Tesla Inc (TSLA)

[boston745]

BANKRUPTCY ISN'T LIKELY FOR TESLA BUT THE ODDS ARE GROWING
Two new factories are operating at less than 50% of capacity. Massive capital investments plus vertical integration plus falling sales plus no new models (other than the Frankenstein-mobile) = huge cash burn. FSD at Level 2 autonomy remains well behind competitors and isn't remotely capable of running a robotaxi system.

In this excellent piece, the invaluable (for Tesla shorts) Motorhead walks through how and why it might happen, comparing Tesla to other CAR COMPANIES who've gone bust. He recommends Tesla do a $100 billion equity raise to hold them over the next ~ 3-4 years until they might have new product.

https://www.linkedin.com/posts/joseph-bohrer-6b9786_could-tesla-go-bankrupt-the-odds-are-rising-activity-7187083286215557120-Npqo


Most of this article is exaggerations but the part about Teslas business model being dependent on growth is true. Without continued growth, Teslas fixed costs will eat away at its margins. The downside of having everything in house.

He finds fault in Tesla's business model, which he says is dependent on robust revenue growth, integrating vertically to capture profits from car sales, and directly selling cars to consumers.

"That is a brilliant model when [there's] growth … because you actually get paid for growing and you capture all the margin. The problem is, when you go into reverse and sales go down, it also goes in reverse," Lekander said, noting that Tesla was now faced with paying its fixed costs and negative working capital, a situation where liabilities exceed a business's income and assets.

https://markets.businessinsider.com/news/stocks/tesla-stock-price-crash-bubble-bear-outlook-demand-per-lekander-2024-4