Most other manufacturers work out the kinks before mass production begins.
How does 20,000 Model 3's in the fourth quarter sound? That's an additional billion in sales just for that quarter. If Musk avoids building another giant plant in the next four or five quarters, their cash burn will drop toward zero rapidly.
If Tesla could demonstrate that they were actually capable of producing 20,000 Model 3's in a quarter, people wouldn't be so pessimistic. As it stands, they're still struggling to produce a few hundred cars a quarter without serious quality control concerns, and they've missed every self-imposed target for several years straight. (Tesla reported roughly 2500 Model 3s in all of Q4. For comparison, most other manufacturers can produce more cars than that in a single day.)
There were tens of millions of vehicles recalled for manufacturer defects in America alone last year, and the same can be said about 2016. I don't think this statement is a fair one.
The vehicle quality reviews on the bottom half of all auto manufacturing says otherwise.
> If Tesla could demonstrate that they were actually capable of producing 20,000 Model 3's in a quarter, people wouldn't be so pessimistic.
They keep proving an ability to produce volumes of cars, and people keep acting like they've never built any cars at all -
"As for its higher-priced Model S sedans and Model X sport utility vehicles, Tesla said it delivered a record number during the quarter. Model S and X deliveries grew 10 percent globally over Tesla's prior record in the third quarter, and were up 28 percent compared to the fourth quarter of 2016."
Right now they're forecasting 2,500 per week of the Model 3 for the end of the first quarter. If they can hit that very near-term marker, they can hit 5k in the fourth quarter.
The way the skeptic game has worked - all the way back to the Roadster days - with Tesla is this: the skeptics say blah blah blah, Tesla can't blah blah blah. Then Tesla eventually does what they say they will. Then the skeptics move the goal post, and the entire cycle repeats, while the skeptics continue to pretend Tesla has never produced vehicles at volume. Meanwhile Tesla keeps powering forward, selling more and more vehicles each year, with their revenue skyrocketing.
https://www.cnbc.com/2018/02/07/tesla-q4-2017-earnings.html
Which part of it isn't looking good?
$3.4 billion in cash. $277m cash burn in the quarter (a dramatic decrease there).
43% revenue growth with the Model 3 barely contributing in the quarter. 10k to 15k Model 3's likely to be produced in the second quarter.
Build quality... you mean on the first couple thousand Model 3's? How is that surprising?
I'm not a particular fan of Tesla in any regard, and this looks pretty straight-forward. The pessimism is comical.
They could do a ~$2 billion equity raise any time - against their $58 billion market cap - and fund the company as-is for another two years, on top of the runway they already have, without missing a beat. That's assuming the Model 3 doesn't ramp up meaningfully and push them toward cash flow positive in the coming six to eight quarters.
How does 20,000 Model 3's in the fourth quarter sound? That's an additional billion in sales just for that quarter. If Musk avoids building another giant plant in the next four or five quarters, their cash burn will drop toward zero rapidly.