TESLA Headed for Lack of Cash Again?

[Buggle]

How is Buffalo a lost cause? I'm getting standard Panasonic panels from there put on my roof in about 3 weeks. The state paid for so much build out, there's really no financial risk for Tesla. Worst case scenario they continue printing standard panels while the wildly popular solar roof product continues it's slow roll out. Employment requirements are on target and fairly easily achieved. So what's the problem?

Actually a big thing people seem to be missing about this move to online automotive sales is the impact this strategy will have on the energy side. The single biggest impediment to the residential energy services industry taking the next big step is sales cost, hence Elon fired all everyone and ended door-to-door sales. He identified something that absolutely would not scale, so he took the bold step of ending it and moving the energy group into hibernation mode.

The last SCTY earnings call pegged customer acquisition costs at $.91/Watt installed and Vivint just reported a 4Q18 figure of $1.08/W, that is absurd. Having sales(DevCo for SolarCity) essentially dictate the rollout and expansion of residential solar has put an price floor on the US market. When 30% of your pricetag is sales you can't compete, and when you try to push down costs the sales org naturally pushed back to maintain the sweet deal they got going.

Taking the step of moving sales exclusively online, Tesla sets themselves up to be by far the industry leader on cost once they decide to move back into residential solar/storage aggressively. Imagine having the most desired product, a vertically integrated manufacturing operation, and a 30% cost advantage over the entire market. Buffalo is so lean on the cost side that they can likely tread water for as long as they like, when the market turns they can pounce and dominate.

You see them selling solar roof as on online only solution? Really?? I mean I like to think I'm fairly open minded, but that's more than a stretch.

 

[TheTalkingMule]

You see them selling solar roof as on online only solution? Really?? I mean I like to think I'm fairly open minded, but that's more than a stretch.

Why? "Online sales" doesn't mean you buy it and it shows up, it means no one's going to sit in your livingroom, try to convince you to buy it, and add $6k to the pricetag.

Moving sales online segments the market for you too. All the early adopters are ready to go, this system means they can leap first and not be mixed into the customer pool with uninformed folks from other segments. Works great, saves thousands.

 

[Buggle]

Why? "Online sales" doesn't mean you buy it and it shows up, it means no one's going to sit in your livingroom, try to convince you to buy it, and add $6k to the pricetag.

Moving sales online segments the market for you too. All the early adopters are ready to go, this system means they can leap first and not be mixed into the customer pool with uninformed folks from other segments. Works great, saves thousands.

I think you're insane. Normal ppl don't drop that kind of money on that kind of a roof without being fully sold. You are not the average consumer. Time will tell.

 

[gnuarm]

Looks like much of the investing community is backing my analysis of the situation, not to mention the investors. The stock is rather down ahead of the model Y announcement tonight. You would think this would provide a bounce and so the stock would be mostly up. Maybe they are expecting Musk to do something erratic during the question and answer.

I picked up a few hundred more shares on the dip. I'm hoping the announcement will shift focus from the negative to the positive. Too bad it won't actually change any of the facts.

 

[wjhepworth]

Looks like much of the investing community is backing my analysis of the situation, not to mention the investors. The stock is rather down ahead of the model Y announcement tonight. You would think this would provide a bounce and so the stock would be mostly up. Maybe they are expecting Musk to do something erratic during the question and answer.

Dude, anybody saying this is seriously delusional. The "investing community" doesn't agree with anybody on anything at any time or for any reason. They freakishly overreact to every piece of news and flip from hot to cold and back with each news headline. Luckily, I have a strange sense for this silliness and am making pretty good money on the stock because of it.

You can troll all you want but the stock will be all over the place for another few years at least. Tesla is still tipping the tea cart in the automotive industry and challenging the big dogs and most of the "investing community" don't know how to respond to them because they are defying all the norms. Nobody has seen anything even remotely close to what they are doing to the industry. Tighten your chin strap, it is going to be a wild ride.

 

[gnuarm]

Dude, anybody saying this is seriously delusional. The "investing community" doesn't agree with anybody on anything at any time or for any reason. They freakishly overreact to every piece of news and flip from hot to cold and back with each news headline. Luckily, I have a strange sense for this silliness and am making pretty good money on the stock because of it.

You can troll all you want but the stock will be all over the place for another few years at least. Tesla is still tipping the tea cart in the automotive industry and challenging the big dogs and most of the "investing community" don't know how to respond to them because they are defying all the norms. Nobody has seen anything even remotely close to what they are doing to the industry. Tighten your chin strap, it is going to be a wild ride.

The stock price hasn't been "all over the map" since the announcement. It has been very down. Regardless this is not just an issue with the stock price. If the model Y doesn't generate a lot of presales, that will be a hunk of cash Tesla won't have. More important is the issue of demand. Sure the model Y should sell better than the model 3, but in the next 2 years the model 3 is all Tesla will have to sell in volume. If they survive that long, the model Y will need to be a big shot in the arm to help them finance the next vehicle into production.

Yes, the stock is volatile. The fact that you are making money on it shows you don't believe it is a solid stock. Something good has to happen to make money being long. Recently it has all been bad and there is plenty of potential for bad news to come. Musk talks like he wants to have a shootout at the OK corral with the SEC. It is hard to imagine how that will end other than badly.

I'm starting to be fearful of how the quarter will end. Maybe things will turn for the better in Q2.

BTW, please don't call me a troll. I realize that there are a lot of fanbois here who don't want to face reality. But talking about the reality that Tesla faces doesn't mean I'm trolling. Trolling is trying to stir up controversy. I would be happier if the irrational, emotional Tesla fanbois would just stay quiet so a decent conversation can be had.

 

[wjhepworth]

The stock price hasn't been "all over the map" since the announcement.

I didn't say since the announcement. The stock went down due to a flurry of announcements from Tesla. The Model Y announcement didn't move the needle because it was exactly what everyone expected. The main concerns were Tesla's sudden maneuvers and the continued fears they are bleeding cash. I will admit it didn't help to have Elon joking about it.

Yes, the stock is volatile. The fact that you are making money on it shows you don't believe it is a solid stock.

Actually you misread my intention. I fully believe in Tesla but I take advantage of the ridiculous gyrations of the market. I do have part of a long position in Tesla but after seeing the pattern I would be an idiot not to take advantage of the analyst silliness.

Recently it has all been bad and there is plenty of potential for bad news to come.

Two quarters of profits for a startup going up against the likes of GM, Ford, BMW etc is not bad. Being ahead of expectations for announcing the Model Y is not bad. Finally creating differentiation of the Model 3 line versus Model S line is not at all bad. They needed to juggle pricing and offerings to provide a clean line of cars which they now have. Yes, there are negatives but all you are communicating is doom and gloom.

Musk talks like he wants to have a shootout at the OK corral with the SEC. It is hard to imagine how that will end other than badly.

Here I agree totally with you. I wish he would think before he tweets. These wounds are self inflicted.

BTW, please don't call me a troll. I realize that there are a lot of fanbois here who don't want to face reality. But talking about the reality that Tesla faces doesn't mean I'm trolling. Trolling is trying to stir up controversy. I would be happier if the irrational, emotional Tesla fanbois would just stay quiet so a decent conversation can be had.

Differing opinions are good but I have noticed that you seem really fixated on the negative. We are talking about a company that has done amazing things. We should still be skeptical but keep it all in perspective. I do apologize for the troll comment though. It wasn't necessary.

 

[oneday]

If the model Y doesn't generate a lot of presales, that will be a hunk of cash Tesla won't have.

Define a lot of presales? How about in dollar amount? Is $250,000,000 a lot (just a random number)? No matter what it is, I don’t see how it can really move the needle when Tesla last reported cash at $3.7B.

If they survive that long, the model Y will need to be a big shot in the arm to help them finance the next vehicle into production.

If the sky doesn’t fall you mean? Or nuclear war? What are you insinuating here? Looks like troll commentary to me. Stirring things up, you know what I mean?

It is hard to imagine how that will end other than badly.

Here’s one for you, the Judge dismisses the case.

I'm starting to be fearful of how the quarter will end. Maybe things will turn for the better in Q2.

Starting? You started this post a month ago, with a FUD headline. Here’s a couple questions I have for you, and since your thread header is “TESLA Headed for Lack of Cash Again”:
1. What is your estimate for end of Q1 cash Tesla will report?
2. If Tesla is guiding for profit all quarters after Q1, with only slight profit in Q2, wouldn’t this be the last quarter of worry in terms of lack of cash?
3. How much cash do you think they need Q1 onward? Or at least for the rest of this year?
4. Did you not notice the massive FCF Tesla is capable of generating as evidenced by Q3&Q418?

 

[neroden]

Gnuarm is at best an idiot, and more likely a troll. He has contributed nothing useful ever.

He's no schonelucht, and I've been reporting his junk posting.

 

[gnuarm]

Define a lot of presales? How about in dollar amount? Is $250,000,000 a lot (just a random number)? No matter what it is, I don’t see how it can really move the needle when Tesla last reported cash at $3.7B.

Let's put that in context. How much did Tesla spend to bring the model 3 production up to speed? I recall losses of better part of a billion dollars for a year! Cash flow was a bad as $-1.5 billion! Now they are bringing up two factories. I've pointed this all out before. $3.7 billion is not such a large amount given the task they have ahead.

If the sky doesn’t fall you mean? Or nuclear war? What are you insinuating here? Looks like troll commentary to me. Stirring things up, you know what I mean?

I know that rather than discuss the facts, you seem to like to respond emotionally.

Tesla is showing many, many signs of a company hunkering down for a bad stretch ahead. It's been reported. It's been discussed, but many here really don't want to hear it and so respond with spite.

Here’s one for you, the Judge dismisses the case.

I think we all know that is very unlikely.

Starting? You started this post a month ago, with a FUD headline. Here’s a couple questions I have for you, and since your thread header is “TESLA Headed for Lack of Cash Again”:

You left off the question mark which is the entire point. I was asking a question so it could be discussed. No FUD, asking a question that a large investment community is asking.

1. What is your estimate for end of Q1 cash Tesla will report?
2. If Tesla is guiding for profit all quarters after Q1, with only slight profit in Q2, wouldn’t this be the last quarter of worry in terms of lack of cash?
3. How much cash do you think they need Q1 onward? Or at least for the rest of this year?
4. Did you not notice the massive FCF Tesla is capable of generating as evidenced by Q3&Q418?

Tesla can generate cash by selling cars. They did a good job with this in the second half of 2018. But it wasn't enough to make Tesla profitable in 2018. They lost over a billion dollars and cash was only up $300 million. Guidance for Q1 2019 is "small" profit. We haven't heard estimates for the remainder of the year and there are many signs of dropping demand. What we know for sure is that they will be spending a LOT of money to get two factories up and running.

I don't get why people are so touchy discussing this. There is so much vitriol. One poster said he was going to have me banned.

If you don't like what I post, perhaps it is best if you just don't read it?!!!

 

[gnuarm]

Here is another interesting point. They are making about 7,000 cars a week in Fremont. Musk has asked for volunteers to deliver 30,000 cars in the last two weeks of the quarter. That would indicate they have over 15,000 cars sitting somewhere that they have not delivered. The factory is making more cars than they can deliver/sell. Even ignoring that issue, how could they possibly deliver so many cars by volunteers? Driving to the next town with a car is one thing. Driving to other states to deliver an extra 15,000 cars in two weeks is nearly insane!

 

[mongo]

Let's put that in context. How much did Tesla spend to bring the model 3 production up to speed? I recall losses of better part of a billion dollars for a year! Cash flow was a bad as $-1.5 billion! Now they are bringing up two factories. I've pointed this all out before. $3.7 billion is not such a large amount given the task they have ahead.

Better context: When Tesla made the 3 line, they only were selling 100k S+X and were not making a profit regularly. Now they are selling ~100k S+X and ~350k 3 and making quarterly profits... ( not to mention gettgin financing for GF3 and getting it running a high accelerated timeline).

 

[ggr]

Here is another interesting point. They are making about 7,000 cars a week in Fremont. Musk has asked for volunteers to deliver 30,000 cars in the last two weeks of the quarter. That would indicate they have over 15,000 cars sitting somewhere that they have not delivered. The factory is making more cars than they can deliver/sell. Even ignoring that issue, how could they possibly deliver so many cars by volunteers? Driving to the next town with a car is one thing. Driving to other states to deliver an extra 15,000 cars in two weeks is nearly insane!

15,000 cars somewhere is the contents of three car carrier ships; I believe there were 4 in transit at the time of his email.

 

[oneday]

Let's put that in context. How much did Tesla spend to bring the model 3 production up to speed? I recall losses of better part of a billion dollars for a year! Cash flow was a bad as $-1.5 billion! Now they are bringing up two factories. I've pointed this all out before. $3.7 billion is not such a large amount given the task they have ahead.




I know that rather than discuss the facts, you seem to like to respond emotionally.

Tesla is showing many, many signs of a company hunkering down for a bad stretch ahead. It's been reported. It's been discussed, but many here really don't want to hear it and so respond with spite.



I think we all know that is very unlikely.



You left off the question mark which is the entire point. I was asking a question so it could be discussed. No FUD, asking a question that a large investment community is asking.



Tesla can generate cash by selling cars. They did a good job with this in the second half of 2018. But it wasn't enough to make Tesla profitable in 2018. They lost over a billion dollars and cash was only up $300 million. Guidance for Q1 2019 is "small" profit. We haven't heard estimates for the remainder of the year and there are many signs of dropping demand. What we know for sure is that they will be spending a LOT of money to get two factories up and running.

I don't get why people are so touchy discussing this. There is so much vitriol. One poster said he was going to have me banned.

If you don't like what I post, perhaps it is best if you just don't read it?!!!

You literally didn’t answer one of my questions.

 

[ggr]

You literally didn’t answer one of my questions.

Which one didn't he answer? ;-)

 

[neroden]

You literally didn’t answer one of my questions.

That's gnuarm's style -- he diverts and distracts instead of responding to questions. I caught him doing that earlier in this thread, which is when I concluded he was trolling.

It's bad-faith debating, and it's a classic trolling technique. Which makes him a troll.

 

[gnuarm]

15,000 cars somewhere is the contents of three car carrier ships; I believe there were 4 in transit at the time of his email.

What does that have to do with delivering cars in the US?

I recall near the end of one of the panicking quarters Musk came up with the idea of building his own car carries! lol I guess this is a similar idea.

 

[TheTalkingMule]

How is this clown still allowed to post here? Obvious trolling with no redeeming qualities.

 

[juliusa]

They are making about 7,000 cars a week in Fremont. Musk has asked for volunteers to deliver 30,000 cars in the last two weeks of the quarter. That would indicate they have over 15,000 cars sitting somewhere that they have not delivered.

It is called "in transit". They build international deliveries early in the quarter, and domestic deliveries late in the quarter, and deliver most vehicles the last month of the quarter. They have been doing this for 5 years - anyone investing in the stock should know this.

The factory is making more cars than they can deliver/sell.

How did you arrive at that incorrect conclusion?

Are you a short troll? It seems you are the author of many uninformed negative posts.

 

[Right_Said_Fred]

What does that have to do with delivering cars in the US?

I recall near the end of one of the panicking quarters Musk came up with the idea of building his own car carries! lol I guess this is a similar idea.

It’s your assumption that the 30,000 cars are all US cars. That assumption is wrong. Unfortunately. Because Q1 would be huge if they were just US cars.

It may be huge anyway.