I've been on holiday in Italy, just flew back into the UK yesterday and only got back to the apartment, where I work from, today.
So I'm a bit slow to this thread.
OK so, from my viewpoint.
Why is it important to show that Tesla is selling more revenue than any other manufacturer in the US?
Well, let me see, because people keep on pointing to Tesla cash flow and saying that it's going to go bust. OK, so Revenue is vitally important, not sheer volume of cars. Because Tesla has to get over the hump of all that money invested to get the company going.
So, let me see. The vast rise in Tesla revenues began when Tesla started selling Model 3 cars in volume. Because the Model 3 is by far the largest revenue earner, it's important to know how this affects cash flow. Because it is of no use having $10bn in revenue if it costs $12bn to manufacture them.
So, what is the
cost of a Tesla Model 3, to manufacture, as shipped today for ~$55,000?
The engineers estimate a total of $28,000 in costs to build the Model 3: $18,000 for materials and $10,000 for labor and production
Right, so there is some $27,000 difference between the average sale price of the Model 3 being manufactured today and the cost of manufacturing. The guys who tore this car apart are from the vehicle manufacturing business so if they don't know then nobody does.
Let us assume that the loss making parts of Tesla consume half of that money. That leaves us with $13,500 in profit for every vehicle. That is 24% profit. SIGNIFICANTLY higher than any estimates so far from the "pundits".
Perhaps I'm being too unrealistic, let's say that it costs $18,000 to cover all the loss making parts of Tesla, per car. Now we're talking $9,000 and that is still 16% profit. Also significantly more than analysts are talking about.
Bloomberg estimates that 51,000 Model 3's have been manufactured in Q3 so far. If we take that $9,000 profit, that leads to $450m in profit. Less the costs of any additional equipment required to increase production and we know that Tesla will receive 3 new automation infrastructures, designed to get Tesla over the 6,000 per week hurdle, in the next few weeks. So let us take $100m off that. We're still talking some $300m in profit.
That is _NOT_ the sign of a company in decline or about to collapse. It is, however, a sign of a company rapidly approaching profitability and using that money to make themselves even more profitable, per unit, in the future.
There is a very LARGE difference between the marketing, sales pitch and financial structure, of a startup; than there is with a large and well established company. If anyone has any doubts about this, they should look at how much of a dividend Alphabet pays to its shareholders....
For some recognition of what Tesla has done, in comparison with other vehicle start up's, we might want to compare
Ford.
How many times did it take Ford to get his company going? Where exactly did Cadillac come from?
Even better you talk about Musk and how "bad" he is for what he does and says...
Henry Ford turned the presidency of Ford Motor Company over to his son Edsel Ford in December 1918. Henry retained final decision authority and sometimes reversed the decisions of his son. Ford started another company, Henry Ford and Son, and made a show of taking himself and his best employees to the new company; the goal was to scare the remaining holdout stockholders of the Ford Motor Company to sell their stakes to him before they lost most of their value. (He was determined to have full control over strategic decisions.) The ruse worked, and Ford and Edsel purchased all remaining stock from the other investors, thus giving the family sole ownership of the company
Such a nice guy, really, really, nice.
Nice people, the one's you want to marry your daughter, they go nowhere. Those who go places are, in business, armed with necks of solid titanium.
ON Unions.
Ford was adamantly against labor unions. He explained his views on unions in Chapter 18 of My Life and Work.[33] He thought they were too heavily influenced by some leaders who, despite their ostensible good motives, would end up doing more harm than good for workers
Ford also believed that union leaders had a perverse incentive to foment perpetual socio-economic crisis as a way to maintain their own power
Really? Never!
To forestall union activity, Ford promoted Harry Bennett, a former Navy boxer, to head the Service Department. Bennett employed various intimidation tactics to squash union organizing.[34] The most famous incident, on May 26, 1937, involved Bennett's security men beating with clubs members of the United Automobile Workers, including Walter Reuther.[35] While Bennett's men were beating the UAW representatives, the supervising police chief on the scene was Carl Brooks, an alumnus of Bennett’s Service Department, and [Brooks] "did not give orders to intervene."[36] The following day photographs of the injured UAW members appeared in newspapers, later becoming known as The Battle of the Overpass.
Such an excellent chap. Indeed. He also had issues with being Anti Semitic. Something which was actually acceptable at the time..
During this period, Ford emerged as "a respected spokesman for right-wing extremism and religious prejudice", reaching around 700,000 readers through his newspaper.[59] The 2010 documentary film Jews and Baseball: An American Love Story (written by Pulitzer Prize winner Ira Berkow) states that Ford wrote on May 22, 1920: "If fans wish to know the trouble with American baseball they have it in three words—too much Jew."[60]
Then, of course, we have
Honda.
Another of the great car makers which started up in the same century. Note just how many times it took Honda to get going.
Back in the late 90's there were articles which were much less polished than the Wiki page of today and they told a very interesting story which has vanished in the great bit bucket of the internet. After WWII Japan still had a tradition allowing manufacturers to demand up front payment of a product which had not bee delivered. Of course in a culture like theirs, where Suicide was the alterative to actually delivering, this was not such a bad risk.
Had it not been for the ability to get up front payments, in full, for the motorcycles that Honda was manufacturing, Honda would never have been a company, it would have failed before it started.
So when we talk about Tesla and whether it is going to survive or fail, when we talk about how it is producing revenue and product and what the ratio's are, it is well to keep in mind that Tesla is a START UP and to compare apples with apples and not apples with a stainless steel orange.
