webb14leafs wrote: ↑
Thu Dec 05, 2019 10:36 am
That's actually not quite true. Tesla is no doubt over-valued, but based on Gross Profit and EBITBA they only need to increase their revenue by about 2.5 times to achieve similar earnings as Ford right now. Goes to show how big their margins are.
Studying Tesla really makes you realize how slim the margins are for the Big 3s high volume compact cars and sedans. All of their profit comes from their Trucks and optioned out SUVs. Tesla makes a significant profit on almost all of their cars. How much is arguable, but skeptical experts have estimated that the standard model 3 has about 13% margin. If you assume each added option has anywhere from a 25%-300% margin, it's easy to see why their profits are so big.
Throw in speculation on the big rig, self-driving technology, and solar/energy storage and it's not to hard to say Tesla isn't over-valued at all.
Tesla's "high" "margins" are inflated (as I posted before at viewtopic.php?p=509813#p509813
) because they don't include R&D costs as part of cost of automotive revenues/sales. If they did, their margins wouldn't be as hot looking.
I decided to check.
Look at Ford, for example at https://s22.q4cdn.com/857684434/files/d ... Report.pdf
(from https://shareholder.ford.com/investors/ ... fault.aspx
). On page 120, they have a line item for cost of sales. On page 131 they say "Engineering, research, and development expenses, primarily salaries, materials, and associated costs, are reported in Cost of sales". For GM https://investor.gm.com/static-files/54 ... a9b4d366de
from https://investor.gm.com/sec-filings?fie ... ings-table
on page 58 says "Research and development expenditures, which are expensed as incurred in Automotive and other cost of sales,".
Tesla's profits are not big. In the time they've begun reporting, including their few net profitable quarters, they've racked up over $6.5 billion in cumulative losses. Per https://ir.tesla.com/node/20246/html
page 5, for the 9 months ending Sept 2019, their net income attributable to common stockholders is $967 million. Their total debt is over $12 billion (page 24).
You can see from page 41 of https://ir.tesla.com/node/19496/html#Item_6
, for the years they list (2018 to 2014), every single year, they've recorded a net loss ranging from $294 million to almost $2 billion for a given year. Page 62 of https://www.sec.gov/Archives/edgar/data ... tx668062_9
has their net losses for 2013 to 2009, ranging from ~$55 million to ~$396 million. They have yet to report a single net profitable calendar year.
As others have pointed out, AFAIK, their solar business seems to be dying, just like it was before the bailout/takeover of Solar City.
As for "Big 3s high volume compact cars and sedans", what? The Big 3 have pretty much exited those segments in the US.