Have a read of this again:
This is an actual finance guy explaining the world to you. Listen to him. You come across like a 30 year old college student who's on his third arts degree and has never held a real job. Mixed with Karl Pilkington.

EBIDTA makes no sense for capital intensive businesses, of which cars are one of the worst. A vast amount of money gets spent designing and tooling for production of just that car, is not reusable, and has a finite life and production volume, and hence it makes no sense to talk about the profitability without accounting for that direct cost.

Yet you want to, and in fact think EBITDA is the best way to measure profitability per product in an ultra capital consuming business, because you haven't go a single clue what you're talking about.

You keep on digging. Just stop!

If you were to read your own posts one after another, you would understand what I have laid out in plain and simple terms.

What are the differences in the production lines? Seems like the differences would be subtle and require pretty minor adjustments.

How do other large companies depreciate these types of capital investments? I would guess (as an admitted layman) that the bulk of the investment would be economically useful for a very long time.

Why does it seem like that? I guess the layman utter ignorance of manufacturing is part of the reason people are bullish on Tesla.

The M3 batteries and packs bear almost no relation to the Model S & X battery pack. They have next to nothing in common in terms of manufacturing.

The Model S/X use pre-made 18650 cells, a standard battery that has been around for a long time and is made on deprecated capital. The M3 uses a new type of cell, and the packs are put together different. Here's a good read about the huge challenges they're having putting these packs together. Musk says this on the conference call:

By the way, the last is stone cold proof that Musk has committed stock fraud and was flat out lying when he doubled and tripled down on his production target of 5000/week by the end of 2017. These targets, even a fraction of these targets, would have been known to be impossible since September at least.

Anyway clearly, having to design an entirely new battery production cycle and ****ing it up badly at every single stage in the process shows that no, the differences aren't "subtle" and don't "just require minor adjustments". Read the article linked above about the problems at the factory.
No, not at all. A new model of car cost $1 billion - $6 billion for established car makers to merely design - just design - using existing knowhow, tools, software, parts suppliers (who do their own vast capital expenditure not included in the above figure), etc. It's a very expensive process and that money is flushed down the toilet if the car doesn't succeed. The majors properly count that design cost as part of the cost of production; Tesla is the only car maker who doesn't, to dishonesty make gross margins seem good and distract people away from their actual profit line, which is horribly in the red.
The Model S & X were obviously not profitable and they lost a large amount of money per car when you include the cost of designing these cars - a cost that isn't transferring at all to the M3 and never will. Which was my only point. Spurious is such a deranged fanboy he spent a page tarding up this thread trying to argue against facts.

Depreciation and proper accounting takes care of this large cost (which is one reason that EBITDA is worthless for highly capital intensive industries). Tesla does accounting fudges as well on a large scale (the SEC pulled them up on some of it). Basically, Tesla accounts for costs very different to other auto makers, as well as revenue.

To give you one example: Unlike all other auto makers, Tesla doesn't include R&D costs in their gross margins. So the cost to develop the battery packs and lines for Model S/X, which isn't at all transferable to the M3 as you can see by their massive failures, different cell and pack design and years long problems, isn't counted as Model S/X development cost.

To give you another example: When majors sell the car wholesale, they book that as revenue, not the retail price. When Tesla sell a car, they book the entire retail sale price as revenue, and charge the cost of operating the sales and service centers, which are large, to a different accounting line. So it looks like their margins are positive, but when you add up the entire cost of building and selling and servicing a car that's non-recoverable and non-reusable, they lose a fortune per car. Why do you think they were losing a fortune per quarter, long before the Model 3 capex started burning meaningful cash, if they had 30% gross margins? Answer: they didn't - it's all an accounting fraud used to distract people.

Hope that helps.

lol all their finance executives keep quitting and they won't let anyone talk to their cfo

this is fine

Also, just to follow up for Abba on accounting, so you can see for yourself. Note how Tesla account for R&D and SGA lines. Note the truly massive losses before capex. These are astonishing numbers for someone selling 5% of Ford's volume, no?

Tesla:


Ford:


Note that complete absence of R&D in Ford's accounting - zilch, nada, not a dollar, despite spending billions on autonomous driving research, battery research, new production methods, etc. They are properly accounted as costs of revenue, because that's what they are - these continuous costs are needed to keep selling cars. Note also "selling general and administrative" for 50x as many cars is only 4.5x larger.

Tesla accounts for these costs differently in order to keep gross margins looking great (they are horrible) and keep people like Spurious thinking they're actually making a profit rather than massive losses per car.

Do you not think there're any costs associated with R&D that're non-recurring / attributable to the learning curve of a company that's new to the industry that could reasonably be filed as operating expenses? It's possible (from reading those documents) they're also appropriately filing aspects of R&D costs in cost of revenue.

Gaap specifically states that when no guidance exists a company should revert to industry standard. The fact tesla doesn't on the RD as COGS is so amazing, but no where near as amazing as how many people put their money in this without understanding these basic things. The rd cap and the 10% boost in price from no dealerships BY ITSELF would likely make margin negative, forget ebitda, gross margin would be negative.

GAAP and IFRS both default to expensing R&D right away. Auto companies also report R&D separately although they include it in gross margin calculations. In fact, one could argue having R&D as a separate line is appropriate for Tesla because so much of its R&D is not actually tied to anything being sold any time soon.

The whole thing is kind of asinine. If Tesla reaches anything close to their projected scale their gross margins would be pretty much in line with luxury automakers like Porsche.

No, one could not argue that. Everything they do is tied to imminent production. What R&D expenses do they have that aren't core components of their immediately-selling cars? Software = in their current model. Autonomous driving = in their current model. Battery packs and supply = in their current model. Tesla don't have any money to do non-immediate R&D. It is far more appropriate for say, Toyota, to expense R&D separately, as they do actual R&D - new battery tech, hydrogen fuel cells. Yet even Toyota don't do that. Tesla does, violating industry standards. Why? It is less appropriate for them do it than any other car maker according to your own rationale.

This whole conversation started because I explained why it would be stupid for other carmakers to compete on the Model S/X, as it's money flushed down the toilet for absolutely zero gain, as batteries weren't ready for commercial viability and there was no research benefit or first mover advantage worth having in doing so. And Tesla lost a fortune per car bringing performance electric sports car to market far too early. Spurious asininely objected to that, even though it's a true statement, because it gets in the way of him cult-idolizing Musk. <shrugs>

As for comparisons with Porsche, lol. Porsche delivered $4 billion in profit per year on 230K cars. Musk delivered $1.9 billion in losses on 100K cars, despite having a monopoly on a great and unique user experience (performance electric drives). Scale is not the issue here, man.

And further, it is not a given, as you assume, that if Tesla scales up a lot it will reach good gross margins or profitability. The auto industry has thin margins built on vast and complex supply chains and zero error tolerance, where small failures or oversights can cost tens of billions or recessions can sink a company. There is no indication that Musk can scale and a ton of indications he can't - horrible management, horrible delegation (look at the battery debacle for M3), a cowboy attitude to testing and safety, etc. With his current competence level Tesla is dead at 20x the volume.

whats the make of the uber that mowed down a cyclist?

Aren't they cooperating with Volvo?

regardless of who it was, they're WAY AHEAD of Tesla (in killing pedestrians)

I like that you have to qualify pedestrians, and can't say people, yet somehow still probably fist pump at how clever you are

FIST PUMP

cyclist is different than a pedestrian. and that actually matters

yeah pedestrian is much worse imo. And that's what I've seen reported, haven't seen cyclist anywhere

pedestrian is worse. im also seeing mixed reports

This report implies she was a pedestrian wheeling a bike:

https://www.reuters.com/article/us-a...-idUSKBN1GV296

Chessmate

From articles sounding like the collision wasn’t avoidable by the car.

But mentions the car was going 38 in a 35, I thought the whole point of self driving cars is they never break the law??? Why the hell would they program them to speed?


https://fortune.com/2018/03/19/uber-...ing-car-crash/

They programmed driverless cars like that for a while, basically driving like a little old lady. But it drove passengers crazy and was probably less safe to go exactly the speed limit on roads where everyone sped. So they started driving more like everyone else on the road.

Seems like knowingly making your product break the law is just blatantly increasing liability when bad stuff happens?

The whole thing is fake news. She stepped right into traffic.

I'm guessing it was a bright day and she was wearing white, nothing u can do about that