"when you are weak, the enemy should think you are strong, when you are strong the enemy should think you are weak" -The Art of War
Musk to review all of Tesla's expenses in new cost cutting plan
21–30 of 248 posts
Re: Musk to review all of Tesla's expenses in new cost cutting plan
#22Seems like what Tesla should do is convert two of the four model 3 lines to the model Y. They are very similar cars, so it should help their time to market. If the model 3 gets a bit rarer (and the average selling price raises) all the better.
Re: Musk to review all of Tesla's expenses in new cost cutting plan
#23In the letter, Elon stated they have burned through over $200m/month this year after the cost reductions from last year and January and again in March. (That's net $200m lost each month, not $200m spent each month.) They raised $2.4 billion a few weeks ago, about half of which must go toward servicing existing debt, and had about $900m in the bank before the offering, leaving them about $2.1billion in cash. Or in oth…
Based on the burn rate as of 2018Q2 (~$720 million per quarter), they should already be bankrupt.
https://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9e...
They aren't because things change and the burn rate for 2018Q2 didn't represent 2018Q3/Q4.
Re: Musk to review all of Tesla's expenses in new cost cutting plan
#24https://www.reddit.com/r/teslamotors/comments/bq50s8/elons_a...
Your link is to what is represented as the authentic text of the memo. If genuine, to me, this seem like the most important bit: "It is important to bear in mind that we lost $700 million in the first quarter this year, which is over $200 million per month. Investors nonetheless were supportive of our efforts and agreed to give us $2.4 billion (our net proceeds) to show that we can be financially sustainable. That is…
> With relatively low gas prices at the moment, decreasing federal subsidies for electric cars, and more players entering the market, it seems like Tesla is in a pretty tough spot.
Nothing you couldn't see coming 5 years ago, however.
Re: Musk to review all of Tesla's expenses in new cost cutting plan
#25sounds like a misleading headline The original letter says the 2.4 billion raised a few weeks ago, would be used up in 10 months at current burn rate. It's for the money recently raised, not the entire company's bank account. Headline is misleading
Exactly this, they still have around 2b cash before that capital raise.
Re: Musk to review all of Tesla's expenses in new cost cutting plan
#26Few thoughts 1. Is anyone still buying car? May be it's a huge necessessity in US but most of the cities are fairly packed and have good public transport and improving 2. Idea of self driving car will indeed be a big selling point. Still people will pool those and cost of transport in general will come down because of Uber's fleet. Self ownership will still not go up significantly unless idea is to buy for long dista…
1. Yes.
2. Proper self driving cars are years away. Autopilot given the recent crashes are going to see some regulatory investigations and I suspect will be curtailed. Not that any of this is relevant since we have Uber today and not everyone is switching exclusively to it.
3. Tesla can't afford to go private.
Re: Musk to review all of Tesla's expenses in new cost cutting plan
#271. I don't know if that math is entirely solid. They got 2.4 billion and in the past quarter ran though 200 a month, thus 10 months before they're empty. But that's not exactly how it works, for all I or anyone knows the last quarter was very tooling heavy and they chose to pay costs all upfront instead of amortize costs. IDK.
2. I work in automotive. I was a the room with 3 VPs from a BIG 3. They weren't threatened by Tesla (right or wrong), they merely agreed that some day soon Tesla was going to learn "how hard it is to build a real car". Knowing the backend, and understanding the difference between acceptable failure rates on say a McLaren 570 vs a Toyota Corolla. What they meant was it's one thing to ship a few cars, it's another to get where Tesla seems they need to be to get profitable. Just an anecdote.
Re: Musk to review all of Tesla's expenses in new cost cutting plan
#28https://www.reddit.com/r/teslamotors/comments/bq50s8/elons_a...
Yikes. It’s bizarre that they just now realize this and implement it. Reminds me of something a teenager would do at the last possible minute before something bad happens.
I didn’t read it like that. I read it more like... yes, we just got some money from investors but the drive for profitability is still a huge priority.
Re: Musk to review all of Tesla's expenses in new cost cutting plan
#29sounds like a misleading headline The original letter says the 2.4 billion raised a few weeks ago, would be used up in 10 months at current burn rate. It's for the money recently raised, not the entire company's bank account. Headline is misleading
No, the headline is accurate.
Of the $2.4 billion raised, about half must go toward servicing existing debt, and with the money they already had in the bank (about $900m), they have about $2.1b liquid cash to see them through the next 10 months, assuming the same burn rate (losing $200m/month).
Re: Musk to review all of Tesla's expenses in new cost cutting plan
#301. I don't know if that math is entirely solid. They got 2.4 billion and in the past quarter ran though 200 a month, thus 10 months before they're empty. But that's not exactly how it works, for all I or anyone knows the last quarter was very tooling heavy and they chose to pay costs all upfront instead of amortize costs. IDK. 2. I work in automotive. I was a the room with 3 VPs from a BIG 3. They weren't threatened…
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