Tesla Lost $34.9m In Q3, Dropped $103m Year-To-Date

by Edward Niedermeyer

Published: November 9th, 2010

tesla lost 34 9m in q3 dropped 103m year to date

California EV maker Tesla has reported its Q3 results, and they’re a sizable helping of not great. But before we dive into the messy reality, let’s check in with CEO Elon Musk for an unreasonably rosy take on the loss:

We are very pleased to report steady top-line growth and significant growth in gross margin, driven by the continued improvement in Roadster orders and our growing powertrain business. Roadster orders in this quarter hit a new high since the third quarter of 2008, having increased over 15% from last quarter. While some of this is due to seasonal effects associated with selling a convertible during the summer months, we are pleased with the global expansion of the Roadster business and the continued validation of Tesla’s technology leadership position evidenced by our new and expanding strategic relationships

Translation: Toyota is investing in us… now get out of here with your awkward questions. Unfortunately for Mr Musk, it isn’t quite that simple…

What Musk leaves out is, well, there’s a lot he leaves out. For one thing, Tesla managed to lose only $4.6m in Q3 of 2009, so these latest results are a disaster when compared year-over-year. And the picture is even worse for year-to-date results: Tesla has lost $103m so far this year, over three times the $31.5m loss accrued in the first three quarters of last year. And even using Musk’s generous comparison to Q2 2010, Tesla’s operating loss actually widened (on massively increasing operating expenses), and was offset only by an increase in “other income.” And no surprise: automotive sales revenue was nearly half its Q3 2009 level.

UPDATE: Elon Musk tells the San Jose Mercury News that

attaining quarterly profitability isn’t a goal… We’re very focused on long-term profitability.

So… mission accomplished. Except that making profit on a blue-sky luxury electric sedan is typically a long-term (to say nothing of expensive) proposition. And the Model S won’t be the only green luxury game in town come 2012. But then, that kind of negative thinking has a history of not bothering Musk. If and when it starts affecting Tesla’s stockholders, things could get ugly.

#EV #HighFinance #Industry #Tesla

Edward Niedermeyer

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3 of 24 comments

Cmoibenlepro on Nov 10, 2010

Their operating profits increased, which is a good thing. Their financial situation improved compared to 2009. They had a 34M loss because their Research and Development costs increased by 20 folds. Please compare apples with apples. Maybe they could make a profit from this research.

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- John Horner on Nov 10, 2010
  
  "Their operating profits increased, which is a good thing"
  
  Uh, no they didn't. Read the line "Loss from operations" again. Losses were worse this quarter than last, and dramatically worse this quarter compared to last year's equivalent time period.
  
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Lokki on Nov 10, 2010
Tesla’s risk is that they aren’t making money right now, and nobody is sure where they’re headed (well, some readers here seem to have a crystal ball). Uhm, I don't have a crystal ball, but I think I can see the handwriting on the wall: 1. What Tesla actually has to sell right now: a. Isn't selling that well b. Isn't making much money for them(if any) when it does sell. 2. Tesla has gotten this far on the basis of a nice juicy (electrical juice?) "loan" from the DOE. That won't last forever and may not even last until the introduction of the Model S a. It's easier to get a first loan than a second one. b. The Republicans are in control of the House (where money comes from) and they're looking for places to cut spending. Second loan from Tesla from them? I don't think so. c. California to the rescue? Better ask the State Employees Pension plan 'cause they're the only ones in the California government with any money. 3. Even if the Model S makes it to market, how big IS that market anyhow? Electric cars are good as commuter cars...not so much for family transport. Unless you're carpooling what is the market for an electric family sedan? Oh, and at the cost of a BMW 5 Series at that. 4. Even if the Model S makes it to market, and is a success, how much money will Tesla actually make on the car? Enough to sustain the company? Hmmmmmm So, although I've no crystal ball, even though the scratched and dirty plastic lenses of my cheap glasses, I don't think things are looking so good for Tesla.

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