Re:Master Plan, Part Deux
by dragontamer on Thursday July 21, 2016 @07:10PM
(#12140689)
I'm combating the "aggressive expansion" meme that people don't understand.
Tesla could stop ALL R&D they're doing and they will still be an unprofitable company.
You specifically referenced a line from the post you are replying to as such:
> > They make a net profit on their cars, but they are currently investing it all into aggressive expansion
> Citation needed.
The citation is right in the statement. They make a gross profit, which means they make a profit on their cars. The in turn spend more on activities that do not involve getting cars to customers. The activities that cause the company to have a net loss are not "cost of revenue" activities. Presumably the majority of that non-revenue expense involves expansion of the company.
I agree with, basically Musk is hoping that investors won't lose confidence in the company for several more years.
However, this model has so far proven worked with Amazon and a few others and I think there is enough shareholders willing to keep the stock that long.
Tesla takes in more revenue than their cars cost to build. It currently is not enough to cover all the other expenses of the company.