Inflation

[divs4ever]

as i was saying in several places , Evergrande is an example , not an outlier

watch out for contagion ( and tighter credit ) in by-gone days the sub-contractors get squeezed first

by the same token , those who like REITs ( and i sure do ) might have some buying times ahead in the next three years ( maybe the regional banks will look more attractive as well )

 

[ducati916]

Performance Summary

• Tesla's latest twelve months return on capital employed is 12.4%.

How does Tesla's Return On Capital Employed benchmark against competitors?​

We've identified the following companies as similar to Tesla, Inc. because they operate in a related industry or sector. We also considered size, growth, and various financial metrics to narrow down the list to the ones listed below.
Tesla Return On Capital Employed Benchmarks

Name	Ticker	Return On Capital Employed
Workhorse Group Inc.	NASDAQCM:WKHS	-97.2%
Rivian Automotive, Inc.	NASDAQGS:RIVN	-57.0%
Virgin Galactic Holdings, Inc.	NYSE:SPCE	-35.7%
Electrameccanica Vehicles Corp.	NASDAQCM:SOLO	-30.5%
Netflix, Inc.	NASDAQGS:NFLX	0.0%
Ford Motor Company	NYSE:F	1.8%
Consumer Discretionary	SECTORSCY.US	5.7%
General Motors Company	NYSE:GM	7.7%
Tesla, Inc.	NASDAQGS:TSLA	12.4%

The Complete Toolbox For Investors | finbox.com

finbox.com

At the top of this post you claim a figure of 12.4%.

So I went to the link x2 that you kindly provided, unfortunately, this is what came back:



So clearly your number cannot be verified from this source.

To save time I went directly to the horse's mouth:

https://www.sec.gov/Archives/edgar/data/1318605/000095017021002253/tsla-20210930.htm#consolidated_statmnts_of_cmprehnsve_loss

https://www.sec.gov/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm#ITEM_8_FINANCIAL_STATEMEMTS_SUPPLEMENTAR

TSLA has not put out its 2021 10K statement yet, so you have to combine the 10Q's. Therefore my original figures of 5% represent the 2020 numbers.

Anyway what your website 'seems' to have done to get to the 12% is average 2020 with 2021, which is fair. That brings us to the 12%. It looks from the numbers that 2021 will come in at 18%, unless that is an after inflation adjusted number. Then it is 11%

That is a big jump. Almost suspiciously so. Anyway, I digress.

Using either number, is that the number that indicates something special in terms of productivity?

The answer is no. Even using the 18%, that only just barely clears the minimum requirement of 15% before inflation is deducted. A real ROCE is 11%. So TSLA can beat inflation currently, but not much more.

TSLA moves from woeful to below average.

I have provided a scan of 41 of 150 companies that have a ROCE of 50%+



All of these would need to be looked at properly before you could conclusively say that they were great companies. However, the point is that these (on paper) demonstrate that TSLA is very, very average, which isn't really surprising given the industry. Car manufacturing is a notoriously poor industry to operate in.

Just picking 1 at random from page 1



Has a ROCE of 187%. It is an industrial (same as the car-makers) but in the aero-space segment. You now have a list of 150 companies and industries that can potentially ameliorate through productivity, the ravages of a high (increasing?) inflation rate.

Therefore, TSLA when discussing 'productivity' moves from woeful to piffling.

jog on
duc

 

[JohnDe]

At the top of this post you claim a figure of 12.4%.

So I went to the link x2 that you kindly provided, unfortunately, this is what came back:

View attachment 136362View attachment 136363View attachment 136364

So clearly your number cannot be verified from this source.

To save time I went directly to the horse's mouth:

https://www.sec.gov/Archives/edgar/data/1318605/000095017021002253/tsla-20210930.htm#consolidated_statmnts_of_cmprehnsve_loss

https://www.sec.gov/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm#ITEM_8_FINANCIAL_STATEMEMTS_SUPPLEMENTAR

TSLA has not put out its 2021 10K statement yet, so you have to combine the 10Q's. Therefore my original figures of 5% represent the 2020 numbers.

Anyway what your website 'seems' to have done to get to the 12% is average 2020 with 2021, which is fair. That brings us to the 12%. It looks from the numbers that 2021 will come in at 18%, unless that is an after inflation adjusted number. Then it is 11%

That is a big jump. Almost suspiciously so. Anyway, I digress.

Using either number, is that the number that indicates something special in terms of productivity?

The answer is no. Even using the 18%, that only just barely clears the minimum requirement of 15% before inflation is deducted. A real ROCE is 11%. So TSLA can beat inflation currently, but not much more.

TSLA moves from woeful to below average.

I have provided a scan of 41 of 150 companies that have a ROCE of 50%+

View attachment 136365View attachment 136366View attachment 136367

All of these would need to be looked at properly before you could conclusively say that they were great companies. However, the point is that these (on paper) demonstrate that TSLA is very, very average, which isn't really surprising given the industry. Car manufacturing is a notoriously poor industry to operate in.

Just picking 1 at random from page 1

View attachment 136368

Has a ROCE of 187%. It is an industrial (same as the car-makers) but in the aero-space segment. You now have a list of 150 companies and industries that can potentially ameliorate through productivity, the ravages of a high (increasing?) inflation rate.

Therefore, TSLA when discussing 'productivity' moves from woeful to piffling.

jog on
duc

That clears everything up, your research skills are at fault and is the reason you keep chasing your tail.

Bellow is a screenshot taken 99 seconds ago from my phone -

 

[ducati916]

That clears everything up, your research skills are at fault and is the reason you keep chasing your tail.

Bellow is a screenshot taken 99 seconds ago from my phone -
View attachment 136369

LOL.

So the link that I provided to you was the 'official' TSLA website:



You (should) see that the 2021 10K will be released 26 Jan. 2022.

Which means....it has not yet been released. As I said, what your website has done is simply average 2020 10K results with 3Q of 2021 results, which....gives you your 12%.


For real 'productivity' (12% - 7% inflation) you end up with 5% ROCE, which is just not very good.

Why is it no good?

Any company that has to produce goods with a large amount of physical plant and land investments, will always have lower productivity than a company that is asset lite (ie. no physical plant) and produces a good that can be distributed digitally.

TSLA may (or may not) be the best in the car industry, but the car industry is a TERRIBLE industry to try and find productivity gains.


jog on
duc

 

[JohnDe]

LOL.

So the link that I provided to you was the 'official' TSLA website:

View attachment 136371View attachment 136372

You (should) see that the 2021 10K will be released 26 Jan. 2022.

Which means....it has not yet been released. As I said, what your website has done is simply average 2020 10K results with 3Q of 2021 results, which....gives you your 12%.


For real 'productivity' (12% - 7% inflation) you end up with 5% ROCE, which is just not very good.

Why is it no good?

Any company that has to produce goods with a large amount of physical plant and land investments, will always have lower productivity than a company that is asset lite (ie. no physical plant) and produces a good that can be distributed digitally.

TSLA may (or may not) be the best in the car industry, but the car industry is a TERRIBLE industry to try and find productivity gains.


jog on
duc

You're still chasing your tail.

You are making this all about Tesla, when I gave an example to my reasoning that there are industries and companies that can survive a world with high inflation -

"Tesla is proof, they found an obvious way to design and manufacture vehicles at reduced cost and time that other major vehicle manufacturers have not been able to do. Read the book Power Play: Tesla, Elon Musk, and the Bet of the Century

Keep an eye out for investments in artificial intelligence, robotics, energy storage, DNA sequencing, and blockchain technology."

The only way to assess a business and an economy is by looking at the most up to date figures and information available. I have looked at the current information, you are looking at the last financial year. The latest update is only for Q3 2021 the next will be
Tesla Announces Date for Fourth Quarter and Full Year 2021 Financial Results and Webcast on Wednesday 26th January. that will be an interesting day, with all the information required to assess whether Tesla is going forwards or backwards.


As for your ROCE -

5 Businesses That Almost Failed and Showed Us Why It Pays to Keep Going

Tesla did not start with Elon Musk, both are no angel but they have transformed the automotive industry as they promised. Read the book by Tim Higgins - Power Play Elon Musk, Tesla and the Bet of the Century.

The secret behind Tesla’s 30% gross margin

The company's Q3 sales rose 58% year-on-year despite a 6% decrease in average selling price, allowing for high margins for the electric vehicle manufacturer

Manufacturers of vehicles using internal combustion engines say large investments funded by revenue from selling gas and diesel vehicles can make up for the deficit incurred by the production of electric vehicles (EVs).

US-based Tesla, the world's largest EV maker, however, has broken this paradigm in the sector. Its recent report on its third quarter performance refutes the idea that the company cannot earn huge profits by selling EVs.

Gross sales margin that outstrips that of luxury automakers

Tesla's car sales in the third quarter rose to an estimated US$12.1 billion, up 58%

A noteworthy detail is that automotive gross profit — overall sales minus manufacturing costs — surged 74% over the same period. The automotive gross margin of such vehicles — the ratio of gross profit divided by sales — also rose from 27.7% to a record-high 30.5%, meaning Tesla earned a profit of around US$25,000 for every roughly US$90,000 vehicle it sold.

Despite this, the company's profit margin improved because manufacturing costs decreased significantly more than sticker prices. Over the cited period, the cost per unit decreased 12% from around US$40,000 to roughly US$35,200.

How did Tesla earn such a high margin by selling electric vehicles, which are traditionally money losers?

The first factor is its economy of scale. In industries with a large proportion of fixed costs such as facility investment and development expenses such as cars, profits surge when sales increase due to the profit-leverage effect, in which the manufacturing cost per unit falls with high sales volume.

Tesla makes four models: the Model S, Model X, Model 3 and Model Y. Lower production costs are made possible through efforts like cutting the unit price of parts and maintaining fixed costs due to rising sales. Makers of cars using internal combustion engines that entered the EV market late face different circumstances, however. Until sales of electric vehicles reach a given scale, losses are inevitable due to massive investment costs.

The profitability of EVs basically depends on the scale of output using the EV-only framework [platform] developed by the manufacturer," adding, "Tesla will produce about a million units this year, resulting in economies of scale, but Hyundai is only capable of doing the same by 2025."

The magic of "giga casting"

Through vertical integration by directly being involved from floor design to parts supply and demand, production and service, Tesla has helped reduce costs by raising the degree of its parts integration and cutting overlapping costs."

Tesla's unique structure of vertical integration, ranging from the development of semiconductor chips, software and batteries for electric vehicles, to charging, unmanned driving and insurance services, helps lower costs. Its “do-it-all” approach simplifies the automotive production process in a manner resembling that of electronic products. In contrast, other automakers actively utilize production outsourcing to diversify vehicle quality risks and raise output efficiency.

A leading example is Tesla's “giga” aluminum die-casting process. A Giga Press weighing more than 1 giga pound (400 tonnes, or around 900,000 pounds) stamps the entire rear chassis of a car with a large aluminum alloy. About 70 metal plates can be welded to the chassis, but giga casting can simplify the process and slash production costs by about 40%. This is why Tesla electric vehicles have recently reduced panel gaps issues — defects caused by misaligned steel plate seams.

The company plans to expand the use of giga casting, which it began applying last year, to the front of its EVs.

Comparing Spending on R&D and Marketing Per Car




Return On Capital Employed for Tesla, Inc.

Tesla, Inc. designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, China, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers electric vehicles, as well as sells automotive regulatory credits. It provides sedans and sport utility vehicles through direct and used vehicle sales, a network of Tesla Superchargers, and in-app upgrades; and purchase financing and leasing services. This segment is also involved in the provision of non-warranty after-sales vehicle services, sale of used vehicles, retail merchandise, and vehicle insurance, as well as sale of products through its subsidiaries to third party customers; services for electric vehicles through its company-owned service locations, and Tesla mobile service technicians; and vehicle limited warranties and extended service plans. The Energy Generation and Storage segment engages in the design, manufacture, installation, sale, and leasing of solar energy generation and energy storage products, and related services to residential, commercial, and industrial customers and utilities through its website, stores, and galleries, as well as through a network of channel partners. This segment also offers service and repairs to its energy product customers, including under warranty; and various financing options to its solar customers. The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Austin, Texas.

 

[ducati916]

You're still chasing your tail.

You are making this all about Tesla, when I gave an example to my reasoning that there are industries and companies that can survive a world with high inflation -

"Tesla is proof, they found an obvious way to design and manufacture vehicles at reduced cost and time that other major vehicle manufacturers have not been able to do. Read the book Power Play: Tesla, Elon Musk, and the Bet of the Century

Keep an eye out for investments in artificial intelligence, robotics, energy storage, DNA sequencing, and blockchain technology."

The only way to assess a business and an economy is by looking at the most up to date figures and information available. I have looked at the current information, you are looking at the last financial year. The latest update is only for Q3 2021 the next will be
Tesla Announces Date for Fourth Quarter and Full Year 2021 Financial Results and Webcast on Wednesday 26th January. that will be an interesting day, with all the information required to assess whether Tesla is going forwards or backwards.


As for your ROCE -

5 Businesses That Almost Failed and Showed Us Why It Pays to Keep Going

Tesla did not start with Elon Musk, both are no angel but they have transformed the automotive industry as they promised. Read the book by Tim Higgins - Power Play Elon Musk, Tesla and the Bet of the Century.

The secret behind Tesla’s 30% gross margin

The company's Q3 sales rose 58% year-on-year despite a 6% decrease in average selling price, allowing for high margins for the electric vehicle manufacturer

Manufacturers of vehicles using internal combustion engines say large investments funded by revenue from selling gas and diesel vehicles can make up for the deficit incurred by the production of electric vehicles (EVs).

US-based Tesla, the world's largest EV maker, however, has broken this paradigm in the sector. Its recent report on its third quarter performance refutes the idea that the company cannot earn huge profits by selling EVs.

Gross sales margin that outstrips that of luxury automakers

Tesla's car sales in the third quarter rose to an estimated US$12.1 billion, up 58%

A noteworthy detail is that automotive gross profit — overall sales minus manufacturing costs — surged 74% over the same period. The automotive gross margin of such vehicles — the ratio of gross profit divided by sales — also rose from 27.7% to a record-high 30.5%, meaning Tesla earned a profit of around US$25,000 for every roughly US$90,000 vehicle it sold.

Despite this, the company's profit margin improved because manufacturing costs decreased significantly more than sticker prices. Over the cited period, the cost per unit decreased 12% from around US$40,000 to roughly US$35,200.

How did Tesla earn such a high margin by selling electric vehicles, which are traditionally money losers?

The first factor is its economy of scale. In industries with a large proportion of fixed costs such as facility investment and development expenses such as cars, profits surge when sales increase due to the profit-leverage effect, in which the manufacturing cost per unit falls with high sales volume.

Tesla makes four models: the Model S, Model X, Model 3 and Model Y. Lower production costs are made possible through efforts like cutting the unit price of parts and maintaining fixed costs due to rising sales. Makers of cars using internal combustion engines that entered the EV market late face different circumstances, however. Until sales of electric vehicles reach a given scale, losses are inevitable due to massive investment costs.

The profitability of EVs basically depends on the scale of output using the EV-only framework [platform] developed by the manufacturer," adding, "Tesla will produce about a million units this year, resulting in economies of scale, but Hyundai is only capable of doing the same by 2025."

The magic of "giga casting"

Through vertical integration by directly being involved from floor design to parts supply and demand, production and service, Tesla has helped reduce costs by raising the degree of its parts integration and cutting overlapping costs."

Tesla's unique structure of vertical integration, ranging from the development of semiconductor chips, software and batteries for electric vehicles, to charging, unmanned driving and insurance services, helps lower costs. Its “do-it-all” approach simplifies the automotive production process in a manner resembling that of electronic products. In contrast, other automakers actively utilize production outsourcing to diversify vehicle quality risks and raise output efficiency.

A leading example is Tesla's “giga” aluminum die-casting process. A Giga Press weighing more than 1 giga pound (400 tonnes, or around 900,000 pounds) stamps the entire rear chassis of a car with a large aluminum alloy. About 70 metal plates can be welded to the chassis, but giga casting can simplify the process and slash production costs by about 40%. This is why Tesla electric vehicles have recently reduced panel gaps issues — defects caused by misaligned steel plate seams.

The company plans to expand the use of giga casting, which it began applying last year, to the front of its EVs.

Comparing Spending on R&D and Marketing Per Car

View attachment 136377


Return On Capital Employed for Tesla, Inc.

Tesla, Inc. designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, China, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers electric vehicles, as well as sells automotive regulatory credits. It provides sedans and sport utility vehicles through direct and used vehicle sales, a network of Tesla Superchargers, and in-app upgrades; and purchase financing and leasing services. This segment is also involved in the provision of non-warranty after-sales vehicle services, sale of used vehicles, retail merchandise, and vehicle insurance, as well as sale of products through its subsidiaries to third party customers; services for electric vehicles through its company-owned service locations, and Tesla mobile service technicians; and vehicle limited warranties and extended service plans. The Energy Generation and Storage segment engages in the design, manufacture, installation, sale, and leasing of solar energy generation and energy storage products, and related services to residential, commercial, and industrial customers and utilities through its website, stores, and galleries, as well as through a network of channel partners. This segment also offers service and repairs to its energy product customers, including under warranty; and various financing options to its solar customers. The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Austin, Texas.


View attachment 136375

LOL.

So let's work backwards here:



So 2 claims here:

1. I am making this all about TSLA. So let's (again) examine the evidence:



So the issue was (a) smart companies that can (b) counteract inflation through productivity.



You raised TSLA as an example in this post, of a company that has made strides in productivity.



The numbers demonstrate that TSLA may (or may not) lead the car industry in productivity.

Fine. So we move on to see whether those numbers are actually any good. They are not, demonstrated from TSLA's own financial reporting, taken from the official TSLA website.

You provide your own numbers:



Which demonstrate just how bad, historically and currently, the numbers are.



Then just to remind you for:

2. Until I told you, you didn't even know that TSLA hadn't reported its 10K yet. LOL.

I'm guessing that's because you rely on 3rd parties for your information and from the evidence, prefer the quick, low effort way:




jog on
duc

 

[JohnDe]

LOL.

So let's work backwards here:

View attachment 136386

So 2 claims here:

1. I am making this all about TSLA. So let's (again) examine the evidence:

View attachment 136382

So the issue was (a) smart companies that can (b) counteract inflation through productivity.

View attachment 136383

You raised TSLA as an example in this post, of a company that has made strides in productivity.

View attachment 136384

The numbers demonstrate that TSLA may (or may not) lead the car industry in productivity.

Fine. So we move on to see whether those numbers are actually any good. They are not, demonstrated from TSLA's own financial reporting, taken from the official TSLA website.

You provide your own numbers:

View attachment 136385

Which demonstrate just how bad, historically and currently, the numbers are.

View attachment 136386

Then just to remind you for:

2. Until I told you, you didn't even know that TSLA hadn't reported its 10K yet. LOL.

I'm guessing that's because you rely on 3rd parties for your information and from the evidence, prefer the quick, low effort way:

View attachment 136390


jog on
duc

Your post is incoherent in that format. I’ll have a beer first & try to decipher the rambling & misquotes.

 

[Country Lad]

Bored with this pi$$ing contest which bears no relationship to the inflation topic. Not reading it just visiting to see if you are finished yet and now discussing inflation.

As a wise man once said about hijacking a thread , "You have flown it to a desert outside Amman and blown the ******* thing up"

 

[JohnDe]

Bored with this pi$$ing contest which bears no relationship to the inflation topic. Not reading it just visiting to see if you are finished yet and now discussing inflation.

As a wise man once said about hijacking a thread , "You have flown it to a desert outside Amman and blown the ******* thing up"

Agreed.
Now where is your input about inflation

Mine is that I think that there will be companies that can ride out a high inflation environment and create wealth for share holders, I even gave some examples of industry categories and a video from Cathy Wood giving reasons.

 

[Wedgy]

I am a bit concerned that any attempt to kerb inflation could be a disaster, the issue being the cause of inflation, which in my opinion is caused by supply chain issues, increased transport costs and increased costs due to covid compliance requirements. It is not being caused by wage increases, low unemployment and an over-heated economy. Some sectors have seen wage increase but not many, yes the official unemployment rate is low but that is probably due to lack of foreign workers who can't get in the country, once they are allowed in, unemployment is likely to increase. I suspect that profit margins for most business have, due to increased costs, declined since Covid. So my view is that increasing interest rates now to reduce inflation, could prove to be a big mistake.

 

[frugal.rock]

yes the official unemployment rate is low but that is probably due to lack of foreign workers who can't get in the country, once they are allowed in, unemployment is likely to increase

Hmm, I think the unemployment rate is low because apparently a lot of people aren't looking for a job, which even though they may be of working age, the government removes them from the stats. Smoke and mirrors...

Scummo offering reimbursements of visa costs to foreign workers soon on arrival here, and apparently there's 10k people with visas ready to go.
These foreign workers will hardly fill the gap, and the majority will be going into areas where employers are finding it hard to find people. Eg; hospitality, agriculture, distribution etc
So unlikely to affect unemployment rate, however you can be sure the gov will spruik about more jobs filled/ created, just like their US counterparts already have.

There have been reports of employers poaching people by means of offering a better wicket, grass is greener style scenario, better money, better perks.

 

[Tyre Kicker]

I am a bit concerned that any attempt to kerb inflation could be a disaster, the issue being the cause of inflation, which in my opinion is caused by supply chain issues, increased transport costs and increased costs due to covid compliance requirements. It is not being caused by wage increases, low unemployment and an over-heated economy. Some sectors have seen wage increase but not many, yes the official unemployment rate is low but that is probably due to lack of foreign workers who can't get in the country, once they are allowed in, unemployment is likely to increase. I suspect that profit margins for most business have, due to increased costs, declined since Covid. So my view is that increasing interest rates now to reduce inflation, could prove to be a big mistake.

Good points. Money printing throughout the world, esp US, has/is contributing too.

Australians have on average, saved 3x as much of their household income in the past 2yrs compared to pre pandemic. You would think a lot of that money is going to find its way into the economy at some stage stimulating demand and growth in lots of sectors.

Boom times ahead?

Australia COVID: How households plan to spend their pandemic savings

amp.smh.com.au

 

[Garpal Gumnut]

Good points. Money printing throughout the world, esp US, has/is contributing too.

Australians have on average, saved 3x as much of their household income in the past 2yrs compared to pre pandemic. You would think a lot of that money is going to find its way into the economy at some stage stimulating demand and growth in lots of sectors.

Boom times ahead?

Australia COVID: How households plan to spend their pandemic savings

amp.smh.com.au

One of the big problems is that those "savings" are in cash, and governments have been diluting cash by printing money, so when the time comes to pay the tiller man, the cost of goods will have inflated greatly, more than any rise in intrinsic price of those goods.

Governments will need to get the money back somehow.

gg

 

[sptrawler]

The story about leaving the house and the mortgage behind was not true USA wide, some states yes, others no.....
Another reason not to judge US as a whole

There was enough worthless crap home loans wrapped up in the CDO's to send plenty of U.S and EU banks to the wall, whether it was U.S wide or only part of the U.S is a mute point, it was enough to cause havoc and a global financial crisis.

 

[divs4ever]

I am a bit concerned that any attempt to kerb inflation could be a disaster, the issue being the cause of inflation, which in my opinion is caused by supply chain issues, increased transport costs and increased costs due to covid compliance requirements. It is not being caused by wage increases, low unemployment and an over-heated economy. Some sectors have seen wage increase but not many, yes the official unemployment rate is low but that is probably due to lack of foreign workers who can't get in the country, once they are allowed in, unemployment is likely to increase. I suspect that profit margins for most business have, due to increased costs, declined since Covid. So my view is that increasing interest rates now to reduce inflation, could prove to be a big mistake.

well my answer to inflation , has always been improved efficiency ( and therefore better productivity for the buck ) however i seem to be a tiny minority , because large grandiose plans keep getting muppets employed and clowns elected

our reliance on foreign workers has been the showpiece of our incompetence , now sure some migration is healthy , but to NEED temporary migration ( even as tourists and international students ) shows our whole economy is flawed , and the constant outflow of rising talent ( ever since i left high school .. because the ones a little older were sent to a pointless war in Vietnam ) was the first major sign our system was failing ( no room for quality )

give up on the Employment figures they are nothing like real they have manipulated since at least 1990 to fit various political agendas the easy way is to ask the personnel officer at a solid company ( that treats employees as assets ) how many job applications they get , many other businesses just churn staff ( and sometimes board directors as well ) hoping for a shiny star to pass through and lift morale for a while .

or failing that listen to the youngsters in their 20s and 30s , who has a job they hate , who has 3 , 4 , or 5 jobs , trying to get ahead ( and who uses the job as a front for illegal activities which is the real income )

so yes Wedgy , those who helped to descend us into the current mess ( over several decades ) are hardly the best choice to guide you out

for example do you realize how little fuel we now refine in Australia ( despite being a gas and oil exporter )

we could make our own electric vehicles , we mine most of the resources here REE , lithium , silver gold , copper aluminum , we have plenty of oil , gas , coal , uranium and sunshine and all we need to make is an electric SUV , or panel van to make a viable industry ( all it needs to be is an over-sized golf buggy , or mobility scooter )

after all the recent supply chain issues , how many steps have we made toward self-sufficiency in the last two years

 

[Tyre Kicker]

We could do and make a lot of things to improve our self sufficiency in this the ‘lucky’ country but unfortunately we continue to be the ‘dumb’ country in so many ways, many of which you have touched on above divs.

 

[divs4ever]

we have the talent , i have ridden with at least 3 cab-drivers studying automotive engineering , i bet we could find other useful people doing non-essential jobs , they are out there painting houses , working in warehouses , driving cabs , etc etc etc

 

[over9k]

we have the talent , i have ridden with at least 3 cab-drivers studying automotive engineering , i bet we could find other useful people doing non-essential jobs , they are out there painting houses , working in warehouses , driving cabs , etc etc etc

Can't put the best people on the job divs, we have diversity quota's to fill.

 

[Jeda]

You're still chasing your tail.

You are making this all about Tesla, when I gave an example to my reasoning that there are industries and companies that can survive a world with high inflation -

"Tesla is proof, they found an obvious way to design and manufacture vehicles at reduced cost and time that other major vehicle manufacturers have not been able to do. Read the book Power Play: Tesla, Elon Musk, and the Bet of the Century

Keep an eye out for investments in artificial intelligence, robotics, energy storage, DNA sequencing, and blockchain technology."

The only way to assess a business and an economy is by looking at the most up to date figures and information available. I have looked at the current information, you are looking at the last financial year. The latest update is only for Q3 2021 the next will be
Tesla Announces Date for Fourth Quarter and Full Year 2021 Financial Results and Webcast on Wednesday 26th January. that will be an interesting day, with all the information required to assess whether Tesla is going forwards or backwards.


As for your ROCE -

5 Businesses That Almost Failed and Showed Us Why It Pays to Keep Going

Tesla did not start with Elon Musk, both are no angel but they have transformed the automotive industry as they promised. Read the book by Tim Higgins - Power Play Elon Musk, Tesla and the Bet of the Century.

The secret behind Tesla’s 30% gross margin

The company's Q3 sales rose 58% year-on-year despite a 6% decrease in average selling price, allowing for high margins for the electric vehicle manufacturer

Manufacturers of vehicles using internal combustion engines say large investments funded by revenue from selling gas and diesel vehicles can make up for the deficit incurred by the production of electric vehicles (EVs).

US-based Tesla, the world's largest EV maker, however, has broken this paradigm in the sector. Its recent report on its third quarter performance refutes the idea that the company cannot earn huge profits by selling EVs.

Gross sales margin that outstrips that of luxury automakers

Tesla's car sales in the third quarter rose to an estimated US$12.1 billion, up 58%

A noteworthy detail is that automotive gross profit — overall sales minus manufacturing costs — surged 74% over the same period. The automotive gross margin of such vehicles — the ratio of gross profit divided by sales — also rose from 27.7% to a record-high 30.5%, meaning Tesla earned a profit of around US$25,000 for every roughly US$90,000 vehicle it sold.

Despite this, the company's profit margin improved because manufacturing costs decreased significantly more than sticker prices. Over the cited period, the cost per unit decreased 12% from around US$40,000 to roughly US$35,200.

How did Tesla earn such a high margin by selling electric vehicles, which are traditionally money losers?

The first factor is its economy of scale. In industries with a large proportion of fixed costs such as facility investment and development expenses such as cars, profits surge when sales increase due to the profit-leverage effect, in which the manufacturing cost per unit falls with high sales volume.

Tesla makes four models: the Model S, Model X, Model 3 and Model Y. Lower production costs are made possible through efforts like cutting the unit price of parts and maintaining fixed costs due to rising sales. Makers of cars using internal combustion engines that entered the EV market late face different circumstances, however. Until sales of electric vehicles reach a given scale, losses are inevitable due to massive investment costs.

The profitability of EVs basically depends on the scale of output using the EV-only framework [platform] developed by the manufacturer," adding, "Tesla will produce about a million units this year, resulting in economies of scale, but Hyundai is only capable of doing the same by 2025."

The magic of "giga casting"

Through vertical integration by directly being involved from floor design to parts supply and demand, production and service, Tesla has helped reduce costs by raising the degree of its parts integration and cutting overlapping costs."

Tesla's unique structure of vertical integration, ranging from the development of semiconductor chips, software and batteries for electric vehicles, to charging, unmanned driving and insurance services, helps lower costs. Its “do-it-all” approach simplifies the automotive production process in a manner resembling that of electronic products. In contrast, other automakers actively utilize production outsourcing to diversify vehicle quality risks and raise output efficiency.

A leading example is Tesla's “giga” aluminum die-casting process. A Giga Press weighing more than 1 giga pound (400 tonnes, or around 900,000 pounds) stamps the entire rear chassis of a car with a large aluminum alloy. About 70 metal plates can be welded to the chassis, but giga casting can simplify the process and slash production costs by about 40%. This is why Tesla electric vehicles have recently reduced panel gaps issues — defects caused by misaligned steel plate seams.

The company plans to expand the use of giga casting, which it began applying last year, to the front of its EVs.

Comparing Spending on R&D and Marketing Per Car

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Return On Capital Employed for Tesla, Inc.

Tesla, Inc. designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, China, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers electric vehicles, as well as sells automotive regulatory credits. It provides sedans and sport utility vehicles through direct and used vehicle sales, a network of Tesla Superchargers, and in-app upgrades; and purchase financing and leasing services. This segment is also involved in the provision of non-warranty after-sales vehicle services, sale of used vehicles, retail merchandise, and vehicle insurance, as well as sale of products through its subsidiaries to third party customers; services for electric vehicles through its company-owned service locations, and Tesla mobile service technicians; and vehicle limited warranties and extended service plans. The Energy Generation and Storage segment engages in the design, manufacture, installation, sale, and leasing of solar energy generation and energy storage products, and related services to residential, commercial, and industrial customers and utilities through its website, stores, and galleries, as well as through a network of channel partners. This segment also offers service and repairs to its energy product customers, including under warranty; and various financing options to its solar customers. The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Austin, Texas.


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I thought that GM had the record for highest R&D dollars. Learn something new everyday

 

[Jeda]

Too much fear around inflation when no one know's what will happen with covid in the mix. Relax & prepare

I found this a good read - Will We Go From Pandemic to Recession?