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Does sound like a larger-than-expected portion of the revenue was ZEV credits. Not clear to me whether they are profitable on the cars they are building without that or if that is factored in.
mtndrew1 said:Q3 $0.14/share GAAP profit and guiding for another GAAP profitable Q4. Maintaining guidance of 80k deliveries in 2016. Model 3 on time, Gigafactory on time. No need to raise cash before M3 launch.
It's looking more and more like Tesla is going to be a going concern for the foreseeable future.
lorenfb said:mtndrew1 said:Q3 $0.14/share GAAP profit and guiding for another GAAP profitable Q4. Maintaining guidance of 80k deliveries in 2016. Model 3 on time, Gigafactory on time. No need to raise cash before M3 launch.
It's looking more and more like Tesla is going to be a going concern for the foreseeable future.
Two positive GAAP quarters in corporate history hardly makes for a long term profitable company!
Remove the ZEV credits and then the reality becomes apparent.
http://www.wsj.com/articles/tesla-the-bill-is-still-coming-due-1477518644Tesla: The Bill Is Still Coming Due
Tesla Motors’ third-quarter results aren’t as strong as they seem
At first glance it is hard not to be impressed with results released Wednesday by Tesla Motors.
The company blew past boss Elon Musk’s third-quarter profitability goal, reporting revenue of $2.3 billion and earnings per share of 14 cents. Both topped analyst expectations. Tesla also delivered a record number of cars in the third quarter and expects to meet its full-year target.
Tesla even reported positive free cash flow, defined as operating cash flow less capital spending, for the first time since 2013, to the tune of $176 million. Shares rose after hours, a sign that fortunes for beleaguered investors might be turning.
But a closer look suggests that Mr. Musk will have his hands full delivering on his vision...the sale of regulatory credits to other auto makers generated $139 million of high-margin revenue...Total net income was just $22 million...
https://files.shareholder.com/downloads/ABEA-4CW8X0/2563692152x0x903036/562D56A1-5426-4D79-8B99-3408D1B60226/Q2_16_Update_Letter_-_final.pdf....recognized an insignificant amount of ZEV credit revenue in Q2...
http://blogs.barrons.com/stockstowatchtoday/2016/10/27/tesla-motors-not-as-good-as-it-looks/Tesla Motors: Not as Good as It Looks?
Firstly, on why it is not as good as it looks: Tesla reported a +$139 mn benefit from the sale of Zero Emission Vehicle (or “ZEV”) credits, vs. our model which had forecast $25 mn and vs. guidance for a negligible amount. We estimate this alone helped EPS +$0.73 vs. our model, meaning that what appears to be a large +$1.13 beat to JPM was more like a +$0.40 beat — so still a beat, but not as strong...
https://www.bloomberg.com/gadfly/articles/2016-10-26/tesla-earnings-pie-looks-a-bit-crumblyTesla's Pie Looks a Bit Crumbly
mtndrew1 said:lorenfb said:mtndrew1 said:Q3 $0.14/share GAAP profit and guiding for another GAAP profitable Q4. Maintaining guidance of 80k deliveries in 2016. Model 3 on time, Gigafactory on time. No need to raise cash before M3 launch.
It's looking more and more like Tesla is going to be a going concern for the foreseeable future.
Two positive GAAP quarters in corporate history hardly makes for a long term profitable company!
Remove the ZEV credits and then the reality becomes apparent.
Correct, it does not. But Tesla's massive slowdown in cash burn combined with a sliver of profit amidst truly mind boggling expansion and exponential growth in vehicle deliveries points to the company making it successfully to the Model 3 full launch. Which, incidentally, is looking more and more likely to be on time.
At some point here (~2020), if Tesla remains a going concern long enough, their need to invest capital into the Gigafactory is going to go away, the Fremont expansion needs will go away, the need to develop more platforms will go away, and they'll be left with four core models on two platforms with between 12% and 30% gross margins.
We then have a car and energy storage company which has a 500k unit/year factory fully running and developed, the largest battery factory on earth with inherently low $/kWh, and two malleable platforms in the hottest segments in the car industry (large premium sedan/CUV, small premium sedan/CUV).
It could all go tits up of course, and I suspect Tesla will be running right at the razor's edge of financial stability until the Model 3/Y launch, but after that it could very well be off to the races.
Additionally, a large part of operating cash flow was achieved by the company not paying its bills. If we look at the balance sheet, accrued liabilities and accounts payable rose by more than $628 million in the period! That's nearly 1.5 times the quarter's operating cash flow, and more than 3.5 times free cash flow for Q3. While the headline looks good, it was mainly due to good accounting. Had Tesla paid its bills, cash flow would have likely been negative, and perhaps by several hundred million dollars if accounts payable and accrued liabilities had been flat sequentially.
By any rational accounting standard TSLA already is a spectacular corporate failure, having destroyed billions of dollars of investor's capital.finman100 said:...It's actually hilarious the way people WANT Tesla to fail....Go Tesla!
The ZEV credits TSLA received from each BEV it sold, has reduced more than one BEV sale by another manufacturer....The problem for TSLA going forward is, this off-the-books asset is now largely depleted, as after TSLA sold over 80,000 ZEV credits in the eleven months prior to 8/31/16, it had only ~3,500 remaining in inventory at that time:
https://www.arb.ca.gov/msprog/zevprog/zevcredits/2015zevcredits.htm
braineo said:Wonder who is drinking the Koolaid?
Without TESLA coming into the picture,
1. GM wouldn't have done the Volt nor the Bolt EV.
2. Nissan wouldn't have released the Leaf early with a faulty battery.
3. Mercedes wouldn't have launched the Smart EV nor the the B class, nor stated that they will have 20+ EV cars by 2020
4. Norway, the Netherlands and now Germany wouldn't have thought that they would ban ICE vehicles by 2025 or 2030.
5. BMW wouldn't have come up with the i3, i8 and electrifying all their fleet.
6. VW wouldn't come up with the Dieselgate nor starting to get into EV for the whole fleet.
7. Audi wouldn't be electrifying their whole fleet.
Seems there is a German trend here, when all German manufacturers are scrambling to come up with any competition to TESLA before their main profit makers are obsolete. ANd now they are running behind 3-5 years at least while TESLA pulls ahead 200 million miles +++ each year with not only EV's but Sperchargers and autonomous features.
Is that a failure?
Yep.lorenfb said:braineo said:Wonder who is drinking the Koolaid?
Without TESLA coming into the picture,
1. GM wouldn't have done the Volt nor the Bolt EV.
2. Nissan wouldn't have released the Leaf early with a faulty battery.
3. Mercedes wouldn't have launched the Smart EV nor the the B class, nor stated that they will have 20+ EV cars by 2020
4. Norway, the Netherlands and now Germany wouldn't have thought that they would ban ICE vehicles by 2025 or 2030.
5. BMW wouldn't have come up with the i3, i8 and electrifying all their fleet.
6. VW wouldn't come up with the Dieselgate nor starting to get into EV for the whole fleet.
7. Audi wouldn't be electrifying their whole fleet.
Seems there is a German trend here, when all German manufacturers are scrambling to come up with any competition to TESLA before their main profit makers are obsolete. ANd now they are running behind 3-5 years at least while TESLA pulls ahead 200 million miles +++ each year with not only EV's but Sperchargers and autonomous features.
Is that a failure?
Really? And what are the basis for those conclusions? You have just presented personal suppositions without any
underlying data. Luckily neither CARB/EPA nor the DOE has been or will be relying on your EV market analysis for future decisions and funding related to EVs.
For some, it's difficult to imagine a world without the existence or influence of Tesla.
GRA said:To be fair, his point '1' is valid; Bob Lutz has been very clear that he used the Tesla Roadster (also the Prius) as a way to convince his bosses at GM to go ahead with the Volt, when the auto companies were trying to get the CARB standards eliminated. See http://blog.sfgate.com/energy/2011/11/10/the-chevy-volts-unlikely-father/ as an example.
Without the Roadster the Volt almost certainly wouldn't have happened as the auto makers would have been able to more effectively hold back the mandates, which means the Spark EV and now the Bolt probably wouldn't have appeared either. LEAF-level capability, by itself, isn't compelling to the mass market - the Model S (along with the equally important SC network) was the first and IMO remains the ONLY compelling PEV that could sell without subsidies. Model X had too many poor decisions in the design to have the impact that the Model S did.
So, while government mandates have played a huge role, I think the public support for those mandates has been based to a large part on the demonstrated capabilities of the Roadster and particularly the Model S/SCs; automakers couldn't claim that 'it can't be done', with the latter especially giving the lie to that. Automakers were left with the weaker claim that 'it can't be done at a price point that the public can afford and we can make a profit on'. So far that remains true without subsidy except at the premium end of the market, but that claim too is approaching obsolescence with the Volt 2 knocking on that door, and the Bolt and/or Prius Prime ready to go through it, once the subsidies expire and they drop their prices in consequence.
http://www.wsj.com/articles/tesla-ceo-elon-musk-aims-to-make-solar-panels-as-appealing-as-electric-cars-1477705988Tesla CEO Elon Musk Aims to Make Solar Panels as Appealing as Electric Cars
Mr. Musk lays out vision of how his proposed merger of Tesla Motors, SolarCity would work
Elon Musk wants to make solar-roof panels as sexy as his electric luxury cars.
Mr. Musk, who is chairman of both Tesla Motors Inc. and SolarCity Corp., laid out in broad strokes his vision for how his proposed merger of the two companies would result in an integrated system of solar panels, wall-mounted batteries and electric cars...
“The goal is…to make solar roofs that look better than a normal roof, generate electricity, last longer, have better insulation and an installed cost that is less than a normal roof plus the cost of electricity,” he said.
The audience greeted his words with cheers of encouragement, including an attendee who yelled, “Save us, Elon!”
Consumers equipped with the products of the combined companies could generate enough clean energy to help reduce global greenhouse gases, he said, and score points with neighbors...
http://www.salon.com/2016/10/29/behind-the-myth-of-elon-musk-has-the-onetime-silicon-valley-visionary-lost-his-magic/
Behind the myth of Elon Musk: Has the onetime Silicon Valley visionary lost his magic?
Musk is the CEO of three companies — Tesla, SpaceX and SolarCity — all of which would fail without government money
...The ugly truth is that, for all Elon Musk’s entrepreneurial moxie and innovative thinking, his companies are not money-making enterprises...
The question now is clear. Can Musk survive his present financial perils or, despite considerable government help that has allowed him to become a very wealthy man, will his empire finally succumb to the sheer weight of its massive debt? Stay tuned for that announcement, splashy or otherwise.
edatoakrun said:How could anybody call Tesla a cult?
Tesla's misrepresentation of its financial results for last quarter has been discussed extensively on this thread, so I'll assume you are joking...sparky said:...This was covered up-thread. Check it out; Tesla is now profitable...edatoakrun:
Musk seems to be incapable of turning a profit, no matter how much money the American and individual State taxpayers throw his way...
No, that's Bob Lutz' opinion, and he's in the best position to know, as he was the Volt's corporate godfather at GM.lorenfb said:GRA said:To be fair, his point '1' is valid; Bob Lutz has been very clear that he used the Tesla Roadster (also the Prius) as a way to convince his bosses at GM to go ahead with the Volt, when the auto companies were trying to get the CARB standards eliminated. See http://blog.sfgate.com/energy/2011/11/10/the-chevy-volts-unlikely-father/ as an example.
Without the Roadster the Volt almost certainly wouldn't have happened as the auto makers would have been able to more effectively hold back the mandates, which means the Spark EV and now the Bolt probably wouldn't have appeared either. LEAF-level capability, by itself, isn't compelling to the mass market - the Model S (along with the equally important SC network) was the first and IMO remains the ONLY compelling PEV that could sell without subsidies. Model X had too many poor decisions in the design to have the impact that the Model S did.
So, while government mandates have played a huge role, I think the public support for those mandates has been based to a large part on the demonstrated capabilities of the Roadster and particularly the Model S/SCs; automakers couldn't claim that 'it can't be done', with the latter especially giving the lie to that. Automakers were left with the weaker claim that 'it can't be done at a price point that the public can afford and we can make a profit on'. So far that remains true without subsidy except at the premium end of the market, but that claim too is approaching obsolescence with the Volt 2 knocking on that door, and the Bolt and/or Prius Prime ready to go through it, once the subsidies expire and they drop their prices in consequence.
That's your opinion of what was the key impetus for GM.
I'm not inferring that they all were similarly motivated - Carlos Ghosn gets the credit at Nissan/Renault. But the German premium manufacturers have unquestionably been motivated to compete with Tesla on BEVs owing to the latter's success, as well as the mandates which they were unable to ignore or fight successfully, again owing to Tesla's demonstrated capabilities. So, while I'm often critical of Tesla's mistakes, I'll also give them credit where it's due. Would PEVs, especially long-range BEVs, have come about without them anyway? Maybe, but they would undoubtedly have been delayed by several years, and it would have been far tougher for CARB et al to maintain mandates in the interim without some such successful product. They already showed that movie in the late '90s/early '00s.lorenfb said:To then infer that all other present and future
EV participants were similarly motivated or a definitive link exists from a very limited edition vehicle,
i.e. the Roadster, with a production volume of about 2500 is a "stretch". Furthermore, none of the other
present EV market participants view the EV market as does Tesla, i.e. with its relatively small Model S/X
volume, for the numerous issues that are discussed in the FCEV thread and that you "trumpet".
This is Lutz' actual opinion, his words from that 2011 interview:GRA said:... See http://blog.sfgate.com/energy/2011/11/10/the-chevy-volts-unlikely-father/ as an example...
that's Bob Lutz' opinion, and he's in the best position to know, as he was the Volt's corporate godfather at GM...
And IMO TSLA's BEVs, sold at average prices exceeding $100,000 remain in the realm of the relatively pointless, particularly so as TSLA, even after receiving tens of thousands of dollars of additional government subsidies for each car it sells, still remains unprofitable....John Lockner, who was my closest subordinate on this thing — a brilliant technologist and a guy with fantastic common sense — said, “You know Bob, look, we could easily do the same thing that Tesla does. But we’d wind up with a $90,000 to a $100,000 car, which is relatively pointless...
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