RE: Tesla launches 691hp Model S P85D

[DonkeyApple]

TransverseTight said:

ctallchris said:

DonkeyApple said:

They do lose money selling cars.

They make a money selling the ZEV credits.

I think this time last year was the first time that they had what accountants can call a profitable quarter but each car is a loss maker. The key is that the loss per unit is shrinking quicker than investors originally bought in on.

The non US growth could double volumes and that's likely to be the point where they could break even. So long as the massive investment in the smaller cars doesn't incur any hiccups in predicted revenues.

It's all looking good but each car is a loss still and it's only because of the ZEV credits they get on each unit that they then sell on that they can make enough revenue to match the burn.

In reality they are a carbon credit trading firm with a car building arm.

Some industries are more complex than
- make widget
- sell widget for more money than it costs to make widget
- profit

Design costs money and tesla is designing products. The company is not announcing huge profits because it is firmly in the middle of a growth stage. Any profits get taxed so if you want to grow it is far better to ensure the cash assists that aim.
In their financial statements this is clear
http://ir.teslamotors.com/secfiling.cfm?filingID=1...

From 4Q 2013 to 1Q 2013
Sales up by 60 million
Cost to produce cars exactly the same (increasing efficiency)
so they made $60 million more
and spent an additional 30 million on R&D
and nearly 60 million on the supercharger network, New showrooms, etc.
These are assets <political>like the channel tunnel</political> while they may not show up as a cash profit but they are where the cash has ended up meaning they are comfortable in spending tens of millions on a longer term plan.

If they were selling widgets I would assume they have a minimum margin of around 20%, This is more than the tax credits even on the cheaper model. To me though it seems like a good way to spend the tax credits. Building infrastructure and new technologies.

They could easily have announced a huge profit and put peoples tax into the hands of a few rich shareholders.

Cheers Chris....

Nothing like the company balance sheet to get the facts straight on whether they make a profit on selling cars, vs making a profit overall as a company...

	Q1 2014	Q1 2013
Revenues
Automotive sales	$618,811,000	$555,203,000
Cost of Revenues
Automotive sales	£462,471,000	$461,818,000

So this year for automotive sales a tidy 156 million profit on a cost of 462 million / sales of 618 million. That's 25% profit in my book.

That gets eaten up by the 81 million spent on R&D and 117 million, selling general and administraive (shops, marketing events and superchargers).

If they were making a loss on every car sold they'd have gone bust by now. Probably.

Still, the right wing oil and gas lobby want Americans to believe Telsa is getting tapayers money to support an unprofitable business. If you google Telsa profits most of the articles that come up are blog sites slagging off CARB credits (which only affect sales in 11 states anyway). Never belieive what you read on the internet! (Even what I just wrote, LOL). There's a blog war going on to try and delay the introduction of EVs an clean tech, to give them a bit longer to sweat out investments already made.

Agree that the whole EV is a political battleground. Staying divorced from the loons on both sides who have none of our interests at heart is hard work.

This gives a broader picture but the question is where are the $70m profit in credit sales booked? And also the consultancy income from Mercedes and Toyota?

http://investing.businessweek.com/research/stocks/...

https://finance.yahoo.com/q/is?s=TSLA

But I think this little thread element stems from one of the special people trying to link last week's share price action to the fortunes of the business, to which I have been responding highlighting the error in logic.

I think this is also a good read for any petrolhead who' sole interest doesn't lie in political agendas and a live of diesel stboxes.

https://finance.yahoo.com/q/is?s=TSLA

[k-ink]

wst said:

I think, if everywhere seems to have a Tesla charge point available, they might end up the Xerox, Kleenex or Sellotape of electric car manufacturers? Getting that ingrained in the very fibre of an emerging market has got to be worth losses at the start.

Just like the start of Microsoft - get market share at any cost. Reap the rewards in decades to come, i.e. own the entire market.

[TransverseTight]

DonkeyApple said:

At this moment in time they are not a profitable firm but lose money on each unit even stripping out the factory and network investment.

Why do you keep saying this? Someone just posted the link to the financials that show otherwise. And I just posted the key info 25% profit margin on car sales. That why they are frikin expensive for what is effectively a electric version of an XF. Less buttons and less fancy interior. But a tonne of Li-ion batteries and a 360+hp electric motor.

This was the plan - make money from selling 1 car to develop the next market further down.

$100,000 2 seater sports car funds $50,000 (starting price) 5 door hatch funds $35,000 (starting price) compact exec (probably hatch)

If they made a loss on each one no one would invest as they'd say - er, this is great but when will you make money from selling cars?

I agree they are not a profitable firm.

My own take is the base 60kWh car is probably break even and offering all the battery and tech upgrades is where the money rolls in. IF you ever spec one up, you start at £50,000 and go, I'd want supercharger facility, which is £2,000, but then you may as well pay the extra £5,000 for the 85kWh battery as supercharging is included and you then get an unlimited mileage warranty on the battery. You'll want the £1250 on the twin charger, allowing you to charge twice as fast at home and public chargers. So then your at about £60k. Doesn't seem that expensive now to add the electronics pack for £3000+. And leather is only £1250. Bargain! Do you want to be able to fit a roof rack? IF so you'll need the £2000+ panoramic sunroof option which increases roof strength I presume. AWD and 10 miles extra range for £4k. I.e. it's very easy to get sucked into spending £70k instead of £50k! IF you want the fastest 4 door hatch on the planet add £25k. Comes in fully loaded at just over £100k IIRC. [edit to add... that actually means you could have 2 base spec 60kwh cars for the cost of a P85D! Hmmmmn.]

Someone asked about where the consultancy money comes in. There's a couple if lines in the financial statements. Development services and sales of automotive drive trains to other suppliers. IIRC the Smart EV uses Telsa components, though not sure who else. I'm pretty sure the new autopilot stuff, has come back the other way. (Although I lost track of the group ownership between Mercedes and Daimler).

Edited by TransverseTight on Wednesday 15th October 11:24

[DonkeyApple]

TransverseTight said:

DonkeyApple said:

At this moment in time they are not a profitable firm but lose money on each unit even stripping out the factory and network investment.

Why do you keep saying this? Someone just posted the link to the financials that show otherwise. And I just posted the key info 25% profit margin on car sales. That why they are frikin expensive for what is effectively a electric version of an XF. Less buttons and less fancy interior. But a tonne of Li-ion batteries and a 360+hp electric motor.

This was the plan - make money from selling 1 car to develop the next market further down.

$100,000 2 seater sports car funds $50,000 (starting price) 5 door hatch funds $35,000 (starting price) compact exec (probably hatch)

If they made a loss on each one no one would invest as they'd say - er, this is great but when will you make money from selling cars?

I agree they are not a profitable firm.

My own take is the base 60kWh car is probably break even and offering all the battery and tech upgrades is where the money rolls in. IF you ever spec one up, you start at £50,000 and go, I'd want supercharger facility, which is £2,000, but then you may as well pay the extra £5,000 for the 85kWh battery as supercharging is included and you then get an unlimited mileage warranty on the battery. You'll want the £1250 on the twin charger, allowing you to charge twice as fast at home and public chargers. So then your at about £60k. Doesn't seem that expensive now to add the electronics pack for £3000+. And leather is only £1250. Bargain! Do you want to be able to fit a roof rack? IF so you'll need the £2000+ panoramic sunroof option which increases roof strength I presume. AWD and 10 miles extra range for £4k. I.e. it's very easy to get sucked into spending £70k instead of £50k! IF you want the fastest 4 door hatch on the planet add £25k. Comes in fully loaded at just over £100k IIRC. [edit to add... that actually means you could have 2 base spec 60kwh cars for the cost of a P85D! Hmmmmn.]

Someone asked about where the consultancy money comes in. There's a couple if lines in the financial statements. Development services and sales of automotive drive trains to other suppliers. IIRC the Smart EV uses Telsa components, though not sure who else. I'm pretty sure the new autopilot stuff, has come back the other way. (Although I lost track of the group ownership between Mercedes and Daimler).

Edited by TransverseTight on Wednesday 15th October 11:24

It was me who posted the basic accounts.

They aren't a profitable firm, you agree with this.

It's irrelevant at this moment in time as this is their business model and I think you agree with this.

They posted one quarter in 2013 which was profitable by $15m but only due to booking $70m of revenue from selling tax credits to competitors. I think you agree with this.

The cars are subsidised by various grants, not just local unit incentives, I think you agree with this.

Profitability is scheduled for after the launch of the cheaper model in 2017 but this is wholly at the mercy of getting the giga factory on stream ahead of that. I think you agree with this.

I also think you agree that the person who tried to make a link between the success of the business to date and the recent share price action was wrong and I think we both agree that their business model is running ahead of schedule despite the 2008 US automotive disaster and that all is looking good?

I'm missing where we are at odds?

[k-ink]

Microsoft was not profitable when it started. Their business model was to capture market share. Only later did the focus change to making (a st ton) of money.

[DonkeyApple]

k-ink said:

Microsoft was not profitable when it started. Their business model was to capture market share. Only later did the focus change to making (a st ton) of money.

Yes but no one is saying that not being profitable is negative in this situation. They are ahead on revenue projections and closer to being profitable than planned in their last fund raising. All is looking good.

All that's being discussed is that someone said that they were already profitable but they aren't.

[slippery]

Can't we talk about the car a bit more, rather than the financial stature of the company. This is PH after all.

[DonkeyApple]

Chris Rees said:

GGX said:

Not sure ranges that you give in the article are correct.

If you look on Tesla's US website, seems that range on 80 has improved from 265 miles to 295 miles on 80D.

On P85 range has also improved by 10 miles to 275 miles on P85D from 265 miles.

Seems a win/win with improved performance and better range. Just the small matter of cost to consider...

These were the figures quoted to me by Tesla UK, re range (at 65 mph):

• 60D: 225 miles (vs 215 miles for 60)

• 85D: 295 miles (vs 285 miles)

• P85D: 275 miles (vs 285 miles)

I would add that it's not often you see a 600+ bhp big saloon cruising steadily at 65.

It's going to gain hugely in stop, start urban traffic but I wonder what the real range is when you simulate a typical big saloon and cruise at 90 with regular breaking and acceleration bac up to 90? How much of that range is lost by maintaining an ICE driving style?

[TransverseTight]

DonkeyApple said:

It was me who posted the basic accounts.

They aren't a profitable firm, you agree with this.

It's irrelevant at this moment in time as this is their business model and I think you agree with this.

They posted one quarter in 2013 which was profitable by $15m but only due to booking $70m of revenue from selling tax credits to competitors. I think you agree with this.

The cars are subsidised by various grants, not just local unit incentives, I think you agree with this.

Profitability is scheduled for after the launch of the cheaper model in 2017 but this is wholly at the mercy of getting the giga factory on stream ahead of that. I think you agree with this.

I also think you agree that the person who tried to make a link between the success of the business to date and the recent share price action was wrong and I think we both agree that their business model is running ahead of schedule despite the 2008 US automotive disaster and that all is looking good?

I'm missing where we are at odds?

The bit where I had an issue is when you say they are making a loss per unit. That's the same as saying they are making the cars at a loss. Ie. each 60kWh models costs £60,000 to build and they are selling at £50,000. When in fact its more like it costs them £40,000 to build and they sell at £50,000 (rough examples). So actually building and selling the cars themselves is profitable. If they told everyone to charge at home and had no dealers they'd be fine ;-) They already get you to configure and buy over the internet. If you go to the dealers - they just set you up an account in the showroom and do it with you on the same site.

It's one of those companies where you think is it really overpriced, or should I get in on the action before they start selling the Gen III. Specifically thinking of the google's and amazons of the world here. Back in 1994 just 20 years ago google didn't exist and amazon had only been trading for a few months. Still its a bit harder for a company to grow that actually makes things not ships them, or searches for them.

I do agree looking at the figures this car company is about to hit the big time, look at how revenues are going up over $100M per quarter. That's was before the headline halo car the P85D came along. The order waiting lists in UK just jumped from 5 months to 11 months! Well Maybe... there's no date mentioned for the RWD anymore, but UK AWD deliveries start in Sept 2015! or May if you want the 3.2s God Car :O

Imagine what will happen when more people have heard of Tesla! I've only seen 2 on the roads. So it you want something exclusive .... A S85D in Silver, with dual chargers, tech pack, pano roof and grey leather comes in at just £69,930. If I had that sort of cash lying around I'd be tempted to get an order in - and screw paying off the mortgage sooner ;-) Put the fuel saving into the mortgage instead.

One thing I did think of... on other energy saving products the government use a lower 5% rate of VAT. If they did this on EVs the Tesla would save a lot more than 5k - the total on the example above is £12,500 VAT. Instead of giving you a grant from tax payer coffers, they just wouldn't take as much tax off you when you buy a car. I think that works better in the minds of voters. I suppose they could stick a £5k limit on the VAT saving so cheaper cars save proportionately more percentage and it isn't seen an a perk for the Tesla owners.

[pSyCoSiS]

I had the chance to visit a Tesla showroom in California earlier in the summer, and sat in the top of the range version of one of these.

I must say I was very impressed with the quality of the interior and switchgear.

Impressive stats no doubt with mind blowing economy to boot. And I personally think it's a rather good looking car.

[TransverseTight]

pSyCoSiS said:

I must say I was very impressed with the quality of the interior and switchgear.

Did you get to drive it? The only thing I could fault with the car was that, (in the UK at least) the indicator stalk is off at the 8 o'clock position. It should be off at 9 o'clock. I'm sure you'd get used to it, but I kept trying to cancel it, and then realised I was indicating right. Aaaargh! However - I think they just fixed that as it's been a common compliant.

That and its almost too flipping fast. I drove the lower powered 85kw 360hp S RWD version. There's no turbo lag, no build up of revs. Stick you foot down and it goes. Brain need reprogramming. That was from sitting in the middle lane of the M4 at 65mph. You have to make sure you are pointing at an empty space before pressing on the speed control pedal. Even with traction control in the wet - accelerating from a standstill induced a little wiggle as the car sorted itself out. I can see AWD as a good choice in the wet UK.

If it wouldn't divert them from their goal of rolling out EVs to the masses ASAP, I'd suggest they release a no cost limit carbon fibre 2 seater lambo killer. With 2 400hp rear motors and 1 up front. 1200+Hp. Using the next gen battery tech they are probably saving for 2018. I reckon they could build a sub 1500kg car with the fastest 0-100-0mph times. Probably. I'm sure they have CAD and model scale clay mockups by now ;-) They are rumoured to be doing a replacement for the Roadster though, so maybe not something as big as a Lambo. 3 motors to capture regen would mean no need for friction brakes, stick in a supercapcitor buffer ala F1, and I hate to say it, but I think they'd mop up the supercar market. Unless people really want to be seen in slower but noisier cars. Depends on how it handles really! And whehter it can do track days withoput overheating. Again - why they need to build a car like this to push the development envelope. Though the other side of me says... the nees of a commuter aren't really the same as a track day enthusiast. So why commit resources till you have the mass market sorted. I would love to see a Model S in the GT AM Class at Le Mans ;-) They'd come last, but who cares. Gotta start somewhere.

[slippery]

DonkeyApple said:

Chris Rees said:

GGX said:

Not sure ranges that you give in the article are correct.

If you look on Tesla's US website, seems that range on 80 has improved from 265 miles to 295 miles on 80D.

On P85 range has also improved by 10 miles to 275 miles on P85D from 265 miles.

Seems a win/win with improved performance and better range. Just the small matter of cost to consider...

These were the figures quoted to me by Tesla UK, re range (at 65 mph):

• 60D: 225 miles (vs 215 miles for 60)

• 85D: 295 miles (vs 285 miles)

• P85D: 275 miles (vs 285 miles)

I would add that it's not often you see a 600+ bhp big saloon cruising steadily at 65.

It's going to gain hugely in stop, start urban traffic but I wonder what the real range is when you simulate a typical big saloon and cruise at 90 with regular breaking and acceleration bac up to 90? How much of that range is lost by maintaining an ICE driving style?

That's a question I would really like the answer to. I'm guessing about 200 miles.

[boxerTen]

slippery said:

DonkeyApple said:

I would add that it's not often you see a 600+ bhp big saloon cruising steadily at 65.

It's going to gain hugely in stop, start urban traffic but I wonder what the real range is when you simulate a typical big saloon and cruise at 90 with regular breaking and acceleration bac up to 90? How much of that range is lost by maintaining an ICE driving style?

That's a question I would really like the answer to. I'm guessing about 200 miles.

I did a little numerical analysis fitting a quadratic curve through the power consumption implied by the ranges on Tesla's web site for the 6 speeds from 45 mph to 70 mph, and extrapolating (always a bit dangerous) got the following:

Speed: Range
75 mph: 220 miles
80 mph: 203 miles
85 mph: 187 miles
90 mph: 172 miles
95 mph: 159 miles
100 mph: 147 miles

As to how accurate these figures are ... well as they say: 'your mileage may vary' .

[DonkeyApple]

TransverseTight said:

The bit where I had an issue is when you say they are making a loss per unit. That's the same as saying they are making the cars at a loss. Ie. each 60kWh models costs £60,000 to build and they are selling at £50,000. When in fact its more like it costs them £40,000 to build and they sell at £50,000 (rough examples). So actually building and selling the cars themselves is profitable. If they told everyone to charge at home and had no dealers they'd be fine ;-) They already get you to configure and buy over the internet. If you go to the dealers - they just set you up an account in the showroom and do it with you on the same site.

It's one of those companies where you think is it really overpriced, or should I get in on the action before they start selling the Gen III. Specifically thinking of the google's and amazons of the world here. Back in 1994 just 20 years ago google didn't exist and amazon had only been trading for a few months. Still its a bit harder for a company to grow that actually makes things not ships them, or searches for them.

I do agree looking at the figures this car company is about to hit the big time, look at how revenues are going up over $100M per quarter. That's was before the headline halo car the P85D came along. The order waiting lists in UK just jumped from 5 months to 11 months! Well Maybe... there's no date mentioned for the RWD anymore, but UK AWD deliveries start in Sept 2015! or May if you want the 3.2s God Car :O

Imagine what will happen when more people have heard of Tesla! I've only seen 2 on the roads. So it you want something exclusive .... A S85D in Silver, with dual chargers, tech pack, pano roof and grey leather comes in at just £69,930. If I had that sort of cash lying around I'd be tempted to get an order in - and screw paying off the mortgage sooner ;-) Put the fuel saving into the mortgage instead.

One thing I did think of... on other energy saving products the government use a lower 5% rate of VAT. If they did this on EVs the Tesla would save a lot more than 5k - the total on the example above is £12,500 VAT. Instead of giving you a grant from tax payer coffers, they just wouldn't take as much tax off you when you buy a car. I think that works better in the minds of voters. I suppose they could stick a £5k limit on the VAT saving so cheaper cars save proportionately more percentage and it isn't seen an a perk for the Tesla owners.

We'll have to disagree on unit profitability as it's not cost to build but cost to sell that is critical and that includes what it takes to keep the lights on and get the product into the hands of the consumer. But it is a trivial point at that level.

I'd certainly like to see the point at which grants were removed. I agree with them fully as a tool to kick start a beneficial product but never like to see them in position for too long. One aspect that I dislike about subsidies is the suspicious nature in which the price post subsidy is always conveniently in the right place. The UK pool was frozen by Cameron so this could shrink quite rapidly as sales increase.

There are about half a dozen S's around here now. They look nice. Probably better looking than the ubiquitous embezzler minicab but not as pretty as the XJ.

The SUV will be the big one as wives aren't going to take the S as their runabout and these cars fit much better as suburban workhorses taking the kids to school, on the shops, out to lunch, back to collect the kids, on to after school classes and a driveway at night to charge it on and the capability of driving 200 miles in a hit for the odd days when the mothers' routine deviates from the local norm.

[countachman]

I drove the S yesterday and its a fine car. You have to drive one to know what it feels like.

The instant exceleration and pick up just goes on and on.....GO DRIVE ONE. ..ITS THE FUTURE.

[McWigglebum4th]

countachman said:

I drove the S yesterday and its a fine car. You have to drive one to know what it feels like.

The instant exceleration and pick up just goes on and on.....GO DRIVE ONE. ..ITS THE FUTURE.

I drove a Nissan leaf and felt vaguely similar

[ctallchris]

boxerTen said:

I did a little numerical analysis fitting a quadratic curve through the power consumption implied by the ranges on Tesla's web site for the 6 speeds from 45 mph to 70 mph, and extrapolating (always a bit dangerous) got the following:

Speed: Range
75 mph: 220 miles
80 mph: 203 miles
85 mph: 187 miles
90 mph: 172 miles
95 mph: 159 miles
100 mph: 147 miles

As to how accurate these figures are ... well as they say: 'your mileage may vary' .

I was trawling the website at lunch and they have published estimates for this

http://www.teslamotors.com/goelectric#range

It is also some very slick web design.

[simonrockman]

Ignore it being on a public road.. https://www.youtube.com/watch?v=iSZ6hf20XBU

[croyde]

People's reactions

Made me grin.

https://www.youtube.com/watch?x-yt-cl=84838260&amp...

[unpc]

TransverseTight said:

If it wouldn't divert them from their goal of rolling out EVs to the masses ASAP, I'd suggest they release a no cost limit carbon fibre 2 seater lambo killer. With 2 400hp rear motors and 1 up front. 1200+Hp. Using the next gen battery tech they are probably saving for 2018. I reckon they could build a sub 1500kg car with the fastest 0-100-0mph times. Probably. I'm sure they have CAD and model scale clay mockups by now ;-) They are rumoured to be doing a replacement for the Roadster though, so maybe not something as big as a Lambo. 3 motors to capture regen would mean no need for friction brakes, stick in a supercapcitor buffer ala F1, and I hate to say it, but I think they'd mop up the supercar market. Unless people really want to be seen in slower but noisier cars. Depends on how it handles really! And whehter it can do track days withoput overheating. Again - why they need to build a car like this to push the development envelope. Though the other side of me says... the nees of a commuter aren't really the same as a track day enthusiast. So why commit resources till you have the mass market sorted. I would love to see a Model S in the GT AM Class at Le Mans ;-) They'd come last, but who cares. Gotta start somewhere.

It might be fast but desirable? Supercars are plenty quick enough as they are and most/all are an emotional purchase. Something that sounds like a hairdryer is unlikely to "mop up" the market and the average supercar buyer couldn't give a flying fk about fuel consumption.