Featured Toyota Announces 2 New EV's

I've been seeing this kind of stuff from tesla shorters since I bought the stock in 2012. Gross margins on cars are over 20%. I unfortunately sold out before last years run, but even if tesla had lost a lot of money last year the getting the model Y design finished and into mass production, the production from the new Chinese tesla factory, the expansion of the super charger network, the company would be profitable this year. Do you object to Chinese subsidies for the Chinese plant?

It does cost money to design the 3 new vehicles (semi, cybertruck, roadster) and complete the gigafactories in Austin and Berlin. I really didn't like the local subsidies for the Austin plant. Then again I didn't like the subsidies to move toyota's US headquarters to texas either. Still subsidies are going to decrease for tesla. They already get no federal subsidies for each ev they sell, the do get credits that they sell to other companies that do not have enough efficient vehicles, but then again this is less expensive for those companies than shifting away from gasoline powered trucks and suvs in the american market. Every car company gets subsidized. Tesla had incredible growth in 2020 during the pandemic.

 

Austin, you are assuming a position that I have not taken. The assertion was made that Tesla was making a profit on their car production. I simply pointed to the fact that they would not have been profitable without the credits and subsidies that they get. I don't care that they are supported by taxpayer dollars any more than I would have objected to the subsidies that helped sell the first Prius models.

But I can see how, as an investor in Tesla and a buyer of their product how you might feel strongly about it. If a company does not make a NET profit (not gross) without subsidies it will be likely to flounder and maybe even perish. Stock crashes. Support fades away.

What is Tesla's Profit per Vehicle? | ZagInvestor shows that in 2019, Telsa had 2 out of 4 quarters that made a profit per car of up to $3203 4q2019. Unfortunately for the year of 2019 they had their best year so far, averaging only $1000 loss per car over the course of the year.

From Tesla's dirty little secret: Its net profit doesn't come from selling cars you get the fact that Tesla made $1.6 billion in 2020 from carbon credits sales. It posted a net income of $721 million. If the value of the carbon credits ever drops, a large part of their income stream goes away.

Now, do I care? Nope. My only reason for posting the one before this was to add facts to the discussion.

 

The problem with using profit per car is that it doesn't account for what Tesla is spending money on. They are expanding their manufacturing infrastructure and the Supercharger network. New factories are a huge outlay of cash, but without them Tesla can't grow their revenue. Established car companies already have that in place, and don't need to expend as large of a percentage of their income on new factories.

As for selling credits, car companies have been trading and selling CAFE credits before Tesla was an idea. Toyota likely made some bread off the Prius that way. The loss of some credit markets won't be good for Tesla, but the increased production capability from those new factories will offset it.

 

The downside of this is that the federal tax credit for Toyota will expire as Toyota goes over 200,000 EV vehicles, and Prius Prime will no longer be a cheap car.

 

Look at the news, specifically for the "GREEN" proposal from the Biden administration.

 

tesla is going to be raking it in. more so than ever.

toyota and gm will be talking up bev's until the dems are out again.

 

You mean this? OK, it remains to be seen.

EV tax credit renewal and expansion gets first big push under Biden administration - Roadshow

As for Tesla, they would eat away the remaining 400,000 cars in less than a year. They have never been a profitable company and they will be facing more and more competition soon. Tesla stock, with its price-to-earning ratio of 1,268, is a bubble to burst any time. Elon Musk has achieved success by overhyping his companies and himself, promoting himself as a rocket scientist and inventor. His rockets have been blowing up lately. His Bitcoin investment is in the lines of desperation—something no respectable car company would do.

 

been hearing that for over a decade...

 

The big reason environmental credits went up so far up in 2020 to $1.5B is that car makers in Europe are not close to getting to the ghg goals so they - especially fiat Chrysler bought a lot of credits, to tide them over for the next 2 years. I don't expect this will reverse in the next couple of years, but as tesla grows it will be a much smaller part of revenue. The credits remove the excuse that no one can build cars that efficient. Car companies will invest or pay. Shorts focus on the subsidies to make it a political issue and drive the stock price down. They have now lost billions of dollars, but it like the anti hybrid stuff is not coming from a truthful point of view.

If your question is are tesla's cars profitable today without the environmental credits, the answer is yes, but you need to do different accounting than those pushing no.

You will note from the summary -

The reason why tesla was not profitable in 2019 was growth. They had R&D expenses for the model y, roadster, cybertruck, and semi. They had costs related to giga china and berlin that were not producing. They had expenses for the supercharger network, and losses in the solar panel business. None of these should count against gross margins of the model S, X, and 3 that were sold in that year.

2020 R&D was $1.5 billion and there were still those vehicles not being sold and giga berlin and austin costs. As sales grow this year SG&A expense will fall as a percentage of gross margin and giga austin and berlin will start contributing to revenue and not just costing it. In 2020 the solar panel business losts more than it did in 2019, even having a negative gross margin in the last quarter.

From that -

Now who knows maybe growth with stop and they will not finish the 2 gigafactories in progress or make the roadster or cybertruck or semi. They could still cut R&D, sell the solar business, and still be profitable. But if they do finish those factories and make those cars then we should not count the expenses related to those to net margin of there current cars.

 

Don't talk about stuff you obviously know nothing about.

The profit center is the Falcon 9 and it's been very reliable lately. The Starship test mules in Boca Chica are the ones "blowing up", some on purpose (pressure test to failure) some not unexpected (Starships SN8 and SN9) due to testing a hard maneuver for the first time (belly flop and flip to landing).

 

I can see the need for tax credits when you have a new technology that works but that meets strong resistance from the public. I don't see it as being needed once the total sold by the industry exceeds a million or so. A million examples that "it works" should be enough word of mouth to sell a viable design.

Dan

 

There are no federal subsidies for teslas or gm cars in north america or many other countries. There are in california, china, and other countries. Both want to sell a much higher percentage of these types of cars. These subsidies are not included in environmental credits.

CARB states have zev mandate and europe has corporate ghg regulationss. The bulk of the environmental credits for tesla in 2020 where sales of its ghg credits in europe but it is still making money selling zev credits.

I do agree tesla does not need these. It just raised another $5B in 2020 from new equity offering to continue their fast growth. The ghg regulation in europe is probably is more likely to be successful than their cap and trade policy and less expensive. They probably could do the same thing with higher gas taxes but this is more politically popular.

 

Yes, they have a working rocket. The last two crash landings were not intentional. They were failed attempts.

 

RAV4-Prime MSRP: From $38,100

If people are willing to spend MSRP of $37,990 for a model 3, or $41,990 for a Model Y, there's no reason that they should balk at the pricing of the RAV4-prime.

 

Like I said, "some not unexpected (Starships SN8 and SN9) due to testing a hard maneuver for the first time (belly flop and flip to landing)."

Before the first flight Elon predicted a 50% chance of failure. So a flight that was over 90% successful (3 engines light, good ascent, first engine shutdown, good control, second engine shut down, successful hover, successful flip to belly flop, successful controlled descent, correct navigation to the LZ, successful two engine start, successful flip, one engine fails, hard landing on the LZ) is hardly something to be ashamed of.

 

Saw this on Twitter last night, PROACE EV with 50 kWh (available 75 kWh) battery can fully charge in 30 mins using a 100 kW charging station. I guess that's with the three phase 11 kW onboard charger instead of the 7.5 kW single phase. Toyota further expands electric line-up choice with new PROACE Verso Electric

Checkout the charging port. CCS2 for Europe.

 

Toyota RAV4 vs. RAV4 Prime: Which Is Better?

msrp is $38,100 but its really $39,275 when destination is included. While vw group and tesla were able to each buy or make battery packs for half a million cars, toyota has said it has trouble making the 20,000 batteries for the first year of rav4 production for the US. While this happens those dealerships are going to jack the price, especially given that after tax credit in the US the price is so low for such a capable SUV. Once that battery situation is fixed though dealers will not be able to charge the the gouging mark ups. It appears toyota dealers are following the model of the gen 2 prius, but there is competition in this segment.

The base rav4 prime is the awd SE trim. It will sell once Toyota solves its battery production problems.

 

Hmmm. Folks don't understand what MSRP means? That's the manufacturer's suggested price for an individual car AS EQUIPPED.

When you start talking about all the options, taxes, etc that are added by the dealer, then you are no longer talking about MSRP.



Dan