Tesla still an unprofitable automaker

[jaysabi]

Despite Tesla's first quarter earnings, Tesla is still an unprofitable automobile manufacturer. Digging into the numbers, Tesla reported a $438M GAAP net income, but they had $518M in regulatory credit sales and more than $100M in profit related to bitcoin sales (they sold a total of $272M worth of bitcoin in Q1), which means the primary business of manufacturing cars is still not profitable.  Perhaps as they continue to scale this will change, but the valuation still looks insane at these levels, and electric vehicle competition is only going to get stiffer going forward.

[stompix]

Perhaps as they continue to scale this will change, but the valuation still looks insane at these levels, and electric vehicle competition is only going to get stiffer going forward.

It will take a decade before their stock price would justify the profits made from selling cars.
Their products are good, their marketing works like wonder, they have already a huge fan base that has transformed into a cult but the problems are still there, they will need to achieve the size of BMW and Mercedes and keep the same profit margin per car as those and furthermore start paying dividends on their stock.

But that's not the concern of the people holding stock, they don't care about the math, they care about the price, and there is currently nothing stopping it, at least for a few years when the other manufacturers that have finally figured out they simply need to use the same car body but an electric engine, not some scoobydoo van (see urbanetic) to get some clients. I3? Common, who's the genius behind that design?

That being said, they did make some profit from selling coins, so, should they switch and build and exchange and a mining farm instead of cars and batteries? 

[teosanru]

Despite Tesla's first quarter earnings, Tesla is still an unprofitable automobile manufacturer. Digging into the numbers, Tesla reported a $438M GAAP net income, but they had $518M in regulatory credit sales and more than $100M in profit related to bitcoin sales (they sold a total of $272M worth of bitcoin in Q1), which means the primary business of manufacturing cars is still not profitable.  Perhaps as they continue to scale this will change, but the valuation still looks insane at these levels, and electric vehicle competition is only going to get stiffer going forward.

I think it's too early to expect positive Operational Incomes from Tesla when it's at such a growing stage across different geographies. Tesla is still like a huge startup which has got listed. Valuations are Insane due to huge potentials in future of Electric Vehicles. I mean if any day consumption pattern of Electric Market changes. Tesla has both capability and Brand to cater that Market. It would easily be able to cater more than half of that demand while traditional automakers will take time to adapt to that change. Very interesting thing here is the bitcoin investment. If they are able to generate good profits to offset their operational loss using other incomes that's a good sign of health of the company. It would mean company has a huge bandwith to sustain despite of long losses which obviously COVID could give them.

[The Sceptical Chymist]

It will take a decade before their stock price would justify the profits made from selling cars.

Maybe not that long if people start wising up and buying electric-powered cars instead of gas-guzzling monstrosities.  And I'm not sure how extensive Tesla's product offering is, but it might help if they produced some cars targeted at the average workaday person (and they might--again, I'm not familiar with how many models they have but I do know they produce some very expensive ones). 

I just took a look at their EPS, and it looks like it's $0.62/share with a P/E of 1,173x.  So they're definitely an overvalued stock, and especially if bitcoin sales account for a significant portion of their profits for the last quarter (or any quarter) since that's not their core business. 

Why the hell did they even buy bitcoin if they were just going to sell it so quickly?  Sure, they might have made a profit but they're not in the business of currency speculation.  At least with MSTR, they're keeping their bitcoin as an alternative to cash and presumably plan to hold it long-term.

[jaysabi]

Despite Tesla's first quarter earnings, Tesla is still an unprofitable automobile manufacturer. Digging into the numbers, Tesla reported a $438M GAAP net income, but they had $518M in regulatory credit sales and more than $100M in profit related to bitcoin sales (they sold a total of $272M worth of bitcoin in Q1), which means the primary business of manufacturing cars is still not profitable.  Perhaps as they continue to scale this will change, but the valuation still looks insane at these levels, and electric vehicle competition is only going to get stiffer going forward.

I think it's too early to expect positive Operational Incomes from Tesla when it's at such a growing stage across different geographies. Tesla is still like a huge startup which has got listed. Valuations are Insane due to huge potentials in future of Electric Vehicles. I mean if any day consumption pattern of Electric Market changes. Tesla has both capability and Brand to cater that Market. It would easily be able to cater more than half of that demand while traditional automakers will take time to adapt to that change. Very interesting thing here is the bitcoin investment. If they are able to generate good profits to offset their operational loss using other incomes that's a good sign of health of the company. It would mean company has a huge bandwith to sustain despite of long losses which obviously COVID could give them.

I do agree the future is electric, but the valuation is priced as if Tesla will be the only electric car maker and that's simply not the case.  Further, I think the traditional manufacturers will do a better job once they are fully electric, which some have pledged to be sooner than others, but just about every major automaker pledges to have a pretty robust offering  they have all pledged to be in the not-too-distant future.  Plus some of the new models look sharper to me than the Tesla equivalent.  I especially like the look of the Audi E-Tron.

[franky1]

when car manufacturers are in the expansion phase they are never profitable
every penny goes into making newer bigger facilities. if they just stored the money. declared it as profit and paid tax on it. they are wasting it

no expanding business makes profit. its how they expand.
paper losses dont equal property losses

heck even trump earned hundreds of millions and only declared a couple thousand in profit (less than a minimum wage waitress would declare)

even bezos under declares his true financial state to pretend he is not making profit

[teosanru]

Despite Tesla's first quarter earnings, Tesla is still an unprofitable automobile manufacturer. Digging into the numbers, Tesla reported a $438M GAAP net income, but they had $518M in regulatory credit sales and more than $100M in profit related to bitcoin sales (they sold a total of $272M worth of bitcoin in Q1), which means the primary business of manufacturing cars is still not profitable.  Perhaps as they continue to scale this will change, but the valuation still looks insane at these levels, and electric vehicle competition is only going to get stiffer going forward.

I think it's too early to expect positive Operational Incomes from Tesla when it's at such a growing stage across different geographies. Tesla is still like a huge startup which has got listed. Valuations are Insane due to huge potentials in future of Electric Vehicles. I mean if any day consumption pattern of Electric Market changes. Tesla has both capability and Brand to cater that Market. It would easily be able to cater more than half of that demand while traditional automakers will take time to adapt to that change. Very interesting thing here is the bitcoin investment. If they are able to generate good profits to offset their operational loss using other incomes that's a good sign of health of the company. It would mean company has a huge bandwith to sustain despite of long losses which obviously COVID could give them.

I do agree the future is electric, but the valuation is priced as if Tesla will be the only electric car maker and that's simply not the case.  Further, I think the traditional manufacturers will do a better job once they are fully electric, which some have pledged to be sooner than others, but just about every major automaker pledges to have a pretty robust offering  they have all pledged to be in the not-too-distant future.  Plus some of the new models look sharper to me than the Tesla equivalent.  I especially like the look of the Audi E-Tron.

Actually when a share is listed, it's just not about the correct valuation, you would find 60% of times stocks are way over or undervalued than their actual valuations that because people perceive companies differently. Lot of its valuation comes from his energetic CEO who has a good reputation in eyes of people as a leader and Entrepreneur. A lot of its reputation comes from bringing the Innovation in every model like the auto pilot mode and everything. So these sentimental factors also add upto valuation. But yes it's currently high and you'll see soon it'll coincide with real valuation that's how market is.

[Febo]

Despite Tesla's first quarter earnings, Tesla is still an unprofitable automobile manufacturer. Digging into the numbers, Tesla reported a $438M GAAP net income, but they had $518M in regulatory credit sales and more than $100M in profit related to bitcoin sales (they sold a total of $272M worth of bitcoin in Q1), which means the primary business of manufacturing cars is still not profitable.  Perhaps as they continue to scale this will change, but the valuation still looks insane at these levels, and electric vehicle competition is only going to get stiffer going forward.

That is how fast growing companies work nowadays. They spend way more then they produce. Lending money is super cheap. Tesla will just keep making loss. Every year. That is economy and society we build. Maybe we will change that in the future. Maybe Bitcoin will help us achieve that. So people and companies will first produce to spend and not lend to spend.

[Raytheon]

and electric vehicle competition is only going to get stiffer going forward.

Many people in this topic overlooked or underrated this. Tesla has been the lone runner in electric vehicle market for more than a decade but so far, the only thing that makes them stand out among other manufacturers is Autopilot system. Now that traditional auto makers have taken part in EV market, competition becomes fierce. So far, it's been Audi E-Tron, Porsche Taycan, Mercedes-Benz EQS and the less known Lucid Air. Tesla might hold some advantages in terms of specs but soon, those will be caught up since Audi, Porsche or Mercedes-Benz is no amateur in the auto industry. The far from perfect Autopilot isn't enough to put Tesla far ahead its competitors.

Though I like Elon Musk for his interest in bitcoin and cryptocurrencies, I think he should pay more attention to Tesla.

[Mauser]

Despite Tesla's first quarter earnings, Tesla is still an unprofitable automobile manufacturer. Digging into the numbers, Tesla reported a $438M GAAP net income, but they had $518M in regulatory credit sales and more than $100M in profit related to bitcoin sales (they sold a total of $272M worth of bitcoin in Q1), which means the primary business of manufacturing cars is still not profitable.  Perhaps as they continue to scale this will change, but the valuation still looks insane at these levels, and electric vehicle competition is only going to get stiffer going forward.

I think Tesla is still in the growth stage, they are trying to build new factories all around the world while developing better batteries. Investors are just hyped about the future to come for Tesla. Once the new batteries have range of 1000 - 2000 kms the cars become much more attractive for many families. On top of  that is Elon Musk speculating on a harder stand against global warming. If the governments around the world will make new taxes against traditional fuel based cars it will be much more attractive to buy a Tesla. The future will be electric cars while the fuel based cars will die out.

[pixie85]

But that's not the concern of the people holding stock, they don't care about the math, they care about the price, and there is currently nothing stopping it, at least for a few years when the other manufacturers that have finally figured out they simply need to use the same car body but an electric engine, not some scoobydoo van (see urbanetic) to get some clients. I3? Common, who's the genius behind that design?

And renault twizy with no windows so that you can get wet when it rains

For some time I thought who the hell is designing BMW these days. Most of their ideas are shit.
I3 with its stupid doors that have to be closed in the right order or they'll jam.
I8 that's unreliable, overpriced and plays engine sounds from speakers for whatever reason
The grills of new models getting bigger and bigger and now they look like a pig's nose...

Tesla is like Apple for cars. It has fanboys that are going to keep paying for overpriced shit and it's not going to disappear. Musk is set for years to come.

[Fortify]

Despite Tesla's first quarter earnings, Tesla is still an unprofitable automobile manufacturer. Digging into the numbers, Tesla reported a $438M GAAP net income, but they had $518M in regulatory credit sales and more than $100M in profit related to bitcoin sales (they sold a total of $272M worth of bitcoin in Q1), which means the primary business of manufacturing cars is still not profitable.  Perhaps as they continue to scale this will change, but the valuation still looks insane at these levels, and electric vehicle competition is only going to get stiffer going forward.

I haven't checked in a while but remember seeing Tesla with a P/E ratio of 1,600 relatively recently and that is just a disaster waiting to happen. It seems that every single car manufacturer around the world is now transitioning to electric vehicles and that will ultimately eat the market that Tesla is trying to conquer. At the same time those credit sales will eventually evaporate as other car manufacturers stop needing to buy carbon credit offsets. Far from being able to tap the Chinese market, all their tech is likely to go stolen by Chinese manufacturers after they open their gigafactories and Tesla vehicle manufacturing hubs - to be incorporated into local manufacturers who will slash the price. Ultimately they are a car manufacturer and that is a highly competitive industry with volatile consumer tastes - it will be just another brand battling to stay alive. The driverless tech is pretty advanced but is unlikely to be perfected for a long time, with every crash bringing a little bit more mistrust. Who knows when the bubble will pop and hopefully it is a slow deflation.

[posi]

I haven't dipped deep about the result of the Tesla income this year but a lot of companies around the world will make some losses last year and this year due to the effect of the pandemic that also affected the economy so it normal if they make lost in this year Q1. After all they things are not always like this with them and I am sure a lot of the Tesla investors will be happy that Elon invested in Bitcoin and this news is enough to increase the positive image of Bitcoin.

[stompix]

Why the hell did they even buy bitcoin if they were just going to sell it so quickly?  Sure, they might have made a profit but they're not in the business of currency speculation.

Why not? They've risked, bough, made a profit, sold!
Huawei is entering the pig farming business, Tesla might get into the casino business with the knowledge they've got, I've seen far weirder things going around, gas companies closing and selling gas stations in one-third of the country but buying two hotels in the area, a former chain store business going into electric distribution while their former business was going bankrupt and so on...
And probably in every country where are some even more extreme examples, Nokia was making paper a century ago 

For some time I thought who the hell is designing BMW these days. Most of their ideas are shit.
I3 with its stupid doors that have to be closed in the right order or they'll jam.
I8 that's unreliable, overpriced and plays engine sounds from speakers for whatever reason

The I3 looks like the result of a car crash but I do like the I8, it was a car that finally looked good, as I was saying BMW seems to have learned from the past mistakes, the I4 wilL not be another monstrosity but just the regular G22 4 series with an electric motor, as for Mercedes there is little to no difference between the EQC/A and the GLC/A series.

[jaysabi]

Why the hell did they even buy bitcoin if they were just going to sell it so quickly?  Sure, they might have made a profit but they're not in the business of currency speculation.  At least with MSTR, they're keeping their bitcoin as an alternative to cash and presumably plan to hold it long-term.

My guess is they took some profits because who would expect it to rise that quickly?  At the end of the day, they're a car manufacturer with significant capital requirements.  I thought it was stupid of them to lock up capital in Bitcoin in the first place if it was going to be a long term hold, but I was wrong about how much they needed at the time.  Bitcoin could have just as easily dropped 50% as risen 50% after they bought it, which would have harmed their financials and wouldn't have gone over well with investors who are already shelling out insane multiples for the stock.  It remains an incredibly risky move, so it makes sense to lock in some of the gains.

[Findingnemo]

Tesla itself became one of the biggest automobile company in terms of value with their stock value increased not from selling their cars that is why we can find Tesla cars are cheaper when we compare the features they are offering for that price. Its true that they made huge profits from bitcoin but they are not going to connect their bitcoin investments to their company but they do accepts BTC as payment to buy a Tesla now.

[Mahanton]

Despite Tesla's first quarter earnings, Tesla is still an unprofitable automobile manufacturer. Digging into the numbers, Tesla reported a $438M GAAP net income, but they had $518M in regulatory credit sales and more than $100M in profit related to bitcoin sales (they sold a total of $272M worth of bitcoin in Q1), which means the primary business of manufacturing cars is still not profitable.  Perhaps as they continue to scale this will change, but the valuation still looks insane at these levels, and electric vehicle competition is only going to get stiffer going forward.

Not for now but this isn't something that you can really get some good results when it comes to EV business.For now it is already getting some recognition but not really much
if we do compared into those petrol car companies but at least you can see some demand or need of it but not that much.If they would sustain up for long future years then
they might get some probability of success when everything turns to be on electric.This is actually a personal company problems and if they aren't really making such profit
then its up to them if they would set to continue or not but I don't see for it to happen anytime soon.

[jaysabi]

when car manufacturers are in the expansion phase they are never profitable
every penny goes into making newer bigger facilities. if they just stored the money. declared it as profit and paid tax on it. they are wasting it

no expanding business makes profit. its how they expand.
paper losses dont equal property losses

heck even trump earned hundreds of millions and only declared a couple thousand in profit (less than a minimum wage waitress would declare)

even bezos under declares his true financial state to pretend he is not making profit

Yeah, that's not how it works. That would be securities fraud since Amazon is a public company and has strict requirements about what has to be reported. You can't "pretend" to not be making a profit. You either are or you're not, and if you are there's no pretending you're not. I think you might be confusing cash-flow and net profit. A lot of companies are cash-flow positive but still not profitable. But being cash-flow positive isn't going to magically make Tesla grow into the valuation they have. At the end of the day, profitability is all that will matter.

[livingfree]

I've read that they're setting a standard and goal of making more cars every week.

Though I like Elon Musk for his interest in bitcoin and cryptocurrencies, I think he should pay more attention to Tesla.

Soon, they'll get into more competition while most of the known car brands will start getting into electric vehicles too. It might not be as quick as they enter in the competition but they'll also be gradually joining Tesla on the production of EVs.

[dothebeats]

The world is still largely-dominated by gas automobiles nowadays. And even if there are demands of Tesla cars, or even EV in general, it would still be considered as a niche vehicle since not everyone has the $$$ to buy it nor our current public infrastructure is adapted to cater these cars. It will still take time for Tesla to post profits solely from their EVs and they will have to rely on Elon's shilling on public for their stocks to perform well (which in the long run isn't a good thing)