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Re: TSLA corporate outlook

Sat Aug 05, 2017 4:37 pm

GRA wrote:
LTLFTcomposite wrote:
GRA wrote:Zero commitment?!? BMW had more PEV models on the market than any other manufacturer, and considering their price most of them seem to be moving quite well. 330e/530e/X5-40e/740e sales totaled 1,273 last month despite their limited AERs, then there's the i3 with 601 (at least two thirds and maybe 3/4ths of which were the REx) and the i8 with 55, for a total of 1,929 (plus 75 of the Mini Countryman). That puts them in 3rd place for the month, behind GM and Tesla and ahead of Toyota and Ford. Porsche and Audi are committed albeit trailing BMW a bit, but will have more BEVs than BMW sooner, and even Mercedes has 4 PEVs on the market. That the majority of these are PHEVs rather than BEVs is critical to purists, but of no concern to others who are just getting their feet wet.

Look up unimpressed, there's a picture of me next to it. All their ads feature roaring ICE exhaust. Go to one of their dealers, 99% ICE. Their priorities are clear. Legacy all the way.

Yes, their priorities are clear. They will electrify while continuing to sell cars that make them a profit. It's so much easier to be disruptive when you don't have to worry about that last part. :lol:


A rational view can be found in this thread, occasionally.

edatoakrun
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Re: TSLA corporate outlook

Mon Aug 07, 2017 7:17 am

sparky wrote:
edatoakrun wrote:
sparky wrote: ...I thought the cash burn and loss would be ugly...

You think burning through $1.16 billion in cash, and a loss of over $400 million, in one quarter, is pretty?
I think the achievement of Model 3 production on a timeline that even Tesla suggested was impossible with less cash burn than expected is stunningly beautiful...

TSLA plans to sell $1.5 billion worth of junk to raise more cash to toss on the stunningly beautiful bonfire...

Tesla seeks to raise $1.5 billion to fund Model 3 production

(Reuters) - Tesla Inc (TSLA.O) said on Monday it would raise about $1.5 billion in a bond offering as the U.S. electric car maker ramps up production of its newest sedan, the Model 3.

The debt offering marks Tesla's debut in the junk-bond market and the company will start roadshows on Monday, IFR reported, citing lead bankers on the deal.

Elon Musk-led Tesla is counting on the Model 3, its least pricey car, to become a profitable, mass market manufacturer of electric cars...

Goldman Sachs, Morgan Stanley, Barclays, Bank of America Merrill Lynch, Citigroup, Deutsche Bank and RBC are the bookrunners on the bond offering, IFR reported.

http://www.reuters.com/article/us-tesla ... SKBN1AN13I
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LTLFTcomposite
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Re: TSLA corporate outlook

Mon Aug 07, 2017 8:20 am

Is "burning cash" really an appropriate term to describe investing in the means of production to meet what's probably a $25B backlog?
LTL
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GRA
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Re: TSLA corporate outlook

Mon Aug 07, 2017 5:21 pm

LTLFTcomposite wrote:Is "burning cash" really an appropriate term to describe investing in the means of production to meet what's probably a $25B backlog?

The investment is certainly necessary, but if the economy were to turn south, capital markets were to dry up and lots of people decided they had better things to do with their money than spend it on an expensive and unnecessary car (not to mention deciding that they've got better uses for $1k than giving a company an interest-free loan), burning cash seems an entirely appropriate description. Like most 'disruptive' businesses, Tesla's business up til now has been largely based on faith. I'm glad that they're trying to do what they are, and think they're about 80% there, but that doesn't blind me to the risks. Their business model is still in what I call the 'El Mystico and Janet' phase:

https://www.youtube.com/watch?v=1ujRE2IkEIo
Guy [I have lots of experience designing/selling off-grid AE systems, some using EVs but don't own one. Local trips are by foot, bike and/or rapid transit].

The 'best' is the enemy of 'good enough'. Copper shot, not Silver bullets.

GRA
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Re: TSLA corporate outlook

Mon Aug 07, 2017 5:47 pm

Via IEVS:
Here’s What Happens When You Cancel A Tesla Model 3 Reservation
http://insideevs.com/heres-happens-canc ... servation/

Let’s says you’ve got a Tesla Model 3 reservation, but following the reveal (or perhaps even long ago) you decided to cancel. What happens next? According to Tesla’s website, you’re free to cancel your reservation at will, but it specifically says that “refunds can take up to three weeks depending on your country of delivery.”

Well, apparently some individuals who’ve cancelled their Model 3 reservations have been waiting much longer than 3 weeks for refunds. . . .

Hopefully sloppiness rather than a cash crunch.
Guy [I have lots of experience designing/selling off-grid AE systems, some using EVs but don't own one. Local trips are by foot, bike and/or rapid transit].

The 'best' is the enemy of 'good enough'. Copper shot, not Silver bullets.

edatoakrun
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Re: TSLA corporate outlook

Tue Aug 08, 2017 4:14 pm

More details on TSLA's latest plans to gather more fuel for the fire:

Tesla seeks $1.5 billion junk bond issue to fund Model 3 production

...Following the announcement, Standard & Poor's reaffirmed its negative outlook for the automaker and assigned a "B-" rating for the bond issue - deep into junk credit territory. S&P also maintained its "B-" long-term corporate credit rating on Tesla.

"We could lower our ratings on Tesla if execution issues related to the Model 3 launch later this year or the ongoing expansion of its Models S and X production lead to significant cost overruns," S&P said in a statement on the bonds.

Moody's assigned a junk "B3" rating to the bond issue and said the company's rating outlook was stable.

The rating agency said the overall company's "B2" rating was supported by the fact that if Tesla ends up in serious financial trouble, its brand name, products and physical assets would be of "considerable value" to other automakers.

The automaker's debt load increased significantly last year when it bought solar panel maker SolarCity.

CFRA equity analyst Efraim Levy said the bonds provide Tesla with funds "at least into mid-2018."

BURNING CASH

The latest effective yield on single-B rated bonds maturing in seven to eight years, the class for a Tesla issue, is around 5.5 percent, according to Bank of America/Merrill Lynch Fixed Income Index data.

Tesla’s bond will price later this week after several days of meetings with credit investors...

Tesla is counting on the Model 3, its least pricey car, to become a profitable, high-volume manufacturer of electric cars...

https://www.reuters.com/article/us-tesl ... SKBN1AN13I

To sell the paper, Elon is upping his revenue prognostications using both higher production numbers, and higher model 3 prices:

Tesla Model 3 annual demand could surpass 700,000 units, says Elon Musk

...Goldman Sachs hosted a meeting with Tesla CFO Deepak Ahuja for bondholders to discuss the opportunity that the new bonds offer and Musk joined in on the phone to answer a few questions.

Two sources at the event told Electrek that Musk updated his projection to “700,000 units per year” and he added that he could see it eventually go even higher.

In comparison, BMW 3 Series and Audi A4, two vehicles against which Tesla hopes to compete with the Model 3 in the mid-luxury sedan segment, have annual production rates of about 400,000 and 330,000 cars per year respectively....

Furthermore, the CEO also updated his expectations for the average sale price of the vehicle.

Musk previously said that he expects the Model 3, which starts at $35,000, to have an average sale price of $42,000.

Today, he said that the average sale price should be closer to $45,000 once the vehicle is at full production. At first, Musk said the average price should be closer to $50,000 as Tesla limits the options to the long range battery pack and premium interior, which results in all Model 3 vehicles being delivered today costing at least $49,000.

... the new figures have a great impact on the overall estimated financial value of the Model 3 program, which was previously estimated as having a potential of about $20 billion in revenue per year.

Now Musk’s new projections put the overall annual revenue of the Model 3 program to over $30 billion per year....

https://electrek.co/2017/08/07/tesla-mo ... elon-musk/
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LTLFTcomposite
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Re: TSLA corporate outlook

Fri Aug 11, 2017 12:37 pm

LTL
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edatoakrun
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Re: TSLA corporate outlook

Fri Aug 11, 2017 1:31 pm

LTLFTcomposite wrote:Debt offering raised to $1.8B

https://www.cnbc.com/2017/08/11/tesla-d ... emand.html

Quote of the day...from that article:

...It "speaks to the sheer insanity found in the high yield market to have a deal like this upsized with terms so unappealing to investors,"...
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Re: TSLA corporate outlook

Fri Aug 11, 2017 3:31 pm

Funny that 5.25% is considered "high yield". Doesn't seem like much of a premium for the risk.
LTL
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Re: TSLA corporate outlook

Fri Aug 11, 2017 3:42 pm

ISTR getting 16 or maybe it was even 18% interest on a passbook savings account! Course, inflation was ridiculous at the time.
Guy [I have lots of experience designing/selling off-grid AE systems, some using EVs but don't own one. Local trips are by foot, bike and/or rapid transit].

The 'best' is the enemy of 'good enough'. Copper shot, not Silver bullets.

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