Tesla’s profitability at its core cars division fell to its lowest level in five years in the fourth quarter, as the carmaker liquidated excess inventory at rock-bottom prices.
People touting SALES as a significant marker for the health of a company or product in general need to read that statement carefully.
"Rock bottom prices"
Since the beginning people complained Tesla never paid a dividend and that it burnt through cash at a phenomenal rate. The "Experts" said it didn't matter, it was a growth stock and that "one day" it would emerge as a winner and chalk up real profits. GM as we know was selling EV cars well below production cost, and that came about because of trying to keep up with the deep price cuts Tesla began a year or more ago. So what was Tesla's profit in the last quarter of 24? Up because of sales no doubt, but if those sales were below production costs it's another matter.
Cars are a mature technology, you're not going to see a drastic price fall due to innovation in wheels and steel bodies, glass etc. Nothing like the falls we saw in computers in 2000 for example, or color TVs a generation before. Those drops came about in part because the manufacturers had been selling high to recoup the cost of the factories and because consumers will always pay a premium for the latest whizz bang technology. Also because the appliances got vastly better over time. And chiefly because
everyone wanted them! But as we see, not everyone wants an EV. In fact only a fraction of consumers do now that all the downsides are apparent. Did the Federal Government have to mandate that all homes by 2005 had to have a computer in them? Or that by 1980 all TVs sold had to be color? Think about if for a minute and it completely dismisses the idea that there will be a mass uptake of this technology.
Leaving aside the actual mature "car" side of things, that leaves only the electric side of the EV as far as innovation and cost cutting goes.. The motors are a pretty mature tech too, so it leaves the batteries, nearly 1/2 the price of the actual long range car's production cost. LiPo is also a mature technology now, so unless they come up with some wonder battery formula we are at the rock bottom of prices I would suggest. All batteries are made from expensive metals, just look at the price of your average lead acid car battery. NiMH have gone well up in price too of late. So where is the savings going to come from to boost Tesla and the others given they now sell at rock bottom prices? The Dec sales were boosted by the Trump scare. Last year there was another Scare that boosted sales. How many times are the consumers going to be scared into buying an EV?
“I’m surprised to see the stock up,” admitted Deepwater Asset Management partner Gene Munster following Wednesday’s results. Despite what he called “largely a messy and difficult outlook for 2025,” the shares are trading 4% higher at press time...
I'm not surprised, not at all. Whose actually buying the shares, you and me? Or how about massive corrupt Pension funds that are chasing a rabbit as they dine at $2000 a plate restaurants with the executives of Tesla etc. If you don't think those men feather their own nests I have a bridge in Manhattan to sell you. We don't even know who these men are? They move from executive position to executive position like kids in a playground and yet they control Billions and Trillions of our life savings. Were any called to account in the GFC? Of course not. That was just an anomaly, a crash no one could have predicted
www.hydrogencarsnow.com
