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NY Times revisits Tesla Motors

"But whether Tesla remains a good advertisement for government aid partly depends on how the company now performs. Should Tesla falter badly, it will only highlight the risks of lending to EXPERIMENTAL companies."

"“The reason the loan is being paid off is NOT BECAUSE OF VEHICLE SALES,” said Patrick J. Michaels, a director at the Cato Institute, a libertarian-leaning research group."

But it is NOT CLEAR whether the initial burst of demand for its sedan was MERELY the result of enthusiasts rushing to get their cars. Skeptics doubt the market is as big as the company projects, and expect the shares to PLUNGE when that becomes apparent.

"While Tesla has made ambitious targets for selling cars, its more immediate financial projections seem less impressive. It recently suggested that cash flows from its operations MIGHT not be positive in the second quarter and it seemed to forecast a drop in North American sales in the second half of the year." (B/C of Euro Shipments)

"In several instances, the department softened the conditions of the loan. These amendments to important covenants MIGHT have allowed Tesla to avoid falling into a default, which COULD have been embarrassing for the Energy Department after the collapse of Solyndra."

EMPHASIS MINE

http://dealbook.nytimes.com/2013/05/22/tesla-repays-465-million-governme...

Keep it coming... shorts haven't paid enough yet.

Wow, what sore losers.

Mark C

+1

"that cash flows from its operations MIGHT not be positive in the second quarter "

They just mention that fact without stating the reason (deferred revenues from leases, lower shipments due to cars in transit to Europe).

Of course not a word about improving gross margins, just pick the negatives.

Half truths are worse than whole lies.

Broders buddies are sore.... as he got into the Urban Dictionary.

Leasing? What leasing? Only Athlon in Europe has an actual leasing program for ITS clients so far, AFAIK, and those are (150?) sales from the TM POV.

When the editors of the NYT want to shape the news, they can be relentless.

NYT = Not Yet Trustworthy

Brain H, this was what Elon said:

"The lease accounting treatment for cars sold through our new financing plan will have no impact on our cash flows, and we expect to be roughly breakeven on cash flow from operations in Q2, despite launch costs in Europe and a huge increase in service centers, stores and Supercharger stations. However, the deferred revenue recognition required by GAAP for lease accounting will lead to a net loss on paper in Q2."

Having written that, I see that the lesae doesn't affect cash flow, but the launch cost of service centers and SuperChargers does.

I guess the promise of a walk-away-buyback triggers that. Not full-featured leasing, though. Odd hybrid, indeed.

Elon has made an enemy for life in the NYTimes. Even though he was exonerated by Margaret Sullivan, the rank-and-file are looking for any chinks in the armor.

Jim Motavalli is an exception.

Plus this is from Dealbook which is the Hedge side of the NYT. And THEY are really butt-sore right now.

Every day Tesla remains in business the stain of mediocre journalism becomes that much more indelible for the NYT. Expect periodic guerilla attacks.

I think tomorrow the short interest data is published for mid month. With the increase in forum trolling and fud articles I'm thinking all the shorts have not cleared out....

In my opinion, NYT is paid off by the big oil and other fat cats. They only care about going backwards to line their pockets at the cost of REAL middle AMERICA. FU&K them all.

Imagine BIG AUTO's business model looked like this:

1. Your cars have lots of tiny parts that are always breaking. Belts, drives, turbos, fluids. Lots of expensive service and MANY failure points.

2. Your fuel is hard to extract, expensive to transport, toxic when spilled, and politically inaccessible.

3. Your small but (now) well financed competitor is offering revenue neutral maintenance, free fuel on long trips and near term full U.S. rollout.

"But whether Tesla remains a good advertisement for government aid partly depends on how the company now performs. Should Tesla falter badly, it will only highlight the risks of lending to EXPERIMENTAL companies."

No, the government has been repaid, and it earned interest, so it worked. What is meant by "experimental" companies? It didn't look like an experiment to me, at any stage of their development.

"“The reason the loan is being paid off is NOT BECAUSE OF VEHICLE SALES,” said Patrick J. Michaels, a director at the Cato Institute, a libertarian-leaning research group."

No, vehicle sales is the precise reason the loan is being paid off. Since Tesla has exceeded their target, private investors have queued up to put enough money into the company to pay off the loan and finance growth.

"But it is NOT CLEAR whether the initial burst of demand for its sedan was MERELY the result of enthusiasts rushing to get their cars. Skeptics doubt the market is as big as the company projects, and expect the shares to PLUNGE when that becomes apparent."

They burned through their pre-sales long ago, and are still taking orders. They're way beyond enthusiasts and into mainstream luxury car owners now. If the writer got out of the right wing lobbying office, they would see these cars in every high income neighborhood.

"While Tesla has made ambitious targets for selling cars, its more immediate financial projections seem less impressive. It recently suggested that cash flows from its operations MIGHT not be positive in the second quarter and it seemed to forecast a drop in North American sales in the second half of the year." (B/C of Euro Shipments)

If North American sales decrease, it will only be because they decide to sell more of their cars outside of North America. They can sell every car they can build this year, which is why they raised money to expand. Even oil companies need cash to drill for more oil. Since they raised additional capital, they do not need to limit their spending on growing their engineering, manufacturing, and sales to their gross margin.

This is just FUD from a mouthpiece for incumbent energy extractors.

@KenG
"they would see these cars in every high income neighborhood."

I would add, "and some not-so-high income neighborhoods".

I suspect there are many owners and prospective owners, like me, who have been quite frugal throughout the years and have decided to reward themselves by buying a Model S.

Hey, did you guys ever detect a whiff of hydrocarbons from a fresh copy of the NYT? Wonder why.

Anyway, I must congratulate the hive of hacks like Broder for doubling down again. His botched review drive was, in a meta kind of way, what awoke my interest in Tesla and I have a (so far) pretty successful investment in the company, thanks in no small part to sceptics of his ilk. Please, Mr Broder, do bring on some more capital gains our way: I may need them to pay for my next car. Guess which make it will be? {silent grin}

Oh btw, does anyone know if NYT is readable on the 17" center console? That might push a number of MS's off the roads; I suspect that the odor permeates through the Ether.

Articles like this remind me why I cancelled my NYT subscription, twice: well written, (irrelevant) fact laden, convoluted piece of malarkey, basically an opinion, and not news.

My model S doesn't live in a high income neighborhood.

I agree with TI Sailor. There is a market of people that want to support Tesla and the future of electric cars. We would not buy an expensive ICE.

One neighbor exclaimed, "We have a Tesla on the block!"

I am not wealthy and have never wanted to own a luxury car. Before my Model S. I was driving a 2003 Honda Civic. I planned to pay for my Model S by investing heavily, very heavily, in Tesla stock last spring. It was a gamble but I was betting on Elon Musk which greatly tipped the odds in my favor. I hit a jackpot!!

Tesla stock paid for my car, registration, capital gains tax, insurance and the solar system to charge the car. I had complete faith the stock price would go up but never dreamed it would be so high when my multi red Model S was ready.

Anyone else pay for their car with Tesla stock?

Fund managers who shorted other people's money should all be fired.

@flassar

Congratulations, but I think you got out a little early. If you'd waited another year it could have been an S and an X.

Anyone STILL shorting is in a world of hurt.

@TI Sailor, flassar, I only meant that they should be comparing sales of the S with other luxury cars, and if they did that, they would see it's a huge success. There will obviously be those who don't fit the income profile of a luxury car owner who will do what they can to own a Tesla, and that is even more proof that Tesla is a success.

This thread's title says it all NYT revisits Tesla because people have stopped visiting NYT. It's been over 2 months and have not visited nyt.com.

I didn't get out completely. I took out my original investment plus the amount to cover car etc. for my daughter's peace of mind.
Her new instructions are to let it ride.

Good for you. Enjoy the fruits of your good taste.

@flassar

"Anyone else pay for their car with Tesla stock?"

Not yet, but I'm going to soon. Sold half my TSLA yesterday at $92.4. I've held the stock for well over a year, some of it for two years. TSLA is now at about $97, but I have no regrets. It pays for my Model S (reserved in Feb. 2010, but finalized a few days ago), and the income taxes that I have to pay for withdrawing from my IRA and brokerage account. And I still have half the stock. I expect that to double multiple time over the next five years.

@ David70,

I thought Tesla prompted folks to finalize reservations a long time ago? How were you able to reserve back in '10 but delay finalizing until recently?

Figuring out the timing of a down payment is one of the obstacles keeping me from a MS (60kwh). If there is any chance I might have to forfeit the reservation fee, I won't make one.

Longtime reader, first-time poster. Thank you for any help.

One thing common in alll of these articles is that the author never has driven the car. This makes the author unqualified to write anything about the car or tesla motors,IMHO.

@pfg1982.
When I got my invitation to finalize on Aug. 7th, I emailed Tesla to tell I didn't have the funds, but hoped to have them in the next year or two. I was told that I had three options. One was to convert the reservation to that for the Model X, the second to cancel and get my deposit back. The third was to defer for an unspecified time. I took that option.

If you haven't already reserved, I doubt that the deferral option is any longer available. However, the production rate is such that if you delay until you're sure you will have the funds available, you still won't have to wait very long. Probably 3 months with the 60kW-h version.

David70;
Did you dream in 2010 that things would work out so splendidly, with the "Tesla project" more or less self-financing for you, and leaving you not only with the car but your original # of shares as a nest egg? You must feel as if you'd been sprinkled with pixie dust.


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