TSLA corporate outlook

danrjones said:

They currently have what, about a 30% gross margin per vehicle? More?
- and yet they think they need an even higher gross margin?

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Where is that stated or implied in the Elon email ? All I read was Elon taking steps to reduce fixed costs heading into a presumed recession.

SageBrush said:

danrjones said:

They currently have what, about a 30% gross margin per vehicle? More?
- and yet they think they need an even higher gross margin?

Click to expand...

Where is that stated or implied in the Elon email ? All I read was Elon taking steps to reduce fixed costs heading into a presumed recession.

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I just stated it.

Why would you take steps to reduce cost if you don't have a demand problem nor a margin problem? They have more demand than they can possibly handle, and they are making over 30% margin per car. They have neither problem. And If they had an actual demand problem (or a forecasted demand problem), given their margins, they could easily lower the cost of the vehicles.

So why make cuts? *IF* we do indeed enter a recession, and *IF* Tesla starts to actually have a demand problem, *THEN* you might make cuts *IF* your margin per item sold was getting low. But given they have a ridiculous margin per car, why even make pre-emptive employee cuts rather than cut the cost of the vehicle? Unless, of course, one wants to raise the margin.

He wants to squeeze even more profit out per car. That's the answer. Screw the employees, screw the customer. More. Money.

And now, folks, it's time for "Who do you trust!" Hubba, hubba, hubba! Money, money, money!

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This is what happens when one of the two major political parties in a society spends decade after decade after decade appealing to the greed and selfishness of both people and businesses. You get low taxes, little or no sense of community or personal responsibility (and with cults like the NRA and Q-Anon replacing previous social institutions), and companies that engage in what the Times is calling "Greedflation." They just make as much money as they can, any way they can, and screw anything other than the Bottom line.

I wonder if the galaxy, if not the universe, is littered with essentially dead planets where the instincts that lead a dominant species to thrive then cause, with the inevitability of mathematics, the extinction of their ecosystems.

That's actually one solution to the "Great Filter", in the context of the Fermi paradox, and is one such possible resolution to the paradox

Every sentient species essentially kills itself off through greed.

danrjones said:

SageBrush said:

danrjones said:

They currently have what, about a 30% gross margin per vehicle? More?
- and yet they think they need an even higher gross margin?

Click to expand...

Where is that stated or implied in the Elon email ? All I read was Elon taking steps to reduce fixed costs heading into a presumed recession.

Click to expand...

I just stated it.

Why would you take steps to reduce cost if you don't have a demand problem nor a margin problem? They have more demand than they can possibly handle, and they are making over 30% margin per car. They have neither problem. And If they had an actual demand problem (or a forecasted demand problem), given their margins, they could easily lower the cost of the vehicles.

So why make cuts? *IF* we do indeed enter a recession, and *IF* Tesla starts to actually have a demand problem, *THEN* you might make cuts *IF* your margin per item sold was getting low. But given they have a ridiculous margin per car, why even make pre-emptive employee cuts rather than cut the cost of the vehicle? Unless, of course, one wants to raise the margin.

He wants to squeeze even more profit out per car. That's the answer. Screw the employees, screw the customer. More. Money.

And now, folks, it's time for "Who do you trust!" Hubba, hubba, hubba! Money, money, money!

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Did you actually read the e-mail? Tesla is cutting salaried positions. I.E. engineering, accounting, corporate positions. The 10% cut refers to salaried staff only. They hiring for hourly positions. I.E. manufacturing, logistics, warehouse positions. If you are expecting a recession, cutting back on R&D makes sense. Development for Cybertruck and the Roadster is done. Model 2 will have to wait. Spend the money on production. Get Austin and Berlin up to capacity and build new battery production plants. Tesla is going to need all the batteries it can find. Batteries are the bottleneck here and also the key to reducing prices.

Proactively planning for future conditions is easier and simpler than scrambling after the fact to correct things.

LeftieBiker said:

This is what happens when one of the two major political parties in a society spends decade after decade after decade appealing to the greed and selfishness of both people and businesses. You get low taxes, little or no sense of community or personal responsibility (and with cults like the NRA and Q-Anon replacing previous social institutions), and companies that engage in what the Times is calling "Greedflation." They just make as much money as they can, any way they can, and screw anything other than the Bottom line.

I wonder if the galaxy, if the universe, is littered with essentially dead planets where the instincts that lead a dominant species to thrive then cause, with the inevitability of mathematics, the extinction of their ecosystems.

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Both parties respond to their constituent bases. Both parties spend YOUR money to help their causes. Both parties are at fault. I will admit that the Republican's are more cohesive and better organized, but the Democrats share blame as well.

Would you prefer the Borg model of planetary rape and assimilation? Resources are always limited and sooner or later you have to run out.

johnlocke said:

Proactively planning for future conditions is easier and simpler than scrambling after the fact to correct things.

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Which is a counter point to your own argument. The people that do R&D ARE the people that plan for future conditions, and they are the salaried employees.

YMMV but I see this as Greed, pure and simple. And in my experience companies sacrificing research for profit are dying companies.

Now if Elon said they were going to trim the fat in order to lower the vehicle prices, I'd sing a different tune. Any talk of passing savings to the consumer? No?

Just my 2 cents.

danrjones said:

cwerdna said:

Here’s the email Elon Musk sent all Tesla employees about 10% head count reduction
https://www.cnbc.com/2022/06/03/heres-the-email-elon-musk-sent-all-tesla-employees-10percent-job-cuts.html

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The more I watch Tesla, the more I think they have lost site of their mission to help electrify our auto industry and reduce vehicle emissions.

They currently have what, about a 30% gross margin per vehicle? More?
To me that's essentially akin to ripping off the consumer - and yet they think they need an even higher gross margin?

So they have more orders than they can fill, they have a ridiculous margin per sale, multiple new factories and battery plants coming online, a cyber truck to develop, the roadster to develop, the semi to develop, the model 2 to develop -> and they [he] thinks they need to reduce the workforce?

Very strange, but then, its coming from you-know-who. Stock holders certainly didn't like the news.

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They may well be overstaffed in some salaried positions. Wouldn't be surprising given their rapid growth, that some of that growth was disorganized.

My take is that it's just meant to 'motivate' the salaried workforce who are probably the only ones who have been working at home and have been asked to return to site.

Tesla has had the reputation as a 'sweat shop' in the tech field and this fits that appraisal quite well.

danrjones said:

Stock holders certainly didn't like the news.

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One should look at who is buying the dip... Elon waves the wand, stock moves and millions are made along the way...

danrjones said:

That's actually one solution to the "Great Filter", in the context of the Fermi paradox, and is one such possible resolution to the paradox

Every sentient species essentially kills itself off through greed.

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OT: Can't speak for other sentient species, should they exist. Jury is still out on us, that much seems certain.

However, our improving understanding over the last 15 years or so of just how rare and unlikely the development of complex life, much less complex life capable of forming differentiated tissues, was - just now reaching the more mainstream science outlets - suggests other less sensational solutions for the Fermi Paradox.

What we typically mean with "life on Earth" - namely the stuff we can see, effectively - represents just a tiny, tiny, tiny fraction of biodiversity on our planet, and all of it a rather late development. Simple life forms arose rather quickly after the formation of the oceans, as the evidence increasingly suggests, but it was another 2 billion years before complex single cells arose, and another 1.5 billion before those complex cells evolved into organisms. No differentiated tissues means no brain, no hands, no opposed thumbs. And simple life forms, despite their enormous head start, have never developed anything even beginning to approach the complexity of more complex life forms.

"Life on Earth," as we commonly refer to it, arose just 500 million years ago here. Primordial life, on the other hand, arose somewhere near 4000 million years ago. Not a trivial difference. And the mechanism for that step change from simple life to complex cells is apparently a single event. If that finding stands, it's a revolutionary insight.

TLDR: Expect to find simple life forms along the lines of bacteria and archaeans more or less everywhere conditions have been favorable for a few hundred million years. Fish? Amphibians? Oxygen producing plants? Not so much. Sentient beings? Once you get to complexity, we see lots of possibilities arise. The problem is getting to complexity.

Yep, it is entirely possible (plausible) we are past the great filter. Who knows?

I think that it's pretty self-evident that life that never evolves the means to manipulate the environment with tools is much more likely to survive for a very long time than life that becomes the equivalent of a 6 year old child with a tool kit. In that case it's Hide The Appliances time.

LeftieBiker said:

I think that it's pretty self-evident that life that never evolves the means to manipulate the environment with tools is much more likely to survive for a very long time than life that becomes the equivalent of a 6 year old child with a tool kit. In that case it's Hide The Appliances time.

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Nicely said.

OT: For those interested in the folks behind the latest developments I referenced above, start here: https://nick-lane.net/publications/why-is-life-the-way-it-is/

-b

OldManCan said:

danrjones said:

Stock holders certainly didn't like the news.

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One should look at who is buying the dip... Elon waves the wand, stock moves and millions are made along the way...

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Ride the wave or get crushed by it. Making money in the stock market is easy, keeping it is way harder.

Tesla owned 43,000 Bitcoin valued at $2 billion at the end of Q1.

Today's value would be $1 billion.

Tesla raises prices, again
Select Model 3, S, Y, and X cars are affected
By Jon Porter@JonPorty Jun 16, 2022, 4:56am EDT
https://www.theverge.com/2022/6/16/23170714/tesla-price-increase-june-2022-model-3-y-s

Tesla's 10% staff cuts have kicked off, with ex-employees confirming on LinkedIn that they've been laid off
https://www.businessinsider.com/tesla-elon-musk-layoffs-10-percent-staff-have-begun-2022-6

Tesla is sending untrained employees to work on cars as service becomes problematic
https://electrek.co/2022/06/16/tesla-untrained-employees-work-on-cars-service-problematic/

Tesla (TSLA) lays off more employees, and hourly ones this time despite Elon Musk’s comments
https://electrek.co/2022/06/17/tesla-tsla-lays-off-more-employees/

Musk says Tesla’s factories in Berlin and Texas are ‘gigantic money furnaces’
https://www.cnbc.com/2022/06/23/musk-says-tesla-berlin-and-austin-factories-losing-billions-of-dollars.html

Tesla’s factories in Texas and Berlin are losing “billions of dollars right now” as supply chain disruptions hamper the electric vehicle giant’s ability to ramp up production, CEO Elon Musk said.
“Both Berlin and Austin factories are gigantic money furnaces right now. Okay? It should be like a giant roaring sound which is the sound of money on fire,” Musk said.
He said some of the tools required to make some cars are “stuck in a port in China” because of a resurgence of Covid there and the resulting lockdowns.

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cwerdna said:

Musk says Tesla’s factories in Berlin and Texas are ‘gigantic money furnaces’
https://www.cnbc.com/2022/06/23/musk-says-tesla-berlin-and-austin-factories-losing-billions-of-dollars.html

Tesla’s factories in Texas and Berlin are losing “billions of dollars right now” as supply chain disruptions hamper the electric vehicle giant’s ability to ramp up production, CEO Elon Musk said.
“Both Berlin and Austin factories are gigantic money furnaces right now. Okay? It should be like a giant roaring sound which is the sound of money on fire,” Musk said.
He said some of the tools required to make some cars are “stuck in a port in China” because of a resurgence of Covid there and the resulting lockdowns.

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If you read the entire article, the problem comes down to batteries. Musk needs a 1000 batteries per car. If each factory is capable of producing 500000 cars per year and you have 4 factories, that's 2,000,000,000 (2 billion) batteries per year., Until he gets the battery lines up and at full production, he can't produce the cars. That's why he's after Panasonic and LG Chem and anyone else he can find to buy batteries from. It's also why he's looking at LFP batteries and existing 21700 production as stopgaps. Add to that the expectation that he'll build a couple of more plants in the next couple of years and you see where this leads.