Tesla Model 3 = 24% of Small and Midsize Luxury Car Sales in USA

Re:Tesla Model 3 = 24% of Small and Midsize Luxury Car Sales... by electriclove on Monday October 07, 2019 @11:57AM (#21182393)

Tesla is focused on growth (and not profit) at this time. So the stock has that pressure on it. Tesla is worth about the same amount as GM and GM sold almost 10 million vehicles in 2017. It isn't so simple though and a crude analogy could be made for Amazon and Walmart 20 years ago.

I don't think profit will be the focus for a while as they keep investing in new tech, new factories, new product lines. All of those things will increase the potential for Tesla and its stock.

Back seat quarterbacking.. but they might want to strategically focus a little bit on profit though (show profit -> get added to S&P 500 -> more stable stock price).

[ Parent | on HN ]

Re:Tesla Model 3 = 24% of Small and Midsize Luxury Car Sales... by dragontamer on Monday October 07, 2019 @01:29PM (#21183557)

You are mistaken. Growth / Capital Expenditures count as $0 on the income sheets.

Pay for a $5 Billion factory, and it cost you $0 in terms of profit.

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A $5 Billion factory will cause $5 Billion of negative CASH FLOW. But it won't actually change "net profit" at all. Tesla is losing money at the operational level: their superchargers and high-end mall space is too expensive, and their margins are too thin.

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On the asset sheets, consider what happens when you pay for a $5 Billion factory. You lose $5 Billion in cash, but you GAIN a $5 Billion factory. So +$5Billion factory - $5 Billion cash == $0 on the bottom line.

[ Parent | on HN ]