Much less than that actually. At their current burn rate they won't even be making it to the end of this year without either selling enough M3 to generate some real cash, or by raising some new money from the market. Also, they have a lot of debt come due next year (and even more over the following years) while yields are up to over 8%.
However, M3 production numbers are actually looking good now, and they are hitting their targets for the first time. And their cash burn for Q2 came in lower than expected after some cost cutting. So they might be able to turn the corner just in time. Musk has repeatedly stated that the company will not need to raise new money, but had also done that before some previous financing rounds, so the market does not put that much faith in his words at this point.
It all hinges on the M3 now. Can they get production (and sales) numbers to where they need to be in order to become cash flow positive?
God I can’t wait for the Tesla fanboydom to just be put in its place. Cool concept, not cool people attached to it. M3, lol.
“M3” has and will always refer to a BMW.
Really? Where can I read the official quarterly numbers? Of what quality are these cars? Do they all need to be reworked?
>Musk has repeatedly stated that the company will not need to raise new money
He said that prior to raising cash the last 3 times. He also said he was going to take the company private at $420. For some reason, I'm doubtful.
"I did it for the lulz" is unfortunately not a valid legal defense.
When I first heard that he did 100 hour weeks voluntarily, I was envious of his ability to put that many hours in. I’ve done that once and… vowed never again.
Now I am of the opinion that it broke him and he was unaware of it, and that all of his goals will be better met if he halves his work week.
People said that the Prius would go away when other car makers started making hybrids. After years of competition, the Prius still dominates. Why? Because the economic reasons for owning a hybrid really aren't that compelling. The social signaling reasons are. So, if you want to say those things about yourself you own a Prius because everyone knows you are driving a hybrid at a glance. A Tesla makes a different-- but I would argue equally powerful-- statement to all who behold it. If Tesla goes into bankruptcy the brand and the cars will be revived.
Occam razor: they expect to be profitable this quarter and are more patient than short-term speculators.
27.88% of all shares in existence are short-sold. Its one of the biggest shorts on the market at the moment.
Wall Street is CERTAINLY betting that they're going down.
Instead, we can look at the Bond market for that. Moody's rates Tesla 2025 bonds at Caa1, and today the interest rate on Tesla has risen above 8.8%
The bond market certainly is pricing in the risk of default and/or bankruptcy at this point. 9%ish bonds are really bad on a 7-year bond, especially in today's market that's got relatively low-interest rate.
BTW, you mention the "interest rate" on those bonds when I think you meant yield. Very big difference.
I'm not very knowledgeable here, but is the key difference that yield is more a result of the market (i.e. bonds fluxuate in value but the return on the bond itself is fixed, so the yield reflects the relationship between cost and payout)?
There is a "coupon", which is the amount a bond pays each year. Which is one kind of interest rate.
There is the "yield to maturity", and since Tesla's 2025 bond seems like a normal bond, so Yield implies yield-to-maturity. This is another "interest rate" but just saying "interest rate" is meaningless.
Since coupon vs yield is ambiguous, I should have used more precise language earlier.
> bonds fluxuate in value but the return on the bond itself is fixed, so the yield reflects the relationship between cost and payout
Yes.
I wouldn't normally refer to the return as "fixed" as that is primarily only used in reference to the coupon and because of the fact that you mentioned earlier in that sentence; bonds fluctuate in price so the yield is regularly changing given a change in price.
Most large investors are just holding. The small amount of shares that are exchanged every day are bought/sold by speculators and they are backed by institutions that get paid for this intraday activity. Also, with all the short positions on TSLA, the bank are risking an almost infinite sum of money (in case of a short squeeze).
Since Tesla doesn't intend to raise capital for the foreseeable future, banks can only gain from volatility or from a major event that would force Tesla to raise funds.
The largest shareholders were dumping shares last disclosure. Do you have data that says otherwise?
But, analysis based strictly on car sales a mistake, especially as established car companies outsource so much parts production.
But, if you had a company that just did self driving and had as many cars on the road as Tesla does people would value it. Likewise for a giant battery factory, or a company putting out those solar shingles even with just a handful of installs.
Now suppose they sell those lines of business off to some other company to free up some capital. It's a path through the cash crunch that may catch people off guard.
PS: I am not saying buy the stock, but I don't think it's dropping enough to become a 45 billion dollar company any time soon.
EX: Several companies could sell Hulu to free up some cash. The Walt Disney Company (30%), 21st Century Fox (30%), Comcast (30%), AT&T (10%)
This is highly unlikely in the short term and in the long term they'll be building more plants. It's also something anyone can insure against by placing a bet that an earthquake will destroy their factory in the next five years. You'll presumably get 50:1 odds or better (a good chunk of which is the vig), which means the insurance would cost less than 2% of the sum you want insured.
> they have about a year of cash runway left( optimistically)
Unless they turn a profit (or come closer to it), which it's plausible they're about to do.
> You can't just collect insurance money and build a new factory like you can with a house, this is a many year project.
No, but you can buy insurance in the amount of the value of the output (or of your shares) rather than the cost of building a new facility, if you were really that worried about it.
> And the most worrying thing for them is that their next car will compete head on with Mercedes, BMW, Audi, and GM. That will be the first time they've had to compete head on with a competitor.
The entire EV market is production capacity constrained and will be for a couple more years at least. They can't lose sales to Mercedes or BMW EVs because they'll all already be selling 100% of the EVs they can manufacture, all of which are coming at the expense of petrol cars.
I bet you Musk does another stock offering by the end of the year. Its kind of a yearly-tradition at this point, with exception of 2014 when Musk decided to raise a few billion in bonds instead.
http://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9ec...
Also, gross margin is literally margin after cost of goods. Doesn't include SG&A expense.
The statement given is ex ZEV and stock based comp, not ex ZEV/GHG and Services/Other. ZEV/GHG accounted for ~2% of margin in the first half of 2018 while Services/Other accounted for a little over 5%. Check the 10-Qs.
> Also, gross margin is literally margin after cost of goods. Doesn't include SG&A expense.
Most OEMs use the delta between the retail price and the bulk invoice including cost of stores to calculate their margin.
I have no idea what your last statement means. There is US Accounting definition of what gross margin is and it is Revenue - Cost of Goods. Other expenses such as compensation, stores, are part of operational expense and it included in net income.
The point is that if Tesla wants to remain solvent then it will be forced to offer an attractive chunk of equity as part of a raise, and that will be a blow to the share price. They're out of assets to put up as security and their unsecured debt is already yielding north of 8%. They'll have to offer equity.
When he first got the Tesla it had huge body panel alignment problems. Eventually these were fixed, but it took too long and was difficult to get Tesla to fully acknowledge them.
After that he had a range of little annoying problems, many of which were likely software bugs, but then he (actually his GF) experienced something in autopilot mode known on the Tesla forums as "shadow braking" -- the car braking hard on the highway because it seems to see the shadow of an overpass and think it's a wall. This is extremely dangerous. It was on the I-405 (SoCal) going 70-80mph, and such a thing could easily cause a rear end collision.
At that point they're starting the process of returning the car. Not only have there been many problems including a major safety issue, but Tesla has apparently been evasive and difficult getting them fixed.
I hate to type this because I love most of what Musk has done and I really credit Tesla with helping get the ball rolling on EVs. EVs are tipping now, and I'm not sure that would have happened without Tesla. It at least would likely have taken longer. But... it is what it is. I'm just telling the truth.
Reading between the lines a little Musk seems horribly burnt out. If I could give him advice I'd say pass Tesla to someone with more experience in the car industry, start gracefully exiting Tesla, take a break and do a little personal inventory, and then focus 100% on SpaceX. The latter is the far more important of the two companies and is in much better shape. I also feel like it's his real true love.
If Telsa can't be righted its fate will probably be purchase (or purchase of its assets in bankruptcy) by another car company. That's fine. As I said: EVs are tipping.
Finally to speculate a bit... I wonder if Tesla is an indirect victim of the latest wave of AI hype? It seems like they were on the right track until they decided to go all in and shift their major focus from making a great electric "driver's car" to self-drive or bust. Self-drive probably consumed insane amounts of capital, and has greatly harmed the company's reputation by causing serious accidents because it is clearly not ready.
The shadow braking thing really reveals how primitive "AI" actually is-- this is something a bumblebee would not do, and its brain consumes milliwatts of power. From what I've read self-drive is really just object recognition combined with spatial mapping, path finding, and a lot of heuristics. The latter is what worries me. "Expert systems" can't capture complex problem domains due to the exponential nature of a combinatorial explosion. There will always be edge cases. Needless to say we will not be uploading consciousness anytime soon, nor will fully autonomous AIs be taking over the world.
>Needless to say we will not be uploading consciousness anytime soon
I'd say that uploading consciousness is an entirely orthogonal problem to AI. Uploading a consciousness is all about scanning the brain and simulating it accurately. It doesn't involve any AI since the intelligence already exists. Conversely if you succeeded with uploading it wouldn't necessarily help with AI, since it would still be hard to see how the brain was working.
So I don't think progress in one field can tell you anything about the other.
I can think of specific exceptions, especially using a very strict definition of the field of AI research, that says that the fields are separate, but until we've succeeded at both, it's impossible to say what was actually necessary in order to get there.
Why is he not leaving the beta of Autopilot then? The car would still be better than the competition in most domain (acceleration, navigation, range...) wouldn't it?
Does your friend believe the car is worthless if it isn't on Autopilot? All benchmarks of driver assist systems show that Tesla is far better than comparable cars, so it's pretty dumb to ask for a buy-back for a car because of such a small and extra feature. He could have asked for a buy-back of the Autopilot option but then, your comment wouldn't add to the conversation (that would be a non story, actually, considering all the Tesla owners who love it).
What does he think of the rest of the car?
(1) Serious and clearly visible body panel alignment issues. They got fixed, but it took a while and Tesla didn't have a loaner car. There was also a scratch on the car when it was delivered.
(2) Door handles not extending. This problem occurred multiple times. The first "fix" was to reboot the computer.
(3) A whole host of software bugs including constant apparently false (according to Tesla) warnings about suspension problems, inability to pair with Bluetooth devices, UI glitches, inability to lock the car (turned out this was a 'feature' but one with no documentation and no UI feedback), etc.
(4) Dangerous autopilot failure modes.
The car's drive train is indeed excellent. It accelerates great, has great range, and performs and drives well. The rest of the car however is really problematic.
The big thing causing him to want to return the car is that Tesla service has apparently been less than helpful and evasive. It's been back and forth, back and forth, back and forth... The dangerous failure modes in the autopilot are the brick that broke the camel's back.
He said he's been many times more patient than Tesla than he would have been with any other car company because he like me believes in what Tesla is trying to do.
All surveys about panel gaps points to Tesla being above average (expect in the first few cars out of the line, which are generally owned by employees).
If your friends' Tesla has serious software bug, I'm curious to know his experience with other brands! Unless he can't stand a small bug in an optional, beta feature.
As for autopilot, he knows he can turn the autosteer off and still get the best ADAS available on the market?
>inability to lock the car (turned out this was a 'feature' but one with no documentation and no UI feedback), etc.
I don't own a Tesla and only test drive one and somehow I was aware of that. Looks like PEBCAK to me.
But this part...
Unless he can't stand a small bug in an optional, beta feature.
That’s not okay. Shadow braking is not a small bug. It’s a dangerous thing that can happen. Calling something “beta” doesn’t work when you’re driving down the road at 70 MPH. That’s just plain dangerous. Putting something like that out into the public as a “beta” feature puts not only the customer but everyone else on the road in danger.
I have no problem with a company testing car features on the road with test drivers who are well trained (with well marked cars). But “beta” doesn’t belong on the highway in the hands of a customer.
Most brands have actual knobs and handles instead of putting everything in a digital interface in the entertainment console.
Maybe he got a "lemon," but in that case Tesla should have been much more ready to fix or exchange the vehicle instead of dragging their feet and arguing over minutia.
I also question what's happening at Tesla when they even ship a vehicle with such obvious defects to a customer.
Do your Subaru is electric? Does it range compare to the Model 3? How does it compare to its acceleration?
Don't ever buy a product for a feature in beta. For the sake of anyone, never ever EVER do that.
On the other hand, none of the features on my Subaru are in beta. Most importantly, it has fully functioning adaptive cruise control, which is a crucial feature for making highway drives more pleasant (particularly when driving in traffic), and in this day and age, I wouldn't buy a commuter vehicle which lacks a fully functioning adaptive cruise control system.
I'm not impressed with self-driving AI so far, but I think you should be fair if you're comparing it to bugs. Insects are notoriously not good at avoiding collisions on the highways.
I was comparing the two to illustrate how far behind biology we still are when it comes to AI. Our AIs consume hundreds or thousands of watts and are demonstrably inferior to the brains of insects that consume milliwatts. We are many orders of magnitude behind what biological brains can do both in absolute terms and in terms of efficiency. The difference in efficiency is so large I think it argues strongly for unknown unknowns -- things living brains are doing that we simply don't understand at all.
And yet, they are commonly seen splattered over the front of cars. Which is failing at exactly the same problem driving AI needs to solve.
You seem to be dismissing this as not part of "their world", but if we're going to compare them at all, I think it is. Conversely, avoiding being eaten is not something driving AI needs to solve.
This is a known issue. It isn't a software bug. It is autopilot learning that the overpass isn't a tractor trailer or other large object the camera can't discriminate crossing the path of the vehicle. [1] It was introduced after this fatality [2].
With that said, if that causes concern for the driver, the vehicle isn't for them.
[1] https://www.tesla.com/blog/upgrading-autopilot-seeing-world-...
[2] https://electrek.co/2016/07/01/understanding-fatal-tesla-acc...
Potential life threatening maneuvers on the road are a feature of the self-learning Autopilot system???? Because without it the car will just ram itself into a wall???
>With that said, if that causes concern for the driver, the vehicle isn't for them.
What if it causes concern for the driver behind them, what then? My family will get a settlement after a Tesla kills me?
How the fuck are these cars legal anywhere???
Because product defects don't (in general) make the car illegal, they just incur strict liability for the manufacturer (and the chain of commerce, but in Tesla’s case that's moot except as to defects that originate upstream of them, since they sell direct to consumer) when they cause damages.
> How the fuck are these cars legal anywhere???
They're legal because Autopilot is driver assistance. The driver is still 100% responsible, just as they would be for cruise control.
Not if you slam on the brakes without cause on the highway.
“Any person driving a vehicle on a highway shall drive the same at a careful and prudent speed not greater than nor less than is reasonable and proper, having due regard to the traffic, surface and width of the highway and any other conditions then existing, and no person shall drive any vehicle upon a highway at a speed greater than will permit the driver to bring it to a stop within the assured clear distance ahead.”
Maybe if you have a dash cam. Maybe if you can prove there was nothing in front of the person in front of you. Lot of maybes.
That's a bit of a sideshow. Tesla needs to worry about the civil liability involved in making a car that stops suddenly in the middle of the road. For example, "The driver is still 100% responsible, just as they would be for cruise control" is absolutely not going to impress anyone as a defense if there is enough property damage or personal injury involving such a feature to justify a class action.
Class action vs. direct action is immaterial; Tesla can't disclaim it's liability for manufacturing g defects even if it tried, and stating that the driver remains responsible for following traffic laws isn't even superficially a disclaimer of product defect liability anyway.
Product defect liability is strict liability for damages produced, and there's a fairly high bar for excluding liability due to intervening causes which would not generally apply to the simple negligence of a driver (either of a Tesla or the other involved vehicle) which contributed to a collision where the defective operation of an assist system was also a contributing cause.
Anyone can sue anyone in the US. Take it up with their general counsel.
If your brakes don't work your car is illegal on the road (at least here in Europe). But apparently if its a software bug in the brakes then its okay to drive it around...
Even when self-driving cars become popular, people will still be injured and die in them. And it won't be just a subset of the people who would have died without such cars. It will almost certainly be a different, randomly selected group of people. If it's your time to go, does it matter to you whether you died because a texting teenager slammed into your stopped car? Or because an edge case triggered in a car's software? The former case is just stupid. The latter case is something society can learn from and prevent from ever happening again.
If you are in favor of more people dying in "normal" accidents, then by all means, please continue expressing your outrage.
The cost of progress in this area is computers making mistakes instead of people making them.
There is no way that Autopilot is worse than human drivers: https://i.imgur.com/au8A1o3.gifv
I'm starting to understand why all the other self-drive companies use active sensors like lidar. You need that to compensate for the fact that the AI actually driving the car is less intelligent than a honeybee.
A self-drive "AI" is dumb. It's just a glorified expert system with a lot of pattern recognition and other stuff bolted on. But the performance of dumb things can sometimes be improved by giving them more information. Self-driving cars need super-human senses.
Lidar is doubly special because its an active sensing system. If the car hits an undecidable edge case it can probe it to see if it's physical or a lighting artifact. It needs to be able to do this because it has no higher order conceptual model of the world to reference. It doesn't "know" what an overpass or the sun "are."
Edit: This principle is also why "big data" has helped revive "AI." We need big data because our AI isn't very I. Biological intelligences do incredible things with very small amounts of data because they have more I. What's so impressive about biology is what it can do with small data.
Every roboticist since the DARPA Grand Challenge knew this, as every team that finished had a Velodyne LIDAR. It was THE piece of tech that made that race possible. So for everyone who learned that lesson, to then see Telsas out on public roads with a feature called "autopilot" that did not have any LIDAR sensor attached to it... well... Let's just say we've been saying "I told you so" since then.
IMHO doing without precise active sensing would require a breakthrough in AI that hasn't happened yet.
On the plus side the fact that Tesla's autopilot is able to work as well as it does without lidar might indicte that with a lidar system it might be the best autopilot on the market. Who knows.
A human driver who did that during a driver's license test would be failed.
You must own a lot of Tesla shares to make such a ridiculous statement.
I do, but I also entrust my wife and kids in a Model S. I specifically bought the Model S (a used 75D) for them due to its safety record. That's worth far more to me than any Tesla shares. With that said, my wife is aware under what conditions it is safe to engage Autopilot, and is also aware that she is still the responsible party if an accident happens when it's engaged. She doesn't use her phone, she doesn't not pay attention, she is babysitting the vehicle while at speed and still has final authority.
> to make such a ridiculous statement.
You think the statement is ridiculous. 40,000 people a year die in the US driving due to human decisions. Several friends I attended high school with were killed in car accidents. Loved ones have been killed in car accidents. I don't think my statement is ridiculous in that context. These sorts of efforts are necessary to move the needle on transportation safety. Perfectly happy with my TSLA shares going to zero in the process, as long as progress is made.
"The vehicle could do X while under your control. If you are not comfortable with X occurring while under your control, do not buy the vehicle (or buy the vehicle, but do not purchase Autopilot). The vehicle feature that could cause this is still permitted by regulators to be functional. You are solely responsible for the actions of the vehicle while operating it."
Don’t tailgate.
More importantly for discussion of an automated system shadow braking, however, fault of drivers based on negligence (or more serious mental states, like recklessness) is a separate concept from fault of manufacturers for product defects (which is based on strict liability, not negligence, and therefore bars to liability based on negligence of the injured party due to contributory or modified comparative negligence theories would not generally apply; liability might be barred on a theory of superseding intervening cause, but that would require the intervening cause to be unforseeable—too close freeway following is not so rare as to be an unforseeable intervening cause and thus would not usually limit recovery on a strict liability product defect claim.)
[0] see, e.g., https://www.nolo.com/legal-encyclopedia/is-fault-automatic-r...
>From the outside it looks like Telsa is about going to go into a tough winter like moment.
From the outside, it looks like they have a product that's a generation ahead of the competition and is flying off the shelves.
> They need to start designing and building out manufacturing facilities for their next car and the help bolster Model X manufacturing.
They are. Apart from the Shangai one, they've never actually stopped building the Reno factory, which still has to triple in size before it reaches its final form.
>They are cash flow negative, they have about a year of cash runway left( optimistically)
Based on 2 quarters during which they built up a factory. Their guidance for Q3 or Q4 has them turning a profit. Usually, people doing these wild extrapolations form the basis of jokes (ie Discu Stu's record sales).
> And the most worrying thing for them is that their next car will compete head on with Mercedes, BMW, Audi, and GM. That will be the first time they've had to compete head on with a competitor.
This is growing the EV market as a whole. Tesla does not want to own 100% of a sub-5% EV market. They want to own a decent chunck of a 100% EV market.
People really, really don't like hearing this particular point, but their cars are approximately a generation ahead of other EVs. Specs wise, Taycan and EQC are essentially matching a 2016-era Model S / Model X and will be available about 2 years from now.
Everybody seems to have forgotten how the Bolt was supposed to be the "Tesla Killer". Look, I even found one specifically from the same source as this article: https://twitter.com/business/status/554725778420957184
Then people were "worried" about their ability to manufacture at scale: https://www.theatlas.com/charts/HkNUFo57f
The problem is that when you actually have to put real money down and these theoretical comparisons become real, things go the opposite direction. Current Bolt sales are flat/declining around ~1500/month, while Tesla is pushing out 5000+ Model 3s per week.
A 2016-era Model S is very, very similar to a 2012 era Model S, and a 2019-era Model S looks a lot like a 2016-era one with a less-safeguarded but comparably capable cruise control added on. The Model 3, as far as I know, is similar but hopefully has less technical debt.
As far as I can tell, Tesla leads in four respects:
- A good drivetrain. It’s impressive to build a reliable <300lb motor-and-controller-in-a-box that outputs up to ~400kW and is efficient at a wide range of operating points. But everyone else will get it eventually. As far as I know, it’s not actually that hard.
- A willingness to put monster screens and few buttons in a car. It’s unclear that this is actually a good thing. Certainly every other major manufacturer could follow suit if they wanted.
- Cruise control that claims to self-drive. Enough said.
- Cachet. Teslas are sexy.
- Superchargers. This is a big deal. The technology is boring. The fact that they’ve built and deployed a bunch of them is important.
A couple of decent embedded Qt developers should be able to cranks out a system of comparable quality in a few months. The major exception is the map app, which would take at least some real effort.
Most of the time I comment, its more to get my ideas clarified, if you think I've outright lied then please correct me.
As your comment stands you didn't actually refute any of my points.
Is the Reno factory going to be building cars if not then its irrelevant to the topic of factories to build cars with?
The China factory hasn't started yet, so I think I'm on strong footing with this.
Tesla has also been cash flow negative for not just two quarters, but almost its entire life, now to be fair to Tesla, this was by design. It's possible with all the cost cutting and M3 sales that they could be profitable in Q3 but does anyone think they have finally turned the corner and will leave their trail of losses behind them?
I'm not convinced of that:)
I'm looking for actual thoughtful dissent to change my mind, but so far you haven't actually provided any facts or even opinions to show "outright lies" in my statement.
As others have noted in this thread, the unceasing torrent of negativity around Tesla has made it practically impossible to tell trolls and haters apart from regular folk. So how can I tell from your writing which one you are? Honest question here. Does your writing express doubt, pose questions, use qualifications? Or is it judgemental and prescriptive?
After all, commenting takes time, why would you expect others to invest their time in responding throughtfully to you, when you come across as simply wanting validation for your negativity from the echo chamber?
> The China factory hasn't started yet, so I think I'm on strong footing with this.
You mean they're not building the physical building at the moment? No, but they've signed the agreement with the government, hired people, etc. So they've started on it, and it will make cars. But... that doesn't confirm your pre-existing views, so you have to discard it.
> Tesla has also been cash flow negative for not just two quarters, but almost its entire life
No, you said they have a one year of cash left. That's only at the rate they were spending when building their factory. If they're not spending at that scale, they have years left. You're trying to change your assumptions, while keeping your original views.
> I'm not convinced of that:)
Yes, but have you actually purchased on EV in the last year? I mean, it's really easy to hold any opinion you want when it costs you nothing (actually, here it gets you internet points, because negative denouncements are rewarded handsomely). But what would happen if you had to actually pay tens of thousands of dollars based on your opinion?
I mean, you said they'll have to compete with GM, completely ignoring the reality that they are competing with GM today https://www.reddit.com/r/teslamotors/comments/9dm0i2/the_tes...
> I'm looking for actual thoughtful dissent to change my mind
I don't see that at all. I think you just want the echo chamber to confirm your views. How else would you explain looking at the above graph and thinking "oh boy, Tesla's gonna be in big trouble because of GM"?
Online arguments can certainly be annoying; we all feel this. That makes it more, not less, important to follow HN's rules.
Tesla’s brand is strong enough that they can charge Mercedes level prices with poor quality interior fittings. Sit in a Tesla, it feels like a car costing half as much.
If Mercedes can maintain their user experience in EVs without a significant price premium, Tesla is toast.
They guidance suggest they should be profitable this quarter because as of right now they are hitting their production target.
Update: I guess technically it's $50k, the other day I read the average selling price was $60k and that was stuck in my head. Regardless, far away from $35k!
Twenty thousand dollars.
And they are outselling BMW’s entire passenger car lineup.
It cost them a pretty penny to get here but cash is literally pouring in for Tesla right now.
And also pouring out, they are losing a massive amount of money every quarter.
Source?
They are now at capacity and they are expected (by Tesla top management) to announce profitablity for this quarter. In other words, they were not a capacity last quarter and not profitable.
That's why with the record sales and production of this summer, Q3 earnings publication will be very interesting. But we won't know the actual result until end of October. By then, the shorts (with billions in backing) will do all their best to give the company an extremely bad look. Because if Tesla manage to turn a profit this Q3, they'll lose dozens of billions. It's now or never for them.
Please stop with this thought process. TSLA is doing a fine job all on its own making themselves look bad. On the business side, Musk has missed how many production estimates? There are also concerns about quality. On the personal side, he's still harping on this pedophile thing /facepalm. Then what looks like a complete lie about being bought out.
The way you fix the shorts problem is to actually deliver on your promises and make some money. Deflecting that it's the shorts causing problems for TSLA is typical TSLA deflecting the horrible job they have done at running TSLA.
Take this Reuters article for instance, which has been published and translated by dozens of top newspapers: https://www.reuters.com/article/us-tesla-germany-daimler/ele...
3rd paragraph: "The market for upscale electric cars is Tesla’s to lose, with sales of its entry-level Model 3 sedan expected to reach about 50,000 cars this year and almost double that in 2019."
All sources indicates that Tesla has already produced 50K Model 3. In the first three quarters. There's is still one quarter to go in 2018. And Tesla plan to produce more than 300K Model 3 next year, not 100K.
What kind of error is that? Reuters is aware of this "mistake" and they are not correcting it. All media who published the report and were made aware of the wrong numbers kept it "as is", even though the 50K has already been proven wrong.
How can Reuters and co keep such blatant errors while knowing it's bullshit? For some reasons, the disinformation only increases as Tesla pressures the legacy automakers margin (Tesla surpassed both BMW and Mercedes in US car sales this summer while the German are losing big time).
Reuters & co might not be short themselves. But they knowingly play the short game and kep spreading the FUD ("See these terrible numbers? Who can expect Tesla to turn a profit? Now, let's hear what competitors and short sellers have to say...").
There is no universe where Tesla will be manufacturing 25,000 (300k/12) $40-50k cars per month. BMW alone sells something like 9,000 3-series vehicles in that price range per month. It's not credible that Tesla, with a limited sales network, limited charging infrastructure, high costs and long backlog is going to magically take away double digit percentages of the highly competitive small luxury sedan market.
They have been an amazingly innovative company. Hopefully when they do bankrupt the carcass gets picked up by a company who is a good steward of the assets.
Did you miss the report last week that Tesla is outselling BMW’s entire passenger car lineup? [1]
Also, double check your numbers - “The BMW 3 Series (the Model 3's direct competitor) sold only 3,751 cars in August.“
Tesla delivered between 17,000 - 20,000 Model 3’s in August, by comparison.
> Ford makes 50-90k F-150's a month without the drama.
“Production of the F-150, the most important vehicle in Ford’s showrooms, has ground to a halt.
Ford on Wednesday was forced to suspend all production of the F-150 after a fire at a key supplier’s manufacturing facility. It remained unclear how long the plants in Kansas City, Missouri, and Dearborn, Michigan, will need to wait before building F-150s again” [2]
That was back in May. Today they announced a recall of 2 million F150s due to a fire risk which is estimated to cost them $140 million dollars. [3]
[1] - https://www.autoblog.com/amp/2018/09/06/tesla-model-3-outsel...
[2] - https://www.foxbusiness.com/markets/why-the-ford-f-150-is-a-...
[3] - https://interestingengineering.com/ford-recalls-more-than-2-...
Asking because if it's the first case then of course the comparison would not be fair.
Yeah there are about 400,000 people lined up to buy them, and they will keep on selling them just as fast as they can make them for many many more months.
We don’t know how many new reservation holders are being added at the end of the list, just that the total dollar value of all deposits on hand is increasing.
You’re right though it’s not a comparison. No car company in history has been able to get 400,000 people to put down $1,000 on a vehicle, sight unseen, never mind an electric one at that.
The BMW i3, by comparison, sold a grand total of 418 cars last month. No one is lining up around the block to buy that one.
A fire at a factory shutting it down is not hte same type of drama as constantly missing estimates and using a tent to extend the line.
GP said Ford makes the F150s with “no drama” and yet their factory is burning and their cars are catching fire — something I recall Tesla getting flack for, but Tesla never had a $140 million recall for it.
I get it, different standards for different companies. The company making 20 mpg pickup trucks in business for 115 years I completely agree it’s a different kind of drama for their factory to burn, all F150 vehicle production to cease, and to recall 2 million vehicles for spontaneously combusting.
GP said, “It's not credible that Tesla, with a limited sales network, limited charging infrastructure, high costs and long backlog is going to magically take away double digit percentages of the highly competitive small luxury sedan market.”
Except that’s exactly what they’ve done. Fan or not, those are the facts, and I think to debate about Tesla it helps if you’re not in denial about their actual accomplishments.
Ford had an F-150 production stoppage due to a fire, and was able to restart production a few weeks later. They had the capital and (invisible, unsexy) team to deploy Russian heavy lift aircraft to move key tools in hours and restore production. It was largely invisible.
With Tesla, you have the constant stream of PR and the apparent need for the CEO to personally assume control of the factory to meet minimum requirements. The process and company is broken.
The Model 3 certainly smashed all records for new car reservations — 232,000 in two days, 500,000 by July 2017. (The previous record was for the 1955 Citroën DS that had 80,000 deposits during the ten days of the Paris Auto Show) [Says Wikipedia]
But these are by no means pre-orders. Refundable $1,000 deposits, of which about 25% have actually been refunded to date, it’s not so much of a hook when you can click a button to refund it, and the car costs $50k+
> There’s no world where 25,000 people a month are showing up and driving away with a car.
Do you dispute that 20,000 people showed up, paid $50,000+, and drove away with Model 3’s in August?
Do you think that number won’t be 25,000 in September?
You sound offended that Tesla has a hot product that people have lined up to buy. Yeah, they took pre-orders and people have waited years to get one. Because they want one. Because it’s like nothing else on the road today. Because, as the WSJ said, it’s a “rainbow-farting spaceship.”
This is the CEO that wanted his 3 models to spell S-E-X but couldn't because of Ford’s trademark, so he settled for “S3X”. You might not like his style, but you’re simply denying the reality of the sales numbers.
https://www.bloomberg.com/graphics/2018-tesla-tracker/
Tesla dropped production to 4716-ish cars this week. A few weeks ago, Tesla was at 6000 cars/week, but apparently that was unsustainable.
They're now below 5k/week and dropping. Rumors is that they have supply issues with SiC MOSFETs and can't build enough power-inverters.
Who cares? What influence do you think this article and that estimate has?
"Disinformation"; that's laughable. Tesla and Musk are being sued and investigated for stock manipulation, but you're crying about Reuters being off on their prediction. Who is showing bias? Where is the outrage?
>And just as Tesla surpasses BMW and Mercedes in car sales in the US, it's only getting worse.
Sedan sales, while the whole industry moves to CUVs and SUVs. Do you think this is sustainable, or is it clearing a backlog? Why can you get a car in 2 weeks now?
I never understand how this is a legit argument.
Just because one party shows disinformation doesn't make another party's disinformation right.
I don't think you know what disinformation is. You really believe one party is deliberately misleading, while the other is not?
FUD is what people do to Apple when they are making money hand over fist every quarter. TSLA is just a terribly run company that may end up out of business. Which is sad, because they have what appears to be a good product. Their production arrogance may not be able to be overcome though.
This is also standard Musk to blame short-sellers for TSLAs financial and production woes. Please tell me how short-sellers impact TSLA's production floor? The short-seller problem fixes itself if TSLA ever delivers.
>And Tesla plan to produce more than 300K Model 3 next year, not 100K.
I'll be amazed if they hit that number. They had to pull out all of the stops to hit the last one.
Yes. That's pretty bad. Their growth is quite backwards, they've learned to lose more money over time.
http://ir.tesla.com/news-releases/news-release-details/tesla...
http://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9ec...
EVEN IF WE IGNORE $600 Million worth of CapEx, Tesla is still $100 million loss. Again, Tesla lost a total of $742 million, and no, investments into equipment or building space does NOT fully explain the loss.
https://www.forbes.com/sites/greatspeculations/2016/07/12/ba...
Honest question: when did you start following this company? Elon has claimed profitability for years. Where is it? Where are the economies of scale that were promised?
>By then, the shorts (with billions in backing) will do all their best to give the company an extremely bad look.
The shorts will? Really? Which stories are false?
So is most of Silicon Valley, which is actually in an earthquake zone that some believe is overdue an earthquake.
I would imagine most billion dollar companies have multiple sites and manufacturing and data centers spread across multiple sites.
From the outside it looks like Telsa is about going to go into a tough winter like moment.
They are almost losing by winning. They are at capacity in their Fremont factory but still not making a profit.
They need to start designing and building out manufacturing facilities for their next car and the help bolster Model X manufacturing.
Stop and think for a second that Tesla is one earthquake away from no longer being a company.
- They are cash flow negative,
- they have about a year of cash runway left( optimistically)
You can't just collect insurance money and build a new factory like you can with a house, this is a many year project.
Tesla can't afford to not build cars for multiple years.
Forget the SEC investigation hanging over their head. From what I read, they are likely to get a large fine and a strong talking to.
And the most worrying thing for them is that their next car will compete head on with Mercedes, BMW, Audi, and GM. That will be the first time they've had to compete head on with a competitor.