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0 pointsgordon_freeman6y ago0 comments

Not sure how does the CapEx gets allocated for the projects that are already progressing. For example: Tesla started building GF2 in China a few months ago so any idea in which Quarter(s) Tesla account for the CapEx? Is it before the project starts or at the end or every month gets even distribution of CapEx allocation from Start until End of the project.

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toomuchtodo6y ago

China GF is GF3. GF2 is in Buffalo, NY (old SolarCity facility, which also manufactures Supercharger station hardware).

I can't speak to how GF3 capex is being accounted for, but competition was fierce to provide financing to Tesla [1]. China pulled out all of the stops not just for permitting and financing, but also construction (GF3 is already having Model 3 production line equipment installed, after breaking ground in January [2]). In less than a year, it will go from vacant land to producing Model 3s.

[1] https://www.teslarati.com/tesla-gigafactory-3-funding-chines...

[2] https://www.youtube.com/watch?v=XI6nJOic4BM (June 22 2019) Tesla Gigafactory 3 in Shanghai China Update

navigatesol6y ago

Linking to a Teslarati article, that's a laugh.

When will you realize that this company makes things up at every turn? They are cutting capex, again. They are slashing prices on cars with "unlimited demand". Let's see in a year how it's going,and what excuse you and they will have.

toomuchtodo6y ago

Is that Youtube video fake? The ~90k vehicles Tesla sold this quarter? "Fake news"? I have no excuses, just proof of hundreds of thousands of Tesla vehicles on the road, and billions of dollars worth of manufacturing capacity running.

Come back in a year we shall.

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rgbrenner6y ago

Simply buying a capital asset is not an expense. It just moves assets from one asset account (cash, for example) to another (fixed asset account).

You then depreciate the asset over the expected life of the asset. So if you depreciate it over 30 years, then in year 1 you would record a depreciation expense of 3.33%. (That's for straight line depreciation.. there are accelerated schedules.)

In other words.. It's spread out over the expected life of the asset.

Also the depreciation usually wouldn't start until the asset has been put into production.

lancewiggs6y ago

When invoices arrive from the build of the project they would be put into a capital expense account. I would imagine that the costs include upfront and ongoing components, as that's what contractors need. The asset (plant) is valued as the total of the invoices received and depreciation applies, which gives an ongoing tax shield.

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toomuchtodo6y ago

China GF is GF3. GF2 is in Buffalo, NY (old SolarCity facility, which also manufactures Supercharger station hardware).

[1] https://www.teslarati.com/tesla-gigafactory-3-funding-chines...

[2] https://www.youtube.com/watch?v=XI6nJOic4BM (June 22 2019) Tesla Gigafactory 3 in Shanghai China Update

navigatesol6y ago

Linking to a Teslarati article, that's a laugh.

toomuchtodo6y ago

Come back in a year we shall.

1 more reply

rgbrenner6y ago

Simply buying a capital asset is not an expense. It just moves assets from one asset account (cash, for example) to another (fixed asset account).

In other words.. It's spread out over the expected life of the asset.

Also the depreciation usually wouldn't start until the asset has been put into production.

lancewiggs6y ago

j / k navigate · click thread line to collapse