Tesla Continues To BURN Cash But Talks Model Y On Earnings Call — What Are The Chances We Won't See The Y?

Tesla does often miss targets, that is true. However, the Model 3 is ramping up, they still have 450,000+ reservations, and there is an actual goal of profitability now (versus planning for losses in order to scale faster Amazon style). The current plan is to turn a profit in Q3 and Q4, but even if that gets delayed by 3 or 6 months it will not put Tesla under like so many people here think.

That all being said, I think they will do some sort of round early next year for CAPEX to build the Model Y line and Gigafactory 3 in China. If they do it while profitable, they will get more bang for their buck.

The biggest risk to Model Y is being too ambitious with the number of improvements over Model 3. Hopefully they'll learn from the mistakes in the 3 ramp.

Tesla keep on doing the "smoke and mirrors show." They proclaim self-imposed targets, and miss them. They predict self-proclaimed production ramp-ups, and miss them.

Then they do "creative" stuff like somehow "producing" thousands of Model 3s in the last week of a quarter (great for PR!), but when you look at their weekly average for the quarter, you see numbers in the few hundreds. Tesla would have you assume that the "production" numbers they quote in the last week of the quarter will be sustainable moving forward, and that they will climb even higher, but that hasn't been the case historically.

Well, as long as the Tesla Faithful pour more money into Tesla Motors -- in the form of buying new share issues or the next batch of Junk Bonds -- then Tesla can continue doing business as usual. But when the Tesla Faithful begin to lose the faith, and they stop scooping up new share and bond offers, then Tesla will have to get creative about how to raise the cash that's essential for daily operations.

Money is not the impediment for Tesla going forward - there will always be a way for companies - even like Tesla - to raise substantial cash if they need to.

THe Problem remains TIME. THe longer they take to ramp up production - the more likely the market will have OTHER options made by ongoing major Car manufacturers who CAN mass produce cars. THe "Y" is not the issue - Tesla's marketing model - ie - being completely closed - ONLY works as long as their product is essentially alone in the market. Limited distribution points - along with limited service places - AND a monopoly on pricing only works when you control the market.

Hyundai has now introduced an EV based on their Hybrid Kia Niro - claimed a crossover - adding another over 200 mile competitor to the fray. (I assume the Equivalent Hyundai will also come as an EV eventually). AND Hyundai has a slew of very competitive dealers who - are NOT afraid to discount heavily (As is Hyundai itself). I do not believe the current Tesla 3 is profitable in its basic form - and that is why they are producing only the highest end versions first. IT is competition like this - local dealers - local service - flexible pricing - that will do Tesla in. They did indeed have their time - and they wasted it.

Another issue for Tesla that isn't often discussed is Solar City. It has its own set of cash needs that weigh on the company. When Tesla merged it into the company Solar City changed its marketing strategy from long term leases of systems, backed by investors seeking fixed returns, to selling directly from Telsa stores. Now system placements are down 38% but there are cash payments due those investors who financed the original sales model. A cash squeeze.

AGENT OOR - I note that in all of the discussions of the AUTONOMOUS cars - it has not been brought up here about the potential use in the Military. Imagine an Autonomous TANK - if it accidentally plows over some enemy combatants - this could actually be a plus!

There could also be autonomous Rocket Launchers - autonomous Artillery - even Autonomous Supply Trucks and Ammunition trucks - without the need to put a human at risk. OF course - having congressmen drive the trucks would do the same thing!

The military has made this a priority for development.

Model Y will get to production. Tesla is still a fairly small manufacturer & so it'll have some periods where their finances will seem a bit underwhelming.

But if Tesla does plan to produce 5-6 vehicles, they will eventually need help. The right combination of industry partnerships would both help it maintain it's halo cachet while keeping up with production demands.

Tesla needs variable production facilities & a variable source for labor - where efforts can be shifted or idled as needed depending on demand for certain products.

Labor is an interesting point. Despite all the investment in automation the Tesla Fremont plant has significantly more employees in total than when it was a Toyota/GM plant and obviously much less productivity and lower quality. Before they tackle multiple models they need to get what they have now into high quality productive manufacture.

It's still not optimized, labor cost per unit will drop at full production. Also the average sell price is more than double the Toyota/GM cars produced there, should also factor that in.

Model Y? Lol. They don't even have a factory location yet (Musk said there is no room in Freemont). So 36 months from now at the earliest. Meantime, burned $1 billion of cash this quarter. Working capital (Current Assets - Current Libilities) fell from negative 1 billion to more than negative 2 billion. A capital raise is imminent and necessary.

The earnings call was postively Enron-esque. Dodge the hard questions and call analysts bad names. Unless there is a miracle, I'd say there is a 50% chance of liquidation. Forget restructuring since Tesla doesn't have anything that other manufacturs would want.

At the current rate they would run out of money in 3 quarters. If production ramps to what it should have been 6 months ago, they can run indefinitely without a raise. Time will tell, but the production ramp seems like a temporary problem from everything that I have heard so far.

I'm in Hong Kong and I can't believe the sheer number of Teslas here. This has to be there biggest market but oddly not much Buicks like in Shanghai though. I'm sure Gheely or one of the other big Chinese companies will purchase the BK assets of Tesla -too big of a market to ignore here....

It's a big market for pretty much any large city. Silicon Valley has an insane number as well.

It's not Tesla, it's top management, which is to say Musk who keeps going away losing money because he doesn't care about that he knows nothing about car manufacturing. I mean, putting the 3 into production before obtaining all the equipment needed to, you know, manufacture =them, makes perfect sense.
To someone with about as much experience as I have, that is. But Elon's a BSer par excellence. And, more importantly, his primary experience isn't in running a profit-making business but in financial trickery.