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Auto production is hard:
Having racked up its first quarter of burning through more than $1 billion of cash in the three months ending in June, Tesla topped that with $1.4 billion of negative free cash flow in the third quarter. In the past two quarters, therefore, Tesla has burned through more cash than the previous six combined. More importantly, it has burned through roughly four out of every five of the $3.2 billion dollars it has raised since late March through selling new equity and convertible debt and its debut in the high-yield bond market.
Consequently, debt has soared. Even just using debt with recourse to the company, on a net basis it has almost tripled since the start of the year to $3.36 billion.This would matter less if the primary objective of sucking in most of that external funding -- mass production of the Model 3 -- was fast approaching. Instead, it has receded further.
When Musk first talked about production targets for the Model 3 in 2016, they implied Tesla would be producing roughly 3,800 to 7,600 a week in the second half of 2017. By July of this year, Musk was guiding toward production hitting about 5,000 a week by the end of December. I estimated at the time that this implied a second-half average of maybe 1,400 a week.
Now, Musk estimates production might hit 5,000 a week by the end of the first quarter of 2018. As for this year, it might be in "the thousands" by the time New Year's Eve rolls around. He refused to say what the current run rate was. But I would estimate Tesla will be lucky to produce 10,000 Model 3 vehicles in total this year, or an average of 400 a week for the second half -- roughly 5 to 10 percent of the original guidance. As for the earlier target of 10,000 a week in 2018 ...
Also at NYT and MarketWatch.
Previously: Tesla Adds Lots of Certified Pre-Owned Model S Vehicles for Under $40,000 with New Warranty
Time to Bash Tesla Model 3
Tesla Reportedly Teaming Up With AMD for Custom AI Chip
Tesla Fires Hundreds of Employees
(Score: 0) by Anonymous Coward on Friday November 03 2017, @08:17AM (2 children)
Can you imagine a future where "gas stations" keep a generator on site for electric vehicles? I know it's just blue sky, impossible thinking but dig deep and stretch that imagination.
(Score: 1) by khallow on Friday November 03 2017, @12:15PM
(Score: 0) by Anonymous Coward on Friday November 03 2017, @12:15PM
Please run some very simple calculations to pick a size for that generator. How many cars will it charge at once -- the Tesla Supercharger near me has 8 bays and its own big transformer from the mains. If electric cars dominate, hundreds of bays will be needed (time spent at the charging spot is many times longer than time sitting at a gas pump). What kind of pollution controls will be required?
Who is going to pay for this monster generator that sits idle 99%+ of the time. Will it even run after sitting for a few years?
Or, you know, you could have your own generator at home, probably need a garage to keep it out of the weather. At 120VAC 15 amps you can add about 4 miles to an electric car range in an hour. Hope you have a bicycle to speed up the trip to the gas station to get more gas for the generator...