
Tesla announces biggest quarterly loss - random_moonwalk
https://www.theguardian.com/technology/2018/feb/07/tesla-quarterly-loss-elon-musk-spacex
======
sien
Meanwhile:

The Nissan Leaf is expanding where it is being sold.

[https://electrek.co/2018/02/06/nissan-new-leaf-sales-
seven-a...](https://electrek.co/2018/02/06/nissan-new-leaf-sales-seven-
additional-markets/)

There are now 300K Nissan Leaf's on roads:

[https://www.forbes.com/sites/sebastianblanco/2018/01/09/niss...](https://www.forbes.com/sites/sebastianblanco/2018/01/09/nissan-
leaf-300000-sales-global/#5b27e5b41cf6)

Kudos to Tesla for pioneering and kicking off electric cars.

~~~
gamblor956
The Leaf has been in mass production since at least 2010, predating all Teslas
but the Roadster, a limited edition vehicle based on the Lotus Elise chassis
(edit) first designed sometime in 2004 or 2005(end edit). The Leaf itself
first premiered in 1997 as a prototype at the LA Auto Show, and was sold in
similar numbers to the Roadster over the next decade until the production
model was released in 2010.

Why is Tesla getting kudos for something Nissan did first?

~~~
adventured
Why is Nissan supposed to get credit for something GM did first?

edit: cute downvotes, but the fact is GM was _the_ modern pioneer on electric
vehicles.

"The General Motors EV1 was an electric car produced and leased by General
Motors from 1996 to 1999. It was the first mass-produced and purpose-designed
electric vehicle of the modern era from a major automaker"

[https://en.wikipedia.org/wiki/General_Motors_EV1](https://en.wikipedia.org/wiki/General_Motors_EV1)

~~~
Retric
EV1 was never sold to the public. It was only operated as a lease program at a
loss in response to a California mandate.

~~~
dragonwriter
It wasn't an in-house test program. They were leased to the public in
California, as GM s way of working within an incentive/mandate system that
existed at the time (Toyota’s original RAV4 EV and Honda's EV+ were, as well.)

~~~
Retric
Total EV1's sold to the public.

0

Cost to produce, 500,000$ each. GM had zero interest in rolling these things
out to the public and it showed.

~~~
cptskippy
Not sure where you got that figure. Cost estimates for the EV1 range from
$80-250k per unit. The $250k figure came from GM's Vice Chairman Bob Lutz.

~~~
Retric
"GM stated the cost of the EV1 program at slightly less than $500 million
before marketing and sales costs" They made 1,117 of them.
[https://en.wikipedia.org/wiki/General_Motors_EV1](https://en.wikipedia.org/wiki/General_Motors_EV1)

Adjust for inflation and that's well over 700,000$ each in today's money.

Cost per unit would have dropped if they where making 10,000 + / year.
However, that was not their goal.

~~~
cptskippy
From that same paragraph...

"One industry official said that each EV1 cost the company about US$80,000,
including research, development and other associated costs;[67] other
estimates placed the vehicle's actual cost as high as $100,000.[2] Bob Lutz,
GM Vice Chairman responsible for the Chevrolet Volt, in November 2011 stated
the EV1 cost $250,000 each and leased for just $300 per month.[68] GM stated
the cost of the EV1 program at slightly less than $500 million before
marketing and sales costs, and over $1 billion in total, although a portion of
this cost was defrayed by the Clinton Administration's $1.25 billion
Partnership for a New Generation of Vehicles (PNGV) program.[69][70][71] In
addition, all manufacturers seeking to produce electric cars for market
consumption also benefited from matching government funds committed to the
United States Advanced Battery Consortium."

[https://en.wikipedia.org/wiki/General_Motors_EV1](https://en.wikipedia.org/wiki/General_Motors_EV1)

~~~
Retric
Well yea, if you include the governments contribution they spent over 1
million per EV1 produced. Look only at material costs and labor you can get
~80k each, but cost to GM per unit is really a question of: (how much GM spent
on the program) / (number produced).

Anything else is subject to spin as for example it costs money to setup a
factory making just (parts) + (labor costs) overly optimistic. Similarly
marketing and sales costs can easily inflate unit costs to make it look worse.

On the other hand if GM could have used current battery technology and current
battery costs they may have tried to make it work. But, it was clear at the
time it was going to fail so they had fewer incentives to keep costs down.

~~~
cptskippy
> Well yea, if you include the governments contribution they spent over 1
> million per EV1 produced.

You're not actually reading the paragraph. It says that the government
contributed an unspecified amount from a $1.25 Billion budget to GM. And that
the contribution defrayed the stated costs by GM which means a portion of the
$500 million they spend was grant money.

~~~
Retric
"EV1 program at slightly less than $500 million before marketing and sales
costs, _and over $1 billion in total "_

adjust for inflation and that's well over 1 million / car.

------
gok
They were expecting to lose even more money this quarter, so that headline is
slightly misleading.

~~~
pavlov
What do you mean? It’s still their biggest loss ever, regardless of what they
predicted.

~~~
gok
The headline makes it sound like bad news. This was actually better than
expected news. This would be like having a headline of "Sports Team Scores
Least Points This Season" burying the lede that they actually won the game.

To be sure, there is plenty of mediocre to bad news in this quarterly report.
They still can't make cars at nearly the rate they expected. They're not even
mentioning the the autonomous stuff any more. But the loss itself wasn't
really bad news.

~~~
rdiddly
The most neutral way to put it would be to say "Tesla Reports Loss of $675.4
in 4th Quarter." So yes, there's some hyping going on, to get the clicks from
all the Musk haters.

However, this isn't a team that won the game; it's a team that lost $675M in 3
months. That's not wonderful good news that got manipulated and twisted around
by the media. Not even if you use that trick where you make up a number ahead
of time and then the reality looks good by comparison.[0]

[0][https://en.wikipedia.org/wiki/Anchoring](https://en.wikipedia.org/wiki/Anchoring)

Some will say it's an "investment" of $675M. That will become true if it pays
off, but currently it's a loss, and will remain a loss unless/until it makes
money. Investments vs. "bad investments" (losses) are defined retroactively in
other words, and we dont know yet.

------
konschubert
I really wish Tesla would succeed. But between their build quality issues and
their production issues, it's not looking good.

And this isn't even their biggest problem, which is that the cars are too
expensive for the mass market.

~~~
cryptoz
Their build quality problems are solvable. So are the production issues. These
are not issues that will sink the company, especially because they are
solvable and generally something to be expected during hyper growth like Tesla
is right now.

> And this isn't even their biggest problem, which is that the cars are too
> expensive for the mass market.

How is Tesla's biggest problem that their cars have a very high ASP? Demand is
not a problem for Tesla at all, much less their biggest one.

Now, if you think that Tesla should make a cheaper car, don't hold your
breath. Elon has said many times that rather than make a cheap electric car,
he thinks it will make more sense to make a mid-price car that can do self-
driving to earn the owner money during off-driving hours that the owner can
then use to offset the cost of ownership of a Tesla.

Yes it is a bold play, and it might not work. But Tesla's biggest problem is
not that they make expensive cars. I'm not sure what their "biggest problem"
would be, except for solving their current issues so that they could scale up
more smoothly.

~~~
matte_black
You have to be incredibly out of touch to think people are going to want to
rent out their personal car to filthy strangers to help offset the cost of
ownership.

~~~
aianus
People are already successfully renting out Porsches and Teslas on Turo in my
city at over a hundred dollars a day (and with 5 day minimums!).

If you give me $500 you can puke in my car all you want. And I'm relatively
well-off and don't need the money, imagine someone struggling to make the
payments like most Americans.

~~~
matte_black
People also rent out their homes on AirBnB. Yet we don’t live in a world where
most people buy a primary home they can’t afford with the intention that they
will just rent it out to offset the mortgage a bit. The closest we get is
people getting roommates for an apartment.

------
ProAm
Im interested in their earnings release in 7 quarters from now. I expect this
to remain poor for awhile.

------
rapsacnz
Who cares about their loss if Elon is blasting cars into space? How can you
get better marketing than that?

~~~
lopmotr
It didn't work for Delorean and Back to the Future promoting their car.

~~~
quink
They went bankrupt in 1982. BTTF came out in 1985.

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rak00n
And yet their stock went up by 3%.

~~~
adventured
That's because their cash burn declined _dramatically_. Cash burn is the
primary threat to their business today.

The path they're on now, puts them to near profitable by the end of the year.
That's while simultaneously missing the old Model 3 forecast by a mile.
They're forecasting 5k Model 3s produced per week in the second quarter.
Assume that production rate is further delayed until the fourth quarter,
they'll still be near break-even on their cash burn rate.

------
csours
Disclaimer up front: I work for a Tesla competitor.

The SpaceX launch was truly amazing, everybody was talking about it at work!

I wonder if that was the most expensive car commercial in history? Did Tesla
pay SpaceX for promotional consideration?

~~~
mburns
>I wonder if that was the most expensive car commercial in history?

Surely it was the cheapest, no? Tesla spent ~$0 for a huge amount of global
advertising.

SpaceX was already going to spend the money for the launch and the media has
given what is effectively free advertising covering the historic event.

~~~
csours
TANSTAAFL - There ain't no such thing as a free launch.

Certainly someone paid for the launch. I think it was a super clever play.

~~~
mstank
I guess the US Government / Air-force, and other launch customers paid for the
launch since they have active Falcon Heavy contracts with SpaceX. This test
was part of the certification process.

I'm pretty sure that Tesla didn't pay anything for the advertising. It was
Elon's own Roadster. If you look closely, the Tesla logo wasn't included in
the Falcon Heavy launch promotional video:
[https://www.youtube.com/watch?v=Tk338VXcb24](https://www.youtube.com/watch?v=Tk338VXcb24)

