First, Elon promised a 2018 transformation:
Elon Musk predicts profit at Tesla in 2018, and much more
After reporting largest quarterly loss in a long history of losses, Tesla CEO lays out expectations for ‘transformative year’
...“2018’s likely to be a very big year for us,” Musk said in a conference call, after describing 2018 as a “transformative year” in a letter to shareholders. “At some point in 2018, we expect to begin generating positive quarterly income on a sustained basis, operating 5,000 per week of Model 3 production and I’m optimistic that we will be GAAP profitable.”...
https://www.marketwatch.com/story/elon- ... 2018-02-07
But many TSLAists seem not to have noticed the continued erosion in model 3 production forecasts, which used the same numbers as those when the last delay was reported last month, but now using more "squishy" language:
A First Look At Tesla's Dreadful Q4 Results
...Squishy Model 3 Guidance: Most ominous was this paragraph from the update letter (which I have broken into its three component sentences):
"We continue to target weekly Model 3 production rates of 2,500 by the end of Q1 and 5,000 by the end of Q2.
It is important to note that while these are the levels we are focused on hitting and we have plans in place to achieve them, our prior experience on the Model 3 ramp has demonstrated the difficulty of accurately forecasting specific production rates at specific points in time.
What we can say with confidence is that we are taking many actions to systematically address bottlenecks and add capacity in places like the battery module line where we have experienced constraints, and these actions should result in our production rate significantly increasing during the rest of Q1 and through Q2."
What does it mean to “target”? Is that the same as guidance? I don’t think so...
https://seekingalpha.com/article/414448 ... q4-results
IMO, the big surprises in the 4Q report were the reduction in capex and the raid on the ZEV Credit piggybank, both of which artificially inflated the financial results, which were actually weaker than consensus expectations, but for this artful makeup-job-on-the-TSL-4Q-pig.
Tesla Put a Car in Space But How About in Showrooms?
If it can't ramp up Model 3 production soon, it's going to need to raise more cash.
A day after deserved jubilation in Cape Canaveral, it was back to the relatively mundane task of reporting Tesla's quarterly results. The big question was whether Tesla would shift its production target for the Model 3 back (again). It didn't, thankfully. However, as is often the case with this company, there are caveats:
"It is important to note that while these are the levels we are focused on hitting and we have plans in place to achieve them, our prior experience on the Model 3 ramp has demonstrated the difficulty of accurately forecasting specific production rates at specific points in time."
In other words, Tesla's ambitions for the Model 3 remain intact, but please bear in mind that such ambitions have proved, on prior occasions, somewhat overambitious. There was no update on the current production rate, despite repeated questions on Wednesday evening's call, which is troubling.
Recall that, a month ago, Tesla claimed it had hit a pace that "extrapolates" to more than 1,000 vehicles per week. Whatever that meant exactly, it doesn't appear to have been sustained, at least according to sales estimates by InsideEVs: They put January Model 3 deliveries at a little less than 1,900 overall.
Getting the Model 3 production line fixed is critical...
Selling zero-emission vehicle credits masked a very weak underlying gross profit margin in Tesla's core automotive business in the fourth quarter...
And Tesla now expects capex in 2018 to exceed last year's level of $3.4 billion, which happens to equal the amount of cash Tesla has in the bank. This, more than anything, is why Tesla must hit its stride on the Model 3. Otherwise, raising more capital could be unavoidable in the second half of the year...
https://www.bloomberg.com/gadfly/articl ... -showrooms
And of course, this begs the never-ending question of TSLA's cash burn.
What happens if it offers more equity or debt to support its massive continuing losses, and no one is willing to buy it?