HD: Me thinks they are laying the ground work in the U.S. for future BEVs.

Interesting they sold their huge plant in California to Tesla; I wonder what was the thinking behind that at the time; and, did they foresee Tesla eating their lunch?

With a JFY16 Gross Revenue of $247B (over 10M cars and lots of other stuff) Toyota Motors paid $6.6B to shareholders in the form of dividends, bought back $6B in shares, and still managed to invest almost $9B in R&D and $11B in CapEx while finishing with positive change in Cash and Cash Equivalents. Cash Flow from Operations ($30B) exceeded the combined total of net borrowings ($9B) by more than 3X.

With a 2016 Gross Revenue of $7B (just under 80k cars, some solar leases, and a handful of storage bnatteries) Tesla issued shares to the tune of $2B, and the ratio of $1.7B in net borrowings to operating cash flow had no meaning since, once again, Cash Flow from Operations was negative. With all that financing and borrowing Tesla did manage to spend $834M in R&D and $1.4B in CapEx.

Tesla can get a lot of people to send them money for the next promise of Visionness and Disruptivity. But I think in terms of lunch-stealing the Cali lad only managed to run off with a Skittle or two from the ziploc that Toyota's mom packed in his lunch pail. Tesla strutted around the lunchroom and bragged about it, but the quiet Nipponese boy still maintains an admirably large foot-long po' boy, a big bag of fuego Takis, a 20oz. tea, a snack bag of wasabi peas, and a big honeycrisp apple. Plus most of his Skittles. (Toyota doesn't carry a bento when he's Stateside -- big lunches only, mom.)

But I'll admit those little candies are tasty.

Brian:
They are in EV production and it's quite tasty.
Wonder how Tesla makes a profit if California is such an expensive place to do business. Perhaps the difference is Tesla pays a decent wage to it's workers and it's not all about trying to satisfying the greed of management. But I will give you it's not as cheap as where Toyota moved their Headquarters...starts with a "T."

At this stage they are a growth company and plowing their profits back into the business...but they could quit their growth pattern and settle to just making a profit...it's just a Wall Street accounting game at this point in their development.

Do I detect a bias there? Not necessary enamored with Tesla here; but, they are at least making progress in EVs while the Toyota company, like many others, appears to be happy just waiting.

No bias here, Lad: realism. Tesla has taken the world's imagination by storm and energized the EV movement more effectively than anyone expected.

All good.

But they aren't plowing profits back into the business. Excepting 2014, SG&A and interest expense ate more than their total gross margin. That's BEFORE any R&D is accounted. Looking at the balance sheet: all the Capital Investment has been paid for through borrowing or sales of shares and/or convertible bonds. Excepting a couple of quarters, Tesla has never generated cash from operations; as a net they've burnt over $1B just building product and keeping the lights on -- that's before a dime of CapEx. That's Tesla's filings talking here; I'm just telling you what they say.

Toyota has delivered over 10 Million hybrid autos since they started with the Prius. Like it or not, the energy equation for the CHO-burning world currently makes hybrids the best net saver of emissions for private mobility except for PHEVs. Yes, better than pure BEV's, and yes, that is changing rapidly.

But in the meantime the core activities of making EVs (affordable and efficient power electronics and motors, robust controls, etc.) continues to be led in the industrial world by Toyota, all while we witness a rapidly developing global commoditization that's outstripping everyone's expectations.

The future of batteries is unwritten and no doubt extraordinary. While Tesla's mass(ively)-produced 2170 will likely set a cost and packaging standard, it will be fleeting. Tethered H2 vehicles will enter the scene more commonly than any of us (me included) expected. And ICEs have a surprisingly vibrant path ahead as well. You haven't seen the end of them. The coming times are excellent for consumers, which means brutal and bloody for manufacturers.

Currently only five automobile companies truly make money (WACC/ROIC ratio > 1): FHI's Subaru, Great Wall, Suzuki's Maruti venture, BMW, and Daimler.
Nope, not Toyota, but they are close.

Tesla is WAY below the crowd, not only <1 but negative. Tesla does not make money: Tesla Raises money, and very effectively I might add.

Toyota's step by step (55+ empg HEVs, 100+ empg PHEVs, 100+ empg FCEVs and 120+ empg BEVs) may end up by being the most effective approach to reduce pollution and GHG.

Sometime after 2020, Toyota may still be number one (or close to) with 20,000,000+ mass produced electrified vehicles.