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Elon Musk's Tesla made a strong start to the year with profits up and record deliveries of its electric cars.

It came despite production hurdles due to a global shortage of computer chips that has also hit other carmakers.

Mr Musk said the chip shortage caused "supply chain challenges", although that "particular problem" had eased.

Profits for the first three months of the year were $438m (£315m), up from $16m last year, bolstered by sales of Bitcoin and environmental credits.

But the profits were dented by a $299m payment to Mr Musk as part of a controversial compensation plan struck in 2018.

Revenue rose to $10.4bn, from $6bn in the same quarter last year.

Mr Musk claimed Tesla's Model 3, its midsize sedan, was the "best-selling luxury sedan of any kind in the world" for the quarter.

He also predicted the company's midsize sport utility Model Y would become the best-selling car or truck of any kind in the coming years.

"We've seen a real shift in customer perception of electric vehicles, and our demand is the best we've ever seen," Mr Musk said.

The company said the Model Y had so far received a strong reception from consumers in China, where Tesla began manufacturing last year.

China is possibly the world's most competitive market for electric vehicles, with hundreds of manufacturers vying for a slice of the growing market.

Bitcoin move
However, not all of the company's revenues came from selling cars.

The company bought $1.5bn of Bitcoin during the first quarter, but then cut its position by 10%, which contributed $101m to its revenues.

Tesla recently made it possible for customers to purchase the cars in Bitcoin, allowing it to accumulate more of the cryptocurrency.

"It is our intent to hold what we have long term and continue to accumulate Bitcoin from transactions from our customers as they purchase vehicles," the company's chief financial officer, Zachary Kirkhorn, told investors.

Tesla also earns credits for exceeding emissions and fuel economy standards and then selling them to other carmakers that fall short so they can avoid penalties.

The company earned $518m from sales of those credits in the first quarter, an increase of 46% over the same quarter in 2020.

Tesla said it delivered roughly half a million cars in 2020, and 185,000 in the January-to-March period.



The company expects its deliveries to increase by 50% annually, and is ramping up production at its existing facilities in California and Shanghai while it builds its new factories in Berlin and Texas.

Tesla is the world's most valuable car company, with its share price pushed higher by investors betting on strong growth in electric vehicles in the coming years.

However, the company makes far fewer cars than companies such as Toyota and Volkswagen, which each sold more than nine million cars last year.

Nicholas Hyett, equity analyst at stockbroker Hargreaves Lansdown, said that despite the generally positive results, there could be problems ahead.

"There's the complete lack of guidance around near-term production headwinds," he said. "A global shortage of computer chips is expected to limit production from all manufacturers in the immediate future, and Tesla won't be exempt. Given the ongoing importance of its production ramp up, it may even be more heavily impacted."

And despite Tesla making a profit from sales of Bitcoin, Mr Hyett said there were many sceptics: "Tesla has made some $101m on its investment so far, which is all well and good, but huge gains and losses aren't really what corporate treasuries are all about.

"Investors could well argue that if they wanted to have exposure to Bitcoin they would have bought some themselves and don't need Tesla to do it for them.

"Still Tesla has never played by the rules - so far that hasn't stopped it being a winner."

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Profit of $438m with $518m from emissions credits. Same tale, different #'s.

This equates to Stellantis paying Tesla automotive alimony via our wonderful govt.
 

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That's a lot of risk with that bitcoin, granted, not enough to take the company down if it lost all value, but a huge variable every time they issue financials as it has to be revalued to market value. With the massive swings bitcoin can have, that can easily wipe out all of their profits. Granted, it is just on paper and their cash flow will be fine. Though, they are open to someone paying in bitcoin today and the next day that bitcoin being worth half of what it was - so they'd have essentially sold that car for 50% off.

But, on the same token, the value can double the next day.

But, either way, that's a lot of volatility that I suspect many investors don't want to see.
 

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Profit of $438m with $518m from emissions credits. Same tale, different #'s.

This equates to Stellantis paying Tesla automotive alimony via our wonderful govt.
True but they're also paying Musk about 3-4 years in advance of what they thought they would.

Lots of great potential products going to be rolled out this year too. If they just keep the 185k delivered pace up they'll be above 700k delivered this year.
 

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True but they're also paying Musk about 3-4 years in advance of what they thought they would.

Lots of great potential products going to be rolled out this year too. If they just keep the 185k delivered pace up they'll be above 700k delivered this year.
What's new this year other then the potential Cyborgtruck at the end of the year? Updated S?

I doubt the truck makes retail this year. I own a few shares but waited too long to purchase.
 

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What's new this year other then the potential Cyborgtruck at the end of the year? Updated S?

I doubt the truck makes retail this year. I own a few shares but waited too long to purchase.
Gigaberlin will be online (well should) so instead of shipping cars from Cali they'll be able to have a very stable production number in the EU.

Texas is coming along insanely fast.

Tesla Semi should be coming this year too although it wont be in huge numbers but apparently they've figured out production capability issues and can produce the battery packs in the time frame they want.
 

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Profit of $438m with $518m from emissions credits. Same tale, different #'s.

This equates to Stellantis paying Tesla automotive alimony via our wonderful govt.
We've seen this quarter after quarter now for it to not be a coincidence. It's clearly a matter of carefully managing growth.

Tesla could grow faster but would be in the red. Or they could show more profit now but would be under-investing n the future. Instead, they are choosing to invest as much as they can in growth while still staying around break even to slightly profitable, considering all revenue streams. I'd argue that is the right way to run a growing company.
 

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Gigaberlin will be online (well should) so instead of shipping cars from Cali they'll be able to have a very stable production number in the EU.

Texas is coming along insanely fast.

Tesla Semi should be coming this year too although it wont be in huge numbers but apparently they've figured out production capability issues and can produce the battery packs in the time frame they want.
Also Model Y isn't available in Europe until Giga Berlin comes online. So that's possibly a big boost as Y is likely to outsell 3 by a big margin in Europe (cars with trunks aren't popular on that side of the pond).
 

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I propose a new rule. If you are a company receiving energy credits and you are also buying Bitcoin, they deduct the energy wasted "mining" the coins you have from the credits you receive.
 

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So they are losing money on car production, but making money selling carbon credits and BitCoin? Or did I read it wrong?
 

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So they are losing money on car production, but making money selling carbon credits and BitCoin? Or did I read it wrong?
They're not losing money on the cars themselves...they're still building factories and taking on other initiatives that have a heavy initial cost.
 
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They're not losing money on the cars themselves...they're still building factories and taking on other initiatives that have a heavy initial cost.
Exactly. And they are carefully managing that long-term growth to use up (almost) all the profit they generate but not more than that, which is why we don't see big profits or losses.
 
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Exactly. And they are carefully managing that long-term growth to use up (almost) all the profit they generate but not more than that, which is why we don't see big profits or losses.
It doesn't make sense that we keep hearing these comments, not necessarily jumping on you TruckMan in this case as your post just raises the topic but when talking Tesla and profitability you have to remember that we're not talking about an automaker that's been around for 80,90,100 years, Tesla is new to mass production autos as they haven't even been doing this for 10 years. So those startup costs are going to be there and they're going to be a factor in their finances for the foreseeable future.
 

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Didn't they issues a bunch of stock last year?...........................
 

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Didn't they issues a bunch of stock last year?...........................
Yup, contributed to the $17B cash pile (not including Bitcoin).
 

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So they are losing money on car production, but making money selling carbon credits and BitCoin? Or did I read it wrong?
They're not losing money on the cars themselves...they're still building factories and taking on other initiatives that have a heavy initial cost.
Let me preface this by saying "I'm not sure" if this is figured correctly, (Especially since we are dealing with Tesla, they tend to make a lot of crap up) but the principal premise is accurate........

Tesla had GROSS PROFIT of about 25%.
Regulatory/Carbon Credit (per unit) is about $6,000 (working backwards from information on the interweb).

Ballpark ASP for a Tesla (primarily M-3's and M-Y's) ~$50,000

That makes gross profit per car about $12,500 (25% of $50,000)

Take away the $6,000 and gross profits drops to $6,500 or 13% ($6,500 / $50,000)
13% in not a lot, especially for a company that is growing/expanding, in the capital and R&D heavy business that it is.

  • Tesla has "self-funded" much of it's existence with the issuance of more stock, can they continue to do that?
  • Will the competition continue to buy credits from Tesla, as Tesla makes more cars, and as they themselves make more EV's?
  • With more competition, does Tesla have to cut its price (more) to continue to grow as it is predicting?
  • At some point a P/E of 1,000 will be too high, and continuing to dilute shareholders (by issuing more shares) will catch-up with them.
This is sort of the path Amazon took, but Amazon created/dominated a relatively "light" infrastructure business segment that didn't exist and dominated it, additionally, they make a lot of their money in other things than their "core" internet sales business, for example AWS.
 
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Let me preface this by saying "I'm not sure" if this is figured correctly, (Especially since we are dealing with Tesla, they tend to make a lot of crap up) but the principal premise is accurate........

Tesla had GROSS PROFIT of about 25%.
Regulatory/Carbon Credit (per unit) is about $6,000 (working backwards from information on the interweb).

Ballpark ASP for a Tesla (primarily M-3's and M-Y's) ~$50,000

That makes gross profit per car about $12,500 (25% of $50,000)

Take away the $6,000 and gross profits drops to $6,500 or 13% ($6,500 / $50,000)
13% in not a lot, especially for a company that is growing/expanding, in the capital and R&D heavy business that it is.

  • Tesla has "self-funded" much of it's existence with the issuance of more stock, can they continue to do that?
  • Will the competition continue to buy credits from Tesla, as Tesla makes more cars, and as they themselves make more EV's?
  • With more competition, does Tesla have to cut its price (more) to continue to grow as it is predicting?
  • At some point a P/E of 1,000 will be too high, and continuing to dilute shareholders (by issuing more shares) will catch-up with them.
This is sort of the path Amazon took, but Amazon created/dominated a relatively "light" infrastructure business segment that didn't exist and dominated it, additionally, they make a lot of their money in other things than their "core" internet sales business, for example AWS.
Regulatory/carbon credits used to be $6000 per unit about a year ago. It's about $2900/unit now ($518m/180k units from Q1 report). As volume grows, this will continue to be a smaller and smaller chunk.

Tesla has been increasing their prices, not cutting them. The cheapest is now $39k (up from $35k at Model 3 launch).

As long as the market is putting up with ridiculous valuations, I see no reason for Tesla to not issue more stock (easy for me to say as I don't own any!)
 

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I stumbled across this today, maybe issue more stock soon?

63597
 
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