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What was our conclusion with teslas deferred tax credit? I don't see these impairment charges as anything material because the deferred tax credit when realized also does nothing to the stock. Might as well have accounting rule fight it out and neutralize this q.

I have hesitated commenting on the Deferred Tax Asset Valuation Allowance because it is a very difficult topic to explain.
Here is a very simplified explanation with my thoughts on recognition:
  • Tesla will have losses on their annual Tax Returns for many years to come as Stock Compensation is expensed at a higher amount for tax purposes than it is for the financial 10K. So when we see profits in their financial statements (10K), there will still be losses on their Tax Return.
  • The Deferred Tax Asset we are looking at relates to the fact that Tesla can take losses from prior years to offset profits in future years. But carrying forward these losses have an expiration. If you don't use them by the expiry date, you lose them. Since Tesla is not certain that they can use these losses before expiry, they have not taken this benefit.
  • The US Federal Tax law changed so that losses incurred starting in 2018 have no expiration. See this chart and my commentary below the chart:
1655565009327.png


  • I completed this chart a few years ago. It is directional at best. At the end of 2019, Tesla had $1,955m in Deferred Tax Assets related to prior losses that they have not recognized. Much of it will expire if not used except for the Federal Amounts in 2018 and 2019.
  • I have always believed that Tesla could at least take $333m ($200m from 2018 and $133m from 2019) as a benefit to income, since these years have no expiration. From reading prior 10Qs and 10Ks, I don't believe Tesla has taken this $333m benefit to the financial statements yet.
  • So there is a possibility that we see some benefit come to the P&L soon but I believe it is unlikely as Tesla appears to be very conservative in this area.
Of course I yield to @st_lopes and @CreativeName who both have a tax background.
 
I decided to watch my first "Now You Know" in a long time when I saw they went camping with their RT1. Jesse made it very clear the reason they were so harsh on Rivian for not having a useable charge network was two-fold:

1) The Rivian is billed as an "adventure vehicle", this means trips to remote areas should be considered a primary purpose, unlike other EV's that are purchased for daily commuting.
2) Rivian has made a big deal about their Adventure Charging Network that still doesn't exist.

Other EV's might be fine with home charging and using the non-Tesla DC charge networks occasionally, but not a vehicle billed specifically as an adventure vehicle.
I mostly agree with your thoughts but I would argue that $75k+ trucks are quite often the family adventure vehicle. We camp a lot with our X and often are one of just a few non-truck vehicles. I wouldn’t be buying a cybernotatruck if it were only destined to do dump runs and move sofas. It’s the versatility.

Rivian said they were going to build out their charging network for adventurers and the jury is still out on whether that will happen. I’d say it’s still early days.
I’ll concede that it may have been a misstep by Rivian to lean so heavily on the adventure charging advertising. At their current cash burn rate; I think that building out some chargers would be insignificant financially and worthwhile for the brand.

My point in the OP is that the other truck EV’s coming to market (F&GM) will have the same limitations if they’re unable to use the SC network. Maybe an opportunity for Tesla to throw them a life preserver.

Longer term I don’t think it’s an issue as I believe the national and state parks will get with the program and install charging infrastructure…I believe it fits their mission.
 
As to Ford, they have done a very "big brotherly" thing by including a Tesla charge adapter with every F-150 Lightning to rescue the hordes of Tesla drivers who couldn't quite make it to the nearest Supercharger.

And this tells us everything we need to know about Ford's current thinking. At their very foundation, they still want EVs to fail.

People can say that's just the PR creatives going off on their own tangent, but it isn't because clearly Jim Farley is fully on board with the narrative.

F investors should be livid. Clearly Ford has the opening here to OWN EV pickups, if they took the transition seriously and moved forward with a sincere effort. But that's simply not going to happen.

It's like everything else in life, they don't truly want to do it.....so they won't.
 
I have hesitated commenting on the Deferred Tax Asset Valuation Allowance because it is a very difficult topic to explain.
Here is a very simplified explanation with my thoughts on recognition:
  • Tesla will have losses on their annual Tax Returns for many years to come as Stock Compensation is expensed at a higher amount for tax purposes than it is for the financial 10K. So when we see profits in their financial statements (10K), there will still be losses on their Tax Return.
  • The Deferred Tax Asset we are looking at relates to the fact that Tesla can take losses from prior years to offset profits in future years. But carrying forward these losses have an expiration. If you don't use them by the expiry date, you lose them. Since Tesla is not certain that they can use these losses before expiry, they have not taken this benefit.
  • The US Federal Tax law changed so that losses incurred starting in 2018 have no expiration. See this chart and my commentary below the chart:
View attachment 818075

  • I completed this chart a few years ago. It is directional at best. At the end of 2019, Tesla had $1,955m in Deferred Tax Assets related to prior losses that they have not recognized. Much of it will expire if not used except for the Federal Amounts in 2018 and 2019.
  • I have always believed that Tesla could at least take $333m ($200m from 2018 and $133m from 2019) as a benefit to income, since these years have no expiration. From reading prior 10Qs and 10Ks, I don't believe Tesla has taken this $333m benefit to the financial statements yet.
  • So there is a possibility that we see some benefit come to the P&L soon but I believe it is unlikely as Tesla appears to be very conservative in this area.
Of course I yield to @st_lopes and @CreativeName who both have a tax background.

My gut, and this is just my opinion, is Tesla will book those DTAVA's at the last possible moment, so as to avoid the criticism of "cooking the books to make things look better than they are". Their, legitimate, argument will be that "we had to take them or we lose them, and that is not in the best interest of shareholders."

So over time, I expect these to be rolling additions to the bottom line, which you can probably bank on being taken at the last possible minute.
 
Well, it definitely wasn't Q4 earnings. Based on those, and 2022 projections, we should have stayed over 1200+ easy. And Covid lockdown in China didn't happen until after a massive SP drop, and has no long term impact on Tesla. Maybe you're talking about the Twitter deal and Elon selling shares last year, but again, those were after/before the Q1 SP crash.
You said after Q1, lockdown impact was evident after Q1 as was the Twitter deal.

*Edit: I guess you meant after the Q1 earnings report for Q4?
 
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Well, it definitely wasn't Q4 earnings. Based on those, and 2022 projections, we should have stayed over 1200+ easy. And Covid lockdown in China didn't happen until after a massive SP drop, and has no long term impact on Tesla. Maybe you're talking about the Twitter deal and Elon selling shares last year, but again, those were after/before the Q1 SP crash.
To be honest, Elon's selling-spree to raise cash for Twitter purchase did not help.
That week alone TSLA dropped well over 15% (IIRC, the day he started selling was 9% just a single day).
 
I think you are making a mountain out of a molehill considering that BTC is such a small percentage of Tesla's total cash on hand and, once an impairment is written off, it's written off. What I mean by that is if BTC goes sky high again and then crashes back to 18K, they won't have to write off another loss because it' already carried on the book at a very low cost basis. And they will not book a profit until they sell it at a price above the lowest value that asset attained in a previous quarter.

This is potentially a valuable tool to use at the right moment. I tend to take Tesla at their word when they indicated it's a long-term strategic hedge and I look forward to seeing how the decide to use it to their advantage, if they ever do. If not, no big deal, not everything works out as intended. It would have to be about four times as large as it is for this to bother me at all, and more than that as Tesla's cash reserves grow.
I dont disagree with anything you said. However, when mulling over the question: “is it likely Tesla is going to put more money into crypto?”, the fact that is is still on the balance sheet tips the balance to “yes.” Maybe in 5 years, it will prove to be a good investment but it is still not fundamental related. This is a risk we cant fault institutional investors for not taking. “Tesla will never be profitable”. “LIDAR is indisposable”. “China is a risk”. These are all stupid reasons for not buying. But “Tesla is getting too deep into crypto”? I’m not sure I can argue with this. Maybe this is it - Tesla will never buy another coin. But it may also buy a lot more - can anyone guarantee this will not happen? By getting rid of BTC, Tesla will do itself and shareholders a huge favor.
 
In addition to the large amount of cars we've seen at Shanghai's logistics lot, there are many vehicles at the Luchao Port loading onto a ship for the Chinese domestic market. Wu Wa mentions they are heading to the southern route at Guangzhou Nansha Port and the northern route at Tianjin Port.
Hopefully they arrive in time for Q2 delivery.

1655567848997.png


Wu Wa's Video Here
 
To be honest, Elon's selling-spree to raise cash for Twitter purchase did not help.
That week alone TSLA dropped well over 15% (IIRC, the day he started selling was 9% just a single day).
One of the things the good people of this site have drilled into my head over the years is that share prices and market cap aren't a pile of dollars.

There's nobody chipping away at the pile when it goes down. Nobody needs to shovel anything back on a pile to make it go up. It's a simple expression of how much one market participant values a share they're selling to another market participant at one moment in time.

We obviously all know this, but I find we forget it most days.

All of the crap that happened since January means exactly nothing right now. If someone wants shares tomorrow, they gotta pay whatever someone's willing to let em go for tomorrow.

We're not in a hole, we're just sitting down at the moment.
 
To be honest, Elon's selling-spree to raise cash for Twitter purchase did not help.
That week alone TSLA dropped well over 15% (IIRC, the day he started selling was 9% just a single day).
Perhaps it's just all macro. I compared tsla against my amd investment as they are almost polar opposite when it comes to management, but similar when it comes to disruption. Both stocks dropped as of now almost exactly 50% from peak. Both with higher than expected guidance without any demand concerns. The ceo is loved by Wall Street, main Street, doesn't post nonsense, and doesn't cause drama. Execution machine with exceeding expectations 12 quarters in a row.
 
I realize that having more EVs out there is a great thing … but if pull up to a supercharger and there is any other make of auto plugged in , I’m not sure how I will feel about it.

Cheers to the longs …. Better days ahead
They help to make Tesla more profitable as they pay (hopefully) for their service (beyond what we pay)?
 
The great Teslafication

How supply-chain turmoil is remaking the car industry​

This is a well researched article on what legacy auto is doing to emulate Tesla. Like most of these types of articles it stops short of extrapolating out in any real detail what is happening now into the not too distant future. Tesla is gaining momentum while the legacy automakers are still trying to turn around the ship from ICE to EV. No mainstream publication seems to be willing to take a risk and forecast out what will happen if Tesla actually does what they say they will do and grow at 50% for the next 5 to 10 years. The best we seem to get is dense list of chaos crammed into the next to last paragraph (below) which to me seems like the author is turning his/her head and whispering out the likely dreaded outcome so as no one will hear. At some point the media is going to have to admit that some legacy automakers are f'd.

"All this amounts to a once-in-a-century upheaval for a globe-spanning industry encompassing thousands of companies, millions of workers and billions in sunk ice-age costs. Refashioning value chains will require spending lots of time and money, and comes with the risk of failure. For suppliers, it potentially means less business, as vertical integration makes them less central to carmaking—a prospect reflected in the sliding share prices of some, including large ones like Continental, in the past few years."
 
Generally don’t post YouTube videos here or even watch very much YouTube, but stumbled across a good Rivian test drive/ misadventure from the Now You Know guys about a camping trip in the Rivian. I watched it because it was very similar to a trip I did in my Model Y last year.


For the TLDW folks, they were seriously disappointed with the non-Tesla charging network and had some significant road trip issues with the Rivian. Kind of disappointing that in 2022 EA and EVGo are still so unreliable. I suspect when Tesla eventually opens up their charging network anyone who road trips at all is going to switch.

Also… lots of funny commentary about how YouTubers pander to car makers so they can get access to test vehicles.
They have a Semi on order. I don't know how they plan to use it to test and report on it.
 
I might be a bit too emotional right now but if they are buying this “dip” I might have to consider selling. Maybe thats a stupid thing to do. I dont know. But please dont be daft and dig yourself a bigger hole than its already is, leadership.

@Artful Dodger I see you are passing out Disagrees again. When BTC is trashing the EPS like it is right now, I think you’ll have a hard time arguing this is not investor related.

No, it is not fundamental related but ask yourself this: if they are not willing to admit this was a mistake, whats gonna prevent them from making other similar not-a-mistake? How long before a one-time impairment loss becomes a recurring theme?
Here’s a thought. Maybe it’s your mistake. Looks like a mistake today, but when BTC was sitting at over $50k - hmmm…not so much. And didn’t they sell some of that BTC at a profit?

I’ve heard lots of this was a mistake that was a mistake for years now, but nobody ever waits long enough to see where it all ends up and then freely admits, dang, they were right all along.

People need to be less excited and willing to get on the judgement train.
 
Here’s a thought. Maybe it’s your mistake. Looks like a mistake today, but when BTC was sitting at over $50k - hmmm…not so much. And didn’t they sell some of that BTC at a profit?

I’ve heard lots of this was a mistake that was a mistake for years now, but nobody ever waits long enough to see where it all ends up and then freely admits, dang, they were right all along.

People need to be less excited and willing to get on the judgement train.

BTC purchase was speculation, pure and simple. I didn’t think it was the best use of cash when BTC was at 50,000 and certainly not now.

A billion dollars could have paid for a lot of superchargers, service support staff, or someone to pick up the phone when the press is trying to get answers about Tesla email leaks and damaging rumors.

Even geniuses make mistakes.
I know this from experience 🧐
 
Here’s a thought. Maybe it’s your mistake. Looks like a mistake today, but when BTC was sitting at over $50k - hmmm…not so much. And didn’t they sell some of that BTC at a profit?

I’ve heard lots of this was a mistake that was a mistake for years now, but nobody ever waits long enough to see where it all ends up and then freely admits, dang, they were right all along.

People need to be less excited and willing to get on the judgement train.

I like your post. right on. I just bought a little BTC (will buy more as it drops)and put it away in a wallet for a long time. Normal trading with fud and fear. Someone once said he likes to buy when there is blood in the street. I don't think many people understand fiat currency or inflation.