

Tesla reports net loss of $50 million in Q1 [video] - selmnoo
http://www.usatoday.com/story/money/cars/2014/05/07/tesla-first-quarter-earnings-2014/8814725/

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DigitalSea
Tesla is just like any other startup, the fact they made a loss is irrelevant
because the overall vision is much bigger and eventually Tesla will be at the
forefront of electric vehicles, a household name like Ford or General Motors.
The fact they've made leaps and bounds in battery tech and the drivetrain
component puts Tesla at the forefront (not to mention shaking up how cars are
sold), the losses can be written off as collateral damage. You have to spend
money to make money and Tesla are arguably competing in an industry that even
almost killed the players that were there from the beginning.

Starting out in any kind of industry that relies on manufacturing and
continual research is going to very expensive, but the good thing is your
costs are destined to continually come down. Until they can drive down their
production costs and adoption increases, I have a feeling we'll see many more
quarterly losses before they start to become profitable.

I think the future of Tesla's revenue model will be split 50/50 between sales
and licensing. The deal Tesla signed with Toyota in 2010 to develop an
electric Rav4 was just the beginning. The technology and advancements Tesla
have made put them in a fantastic position to licence it out to other car
companies as more and more of them move into the electric car market, they'll
most likely come crawling to Tesla.

I'm excited to hopefully own a Tesla vehicle one day, in Australia it's not
really a viable option to own one just yet (that I am aware of anyway), but I
know that will change soon enough. Don't be concerned with the loss, there are
lot of companies out there not turning a profit just like Tesla.

~~~
hnnewguy
> _they 'll most likely come crawling to Tesla._

What specific technologies or patents do they own that will cause other
companies to "crawl" to them? Sure, they're leading the way right now, but
competition is heating up. Almost every major player in the market has
developed or is developing EV technologies.

Are we that enamoured with the aura of Elon Musk that we really believe the
major automobile manufacturers, with their hundreds of billions of dollars and
reams of engineering experience, won't be able to match or surpass what Tesla
is doing? That's a bold bet. The automobile world is an _incredibly_
competitive space. Look how much competition is in every single market
segment.

~~~
27182818284
>Are we that enamoured with the aura of Elon Musk that we really believe the
major automobile manufacturers, with their hundreds of billions of dollars and
reams of engineering experience, won't be able to match or surpass what Tesla
is doing?

YES, A THOUSAND TIMES YES because Tesla seems to be in the process of
_gettting it._

For the same reason Google was able to exist when Apple, Yahoo, and Microsoft
when, by your thinking, "with their hundreds of billions of dollars and reams
of engineering experience," should have crushed them. Because Google _got it_

It is similar to when Woz was asked how many computers they could sell and his
immediate answer was "a million" Surly against IBM and their "their hundreds
of billions of dollars and reams of engineering experience" Apple would fail,
right? But Woz knew better and when asked how he knew he could sell a million
"because there are at least a million ham radio operators" Because _he got
it!_

For the same reason that on Slashdot, when the iPod was revealed, the editor's
comment was "No wireless. Less space than a nomad. Lame." Slasdot didn't get
it, Apple _got it_

Similarly, Tesla's cars are the first cars I've ever wanted. _wanted_ wanted.
I have a car, I use it, it isn't sexy or special to me. I _want_ a Tesla. They
aren't there yet, but they're on the path and will "get it."

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roymurdock
The fact that they had a net loss of $50m is pretty remarkable, given their
steep, uphill battle against the deeply entrenched auto industry [1], the
costs of scaling up production [2], and the large expenses of building a
suitable infrastructure in multiple massive markets for vehicle charging [3].
I would've expected a much higher loss as they continue to plow money in
development.

It seems like people often tend to ignore the fact that Tesla makes really
solid cars [4].

Is the stock market overreacting? Good time to buy?

[1] [http://www.businessinsider.com/how-tesla-got-outspent-and-
ou...](http://www.businessinsider.com/how-tesla-got-outspent-and-outgunned-in-
jersey-2014-3) [2] [http://articles.latimes.com/2014/feb/26/business/la-fi-
tesla...](http://articles.latimes.com/2014/feb/26/business/la-fi-tesla-
battery-factory-20140227) [3] [http://www.reuters.com/article/2014/04/22/us-
autoshow-china-...](http://www.reuters.com/article/2014/04/22/us-autoshow-
china-tesla-motors-idUSBREA3L0TN20140422) [4]
[http://www.teslamotors.com/about/press/releases/tesla-
model-...](http://www.teslamotors.com/about/press/releases/tesla-model-s-
achieves-best-safety-rating-any-car-ever-tested)

~~~
hnnewguy
> _It seems like people often tend to ignore the fact that Tesla makes really
> solid cars_

Most Tesla fans tend to ignore the fact that building a solid car doesn't mean
the company should be valued at a bajillion dollars.

Stern's Prof. Damodaran (of online valuation course fame) believes "the value
per share estimate... [of] Tesla is between $110 and $115 per share." He might
not be right, but at least his model is based on real-world projections and
shows the magnitude of optimism/hype behind Tesla's share price.

There's a lot of talk about about Tesla being a startup or a tech company. In
reality, they're a car company (albeit one that's doing a few things
better/differently), and need to be looked at in that context.

~~~
marvin
Plenty of DCF models predict a Tesla share price which is higher than today's
closing price. The problem is that they necessarily must rely to a heavy
degree on assumptions about the future. Given that any realistic DCF model of
Tesla needs to be probabilistic to some degree (measure different scenarios
against each other) and that a company's true market value is still the
unknown present-value adjusted sum of all its future earnings, we are still
going to see massive disagreement about Tesla's correct valuation in the years
ahead. Contemptuous comments about bajillion-dollar valuations and hype don't
provide any value to this discussion.

If you're arguing from authority, it's also worth pointing out that Damodaran
was uncertain about his valuation in the comment thread after his latest
valuation of Tesla.

~~~
hnnewguy
> _Contemptuous comments about bajillion-dollar valuations and hype don 't
> provide any value to this discussion._

The OP asked why the stock was down, and whether this was a buying
opportunity. I offered perspective that it might not be, based on the analysis
of someone respected in the field. I understand that DCF models can produce
any numbers you wish (as does Prof. Damordaran; says so right in the article).
But there's his model and there's his numbers, based mainly off assumptions
that Tesla builds cars.

Tell me, what value did _your_ comment add to the discussion?

If I sound "contemptuous", it's because the hype and fandom is tiring. Read
the comments in this thread ("Tesla <3") or on Prof. Damodaran's article ("You
can't vaue Tesla unless you've driven one!").

~~~
marvin
Morgan Stanley's latest DCF arrived at $320/share, Goldman Sachs's arrived at
$200, for instance. If your goal was to contribute by providing a contrarian
view, that is fair enough and I might have misread the tone of your comment. I
am merely pointing out that it is not just noveau riche kids and hype train
riders who figure that Tesla is a good investment even at the current price -
I figure that this is an interesting point, since my impression is that the
financial press says the opposite.

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jqm
I like everything about Tesla.

Except they don't make an auto that is affordable for most people. Hopefully
their battles eventually produce this, whether it is them that brings it to
market or someone else.

~~~
grecy
It's been their plan all along to make cars that are more and more affordable.

~~~
johnny5
Indeed, and the next one has gullwing doors, following in the footsteps of
esteemed car makers DMC and Bricklin.

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urbangangster
Tesla <3

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n0rm
_Tesla also said that using non-GAAP information that excludes some items...
it earned $17 million,_

Which means the article is like a proof-piece on how unreliable these
financial analyses are.

They got 12 cents when analysts expected 6. That is a %50 error.

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fersho311
I fail to see a reason why this article is on the front page. Tesla Q1 report
does not disclose any new information that we didn't already know: Planning of
a Gigafactory, battery supply constraints, rapid movement into China, etc.

