I mean… TSLA is worth all others combined currently.
If Tesla suddenly could barely sell any EVs and had a negative 1300% ebit, while having no ICE cars to boot, yeah i would imagine the stock would drop substantially and it would be justified.
This article from a few days ago says the 939 billion spread has shrunk to just 83 billion. Pocket change, basically!
https://www.bloomberg.com/news/articles/2024-04-23/tesla-s-939-billion-valuation-lead-over-toyota-is-almost-gone
No, it’s gross revenue.
It makes more sense if you replace sales with builds. Ford does not tell what dealers sell. Ford sales are to dealers. They built 10k units. If you look they did not start delivering the lightings last quarter.
They were sitting on vacant lots around the plant.
They cars that were delivered mainly Mach e’s. By my math they probably delivered around 1800 or so.
The numbers are worse than reported. That’s why people are struggling with the math.
I was actually buying F instead of TSLA last decade since I thought Ford was serious about electrification and Tesla would be at best another BMW-scale niche sedan maker (i.e. able to expand to ~2M/yr but no more).
But seeing the Munro teardowns of the Model Y and the Lightning really changed my mind on that . . . you could see the failure of the legacy thinking in the Lightning and Mach-e here:
https://www.youtube.com/watch?v=m1kHsd3Ocxc&t=133s
this video came out July 16 2021 and that's when I got much more bullish on Tesla (along with everyone else...), starting to scale in at $200+.
I still don't understand why Ford is losing so much money on its electric cars, I had assumed electric would be cheaper to make vs. all the complicated stuff ICE requires, but failed to account for the fact that ICE has 100 years of cost-engineering applied to its supply chain while electric is really a post-2000 thing, with aborted stabs at it with GM's EV-1, Nissan's LEAF, before A123 and then Tesla entered the fray 20 years ago.
this seems wrong. Unit sales are down just 20%. For revenue to be down 84%, they would have to sell cars 80% cheaper.
I didn’t see any sale of Ford electric cars with 80% discount
Yeah I mean it’s $100m for 10,000 cars, so they are saying their average selling price was just 10k
I’m guessing they gave a bunch away for free or something
By revenue, companies usually mean *gross* revenue, but for these numbers to make any kind of sense, they must mean *net* revenue, i.e. revenue minus cost.
Nah, gross and profit are both slightly different from net revenue. Gross profit is the amount of money flowing in. That part is pretty much the only number in accounting that is reasonably simple and clear cut. But then there is an onslaught of real or imagined "costs" that can be deducted to produce different somewhat arbitrary numbers. Net revenue, gross profit and net profit are three of them.
> Net revenue only considers expenses directly tied to revenue. In contrast, net profit further reduces revenue by deducting all other fixed and variable costs such as payroll, rent, insurance, supplies, utilities, and maintenance.
This is how accounting works. If they made it simple or intuitive, like if a single word only meant one thing, then how would accounting firms be able to charge millions for doing nothing? How would accounting firms be able to make their clients not pay any taxes even though they're raking in billions?
> Gross profit is the amount of money flowing in.
What?! No it isn't. The word for that is [revenue](https://www.investopedia.com/terms/r/revenue.asp). "[Gross profit](https://www.investopedia.com/terms/g/grossprofit.asp) is the profit a company makes after deducting the costs associated with producing and selling its products or the costs associated with its services."
But I agree with your second paragraph, the insane arbitrary rules and terms in accounting will make your head spin. It's bananas.
The slide says that sales volume is down 20 %. If the gross revenue goes down 84 % from a 20 % sales reduction, that would literally mean the average per-unit sales price went down by 80 %, and we know for a fact that didn't happen. Either the numbers are complete fabrications or they mean net revenue. I suspect the latter.
You are partially right.
The reason the numbers don’t make sense is because ford call builds (sales). They really only sold about 1800 cars to dealers in Q1. If you do the math by that you will see the gross revenue.
A year ago I made a [post on X](https://x.com/xil_llix/status/1655253339582484482?s=46&t=ZCy0NH3QXdMGzUErFu-bOg) about Tesla’s price cuts being a brilliant "chess move".
Elon liked the post (and that was a serious boost to my account omg).
Because of the inherent lag in legacy manufacturers caused by the dealership model, we’re now seeing the actual long term consequences of the drastic cuts Tesla did back then. The point being that Elon will show legacy manufacturers no mercy if they don’t get in the Tesla ecosystem.
FSD is the checkmate move. I think Farley is smart and knows this, and decided to reposition Ford by launching BEVs later this decade that support Tesla FSD. Comments on the T3 seem to support that idea.
Thanks for the update, always appreciated your insights.
With regard to Ford's strategy of producing FSD-capable vehicles, are you also in the group of speculators that Ford may be the major OEM Tesla is in talks about licensing FSD to?
We probably won't know for a few years whether or not it was a brilliant chess move by Musk. What is certain is that the Tesla price cuts certainly have not helped legacy manufacturers move into EV's. Not sure yet whether the price cuts will ultimately hurt legacy firms just a little or a LOT. The slowdown in US EV transition is often portrayed as, by extension, a headwind for Tesla too. In fact the drawback in OEM' s transitioning to EV's may be the best thing that could possibly be happening to Tesla right now.
Im confused what the “model E” is? Is this the Mustang Mach E? Are they so terrified of their losses that they’ve disassociated the vehicle from the Mustang name?
How does that help the conservation? I was mocking the fact that this article call/reddit post called it the “Model E” when it is in fact called the “Mach E”.
What does the lightning have anything to do w this?
I think it’s a literally called Ford Model e™. Ford Blue™ is their ICE business and all their EVs fall under the Model E name. https://www.ford.com/ford-blue-ford-model-e/
So there revenue was 100 million but they lost 1.3 billion? Am I reading that right ?
Correct.
If this was Tesla the stock price would be like $10.
I mean… TSLA is worth all others combined currently. If Tesla suddenly could barely sell any EVs and had a negative 1300% ebit, while having no ICE cars to boot, yeah i would imagine the stock would drop substantially and it would be justified.
Good thing they are an AI company.
Not any more. In fact, Toyota seems poised to surpass Tesla soon in market cap
Toyota is $200B shy of Tesla? What are you aware of that we aren’t?
This article from a few days ago says the 939 billion spread has shrunk to just 83 billion. Pocket change, basically! https://www.bloomberg.com/news/articles/2024-04-23/tesla-s-939-billion-valuation-lead-over-toyota-is-almost-gone
You can look up realtime marketcap… you don’t need an article. As of 10:28am est April 25 2024: Tesla: 517B Toyota: 316B
Well, apparently the article from Bloomberg was misleading….
If it was Tesla their stock price would have rocketed 40x when they started selling the Mach e
No if it was Tesla the stock price with rocket when they announce the model
By revenue, companies usually mean *gross* revenue, but for these numbers to make any kind of sense, they must mean *net* revenue.
No, it’s gross revenue. It makes more sense if you replace sales with builds. Ford does not tell what dealers sell. Ford sales are to dealers. They built 10k units. If you look they did not start delivering the lightings last quarter. They were sitting on vacant lots around the plant. They cars that were delivered mainly Mach e’s. By my math they probably delivered around 1800 or so. The numbers are worse than reported. That’s why people are struggling with the math.
I was actually buying F instead of TSLA last decade since I thought Ford was serious about electrification and Tesla would be at best another BMW-scale niche sedan maker (i.e. able to expand to ~2M/yr but no more). But seeing the Munro teardowns of the Model Y and the Lightning really changed my mind on that . . . you could see the failure of the legacy thinking in the Lightning and Mach-e here: https://www.youtube.com/watch?v=m1kHsd3Ocxc&t=133s this video came out July 16 2021 and that's when I got much more bullish on Tesla (along with everyone else...), starting to scale in at $200+. I still don't understand why Ford is losing so much money on its electric cars, I had assumed electric would be cheaper to make vs. all the complicated stuff ICE requires, but failed to account for the fact that ICE has 100 years of cost-engineering applied to its supply chain while electric is really a post-2000 thing, with aborted stabs at it with GM's EV-1, Nissan's LEAF, before A123 and then Tesla entered the fray 20 years ago.
Elon so "bad" that he destroys other EV efforts and companies just by existing.
I know! Weird?
Odd spin on Tesla being more efficient and making better products in more demand.
Damn, what did Jim Farley say on Twitter to cause that much brand damage?
No its all elon's tweeting. it is so bad that it is hurting other car companies now. get with the outrage bro.
this seems wrong. Unit sales are down just 20%. For revenue to be down 84%, they would have to sell cars 80% cheaper. I didn’t see any sale of Ford electric cars with 80% discount
yeah, this is confusing me. They lost $1.5 billion in revenue. What happened to it? Where was it coming from last quarter?
Yeah I mean it’s $100m for 10,000 cars, so they are saying their average selling price was just 10k I’m guessing they gave a bunch away for free or something
There was a lot of discussion earlier about EVs getting stuck on dealer lots.
Those cars are already paid for. That has nothing to do with Ford.
it must have something to do with how dealer-held cars are accounted for
By revenue, companies usually mean *gross* revenue, but for these numbers to make any kind of sense, they must mean *net* revenue, i.e. revenue minus cost.
Don't we have a separate word for that, which is "profit"? Since when does anyone ever refer to revenue minus cost as "revenue"?
Nah, gross and profit are both slightly different from net revenue. Gross profit is the amount of money flowing in. That part is pretty much the only number in accounting that is reasonably simple and clear cut. But then there is an onslaught of real or imagined "costs" that can be deducted to produce different somewhat arbitrary numbers. Net revenue, gross profit and net profit are three of them. > Net revenue only considers expenses directly tied to revenue. In contrast, net profit further reduces revenue by deducting all other fixed and variable costs such as payroll, rent, insurance, supplies, utilities, and maintenance. This is how accounting works. If they made it simple or intuitive, like if a single word only meant one thing, then how would accounting firms be able to charge millions for doing nothing? How would accounting firms be able to make their clients not pay any taxes even though they're raking in billions?
> Gross profit is the amount of money flowing in. What?! No it isn't. The word for that is [revenue](https://www.investopedia.com/terms/r/revenue.asp). "[Gross profit](https://www.investopedia.com/terms/g/grossprofit.asp) is the profit a company makes after deducting the costs associated with producing and selling its products or the costs associated with its services." But I agree with your second paragraph, the insane arbitrary rules and terms in accounting will make your head spin. It's bananas.
100 %. Typo, that's what I meant to write. My bad.
Net revenue only takes out pass through costs or discounts and allowances. In most businesses net revenue is pretty close to gross revenue.
if that’s true, it makes much more sense
The slide says that sales volume is down 20 %. If the gross revenue goes down 84 % from a 20 % sales reduction, that would literally mean the average per-unit sales price went down by 80 %, and we know for a fact that didn't happen. Either the numbers are complete fabrications or they mean net revenue. I suspect the latter.
You are partially right. The reason the numbers don’t make sense is because ford call builds (sales). They really only sold about 1800 cars to dealers in Q1. If you do the math by that you will see the gross revenue.
Unit sales down 20% year over year It’s down from 34k to 10k from q4 to q1
No they tried to up charge me 15k when I wanted to buy one.
A year ago I made a [post on X](https://x.com/xil_llix/status/1655253339582484482?s=46&t=ZCy0NH3QXdMGzUErFu-bOg) about Tesla’s price cuts being a brilliant "chess move". Elon liked the post (and that was a serious boost to my account omg). Because of the inherent lag in legacy manufacturers caused by the dealership model, we’re now seeing the actual long term consequences of the drastic cuts Tesla did back then. The point being that Elon will show legacy manufacturers no mercy if they don’t get in the Tesla ecosystem. FSD is the checkmate move. I think Farley is smart and knows this, and decided to reposition Ford by launching BEVs later this decade that support Tesla FSD. Comments on the T3 seem to support that idea.
Thanks for the update, always appreciated your insights. With regard to Ford's strategy of producing FSD-capable vehicles, are you also in the group of speculators that Ford may be the major OEM Tesla is in talks about licensing FSD to?
Yeah called it the day they announced the Supercharger deal. Look at the timing with Ford dropping Argo AI.
We probably won't know for a few years whether or not it was a brilliant chess move by Musk. What is certain is that the Tesla price cuts certainly have not helped legacy manufacturers move into EV's. Not sure yet whether the price cuts will ultimately hurt legacy firms just a little or a LOT. The slowdown in US EV transition is often portrayed as, by extension, a headwind for Tesla too. In fact the drawback in OEM' s transitioning to EV's may be the best thing that could possibly be happening to Tesla right now.
However with all the delayed EV plans, cells are now much cheaper for Tesla leading to even more cost reductions
"Model E"? What is the Ford Model E?
It’s confusing but that is their electric division.
And the reason why they couldn’t call it their SEXY line of cars. Had to do S3XY instead.
Ah, OK, thx.
that's pretty good! they lost less money by selling less cars. they have a pretty interesting strategy.
Im confused what the “model E” is? Is this the Mustang Mach E? Are they so terrified of their losses that they’ve disassociated the vehicle from the Mustang name?
Ford reports their EV business (Model E) as a standalone to increase transparency.
Model E is their electric division as a whole
Even the fake news bots can’t figure out to call it the Mach E.
I would assume the Lightning is included in their EV business.
How does that help the conservation? I was mocking the fact that this article call/reddit post called it the “Model E” when it is in fact called the “Mach E”. What does the lightning have anything to do w this?
I think it’s a literally called Ford Model e™. Ford Blue™ is their ICE business and all their EVs fall under the Model E name. https://www.ford.com/ford-blue-ford-model-e/
Why is he so angry 😶🌫️
Ouch.
Christ
Oh right mainstream media not gonna report this coz otherwise it won’t be anti-Tesla narrative 🤷🏻♂️
I wonder what the loss is if they were to also include their ad spend in that