[JoeReal]

Tesla's current liability per car is $40.8K
GM's current liability per car is $8.3K

http://seekingalpha.com/article/4039702-questions-teslas-elon-musk

 

[DonC]

Lots of incorrect assumptions and some bogus comparisons. It's not written in stone that Tesla will survive as a company but this seems over the top on a number of fronts.

 

[Henry_FL]

First thing to learn is seekingalpha is worthless as a credible source for information

 

[Belgin]

Tesla has no profit making cars. GM does. Tesla has limited quality and testing resources so they will have more issues per car especially the ones they haven't been making for 5 years. There is more to an EV than the battery. Tesla will not survive as an automaker on their own. Once the federal credits go away they will lose their only source of profit. That's why giving Faraday and Lucid any time at all is a joke. Fisker proved that small car makers can't do it because you need the proper infastructure to make and maintain the car. When MB or Audi make an EV that targets the Model S then you see Tesla trying to sell itself to somebody.

 

[jsmay311]

Tesla has no profit making cars.

(eyeroll)

https://ycharts.com/companies/TSLA/gross_profit_margin

They make plenty of profit building and selling Model S's and X's.

They don't make profit building giant factories until those factories are churning out product.
They don't make profit designing/testing/tooling up for new vehicles before those vehicles are in production and generating sales revenue.
They don't make profit installing and operating charging stations that are free to use. (and will soon charge only enough to new owners to offset some costs but not turn a profit.)

Duh.

 

[Dakster]

The figures never lie, but liars always figure...

How many cars does Tesla have out on the road vs. GM... I seem to remember GM getting a bail out of their financial obligations when they went bankrupt as well. Elon Musk did not get as rich and powerful as he is by doing things that lose money. Takes money to make money. He has his hands in other industries as well.

Not meaning to bash either company. I want them BOTH to survive and prosper. In fact, I want them all to survive in the EV/EREV market. It will only work if they all play nice together. Which is what worries me about the charging infrastructure. It's almost like we have VHS and BETA going at it again.

 

[DonC]

https://ycharts.com/companies/TSLA/gross_profit_margin

They make plenty of profit building and selling Model S's and X's.

I understand your point but he's correct in saying that Tesla doesn't make a profit selling vehicles. The chart you've cited shows the gross sales margin, which is the difference between producing the good and the sales price of the good. Profit is the difference between revenue from all sources and the costs of running the business (the things you've mentioned as not being profit centers as well as many more).

While Tesla makes a positive margin selling vehicles it is not profitable. Not sure of the exact number, but I believe that car companies generally need to make a 48% margin in order to be profitable. Tesla is at something like 28%, so it's definitely short. i don't think the chart includes the sale of ZEV credits. That would help Tesla a lot since it might add another 7% to the margin. That's at least a fighting chance. If it is included then things look pretty dismal.

FWIW the Bolt EV has a positive margin and may get to the 48% margin if you include the ZEV credits and the contribution to CAFE. Without those factors the Bolt EV "loses money".

Elon Musk did not get as rich and powerful as he is by doing things that lose money. Takes money to make money. He has his hands in other industries as well.

While it's true that you can't make money running a business that doesn't make money, you most certainly can make a lot of money selling a business that doesn't make money. GM paid more than a billion dollars for Cruise Automotive and I don't think that company ever made a dime.

 

[11715]

Tesla has no profit making cars. GM does. Tesla has limited quality and testing resources so they will have more issues per car especially the ones they haven't been making for 5 years. There is more to an EV than the battery. Tesla will not survive as an automaker on their own. Once the federal credits go away they will lose their only source of profit. That's why giving Faraday and Lucid any time at all is a joke. Fisker proved that small car makers can't do it because you need the proper infastructure to make and maintain the car. When MB or Audi make an EV that targets the Model S then you see Tesla trying to sell itself to somebody.

What federal credits are Teslas source of profit? Are you talking about the federal tax credits available to a buyer?

 

[Dakster]

DonC - Microsoft and Motorola buy out companies like that too, they incorporate their technology into their own company for profit, even though the original company wasn't profitable.... Kinda wasn't where I was going with it, but it's also a potential source of profit for him. Sell Tesla when the time is right, the problem is that the company will be "worth" a lot so only a select few companies would be able to afford it.

 

[DonC]

Kinda wasn't where I was going with it, but it's also a potential source of profit for him. Sell Tesla when the time is right, the problem is that the company will be "worth" a lot so only a select few companies would be able to afford it.

I suspect this was the plan. The problem is that, as you point out, the stock price makes is difficult to find a buyer. Plus Tesla doesn't have any "must have" technology.

The biggest risk to Tesla at this point is Trump and the Republicans. Take away CARB and the solar credits and Tesla likely goes belly up.

What federal credits are Teslas source of profit? Are you talking about the federal tax credits available to a buyer?

I think he was referring to the $7500 tax credit. Those likely don't matter that much for the Model S and Model X but would definitely matter for the Model 3. However, note that Tesla now owns Solar City and tax credits play a big role in that business as well. So the subsidy question is a fair one.

 

[11715]

I suspect this was the plan. The problem is that, as you point out, the stock price makes is difficult to find a buyer. Plus Tesla doesn't have any "must have" technology.

The biggest risk to Tesla at this point is Trump and the Republicans. Take away CARB and the solar credits and Tesla likely goes belly up.

I think he was referring to the $7500 tax credit. Those likely don't matter that much for the Model S and Model X but would definitely matter for the Model 3. However, note that Tesla now owns Solar City and tax credits play a big role in that business as well. So the subsidy question is a fair one.

Tax credits for buyers are not a profit source.

 

[viking79]

Plus Tesla doesn't have any "must have" technology.

The biggest risk to Tesla at this point is Trump and the Republicans. Take away CARB and the solar credits and Tesla likely goes belly up.

Tesla is very good at marketing key must have features, Autopilot, Superchargers, 17" touch screen, OTA updates, bioweapon defense mode, fast acceleration, etc.

I don't think they have to worry from Trump since they are all American, but I do find it funny that many Trump supporters don't like Tesla when they are as American of a company as you can be. I also find it funny that many people complaining about EV subsidies have no complaints about their child tax credits or other subsidies they might take advantage of.

 

[mczajka]

Tesla has no profit making cars. GM does. Tesla has limited quality and testing resources so they will have more issues per car especially the ones they haven't been making for 5 years. There is more to an EV than the battery. Tesla will not survive as an automaker on their own. Once the federal credits go away they will lose their only source of profit. That's why giving Faraday and Lucid any time at all is a joke. Fisker proved that small car makers can't do it because you need the proper infastructure to make and maintain the car. When MB or Audi make an EV that targets the Model S then you see Tesla trying to sell itself to somebody.

I'm not sure I agree with this statement, on a personal level. I'm looking at every EV now as if the federal tax credit were NOT there. So, with that in mind, would I ever buy or lease a Bolt? Probably not. It's just too much for "what's inside." I think the Tesla "brand" will sell with or without the tax credit. The lower priced/range EVs will struggle without price reduction.

 

[saghost]

I understand your point but he's correct in saying that Tesla doesn't make a profit selling vehicles. The chart you've cited shows the gross sales margin, which is the difference between producing the good and the sales price of the good. Profit is the difference between revenue from all sources and the costs of running the business (the things you've mentioned as not being profit centers as well as many more).

While Tesla makes a positive margin selling vehicles it is not profitable. Not sure of the exact number, but I believe that car companies generally need to make a 48% margin in order to be profitable. Tesla is at something like 28%, so it's definitely short. i don't think the chart includes the sale of ZEV credits. That would help Tesla a lot since it might add another 7% to the margin. That's at least a fighting chance. If it is included then things look pretty dismal.

I've always read that typical auto industry gross margins were more like half what Tesla is running, which matches with this:

http://csimarket.com/Industry/industry_Profitability_Ratios.php?ind=404

I don't know much about that site - it's just the first link that the Google gave me for typical automotive gross margin, and it looked pretty authoritative and matches what I've read elsewhere.

 

[Joe67]

Tesla's current liability per car is $40.8K
GM's current liability per car is $8.3K

And?
What is this telling me?

 

[saghost]

And?
What is this telling me?

It tells you that Seeking Alpha continues to be full of Tesla short sellers who write hit pieces in hopes of driving the stock down.

 

[Qinsp]

Tesla is very good at marketing key must have features, Autopilot, Superchargers, 17" touch screen, OTA updates, bioweapon defense mode, fast acceleration, etc.

I don't think they have to worry from Trump since they are all American, but I do find it funny that many Trump supporters don't like Tesla when they are as American of a company as you can be. I also find it funny that many people complaining about EV subsidies have no complaints about their child tax credits or other subsidies they might take advantage of.

So you think it's the working class democrats who are buying Tesla cars and TSLA stock? Numbers are up since the election.

Tesla is non-union, and has little diversity at the management level. White Guy Inc. Not exactly a food bank for the poor either.

Not every non-Hillary gives a crap about Trump the Man. We just wanted to fire the existing government before they finished picking all our pockets and selling the last bits of our country to foreign nationals.

 

[Raymondjram]

The figures never lie, but liars always figure...

How many cars does Tesla have out on the road vs. GM...

Not meaning to bash either company. I want them BOTH to survive and prosper.

Are you asking for all their cars, or just EVs? GM makes more cars, and TM makes more EVs, but GM made the first EVs.
I also wish for BOTH to survive because competition increases the market offers. But there are fanboys on both sides that shoot down the competition foolishly without valid reasons. Both companies are risking millions to develop and produce the next EV, so they have to lose money for a while to make money later.

In reality, GM will recover its investments sooner for the Bolt EV development than TM will for the Model 3, such that GM will have a Gen 2 Bolt EV in five years (2021). TM hasn't redesigned the Model S yet, and went with battery and power upgrades instead. That costs less to do, but a Gen 2 Model S has been expected by they customers. And right now, Tm is busy with the Model 3 development, so if a Gen 2 Model S is planned, it will probably be out after 2021.

 

[Raymondjram]

The lower priced/range EVs will struggle without price reduction.

Not true. If you want a BEV, you are willing to pay for it. If you just want transportation, then you buy what will cost less. If I wanted a sportscar but can't afford a Model S, I can buy a Corvette Stingray at my GM dealer right now, and get what I want: a sportscar for less!

Lower priced EVs will never struggle because the Bolt EV has a better range that the lowest cost Model S, yet cost less than half of that same Model S. Bolt EVs are being bought by customers who want a EV with range. Cost is ALWAYS secondary. If the Bolt EV cost is too much for you, then you don't want a long range EV. You want a "cheap" EV". Buy a used Nissan Leaf which is the most sold EV in modern history, and get the cheapest EV.

Tesla Motors buyers are those who want an electric sportscar and will pay for it. But for that money I would buy a Volt and a Bolt EV, and spend less.

 

[Joe67]

It tells you that Seeking Alpha continues to be full of Tesla short sellers who write hit pieces in hopes of driving the stock down.

Well, there is that