By on January 31, 2019

Tesla CEO Elon Musk waded through his company’s entire fourth-quarter earnings call before springing the news that two-time chief financial officer Deepak Ahuja is headed for retirement. It seems likely that Ahuja’s second retirement will be permanent.

Ahuja presided over a year Musk called the most challenging in Tesla’s history. Previous statements from the CEO suggested a second consecutive profitable quarter, and that’s just what Tesla announced last night: a $139.5 million profit in Q4 2018. That’s down from the previous quarter’s $311 million, but far and away better than Q4 2017’s $675 million loss.

It’s also a first for Tesla.

Never before has the company seen two profitable quarters line up next to each other, and with good reason. Before Q3 2018, the company’s list of profitable quarters held a single entry.

With Model 3s pouring out of Fremont at a steady clip, Tesla’s Q4 revenue of $7.23 billion beat analyst estimates, while its pile of available cash ($3.7 billion) continues to grow. It’ll need a chunk of that cash soon. The company has a $920 million convertible bond that matures in March, but Musk and Ahuja told investors the company is in a position to “comfortably” pay it off.

Forecasting deliveries in the 360,000 to 400,000 vehicle range for 2019, Musk said investors can expect profits going forward, with only Q1 2019 warranting a question mark. He also said that if the long-feared recession does appear this year, Tesla deliveries will still rise 50 percent. That said, this quarter’s Model 3 deliveries might fall in the U.S. as Tesla begins shipping the sedan overseas.

Speaking of overseas, the company’s Shanghai assembly plant will crank out 3,000 Model 3s per week by the middle of next year, Musk said. The Model Y, Tesla’s upcoming compact crossover, will appear by the end of 2020.

Tesla’s standard battery Model 3 — the $35,000 car promised by Musk during the model’s launch three years ago — should arrive this summer.

As the company cuts staff and rearranges trims and pricing, a new threat looms: competition. Tesla is no longer operating in a vacuum, and luxury automakers the world over are keen to beat the California company at its own game. Michael Dean, an analyst with Bloomberg Intelligence, commented that, “Tesla’s effective premium monopoly is also over with competition coming through in 2019 from Porsche, Audi and Mercedes.”

Edmunds analyst Jessica Caldwell said that, despite the bright points in its Q4 report, Tesla still faces an uphill climb.

“Things really aren’t going to get any better for Tesla in the U.S. than they did at the end of 2018,” she told CNBC. “Turning a profit, creatively addressing production challenges and getting the Model 3 to the masses were huge milestones, but keeping up this momentum is going to be virtually impossible.”

[Sources: Bloomberg, CNBC]

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30 Comments on “Tesla Turns Another Profit As CFO Heads Out the Door...”


  • avatar
    ToddAtlasF1

    I’ve seen this at a shady place I used to work. Some people can’t stomach signing off on cooked books.

    • 0 avatar
      EGSE

      Yup. The founder of a privately-held company I was at announced they were planning to do an IPO. The next day the top two financial officers resigned. Sarbanes-Oxley violations can ruin your life.

      They were eventually bought by a Fortune 100 company. Within a few years they were one-half the size they were when acquired.

  • avatar
    Matt51

    Why do so many people quit? What is wrong with Musk?

    • 0 avatar
      PrincipalDan

      I’ve said it before: Musk’s face is sooooooooooooooo punchable…

    • 0 avatar
      indi500fan

      Their turnover in management is truly epic.
      No way that allows an organization to be successful.

      Also some reports are that the California factory peeps that got flushed were from the top of the seniority list because they made the highest hourly rate. That will certainly incentivize bringing in the UAW.

      • 0 avatar
        FreedMike

        Epic turnover in management? I thought were talking about Tesla, not the White House…

        • 0 avatar
          EGSE

          There’s almost no similarity between the two….Tesla employees quit or are fired to “pursue other opportunities”.

          White House employees are indicted and go on to make license plates.

          • 0 avatar
            indi500fan

            Tesla boosters claim this is “normal” personnel churn typical of Silicon Valley tech enterprises.
            But I don’t see how you can design and mass produce something as complex as vehicles with no continuity and no institutional memory.

          • 0 avatar
            FreedMike

            Now, that’s not fair, EGSE…some end up on “Big Brother.” I demand you stop with the TDS!

      • 0 avatar
        SCE to AUX

        “Their turnover in management is truly epic.”

        I’m not so sure that’s true. *Coverage* of their management turnover is epic, however.

        I suspect some (not all) of these departures are people who use the Tesla brand to leverage their resume. Some are likely fleeing something. Mr Musk isn’t easy to work for, so there’s that, also.

        As for Deepak Ahuja, he claims he’s retiring (at 56). Maybe that’s actually true. I’m soon 56; if I could retire, I’d consider it.

        Departures can always ring a bell. In this case, Mr Ahuja is leaving after posting a profit and saying he wants to retire, but some say it’s because he doubts Tesla’s future? On the other hand, if he left after a loss, we’d say it’s because of the loss.

        So when is a departure from Tesla not a scandal?

        • 0 avatar
          jatz

          @SCE

          All excellent points.

        • 0 avatar
          Lockstops

          “I suspect some (not all) of these departures are people who use the Tesla brand to leverage their resume. Some are likely fleeing something. Mr Musk isn’t easy to work for, so there’s that, also.”

          Are you trying to make a case FOR Tesla?
          “Hey, everything fine: top management only comes in to fluff their resumés, the company books and operating practices are rotten, and the CEO is horrible. Just fine and dandy.”

          • 0 avatar
            SCE to AUX

            @Lockstops:

            TSLA has a market cap of $52 billion and owns 80% of the US EV market. So yes, having Tesla on your resume would be beneficial for future employment.

            And your charge that Tesla’s books are cooked is essentially libelous. With so many eyes on them, I doubt Tesla would be so stupid as to try such a stunt. For warm books, I’d look at little companies trying to fly under the radar.

          • 0 avatar
            Art Vandelay

            80% of 2% of the US Vehicle Market.

    • 0 avatar
      JMII

      Musk is like Jobs – these types demand the impossible, fly off the handle, change directions with no notice… basically bonkers and thus the working environment is brutal for everyone – executives to hourly.

      • 0 avatar
        Vulpine

        @JMII: “Musk is like Jobs – these types demand the impossible, fly off the handle, change directions with no notice… basically bonkers and thus the working environment is brutal for everyone – executives to hourly.”

        — Anyone who has read Jobs’ authorized biography will agree with you.

    • 0 avatar
      Asdf

      What’s wrong with Musk? He’s incompetent, that’s what the problem is. After making cars for a whopping 15 (!) years, Musk’s company still hasn’t managed to build a car that may be fully charged in a reasonable five minutes, which is such a basic requirement that he should have made sure that it was implemented before the very first Tesla model left the conveyor belt. This epic failure should have had him fired long ago, and he would have been if it weren’t for brainwashed greenies and outright morons diligently making poor excuses for his failures.

      • 0 avatar
        jatz

        “He’s incompetent, that’s what the problem is.”

        Jeez, dude, he’s certainly been competent about getting rich. I haven’t; how about you?

      • 0 avatar
        Master Baiter

        @Asdf

        “Musk’s company still hasn’t managed to build a car that may be fully charged in a reasonable five minutes…”

        I really wish you’d get your head out of that dark place in your anatomy it perpetually occupies.

        You seem to think that if Tesla added a 25 cent diode to the car, it would charge in five minutes. Do you have any clue as to what it would take to charge an EV in five minutes? I’m an electrical engineer who designs batteries for a living, and I can tell you, it is incredibly difficult, and would involve many compromises in other areas of the vehicle design, performance and cost. Just like if Porsche wanted a Boxster to be able to tow 8000 pounds.

        Please stop with this nonsense; you are beyond tiresome.

        • 0 avatar
          mcs

          A 3-minute fueling might be an issue when you are standing beside your car pumping in gas in -20-degree temps. When your car can get fueled unattended while you shop or enjoy a hot cup of coffee in a nice warm place, it’s not a problem.

          • 0 avatar
            Art Vandelay

            I couldn’t fuel my leaf at the mall last time I drove there because a couple of Tesla drivers that obviously worked there stayed parked there for 8 hours. (Our Corporate office is there and I figured I’d park there, charge it, then move). I never got the chance. Yet they B!+ch and moan about trucks “ICEING” the Tesla chargers.

        • 0 avatar
          EGSE

          No cogent argument will sway him because he’s not here to argue it on the merits, he’s here to be noticed, to gain attention to feed his ego. I’m also an EE and know he’s full of it but that is immaterial to the immature.

          We should ignore him, not make it a contest based on ignorance where he can beat us by experience.

          Wishing the moderators would step in to decisively handle the problem….

          • 0 avatar
            Art Vandelay

            I mean it is an opinion. The mods haven’t stepped in to ban him for calling everyone retarded so I doubt his stance on charge times would get him banned. Scroll on…you are feeding him.

      • 0 avatar

        Yeah, Steve Jobs also was incompetent said former PepsiCo executive.

  • avatar
    EGSE

    Tesla has put a lot of emphasis on the technology that underpins their products and they’ve won high marks in the engineering tear-downs that third-parties have conducted. Where they’ve fallen short by comparison is in design for manufacturing. Getting the tech IP done is a non-recurring cost whereas not getting the DFM right is a recurring cost hit. Has anyone heard anything from Tesla that there’s an emphasis to pursue this (beyond battery manufacturing)? One example was in a sub-frame component for the Model 3. It consists of eight pieces fabbed into one; a statement from a manufacturing engineer familiar with auto manufacturing stated it could have been one stamping (in his opinion) if made at an established car company.

    I don’t obsessively follow Tesla and would appreciate hearing something that’s actually based on facts.

    For a change.

  • avatar
    SatelliteView

    So, model S outsold MB S-class, BMW 7-series and Audi A8, I think combined(?) Now model 3 outsold C-class, 3-series, and A4. Yet Mask is incompetent. You guys are jocking

    • 0 avatar
      conundrum

      Jocking? I don’t think so. A certain portion of the population were willing to give Tesla $1K for the privilege of being put on a list for the $35K el cheapo 3 – they all expected to get a big fat $7.5K government incentive as well. Greed motivated many of them. Nissan and Chrysler play the $4 or $8K or 15% OFF routine, and the saps keep rolling in. They focus on the discount rather than the absolute value.

      Then Musk decided only to make and sell higher-end versions to anyone with the loot, like right now. The paid-up faithful still pace the floor waiting for their Econo3.

      If you read today’s press, the 7% cull of employees was the higher-paid ones – and included the QC department, which is what Tesla calls the re-work area in true 1970’s fashion before QA programs came in during the 1990s. So now the less experienced remaining hourly workers will turn over a new Leaf and assemble the vehicle 100% perfect, every time, without fail.

      Teslas are selling well, no question. Now read some forums and see how the after-sales service is doing. Some folks are gluttons for punishment and still give the company a pass. Wonders will never cease. And I’m not joking.

  • avatar
    SatelliteView

    Take a step back and tell me what other automotive company has done everything 100% perfect? Also when was the last time business did not pray on people gullibility?

    By your logic US is a shitty country because of a few flaws. Are you a cultural Marxist, by any chance?

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