How can Tesla afford Superchargers?

Because rich people give money in hope that superchargers will turn into profit one day and make them richer.

The story that Tesla takes the money from Tesla sales isn't true. To be able to afford something you have to have money to spend.

If you take a look at the financial statements, Tesla make about 3.75 bn in revenue by selling cars. cost of sales was about 2.8bn. That's a gross profit margin of about 25% (~33.3% markup). A 25% gross profit (< 1bn) results in a loss of operations of about 700mn, that's about the same as the expenses for research and development. The total loss is at about 888mn.

If you take a look at the cash flow statement you can see cash out flow of about 1.6bn for the purchase of property and equipment. Since superchargers are tangibles and placed on property I assume that they belong to this investment position. It should be obvious that the superchargers are not financed by the profit of car sales and services, but by a better cash position in 2014. If the statement of financial position of 2015 and 2014 are compared you'll see that the cash position went down by 700mn.

A 20% gross profit of revenue means almost 0 net income and a loss for companies like Tesla. It only works in economies of scale or if you are a government contractor or an outsourced research company of bigger companies or if you can convince investors to put more money into the company. Billions of almost nothing is at least something. Supercharging is priced into the Tesla Models purchasing price, but atill it only works out if enough Tesla are sold, that's not the case, and that's why the investment for superchargers is mainly a result of investing available cash. The cash for that investment is also not a result of big 2014 sales, but of "Proceeds from issuance of convertible and other deb" of 2.3.bn in 2014.

http://files.shareholder.com/downloads/ABEA-4CW8X0/1970837110x0xS1564590-16-13195/1318605/filing.pdf :

p.19

Our plan to expand our network of Tesla stores, service centers and Superchargers will require significant cash investments and management resources and may not meet our expectations with respect to additional sales of our vehicles. This ongoing global expansion may not have the desired effect of increasing sales and expanding our brand presence to the degree we are anticipating. We will also need to ensure we are in compliance with any regulatory requirements applicable to the sale and service of our vehicles in those jurisdictions, which could take considerable time and expense. If we experience any delays in expanding our network of Tesla stores, service centers and Superchargers, this could lead to a decrease in sales of our vehicles and could negatively impact our business, prospects, financial condition and operating results.

/r/teslamotors Thread