Tesla still an unprofitable automaker

[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.

If you do a bit of reading you'll see that a price to earnings ratio near the peak was over 1,000. It currently rests at around 500. Any "normal" company has a p/e of let's say 30. A high p/e can sometimes represent a high growth company, where the earnings are expected to grow strongly in the future which would have an effect of lowering the p/e. However Tesla does not really have much special to offer, besides being first to market with mass scale electric cars, a slight advantage of battery research and autonomous driving software (related to several accidents). Car manufacturing is a highly competitive business and while it has taken a while to turn around, pretty much every manufacturer is now focused on electric car models - this is going to make it much harder for Tesla to grow at the expected rates and eat away at their market share. We already see it down more than 40% from the high and there is still plenty of room for it to fall, especially with the erratic management at the top and eco-credits income will be dropping off as competitors bring their own "green" cars into production.

[1714642863]

1714642863

[1714642863]

1714642863

[1714642863]

1714642863

[Gyfts]

Electric cars are the future, Tesla's are not the future.

Agreed with the second part, but not with the first part of your sentence. I think EV's are one of the biggest scams of this decade. They are not practical, they are expensive to repair, low resell value and batteries are not really as green as many people think they are.

EV's manufacturers are just reinventing the wheel because capitalism is about to eat its own tail and they need to make current oil-powered cars obsolete to be able to sell these newly made glorified golf-carts.

I am not planning to get an EV in the next 1000 years.

The way I look at it is strictly from the POV of renewables. If we run out of fossil fuels (which we eventually will), what is the alternate source of energy?

My view -- probably nuclear. So nuclear generated energy can produce an insane amount of electricity, so these electric vehicles end up being a lot more efficient granted we can get the battery's to be efficient. Tesla kinda solved this problem, so I think more car companies will follow through. To your point though, gas vehicles won't completely be phased out, because not many people wanna drive an electric golf cart over their pick up trucks.

[mindrust]

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.

If you do a bit of reading you'll see that a price to earnings ratio near the peak was over 1,000. It currently rests at around 500. Any "normal" company has a p/e of let's say 30. A high p/e can sometimes represent a high growth company, where the earnings are expected to grow strongly in the future which would have an effect of lowering the p/e. However Tesla does not really have much special to offer, besides being first to market with mass scale electric cars, a slight advantage of battery research and autonomous driving software (related to several accidents). Car manufacturing is a highly competitive business and while it has taken a while to turn around, pretty much every manufacturer is now focused on electric car models - this is going to make it much harder for Tesla to grow at the expected rates and eat away at their market share. We already see it down more than 40% from the high and there is still plenty of room for it to fall, especially with the erratic management at the top and eco-credits income will be dropping off as competitors bring their own "green" cars into production.

Tech companies are usually at 30-50 p/e and car manufacturers are around 10-15 p/e. (Toyota p/e is 11 and Ford is 12.30 as I am writing this post)

And since Tesla's main business field is making cars, 500-1000 p/e indicates it is way too overpriced as a car manufacturer.

As a coin trader? Who knows. It seems Elon can manipulate the non-regulated markets as he pleases and since coin markets are not regulated, the SEC won't lift a finger.

Then TSLA would deserve its 500-1000 p/e because Elon can manipulate and steal every single buck left out of the crypto people forever.

[Twinkledoe]

For many years Tesla was an electric car company that did not make a profit from the production and sales of electric cars, but they made money in other ways: selling solar panels and transferring technology. environmental certifications.
Although they are not profitable at the moment, they are increasing sales and making better profits than previous quarters.
I think that they are not profitable that is their strategy to go further in the market.

In other words, they have other means to augment their income. If they will rely only in selling cars, I don't think they will be earning profits. As only few can afford their brand, they can only sell few number of their cars. However, other economical EVs can sell much more than Tesla as it is the new trend especially in some advanced countries. If you say Tesla, it somehow equates to high-end EV, and we all know, that the masses can't afford such brand.

[Sithara007]

The way I look at it is strictly from the POV of renewables. If we run out of fossil fuels (which we eventually will), what is the alternate source of energy?

My view -- probably nuclear. So nuclear generated energy can produce an insane amount of electricity, so these electric vehicles end up being a lot more efficient granted we can get the battery's to be efficient. Tesla kinda solved this problem, so I think more car companies will follow through. To your point though, gas vehicles won't completely be phased out, because not many people wanna drive an electric golf cart over their pick up trucks.

The current EV technology is not viable in the long term. Despite huge subsidies and tax breaks given by the governments, the EVs still cost more than twice that of an equivalent gasoline-driven version. On top of that maintenance and servicing seems to be more costly as well. In order for EVs to be more economically viable, the battery prices need to come down and they (batteries) need to last more. The current battery technology of Tesla (lithium-nickel-cobalt-aluminum) is even more unsustainable than the fossil fuels in the long run. Because out planet has limited resources of many of these metals.

[rajakulam]

Although Tesla's earnings are not very profitable, Elon Musk has other businesses that may not all be publicized in the outside world, and recently Elon Musk has started trying to increase his income through cryptocurrency investments by supporting bitcoin and dogecoin, although in the end Elon Musk made a statement that he is no longer accepting Tesla Payments using cryptocurrency, and in the meantime the cryptocurrency market has plummeted again due to the issue.

[jaysabi]

Not really relevant to an assessment of operating cost since being in an accident isn't routine and part of the normal cost of owning a car.  If you get in a lot of accidents, yeah, it's an obvious down side.  If you get in a lot of accidents, you're also probably not the type of driver who buys anything other than total garbage cars anyway.  Range is only a concern for the vast minority of drivers since the number of drivers who drive more than a couple hundred miles in a day is so small.  Operating costs are superior for EVs over gas-powered cars for everyone else.

Operating costs may be lower for Tesla, but the huge expense for maintenance take away that advantage. If I am not wrong, the battery needs to be replaced every 5 years or so and it costs at least $35,000. On the other hand, a gasoline-driven car doesn't need any major replacements for at least 20 years. And regarding accidents, they can occur anytime. You can't just say that all of the accidents happen due to the carelessness of the owner. And in case that happens, the Tesla owner will be in deep trouble.

The battery in a $35,000 car obviously does not cost $35,000.  Gasoline driven cars have regular maintenance on the engine, all the points that use oil, etc.  Teslas have an electric drivetrain, there is no internal combustion engine, so nothing to maintain related to that.  The maintenance is essentially tires and air filters, which is the same for gasoline cars.  Your post isn't even close to being accurate.

[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.

Elon Musk actually stabbed bitcoin recently with his announcements but overall I think he is a positive to the crypto community because of his involvement in dogecoins and he often appreciates bitcoins and crypto which has brought a lot of new traders since millions of investors and traders follow him and his advice.

In the previous ATH market it was Apple Co-founder (Steve Wozniak) and in this current market it was Elon. But people like Elon is an Engineer and a business man, they will only do things that will be In their favor not for the love of the technology and that's the reason why Elon stabbed Bitcoin.

Tesla is in profit or loss I don't know but they should deliver cars faster. I heard in a recent UFC fight after the fight won he said requested Musk to send the car and later on Twitter replied to it by saying on the way. I mean if celebs are getting it with so much delay, imagine what a common man must go through. This might be part of the company going down, if it is going down though.

Base on what I read on a certain thread on this forum, the company make lost which I don't know how it happened but make a gain through their Bitcoin investment.

[Lorence.xD]

What's it to you if they are still unprofitable, don't buy their stock then if you think that they are unprofitable. Also, it's not like they are rushing to make money, they still do a break even and make something more out of it and just let it be, the profit will eventually come to them.

[jaysabi]

What's it to you if they are still unprofitable, don't buy their stock then if you think that they are unprofitable. Also, it's not like they are rushing to make money, they still do a break even and make something more out of it and just let it be, the profit will eventually come to them.

The point of the post is to contrast "Tesla is a profitable company" with the fact that Tesla is not a profitable automaker. Tesla was profitable because they sold tax credits from the government and crypto, they lose money on the production of cars still.

[Lorence.xD]

~

The point of the post is to contrast "Tesla is a profitable company" with the fact that Tesla is not a profitable automaker. Tesla was profitable because they sold tax credits from the government and crypto, they lose money on the production of cars still.

Electric cars are going to destroy a lot of industry so we can see how they are still unprofitable automaker because fossil fuel, oil and conventional cars to name a few will be the most affected so they conspire to make it as hard for electric cars to take off because if it takes off, their days as giants in the industry is going to be numbered.

[Vishnu.Reang]

The point of the post is to contrast "Tesla is a profitable company" with the fact that Tesla is not a profitable automaker. Tesla was profitable because they sold tax credits from the government and crypto, they lose money on the production of cars still.

That unfortunately gives rise to a few questions. Can the governments afford to pour billions into Tesla. And with other automakers entering this sector, there is a chance that the tax credits will be divided up by them as well. From what I have heard, Tesla hasn't made any major technological innovation for the past 4-5 years. Their battery technology remains the same, and the affordability of their vehicles haven't improved. Everything has remained stagnant and that has opened some space for their competitors.

[jaysabi]

Not really relevant to an assessment of operating cost since being in an accident isn't routine and part of the normal cost of owning a car.  If you get in a lot of accidents, yeah, it's an obvious down side.  If you get in a lot of accidents, you're also probably not the type of driver who buys anything other than total garbage cars anyway.  Range is only a concern for the vast minority of drivers since the number of drivers who drive more than a couple hundred miles in a day is so small.  Operating costs are superior for EVs over gas-powered cars for everyone else.

You don't have to get in a lot of accidents to be able to benefit from the low repair costs of a Toyota. Only 1 will suffice. Even if you don't crash your car ever, it is still not a good idea to get a Tesla but people will choose to learn that by the hard way it seems.

I remember I was hyped af when Elon came up with Model3. TV has that kind of effect on people sadly. They can even sell you their shit if they promote it hard enough. (which is Tesla btw)

My point is just that accidents aren't routine maintenance or operating costs, so it's not relevant to a discussion of which car has lower operating cost. If you want to make the argument that "if you ever get in a major accident, your replacement costs are higher," that's another discussion, and one I don't even know to be true anyhow.  The forum posted in hear about Tesla owners having trouble finding places to repair their cars is over 7 years old, it's not even relevant anymore.

[jaysabi]

The point of the post is to contrast "Tesla is a profitable company" with the fact that Tesla is not a profitable automaker. Tesla was profitable because they sold tax credits from the government and crypto, they lose money on the production of cars still.

That unfortunately gives rise to a few questions. Can the governments afford to pour billions into Tesla. And with other automakers entering this sector, there is a chance that the tax credits will be divided up by them as well. From what I have heard, Tesla hasn't made any major technological innovation for the past 4-5 years. Their battery technology remains the same, and the affordability of their vehicles haven't improved. Everything has remained stagnant and that has opened some space for their competitors.

What billions does the government pour into Tesla?  The company is funded by debt and securities sales, just like every other capitalist enterprise.  The government doesn't own any of Tesla as a company.  Tesla has made innovations, it's just never as good as they hype.  Battery tech is incremental and not the improvements you're lead to believe with events like "Battery Day."  The affordability of the vehicles has definitely improved over time too as they've scaled.  That said, I don't believe they'll command the EV market share they have now in the future, which is why I'm not a Tesla investor.  The stock looks obviously overpriced.

[mindrust]

Not really relevant to an assessment of operating cost since being in an accident isn't routine and part of the normal cost of owning a car.  If you get in a lot of accidents, yeah, it's an obvious down side.  If you get in a lot of accidents, you're also probably not the type of driver who buys anything other than total garbage cars anyway.  Range is only a concern for the vast minority of drivers since the number of drivers who drive more than a couple hundred miles in a day is so small.  Operating costs are superior for EVs over gas-powered cars for everyone else.

You don't have to get in a lot of accidents to be able to benefit from the low repair costs of a Toyota. Only 1 will suffice. Even if you don't crash your car ever, it is still not a good idea to get a Tesla but people will choose to learn that by the hard way it seems.

I remember I was hyped af when Elon came up with Model3. TV has that kind of effect on people sadly. They can even sell you their shit if they promote it hard enough. (which is Tesla btw)

My point is just that accidents aren't routine maintenance or operating costs, so it's not relevant to a discussion of which car has lower operating cost. If you want to make the argument that "if you ever get in a major accident, your replacement costs are higher," that's another discussion, and one I don't even know to be true anyhow.  The forum posted in hear about Tesla owners having trouble finding places to repair their cars is over 7 years old, it's not even relevant anymore.

Car accidents are a risk of driving a car. It can happen when you least expect it. That's why we have car insurances. You cannot ignore that car accidents don't happen. They happen every once in a while and if you are shit out of luck if you happen to be driving a tesla when you crash your car.

The information I am talking about isn't about that. It is about Tesla wanting you to use their own repair shop and no one else. As long as this information is true, it cannot get outdated.

[jaysabi]

Not really relevant to an assessment of operating cost since being in an accident isn't routine and part of the normal cost of owning a car.  If you get in a lot of accidents, yeah, it's an obvious down side.  If you get in a lot of accidents, you're also probably not the type of driver who buys anything other than total garbage cars anyway.  Range is only a concern for the vast minority of drivers since the number of drivers who drive more than a couple hundred miles in a day is so small.  Operating costs are superior for EVs over gas-powered cars for everyone else.

You don't have to get in a lot of accidents to be able to benefit from the low repair costs of a Toyota. Only 1 will suffice. Even if you don't crash your car ever, it is still not a good idea to get a Tesla but people will choose to learn that by the hard way it seems.

I remember I was hyped af when Elon came up with Model3. TV has that kind of effect on people sadly. They can even sell you their shit if they promote it hard enough. (which is Tesla btw)

My point is just that accidents aren't routine maintenance or operating costs, so it's not relevant to a discussion of which car has lower operating cost. If you want to make the argument that "if you ever get in a major accident, your replacement costs are higher," that's another discussion, and one I don't even know to be true anyhow.  The forum posted in hear about Tesla owners having trouble finding places to repair their cars is over 7 years old, it's not even relevant anymore.

Car accidents are a risk of driving a car. It can happen when you least expect it. That's why we have car insurances. You cannot ignore that car accidents don't happen. They happen every once in a while and if you are shit out of luck if you happen to be driving a tesla when you crash your car.

The information I am talking about isn't about that. It is about Tesla wanting you to use their own repair shop and no one else. As long as this information is true, it cannot get outdated.

Car accidents are not relevant to the operating costs of the car.  And no, Tesla-authorized and Tesla-owned shops are not the same thing.  There are undeniably far more Tesla-authorized repair shops today than there were 7 years ago.  The post you cited is no longer relevant, which is why you had to resort to one from 7 years ago to try and make a point.