ZachF
Active Member
Let's take a moment to marvel at this:
- Tesla is expanding Fremont's production capacity.
- Building out the Kato Road facility
- Significantly expanding Shanghai
- Building a new facilty in Austin
- Building a new facilty in Berlin
..and
- they are not funding this with a Capital Raise
- they are not funding it with Debt
- they are not drawing down their Cash on the balance sheet.
Tesla is funding all this with cash generated from Operations. Yep, the company that "loses money on every car it sells", generates enough cash each quarter from operations to fund this massive expansion.
Even after funding all these Capital Expenditures, they still have cash left over (Free Cash Flow). In fact, since Q2 2020, they will have generated Free Cash Flow of $4.4B by Q2 2021.
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Unappreciated how important this point is.
Most of the modern auto OEMs need to go to the capital markets just to maintain steady state operations with 0% revenue growth. Many of them are bloated with debt and servicing costs eats up more than 100% of cash flow.
Now they need even more money to fund EV switchovers.