© Kim Hong-Ji / Reuters
Elon Musk always keeps things interesting.
The eccentric billionaire is a big visionary who accomplished a great deal in the last couple decades. After creating quite a windfall for himself with PayPal, he turned the automobile industry on end by pushing everyone towards eletric vehicles. At the same time, Tesla is one of the leading companies in autonomous vehicle technology although no company reached level 5 up to this point.
Of late, Musk's behavior is a cause of concern. Many are starting to question his leadership abilities along with his sanity. This, at a time, when Tesla is losing money hand-over-fist and requires money from Wall Street in billion dollar chunks.
Tesla will announce their second quarter numbers after the bell on Wednesday. The last earning call saw Musk cut off questions from analysts and head over to YouTube for questions.
This is a big quarter for Tesla since analysts will be looking for signs of movement towards profitability, something Musk promised in the second half of this year.
Last week, Tesla stock dropped to a two month low after it was reported that Tesla asked for refunds from suppliers in an effort to turn a profit.
Working in the company's favor is the fact that it did meet the 5,000 per week production of the Model 3, albeit 6 months after Musk promised. Many are now looking to see if it is a number that can be sustained. Musk claims the company will be at 6,000 by the end of August.
This quarter will see another huge loss for Tesla. It is no without precedent considering Amazon went the better part of a decade losing money. Musk erratic behavior might well be wearing thin on Wall Street. Investors are willing to keep funding a long-term project they believe in if there is something that gives them confidence. Nothing shakes big money Wall Street players like erratic behavior.
Analysts are expecting $3.89 billion in revenues for the quarter with a loss of $2.88 per share.
In addition to the numbers, there are a few of other things people will be watching.
Musk's behavior certainly will be on center stage. After the last call, he would be wise to toe the company line and behave. While an apology is most likely out of the question with Musk, some form of atonement with the analysts could go a long way.
The number of Model 3 reservations are something that received press of late. Some are claiming that interest in the car is waning. Others feel that it is still strong and nothing to worry about. It will be interesting to see what numbers the company puts out regarding that.
Will we hear an update about the Model 3 production line? After the frenzied pace towards the end of last quarter, along with the media coverage, things were quiet in July.
With Tesla, though, it is always best to expect the unexpected.
"Investors" did have confidence in Bernie Madoff.
Same applies to Tesla.
There's Federal tax credit + State tax credit.
Tesla is selling carbon allowance for $150M/year.
Tesla isn't making base Model 3, but the top $55k version. $35k version will create more loss than the $55k version.
Soon they will hit 200,000 or so cars made so they will lose hefty Federal tax credit.
Insurance is growing because you have to service accident damage at their certified overpriced service stations.
And they are still burning money like there's no tomorrow.
Then you have 8 year warranty on battery and drivetrain. Most cars are still in warranty but on older ones, drivetrain and batteries are starting to fail - more expences on cars already sold.
More the Tesla cashflow is desperate, more stupid promises Elon makes to attract attention.
Elon Musk is marketer (he can sell you shit while you believe it's cake). Not businessman.
And he's got lots of government cronies to back his stupid ideas with govt money.
Elon Musk never cared about Tesla profit. He's interested only in keeping this Zeppelin flying so he can get most money out of it. And then let it explode in investors face.
Volkswagen AG marketcap is less than double of TSLA.
VAG makes 100x more cars, has profit, can cope with $20-30 bln fine by US government.
TSLA is just burning money, more cars they make, more money they burn.
and they are ugly as sin, they look like they were designed as props for a bad science fiction film.
The Model S is as well-made as any car I've ever seen, and most folks I've heard discuss Teslas disagree that they are ugly. The one I've looked at close up was impeccable in terms of fit and finish.
Your subjective appreciation of beauty is your own, but it isn't the mainstream view. Build quality I have personally seen is top tier.
Tesla Model S interior fit and finish is as 80's communist cars.
"leatherette" worns out on certain areas within year or two.
I see them all the time and they remind me of a Saturn crossed with the cars from Demolition Man, the x-type looks a lot like an Aztek
I guess the Consumer Reports can't recommend the Model 3, for what a Model S costs it had better have decent fit and finish.
Who are most folks that you have heard discuss them?
Mostly fanboys.
LOL at first I was going to ask, "have you been mostly talking to fanboys?"
Weird thing about Tesla is you don't find many fence-sitters. It's either fanboys or haters.
I'm all for electric cars, as long as they're not computer controlled. I have become a complete hater of self-driving cars, because of the control freaks that make them utterly vulnerable to outside control.
OTOH, I'm a complete fanboy of electric motor reliability compared to the Infernal Combustion Engine.
So, I don't want a Tesla anymore. Unless I can get one that cannot sense a damn thing or has so much as ABS. I want a completely analog electric car, or I'll stick with my 1980 VW pickup with mechanical fuel injection.
The only thing you could hack my truck with is an axe.
Musk stated publicly that he didn't care about Tesla profit. He stated his intention was to change the automobile industry and make them produce electric cars, which has been achieved.
I believe he also intends to create industry suitable for Martian development, which all his companies do. While I don't disagree with the dismay of investors in Tesla as a for profit concern, Musk has proved to be a genius at achieving suitable Martian development infrastructure, which has always been his publicly stated goal.
Profit has not, and I wouldn't expect it. This is why I wouldn't recommend investing in Tesla, unless I sought to develop Mars rather than generate profit.
Elon Musk is running Tesla for profit - just his personal.
Who's not making profit and won't ever be are investors.
He's not going to change the automobile industry but it going to make it into history books as author of what could be the closest to Ponzi scheme in history of automobile - selling promises for over 10 years while tunneling money bit by bit out of company.
he should probably release another batch of flame throwers.
Neither flamethrowers, rescue subs, or tunnel machines, but some new meme-worthy PR spectacle will be splashed across the media.
it was surfboards
I must admit that i think Tesla has to get the model 3's out as quickly as they can, otherwise the hype for them will just disappear
I wanted to short this ER, but there is too much uncertainty of what Musk will say and do.
Oh man looking dmmm...
I think it is pretty understandable why Tesla doesn't show enormous profits, everytime you evolve/improve the society it takes time until people realise that will be the future. In my opinion Tesla will be the leading company in some years, just because they have the technology and are very advanced in terms of research and implementation.
When things go right Elon Musk is a genius, when someone starts to lose a few dollars he becomes a mad man, ridiculous , in my opinion. Let the men see the future and help us evolve...
Great article. Shorting Tesla is a great idea in the short and middle term. Elon's wealth and power has gotten to a level that is more than he can control and other companies are starting to be more successful in replicating his tech.
Tesla will be a good buy if they are acquired or new management takes over. You can't have your founder and CEO interrupting a rescue operation with his useless junk and then calling the heroes pedophiles - not when you are this big.
The car market is changing rapidly from CAR to SUV. Tesla is out of cycle, time and soon money.
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