CNN: Tesla's Net Profit 'Doesn't Come From Selling Cars' (cnn.com) 202
"Tesla posted its first full year of net income in 2020 — but not because of sales to its customers," reports CNN:
Eleven states require automakers sell a certain percentage of zero-emissions vehicles by 2025. If they can't, the automakers have to buy regulatory credits from another automaker that meets those requirements — such as Tesla, which exclusively sells electric cars. It's a lucrative business for Tesla — bringing in $3.3 billion over the course of the last five years, nearly half of that in 2020 alone. The $1.6 billion in regulatory credits it received last year far outweighed Tesla's net income of $721 million — meaning Tesla would have otherwise posted a net loss in 2020. "These guys are losing money selling cars. They're making money selling credits. And the credits are going away," said Gordon Johnson of GLJ Research and one of the biggest bears on Tesla shares...
Tesla also reports other measures of profitability, as do many other companies. And by those measures, the profits are great enough that they do not depend on the sales of credits to be in the black... Its automotive gross profit, which compares total revenue from its car business to expenses directly associated with the building the cars, was $5.4 billion, even excluding the regulatory credits sales revenue... But the debate between skeptics and devotees of the company whether Tesla is truly profitable has become a "Holy War," according to Gene Munster, managing partner of Loup Ventures and a leading tech analyst.
"They're debating two different things. They'll never come to a resolution," he said. Munster believes critics focus too much on how the credits still exceed net income. He contends that automotive gross profit margin, excluding those sales of regulatory credits, is the best barometer for the company's financial success. "It's a leading indicator," of that measure of Tesla's profit, he said. "There's no chance that GM and VW are making money on that basis on their EVs..."
Tesla shares are now worth roughly as much as those of the combined 12 largest automakers who sell more than 90% of autos globally. What Tesla has that other automakers don't is rapid growth...
Tech analyst Gene Munster also tells CNN "Something most people can agree on... Electric vehicles are the future. I think that's a safe assumption."
Tesla also reports other measures of profitability, as do many other companies. And by those measures, the profits are great enough that they do not depend on the sales of credits to be in the black... Its automotive gross profit, which compares total revenue from its car business to expenses directly associated with the building the cars, was $5.4 billion, even excluding the regulatory credits sales revenue... But the debate between skeptics and devotees of the company whether Tesla is truly profitable has become a "Holy War," according to Gene Munster, managing partner of Loup Ventures and a leading tech analyst.
"They're debating two different things. They'll never come to a resolution," he said. Munster believes critics focus too much on how the credits still exceed net income. He contends that automotive gross profit margin, excluding those sales of regulatory credits, is the best barometer for the company's financial success. "It's a leading indicator," of that measure of Tesla's profit, he said. "There's no chance that GM and VW are making money on that basis on their EVs..."
Tesla shares are now worth roughly as much as those of the combined 12 largest automakers who sell more than 90% of autos globally. What Tesla has that other automakers don't is rapid growth...
Tech analyst Gene Munster also tells CNN "Something most people can agree on... Electric vehicles are the future. I think that's a safe assumption."
Ah the trolls are EVERYWHERE. (Score:5, Insightful)
The fact is, that even these certificates are because they sold EVs. If they were selling LICE, then they would be buying the certificates as a cost of doing business. So, claiming that profits do not come from selling cars is just total BS.
Re: Ah the trolls are EVERYWHERE. (Score:5, Insightful)
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He is also SPOT on.
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Same story as Amazon. If investors had taken all the profits in the first decade, Amazon would never have grown to where it is today.
Re: Ah the trolls are EVERYWHERE. (Score:3, Insightful)
Re: Ah the trolls are EVERYWHERE. (Score:5, Informative)
I'd also like to point out that everyone is always so desperate to subtract credits (which come mainly from the EU). Nobody seems so eager to:
* Add in the extra $7500 Tesla could charge per EV in America if the EV credit didn't exclude them (an amount that dwarfs all direct credits earned by Tesla)
* Subtract the severalfold increase in stock compensation expense caused by Tesla's stock runup (in Q1 it was $211M; in Q4, $633M)
* Subtract anything "long-term unsustainable" from anyone else's books (including but not limited to EV credits) - including, one should add, ICE vehicle manufacture itself.
* Look at non-GAAP measures, which exist to negate the impact of one-time / expansion expenses that drag down GAAP and don't reflect the steady-state (said measures are, FYI, superb at Tesla - Q4 = $903M non-GAAP, $1850M EBITDA). E.g. in Q4 alone Tesla expanded stores and service by 12,2%, mobile service by 5,5%, superchargers by 17,6%, etc. These are costs which have no bearing on Tesla's steady-state sustainability.
As was noted before: while nothing bad comes with improving non-GAAP profits, excessive GAAP profits come with taxes and demands for buybacks or dividends. It is in Tesla's interest to minimize GAAP profits.
There's also this notion that "credits are going away". Perhaps direct regulatory credits to manufacturers may be on a decline, but globally, buyer credits are on a brand-new upswing. Buyer credits indirectly subsidize EV manufacture via increasing margins.
This also ignores the elephant in the room that anyone in the world can get these credits. All they have to do is make and sell EVs. That's it. Their inability or unwillingness to switch to EVs is not Tesla's fault, and it's not Tesla's problem. Tesla's global share of BEVs has been climbing since 2017 and is nearly a quarter of all BEVs produced (Tesla did lose market share in Europe in 2020, but primarily because of manufacturers selling no-profit or negative-profit EVs to dealerships, to be immediately rebranded as preowned, in order to reduce their emissions fines before year-end. And it's worth noting that Tesla has to pay transoceanic shipping costs and then 10% import tariffs before their vehicles hit the market, a scenario which will reverse this year with the opening of GF Berlin)
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As things stand, the US government pays EV buyers $7,5k to not buy from Tesla or GM (and Tesla still completely dominates the market). You honestly think that doesn't have any impact to what Tesla can charge, or how much buyers option up their vehicles?
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In the steady-state, Tesla has to pay for maintenance of its network, but it does not have to pay for increasing the total number of stations 17,6% in a single quarter. Steady-state = maintenance plus new stations at the rate of growth of the overall
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According g to the article they could own 90% of all auto sales overnight by buying the 12 largest auto makers.
Who needs growth when you can buy a monopoly?
That's not how markets work....
You'd need to pay a premium to take over a company. The current shareholders have to want to sell to you.
(Pretending the regulators wouldn't just shoot down your proposal.)
Same as GameStop (Score:2, Informative)
So many bozos scream about everything.
The fact is, that even these certificates are because they sold EVs. If they were selling LICE, then they would be buying the certificates as a cost of doing business. So, claiming that profits do not come from selling cars is just total BS.
Shorts have been attacking Tesla for several years now, it was exactly the same thing as hedge funds are doing to GameStop right now.
Tesla used to be the most shorted stock in history - they've still got a significant short interest, but I think some of the shorts have been scared off. They're not over 100% like GameStop is, but it used to be over 25% shorted. It's now down around 5% short. (Unless I dropped a digit or something - can someone fact check?)
Reading about Tesla was rife with blatant lies and er
Two completely different things (Score:5, Informative)
GameStop was shorted because people believed the business was in trouble - because it is.
Tesla is completely different situation.
Consider this. Suppose I offered you this deal - you give me $10,000 today and I'll pay you back $10,000 in ten years. Would you take that deal? If you were a smart investor, you'd expect to get back $20,000 ten years from now. $1 today is worth $2 in ten years.
Notice the summary mentions:
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Tesla shares are now worth roughly as much as those of the combined 12 largest automakers who sell more than 90% of autos globally.
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Tesla shares are currently priced as if they are worth as much as the entire global auto industry. More than all major car manufacturers *combined*.
Musk has repeatedly pointed out how ridiculous the share price is.
You say that valuation is based on where they'll be in ten years?
That makes sense if they are guaranteed to be twice as big as the entire global auto industry ten years from now. On the other hand, if Tesla does phenomenally well and grows 10X over the next years, selling $20 BILLION of cars every year, it won't be worth today's price.
Today's price needs them to be selling $40-$50 billion within ten years - twice as much as all the cars sold around the world. Which is a tall order since last I checked they aren't even the selling the most EVs. Last I checked, BVD sells the most EVs.
If you are certain Tesla is going to do very well, maybe grow their business by 5X over the next years, you'd be willing to pay maybe $250 for the stock. Since it's currently selling at $793, if you think Tesla is going to do very well and end up worth $500 you'd short it at $793.
That's not even considering that fact that even if you think they will do very well, and you're smart, you realize you could be wrong. Shit happens. Elon could fall dead tomorrow, maybe skydiving with Branson. So if you think Tesla will probably end up larger than the entire auto industry put together, you STILL wouldn't value the stock as if they already are - because it's possible that they won't be.
Re:Two completely different things (Score:5, Informative)
Last I checked, BVD sells the most EVs.
First off, it is BYD, and secondly, it is not even close. [statista.com] Tesla is the world's largest builder of EVs. [insideevs.com]
OTOH, if you add in BYD's hybrids, then yes, BYD is bigger. But the fact is, BYD sells ICE, hybrids, and EVs.
Re:Two completely different things (Score:4, Insightful)
That makes sense if they are guaranteed to be twice as big as the entire global auto industry ten years from now.
Something to keep in mind though is that we're not just talking about the potential car industry though. Here are a few other sectors to consider:
* Solar - This grew in Q4 and they plan to keep expanding on it and being one of a few companies offering roof tile based solar.
* Batteries - They will continue to scale this sector up for their cars, powerwall, and megapack. They could potentially become a supply chain provider for other companies as well though.
* Energy - They will be an energy provider through some of their solar plans and there is potential for an expansion on this through their battery tech but we haven't seen any guidance to suggest this yet.
* Automated Driving Software - Musk said in the Q4 call that they could see themselves licensing the Autopilot suite to other companies. This could be a huge source of revenue if they get it to Level 4.
* Robotaxi - Should be obvious.
* Electric Motors and drive train packages - While they haven't mentioned doing this, they could sell their whole drive train to other car makers.
Re: Two completely different things (Score:3)
You forgot Trucking which can be heavily automated, increase miles per day, decrease stop&go fuel costs, and cut down on maintenance.
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I doubt Tesla will go into Trucking within the next 10 years. They have enough on their plates right now and everything I mentioned are things that are easy to sell right this second. Starting up a freighting sector would incur a whole different set of costs and require building up different types of logistics and systems. If FSD comes fully online, it's possible they could do it, but I rank it low. It has been a moonshot idea of my own, especially when paired with Starlink, but it'd really stress the compa
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I bought one share of Tesla at something like $26 just because I wanted to see what happened to the company. When that hit $400, I figured I'd just stay there and keep watching. When I found I had 5 shares worth $625 each, I sold three shares and kept 2 shares. I don't care if Tesla goes up 10x or even 100x, I'm perfectly happy with taking the profit I got and running, leaving the last two shares to keep watching how the roller coaster goes (as in, if I lose all value of those shares, I'm content, but do
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Sounds like a very good plan. At $5 / share (split adjusted) you probably bought that at a reasonable valuation for the time.
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In reality, in about 5 years Tesla will dominate auto manufacturing worldwide *and* own all the charging stations.
Tesla will be in top 10 within 2-3 years. However, that will be only because the LICE makers have moved far too slowly to EVs, and will continue to lose sales.
In 5 years, yeah. I would think that they will be in the top 3.
But own all the charging stations? Not even close. Governments, businesses, etc will own plenty out there. Even now, their network is by far the best, BUT, in about another 2-4 years, Ionity/EA/EC will be FORCED to finally become decent.
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7.43% short interest currently.
Re:Ah the trolls are EVERYWHERE. (Score:4, Insightful)
Tesla can quickly && easily drop back into profitable ranges on their cars section. They just need to quit expanding so fast. However, by expanding quickly, they have the ability to compete against the LICE makers and, hopefully, against what will be coming from China.
Thankfully, none of that matters. So many ppl like to look at just 1 aspect of their business and claim that it is making/losing money. yet, they ignore the company as a whole. For example, solar is growing fast again. Likewise, their residential, business and utility storage is booming. Once they have the new battery line up in Freemont, they will have the semi truck into production.
And in the end, Gordon Johnson is a KNOWN troll. I mean his ONLY reason for being listed is that he works for Jim Chanos, and has GJ has helped destroy other companies so that Chanos looks good.
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What is mind blowing to me is that isidore would actually write such a foolish article. It is trivial to find out about Johnson, so anybody quoting him, HAS to be on the take of some sort.
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Mods: Troll != Disagree
Re: Ah the trolls are EVERYWHERE. (Score:3)
So the profits comes from the EV cars they sell? Actually, it doesnâ(TM)t. They come from poor people buying a Honda or Ford car that need to overpay just to give some money to the richest person in the world, Mr. Elon Musk. Note: I am a fan of Musk, as a few hundred million people are. But saying the money comes from selling cars is only true of by that you mean the money Tesla makes comes form other carmakers cars, who in turn have their final buyer overpay so someone rich can have a cheaper Roadster
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They come from poor people buying a Honda or Ford car that need to overpay just to give some money to the richest person in the world, Mr. Elon Musk.
Poor people don't buy new cars.
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Instead of arguing, I looked - average new car buyer makes $80k/year. About $30k/more a year than the average person. Average age of a new car buyer is in their early 50s - prime earning years for most people.
While financing can be "cheaper" on a new car, I suspect the a
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Well, the companies buying the credits don’t have to. They could just produce EVs instead. But yes, your general point that it is a regulatory requirement is accurate. I don’t think you will get any argument that it is not a viable long-term strategy. I also don’t think there is any evidence that Tesla intends it to be. As of Q42020 the credits amounted to less than 20% gross revenue IIRC. Clearly there is still a need to sell more cars with better margins, but they seem to be getting ther
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Soon is a bit relative. The question is will Tesla scale fast enough to outpace this change in the market. A legitimate question, but the article doesn’t make any attempt to address it. Tesla has been doubted many times before and has made it through, so I predict they’ll be fine. As of now, only GM appears to be serious enough to build their own Gigafactory, and it’s not online yet.
Elon has a philosophy on profit (Score:5, Insightful)
He has explicitly stated that Tesla needs to be profitable (cause otherwise a company will eventually go under) but not very highly profitable (because that would be generating profit at the expense of funding rapid growth.)
In short, he's totally on top of where Tesla is on profit, and as long as it's above 0, (from whatever revenue stream. It doesn't matter.), he's good with it. If one revenue stream dries up he will simply direct the necessary changes to control to achieve above 0 profit in another manner. He runs a learning and optimizing organization, and it is being optimized for maximum growth and above 0 profit. That's it. And it's working just fine and will continue to do so.
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You conveniently forget Musk is the same guy who whines about socialism while receiving billions in taxpayer subsidies. And no, I don't mean all the clean energy tax credits people buying the cars receive. I mean direct to company subsidies from both the federal and state governments.
In fact, as this, and many other articles, point out, were it not for these tax credits, Tesla would have been bankrupt long ago. With the expiration of these credits, the real balance sheet will come to light. And it won't b
Re: Elon has a philosophy on profit (Score:5, Insightful)
I will never understand people who try to claim they are the ones who understand capitalism, and then try to use the fact the a government somewhere has a policy that creates a benefit to an industry as evidence of some sort of uncool shenanigans.
No, this is smart people in government using the naturally rebalancing nature of economics to drive a desired outcome without having to try and take control of the affected industry direct. It is capitalism being used as intended. Not some socialist trick. Socialism would have the Government taking direct control of the means land production and doing it themselves. If they are not doing that, no matter your opinion of the policy direction itself, itâ(TM)s not socials. It is capitalism.
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I will never understand people who try to claim they are the ones who understand capitalism, and then try to use the fact the a government somewhere has a policy that creates a benefit to an industry as evidence of some sort of uncool shenanigans.
It is very easy to understand.
Just imagine it were a Chinese company receiving government subsidies from the Chinese government instead, I can probably hear your screams of "uncool shenanigans" about now.
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That's the problem with most people learning about economics not from a teacher in HS, or a professor in college, or even a few scholarly books on the topic read in their free time for personal improvement, but from talking heads on TV and in the news. They get a flawed understanding of what economics is (such as the idea that Emissions credits are any less valid of a market manipulation as temporary monopolies, such as patents or copyrights), and how
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Bravo, it is no everyday that one can get a objective, level-headed reply after China was brought into the discussion.
I totally agree with you, and I have no problem with Tesla factoring subsidies into their business plan. The reason of my previous reply was that you point about "a government somewhere has a policy that creates a benefit to an industry as evidence of some sort of uncool shenanigans" was exactly the logic a lot of Americans used when criticising Chinese govt & companies, so it pique my
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The first part of that line was supposed to make it clear I didn't agree with that interpretation of government intervention as shenanigans. That I thought that was stupid, precisely BECAUSE we do it all of the time.
The TPP and other trade pacts, we sell them to the world and the US voters as "free trade", but that carrot comes with a very big stick, the imposi
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No, this is smart people in government...
Sorry you lost me...
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You sell really efficient cheap ICE cars? Tough shit, you're treated the same as a manufacturer making 6 litre engine SUVs.
I agree that would be stupid, but that isn't how it works at all.
The US system requires automobile manufacturers to use their fleet averages as the basis. And that average is based on what they actually sell. Design an EV
Re: Elon has a philosophy on profit (Score:2, Troll)
The free market is not a market with not external factors or influence by the government. That is Anarchy.
Ask any economist, and theyâ(TM)ll agree that the key to a healthy free market economy is appropriate regulation. Without it the natural trend is toward rent seeking, slavery, insider trading, and perversion of market forces by the wealthy for their own benefit.
Regulations set the limits of play to ensure that the system works for everyone, or
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Patents are not neutral. They choose to prevent potential competitors from creating new products without transferring money from thei
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These FEEL "neutral" because you are used to them, but their creation and major modifications/expansions faced just as much opposition - using many of the same arguments about interference in the free market - as emissions credits. Last year I read a book about how the FDA came to be. I was amazed by how many of the arguments used to try and resist basic
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I can absolutely get behind a discussion of the merits of funding the fossil fuel industry, a net carbon emitter, while at the same time creating frameworks to favor reduced carbon emissions. Seems like we are pulling in 2 different directions simultaneously. I'm sure there is a lot of good ground to be worked on exactly why we are doing this apparently contradictory thing, and how we might accomplish some of the underlying goals that led to subsidies of the fossil fuel indus
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So tax credits == socialism to you? Interesting that the definition of socialism can change so easily to suit any particular political argument.
There are reasonable arguments for and against giving companies tax rebates as incentives to invest in the local economy. There are examples like the Foxconn factory in Wisconsin and the second Amazon headquarters that were clearly bad. But some can be quite good and serve to really inject a stimulus in the local economy. There was nothing in Sparks, NV before Tesla
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So tax credits == socialism to you? I
Didn't read what I wrote, did you? Here, let me copy and paste my exact words:
And no, I don't mean all the clean energy tax credits people buying the cars receive. I mean direct to company subsidies from both the federal and state governments.
That said, according to Republicans, giving people money so they can buy food or have a roof over their head is socialism, but when companies receive billions in taxpayer money, it's capitalism. Let me know which definition of socialism you want to use.
Re:Elon has a philosophy on profit (Score:5, Insightful)
Neither is socialism and you know it, so stop pretending otherwise.
You said,
You conveniently forget Musk is the same guy who whines about socialism while receiving billions in taxpayer subsidies
You are clearly trying to equate tax rebates to socialism, which it isn’t. If you have an argument to make against tax rebates, make it, without resorting to vapid sophistry.
What you're missing (Score:2)
A summary of what is required (and no, you can't negotiated with physics) is roughly 50% GHG emissions reductions over the next decade, and elimination of all the remaining emissions (and going to net negative) in the 2 decades
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This is pretty standard business philosophy. A low-growth business (e.g. a consultancy where you sell your labor and expertise) needs to be profitable to justify its existence. A high-growth doesn't need to be very profitable as long as it sustains its growth, because while it is not very impressive relative to its revenue in absolute terms it's making a lot of money.
It's not a "real" business (Score:4)
Aha! Revenge (Score:5, Insightful)
Gordon Johnson?! (Score:5, Funny)
Isn’t he the constant Tesla bear? I guess like a broken clock, he’s occasionally right. Like -9.4% in the last year in a bull market. Any idiot can make money in a bull market, it takes a real genius to lose it.
So what is the problem? (Score:2)
If you are concern-trolling over Tesla making money on this meaning the stock is too high - well do you think with a Biden/Democratic administration there will be more, or less of such income for electric car makers?
Tesla is in a prime position to make money from the direction the US and world are taking right now re: electric cars.
Re: So what is the problem? (Score:2)
I think outfits like Tesla are going to do quite well under a Biden administration for the same reason I think that woke HR consulting operations are going to do quite well.
Trolling aside, the concern with this, as with all other government-mandated market distortions, is that finite resources are being distributed suboptimally resulting in some connected few doing well at the expense of the rest of us in a way that would not fly in a free market governed by the choices and voluntary associations of many se
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1. the grid is getting cleaner all the time. With my electricity company, i run everything on renewable energy - change your supplier.
2. comparing the environmental toll of mining and chemical production for batteries with oil drilling and refining and burning gasoline. - Batteries are recyclable and not single use either - refine
"no chance...GM, VW...making money on that basis" (Score:2)
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They do make EVs themselves, and even made them before Tesla even existed.
Schwinn (Score:5, Funny)
Auto makers couldn't just bundle a bicycle with each SUV?
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Needs to be an e-bike. I'd like to think that the government is not incompetent enough to leave that as a loop hole, but really after the past few years all bets are off.
Revenue vs profit (Score:2)
Of course they post little profit. This is like "Amazon did not post profits for years". Well, duh! They are growing at an explosive rate. They double the production every 2 years or so, and are currently building many new giga-factories and several new models including the "cyber" truck and the highly ambitious semi.
They only need to make enough profit to cover salaries and other expenses. Every other dollar goes to investments. If that was not the case people would be up in the neck of Elon Musk.
So, wait (Score:2, Funny)
Pshaw.
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What do you have against the tunnels? It looks like they're going to build more of them in Las Vegas. Sure, you can stuff more people in a train, but trains aren't good everywhere.
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HVAC systems and medical ventilators are the same technology
They are as far as a CEO is concerned. They are electro mechanical devices that move air around. The devil is in the details, but that's what engineers are for. And regardless of what you think, Tesla actually delivered functional units to hospitals which did get used.
It's quite clear from your post that you are neither an engineer nor have any idea about businesses or the role of a CEO.
$1.6Million for each car sold in 2020 (Score:4, Insightful)
Telsa’s current market valuation is $800B. They sold 500K cars last year. That comes to $1.6M per car sold in 2020. I think their cars are great. I think they are doing a good job expanding and I think there will be a market for everything they build. I don’t care about their net profits at this point.
But I do not think the company is worth $800B.
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You could literally put your money where your mouth is and short their stock. The more certain you are of your position the more money you are likely to make.
Irony of Credits (Score:2)
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EV owners obviously. The manufacturer is then able to turn the fact that you paid extra to not pollute, into someone else polluting on your behalf by selling credits (or using them internally) so a manufacturer can sell a bunch of vehicles that exceed fleet fuel economy requirements. You may as well buy a car that exactly matches fleet requirements, it'll be a lot cheaper and force manufacturers to do something about their less efficient vehicles.
Solar has a similar problem with many installers, you pay to
Could be okay... (Score:4, Interesting)
I'm not going to comment on the stock. Okay, I think it is overvalued. Tesla is not going to replace all automakers. But, Tesla still has lots of opportunities.
Tesla doesn't need to be a automaker. If it stays one, it's in trouble. Now, if it works on standardizing electric motors, battery technology and form factors, regen braking systems and advanced drive assistance, then Tesla technology could be in most every car. And charging stations, the grid and so on.
Here what I think almost nobody has figured out yet. You should be able to swap out the motors and braking systems and control center (the touchscreen and related buttons) quick and easy because it's all standardized in terms of layout, mounts, tolerance, performance and so on. Remember upgrading radios in a car? Think that.
That allows companies to focus on design and the overall experience, enables a huge customization market and drives the costs down and accelerates the adoption of the new tech. And Tesla could ride that wave and do very, very well.
This guy is a known enemy of Tesla (Score:2)
Not an expert. But who is this guy? In a week of news about the GameStop revenge against Melvin, who shorted Tesla, another guy appears out of nowhere who sounds similar.
Hmm... According to LinkedIn, Gordon Johnson was a VP at Lehman Brothers until Lehman Shock, so he was partly responsible for that.
LinkedIn says his success rate is 53% with average return at -9.4%. I wouldn't hire him. The summary on the below link is also pretty damning.
https://www.youtube.com/watch?... [youtube.com]
"Tesla Short Seller Analyst Gordon J
GME Proxy War (Score:2)
This "story" is only breaking b/c Musk is supporting the WSB GME efforts and this is the big hedge fund companies retaliating by proxy. CNN *is* in their pockets.
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Re: do green tax credits work? (Score:3)
And Tesla's insane growth is successfully panicking all of the other serious auto companies around the world into massively investing in EV technology to try to fend off being outcompeted (for the all-vehicles market once BEVs reach cost-parity)
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They better invest in switching to EVs as soon as possible, because the carbon credits they're paying for are directly financing their competitors who are already selling EVs today. That's a losing strategy no matter how you look at it.
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Their business model involves profiteering from polluting technologies of their customers
Yes, they profiteer by making polluting technologies more expensive while getting extra money for each non polluting car sold.
What is so hard to understand about this? A fundamental lack of understanding of economics is not enough to come to the conclusion you did. You need to willfully attempt to distort the concept of economics to think in any way that carbon credits and profits somehow mean that EV's are bad.
Yes your fossil-tainted pickup is bad. You deserve a lecture. And when people are done lecturing
Re:I guess I'm the minority (Score:5, Insightful)
Most estimates have us running out of Lithium in only a couple hundred years at projected consumption rates, and there's no cost-effective method for recycling on the horizon.
That's a LONG time to solve the recycling problem.
Re:I guess I'm the minority (Score:4, Interesting)
US fossil fuel subsidies are around $650 billion per year. Compared to that, Green Energy subsidies aren't even a fart in a hurricane. And that's not even counting all the oil wars Americans have bled and died for over the years.
As soon as the US doesn't have to rely on Middle East oil, we can build e-grandstands around the whole area and sell ticket to the hate-fest.
If you were honest and wanted to talk about "crony capitalism", you'd be talking about fossil fuel subsidies and Wall Street. But you aren't, are you.
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US fossil fuel subsidies are around $650 billion per year.
No they aren't. They're closer to $20B, or about 2.5% of Tesla stock
As soon as the US doesn't have to rely on Middle East oil
Donald Trump promised energy independence and acheived that in 2019. Feel free to send him a thank you card.
If you were honest...
You first...
thank obama actually (Score:2)
Obama is the one who got USA oil production ramped up. Then the Pelosi rule was killed so the oil could be exported which encouraged more oil. Doing nothing would have got the USA close probably with the rule still in place; but without it that probably made it happen sooner... killing the rule I don't think needed Trump at all.
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Argue with Forbes Magazine, dummy.
https://www.forbes.com/sites/jamesellsmoor/2019/06/15/united-states-spend-ten-times-more-on-fossil-fuel-subsidies-than-education/
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US fossil fuel subsidies are around $650 billion per year.
No they aren't. They're closer to $20B, or about 2.5% of Tesla stock
It doesn't take much searching to know he was referring to the International Monetary Fund's estimate of $649 billion in fossil fuel subsidies, which includes unpriced pollution and greenhouse emissions (which is the vast majority of the "subsidies"). You may not agree with this approach, but your claims that the GP is not being honest is quite dishonest itself.
Donald Trump promised energy independence and acheived that in 2019. Feel free to send him a thank you card.
Here you play fast and loose with terms yourself. The US does not have energy independence and it isn't trying to. The US is still quite dependent o
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Most estimates have us running out of Lithium in only a couple hundred years at projected consumption rates, and there's no cost-effective method for recycling on the horizon.
That's an interesting assertion, well two assertions. Would you have a reliable reference to the first? I was under the impression that we would experience difficulties / constraints on the 'easy' supplies a lot sooner than that, and are at no risk of ever running out if we only consider what's actually available (i.e. ignoring the cost of extraction / purification), but I am always keen to read considered expert opinions.
As to the second: allowing for the moment that your first is correct, then the law of
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Can we think of a better way to run this system?
The auto market currently has a massive secondary market. The working poor aren't buying new. For them to be buying EVs, which from a cost-of-operation standpoint would be a huge win for them, they need a secondary EV market.
Maybe...if both gasoline and electric cars are at least comparable in price?
They aren't, and they won't be for a very long time without giving the market a nudge. Have you not even skimmed the comments here? Tesla isn't making much in the way of profit. It's not like they can sell their cars for 50% their current price and stay in business.
For there to be a se
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We see a societal benefit of moving to EVs faster than the market was moving, so we decided to provide a financial incentive to do so.
I think it is unfair to ask people buying work vans and economy cars to subsidize purchases of luxury electric cars.
There were two ways to go about this - either give the incentive to the buyers, or give it to the sellers. Both run into the same issue you describe.
The nature of current credits is that manufacturers have to buy these credits from Tesla and they pass that costs to the buyers of internal combustion cars. As there are more cheaper cars sold, you effectively end up taxing people buying economy cars to pay for people buying luxury cars.
Adding 100$ to the cost of each Honda Civic that costs $21K so you can remove $1000 from the cost of each
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For them to be buying EVs, which from a cost-of-operation standpoint would be a huge win for them
Please show your working.
We see a societal benefit of moving to EVs faster than the market was moving
Please show your working.
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Pretty sure Tesla's automotive profit (Score:2)
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What is bringing them down is a bunch of one-time costs. In general, their automotive division is already profitable without support.
The lifecycle of most car models is about 8-10 years, by this I mean the shape and style that looks modern (to whatever year it currently is). In order to stay relevant, manufacturers need to refresh designs every 10 years or so to the latest fad look. Tesla's still look ok in 2021, but in another couple of years they're going to start to look dated. This is process is not usually cheap so expect some more of these costs soon.