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Are they running hot? They're in serious financial trouble and have been unable to meet self-imposed production levels. Now they're laying off thousands of people.



"running hot" seems like an ambiguous metaphor in this case. It could mean "they're doing very well", but could also mean "in imminent danger of failure", as in a CPU or overworked engine. The latter might be what the parent meant.

Or maybe they didn't, and their choice of words is unintentionally amusing and ironic.


"have been unable to meet self-imposed production levels". Scaling car production takes lots of experience, takes lots of infrastructure. I mean, Ford's Ford Rogue River Complex is 1 mile x 1.5 miles, it has 93 buildings making up nearly 16 million square feet of factory.

Musk always overestimates what he will be able to achieve in a given period and that's a good thing. It keeps you busting ass to make your goal instead of getting complacent and lazy.

Investors and keyboard cowboys need to realize that Tesla is not Ford/GM/Toyota, that it is a company that is effectively still an infant and has never produced at any worthwhile scale and has to figure all that out.


They are not in financial trouble. Most people are only skeptical if they can do it without raising capital.

However everybody agrees that they both have many costumers waiting and would be able to raise capital.

Nobody believes that Tesla is in real real serious troupe.


Spending tons more than you make and not having savings is traditionally called financial trouble. Even after a recent huge rally their most recently issued bonds are yielding 7% which means lots of real people think they are a risk.

Lots of customers is good, but the more cars they have made the more money they have lost. Negative operating leverage is really bad for any company, but especially one as cash intensive as manufacturing vehicles.

I'm rooting for them, but Tesla is indeed in serious financial trouble. Just ask Elon who fired 3,500 people so he could make the books look nicer.


> They are not in financial trouble. Most people are only skeptical if they can do it without raising capital.

Take a few minutes and read https://priceonomics.com/porsche-the-hedge-fund-that-also-ma.... The moral of that story was, if you're "fine as long as you can raise capital", then you're actually in a very precarious position. And it was even another luxury car company to boot!

Not that Tesla is making the same speculative financial shenanigans that Porsche was, but the point is, access to capital has a tendency to dry up right when you need it most. If there's a recession in the next 18-24 months (which, glancing at yield curves, is looking increasingly likely) and lending tightens up, Tesla might not find it as easy as you think to raise capital right when they need it to avoid running out of money.


And Tim Cook is waiting for that moment to arrive, so that he can put an apple on every Tesla.


> They are not in financial trouble. Most people are only skeptical if they can do it without raising capital.

I agree, they are not in financial trouble. Being dependent on a near-term capital raise, however, is financially perilous. Lots of companies were waiting for the fall fundraising season when Lehman went bankrupt.


Elon said in the last meeting that this is not required.


Elon has said many things that weren't true and the balance sheet doesn't lie. Tesla is going to need to raise capital.


Mostly timeline related, not sure if he has lied/misled about financials.


They can't keep up with demand and their sales look like this over time:

$4 billion -> $7 billion -> $11.7 billion -> ~$17 billion

How is 4x growth in three fiscal years anything other than running hot?


Their losses look like this over time:

$889m -> $675m -> $2b -> ??? (a cool $710m in the 1Q so annualized like you did with revenue would be ~$3b).

They have ~$2.8b in the bank, so that's about a year if things continue like they have been, less if they hit a snag. Which is why Elon is firing people left and right.


> They have ~$2.8b in the bank, so that's about a year if things continue like they have been, less if they hit a snag.

More if they succeed in ramping up the Model 3 production.


Yes, and people who are going bankrupt will also have their problems alleviated if they suddenly get a better job. That has nothing to do with whether or not there is a cashflow problem in the first place. I'm rooting for them, but Tesla is certainly in financial trouble.


> Yes, and people who are going bankrupt will also have their problems alleviated if they suddenly get a better job.

If people going bankrupt have marketable skills and are doing everything in their power to find a job in a hot market, I would be brave enough to lend them some money for the transition.

My point is that Tesla's success in ramping up production is not as improbable as you make it sound. They are focussing all their resources on this goal, and at least to my mind, they are likely to succeed.


But at the same time they had a net loss of $888.66 million in 2015, $674.91 million in 2016, and a whopping $1,961.4 million in 2017 [1]. In the first quarter of 2018 alone, they had a loss of $785 million [2].

That's not looking good.

1: http://archive.is/7sPSR

2: https://www.theverge.com/2018/5/2/17312772/tesla-earnings-q1...




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