Tesla Isn't Done Yet, But Has Some Serious Cash Flow Issues To Deal With

Automakers like to make some outrageous statements on April Fool's Day. As a joke, Tesla CEO Elon Musk sent out a tweet saying his company had gone bankrupt. The statement was of course, a joke, but things haven't been so rosy for Tesla lately. The company burns through money at an alarming rate and production of the Model 3 sedan is still behind schedule. As Tesla continues to grow, it can be easy to loose sight of how big the problem has become. According to Bloomberg, the company is currently operating with over $10 billion in debt.
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skytop - 4/4/2018 10:45:57 AM

+7 Boost

Elon Musk has been successful luring in liberal loons to support his Tesla debt bomb.
Tesla is now over $12 billion in debt and will run out of operating money later this year.
Poor build quality, inadequate production numbers, and mounting EV competition from most every other auto maker paints a dire and desperate picture for Tesla.

Vette71 - 4/4/2018 11:37:20 AM

+3 Boost

The real issue is when does Tesla become a steady state producer of mass volume autos, the Model 3. To date their history is unsteady, with huge, expensive, inefficient end of the quarter surges. Even the S and X show this. In the first quarter they produced 10,400 Model 3s. That's an average of 800 Model 3s per week. However 20% of their production occurred in the last week of the quarter. This quarter they need to produce 45,500 Model 3s or an average of 3500 per week. Each week has to produce 10% then the week before it. If the 5000/week end of quarter goal is reached and its 20% of that quarter, they will have produced only 25,000 Model 3s in Q2. A huge shortfall of much needed cash flow. The problem snowballs into the 3rd quarter.

Vette71 - 4/4/2018 11:39:46 AM

+1 Boost

Should read "10% more than the week before it".

SanJoseDriver - 4/4/2018 1:06:13 PM

-9 Boost

As long as their is a gross margin for each car sold, it will contribute to the operating shortfall in Q2. They are forecasting an operational profit in Q3.

Their production ramp does not seem to be smooth at all, with periodic shutdowns where they change process and machinery and provide a sudden boost the following week. If they can at least maintain 2k/week, it will be inline with the S and X combined. Their current capital expenses are optimized for 5k units per week of the Model 3, so the faster they hit that point the better.