GOLFMK8
GOLFMK7
GOLFMK6
GOLFMKV

Tesla loses $50 million in 1st quarter as costs rise

DUBPL8

Go Kart Champion
Location
DFW
http://www.cbsnews.com/news/tesla-loses-50-million-in-first-quarter-as-costs-rise/

DETROIT - Electric car maker Tesla Motors (TSLA) lost $49.8 million in the first quarter as it accelerated the development of its new crossover.

Tesla's loss of 40 cents per share compared with a profit of 10 cents per share in the January-March period last year. Last year's first-quarter profit was the decade-old company's first ever profitable quarter.

Revenue grew 10 percent to $620.5 million in the latest quarter. Tesla said it produced a record 7,535 Model S sedans during the period and delivered 6,457 to customers.

Play Video
Elon Musk on his family history
Still, the results fell far short of Wall Street's estimates. Analysts polled by FactSet had forecast a profit of 8 cents per share on revenue of $683.5 million.

Tesla's shares fell 8 percent to $185.51 in after-hours trading.

Research and development costs jumped 49 percent to $81.5 million as Tesla prepares to launch the Model X crossover next year and adapts the Model S for a growing number of international markets. Tesla plans to launch a right-hand-drive Model S in the United Kingdom in June and in Japan and Hong Kong later this summer.

Play Video
Elon Musk talks about the future of Tesla
The Palo Alto, California-based company is also laying the groundwork for a battery factory that is expected to be complete in 2020. Tesla is considering sites in New Mexico, Arizona, Texas and Nevada, and will develop two possible sites simultaneously to minimize delays. But in a letter to shareholders, Tesla didn't say which states will get the nod.

Tesla also incurred costs to install additional safety equipment on its new and existing cars after the government began investigating two Model S battery fires. In both cases, road debris punctured an aluminum shield and the battery, touching off fires. Drivers were able to safely pull off the road and escape injury, but the cars were destroyed.

At no cost to owners, Tesla added an aluminum bar, a titanium plate and another piece of aluminum to stop road debris from entering the battery pack. The National Highway Traffic Safety Administration closed its investigation in March after Tesla said it would install the shields.

Tesla said it expects to deliver 7,500 Model S sedans in the second quarter, and reiterated its plan to sell more than 35,000 cars this year. The company also expects to increase production by 13 percent to 19 percent in the second quarter, to 8,500 to 9,000 cars.

Tesla said tight supplies of battery cells will constrain second-quarter production but should ease in the third quarter.

Wonder if it's just temporary or a sign of things to come in the months or years ahead.

Thoughts? :iono:
 

Appogee

Ready to race!
Location
Seattle, WA
I don't know man. I don't think Tesla has as much room to grow as people think. Eventually you run out of market for people are willing to pay an arm and leg for an electric sports car.
 

Gunkata

Drag Race Newbie
Location
Lombard, IL
wow.. will the stock plummet now or?
 

maxtdi

Go Kart Champion
Location
Nor-Cal
Why is anyone surprised by this?

They are completely under capacity, and they can't build enough cars due to battery shortages.

Their Fremont factory is at like 10% capacity.

They are building an incredibly expensive charging network that they are not charging (ha pun!) anyone for.

But yes... of course stock dropped.
 

PetrolHead

When's the next track day
Location
Motor City
Car(s)
MKVI GTI
Of course the loss is temporary, it's incurring a ton of costs. These will pass, and profitability may resume. The big questions that remain:

1.) When will demand for $80k+ luxoelectro cars be satiated (soon, I imagine)
2.) How many people are left that want an electric crossover for the same or more as #1?
3.) How quickly can the volume model come to market, and will it be supply constrained?

It's clear that the company is putting a lot of capital into investment. Infrastructure, R&D, these things are critical for its long-term health. While hurting profitability, it's something that needs to be accomplished before it can truly blossom, and it's a large part of why many other like manufacturers haven't made it. As overall demand for electric vehicles wanes (it's barely 1% of industry), how many premium priced models can Tesla sell to sustain its level of necessary spending? China will be critical to keep volume up, but there will still be the battery constraint. Without a volume model, wider adoption of electric models, or higher gas prices, Tesla's going to struggle until it finally dies. It filled a need and market that was completely unmet, but once it his, how will Tesla survive? There's only so many people that can afford an $80k+ second car.

I think that the drop in stock price in a correction to more realistic levels. "Analysts" who know absolutely nothing about the industry have inflated the stock price to levels that are completely unsustainable and frankly, laughable. There's absolute nothing about the financial performance or current strategy that indicate a $23B market cap (as of writing this).
 

XGC75

Go Kart Champion
Location
sw mi
wow.. will the stock plummet now or?

Yep, the stock will correct, but high R&D costs coupled with a drop in stock is a REALLY GOOD REASON TO BUY LONG!

That R&D, especially for a tech stock which it could be argued Tesla is, is going to hit the ground in spectacular fashion and bloat the stock back up again.
 

PetrolHead

When's the next track day
Location
Motor City
Car(s)
MKVI GTI
Yep, the stock will correct, but high R&D costs coupled with a drop in stock is a REALLY GOOD REASON TO BUY LONG!

That R&D, especially for a tech stock which it could be argued Tesla is, is going to hit the ground in spectacular fashion and bloat the stock back up again.

Agreed.
 

Bender1

Banned
Location
Doylestown, PA
Of course the loss is temporary, it's incurring a ton of costs. These will pass, and profitability may resume. The big questions that remain:

1.) When will demand for $80k+ luxoelectro cars be satiated (soon, I imagine)
2.) How many people are left that want an electric crossover for the same or more as #1?
3.) How quickly can the volume model come to market, and will it be supply constrained?
As to point 1, while they can't live on it long term, I don't see an end to the demand here. That said, as Rockchops and Calvinball can attest to, our auto market here is a bit bizarre.

As to 2 - everyone that bought the sedan will but a crossover for their wife (again, here), literally.

3 is a HUGE question mark that could pull them down without it rightly corrected.

As overall demand for electric vehicles wanes (it's barely 1% of industry), how many premium priced models can Tesla sell to sustain its level of necessary spending?
Why would it wane? We are still in early adopter territory, 12 months out from normal folks would cross shop them.



I think that the drop in stock price in a correction to more realistic levels. "Analysts" who know absolutely nothing about the industry have inflated the stock price to levels that are completely unsustainable and frankly, laughable. There's absolute nothing about the financial performance or current strategy that indicate a $23B market cap (as of writing this).

Agreed, market cap is WAY high. It will be a great purchase at some point, but right now its way over valued.
 

PetrolHead

When's the next track day
Location
Motor City
Car(s)
MKVI GTI
As to point 1, while they can't live on it long term, I don't see an end to the demand here. That said, as Rockchops and Calvinball can attest to, our auto market here is a bit bizarre.

No end to demand for expensive limited range/use cars? I'm sure they're popular, but I just can't imagine demand being as deep as many think it is.

As to 2 - everyone that bought the sedan will but a crossover for their wife (again, here), literally.

Maybe...but the first time it runs out of juice and strands her on the highway because she ignored the range indicator, she'll be back in the Range Rover before he knows it.

Why would it wane? We are still in early adopter territory, 12 months out from normal folks would cross shop them.

LEAF's been out for 3 years now. Everyone else is selling an electric version of something because they have to in order to sell cars in California. Demand (and share of industry) isn't increasing while supply is. Consumers don't want to pay the extra money for a car that does most things worse than a gas car. The real money will be made by tapping into the mass consumer market, and they don't want electric cars (yet).

The big part of that is YET. Once the infrastructure is in place, I'm sure electric cars will increase in demand. Will Tesla be able to survive long enough to see that happen? It's making itself a part of the solution, so the likely answer is yes. Still, I question its medium-range prospects.
 

Gunkata

Drag Race Newbie
Location
Lombard, IL
I disagree on demand , big time.

First, the base model is closer to $60K, iirc.

Second, they are popular as hell out by me. And even conservative types who 2 years ago would rage on a prius or Leaf owner - maybe even a Volt owner - are now driving these. because...

Third - they check all boxes. They are lux, rare/exclusive, baller, AND electric. This hits so many targets for someone in the price range of $60-80K, AND the faster S is.. FAST. So again, another box checked. They will continue to sell and with more models, more sales, imho.

Any time you can buy something that checks all these boxes AND avoids you from paying at the pump, no matter what political or environmental stance the customer has, they are going to look into these cars. A truly innovative product or service will always transcend typical boundaries that exist/may have existed before in the market place.
 

PetrolHead

When's the next track day
Location
Motor City
Car(s)
MKVI GTI
You can't buy one for $60k. They only exist in theory. I was being generous with $80k. Average Transaction price is north of $100k

While I agree that demand is strong, I don't think it's limitless. Only so many people can buy $100k cars as second vehicles.
 

Gunkata

Drag Race Newbie
Location
Lombard, IL
OK.. even that said, the rich have only gotten more rich over the years... and many are being driven daily, at least in my area.
 
Top