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Musk to review all of Tesla's expenses in new cost cutting plan

reuters.com

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Re: Musk to review all of Tesla's expenses in new cost cutting plan

#161

Post by taf2 »

barbecue_sauce wrote: post #122
proee wrote: post #101

I worked for a company that had a similar take on spending. The company was extremely profitable and brought in greater than 1 billion dollar in revenue. Yet any PO that was greater than $100 needed approval by the CEO. Not only that, the PO had to be typed on a manual typewriter (this is 2007) using carbon paper, and hand-delivered to a number of people to start moving up the chain. The process intentionally took MO…

$100 seems like a pretty extreme threshold. Would make more sense to have a budget for a group or an individual, then only require approval once the budget has been depleted (though I guess this could potentially incentivize overspending instead).

* 1000 to 10000 people making those $100 purchases maybe not too extreme? Said they posted over a billion so I’d guess pretty large number of employees

Re: Musk to review all of Tesla's expenses in new cost cutting plan

#162

Post by new_realist »

mikeash wrote: post #108
gamblor956 wrote: post #29

Earlier quoted context omitted.

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).

Isn’t that double counting the debt service payments?

No, they have two large balloon payments due in 2019 from prior debt.

Re: Musk to review all of Tesla's expenses in new cost cutting plan

#163

Post by Robotbeat »

2819b wrote: post #126
twblalock wrote: post #89

At this point the Tesla brand is so valuable that the company is unlikely to die. A more likely outcome is that Tesla will be partially or fully acquired by another company. The Ford-Mazda partnership that ended around 2015 is one possible model.

A bankruptcy rarely means a company actually "dies"...but it would be quite the wake-up call for SV.

It'd be a wake-up call for the "technology alone, no policy needed" strain green optimism.

I'm more and more convinced that we need strong, supportive policy to transition to a carbonfree future in time to avoid the worst effects of climate change, and that the current political situation looks incredibly grim from that perspective. It's pretty common for states nowadays to pass punitive taxes on EVs as "compensation" for lost gas taxes, universally over-estimating the number of miles an EV driver typically does in a year: https://www2.greencarreports.com/news/1123069_1000-illinois-... https://cleantechnica.com/2019/05/17/whos-behind-the-war-on-...

China has incredibly supportive policy for EVs right now. From a purely industrial policy standpoint, we're close to strangling our own nascent EV industry with the sunsetting of the EV tax credit and all these new punitive state-level EV taxes. (Few Bolts are made, the Volt was recently canceled, and Tesla is struggling after having to deal with roughly a $3750 impact on their car price, soon to be increased to $5625 and then $7500... many of the rest are compliance cars or are available only in extremely limited quantities.)

If things don't change soon on the political front, it could be really bad. For the US and the world.

Re: Musk to review all of Tesla's expenses in new cost cutting plan

#164

Post by new_realist »

pbreit wrote: post #156
marcinzm wrote: post #31

Earlier quoted context omitted.

Someone else in this thread has stated that a) around half of the raised money needs to be used to service debt b) Tesla had $900 million in the bank before raising money. Doing the math based on the letter's $200 million/month loss rate that comes out to 10 months before Tesla is utterly out of money. Are those statements incorrect?

No. The 10 months was based on the $2b+ raised. Tesla reported another $2b+ in cash at end of Q1. The shorts are everywhere and they are not reliable.

Tesla's cash balances are always higher and the end of the quarter, when they draw on the ABL while also selling a mass of cars that serve as collateral for the same ABL. Look at the interest they earn each quarter to get the average cash balance.

Re: Musk to review all of Tesla's expenses in new cost cutting plan

#165

Post by MegaButts »

ajross wrote: post #136
Waterluvian wrote: post #117

Earlier quoted context omitted.

In your endeavour to rake people you perceive as internet haters over the coals, you also target people like me who genuinely wants Tesla to succeed but is the kind of person who loves asking questions and understanding how things work. And that really diminishes your credibility as perceived by everyone who reads the thread. Also it just kind of stings and discourages me from participation because then I have to dea…

To be clear: you asked a question about bankruptcy, that I answered. I also editorialized a little at the clearly implied frame of your question which seemed to assume that TSLA would be in chapter 11 in ten months. And that's insane. If you were merely wrong and not spinning, I sincerely apologize. It's exceedingly hard to tell these days. Because hate.

I don't see any hate in this comment thread. I think you are overly defensive to the point where you are actually the one harming the conversation.

Re: Musk to review all of Tesla's expenses in new cost cutting plan

#166

Post by TaylorAlexander »

clouddrover wrote: post #150
proee wrote: post #101

I worked for a company that had a similar take on spending. The company was extremely profitable and brought in greater than 1 billion dollar in revenue. Yet any PO that was greater than $100 needed approval by the CEO. Not only that, the PO had to be typed on a manual typewriter (this is 2007) using carbon paper, and hand-delivered to a number of people to start moving up the chain. The process intentionally took MO…

> This resulted in engineers that would purchase their own equipment and bringing it to work to use because they couldn't wait a month for a $200 piece of equipment. That's a mistake. You should never pay other people's costs. If the company wants to put itself in a position where work is delayed by a month for the sake of $200 then that is the company's cost to pay.

It’s a mistake if the company is healthy. But if individual workers are in a position to get a performance bonus or impress their boss, it may be worth it for them to spend some money to ensure that would happen. It would also be a bad work environment.

Re: Musk to review all of Tesla's expenses in new cost cutting plan

#168

Post by [deleted] »

jjeaff wrote: post #147
windexh8er wrote: post #94

Earlier quoted context omitted.

This is my foundational fear of losing Tesla. Love them or hate them if they were to sink I feel the large drive to compete with them goes away and we go back to business as usual burning dead dinosaurs. While Tesla isn't perfect by any stretch I do think they continue to be very important to the overall market progression and higher expectations of auto manufacturers.

Is there really a large drive to compete with them? So far they have proven that unit profitability is difficult if not impossible with current tech. And meanwhile, Ford is selling a quarter million F-150 trucks every quarter compared to Teslas total units per quarter around 40k. I don't think the big automakers are worried yet.

[deleted]

Re: Musk to review all of Tesla's expenses in new cost cutting plan

#169

Post by gamblor956 »

pbreit wrote: post #156
marcinzm wrote: post #31

Earlier quoted context omitted.

Someone else in this thread has stated that a) around half of the raised money needs to be used to service debt b) Tesla had $900 million in the bank before raising money. Doing the math based on the letter's $200 million/month loss rate that comes out to 10 months before Tesla is utterly out of money. Are those statements incorrect?

No. The 10 months was based on the $2b+ raised. Tesla reported another $2b+ in cash at end of Q1. The shorts are everywhere and they are not reliable.

The 10 months is based on the $2b raised and Tesla's cash on hand and is based on unbiased analysts (i.e., not short or long on Tesla).

Re: Musk to review all of Tesla's expenses in new cost cutting plan

#170

Post by [deleted] »

proee wrote: post #101

I worked for a company that had a similar take on spending. The company was extremely profitable and brought in greater than 1 billion dollar in revenue. Yet any PO that was greater than $100 needed approval by the CEO. Not only that, the PO had to be typed on a manual typewriter (this is 2007) using carbon paper, and hand-delivered to a number of people to start moving up the chain. The process intentionally took MO…

[deleted]
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