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