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Tesla Inc. lost $408 million in Q2 2019 despite record deliveries.


Harley Lover

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But we were assured that Tesla had it going on big time with all those sales!

Tesla Inc. lost $408 million in the second quarter of 2019, worse than Wall Street expectations, despite record deliveries.

Stocks of the Silicon Valley electric-vehicle company fell 11% in after-hours trading on the news.

Tesla on Wednesday said in a letter to shareholders the loss was on revenue of $6.3 billion, a 59% increase year-over-year. Although Tesla delivered a record 95,356 vehicles in April, May and June after it launched the Model 3 sedan in China and Europe in the first quarter, its older, pricier models S and X are showing their age. That's leading to tighter profit-margins, and puts into question the sustainability of its business strategy.

https://www.detroitnews.com/story/business/autos/mobility/2019/07/24/tesla-second-quarter-earnings/1804616001/

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21 minutes ago, akirby said:

Cue Musk and some new future product to scam more venture capital.....

In other news, Musk says the Tesla Truck reveal* coming soon....

 

 

 

 

 

*Tesla truck is currently a figment of Musk's imagination, we have one "prototype" of panels that look like a truck but doesn't function; an actual truck won't be on sale for another 5 years, and the starting price won't be available until 2027 at the earliest; please give us your money now for a "deposit".

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If you lose money on every item you sell and you sell more of them it is not that hard to realize you'll just lose a lot more money.

I don't understand when pro Tesla investment people talk about "cash flow" on Tesla, cash flow in a money losing company is basically a Ponzi scheme as the new money you're taking in is to pay debts you can't sustain without the incoming cash as the product you sell isn't producing enough profit to make those payments.

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Just now, jasonj80 said:

If you lose money on every item you sell and you sell more of them it is not that hard to realize you'll just lose a lot more money.

I don't understand when pro Tesla investment people talk about "cash flow" on Tesla, cash flow in a money losing company is basically a Ponzi scheme as the new money you're taking in is to pay debts you can't sustain without the incoming cash as the product you sell isn't producing enough profit to make those payments.

But they are so far ahead of everyone else in regards to electric vehicles.

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5 minutes ago, jasonj80 said:

I don't understand when pro Tesla investment people talk about "cash flow" on Tesla, cash flow in a money losing company is basically a Ponzi scheme as the new money you're taking in is to pay debts you can't sustain without the incoming cash as the product you sell isn't producing enough profit to make those payments.

They're just rationalizing because they love the vehicles or the idea of BEVs in general.

I think they fall into 2 camps:

1 - the gadget lovers.   They view a Tesla just like a big smartphone.  Look at all the cool stuff it can do!   And they don't have to buy it from a stodgy 50 year old dealership.

2 - the greenies.   BEVs will save the planet!

And they'll ignore any bad news or warning signs just because they WANT Tesla to succeed.  Facts be damned.

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3 minutes ago, akirby said:

They're just rationalizing because they love the vehicles or the idea of BEVs in general.

I think they fall into 2 camps:

1 - the gadget lovers.   They view a Tesla just like a big smartphone.  Look at all the cool stuff it can do!   And they don't have to buy it from a stodgy 50 year old dealership.

2 - the greenies.   BEVs will save the planet!

And they'll ignore any bad news or warning signs just because they WANT Tesla to succeed.  Facts be damned.

If this was any other auto company, investors would have walked away years ago,
true believers still cannot see the fundamental flaw with Tesla's business operations.

I bet GM/Ford engineers  laughed when they saw the complexity of the 3's body structure,
lots of rookie mistakes in there that should have been addressed years before construction.

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8 minutes ago, blwnsmoke said:

But they are so far ahead of everyone else in regards to electric vehicles.

They really aren't though. Electric vehicle are actually super basic compared to an ICE vehicle. What Tesla did realized is that if you made them a performance vehicle rather than a compliance vehicle you can change the prices needed for the cost of the battery's and that is huge. Tesla then went and promised a 35K car and had to build something that didn't have the ability to make money on it, built it then stopped building it. All other OEM's have to make money, and that guides business decisions; Tesla doesn't and really only current money it makes is selling credits, which the rules today agreed to by California and Ford/Honda/VW/BMW make selling those all but useless. 

Tesla should have sold at the Model 3 and started it at 50K, and had it slightly more luxurious. Then had the model Y start at 60K and refresh the S and X and added an even more lux vehicle above those add a pickup at 65K+. The model would work at what the costs of battery's are going to cost over the next 5 years and would have made money. Musk wasn't happen being a Luxury player, he wanted mass market when the production costs don't allow him to be in that market his ego is what doomed it.

They are running out of cash so they are either going to need to issue more stock or get more deposits in for future vehicles. The big Institutional investors have slowly exited and are walking away and if the losses don't slow down they will be bankrupt by the end of next year. Large investors (Saudi's for example) have guarantees elsewhere to be made whole in case of default, so its going to be the smaller guys, workers with options and the stock gamblers that are going to get killed. 
 

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6 hours ago, jcartwright99 said:

So if you took away their carbon credit revenue, how bad do you think their losses would be? The fact other than the Model 3 their products are stale and they don't have enough money to refresh them is all you need to know.

Damn straight

If you took away FCA needing to buy carbon credits, Tesla would be deeper in the sh....

Edited by jpd80
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19 hours ago, akirby said:

That's not even a question for anybody with half a brain who understands you have to eventually turn a profit to stay in business.

But, BUT!

Sure, on average they are losing money for each car sold. But there's a solution to that. Sell more of them!

;)

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1 hour ago, HotRunrGuy said:

Tesla is the definition of insanity. It's, rinse and repeat.

I am sure it will be made in 2020 and there will be many $39,000 models produced. I am sure loaded models won't more than double the base price. I am also sure build quality will be top notch.

 

 

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20 hours ago, blwnsmoke said:

But they are so far ahead of everyone else in regards to electric vehicles.

They're really not though lol.... Their cars may be technically and conceptually great, but if you can't deliver your product at a price consumers will pay, you have nothing.

 

Yeah, you can keep selling vehicles at a loss and hope eventually your costs will come down, or you find another way to profit from those sales after the fact.... but until that pans out you're playing a dangerous game.

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2 hours ago, probowler said:

They're really not though lol.... Their cars may be technically and conceptually great, but if you can't deliver your product at a price consumers will pay, you have nothing.

 

Yeah, you can keep selling vehicles at a loss and hope eventually your costs will come down, or you find another way to profit from those sales after the fact.... but until that pans out you're playing a dangerous game.

Your sarcasm meter needs to be fixed lol.  I know they arent..  just saying what certain people on here say all the time.

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4 hours ago, akirby said:

They won't "go under" - they'll be bought by somebody.

Well, sure, I predict that too.  But...

1) I don't expect the transition to be seamless, and
2) Will they be bought to be kept open as a brand (like the PAG brands), or will whoever buys them raid their R&D for their own benefit and say to heck with the service centers?

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9 hours ago, blwnsmoke said:

Your sarcasm meter needs to be fixed lol.  I know they arent..  just saying what certain people on here say all the time.

Nah, I got it, I just like to hear myself talk (type?)  I was agreeing with you. Should have liked to make it more clear.

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On 7/27/2019 at 9:53 AM, papilgee4evaeva said:

Well, sure, I predict that too.  But...

1) I don't expect the transition to be seamless, and
2) Will they be bought to be kept open as a brand (like the PAG brands), or will whoever buys them raid their R&D for their own benefit and say to heck with the service centers?

I dunno, maybe everyone lets Tesla hobble along financially like a crippled bird
and when the time is right, just move in with their own products and presto,
full charging grid and plenty of ready made customers who want BEVs.

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