Tesla incurs loss of £523 million. EDIT: Now posts a profit!

AMG Power · 5th May 2018, 10:15

Tesla seems to be getting into trouble sooner than expected and has reported losses of £523 million for the first 3 months of 2018. Elon Musk says that it will achieve profitability by the year end by reducing capital expenditure and meeting production targets.

The company’s first-quarter loss was more than double the £243 million the firm lost in the same period a year ago. Tesla generated £2.5 billion in revenue between January and March – a year-on-year rise of 26 percent – but continued to fall below its own production targets for the Model 3.

When asked what percentage of customers who had reserved a Model 3 had configured options for their cars – a signal of how much profit the firm could make on each vehicle – Musk responded: “These questions are so dry. They’re killing me.”

Tesla shares fell by 5% wiping out £1.47 billion of the value of the company during a conference call by Elon Musk.

More info

ritz3645 · 5th May 2018, 10:26

Elon Musk explains on Twitter

'Please ignore this thread unless you’re interested in a tedious discussion about Tesla stock'

https://mobile.twitter.com/elonmusk/...61223793487872

Tesla is the biggest short in the US stock market

https://www.cnbc.com/amp/2018/04/11/...ck-market.html

History : Hedge Fund Managers in Tears as Volkswagen Triggers Short-Squeeze.

http://www.marketoracle.co.uk/Article7075.html

petroguzzler · 5th May 2018, 11:58

Tesla needs a shrewd businessman at the helm to succeed.

The competitive advantages held by the firm are no longer unique.

An interesting article on HBR:

https://hbr.org/2018/04/to-understan...-history-of-gm

The Brutailer · 5th May 2018, 12:13

Honestly, I believe Tesla has the technology but doesn’t have the profound experience and skills to manage it, something the German and Japanese giants have in hordes. Also, Elon Musk seems a tad bit immature, which is not necessarily a bad thing but he’d be better off collaborating with companies like Mercedes-Benz or maybe Toyota (whichever country he prefers) like he has done with Virgin on the Hyperloop project.

Musk is a visionary like Steve Jobs. Unlike Jobs though, he’s not a shrewd businessman.

GTO · 7th May 2018, 16:48

The biggest thing going for Tesla is its first-mover advantage & the supercharging network. Once the big boys mass adopt EVs, it's going to be a tough sell. R&D & mass manufacturing of cars worldwide isn't easy. And you also need frequent product refreshes - everyone is talking about the Model 3, but the flagship Model S is already 6 years old and there's no news of the next-generation (while Mercedes has changed the game with the new S-Class).

IMHO, Tesla will perform better as a subsidiary of a larger established carmaker. That way, it can focus on the tech, innovation & coolness while big daddy worries about production, distribution etc. It's hard to imagine Tesla remaining as a standalone carmaker over the longer term.

HKap · 7th May 2018, 19:49

Tesla has a backlog of over 400k vehicles and this is without any marketing or even product display. At the moment, I don't think there is any automaker that is even remotely close to Tesla in terms of product features or range. I think the company will do extremely well once the production issues are sorted out. Also note that there is not a single dollar of discount available on any of their cars. Yes, there will be fancy financial models over time but all these things augur well for the company and I think the big boys are still a few years away from even calling themselves competition to Tesla.

Remember, they aren't selling cars by harping on the electric thing. They're selling them as amazing cars that happen to be electric.

I think they will be fine for at least few years before the big boys start catching up and who knows how the market will have shaped by then.

SmartCat · 7th May 2018, 20:20

Quote:

Originally Posted by GTO

IMHO, Tesla will perform better as a subsidiary of a larger established carmaker.

OR

as an independent technology/component provider (like Bosch) to large car manufacturers.

gupta_chd · 7th May 2018, 20:21

Musk is a visionary like Steve Jobs, may be an even greater technocrat. He should be able to steer Tesla clear of all the issues in coming years.

The way I percieve Tesla 15-20 years down the line is, a standalone automobile behemoth with sales volume among top 10 automakers and profit amongst top 5. Only time will tell though.

The criticism and cynicism will keep on cropping with every instance of any financial or technical hurdle. But Musk has proved time and again that he has what it takes to establish newer horizons and rearrange all equations.

ajmat · 7th May 2018, 21:04

Quote:

Originally Posted by GTO

IMHO, Tesla will perform better as a subsidiary of a larger established carmaker. That way, it can focus on the tech, innovation & coolness while big daddy worries about production, distribution etc. It's hard to imagine Tesla remaining as a standalone carmaker over the longer term.

Tesla and Daimler worked closely together. Daimler had a 6% stake in Tesla but sold out as the gains were too good to miss.

Quote:

Originally Posted by gupta_chd

Musk is a visionary like Steve Jobs, may be an even greater technocrat. He should be able to steer Tesla clear of all the issues in coming years.

The way I percieve Tesla 15-20 years down the line is, a standalone automobile behemoth with sales volume among top 10 automakers and profit amongst top 5. Only time will tell though.
.

He might with good funding

My take

Expect Daimler to take another stake - under pressure by Geely - to assure future car development and sharing of components.

Expect some kind of Chinese government backed entity to take a major equity stake in Tesla- this will indirectly assure price effective lithium supplies and components.

ritz3645 · 7th May 2018, 22:55

There is a debate happening between Warren Buffett and Ellon Musk. A technology adept Ellon Musk and technology averse Warren Buffett. This is after the investors earnings call where Tesla said it was happy to share supercharging network with other Brands or it's "moats" — a term coined by Warren Buffett referring to a competitive buffer surrounding companies.
Why? According to Musk, "the pace of innovation" is more important. Electric car was first developed in year 1828, but now Tesla has a full catalog of Electric vehicle.

*
'technology averse Warren Buffett' below link 2/3

http://www.cnbc.com/amp/2018/05/07/m...fet-clash.html

https://www.investopedia.com/ask/ans...ogy-sector.asp

http://fortune.com/2018/05/06/why-wa...google-amazon/

https://en.m.wikipedia.org/wiki/Hist...ectric_vehicle

SubodhRage · 8th May 2018, 01:05

To the people suggesting that Musk should collab with other manufacturing giants. The minute he joins in with them<- he turns into a R&D/small brand working for that giant he collaborated with, and not a unique wild company that the public is currently in love with. A collaboration should be considered only as a last option IMO.
On the other hand, Tesla could hire in an experienced person to help him sort out the production lags and other misc. hiccups at Tesla.

GutsyGibbon · 8th May 2018, 02:55

I think Conan sums up the situation pretty good.

https://youtu.be/1mCPpWn2Dog

ach1lles · 8th May 2018, 04:21

Hehe. Tesla is going to kill it. They've been killing it. But now, they need their big boy pants, they're being stitched. Once they have 'em, it is good night. The only car companies that will be able to stand up to Tesla are the ones that are currently scrambling, desperately etching to clone the company's products.
Tesla has about a 5 year lead in software, a comparable lead in charging network, and probably a bigger lead in battery tech and supply.
They're not selling, getting bought, or closing shop.

It is the same debate that keeps on happening over and over again. Here's a thought experiment: Tesla can become better car manufacturers faster and easier than other guys can create software and the network. Why? Because building and manufacturing cars has been happening for a century. People have figured this out. Not many have figured out what Tesla has. It isn't going to be easy for any of the existing players.

GutsyGibbon · 8th May 2018, 06:08

Quote:

Originally Posted by ach1lles

Tesla can become better car manufacturers faster and easier than other guys can create software and the network.

I would say other manufacturers need a drastic change in the way they think. Just looked at this monstrosity that BMW 7 series calls a keyfob.
http://www.bmwblog.com/2015/01/06/bm...creen-display/

It has a 2.2 inch display with touch screen. But, they don't trust their touch screen software, they have to add buttons all around this thing. On top of your phone, you need to dock this monster and charge it, and carry it in your pocket.

Once you sit inside you will be smothered by their definition of luxury - Buttons! Buttons for everything, everywhere, all around the LCDs with touchscreen capability. Mercedes has the same issue.

androdev · 8th May 2018, 07:21

Companies like Toyota and Daimler can neutralise the tech advantage of Tesla once they fully commit to EVs. Tesla will be just another player in the market depending how quickly they figure out the capacity building and other mundane but critical areas.

The current leadership position of Tesla in EVs is partly because the big players are waiting for the right time to enter the play. Unlike Tesla, the big players don't have luxury/permission to learn on the job. But once they figure it out at the expense of Tesla, they will come down heavily. Tesla should get it's house in order before that. Key innovation will give you a couple of years of lead and if you don't capitalise within that time, it will be the usual rat race.

5th May 2018, 10:15	#1
AMG Power Senior - BHPian Join Date: Mar 2017 Location: BLR Posts: 1,278 Thanked: 8,850 Times	Tesla incurs loss of £523 million. EDIT: Now posts a profit! Tesla seems to be getting into trouble sooner than expected and has reported losses of £523 million for the first 3 months of 2018. Elon Musk says that it will achieve profitability by the year end by reducing capital expenditure and meeting production targets. The company’s first-quarter loss was more than double the £243 million the firm lost in the same period a year ago. Tesla generated £2.5 billion in revenue between January and March – a year-on-year rise of 26 percent – but continued to fall below its own production targets for the Model 3. When asked what percentage of customers who had reserved a Model 3 had configured options for their cars – a signal of how much profit the firm could make on each vehicle – Musk responded: “These questions are so dry. They’re killing me.” Tesla shares fell by 5% wiping out £1.47 billion of the value of the company during a conference call by Elon Musk. More info
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5th May 2018, 10:26	#2
ritz3645 BHPian Join Date: Jun 2012 Location: Traveller Posts: 147 Thanked: 285 Times	re: Tesla incurs loss of £523 million. EDIT: Now posts a profit! Elon Musk explains on Twitter 'Please ignore this thread unless you’re interested in a tedious discussion about Tesla stock' https://mobile.twitter.com/elonmusk/...61223793487872 Tesla is the biggest short in the US stock market https://www.cnbc.com/amp/2018/04/11/...ck-market.html History : Hedge Fund Managers in Tears as Volkswagen Triggers Short-Squeeze. http://www.marketoracle.co.uk/Article7075.html
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5th May 2018, 11:58	#3
petroguzzler BHPian Join Date: Mar 2010 Location: Madras Posts: 461 Thanked: 264 Times	re: Tesla incurs loss of £523 million. EDIT: Now posts a profit! Tesla needs a shrewd businessman at the helm to succeed. The competitive advantages held by the firm are no longer unique. An interesting article on HBR: https://hbr.org/2018/04/to-understan...-history-of-gm
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5th May 2018, 12:13	#4
The Brutailer BHPian Join Date: Apr 2016 Location: - Posts: 566 Thanked: 1,437 Times	re: Tesla incurs loss of £523 million. EDIT: Now posts a profit! Honestly, I believe Tesla has the technology but doesn’t have the profound experience and skills to manage it, something the German and Japanese giants have in hordes. Also, Elon Musk seems a tad bit immature, which is not necessarily a bad thing but he’d be better off collaborating with companies like Mercedes-Benz or maybe Toyota (whichever country he prefers) like he has done with Virgin on the Hyperloop project. Musk is a visionary like Steve Jobs. Unlike Jobs though, he’s not a shrewd businessman.
	(11) Thanks

7th May 2018, 16:48	#5
GTO Team-BHP Support Join Date: Feb 2004 Location: Bombay Posts: 71,821 Thanked: 321,488 Times View My Garage	re: Tesla incurs loss of £523 million. EDIT: Now posts a profit! The biggest thing going for Tesla is its first-mover advantage & the supercharging network. Once the big boys mass adopt EVs, it's going to be a tough sell. R&D & mass manufacturing of cars worldwide isn't easy. And you also need frequent product refreshes - everyone is talking about the Model 3, but the flagship Model S is already 6 years old and there's no news of the next-generation (while Mercedes has changed the game with the new S-Class). IMHO, Tesla will perform better as a subsidiary of a larger established carmaker. That way, it can focus on the tech, innovation & coolness while big daddy worries about production, distribution etc. It's hard to imagine Tesla remaining as a standalone carmaker over the longer term.
	(18) Thanks

7th May 2018, 19:49	#6
HKap BHPian Join Date: Jun 2010 Location: Toronto Posts: 362 Thanked: 422 Times	re: Tesla incurs loss of £523 million. EDIT: Now posts a profit! Tesla has a backlog of over 400k vehicles and this is without any marketing or even product display. At the moment, I don't think there is any automaker that is even remotely close to Tesla in terms of product features or range. I think the company will do extremely well once the production issues are sorted out. Also note that there is not a single dollar of discount available on any of their cars. Yes, there will be fancy financial models over time but all these things augur well for the company and I think the big boys are still a few years away from even calling themselves competition to Tesla. Remember, they aren't selling cars by harping on the electric thing. They're selling them as amazing cars that happen to be electric. I think they will be fine for at least few years before the big boys start catching up and who knows how the market will have shaped by then.
	(12) Thanks

7th May 2018, 20:21	#8
gupta_chd BHPian Join Date: Nov 2009 Location: Chandigarh Posts: 322 Thanked: 418 Times	re: Tesla incurs loss of £523 million. EDIT: Now posts a profit! Musk is a visionary like Steve Jobs, may be an even greater technocrat. He should be able to steer Tesla clear of all the issues in coming years. The way I percieve Tesla 15-20 years down the line is, a standalone automobile behemoth with sales volume among top 10 automakers and profit amongst top 5. Only time will tell though. The criticism and cynicism will keep on cropping with every instance of any financial or technical hurdle. But Musk has proved time and again that he has what it takes to establish newer horizons and rearrange all equations.
	(2) Thanks

7th May 2018, 22:55	#10
ritz3645 BHPian Join Date: Jun 2012 Location: Traveller Posts: 147 Thanked: 285 Times	re: Tesla incurs loss of £523 million. EDIT: Now posts a profit! There is a debate happening between Warren Buffett and Ellon Musk. A technology adept Ellon Musk and technology averse Warren Buffett. This is after the investors earnings call where Tesla said it was happy to share supercharging network with other Brands or it's "moats" — a term coined by Warren Buffett referring to a competitive buffer surrounding companies. Why? According to Musk, "the pace of innovation" is more important. Electric car was first developed in year 1828, but now Tesla has a full catalog of Electric vehicle. * 'technology averse Warren Buffett' below link 2/3 http://www.cnbc.com/amp/2018/05/07/m...fet-clash.html https://www.investopedia.com/ask/ans...ogy-sector.asp http://fortune.com/2018/05/06/why-wa...google-amazon/ https://en.m.wikipedia.org/wiki/Hist...ectric_vehicle
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8th May 2018, 01:05	#11
SubodhRage BHPian Join Date: Dec 2014 Location: BGLR/DEL/MEX Posts: 34 Thanked: 114 Times	re: Tesla incurs loss of £523 million. EDIT: Now posts a profit! To the people suggesting that Musk should collab with other manufacturing giants. The minute he joins in with them<- he turns into a R&D/small brand working for that giant he collaborated with, and not a unique wild company that the public is currently in love with. A collaboration should be considered only as a last option IMO. On the other hand, Tesla could hire in an experienced person to help him sort out the production lags and other misc. hiccups at Tesla.
	(5) Thanks

8th May 2018, 04:21	#13
ach1lles BHPian Join Date: Oct 2016 Location: Bombay Posts: 300 Thanked: 1,516 Times	re: Tesla incurs loss of £523 million. EDIT: Now posts a profit! Hehe. Tesla is going to kill it. They've been killing it. But now, they need their big boy pants, they're being stitched. Once they have 'em, it is good night. The only car companies that will be able to stand up to Tesla are the ones that are currently scrambling, desperately etching to clone the company's products. Tesla has about a 5 year lead in software, a comparable lead in charging network, and probably a bigger lead in battery tech and supply. They're not selling, getting bought, or closing shop. It is the same debate that keeps on happening over and over again. Here's a thought experiment: Tesla can become better car manufacturers faster and easier than other guys can create software and the network. Why? Because building and manufacturing cars has been happening for a century. People have figured this out. Not many have figured out what Tesla has. It isn't going to be easy for any of the existing players.
	(5) Thanks

8th May 2018, 07:21	#15
androdev Distinguished - BHPian Join Date: May 2007 Location: bangalore Posts: 3,255 Thanked: 25,279 Times	re: Tesla incurs loss of £523 million. EDIT: Now posts a profit! Companies like Toyota and Daimler can neutralise the tech advantage of Tesla once they fully commit to EVs. Tesla will be just another player in the market depending how quickly they figure out the capacity building and other mundane but critical areas. The current leadership position of Tesla in EVs is partly because the big players are waiting for the right time to enter the play. Unlike Tesla, the big players don't have luxury/permission to learn on the job. But once they figure it out at the expense of Tesla, they will come down heavily. Tesla should get it's house in order before that. Key innovation will give you a couple of years of lead and if you don't capitalise within that time, it will be the usual rat race.
	(2) Thanks