“The Palo Alto company is also building a $5-billion battery factory in Nevada. Many analysts are wondering whether it can maintain enough cash flow to see those projects to completion.
Kelley’s Brauer pointed out that state incentives for buyers of electric cars, which have helped power Tesla’s success, will be expiring over the next few years. Brauer believes Musk “is going to run out of tax rebates before he gets to the real world consumer.”
Tesla’s shares slid $11.24, or 5.3%, to $200.11. Shares of SolarCity fell even further, closing down $1.88, or 9.1%, to $18.78.”
Read more "After SpaceX rocket crisis, Elon Musk also faces Tesla safety and cash-flow issues"
Tesla continues to burn cash and adding SolarCity to its operations accelerates that. Tesla burned $332.5 million from operations during the past 12 months and consumed $1.3 billion in capital expenditures. That’s a aggressive cash burn for a company with $3.2 billion in cash and short-term investments. Meanwhile, SolarCity tore through $2.8 billion in free cash flow during the past 12 months, a startling amont considering the company has $145.7 million in cash. Refinancing can shore up the cash situation in the short-term, but the combined company will need to start generating cash soon.
Read more "Ask Matt: Will Tesla run out of cash?"
In short, the cash being counted isn’t really cash from operations. “What they’re really saying is that they hope to get the full amount from the guarantees,” says Ciesielski. If the used car market suffers from a dearth of buyers or a glut of green vehicles, Tesla will be forced to cover the shortfall when the banks sell vehicles for less than the guarantee price, or shed the inventory it’s obliged to repurchase from the banks at a loss. In either case, it will be returning a lot of the cash that it wants investors to believe is a sure thing. “Cash flow” that’s subject to a large contingent liability, to major uncertainty, shouldn’t be classified as cash-in-hand generated from running the business.
Tesla has attracted a legion of true believers who love the vision and don’t fret much over the numbers. Non-zealots should follow the conservative reporting that the official rules require, and ignore the pro-forma stuff. That’s the best way to track Elon Musk’s progress in molding an epic vision into the greatest green profit-maker the world has ever seen.
Read more "Why Tesla’s Cash Crunch May Be Worse Than You Think"
SolarCity’s Sugar Daddy
You might know that SolarCity actually owns most of the hundreds of thousands of rooftop solar systems it has built. As a result, it needs billions of dollars in funding each year. So the flow of debt coming into the company is vital to its very survival.
What people might not know is that SolarCity is getting a lot of funding from SpaceX and Elon Musk and family. They’re buying hundreds of millions of dollars in solar bonds that almost no one else is interested in. Below is a table that shows the large purchases of solar bonds by SpaceX, Elon Musk, SolarCity CEO Lyndon Rive, and CTO Pater Rive over the past year-and-a-half.
Read more "Believe It or Not, SpaceX’s Falcon 9 Explosion Could Be Terrible for SolarCity"
The fire that burst from the top stage of a SpaceX Falcon 9 rocket, quickly consuming it and the satellite it was to carry to orbit, did more than melt aluminum and crack carbon fiber on a $62 million rocket and throw another wrench into Elon Musk’s already busy day. It will have repercussions across the globe.
Read more "SpaceX’s lost rocket could upset a global merger and delay America’s human spaceflight plans"
Also in July Musk published a much-hyped (in anticipation) single page vision of where he wants to take Tesla in the future. Unfortunately for him though, Tesla is far behind deep-pocketed competitors in nearly every facet of this vague and unfinanced “plan,” something easily discerned by conducting a simple Google search on each of his stock-pumping buzzwords. Here’s one example, here’s another and here’s a third. I could easily post twenty or thirty more.
Read more "Tesla Motors Inc (TSLA) isn’t “a business”; it’s a cash incinerator"
Audi’s upcoming four-door luxury electric car will have a 311-mile range, along with Level 4 self-driving features (essentially full autonomy, for those keeping track) and three separate electric motors, according to a new report from Autocar. The car is set to go head-to-head with the Model S, based on these new stats, and will likely be called the “A9 e-tron” when it goes on sale sometime in 2020, the publication says.
Read more "More details on Audi’s Tesla Model S competitor emerge"