Curious thought: what if tesla failed?

[chibi_kurochan]

curious thought popped up to me, what if tesla failed to deliver model 3? What will happen if Tesla stock crashed? What will happen to California's economy if Tesla goes bankrupt?
What will happen to Fremont factory workers?

Please feel free to enlighten me.. thank you!
Btw, this is a big hypothetical question, so please don't take any offense or take it personally.

 

[cwerdna]

What will happen to California's economy if Tesla goes bankrupt?

Not that much. Looks like Tesla's revenues for 2016 were $7 billion. California GDP for 2015 was over $2.4 trillion.

What will happen to Fremont factory workers?

Somewhere between some to all would be laid off. It would depend on the terms of the bankruptcy and who buys them out, if any. Worst case is all are gone except a skeleton crew to help w/a wind down operations.

 

[WarpedOne]

This question is not even wrong.
Tesla is already too big to fail.

Fail == goes to zero.
Everything else is not a failure.

 

[AnxietyRanger]

I have to agree with @WarpedOne. Tesla failing would probably, at worst, mean a low-valuation buyout by the likes of Google. Not ceasing to exist.

 

[GreenT]

Tesla is already too big to fail.

No one is too big to fail.
Even GM failed ... only to have the government, excuse me, you and me, bail them out.

 

[wdolson]

If Tesla failed somebody would buy the rights to the Model S and X and keep selling them until nobody wanted them anymore. The gross profit per car is one of the highest in the automotive industry and as such they are very valuable assets. Somebosy would also support the existing cars. A company in Texas started up to support DeLoreans and there are a lot fewer of those around.

There would be little to no further development though.

That's the worst case scenario. It's also likely somebody would buy the company and keep developing EVs.

As far as California's economy goes, it would be a blip so small only the Tesla employees would be affected. If California was a separate country it would have the 6th largest in the world. The only countries with larger economies are the US, China, Japan, Germany, and the UK. For a sense of the scale of California's economy, it produces over 13% of the US's total agriculture output and dwarfs #2 Texas which only produces 6.8%. Three of California's county compete each year to see which one scores as the most productive agriculture output county in the world. Tulare, Kern, and Fresno counties are always in the top 3 (in dollar value of production). And most Californians are completely unaware of this because it's only a $31.8 billion industry is only 1.3% of the state's GSP.

If Tesla screws up the Model 3, it could put the company on shaky ground. Also if the economy craters like 2008 again it could threaten Tesla's future. Though the scenarios for going out of business now are fewer than they were a few years ago. Despite the critics, if Tesla quit spending so aggressively on expansion and R&D, they would become profitable overnight. They spend a much larger percentage of their revenue on the future of the company than any other car company producing cars (there are a lot of start ups out there, but they don't count for this discussion because they have few if any cars for sale).

 

[Mark Z]

The challenge could be obtaining parts. It takes time to get parts now. A windshield for the 2012 is on backorder. I need touchup paint for the 2017. Gotta keep the EVs running so I can enjoy those CAV stickers and drive in the HOV lanes.

Clean Air Vehicle (CAV) Decals - High Occupancy Vehicle HOV Lane Usage

Don't worry about California. Governor Brown will continue to raise taxes and fees to avoid bankruptcy. Those stickers cost $8 last year. Now they are $22.

 

[wdolson]

The challenge could be obtaining parts. It takes time to get parts now. A windshield for the 2012 is on backorder. I need touchup paint for the 2017. Gotta keep the EVs running so I can enjoy those CAV stickers and drive in the HOV lanes.

Clean Air Vehicle (CAV) Decals - High Occupancy Vehicle HOV Lane Usage

Don't worry about California. Governor Brown will continue to raise taxes and fees to avoid bankruptcy. Those stickers cost $8 last year. Now they are $22.

The problem places like California are facing is if they continue to allow EVs to drive in the HOV lane with only one occupant, as more and more EVs get on the road, the benefit decreases.

Most states are also raising rates and fees on EVs. Washington imposed a $100 fee on car registration for EVs to offset the loss in gas tax, even though few people driving ICE cars use that much gasoline in a year and now it's gone up to $150 a year.

 

[chibi_kurochan]

Thanks guys for all the informative answers! It's always good to see various POVs..

 

[Xminus6]

The problem places like California are facing is if they continue to allow EVs to drive in the HOV lane with only one occupant, as more and more EVs get on the road, the benefit decreases.

Most states are also raising rates and fees on EVs. Washington imposed a $100 fee on car registration for EVs to offset the loss in gas tax, even though few people driving ICE cars use that much gasoline in a year and now it's gone up to $150 a year.

At some point CA DMV will stop issuing White Decals to new EVs. It's inevitable just as it was for Hybrid Yellow Stickers. While that will be a disappointment for people who buy EVs then, it will mean that market penetration of EVs is great enough to invoke the rule change, which would be an overall good thing. I think CA is going to keep installing more Express Lanes anyway and White Decals don't qualify you for free access to those anyway. It'll be pay-to-play for everyone.

 

[MXWing]

Apple or Google or Amazon snap up Tesla were the price low enough. It doesn't go to zero.

50 billion market cap is still relatively chump change relative to trillion dollar market cap.

 

[Canuck]

Tesla could be bought by Google, Apple, Amazon, etc. on it's way up rather than down. Musk never said never to that.

 

[MXWing]

Tesla could be bought by Google, Apple, Amazon, etc. on it's way up rather than down. Musk never said never to that.

Outright acquisition doesn't seem like the best fit and would be risky for Apple shareholders. I think Apple taking a big stake and putting something like an iOS App and iTunes Store in all Tesla's would be a win win for both companies.

 

[wdolson]

If Elon Musk had to sell out, he would likely sell out to Google. But at this point it's highly unlikely that Tesla will need to sell itself to survive.

 

[MXWing]

If Elon Musk had to sell out, he would likely sell out to Google. But at this point it's highly unlikely that Tesla will need to sell itself to survive.

Think about how ugly the Tesla's would get once Waymo got their paws on them. like clown cars. Really really fast clown cars but still...

 

[N5329K]

curious thought popped up to me, what if tesla failed to deliver model 3? What will happen if Tesla stock crashed? What will happen to California's economy if Tesla goes bankrupt?
What will happen to Fremont factory workers?

Please feel free to enlighten me.. thank you!
Btw, this is a big hypothetical question, so please don't take any offense or take it personally.

What if the sun went nova?
Robin