It took awhile for people to imagine the new possibilities of the movie camera: closeups, tracking shots, crane shots, etc. It always takes awhile for people to imagine the new possibilities of new technology.

I probably can't imagine all the new possibilities of Tesla Network, but I know smelly cars will not be a problem.

You call a robotaxi with your phone app. The car arrives smelling like hell or dirty or damaged. You immediately tap the appropriate button in your app, which calls another car for you, and you optionally snap a photo of the mess that automatically gets sent to Tesla. Tesla checks video of the previous rider (taken with the interior camera and stored temporarily) and verifies that this rider made the mess. This rider is immediately banned from Tesla Network and will never defile another robotaxi.

You will always report any abuse of the car in this way, because if you don't, the rider after you will report YOU, and you might get banned and have to appeal the decision, which is a big hassle.

After an initial learning period, there will be no abuse of robotaxis, or so little that most riders will never see it.

Tesla has proven that their engineers think outside the box. Let's give them credit for some imagination.

 

[Sudre]

I'm trying to rectify how this analysis means this forum really messed up a year ago. How could Elon say they were going to be profitable every quarter going forward, if they weren't confident in realizing these tax benefits? We didn't see that.

Elon did not say they would be profitable every quarter going forward. There were strings attached to his statement that everyone leaves out. It was clear to me at that time he thought 19Q1 profit was most likely not going to happen.

 

[Artful Dodger]

View attachment 502013

Word. Chicxulub kinetic impactor incoming. Shortzes can run, but dey can't hide...

Cheers!

 

[FrankSG]

A Path to S&P Inclusion ....NOW:
@Fact Checking - your comment above was related to the potential that Tesla's Call options gains could bring sufficient GAAP profits in Q4 to ensure S&P inclusion with the Q4 filing. In a separate post I commented that the gains would not likely be counted as income.
However:
There is an obscure item on Tesla's Balance Sheet that could bring huge upside to Q4....enough to achieve full year 2019 GAAP Profits and inclusion into the S&P. I have hesitated to bring this up in the past because it could easily be a big Nothing Burger and also because it is a very technical tax accounting issue. But since this is the weekend and your post touched on early S&P inclusion, I thought I would share it.

TL;DR: Tesla has deferred the recognition of $1.8B in tax benefits on the P&L because they could not conclude it was likely that they would have income in the future to take advantage of these benefits. Once profitability is likely (and supported by the auditors), this $1.8B (or a portion thereof) gets recognized immediately to GAAP profits. If Tesla concludes now that profitability is likely in 2020 and thereafter, $1.8B (or a portion) gets included in Q4 profits.

The Long Version
When a company incurs a loss, they record a tax benefit because they can reduce taxes in the future by offsetting future tax income with these tax losses. It's called a "Net Operating Loss Carryforward" (a Tax Asset).
So you would typically see a P&L as such:

$(100,000) - Pretax Income (Loss)
$ 30,000 - Tax Benefit (Expense)
$ (70,000) - Net Income (Loss)

However, the accounting rules state that you can only record this benefit if "it is more likely than not" that you will be able to use this benefit (tax asset) in the future.
Tesla has not recognized any of these benefits over the past 15 years because they could not confidently conclude and support to the auditors that profitably in the future was "more likely than not".
Here is Tesla's wording from the 2018 10K:

As of December 31, 2018, we recorded a valuation allowance of $1.81 billion for the portion of the deferred tax asset that we do not expect to be realized.....Management believes that based on the available information, it is more likely than not that the U.S. deferred tax assets will not be realized, such that a full valuation allowance is required against all U.S. deferred tax assets.​

You can see this deferred benefit (valuation allowance) on their deferred tax asset schedule from the 2018 10K below:
View attachment 501942

Tesla's position on this tax accounting is correct.

Here is the important point: As soon as Tesla can support to the auditors, that "it is more likely than not", that profitability will be achieved in 2020 and beyond, this tax benefit comes back to earnings immediately. If not all of the $1.8B a substantial amount would.

Points Against Recognition in Q4

• Since Tesla has never had a full year profit in its history, they and their auditors may take a conservative approach and deem future profits unlikely.
• Despite 2 profitable Qtrs in 2018, Telsa still concluded (as seen in the 2018 10K) that it was "more likely than not" they would not be able to recognize the tax benefits with future profits.

Points For Recognition in Q4

• Tesla has been profitable in 4 of the last 6 Qtrs
• With Model 3 fully ramped, GF3 producing vehicles and Model Y entry assured for 2020, profitability is "more likely than not".
• Elon will likely state during the Q4 earnings call that Tesla expects a full year profit in 2020. Telsa can't state this publicly while simultaneously stating in the 2019 10K that future profits cannot be assured for taking the tax benefits.
• Generally Accepted Accounting Principles (GAAP) needs to be applied consistently. You can't take the position: "profits are more likely than not but let's not take the earnings benefit just to be conservative". Profits are either "more likely than not" or they're "more unlikely than not". If it is the former, you take the benefit to earnings.

I'm not sure which way this will go. If the huge benefit is not taken in Q4 2019, it's certain we'll see it in 2020.
My brain tells me that they will take the huge benefit in Q4 2019 but my gut says they won't.

TeslaQ has been all over the Balance Sheet pushing questions on Warranty Reserves, Accounts Receivables, etc.......but they're not talking about this one.

Let's see how this plays out.

Another very interesting tidbit is how they've changed some of the wording in their SEC filings over the years. Credit for this find goes to @Rande.

2010

As of December 31, 2010, we had recorded a full valuation allowance on our United States net deferred tax assets as at this point we believe it is more likely than not that we will not achieve profitability and accordingly be able to use our deferred tax assets in the foreseeable future.

2011

As of December 31, 2011, we had recorded a full valuation allowance on our United States net deferred tax assets as at this point we believe it is more likely than not that we will not achieve profitability and accordingly be able to use our deferred tax assets in the foreseeable future.

2012

As of December 31, 2012, we had recorded a full valuation allowance on our net deferred tax assets because we expect that it is more likely than not that our deferred tax assets will not be realized in the foreseeable future.

2013

As of December 31, 2013, we had recorded a full valuation allowance on our net U.S. deferred tax assets because we expect that it is more likely than not that our U.S. deferred tax assets will not be realized in the foreseeable future.

2014-2017
Appear to be the same as 2013 and 2018.

2018

As of December 31, 2018, we had recorded a full valuation allowance on our net U.S. deferred tax assets because we expect that it is more likely than not that our U.S. deferred tax assets will not be realized in the foreseeable future.

It sounds like "will not be realized in the foreseeable future" is their stance on it today. It sounds like as soon as they expect part of these to be realized in the foreseeable future, the valuation allowance will be adjusted, and part of it will be added to the P&L.

 

[Mad@gascar]

Or trade in her Tesla for a car with more sedate acceleration.

Like an E-tron.

I think the technical term is "a more elegant pull-away"!

 

[Singuy]

I'm trying to rectify how this analysis means this forum really messed up a year ago. How could Elon say they were going to be profitable every quarter going forward, if they weren't confident in realizing these tax benefits? We didn't see that.

Actual quote from Q3 Earnings call

Elon: "Moreover, we expect to again have a positive net income and cash flow in Q4 and I believe our aspirations certainly will be for all quarters going forward. I think we can actually be positive cash flow and profitable for all quarters going forward, leaving aside quarters where we may need to do a significant repayment, for example in Q1 next year, but I think even in Q1, I think we can be approximately flat in cash flow by end of quarter."

 

[SoGA Fan Club]

A bit disappointed that Clean Technica also went down the sugar hole.
NHTSA May Recall Every Tesla Ever Made Over Sudden Unintended Acceleration Complaint | CleanTechnica

Seems they regret that decision.

"First of all, I’ll say that I think we f***ed up by publishing an article on this topic that lacked important context and included misleading framing."

That NHTSA Tesla "Sudden Unintended Acceleration" Petition? Created By A TSLA Short Seller Who Doesn't Own A Tesla | CleanTechnica

 

[StealthP3D]

I just want to point out that Elon’ Dinosaur doom meme has a double meaning

Obvi - Dinosaurs are GM, VW, BMW, etc...

But Tesla’s rise is also hastening the end of the dinosaur juice business!

I interpreted his dinosaur meme to refer to EV haters. Old, bitter people who hate EV's and are about to go extinct. In other words, TSLAQ.

 

[FrankSG]

This is fascinating, thanks so much for sharing!

It also looks like part of the tax benefits are due to SolarCity losses, and these appear to be subject to approval?

@The Accountant

Apparently out of Tesla's $1.8B valuation allowance, $425M originates from SolarCity.

(From SolarCity 2016 10-K)

Here is an article with some information about using NOLs when a company is acquire:

The Section 382 Limitation

Since a net operating loss can be used to directly reduce the amount of taxable income, it can be considered a valuable asset. If a business acquires an entity that has an NOL, the reason for doing so should not be the presence of the NOL, for the Internal Revenue Service has placed a restriction on the use of an acquired NOL. The restriction is documented in section 382 of the Internal Revenue Code. Section 382 states that:

1. If there is at least a 50% ownership change in a business that has an NOL,
   
   
2. The acquirer can only use that portion of the NOL in each successive year that is based on the long-term tax-exempt bond rate multiplied by the stock of the acquired entity.
   

Despite this restriction, the presence of a large NOL can impact the price paid by an acquirer to the shareholders of an acquiree, since it impacts the net-of-tax cash flows that an acquirer will derive from the ongoing results of an acquiree.

Section 382 can create a significant problem when a business has large unused NOLs on its books. In these situations, a business that is attempting to gain additional investor funding should avoid any equity offering that could give the appearance of a change in ownership. For example, it could avoid triggering section 382 by issuing non-voting preferred stock that cannot be converted into common stock.

I think there should be no question that Tesla did not acquire SolarCity for the NOLs. I don't really understand the second point about multiplying the tax-exempt bond rate by the stock. Maybe somebody more knowledgeable could weigh in on this?

 

[Mike Smith]

Twas a quiet January night until The Accountant waltzed by and dropped catnip on a clowder of feral cats...

Having our own in-house Accountant has really been paying dividends.

 

[generalenthu]

Accounting rules often seem odd to me (as a non-accountant). What would happen to a company in the following scenario:

The quarter in which a company determines the Operating Loss Carryforward will be more likely than not to be used (in future quarters) happens to be the last quarter of a long string of quarterly losses and it was a break-even quarter? The company is hanging on by a shoestring, heavy with debt, but the future looks bright. After the long string of losses they have a HUGE Operating Loss Carryforward to recognize in that quarter. This gives them a HUGE GAAP profit but no money with which to pay the taxes. It doesn't seem to make a lot of sense.

This is a simple one. Tax accounting is separate from Gaap accounting. Two very different books.

For tax accounting, you have to do it by jurisdiction. And it will have separate approach to calculating p&l. I believe deferred tax asset changes, etc., do not flow thru tax accounting creating a tax hit.

 

[Artful Dodger]

Youtube channel "The Market is Open" has a review of Sandy Munroe's recent appearance on Autoline Afterhours, focusing on Tesla Cybertruck production:

TMIO Tesla

"Sandy Munro loved the Tesla Cybertruck at first sight and gives his insight on Elon Musk's engineering decisions with the design of the truck. The Cybertruck may share learnings from the upcoming Model Y which will give it an edge over the competition and allow for an affordable and wide scale electric pickup truck."​

I will release my own bullet-pointed summary of Sandy's comments sometime later this weekend.

Spoiler: Hint

Sandy largely confirms the points I've made previously over on the Cybertruck thread, then adds more details about ramping production from 50K/yr to 600K/yr

Cheers!

 

[MP3Mike]

Another Jason Yang video of GF3:

Lots of progress on the foundation by the stamping section.​

 

[JustMe]

I interpreted his dinosaur meme to refer to EV haters. Old, bitter people who hate EV's and are about to go extinct. In other words, TSLAQ.

Aah yes, i can see that too.

I sort of consider TeslaQ to be like the slime mold in the doomed dinosaur epoch. TeslaQ is hardly majestic enough to be likened to a T-Rex. But - fun fact, most oil actually derived from such microscopic sludgy creatures. Let’s leave that crud buried where it belongs.