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Ultimately all this doesn't matter. What people will remember is how good or bad X is.

But I hope it is worth all the delays and resulting cash flow issues.
 
JasonA said:
I just love all the haters... and we know who you are... :roll:

Is Tesla losing $4000 per car sold? Nope, it’s capital investment for future sales
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http://longtailpipe.com/2015/08/11/...sales/?utm_source=dlvr.it&utm_medium=facebook

Trolls are gonna troll..
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First pointing out facts is not trolling, this word is highly misused here.

Second: both these facts are true and not mutually exclusive.

Tesla IS losing $4000/car sold in the quarter. Tesla IS putting money toward infrastructure causing the loss. The reason the loss is important is because of two reasons:

1) infrastructure expenditure CAN payoff assuming it is used in future to make MORE money than is spend on it. Obviously good investment in that case. But it is nor guaranteed and can't be known until later.

2) but 1) causes cash shortfall now. This has consequences and risks. It's not unplanned, or out of control. But it's also true.

3) if investors believe 1) is a good plan with more payoff than 2) there will always be new money to keep going. If that changes 2) will put you out of business.

IMHO and based on stock prices 3) is not the case at this time. But the launch of X, the sales, and time to Model 3 and response will impact 3.

So there is real risk, but it's required to be a growth company and a vision. And no, pointing any of this out, or saying there is real risk, is NOT trolling.
 
It IS misleading though.
Saying Tesla is loosing $4000 for every car sold implies the cars are sold at a loss.
At first glance, many that don't know the details, would think, "they should sell fewer cars until they can sell them at a profit".
Where the reality is they should sell as many cars as they can to make more profit.

A less misleading statement would be, "Tesla makes 250 Million selling cars, and looses 150 Million dollars" (replace numbers with the real ones of course).
 
Zythryn said:
It IS misleading though.
Saying Tesla is loosing $4000 for every car sold implies the cars are sold at a loss.
At first glance, many that don't know the details, would think, "they should sell fewer cars until they can sell them at a profit".
Where the reality is they should sell as many cars as they can to make more profit.

A less misleading statement would be, "Tesla makes 250 Million selling cars, and looses 150 Million dollars" (replace numbers with the real ones of course).
Click to expand...

Fair enough. I guess I personally always jump past the headline in anything of interest, so I mistakenly assume so does everyone else.
 
Tesla was honored yesterday with an entry in the FTAlphaville :

This is nuts. When's the crash? series.
This is Tesla. When does Musk crash?

...Tesla Motors, the loss making manufacturer of electric cars, has announced plans to sell an additional 2.1m shares to its investors, to raise $0.5bn in cash.

After raising the cash to help build a so-called “gigafactory” Tesla will have 130m shares in issue. At $245 per share the company is worth $32bn, about nine times annual sales. It expects to deliver as many as 55,000 cars this year.

Tesla has aspirations to be a significant manufacturer of batteries, as well as introducing a third model of electric car, which requires investment, about $1.5bn for this year alone, it predicts. We previously calculated Tesla had spent $3.1bn on capex and research and development up to the end of 2014, which works out to about $40,000 per car sold, so far.

At the end of June the company had access to $750m in bank funding lines, but has also said it may raise cash when the opportunity arises. Shareholders appear to like the opportunism, and the mild dilution, bidding up the price of the stock by 2 per cent, at pixel.

For anyone pleased to see Mr Musk investing alongside them, may we draw your attention to his remuneration. The CEO, PA & COB was granted 5.3m stock options in August 2012, vesting in ten “tranches”. As of the end of June, six of the tranches had been approved, and a further three were considered probable to be achieved.

Some might suggest the Tesla stock price is far more important to Mr Musk’s fortune than the impact of $20m spent in a symbolic show of support to the latest fundraising.

Indeed, according to the most recent quarterly...

The possibility of margin calls causing Mr Musk to sell stock, in the event of a share price decline, is listed as a risk factor by Tesla....
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http://ftalphaville.ft.com/2015/08/13/2137334/this-is-tesla-when-does-musk-crash/

The response to this offering by TSLA shareholders was a resounding:

Thank you sir! ...and may I have another?

Which was promptly accommodated by the veritable murderer's row of investment banks working together on the TSLA project:

Tesla Motors Inc. on Friday boosted the size of its stock offering, unveiled just a day earlier, by more than $140 million...

The new round of fundraising that suggests the cost of disrupting the global auto industry with its pricey electric vehicles is more expensive than Chief Executive Elon Musk initially thought...

While the Palo Alto, Calif., auto maker consistently has expanded revenue during that two-year period, its net losses have deepened. And the company continues to burn large sums of cash on capacity expansions and new products.
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http://www.wsj.com/articles/tesla-boosts-stock-offering-1439551803
 
cwerdna said:
dm33 said:
cwerdna said:
Do also keep in mind that although Tesla is a very new car company compared to the "Big 3" in the US in and Japan, they were founded in 2003 (http://www.teslamotors.com/about).
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And GM loses a bunch of money on every Volt sold despite having recently been bailed out.
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But the Volt is just a tiny drop in the bucket vs. the rest of their US vehicle sales.

And per http://www.gm.com/content/gmcom/home/company/investors/earning-releases.content_pages_news_emergency_news_2015_0723-earnings.~content~gmcom~home~company~investors~earning-releases.html, GM had net income of (positive) $1.1 billion last quarter.

Per http://media.gm.com/content/dam/Media/gmcom/investor/2015/aug/GM-Deliveries-July-2015.pdf from http://www.gm.com/content/gmcom/home/company/investors/sales-production.content_pages_news_us_en_2015_aug_0803-gmsales.~content~gmcom~home~company~investors~sales-production.html, in the US, YTD, 6,935 Volts were sold YTD out of GM's 1.78 million vehicles sold YTD in the US.
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Thats exactly why Tesla needs to spend lots of money; to build up a business. GM has mountains of income so it can throw away money in electric cars even if it doesn't want to build them.
Tesla has to build good electric cars because thats their entire business.
No one said its easy to build a car company. GM has a 107 year head start, having been founded in 1908. The US Government helped bail GM out but helping dismiss its debt and obligations to former employees in 2009 when GM went backrupt.
 
A good read if anyone cares, nothing new just well summarized:

"This is the best time for Tesla to sell $500 million in stock"

http://uk.businessinsider.com/r-tesla-seeks-to-raise-about-500-million-through-share-sale-2015-8?r=US&IR=T
 
Should be interesting to see how the stock market responses on 10/1 which is the beginning of Q4. 9/30
is the most recent "slip date" announced for Model X deliveries. Previously the deliveries were to begin
within Q3. But now that we're half way through Q3, it's now the last day of Q3. Luckily for Elon, 9/30 is
the middle of the week and not on a Sunday.
 
lorenfb said:
Should be interesting to see how the stock market responses on 9/30 which is the end of Q3 and when
the most recent "slip date" was announced for Model X deliveries. Previously the deliveries were to begin
within Q3. But now that we're half way through Q3, it's now the last day of Q3. Luckily for Elon, 9/30 is
the middle of the week and not on a Sunday.
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I have seen both reports that they MAY get a few units out by end of September to meet the ship date, and I have seen a couple of reports that Tesla hasn't even started ordering the parts from subcontractors. Which with lead time would mean they are not starting the production lines any time soon.

But then again both of these may be true. They may have enough manufacturing samples of various parts to build a certain number of initial units and ship them before end of Q1.

None of this really matters much. It really comes down to when they can start shipping the backlog and recoup the investment dollars in form of cash flow. They have more then enough buffer that months of delay isn't going to threaten them.

But if you know you will take a perceptual and stock price hit from missing the deadline then it makes even more sense to sell now while the stock still is holding good valuation. This would be my guess, because if they were going to meet the ship date it would have made more sense to wait until AFTER the news of production start raised the value to sell new stock.
 
dm33 said:
Thats exactly why Tesla needs to spend lots of money; to build up a business. GM has mountains of income so it can throw away money in electric cars even if it doesn't want to build them.
Tesla has to build good electric cars because thats their entire business...
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While I take your point, Tesla Motors also has another business: selling Powerwalls. I haven't paid much attention to it, but my impression is that it is expected to be more profitable that selling cars.
...No one said its easy to build a car company. GM has a 107 year head start, having been founded in 1908. The US Government helped bail GM out but helping dismiss its debt and obligations to former employees in 2009 when GM went backrupt.
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Yes. As one of the GM shareholders who had my position wiped out in that bankruptcy, I get very irritated when the new GM crows about its profits, some of which came from my pocket. I'm not a GM fan, to put it mildly...
 
epirali said:
seen a couple of reports that Tesla hasn't even started ordering the parts from subcontractors.
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for clarity those reports are about TSLA not signing or completing volume orders when the supplier expected. As in the supplier is leaking that to force negotiations to complete.

possibilities from that include:

A. They have enough parts to start limited production but haven't signed for volume parts delivery to keep from having cash outlay and parts piling up.

B. They are trying to decide between multiple vendors for a single part and one of them is leaking the story not knowing about the other vendor.

C. They are trying to decide between multiple vendors for a single part and one of them is leaking the story with full knowledge of the other vendor.

D. TSLA is trying to decide between building a part in house and buying from a vendor, and the vendor leaked the story not knowing they might blow their own deal.

of course everyone wants to read into the tea leaves whatever version fits their spin.
 
dhanson865 said:
epirali said:
seen a couple of reports that Tesla hasn't even started ordering the parts from subcontractors.
Click to expand...

for clarity those reports are about TSLA not signing or completing volume orders when the supplier expected. As in the supplier is leaking that to force negotiations to complete.

possibilities from that include:

A. They have enough parts to start limited production but haven't signed for volume parts delivery to keep from having cash outlay and parts piling up.

B. They are trying to decide between multiple vendors for a single part and one of them is leaking the story not knowing about the other vendor.

C. They are trying to decide between multiple vendors for a single part and one of them is leaking the story with full knowledge of the other vendor.

D. TSLA is trying to decide between building a part in house and buying from a vendor, and the vendor leaked the story not knowing they might blow their own deal.

of course everyone wants to read into the tea leaves whatever version fits their spin.
Click to expand...
Exactly, which is exactly what you are doing right? Because I didn't spin anything. I said there were conflicting reports. Which is factual.

In my OPINION a) is likely and indicates they are not about to start mass production soon, b/c/d is not likely at all because it gains vendors nothing and potentially cost them a lot. And from what I read the report (which may be inaccurate) was implying that the contracts with selected vendors were not yet issued, it wasn't a selection process.

Also I noted that it really has little material impact as they have a lot of cash, but it impacts perception and stock prices which may explain the round of stock sale now before Sep 30 deadline passes.
 
Interesting article, I am putting a BIG WARNING that the title is extremely and inappropriately alarmist. And it doesn't even match the content of the article. The content is actually a good read IMHO, not sure why they went with that title (click bait?). And this is on a day where Tesla stock is doing quit nicely.

Nice brief history of the story so far and the opportunity ahead. In case you don't believe it here is how it ends (spoilers):

"It's a cliche to say that every crisis is also an opportunity. But for Tesla, its latest crisis will finally force the world see the company for what it truly is.

And what it truly is could actually change the world."


http://uk.businessinsider.com/tesla-is-entering-another-crisis-2015-8?r=US&IR=T
 
Many of us remember in early 2014 when Adam Jonas of Morgan Stanley wrote a few analyst reports hyping
Tesla's future stock price. Shortly thereafter, Morgan Stanley participated in the sale of the $1.5B convertible
bond offering, i.e. the capital infusion that Panasonic was to match for Giga, but as yet has only provided about
$200M.

As of late per this thread, Tesla plans a new stock offering to generate needed working capital. And guess what
brokerage firm and analyst just recently hyped the stock and predicts a price of $465 based on a self-driving
vehicle. Could this be another quid pro quo to participate in the stock offering? So coincidental, isn't it though?

Seems the stock rose on the news, so both the Wall Street firms and Tesla both win. Have to love the "Random
Walk Theory" we learned in biz school, right?
 
Although its already known that MBZ will drop Tesla as their battery supplier, I didn't know how much these battery sales were as part of Tesla revenues ... 11% !!

The contract with Mercedes accounts for about 11% of Tesla’s accounts receivable, according to a writer at Seeking Alpha. The company’s latest 10-K filing with the SEC says:

Powertrain component and related sales for the periods presented were related to powertrain component sales to Daimler under the Mercedes-Benz B-Class Electric Drive program which commenced in April 2014 and to Toyota under the RAV4 EV program. Powertrain component and related sales for the years ended December 31, 2014, 2013 and 2012 were $113.3 million, $45.1 million and $31.4 million. During the third quarter of 2014, we completed the RAV4 EV program.

http://gas2.org/2015/08/21/mercedes-is-saying-goodbye-to-tesla/
 
redLEAF said:
Although its already known that MBZ will drop Tesla as their battery supplier, I didn't know how much these battery sales were as part of Tesla revenues ... 11% !!
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Which will be more than offset by the new sales to home and industrial power storage.

They'll have a steady cashflow with a ~15% profit per powerpack sold. Expecting to sell hundreds of millions dollars worth of packs in 2016.

http://www.nasdaq.com/aspx/call-transcript.aspx?StoryId=3406155&Title=tesla-motors-tsla-elon-reeve-musk-on-q2-2015-results-earnings-call-transcript

if you just take the reservations that have been made thus far, it's well over $1 billion worth of Powerpacks and Powerwalls. So – and that's with no marketing, no advertising, no sales force to speak of, really, we're not trying to sell it, it's basically a presentation and a webcast and 30 minutes of press Q&A.

So there's probably room to improve. So this is – I mean, really, we're basically sold out of what we could make in 2016 at this point. And assuming these orders are real, which they seem to be. So were looking at maybe, again, just to preface with meaningful uncertainty, $40 million to $45 million in stationary storage in Q4 and maybe as much as 10 times that number in for next year. So it's $40 million to $50 million that this year and 10x of that next year. And I mean that growth rate is probably going to just, keep going at quite a nutty level. It's probably at least a few billion dollars in 2017, somewhat speculative at this point, but I think that's likely. So it's sort of growing by half order of magnitude to an order of magnitude per year.
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Colin Michael Langan - UBS Securities LLC

Okay. And just last question, how should we think about the margin profile over the next few years as this ramps? I believe you said Q4 would be pretty low. Should that meaningfully improve and when do you kind of get parity with your gross margin on the auto side?


Elon Reeve Musk - Chairman & Chief Executive Officer

We are getting quite speculative about the battery business, but – what's that? I can't read your writing. Oh, 15%? Yeah, I think – yeah, I mean, in the early days, the battery gross margins that are on the order of 15%, over time that could rise to 25% or maybe 30%. But we just don't know that quite yet. And we'd have to look at what the price elasticity of demand is to understand where should we be pricing and what's the right gross margin to hit for.
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there is a reason Tesla does not report sales or its finances the same way other car companies do and its because it would destroy their cash cow of promoting hype
 
redLEAF said:
The contract with Mercedes accounts for about 11% of Tesla’s accounts receivable, according to a writer at Seeking Alpha. The company’s latest 10-K filing with the SEC says:
Click to expand...
You mean according to Anton, who shorts TSLA ?
 
dhanson865 said:
Which will be more than offset by the new sales to home and industrial power storage.

They'll have a steady cashflow with a ~15% profit per powerpack sold. Expecting to sell hundreds of millions dollars worth of packs in 2016.
Click to expand...

Right, just like when Tesla forecasts (hyperbole) its future and:

1. Becomes profitable in 2015/16 by projected Model X sales;
2. Becomes additionally profitable in 2017 by projected Model 3 sales;
3. Becomes exceptionally profitable in 2020 by selling 500K to a million BEVs.

Dream on!
 
Your bias is showing, Dave... It is not becoming on you.

DaveinOlyWA said:
there is a reason Tesla does not report sales or its finances the same way other car companies do and its because it would destroy their cash cow of promoting hype
Click to expand...
 

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