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This will become a problem if they run out of cash. Not delivering as many cars as planned is fine if you make a profit (or at least positive cash flow). But bu
by dx034 9y ago
This will become a problem if they run out of cash. Not delivering as many cars as planned is fine if you make a profit (or at least positive cash flow). But burning more cash than expected can be problematic. Especially if you constantly miss deadlines which means investors don't know if they should believe any of your plans.
The second issue is that of competition. Model S didn't have any meaningful EV competition. Model 3 competition is still comparably low but this will look different in 2-3 years. If they produce enough cars until then, prospective buyers will eventually switch to another brand.
- omarforgotpwd 9y agoSomeone will give them cash. Elon will if nothing else.
- dx034 9y agoDoes he still have that much cash? Would expect that SpaceX would have to cut if Tesla really needs money. I don't think Musk has much cash lying around that's not already in one of his companies.
- omarforgotpwd 9y agoEnough people believe in Tesla that they can certainly find a way to generate cash. As a WORST case scenario i’m sure another auto maker would love to recapitalize them in order to acquire their technology. Tesla actually going out of existence seems unlikely to me at this point.