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Why is Tesla Losing $154 Million in Q1

Today Tesla Motors announced it's Quarter 1 earnings beating analyst expectations with lower-than-expected loss, but the loss is still $154 million. Tesla owners explain the reason of this loss in lay man's terms.

I asked the question in one Tesla Owners group about the Q1 loss and here is how the Tesla fans and owners explain it.

"R&D for serious infrastructure can cost up-front money. Think of Apple when they only had the Apple One PC (Tesla will be a billion times that in a few more years, and then some!)," writes one owner.

To my rhetorical question "Is Tesla is paying to have its cars sold?", and if that is a fair assessment, one commentator wrote the following. "Not fair and definitely not accurate. Tesla is a growth company. Majority of revenue is redirected to capex investment. Look closely at vehicle gross margins, 25% (I think). This tells the story if they're giving the cars away."

"That money is invested in Model X and Model 3 development, superchargers network, sales and service centers, software improvements and auto pilot for Model S, and gigafactory development. All that R&D will pay off in 3-5 years and for many many years after that, that's why all us Tesla cars owners who own TSLA shares are long term investors in TSLA, owners are believers," wrote yet another commenter.

Today we also learned that Tesla is buying an EV battery manufacturer Riviera Tool, thus establishing a physical presence in Michigan. Detroit Free Press just reported it, quoting a person familiar with the matter.

Tesla stock lost 1.08 percent today, closing at 230.43, but TSLA gained 1.38 percent during the after-hour trading.

Comments

Alexi (not verified)    May 7, 2015 - 10:15AM

It's understandable that when you invest money you will probably show loss during the earnings report. But when will Tesla actually make money and report earnings?