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Tesla Motors, Inc. Message Board

  • temagami67 temagami67 Feb 28, 2013 10:06 AM Flag

    Connecting the Dots

    It seems to me that a few peculiar things have happened lately.
    1) Tesla is staring down the barrel of a $40M loss (GAAP) in the first quarter, and yet Musk predicts that he will show a profit (non GAAP).
    2) Musk no longer is predicting a profit for later quarters.
    3) Reservation numbers are no longer being assigned.
    4) The 40 kWh vehicle is still not EPA certified.
    5) Tesla is not demand-limited. Yet Musk says that the NYT article cost him 100 reservations and $100M.
    6) There are truly some customers getting cars delivered 60 days after reservation.

    Please do not use this thread to pick these apart one at a time. There are plenty of other threads for that. And if you feel the need to cheerlead or bash the company, again there are plenty of other threads for that. I’m looking for some insight as to what picture it paints when these peculiar things are taken all together. Give it some thought and make your comments holistic.

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    • you post assumptions that we are not to comment on if inaccurate. heres holistic insight for you, you are stupid. i hope that is general and holistic enough for your taste. obviously a basher.

      • 1 Reply to seethelong
      • Seethe, I recommended some guidelines for the thread to try to focus the discussion and prevent it from degrading into a name-calling exchange like so many other threads. Certainly, we can pick apart the assumptions, but let’s start new discussion threads for them. And that’s what this message board is for, isn’t it?

        If you would like to categorize me more correctly, I’m someone who is extremely skeptical that this company will ever turn a quarterly profit. Not this year, not ever. It’s not that they don’t offer an exciting product; in my opinion, it’s hands-down car of the year. It’s just that the earnings numbers don’t add up. The earnings never go positive. It boils down to the fact that SG&A expenses will ramp up faster than profits on car sales, especially when they expand operations overseas.

        So as long as you keep your calculator hidden in the back of your desk drawer, you can be bullish on the stock. Unfortunately, I have a character flaw that prevents me from doing that.

    • That's all noise. The only two things that matter now are:

      1. Can they delivery 5000 or more cars a quarter for 4 quarters?
      2. Can they achieve 25% margins?

      Everything else is just distraction.

      Sentiment: Buy

      • 2 Replies to aeon_01
      • Actually there is one more thing that matters.
        3. Can 5000 cars at 25% margin generate enough gross profit to cover operating expenses?

        This in a nutshell is why you don't see any independent companies making 20,000 cars a year.
        And yes, everything else is just distraction.

      • OK, I’ve been chewing on it all evening and here’s what I’m seeing. Obviously, they have already burned though all of the 85kWh reservations except for the multi-coat red. New reservations worldwide have only been coming in at 300/wk in 2013. It makes little sense for them to spend massive overtime to crank out more than 400/wk. So I think they’ve adjusted the business plan to go after higher GM even though sales revenues may drop somewhat. They’ll probably settle in at about 350/wk. But since production would still outpace reservations, it makes little sense to continue to assign reservation numbers. For a number of reasons, I really think that Tesla would prefer to forget about 40kWh cars. They were downplayed in the shareholders’ letter, though later GB assured customers that deliveries would begin around May 1.

        Regarding profit comments, I’m sure that Musk has adjusted his spreadsheet in light of the revised business scenario and no longer believes that there will be profits in later quarters this year. But why on earth is he predicting profit in the first quarter? What possible good can come from saying that? Maybe he’s having second thoughts now and is setting up the NYT to blame for any shortfall.

    • The debate about the technical and commercial viability of Tesla is turning out to be like the religious wars in the UK. Protestants on one side versus Catholics on the other side. They killed each other, including innocent men, women and children over the centuries. Guess what? Neither of them made sense. Personally, they all look the same - pale and white.

      Same with Tesla/BEV and ICE cars. Of course, Tesla is a long shot. However, it has come a long way compared to previous versions of BEV, in terms of range, performance, utility, etc. Advances in battery technology may indeed make tech viable progressively. In terms of profitability, they got to be close to break even once they optimize their manufacturing and supply chain.

      Place your bets - long and short. Let us see what happens.

    • Tegam. notpicking, just clearifying. Mush said the Times article cost him one hundred million because of cancellations. That's a thousand cars. When called on it, he stuttered and said it was couple of hundred. Clearly, he realized he didn't want to say he had a thousand cancels in one week!

      Sentiment: Strong Sell

    • (( Musk no longer is predicting a profit for later quarters. ))

      What is the point then?

    • Musk also will be delivering to Europe In June, (Likely still be in transit at the end of June.) Reportedly
      Finalize order requests have been sent to European reservation holders..

      I will do my best to answer but different points mean different thing IMO.
      The 1 & 2 suggests= a One time only event. a deal with a lump sum payment, sales of certificates, something like that.

      # 4 GB made a comment TMC stating the 40kWh will begin deliveries in March only new orders of it will be delayed until Aug. I expect EPA cert is eminent.

      #3-5 6
      All make me think the reservation list in the US has a couple of months of orders. Europe has a couple of months of reservations as well.
      As a whole The company is

      • 1 Reply to frogfather44
      • First off, I should say that I don't know how or if the dots actually do connect. It just seemed to me that there were a number of surprising observations. And there are some non-surprising things that may need to be added to complete the picture. For example as Frog points out, European deliveries are beginning soon. It's a major milestone, but one that was expected. Also, most of us expected that Tesla would ramp up to their full production rate of 400/week. Based on delivery reports, it certainly seems to be the case. My delivery tracker shows 2900 +/-100 deliveries in Jan and Feb. So they would need another 1600 in March to reach 4500 for the quarter. I'm guessing they'll hit it unless they ease off to reduce overtime. It does not look like a single 40kWh will be delivered in March.

        Frog, your message was cut off just as you were summarizing your thoughts. I'd like to hear what you have to say.

    • I connected the dots and got a rorschach diagram. And as we all know that simply means cat in any language, probably including Musk's. What's not to like. Particularly when your car is an extension of your...

    • some very valid remarks/observations .nobody can connect the dots yet, me neither. i have my conviction as you know and don't believe that Musk can deliver. the next quarters will allow to connect the dots, or not.

      Sentiment: Strong Sell

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