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posted by CoolHand on Thursday November 02 2017, @10:34PM   Printer-friendly
from the elon-watchers dept.

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

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  • (Score: 2) by bradley13 on Friday November 03 2017, @08:33AM (3 children)

    by bradley13 (3053) on Friday November 03 2017, @08:33AM (#591589) Homepage Journal


    Everyone is somebody else's weirdo.
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  • (Score: 2) by takyon on Friday November 03 2017, @09:08AM

    by takyon (881) <{takyon} {at} {}> on Friday November 03 2017, @09:08AM (#591597) Journal

    Elon Musk has deep pockets, and Tesla has benefited from a hypegasm that drove its market value to over GM and Ford. There's also vertical integration with battery production and SolarCity, both of which strike me as more stable pursuits.

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  • (Score: 2) by realDonaldTrump on Friday November 03 2017, @09:44AM

    by realDonaldTrump (6614) on Friday November 03 2017, @09:44AM (#591608) Homepage Journal

    It's the Trump of cars. When folks look for condos, hotels, resorts, or golf courses they look for the Trump name. Because it means the biggest and the best. Maybe, probably, the most expensive, but always the best. My motto is NEVER SETTLE. And when folks look for cars, they look for the Tesla name. Because it means the fastest and it means environmental. A little expensive, but always the fastest and always environmental. Let me tell you, I'm a very big person when it comes to the environment. I've received awards on the environment. I've done a lot for the environment, more than Tesla has. Probably a lot more. People don't know that, they just know they're getting the best when they choose Trump. You get your name out there. I'm great at getting my name out. And so is Elon. Believe me, he's a winner.

  • (Score: 3, Interesting) by etherscythe on Friday November 03 2017, @03:11PM

    by etherscythe (937) on Friday November 03 2017, @03:11PM (#591697) Journal

    People are betting long on this company. There's more than a few ideological folks investing simply because they want to see the EV revolution succeed. What I don't get is how Elon Musk has time for all this crazy stuff, even if his cult of personality is the reason any of these ventures got off the ground. Tesla, SpaceX, Hyperloop/Boring Company, Neurolink: huge, ground-breaking ideas - I don't know how the guy has time to eat, much less sleep. Makes me feel positively useless in comparison.

    "Fake News: anything reported outside of my own personally chosen echo chamber"