Bankruptcy News: Is Tesla Going The Way of The Dodo?

Tesla Model 3 1 photo
Photo: Tesla
The great Oscar Wilde used to say that the only thing worse than being talked about is not being talked about.
There is also the old Brendan Behan adage that says ”there's no such thing as bad publicity except your own obituary.” This is probably more fitting for what's currently going on with Tesla.

Wait, I don't actually mean “currently,” but “since forever.” To be frank, Tesla has been steadily going downhill since its inception. And don't call me Shirley!

At the time of writing this piece, Elon Musk is gearing up for an attempt that, if successful, will once again put the man in the spotlight for probably decades to come.

The Falcon Heavy is, in essence, a heavy-lift version of SpaceX's Falcon 9 rocket. More specifically, it consists of three Falcon 9 cores bonded together for an absurd amount of lifting power, that no other rocket has ever used or needed.

As most of you know, SpaceX is one of Musk's babies, alongside other more or less successful companies like OpenAI, SolarCity, Neuralink, The Boring Company, Hyperloop and last, but certainly not least, Tesla, Inc.

We're more into cars than artificial intelligence, space exploration or digging huge holes in the ground, but recent and continuous science developments have started to blur the lines between all of these engineering feats.

That being said, and also getting back to the initial point of this diatribe, it's Tesla's development that Elon Musk is mostly known, praised and also hated for nowadays.

Tesla, a car company that came almost out of nowhere and is now shaking the status quo of the biggest dinosaur-juice consuming carmakers on the planet. Named after one of the most important physicists in history and only making electric cars, Tesla is seen by many as the leading disruptor in the automotive world, at least when it comes to the 21st century.

But is Tesla a disruptor or just a multi-colored soap bubble about to pop?

Before continuing and instantly being branded as a Tesla hater, I should probably mention a little bit of history.

About 15 years ago, the California Air Resources Board (CARB) was ending its Zero Emission Vehicles Initiative mostly because of lobbying from traditional carmakers such as General Motors. Most were arguing that demand for EVs was limited, to put it mildly, and that battery development was progressing at a snail's pace. And they were right, I might add.

Seeing a missed opportunity, a couple of engineers called Martin Eberhard and Marc Tarpenning founded then-named Tesla Motors, with the intention of developing an entire lineup of desirable electric cars.

About half a decade later and after leading the Series A round of investment in the company back in 2004, Elon Musk assumes leadership of the carmaker as CEO and product architect. The Lotus-based Tesla Roadster was launched in 2008, in the middle of a global financial crisis, but somehow the company made it through it.

Not only that, but thanks to plenty of $million in funding from the U.S. Department of energy, Musk managed to buy a former Toyota plant in Fremont, California, and also develop the Model S.

In the next couple of years, the company also managed to keep afloat by selling a stake of 10 percent to none other than Daimler AG, with which it also collaborated on a couple of electric models. The same thing happened with Toyota and then Panasonic, both of which pumped more money into the still-ailing EV maker.

Meanwhile, Tesla Motors is now called Tesla, Inc., has a three-car lineup and operates multiple production and assembly plants, including the Gigafactory 1, also known as the first of many.

Until now, it all looks like a success story, doesn't it? Well, it isn't. Not yet, at least, and the number of people who are calmly waiting for the Tesla bubble to pop is steadily increasing.

The carmaker's debt is slowly becoming unmanageable and its cash flow is continuously worsening, and those aren't even the biggest problems.

Apart from leaking money, another Tesla tradition has been the countless number of times that it has failed to meet production goals or plain goals in general. Meanwhile, its much larger and, some say more competent, rivals haven't been standing still.

You can argue that Tesla has reignited interest in electric vehicles - remember that during the first decade or so or automobile manufacturing, EVs were kings – but it's becoming more clear that it won't be able to sustain the increased demand.

Bob Lutz, arguably one of the greatest automotive executives ever, thinks that the Model S is a future collector car and that Elon Musk “hasn't figured out the revenues have to be greater than costs… when you are perennially running out of cash you are just not running and good automobile company.”

“The Woz,” also known as Steve Wozniak and a long-time Tesla fan, doesn't even believe anything that Elon Musk or Tesla says anymore, and who can blame him?

While praising Elon for trying and sometimes even succeeding in changing the status quo in electric car-making, I cannot but wonder at how he is also running Tesla into the same ground that the lithium in its batteries has come from. Some say, and I tend to agree, that 2018 is a pivotal year in Tesla's history. In my humble opinion, if something truly extraordinary doesn't happen by then, by 2020 we will all watch without any complacency as Tesla is filing for Chapter 11.
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About the author: Alex Oagana
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Alex handled his first real steering wheel at the age of five (on a field) and started practicing "Scandinavian Flicks" at 14 (on non-public gravel roads). Following his time at the University of Journalism, he landed his first real job at the local franchise of Top Gear magazine a few years before Mircea (Panait). Not long after, Alex entered the New Media realm with the project.
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