Elon Musk's Tesla announces biggest quarterly loss ever

Discussion in 'Politics, Religion, Social Issues' started by AutoUnion39, Feb 8, 2018.

  1. AutoUnion39 macrumors 601

    AutoUnion39

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    #1
    https://www.theguardian.com/technology/2018/feb/07/tesla-quarterly-loss-elon-musk-spacex

    Loss of $675.4m announced day after Musk’s car sent into space in test of SpaceX rocket

    [​IMG]
     
  2. Dmunjal macrumors 65816

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    #2
    And yet they forecast being profitable later this year as Model 3 ramps up to 5K a week.
     
  3. Solomani macrumors 68040

    Solomani

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    #3
    This is some hot serving of karma.

    Wozniak must be smiling at this news.
     
  4. Dmunjal macrumors 65816

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    #4
    How so? The loss was LESS than expected by analysts. They are spending a lot of money building out infrastructure to scale to 5K a week. The revenues and profits will come when they get there. Very typical of a high capital intensive business like auto manufacturing.
     
  5. AutoUnion39 thread starter macrumors 601

    AutoUnion39

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    #5
    You mean the same ramp-up that's months behind schedule?

    The original figures (from Tesla) said they'd be making 5k a week by 4Q2017 and 10k a week in 2018.

    Current production rate? Under 2,500/week

    http://www.latimes.com/business/autos/la-fi-hy-tesla-earnings-20180207-story.html

     
  6. Dmunjal macrumors 65816

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    #6
    Yes, it is months behind schedule. In the grand scheme of things, it won't matter whether they get to 5K a week in Q1 or Q3.
     
  7. juanm macrumors 68000

    juanm

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    #7
    It will matter, however that other makers are six YEARS behind in bringing a comparable car, and haven’t even started building any modern charging infrastructure.
     
  8. Mac'nCheese Suspended

    Mac'nCheese

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    #8
  9. A.Goldberg macrumors 68020

    A.Goldberg

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    #9
    I don’t quite understand what the problem is here. They can build tens of thousands of Model S and X, they can launch the world’s biggest rocket and vertically land boosters, but when it comes to the Model 3 it’s like it’s like alien technilogy. Apparently rocket science is easier than automotive production these days.

    They haven’t exactly been transparent with what’s holding them back- what Tesla officially says and Tesla employees unofficially say are two diffferent stories.

    Personally I think Musk’s over ambitions, over projections, and over hyping will ultimately cause problems with investors. The corporate fed fanfare is over the top, even down to the smallest of things- I mean yesterday they’re raving about how the Tesla Roadster will be orbiting in space for a “billion years”, creating this iconic image of a Tesla floating in space for eternity, when in reality between space debris and unsheilded radiation it will be shredded to bits within a year or so- creating yet another constellation of space junk. But I suppose there is truth that a (pulverized) Tesla Roadster will be orbiting in space for centuries to come.
     
  10. Dmunjal macrumors 65816

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    #10
    I think the difference with the Model 3 is that they're creating systems and processes to scale to 10K a week next year. That's a huge upgrade from 2K a week for both S and X. It's a much bigger problem to solve, even with a simpler car. They are at 1K a week now.

    I got my Model 3 last month and it's an amazing car. Most owners will love it.
     
  11. takao macrumors 68040

    takao

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    #11
    In Q4 they delivered around 1500 model 3... in total.

    So “under 2500 per week” is quite an understatement.
     
  12. Dmunjal macrumors 65816

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    #12
    If you read the Tesla boards, VINs are already above 6000 in the wild. They are ramping up significantly. 2500 a week by end of March. 5000 a week by end of June.
     
  13. juanm macrumors 68000

    juanm

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    #13
    Why would it be shredded to bits? Collisions are extremely rare. Some things (plastics, fabric?) will deteriorate quicker than others, but others won’t.
     
  14. takao macrumors 68040

    takao

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    #14
    Those are the targets they want to reach according to their press release.

    You know just like VW plans to invest 50 billion over the next 5 years in new vehicles.

    Take such stuff with a grain of salt.


    Tesla not using experienced 3party car builders for the first production start and phasing in their own production over time is a serious business blunder.

    On automotive production vs rocket science: I can give some examples:
    The amount of suppliers required for a car ? 500+... and suppliers don’t have 1 production plant but might have dozens each. If you add those it might add up to 5000+ Supplier locations for a whole car company.... just for the parts!
    For every single car the parts of those 500 suppliers have to arrive,not only just in time, but might have to arrive just in sequence correctly ordered.

    Those parts are delivered in transport boxes and handling units which sometimes are standardized and most of the time owned by car companies.

    On every transfer the informations about those containers are exchanged.

    A car manufacturer might have to handle 50.000 per day... not containers but just data transfers about container boxes from suppliers to manufacturer. Which means it might have to handle a few hundred thousands reusable boxes per day.
    And of course the suppliers need replacement boxes depending on orders coming up. And of course keep all those boxes separated. Every car manufacturer uses their own.

    And so far we aren’t even talked about local logistics or even production.
     
  15. vrDrew macrumors 65816

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    #16
    The problem(s) is this:

    Hardware is hard. It is very, very difficult to get the million-and-one engineering, purchasing, machining, scheduling, etc. details rights when building a car for consumers.

    In automotive engineering, entry-level engineers will spend literally months of work getting details like a door handle or the nap on seat fabrics just right. And then its got to be passed on to purchasing or manufacturing to see if the *fantastic* part they've just designed can actually be made.

    Musk made his (first) fortune with PayPal. Where, truth be told, it was relatively easy to come up with a disruptive business model. It used to be unbelievably expensive and complicated to send money to other people safely. An opportunity for disruption using computer technology.

    It's not so simple to build automobiles. There really aren't that many opportunities for disruption. Musk thinks that replacing traditional internal combustion engines and transmissions is ripe for disruption. But its a bit more tricky than that. There are intractable physical problems to be overcome - current battery tech. (even lithion ion) can only pack so much energy into each kilogram of mass. And it's expensive. And then he faces the same engineering/production cost curves as every other car maker out there.

    Musk is facing the same challenge with his Boring Company project. But the truth is, tunnel-boring machines are not the main cost-driver in underground railroad projects. Its things like environmental impact studies, and labor union rules. It's zoning and building stations, getting waivers, and eminent-domain lawsuits. That's what makes underground subway projects so expensive. Not the cost of buying a tunneling machine.

    I give people like Musk a huge amount of credit for the effort and money they've put forth. But I am convinced that many of modern life's most intractable problems are not so easy to solve. Not intractable. But not easy, or cheap, to solve.
     
  16. s2mikey macrumors 68020

    s2mikey

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    #17
    Junk cars and a talentless figure-head running the joint. What did you expect? Let it die. Its already been propped up by taxpayers as it is. Barf.
     
  17. rafark macrumors 6502a

    rafark

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  18. Dmunjal macrumors 65816

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    #19
    Have you ever driven one of these junk cars?
     
  19. A.Goldberg, Feb 8, 2018
    Last edited: Feb 8, 2018

    A.Goldberg macrumors 68020

    A.Goldberg

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    #20
    Things like satillites are generally designed or placed in a specific orbit to avoid collisions with space junk.

    The Tesla has no propulsion or sensors to avoid collision, traveling in a more open orbit. Considering space debris can travel up to 17,000mph small objects will cause significant damage. If the Tesla is lucky enough to avoid collisions, the intense radiation will rapidly degrade the carbon bonds in the leather, fabrics, paints, most glues, rubber, plastics, including the carbon fiber body... basically anything made from carbon with fall apart. The glass has plastics in it that will discolor. That leaves the frame and the wheels with the unglued windsheild floating off somewhere. Nice.

    Many of materials used probably aren’t well equipped to survived the extreme temperatures of space either.
     
  20. mac_in_tosh, Feb 8, 2018
    Last edited: Feb 8, 2018

    mac_in_tosh macrumors 6502

    mac_in_tosh

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    #21
    I admittedly don't know much about Tesla or Musk, but I remember when Amazon started up and kept losing money year after year that Bezos had a lot of doubters too.
     
  21. Zenithal macrumors 604

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    #22
    Amazon has a history of investing nearly all its profit back into itself. Corporate employees get used doors as desks. I don't believe they even give their employees MBPs like the other big tech companies do. Today, Amazon has grown into a behemoth company that's diversified.

    Problem with Tesla is that you're just paying for the battery and tech behind the car. Not the quality of the vehicle. People love to say that Tesla is only a new company and can't be compared to giants that have been around in one form or another. Though is it fair to consumers to have to deal with such poorly built cars? Especially after spending that kind of money? Tesla has only just recently fixed the gap and quality issues that arose during the first four years of Model S production.
     
  22. Falhófnir macrumors 68040

    Falhófnir

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    #23
    Ramping up production of cars with misaligned body plates that then presumably have to be amended at manufacturer cost, scrapped and refunded, or are certain to make the customer swear off the brand for life seems like a pretty dubious business model in itself :confused:
     
  23. rjohnstone macrumors 68040

    rjohnstone

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    PHX, AZ.
    #24
    Tesla paid back their government loan years in advance. Tax payers are not funding any of it.

    And if you want to claim the tax credits are helping them, every automaker that makes an EV is using those.
    And it's actually the buyer that gets the credit, not the manufacturer.

    Both Tesla and GM are expected to reach their allotment of credits this year at which point the phase out period starts.

    https://www.nytimes.com/2018/01/11/business/electric-vehicles-taxes-tesla-gm.html
     
  24. Zenithal macrumors 604

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    Sep 10, 2009
    #25
    That's not quite the problem. Tesla is still using a lot of human oversight in panel production whereas every other company has moved onto robotics. Mind you, this is also the company that charged a premium for rain sensing wipers and took years to deliver the firmware. Why? They did it different than other manufacturers because they wanted to be different. Which explains a lot of their manufacturing woes. They did release the firmware for it earlier this year, but it's still in beta. Meanwhile cars equipped with rain sensing wipers just work and have worked.
     

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