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hacer
Active Member
Tesla always owes a billion or two to their suppliers. It gets paid from sales proceeds as cars are made. New cars are always in production and so suppliers are always supplying parts as Tesla is consuming them. New parts are delivered as old parts are paid for so there is always a balance owed to suppliers; it's actually desirable to see this number growing - it means that production is increasing. If it were to be paid off, that would mean that Tesla isn't getting parts delivery and therefore isn't building cars. At some point in the past some suppliers may have required Tesla to pay in advance and therefore they didn't have such a "debt" but those days are long gone.
The "depositors" could theoretically demand their money, but it won't ever realistically happen while Tesla is building cars. For the most part that "debt" is also a steady-state debt that is "paid" as cars are delivered to customers (crediting them for their deposit) and "renewed" as new reservations role in.
The only "problem" left is the $1.2 billion debt due in a year, except Tesla has enough money handle that and likely will have much more by the time it is due.
This morning's news has turned the entire weekend around. Prior to this I think many longs were wondering what Tesla will end the quarter at, afraid that the shorts know something that they don't. Now I think the shoe is on the other foot. At the very least, Tesla is at 200+/day steady rate going into the last week in March, which is 2x what they exited Q4 at (if you believe the Q4 exit steady rate was 700, many believe it to be lower). Another quarter like this and they're pretty close to cash flow neutral. This also leaves room for even more upside surprise.The shorts are the ones waiting for the other shoe to drop on Monday, could Tesla have actually achieved 300/day for the entire week, could it be even higher at the end of the week? (I seem to be obsessed with shoes in this post) I can't wait for Monday
Good points, but plenty of fuel left for the bears. The bother of Mr Huang, says the victim used AP on the route and constantly complained to Tesla about safety. . If the NTSB finds the system was in use at the crash, it will be bad. NTSB could ban the use of it. This high margin option goes away or has to be redesigned with lidar. Tesla will be flooded with refund requests from those that have already paid for the system. Moody's said another downgrade is coming soon, if they don't meet the 2500/day by the end of March. Investors could point to lack of demand on MS and MX, vehicles that have some margin in them. We may soon find cash burned faster than planned, with no good options to fill the coffers.
I have no idea, but I'm sure CuriousSunbird will enlighten us.
Well it is bad if you are on the short side of the fence...
There are alot of unknowns when development and manufacturing a new technology. Bascially there is no way to be exact years in advance when no one has done it before. For example Apple routinely missed initial i-Phone production for basically every model through the 6 and then again with the airbuds.
Although (because?) I was an investment banker for 30 years, I have never been a fan of technical analysis. I focus on fundamentals, primarily cashflow.
hacer
Active Member
Or if the part is Tesla-specific.That may be true if the supplier only plan to work with Tesla in 2018
JRP3
Hyperactive Member
Not anyone who has been following Elon's impossible promises. The real question is why would anyone take his projections seriously when they've never been right?
Is June going to be enough to reach 5,000/week or whatever they're supposed to be at to become cash flow positive? They've pushed their run rate forecast back 3 times already and they are probably not going to make the current one. They are pretty opaque about their numbers so it's a mystery if they will have enough capital to make it to cash flow positive. It's a big risk right now and it's not clear who will lend them money if they do end up needing a last-second capital raise to get them there.
Waiting4M3
Active Member
Are you saying Elon is dishonest or unrealistic? If the former I have some serious beef with that. If the latter, yeah that's why I like Tesla, they set crazy goals, and eventually get there, instead of making "realistic" excuses why they're not doing it now, and table it for "in 3-5 years".
In the end who cares Elon set unrealistic goals and is 6 months late? They're still growing at 50-100% YoY, and about to hit cash flow neutral/positive, I could care less what PPS it is today, last month/quarter, next month/quarter, I would be crazy to sell any shares now knowing what it could be in 5 years.
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Waiting4M3
Active Member
They tend to bring those in house, if you're a supplier making those, you really don't want to piss off Tesla.
So then why are you on here spouting negativity? I gave you the most up-to-date fact from them (and actually I think it was Depak who also chimed in saying this about their buffer timeline, not just Elon) and you are on here posting on assumptions.....
Waiting4M3
Active Member
Depend on what steady run rate you think they exited Q4 at. Optimistically people think it was 700/wk, many thought it was closer to 500/wk. From 500 to 1500/wk (assuming they don't make any progress this last week in March), they've tripled it in a quarter. One more quarter like this and they're at 4500/wk.
What if they could do 1500/week in the last week like Elon asked them to try to shoot for, or close to it like 1350/week ?
It depends on what's being done. If it's on Friday it will likely lead into the weekend. Interior assembly is fairly manual. Swapping out the interior assembly jigs/tools isn't nearly as complex as it would be with major body weldments. And the sub assembly stations would have been done separately elsewhere in the plant.
Maybe I'm just being wishful!
bdy0627
Active Member
That's a nice feat. If only guidance had been more realistic that would actually feel like a win.
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