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Tesla Motors Turns a Profit For the First Time

Soulskill posted more than 5 years ago | from the even-a-blind-squirrel dept.

Businesses 248

d0rp writes with news that Tesla Motors has reported earning a profit for the first time in its six-year history. Sales of the $109,000 Roadster earned the company $20 million in revenue, which settled out to $1 million in profits. "Most of that money rolled in after Tesla delivered cars customers had already placed deposits on. Although the company has, according to spokeswoman Rachel Konrad, seen a 'surge' in orders for the Roadster and the higher-performance Roadster Sport (price: $127,500), it isn't likely to keep rolling cars out so quickly. Konrad says Tesla is 'definitely on pace' to meet its goal of 1,000 to 1,200 cars a year but didn't say when that might happen. Tesla has so far delivered about 609 Roadsters since production started in March, 2008." The company is working on a new 'Model S' sedan, with the help of $465 million in government loans, and has also entered into a partnership with Daimler to help the German auto company produce electric Smart cars.

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First... (5, Funny)

Anonymous Coward | more than 5 years ago | (#28995799)

...year of profits!

Re:First... (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#28995991)

First ... modded up "first post" post. Niggers.

Customer is a sucker... do the math (0, Flamebait)

catmistake (814204) | more than 5 years ago | (#28996861)

I love these cars... I do... but they make no financial sense.
$109,000???

for $9000 you can get a very very nice gas guzzler that's maybe a year or so old (sticker $18K).
for $100,000 you can get 20,000 gallons of gas at $5/gallon, giving you
200,000 miles at 10MPG
domestic gas guzzlers are cheap to repair, can be maintained anywhere in the US.

Even if I had a billion dollars, I'd rather give a million to a random poor person than spend $109,000 on my insecure ego, and delude myself into thinking I was helping the environment.

Private property. Keep out (1, Informative)

BadAnalogyGuy (945258) | more than 5 years ago | (#28995815)

I'm just angered by the insinuance that somehow because someone owns something that was granted to them by the government that somehow they have a monopoly over it and the right to shut me out on a whim.

What is hopeful is how Tesla is working with the auto industry to spread their battery and electric vehicle patents in a cooperative way rather than trying to submarine them. I see a profitable road ahead for Tesla if they can keep their IP chest ahead of the curve.

Re:Private property. Keep out (5, Insightful)

Deadstick (535032) | more than 5 years ago | (#28995891)

the insinuance that somehow because someone owns something that was granted to them by the government that somehow they have a monopoly over it

That would seem to be a fairly accurate definition of "patent"...

rj

Re:Private property. Keep out (1)

derGoldstein (1494129) | more than 5 years ago | (#28996259)

...something that was granted to them by the government...

I think that by that part he meant that a patent usually costs money [cbs5.com] .

Re:Private property. Keep out (0)

Anonymous Coward | more than 5 years ago | (#28996399)

Private property. Keep out
I'm just angered by the insinuance that somehow because someone owns something that was granted to them by the government that somehow they have a monopoly over it and the right to shut me out on a whim.

I'm pretty sure he was alluding to the following line from Signs [guntheranderson.com] performed by Tesla [wikipedia.org] .

And the sign said anybody caught trespassin' would be shot on sight
So I jumped on the fence and I yelled at the house
"Hey, what gives you the right
To put up a fence to keep me out, or to keep Mother Nature in
If God was here he'd tell you to your face, man you're some kind of sinner!"

Re:Private property. Keep out (2, Insightful)

rednip (186217) | more than 5 years ago | (#28995963)

I see a profitable road ahead for Tesla if they can keep building cars people want to buy.

There fixed that for you.

Re:Private property. Keep out (5, Insightful)

BadAnalogyGuy (945258) | more than 5 years ago | (#28995981)

No. It's pure naivete to think that Tesla will somehow continue in this business as a car manufacturer. They don't even manufacture the body of the car they sell. They are an IP company through and through. Their only hope is to have a good patent chest and find licensees.

Daimler seems to be interested, and I'm sure they aren't the only ones who want to build an electric vehicle.

Anyone who thinks Tesla will be around as a car manufacturer 3 years from now ought to buy stock in Moller today.

Re:Private property. Keep out (0)

Anonymous Coward | more than 5 years ago | (#28996121)

I think you are partially right, they will go to one of two extremes. Get bought up by someone else like Daimler who will really utilize their technology. Or become the tech start up that killed the established giants and be a major player in the auto industry. They won't continue to be a sideline player as they are now.

Re:Private property. Keep out (0)

Anonymous Coward | more than 5 years ago | (#28996165)

Didn't Moller try to make "flying" cars. Besides, Ford was a young company ... once. They exploited the cutting edge tech (ie: the assembly line, etc) of the time and they made it a hundred years later. That's better than GM right now. Tesla might be around for 5 days. they might be around for 5 decades. Don't write them off as just an IP company.

Re:Private property. Keep out (2, Insightful)

siriuskase (679431) | more than 5 years ago | (#28996219)

IDK, fabless chip manufacturers are still chip manufacturers, so why not a car manufacturer that outsources all its factory work?

Re:Private property. Keep out (1, Insightful)

BadAnalogyGuy (945258) | more than 5 years ago | (#28996269)

That's already the case for many makes and models.
http://www.magna.com/magna/en/ [magna.com] (for example)

What game-changing idea does Tesla really bring to the table? What idea would let them survive in the competitive car market?

Their market isn't automobiles (or even sports cars), it's electric vehicles. There would need to significant financial incentives for Tesla to become a serious contender in the automobile market. Asit is, there is a little incentive to buy a greener car these days, but not enough to cover the gap in price.

Re:Private property. Keep out (1)

drinkypoo (153816) | more than 5 years ago | (#28996893)

Their market isn't automobiles (or even sports cars), it's electric vehicles.

And electric vehicle technology. If Tesla gains enough mindshare then the big automakers will be falling over themselves to release EVs. Also, Nissan has pledged to deliver an affordable EV to the North American market by 2010. I figure they're looking to be to EVs as Toyota is to Hybrids. It will be interesting to see how that works out for them given Toyota's successful past (and present) with the RAV4 EV.

There would need to significant financial incentives for Tesla to become a serious contender in the automobile market.

Like the fat loan they got to boost manufacturing capacity?

Asit is, there is a little incentive to buy a greener car these days, but not enough to cover the gap in price.

The wealthy will buy it for the performance. The almost-wealthy will buy it for the smug factor. The next generation vehicle will be a big hit if it achieves 75% of its stated goals (in terms of capacity, not number.) The plan is and always has been to build a cheaper car after the Model S.

P.S. Where's my bad analogy, dammit?

Re:Private property. Keep out (1)

LateArthurDent (1403947) | more than 5 years ago | (#28996971)

There would need to significant financial incentives for Tesla to become a serious contender in the automobile market. Asit is, there is a little incentive to buy a greener car these days, but not enough to cover the gap in price.

You remember last year when we had $4 / gallon gas? If you don't think that's going to be back by this time next year and that 3 years from now the cost will get to at least $5 / gallon, then you're living in la-la land. The financial incentive is coming in fast.

Re:Private property. Keep out (1)

damnfuct (861910) | more than 5 years ago | (#28996521)

No one innovates anymore except small companies. Big companies buy those small companies out as soon as they make something profitable.

Re:Private property. Keep out (0)

Anonymous Coward | more than 5 years ago | (#28996295)

Daimler already owns 10% of Tesla. You make a lot of grandiose statements for not knowing very much about the company, what else is new I guess...

Re:Private property. Keep out (1)

Attila Dimedici (1036002) | more than 5 years ago | (#28996375)

Right now, none of the major car companies could sell as many of the Tesla Roadster for the price that Tesla is selling it as Tesla is. I don't believe that will change in the next three years. A significant number of the people who are buying the Tesla (and of the potential market for the "Model S") are buying it because Tesla is a start up doing something "new and different". In the U.S., at least, the infrastructure is not in place to allow an all electric car to be sold solely on its merits vs. other options, at least for the foreseeable future (approximately 5 years), electric cars will be novelty items.
This doesn't mean there is anything wrong with electric cars, just that the people who are buying cars from Tesla would be less likely to buy the exact same spec car from one of the established car manufacturers. I believe that if Tesla is still manufacturing cars in 5 years (possibly as a division of a larger company), the infrastructure necessary to make all electric cars a viable competitor to current technology automobiles (gasoline and hybrid) for the average driver in the U.S. will be starting to be built (or already built in certain limited areas). If Tesla is not manufacturing cars in 5 years, the day of the electric car will still be in the indefinite future as opposed to the imminent future.

Re:Private property. Keep out (2, Interesting)

FlyingSquidStudios (1031284) | more than 5 years ago | (#28996435)

The infrastructure is already in place in some cities. In Los Angeles, where I expect to see more than a couple of Teslas on the road, there have been signs for electric vehicle charging stations all over the place for years.

Re:Private property. Keep out (2, Informative)

Bigjeff5 (1143585) | more than 5 years ago | (#28996795)

Ok, you know they are Electric cars right?

Except in places where the infrastructure is already near capacity (California and some parts of the northwest spring to mind), the infrastructure is already in place, and all anybody really needs is the correct outlet.

Infrastructure for these things is no problem, except in places where the electrical infrastructure is already poor.

Re:Private property. Keep out (2, Interesting)

runningduck (810975) | more than 5 years ago | (#28996397)

Tesla also has a revered brand for which people are willing to pay.

On the manufacturing side they are some advantages as well. They have very few long term commitment contracts with suppliers who make parts that are irrelevant to electric cars. They are very few if any long term commitment contracts to labor organizations to keep organizational charts wide and heavy. They have few if any long term contracts with city, county or state governments regarding factory locations or employment levels. They have few if any long term leases on land and facilities that must be used or create a financial drag on the organization. They have few if any dealership agreements with odd inventory management clauses that cause inconsistent and inefficient bullwhip effects through the entire supply chain. They have few if any contracts with top executives who demand lavish lifestyles or are ineffectual without hundreds of subordinates that somehow make things happen in spite of their ignorance and egos.

On the down side, they do not have a manufacturing plan or a well built organization to support such a plant. With the big automakers suffering Tesla will likely get to pick the cream of the crop of executives and management to create this without falling into many of the pitfall often plagued by young organizations.

Re:Private property. Keep out (1)

Theolojin (102108) | more than 5 years ago | (#28996601)

No. It's pure naivete to think that Tesla will somehow continue in this business as a car manufacturer. They don't even manufacture the body of the car they sell. They are an IP company through and through.

O, how I hope you're wrong. I hope I am not merely naive. The Model S appears to be one heck of a car. I have long dreamed of a purely electric car. If they are successful with it and the price drops ~$15,000 (due to improved manufacturing efficiency), I think this car could become very popular and make a huge impact in the car industry.

Re:Private property. Keep out (1)

Bigjeff5 (1143585) | more than 5 years ago | (#28996951)

The Model S looks to be more in line with a decent BMW than a more affordable vehicle. Tesla's plan from the beginning has been to develop their tech on the markets most able to support them - first the people with cash to burn, for whom $100k+ for a status symbol seems like a good deal (and who can lay down a $30k deposit and let it ride for a year or two). Next they target the "well off" folks, who could maybe swing a Roadster but don't really have money to burn. They can afford nice cars, and would see $50k for a status symbol in addition to a nice vehicle as a good investment.

Whatever comes after the Model S will be targeted for a much wider market, probably in the $30k range. By then they should have the base to support it, and get the price down in that range reasonably. It will compete with the nicer Subarus, Toyatas, Hondas, and domestics.

Re:Private property. Keep out (1)

myrdos2 (989497) | more than 5 years ago | (#28996609)

A brief examination of Tesla's business plan suggests that they will, in fact, be manufacturing cars three years from now. Unless you're suggesting that it's all a pack of lies? If so, they'll have some explaining to do, as they just got half a billion from the US government to develop their next line of lower-cost electric vehicles, the Model S.

Unless you're suggesting they're doomed to fail, despite being flush with cash and profitable in the middle of a recession?

Outsourcing (2, Informative)

sjbe (173966) | more than 5 years ago | (#28996991)

They don't even manufacture the body of the car they sell.

That's not so unusual. Do you think the big auto makers actually make most of the parts that go into their cars? They don't. In fact it is standard practice to outsource even entire subsystems of the car to the Tier 1 suppliers. The body of the car is just another part which can be purchased from a supplier if desired. It's less common to outsource that part but not unheard of.

They are an IP company through and through.

So are most manufacturers when you get right down to it. Any sophisticated product not covered by patents and trade secrets will be copied quite rapidly these days.

yay tesla (0)

Anonymous Coward | more than 5 years ago | (#28995817)

i may never be able to drive one, but good for them.

'profit' can mean different things (5, Interesting)

lapsed (1610061) | more than 5 years ago | (#28995843)

This should be taken with a bit of skepticism. There's a difference between positive cash flow (more cash coming in than going out), positive net income (what most people think of as 'profit') and positive EBITDA (earnings before interest, taxes, depreciation, and amortization, or profit from operations). TFA doesn't mention which Tesla is reporting.

Re:'profit' can mean different things (0, Offtopic)

Smidge207 (1278042) | more than 5 years ago | (#28995895)

There's a difference between positive cash flow (more cash coming in than going out), positive net income (what most people think of as 'profit') and positive EBITDA (earnings before interest, taxes, depreciation, and amortization, or profit from operations).

Jeez, a little imagination please.

Try taking two Sims (or better yet, many!) with opposing personalities, then bricking them into a room with nothing but a toilet an espresso machine and a Tesla automobile.

"Get the fuck out, asshole. I need to take a leak!"

"Really? You sure you just don't want another Caramel Machiatto?"

It's the only way I've actually made a Sim I didn't control kill another Sim (gotta love them neighbors!). It takes about 10-15 fist-fights, but eventually one takes a permanent dirtnap. I even had BOTH Sims fall asleep in the middle of one of them fist fights once because there was no bed. Ball of Fury, then pow!, interrupted script and two Sims sleeping in puddles of piss.

The funniest part is watching the "totally surprised" reaction of the Sim that did the killing when the Grim Reaper shows up.

"Oh sure, it's all fun and games until someone gets hurt!"

=Smidge=

Re:'profit' can mean different things (5, Interesting)

seanadams.com (463190) | more than 5 years ago | (#28995899)

There are lies, damned lies, and accounting.

earnings before interest, taxes, depreciation, and amortization

The latter two of which are absolutely huge for a brand new manufacturing operation that is not running at capacity. EBITDA always makes me chuckle a little. See it started as EBIT, then became EBITDA because the PHBs said no, really we need to look profitable so we can get this loan or whatever. Pretty soon it'll be EBITDAP (payroll) and then EBITDAPHAB (hookers and blow) etc.

Kind of like how the mortgage brokers in their heyday were allowed to use a modified credit rating, essentially calculated as "here's what your credit rating WOULD be if we overlooked all the negative stuff". I wish I was kidding.

SOP for startups (1)

hwyhobo (1420503) | more than 5 years ago | (#28996519)

See it started as EBIT, then became EBITDA because the PHBs said no, really we need to look profitable so we can get this loan or whatever. Pretty soon it'll be EBITDAP (payroll) and then EBITDAPHAB (hookers and blow) etc.

This is a standard accounting operating procedure for Silicon Valley startups. In fact, compared to the late 90s "boom", this is positively conservative.

Kind of like how the mortgage brokers in their heyday were allowed to use a modified credit rating, essentially calculated as "here's what your credit rating WOULD be if we overlooked all the negative stuff". I wish I was kidding.

Back in the day when I worked in mortgages (more than a quarter of a century ago - yes, I am older than dirt underneath my feet), we didn't have credit scores. We just used common sense. What a concept.

Re:'profit' can mean different things (1)

Saysys (976276) | more than 5 years ago | (#28996569)

You are ignorant and it shows.

Earnings before depreciation and amortization makes sense because these are not actual losses but 'funny money' losses.

Re:'profit' can mean different things (1)

Bigjeff5 (1143585) | more than 5 years ago | (#28997037)

If you spend $10 yesterday to make $11 today, but the dollar today is only worth 90% of what it was yesterday, you did not make a $1 profit, you took a $0.1 loss.

It's not funny money, it's real buying power. Granted, had you not done anything you would have lost $1 in buying power instead.

This is called accounting. You should learn a little.

Re:'profit' can mean different things (1)

russotto (537200) | more than 5 years ago | (#28995933)

I'd take it with a LOT of skepticism. They shipped 109 cars in a month, which probably means they booked the revenue for those cars in that month. But they probably didn't make (and thus book the costs of) anything like 109 cars in that month. So it's just a blip.

Re:'profit' can mean different things (-1, Troll)

Lumpy (12016) | more than 5 years ago | (#28995953)

How about the fact that their car was panned HARD on Top Gear and you can buy the Lotus Elise car that the Tesla is built on for far, FAR, cheaper and get better performance?

I do understand where they are coming from and what they are making. But they still have a very long way to go.

Re:'profit' can mean different things (3, Insightful)

MtHuurne (602934) | more than 5 years ago | (#28996003)

Do people actually take Top Gear as consumer advice? I watch it for entertainment; I don't even have a car.

Re:'profit' can mean different things (1)

Hurricane78 (562437) | more than 5 years ago | (#28996035)

Right. I saw it, and I always loved the Elise. You can't get more fun per dollar with any other car. It fits in every parking space, looks very cool, has an insane acceleration, gets around the corners like a dream, and still is pretty cheap for such a sports car. The only thing lacking, is comfort. The perfect second car, if you got a bit more money to spend. Or my first car. Because I'm a MAN. ;)

Re:'profit' can mean different things (1)

WCguru42 (1268530) | more than 5 years ago | (#28997129)

You can't get more fun per dollar with any other car.

Unless you're 6'4", then you can't get more cramps with any other car. The Elise is probably the only reason I wish I wasn't tall, but I guess you can't have everything in life.

their car was panned HARD on Top Gear

hahaha, that's like relying on any of the cable news stations for clear and accurate news.

Re:'profit' can mean different things (5, Informative)

Anonymous Coward | more than 5 years ago | (#28996041)

If by panned HARD you mean Top Gear faked it running out of charge and that Jeremy Clarkson's predetermined opinions warrant being classed as an unbiased review then sure.

They do some funny stuff on Top Gear but the know stuff all about cars and their 'testing' is a joke. Seriously. You are going to end up disappointed if you buy a car based on one of the reviews. That is if you actually happen to see one of the rare episodes they lower themselves to road test a car that costs less than £50,000. Anyone with even a little bit of motor vehicle knowledge will see through the sensationalist rubbish that they call road tests. If you want a Top Gear recommendation make out it is an Italian sports car and they will fall over themselves to stick their cocks up its the exhaust. No how matter how shit and unreliable Alfa Romeo makes their cars Clarkson and Co will insist they will buy one anyway. And they would sell their Granny to say wonderful things about a 1970s Ford Cortina if you tapped a Ferrari badge to the bonnet.

Re:'profit' can mean different things (5, Informative)

Random Destruction (866027) | more than 5 years ago | (#28996365)

Indeed. the beeb admitted [autoblog.com] that the cars never ran out of juice. That scene was faked to "show what would happen if the battery had actually been depleted."

Re:'profit' can mean different things (1)

legirons (809082) | more than 5 years ago | (#28996001)

This should be taken with a bit of skepticism. There's a difference between positive cash flow (more cash coming in than going out), positive net income (what most people think of as 'profit') and positive EBITDA (earnings before interest, taxes, depreciation, and amortization, or profit from operations). TFA doesn't mention which Tesla is reporting.

It's not "positive cash flow while being given $465 million" then?

Re:'profit' can mean different things (3, Insightful)

Macrat (638047) | more than 5 years ago | (#28996323)

Yeah, they can pay off the "loan" in 464 years.

Re:'profit' can mean different things (1)

damnfuct (861910) | more than 5 years ago | (#28996497)

All that stuff is from in step 2: "????." They are in step 3 now, and that's clearly "PROFIT"

Long road behind and more ahead (0, Interesting)

Anonymous Coward | more than 5 years ago | (#28995901)

I have been following Tesla for a long time, and certainly have been cheering them on. Mostly because THEY are SINGLY HANDED Responsible for forcing ALL OF THE MAJOR car makers to go to electric. Not a one wanted to go down this path. BUT, tesla has forced it. OTH, they like to claim that they are an American Car builder. Nothing could be further from the truth. Where do the current motors and electronics come from? Taiwan. Where does the processed lithium come from? China. The body and frame CURRENTLY comes from Lotus, but that will be coming shortly from America. If Elon was smart, he would push for motors from America (which DOES have a number of companies that produce these). Likewise, he would consider pushing for Lithium from other sources, rather than solely China. China (and somewhat Taiwan) have a LONG history of out and out stealing IP. It is only a matter of time before any quiet IP will show up in competitors. But if America is loaning him the money for this, I would like to see more of his source come from America. At least from those countries that will honor IP and have their money freely floating against ours and not have trade barriers.

Re:Long road behind and more ahead (0, Flamebait)

Smidge207 (1278042) | more than 5 years ago | (#28995923)

But if America is loaning him the money for this, I would like to see more of his source come from America.

Hear Hear! With that Obama money helping this fledgling company along, they better have survived; they have a lot riding on their success. Especially if Obamas 10 year plan to pull out of Middle East Oil is to be realized. Now, if they could bring this tech to the 30-45k vehicle market, I might be able to contribute to this endeavor! Outside of George Clooney, what average Joe can afford these?

Obviously, those Right-Winging cretins are fighting tooth and nail because their old money was paved with OIL and they are neither smart, young[i.e. willing], or idealist enough to reinvest their coffers into Hydro-electric vehicles!

Re:Long road behind and more ahead (3, Insightful)

SerpentMage (13390) | more than 5 years ago | (#28995937)

What the heck is your problem????

Don't you find it good that a company in CALIFORNIA manages to turn a profit on new technology? If the company had to reinvent the wheel on batteries, motors and everything else they would be years from a model and profit. This is why GM's electric system is so far behind. They have to invent everything themselves. And what results is a crappy car called the volt, which is not even completely electric. It reaches 40 miles before needing juice. GIVE ME A BREAK...

BTW China is starting to honor IP... Why? Chinese companies are starting to sue Chinese companies for stealing of their IP.

Re:Long road behind and more ahead (-1, Troll)

Anonymous Coward | more than 5 years ago | (#28995965)

don't worry. Obama Motors will find a way to wrestle this technology away from Tesla. Hell, cash for clunkers? Isn't every vehicle that rolls off the assembly line at Obama Motors considered a clunker? That's why most non-retarded American's (oxymoron?) don't buy those pieces of shit.

Re:Long road behind and more ahead (2, Insightful)

Anonymous Coward | more than 5 years ago | (#28995983)

This is slashdot, if it is not an Apple product made in China, then it is not worth bothering with.

Re:Long road behind and more ahead (0, Flamebait)

Anonymous Coward | more than 5 years ago | (#28996023)

BTW China is starting to honor IP... Why? Chinese companies are starting to sue Chinese companies for stealing of their IP.
BS. China is ONLY protecting OTHER Chinese companies. The Chinese gov. STILL encourages Chinese companies to out and out steal from western companies. In addition, they still have their money fixed against the Euro and Dollar, as well a have full trade barriers in place. Show me evidence that any western company suing is changing things with regard to Western companies.

Re:Long road behind and more ahead (2, Insightful)

Vellmont (569020) | more than 5 years ago | (#28996249)

I don't completely disagree with you, but you might want to take price into consideration as well. The Model S is supposed to retail for $57,000. The Volt is supposed to retail for $40,000. Both have a $7500 tax credit attached to them.

Which do you think is more affordable for the average person? A $33,000 car, or a $50,000 car? Neither is an acceptable answer, but at least the Volt is in the ballpark.

A 40 mile electric charge range ain't bad. On most days I don't drive more than 40 miles, and I commute to work every workday. If I were making the choice between them, I'd easily choose the Volt over the Model S and do something else with the $17,000 in savings (hell, you could buy a whole other car for that if you were so inclined). In reality I'll buy neither of them, but at least it's a start.

Re:Long road behind and more ahead (2, Interesting)

Anonymous Coward | more than 5 years ago | (#28996355)

How about the sub $20K, 100 mile Aptera 2e? (Or if you wait until 2010, the hybrid model that goes 600 miles on one tank?)

http://en.wikipedia.org/wiki/Aptera_Motors [wikipedia.org]

Re:Long road behind and more ahead (1)

Vellmont (569020) | more than 5 years ago | (#28996551)

No thanks. If I didn't care about my safety I'd just buy a motorcycle rather than something that looks like it came from an issue of Popular Mechanics 20 years ago.

Re:Long road behind and more ahead (1)

Macrat (638047) | more than 5 years ago | (#28996329)

Don't you find it good that a company in CALIFORNIA manages to turn a profit on new technology?

$1mil "profit" after a $465mil "loan" is a profit?

Re:Long road behind and more ahead (1)

yamfry (1533879) | more than 5 years ago | (#28996019)

In a sense they are pushing for these things by creating a market for those factors of production. It may be that in the end that the market for those factors will be filled by foreign companies who can provide them more efficiently and cheaper. American companies are more than welcome to enter that market -- they certainly have an advantage of being able to supply the factors on-demand, with minimal transportation costs, and free from customs clearance due to their geographic and political proximity. Currently I don't see why Tesla would even consider purchasing their factors of production from an American company for a higher price or at lower quality. Jingoism will only work to the detriment of Tesla.

I think you overestimate Tesla's influence (3, Insightful)

Lonewolf666 (259450) | more than 5 years ago | (#28996667)

So far, they sell one nice electric sports car. And they announced to make a sedan for a somewhat wider audience. But Tesla does not have the market share yet to put real pressure on the major car makers.

I think Toyota played a bigger role there:
While only partially electric, their Prius demonstrated that a hybrid can actually sell serious numbers. AFAIK one million worldwide so far.

Where in the hell do people get this money? (0)

Anonymous Coward | more than 5 years ago | (#28995959)

Seriously, I don't know anyone that could just blow $100k on a car. Where are these people getting all this money and why does it seem like there are so many of them?!

Re:Where in the hell do people get this money? (5, Insightful)

Frosty Piss (770223) | more than 5 years ago | (#28996049)

Seriously, I don't know anyone that could just blow $100k on a car. Where are these people getting all this money and why does it seem like there are so many of them?!

Well, look around you next time you're out on the road. See those huge new pick-ups and SUVs? Many are up in the 60k range, and for a sports car, those same type of people are the customers. People who have few obligations such as family and making "good money" plunk down that kind of change for toys all the time.

But the carrot is that the technology in these 100k$ cars will trickle down to cheaper, more consumer targeted vehicles.

Re:Where in the hell do people get this money? (1)

edalytical (671270) | more than 5 years ago | (#28996559)

But the carrot is that the technology in these 100k$ cars will trickle down to cheaper, more consumer targeted vehicles.

This is delusional. Sorry but it is. You're not alone and it's the support argument that gets repeated the most. But think about what technology it is that is supposed to magically trickle down: batteries.

Hmm, where have I see those before? I don't know maybe in millions of laptops, cell phones, handheld devices, power tools, calculators, and cars. Nearly everything uses batteries, but good batteries still cost about $100 per pound.

If all those batteries haven't reduce the price thus far why would a car company selling a few thousand cars make any difference at all? I highly suspect it won't.

Re:Where in the hell do people get this money? (2, Informative)

Ironsides (739422) | more than 5 years ago | (#28996979)

Oh, because the batteries used in electric vehicles are quite a bit different than the ones used in laptops and cell phones? Laptops and Cell phones draw a small amount of current compared to the ones needed for electric vehicles. Also, the cell size and capacity are difference. Portable devices need light weight, SMALL battery cells. Battery cells for electric cars need a high power density and high current output, volume and weight are much less of an object. Among other things, the multiple order of magnitude difference in current draw makes the two types significantly different. Then there is the battery life. Your portable battery may a few years before becoming mostly useless. Car batteries need to last 10 years.

Re:Where in the hell do people get this money? (1)

edalytical (671270) | more than 5 years ago | (#28997135)

That's my point exactly. The batteries you're talking about don't exist. The Tesla uses standard Li-ions found in laptops and cell phones. There is no innovative technology here. There is nothing to trickle down.

Re:Where in the hell do people get this money? (1)

Frosty Piss (770223) | more than 5 years ago | (#28997093)

But think about what technology it is that is supposed to magically trickle down: batteries.

I'm sorry, but if you think batteries are the only trickle-down technology from efficient and well engineered electric cars, you're ignorant. Think more in terms of the entire drive-train.

Re:Where in the hell do people get this money? (1)

zwei2stein (782480) | more than 5 years ago | (#28997117)

Model S is priced at 49.900$

It somehow already happened. Cool, eh.

Re:Where in the hell do people get this money? (0)

Anonymous Coward | more than 5 years ago | (#28997099)

> Where are these people getting all this money

It's not *that* far fetched. A successful software engineer can pull down $100-200K per year in the USA, and if s/he's single, it's quite easy to buy a $100K car on that kind of salary.

Or lawyers.

Or doctors. Or dentists.

Or even many successful tradesmen.

There are many people who can afford a $100K car without breaking the bank. On a 5 year loan, financing $80K of the price, it's around $1500/month at 6% loan rate. Plenty of people can do that.

465 Million $ loan?? (5, Insightful)

smallshot (1202439) | more than 5 years ago | (#28995985)

How does a company that makes $1,000,000 in profit over 1 full year, get 465 Million dollars in loans from our government?? How will they pay that back in a reasonable time?

Re:465 Million $ loan?? (3, Insightful)

FooAtWFU (699187) | more than 5 years ago | (#28996033)

It's "green". Duh.

Re:465 Million $ loan?? (0)

Anonymous Coward | more than 5 years ago | (#28996485)

As far as I am aware you can't actually order a "green" version, only red, silver and what not. Slightly dissapointing I might add and definitely fits into the poor marketing category ;-)

Re:465 Million $ loan?? (1)

hoggoth (414195) | more than 5 years ago | (#28996081)

Exactly what I was thinking!

Why should I pay taxes to give $465 million dollars to a company that GROSSES $20 million a year?!

I guess my big mistake is not having a company that knows how to play the government game and get people to fund my pet projects.

Re:465 Million $ loan?? (1, Insightful)

Anonymous Coward | more than 5 years ago | (#28996087)

because they're expected to become more profitable in the future, dumbass.

If you'd ever tried to play restaurant empire, simtower, simcity, or the sims, you would understand this.

Re:465 Million $ loan?? (4, Insightful)

Vellmont (569020) | more than 5 years ago | (#28996091)


How does a company that makes $1,000,000 in profit over 1 full year, get 465 Million dollars in loans from our government?

The same way the banks got billions of dollars of loans that LOST billions of dollars. A failing economy.

You're right that it doesn't make a lot of sense from a loan perspective. But I at least feel better about money going towards developing a product that may help out ongoing energy problems than it going towards lining the pockets of investors and million dollar bonuses for bank executives.

The whole thing is part of the economic stimulus of the economy. The idea being that in a down economy nobody wants to spend money.. because the economy is down (so the process self-perpetuates). The only entity that can afford to spend a lot of money in a down economy is The Government. The massive government spending that occurred to produce all the crap for WWII is the only thing that got us out of the depression.

Re:465 Million $ loan?? (1)

smallshot (1202439) | more than 5 years ago | (#28996223)

I would feel better if they were making an AFFORDABLE economical vehicle that would benefit the majority of Americans (and the environment). Making 10,000 unaffordable "green" cars over 10 years has very little environmental impact and not worth my tax dollars in my opinion.

Re:465 Million $ loan?? (1)

Vellmont (569020) | more than 5 years ago | (#28996373)


I would feel better if they were making an AFFORDABLE economical vehicle that would benefit the majority of Americans

I'd feel better too. But look at price for any new technology, and then look at them again 10 years later. In general prices go down drastically. The hope is that the same is true for electric cars.

Think about it this way though. We spent billions of dollars in WWII to make things that literally destroyed themselves and other things, people, and infra-structure. Then we spent billions of dollars AFTER WWII to rebuild all the shit in Europe we blew up. What was the ultimate economic benefit from making all the shit to blow stuff up, then paying again to fix all the shit we blew up? (Ignoring all the obvious good of destroying Nazi Germany, ending the Holocaust, and stopping the Japanese from taking over much of Asia).

Re:465 Million $ loan?? (2, Interesting)

teg (97890) | more than 5 years ago | (#28996393)

They aren't getting the loan for making more Tesla Roadsters... but for their new Tesla Model S sedan [autoblog.com] . Which is a lot more affordable (and useful) than the Roadster. Still more pricey than a normal car, but it's definitely going in the right direction.

It could even be a hit here in Norway, as it will be exempt from all normal car taxes (which easily make most cars 2 times or more expensive than in the US) - it will even be exempt from the VAT (25%). Exporting US cars again would be nice, wouldn't it?

Re:465 Million $ loan?? (5, Insightful)

Jeremi (14640) | more than 5 years ago | (#28996477)

I would feel better if they were making an AFFORDABLE economical vehicle that would benefit the majority of Americans (and the environment).

Me too, but experience has shown that you can't approach the problem that way. A number of companies have tried make "economical" electric cars, and they end up looking (and driving) like golf carts, while still costing more than, say, a Honda Civic. So when the companies go to sell these cars, the American public just laughs at them, and the companies quickly go out of business. The companies never have a chance to produce a more attractive product, because they never have a chance to establish the manufacturing base necessary to make electric vehicles efficiently, and therefore they can't compete with gas-powered cars.

Tesla is trying to opposite approach: instead of trying to compete with Ford/Honda/Toyota/GM/etc on the low end (an economic suicide mission), they are starting from the high end and working their way down. It turns out that you can make a fairly competitive electric sports-car, because at the high end, pricing is less of an obstacle to consumer acceptance, and therefore you can sell cars even if you have to give them a pretty large markup to offset your startup costs.

Tesla's next step after the Roadster will be to sell the Model S [teslamotors.com] , which will compete with the Mercedes and the BMWs of the world and sell in greater numbers than the niche Roadster product. Assuming the Model S is successful, their next product will be an even more inexpensive model to compete with the Nissans and Hondas of the world. At each step of the way, they leverage the capital and knowledge gained in the previous product to make something that is more mainstream, more cheaply than they previously could have done. In this way, they (hopefully) have a viable path towards making electric cars a popular mass-market product, which is something that you can't say for the electric-car companies that tried things your way and failed.

Who knows whether they will succeed or not, but the plan certainly has its merits.

Making 10,000 unaffordable "green" cars over 10 years has very little environmental impact and not worth my tax dollars in my opinion

That isn't the goal, so your opinion is unfounded.

Re:465 Million $ loan?? (1)

smallshot (1202439) | more than 5 years ago | (#28996857)

Thank you for clearing that up. It makes more sense to me now. I still stand by my opinion, though, but it apparently doesn't apply to Tesla.

Re:465 Million $ loan?? (1)

runningduck (810975) | more than 5 years ago | (#28996531)

While Tesla does not make affordable cars, they have a clearly stated desire to make such cars as soon as they can reach the appropriate manufacturing scale. This pushes affordable cars more than you might think. The big auto makers see operating profit on Tesla's books and a well respected brand so they have to counter or face the possibility that Tesla may one day own the electric car market.

Ironically, government investment into Tesla creates more incentive for other auto makers to step up to the plate and build mainstream electric cars than direct investments in the auto makers for the same purpose. Investment in Tesla accelerates the possibility of Tesla reaching the mainstream first. Without Tesla nipping at their heals any direct investment in established auto makers would likely be soaked to keep the lights on for the "research and development" departments and product very little in the way of affordable electric cars.

it ain't easy being green... (1, Interesting)

Myrcutio (1006333) | more than 5 years ago | (#28996309)

I at least feel better about money going towards developing a product that may help out ongoing energy problems

Just because its all electric doesn't mean it will solve our energy problems. It just offloads the burden to another infrastructure. Currently our use of fossil fuels is generating most of our electricity, dump a few million electric cars on the grid and sure you save some gas and emissions (and coal plants have much better filtration and carbon capture than combustion engines) but at the cost of stressing our electric grid. The efficiency of converting gas into kinetic energy is relatively high, as far as energy conversions go. Converting fuels into electricity is far less efficient, not to mention losses from battery storage.

don't get me wrong, i'd love for everyone to drive an electric car instead of a combustion engine, but our grid isn't capable of supporting that dream yet. The change will come, but it will be slow, and driven by economics.

Re:it ain't easy being green... (2, Interesting)

FlyingSquidStudios (1031284) | more than 5 years ago | (#28996459)

Maybe not, but it will sure solve a lot of smog problems out here in Southern California. We get our power from natural gas, nuclear and a little bit of hydro and wind. The smog is from the cars.

Re:it ain't easy being green... (0)

Anonymous Coward | more than 5 years ago | (#28996683)

Then get CNG cars and be done with it! That way you don't need to rape the electric infrastructure, use shit loads of copper, and have so much battery waste.

Re:it ain't easy being green... (5, Informative)

Anonymous Coward | more than 5 years ago | (#28996619)

I call bs on this statement: "The efficiency of converting gas into kinetic energy is relatively high, as far as energy conversions go. Converting fuels into electricity is far less efficient, not to mention losses from battery storage."

The efficiency of converting gas into kinetic energy is NOT relatively high, Theoretical max of ~30%, in a high efficiency car it will be in the upper 20s.
Converting fuels into electricity is NOT far less efficient, Theoretical max of ~70%, and this is just using a steam turbine generator, ie coal plant.

The truth is that ~70% of the energy stored in gas is heat, ~30% is expansion. The internal combustion engine uses the expansion of gasses, and then uses energy to throw away the heat.

In order for gas to be more efficient you have to have over 50% loss. The loss areas include: electric transmission 92.8% efficient, storage in lithium batteries 90%, and the electric to kinetic( the electric motor) 89%. This is equivalent to over 48% net efficiency. and 48% >> 28%. This is not even taking into account the benefit of regenerative braking.

If you convert the cost per mile (of energy ie electricity) of a tesla to mpg, is will be in the 230 mpg range. Find me a internal combustion engine that can support that.

except that nuclear plants are local (2, Interesting)

SmallFurryCreature (593017) | more than 5 years ago | (#28996643)

No need to fight wars for a nuclear, or solar or wind energie or geo-energie.

That is the beauty of the electric grid. it don't give a damn what you hook up to it.

Petrol cars run on petrol.

Electric cars run on anything that pump out juice.

Re:it ain't easy being green... (1)

Vellmont (569020) | more than 5 years ago | (#28996815)


The efficiency of converting gas into kinetic energy is relatively high, as far as energy conversions go. Converting fuels into electricity is far less efficient

No really. A power plant is far more efficient at converting energy into a usable form than a gas-combustion engine. Power plants are in the range of 36-40% efficient. An internal combustion engine is around 18-20% efficient. That's a factor of 2 times more efficient for a power plant. Power plants are essentially always going to be more efficient than a gas/diesel engine simply because you can have much higher temperatures in a large scale plant than you can ever achieve in a small engine. You're right that you'll lose a bit in the batteries, but that's made up for in the greater power plant efficiencies.

A couple references about effiency:
http://en.wikipedia.org/wiki/Internal_combustion_engine#Energy_efficiency [wikipedia.org]
http://en.wikipedia.org/wiki/Fossil_fuel_power_plant [wikipedia.org]

Also try to remember the energy problem isn't simply one of "energy efficiency". It's about the source of the fuel, the CO2 emitted, and how centralized the emissions source is. Gasoline or diesel comes from oil. We've likely reached peak oil production right now. Power plants producing electricity can use any number of different sources of energy. Many of the sources of oil in the world aren't exactly the places we should be throwing tons of money at.

I don't know about the grids ability to support electric cars, though I've seen some studies suggesting that it could if people charged over-night and not at peak times.

Re:465 Million $ loan?? (1)

misexistentialist (1537887) | more than 5 years ago | (#28996621)

Post-WWII we had a lot of income coming in from other countries. This economic recovery is more like a civil war against rebel corporations and banks--all destruction, no payout.

Re:465 Million $ loan?? (0)

Anonymous Coward | more than 5 years ago | (#28996105)

Yeah, tell me about it! $1,000,000 of profit over 6 years of operation is crap, if they really want a decent level of government assistance they should've posted $82,000,000,000 in losses over the last 4 years like GM [reuters.com] , now there's a real company!

Re:465 Million $ loan?? (1)

johannesg (664142) | more than 5 years ago | (#28996111)

How does a company that makes $1,000,000 in profit over 1 full year, get 465 Million dollars in loans from our government?? How will they pay that back in a reasonable time?

The same way that companies that make billions in losses get billions of loans from your government, I suspect...

Re:465 Million $ loan?? (3, Insightful)

ucblockhead (63650) | more than 5 years ago | (#28996163)

Because it is extremely doubtful that Tesla Motors will make a steady $1 million every year for the foreseeable future. There are two likely scenarios.

1) Tesla will be successful, and rapidly expand into a moderate sized care company, where $100 million in profits in a year is reasonable.
2) Tesla will go bankrupt.

For a startup, it is more about projected profits than current profits. At this stage in its growth, Tesla should not be concerned about profits at all. Best case for it is to funnel all money into growth and have $0 in profit.

Re:465 Million $ loan?? (1)

sethrulesall (1161623) | more than 5 years ago | (#28996203)

The only way a new company focusing on unproven and risky technologies is to have a large financial base. No one is going to lend to that type of corporation in this economy. This coupled with the interests of Tesla being parallel to a less fuel dependent nation == government loans.

Re:465 Million $ loan?? (1)

CrankinOut (629561) | more than 5 years ago | (#28997043)

Counter-examples include Microsoft, Apple, Whole Foods (selling high priced organic food against mass market producers), Cisco Systems, Oracle, Sun Microsystems, ...

Re:465 Million $ loan?? (3, Insightful)

tomherbst (888500) | more than 5 years ago | (#28996221)

Telsa has a valuation in the billions of dollars. The way they pay back the loan is by having what the VC's call a "positive exit" - the company going public or being acquired by a larger company. Even growing organically they could do it - they are manufacturing constrained right now, the loan is all about expanding manufacturing. Personally, I would have rather seen the gov't broker a deal for Telsa to use the NUMI manufacturing plant in Fremont rather than get big gov't loan to build a new plant at the same time they are giving Toyota a bunch of incentives to keep NUMI open after GM walked. If I fit in the roadster, I'd want one. Got a ride in one and it was wicked fun. 0-80 in half a block.

Re:465 Million $ loan?? (5, Informative)

shway (1614667) | more than 5 years ago | (#28996225)

The government loan was not for their Roadster business (of which they just posted a profit) it was to create the upcoming Model S sedan. They will pay back the loan by selling the Model S, which they plan to start in 2011 after they build use their government loans to build a manufacturing facility.

Re:465 Million $ loan?? (0)

Anonymous Coward | more than 5 years ago | (#28996479)

The model S looks great by the way.
http://www.teslamotors.com/models/index.php

Re:465 Million $ loan?? (1)

hydromike2 (1457879) | more than 5 years ago | (#28996389)

parent should have been modded troll, but anyways from TFA the 465 is for the model s sedan, a cheaper more wide spread which will make back the 465 in volume, the 1 million dollar profit has no ties to the 465.

Re:465 Million $ loan?? (2, Insightful)

hey! (33014) | more than 5 years ago | (#28996471)

By applying.

Ford got 5.9 Billion, and they expect to lose money this year. They're going to retool their factories. The Telsa loan is in some ways less risky, since we're not betting on the survival of an industry that is, on it's own, dying in this country: building ICE automobiles.

Everybody in the auto industry is in bad shape. The idea of the loan program isn't just to stem the cash bleeding until the next economic upturn, but to reclaim technological leadership. The 465 million is supposed to result in something that has eluded us for years: a practical, competitively priced electric vehicle. That may not be the answer to all our prayers, but it will give us us some answers about personal transportation in a post petroleum world before the lack of answers becomes a national crisis. That's well worth the opportunity cost on the 465 million dollar loan.

Re:465 Million $ loan?? (0)

Anonymous Coward | more than 5 years ago | (#28996511)

I don't think "profit" is the only consideration when making loans. I imagine Tesla also has a lot in the way of existing equity that can be used as collateral. It's also important to note that they are an extremely small company by car manufacturing terms. If they are making any sort of profit after selling less than 1000 vehicles I'd call it extremely successful. Which means it's reasonable to expect greater profits in the future.

Re:465 Million $ loan?? (1, Troll)

Theolojin (102108) | more than 5 years ago | (#28996571)

How does a company that makes $1,000,000 in profit over 1 full year, get 465 Million dollars in loans from our government?? How will they pay that back in a reasonable time?

Imagine you have an account at a bank that has unlimited ability to borrow money from other banks. Now imagine that bank actually borrows money from other banks to pay the interest on the previously borrowed money. It's not a problem for the bank because if the interest payments get too large, the bank can---and will---borrow still more money. Now say you ask to borrow money from that bank. The amount is less than an hour's worth of revenue (real and borrowed) for the bank. If you default on the loan, the bank can just borrow more money to cover the loss. At best you can only pay back interest on this relatively small loan. Do you really think this bank would care?

Welcome to America.

Re:465 Million $ loan?? (1)

CorporateSuit (1319461) | more than 5 years ago | (#28997001)

Because Congress didn't work for that $465,000,000 loan. My kids will. Therefore, congress doesn't care.

Good for them .. (0)

Anonymous Coward | more than 5 years ago | (#28996051)

This is how a nation leads technology in the world, 20 years from now when petroleum products are rare. This would ensure the nations leadership in the world

It's normal. (1)

fenring (1582541) | more than 5 years ago | (#28996431)

It is quite uderstandable that Tesla turns a profit. After all, their roadster is on parity with other sports cars, has the same performance (at least in a drag race, not so sure about handling on a race track) as a Porsche 911 and makes the owner feel good about him/herself. And, on a more subjective point of view, it's quite nice to look at. If I had $100k to blow on a car, I would buy one.
The problem I see with Tesla is if they can turn what they've done until now into an afordable sedan or they will fade into oblivion. This has much to do with the fact that I'm not quite sure that electric cars are the way to go. After all, in a couple of years hydrogen could be the next big thing. Time will tell.

It's actually impressive folks (3, Insightful)

Anonymous Coward | more than 5 years ago | (#28996461)

I noticed a lot of negative comments but the news was amazing. We aren't even talking 18 months after they delivered their first car they showed a profit! I've never heard of that from anyone in recent history. Breaking even for a car maker takes years not months. Yes I know it's not a true profit to the investors but that was always going to take years, probably 5 to 10 years and they all knew it. Ask any investor if they are happy or disappointed and I'll bet you couldn't wipe the grin off their faces. I've seen claims Tesla won't survive 3 years get modded Insightful. I'd mod it shortsighted. Dan hasn't peaked yet so declaring their death is a little premature. They are doing the right thing and expanding their car line to more afordable models. They are partnering up with established companies. They seem to be doing all the right things to not only survive but thrive. People have called the roadster expensive but haven't pointed out that it can beat a car costing twice as much in the straightaway. Once batteries get lighter they'll corner better and they can beat them in the corners as well. People say electrics must be cheaper to be acceptable because of range and recharge limitations. How's half priced for cheaper? Yes they can't make a family car cheaper and they probably never will. The range and recharge will improve over time. You've got to remember a Tesla car is exactly the same as a hydrogen car it just uses batteries instead of a fuel cell. The cars could use fuel cells just as easily. The batteries are the major expense. Electric motors tend to be cheaper than gas engines and they lack all the extra bits like fuel pumps and such to keep them going. How much geekier can you get than an electric car??? Time to celibrate. Also you've got to remember the single biggest point. They did it in the middle of the worst economic downturn since the Great Depression! Two out of the big three car makers just declared backruptcy!

Not bad for a startup. (2, Interesting)

Animats (122034) | more than 5 years ago | (#28996757)

They've spent far less money than GM spent on the EV-1, and have almost as many cars on the road. About 1100 EV1 cars were produced.

The current version of the Tesla roadster is a reasonably good sports car. Speed is good, acceleration is very good, the range is 200 miles, and it looks good as it whooshes by. It's overpriced, but there's hope of getting that down as volume goes up.

They had some initial problems stemming from trying to make it go fast. First they had motor overheating problems at high revs, so they put in a two-speed transmission. That was a disaster; shifting under load ate up the transmission because the two speeds were too far apart. Then they went back to a simple single speed transmission, but water-cooled the motor, which simplified the mechanics and got them the desired top speed. The current drive train seems to be holding up well. Top speed is only 125MPH, which is low for $100K+ sports cars, but few customers really take their Ferraris to a track anyway.

I see Teslas on the road almost daily. I live near the Silicon Valley dealership and on a road the sales reps use for demos. They change lanes very smoothly, with all that battery mass holding the center of gravity down.

Profit? (-1, Flamebait)

nurb432 (527695) | more than 5 years ago | (#28996781)

Was this 'profit' including the money they got from the Feds?

Re:Profit? (2, Informative)

CrankinOut (629561) | more than 5 years ago | (#28997079)

Basic accounting does not consider a loan as profit. The Balance Sheet is defined as Assets = Liabilities + Equity. The loan increases cash(assets) and increases liabilities (obligation to repay). Profit appears on the Income Statement. Profit = revenue from sales less expenses of those sales over a defined time period.

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