Tesla Delivers A Disastrous Q2, CTO Leaves, Stock Gets Pummeled — Now What?

"...reporting a rather staggering 19-percent profit margin on each car sold."

Wrong. There is zero profit margin if the company cannot make a profit. Q2 $408 million loss divided by 95,356 cars is a loss of over $4k per car.

The losses are staggering and unsustainable. A child that invests in a lemonade stand earns more profit in 5 minutes than Tesla has in 16 years.

At 19% GP per car what is happening to make Tesla unprofitable? Perhaps it is their investment in new product to fill out their portfolio from Semi to Roadster? They know that they need a full line of cars, trucks and SUVs to survive longer term.

Q1 was a disaster, Q2 was meh. Also by removing ZEV credits and properly recognizing lease revenue the loss was $100 million. It was a significant improvement from last quarter and last year, but obviously there is still a long way to go.

They still have $5B cash on hand, which is more than they ever had in the past. They will be able to scale production at a lower cost. For example, the Model 3 line in Fremont cost $2B to build while the whole Shanghai Gigafactory's phase 1 will cost $500M. Labor will also be significantly lower. By next year their average cost per car will be lower and the CAPEX will be spread across a larger number of units.

70% of cars sold also have a $7k upsell option, "Full Self Driving." The first FSD features are coming out mid August, that should help boost margin retroactively. Once ridesharing is available, like UBER and Lyft, Tesla will get a cut, another future revenue stream for current product that has already been sold.

Cue Truthy to cut and paste his five-year-old spiel about how Tesla's demise is imminent. Lol.

Says the cut and paste diatribe king.

You fanboys have more sunshine up your ass than Elon. Tesla cut Capex in order to have positive cash flow. Over the last 8 quarters the ASP is falling faster than COGS - horrible trend. There is no path to sustainable profitability.
Elon has to keep reducing prices to prop up demand. Sad.

8 quarters ago, there was no Model 3. If you release a car that is half the cost of the only cars in your lineup, obviously ASP will drop. The ASP drop from Q1 was marginal despite $35k and $37k standard range options. Due to the changes made this quarter to the high end Model 3s, they expect ASP to stay the same in Q3 despite the loss of government incentives.

Wrong again, SanJose. The model 3 has now been available for a year. True, this contributes to the decline, but the important takeaway is COGS is not declining as fast as ASP. Margins are eroding. Model S and X are sinking even faster. The product mix is skewing to even cheaper model 3s. Elon keeps dropping the price or else demand drops off.
If Tesla cannot make money with this delivery rate, they never will. And growth companies don't cut capex. $5.0 billion in the bank is not nearly enough to fund all the BS projects Elon is promising and keep the company running on losses.
You forgot to address the executives selling their stock.

Nope, July 2017: https://en.wikipedia.org/wiki/Tesla_Model_3

New lines are expected to cost half a billion. It will take $1B to get the Y off the ground in both the US and China. The Roadster and Semi are niche products that will likely be mostly hand-built. The truck is the only question mark for capex right now.

Given that Tesla does no in-car prototyping and doesn't waste time on engineering, it probably will take only $1B. And like the Model 3, the prototypes will be sold to unsuspecting customers.

now you can remove your head from their ass

Did something happen in the bathroom stall?

Also check out SEC filings in the last two weeks. On top of the co-founder leaving and selling his stock, many tesla executives are selling their stock. Enron 2.0

#KillTesla #StopItDead

If Tesla was a horse you would shoot it.

I'm actually against the killing of wild horses. I'd like the kill the people who do, however.

Wild animals that are injured will eventually die in the wild due to predators - a far worse death the euthanasia. Euthanising an injured animal is actually a far better end for them than being eaten alive.

They aren't killing injured animals you hateful old moron.

If Tesla was a horse you would shoot it.

From all the above, I walk away with two conclusions. SanJoseDriver is the head of the Tesla marketing department and Truthy is the head of the Audi, or BMW, or Mercedes marketing department (or whatever other competitor).

SanJoseDriver also wears knee pads when he goes to work and that isn't a part of Truthy's work world.

SanJoseD is somehow spinning that losing $400 million and stopping capex is a positive.
I am stating the obvious and consensus among analysts - and apparently numerous Tesla executives who are dumping their stock - there is no path forward for sustainable profitability. Elon has pretty much pulled his demand levers. All that is left is reducing the price. The new German models are hitting the S and X models. There is a reason why no one is attacking low price EVs, they lose money.

I wish I was the head of marketing at Tesla, that sounds like a kick ass role. I'd rather be a product manager though, think there are a lot of minor things that could be improved with the S/X/3 that would not be expensive and would add value/demand. A CCS combo charger built into the car for one.

A $400m loss is definitely not a positive, but it is also not a death knell and shows improvement from Q1. There are many demand levers to go, including software locked features in every car.

Once again Sunshine, $400 million loss is "not that bad?!?" Elon has been promising sustainable profitability for 3 quarters in a row. As the ASP is falling faster than COGS, and Elon has already lowered prices twice in the third, how is tesla going to make money?
China? Current demand there is about 40,009 per year, so, um, no.

Demand is way from than 40k/year in China, especially with locally built tariff-free cars coming online soon. $400M loss is 6% of revenue, bad but not horrific.

Have I somehow ended up on a Tesla forum website? My mistake.