>On Jan. 30, Musk told investors he thought Tesla would continue making money after finally turning its first back-to-back profits during the third and fourth quarters of last year, fulfilling his previous forecast that Tesla would become “sustainably profitable” from the third quarter of 2018 onward.
Followed by a massive quarterly loss of $700MM and the pronouncement that the company has less than 10 months of cash after raising money (which we were also told would never be needed again). Can someone explain how that happens?
It’s because I didn’t buy a Model 3, as I wasn’t offered a $35k version along with the $7500 federal rebate as I was planning on. Suspect a few tens of thousands of others made the same decision. Congress needs to pass the $7000 electric car tax credit or Tesla has a long bumpy road ahead.
Sure... I was planning on buying the $27,500 (after rebate) version. As the rebates have expired, that theoretically priced Model 3 no longer exists. At $27,500 it was an amazing deal - better than an Accord or Camry.
A Tesla Model 3 at $27,500 would have been such an absurdly sweet deal the demand would be ludicrous.
If they could have snapped their fingers and manufactured as many as they needed, I would guess based on passenger vehicle sales numbers, they could have sold 300,000 in a single quarter at that price. They barely build that many in a year.
I’m sorry, you were never going to see a Model 3 for $27,500. With the way the credit phases out, they could never have built up the capacity to fulfill $35k orders under the full credit, just to have the price then spike as the credit phased out and be left with huge excess capacity as it came back to full price.
I was certainly in the top few people placing my reservation. High enough that if they were delivered in order of reservation, I’d have my $27,500 Model 3. They opted to maximize their revenue by delivering the expensive versions first. A Tesla won’t be my next purchase.
That alone tells a lot about their costs as well. My personal conclusion was that Tesla failed to make a profit from the 35k $ version and pushed the higher priced versions.
"The most you could said is that [Tesla] executives were too optimistic. They presented a better face to the situation that should have been presented in the final few months, but then, if they didn't do that, it would have become a self-fulfilling prophecy - as soon as a CEO says I'm not sure if we'll survive, you're dead. You know, I think people are making too much of this [Tesla] thing."
Fraud. It was apparent they were hurting those quarters and the math didn't seem to add up. The we are profitable announcement was on the heels of high profile departures in their accounting and finance department.
Followed by a massive quarterly loss of $700MM and the pronouncement that the company has less than 10 months of cash after raising money (which we were also told would never be needed again). Can someone explain how that happens?