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Tesla sold 6,457 Model S sedans during the quarter, looks forward to sales of 35,000 for 2014

Tesla Motors may be a relatively young American automaker — at least compared to existing heavy hitters like General Motors and Ford — but it is steadily ramping up sales of its Model S all-electric sedan and expanding into new markets to help drive growth.
 
I. Q1 2014 performance sees non-GAAP net income of $17 million
 
Tesla released its Q1 2014 earnings reports yesterday and things are looking good for the company. Tesla managed to sell 6,457 Model S sedans during the quarter, which was slightly ahead of earlier company guidance. During the quarter, Tesla actually built 7,535 Model S sedans to pad the inventory in preparation for the vehicle’s Chinese launch (sales began in that country two weeks ago).
 
The forecast for Q2 2014 calls for production of 8,500 to 9,000 cars with deliveries of 7,500. For all of 2014, Tesla is expecting global delivery of 35,000 vehicles. The current production rate for Model S is nearly 700 vehicles per week, and by the end of the year, that number is expected to rise to 1,000 vehicles per week.


Tesla Model S
 
As for the financial side of things, Tesla reported non-GAAP revenue of $713 million, net income of $17 million, and gross margins of 25.4 percent. Research and developments (R&D) expenses rang in at $68 million.
 
On a GAAP basis, revenue was $621 million, the net loss was $50 million, gross margins were 25.3 percent, and R&D costs totaled $82 million.
 
R&D expenses on a non-GAAP basis were up 17 percent compared to the previous quarter thanks to the global expansion of the Model S and the engineering for the upcoming Model X crossover (which has recently been delayed again).
 
II. Tesla Motors looks to China for growth
 
Tesla Motors CEO Elon Musk is enthusiastically embracing the Chinese market, having just launched the Model S there last month. Musk described:
 
Each event enjoyed ample media coverage, complete with delighted Model S owners receiving their cars. Tesla received further media attention thanks to the Shanghai government’s announcement that Model S drivers in the city will be entitled to free license plates, thereby avoiding the usual public auction price of $10,000 to $15,000 per plate. Since Model S pricing in China was already very competitive, this makes the car’s value proposition even more compelling.
 
We plan to expand in China as fast as possible because we believe the country could be one of our largest markets within a few years. We are also encouraged by how fast we have been able to develop our infrastructure in China when the proper support is in place.
 
Infrastructure is a key concern in the Chinese market. While Tesla has plans to expand its growing Supercharger network in China, it currently only has three sites open in the country.


Tesla CEO Elon Musk during a recent visit to Beijing [Image Source: Julie Makinen/LA Times]
 
The Chinese government — like the U.S. government — is pushing automakers to embrace electric vehicles. This means not only investing millions into developing and producing EVs that are such a small percentage of the overall Chinese auto market, but also building out the infrastructure in the form of charging stations across the country.
 
According to a report from the China EV Blog, the overall Chinese auto market pushed 22 million vehicles in 2013. However, only 14,604 of those were EVs. While that number seems minuscule, Musk sees excellent growth potential as Chinese buyers warm up to EVs and the crucial infrastructure is in place to support the viability of owning an EV.
 
III. California wants in on Tesla’s Gigafactory
 
When it comes to Tesla’s much-ballyhooed Gigafactory — which will produce batteries for Tesla’s EVs and its sister company, SolarCity — four states were selected as potential sites for construction. New Mexico, Nevada, Arizona, and Texas were selected as finalists for the gigafactory, but the latter two seem unlikely to win the bid due to their auto sales laws that favor dealerships.
 
However, a new wrinkle has surfaced, and it’s coming from the state of California. California is looking to court businesses after its Toyota announced plans to pack up its headquarters and move to Texas (although some insiders have claimed that the move was due to high taxes and regulations, Toyota execs points to streamlined operations and economies of scale for moving to Texas)
 
While the state of California can do nothing to stop Toyota from leaving, Governor Jerry Brown is making a concerted effort to persuade Tesla — which currently has its HQ and production facilities based in California — to build the Gigafactory in the state.


California Governor Jerry Brown
 
"The administration is working every day to bring companies to California and help them grow here,” said a spokesman for California Governor Brown. “Tesla is certainly one of those companies."
 
Musk isn’t exactly sold on the offer; after all, there was a reason why California wasn’t a finalist for the Gigafactory in the first place. "We can't afford to wait a year or more for permits to proceed," said Musk on Wednesday. "If we don't have the gigafactory online when we have the vehicle capacity online we would be in deep trouble."
 
“But the question of timing is still a big one, and we need to make sure ongoing operational costs are not significantly worse than other states. California is in the improbable, but not impossible, category at this point.”
 
Interestingly enough, Tesla plans on breaking ground on its first Gigafactory site in June, and the second site a few months after. Yes, you heard that right; Tesla is planning to — at least initially — break ground on two separate sites. This costly move doesn’t mean that Tesla is actually going to build two Gigafactories, but it is hoping to further pit state and local governments against each other in an effort to score the largest incentives package possible.
 
"This is certainly a unique approach, and -- not in a negative way -- a very shrewd tactic as well,” said Alec Gutierrez, a senior analyst at Kelley Blue Book. "But my guess is they've done the math, and the concessions package they're expecting will more than offset those costs."

 
Looking forward, Tesla is expecting that the Gigafactory will allow it to produce roughly 500,000 EVs per year by 2020. However, by that time Tesla will be facing pressure in the EV space from a host of manufacturers (both mainstream and in the luxury space).
 
We’ve already seen companies like BMW and Mercedes-Benz show interest in all-electric vehicles, and the latter doesn’t see a bright future ahead for Tesla once traditional automakers start gearing up production.
 
“Tesla is great, but you’ve got plenty of well-established brands that mean luxury, like Porsche or Mercedes-Benz, and how long do you think we’re going to wait and let Tesla be out there alone [selling premium electric cars]?” said Mercedes-Benz U.S. head Steve Cannon last month. “So, good job, Tesla, but will they be able to maintain that with the others of us out in the market? That remains to be seen.” 

Sources: Tesla Q1 Results [PDF], China EV Blog, Fortune Tech, LA Times



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This article is over a month old, voting and posting comments is disabled

Yeah Right. Total BS IMO
By GotThumbs on 5/8/2014 10:01:20 AM , Rating: 5
quote:
"The administration is working every day to bring companies to California and help them grow here,”


Talk is cheap.

Higher tax rates in Cali say otherwise, but Brown wants you to overlook those facts.

This is a sign that Cali is realizing it's pushing businesses away and thus losing tax revenues. Big surprise? Only to Brown IMO.

Read Atlas Shrugged and then ask yourself
quote:
Who is John Galt?




RE: Yeah Right. Total BS IMO
By FITCamaro on 5/8/14, Rating: -1
RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 11:14:27 AM , Rating: 4
Actually, as I keep telling you Fit, CA is alot more republican than you think... It has been run by republicans a great deal of recent history. I will give you this, GRay Davis, the dem, did ALOT of damage in his short 4 years. Worst of the worst, but still, the state has been run by reps the dominat part of its modern history.

http://governors.library.ca.gov/

Reagen 67-75 - Republican
Brown 75-83 - Democrat
Deukmejian 83-91 - Republican
Wilson 91-99 - Republican
Davis 99-03 Democrat
Schwartzeneggar 03-11 - Republican

Sorry that facts mess up your rhetoric.


RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 11:16:25 AM , Rating: 2
I meant to add... CA is messed up becasue its govt structure is corrupt from the ground up with corporate allies and thier greedy little string pulling on both sodes of he aisle, it has nothing to do with " L's or R's"


RE: Yeah Right. Total BS IMO
By Reclaimer77 on 5/8/14, Rating: 0
RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 11:44:05 AM , Rating: 1
LOL... Well, ok. I will say this... Duke and Wilson are as right wing as it gets. The "hippie progressive commies" absolutely hated them. Anyhow there are alot of "R" in the state that keep electing R governors and R state reps. It's not a purely left state as you guys who have never been there seem to think.

Like I said, the state in in the shitter, not because of progressive policies or conservative ones for that matter, its because of selling out to corporations. Cal Trans paying absolutely insane amounts to it's corporate partners, and 100's of examples just like it. It s money pit, corrupt from the ground up. Any progrgessive law or conservative law that is enacted is enacted to pay the corporate coffers, not to drive the agendas for either side. It's just $$$.


RE: Yeah Right. Total BS IMO
By Reclaimer77 on 5/8/14, Rating: 0
RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 12:56:32 PM , Rating: 2
That isnt what I said... Corporations will do what they will get away with (as would I). Corrupt politicians are the problem, D's and R's L's and C's.


RE: Yeah Right. Total BS IMO
By Samus on 5/9/2014 1:18:53 AM , Rating: 2
Sacramento and San Diego are among the most conservative cities I've even been too. I used to live in San Diego and politically it's no different than Tucson or Phoenix.

Every liberal state has its conservative cities, and vice versa. Flagstaff, AZ is incredibly liberal while being in an incredibly conservative state. Then you have the Austin's of the world, an anomaly in Texas, and an amazing city.

I live in Chicago now, a very liberal city, but as soon as you go to practically ANY suburb (which as a whole, outnumber the inner-city Chicago population) and views are very conservative. I recently read that Fox News' largest viewer base per capita is Illinois.

Fox's largest news headquarters in the United States, WFLD, is located in Chicago, being the second most watched news program in the city.

Anyway...

Back to the point. The only incentive Tesla has to build the Gigafactory in Cali is port access\logistics especially for its Japanese partner, and the possible retrofit of existing developed and unutilized sites, such as how the current Tesla factory was built.

But realistically, every other state they chose are simply better for manufacturing than California. From ridiculous environmental emissions regulations (building batteries ain't "green") to the unbelievably high corporate tax, among the highest in the country, I'd never run a business there.


RE: Yeah Right. Total BS IMO
By FITCamaro on 5/8/2014 12:19:52 PM , Rating: 1
Yes there are a lot of Republicans in the state. But they are far overshadowed by liberals in the coastal cities. Pretty much all of the eastern part of the state is conservative. But they're largely ignored at the state level due to the massive population of the cities.


RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 12:59:20 PM , Rating: 2
Eastern? You have never set foot in CA have you? No, there are reps all over the place, even some in San Francisco.

Anyhow, like I said the problems in CA aren't "Left v.s Right", it's about the endless procession of corrupt politicians on both sides of the aisle... Exactly as it is at the federal level.


RE: Yeah Right. Total BS IMO
By Reclaimer77 on 5/8/2014 2:36:28 PM , Rating: 2
Says the guy who voted for Obama.

Just saying...


RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 3:02:59 PM , Rating: 2
Voted in 08, not 12. He proved he was just another politician exactly like the rest.

Right, how could I forget, everything wrong is all because of the "damn libral's". Lobbing endless grenades over the fence accomplishes nothing if you don't acknowledge the real issues.


RE: Yeah Right. Total BS IMO
By Reclaimer77 on 5/8/14, Rating: 0
RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 4:31:32 PM , Rating: 1
"If you cannot recognize the truly destructive policies of the Left, you seriously are not as intelligent as you claim to be. Others see it quite clearly."

Dont get me wrong, I am no fiscal liberal, I hate that shit... I do see it. I see exactly what you see. The nanny state, welfare abuse, govt. run healthcare, ridiculous nanny laws - the list goes on and on. It sickens me... What you don't seem to see is the destructive stuff the right does too and how they work together with the whole divide and conquer thing.


RE: Yeah Right. Total BS IMO
By Spuke on 5/8/2014 3:08:32 PM , Rating: 2
Retro, yes R's and D's are both to blame but even the R's here are progressive as they vote pretty much in lock step with the D's. I also disagree that political idealism has little to do with the corruption in state government here. That's the driving force behind the corruption IMO (look at the outcomes).


RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 3:37:17 PM , Rating: 2
I know whats going on there, I grew up and spent most of my life there. I know enough to have gotten the hell out 10 years ago though. The place had gone way the hell downhill already by then...

Anyhow as far as the different ideologies, I just don't buy into the BS about this side vs. that. This country is roughly split 50/50. Both sides have had power and both sides have states where they are in complete power and both sides have proven to be completely inept and corrupt. It's not Dems vs reps, or libs vs. cons or right vs. left. Its ALL of them that are screwing us. Masterfully laughing at the "divide and conquer" mentality they manifested and continue to nurture. They keep us bickering and blaming while they all together rob us blind.


RE: Yeah Right. Total BS IMO
By Reclaimer77 on 5/8/2014 4:33:42 PM , Rating: 1
quote:
I know whats going on there, I grew up and spent most of my life there.


No offense but that doesn't qualify you as an expert on all things wrong with California. Were you IN the Government or something? A State Senator?

They don't call it the Peoples Republic of Commiefornia because it's known for being "right wing".

It's a big mess created by Liberals. You know it, and I know it.


RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 4:51:37 PM , Rating: 2
Yes yes, its ALL the left. Everything always. You lob grenades over the fence, the left wingers lob them back and none of you get anywhere.


RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 4:59:12 PM , Rating: 1
"No offense but that doesn't qualify you as an expert on all things wrong with California. Were you IN the Government or something? A State Senator?"

No, but having spent 30 years there I do know it is not some crazy den of hippies like you and Fitcamaro always make it out to be. Most everyone there are just normal hard working people that (and I know you will be amazed by this) dont eat their babies... They go to work, raise their kids and live their lives. There is a huge amount of industry, not to mention agriculture, small business and everything else that humans do in between. CA is a powerhouse moneymaker for the USA and if it were to succeed from the union would be the 6th richest nation on Earth.

To you two clowns, having never been there outside of maybe a vacation when you were young and knowing nothing about it at all (which is obvious by your comments) belittling things you know nothing about is tiresome. You know who is footing the bill for your red welfare states? IT's those damn hippies.


RE: Yeah Right. Total BS IMO
By Reclaimer77 on 5/8/2014 7:01:02 PM , Rating: 2
quote:
I do know it is not some crazy den of hippies like you and Fitcamaro always make it out to be.


Wait, what?

quote:
You know who is footing the bill for your red welfare states? IT's those damn hippies.
'

Wow now you're getting your talking points DIRECTLY from Liberals. And you voted for Obama...

Yeah once again, another person sympathetic to the Leftist cause trots out their "both sides are the same" in order to mask the utter failure of the Liberal agenda and the destruction wrought on our nation.

When the whole country is bankrupt in a few years, try using that "Red State" nonsense and see how well received it is.


RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 9:04:45 PM , Rating: 2
Lol... you do realize I said that red state comment to make a point. I don't actually think like that. My point was California as a state contributes a lot, more than any other state. Its economy is huge and it is a big business state heavy with industry. Its not just full of hippies and surfers and freaks that like Pelosi. it's a huge dynamic state filled with all walks of life and all the extremes to both ends. its funny anytime anyone in the middle tries to point how extremely right you are you accuse them of being liberal, and to you that is a true insult. Dude to you Ronald Reagan must be too liberal because look at his record deficits at the time. No sorry, I am NOT liberal. I am independent. I have a lot of liberals social views other than I am pro gun and pro death penalty, and fact I am for a dramatic expansion of the death penalty. I voted for Obama in 2008, so did 57% of the voting public. I honestly thought he would be different and I was obviously wrong and I have admitted that a thousand times... I did not vote for in 2012 because by that time it was obvious he was a piece of crap like every other politicians in Washington.

but you my friend could really benefit from taking off the "us versus them" glasses and realize that both us and them is all the same public being screwed over by the same people. Everything wrong in this country is not caused by the extreme left. what is wrong with this country is the people running it have the dull masses convinced that it's us versus them and left vs right while they are collectively robbing us blind and blowing our vast wealth


RE: Yeah Right. Total BS IMO
By Spuke on 5/8/2014 5:46:22 PM , Rating: 3
I don't think I'm being clear here. They are BOTH to blame but the ideology behind their motivations in California's case IS decidedly left wing. There is nothing conservative about how this state goes about its business. On the Fed level is a different story. IMO that is just pure power corrupts at that level. They really don't care about ideology. IMO, they pretend they have an ideology but they BOTH act EXACTLY the same. That's not CA's case at all, the state gov IS decidedly left wing.


RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 6:07:16 PM , Rating: 2
"They are BOTH to blame but the ideology behind their motivations in California's case IS decidedly left wing."

I agree that the state gov definitely leans left, no denying that... And I agree with rec and fit that even the some of the reps there are decidedly progressive reps. Not Reagan Duke or Wilson, but alot of them. But not every single thing wrong there is a great hippie plot and the state is a huge contributor to the overall economy of the country. Its not a borderline socialist state like they would have people believe. Hello, Rondald Reagan


RE: Yeah Right. Total BS IMO
By Reclaimer77 on 5/8/2014 7:09:19 PM , Rating: 1
quote:
Hello, Rondald Reagan


That was then, this is now.

The country is so Liberal now Reagan probably wouldn't even get the nomination....


RE: Yeah Right. Total BS IMO
By Reclaimer77 on 5/8/2014 11:30:39 AM , Rating: 5
quote:
California is a pure example of what happens when progressives run a state.


Detroit is also a pretty impressive example of the end result of the Democrat ideology put into practice.

Detroit was run exclusively for 60+ years by Liberal Democrats, and literally went bankrupt.

Detroit today looks like it belongs somewhere in a third world country, not America.


RE: Yeah Right. Total BS IMO
By FITCamaro on 5/8/2014 12:20:52 PM , Rating: 5
What's funny is it took less time for Detroit to go bankrupt than the writer of Robocop gave it credit for.


RE: Yeah Right. Total BS IMO
By BaronMatrix on 5/8/2014 3:15:45 PM , Rating: 3
Why do Americans treat political parties like sports teams.. They aren't...

The Republican policies that paid companies to move overseas destroyed Detroit...

I love how we love to subjectively look at things...
Actually I hate it.. America has fallen far with this blame game nonsense that only helps the rich...

Suckers...


RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 3:38:56 PM , Rating: 3
"The Republican policies that paid companies to move overseas destroyed Detroit... I love how we love to subjectively look at things... Actually I hate it.. America has fallen far with this blame game nonsense that only helps the rich...

Exactly... It's a game of divide and conquer that both sides pull on us and most arent bright enough to see it, or are just too angry and bitter and busy blaming the "other side"

Maddening.


RE: Yeah Right. Total BS IMO
By Reclaimer77 on 5/8/2014 4:04:36 PM , Rating: 4
Please show me a "Republican" bill that "paid" companies to move oversees. I would love to see it.

Detroit paid bills by BORROWING money it didn't have, for decades. This is a TRADEMARK economic policy of the Left. And since Republican leadership didn't exist in Detroit on any level, how can you blame them?

Oh look, what's our Democratic President and Senate doing? Spending money we DON'T HAVE! Hmmm I think I see a pattern here!

I guess it was somehow the "Republicans" fault that Japan kicked GM's and Chryslers ass at making vehicles too, right?

You hate the blame game as you call it, but just blamed Republicans for Detroits downfall. An absolutely indefensible statement. I'm baffled you could even push such excrement out of your mouth without choking. What Republicans? How?

Let's not forget that Bill Clinton boosted outsourcing to China with his "free trade" NAFTA nonsense. He was a Democrat, right?


RE: Yeah Right. Total BS IMO
By TSS on 5/8/2014 10:52:15 PM , Rating: 2
A defining feature of Reaganomics was (and still is) deficit spending. And Bush was the first to reach a $1 trillion deficit.

Also, on Nafta:

quote:
Following diplomatic negotiations dating back to 1986 among the three nations, the leaders met in San Antonio, Texas, on December 17, 1992, to sign NAFTA. U.S. President George H. W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas, each responsible for spearheading and promoting the agreement, ceremonially signed it. The signed agreement then needed to be authorized by each nation's legislative or parliamentary branch.


Spending more then you have is a Republican trademark. The very fact you call it a democrat trademark shows how deeply you've been indoctrinated. That you cannot even go to wikipedia to find the above (LITTERALY a 10 second search through google) just shows how incredibly stupid/lazy/guillible you are. Both sides are incredible corrupt but atleast the democrats go about screwing the US public intelligently. Usually atleast don't know what Obama's doing.

As far as Detroit goes, it's been a combination of factors over a long period of time. If anything's at fault it'd be Demographics. Cities thought off in a new way with new/more efficient forms of transportation allowing for a suburban culture to rise where detroit was mainly based upon an older form of city. One where the factories where in the center with it's workers living closeby. The white/black income gap also had to do with it especially after the 1967 riots. Globilization was just the final nail in the coffin.

It continues to amaze me how the US is one of the countries where the population engages in politics the most, yet knows the least about them by far.


RE: Yeah Right. Total BS IMO
By retrospooty on 5/8/2014 11:05:12 PM , Rating: 2
no, no, it can't be. It was all because of librulz . It must have been because I am entrenched. /s

"It continues to amaze me how the US is one of the countries where the population engages in politics the most, yet knows the least about them by far."

That is where you and I differ... It has ceased to amaze me. ;)

Clearly blaming the other side is FAR more important than examining the real issues to most Americans. That goes for both sides... Equally bad. The funny thing is everyone agrees congress is constantly in "attack the other sidev mode and is too partisaned to function... Then they act the same way themselves.


RE: Yeah Right. Total BS IMO
By Reclaimer77 on 5/9/2014 8:29:27 AM , Rating: 1
quote:
And Bush was the first to reach a $1 trillion deficit.


I'm sure that's what you've been told. Please go look the facts up for yourself.

When Bush left office, he left Obama with a $340~ billion dollar deficit. Not great, I'll give you that. But that's FAR from a trillion. And at NO point in his Presidency did his deficits get anywhere near a trillion.

quote:
Spending more then you have is a Republican trademark.


No, it's a US Government trademark. However the only ones even trying to bring a modicum of fiscal responsibility to the table are Republicans.

Compare Reagan to Carter, or Bush to Obama. No matter how you slice it, the Democrat in these examples were the worst offender by far.

quote:
but atleast the democrats go about screwing the US public intelligently. Usually atleast don't know what Obama's doing.


Well I think this here threw out any credibility you might have had. The Democrats "screw" us intelligently lol, wow. And you think you can stand here and accuse others of being dumb.

Also, for the hundredth time, I made it VERY clear that this wasn't about political party, but ideology. Why is that so hard to grasp?


RE: Yeah Right. Total BS IMO
By Mint on 5/9/2014 11:32:50 AM , Rating: 2
quote:
When Bush left office, he left Obama with a $340~ billion dollar deficit
You believe that nonsense because you're too stupid to realize that FY2009 was already well under way by the time Obama came into office, and the spending request for it was submitted by Bush over 7 months earlier.

What's more is that if you had your way, low tax revenues (which were the primary cause of the 2009 deficit) would be even lower, and make the deficit far worse.

The ONLY way that the US will go bankrupt is if the GOP forces it to via the debt ceiling. It will never, EVER, run out of people willing to lend it money. I'll bet anything you want about a non-debt-ceiling bankruptcy, and give you 100:1 odds.

FYI, there are ways for you to make money if the federal gov't goes bankrupt: credit default swaps. Right now they're really cheap at only 16 basis points. So if you pay $130/mo, and the US treasury defaults, then you'll make $1,000,000.

Put your money where your mouth is or STFU.


RE: Yeah Right. Total BS IMO
By retrospooty on 5/9/2014 4:22:59 PM , Rating: 2
"FY2009 was already well under way by the time Obama came into office, and the spending request for it was submitted by Bush over 7 months earlier."

You are correct there. The shortfall that year and the next few were largely due to decreased revenue fro the massive recession. But...

"The ONLY way that the US will go bankrupt is if the GOP forces it to via the debt ceiling. It will never, EVER, run out of people willing to lend it money."

... The rest is just wrong. The debt rating has already been close to being lowered and it is not a limitless thing. We need to get the budget in line or it WILL bite us and our grandchildren in the asses. At this point, China's has to lend us more because their whole economy depends on ours. If we crash, they crash... And it can all topple if not fixed.


RE: Yeah Right. Total BS IMO
By Mint on 5/16/2014 2:14:52 PM , Rating: 2
You don't understand the beauty of a country having its own currency.

Where else do you think the wealthy will put their US dollars? If they exchange currency, those US dollars are someone else's problem. If they buy existing stock shares or real estate or gold, same thing. If they fund newly issued stock/bonds/homes, the economy booms. The debt rating doesn't matter because US dollars have nowhere else to go.

If they don't lend to the US gov't, then they put it in a bank account. The banks have to put all the money it doesn't lend privately with the Federal Reserve (they also get 0.25% from them anyway, which is better than just keeping it in a vault), who in turn will buy and sell US debt as needed. The only way the banks won't have leftovers to give the Fed is if the economy booms for ages, in which case the US is flooded with tax revenue and possibly inflation, both of which slash real debt.

It's nothing like Greece/Italy/Spain, who f***** themselves by adopting the Euro and letting wealth leak out permanently.

The worst thing that can happen is a weakening US dollar, in which case exports will boom.


RE: Yeah Right. Total BS IMO
By Spuke on 5/8/2014 5:51:18 PM , Rating: 3
quote:
America has fallen far with this blame game nonsense that only helps the rich
Explain exactly how are the rich getting helped here? Hating the rich for no reason whatsoever other than them being rich is just as much divide and conquer IMO.


RE: Yeah Right. Total BS IMO
By GotThumbs on 5/9/2014 9:43:57 AM , Rating: 2
quote:
literally went bankrupt


They ACTUALLY went bankrupt.

Big difference, but I fully agree with your main point.


RE: Yeah Right. Total BS IMO
By Mint on 5/8/2014 10:54:26 AM , Rating: 1
I don't think a few percent more tax matters much for the gigafactory. Tesla spends almost all of its gross margins on R&D and infrastructure, and will continue to do so for a long time, so there isn't much profit to tax. They'll probably save more on shipping heavy battery packs to their assembly plant.

The atmosphere of Silicon Valley and the local pool of talent is a far bigger factor for new companies than tax. That's why it continues to be a hotbed of innovation. Low corporate tax is more of an incentive to draw existing, mature, high-profit businesses away from CA, and even that is limited because foreign subsidiaries are even better for that purpose.

As the article shows, Tesla is more worried about permits and delays, and possibly labor/construction cost. I'm sure land costs more in CA, too.


RE: Yeah Right. Total BS IMO
By Spuke on 5/8/2014 12:04:28 PM , Rating: 3
quote:
I don't think a few percent more tax matters much for the gigafactory.
Did you just say a few percent? LMFAO!!!


RE: Yeah Right. Total BS IMO
By Mint on 5/8/2014 12:39:51 PM , Rating: 2
Depends on who you compare to. New Mexico and Arizona have corporate tax rates only a few percent lower.

Let's assume the following:
A) Tesla has a taxable profit of maybe 3% of revenue for the next 10 years as it expands (it's far less right now, and even Toyota and Ford are only 5%), even after forwarding losses from previous years.
B) Tesla does some accounting shenanigans to make ALL its profits appear in the gigafactory state
C) NM and AZ are out of the running, so we compare to zero tax states

Then CA corporate tax amounts to 8.85% of profit, i.e. <0.3% of revenue. So they can offset that with a mere $200 price hike on a $60k car with minimal EV competition.

There's far, FAR greater concerns for Tesla right now. The difference between mediocre and good execution on the gigafactory will affect costs 10x as much as corporate tax.

If you want to make a case about excessive CA regulations and permitting, then I'm not going to argue. It's right there in the article that it's a big factor for Elon. But chasing low taxes are a low priority for Tesla and almost any rapidly growing business.


RE: Yeah Right. Total BS IMO
By Spuke on 5/8/2014 3:18:52 PM , Rating: 2
quote:
Depends on who you compare to. New Mexico and Arizona have corporate tax rates only a few percent lower.
But those states are NOT going to charge full corp tax rates to the Gigafactory!!!! That's why CA is not even a consideration here. CA wants the Gigafactory but is not going to use incentives to do so or if they do it will be for a VERY short period of time. But nevermind that, step one, getting permits, takes WAY longer than Musk cares to wait for. Can you imagine the environmental hoops they'd have to jump through? You can't even build public transportation (something the hippies WANT us to use LMAO) without spending the GDP of Cuba in impact studies.


RE: Yeah Right. Total BS IMO
By Mint on 5/9/2014 10:30:33 AM , Rating: 2
I don't know what kinds of deals AZ and NM will cut, but why are you ignoring everything else my post? I did a quantitative comparison to a zero tax state.

Even 9% just isn't going to be a major factor for a long, long time. Sunshine/wind for their solar panels and wind turbines is yet another factor that will affect cost more than corporate tax will.


RE: Yeah Right. Total BS IMO
By Reclaimer77 on 5/9/2014 11:04:38 AM , Rating: 2
Mint...you sound absolutely insane.

Are you being serious with this?


RE: Yeah Right. Total BS IMO
By Mint on 5/9/2014 11:46:32 AM , Rating: 2
I know you have the math skills of a 5 year old, but go ahead and try to disprove me. Unlike your chickensh!t BS full of empty claims, I layed my argument out there to be attacked by logic.

Why do you think so many tech companies - whether small or enormous - remain in California? Tax is a very minor location consideration for a growing company that reinvests earnings into its business.

Tesla cares about permitting, regulation, renewable energy, land cost, labor pool expertise, labor cost, shipping cost, and more ALL more than it cares about corporate tax, because they all affect Tesla's bottom line in bigger ways.


RE: Yeah Right. Total BS IMO
By Reclaimer77 on 5/9/2014 1:55:32 PM , Rating: 2
quote:
Why do you think so many tech companies - whether small or enormous - remain in California?


Access.

San Francisco bay area, where everything comes in from China and Asia. Access to shipping in a BIG way.

Access to ecosystem. Law firms, PR firms, all right in the Valley with tons of experience working with tech firms.

Access to railways. Intercontinental railway is RIGHT there.

Access to Internet infrastructure. Major trunk cables right there in Silicon Valley. Without those Google, Yahoo, Facebook etc etc wouldn't be there.

Great weather. Hey, never underestimate the power of a good location.

As Silicon Valley, in the 70s, started getting real momentum, it pulled in people like my dad, who were geeky engineers. That, in turn, pulled in more engineers (they do like to hang out together -- even today I hear from geeks all over the world who would love to move to Silicon Valley because it's hard to find other folks to build stuff with in their local towns).

That caused an ecosystem to be built, with lawyers, banks, shops (Fry's Electronics), PR/press, marketers, and investors -- all who understood the geeky entrepreneur. I haven't seen an ecosystem like it anywhere else (although China is getting close and Israel has many pieces, too).


RE: Yeah Right. Total BS IMO
By retrospooty on 5/9/2014 4:17:50 PM , Rating: 2
Also skillset. The workforce in Silicon Valley and the rest of the Bay area for that matter has a ton of people with a ton of education and high tech experience.


RE: Yeah Right. Total BS IMO
By Mint on 5/16/2014 1:38:54 PM , Rating: 2
Thank you for proving my point.

All these things matter way, way more than tax.


RE: Yeah Right. Total BS IMO
By GotThumbs on 5/9/2014 10:03:21 AM , Rating: 2
You're Obviously NOT a finance major or tax accountant.

Hows your multi-million dollar company doing?

If you don't own/run a multi-million dollar company, then maybe it's because you simply lack the full understanding of what it actually takes to build/run a business.

You and Obama friends or what?

All kidding aside, 3% of 50 million is 1,500,000. 5 % = 2,500,000. Just a difference of 2% is an additional 1 million dollars in tax.

California's corporate tax rate is 8.84%.
Florida's is 5.5%
Nevada has NONE

When you're dealing in large numbers, each % DOES make a difference.

http://taxfoundation.org/article/state-corporate-i...

PDF of Small Business & Entrepreneurship council's Business Tax Index 2012, which shows various tax advanates by states. Texas is 2nd best and Nevada is 3rd best. Cali is ranked 45th.

http://www.sbecouncil.org/uploads/BTI2012FINAL.pdf


RE: Yeah Right. Total BS IMO
By Mint on 5/9/2014 12:32:23 PM , Rating: 2
quote:
All kidding aside, 3% of 50 million is 1,500,000. 5 % = 2,500,000. Just a difference of 2% is an additional 1 million dollars in tax.
So what? Do you know how little $1M is to a company like Tesla? That's less than $30/car this year. Who is going to notice a price hike like that?

Do you have any idea how many things affect manufacturing cost more than that? If they build in Texas and fail to headhunt a battery expert who wants to stay in California with his family, that alone could easily have 10x the impact.

quote:
When you're dealing in large numbers, each % DOES make a difference.
When you're dealing in large numbers, you'd have to be an idiot to consider tax before energy cost, labor, shipping and logistics, etc.

Why do you think Elon has SpaceX based in LA as opposed to Texas or Florida, where they do tests and launches? The company is heavily dependent on engineering talent.


RE: Yeah Right. Total BS IMO
By GotThumbs on 5/9/2014 1:07:48 PM , Rating: 2
quote:
a battery expert who wants to stay in California with his family


LOL.

So there is only ONE battery expert in the world the he/she lives in Cali and would NEVER consider moving for a high-paying job in another state that has lower OR zero state income tax?

LOL.

Smoke another one dude.


RE: Yeah Right. Total BS IMO
By BaronMatrix on 5/8/2014 3:12:14 PM , Rating: 1
Please... Taxes are a part of the social contract and they are the lowest they've been in 40 years...

You can't have high-tech roads, bridges and airports when you complain that taxes are unfair...

Things worked well up until Reagan dropped the top rate from 70%...


RE: Yeah Right. Total BS IMO
By Spuke on 5/8/2014 3:21:06 PM , Rating: 2
quote:
Things worked well up until Reagan dropped the top rate from 70%...
Yes, the recession that was the 70's was an excellent time in our history.


RE: Yeah Right. Total BS IMO
By Reclaimer77 on 5/8/2014 7:11:53 PM , Rating: 2
LOL gotta love this idiot.

Yeah the country was just humming right along under Carter's policies, let me tell you!


RE: Yeah Right. Total BS IMO
By TimberJon on 5/9/2014 12:21:38 PM , Rating: 2
Going to add to all this R v D stuff, also noting the remarks about rampant corruption... that it doesn't really matter who claims to be a part of which party. They are all pawns, like whoever sits in the iron throne... I mean oval office. Choosing a party might begin as a personal opinion or morals kind of thing but once in any office things likely change and then its a tool. An agenda may coalesce. A means to get something be it short or long term.

I really don't care who is who or what they say. What do they do? What did they do? Are they consistent in their deliveries vs: what they promise or suggest?


By k20boy on 5/8/2014 12:07:40 PM , Rating: 3
There seems to be a lot of misinformation about taxes and regs driving Toyota out of CA (in fact it will maintain about 2,300 jobs here, about 2,000 of the 4,300 jobs are actually moving to Texas). The real reason is to centralize a lot of Toyota's employees near their US manufacturing centers throughout the South (KY, Al, TX). As per Toyota's North American CEO:

quote:
Toyota's Lentz, however, told workers Monday that the move was driven by a desire to create an efficient management structure in a centralized headquarters.

In meetings with employees, Lentz described the move as a critical step in erasing divisions among Toyota's separate engineering, manufacturing, sales and financial operations. He said putting all those businesses on a single, state-of-the-art campus will improve communication and collaboration.

Toyota chose Plano because of its Central Time Zone location, proximity to airports serving all parts the U.S. and Japan, its cost of living, educational opportunities and cultural offerings, Lentz said.


here's the link in case you think I'm just one of the those "crazy lefties": http://www.latimes.com/business/autos/la-fi-toyota...

P.S. Please stop using Atlas Shrugged for political and economic ideologies or to support your arguments about the real world, cite data and research publications from reputable sources :)




By kattanna on 5/8/2014 3:13:57 PM , Rating: 2
hush you.. the DERP must flow


By Spuke on 5/8/2014 3:23:03 PM , Rating: 2
Because the LA Times has always been a bastion of conservatism.


By k20boy on 5/8/2014 10:40:23 PM , Rating: 2
The LA Times does have that reputation. However, this was not an editorial piece, it was a news story. They were directly quoting the Toyota North American CEO so I don't really see how this might be spun to be left-wing propaganda by the "lefty" LA Times? Also, I mis-spoke earlier, it is 3000 jobs of 5,300 going from CA to TX. People are such ideologues, let's use data and come to the best overall solution with as much empirical evidence as possible and enact policies that benefit the most broad swath of Americans. Certainly, some policies might hurt some and help others, but "on-balance", we can probably come to some smart solutions that do not conform to either party's extreme base. Aren't we supposed to be thinking tech enthusiasts on this site? I would presume a lot of us are engineers, let's think like scientists and engineers and use a data-driven approach to solving our economic and political problems. Obviously, it is terrible that some people take advantage of the safety net, but that doesn't call for dismantling it because it also does a lot of good for a lot of hard-working, skilled people who are just down on their luck and will fill a job that matches their skill-set as quickly as they can find one. Structural changes in the economy aside, it makes no sense for any of us to have someone who is a skilled professional working at McDonald's because they needed short term liquid assets. This is a loss of economic potential for us all (as well as lower tax receipts).


Inflation
By HoosierEngineer5 on 5/8/2014 10:18:58 AM , Rating: 2
Is Gigafactory the new Megafactory?




RE: Inflation
By Guspaz on 5/8/2014 10:58:48 AM , Rating: 2
They're using the term here to denote another level of scale; they're expecting this new factory alone to be capable of producing more lithium ion batteries than every other factory on the planet combined. Even most megafactories can't claim that about their production.


Kalifornia
By btc909 on 5/8/2014 11:34:41 AM , Rating: 2
If I were Tesla i'd get out of Kalifornia all together.




Don't do it.....
By GotThumbs on 5/8/2014 9:56:42 AM , Rating: 1
All I ask is that Tesla does not build the mega factory in Cali.




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