TSLA corporate outlook

[edatoakrun]

Each week that the promised ~5,000 model 3's are not sold, results in ~ $250,000,000 in lost revenue for TSLA, accelerating the timing for another cash infusion to keep the gigafactory doors open.

Tesla stock downgraded to sell on signs Model 3 demand is starting to flag

Customers are realizing that they can’t get new vehicles until 2019, and are starting to look elsewhere

Tesla Inc. stock was downgraded to sell from hold by Cascend Securities on Tuesday on signs that customer demand for the mass-market sedan, the Model 3, is beginning to flag as the company grapples with production issues.

Cascend’s Chief Investment Strategist Eric Ross said new customers who have not already preordered the Model 3 are realizing that they can’t get new vehicles until 2019, and are starting to look elsewhere. The electric-car field is growing, with all the major car makers working on their own models, he said. Ford Motor Co. F, -1.35% alone has 13 electric vehicles planned for release in the next five years.

Meanwhile, “the company is burning through cash and will likely need to raise capital in the first half of 2018 (and perhaps even the first quarter 2018),” Ross wrote in a note. “And there won’t be enough Model 3 production to suggest break-even is around the corner.”...

https://www.marketwatch.com/story/tesla ... 2017-12-05

...Whether or not Tesla itself survives as a company and manages to introduce mass market cars, mass market BEVs undoubtedly will arrive, largely thanks to them demonstrating what could be done.

TSLA has never built any "mass market BEVs", as defined by relatively high production levels and low price, and may never build any.

I am one of millions of drivers world-wide who actually do drive "mass-market BEVs", in my case since early 2011.

I doubt the large majority of those who drive BEVS were significantly influenced by TSLA, even if they, like many misguided ICEV drivers, see some achievement in TSLA's failures.

I don't see how it is possible find any plausible rational counterfactual argument that the billions of dollars flushed down TSLA these many years could not have been far more productively invested in BEV production, under more competent management.

Which management would that be, since no one else has managed to produce a compelling BEV salable outside the limited market of BEV enthusiasts (without subsidies, that is)? As I said, whether or not Tesla will build the first mass market BEV remains unclear, but someone will because Tesla has

1. Eliminated for all time the canard about BEVs being "nothing more than glorified golf carts"

2. Taken significant business from the likes of BMW, Mercedes, Audi, Porsche etc., so they can't dismiss them as being niche cars, and have to compete.

3. Showed how and then built a charging infrastructure that makes BEVs usable for shorter trips (if still well short of what's needed to fully compete with liquid fuels on longer ones)...

1. The opinions of idiots have limited relevance.

2. Unsupported by facts. Those companies have seen premium SUV sales surge, more than offsetting losses in the declining sedan segments.

In fact, TSLA seems to have increased total high-priced vehicle sales by means of subverting the intent of government subsidies for BEVs, diverting those payments toward the premium market segments. In doing so, TSLA has provided cover for other premium vehicle brands to take their own seats at the taxpayer-funded trough.

3. Each supercharger location is an open wound from which TSLA bleeds cash. Why anyone would regard such a silly and unsustainable promotional stunt as a corporate asset, is beyond rational understanding.

Superchargers are a major reason why, despite selling cars at very high prices, and further supported by very high government subsidies, TSLA today still has no profits in view.

[hyperionmark]

blah blah blah...more drivel from the weak minded (and short sighted)

you sure do waste a lot of time on this site trying to work others into your frenzied short position....how many other sites do you rotate to?

must suck living in such constant negativity and doubt

[webb14leafs]

The negativity is a little crazy on this thread. It's easy enough to have an intelligent and civil conversation.

Each side of this debate is grounded in logic and fairness. Tesla IS burning through cash at alarming rates right now, and HAS missed multiple self-imposed deadlines. It's fair to point that out and say that it is concerning to the overall health of the company.

I look at the other side and say that it is inevitable that Tesla will resolve its production issues and within 1-2 years will EASILY sell 500,000 cars per year - resulting in an ESTIMATED net profit of $4-Billion/year. They are the brand leader in a rapidly growing market. To me it's a no-brainer and I would ignore all of the nay-sayers. If you find it hard to ignore the cash woes and production issues - I respect that. You might be right, but I respectfully disagree. I think Tesla will have no problem selling their "junk" bonds to raise cash next year (which I predict they will have to do). An extra quarter or 2 of cash burn is nothing compared to profits Tesla will gain.

I will say that it is concerning that production STILL hasn't picked up. This makes me think the issues are deeper than a couple of component bottlenecks. I still believe it ultimately won't matter.

[palmermd]

+1 webb14leafs

[DaveinOlyWA]

most of the vitriol and conflict in this thread is premised on the mistaken assumption that Tesla wants to make money selling cars. Couldn't be farther from the truth which is why arguments on both sides have "some" sense to them. But the reality is neither applies here.

[GRA]

TSLA has never built any "mass market BEVs", as defined by relatively high production levels and low price, and may never build any.

I am one of millions of drivers world-wide who actually do drive "mass-market BEVs", in my case since early 2011.

I doubt the large majority of those who drive BEVS were significantly influenced by TSLA, even if they, like many misguided ICEV drivers, see some achievement in TSLA's failures.

I don't see how it is possible find any plausible rational counterfactual argument that the billions of dollars flushed down TSLA these many years could not have been far more productively invested in BEV production, under more competent management.

Which management would that be, since no one else has managed to produce a compelling BEV salable outside the limited market of BEV enthusiasts (without subsidies, that is)? As I said, whether or not Tesla will build the first mass market BEV remains unclear, but someone will because Tesla has

1. Eliminated for all time the canard about BEVs being "nothing more than glorified golf carts"

2. Taken significant business from the likes of BMW, Mercedes, Audi, Porsche etc., so they can't dismiss them as being niche cars, and have to compete.

3. Showed how and then built a charging infrastructure that makes BEVs usable for shorter trips (if still well short of what's needed to fully compete with liquid fuels on longer ones)...

1. The opinions of idiots have limited relevance.

Since many of those 'idiots' were and in many cases still are the management of the companies which are now scrambling to build BEVs to compete with Tesla, that brings us back around to my "Which management would that be?" question. Besides, prior to the advent of high specific energy Li-ion batteries like Panasonic's NCA, it was largely the correct view.

2. Unsupported by facts. Those companies have seen premium SUV sales surge, more than offsetting losses in the declining sedan segments.

Oh, come now. While consumer preferences are clearly shifting away from cars and towards CUVs/SUVs, BMW (to take one example) has sold twice as many cars as CUVs in the U.S. this year, 162,514 to 80,869. The Model S has unquestionably taken sedan market share from the Euro-lux makers. Even in the CUV segment, while the BMW X5xDrive40E PHEV is selling reasonably well, the Model X, despite its utility compromises and probable long-term reliability issues, is outselling them 4:1, 18,015 (IEVS est.) to 4,517 YTD. Do you think BMW, Audi et al are developing BEV CUVs just because they can?

In fact, TSLA seems to have increased total high-priced vehicle sales by means of subverting the intent of government subsidies for BEVs, diverting those payments toward the premium market segments. In doing so, TSLA has provided cover for other premium vehicle brands to take their own seats at the taxpayer-funded trough.

You'll get no argument from me that it's high time to put a price cap on which vehicles qualify, but that seems likely to be moot soon as far as the feds.

3. Each supercharger location is an open wound from which TSLA bleeds cash. Why anyone would regard such a silly and unsustainable promotional stunt as a corporate asset, is beyond rational understanding.

Superchargers are a major reason why, despite selling cars at very high prices, and further supported by very high government subsidies, TSLA today still has no profits in view.

SCs are a marketing expense, far more useful and valuable to customers (not to mention as assets to potential purchasers of the company) than advertising would be. Despite their usual delays, Tesla should initially complete (for small battery cars) the primary interstate network in 2018; in most cases the interstates awaiting completion only need another 3 or 4 to do so. After that, they will need to devote more attention to off-interstate SCs, but owing to the much higher density of the interstate network east of the Mississippi that will largely be restricted to west of it, so probably just 100-200 more will be needed for that. And once the Model 3 starts to be delivered in large numbers, the amount of charging that's 'free' will rapidly decline, although it's unlikely that very many Model S/X owners have used SCs enough to wipe out the extra $2k they paid up front, which financed their building.

[GRA]

Via IEVS:

Tesla Finally Lands Win In Ongoing Direct-Sales Battle

https://insideevs.com/tesla-win-direct-sales-battle/

The Missouri Court of Appeals ruled that three plaintiffs had no standing to follow through with a lawsuit banning Tesla from selling its cars directly in the state. The Missouri Automobile Dealers Association (MADA), along with a local automobile dealer, and a mobile home manufacturer recently went to bat against the Silicon Valley automaker. A lower court had moved to revoke Tesla’s license to sell, but the appeals court overturned that ruling.

When then lower court ruled not to renew the automaker’s license, Tesla had to temporarily close up shop at its Kansas City and University City stores. However, the higher court allowed the company to immediately reopen during the appeal proceedings.

MADA, Reuther Ford, and Osage Industries asserted that their right as economic competitors and taxpayers allowed them to sue Tesla in an attempt to get the automaker’s sales license revoked. The appeals court disagreed. The court believes that its ruling was:

“… consistent with every appellate court ruling in the country that has addressed standing in similar Tesla license challenges in other states.”

The court basically said that it only appeals cases where a business license is denied or revoked. Simply being an economic competitor doesn’t give a company standing to bring forth a lawsuit. . . .

[cwerdna]

most of the vitriol and conflict in this thread is premised on the mistaken assumption that Tesla wants to make money selling cars. Couldn't be farther from the truth which is why arguments on both sides have "some" sense to them. But the reality is neither applies here.

For most companies, if they have no profits and just continual large losses, they will go bankrupt unless some savior comes to rescue them in some way (e.g. buyout). The purchaser will want to eventually make money and will make changes in an attempt to make the unit profitable. There'd be no reason to buy if it's just another money pit.

TSLA's net income is somewhere north of negative $3.8 billion cumulative now. They're also burning thru cash like crazy.

It is both amusing and annoying that certain folks here (more like one) are just completely dismissive of anything that doesn't worship the cult of Elon and doesn't paint Tesla/Elon in a positive light/can do no wrong.

For the company's sake, hopefully there is an actual point at which they can breakeven and become profitable w/sufficient Model 3 deliveries. And, hopefully the company can reach it before running out of cash.

[DaveinOlyWA]

most of the vitriol and conflict in this thread is premised on the mistaken assumption that Tesla wants to make money selling cars. Couldn't be farther from the truth which is why arguments on both sides have "some" sense to them. But the reality is neither applies here.

For most companies, if they have no profits and just continual large losses, they will go bankrupt unless some savior comes to rescue them in some way (e.g. buyout). The purchaser will want to eventually make money and will make changes in an attempt to make the unit profitable. There'd be no reason to buy if it's just another money pit.

TSLA's net income is somewhere north of negative $3.8 billion cumulative now. They're also burning thru cash like crazy.

It is both amusing and annoying that certain folks here (more like one) are just completely dismissive of anything that doesn't worship the cult of Elon and doesn't paint Tesla/Elon in a positive light/can do no wrong.

For the company's sake, hopefully there is an actual point at which they can breakeven and become profitable w/sufficient Model 3 deliveries. And, hopefully the company can reach it before running out of cash.

They will NEVER be a profitable company building cars... NEVER. But that is not Tesla's long term goal anyway.

[webb14leafs]

most of the vitriol and conflict in this thread is premised on the mistaken assumption that Tesla wants to make money selling cars. Couldn't be farther from the truth which is why arguments on both sides have "some" sense to them. But the reality is neither applies here.

For most companies, if they have no profits and just continual large losses, they will go bankrupt unless some savior comes to rescue them in some way (e.g. buyout). The purchaser will want to eventually make money and will make changes in an attempt to make the unit profitable. There'd be no reason to buy if it's just another money pit.

TSLA's net income is somewhere north of negative $3.8 billion cumulative now. They're also burning thru cash like crazy.

It is both amusing and annoying that certain folks here (more like one) are just completely dismissive of anything that doesn't worship the cult of Elon and doesn't paint Tesla/Elon in a positive light/can do no wrong.

For the company's sake, hopefully there is an actual point at which they can breakeven and become profitable w/sufficient Model 3 deliveries. And, hopefully the company can reach it before running out of cash.

They will NEVER be a profitable company building cars... NEVER. But that is not Tesla's long term goal anyway.

If they NEVER reach their goal of selling 500,000 cars per year, then of course your statement is true. I believe they will. I believe unit sales in the millions will be easily achievable within 5 years based on demand in Europe and China. Again, there is a possibility that TESLA will prove so inept at manufacturing that noone will buy their bonds when they need cash in 1st or 2nd quarter 2018, but I think that possibility is extremely slim.