Tesla Reality Check?

[Jeff Kershner]

Tesla lost $702 million last quarter after drop in Model 3 deliveries - https://www.theverge.com/2019/4/24/18514427/tesla-q1-2019-loss-model-3-elon-musk-earnings

 

[craigh]

Tesla lost $702 million last quarter after drop in Model 3 deliveries - https://www.theverge.com/2019/4/24/18514427/tesla-q1-2019-loss-model-3-elon-musk-earnings

That's just how business is done these days apparently.
He announced a leaf blower to distract from these disastrous numbers.

 

[Alexander Lau]

Tesla lost $702 million last quarter after drop in Model 3 deliveries - https://www.theverge.com/2019/4/24/18514427/tesla-q1-2019-loss-model-3-elon-musk-earnings

What I don't get about him, he's venturing into other verticals like vacuum cleaners and insurance. Those verticals are just as complex and competitive as automotive and he'll master none of them.

https://www.cnbc.com/2019/04/24/elo...ch-an-insurance-product-in-about-a-month.html

 

[craigh]

What I don't get about him, he's venturing into other verticals like vacuum cleaners and insurance. Those verticals are just as complex and competitive as automotive and he'll master none of them.

https://www.cnbc.com/2019/04/24/elo...ch-an-insurance-product-in-about-a-month.html

This is what frustrates me so much.
There are a handful of people alive who might be able to fund and execute on a trip to Mars, exploring space, etc.
There are thousands of people who can design a better vacuum or leaf blower.

He needs to focus where his time is needed and I think that being an executive at a public company forces him to do things that make far less sense for the long term vision.

 

[SoCalMark]

God forbid when the owner get's into a fender bender for the 6-20 months it takes to get parts
Even the insurance companies are raising their rates for Tesla owners

 

[Chris Cachor]

Tesla lost $702 million last quarter after drop in Model 3 deliveries

To be fair - they didn't have a true drop in deliveries. Tesla's are cash on delivery, so if you can't deliver it to the actual owner (overseas, in this case) before Q1 ends, it gets recorded in Q2. I doubt they'll make that same mistake again. So the $700m loss is probably more or less $50m. If they sold franchises they wouldn't have half of the problems they have. Parts, service, body work, deliveries, floor planning, etc. If they want to compete with the big dogs you can't do cash on delivery. You can do that when you're Rolls Royce...

 

[Chris Cachor]

I will say, if they start doing body work and insuring their own vehicles that is a compelling option. The whole reason insurance on these things is ridiculous is because nobody knows how to fix them or they can't get parts quickly. I've heard the same issue with the Volt/Bolt but they're lower volume vehicles.

I was talking to the guy I rented the Model 3 from. It's a full time Turo car. $99/day and it's rented out almost daily. Most of the time he has it out for a week at a time for business travelers cause it's expensed to the company. He said parents are renting them to take their kids to the prom. So I think there is quite a bit of demand for them.

 

[craigh]

So the $700m loss is probably more or less $50m.

For perspective:

Tesla Net Income in Millions
Q1 2019: -702
2018: -976
2017: -1,961
2016: -675
2015: -889
2014: -294
2013: -74
2012: -396
2011: -254
2010: -154
2009: -56
2008: -82
2007: -78

 

[SoCalMark]

I have a friend who is an underwriter for AAA and they are backing off many of the claims because the average time Tesla customers are expected to be in a rental vehicle is 6+ months with not enough Tesla approved body shops put there either.

 

[Chris Cachor]

For perspective:

Tesla Net Income in Millions
Q1 2019: -702
2018: -976
2017: -1,961
2016: -675
2015: -889
2014: -294
2013: -74
2012: -396
2011: -254
2010: -154
2009: -56
2008: -82
2007: -78

Wow. I thought they posted a small profit Q42018? Let's not forget, this is a company following a "Blitzscaling" strategy (https://www.blitzscaling.com) so burning cash is sort of the name of the game. You could say the same of Uber, Netflix, Waymo, etc. Even AMZN has had negative net income several times in the past few years.

At the same time, those are really big negative numbers. If they can demonstrate crazy growth then fine but if demand is softening quickly they're in trouble :/