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Tesla Q3 Financial Results (tesla.com)
332 points by danhak 19 days ago | hide | past | web | favorite | 284 comments

Sorry if this is slightly off topic, but it is amazing to me how differently various publications are spinning the same basic facts. Some headline samples:

"Tesla shares soar after crushing third-quarter earnings" CNBC

"Tesla's Quarterly Profit Drops 54%" WSJ

"Tesla returns to profitability and tops Wall Street's third-quarter earnings" Business Insider

"Tesla ekes out a profit as all eyes turn to its China Gigafactory" The Verge

I get that financials are prone to much speculation, interpretation, etc. But it seems that the news is so agenda driven today that we're twisting facts to fit some narrative rather than the other way around.

When the narratives being pushed at us by news organizations are so polarized around concrete numbers being reported at regular intervals in a heavily regulated manner, how can we hope to interpret more nuanced news appropriately?

Sorry, rant over. This is exciting news for Tesla! Or maybe the beginning of the end.

And you know what? All the headlines are true! Knowing which takeaways matter is the hard part, and particularly with investing, if you did know, you’d be very rich.

I think the YoY EPS is the least interesting and more erratic headline personally.

They had one prior profitable quarter which happened to be Q3 2018. That was under a full subsidy regime only selling the highest ASP Model 3s while there was still higher volume X/S sales to boot.

All eyes are definitely on G3. Tesla spent 2019 improving process efficiency and returning to profitability but have been seriously production limited the last two quarters.

G3 production coming online for China, also by the way just in time to avoid a steep rise in import tariffs, is hugely critical for Tesla, and China as a long term EV market is absolutely massive. Getting China excited about a locally built Tesla is super important, and G3 production of 3k units/wk by the end of the year should be a massive boost to their bottom line, because those should be higher margin units even if they are somewhat lower ASP than their global average.

It’s definitely not the beginning of the end for Tesla and I don’t think anyone should come away from this particular report feeling more pessimistic about TSLA than they were going into it.

> They had one prior profitable quarter which happened to be Q3 2018

Both Q3 and Q4 2018 were profitable, and so was Q3 2016, and Q1 2013.

Damn I should have known that. You hear so many deride Tesla over and over I internalized the “they were profitable for one damn quarter” and took it as fact.

  March,     2013 - $ 11.5M
  September, 2016 - $ 21.88M
  September, 2018 - $311M
  December,  2018 - $139M
  September, 2019 - $143M

In terms of being profitable or not a quarter, can't you use accounting techniques to twist this? I know that you can play off assets that still need to be paid as income. Or is the meaning always precise?

For example, the first two don't say much; the third is much more significant and probably difficult to fake.

Personally, I think the most important is whether they can follow their game plan: make a lot of debt for car n, pay all off plus make a little; restart for car n+1. Also, n+1 should sell more units than n.

>can't you use accounting techniques to twist this?

Yes. Elon literally said, "Profits from here on out!" the last time they made profits. Then, Tesla proceeeded to lose 700MM the next quarter.

It's very interesting to read back over their 2018 Q4 report. They knew that starting up international deliveries would have a significant impact on recognizing revenue on all the vehicles they were able to build, whereas selling locally they can count on selling them pretty much as they came off the line;

> While the number of Model 3 vehicles produced should increase sequentially in Q1, deliveries in North America during Q1 will be lower than the prior quarter as we start delivering cars in Europe and China for the first time. As a result of the start of Model 3 expansion into Europe and China, deliveries will be lower than production by about 10,000 units due to vehicle transit times to these markets.

What actually happened was that production rate fell by ~10,000 from 86.5k to 77.1k and they also had deliveries fall behind production by 15,000 instead of their expected 10k;

> In Q4 2018, Tesla produced a total of 86,555 vehicles, and delivered 90,700 vehicles. In Q1 2019, Tesla produced 77,100 vehicles and delivered 63,000 .

I'd have to research the cause of the production drop, but that combined with a larger than expected delivery lag (compared to the prior quarter where they actually over-delivered vs. their production rate) is why they had such a tremendous loss. On top of all that I'm pretty sure gross margins also fell, and the S/X/3 mix became significantly more 3 dominant as the tax credit dropped.

So while I would not dispute that there are tricks that can be pulled, mostly in this case that would come down to the level of CapEx, which for Tesla is now below their depreciation. That's a metric which typically shows a slowing growth company, but in the case of Tesla could just be more reflective of how wasteful their spending actually was in the past (e.g. trying to fully automate production al la "alien dreadnought" and failing).

But in the case of Q4 2018 vs. Q1 2019 really what happened is they had significant issues with production, deliveries, and margins all at once driving down revenue well past anything they could correct by controlling spending.

Not to carry on about it, but any company can decide how much they want to invest in future growth, and if they will raise money to finance that, or if they will constrain their expenses based on their revenue and margins. That's not financial engineering or an accounting trick, that's just basic risk management and calibrating your spending based on your growth opportunity versus your cost of capital.

What we've seen in 2019, I think, is a focus on aligning the company for profit before the next push. I would not expect Tesla to have increasingly large profits each quarter, because it would be strange for them to sit on an increasing cash hoard ($5B+) when they have so many good ideas on how to spend it. Namely, building more factories for Model 3 & Y, getting into battery cell production, and whole new lines needed for the upcoming truck, and Semi production.

You sounds fairly informed about the financials, and that's appreciated. Still:

>What we've seen in 2019, I think, is a focus on aligning the company for profit before the next push.

They are not profitable. They achieved profitability this quarter, but have lost money every year for their entire existence. Is this different from Q3'18?

>because it would be strange for them to sit on an increasing cash hoard ($5B+)

I'm not sure they have a "cash hoard" for any longer than the 10 minutes of their quarterly report. Drawing on debt debt to increase cash balance doesn't affect the balance sheet.

>Namely, building more factories for Model 3 & Y

Where did building more factories, and staffing them, show up in the financial reports? How can all of the labour and capital expenses stay the same (or fall) while this occurs? It's confusing that a company can essentially double its productive capacity without it being seen in the numbers. Can you shed light on that?

Despite what some of the conspiracy theorists on this site say, I may be...anti-Tesla? But only because I think it's such a compelling story. I don't short it (I don't short anything), and I don't talk about it outside of this site (where I talk about it too much). I really don't get it: the financials are a mess, Elon is, imho, a jerk, and yet...

And keep in mind profit is not actually that relevant in many ways; notoriously, AMD has been operating at a loss for most of its existence (iirc).

>AMD has been operating at a loss for most of its existence

And this makes profit irrelevant how exactly?

well, all you need to know is if they beat Street expectations for EPS and FCF...which they did...massively...which is why the stock is up 20% after hours.

Still, a stock valued for massive growth with a revenue decline is definitely something that should leave you with a bad taste in your mouth.

It's not really that surprising. The growth expectations are taking into account that there are still several new markets to enter (Model Y, pickup, semi, etc.) and that continued reductions in manufacturing costs should allow lower prices which lead to higher sales volumes.

But last year there were more tax credits, which front-loaded a lot of sales into a year ago, and they haven't released a new model this year. So this YoY decline wasn't that this quarter was unusually bad, it was that this quarter a year ago was unusually good.

People seem to act like the Model Y will just be an entirely additive thing to Tesla sales. How many Model 3's will be cannibalized by Tesla announcing a cheaper crossover? The demand for each of their vehicles is very interrelated, as seen by what the Model 3 has done to S/X sales in every country it has entered.

What I see with the revenue decline, and if you look at sales patterns by the countries they have entered is a company whose number one vehicle, the Model 3, has peaked in demand. I don't see many levers for them to really increase that, and many of the company releases, like the Model Y, will only cannibalize more of that demand.

Having the Model 3 take sales from Model S or X wasn't great because it costs less. The Model Y is priced above the Model 3. People buying it instead would only increase their revenue.

Yes, but how many Model 3s will they sell when they start selling Model Ys? If they're selling 300,000 Model 3s a year, I would expect that number to decrease when the Y is released.

Suppose they don't compete with each other at all, so they continue to sell 300,000 Model 3s and then sell 200,000 Model Ys. Suppose they do, so in that case they drop to 200,000 Model 3s but sell 300,000 Model Ys. Isn't the second case better for them, since they get more for the Model Y than the Model 3?

Won't being locally built diminish its attractiveness?

A lot of European carmakers already assemble in China, partnered with local companies via joint ventures due to regulations. Tesla's G3 is the first major 100% foreign owned car factory in China IIRC.

Brands aren't usually valued by where they are manufactured. People don't care that Foxconn assembles their iPhones.

Part of the problem is that the Internet has resulted in lots of these news outlets simply trying to be first on a story and then editing articles in real time. For example, that negative WSJ headline doesn't appear to exist anymore and now their article on the subject it titled "Tesla Holds Down Expenses, and Its Shares Surge" with the 54% number relegated to a subheading. Odds are that article will continue to be edited for days and will have a variety of different headlines in that time.

Bet there are always multiple headlines and they're A/B tested for the most views.

Actually (WSJ alum here) our long-ago training was to lead the story with the percentage change in net income, no matter what. The assumption was that in a congested world, that was more likely to be the most useful metric. And it was a simple, easy-to-find number.

Focusing on net income was meant to keep inexperienced reporters from being bamboozled by IR/PR departments that sometimes went to crazy lengths to find something positive in the midst of a crummy report. (One tech company with dwindling sales, profit and market share liked to talk about its strong cash position.)

Of course, that was in the days before up-to-the-second updates on after-hours trading. So now reporters know the market's verdict within a few minutes of the earnings release. That leads to financial-results stories that hunt for something (earnings? revenue? next quarter outlook?) that explains the stock movement. In this environment, different metrics get different levels of prominence all the time.

I wouldn't burn up a lot of energy coming up with conspiratorial reasons why reporters pick different numbers. Inexperience and confusion usually are the simple reasons for 90% of strange decisions. This is probably true in a lot of areas.

Cry wolf enough times and you just start getting ignored though. I can't say I ever click on any Business Insider or the Verge articles anymore regardless of title.

It would be awesome to have a reference list of examples to demonstrate how twisted headlines from major sources really are. Any come to mind?

Verge has anti big tech bias. anti amazon anti Tesla, anti anything or anyone that is big and successful or rich.

Really? I'd say the opposite. They love tech. That's the bread and butter of what they cover. Any anti-articles are due to the fact that that is almost all they cover.

The Verge and other Vox publications definitely do push an anti-tech angle is it's digestible by the populace.

This only makes sense of people who do enough research to realize it's false information. A lot of people just care if the headline fits their own narrative.

If people would ignore fake news, we wouldn't have so much misinformation issues, people biting the onion and flat earthers.

Not usually -- most of these articles end up being consumed very quickly after publication, so A/B testing wouldn't yield any actionable data.

This is why you just go to the [EDGAR files](https://www.sec.gov/edgar.shtml) and think on your own.

If you want entertainment, read the interpretation given by a news organization with your preferred bias.

If you want real insight, read articles with conflicting agendas. I suggest Barrons and WSJ as the obvious conservative-agenda choices, and Bloomberg and Financial Times as liberal-agenda choices.

not to diminish the effort of reading different viewpoints but I have to chuckle about the fact that we live in times were the ideological spectrum spans the astonishing distance from the Wall Street Journal on the one side to the Financial Times on the other

Don’t worry, each one will wrote the opposing headline tomorrow to close the loop.

Best to look at the earnings release itself to get the most objective picture. Or if you want a single metric, look at the after-hours stock movement. TSLA is up 20%, so it can't all be bad news.

> Or if you want a single metric, look at the after-hours stock movement.

I think this is a good rule of thumb, but for famously volatile securities (Tesla, Bitcoin, etcetera) you are really just swimming in a sea of irrational exuberance and nobody knows how it's going to end. Maybe Tesla will be the world's richest company in 10 years. Maybe Tesla will go bankrupt in 2. I don't know, but looking at Tesla stock trends doesn't tell you anything other than how unstable it is.

Also short term stock movements, especially after earnings can be due to Keynesian beauty contests. you think other people think the headline is positive. even if you think the actual results are bad, you still buy because the price is dictated by the greater fools, not you.

After Hours can be low volume and not entirely indicative. The full next day of trading is usually a much more sober indicator.

yeah there is randomness but the companies that tend to go away often have a fatal flaw, such as being dependent on a single customer, or are fads, or have cut throat competition and tiny margins. This is why clothing companies are such bad investments compared to information tech. Tesla has none of those problems.

ME: It's not a good idea to look at stock trends for anything super volatile.

YOU: Tesla doesn't have problems like other stocks.

How is this relevant?

A couple of sentences from the BBC story that probably explain what's going on:

> The firm also reported an unexpected profit of $143m (£110.7m) for the three months to 30 September. That beat forecasts, but was down more than 50% from a year earlier.

The most effective method of manipulation is by selectively highlighting parts of the truth while purposely obscuring other portions.

That’s why it’s so important to not passively intake information but be aware of and actively introspect when doing so.

One of these headlines will A/B test to win viewership and ad revenue. The actual facts do not matter; they're optimizing for colorful and exciting headline. To get clicks, they'll make the headline seem extremely positive or negative, as neutral is uninteresting.

One big reason I built https://legiblenews.com/, which scrapes Wikipedia’s news once a day for headlines, is because their agenda is to be encyclopedic. The headlines link to encyclopedia articles (except for the sources obviously) where if clicked, people might accidentally learn something.

Wikipedia has its own enormous biases; it's editor population is enormously white, male, and American. That changes the filter of what they believe to be notable.

I don't see a realistic way to include every social group of human, proportionally to their impact. This is enormous task. And if we could - would you read news that has 20% content praising chairman Winnie-the-Pooh Xi? Because that's what proportional system would bring. Or 20% news about benefits of peasful islam.

If whole country pushes certain narrative would it make the truth due to sheer number of supporters?

PS: I'm not saying that WASP news are unbiased.

What I'm saying is that we should not take Wikipedia as some paragon of unbiased news. Your editor population determines the content that is published, critiqued and updated. They might have better standards than many online edited sources, but they are far from lacking bias.

If a human was involved, it was biased.

Every piece of market news that says "market change X, because incident Y" is pure speculation since there is no way to establish Y as the cause. I wish they would just say "X happened, and also Y" and stop thinking they can attribute cause and effect.

>Every piece of market news that says "market change X, because incident Y" is pure speculation since there is no way to establish Y as the cause.

This is not correct. There are many market news items that can be directly attributed to another event. Boeing's numbers this week are directly attributable to the Max fiasco. The company and analysts agree on this. Why would you assert that it's "pure speculation."

I mean, he's right that correlation =/= causation, but you're definitely right that there's a lot of times the link between the two are pretty obvious

Fair, if it's a specific stock and a specific event affecting that company, I don't have so much of a quibble with that (although it could still well be that 0.2 of that selloff is because of the event and the remaining 0.8 is because the first 0.2 sold.)

I'm more thinking of the "Markets are down 1% today because of uncertainty associated with the China trade"-style reports.

Note WSJ changed their headline to "Tesla Delivers a Surprising Profit" (the URL still has the old headline): https://www.wsj.com/articles/teslas-quarterly-profit-drops-5...

Sometimes they do that with clickbait titles to get initial article traction, or test titles.

Most of the time I doubt that. You can't really get good test data on the amount of time a day old article exists.

It's up 20% after market though. Inflection point reached? Now it's a matter of organizing the momentum.

I mean, all of these are true. WSJ's quarterly profit decline is probably the least accurate headline. To be honest, the fact that they have a YoY revenue decline is much more significant.

It's all noise. Read the 10q and and decide for yourself.

10-Q isn't released until weeks later

The financials themselves are the facts, everything else written about it is interpretation and punditry.

Why the need to add "today", has news ever been any different in that regard?

$143M GAAP / $342M Non-GAAP Net Income. $371M free cash flow.

GAAP Gross Margin 18.9%. That is before G3 comes online which will, I believe, have an upward case for margins. That is the big news here today. And that is really great news for Tesla.

Over $5.3B cash on hand. TSLA is in an amazing position going into Q4 and 2020.

Highly confident of exceeding 360k deliveries for 2019.

Just an amazing run up to the end of the quarter.

For added inspiration, check out a flyover video of G3 with the loading docks starting to fill up:


Full Disclosure: Long TSLA. No plans to sell in the next 9 years. I told my kids either the shares will pay for their college, or they may need some scholarships.

I don't mean to lecture or suggest your decision is unsound, but note that the expected opportunity cost of investing in any given stock vs. an index ETF over 9 years is about an 85% return.

How is this calculated? Simply by taking the average of every stock you could possibly invest in? On NASDAQ + NYSE?

Basically the median stock is worse than the index. Diversification is good.

most individual stocks lag the index . the odds of choosing a stock that beats or meets the index are low.

why did you pick 9 years? When you use an arbitrary number like that, it looks like cherry picking.

The OP mentioned 9 years.

imho was still a fair question, no need to downvote. Not arguing with the index argument, but I've had finance "experts" trying to pull similar tricks on me by using weird years, etc.

There's a big difference between "these specific 9 years" and "the average 9 year span". It's a lot harder to make cherry picking arguments with the latter.

Flip the bozo bit xor conman bit on anyone using the former.

>I told my kids either the shares will pay for their college, or they may need some scholarships.

Assuming they are teens and old enough to think for themselves. I wonder if they felt safe and happily going out to play or working their ass off trying to get Scholarships.

I vaguely remember Tesla discussion on HN not long ago of it being cash strapped and was on the verge of bankrupt. ( Or something similar ). It is truly amazing how they managed to crush all naysayers and sceptics.

>I vaguely remember Tesla discussion on HN not long ago of it being cash strapped and was on the verge of bankrupt.

That is called fud. They omitted the part about Tesla being able to raise capital very cheaply and easily and about how Tesla is cash-flow positive. I think his kids will be fine. If Tesla were truly in dire straits as the media said it was, the stock price would have reflected that (single digits or low double-digits instead of $200-300/share) and Tesla would not have been able to raise money on such favorable terms.

Are the days of cheap capital still here? Tesla's last capital raise wasn't exactly pretty, and with the implosion of WeWork and some other cash intensive startups where profits were lacking it isn't immediately obvious what terms they would raise capital at.

I remember that stuff. Passing look at the financials would tell you it was all bullshit. Tesla had enough cash to keep eating their losses for another two years. Making money on unit sales. And had a couple hundred thousand preorders.

They also have enormous debts, negative working capital, and their CapEx hasn't come close to depreciation for a few quarters.

My kids are going to work for scholarships if college is in their future. I should have but didn't because my parents didn't understand the game and nobody told me otherwise. There is a balance to this though but I will provide all of the supports I can to help them be the individuals they are.

Please don't xplain the game you are referring to. I had scholarships but I don't get the game.

I hate that can't edit my comment up above, shouldn't type on the bus. I was trying to say "Please explain the game".

I disagree that college is a scam. I went many years ago when it wasn't that expensive, I had a job and also scholarships, was able to pay as I went with some parental help. But it was nothing like today, where it costs 30k a year at a reasonable state school. My generation has not met our responsibilities to maintain our countries infrastructure including educational infrastructure. It doesn't help that much that I have argued and voted against the direction of making education ever more expensive (in part because of lack of state funding).

If you apply to enough scholarships you will get some. Anyone paying for their full cost of education is a chump.

> I told my kids either the shares will pay for their college, or they may need some scholarships.

Probably not the best strategy to put essential money into a growth stock during an unprecedented bull run and expect the growth to continue for another 9 years. The likes of TSLA being at a higher price than today in 20-30 years are decent, but in 9 years? Very uncertain. See: every growth stock that hit a peak in 2000, and what happened in the following 9 years.

At the very least, it's probably not the best idea to tell your kids that this is what you're doing.

Highly confident of exceeding 360k deliveries for 2019.

Musk got in trouble for tweeting that he’d hit 500,000 this year.

*Run rate of 500,000

From their 2018 Q4 report;

“Barring unexpected challenges with Gigafactory Shanghai, we are targeting annualized Model 3 output in excess of 500,000 units sometime between Q4 of 2019 and Q2 of 2020.”

Musk later tweeted he thought it would come in at the earlier Q4 side of the guidance.

500k annualized is 9,600/wk. They past 7k/wk with Fremont and want to be at 3k/wk in GF3 by the end of the year.

I think they will guide a range of 600-750k units in 2020. It depends how quickly they can get GF3 up to 5k/wk and how much additional capacity they will bring on for Model Y in Summer 2020.

Why would they produce 500,000 if they only are delivering 360,000.

just goes to show how media narratives are often wrong. everyone for the past 2 years has been saying tesla is dead due to losses and Elon Musk's supposed "erratic behavior" (that is what the media labels you if you are successful but fail to comply with what they deem to be conventional social etiquette ), yet Tesla has consistently shown an ability to prove naysayers wrong. Tesla generates tons of cash flow from business operations, similar to Amazon despite large one-time losses and not needing to advertise. This is analogous to opening a Subway or McDonald's franchise and initially taking on a lot of debt, but the business of selling burgers is profitable. Analogous to a flipping a light switch, as soon as Tesla stops spending on cap-ex for expansion, Tesla will instantly go from losing a lot of money each quarter to making a lot of profit.

Also,Tesla can raise debt so cheaply and so easily, that its stock actually went up when it did a secondary offer. Let that sink in: Tesla stock went up despite diluting itself, which virtually never happens. That’s like being paid to borrow money, which give you an idea of how advantageous of a position Tesla is in. Tesla is possibly the only company in existence that gains value when it takes on debt. Just goes to show how media keeps being wrong about Tesla running out money being a concern. In theory they can raise as much money as they want and the price won’t go down.

Ford and GM need to spend billion on adverting a year to make people aware their new models exist, let alone want to buy them. Tesla gets free PR though its spokesperson and CEO , Elon Musk, and his Twitter account and its captive audience of millions of followers, which is way better than some crappy, million-dollar TV ad that 99.999% of viewers will fast-forward, forget, or ignore. And then the media is glued to Musk's twitter account, so anything Musk tweets out is amplified, all for free.

Tesla is going to go much higher. I think $1000 share within 4 years is easily doable.

My friend is long TSLA because he hopes it will pay for his Tesla.

That sounds pretty weird when you talk about it. Like I'm long Aetna because I hope it will pay for my colonoscopy.

It's not weird actually. Peter Lynch would walk around shopping malls and see what people were wearing and buying. The next thing HN downvoters are going to say is that a good business is not necessarily a good investment. However, it's investing in what you know - which is another Peter Lynch idea.

A number of investors, Peter Lynch and Warren Buffett, especially act as if their process is less sophisticated than it is. Sure, maybe Peter Lynch had a few ideas cued up by walking through shopping malls, but the guy could also read a balance sheet.


News Guidelines:

Please don't comment about the voting on comments. It never does any good, and it makes boring reading.


Paul Graham:

I think it's ok to use the up and down arrows to express agreement. Obviously the uparrows aren't only for applauding politeness, so it seems reasonable that the downarrows aren't only for booing rudeness.


I think people should get points for sparking discussions. So since you generate a lot of replies you should get some points for that. You can have a 1 point thread that has 10+ comments on it.

Since we're getting meta here - I've always thought voting should be based on whether a comment contributes meaningfully to the conversation. Maybe if it's blatantly wrong and misleading it should get a downvote (unless a follow-up comment sets this straight and would get buried if the parent gets nuked) but otherwise I really don't like the "downvote = disagree" trend I've seen recently.

Agreed. Been wanting to post this comment for some time now:

When comments are downvoted, sometimes to oblivion, yet have many and deep set of replies, doesn't that indicate something wrong with the downvotes? The point is to have a substantive discussion and in the case (which is common) I'm noting, the downvoted comment has done just that.

I think any comment should get implied/automatic upvotes for each reply, on a power scale. Say a floor of 2 or maybe 3, then after that 1 or more points for each child comment increasing as the number of comments increase.

I realize that system is subject to abuse, but does it really matter? Whereas OTOH it prevents the echo chamber for hot button topics.

At this time, the now actually dead GP comment has 30 children! It is by definition a worthy comment.

Not all discussion is good discussion. Quality over quantity, as 'dang has said in the past.

That only makes sense in this case if the parent comment is a troll comment but there are cases which clearly are not.

A parent comment can be a bad comment without being trolling, which is important to remember.

I think you'd get 1/2^n for replies, where n is the level depth.

Good point, I removed it.

It's not obvious that an 11 year old comment from somebody who's not really involved in the community anymore should be taken as gospel.

It's natural though. Consensus is that votes are for both post quality and agreement. HN seems to be generally good at focusing on the former.

It has been regularly reinforced by dang.

>Edit: downvoted as expected proving my point...

I will never understand how some people become more confident in their ideas the more other people disagree with them.


I am not in any way implying people need to fall in line or avoid disagreement. I am more commenting on how my mind works. When someone tells me I am wrong, my first instincts are self-doubt and/or questioning why someone would think about the topic differently. I don't get or fundamentally understand the reaction of other people disagreeing with me leading to me being more confident in my initial opinion.


Paul Graham:

I think it's ok to use the up and down arrows to express agreement. Obviously the uparrows aren't only for applauding politeness, so it seems reasonable that the downarrows aren't only for booing rudeness.


For what it's worth, I think PG is completely wrong on this. The site was designed, via progressive lightening, to censor downvoted posts. His statement is essentially permission to censor dissent and doesn't make for a healthy conversation.

Hoovering up and aggregating commentary from those that actually produce content and then imposing a censorship regime on it is the point of HN.

I stand corrected...

It's also just human nature. People will upvote what they like and downvote what they dislike, and for some that just means downvoting whoever disagrees with them.

I'm downvoting because you're whining about downvotes rather than taking responsibility for your discourse.

I actually know somebody who did this but for AAPL many years back. At the time, I too thought he was insane, but it worked out very well for him. A propos TSLA price, the problem is they are about to face a lot more competition from companies with sophisticated, established, distribution networks, etc.

Apple had lots of competition from companies with sophisticated, established, distribution networks, etc. Compaq, Dell, IBM, HP. Apple had to build the Apple Stores.

Also, the car companies have legacy issues handcuffing them. Unions, dealership agreements.

Not saying Tesla can replicate Apple, but Apple didn't have it easy.

This is exactly what I think. They did a very good job capturing the early market given the void left by traditional auto makers. The next 5 years will be very tough. They will be competing on the efficiency of the production chain. Toyota and Volkswagen are unbeatable at that game.

Regarding your story with AAPL: Good for him but how many others will we never hear about? Betting everything on a single stock is the number one mistake that amateur investors make.

It's not just about mass producing an EV though. It's also about the software and tech, and building not just a moving battery pack but one that comes together well with the software, self driving tech, and a supercharging network will be where Tesla will have an advantage for many more years to come.

Can we please all stop pretending Tesla is a software company? This is the same fallacy as stating that WeWork is a tech company.

Yes, there is a bit of software to their stack which they do well. But Tesla is a CAR company (bordering on the lifestyle category).

I don’t think it’s too much of a stretch to say that Tesla is a software company the same way Apple is a software company. They don’t make their money selling software, but their software is a huge reason they are making money.

There is a heck of a lot of software in that car and in all the infrastructure supporting that car. And unlike their competitors, Tesla doesn’t outsource it.

Will Toyota have an EV available in numbers by 2024? I know they love their hybrid platform, and the fuelcell car, but I'm unaware of any EV plans.

> Will Toyota have an EV available in numbers by 2024? I know they love their hybrid platform, and the fuelcell car, but I'm unaware of any EV plans.

FCEVs are as much EVs as BEVs, but yes, Toyota's first production BEV is being sold in Japan in 2020 with plans for India close behind. It's very much not designed for the preferences of the US market so I suspect we won't see it.


They are also imminently launching an all-electric vehicle under the Lexus brand, with plans to electrify across the brand by 2025:


And I know people that have lost money on Apple and Tesla.

Stock market is not some friendly game where everyone wins.

Given AAPL is at an all-time high they would've made money if they held onto it and not sold at a loss.

As most stock market indexes have a general upward trend, more people make money then lose. Though I still wouldn't recommend investing what you can't afford to lose or can put aside for the long term as you'll stand a better chance to make money if you can hold onto it through the downswings. Obviously you can still lose by investing in the wrong company, but you can mitigate your risk by spreading out investments over multiple companies/markets. There's a much lower chance of losing money on shares in the long term if you're sufficiently diversified.

My AAPL stock has paid for several devices and given me my initial investment back

If only I'd bough Apple stock instead of Apple computers ...

This ain't it chief.

Give some support to your claim. If you don’t have the financial literacy to support it, then maybe reconsider hitting that “Reply” button next time.

Too mean.

man, i downvoted you (and usually i strongly dislike and avoid meta discussions on downvoting or being downvoted, yet it seems here it warrants an explanation, at least i'd have liked if somebody gave me a one in a situation like yours) because you're making gross logical mistake:

> You are buying into a cult with some life changing saving (kid's college)

he never said that he is using kid's college savings and/or life changing savings. You ascribed that meaning to what he said, while he may have (and probably) said completely different thing - using small money on TSLA playing the chance that it may convert those small money into the life changing/kid college savings.

Indeed this. If it 20x’s like I think it might (full Robotaxi vision realized) in the next 10 years, then kids will be all set for college, or their first house, their choice. If not we will all have to work harder, but it’s not like I had the college fund saved already and then bet it all, or am living life as if TSLA is already at $2,000.

How can I not bet with someone like Elon Musk? Why bet against him? I want to live in the world where Elon and Tesla succeeds. It’s a win-win that I could personally profit from it too.

Very rarely do we get a company IPOing so early in their lifespan with real ideas and plans to change the world, and the intellectual capital to possibly even succeed. I think it’s a once in a decade opportunity. I hate being a skeptic against someone with an actual positive vision for the future and a strong theoretical backing of how they will get there.

The idea that Toyota is going to eat their lunch to me flies in the face of everything we know about innovation and company culture. The legacy companies are frankly totally blindsided by this EV revolution.

While legacy auto employee unions strike, and legacy auto company plants close down, TSLA moves from a 3% SAM to a 30% SAM (by adding trucks and crossovers to their served market) over the next 3 years.

If their truck is as revolutionary in that market segment as the Model 3 is in its market segment, they won’t even need Robotaxi to hit a market cap of $200B.

Not sure why people think long term Tesla is in an amazing position.

Their market share can only go down. All of the car companies have or are releasing cars this year/next and are significantly more capitalised. Some of these cars are superior to Tesla e.g. Porsche Taycan and their ability to share platforms between brands helps to amortise costs.

As we've seen with Summon their FSD program does not look like coming out anytime soon and their inability to be profitable means they can't invest in it or even fundamentals like product refreshes.

Not an owner or shareholder. I encourage you to read up a bit more on their competitive strengths, including their battery, charging infrastructure, and autonomous driving tech. In that regard they are WAY ahead of the competition. I am stoked that VW is serious about playing the EV game, and you are correct that they are significantly more capitalized; however they are still WAY behind Tesla in the critical areas mentioned above. IMO, they are going to gain a lot more market share, for a long time to come.

> Some of these cars are superior to Tesla e.g. Porsche Taycan

Depends on your metrics. IMO, the Model 3 Performance is the superior car. Half the price, quicker, longer range, and has access to the largest fast-charging network in the country.

I think the hope is the Porsche Taycan will be a legitimate track car. Teslas are still known to overheat, and I have yet to find a single example of someone tracking a Tesla for even 5 laps in a row (I am aware of the Model 3 Track mode, but either nobody is using it or it doesn't work).

EDIT: Found this article:


So it is doing significantly better than what I originally stated, although apparently you're only going to get about 30 minutes of driving before you have to recharge. That takes a few minutes with gasoline, and a few hours with electric (at 80% you won't even last the 30 minutes).

There are some interesting comments on that article, someone calculates the car will only last about 15 minutes on a really demanding track.

I will definitely concede that Tesla's cooling is insufficient for track use.

Track mode pre-cools the batteries when you enable it (among other things), which allows you to go for longer, but it only delays the inevitable.

I'm interested to see if the Model S Plaid edition and Roadster 2.0 have better cooling to make them better on a track.

I think it's just really hard to keep their batteries where they need to be. In order to get better performance/range, Tesla chose NCA batteries.


The problem with NCA is it is more volatile, and if it overheats it literally explodes violently. I am not saying this is insurmountable, but looking at the progress Tesla is making versus the reality of how long you can drive the cars hard, I think Teslas might never be great track vehicles.

Although every EV car will have this problem to some extent, so it's not limited to Tesla. If Porsche can't figure out how to cool an EV well, then it's a long way away because they are famous for their engine cooling technology.

What’s the importance of trac performance in this context?

The Tuscan also quickly runs out of charge at top speed and then be forced into a car or battery swap.

PS: At the extreme Indy cars average 1.92 MPG, batteries are just a poor fit for any kind of endurance racing.

> What’s the importance of trac performance in this context?

OP said the Model 3 was a superior vehicle, I was stating why it might not be.

> The Tuscan also quickly runs out of charge at top speed and then be forced into a car or battery swap.

The meat of my comment was about batteries overheating, not being drained. We have no idea how well Porsche will cool their batteries in their car until someone has had a chance to test it.

> PS: At the extreme Indy cars average 1.92 MPG, batteries are just a poor fit for any kind of endurance racing.

This is a disingenuous comparison. We are talking about street vehicles you or I can buy and drive on public roads, not track-only vehicles that cost more than a house anywhere but the Bay Area.

I also think it's disingenuous to call a half hour of racing an endurance run. I think it's more accurate to say batteries are a poor fit for racing with the exception of drag races.

Hill climb races tend to be a few minutes and would work just fine with electric vehicles. EX: https://en.m.wikipedia.org/wiki/Pikes_Peak_International_Hil...

I concede, it would be really awesome to watch EV cars attempt Pike's Peak. I'm actually surprised how well it seems to cater towards their capabilities.

You can: https://www.youtube.com/watch?v=QnH15dejp0s

(the Volkswagen 2018 full drive)

bronson beat me to it, EVs have now set the Pike's Peak record, and ironically it's a VW (just not one they put into production). Here is another video of the VW, the first result for "EV pikes peak":


> I think the hope is the Porsche Taycan will be a legitimate track car.

No, that is definitely not the hope. The Taycan weighs over 5000 pounds. It will not be a track car.

The hope is that the build quality will be typical Porsche. Whereas the build quality and ergonomics of a Tesla, well hasn't been seen for 30 or even 40 years, at least not in the West.

You didn't even mention efficiency, which means generally slower charging time/km/kW for Taycan.

On the other hand Porshe is still luxury brand, so I can imagine the interior being more elegant.

Slow, heavy Volkswagen is my take.

I have been aware for about 20 years that on technology trends, all the car companies will release electric cars somewhere near 2020. And that once they do the agenda of manufacturers and car dealers will be at odds. Manufacturers will want to sell electric because that is the future, and car dealers will want to push gas cars to capture the future maintenance revenue. With the result that manufacturers will find that actually selling those electric cars is an uphill battle.

The fact that "near 2020" is now "this year or next" doesn't change the rest of the prediction. I would therefore be willing to take a bet that most traditional car companies will be out of the car business in not very many years. This means that there is a giant market share to be captured by new car brands.

Tesla is the best known here. But I would also suggest keeping an eye on the many Chinese brands. I consider, for example, SAIC more of a competitive threat to Telsla than Porsche.

I think this is a very salient point, about the dealership model being a hindrance. It's like Sears and Amazon, at some point the incumbent leader can't change fast enough and the new market is run by new companies.

I do think it will take a long time for the big 3 to die, they will probably go all trucks and big SUVs (as Ford has essentially done already), and leave the car market to EVs.

However, I do not think that Tesla will be the big winner. They will be much like Apple and prosper, but Nissan with the Leaf (also Renault with the Zoe in Europe) and now Kia and Hyundai with their small electric SUVs are perfectly placed. They have the big manufacturer experience and millions of miles on their solid EV platforms. They could create an EV Camry/Accord-killer tomorrow--actually, I'm surprised they haven't already.

Edited to add: this is buried in the Taycan thread, and I wanted to comment on that too. The Taycan is an awesome car and will give Tesla's model S performance a run for their money. But that's it. Porsche is a niche car-maker, and track enthusiasts a niche of that niche. I suppose that being owned by VW (or is it the other way around) just means the technology and know-how will trickle down into the mass market, but that hasn't happened yet, and Tesla is already there with the Model 3.

“They could create an EV Camry/Accord-killer tomorrow--actually, I'm surprised they haven't already.”

The fact that they haven’t tried is the root of the problem. And, I suspect, the problem that will continue to plague them for at least a few more critical years.

Most OEMs know that and redefined their dealer relationships in the last years https://www.cbtnews.com/what-does-vws-new-european-dealer-ag...

That helps in Europe, but not in the USA where laws regulate the manufacturer/dealer relationship.

Tesla was very careful to not have dealerships, and fought several legal battles over the issue. But the traditional manufacturers have no such choice.

> Their market share can only go down.

The only way that could be true is if they had 100% of the market.

Which is far from the case. Most cars in the global fleet aren't even electric yet, let alone Tesla.

Market share can go down while market size for electric vehicles increases with a positive profit growth for Tesla.

But I agree that, as an investment, Tesla stock prices are something the company has to grow into not something that is reflective of in hand performance - and there is always risk there.

> Their market share can only go down.

When you currently hold less than 2% of the market, this is far from a certain statement. Their share is as likely to increase as their competitors, though the rate of increase is certainly open to debate.

> As we've seen with Summon their FSD program does not look like coming out anytime soon and their inability to be profitable means they can't invest in it or even fundamentals like product refreshes.

Considering that both S and X are getting a major drivetrain and battery refresh next year, I don't see how you can say that they aren't investing in product refreshes.

I do not have a positive opinion on their FSD efforts, however, I will say one positive thing about their approach. They seem to be accomplishing at least as much as some of their competitors (for example, Ford) with far less capital investment. I see no reason why that trend won't continue.

All the other car manufacturers are way behind Tesla in pretty much every metric, the most important of which are energy efficiency and safety. Even the much, much more expensive Porsche Taycan S turbo has some margin only in track driving and it will be pretty much destroyed next year by the Tesla S with plaid mode (just looking at the unofficial Nurburgring times) and the new roadster will literally lap it.

> it will be pretty much destroyed next year by the Tesla S with plaid mode

Why don't Tesla's current cars destroy the Taycan? I think it's fair to say that at this time Tesla's a year behind Porsche in the performance EV stakes. Here are some of the Taycan's performance test results which Tesla has so far been unable to match:

- 24 hour endurance run. 3,425 kms covered in 24 hours: https://www.youtube.com/watch?v=4jSG_10_JRg

- Onboard video of their 7:42 run at the Nurburgring: https://www.youtube.com/watch?v=8m31EgQkswg

- Acceleration and handling comparison to the Model S P100D: https://www.thedrive.com/news/30467/watch-a-porsche-taycan-t...

- Model S Plaid's Nurburgring results: https://www.thedrive.com/news/29946/porsche-taycan-laps-brok...

And no onboard video yet from any of Tesla's Nurburgring runs unfortunately. It's also disappointing that Tesla isn't bringing any of its current cars to the Nurburgring.

> the new roadster will literally lap it

That seems unlikely. To literally lap the Taycan the new Roadster will need to achieve a 3:50 lap time.

The current electric lap record is 6:05 held by the Volkswagen ID.R: https://www.youtube.com/watch?v=c3w3fVS-SgQ

And the overall record is 5:19 held by the Porsche 919 Evo: https://www.youtube.com/watch?v=PQmSUHhP3ug

You can add the moose handling test to the list: https://www.reddit.com/r/teslamotors/comments/dhsofz/tesla_m...

None of those metrics are important to average daily use. Taycan is way more expensive and the only gain is on some dumb benchmarks. Also, I'd never buy a car of the Volkswagen Group ever. They are criminals, liars and their handling of the Diesel scandal is disgusting.

> None of those metrics are important to average daily use

The Taycan is a performance sports car. Why are you surprised that they emphasize its performance and the repeatability of that performance? It's what the car is built to do:


> Taycan

A completely unimportant toy.

They can significantly grow with declining market share if the market for electric cars itself grows significantly. That market is currently < 1% of all cars sold.

Consider Apple, which at one time was making more than 50% of the margin in the global market for smartphones, while holding a declining share of unit sales.

They did all right.

I’m not a huge Tesla fan, but the idea that they might become an enormously profitable company without turning into one of those conglomerates that sells cars at every price point seems reasonable, especially in an age where the margins will be in tech and services rather than in selling steel bent into the shape of a car.

>> Their market share can only go down

Are you going to ignore the fact that the market size can only go up?

"Their market share can only go down.", the FUDder cries while ignoring the fact Tesla created the entire market and it's exploding rapidly.

reminds of the same ppl who said in 2003-2013 that competitors to the ipod and then the iPhone have better features or are better. Tesla's value is not just in the features, price, and performance, but also the brand itself.

Other premium car manufacturers have strong brands as well. Tesla have had the field to themselves for some time, this is clearly going to change over the next couple of years.

The Porsche Taycan is not superior on any metric.

Also, they just turned a profit. Did you write this comment before they reported?

On any metric? The car reviews disagree. There's a general consensus that Porsche did a great job with a sporty car that appeals to its client base, and benefits from the luxury and build quality experience of the brand.

Style is subjective. Everywhere else it under performs a Model S and costs twice as much.

The Taycan has been reviewed to have better performance already. It has a better drivetrain with a higher voltage which means more power, faster charging, smaller more efficient motors, cooler operating temps, along with more advanced suspension, traction control and braking system.

If anything, Tesla would win on non-performance factors like autopilot. The whole point is that Porsche made an electric car for their performance-focused clients who otherwise didn't want a Tesla.

> Everywhere else it under performs a Model S

That isn't the practical reality:



A Nissan Leaf can also hunt down the Model S on track:


> A Nissan Leaf can also hunt down the Model S on track:

A modified, race prepped, brand new 2019 Leaf beat an old, stock Model S of unspecified mileage. Given how quickly TSLA has been advancing their powertrain and battery tech, leaving those details out is misleading at best.

> A modified, race prepped, brand new 2019 Leaf

What were the magic modifications that made the Leaf such a monster on track?

> Given how quickly TSLA has been advancing their powertrain and battery tech

Ah. The car is "old", Tesla is advancing so fast, and the "old tech" no longer matters.

So which models and model years of Tesla vehicles are now garbage old tech and should be avoided? Everything prior to 2019?

According to their "tests" P100D did 0-100 in 2.87 seconds, slower than ordinary users in random YT clips with 5 adults in the car.

It must be a conspiracy. Here's another conspiracy:


Another miracle quarter before a capital raise. If you don't think Tesla are paying fast and loose with their books, while at the same time playing games in China, I don't know what to tell you. Silicon Valley's an easy place to sucker.

It's very easy to manipulate financial results without illegally cooking the books.

It all comes down to timing when you incur/pay expenses and when you record sales. Tesla has openly engaged in this in prior quarters, which is why their stellar quarters are usually followed by abysmal quarters.

Cooking the books would involve changing the actual numbers. Not many people are alleging this.

You can play with your net income numbers, but your top line revenue, gross margin, cash flow, and cash on hand are hard to manipulate

Those items are even easier to manipulate.

When do I book this x million of parts? I could book it even we reserve the shipment (accelerate expense) or when we receive the invoice (standard) or when we pay it several months late (defer the expense).

And that's just one transaction that feeds into one line item. There are a lot more opportunities to play with the financial numbers.

>cash flow, and cash on hand are hard to manipulate

Cash flow and cash on hand can be easily manipulated by not paying bills.

Net Income can be manipulated one-time items.

This will all come out in the 10Q, but in the meantime, Elon realiszed that people will not lend money to cash-burning "startups", so we get another "profit".

>Noisy information still contains information.

I didn't use the term "cooking", but I agree, which is why I don't take the numbers at face value.

Also, why does Elon get a pass with the China stuff? Here we are in a trade war with this country, who consistently attacks our IT, economy and culture, who are commiting atrocities in their own country, and yet Musk is given kudos for building factories and raising money over there from the "save the planet" crowd. Astonishing.

We'll know better when we see the 10Q

Normally I invest in companies who I believe are undervalued and have solid fundamentals/profitability and are well positioned for future growth.

TSLA is one of my few "emotional investments" of companies I've invested in because I want it to succeed. IMO its share price is highly speculatively priced, but I expect they'll eventually be able to maintain profitability to justify it as they're best positioned to benefit from an EV (+ renewable energy) future.

I'm long TSLA and didn't expect them to achieve profitability before Shanghai Gigafactory (+ Model Y) is in full production, so this earnings release was a welcomed surprise. Happy to see them continue to grow and further invest in the future.

I feel the same way - as someone who has been invested in $TSLA since it was $34 my risk is now effectively zero. I look forward to watching the company continue to succeed beyond imagination (although I have a serious disdain for FUD-spreading shorts).

How have the shorts succeed beyond your imagination. If you look at their EPS estimates over the last year for this quarter, they've gone from $2 a share to -$0.40, sure they beat the estimate of -$0.40, but with after hours gains the stock has gone from $380 -> $300 with them posting EPS of 30-40% lower.

To really take off in Europe, they need a smaller vehicle. Something the size of a BMW 1-series. Streets here are very narrow.

Model 3 is not tiny, but it’s IMO as small as you would ever want a car that travels highway speeds for safety reasons. I doubt Tesla will ever make a tiny 2-seater but I guess if the market is there they will follow it!

BMW 1: 173” x 69”

Model 3: 184” x 72.8”

Size is somewhat overrated with respect of safety. If you crash at high speeds, the safety of the car will little help you, unless you get the impact speed down to below 60kp/h.

The BMW 1 series and of course the best-selling VW Golf are both quite a bit smaller than a Model 3, still set up to 5 and also driven at high speeds exceeding 200kp/h over here. So there would be some market for a more compact Tesla.

But I think Tesla has currently enough on their plate and enough upcoming models, going into smaller (and cheaper) models will make sense only when they have perfectioned their manufacturing chain as the margins will be smaller.

It's amazing how different parts of the world see that.

I was going over the sizes of the S and 3 with my Dad in Australia, and it turns out the 3 is the same size as the most recent Ford Falcon, one of the biggest Sedans in Australia!

The 3 is NOT small in every country in the world except America.

It appears that the Ford Falcon is 199" in length -- 15" longer than a Model 3.

Note that interior cabin cubic feet and total storage cubic feet will tend to be significantly higher in an EV for the same exterior footprint.

Look at car like the Clio. In Paris we have a lot of vehicle of this size.

The Shanghai Gigafactory going from breaking ground to production ready in 10 months is staggering. Has anything like that been accomplished in NA in the last 10 years?

When we want to, I think it's possible. It's not apples to oranges, but the incidents that come to mind are usually when critical transportation infrastructure fails and is too important to let sit.

An example is https://en.wikipedia.org/wiki/I-35W_Saint_Anthony_Falls_Brid..., in which they were able to skip the typical three year timeframe and condense it down to a bit over one year from collapse to opening. For a 10 lane, 1,200 foot bridge with a 500 foot main span, that's not bad!

When https://en.wikipedia.org/wiki/Interstate_85_bridge_collapse happened, six sections of road were replaced in 43 days, likely a lot shorter than it would have been otherwie.

In normal circumstances (e.g. when it's not an emergency), no, and that's by design. If we needed to, it could absolutely be done.

Funny, the I-35 bridge also came to mind for me. I used to work right at St Anthony Main and often drove that bridge around the time it collapsed.

That's my first thought. It seems that the US did things like that a long time ago in an era that has passed us by, replaced by gridlock and petty politics.

Or it might just be that most of our growth isn't in things we build, and instead in intangible services.

Probably both.

You can still do some extraordinary things in the physical space at warp speed in the US. SpaceX is doing exactly that right now with their new Starship rocket. An entire automobile manufacturing plant of that size, in a major economy? Today that can only be accomplished in China, it can't be done in the US or Europe any longer.

China is full of these stories and it's indeed impressive.

But I also often come to think: It's just the power of never ending supply of cheap, un-unionizable labor [1], with no political self-determination and thus close to zero binding building restrictions nor environmental ones.

[1] of course, in a socialist state there is a union. One, and only one, that is working for the government.

Have they really hired staff yet? I'm very skeptical anytime Elon places a date on something to be ready.

They can always build factories in china and transport them to US


As in actual 'whipped-to-death, sold-as-commodities, separated-from-their-children, paid-not-a-single-cent, worked-to-death' slaves?


But you knew this. So one can only wonder what the point of your hyperbole is.

maybe not but how many people in china were displaced and what was the human cost and environmental cost?

Judging by the photos of the site before construction... maybe 10? There were a couple of rustic structures and an open field.

Human cost? As in deaths?

It wouldn't be that unusual for there to be deaths during a big construction project, especially in a place lacking good safety protections. So it is a reasonable question to ask.

The Foxconn Wisconsin plant had the full support of the executive branch + billions in welfare from the local/state governments and even then they haven't started to working on it primarily due to the significant business risks and high costs of employing labour in America and general uncertainty around manufacturing anything state-side:


Even the Chinese can't build anything in America.

The Foxconn story is far more nuanced than that.

There's been substantial uncertainty in Foxconn's genuine commitment to the project.

It's been heavily reported on that Foxconn is notorious for failing to follow through on its promises.

e.g. https://www.cnbc.com/2017/07/27/heres-whats-worrisome-about-...

There's been some great podcasts on the topic. Last I heard Foxconn kept changing their plans of what would actually be manufactured in WI. Initially it was high-tech state of the art stuff, last I heard their plans had shifted to manufacturing somewhat legacy flat panel display technology. I stopped following the story sometime last year though, at the time it sounded like Foxconn was really shafting WI.

It benefits Foxconn to drag their feet in executing on what amounts to nothing more than a handshake deal. The more WI invests in that project the stronger Foxconn's position becomes.

Foxconn has purchased a number of buildings, but hasn't quite figured out what it wants to do with them. Simply put, it's a huge, multi-billion dollar global company with many, many more things going on that just Wisconsin, and as such a combination of things- most likely internal politics and / or misaligned management- have slowed down, but not stopped, their plans to expand.

For example, they're in the process of purchasing a property in Eau Claire, have delayed their plans for madison and green bay, and have a stated goal of a 2020 opening for the data center portion for the mount pleasant office building:


Of course, they're getting a lot more in tax breaks per job created in WI than the original plan was (along with fewer total jobs expected), and it's taking longer, so people are understandably upset.

I'm wondering if the new plans- datacenter, plus "innovation centers" and basically white collar service jobs- aren't a better long term deal for WI anyway. We tend to lose a lot of those types to Chicago and Minneapolis / St. Paul, and if they actually pan out might slow that drain. The 13k manufacturing jobs certainly would have been nice, nonetheless.

US is slowly turning into Europe. And all the disadvantages without any of the perks.

"Margin was impacted in part due to fundamental improvements in our operating efficiency, including higher fixed cost absorption, reductions in manufacturing and material costs and continued improvements in vehicle quality and in part due to Smart Summon-related deferred revenue recognition, FX and other non-recurring items."

How did Tesla cut fixed and variable costs so much? I want more details than this. This is extremely impressive!

And what is an example "higher fixed cost absorption" in this context? Seems like most of the fixed costs here would be the already established factory and other fixed costs would be minimal.

Its also surprising there was such a big opportunity for variable cost savings over a short time period of 1 quarter. Presumably this is from less manufacturing waste, higher quality output, and slightly higher production rates.

Tesla is certainly a rare company that can find ways to increase margin this much, but its extremely impressive to see this happen over 1 quarter instead of 1-2 years as I was expecting.


$143M GAAP Net Income (vs $74M loss expected)

Trial production started at Shanghai Gigafactory

Model Y production moved forward to Summer 2020

Oh crap. Got my Y reservation with the assumption it would be late and I’d have plenty of time to save!

Is Model Y replacing Model X?

No, Model X will remain as the larger and more expensive SUV. Model Y will be smaller, less expensive and compete in the "luxury crossover" segment (Mercedes GLA, BMW X3 etc)

Ah, I see. The crossover market is huge in Asia so that should go well for them...

It's huge everywhere; a relatively smooth roll-out of the Y would be enormous for Tesla.

No, but generally speaking the Model Y is to the Model X what the Model 3 is to the Model S.

To be more specific: the X is build on the S platform; the Y is built on the 3 platform.

No, model Y is built on the same frame as model x. It'll be a suv.

Sorry. meant model 3.

This is incorrect. It's a crossover built on the Model 3 platform. It's basically a Model 3 but slightly taller and with a hatchback.

*Same frame as model 3

Modern cars don’t have frames. They are unibody.

What's even the point of talking about timelines? Tesla's history of achieving them is horrible.

Noisy information still contains information.

Consistently biased information is even better... it contains exactly the same data as unbiased information.

>Noisy information still contains information.

I mostly mean: why are people saying "He bumped up the Model Y launch a couple months" when both deadlines were sort of irrelevant. They are years behind on others.

Model 3 ramp was basically exactly as predicted, delta maybe 6 months.

If you compare to the Model X ramp, which was delayed by what, 2+ years, they have gotten much better at predictable ramps.

Are we talking about official statements or random posts by Elon in Twitter?

I'm not great at reading financial results, but $TSLA is up ~17% after hours, so I'm assuming they did well.

Just a reminder that stocks move in relation to expectations and not relative to results. Bad results that are not as bad as expected results in the stock going up. Likewise good results that are not as good as expected results in the stock going down.

So the takeaway from the after hours trading is not necessarily these results are good in a vacuum, it is that people were surprised that the results were as good (or perhaps not as bad) as they are.

Yes these results were stellar and the movement reflect that

I wish them all the success in the world in the face of increased competition. They basically started the "no compromise electric car" market, in the face of an army of naysayers, and the last few years have been extremely rough on both the company and Musk personally. IMO they pretty much deserve to win.

Disclosure: I hold no TSLA, and don't own any of their cars. I just like dogged persistence in the face of impossible odds.

> I just like dogged persistence in the face of impossible odds.


I'd like to know what Tesla's debt load is, minus any debt related to vehicle leasing. Basically I wonder how much they owe in long term loans and bonds.

I think it's on page 24, but I don't know how to read it.

Ycharts says 13B - https://ycharts.com/companies/TSLA/total_long_term_debt


As of the end of June, 2019, they had $12.159 Billion in long term debt, not including vehicle leasing.

You can view the debt individually with interest rates and maturity date on page 23 of my attached document

Ok from there they have about 1 billion in debt related to leased vehicles and a little over 1 billion in debt related to customer's solar installation financing.

This is great news. There’s few companies in the world I want to do well specifically. Tesla’s gotta be at the top of the list.

After hours price : Tesla Stock is up 16.70%

+ Adjust earnings per share of $1.86 vs. expected losses of 42 cents per share (major reason)

Tesla delivered 1,800 more cars in Q3 versus Q2, and somehow delivered $551MM more net income.

With a lower margin mix of models.

I remember doing a due-diligence on Tesla during the Oil Crisis of 2015. The stock was at 195 or so, the company hadn't released anything other than high-end sedans, and the cars were still sold in stores.

If you went to their website, you saw that they were planning to have a $35,000 vehicle for sale by 2018, with rapid charging stations set up across the country (forming a corridor for coast-to-coast travel), where Tesla owners would be able to charge for free. And furthermore, the leadership - Musk - had shown his worth when he put his last dimes into PayPal just a few years earlier.

I said it was a good company to go long on for a three year timeline. (They didn't listen, I was only 17 and had never invested in my life).

It might be time to give them another examination.

And it's good they didn't invest on your advice to go long on TSLA. If you invested into The diversified SP500 instead with the same timeline (2015 to today) it would give you a slightly similar or even better return than TSLA that went from 195 to 295 ( and that is IF the current price holds until tomorrow which will most probably not).

Never forget opportunity cost while investing!

As in, as far as I can tell, maybe like 1 month in 2015 to now would get you superior returns to the S&P, with like, 3x the volatility. Unless you bought Tesla before like, 2013, the returns(especially risk-adjusted) in general are not great.

That definitely grinds my gears a bit when it comes to Tesla. The cars are fantastic, but the equity isn't quite the product. You can dismiss the haters, but that volatility is pretty intrinsic to Tesla.

They're doing a lot of great things, but that alone does not a great investment make, and I think that doesn't get discussed very honestly. One thing it does have going for it, very low correlation.

but the person who buys telsa instead of an index fund is likely anticipating increase volatility and has higher risk tolerance

They can anticipate higher volatility, but that doesn't mean they're being compensated for it.

Yeah we have the benefit of hindsight, but that's what we're talking about. If you're just evaluating past performance starting from any point in 2015, Tesla generated average returns, was pretty uncorrelated (which is great), and was way more volatile than the S&P. That's not thrilling.

Tesla as a long term investment going forward largely depends on whether you view the electric car as a disruptive innovation (breaks established car companies' business models) or sustaining innovation (does not break established car companies' business models).

Established players tend to have the upper hand for sustaining innovation. Sustaining innovation can start at the top of a market and work down.

Disruptive innovation favors the upstart. However, disruptive innovation starts at the bottom of a market and moves up.

The more I see what Tesla and other car companies are doing with EVs, the more it seems that the electric car is actually a sustaining innovation.

Tesla is probably a new market disruption. If so electric is a bit of a red herring. There is some evidence of this with the trade in data. The analogy is apple taking out Nokia Motorola and Blackberry with a phone that wasn't good by the standards of the day since it was playing a different game.

Why? Effectively assembling vehicles at margin seems to be the major key to the auto industry EV or ICE. The existing competitors still have greater skill at that.

i view Tesla as a low volume car manufacturer. so low volume that right now they're simply not that interesting. and i don't see them reaching millions of cars per quarter. like VW, Hyundai or GM.

hopefully they'll prove me wrong, and come out with a $15k car next year or something.

in the meantime i'm holding my hopes up for the upcoming crop of ev's with sub-tesla prices from all the usual suspects.

The competition also can not simply produce millions of EVs. The economic problems are very real. In fact one of the reason they are not pushing it as much as they could, is because EV don't make profit for them.

Actually it's more of a supply chain issue.

The production of cars like the Hyundai Kona EV or Jaguar i-Pace was seriously constrained by the lack of proper li-ion battery manufacturing capability.

That's my point, you can just pull a whole supply chain from nothing.

They recognized some FSD revenue.

Where do you see that? I see this line about them expecting to do that going forward, but nothing about them recognizing revenue in Q3.

>We also expect to gradually release nearly $500M of accumulated deferred revenue tied to Autopilot and Full Self Driving features.

> Margin was impacted [...] in part due to Smart Summon-related deferred revenue recognition

> Margin was impacted [...] in part due to Smart Summon-related deferred revenue recognition

In case anybody has been watching the Tesla Smart Summon demolition derby videos on YouTube and is wondering what on earth Tesla was thinking when they pushed the feature out in its current state.

They were thinking they could book some deferred revenue to look more profitable than they really are.

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