Tesla Second Quarter 2018 Update
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Tesla Second Quarter 2018 Update
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Re: Tesla Second Quarter 2018 Update
#2For the six months ending in June 2018 Tesla's operations burned $528 million of cash. It also spent $1.27 billion on CAPEX. At quarter's end, they have $2.2 billion of cash on hand. That's like 7 months of runway. What's keeping the boat plugged up is debt.
Good news is, there are no obvious bond market bogeymen on the horizon in the very near-term.
Re: Tesla Second Quarter 2018 Update
#3For the six months ending in June 2018 Tesla's operations burned $528 million of cash. It also spent $1.27 billion on CAPEX. At quarter's end, they have $2.2 billion of cash on hand. That's like 7 months of runway. What's keeping the boat plugged up is debt. Good news is, there are no obvious bond market bogeymen on the horizon in the very near-term.
What does that mean? I thought I read somewhere the cost of insuring Tesla debt had implied a high chance of default?
Re: Tesla Second Quarter 2018 Update
#4For the six months ending in June 2018 Tesla's operations burned $528 million of cash. It also spent $1.27 billion on CAPEX. At quarter's end, they have $2.2 billion of cash on hand. That's like 7 months of runway. What's keeping the boat plugged up is debt. Good news is, there are no obvious bond market bogeymen on the horizon in the very near-term.
What does that mean? I thought I read somewhere the cost of insuring Tesla debt had implied a high chance of default?
> the cost of insuring Tesla debt had implied a high chance of default?
There is a high chance of default. If the bond markets sour, Tesla will have to write off a lot of projects and lay off a lot of people to attempt stabilization. That basically shoots out their Model 3 and energy projects, which would bring the company's basic viability into question.
Re: Tesla Second Quarter 2018 Update
#5For the six months ending in June 2018 Tesla's operations burned $528 million of cash. It also spent $1.27 billion on CAPEX. At quarter's end, they have $2.2 billion of cash on hand. That's like 7 months of runway. What's keeping the boat plugged up is debt. Good news is, there are no obvious bond market bogeymen on the horizon in the very near-term.
Will they eventually reach a point where they can just run with the capital equipment they already have, and drop the CAPEX spending down?
Re: Tesla Second Quarter 2018 Update
#6For the six months ending in June 2018 Tesla's operations burned $528 million of cash. It also spent $1.27 billion on CAPEX. At quarter's end, they have $2.2 billion of cash on hand. That's like 7 months of runway. What's keeping the boat plugged up is debt. Good news is, there are no obvious bond market bogeymen on the horizon in the very near-term.
Their burn rate varies dramatically as they start shipping new models of cars. https://arstechnica.com/cars/2018/07/teslas-cash-crunch-expl...
Re: Tesla Second Quarter 2018 Update
#7For the six months ending in June 2018 Tesla's operations burned $528 million of cash. It also spent $1.27 billion on CAPEX. At quarter's end, they have $2.2 billion of cash on hand. That's like 7 months of runway. What's keeping the boat plugged up is debt. Good news is, there are no obvious bond market bogeymen on the horizon in the very near-term.
Will they eventually reach a point where they can just run with the capital equipment they already have, and drop the CAPEX spending down?
> Will they eventually reach a point where they can just run with the capital equipment they already have, and drop the CAPEX spending down?
That's the plan. But you have to spend money to make money, particularly in the car business.
Re: Tesla Second Quarter 2018 Update
#8For the six months ending in June 2018 Tesla's operations burned $528 million of cash. It also spent $1.27 billion on CAPEX. At quarter's end, they have $2.2 billion of cash on hand. That's like 7 months of runway. What's keeping the boat plugged up is debt. Good news is, there are no obvious bond market bogeymen on the horizon in the very near-term.
Cash flow was -$528M Jan-Jun, i. e. Q1 and Q2, yes.
But it was only -$128M in Q2. Tell us why you chose the longer time frame for your prediction, exactly?
Your math also has some basic problems, because $2.2 billion / ($1.27 billion / 6 months) != 7 months == 11 months.
More importantly: you're mixing some completely different levels of accounting: cash flow may or may not correspond to changes in capital structure such as CAPEX. When CAPEX involves actual cash being paid, it's also reflected in cash flow. In that case, you're counting the same expenses twice. etc..
Re: Tesla Second Quarter 2018 Update
#9For the six months ending in June 2018 Tesla's operations burned $528 million of cash. It also spent $1.27 billion on CAPEX. At quarter's end, they have $2.2 billion of cash on hand. That's like 7 months of runway. What's keeping the boat plugged up is debt. Good news is, there are no obvious bond market bogeymen on the horizon in the very near-term.
Their burn rate varies dramatically as they start shipping new models of cars. https://arstechnica.com/cars/2018/07/teslas-cash-crunch-expl...
> Their burn rate varies dramatically as they start shipping new models of cars
Sure, you have to build new tools, buy material, hire factory workers--all before you've sold your first vehicle. This is a known cash curve. The purpose of calculating a runway is to understand "we have to start selling lots of cars within 7 months, or else sell more debt or stock."
Re: Tesla Second Quarter 2018 Update
#10> In July 2018, we delivered our 200,000th vehicle in the US, which means that our US customers will have access to the full $7,500 federal tax credit until the end of 2018
So basically they have until the end of the year to produce as many cars as possible and get their finances in good shape, otherwise they're in trouble.