21 ms·

Tesla Accounting Chief, HR Head Resign on the Same Day; Stock Plunges

172 points by dsr12 8y ago

draw_down 8y ago
Seems like they’re having so many problems lately. It’s too bad.
chollida1 8y ago
And their Chief People Officer, is not coming back from her leave. From the outside it looks like Telsa is about going to go into a tough winter like moment. They are almost losing by winning. They are at capacity in their Fremont factory but still not making a profit. They need to start designing and building out manufacturing facilities for their next car and the help bolster Model X manufacturing. Stop and think for a second that Tesla is one earthquake away from no longer being a company. - They are cash flow negative, - they have about a year of cash runway left( optimistically) You can't just collect insurance money and build a new factory like you can with a house, this is a many year project. Tesla can't afford to not build cars for multiple years. Forget the SEC investigation hanging over their head. From what I read, they are likely to get a large fine and a strong talking to. And the most worrying thing for them is that their next car will compete head on with Mercedes, BMW, Audi, and GM. That will be the first time they've had to compete head on with a competitor.
- mathattack 8y ago
  If they are at capacity, why don’t they charge more money?
  - rcMgD2BwE72F 8y ago
    >They are almost losing by winning. They are at capacity in their Fremont factory but still not making a profit. Source? They are now at capacity and they are expected (by Tesla top management) to announce profitablity for this quarter. In other words, they were not a capacity last quarter and not profitable. That's why with the record sales and production of this summer, Q3 earnings publication will be very interesting. But we won't know the actual result until end of October. By then, the shorts (with billions in backing) will do all their best to give the company an extremely bad look. Because if Tesla manage to turn a profit this Q3, they'll lose dozens of billions. It's now or never for them.
    - matwood 8y ago
      > By then, the shorts (with billions in backing) will do all their best to give the company an extremely bad look. Please stop with this thought process. TSLA is doing a fine job all on its own making themselves look bad. On the business side, Musk has missed how many production estimates? There are also concerns about quality. On the personal side, he's still harping on this pedophile thing /facepalm. Then what looks like a complete lie about being bought out. The way you fix the shorts problem is to actually deliver on your promises and make some money. Deflecting that it's the shorts causing problems for TSLA is typical TSLA deflecting the horrible job they have done at running TSLA.
      - rcMgD2BwE72F 8y ago
        I don't think you realize how much FUD is disseminated daily in the mainstream media. Take this Reuters article for instance, which has been published and translated by dozens of top newspapers: https://www.reuters.com/article/us-tesla-germany-daimler/electric-mercedes-opens-german-assault-on-tesla-idUSKCN1LJ17Y https://www.reuters.com/article/us-tesla-germany-daimler/ele... 3rd paragraph: "The market for upscale electric cars is Tesla’s to lose, with sales of its entry-level Model 3 sedan expected to reach about 50,000 cars this year and almost double that in 2019." All sources indicates that Tesla has already produced 50K Model 3. In the first three quarters. There's is still one quarter to go in 2018. And Tesla plan to produce more than 300K Model 3 next year, not 100K. What kind of error is that? Reuters is aware of this "mistake" and they are not correcting it. All media who published the report and were made aware of the wrong numbers kept it "as is", even though the 50K has already been proven wrong. How can Reuters and co keep such blatant errors while knowing it's bullshit? For some reasons, the disinformation only increases as Tesla pressures the legacy automakers margin (Tesla surpassed both BMW and Mercedes in US car sales this summer while the German are losing big time). Reuters & co might not be short themselves. But they knowingly play the short game and kep spreading the FUD ("See these terrible numbers? Who can expect Tesla to turn a profit? Now, let's hear what competitors and short sellers have to say...").
        compcoffee 8y ago
  - jonknee 8y ago
    Who says they aren't? They're already charging $60k for their "mass market" $35k sedan. Update: I guess technically it's $50k, the other day I read the average selling price was $60k and that was stuck in my head. Regardless, far away from $35k!
    - rstupek 8y ago
      Why wouldn't you build out the higher priced orders first?
      - jonknee 8y ago
        The more concerning part is that they're still losing a fortune while only building out the supposedly high margin top end models.
        zaroth 8y ago
        Tesla gross margin on an AWD Model 3 with Autopilot is ~$20,000. Twenty thousand dollars. And they are outselling BMW’s entire passenger car lineup. It cost them a pretty penny to get here but cash is literally pouring in for Tesla right now.
        jonknee 8y ago
        > It cost them a pretty penny to get here but cash is literally pouring in for Tesla right now. And also pouring out, they are losing a massive amount of money every quarter.
  - secabeen 8y ago
    They did. I put in my order on August 1st, and they increased prices by about $1000 per car on August 3rd. I just got in before the increase.
- martinald 8y ago
  They can't afford any capex on new factories though. They are extremely close to breaching covenants on their debt and personally can't understand why they are not raising equity money as their stock price, despite Musk's crazy antics, is holding up well.
  - debacle 8y ago
    Their stock price has been highly volatile in the last year. It's "holding up," but only by the hairs on its teeth. They're hovering very close to their 52 week low when the rest of the market is having a banner year.
  - rcMgD2BwE72F 8y ago
    Management said they don't need to raise funds to cover the capex needed to ramp up Model 3 sales to 7/week, which is (as confirmed multiple times by Musk) more than needed to turn a profit. They just need to turn a profit in Q3 to get the stock price back up and then, they might raise funds to finance the next products (Model Y, truck and Semi). Why raise funds when Wall Street bet on the company to go bankrupt? Raising capital in this environment would mean that the management don't believe in their ability to turn a profit. But then, why raise further equity and make the problem worse? Occam razor: they expect to be profitable this quarter and are more patient than short-term speculators.
    - scottkduncan 8y ago
      "Wall Street" is not betting on them to go bankrupt. Collectively, investors value this company that produces, at best, 7K cars a week at $45 billion. The idea that one quarter of profitability achieved through slashing capex to the bone fundamentally would fundamentally change their valuation doesn't carry much water in my view.
      - rcMgD2BwE72F 8y ago
        >Collectively, investors value this company (...) Most large investors are just holding. The small amount of shares that are exchanged every day are bought/sold by speculators and they are backed by institutions that get paid for this intraday activity. Also, with all the short positions on TSLA, the bank are risking an almost infinite sum of money (in case of a short squeeze). Since Tesla doesn't intend to raise capital for the foreseeable future, banks can only gain from volatility or from a major event that would force Tesla to raise funds.
- rightnow 8y ago
  Same comments for 6 years now. Bla bla bla
- covercash 8y ago
  Maybe that’s his backup plan if it doesn’t work out... use a BoringCo drill to “accidentally” trigger an earthquake, collect insurance money, funnel it all into SpaceX and launch himself to Mars.
  - SmallDeadGuy 8y ago
    Taking the meaning of "playing the long game" further than anyone else ever has.
  - deusofnull 8y ago
    Maybe he's gonna use a BoringCompany drill to DRILL to Mars. Ever think of that?
    - djstein 8y ago
      Tengen Toppa Gurren Lagann?
    - perl4ever 8y ago
      There was an old story that I can't seem to find by Googling, but the gist of the plot that I recall was that Mars was stealing Earth's atmosphere through a kind of vortex, like a huge double ended tornado, and some guy in an old plane flew through it, getting to Mars without a spaceship.
- api 8y ago
  I have a friend who bought a Tesla and is now asking for a buy-back. His experience has convinced me the negative hype isn't all just shorts propagandizing and "Musk fatigue." This company has huge, huge problems. When he first got the Tesla it had huge body panel alignment problems. Eventually these were fixed, but it took too long and was difficult to get Tesla to fully acknowledge them. After that he had a range of little annoying problems, many of which were likely software bugs, but then he (actually his GF) experienced something in autopilot mode known on the Tesla forums as "shadow braking" -- the car braking hard on the highway because it seems to see the shadow of an overpass and think it's a wall. This is extremely dangerous. It was on the I-405 (SoCal) going 70-80mph, and such a thing could easily cause a rear end collision. At that point they're starting the process of returning the car. Not only have there been many problems including a major safety issue, but Tesla has apparently been evasive and difficult getting them fixed. I hate to type this because I love most of what Musk has done and I really credit Tesla with helping get the ball rolling on EVs. EVs are tipping now, and I'm not sure that would have happened without Tesla. It at least would likely have taken longer. But... it is what it is. I'm just telling the truth. Reading between the lines a little Musk seems horribly burnt out. If I could give him advice I'd say pass Tesla to someone with more experience in the car industry, start gracefully exiting Tesla, take a break and do a little personal inventory, and then focus 100% on SpaceX. The latter is the far more important of the two companies and is in much better shape. I also feel like it's his real true love. If Telsa can't be righted its fate will probably be purchase (or purchase of its assets in bankruptcy) by another car company. That's fine. As I said: EVs are tipping. Finally to speculate a bit... I wonder if Tesla is an indirect victim of the latest wave of AI hype? It seems like they were on the right track until they decided to go all in and shift their major focus from making a great electric "driver's car" to self-drive or bust. Self-drive probably consumed insane amounts of capital, and has greatly harmed the company's reputation by causing serious accidents because it is clearly not ready. The shadow braking thing really reveals how primitive "AI" actually is-- this is something a bumblebee would not do, and its brain consumes milliwatts of power. From what I've read self-drive is really just object recognition combined with spatial mapping, path finding, and a lot of heuristics. The latter is what worries me. "Expert systems" can't capture complex problem domains due to the exponential nature of a combinatorial explosion. There will always be edge cases. Needless to say we will not be uploading consciousness anytime soon, nor will fully autonomous AIs be taking over the world.
- pjc50 8y ago
  > Tesla is one earthquake away from no longer being a company. So is most of Silicon Valley, which is actually in an earthquake zone that some believe is overdue an earthquake.
  - sofon 8y ago
    Are many/most companies with billion dollar valuations so exposed? I would imagine most billion dollar companies have multiple sites and manufacturing and data centers spread across multiple sites.
  - microtherion 8y ago
    Most of Silicon Valley is not as highly indebted as Tesla. Apple, for instance, could literally afford to send all of its employees on vacation for 10 years while their headquarters is being rebuilt, without going into debt (Not that they would, of course).
  - bdcravens 8y ago
    Your typical Internet startup wouldn't lose its means of production, which are people with computers, assuming they are deployed to the cloud. Even those that do any kind of hardware (say scooters) aren't the factories elsewhere and then shipped?
- this_user 8y ago
  > they have about a year of cash runway left( optimistically) Much less than that actually. At their current burn rate they won't even be making it to the end of this year without either selling enough M3 to generate some real cash, or by raising some new money from the market. Also, they have a lot of debt come due next year (and even more over the following years) while yields are up to over 8%. However, M3 production numbers are actually looking good now, and they are hitting their targets for the first time. And their cash burn for Q2 came in lower than expected after some cost cutting. So they might be able to turn the corner just in time. Musk has repeatedly stated that the company will not need to raise new money, but had also done that before some previous financing rounds, so the market does not put that much faith in his words at this point. It all hinges on the M3 now. Can they get production (and sales) numbers to where they need to be in order to become cash flow positive?
  - toomuchtodo 8y ago
    They're also going to sell somewhere between $100 and $200 million in ZEV credits this quarter.
  - dunpeal 8y ago
    Don't they also have some heavy debt obligations coming due very soon?
  - compcoffee 8y ago
    >However, M3 production numbers are actually looking good now, and they are hitting their targets for the first time. Really? Where can I read the official quarterly numbers? Of what quality are these cars? Do they all need to be reworked? >Musk has repeatedly stated that the company will not need to raise new money He said that prior to raising cash the last 3 times. He also said he was going to take the company private at $420. For some reason, I'm doubtful.
    - ben_w 8y ago
      Given that he knows his memes, and that “420” is a weed meme, and given it was a ridiculously stupid thing for him to tweet, I’m of the opinion he was literally high when he said that.
- nickik 8y ago
  With their current production rate they have 11 billion in revenue from the Model 3 alone. They guidance suggest they should be profitable this quarter because as of right now they are hitting their production target.
  - chollida1 8y ago
    May i see your napkin math for the 11 Billion figure?
    - jakobegger 8y ago
      5000 cars per week * 52 weeks * 50000 average selling price = 13 billion dollar revenue per year
      - deleted 8y ago
        [deleted]
    - flexie 8y ago
      I think that would be something like 5,000 cars per week times 52 weeks times the average price of 42,000 dollars per car
- martythemaniak 8y ago
  Kind of depressing that yours is the top comment, given how many outright lies it is based on. >From the outside it looks like Telsa is about going to go into a tough winter like moment. From the outside, it looks like they have a product that's a generation ahead of the competition and is flying off the shelves. > They need to start designing and building out manufacturing facilities for their next car and the help bolster Model X manufacturing. They are. Apart from the Shangai one, they've never actually stopped building the Reno factory, which still has to triple in size before it reaches its final form. >They are cash flow negative, they have about a year of cash runway left( optimistically) Based on 2 quarters during which they built up a factory. Their guidance for Q3 or Q4 has them turning a profit. Usually, people doing these wild extrapolations form the basis of jokes (ie Discu Stu's record sales). > And the most worrying thing for them is that their next car will compete head on with Mercedes, BMW, Audi, and GM. That will be the first time they've had to compete head on with a competitor. This is growing the EV market as a whole. Tesla does not want to own 100% of a sub-5% EV market. They want to own a decent chunck of a 100% EV market. People really, really don't like hearing this particular point, but their cars are approximately a generation ahead of other EVs. Specs wise, Taycan and EQC are essentially matching a 2016-era Model S / Model X and will be available about 2 years from now. Everybody seems to have forgotten how the Bolt was supposed to be the "Tesla Killer". Look, I even found one specifically from the same source as this article: https://twitter.com/business/status/554725778420957184 https://twitter.com/business/status/554725778420957184 Then people were "worried" about their ability to manufacture at scale: https://www.theatlas.com/charts/HkNUFo57f https://www.theatlas.com/charts/HkNUFo57f The problem is that when you actually have to put real money down and these theoretical comparisons become real, things go the opposite direction. Current Bolt sales are flat/declining around ~1500/month, while Tesla is pushing out 5000+ Model 3s per week.
  - chollida1 8y ago
    > Kind of depressing that yours is the top comment, given how many outright lies it is based on. Most of the time I comment, its more to get my ideas clarified, if you think I've outright lied then please correct me. As your comment stands you didn't actually refute any of my points. Is the Reno factory going to be building cars if not then its irrelevant to the topic of factories to build cars with? The China factory hasn't started yet, so I think I'm on strong footing with this. Tesla has also been cash flow negative for not just two quarters, but almost its entire life, now to be fair to Tesla, this was by design. It's possible with all the cost cutting and M3 sales that they could be profitable in Q3 but does anyone think they have finally turned the corner and will leave their trail of losses behind them? I'm not convinced of that:) I'm looking for actual thoughtful dissent to change my mind, but so far you haven't actually provided any facts or even opinions to show "outright lies" in my statement.
- dmode 8y ago
  Tesla's liquidity issues are completely overblown. Nevermind that their cashflow and spend numbers are improving. People also tend to overlook the amount of investor liquidity we have in the market. SoftBank has a $100bn fund. Saudi's have a $1 trillion sovereign wealth fund. I believe the UAE have something similar as well. Raising a couple billion dollars in this environment would be extremely easy. Especially when you have a backlogged demand on your product and the product has a 20% gross margin
  - jcranmer 8y ago
    The complaint isn't that Tesla faces challenges in raising money, but that Tesla is delusional in believing that it doesn't need to raise money.
    - dragontamer 8y ago
      Yeah, but Musk always said that he won't raise money, but does so anyway. I bet you Musk does another stock offering by the end of the year. Its kind of a yearly-tradition at this point, with exception of 2014 when Musk decided to raise a few billion in bonds instead.
  - seebee 8y ago
    Tesla automotive does not have a 20% margin, it's much closer to 10%. In the '18-H letter they claimed 20% margins including ZEV/GHG credits and added back Services & Other (in all Tesla 10-Q's the Services & Other are subtracted). Tesla calculates gross margin by not only including the ZEV/GHG credits but by basing the margin on the retail price of the vehicle rather than the bulk invoice. Cost of stores and R&D expense are also omitted from the gross margin.
    - dmode 8y ago
      Can you point to a source ? I am looking at Q2 statement and gross margin before ZEV is 20%. With ZEV it is 21%. It's on page 2 here http://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9ecac0ad7712 http://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9ec... Also, gross margin is literally margin after cost of goods. Doesn't include SG&A expense.
- AnthonyMouse 8y ago
  > Stop and think for a second that Tesla is one earthquake away from no longer being a company. This is highly unlikely in the short term and in the long term they'll be building more plants. It's also something anyone can insure against by placing a bet that an earthquake will destroy their factory in the next five years. You'll presumably get 50:1 odds or better (a good chunk of which is the vig), which means the insurance would cost less than 2% of the sum you want insured. > they have about a year of cash runway left( optimistically) Unless they turn a profit (or come closer to it), which it's plausible they're about to do. > You can't just collect insurance money and build a new factory like you can with a house, this is a many year project. No, but you can buy insurance in the amount of the value of the output (or of your shares) rather than the cost of building a new facility, if you were really that worried about it. > And the most worrying thing for them is that their next car will compete head on with Mercedes, BMW, Audi, and GM. That will be the first time they've had to compete head on with a competitor. The entire EV market is production capacity constrained and will be for a couple more years at least. They can't lose sales to Mercedes or BMW EVs because they'll all already be selling 100% of the EVs they can manufacture, all of which are coming at the expense of petrol cars.
- gaius 8y ago
  compete head on with Mercedes Tesla’s brand is strong enough that they can charge Mercedes level prices with poor quality interior fittings. Sit in a Tesla, it feels like a car costing half as much. If Mercedes can maintain their user experience in EVs without a significant price premium, Tesla is toast.
- georgeecollins 8y ago
  I agree on all points except that the most worrying thing is the entry of Mercedes, BMW etc. First of all, GM and BMW have sunk a lot of money in electric cars that are on the market and being crushed by Tesla in sales. Second, and most importantly, car brands are incredibly valuable. People said that the Prius would go away when other car makers started making hybrids. After years of competition, the Prius still dominates. Why? Because the economic reasons for owning a hybrid really aren't that compelling. The social signaling reasons are. So, if you want to say those things about yourself you own a Prius because everyone knows you are driving a hybrid at a glance. A Tesla makes a different-- but I would argue equally powerful-- statement to all who behold it. If Tesla goes into bankruptcy the brand and the cars will be revived.
Filligree 8y ago
A while ago I considered reserving a model 3, but I eventually decided against it. Feel like I dodged a bullet, there. There was a time where Tesla had a genuine advantage over the incumbents, but it never was enough of an advantage to overcome their lack of experience. That's only obvious in retrospect, I suppose.
- 5874-4b22-a4e0 8y ago
  It was a full refund even at the time, so not a major bullet. I wasn't sure if I was going to be living at a place that would allow me to install a charger, so there was never a chance for me then. Maybe in 10+ year next wave of advancements will have arrived. https://www.tesla.com/support/model-3-ordering-FAQ#refund https://www.tesla.com/support/model-3-ordering-FAQ#refund
- mikeash 8y ago
  I’ve had a Model S for about 3.5 years and it’s been wonderful. It’s not perfect and there have been some dumb issues, but nothing severe. I’ll probably be ordering a Model 3 soon as a second car, whenever the standard range version becomes available, or possibly sooner if the standard range isn’t available this year. There is still no real competition.
- nickik 8y ago
  Can I as you what you are basing this on? Tesla has more experience in terms of electronics, batteries, electronic drive train and software. They might not be as good in terms of building car frames but they basically figured it out and the M3 is not a mass production car. It seems to me its the other car companies who are missing core experience on many of the core technologies needed for the future.
- rcMgD2BwE72F 8y ago
  Can you cite one source that indicates that Model 3 owners are somehow dissatisfied? All reviews (by the general public and by journalists) say the car performance, quality and experience is excellent and above Mercedes / BMW's. Have you driven one?
debacle 8y ago
Non-amp URL: https://www.bloomberg.com/news/articles/2018-09-07/tesla-chief-accounting-officer-leaves-citing-level-of-scrutiny https://www.bloomberg.com/news/articles/2018-09-07/tesla-chi... Better formatting, no hideously pixelated photos.
- gwbas1c 8y ago
  And the next article, when I kept scrolling, showed Musk smoking a joint and then holding a flamethrower!
empath75 8y ago
IMO, they should fire musk, slow down their blue-sky research projects, rip autopilot out of the cars, and just build "boring" luxury electric cars with huge profit margins and rake in cash.
- spiderfarmer 8y ago
  I don't think they should fire him, but he should most definately do the un-american thing: work a sane amount of hours and go on vacation every now and then.
  - dasil003 8y ago
    I don't care how much he works, but he's gotta do something about his thin skin and incompetence with the media.
    - meowface 8y ago
      He just needs to stop doing PR.
      - enraged_camel 8y ago
        On the contrary, the overwhelming majority of his media appearances have been widely popular. But something seems to have snapped in him recently, perhaps culminating with calling that cave rescuer a pedophile. The dude has serious problems that are probably exacerbated by stress and lack of sleep. He needs to take a break before something bad happens.
    - mschuster91 8y ago
      > I don't care how much he works, but he's gotta do something about his thin skin and incompetence with the media. This sort of thing usually comes from a severe lack of sleep and recreation.
    - rcMgD2BwE72F 8y ago
      Not everyone expect an industry leader to fake a persona in public so as to appear like the media want them to. Wall Street might want that but hey, who cares?
jacknews 8y ago
So the headline is that the CFO is resigning, yet there's a huge picture of the photogenic HR chief(?), who, as a side-story, is 'not returning'. I feel manipulated. Also that this publication should be doing a bit more investigation and a bit less pontificating.
- gnode 8y ago
  > yet there's a huge picture of the photogenic HR chief(?) The photo was tiny in the original article. For some reason the AMP version has been posted, and it blows all the pictures up.
- LaGrange 8y ago
  It's much less huge on the non-amp site: https://www.bloomberg.com/news/articles/2018-09-07/tesla-chief-accounting-officer-leaves-citing-level-of-scrutiny https://www.bloomberg.com/news/articles/2018-09-07/tesla-chi... — I got a hunch that's what I'm seeing b/c that image was incredibly blurry. I have no idea why people link to the googlified versions of websites, they're often barely readable.
- whatok 8y ago
  This is breaking news. You aren't going to get in-depth reporting on it for a while.
- compcoffee 8y ago
  >I feel manipulated. Is it that easy?
sophistication 8y ago
I'm not losing optimism because of this. Musk fits right into the current political & cultural trajectory and the Tesla brand is sleek & timeless. The media is framing Musk's flaws (Twitter insults, weed & booze) as a bad thing, but outside of the media, people do not care about such things nearly as much. It just requires a few years of optimization and the cars are going to be en par with established brands.
- cecja 8y ago
  Talk about gaslighting yourself. If you are not recoginizing that something fishy is going on at tesla you are not reading the same articles as the rest of us.
  - rcMgD2BwE72F 8y ago
    What's fishy? I've been following Tesla since 2010 and the main changes since then isn't what appears to be fishy but what the media are making of it. Do you realize that Tesla sold more cars in the US that Mercedes and BMW this summer? How many media reported that? Do you know that the most trusted car analysts who tear-down the car said it's expected to be the most profitable car produced in high volume? Do you know that all data analyses about turnover in top positions at Tesla indicated that they are average? How many reports about such moves (at legacy automakers) make headlines? They've only increased their coverage of the company and try their best to make every thing more clickbait. It's worked great so far, for sure.
    - Fricken 8y ago
      "We think Tesla is worth zero" -Jim Chanos You haven't been reading the same news I have. While there were plenty of red flags prior, Musk began digging Tesla's grave in earnest in fall 2016. He Started with the Alien Dreadnought, which was bonkers. He sold shareholders on buying Solar City using fake solar shingles which don't exist, that was $5b+ flushed down the toilet. Also he implemented HW2, which is thousands of dollars of hardware going into every new car regardless of whether customers pay for it. When Solar experts, finance people, Vehicle manufacturing experts and Autonomous vehicle experts get together and compare notes there's only one conclusion to arrive at: Tesla is fucked. Alien Dreadnought, Solar City, HW2. I call it the ASH doctrine: Musk's 3 point plan to reduce Tesla to ashes. Post chapter 11 Tesla may have a life ahead of it, but it's been a slow motion trainwreck for years. The Shorts, the Media, the Koch brothers, they didn't destroy Tesla. Musk did. He's incompetent, and nuts. It's pretty obvious now, but if you were paying attention, it was obvious before too.
sumedh 8y ago
I think Elon Musk is a genius and I don't use that word lightly. I think he's also one of the boldest men that ever came down the pike. Put me down as saying I've always been afraid of the guy whose IQ is 190 and he thinks it's 250. I like to think there’s a little of that risk with Elon - Charlie Munger (in 2014)
stevespang 8y ago
Big oil is taking Tesla down . . . .
fencepost 8y ago
As someone who's not obsessively following Tesla, I'm a bit jaded by these. I'm sure there are problems, but what feels like massive PR efforts by the "shorts" has effectively poisoned the well for negative news. As a casual observer I can't tell what's actual bad news and what's well-orchestrated market-manipulation "OMG WE'RE ALL GONNA DIE" by people trying to drop the price, and I don't actually care enough about the company to put in the effort to find out. Kind of depressing, really.
- matwood 8y ago
  > I'm sure there are problems, but what feels like massive PR efforts by the "shorts" has effectively poisoned the well for negative news. What kind of PR effort do you need when every CFO you hire keeps leaving? Think about it. The person in the company who completely knows the financials stays for a month and bounces? Why? Could it be that the financials are so bad they are unfixable? Could it be that that person is being pushed to stretch things a bit here and there to make them look better?
  - dnomad 8y ago
    > What kind of PR effort do you need when every CFO you hire keeps leaving? It's really gotten to a point where all the Musk-haters now believe their own bullshit. This post (and many others in HN's bi-weekly anti-Musk thread) is a classic example. Tesla had had a grand total of two CFOs since Musk took over. > Could it be that that person is being pushed to stretch things a bit here and there to make them look better? Could it be that that person is an alien sent from Venus to stop Musk from returning to Mars? See, it's easy to ask stupidly leading questions and spout completely baseless speculation. What's more difficult is actually examining the facts and drawing a rational conclusion.
    - matwood 8y ago
      >See, it's easy to ask stupidly leading questions and spout completely baseless speculation. What's more difficult is actually examining the facts and drawing a rational conclusion. In the first quarter of this year, the company lost Morton’s predecessor, Eric Branderiz, and Susan Repo, who was treasurer and vice president of finance. CFO Deepak Ahuja retired in 2015, only to return in 2017 after his successor, Jason Wheeler, quit after just 15 months. A rotating door of financial executives screams financial problems. Please tell me what rational conclusion I'm supposed to draw?
Nokinside 8y ago
If Tesla needs more money, investors will use that as a leverage to get the Elon Musk problem addressed. It would be good for everyone if there is intervention that corrects the problem and Musk could continue. Investors can demand to have someone who can veto his craziest decisions and publicity or they can force him out. Musk has structured the board so that nobody has power over him. He must know that if asks more money that changes. Musk seems to be highly functioning bipolar (he thinks so himself). It's probably mild form of bipolar disorder called cyclothymic disorder or something similar. People with cyclothymia are at increased risk of developing full-blown bipolar disorder over time. The problem is that that his mental issues may get out of hand during stressful situations. Musk has been showing signs of slipping from hypomania to full mania for the last year: little sleep, endless energy, lowered inhibitions, erratic quick decisions and unnecessary confrontations. If he publicly calls people he has never met pedophiles, I just can't imagine how bad the situation is with the people who have to deal with him every day. Musk has already achieved so much. It would be shame if it all ends in tragedy.
- HeadsUpHigh 8y ago
  >If Tesla needs more money, investors will use that as a leverage to get the Elon Musk problem addressed. Sounds you are lost into your own bubble. Every vote for removing Musk has failed completely in the past.
  - Nokinside 8y ago
    The first line I wrote addressees this issue. That changes when Musk wants to raise more money next time. Investors can use their power and set the conditions.
  - bdcravens 8y ago
    Those votes have failed due to how the company's voting structure is set up. It takes about 90% of the vote outside of Musk and insiders to oust him.
    - HeadsUpHigh 8y ago
deleted 8y ago
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maxxxxx 8y ago
I just watched a part of the Joe Rogan podcast with Musk and I have to say he looks very unhealthy. Maybe I am wrong but to me he looks like he is drinking a lot or on some other drugs. I can imagine working with a CEO who is pushing himself way other the limit is a pretty unpleasant experience.
- dgritsko 8y ago
  Didn't he actually smoke weed live as part of that broadcast?
  - randlet 8y ago
    He had a single puff and did not appear to inhale (his body language made it look like he was a very inexperienced smoker). He said he'd tried it before but wasn't a big fan (a pretty common experience). edit: people are going to need to get used to the fact that weed is going to become as normalized as alcohol (which is a harder drug than weed).
    - i_am_nomad 8y ago
      Sigh. I suspect you're right about the normalization, I just absolutely hate the smell of it. I grew up on the East Coast, where cigarette smoking was commonplace, and I always found it revolting. Here in the Bay Area, I've had a few years to enjoy the relative scarcity of tobacco smoke, and now suddenly cannabis is out in the open. Seems like there's no escape from second-hand smoke.
      - randlet 8y ago
        Smoking it in public is obnoxious I agree. Hopefully people choose to eat or vapourize it rather than burn it.
  - deleted 8y ago
    [deleted]
  - rcMgD2BwE72F 8y ago
ajmurmann 8y ago
I think it's time for Elon to step away from Tesla. He is an incredible visionary and that's what made Tesla possible and revolutionized the car industry. That work is done now. Everyone is making electric cars now. There is no need for Elon to innovate at Tesla anymore. I might even go so far and say that Tesla had moved the entire industry so much that there isn't even much need for Tesla itself. I think it's best for everyone if Elon focused on SpaceX, the Boring Company and his AI endeavors. Tesla sticks out from this list because mission is accomplished.
- itgoon 8y ago
  I tend to agree. He's been fantastic at getting the impossible to happen, but he's not as good at just running things. There was a bit in time when he offered to help Flint, MI with their water. It turns out they don't need the help. However, if he were to turn his fantastic energy towards helping under-served communities, I think he'd find that there's plenty to do, and very satisfying.
  - ajmurmann 8y ago
    I have the suspicion as well that he isn't great at running a steady business. My point is really about his amazing visionary qualities being more useful elsewhere. Even if he was great at running things too, it's radical innovation where he is a once in a century person. Edit: it would be a shame to waste that amazing innovation talent at what's now a close to regular car company (relative to his other ventures)
claydavisss 8y ago
"Stock Plunges"? If anything, TSLA seems to continue to ride high with only small relative deviations with news that would gut any other stock. Not to say I am bullish on TSLA...quite the opposite. TSLA will inevitably crater but it is going to take most of the NASDAQ with it and probably wipe out the mobility 2.0 market segment and the EV and nascent AV markets. Silicon Valley is way overdue for a serious garbage collection cycle....TSLA is going to trigger it eventually. Its not all bad: a big reset in SV would benefit the big players like Apple and Google who will suddenly have a much deeper and cheaper talent pool to access.
3pt14159 8y ago
It is worrying, but I don't know if I'd really call that a stock plunge.
kerng 8y ago
The revolution devours it's own. What Tesla started is amazing, years ahead of competition initially, but there will be a very tough future ahead as electric cars become more and more the norm.
deleted 8y ago
[deleted]
smpetrey 8y ago
Here's the none-AMP Bloomberg article: https://www.bloomberg.com/news/articles/2018-09-07/tesla-chief-accounting-officer-leaves-citing-level-of-scrutiny https://www.bloomberg.com/news/articles/2018-09-07/tesla-chi...
RobertSmith 8y ago
If you visit Tesla's management's page you can see only 3 names; Elon Musk, CFO Deepak Ahuja and CTO JB Straubel. No exec stays for a long period in Tesla. Who is going to resign next? CFO or CTO https://news.alphastreet.com/tesla-motors-cao-chief-accounting-officer-dave-david-morton-resigns/ https://news.alphastreet.com/tesla-motors-cao-chief-accounti...
onepremise 8y ago
Seems like much of this is closely related to the 'going private' statements. I'm curious if Elon had it out for one of the many short selling firms exploiting TSLA stock, Citron Research, etc... There's more at work here than just Elon being overzealous with corporate ambitions. There are groups of people, venture capitalists, and banks hell bent on weaponizing margin trading to manipulate markets.
ricksanch88 8y ago
I love how someone from Jeffries is concerned with Tesla's use of marijuana. I know three analysts that work at Jeffries and they all microdose and/or use cocaine. It's par for the course.
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acd 8y ago
Tesla may be going bankrupt the Altman-z score of guru focus indicates that. Hopefully the source code will be open source. https://www.gurufocus.com/stock/TSLA https://www.gurufocus.com/stock/TSLA
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172 points by dsr12 8y ago

Seems like they’re having so many problems lately. It’s too bad.

And their Chief People Officer, is not coming back from her leave. From the outside it looks like Telsa is about going to go into a tough winter like moment. They are almost losing by winning. They are at capacity in their Fremont factory but still not making a profit. They need to start designing and building out manufacturing facilities for their next car and the help bolster Model X manufacturing. Stop and think for a second that Tesla is one earthquake away from no longer being a company. - They are cash flow negative, - they have about a year of cash runway left( optimistically) You can't just collect insurance money and build a new factory like you can with a house, this is a many year project. Tesla can't afford to not build cars for multiple years. Forget the SEC investigation hanging over their head. From what I read, they are likely to get a large fine and a strong talking to. And the most worrying thing for them is that their next car will compete head on with Mercedes, BMW, Audi, and GM. That will be the first time they've had to compete head on with a competitor.

mathattack 8y ago
If they are at capacity, why don’t they charge more money?
- rcMgD2BwE72F 8y ago
  >They are almost losing by winning. They are at capacity in their Fremont factory but still not making a profit. Source? They are now at capacity and they are expected (by Tesla top management) to announce profitablity for this quarter. In other words, they were not a capacity last quarter and not profitable. That's why with the record sales and production of this summer, Q3 earnings publication will be very interesting. But we won't know the actual result until end of October. By then, the shorts (with billions in backing) will do all their best to give the company an extremely bad look. Because if Tesla manage to turn a profit this Q3, they'll lose dozens of billions. It's now or never for them.
  - matwood 8y ago
    > By then, the shorts (with billions in backing) will do all their best to give the company an extremely bad look. Please stop with this thought process. TSLA is doing a fine job all on its own making themselves look bad. On the business side, Musk has missed how many production estimates? There are also concerns about quality. On the personal side, he's still harping on this pedophile thing /facepalm. Then what looks like a complete lie about being bought out. The way you fix the shorts problem is to actually deliver on your promises and make some money. Deflecting that it's the shorts causing problems for TSLA is typical TSLA deflecting the horrible job they have done at running TSLA.
    - rcMgD2BwE72F 8y ago
      I don't think you realize how much FUD is disseminated daily in the mainstream media. Take this Reuters article for instance, which has been published and translated by dozens of top newspapers: https://www.reuters.com/article/us-tesla-germany-daimler/electric-mercedes-opens-german-assault-on-tesla-idUSKCN1LJ17Y https://www.reuters.com/article/us-tesla-germany-daimler/ele... 3rd paragraph: "The market for upscale electric cars is Tesla’s to lose, with sales of its entry-level Model 3 sedan expected to reach about 50,000 cars this year and almost double that in 2019." All sources indicates that Tesla has already produced 50K Model 3. In the first three quarters. There's is still one quarter to go in 2018. And Tesla plan to produce more than 300K Model 3 next year, not 100K. What kind of error is that? Reuters is aware of this "mistake" and they are not correcting it. All media who published the report and were made aware of the wrong numbers kept it "as is", even though the 50K has already been proven wrong. How can Reuters and co keep such blatant errors while knowing it's bullshit? For some reasons, the disinformation only increases as Tesla pressures the legacy automakers margin (Tesla surpassed both BMW and Mercedes in US car sales this summer while the German are losing big time). Reuters & co might not be short themselves. But they knowingly play the short game and kep spreading the FUD ("See these terrible numbers? Who can expect Tesla to turn a profit? Now, let's hear what competitors and short sellers have to say...").
      - compcoffee 8y ago
- jonknee 8y ago
  Who says they aren't? They're already charging $60k for their "mass market" $35k sedan. Update: I guess technically it's $50k, the other day I read the average selling price was $60k and that was stuck in my head. Regardless, far away from $35k!
  - rstupek 8y ago
    Why wouldn't you build out the higher priced orders first?
    - jonknee 8y ago
      The more concerning part is that they're still losing a fortune while only building out the supposedly high margin top end models.
      - zaroth 8y ago
        Tesla gross margin on an AWD Model 3 with Autopilot is ~$20,000. Twenty thousand dollars. And they are outselling BMW’s entire passenger car lineup. It cost them a pretty penny to get here but cash is literally pouring in for Tesla right now.
        jonknee 8y ago
        > It cost them a pretty penny to get here but cash is literally pouring in for Tesla right now. And also pouring out, they are losing a massive amount of money every quarter.
- secabeen 8y ago
  They did. I put in my order on August 1st, and they increased prices by about $1000 per car on August 3rd. I just got in before the increase.
martinald 8y ago
They can't afford any capex on new factories though. They are extremely close to breaching covenants on their debt and personally can't understand why they are not raising equity money as their stock price, despite Musk's crazy antics, is holding up well.
- debacle 8y ago
  Their stock price has been highly volatile in the last year. It's "holding up," but only by the hairs on its teeth. They're hovering very close to their 52 week low when the rest of the market is having a banner year.
- rcMgD2BwE72F 8y ago
  Management said they don't need to raise funds to cover the capex needed to ramp up Model 3 sales to 7/week, which is (as confirmed multiple times by Musk) more than needed to turn a profit. They just need to turn a profit in Q3 to get the stock price back up and then, they might raise funds to finance the next products (Model Y, truck and Semi). Why raise funds when Wall Street bet on the company to go bankrupt? Raising capital in this environment would mean that the management don't believe in their ability to turn a profit. But then, why raise further equity and make the problem worse? Occam razor: they expect to be profitable this quarter and are more patient than short-term speculators.
  - scottkduncan 8y ago
    "Wall Street" is not betting on them to go bankrupt. Collectively, investors value this company that produces, at best, 7K cars a week at $45 billion. The idea that one quarter of profitability achieved through slashing capex to the bone fundamentally would fundamentally change their valuation doesn't carry much water in my view.
    - rcMgD2BwE72F 8y ago
      >Collectively, investors value this company (...) Most large investors are just holding. The small amount of shares that are exchanged every day are bought/sold by speculators and they are backed by institutions that get paid for this intraday activity. Also, with all the short positions on TSLA, the bank are risking an almost infinite sum of money (in case of a short squeeze). Since Tesla doesn't intend to raise capital for the foreseeable future, banks can only gain from volatility or from a major event that would force Tesla to raise funds.
rightnow 8y ago
Same comments for 6 years now. Bla bla bla
covercash 8y ago
Maybe that’s his backup plan if it doesn’t work out... use a BoringCo drill to “accidentally” trigger an earthquake, collect insurance money, funnel it all into SpaceX and launch himself to Mars.
- SmallDeadGuy 8y ago
  Taking the meaning of "playing the long game" further than anyone else ever has.
- deusofnull 8y ago
  Maybe he's gonna use a BoringCompany drill to DRILL to Mars. Ever think of that?
  - djstein 8y ago
    Tengen Toppa Gurren Lagann?
  - perl4ever 8y ago
    There was an old story that I can't seem to find by Googling, but the gist of the plot that I recall was that Mars was stealing Earth's atmosphere through a kind of vortex, like a huge double ended tornado, and some guy in an old plane flew through it, getting to Mars without a spaceship.
api 8y ago
I have a friend who bought a Tesla and is now asking for a buy-back. His experience has convinced me the negative hype isn't all just shorts propagandizing and "Musk fatigue." This company has huge, huge problems. When he first got the Tesla it had huge body panel alignment problems. Eventually these were fixed, but it took too long and was difficult to get Tesla to fully acknowledge them. After that he had a range of little annoying problems, many of which were likely software bugs, but then he (actually his GF) experienced something in autopilot mode known on the Tesla forums as "shadow braking" -- the car braking hard on the highway because it seems to see the shadow of an overpass and think it's a wall. This is extremely dangerous. It was on the I-405 (SoCal) going 70-80mph, and such a thing could easily cause a rear end collision. At that point they're starting the process of returning the car. Not only have there been many problems including a major safety issue, but Tesla has apparently been evasive and difficult getting them fixed. I hate to type this because I love most of what Musk has done and I really credit Tesla with helping get the ball rolling on EVs. EVs are tipping now, and I'm not sure that would have happened without Tesla. It at least would likely have taken longer. But... it is what it is. I'm just telling the truth. Reading between the lines a little Musk seems horribly burnt out. If I could give him advice I'd say pass Tesla to someone with more experience in the car industry, start gracefully exiting Tesla, take a break and do a little personal inventory, and then focus 100% on SpaceX. The latter is the far more important of the two companies and is in much better shape. I also feel like it's his real true love. If Telsa can't be righted its fate will probably be purchase (or purchase of its assets in bankruptcy) by another car company. That's fine. As I said: EVs are tipping. Finally to speculate a bit... I wonder if Tesla is an indirect victim of the latest wave of AI hype? It seems like they were on the right track until they decided to go all in and shift their major focus from making a great electric "driver's car" to self-drive or bust. Self-drive probably consumed insane amounts of capital, and has greatly harmed the company's reputation by causing serious accidents because it is clearly not ready. The shadow braking thing really reveals how primitive "AI" actually is-- this is something a bumblebee would not do, and its brain consumes milliwatts of power. From what I've read self-drive is really just object recognition combined with spatial mapping, path finding, and a lot of heuristics. The latter is what worries me. "Expert systems" can't capture complex problem domains due to the exponential nature of a combinatorial explosion. There will always be edge cases. Needless to say we will not be uploading consciousness anytime soon, nor will fully autonomous AIs be taking over the world.
pjc50 8y ago
> Tesla is one earthquake away from no longer being a company. So is most of Silicon Valley, which is actually in an earthquake zone that some believe is overdue an earthquake.
- sofon 8y ago
  Are many/most companies with billion dollar valuations so exposed? I would imagine most billion dollar companies have multiple sites and manufacturing and data centers spread across multiple sites.
- microtherion 8y ago
  Most of Silicon Valley is not as highly indebted as Tesla. Apple, for instance, could literally afford to send all of its employees on vacation for 10 years while their headquarters is being rebuilt, without going into debt (Not that they would, of course).
- bdcravens 8y ago
  Your typical Internet startup wouldn't lose its means of production, which are people with computers, assuming they are deployed to the cloud. Even those that do any kind of hardware (say scooters) aren't the factories elsewhere and then shipped?
this_user 8y ago
> they have about a year of cash runway left( optimistically) Much less than that actually. At their current burn rate they won't even be making it to the end of this year without either selling enough M3 to generate some real cash, or by raising some new money from the market. Also, they have a lot of debt come due next year (and even more over the following years) while yields are up to over 8%. However, M3 production numbers are actually looking good now, and they are hitting their targets for the first time. And their cash burn for Q2 came in lower than expected after some cost cutting. So they might be able to turn the corner just in time. Musk has repeatedly stated that the company will not need to raise new money, but had also done that before some previous financing rounds, so the market does not put that much faith in his words at this point. It all hinges on the M3 now. Can they get production (and sales) numbers to where they need to be in order to become cash flow positive?
- toomuchtodo 8y ago
  They're also going to sell somewhere between $100 and $200 million in ZEV credits this quarter.
- dunpeal 8y ago
  Don't they also have some heavy debt obligations coming due very soon?
- compcoffee 8y ago
  >However, M3 production numbers are actually looking good now, and they are hitting their targets for the first time. Really? Where can I read the official quarterly numbers? Of what quality are these cars? Do they all need to be reworked? >Musk has repeatedly stated that the company will not need to raise new money He said that prior to raising cash the last 3 times. He also said he was going to take the company private at $420. For some reason, I'm doubtful.
  - ben_w 8y ago
    Given that he knows his memes, and that “420” is a weed meme, and given it was a ridiculously stupid thing for him to tweet, I’m of the opinion he was literally high when he said that.
nickik 8y ago
With their current production rate they have 11 billion in revenue from the Model 3 alone. They guidance suggest they should be profitable this quarter because as of right now they are hitting their production target.
- chollida1 8y ago
  May i see your napkin math for the 11 Billion figure?
  - jakobegger 8y ago
    5000 cars per week * 52 weeks * 50000 average selling price = 13 billion dollar revenue per year
    - deleted 8y ago
      [deleted]
  - flexie 8y ago
    I think that would be something like 5,000 cars per week times 52 weeks times the average price of 42,000 dollars per car
martythemaniak 8y ago
Kind of depressing that yours is the top comment, given how many outright lies it is based on. >From the outside it looks like Telsa is about going to go into a tough winter like moment. From the outside, it looks like they have a product that's a generation ahead of the competition and is flying off the shelves. > They need to start designing and building out manufacturing facilities for their next car and the help bolster Model X manufacturing. They are. Apart from the Shangai one, they've never actually stopped building the Reno factory, which still has to triple in size before it reaches its final form. >They are cash flow negative, they have about a year of cash runway left( optimistically) Based on 2 quarters during which they built up a factory. Their guidance for Q3 or Q4 has them turning a profit. Usually, people doing these wild extrapolations form the basis of jokes (ie Discu Stu's record sales). > And the most worrying thing for them is that their next car will compete head on with Mercedes, BMW, Audi, and GM. That will be the first time they've had to compete head on with a competitor. This is growing the EV market as a whole. Tesla does not want to own 100% of a sub-5% EV market. They want to own a decent chunck of a 100% EV market. People really, really don't like hearing this particular point, but their cars are approximately a generation ahead of other EVs. Specs wise, Taycan and EQC are essentially matching a 2016-era Model S / Model X and will be available about 2 years from now. Everybody seems to have forgotten how the Bolt was supposed to be the "Tesla Killer". Look, I even found one specifically from the same source as this article: https://twitter.com/business/status/554725778420957184 https://twitter.com/business/status/554725778420957184 Then people were "worried" about their ability to manufacture at scale: https://www.theatlas.com/charts/HkNUFo57f https://www.theatlas.com/charts/HkNUFo57f The problem is that when you actually have to put real money down and these theoretical comparisons become real, things go the opposite direction. Current Bolt sales are flat/declining around ~1500/month, while Tesla is pushing out 5000+ Model 3s per week.
- chollida1 8y ago
  > Kind of depressing that yours is the top comment, given how many outright lies it is based on. Most of the time I comment, its more to get my ideas clarified, if you think I've outright lied then please correct me. As your comment stands you didn't actually refute any of my points. Is the Reno factory going to be building cars if not then its irrelevant to the topic of factories to build cars with? The China factory hasn't started yet, so I think I'm on strong footing with this. Tesla has also been cash flow negative for not just two quarters, but almost its entire life, now to be fair to Tesla, this was by design. It's possible with all the cost cutting and M3 sales that they could be profitable in Q3 but does anyone think they have finally turned the corner and will leave their trail of losses behind them? I'm not convinced of that:) I'm looking for actual thoughtful dissent to change my mind, but so far you haven't actually provided any facts or even opinions to show "outright lies" in my statement.
dmode 8y ago
Tesla's liquidity issues are completely overblown. Nevermind that their cashflow and spend numbers are improving. People also tend to overlook the amount of investor liquidity we have in the market. SoftBank has a $100bn fund. Saudi's have a $1 trillion sovereign wealth fund. I believe the UAE have something similar as well. Raising a couple billion dollars in this environment would be extremely easy. Especially when you have a backlogged demand on your product and the product has a 20% gross margin
- jcranmer 8y ago
  The complaint isn't that Tesla faces challenges in raising money, but that Tesla is delusional in believing that it doesn't need to raise money.
  - dragontamer 8y ago
    Yeah, but Musk always said that he won't raise money, but does so anyway. I bet you Musk does another stock offering by the end of the year. Its kind of a yearly-tradition at this point, with exception of 2014 when Musk decided to raise a few billion in bonds instead.
- seebee 8y ago
  Tesla automotive does not have a 20% margin, it's much closer to 10%. In the '18-H letter they claimed 20% margins including ZEV/GHG credits and added back Services & Other (in all Tesla 10-Q's the Services & Other are subtracted). Tesla calculates gross margin by not only including the ZEV/GHG credits but by basing the margin on the retail price of the vehicle rather than the bulk invoice. Cost of stores and R&D expense are also omitted from the gross margin.
  - dmode 8y ago
    Can you point to a source ? I am looking at Q2 statement and gross margin before ZEV is 20%. With ZEV it is 21%. It's on page 2 here http://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9ecac0ad7712 http://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9ec... Also, gross margin is literally margin after cost of goods. Doesn't include SG&A expense.
AnthonyMouse 8y ago
> Stop and think for a second that Tesla is one earthquake away from no longer being a company. This is highly unlikely in the short term and in the long term they'll be building more plants. It's also something anyone can insure against by placing a bet that an earthquake will destroy their factory in the next five years. You'll presumably get 50:1 odds or better (a good chunk of which is the vig), which means the insurance would cost less than 2% of the sum you want insured. > they have about a year of cash runway left( optimistically) Unless they turn a profit (or come closer to it), which it's plausible they're about to do. > You can't just collect insurance money and build a new factory like you can with a house, this is a many year project. No, but you can buy insurance in the amount of the value of the output (or of your shares) rather than the cost of building a new facility, if you were really that worried about it. > And the most worrying thing for them is that their next car will compete head on with Mercedes, BMW, Audi, and GM. That will be the first time they've had to compete head on with a competitor. The entire EV market is production capacity constrained and will be for a couple more years at least. They can't lose sales to Mercedes or BMW EVs because they'll all already be selling 100% of the EVs they can manufacture, all of which are coming at the expense of petrol cars.
gaius 8y ago
compete head on with Mercedes Tesla’s brand is strong enough that they can charge Mercedes level prices with poor quality interior fittings. Sit in a Tesla, it feels like a car costing half as much. If Mercedes can maintain their user experience in EVs without a significant price premium, Tesla is toast.
georgeecollins 8y ago
I agree on all points except that the most worrying thing is the entry of Mercedes, BMW etc. First of all, GM and BMW have sunk a lot of money in electric cars that are on the market and being crushed by Tesla in sales. Second, and most importantly, car brands are incredibly valuable. People said that the Prius would go away when other car makers started making hybrids. After years of competition, the Prius still dominates. Why? Because the economic reasons for owning a hybrid really aren't that compelling. The social signaling reasons are. So, if you want to say those things about yourself you own a Prius because everyone knows you are driving a hybrid at a glance. A Tesla makes a different-- but I would argue equally powerful-- statement to all who behold it. If Tesla goes into bankruptcy the brand and the cars will be revived.

Filligree 8y ago

A while ago I considered reserving a model 3, but I eventually decided against it. Feel like I dodged a bullet, there. There was a time where Tesla had a genuine advantage over the incumbents, but it never was enough of an advantage to overcome their lack of experience. That's only obvious in retrospect, I suppose.

5874-4b22-a4e0 8y ago
It was a full refund even at the time, so not a major bullet. I wasn't sure if I was going to be living at a place that would allow me to install a charger, so there was never a chance for me then. Maybe in 10+ year next wave of advancements will have arrived. https://www.tesla.com/support/model-3-ordering-FAQ#refund https://www.tesla.com/support/model-3-ordering-FAQ#refund
mikeash 8y ago
I’ve had a Model S for about 3.5 years and it’s been wonderful. It’s not perfect and there have been some dumb issues, but nothing severe. I’ll probably be ordering a Model 3 soon as a second car, whenever the standard range version becomes available, or possibly sooner if the standard range isn’t available this year. There is still no real competition.
nickik 8y ago
Can I as you what you are basing this on? Tesla has more experience in terms of electronics, batteries, electronic drive train and software. They might not be as good in terms of building car frames but they basically figured it out and the M3 is not a mass production car. It seems to me its the other car companies who are missing core experience on many of the core technologies needed for the future.
rcMgD2BwE72F 8y ago
Can you cite one source that indicates that Model 3 owners are somehow dissatisfied? All reviews (by the general public and by journalists) say the car performance, quality and experience is excellent and above Mercedes / BMW's. Have you driven one?

debacle 8y ago

Non-amp URL: https://www.bloomberg.com/news/articles/2018-09-07/tesla-chief-accounting-officer-leaves-citing-level-of-scrutiny https://www.bloomberg.com/news/articles/2018-09-07/tesla-chi... Better formatting, no hideously pixelated photos.

gwbas1c 8y ago
And the next article, when I kept scrolling, showed Musk smoking a joint and then holding a flamethrower!

empath75 8y ago

IMO, they should fire musk, slow down their blue-sky research projects, rip autopilot out of the cars, and just build "boring" luxury electric cars with huge profit margins and rake in cash.

spiderfarmer 8y ago
I don't think they should fire him, but he should most definately do the un-american thing: work a sane amount of hours and go on vacation every now and then.
- dasil003 8y ago
  I don't care how much he works, but he's gotta do something about his thin skin and incompetence with the media.
  - meowface 8y ago
    He just needs to stop doing PR.
    - enraged_camel 8y ago
      On the contrary, the overwhelming majority of his media appearances have been widely popular. But something seems to have snapped in him recently, perhaps culminating with calling that cave rescuer a pedophile. The dude has serious problems that are probably exacerbated by stress and lack of sleep. He needs to take a break before something bad happens.
  - mschuster91 8y ago
    > I don't care how much he works, but he's gotta do something about his thin skin and incompetence with the media. This sort of thing usually comes from a severe lack of sleep and recreation.
  - rcMgD2BwE72F 8y ago
    Not everyone expect an industry leader to fake a persona in public so as to appear like the media want them to. Wall Street might want that but hey, who cares?

jacknews 8y ago

So the headline is that the CFO is resigning, yet there's a huge picture of the photogenic HR chief(?), who, as a side-story, is 'not returning'. I feel manipulated. Also that this publication should be doing a bit more investigation and a bit less pontificating.

gnode 8y ago
> yet there's a huge picture of the photogenic HR chief(?) The photo was tiny in the original article. For some reason the AMP version has been posted, and it blows all the pictures up.
LaGrange 8y ago
It's much less huge on the non-amp site: https://www.bloomberg.com/news/articles/2018-09-07/tesla-chief-accounting-officer-leaves-citing-level-of-scrutiny https://www.bloomberg.com/news/articles/2018-09-07/tesla-chi... — I got a hunch that's what I'm seeing b/c that image was incredibly blurry. I have no idea why people link to the googlified versions of websites, they're often barely readable.
whatok 8y ago
This is breaking news. You aren't going to get in-depth reporting on it for a while.
compcoffee 8y ago
>I feel manipulated. Is it that easy?

sophistication 8y ago

I'm not losing optimism because of this. Musk fits right into the current political & cultural trajectory and the Tesla brand is sleek & timeless. The media is framing Musk's flaws (Twitter insults, weed & booze) as a bad thing, but outside of the media, people do not care about such things nearly as much. It just requires a few years of optimization and the cars are going to be en par with established brands.

cecja 8y ago
Talk about gaslighting yourself. If you are not recoginizing that something fishy is going on at tesla you are not reading the same articles as the rest of us.
- rcMgD2BwE72F 8y ago
  What's fishy? I've been following Tesla since 2010 and the main changes since then isn't what appears to be fishy but what the media are making of it. Do you realize that Tesla sold more cars in the US that Mercedes and BMW this summer? How many media reported that? Do you know that the most trusted car analysts who tear-down the car said it's expected to be the most profitable car produced in high volume? Do you know that all data analyses about turnover in top positions at Tesla indicated that they are average? How many reports about such moves (at legacy automakers) make headlines? They've only increased their coverage of the company and try their best to make every thing more clickbait. It's worked great so far, for sure.
  - Fricken 8y ago
    "We think Tesla is worth zero" -Jim Chanos You haven't been reading the same news I have. While there were plenty of red flags prior, Musk began digging Tesla's grave in earnest in fall 2016. He Started with the Alien Dreadnought, which was bonkers. He sold shareholders on buying Solar City using fake solar shingles which don't exist, that was $5b+ flushed down the toilet. Also he implemented HW2, which is thousands of dollars of hardware going into every new car regardless of whether customers pay for it. When Solar experts, finance people, Vehicle manufacturing experts and Autonomous vehicle experts get together and compare notes there's only one conclusion to arrive at: Tesla is fucked. Alien Dreadnought, Solar City, HW2. I call it the ASH doctrine: Musk's 3 point plan to reduce Tesla to ashes. Post chapter 11 Tesla may have a life ahead of it, but it's been a slow motion trainwreck for years. The Shorts, the Media, the Koch brothers, they didn't destroy Tesla. Musk did. He's incompetent, and nuts. It's pretty obvious now, but if you were paying attention, it was obvious before too.

sumedh 8y ago

I think Elon Musk is a genius and I don't use that word lightly. I think he's also one of the boldest men that ever came down the pike. Put me down as saying I've always been afraid of the guy whose IQ is 190 and he thinks it's 250. I like to think there’s a little of that risk with Elon - Charlie Munger (in 2014)

stevespang 8y ago

Big oil is taking Tesla down . . . .

fencepost 8y ago

As someone who's not obsessively following Tesla, I'm a bit jaded by these. I'm sure there are problems, but what feels like massive PR efforts by the "shorts" has effectively poisoned the well for negative news. As a casual observer I can't tell what's actual bad news and what's well-orchestrated market-manipulation "OMG WE'RE ALL GONNA DIE" by people trying to drop the price, and I don't actually care enough about the company to put in the effort to find out. Kind of depressing, really.

matwood 8y ago
> I'm sure there are problems, but what feels like massive PR efforts by the "shorts" has effectively poisoned the well for negative news. What kind of PR effort do you need when every CFO you hire keeps leaving? Think about it. The person in the company who completely knows the financials stays for a month and bounces? Why? Could it be that the financials are so bad they are unfixable? Could it be that that person is being pushed to stretch things a bit here and there to make them look better?
- dnomad 8y ago
  > What kind of PR effort do you need when every CFO you hire keeps leaving? It's really gotten to a point where all the Musk-haters now believe their own bullshit. This post (and many others in HN's bi-weekly anti-Musk thread) is a classic example. Tesla had had a grand total of two CFOs since Musk took over. > Could it be that that person is being pushed to stretch things a bit here and there to make them look better? Could it be that that person is an alien sent from Venus to stop Musk from returning to Mars? See, it's easy to ask stupidly leading questions and spout completely baseless speculation. What's more difficult is actually examining the facts and drawing a rational conclusion.
  - matwood 8y ago
    >See, it's easy to ask stupidly leading questions and spout completely baseless speculation. What's more difficult is actually examining the facts and drawing a rational conclusion. In the first quarter of this year, the company lost Morton’s predecessor, Eric Branderiz, and Susan Repo, who was treasurer and vice president of finance. CFO Deepak Ahuja retired in 2015, only to return in 2017 after his successor, Jason Wheeler, quit after just 15 months. A rotating door of financial executives screams financial problems. Please tell me what rational conclusion I'm supposed to draw?

Nokinside 8y ago

If Tesla needs more money, investors will use that as a leverage to get the Elon Musk problem addressed. It would be good for everyone if there is intervention that corrects the problem and Musk could continue. Investors can demand to have someone who can veto his craziest decisions and publicity or they can force him out. Musk has structured the board so that nobody has power over him. He must know that if asks more money that changes. Musk seems to be highly functioning bipolar (he thinks so himself). It's probably mild form of bipolar disorder called cyclothymic disorder or something similar. People with cyclothymia are at increased risk of developing full-blown bipolar disorder over time. The problem is that that his mental issues may get out of hand during stressful situations. Musk has been showing signs of slipping from hypomania to full mania for the last year: little sleep, endless energy, lowered inhibitions, erratic quick decisions and unnecessary confrontations. If he publicly calls people he has never met pedophiles, I just can't imagine how bad the situation is with the people who have to deal with him every day. Musk has already achieved so much. It would be shame if it all ends in tragedy.

HeadsUpHigh 8y ago
>If Tesla needs more money, investors will use that as a leverage to get the Elon Musk problem addressed. Sounds you are lost into your own bubble. Every vote for removing Musk has failed completely in the past.
- Nokinside 8y ago
  The first line I wrote addressees this issue. That changes when Musk wants to raise more money next time. Investors can use their power and set the conditions.
- bdcravens 8y ago
  Those votes have failed due to how the company's voting structure is set up. It takes about 90% of the vote outside of Musk and insiders to oust him.
  - HeadsUpHigh 8y ago

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maxxxxx 8y ago

I just watched a part of the Joe Rogan podcast with Musk and I have to say he looks very unhealthy. Maybe I am wrong but to me he looks like he is drinking a lot or on some other drugs. I can imagine working with a CEO who is pushing himself way other the limit is a pretty unpleasant experience.

dgritsko 8y ago
Didn't he actually smoke weed live as part of that broadcast?
- randlet 8y ago
  He had a single puff and did not appear to inhale (his body language made it look like he was a very inexperienced smoker). He said he'd tried it before but wasn't a big fan (a pretty common experience). edit: people are going to need to get used to the fact that weed is going to become as normalized as alcohol (which is a harder drug than weed).
  - i_am_nomad 8y ago
    Sigh. I suspect you're right about the normalization, I just absolutely hate the smell of it. I grew up on the East Coast, where cigarette smoking was commonplace, and I always found it revolting. Here in the Bay Area, I've had a few years to enjoy the relative scarcity of tobacco smoke, and now suddenly cannabis is out in the open. Seems like there's no escape from second-hand smoke.
    - randlet 8y ago
      Smoking it in public is obnoxious I agree. Hopefully people choose to eat or vapourize it rather than burn it.
- deleted 8y ago
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- rcMgD2BwE72F 8y ago

ajmurmann 8y ago

I think it's time for Elon to step away from Tesla. He is an incredible visionary and that's what made Tesla possible and revolutionized the car industry. That work is done now. Everyone is making electric cars now. There is no need for Elon to innovate at Tesla anymore. I might even go so far and say that Tesla had moved the entire industry so much that there isn't even much need for Tesla itself. I think it's best for everyone if Elon focused on SpaceX, the Boring Company and his AI endeavors. Tesla sticks out from this list because mission is accomplished.

itgoon 8y ago
I tend to agree. He's been fantastic at getting the impossible to happen, but he's not as good at just running things. There was a bit in time when he offered to help Flint, MI with their water. It turns out they don't need the help. However, if he were to turn his fantastic energy towards helping under-served communities, I think he'd find that there's plenty to do, and very satisfying.
- ajmurmann 8y ago
  I have the suspicion as well that he isn't great at running a steady business. My point is really about his amazing visionary qualities being more useful elsewhere. Even if he was great at running things too, it's radical innovation where he is a once in a century person. Edit: it would be a shame to waste that amazing innovation talent at what's now a close to regular car company (relative to his other ventures)

claydavisss 8y ago

"Stock Plunges"? If anything, TSLA seems to continue to ride high with only small relative deviations with news that would gut any other stock. Not to say I am bullish on TSLA...quite the opposite. TSLA will inevitably crater but it is going to take most of the NASDAQ with it and probably wipe out the mobility 2.0 market segment and the EV and nascent AV markets. Silicon Valley is way overdue for a serious garbage collection cycle....TSLA is going to trigger it eventually. Its not all bad: a big reset in SV would benefit the big players like Apple and Google who will suddenly have a much deeper and cheaper talent pool to access.

3pt14159 8y ago

It is worrying, but I don't know if I'd really call that a stock plunge.

kerng 8y ago

The revolution devours it's own. What Tesla started is amazing, years ahead of competition initially, but there will be a very tough future ahead as electric cars become more and more the norm.

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smpetrey 8y ago

Here's the none-AMP Bloomberg article: https://www.bloomberg.com/news/articles/2018-09-07/tesla-chief-accounting-officer-leaves-citing-level-of-scrutiny https://www.bloomberg.com/news/articles/2018-09-07/tesla-chi...

RobertSmith 8y ago

If you visit Tesla's management's page you can see only 3 names; Elon Musk, CFO Deepak Ahuja and CTO JB Straubel. No exec stays for a long period in Tesla. Who is going to resign next? CFO or CTO https://news.alphastreet.com/tesla-motors-cao-chief-accounting-officer-dave-david-morton-resigns/ https://news.alphastreet.com/tesla-motors-cao-chief-accounti...

onepremise 8y ago

Seems like much of this is closely related to the 'going private' statements. I'm curious if Elon had it out for one of the many short selling firms exploiting TSLA stock, Citron Research, etc... There's more at work here than just Elon being overzealous with corporate ambitions. There are groups of people, venture capitalists, and banks hell bent on weaponizing margin trading to manipulate markets.

ricksanch88 8y ago

I love how someone from Jeffries is concerned with Tesla's use of marijuana. I know three analysts that work at Jeffries and they all microdose and/or use cocaine. It's par for the course.

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Tesla may be going bankrupt the Altman-z score of guru focus indicates that. Hopefully the source code will be open source. https://www.gurufocus.com/stock/TSLA https://www.gurufocus.com/stock/TSLA

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