Quote:
Originally Posted by F32Fleet
Does anyone think Tesla can be profitable without selling carbon emissions credits? As I understand it they lost about 600M last year once you remove these credits.
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yeah so that's one of those BS "buh buh buh" narratives - here's why:
Ever notice how lots of companies ALWAYS beat estimates by 1¢? That's not coincidence: the CFO engineers the books to make it happen. In this case, Tesla has the luxury of earning profits by using various sources of income so they do. It wouldn't be hard for TSLA to find $600M elsewhere, but they don't have to so they don't ... so that's irrelevant but actually they shouldn't be able to find it!
The actual question investors should be asking is WHY IS IT POSSIBLE FOR TSLA TO EARN A PROFIT??
That is, you have company in GLOBAL hyper-growth mode who's making a brand new product, disrupting legacy competitors, and inventing new technologies to do it; TSLA should be spending enough to stay underwater for the next decade building factories, building scale, inventing ... they should be reinvesting in R&D, yet their R&D budget is miniscule compared to the challenges they're facing and they're turning profits? That's a bit scary.
TSLA is
the growth company: Profits are only supposed to happen after wide-scale adoption, huge economies of scale, and unassailable moats have been built. TSLA has not achieved any of that and their finances may indicate they're not too concerned about it just happening ... that is, they're not spending for war, they're spending like they've already won so why not kick back and earn a few bucks?
Seems like the wrong attitude, right?
There's a small case to be made that they're earning a see-we-can-do-it PR victory to boost stock price, but they've already done it so why not pivot into huge infrastructure and R&D spend?
Do they know something about their sales they're not disclosing?
Amongst other reasons, that's why I'm not an investor (other than via index funds).