If the production costs (labor, parts etc) happened over a lengthy period and then they recognized profit for 109 shipped cars in July... of course they have a profitable month in July. I'd want to examine the end to end costs of the cars.
Also there fixed costs and I really doubt they have even come close to covering the fixed costs associated with automobile production.
I'm really glad they are profitable for July, it means they might be only a few years away from mass producing these babies.
If musk can do with his cars what he did with spacex he will be able to produce items for his vehicles himself and overcome the fixed cost dilemma. I recall him making some of the parts for his vehicles in the spacex plant. Most of (90 some percent) of his rockets are made in house, which is why he can undercut orbital, lockheed, and the russians by a factor of 3. Last I heard theyare building a tesla manufacturing plant in san jose. Let's wish them luck.
Definitely! I'd love to see a big Tesla plant driving down 101.
It does worry me that if he builds a large portion in house, does it then scale as well as say a Toyota? Is supply chain management somewhere in his background?
I think supply chain management is less of a problem now that a single CnC machine can make a wide range of parts. The goal of any supply chain should be balancing the number of suppliers with the overhead costs. And I think that's been shifting to fewer suppliers for a while now.
If Musk can combine Tesla and SpaceX so I can buy a single stage to orbit roadster that gets 300 miles on a charge for 100k I'd be very happy. I'd even sell my Moller stock.
I highly doubt that their math was that simple. The article even mentions that the revenues reflect GAAP accounting standards. Also, 109 * $109k != $20m, so obviously their revenue numbers for July are not directly based on how many roadsters were actually shipped during that month.
The article is quoting two separate stats about Tesla's July:
1) They were profitable
2) They shipped 109 roadsters
The first is not directly and solely due to the second.
I'm not a GAAP Accounting whiz, but you need to book labor related expenses on the months they occur which much be a large portion of Tesla's expenses. You then can reach profitability by recognizing all sales in one month whereas if you spread out your sales over a few months you would not have. This kind of cookie jarring is borderline illegal but I suspect happens all the time in corporations because it is brilliant press and satisfies your investors.
Also, I'd hope that most of their revenue is directly attributable to selling cars. What they might have is an amount of each sale hitting deferred revenue and recognize it over the length of the warranty (similar to iPod).
Edit: Apologies for finance nerd rage, I'd love for someone to clarify what can and can't be done under GAAP though.
If the production costs (labor, parts etc) happened over a lengthy period and then they recognized profit for 109 shipped cars in July... of course they have a profitable month in July. I'd want to examine the end to end costs of the cars.
Also there fixed costs and I really doubt they have even come close to covering the fixed costs associated with automobile production.
I'm really glad they are profitable for July, it means they might be only a few years away from mass producing these babies.