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Tesla Posts Biggest Quarterly Loss, Slashes Production of Model X and Model S (yahoo.com)
Tesla has reported the largest quarterly loss in its history, and said it was cutting production of its Model S and Model X vehicles. Here are the key third-quarter numbers with expectations via Bloomberg: Adjusted loss per share: -$2.92 (-$2.23 expected); Revenue: $2.98 billion ($2.39 billion expected); Free cash flow: -$1.4 billion (-$1.2 billion (expected). Yahoo News reports: The company said it plans to produce 10% fewer units of its Model S and Model X models in the fourth quarter and reallocate resources to the Model 3, its newest. Tesla expects to hit a Model 3 production rate of 5,000 vehicles per week by late Q1 2018. "While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp such as this makes it difficult to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear," Tesla said in its statement. Tesla said in October that it produced only 260 vehicles, well below its target of 1,500. CEO Elon Musk said the Model 3 was "deep in production hell."
Many companies spend more money than they make starting out and reinvest more money than they make as they ramp up operations. That's pretty typical (take a good look at Amazon).
The Amazon comparison again... Amazon had free cash flow early on and put it back into the company. In their entire public existence, Amazon went to the capital markets just once. Tesla constantly needs other people's money just to keep the lights on.
Tesla != Amazon
Note that I know Volt and Leaf owners, all of them have a similarly positive experience (battery life strong after 180k miles, regenerative breaking making the brakes last a long time, and no mechanical issues with the motors to speak of).
So if it should come to pass that the financials tank Tesla, *hopefully* other vendors shall provide.
My biggest worry is so much of the world pinning all their electric vehicle viewpoint on Tesla, and if it fails at executing on the more mundane facets of running a large automotive company discouraging the rest of the market.
XML is like violence. If it doesn't solve the problem, use more.
Be the first is to lead the market, which requires huge investment, is risky, but can lead to lots of cash in the bank.
The second is to follow the leader, making products that fit the newly exposed demand - not cutting edge, but fit for purpose at a reasonable cost with reduced risk.
Add into the mix that cars are notoriously hard to get right (Tesla reportedly has lots of niggles that established car manufacturers have already solved) and now that vehicles like Volvo's Polestar and the ilk are on the horizon, from a brand reputed for reliability (albeit manufactured in China), and that Germany are building their own battery gigafactory -
Musk should be worried. The only way he'll make money is cashing in on that first wave, and it's already being spread out.
biopowered.co.uk - catalytically cracking triglycerides for home automotive use since 2008. Just say no to big oil!
Please don't learn the difference between principle and principal, as someone who invests in one is unlikely to earn the other.
You're right, they should've said Tesla was decimating production levels, not slashing.
There are shills on slashdot. Apparently, I'm one of them.