backtop


Print 54 comment(s) - last by wookie1.. on Aug 9 at 12:11 PM


Tesla is racing to release its Model S by 2012. As a result it posted another big loss this quarter, burning through a fair chunk of its cash at hand.

Tesla will also deliver an electric version of the Toyota RAV4 crossover in 2012.  (Source: New and Fastest)
Tesla has already lost more this year than it had all of last year

The good news for Tesla Motors is that the company has plenty of cash on hand thanks to government grants and an incredibly successful initial public offering that raised $226M USD.  The bad news is that the company is burning through cash fast as it attempts to develop new vehicles and expand its distribution network.

Reporting financials for the first time as a publicly traded company, Tesla just announced a loss of $38.5M USD for its second fiscal quarter, 2010.  Year-to-year it reports its revenue rose 5 percent, to $28.4M USD.  A year ago the company only lost $10.8M USD, though.

Tesla is looking to begin producing and selling its upcoming Model S mass market luxury sedan in 2012, priced at $57,400 USD.  The car will retain some luxury trappings and have a range of 160 miles.  Tesla will produce the new model at the the former NUMMI factory, located in Fremont, California, which it obtained from Toyota as part of a joint development deal.  The factory had been scheduled close after former co-operator GM pulled out, in the wake of its bankruptcy.

Tesla also has a hand in the development of an electric version of Toyota's RAV4 crossover SUV which will also hit the market in 2012.  Toyota gave Tesla a relatively meager $50M USD to help develop the plug-in, but also gave it access to the NUMMI plant and other perks.  Tesla also recently revealed that it is developing 3 other vehicles internally -- another crossover/SUV, a Cabriolet, and an electric van.

Tesla also has been opening new stores in recent months.  Last month it shipped its first Roadsters to Canada and Japan.

For Tesla, its current financial predicament basically boils down to weathering the storm, which is never an easy position for a company.  If the company can stay afloat through 2012 and make its deadlines for the Model S and Toyota RAV4 vehicles, it will be poised well to return to its short-lived profitability of 2009.

In total Tesla has already lost more this year ($68M USD) than it did 
all of last year ($55.7M USD).  One promising sign, though, was that Tesla significantly improved its gross margin to 22 percent, up from 8 percent from a year before.  Gross margin is a measure of profitability that weighs production costs versus sales costs.

While still above the $17 IPO price, shares of Tesla (TSLA) have plummeted from a high of $22 earlier this week to $19.80 following the financial report.



Comments     Threshold


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

Duh
By nafhan on 8/6/2010 11:17:47 AM , Rating: 1
The government needs to give them more money. They've literally sold hundreds of these cars. If they're having trouble raising more government money, maybe they need to add something about solar and renewable energy to their mission statement...
Subsidies for $100,000+ vehicles, yeah!




RE: Duh
By Pirks on 8/6/10, Rating: -1
RE: Duh
By nafhan on 8/6/2010 12:42:04 PM , Rating: 4
The internet was originally a military project run by DARPA, slightly different. The Tesla thing is more like a government sponsored version of AOL. Government sponsored research is great for the reasons you mentioned, military projects are an unfortunate necessity, but this is neither.


RE: Duh
By Pirks on 8/6/10, Rating: 0
RE: Duh
By dastruch on 8/6/2010 2:56:09 PM , Rating: 2
Advanced transportation of the future!?!? My bottom. Teleportation.


RE: Duh
By Pirks on 8/6/2010 3:21:38 PM , Rating: 2
That's next in line after the last ICE on Earth is recycled and China builds enough fusion reactors.


RE: Duh
By nafhan on 8/6/2010 4:53:24 PM , Rating: 4
Think of it as the partially government funded producer of the advanced, expensive, rich people's transportation of today and you'll be kind of annoyed that your taxes are going towards it.


RE: Duh
By The Raven on 8/6/2010 12:47:24 PM , Rating: 2
The market cares more about advancement of technology than the gov't. The only reason the gov't would like to advance tech is to create jobs and find ways to spread money around.
I know that 'creating jobs' sounds like a good thing, but in and of itself it is not. How about there are less jobs and I only have to work 4 hours a day. All these technological advancements and I still have to work 8 hours a day.


RE: Duh
By Spuke on 8/6/2010 1:29:15 PM , Rating: 2
quote:
All these technological advancements and I still have to work 8 hours a day.
Technology won't change that but some radical thinking would. Personally, I how many hours you work should be determined by what kind of work you do and how much work you have to do. IMO, too many companies think there's 8 hrs a day of work to do. Even the busiest job has lull periods. It would actually save companies money to not have certain people on the clock all day, everyday.


RE: Duh
By Pirks on 8/6/10, Rating: 0
RE: Duh
By AssBall on 8/6/2010 2:20:16 PM , Rating: 2
The internet wasn't a private company selling a luxury consumer product for a profit. Your analogies are just awful, Pirks.


RE: Duh
By Pirks on 8/6/10, Rating: 0
RE: Duh
By AssBall on 8/6/2010 3:15:03 PM , Rating: 4
If the military can sell equipment for a profit, then the money goes back into the military, and lessens the overall tax burden going to the military. Everyone (the majority who voted for it to pass) wins (if you want, think of the military like a company that is owned by every citizen).

When Tesla sells a car, it is a is a tax burden for the citizen. Tesla profits. And everyone else loses money.

You could argue that Raytheon gets a kickback, sure, but remember where their product goes. Everyone (the people's military) just bought it, and Everyone gets the product. Not just some rich eco-jackass.

At least you can say you got something for military spending, even if it is something you didn't want. But I don't have much to show for when I buy someone else's car, house, etc.


RE: Duh
By Pirks on 8/6/10, Rating: 0
RE: Duh
By Spuke on 8/6/2010 3:58:02 PM , Rating: 4
quote:
You don't JUST pay into the Tesla pocket, it's bigger than that. You're investing in your safe and clean future.
Tesla is a privately owned business, where are they required to share their knowledge with the public? Because, unless you're working there, that's the only way WE benefit from Tesla. The military is owned, hook, line and sinker by the public. And have already contributed to society (Internet, GPS, etc.). How does a $120,000 or $57,400 car benefit society? Some of you seem to think that these companies (that are privately owned) owe us. They do not. They exist, by law (publicly traded companies in the US), to turn a profit.

Tesla's designs are proprietary and they are NOT required to share with anyone else. So who benefits from Tesla's exploits again?


RE: Duh
By YashBudini on 8/6/2010 4:26:19 PM , Rating: 2
quote:
Tesla is a privately owned business


That should be past tense, yes? Didn't Toyota buy them?


RE: Duh
By Cheesew1z69 on 8/6/2010 4:27:03 PM , Rating: 2
No?


RE: Duh
RE: Duh
By Pirks on 8/6/10, Rating: 0
RE: Duh
By Spuke on 8/6/2010 7:16:00 PM , Rating: 2
quote:
he more money they make - the faster US will get rid of the foreign oil dependence
No we don't. We can consider ourselves off of foreign and domestic oil (the two can't be separated..oil is a commodity), when the vast majority of the US is not using oil. That's takes an effort on most all industries as well as some personal responsibility. You can "do your part" by reducing the amount of oil byproducts that you use. Here's a few:
http://wiki.answers.com/Q/What_are_the_important_b...

Granted, transportation is about 45% of the usage and reducing that makes a huge dent but we as individuals don't have to wait for demand of cars that use other than crude oil to show up.


RE: Duh
By tng on 8/6/2010 8:36:09 PM , Rating: 2
Agreed, there are more than just cars out there that use many products that are derived from oil.

The US does have a large oil reserve contrary to popular belief. Problem is that it is still cheaper to get it from the Middle East. The oil from the Middle East is cheaper to refine and yes, the labor costs here are another factor.


Wait...
By MozeeToby on 8/6/2010 10:39:34 AM , Rating: 2
So, they've burned through 20% of their cash on hand, at a point in their life cycle where they aren't producing anything and are investing tones of R&D money into the development of their next product. The article isn't exactly clear, at one point it sounds like the $38M figure is for 2 quarters and in another it sounds like it's only for the second quarter.

That's a pretty big difference, considering their next major product is supposed to start selling in 2012. If it's for half a year, they have just enough money (if nothing changes for better or worse) to make it to the release of the Model S. If quarterly, then they don't. Which, like I said, is a huge difference.




RE: Wait...
By JasonMick (blog) on 8/6/2010 11:07:28 AM , Rating: 5
quote:
Reporting financials for the first time as a publicly traded company, Tesla just announced a loss of $38.5M USD for its second fiscal quarter, 2010


quote:
In total Tesla has already lost more this year ($68M USD) than it did all of last year ($55.7M USD).


Seems pretty clear to me -- it lost $38.5M USD this quarter, $68M USD in total this year ($29.5M in Q1 2010). Hopefully that clears it up for you.

quote:
If it's for half a year, they have just enough money (if nothing changes for better or worse) to make it to the release of the Model S. If quarterly, then they don't.


Agreed that things look pretty rough for Tesla, though. It does have $465M (U.S. Gov't) plus $220+M USD (IPO) but if it keeps burning through cash at this rate, it will have lost $300M+ USD by the end of Q2 2012.

I hope that it does makes it because I think it will push GM and Ford harder to innovate when it comes to EVs and more competition is always a good thing.

And if it *doesn't* make it after all the money the gov't poured into it, the taxpayers lose out doubly.


RE: Wait...
By MozeeToby on 8/6/2010 11:31:06 AM , Rating: 2
Whoops! I must have skimmed over the parened part, ironic considering how much subclauses litter my own writing.

The only possible bright spot in these numbers is that they should get better next year as their partnership deals with Toyota (and others) ramp up. Of course, that all depends on what point Tesla gets paid in those deals. If they're getting paid for their knowledge and R&D they could start bringing in revenue immediately, but if its some kind of profit sharing deal they probably won't see a dime from those deals until 2013 or later.

If they knew this dry spell was coming (and they had to have some idea what it would cost to develop the model S) that would go a long way to explaining why they wanted such a large loan from the government. Without it, they would have had to continue manufacturing on the Roadster while simultaneously doing R&D on the Model S, and probably at a much slower rate to boot. With the loan, they have enough to bring the Model S to production, even if their margins are a bit closer than I would like.


RE: Wait...
By Jedi2155 on 8/6/2010 11:36:19 AM , Rating: 2
The article does not seem to mention that Tesla just paid $42 million for a manufacturing plant in the past quarter to start producing the Model S.

That probably had a huge effect to their bottom line as they are still investing heavily into infrastructure, research and design.


RE: Wait...
By shin0bi272 on 8/6/10, Rating: -1
RE: Wait...
By MozeeToby on 8/6/2010 3:32:05 PM , Rating: 4
The whole freaking point of the Volt is that it isn't limited to the batteries range, at all. You can take it on a cross country road trip just like a normal car and never stop to recharge once, all the while getting 50+ mpg.

Your comments on power and torque are more accurate, but only to a certain point. If you take into account the fact that electric motors have a nearly flat powerband a 100 hp motor will easily outperform a 150 hp motor.


RE: Wait...
By Pirks on 8/6/2010 3:49:25 PM , Rating: 2
quote:
chevy volt going a whopping 40 miles between charges
Tesla S does 160 miles, so get real please.


RE: Wait...
By Spuke on 8/6/2010 4:03:48 PM , Rating: 2
quote:
Tesla S does 160 miles, so get real please.
160, 230 or 300. Depends on which battery pack you buy. Besides, the Tesla Model S is $57,400. WAY more expensive than the Volt or Leaf and should have better EV range than either of those for that price.


RE: Wait...
By Iaiken on 8/6/2010 4:17:08 PM , Rating: 2
quote:
WAY more expensive than the Volt


Not really, remember that little gem about dealers wanting to sell the Volt for $61,000?

http://www.dailytech.com/Some+Chevy+Dealers+Sellin...


RE: Wait...
By Cheesew1z69 on 8/6/2010 4:20:14 PM , Rating: 2
That is also a MARKUP, the MSRP is still higher on the Tesla....


RE: Wait...
By Iaiken on 8/6/2010 4:52:11 PM , Rating: 2
And who's to say that Tesla doesn't put pressure on the dealer network to keep markups down until they can bring production costs down? Thus retail can stay the same and markups can go up. :P


RE: Wait...
By Spuke on 8/6/2010 7:25:42 PM , Rating: 2
quote:
And who's to say that Tesla doesn't put pressure on the dealer network to keep markups down until they can bring production costs down?
I don't think the price will change much but you bring up a point. The car ain't out yet and Tesla is kind of shooting themselves in the foot by announcing a price so soon. I'd hold off on that.


RE: Wait...
By Reclaimer77 on 8/6/2010 7:33:33 PM , Rating: 1
Well I wish I could say "I told you so" Jason, but for some reason I don't feel like cheering over my government flushing billions of our dollars down the toilet pushing an agenda that SHOULD be decided by the free market.

I said it then and I'm saying it now, Tesla was a waste of money.


RE: Wait...
By wookie1 on 8/9/2010 12:11:16 PM , Rating: 2
This should make it more clear how gov't grants crowd out private investment. Why would Ford try to compete with Tesla/US gov't? That's a loser's game, because the gov't can afford to take enormous losses to win while competitors go bankrupt trying to compete.

So you say, what if Ford also gets grants? That'd be just great, the gov't competing against itself, trying to see which company could be the bigger bottomless pit while supporting both.

I left GM out, of course, becuase they already have to do whatever the gov't wants, and get whatever money is needed to do it. So that would then be a 3-way money hole for this technology that may or may not be widely adopted despite the billions thrown at it.

If the technology is a winner, then there would be enough private money to support it.


Tesla Great Grant Getter
By beergardenbouncer on 8/6/2010 10:40:45 AM , Rating: 2
Why does Tesla get so much bucks, and give so few cars?




RE: Tesla Great Grant Getter
By Pirks on 8/6/10, Rating: 0
RE: Tesla Great Grant Getter
By HotFoot on 8/6/2010 12:10:31 PM , Rating: 3
Is Bugatti taxpayer-funded?


RE: Tesla Great Grant Getter
By Pirks on 8/6/10, Rating: 0
RE: Tesla Great Grant Getter
By Cheesew1z69 on 8/6/2010 1:06:32 PM , Rating: 2
No, it wasn't...


RE: Tesla Great Grant Getter
By Pirks on 8/6/2010 1:39:02 PM , Rating: 1
So DARPA was funded by a private commercial entity, not by the government?


RE: Tesla Great Grant Getter
By Cheesew1z69 on 8/6/2010 1:43:14 PM , Rating: 2
You really are a moron aren't you?

The Defense Advanced Research Projects Agency (DARPA) is an agency of the United States Department of Defense responsible for the development of new technology for use by the military. DARPA has been responsible for funding the development of many technologies which have had a major effect on the world, including computer networking, as well as NLS, which was both the first hypertext system, and an important precursor to the contemporary ubiquitous graphical user interface.


RE: Tesla Great Grant Getter
By Pirks on 8/6/10, Rating: -1
RE: Tesla Great Grant Getter
By Spuke on 8/6/2010 4:09:01 PM , Rating: 2
quote:
Tesla has been responsible for funding the development of many technologies which will have a major effect on the world
Of which they are NOT required to share ANY of this tech with anyone being a privately owned company and all. Don't bother bringing up Toyota. There was an economic gain for Tesla involved. If they were truly altruistic, which their "followers" seem to think, they would've given away their battery tech.


RE: Tesla Great Grant Getter
By Pirks on 8/6/10, Rating: 0
RE: Tesla Great Grant Getter
By Cheesew1z69 on 8/6/2010 4:43:54 PM , Rating: 1
/me slaps forehead

Wow...just...wow....


RE: Tesla Great Grant Getter
By Spuke on 8/6/2010 7:30:42 PM , Rating: 2
quote:
You enjoy the pleasures of Internet without owning any of its tech either. How about that, Spuke?
That's already been explained but I'll repeat it for you in summary. Government created the Internet, private business did not. So, we DO own it or at least some portion of it which is most likely why private business cannot just cut everyone off or charge exorbitant fees for access. The government could charge royalty fees for the use of their (our) tech but no one wants that.


RE: Tesla Great Grant Getter
By Runiteshark on 8/6/2010 7:49:41 PM , Rating: 2
so i herd you like protocols, specs, routers, modems, switches, nics, etc etc etc etc


RE: Tesla Great Grant Getter
By sinful on 8/7/2010 6:28:39 PM , Rating: 3
quote:
Of which they are NOT required to share ANY of this tech with anyone being a privately owned company and all. Don't bother bringing up Toyota. There was an economic gain for Tesla involved. If they were truly altruistic, which their "followers" seem to think, they would've given away their battery tech.


Uh, they got a LOAN from the government.
Not free money.

So... you have no point whatsoever.

And what's amazing is how people who are all "Free market rah rah rah" don't have the slightest clue how it works.

Perhaps if the world's governments were personified into corporations they'd have a better grasp.

For example, USA-CORP just made a loan to another company that will potentially GREATLY benefit USA-CORP. They may not reap monetary profits directly, but it will help the marketplace move away from SAUDI-CORP's products. SAUDI-CORP's products are bad for USA-CORP because every dollar that goes to SAUDI-CORP is a dollar that USA-CORP loses out on.... Thus even if the LOAN by USA-CORP doesn't make bundles of cash, it doesn't matter so much as long as USA-CORP's interests are advanced.

The people whining about USA-CORP doing this obviously don't realize that SAUDI-CORP is and HAS BEEN doing this for a really long time and on a much larger scale. And thus, "doing nothing" is just another way of saying "Well let's just let SAUDI-CORP make all the decisions, even if it's bad for USA-CORP and its investors..."

Is it starting to sink in yet??


RE: Tesla Great Grant Getter
By Reclaimer77 on 8/8/2010 11:58:04 AM , Rating: 2
quote:
Uh, they got a LOAN from the government. Not free money.


They got their "loan" in the middle of the worst economy in recent history. Where the government has spent itself into bankruptcy. But they can afford to give loans to high risk, low benefit, glamor tech car companies? I might not even mind the loans so much, but has Tesla ever shown that they can at least be solvent without Government money? Not as far as I can tell. And based on what I'm reading, these were LIFE SUPPORT more than they were loans.

At least for me, that's where the anger comes from. It's not that we're giving loans for this stuff, it's the timing of it. When you have no money, and KEEP spending money like you don't have a problem, eventually the burden is going to be placed on the taxpayers. We are raping the future of our children and grandchildren, and you people don't seem to care.

These loans are just an example of a sickness in Washington. That's the only way to describe it. These people are so hell bent on their agenda, they don't care how many future generations they are robbing from. It's a sickness.


RE: Tesla Great Grant Getter
By shin0bi272 on 8/6/2010 2:36:01 PM , Rating: 1
quote:
The Defense Advanced Research Projects Agency (DARPA) is an agency of the United States Department of Defense


And where does the government get the money to pay for the DoD? OH YEAH THE TAX PAYERS!!!


Tesla is just one of many companies
By monkeyman1140 on 8/7/2010 10:53:50 AM , Rating: 2
If it can't manage its money it will fail, end of story.

And as for subsidies, remember when the GOP run congress was handing out tax credits for $75,000 Hummer purchases?




By Solandri on 8/9/2010 5:33:28 AM , Rating: 2
That tax break has been around since the 1980s, renewed annually. It was made to help farmers and small businesses buy trucks they needed to haul stuff around (the vehicle needed to be >6000 lbs to qualify). In the early 2000s, some clever tax dodgers noticed the wording of it could be applied to bigger SUVs. And before you knew it, millions of people were abusing it to buy SUVs.

As soon as the abuse became widely known, the following year the deduction was reduced from $100k back to its original $25k in 2004 by a GOP-run Congress.
http://www.bankrate.com/brm/itax/biz_tips/20030403...


They don't sell much yet
By DXRick on 8/6/2010 3:08:08 PM , Rating: 2
Wouldn't you expect a company to spend a lot on R&D for products yet to be sold? We will have to wait and see what the model S and Rav4-like-hybrid do to their profitability.




"If you can find a PS3 anywhere in North America that's been on shelves for more than five minutes, I'll give you 1,200 bucks for it." -- SCEA President Jack Tretton














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki