The "Is Tesla Going Bankrupt?" thread

[robertvg]

They have 400.000 pre-orders. What bank would not want to invest in that ?

 

[ecarfan]

my associate keeps saying that it's a really bad idea, that I should wait because Tesla is not far from Bankrupt... He doesn't know anything about Tesla...

I think you answered your own question.

 

[rscott0]

Let's say Tesla goes Bankrupt, what will happen to people who bought their cars ? Where are we gonna repair and make the services ? What about the Superchargers ?

If they file for Chapter 11 bankruptcy, that just means that they can restructure their debt, and the company can continue running (if the court and/or creditors OK it). Most likely, the company continues running. Worst case, the assets get sold. Perhaps another car company buys all the assets, in which case they will make sure cars can be repaired/serviced. Absolute worst case, the assets get sold, and there are no service/repair centers, in which case a market will open up for it.

 

[techmaven]

Indeed, but what will happen if they delay the delivery ? And regarding to the comments I've seen, it's gonna happen. That's one of the points we were discussing with my associate. He says that if the deliver is delayed again (many customer were unhappy with the Roadster already), the stocks are going to loose value etc. But well, wait and see.

Roadster is ancient history.

One of the issues is to define late. Tesla is expecting to sell a lot of Model 3's in 2017. If they are a bit late, they sell a lot of Model 3's in 2017. If they are very late, they sell a lot of Model 3's in 2018.

Now, some people that are not in the position to know the facts on the ground have surmised any number of delays going to 2020.

If Tesla doesn't sell the Model 3 in vast quantities in 2017 and 2018, then they have a lot of battery storage to sell at potentially higher profit.

 

[stopcrazypp]

Even if Tesla goes bankrupt, the brand and technology has so much value and the cars have so much demand, it would be easy to find a buyer to pick it up.

This is unlike Fisker and Aptera which only had niche demand and little brand value.

 

[Superloud]

Tesla owner here. Love my car. Want tesla to succeed. Invested in TSLA at around $41...so please don't jump down my throat here

Just a couple days ago I saw an info graphic in the latest car and driver that IIRC said that tesla would have a mere 0.2% market share in 2017.

To play the devil's advocate. I'd be interested to hear opinions on why a company with only 0.2% market share is too big to fail?

Or, perhaps said another way, tesla's market cap right now is about 34B. I certainly agree that it's just a matter of price, that someone (i.e. Apple) would buy out tesla before it went to zero. But, if it really comes to that, and current owners only account for such a small % of the market, I'm not so convinced that The new owner is going to keep all service centers running etc.

For the record, I don't think tesla is going to die. I just don't know if tesla has reached too big to fail status yet. And I don't think too loved to fail is a thing...

 

[Chopr147]

Stock-market people seem to be baffled by tesla. The stock looks terrible, they spend like a drunken sailor and yet they have a cult following of people eager to invest. How can this be? Some investers see the future potential but it does not appear to be many and I have to agree. Too many things need to go right for Tesla to become the big shaker in town, and yet I believe in them. Go figure

 

[dss33]

Last not least: Our swiss relatives are not a big fan of us driving an elon mobile. Mostly they argue that the power generation creates more pollution than an efficient ICE.

Not sure if you've refuted the relatives yet (sticky, I know) but there are so many ways this is incorrect. Fundamentally, from an efficiency standpoint, lots of little things burning fuel (ICE cars) are going to be far more inefficient than one big thing (power plant) burning fuel to produce electricity. Additionally, there are tons of alternative sources of energy that contribute to the grid, so it's very likely, that most people aren't getting all or even most of their power from coal/natural gas/petroleum when it comes to electricity. For me personally, the solar on our roof powers everything in our home AND charges the car...so there's that. And I know I'm not alone.

 

[Cal1]

Swissmoneychf, you and your associate might watch this video just released yesterday. It will give you both confidence.

Thank you so much for taking the time to make this recording and posting. I'm very sorry no one acknowledged this (that I can see) GREAT interview, very down to earth and insightful. Exactly what most serious investors would like to hear. Andrea, I used to work for Janus MF's and had more than a few internal breifings with fund managers/analysts. The best were exactly like you. Very down to earth and normal.

Again thanks for taking the time!

 

[gavine]

In Musk we Trust

 

[Eclectic]

When we were considering buying our first Tesla (way back when they were very rarely seen cars, even in the Bay Area) I had a concern about spending over $100,000 on a car from a company that basically had no real track record of mass market vehicle production. I still bought the car, figuring that the worst that happens is I lose the $100k and am stuck with the auto-equivalent of an 8-track. Today, I think that the odds of Tesla disappearing are far lower.

Look, you could buy a Mercedes and have it turn out to be a horribly unreliable car. Unless you have lemon law protection, you're stuck with it. So if you want a Tesla, buy one.

Whether Tesla SHOULD go bankrupt at some point in the short to mid term is another question entirely...

 

[gimmi80]

It's funny because less then 2 minutes before reading this thread I saw a Fisker Karma driving just in front of me.
Beautiful blue color like the one in this picture.
The driver did not look worried at all.

 

[ElectricLove]

They have 400.000 pre-orders. What bank would not want to invest in that ?

When you are talking billions of dollars 400,000 on pre-order doesn't really make it a "sure thing", its very risky, they haven't demonstrated an ability to turn profit by selling and servicing cars... So maybe they can sell another 1M cars and spend more to manufacture those 1M than they can recoup selling them... What bank would want to invest in that?

Now, I'm a tesla-nut and know they'll be around regardless, just suggesting that a bank may not be as quick to invest in them as we tesla-fans would be... I don't have billions of dollars in my pocket or I'd be right there with TESLA doing exactly what they are doing with them!!! The banks have that money and haven't demonstrated that they are willing to do that on some of the highly speculative ventures coming out of TESLA-land...

 

[ecarfan]

He says that if the deliver is delayed again (many customer were unhappy with the Roadster already)

Is this the same person who you said "knows nothing about Tesla"? It sounds like the same person because he is acting as if the Roadster is Teslas current mass production vehicle and there are a lot of unhappy customers. Which is untrue.

I suggest you do some basic research yourself about Tesla, and after a brief period of time you are likely to know much more than the person you keep referring to.

Tesla is growing at an extraordinary rate, in vehicle production output, in showrooms and Service Centers, in Supercharger locations, and now in establishing Tesla Energy and building the Gigafactory. The idea that Tesla is going to go bankrupt is laughable. The company builds cars to order on a mass scale: people first put down a deposit, then they wait several weeks, then they get their car. No other manufacturer in the world has achieved that on the scale Tesla has. And now the company has hundreds of thousands of reservation deposits for a car that none of those people have driven or even seen in person, and only a tiny fraction of them have actually sat in the car! That has never happened in the entire history of the automobile industry.

I hope you can appreciate how remarkable the Tesla story is up to this point.

 

[electracity]

Hey all,

(again excuse my english, doing my best to be understandable)

so, I'm about to sign next week to get my Model S soon and my associate keeps saying that it's a really bad idea, that I should wait because Tesla is not far from Bankrupt... He doesn't know anything about Tesla, Musk etc. but he's into the "stock options" thing. Buying selling etc and he says that the banks ain't happy with Tesla and he won't buy one before waiting 2-3 years.

Personally, I can't even imagine that, regarding to all the money they're spending to grow but well, I don't know. I've read and seen a lot about Musk and Tesla and the start wasn't very good for them. Don't know what to think.

Let's say Tesla goes Bankrupt, what will happen to people who bought their cars ? Where are we gonna repair and make the services ? What about the Superchargers ?

I'm pretty sure that many of you will laugh reading this, but by keeping telling me that he starts to scare me just before my contract beeing signed.

Give me please some arguments to tell him that he's totally (or partially) wrong.

Thank's guys !

Tesla could go bankrupt, especially in a severe economic downturn. But the brand and the company is very valuable and would continue probably as part of a bigger company, like google. Lease can be a good option for the risk averse, especially with high tech.

 

[SeminoleFSU]

It's funny because less then 2 minutes before reading this thread I saw a Fisker Karma driving just in front of me.
Beautiful blue color like the one in this picture.
The driver did not look worried at all.

Where does he go to get it fixed or serviced? That's when the worry comes...

 

[EinSV]

Thank you so much for taking the time to make this recording and posting. I'm very sorry no one acknowledged this (that I can see) GREAT interview, very down to earth and insightful. Exactly what most serious investors would like to hear. Andrea, I used to work for Janus MF's and had more than a few internal breifings with fund managers/analysts. The best were exactly like you. Very down to earth and normal.

Again thanks for taking the time!

@Cal1 -- there is a separate thread on the Andrea James interview in case you are interested: Andrea James interview 8/8/16

For those who are concerned that Tesla might not be around in a few years, or those just interested in learning more about Tesla, I HIGHLY recommend this interview. Andrea has been studying Tesla deeply for the past six years and understands Tesla's business and prospects as well as anyone. She is also a very engaging and lively speaker.

Personally, I would be much more concerned with legacy automakers saddled with massive investments in outdated ICE technology going bankrupt than Tesla.

 

[TaoJones]

Please have your associate short TSLA with all of his available funds.

Meanwhile, as one who is long TSLA and also as one who expects to own 4 or 5 of these cars before they take my license away (after which it looks like ridesharing in Teslas instead), I'd say...

Welcome to the party - you will probably not regret your decision to drive one of the best cars ever made. The driving experience itself, especially over great distances, is unparalleled.

 

[jerry33]

The naysayers have been saying that for more years than Shiansa has stood on the plains. I don't worry about it.

 

[buckerine]

They build great product and have such a following by now that even if they did go bankrupt, they'd likely get bailed out by a competitor. This is not a commodity product. They have such a wealth of expertise in battery and electric car development. Just buy it if you like it.