
Tesla Second Quarter 2018 Update - kgwgk
http://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9ecac0ad7712
======
dmode
Tesla only sold 104 Roadstars in 2011. Now they are on track to sell 250,000
Model S, X, and 3 combined in 2018. The scale of Tesla's accomplishment is
truly under appreciated. It becomes even more impressive when you realize that
this is an electric car, sold by Tesla owned stores, supported by over a
thousand Superchargers. Amazing !!

~~~
gamblor956
Toyota went from selling 19,000 Prius' in 2000 to 281,000 Prius in the same
timescale. It becomes even more impressive when you realize that before the
Prius, there was no market for green cars, hybrid, electric, or otherwise.
Amazing!!!

[1] Even more impressive is that these are sales of a single model...

~~~
dragonwriter
> It becomes even more impressive when you realize that before the Prius,
> there was no market for green cars, hybrid, electric, or otherwise.

The first incarnation of the Honda Insight was before the Prius, and somewhat
successful before the Prius came on the scene and took over.

~~~
gamblor956
Honda Insight was never offered for sale, lease only. I'm not including leases
because Tesla does not lease their cars and lease stats are more than a simple
Google search away. But if we were to include leases, Prius' stats would look
even better.

~~~
dragonwriter
> Honda Insight was never offered for sale, lease only.

No, 17,000 or so were sold, and it was the first mass produced hybrid sold in
the US.

------
melling
Beyond the finances, Tesla says they’re still on target for 6000 Model 3’s a
week by the end of the month.

Throw in the other Models and Tesla will be shipping 300,000-400,000 electric
cars a year. That’s quite an accomplishment.

~~~
geerlingguy
I wish other car companies would create more compelling and somewhat
affordable electric cars.

At least in the US, the only two cars I can think of (besides the Model 3,
which is hard to come by) that move the needle at all are the Nissan Leaf and
Chevy Bolt, both of which look... not great.

Why don't any other car companies offer a 'standard' mid size or compact sedan
that's fully electric? Just take an existing decent car like a Toyota Corolla,
Honda Civic, etc. and redesign it electric? I know it's a different
drivetrain/architecture, but why not a standard looking body instead of some
weird buggy space-age thing?

~~~
bmelton
> but why not a standard looking body instead of some weird buggy space-age
> thing?

I think they're still counting on the signaling. It's said that the Prius was
bought by so many in large part _because_ it looked so goofy, in that it
didn't look like anything else, so everybody knew it was a Prius, which by
proxy meant that you were driving green.

Tesla shook that up, but styling still remains something withheld for the
maximum dollars. There are very few stylish cars at cheaper price points
because they know that despite whatever features are there, people shop with
their eyes predominately.

If they happen to land on a design that's too fetching for the price point
they're targeting, it seems likely that they'd uglify it somewhat and withhold
the better design for a more expensive vehicle that they may or may not plan
to make.

~~~
sien
The Honda Insight looked even more goofy:

[https://en.wikipedia.org/wiki/Honda_Insight#Design](https://en.wikipedia.org/wiki/Honda_Insight#Design)

They were shown in 1997 and on the road in the US by 2001 or so.

The Prius seems to have been a much better car.

~~~
CarVac
I drive a 2004 Prius and my friend recently bought a 2000 Insight.

The Insight is pretty much strictly a commuter car: it's laughably tiny, like
a roadster without any power. But it's really fun, and gets outrageously good
fuel economy despite how crude the hybrid system is relative to Toyota's.

The Prius on the other hand is an everyday vehicle that's spacious inside and
small on the outside. Far better suited to be the only car someone owns.

------
JumpCrisscross
For the six months ending in June 2018 Tesla's operations burned $528 million
of cash. It also spent $1.27 billion on CAPEX. At quarter's end, they have
$2.2 billion of cash on hand. That's like 7 months of runway. What's keeping
the boat plugged up is debt.

Good news is, there are no obvious bond market bogeymen on the horizon in the
very near-term.

~~~
matt4077
Cash flow was -$528M Jan-Jun, i. e. Q1 and Q2, yes.

But it was only -$128M in Q2. Tell us why you chose the longer time frame for
your prediction, exactly?

Your math also has some basic problems, because $2.2 billion / ($1.27 billion
/ 6 months) != 7 months == 11 months.

More importantly: you're mixing some completely different levels of
accounting: cash flow may or may not correspond to changes in capital
structure such as CAPEX. When CAPEX involves actual cash being paid, it's also
reflected in cash flow. In that case, you're counting the same expenses twice.
etc..

~~~
kgwgk
Your parent is not mixing different accounting concepts. Those are two lines
taken directly from the statement of cash flows ("Net cash used in operating
activities" and "Capital expenditures").

------
lawrenceyan
Looks like the bankruptcy short thesis has been pretty much debunked, cash
burn way below expected.

~~~
oremonger
Except for the 3 billion dollars in short-term debt that they have no hope of
repaying.

~~~
ggm
Cite, and I don't just mean the $3b existing, I mean the 'no hope of repaying'
part. Cite, or delete.

------
gok
> Gigafactory 1 battery production reached an annualized run rate of roughly
> 20 GWh

Kind of interesting...the typical laptop has a 50 Wh battery, and there are
about 160 million laptop sales per year. A typical smartphone has a 5 Wh
battery and there are about 1.5 billion smartphones sales per year. So that
one factory makes just about enough batteries for all the laptops and
smartphones.

~~~
femidav
And we would need 730 of such factories to provide all of 73 million annually
produced cars with a 200kWh battery.

~~~
davidgould
Fortunately, cars do not need 200kWh batteries. 75ish seems like the sweet
spot.

------
btilly
After hours trading jumped from $300.81 to ~$320. That could change again
before morning, but the markets look set to smile on this update. :-)

------
bhandziuk
Is that graph of their market share true? Do they really have a ~50% market
share? It sounds really high. At that sort of percentage can they really grow
at the rate they need? I know they say things like

> We are drawing customers from many other segments, including non-premiums
> sedans and hatchbacks.

Is that the source of growth at this point?

~~~
secabeen
> Is that graph of their market share true? Do they really have a ~50% market
> share? It sounds really high. At that sort of percentage can they really
> grow at the rate they need?

Yes, when comparing to other compact luxury sedans such as the BMW 3-series
and the M-B C-Class, yes, they are at 50% market share. The question becomes,
are they just selling cars to people who would have bought a car in that
class, or are they selling to people who normally would have been in a lower
class. Anecdotally, they're growing the class, as there's a lot of interest in
the Model 3 from people who otherwise would have bought a Camry, Accord,
Malibu, or other mid-grade sedan.

~~~
ntsplnkv2
The Model 3's shipping though are essentially luxury models though, correct?
Not the cheap one that would compete with a Camry, Accord, Malibu, all of
which can be had for around 20k.

~~~
thefounder
Model 3 is supposed to be the cheap/basic version. Maybe a model 5 will be
mid/luxury along with model S

------
Alex3917
> In July 2018, we delivered our 200,000th vehicle in the US, which means that
> our US customers will have access to the full $7,500 federal tax credit
> until the end of 2018

So basically they have until the end of the year to produce as many cars as
possible and get their finances in good shape, otherwise they're in trouble.

~~~
sp332
It will drop to $3,750 in January and then $1,875 in July.
[https://arstechnica.com/cars/2018/07/tesla-
sold-200000-cars-...](https://arstechnica.com/cars/2018/07/tesla-
sold-200000-cars-in-the-us-so-the-7500-tax-credit-is-going-away/)

~~~
Alex3917
Even that phaseout will probably result in a lot of cancellations from people
who have been on the waiting list for several months already but who haven't
taken delivery by the end of the year. Especially for the orders at the lower
end of the price spectrum, which haven't even started shipping yet.

Loss aversion is real, and people aren't going to be happy about being asked
to suddenly pay ~20% more for the exact same car. Since the base models
haven't started shipping yet, it stands to reason that after the end of the
year that will be mostly what's left on the waiting list. So if they lose a
lot of those reservations, they're stuck with huge capital expenses and a
potentially very significant decrease in orders.

~~~
secabeen
> Loss aversion is real, and people aren't going to be happy about being asked
> to suddenly pay ~20% more for the exact same car.

It's 10% more at most, and they are making it pretty clear now that the Short
Range model will not be available before January 2019. Even then, many people
can't even realize the entirety of a $7,500 tax credit. A single person needs
$60k in income to generate $7,500 in taxes due after the standard deduction,
and a married couple needs $80k to reach that point. Most people who are
holding out for the $35k Tesla because that's all they can afford are also
going to have a Tax due of less than the $7,500 credit.

~~~
gamblor956
7500/35,000 = 21.4%

It's a 21% price increase, assuming the buyer would have been fully eligible
for the credit.

Yeah, that's definitely going to change the math for a lot of prospective
buyers. A basic Model 3 isn't worth $35,000 cash compared to other similarly
priced EVs, especially not when those competitors will still qualify for the
rebate.

~~~
secabeen
>It's a 21% price increase, assuming the buyer would have been fully eligible
for the credit.

True, but not until 2020. In H1 2019 there is still a credit of $3750, and in
H2 2019, there's a credit of $1875, so it doesn't fall off a cliff.

------
newnewpdro
Out of curiosity, how many of you bought and sold TSLA over the last few hours
since the report?

------
nodesocket
Reading the comments, feels like HN is schizophrenic which is actually not
surprising (online mob mentality). The shorts and haters were out in full
force before on HN, calling Tesla the next Enron, absolutely slamming Elon.
Today, praise and congratulations.

------
brian-armstrong
Buying a car that's more than, say, $30,000 is such a laughably poor decision.
Cars depreciate rapidly unlike real estate where you actually maintain some
equity. If you're in your 20s and looking to pump your new RSU wealth into
something, almost anything is a better choice than an expensive car.

~~~
anyfoo
Who are you to dictate what I should do with my hard-earned money? As long as
you can comfortably afford it without any debt, spend the money on what you
are enthusiastic on.

Next time you are buying groceries, laptops, or go to a restaurant, I am going
to point out all your laughably poor decisions of not spending your money on
the absolutely cheapest options.

~~~
archarios
That's a pretty ridiculous comparison because of the difference in scale.
There are significant opportunity costs to putting 10s of thousands of dollars
into something that will depreciate in value over time rather than increase.
Especially when you're in your 20's. That amount of money invested could be
worth a lot more in 30 years. Compound growth is your friend.

~~~
ovao
I find it unlikely that the average HN member does not understand that earning
money is a better financial decision than spending it on highly-depreciable
luxury items (because such insights are entirely obvious), which is why
comments like "compound growth is your friend" rub me especially the wrong
way.

If one can reasonably afford a luxury item, it is _perfectly fine_ to spend
that money on that luxury item.

