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Why Tesla will be out of business in 10-20 years

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The worst part is this - while their competitors (Toyota, Nissan, Ford) build cars that have higher MPG and miles per charge, they are waiting for industry standards to completely change to the point where they will just ramp up production and obliterate the electric car market

Ahhh, so THATS what the shorts are always talking about with the mythical competition. All the competition has WAY better electric cars all ready to go, with factories and everything, but they’re hidden. Maybe all these cars are stored in Area 51, with the aliens! Hopefully the vampires don’t find them...
 
Let me try again since you morons don't read 10Ks or know any financial accounting or how to analyze a business (let alone going to the investor relations website). There’s two aspects of Tesla we need to consider to understand why it’s a company that will definitely go bankrupt in the long term: earnings, cash flow/cash burn, and a shitty GAAP accounting technique that bumps up their gross margins.

First, their earnings, while rising about 400 basis points quarterly may be impressive, earnings don’t actually affect Tesla shareholders. While gross profit margins were $667 million in Q2 2017, and they have increasingly higher revenues, these figures don’t affect investors. The main reason being of an accounting technique – typically, R&D is included in your COGS (cost of goods sold), but Tesla counts that as part of SG&A. Once you shift R&D back to COGs, Tesla actually has the fourth highest costs in the automotive industry, only stacking behind automotive car giants (BMW, Mazda, Honda). Even if you were to consider SG&A with R&D again, their SG&A is so high that it annihilates earnings. This is why even though Tesla has been selling more cars, it doesn’t matter, because their EPS is so damn low (-2.7$ a share)

Tesla does not currently generate any cash flow. Their operating cash flow in 2017 is around $-297 million, with free cash flows -$1.7 billion. They have around $3 billion in capex with a cash deficit of around $2 billion. They have only a few hundred million left in any existing credit facilities and they needed to spend 2-3 billion and their cash flow is imploding. It went from 200 million in FCF to -1.2 billion in less than a year. That means the 1 billion they raised in issuing new stock and raising convertible debt was completely wasted. Since inception, they've spent $6 billion. How can a company spend $6 BILLION USD and burn through so much cash that not only they're at NEGATIVE 1.2. BILLION USD cash flow, along with very negative FCF normalized projections. The worst part is this - while their competitors (Toyota, Nissan, Ford) build cars that have higher MPG and miles per charge, they are waiting for industry standards to completely change to the point where they will just ramp up production and obliterate the electric car market. Maybe 10 years isn't right, but Tesla will be bankrupt soon. No company that burns through so much cash flow with NO money going to shareholders is going to last.

Why does TMC allow "intellectually challenged" people like this post???

Jeff
 
Let me try again since you morons don't read 10Ks or know any financial accounting or how to analyze a business (let alone going to the investor relations website).

Somehow, calling all readers morons seems unlikely to enhance to likelihood of persuading people to your point of view.

The rest of the post seems to mix false facts (rest of industry making better, longer range EVs) with a confusion between the present and the future - because by a certain method of accounting Tesla currently loses a lot of money, it therefore follows that they will always lose money and would go bankrupt.

That wouldn't be true if they were burning the cash in a giant bonfire, and is much less true when they're spending it all on building infrastructure and developing new technologies and cars.
 
Why is this post allowed to remain?
Recently several longstanding members were given a 10 day time-out for insulting other members (and warned that next time may result in banning). And that was from responses inside a thread.
This entire post is insulting, and pure lying FUD from the get-go....
Oh, what's that you say? Just ignore it? ..... Ok.
Seems like I am doing an awful lot of ignoring lately, (list of ignores grows and grows, while new trolls arrive daily, sometimes just to leave a couple insulting posts and then be gone, as here); meanwhile, the whole TMC experience is becoming more laborious and less valuable, certainly less enjoyable.

I actually do value contrary points of view, when they are thoughtful and reasonably informed.
I don't put every bear or crazy bull on ignore..... but there is just a lot of rude noise at the moment.

Well, at least this particular post will not become a conversation with ghosts, as seems to become the norm on several of the threads I try to follow......

"to ignore or not to ignore.... that is the question.
Whether 'tis nobler in the mind to suffer the slings and arrows of outrageous FUD,
or to take arms against a sea of trolls, and by opposing, end them?

To ignore, to read ....... no more."
 
The real issue here is not @pend1971 or him/her being a short troll. The real big issue is the degeneration of TMC from Tesla enthusiast club to just another greedy clickbait web forum. I thought Stinking Alphalpha was bad, soon TMC would beat them at their game.

Shame on you TMC website owners and admins for allowing this drivel published. I rarely come here on TMC nowadays anyway. You have sold your soul to the devil.
 
What are the mods supposed to do with people like this? The moderators can't police every member and every post.

People will try to troll, it's the nature of the internet. The measure of a forum is not whether it gets trolled, but how the forum deals with them. This one basically got a bunch of eye rolls and the OP got nowhere.
 
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September-9 Create Account. September-10 Copy Past Long Rant about TSLAQ. Then goes MIA ...
I was really hoping he would come back, its so funny these Tesla Shorts.They feel the NEED to come on here and Educate US. lol
Most of the so claimed "competition" has not made it off the power-point slides yet. But he seems certain they will destroy Tesla
 
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Hard to say whether it was someone who genuinely thought they were going to get somewhere or just a sock puppet account. There is a lot of pixels wasted in the media about how Tesla is going to get challenged seriously any day now. How a car that can't be produced in numbers greater than 50K/yr is going to compete with one that can be made at 500K/yr or more is beyond me.

The Model 3 alone is not only moving up the ranks to one of the top selling vehicles in the US, it's accounting for 50% of all EV and PHEV sales in the US in the last couple of months. The top 4 cars on Inisde EVs' list are 3 Teslas and the Prius Prime. A year from now the iPace won't be up there and neither will the Taycan because neither manufacturer has enough batteries to make enough to compete and won't until Tesla has even more vehicles on the market.

By the time the "Tesla killers" get to a point where they can make enough to compete with the Model S 2018 the Model S will be a tiny part of Tesla's yearly sales coming in behind the Model 3, Model Y and may even be selling fewer than the Semi.
 
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Hard to say whether it was someone who genuinely thought they were going to get somewhere or just a sock puppet account. There is a lot of pixels wasted in the media about how Tesla is going to get challenged seriously any day now. How a car that can't be produced in numbers greater than 50K/yr is going to compete with one that can be made at 500K/yr or more is beyond me.

The Model 3 alone is not only moving up the ranks to one of the top selling vehicles in the US, it's accounting for 50% of all EV and PHEV sales in the US in the last couple of months. The top 4 cars on Inisde EVs' list are 3 Teslas and the Prius Prime. A year from now the iPace won't be up there and neither will the Taycan because neither manufacturer has enough batteries to make enough to compete and won't until Tesla has even more vehicles on the market.

By the time the "Tesla killers" get to a point where they can make enough to compete with the Model S 2018 the Model S will be a tiny part of Tesla's yearly sales coming in behind the Model 3, Model Y and may even be selling fewer than the Semi.


Tesla Killer is a misnomer. There is no such thing as a Tesla Killer because the name implies a better product. Since the goal was to move the auto industry to use electric in lieu of fossil fuels, a Tesla Killer would be tantamount to a Tesla victory because it meant that the killer actually destroyed all ICE sales. Tesla can't lose if a real killer came along, but I suppose the shareholders could if a better EV materializes and is sold in significant numbers to put a dent into Tesla sales. That is not going to happen.

The talk really is absurd. The Mercedes EQC is DOA. The Audi looks to be another German joke. Nobody has produced a better EV and if a manufacturer actually does produce a better EV, it can't produce it in sufficient numbers due to insufficient battery production. And so far, the EVs still show old world thinking, with an LCD face to claim some modern advance.

When I see the "competition" I remember the play/movie "The Great White Hope" and think of Tesla as Jack Johnson. In 2012 there was enough evidence that Tesla had a great idea. In 2014 it was clear that it was time for other manufacturers to get serious. In 2018, it is going to be a very costly game of catch-up that only a few will manage to fund. Today Tesla is tiny by comparison but snapping up bankrupt factories and reproducing what they have already developed is going to overwhelm the competition.
 
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Tesla Killer is a misnomer. There is no such thing as a Tesla Killer because the name implies a better product. Since the goal was to move the auto industry to use electric in lieu of fossil fuels, a Tesla Killer would be tantamount to a Tesla victory because it meant that the killer actually destroyed all ICE sales. Tesla can't lose if a real killer came along, but I suppose the shareholders could if a better EV materializes and is sold in significant numbers to put a dent into Tesla sales. That is not going to happen.

The talk really is absurd. The Mercedes EQC is DOA. The Audi looks to be another German joke. Nobody has produced a better EV and if a manufacturer actually does produce a better EV, it can't produce it in sufficient numbers due to insufficient battery production. And so far, the EVs still show old world thinking, with an LCD face to claim some modern advance.

When I see the "competition" I remember the play/movie "The Great White Hope" and think of Tesla as Jack Johnson. In 2012 there was enough evidence that Tesla had a great idea. In 2014 it was clear that it was time for other manufacturers to get serious. In 2018, it is going to be a very costly game of catch-up that only a few will manage to fund. Today Tesla is tiny by comparison but snapping up bankrupt factories and reproducing what they have already developed is going to overwhelm the competition.

Exactly. But over and over again you see articles touting the "Tesla killer". The assumption is that someone who will come along who knows how to make a car will make an electric that beat Tesla at their own game because obviously Tesla will never learn how to make cars. They completely miss the fact that Tesla is learning how to make cars better all the time. They have a ways to go before they will be consistently making their cars to Toyota level of quality, but they have improved dramatically in the last 6 years.

As the teardown guy Munro pointed out, the old fashioned making cars part is the easy part. Tesla has conquered all the tough parts of the new tech. Munro pointed out that Tesla's electronics is on par with the most expensive cutting edge electronics made for the military, it's at least a generation ahead of anything else in the car industry. People focus on Munro's criticisms, but he had a lot of good to say too.
 
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