They're investing aggressively in new factories and new product lines. If they wanted to show profits today they could give up building and expanding factories and stop entering new product categories. But that would be stupid.
The parent commenter was discussing revenue and not profit. If they were aggressively expanding, I would expect that profits to remain small or negative, but I'd expect revenue to grow as a result.
Just to make it more clear what bqe is saying: they are selling the ~same amount of cars as 2 years ago. Both in terms of $ and in terms of #. Growth is completely flat.
Tesla production will be around 100k+ per quarter until they open a new factory (Berlin, july 2021) or expand current ones.
If they're still production limited the only growth in production numbers for the next 12 monthes will be in their China factory and may be a bit in Fremont (p7 of PDF).
Tesla announced they hope to be close to 500k produced vehicules in 2020 (p10 of PDF) so that makes 157k/quarter for the next two quarters. I don't think they'll reach 500k in 2020.
But of course the thing you have to look at is results from other automakers (hint: ugly).
Referencing your other comment, this claim really starts to fall apart.
* You're cherry-picking 2018Q3. So it's not exactly 2 years, it's actually 1.75 years (2018Q3 - 2020Q2).
* But now you're saying pre-covid too, so now it's actually 1.25 years (2018Q3 - 2019Q4).
That period in question is the time after Tesla finished ramping Model 3 production (using a tent!) at Fremont in 2018Q3, and before they finished building the factory in Shanghai in 2020Q1.
So... doesn't it seem reasonable that production gains would be a bit "lumpy"? They go up every time a new factory is finished, and they stay flat until the next one.
Yea, if they are adding product lines without an increase in revenue that seems (possibly) concerning, though obviously the current economic situation makes it hard to know how to value year over year comparisons.
OP referenced revenue growth, not margin expansion. All else equal, you'd expect to see existing products take share and generate movement on the top-line.
Though it could be the case that their investment in new product development reduces their ability to meet current demand and therein throttles revenue; not sure if the 10Q references their order backlog.
>If they wanted to show profits today they could give up building and expanding factories and stop entering new product categories
Can you show me in the financial statements where this "aggressive investing" in factories is, and how it affects net profit? Why are they doing it if revenues are stagnant?
Factory construction expenses aren't explicitly broken out in the financials. But cutting R&D could more than double their net income this quarter, if they wanted. What's your point? Do you believe that doubling their number of vehicle factories along with significant expansions at both existing factories isn't having a material impact on their expenses?
They are doing it because they need more capacity to increase revenue, because their ASP is lower in the new markets they've entered. And because they need local factories to reduce tariffs. And do you really think that comparing this quarter YoY is a good way to evaluate their revenue growth?
