Reply to financial situation

[1yeliab_sufur1]

Just asked if it would be a gain for them I feel that they basically said yes it will be a gain and not a net loss per truck but what y’all think

 

[E90400K]

Until they recover the capital startup costs, the trucks will sell at a net loss.

 

[1yeliab_sufur1]

Until they recover the capital startup costs, the trucks will sell at a net loss.

That is true

 

[Duke Slater]

Here’s the short version:

Every automaker starts off at a loss, because they’re spending money right now on a factory, paying their employees, developing the truck, etc. The only money they make right now is from $50 reservations and their merch.

Eventually they’ll start getting their money back from their truck sales. If they do really well, they’ll eventually make more money than they spent up to that point. That’s when they achieve profitability.

If they don’t sell enough trucks to achieve profitability, they’ll eventually go bankrupt and end the company.

 

[1yeliab_sufur1]

Here’s the short version:

Every automaker starts off at a loss, because they’re spending money right now on a factory, paying their employees, developing the truck, etc. The only money they make right now is from $50 reservations and their merch.

Eventually they’ll start getting their money back from their truck sales. If they do really well, they’ll eventually make more money than they spent up to that point. That’s when they achieve profitability.

If they don’t sell enough trucks to achieve profitability, they’ll eventually go bankrupt and end the company.

Makes since

 

[SLATEchad]

As others have said, there's pretty much no way they start out at anything but a loss with all the startup costs. I think there's so much potential here though long term. I would imagine the profit margin on the truck itself will be relatively small if they're true to the ~$27k price tag, but there will be bigger margins on the accessories. I also wouldn't be surprised if there are subscription based features in the Slate app (Slate has said that the app and features would not be required to drive the vehicle) that could bring in yet another revenue stream. May be a long shot, but with the Bezos connection, I'm hoping maybe that subscription could be included with Amazon Prime membership? Hopefully the thing takes off, becomes profitable quickly and then they release a 4 door model a couple years later

 

[E90400K]

I've calculated they will start making profit at unit no. 422,961.

 

[1yeliab_sufur1]

I've calculated they will start making profit at unit no. 422,961.

How did you get that number ?

 

[1yeliab_sufur1]

I've calculated they will start making profit at unit no. 422,961.

If that number is true and they stick with the 150,000 unites a year it would take them 2.81 years to start turning a profit if all unites are sold in that time frame

 

[E90400K]

How did you get that number ?

$3.5B in capital costs to launch. I guesstimated a $27.5K Slate has about 30% margin in it, or $8,275. $8,275 into $3.5B is 422,961.

But its really not such simple accounting. Just playing with numbers. All estimates, of course (i.e. pulled outta my ass).