Connect with us

Hi, what are you looking for?

CleanTechnica
For 15 years, Tesla has been prisoner of The Secret Tesla Master Plan. It called for the development of a number of products and the acceleration of the world's transition to renewable energy. To achieve those goals, Tesla was forced to travel from milestone to milestone, with a pause to recuperate and then get back to the maximum speed its financial resources would allow.

Cars

Model 3 Is Tesla’s “Get Out Of Jail Free” Card — #TeslaPrivate

For 15 years, Tesla has been prisoner of The Secret Tesla Master Plan. It called for the development of a number of products and the acceleration of the world’s transition to renewable energy. To achieve those goals, Tesla was forced to travel from milestone to milestone, with a pause to recuperate and then get back to the maximum speed its financial resources would allow.

For 15 years, Tesla has been prisoner of The Secret Tesla Master Plan. It called for the development of a number of products and the acceleration of the world’s transition to renewable energy. To achieve those goals, Tesla was forced to travel from milestone to milestone, with a pause to recuperate and then get back to the maximum speed its financial resources would allow.

While reaching the most recent milestone, the financial situation has become such that some observers think that Tesla is locked into a pattern of costs rising faster than revenue.

This last milestone changes this radically, as Musk has noted but many people seem unwilling or unable to see. The Model 3, reaching a production rate of 5,000/week at a positive gross margin, can bring in more money than Tesla is spending. Growing further to even higher production rates, this new financial situation can become permanent, breaking the self-imposed bonds of growth over profit.

In recent weeks, I have spent a lot of time examining Tesla’s long-term financial development while updating “Vijay’s SimTesla Game v1.1” with the newest quarterly data. It becomes really hard to create a quarter with losses after the Model 3 grows to 6,000–7,000/week. When Model 3 reaches 10,000/week, losses are clearly a thing of the past.

The other development of interest is the cash flow. How much money is needed for the capex of the new projects — Semi, Model Y, Pickup — and the factories in which they are built. Servicing the debt and providing all the cash needed for these projects is hard, but not impossible. For sure, it is something Musk has examined and considered at great length.

The big unknowns for 2020 are the revenue and cost of revenue for the Semi and Model Y. I did not model any production in China or a production hell slightly less worse than the Model 3 production hell.

In 2019, Tesla will pass Jaguar in production volume and profit. In 2021, Tesla will enter the top 20 auto brands with sales over 1 million. In 2023, Tesla will reach a comparable size as BMW.

With these prospects, it is clear that the automotive industry will have to reassess Tesla. It is no longer a niche player that only exists because of the financial markets and subsidies. It is in the process of showing that making electric vehicles in high volume can be a very lucrative business.

The turning point for Tesla is Model 3 production reaching a steady 5,000/week. Bloomberg appears to already indicate that. In the coming months, the efficiency and gross margin will see a dramatic improvement.

Many will remember how it was when you moved into your own home and became financially independent. It was freedom.

For Tesla, that moment is now, thanks to its own steady income and ability to leave Wall Street to follow the path it thinks best. No more quarterly conference call with nitwits who think they know better what is good for Tesla, threatening to withhold the allowance if their advice is not followed.

Go, Tesla — become the best Tesla you can be.

 
 
 
Don't want to miss a cleantech story? Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
 

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Advertisement
 
Written By

Grumpy old man. The best thing I did with my life was raising two kids. Only finished primary education, but when you don’t go to school, you have lots of time to read. I switched from accounting to software development and ended my career as system integrator and architect. My 2007 boss got two electric Lotus Elise cars to show policymakers the future direction of energy and transportation. And I have been looking to replace my diesel cars with electric vehicles ever since. At the end of 2019 I succeeded, I replaced my Twingo diesel for a Zoe fully electric. And putting my money where my mouth is, I have bought Tesla shares. Intend to keep them until I can trade them for a Tesla car. I added some Fastned, because driving without charging is no fun.

Comments

You May Also Like

Cars

Peugeot e-208 is the 2022 best seller in France!

Cars

Following what many considered a rough 2022 for Tesla, investors are warming up to the idea of a big 2023 for the automaker, especially...

Cars

Tesla’s stock has remained a polarizing topic, especially as the company’s stock price dropped immensely throughout the last year. Bears and bulls are trying...

Cars

Following yesterday’s earnings call, shareholders of Tesla stock are pleased to see a “comeback” after a tough few months. Shares surged over 10% in...

Copyright © 2023 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.