That bloody seat isn't like USB cables. I found a picture of the seat and I understand why it's so hard to recreate/obtain.
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Short-Term TSLA Price Movements - 2015
- Thread starter Robert.Boston
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That bloody seat isn't like USB cables. I found a picture of the seat and I understand why it's so hard to recreate/obtain.
CALGARYARSENAL
Member
CALGARYARSENAL
Member
Todd Burch
14-Year Member
MartinAustin
Active Member
Elon has never sounded confident about ramps. He talks about trying to increase production during every CC. How many times have you heard him say something like "you wouldn't believe how many parts there are in a car, auto manufacturing is an incredibly difficult process, you have to unite all these pieces from all these outside suppliers," etc. etc. ?
He is saying exactly the same thing again, this time about the Model X, and it's no different. What we can assume is that they will be ramping up way faster, and way more professionally, and with a higher internal bar of quality, than they did on the Model S. I believe they were trying to make 5 cars a day at the very beginning.
It will pay dividends at their not-for-profit Service Centers, where there will be less Model X cars coming in for fixes.
My overall opinion of the CC was that it was good. Yes I know I'm in the minority. Lowering the guidance was like bad-tasting medicine... you know you need it and at some time in the future things will be improved; it just doesn't taste nice when you take it.
EldestOyster
Member
Please don't post a tease and then tell us not to read it! Do us a favor and post the punch line!Please don't feed the morons!Originally Posted by CALGARYARSENAL
Anton at his best:
This is my hope, as well. If this is a sign of Tesla becoming more realistic on targets after missing 2014; likely (now) missing original 2015; and dropping 2016 from 'initial run rate of 2000/week' to 1600-1800; in an effort to put themselves in a position to more regularly meet/beat, I'm all for that.
Same for the ramp difficulty caveats: I hope this is a genuine signal of more conservative targets, rather than lowering expectations but still shooting for the optimistic side of what they really think.
Internally Elon's blistering pace of pushing is probably a good thing. I'd welcome fewer pie-in-the-sky, if-everything-goes-perfectly projections publicly.
CALGARYARSENAL
Member
Sorry about that folks. I can't believe how much this guy hates Tesla. Why anybody would not root for Tesla and the environment is beyond my comprehension. I didn't like the earnings call, but have no doubts that Tesla will survive and thrive.
One other thing that I think hasn't been emphasized enough on here: they have found a way to significantly increase gigafactoy battery production capacity within the same volume! This is probably why they can ramp stationary storage so quickly, but I think this detail is worth mentioning explicitly too.
Cash flow doesn't look so good.
2015 1st quarter -$557 million
2015 2nd quarter -$564 million
Cash on hand: $1,1150 million
Even with the credit line (I think it was like $500 million, of which they mentioned only using $50 million so far) Tesla will probably need to raise more money early next year. At their current cash flow rates, they will use up most of their cash early next year unless they ramp up production rapidly or raise more cash.
2015 1st quarter -$557 million
2015 2nd quarter -$564 million
Cash on hand: $1,1150 million
Even with the credit line (I think it was like $500 million, of which they mentioned only using $50 million so far) Tesla will probably need to raise more money early next year. At their current cash flow rates, they will use up most of their cash early next year unless they ramp up production rapidly or raise more cash.
Tesla took out a line of credit of $750 Million and drew down $50 million in June 12, 2105:
Tesla Motors Obtains Credit Line From Five Banks - WSJ
I believe Tesla raises another round of cash in May 2016.
Yeah so even then its 1.2 billion cash on hand + 750 million more
So in total if they use their entire credit line they have 2 billion cash on hand with a quarter burn rate of almost $600 million.
This doesn't leave much room for comfort. Especially when you consider the expenditures made for the gigafactory, stores, service centers, and superchargers.
They currently have enough cash to last 3 more quarters before they have to raise more money. Only having 1.2 billion in cash on hand is really tough in the automotive industry.
Look at the cash of their competitors:
General Motors $25 billion
http://www.reuters.com/article/2015/02/13/us-gm-buybacks-insight-idUSKBN0LH01B20150213
Here's a good example with Hyundai:
Hyundai has $110 billion in cash on hand and recently spent $10 billion for 20 acres of land in Seoul. They will donate another further $2billion to the local government and then spend another $10 billion building their global headquarters.
Hyundai-Led Group to Buy Gangnam Site for $10 Billion - Bloomberg Business
Even if Tesla doubles production in Q4 or Q1 of 2016, they will still need to raise substantial amounts of cash.
RobStark
Well-Known Member
Tesla is 3 months behind where they said they would be a year ago.
Now they are saying maybe cash flow positive in Q4 but definitely cash flow positive in Q1 2016.
Again no NEED for a new capital raise.
If terms of a capital raise are compelling they will do so because they can deploy that capital efficiently.
Now they are saying maybe cash flow positive in Q4 but definitely cash flow positive in Q1 2016.
Again no NEED for a new capital raise.
If terms of a capital raise are compelling they will do so because they can deploy that capital efficiently.
They don't NEED to raise capital but they aren't leaving themselves much room for error. At current burn rates they will run out of cash midway through 2016(arguably their expenditures will continue to rise as they complete the gigafactory).
Tesla has only spent $183 million on the gigafactory so far :
Gigafactory investment reaches $183 million as Tesla, NV finalize incentive deal
That's just for the pilot factory (which is 1/5th the size of its final size). So they will have to spend at least $800 million more to complete the entire factory plus pay for tooling and materials. Even if they are cash flow positive, where will the rest of the cash come from?
I never quite understood that logic. It is suggesting Tesla was making all that money and now, due to bad business decisions or issues with their master plan, they are living it up. That could not be further from the truth.
They never had any cash (not in this volume for user) until they raised over 2 billion dollars with the very specific target to spend it all on Model X, Model 3, Gigagfactory and building out their global presence (stores, service centers and the Supercharger network). They are doing exactly that, so I do not get why that`s a problem.
The Gigafactory will probably be built in stages right through 2019. That means those 800 million is spread out over ~18 quarters, which works out to $44 million per quarter. That's not insurmountable.
(Though, hopefully, even before 2017, Tesla should start on the Gigafactory 2.)
It's not that they are living it up, it's just that they are spending a lot more cash than is coming in. My point is that the 2 billion they raised will be all spent by the 2nd quarter of 2016. To put it into perspective, so far in 2015, their cash flow has decreased by almost $1.2 billion. They will probably be cash flow negative again in the 3rd quarter (so another $600 million down) and according to the conference call they don't think they will be cash flow positive in Q4 but instead in Q1 of 2016. That leaves them with almost nothing of the current $1.2 billion they have in cash. They will have to dip into the $750 million credit line (of which they have already used $50 million).
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