[bro1999]

Only fell short 1,300 or so units. 1,500 predicted, 260 produced. Whoops.
http://insideevs.com/tesla-reports-q3-sales-model-3-salesproduction-misses-mark/

Gif describing Tesla's *slight* miss:

 

[11715]

More good news for you. What a great way for you start the week on such a good note.

 

[DonC]

I don't think anyone expected anything else. When your "first sales" are to employees under NDAs it's pretty clear you haven't started delivering what most people would consider to be production vehicles.

Doesn't really matter. Even getting to 1500 per weeks doesn't matter. At this point what matters is seeing some black in a sea of red. Hopefully that will happen.

 

[Upper5Percent]

I don't think anyone expected anything else. When your "first sales" are to employees under NDAs it's pretty clear you haven't started delivering what most people would consider to be production vehicles.

Doesn't really matter. Even getting to 1500 per weeks doesn't matter. At this point what matters is seeing some black in a sea of red. Hopefully that will happen.

The company burned through $1.16 billion in cash in the second quarter...estimates are that Tesla will burn through $4.7 billion of cash this year reaching a total $10.6 billion of cash burn as a public company by the end of 2017, which is unprecedented for a nearly $60 billion market cap company....

For comparison, Amazon burned $1.1 billion of cash over three years and was generating billions of dollars of cash when it reached a $60 billion valuation. Costco burned through $1.9 billion of cash over eight years, but its value topped out at roughly $15 billion during that time period.

Since the last Tesla bonds that were sold at near junk rating...if Tesla needs to raise capital again, it could become very ugly...

 

[viking79]

It isn't a big deal yet, as they are near the steep growth curve, whether it happens now or in 1 month it wont matter much. If it takes more than a few months they might have capital issues. I foresee their delays with autopilot might also be a risk to the company, the switch from mobile eye cost more than a year.

 

[Upper5Percent]

It isn't a big deal yet, as they are near the steep growth curve, whether it happens now or in 1 month it wont matter much. If it takes more than a few months they might have capital issues. I foresee their delays with autopilot might also be a risk to the company, the switch from mobile eye cost more than a year.

It had $3.4 billion in cash at the end of 2016, but some $7 billion in debt after the SolarCity acquisition. It has major debt payments coming due in 2018, 2019 and 2021.

Tesla's 2018 convertibles have a conversion price of $124.52, less than half the current stock price. Yet, in Tesla's latest quarterly filing, it disclosed that holders of $411 million of those bonds, more than 60 percent of the principal outstanding, had filed notice to convert after the quarter ended.

Tesla has two other convertible bonds outstanding. One is a $920 million issue with a coupon of 0.25 percent, due in 2019. The other, with principal of $1.38 billion, matures in 2021 and carries a coupon of 1.25 percent. Both convert at about $360.

The above does not include the near $1.8 Billion junk bond sale this year...still being analyzed...

 

[DonC]

Since the last Tesla bonds that were sold at near junk rating...if Tesla needs to raise capital again, it could become very ugly...

The stock price defies rational analysis and and so far the red ink has only encouraged people. But this can't last forever. Longer than you could remain solvent perhaps but not forever. At some point Tesla needs to show it can make a profit. Then it will have to show it can generate a lot of profits to sustain the lofty stock price.

 

[Upper5Percent]

The stock price defies rational analysis and and so far the red ink has only encouraged people. But this can't last forever. Longer than you could remain solvent perhaps but not forever. At some point Tesla needs to show it can make a profit. Then it will have to show it can generate a lot of profits to sustain the lofty stock price.

Tesla's stock price reminds me of the childhood story...The Emperor's New Clothes...

Still waiting for the kid to point out the obvious...

 

[dannycamps]

All I could think about it Bob Uecker calling Rick Vaughn's pitch: "Just...a bit outside..."

 

[BAZINGA]

The numbers might not add up - yet, but you gotta give EM and Tesla credit. They are dragging the auto industry into the 21st century kicking and screaming. Even if the numbers catch up to them what they have done will survive. I just hope China isn't the one to buy the pieces if they should fail.

 

[saghost]

The company burned through $1.16 billion in cash in the second quarter...estimates are that Tesla will burn through $4.7 billion of cash this year reaching a total $10.6 billion of cash burn as a public company by the end of 2017, which is unprecedented for a nearly $60 billion market cap company....

For comparison, Amazon burned $1.1 billion of cash over three years and was generating billions of dollars of cash when it reached a $60 billion valuation. Costco burned through $1.9 billion of cash over eight years, but its value topped out at roughly $15 billion during that time period.

Since the last Tesla bonds that were sold at near junk rating...if Tesla needs to raise capital again, it could become very ugly...

Okay, what am I missing here?

People write two kinds of stories about Tesla's finances. I see posts like yours that seem to suggest a company struggling for money on the one hand, and then on the other side there's a company that's selling cars for twice the industry gross margin and selling 30-50% more cars for the same margin every year for several years in a row, which should be making a ton of money.

I've usually assumed that this is Tesla pushing the pace - that they are making a ton of money, but they're plowing it all back in to the business in the form of expanding the production lines and developing new products. If this is correct, they could show a net profit at any time just by slowing the investments down a little, but I'm getting the sense that this isn't how you see the situation?

 

[bro1999]

If Tesla's October Model 3 delivery numbers aren't at least where the Sept numbers were supposed to be, we'll know that production hell is more hellish than Elon ever predicted. Of course because Tesla doesn't give monthly numbers, we won't know for sure till January when they release the Q4 earnings report.

 

[viking79]

Tesla is fine as long as they can show they are able to ramp up production on the 3. As long as they can keep investors interested they should be able to raise more money. They are on a knife's edge though, too many stumbles and they could end up bought out by someone like VW

Tesla's gross margins are good, but constantly get compared on different terms as normal manufacturers. They should be put in similar terms to be compared.

 

[saghost]

Tesla's gross margins are good, but constantly get compared on different terms as normal manufacturers. They should be put in similar terms to be compared.

I'm not an expert on the financial side - could you clarify what you mean by that, please?

Is there an article I should be reading about how Tesla defines gross margin vs how others do?

I had assumed the articles citing gross margin all used the same definition...

 

[V0ltastic]

The numbers might not add up - yet, but you gotta give EM and Tesla credit. They are dragging the auto industry into the 21st century kicking and screaming. Even if the numbers catch up to them what they have done will survive. I just hope China isn't the one to buy the pieces if they should fail.

I agree and would prefer a merger with one of our domestic automakers.

 

[DonC]

Okay, what am I missing here?

People write two kinds of stories about Tesla's finances. I see posts like yours that seem to suggest a company struggling for money on the one hand, and then on the other side there's a company that's selling cars for twice the industry gross margin and selling 30-50% more cars for the same margin every year for several years in a row, which should be making a ton of money.

We've been through this before. Tesla nominally has higher gross margins because it EXCLUDES costs which all the other manufacturers INCLUDE. Move R&D and the cost of the stores and service centers from operating expenses to cost of goods sold -- which is what other manufacturers do -- and Tesla's margins look ordinary, at best. To be fair, Tesla's approach conforms more to what most people would expect while the other manufacturer's approach is aberrational, though long established. However, you can't do what you're doing and use Accounting Plan B to claim that Tesla has higher margins than others when everyone else is using Accounting Plan A.

I don't know how many billions of dollars Tesla has lost to date, but it's billions not millions. That's selling cars at $100K+. Rationally it's hard to see how that gets turned around selling cars for $50K much less $35K.

EDIT: Bloomberg says Tesla has lost $10B to date.

 

[Sheldon]

Only fell short 1,300 or so units. 1,500 predicted, 260 produced. Whoops.
http://insideevs.com/tesla-reports-q3-sales-model-3-salesproduction-misses-mark/

It looks to me like Tesla's Model3 is at least 10 months behind the Bolt which sold 579 units in December. That's assuming that they're able to deliver in October at the same quantity and quality level that the Bolt was at in December of 2016. Its possible that Telsa will need a couple of additional months to clean up the Model3 design so it might be more like the Model3 is more like a year behind the Bolt. But obviously, Tesla has more pent up demand so they will ramp up production much higher than the Bolt.

 

[Upper5Percent]

Okay, what am I missing here?

People write two kinds of stories about Tesla's finances. I see posts like yours that seem to suggest a company struggling for money on the one hand, and then on the other side there's a company that's selling cars for twice the industry gross margin and selling 30-50% more cars for the same margin every year for several years in a row, which should be making a ton of money.

I've usually assumed that this is Tesla pushing the pace - that they are making a ton of money, but they're plowing it all back in to the business in the form of expanding the production lines and developing new products. If this is correct, they could show a net profit at any time just by slowing the investments down a little, but I'm getting the sense that this isn't how you see the situation?

That is a false assumption...
The following article is referencing Tesla's very own guidance statements...which tend to be overly rosy and have to be walked back routinely...
http://www.zerohedge.com/news/2017-...ion-loses-13000-car-made-ahead-model-3-launch

 

[Mister Dave]

I don't know how many billions of dollars Tesla has lost to date, but it's billions not millions.

From 2008 to 2016 the total is $2,973,230,000.

 

[HOUSTONVOLTAGE]

Has Chevy or Ford or any other car maker had 400k reservations, at $1k apiece, for any car they were planning to sell in the future?

Maybe they have - but I'm not aware of it, please advise if so.

People keep measuring Tesla by the same yardstick as GM and other car-makers. Its not the same animal at all. Wait until next June or so, when Tesla is selling 10s of thousands of Model 3s a month and the sales are on a steep incline. Then you'll get it.

Full disclosure, although I LOVE my 2011 Volt, I also loved my 2013 Model S, until I traded it for a 2015 Model S with AP, which I LOVE.