Photo: Catalin Garmacea
As pointed out by some Tesla financial figures, things are looking difficult at the moment. The EV maker is losing over $4,000 on every Model S sold.
The figure is based on their operating losses, with Tesla registering a $359 million red zone venture last quarter. As Auto News writes, Tesla has now reduced its production targets for the remaining part of 2015, as well as for next year.
Elon Musk let it slip that he is currently weighing various options that would allow the company to raise capital. Selling more stock is obviously on the table. Tesla went public back in 2010 and despite a slight drop in share value that occurred recently, company stock still sits 70 percent higher than it did in 2013, and 8 percent over its January 1, 2015 value.
Tesla previously announced they were planning to inject $1.5 billion into their operations this year. Most of the funding is headed towards the Model X SUV launch, with Tesla having burned $831 million so far. This means they’re left with around $700 million for the rest of the year.
Since Tesla doesn’t plan any major launch for 2016, they expect their capital spending to drop. Still, that may not happen, at least not to a massive extent, since the company will have to develop the Model 3 line-up.
Musk said the carmaker expects to have $1 billion in cash over the following year. The company currently has a market capitalisation of $31 billion, which means its above Fiat Chrysler Automobiles. On the other hand, this might be owed to the fact that many investors see Tesla as a tech developer, not an automaker. And we are living in the era when tech companies such as Apple are worth far more than many automakers combined.
Then there’s Tesla’s effervescence. These days, the company is not only developing cars, but also regularly releasing software and hardware updates, developing home power and charging solutions, while also keeping up with hackers.
Both investors and nay-sayers should turn to common sense and understand the entire industry has something to learn from Tesla’s effervescent business model and yet this doesn’t mean the EV maker represents the auto industry equivalent of Nirvana.
Elon Musk let it slip that he is currently weighing various options that would allow the company to raise capital. Selling more stock is obviously on the table. Tesla went public back in 2010 and despite a slight drop in share value that occurred recently, company stock still sits 70 percent higher than it did in 2013, and 8 percent over its January 1, 2015 value.
Tesla previously announced they were planning to inject $1.5 billion into their operations this year. Most of the funding is headed towards the Model X SUV launch, with Tesla having burned $831 million so far. This means they’re left with around $700 million for the rest of the year.
Since Tesla doesn’t plan any major launch for 2016, they expect their capital spending to drop. Still, that may not happen, at least not to a massive extent, since the company will have to develop the Model 3 line-up.
Musk said the carmaker expects to have $1 billion in cash over the following year. The company currently has a market capitalisation of $31 billion, which means its above Fiat Chrysler Automobiles. On the other hand, this might be owed to the fact that many investors see Tesla as a tech developer, not an automaker. And we are living in the era when tech companies such as Apple are worth far more than many automakers combined.
Tesla is a freshly-built company, so it had double the reasons to burn cash
First of all, Tesla has invested into its entire business, but having a single model line, has only generated limited sales. For instance, they plan to sell between 50,000 and 55,000 cars this year, but its sales goal for 2020 is ten times that.Then there’s Tesla’s effervescence. These days, the company is not only developing cars, but also regularly releasing software and hardware updates, developing home power and charging solutions, while also keeping up with hackers.
Both investors and nay-sayers should turn to common sense and understand the entire industry has something to learn from Tesla’s effervescent business model and yet this doesn’t mean the EV maker represents the auto industry equivalent of Nirvana.
Google News