• 40 mins Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 6 hours British Utility Companies Brace For Major Reforms
  • 10 hours Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 12 hours Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 13 hours Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 14 hours OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 15 hours London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 16 hours Rosneft Signs $400M Deal With Kurdistan
  • 18 hours Kinder Morgan Warns About Trans Mountain Delays
  • 1 day India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 1 day Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 1 day Russia, Saudis Team Up To Boost Fracking Tech
  • 2 days Conflicting News Spurs Doubt On Aramco IPO
  • 2 days Exxon Starts Production At New Refinery In Texas
  • 2 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 2 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 3 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 3 days China To Take 5% Of Rosneft’s Output In New Deal
  • 3 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 3 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 3 days VW Fails To Secure Critical Commodity For EVs
  • 3 days Enbridge Pipeline Expansion Finally Approved
  • 3 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 3 days OPEC Oil Deal Compliance Falls To 86%
  • 3 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 3 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 4 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 4 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 4 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 4 days Aramco Says No Plans To Shelve IPO
  • 6 days Trump Passes Iran Nuclear Deal Back to Congress
  • 6 days Texas Shutters More Coal-Fired Plants
  • 7 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 7 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 7 days Chevron Quits Australian Deepwater Oil Exploration
  • 7 days Europe Braces For End Of Iran Nuclear Deal
  • 7 days Renewable Energy Startup Powering Native American Protest Camp
  • 7 days Husky Energy Set To Restart Pipeline
  • 7 days Russia, Morocco Sign String Of Energy And Military Deals
  • 8 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
Alt Text

Chinese EV Boom Could Crash Oil Prices

Most oil majors acknowledge that…

Alt Text

Is Hydrogen Fuel As Dumb As Musk Thinks?

Hydrogen fuel cells have been…

Tesla: ‘False Profits’ and a Bullish Market

Tesla: ‘False Profits’ and a Bullish Market

It’s been a great year for Tesla Motors Inc. (TSLA), which everyone’s eyeing for a takeover: the company’s stock is up 194% this year, it’s recorded its first ever quarterly profits, and it just paid off a government loan nine years early.

It’s even earned itself the moniker “America’s fourth automaker”. Shareholders are ecstatic and potential investors are increasingly bullish—but there’s another story here, if you dissect the financials.

So Tesla just released its Q1 2013 financials, showing its first profit: net income of $11 million on total revenues of $562 million. However, that profit was not on its core product—electric vehicles—but on its sale of emissions offset credits. It earned $68 million on the sale of Zero-Emission Vehicle credits, courtesy of the state of California, and $17 million on the sale of greenhouse gas emission credits.

It also had a couple more tricks up its sleeve, including $11 million in “earnings” from warrant liability reversals and $7 million through foreign currency adjustments.

This means its core business, which is the Model S all-electric luxury sport sedan. In fact, on this it lost upwards of $90 million, according to the Wall Street Journal, which seems to have it out for Tesla and the government’s loan largesse.

Related article: Is Tesla on Google's Shopping List?

Dissecting these financials is fair, but it’s not the only story here. While the investors seem to be overly bullish on Tesla with much thought for the real numbers behind the numbers, there have been some impressive achievements.

Last week, Tesla managed to pay off a $465 million government loan issued in 2010. Regardless of how it managed this, it’s impressive because it’s nine years early and because it removes a major hurdle for a takeover. 

And the market loves Tesla: It’s trading for over 800 times what its earnings are estimated for this year, and it’s valued at over $5 billion, according to Bloomberg.  Shares closed on 26 June at $105.72, up 3.24%. 

By the end of last year, Tesla had sold 2,450 of its electric sports car Roadsters that retail for $109,000; and it’s now started shipping the Model S sedan and is eyeing over 20,000 deliveries for this year, retailing at $69,900 a pop. It’s impressive, but still far from ‘mass’ marketing, and the prices aren’t for the faint of heart.

Related article: Tesla Makes a Recall for Certain Model S Vehicles

Is Tesla ripe for takeover? Probably not just yet. CEO Elon Musk, who owns a 24% share, should hold out for more and it’s too early for that—especially since we’re looking effectively at the most expensive automaker in the US with first-time ‘false profits’ that don’t reflect its core product.  But once it manages to prove itself through its financials—without resorting to emissions credit sales—the takeover will be big.

In the meantime, revenues are revenues, and money is money. The market likes Tesla, so we’re listening.

By. Jen Alic of Oilprice.com




Back to homepage


Leave a comment
  • SA Kiteman on June 29 2013 said:
    Jen, I think you are wrong. I think Tesla's core product IS the emissions credits. It jibes with his "Solar City" subsidies too.
  • David Hrivnak on June 30 2013 said:
    I believe you are wrong as Tesla's goal is sustainable transportation. A car that can run on cleaner and more plentiful fuels.
  • SA Kiteman on July 01 2013 said:
    Then why isn't he making ammonia fueled cars? Carbon free fuel that can be made with any source of electricity.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News