Comment Re:So, losing money on every sale (Score 1) 257
I see this moronic attempt at a "joke" every time this topic comes up, but you win today's lottery in terms of getting responses, so...
Tesla makes (significant) profit on every sale. The problem is that they don't make a lot of sales. In order to make a lot of sales, they need to dramatically invest in production. Some of that goes into upgrades and retooling (making it possible to sell cheaper cars, which will get more sales), some of that goes into sheer manufacturing capacity (more factories, including their "gigafactory" for batteries).
That doesn't even count their ongoing investments in research, of course, but without those the company would never have gotten anywhere at all, and for a startup to successfully compete with the big dogs long-term, they have to leverage their first-mover research advantage ruthlessly. That might suck if you're the kind of investor that expects every week to see a higher close price than the last, but if you're *that* stupid, you've got worse problems...
Funny thing about investments in R&D: in the short term, they cost money. Of course, in the long term, they make it possible to earn a *lot* more money than they cost, but they do typically result in a few unprofitable quarters. Tesla could have just gone on selling their current lineup (or hell, their lineup from two years ago; no need to develop the dual-drive models) and been profitable - remember, they earn money on each sale - but they'd never have managed much volume. Eventually their backlog would have grown from "a few months to a year" until it reached "there's no point ordering one, it'll be obsolete by the time it arrives". Relatively shortly thereafter, that lineup of Teslas would have been obsolete on the day each one arrived, and nobody would buy them anymore.
It's not like Tesla can't afford a bad quarter. $100M is a hell of a lot cheaper than "our company is now worthless because we failed to stay relevant in this rapidly growing and advancing industry, squandering our position at the top of it". They can absorb a hit like that, even a number of hits like that.
I'll pass on that business plan.
Well, I guess that explains why you aren't a self-made multi-billionaire, doesn't it?