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Title    Tesla Burns More Cash, Fails to Meet Production Targets
Date    Thursday November 02 2017, @10:34PM
Author    CoolHand
Topic   
from the elon-watchers dept.
https://soylentnews.org/article.pl?sid=17/11/02/1545202

takyon writes:

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


Original Submission

Links

  1. "takyon" - https://soylentnews.org/~takyon/
  2. "is hard" - https://www.bloomberg.com/gadfly/articles/2017-11-01/tesla-earnings-the-nightmare-before-christmas
  3. "burning through more than $1 billion of cash" - https://www.bloomberg.com/gadfly/articles/2017-08-02/tesla-earnings-one-billion-dollars-burned
  4. "its debut in the high-yield bond market" - https://www.bloomberg.com/gadfly/articles/2017-08-11/tesla-bond-behold-its-sheer-artistry
  5. "estimated at the time" - https://www.bloomberg.com/gadfly/articles/2017-07-06/tesla-stock-to-love-it-just-lower-your-expectations
  6. "NYT" - https://www.nytimes.com/2017/11/01/business/tesla-elon-musk.html
  7. "MarketWatch" - http://blogs.marketwatch.com/thetell/2017/11/01/tesla-earnings-focus-on-model-3-production-ramp-demand-live-blog/
  8. "Tesla Adds Lots of Certified Pre-Owned Model S Vehicles for Under $40,000 with New Warranty" - https://soylentnews.org/article.pl?sid=17/06/09/0251230
  9. "Time to Bash Tesla Model 3" - https://soylentnews.org/article.pl?sid=17/07/31/2335216
  10. "Tesla Reportedly Teaming Up With AMD for Custom AI Chip" - https://soylentnews.org/article.pl?sid=17/09/22/1628244
  11. "Tesla Fires Hundreds of Employees" - https://soylentnews.org/article.pl?sid=17/10/14/1240230
  12. "Original Submission" - https://soylentnews.org/submit.pl?op=viewsub&subid=23102

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