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posted by chromas on Friday April 06 2018, @09:55PM   Printer-friendly
from the solar-freakin'-cities dept.

Elon Musk's Tesla, Inc. has been having some problems recently. But one easy-to-overlook problem is the debt incurred by its SolarCity subsidiary:

But 16 months after Chief Executive Officer Elon Musk kicked up controversy by acquiring the solar-panel installer founded by two of his cousins, its obligations are a strain on Tesla's finances. The $2 billion purchase came with a $2.9 billion debt load, and a chunk of that is soon coming due. That's bad timing for a company churning through about $6,500 a minute and trying to stave off the need for another capital raise. "SolarCity debt may not be the immediate cause of Tesla's problems, but it certainly isn't helping right now," said Alexander Diaz-Matos, an analyst at credit research firm Covenant Review LLC.

[...] Tesla's debt runs the gamut -- convertible bonds, promissory notes, term loans, cash-equity debt, asset-backed securities. Most of the total is tied to Tesla the automaker. But the energy unit, which includes the solar business, accounts for 27 of the 29 maturities set to come due through 2019.

[...] In recent months, Tesla's solar business lost the residential-solar throne to rival Sunrun Inc., a San Francisco-based installer with a market capitalization about half the SolarCity purchase price. Tesla ceded market share as it attempted to boost energy-unit profitability and scrapped SolarCity's costly door-to-door retail sales strategy. That was a smart move, according to Ross Gerber, co-founder of Gerber Kawasaki Wealth & Investment Management, which oversees more than $10 million in Tesla shares and options. He criticized the SolarCity deal but is still bullish on the company and Musk. "SolarCity was probably going to go bankrupt," Gerber said.

[...] For his part, Musk hasn't wavered from his commitment to turn Tesla into a one-stop shop selling solar panels to capture power, devices to store the energy and cars that can be charged in the garage. The company started producing photovoltaic glass tiles in December at a factory in Buffalo, New York, and has begun selling solar at some of its own stores and through retailer Home Depot Inc.

At least Tesla production is higher than ever.


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  • (Score: 2, Insightful) by takyon on Saturday April 07 2018, @12:35AM (2 children)

    by takyon (881) <reversethis-{gro ... s} {ta} {noykat}> on Saturday April 07 2018, @12:35AM (#663599) Journal

    To be clear, you have nothing to actually say about the actual article's contents.

    So, they show production at 987 cars in the final week of Q1, when Tesla already announced that the production that week was 2020.

    The change bumps up our standard model's weekly production rate a bit to 1,279/week. That's still quite a bit lower than Tesla's reported 2,020 in the last seven days, but our model will update over the next few weeks if Tesla can sustain it.

    Maybe the point of the model to verify what Tesla is saying. And Tesla has made many lofty production targets and missed them too.

    More likely, now that they have been shown to be lying, they have abandoned the page.

    Updated at: April 06, 2018

    Bloomberg could be lying. Or you could be overdosing on Musky taint. Maybe we should build a statistical model.

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  • (Score: 3, Informative) by NewNic on Saturday April 07 2018, @03:29AM (1 child)

    by NewNic (6420) on Saturday April 07 2018, @03:29AM (#663644) Journal

    Tesla has made predictions and missed them. However, exaggerating the past week's production numbers in a press release is the sort of thing that gets CEOs of public companies sent to jail. So, in this case, I believe Tesla.

    I hadn't noticed the update date. That makes it even worse: Bloomberg knows that their figures are wrong yet fails to note this.

    Keep on taking your investment advice from Bloomberg if you want, but I believe they are being disingenuous because they have an agenda. Now that their model has been shown to be wildly inaccurate, they are moving on to another target: Solar City.

    Credibility is important for news organizations. I have shown above that Bloomberg has none.

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    • (Score: 2, Informative) by tonyPick on Saturday April 07 2018, @08:19AM

      by tonyPick (1237) on Saturday April 07 2018, @08:19AM (#663711) Homepage Journal

      However, exaggerating the past week's production numbers in a press release is the sort of thing that gets CEOs of public companies sent to jail.

      Sure, but playing tricks by highlighting a specific outlier burst in production, or toying with your definitions of "produced" are fair the kind of thing companies will do in press releases.

      And the kicker here is that the VIN figures Bloomberg are basing this on _have_ to be accurate - every Tesla produced needs a registered VIN. The only problem there is that as a rolling average it will have lag to large changes, and the registration is batched (more info on cleantechnica) [cleantechnica.com].

      Plus when you look at the "Total Model 3 Production" graphs the official Tesla quarterly reporting is also tracked against Bloomberg's VIN based estimates, and the estimates are lining up with what Tesla actually did.

      And this kind of tracking matters because Musk has been... misleading before, such when they were hitting about 120 a month and told investors they were "confident" of doing 20,000 units a month by the end of 2017 [mashable.com] but they told the government that at best they were actually expecting less than half that [thetruthaboutcars.com].