Slate Auto CEO Peter Faricy told CNBC his company will make money on every truck it sells. Groundbreaking stuff. A car company that profits from selling cars. Someone get this man a TED Talk and a profile in Fast Company.
The electric pickup costs $24,950. Faricy says each one will be gross margin positive. That means they don't lose money on the actual vehicle before accounting for all the other ways they're losing money. It's like a lemonade stand bragging that the lemon water is profitable while ignoring the $40,000 they spent on the wooden stand shaped like a giant lemon.
They aim to be cash-flow positive next year. Not profitable. Cash-flow positive. That's the financial equivalent of saying you're not bleeding out anymore, just bleeding at a sustainable rate. Investors will throw money at anything that sounds like it might stop hemorrhaging by Q3 2027.
The retail trader who buys this stock will read "gross margin positive" and think they've found the next Tesla. They'll mortgage their house. They'll cash out their kid's college fund. They'll explain to their spouse that Peter Faricy said the magic words on CNBC, which is basically a binding contract that the stock will go up forever.
Here's what gross margin positive means: they sell the truck for more than the parts cost. Congratulations. You've reinvented the business model from 1908. Henry Ford called. He wants his innovation back. Except Henry Ford actually made money, and Slate Auto is burning through investor cash faster than their trucks burn through whatever the f*ck electric trucks burn through.
Every EV startup says the same thing. They'll be profitable next year. Always next year. Never this year. It's the corporate version of telling your parents you'll clean your room tomorrow. Tomorrow never comes, but the allowance keeps flowing.
Faricy probably believes every word he's saying, which somehow makes it worse.
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