TSLA in trouble - Page 64 - Jaguar I-Pace EV400 Forum
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post #631 of 642 (permalink) Old 10-24-2019, 03:57 AM
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Riddle me this. If the Model 3 has so many issues, why did they just sell 44,000 this past quarter in the US after selling 45,000 in the previous quarter? Surely the buyers would have wised up by now and shunned the POS.

Did it ever cross your mind that when a model of car is outselling the one you own (which is not without its flaws) by almost 100:1 that there are going to be more issues reported in car forums for that model? If they are equally flawed/unreliable wouldn't you expect to hear about 100 times more problems for the one that is selling 100 times more units?
People buy tons of ****. Look at McDonalds. Billions served that drivel.
It's not like the Model 3 is the best selling car out there. It's selling well, though:
2019 US Vehicle Sales Figures By Model | GCBC

By your "logic" the Dodge Grand Caravan is not a POS. Well, I've driven one. It is. Kia Soul? POS. Tons of POS cars outsell the I-Pace and Model 3. Sales numbers haven't got jack to do with build quality, and every time I step into the Tesla forum, I see examples of horrible build quality.

And people wise up? If that were the case, Trump wouldn't have a single supporter anymore.

I've strongly considered a Model 3, but there are so many electrics coming, it's hard to commit. The lease rates are crappy. I'd rather keep what I have or maybe find some super-cheap 2 year lease. Or maybe get that Fiat 500e.
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post #632 of 642 (permalink) Old 10-24-2019, 09:50 AM
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@dennis : if this is true then its good news, but that is from their press release, let’s look at the detailed numbers when available, here is a quick take of that part. Also if “growth” is the big story they went down. I believe this was a smoke and mirrors game, and it will help the stock in the short term. And this kind of gaming numbers is one of many reasons I don’t trust Tesla as a company/investment.

“Tesla was able to swing a GAAP profit for three reasons. First, the total cost of revenues came down by $317 million sequentially, and it will be interesting to see if the 10-Q filing sheds any more reasons than just the usual cost improvements cited in the investor letter. The second reason was that zero restructuring charges were taken, which boosted the bottom line by $117 million sequentially. Finally, other one-time items in the "other income" line swung in a positive direction by $126 million.

Adding those last two plus the increase in regulatory credits helped the bottom line by $266 million over Q2's large loss, and that doesn't even factor in the Smart Summon revenue. It was a bit curious to see the cost of goods sold drop so much in the period when Tesla outsold its vehicle production, and yet, inventory on the balance sheet rose by nearly $200 million. Did Tesla sell a lot of product that was previously written down, thus substantially boosting margins in the period? If that was the case, it would explain all of the extra charges taken in prior periods. That would certainly help deliver a big surprise quarter like this.”
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post #633 of 642 (permalink) Old 10-24-2019, 02:20 PM
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@dennis : if this is true then its good news, but that is from their press release, let’s look at the detailed numbers when available, here is a quick take of that part. Also if “growth” is the big story they went down. I believe this was a smoke and mirrors game, and it will help the stock in the short term. And this kind of gaming numbers is one of many reasons I don’t trust Tesla as a company/investment.

“Tesla was able to swing a GAAP profit for three reasons. First, the total cost of revenues came down by $317 million sequentially, and it will be interesting to see if the 10-Q filing sheds any more reasons than just the usual cost improvements cited in the investor letter. The second reason was that zero restructuring charges were taken, which boosted the bottom line by $117 million sequentially. Finally, other one-time items in the "other income" line swung in a positive direction by $126 million.

Adding those last two plus the increase in regulatory credits helped the bottom line by $266 million over Q2's large loss, and that doesn't even factor in the Smart Summon revenue. It was a bit curious to see the cost of goods sold drop so much in the period when Tesla outsold its vehicle production, and yet, inventory on the balance sheet rose by nearly $200 million. Did Tesla sell a lot of product that was previously written down, thus substantially boosting margins in the period? If that was the case, it would explain all of the extra charges taken in prior periods. That would certainly help deliver a big surprise quarter like this.”
The attribution for those quotes is 28 year old Bill Maurer, who has a finance degree but has never had a full time job in finance. He earns his living getting paid for clicks on Seeking Alpha. I don't consider him a credible source for analysis of Tesla's financials since much of what he writes is negative speculation not based in facts.

Restructuring charges are taken when you find ways to take cost out of the business by reducing headcount and/or closing facilities. Tesla undertook significant restructuring activities in Q1 and Q2 in the former Solar City unit and in automotive sales. Because of that they have been able to reduce SG&A expenses by $134M/quarter vs. a year ago, which is very positive. There were no restructuring charges taken in Q3 because there was no further restructuring.

Tesla had very little inventory left at the end of Q2 so the idea that they were holding written down inventory for later sale is just plain wrong. What did happen is that in Q2, after they introduced the new Raven motor and suspension in S/X they heavily discounted the existing inventory and sold it off. That is one of the reasons that gross margins improved in Q3 since the new version didn't need to be discounted. The other is that they continue to ramp volumes on Model 3 resulting in lower parts costs, better fixed costs absorption and labor efficiencies. The improvements in gross margin are real, not manufactured.

Tesla's stated that their finished goods inventory was at the lowest point ever (see the document I linked). So why did inventory go up? Two reasons: they are ramping volumes so they need more parts and the supply chain for the China factory is longer because all the parts that are sourced in the US have to be sent via container ship. Since they are ramping manufacturing in China this quarter that pipeline needed to be filled.

As for the growth story, it is intact but you have to accept the fact that it is lumpy. In 3Q17, before the Model 3 sales ramp, Tesla had $3.0B in revenue. In 3Q19 they had $6.3B in revenue, an increase of 110%. That is a CAGR of 45%.

The next increment of lumpy growth will occur in 2020. The first element is the additional sales of lower priced (and lower cost) Model 3's produced at GF3 in China. The second element is the delivery and production ramp of Model Y, which is now expected in the summer of 2020.
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post #634 of 642 (permalink) Old 10-24-2019, 03:09 PM
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@dennis : I'll reserve judgment until the 10-Q form is filed. There has been a couple of occasions where the "details" were kind of buried until that finding. Again trust is something that has to be there, and with Tesla and Musk that is not the case for a lot of people. Including yet another declaration that self driving will be here by end of THIS year.
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post #635 of 642 (permalink) Old 10-25-2019, 12:08 AM
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@dennis : I'll reserve judgment until the 10-Q form is filed. There has been a couple of occasions where the "details" were kind of buried until that finding. Again trust is something that has to be there, and with Tesla and Musk that is not the case for a lot of people. Including yet another declaration that self driving will be here by end of THIS year.
To be clear, what Elon said about FSD (from the transcript) was:
Quote:
So, it's not for sure, but it appears to be on track for at least an early access release of a fully functional Full Self-Driving by the end of this year.
Early Access is Tesla's designation for a select set of invited customers who test early versions of new software releases. They provide feedback to Tesla and must sign a non-disclosure agreement.Smart Summon was in Early Access release 4-6 months before it was released to regular customers.

While no one believes Elon about FSD, as a reminder a year ago Elon said that Tesla planned to produce Model 3's at a factory in China in 4Q19. Everyone laughed about the mud field that was GF3 in January 2019. And now 9 months later we see photos of a completed and fully outfitted factory with the first article having rolled off the line. So step back and think of the ramifications if Tesla cars are operating autonomously in 2020 even with a very limited set of customers.
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post #636 of 642 (permalink) Old 10-25-2019, 08:49 AM
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Anyone who agrees to be an early tester for Tesla’s self driving is an f-ing idiot. If you are letting your pre-alpha version software drive your car and it hit or kills someone? That’s on you. You’re trusting everything you have to Elon’s software development and QA. And you can bet your arse that Tesla’s EULA will in no uncertain terms put all liability on the driver. Good luck with that.
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post #637 of 642 (permalink) Old 10-25-2019, 09:25 AM
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@Jtdavi3 : that is one of my biggest red flags/concerns about this whole thing. There is a basic “human” test that is failing over and over with Tesla and true believers are just closing their eyes and going “la la la la.” If I send alpha versions of my VR game out and it crashes people get pissed off. But to think the same idea CAN and SHOULD apply to a large piece of metal in the physical world is beyond comprehension. I asked the question where is the line drawn and you can see it simply gets ignored. At least there is good data being collected while large chunks of metal are out there “self driving.”
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post #638 of 642 (permalink) Old 10-25-2019, 07:36 PM
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Originally Posted by Jtdavi3 View Post
Anyone who agrees to be an early tester for Tesla’s self driving is an f-ing idiot. If you are letting your pre-alpha version software drive your car and it hit or kills someone? That’s on you. You’re trusting everything you have to Elon’s software development and QA. And you can bet your arse that Tesla’s EULA will in no uncertain terms put all liability on the driver. Good luck with that.
Elon made it clear in the discussion on the conference call that until both Tesla and regulators agree that FSD features can be used without driver supervision the driver is responsible for monitoring what is happening and taking over if necessary. This is exactly the same as what is currently required for Autopilot (and ADAS's from other manufacturers).
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post #639 of 642 (permalink) Old 10-27-2019, 06:39 PM
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Originally Posted by jsimon7777 View Post
Get a car. It has major production flaws. Return it and roll the dice again. Get a car. It has production flaws. Return and order again. Hope to get a good one without paint issues, body damage, or misaligned panels.
I've read on other forums that Tesla routinely blacklists people who exercise the return policy, preventing them from ordering another Tesla for at least one year.
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post #640 of 642 (permalink) Old 10-27-2019, 06:57 PM
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I've read on other forums that Tesla routinely blacklists people who exercise the return policy, preventing them from ordering another Tesla for at least one year.
Nothing new about that. Even Target has a black list for the returnaholics.
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