> As a company that is running mostly on brand status
They shipped like half a million cars this year! They own like 70-80% of every EV market they compete in. This is the kind of criticism you'd read about Tesla in 2014. The companies that "have been building cars for decades" are getting stomped by Tesla in this space, 12x more Model 3's were sold than LEAF's in the US last year.
At some point the established wisdom among some people that Tesla is failing is going to change, right? The ship has sailed on that, left the harbor, and is half way across the ocean by now.
And the weirdest thing here is that it's not an attempt to attack Tesla from the perspective of established auto makers but from Apple Computer, a company with no experience at all in the market and almost nothing to bring to the table but "brand status" (and a freighter full of cash, of course).
Tesla's biggest threat isn't Apple. It's the other automakers making enough EVs that they don't need to purchase credits from Tesla anymore.
Tesla is profitable, but every single one of its quarterly profits is still the result of selling credits to other automakers, not from the sale of its cars. In that regard, Tesla joins such luminous counterparts as Fiat (1.4 million profit on accounting charge) and Hyundai ($140 million quarterly loss) as the only "major" automaker which doesn't make money selling vehicles.
That credits thing doesn't seem to add up. A quick google shows that 7% of Tesla's 2019 revenue was selling credits. While sure, that's of the same order as the profit, you can't make an argument that "all" of the profit was credits for basic fungibility reasons. "All" of the profit could be any 7% chunk of revenue.
And 7% is like half a year of profits growth in this cases for a company that is still growing rapidly and finding efficiencies.
It's spin, again. And I genuinely don't understand why so much of it continues to be deployed against this company when it keeps proving it wrong.
It's "literally all" of the profit because Tesla controls the timing and amount of credits sold each quarter, and adjusted the sales of credits so that it could make the "4 consecutive quarters" profitability threshold for making the S&P500 rather than selling them all in one quarter as they did in the past.
Profits are not fungible. Companies can, and do, determine profit and loss separately for each line of business, because it matters both for financial reporting purposes and for tax purposes. Even Tesla acknowledges that it is not profitably making and selling cars under GAAP (i.e., under industry-standard accounting); their unit margin deliberately excludes items that would normally be ratably allocated to each unit. Hell, Tesla even fired most of its marketing department and cut its marketing budget so that it could goose the financial metrics it needed to make the S&P.
In that sense, it worked. Tesla is on the S&P. The downside to being on the S&P though is greater scrutiny and more price friction. Tesla can no longer count on retail investors to goose stock prices with marketing stunts.
There isn't an upside. Theoretically it means that certain investment vehicles must buy shares of your company. But they do so from the open market; not from offerings.
Otherwise, it's just a matter of prestige: the S&P lists are just the X largest (by stock value) profitable publicly traded companies.
The difference between S&P X00 and Nasdaq: S&P is just a list of publicly traded companies; it is not a stock exchange. Nasdaq is an actual stock exchange, like the NYSE.
This sounds about right but you're arguing with a point that I'm not making. Sure, they're successful and have market dominance, my point is that this isn't based on them necessarily having a better product or being a better car manufacturing company.
They shipped like half a million cars this year! They own like 70-80% of every EV market they compete in. This is the kind of criticism you'd read about Tesla in 2014. The companies that "have been building cars for decades" are getting stomped by Tesla in this space, 12x more Model 3's were sold than LEAF's in the US last year.
At some point the established wisdom among some people that Tesla is failing is going to change, right? The ship has sailed on that, left the harbor, and is half way across the ocean by now.
And the weirdest thing here is that it's not an attempt to attack Tesla from the perspective of established auto makers but from Apple Computer, a company with no experience at all in the market and almost nothing to bring to the table but "brand status" (and a freighter full of cash, of course).