Tesla's gross margin and net profit

[electracity]

Tesla would not have spent the money to build the store or supercharger network if they only intended to sell 50,000 cars per year. Tesla could not sell a high price EV without supercharger.

To claim that Tesla could be either profitable or unprofitable at 50,000 cars you need to propose a viable ongoing business model at that production level. The same problem exists in evaluating ROI.

 

[jesselivenomore]

There is no reason to be upset, calm down friend, there is nothing wrong with us seeing things differently. Most of my post was about modelling 2016 profitability. Yes I touched the fact that a lot here seems to think that we would be very profitable today if not for spending in growth but I still don't agree with that, R&D spend would have to be cut in half just to break even, and as I said they can't go without R&D at all. So judging by the numbers it does look like Tesla would have to raise prices in order to be significantly profitable today, which is in stark contrast to what many believe here.

My dear friend, it is not that we see things differently, it is that you are ignoring all logic, and twisting your own words.

No, you did not merely "touched the fact" of how bulls view profitability today vs how you do, you LED with that to start your OP, and the rest of your modeling is to prove that point. It is the crux of your entire argument. To try to twist that around now, you must assume people here are illiterate children.

And no, they do not need to raise prices. That is preposterous. They need to sell more cars. But then, that would run in the face of your "loses $7.3k per car" conclusion.

 

[Perfectlogic]

My dear friend, it is not that we see things differently, it is that you are ignoring all logic, and twisting your own words.

No, you did not merely "touched the fact" of how bulls view profitability today vs how you do, you LED with that to start your OP, and the rest of your modeling is to prove that point. It is the crux of your entire argument. To try to twist that around now, you must assume people here are illiterate children.

And no, they do not need to raise prices. That is preposterous. They need to sell more cars. But then, that would run in the face of your "loses $7.3k per car" conclusion.

My model for 2016 is to show how next year is likely to see no profits which is contrary to what many here believe, and analysts as well. Furthermore I touched on the subject that even this year Tesla is not nearly as profitable as many here think, that is clear if you look over the books. I want to challenge the superbullish view that is very prevalent here. I agree that they need scale to get be profitable, I even said exactly this in my OP. That doesn't change the fact that Tesla did lose around $95M last quarter which is $7.3k per car they produced, if they cut all the fat from their spend then they could be break even or maybe even slightly profitable but as it is now they are losing money, and that is excluding capex.
I advice you to change your tone if you don't want your posts removed, you spend an awful lot of energy on ad hominem attacks instead of just discussing the matter at hand.

 

[jesselivenomore]

My model for 2016 is to show how next year is likely to see no profits which is contrary to what many here believe, and analysts as well. Furthermore I touched on the subject that even this year Tesla is not nearly as profitable as many here think, that is clear if you look over the books. I want to challenge the superbullish view that is very prevalent here. I agree that they need scale to get be profitable, I even said exactly this in my OP. That doesn't change the fact that Tesla did lose around $95M last quarter which is $7.3k per car they produced, if they cut all the fat from their spend then they could be break even or maybe even slightly profitable but as it is now they are losing money, and that is excluding capex.
I advice you to change your tone if you don't want your posts removed, you spend an awful lot of energy on ad hominem attacks instead of just discussing the matter at hand.

They may very well show little to no profits depending on how much they decide to spend on expansion. That however will have little impact on share price as long as the spending is for increasing future production or creating new products, and not merely to keep the lights on. Which is the crux of the matter: are they losing money because they are investing in future revenue, ala AMZN? Or are they losing money because costs to run the business are simply higher than what they bring in?

As I have already stated, earnings estimates have already come down drastically for the current quarter and for next year. Has that materially impacted share price? No, in fact share price popped 10+% the instant increase in production was reaffirmed. No one cares about EPS, as long as what brings it down is investment in future revenue growth and not a lack of core business profitability. And that is exactly what you are attacking by parroting the $7.3k per car loss.

So answer me, if they had delivered 1 more car in Q3, does that mean net income(loss) would have increased by -$7.3k?

Save the advice and empty threats, buddy. This is not Seeking Alpha, where you can parrot the same played out nonesense about loss per car and not get called out for it. And for the record, calling your posts ILLOGICAL is not an ad hominem attack. It has nothing to do with your username, and everything to do with the content of your posts.

 

[Bgarret]

As requested in your first post....chimed in, now radio silence on your part. Beginning to doubt your interest in a dialogue, more of a diatribe.

Cheers.

 

[LargeHamCollider]

Is my confidence in the strength of my logic important to you?

That's a joke right?

Anyway I think your numbers are a decent approximation, I don't expect Tesla to be profitable until 2019ish but am still a huge Tesla bull, my risk-adjusted (obviously pretty subjective) model values Tesla at 90B today with a 10% discount rate.

 

[Perfectlogic]

They may very well show little to no profits depending on how much they decide to spend on expansion. That however will have little impact on share price as long as the spending is for increasing future production or creating new products, and not merely to keep the lights on. Which is the crux of the matter: are they losing money because they are investing in future revenue, ala AMZN? Or are they losing money because costs to run the business are simply higher than what they bring in?

As I have already stated, earnings estimates have already come down drastically for the current quarter and for next year. Has that materially impacted share price? No, in fact share price popped 10+% the instant increase in production was reaffirmed. No one cares about EPS, as long as what brings it down is investment in future revenue growth and not a lack of core business profitability. And that is exactly what you are attacking by parroting the $7.3k per car loss.

So answer me, if they had delivered 1 more car in Q3, does that mean net income(loss) would have increased by -$7.3k?

Save the advice and empty threats, buddy. This is not Seeking Alpha, where you can parrot the same played out nonesense about loss per car and not get called out for it. And for the record, calling your posts ILLOGICAL is not an ad hominem attack. It has nothing to do with your username, and everything to do with the content of your posts.

I don't agree that profitability doesn't matter like I have already said, profitability always matters. If Tesla could expand at the same rate without burning equity then they would have a higher mkt cap as it would make their product more profitable today and expectations for that product would therefore be higher in the future.

"So answer me, if they had delivered 1 more car in Q3, does that mean net income(loss) would have increased by -$7.3k?"

Probably not, and that scale advantage is the reason I came to a breakeven estimate next year compared to losing money today. The reason I made that comment was to give people a sense of the amount of money Tesla is losing today. I realize that you think it's misleading in some way, you don't have to repeat yourself.

"Save the advice and empty threats, buddy. This is not Seeking Alpha, where you can parrot the same played out nonesense about loss per car and not get called out for it. And for the record, calling your posts ILLOGICAL is not an ad hominem attack. It has nothing to do with your username, and everything to do with the content of your posts."

You could say that calling my posts illogical is not ad hominem (as it isn't calling me illogical), but after you literally have done so in every single post you clearly have some problem with my person. Also stuff like "and twisting your own words" and "you must assume people here are illiterate children." makes your tone unpleasant. There is a containment thread for people who can't keep their tone under control, and the mods are pretty strict that is all I'm saying.

@Bgarret

I have answered a lot of people in the thread, I am sorry you didn't make the cut. You didn't really make any arguments as to why you chose your cost figures. My answer is that I disagree, you can see the reasoning for my numbers in my OP. But I'm happy you chimed in, I hope this upvote makes you feel better.

 

[Bgarret]

Confirmation your name is consistent with your personality, inverse interest in your opinion confirmed, welcome to the lonely position as sole member on ignore.