Can someone explain why Tesla is cash flow positive (or should be by Q1 2013), but not profitable until end of 2013? Is it basically because reservation cash helps generate cash flow, but can't be booked as revenue yet, or is there more to it?
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Can someone explain why Tesla is cash flow positive (or should be by Q1 2013), but not profitable until end of 2013? Is it basically because reservation cash helps generate cash flow, but can't be booked as revenue yet, or is there more to it?
PureAmps
Model S P85 (#2817)
I did, here's the link for those that want to skip that step:
http://www.reuters.com/article/2013/01/14/autoshow-tesla-profit-idUSL2N0AJ0GX20130114
ELON states: shorts will feel the "STING"
For weeks now everyone going LONG and SHORT on TSLA is waiting on ONE single and
probably most valuable information withheld from ELON MUSK--what was the 4th
Quarter's production rate? Is it 0? 5? 10? 200? 400? With over 25 million shares
being shorted by TSLA, the longs are waiting for one of the most epic squeeze in
history should TSLA meet production estimate of 400 cars produced per week. On
the otherhand, if TSLA fails miserably to meet production targets, the shorts
will soon celebrate. So the question looms: has TSLA met production target? and
if so, why is ELON withholding information that might be beneficial to TSLA
shareholders?
While driving home, I asked myself a simple question: If
the TESLA MOTORS CLUB reservation holders are reporting that over 3,500 VIN
numbers have been produced, then why isn't ELON tweeting this spectacular news?
It is afterall, GOOD NEWS right? Could it be that TSLA isn't meeting production
target? Then it finally hit me, I recalled back during the summer of 2012 when
Elon was being interviewed and commented about short positions on TSLA. He
simply stated that "if you are shorting TSLA at the end of 2012, you are going
to feel the pain--believe me, this one is going to STING!" Yes, Elon used the
word "STING."
It isn't a big secret to investors by now that TSLA short
positions are extremely high. Everyone including TSLA and ELON knows this. As an
investor, just ask yourself one simple question: if you were the CEO of TSLA,
and you have met the 400 MODEL S production target, would you release that
information to the public immediately? Or would you wait and why? Investors like
you and I would simply say--HECK YEA! We'll release it ASAP because TSLA stocks
will rise immediately. However, you and I aren't geniuses like Elon, we tend to
act upon emotions and not logic. The man, ELON is too smart and too logical to
release this kind of information, he is thinking exponential rise on TSLA stock,
he is thinking--"I want to really give a BIG present to TSLA investors!" and
here's how withholding production numbers will benefit TSLA shareholders greatly
should ELON wait till February earnings call:
1. Since TSLA has been cash
flow positive for awhile now, TSLA shareholders are unlikely to sell their
stocks, the majority will simply wait till Feb. 2013 earnings call to anticipate
good news that can cause an epic squeeze. Which leads us to the next question,
how can an epic squeeze occur on TSLA?
2. An epic squeeze can occur for
TSLA by simply hitting production targets of 400 model S produced. However, an
even HIGHER squeeze can occur if you cause panic amongst ALL the shorts! Which
leads us to our next question. How do we create panic amongst ALL of the
shorts?
3. You will create panic amongst the shorts by withholding
information until its simply too late for them to act. A moment where all
shorts, realize its OVER and they ALL race for cover their positions. A moment
similar to the run on the banks during the great depression where all Americans
rushed to the banks to withdraw their money, causing banks to shut down and go
out of business overnight! Which leads us to the next question. So when is the
exact moment when ALL shorts realize its game over?
4. The moment where
all shorts realize its game over isn't at the 400 production target. It's going
to be the moment where TSLA suprises the market 2 months AFTER they've met
production target. The reason why releasing production targets 2 months after
the fact is because by then, TSLA has already moved beyond the point of meeting
production and they are on their way to hitting another milestone, which is
producing 5,000 model S for Quarter 1. Which brings the total model S production
unit to over 8,000 potential MODEL S produced. You see 8,000 is much greater
than 3,000. The moment when shorts realize "oh SHNAP, #$%$?" isnt at 3,000 model
S... its at a number far greater than 3,000. Its the number that ELON can simply
state during Feb's earnings, where he can state: we are on target to hit 8,000
MODEL S production for the 1st quarter. Which will undoubtely create a short
squeeze so high it will leave all TSLA investors with the biggest smile for
months!
So again, as CEO of TSLA just ask yourself: should I wait, or
should I release production numbers now? If its now, then its 3,000 model S
produced. But If I wait, its 8,000 MODEL S PRODUCED. Which one will create the
panic? You do the math!
For weeks now everyone going LONG and SHORT on TSLA is waiting on ONE single and
probably most valuable information withheld from ELON MUSK--what was the 4th
Quarter's production rate? Is it 0? 5? 10? 200? 400? With over 25 million shares
being shorted by TSLA, the longs are waiting for one of the most epic squeeze in
history should TSLA meet production estimate of 400 cars produced per week. On
the otherhand, if TSLA fails miserably to meet production targets, the shorts
will soon celebrate. So the question looms: has TSLA met production target? and
if so, why is ELON withholding information that might be beneficial to TSLA
shareholders?
While driving home, I asked myself a simple question: If
the TESLA MOTORS CLUB reservation holders are reporting that over 3,500 VIN
numbers have been produced, then why isn't ELON tweeting this spectacular news?
It is afterall, GOOD NEWS right? Could it be that TSLA isn't meeting production
target? Then it finally hit me, I recalled back during the summer of 2012 when
Elon was being interviewed and commented about short positions on TSLA. He
simply stated that "if you are shorting TSLA at the end of 2012, you are going
to feel the pain--believe me, this one is going to STING!" Yes, Elon used the
word "STING."
It isn't a big secret to investors by now that TSLA short
positions are extremely high. Everyone including TSLA and ELON knows this. As an
investor, just ask yourself one simple question: if you were the CEO of TSLA,
and you have met the 400 MODEL S production target, would you release that
information to the public immediately? Or would you wait and why? Investors like
you and I would simply say--HECK YEA! We'll release it ASAP because TSLA stocks
will rise immediately. However, you and I aren't geniuses like Elon, we tend to
act upon emotions and not logic. The man, ELON is too smart and too logical to
release this kind of information, he is thinking exponential rise on TSLA stock,
he is thinking--"I want to really give a BIG present to TSLA investors!" and
here's how withholding production numbers will benefit TSLA shareholders greatly
should ELON wait till February earnings call:
1. Since TSLA has been cash
flow positive for awhile now, TSLA shareholders are unlikely to sell their
stocks, the majority will simply wait till Feb. 2013 earnings call to anticipate
good news that can cause an epic squeeze. Which leads us to the next question,
how can an epic squeeze occur on TSLA?
2. An epic squeeze can occur for
TSLA by simply hitting production targets of 400 model S produced. However, an
even HIGHER squeeze can occur if you cause panic amongst ALL the shorts! Which
leads us to our next question. How do we create panic amongst ALL of the
shorts?
3. You will create panic amongst the shorts by withholding
information until its simply too late for them to act. A moment where all
shorts, realize its OVER and they ALL race for cover their positions. A moment
similar to the run on the banks during the great depression where all Americans
rushed to the banks to withdraw their money, causing banks to shut down and go
out of business overnight! Which leads us to the next question. So when is the
exact moment when ALL shorts realize its game over?
4. The moment where
all shorts realize its game over isn't at the 400 production target. It's going
to be the moment where TSLA suprises the market 2 months AFTER they've met
production target. The reason why releasing production targets 2 months after
the fact is because by then, TSLA has already moved beyond the point of meeting
production and they are on their way to hitting another milestone, which is
producing 5,000 model S for Quarter 1. Which brings the total model S production
unit to over 8,000 potential MODEL S produced. You see 8,000 is much greater
than 3,000. The moment when shorts realize "oh SHNAP, #$%$?" isnt at 3,000 model
S... its at a number far greater than 3,000. Its the number that ELON can simply
state during Feb's earnings, where he can state: we are on target to hit 8,000
MODEL S production for the 1st quarter. Which will undoubtely create a short
squeeze so high it will leave all TSLA investors with the biggest smile for
months!
So again, as CEO of TSLA just ask yourself: should I wait, or
should I release production numbers now? If its now, then its 3,000 model S
produced. But If I wait, its 8,000 MODEL S PRODUCED. Which one will create the
panic? You do the math!
As CEO of a publicly traded company, there is a lot that Elon can't say. In fact there was discussion of him getting in trouble for tweeting that Tesla was "cash flow positive." I don't know what the rules are but I'm pretty sure he's being a lot more careful about following the SEC rules. However, he did say in the Reuters article that they had achieved full production and that they would meet their 20K production for next year. He did not say but others have said that they are going to try and increase production beyond 20K. That would make perfect sense since they are effectively selling 400 cars a week and have been for a while now. Tesla needs to increase production to get the reservation list down to a manageable level.
Norbert
TSLA will win
From that article:
However I'd hope that they can demonstrate their ability to get there, much sooner. (Due to becoming cash flow positive, etc.)
- - - Updated - - -
Here is the quote:
Yay, it's (almost) official !!! I suppose this means the biggest hurdle has been taken.
Last edited:
Zzzz...
Member
Reuters said:
Tesla promised to start X production by the end of 2013 and deliveries in the beginning of 2014. Now that looks like more then a half a year delay...
I also believe the are pushing back production of right hand drive S from mid 2013 to end of it.
What would be the reasons? Problems with R&D? Or demand for S is so huge that TM for now concentrates on meeting it?
Norbert
TSLA will win
Both of those (maybe not problems with R&D, but the cost), plus that the longer ramp-up for the Model S may have delayed everything else as well, a few months. I guess the plans all remain the same, just that everything happens a bit later.
Hmmm I don't know if it's been mentioned anywhere else, but it looks like Tesla's going to be showing 'an experimental concept from electric carmaker Tesla' at the Detriot auto show this week. That should give us another good boost! http://www.huffingtonpost.com/2013/01/12/detroit-car-show-why-atte_n_2463300.html?ir=Detroit I wonder if it's the Gen III. It could be the X, but I think that would have been explicitly mentioned as opposed to described as 'experimental concept'. I don't think the X is considered an experimental concept anymore....
Yuri_G
Member
Also the Gen III used to be tentatively 2015-16 and now we're looking at three to four years from now (2016-17).
as far as changes to timeline... Zzzz, wasn't aware they'd said in past anything more specific than 2014 on Model X, but definitely was a quiet revision of Gen III a year of two out. perhaps we'll get a little more detail on causes of revisions coming out of autoshow in Detroit, or conference call next month.
we may never know details of why timeline changed, but Elon often speaks his mind. until then, I'll just speculate a little... even Tesla may have been caught off guard by demand for Model S. they may have had concerns in past about interest in the S peaking, and felt pressure to get the X and Gen III out ASAP to maintain revenue growth. with the significant likelihood of multi-year very robust growth in S demand, they may have seen the opportunity to put more breathing room in the strategic plan for X and Gen III. i.e., if S sales grow for next 3 years with increased visibility and geographical expansion, with a two year echo from X, why not establish brand and make profits an extra year or two and deliver a Gen III with that much better cost, range, and quality. and as another poster suggested, this frees more focus in short term to sort out increasing S production if they are going that direction.
all this is not to overlook (as I am confident the shorts will), Elon also quietly implied they've hit the 400 cars/week production level. :smile:
we may never know details of why timeline changed, but Elon often speaks his mind. until then, I'll just speculate a little... even Tesla may have been caught off guard by demand for Model S. they may have had concerns in past about interest in the S peaking, and felt pressure to get the X and Gen III out ASAP to maintain revenue growth. with the significant likelihood of multi-year very robust growth in S demand, they may have seen the opportunity to put more breathing room in the strategic plan for X and Gen III. i.e., if S sales grow for next 3 years with increased visibility and geographical expansion, with a two year echo from X, why not establish brand and make profits an extra year or two and deliver a Gen III with that much better cost, range, and quality. and as another poster suggested, this frees more focus in short term to sort out increasing S production if they are going that direction.
all this is not to overlook (as I am confident the shorts will), Elon also quietly implied they've hit the 400 cars/week production level. :smile:
CapitalistOppressor
Active Member
This. Current demand already matches their 20k goal and the initial round of store openings isn't even done yet, let alone having any real effort to advertise or push growth in the non US markets, which collectively are far larger anyways.
Model S is a high margin product, and from a business perspective it makes sense to focus your resources on that and try to turn it into a smash hit.
Plus, I suspect that Musk is getting past the need to over promise on delivery dates, and then being forced into making brute force efforts to make everything work. There were sound business reasons to ship Model S when he did, but I'd be willing to bet that the last six months were not how he envisioned them.
Just overly ambitious I think, which was true with the Roadster release date and the Model S release date, so I mentally add 1-2 years to any initially announced date
. The Model S moved a couple times as I recall. First it was 2009 or 2010 I think, then late 2011 (that was the day when I first looked at the website), then finally summer 2012.I've been telling people 4-5 years for the Gen3 when they ask me about a more affordable model. If Tesla comes in earlier, that's awesome, but the scale of prep for Gen 3 is quite a bit beyond the Model S. Tesla has a factory with space, but they'd still need a bunch of new presses, robots, etc and complexities with suppliers that'll dwarf those of the Model S.
mnx
2018 M3P
Hmmm when the car was revealed in March 2009 I don't think they ever mentioned it being ready the same year or even 2010. I thought late 2011 was always the target for the first signatures deliveries at which point the date changed to Mid 2012.
Just overly ambitious I think, which was true with the Roadster release date and the Model S release date, so I mentally add 1-2 years to any initially announced date
Yea, it was way, way back. Google is hard to find on it at this point due to the huge number of more recent hits, but here's an example. It's so old, it was even touted as possibly being an REV. Basically, when it was little more than a concept, the "target" date was quite early. Gen3 is basically a concept now, so that's why I'm not surprised if it's initially hoped date is off by a couple years.
Tesla Whitestar to be offered as both an EV and a REV
Pushing out dates can easily be that they are now focusing on under promising and over delivering.
FalconNinetyD
Active Member
Steph
Member
dmckinstry
Model X 2019
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