I heard this on the news this morning and here's a link to the full story:

http://fortune.com/2018/07/23/tesla-suppliers-cash-back-profit/

As a long time resident of the San Francisco Bay Area, I'm all too aware how multi-billion dollar companies can appear out of thin air with absolutely nothing in terms of hard currency to back them up. It's quite well known that Tesla (located in Fremont, California) hasn't turned a dime in profit and it's relying on all sorts of "funny money" to stay afloat.

In fact, most of the economy in the Bay Area (and California for that matter) is just like Tesla and the whole thing is overdue for a big flush. However, it will be a full blown depression worse than 2008.

 

Tesla is a hard one to figure and harder to invest. The supplier claw-back (that they now say is something else) is just the latest in the Model 3 mess. Their manufacturing ineptness driven more by hubris, ego and pie-in-the-sky visions than by rational acts is coming back to haunt them big time. So far, they've been able to dodge all the bullets by going to the market and selling stock or (last Aug.) $1.8Bn in junk bonds based on their story of proprietary innovation and deferring profits for growth plus a gigantic Model 3 backlog. Those days just may be coming to an end. $7.5K federal income tax credit starts phasing out 1Q'19 and there is some credible competition showing up real soon. The recent opening of the order book to everyone after many waited in line in March '16 to be first coupled with the fact that the promised $35K Model 3 is not happening yet has dampened a lot of enthusiasm as has the sketchy build quality and incomplete software of early units. But with all of that, the stock price has been pretty resilient if volatile. There are as many bears that look at the financials and wince as there are bulls that insist that Tesla is going to own the world of transportation and energy generation and storage and thus rates a high market cap.

We'll see what Q2 earnings and 10K brings. FWIW, Tesla says that problems are behind them and profits in Q3/Q4 are going to happen.

Stay tuned.

 

Tesla and (and a lot of "start ups") are nothing but "Incinerator Stocks" - that is they do nothing except burn capital.

Tesla will wind up just like the real estate market before the crash in 2008 and the company is already starting to turn"upside down".

 

I wouldn't say that they 'do nothing except burn capital'. They actually do make pretty nice BEVs and have invested heavily in the Supercharger network to provide on the road 'fast' charging which sets them apart from most others, for now at least. But to your point, their cash burn is pretty astonishing given what they actually produce and they have more than a few issues with quality - at least according to the fansites.

The business case is less rosy if you just look at the numbers. If they don't get a lot more efficient in manufacturing it's going to be hard to get profitable. They put on an all-hands-on-deck 24/7 effort to reach their stated goals of 5K/week for the Model 3. They managed to achieve that goal just before the end of Q2 but it looks like the rate has dropped since. Now the problem seems to be logistics - lots of cars in temporary storage lots awaiting delivery, presumably to the hoards of reservation holders. Hard to understand why there isn't a fleet of car carriers hauling Teslas to eager customers but that seems to be an issue. Lots of theories why.. but critical info may be getting harder to get - Elon is getting harsh on critics:
https://seekingalpha.com/article/4189933-tesla-montana-skeptic-response
https://www.marketwatch.com/story/e...-by-calling-his-boss-2018-07-25?siteid=YAHOOB
Of course, you can find the serious fanbois too:
www.electrek.com
https://teslamotorsclub.com/tmc/

But they can get pretty nasty:
https://teslamotorsclub.com/tmc/thr...investment-firm-manager-good-riddance.123653/

Personally, I think they are toast but that's just because I am old school and think that even if you are saving the planet, you still need to make a profit.

Interesting stuff.

 

Another potential nail in the coffin for all EVs is the excessive load on the power grid during hot weather:

https://sanfrancisco.cbslocal.com/2...officials-issue-flex-alerts-during-heat-wave/

Here in California, the Mouthpiece Media (that reports only the news that the money interests want you to hear) is clamoring about turning your air conditioning up to 78, turn off the lights, and don;t use appliances. However the news reports never say a word about not charging your car during peak electric demand.

In fact, a gallon of gas contains about 33 KWH so charging an EV is equivalent to pumping about 15 gallons of gas out of the power grid. Of course defenders of EVs will claim they're actually charging with alternative energy (like solar) and not using the power grid. But that's also another self incriminating statement because it's essentially admitting that alternative energy isn't adding additional supply to the grid and we're still stuck on square one.

 

Personally, I think they are toast but that's just because I am old school and think that even if you are saving the planet, you still need to make a profit.

Yeah that is true, but. When oil and even coal, railroads and many other well established "industries" were in the same place as Tesla is today, they lobbied the government for money to get them through the hard times. Many of those "helps" are built into the way things work even today, when they no longer need the "help".

But with Tesla and things like solar that will help the planet, the ones that got/get the "help", lobby against them(Tesla and others) that are coming for their profits. If a century ago oil and other industries haden't got "help" when they needed it, the world would have been shoveling horse apples off the streets for a longer time.

 

Yeah that is true, but. When oil and even coal, railroads and many other well established "industries" were in the same place as Tesla is today, they lobbied the government for money to get them through the hard times. Many of those "helps" are built into the way things work even today, when they no longer need the "help".

But with Tesla and things like solar that will help the planet, the ones that got/get the "help", lobby against them(Tesla and others) that are coming for their profits. If a century ago oil and other industries haden't got "help" when they needed it, the world would have been shoveling horse apples off the streets for a longer time.

Good point.

 

Yeah that is true, but. When oil and even coal, railroads and many other well established "industries" were in the same place as Tesla is today, they lobbied the government for money to get them through the hard times. Many of those "helps" are built into the way things work even today, when they no longer need the "help".

But with Tesla and things like solar that will help the planet, the ones that got/get the "help", lobby against them(Tesla and others) that are coming for their profits. If a century ago oil and other industries haden't got "help" when they needed it, the world would have been shoveling horse apples off the streets for a longer time.

The difference between the coal and oil industries and Tesla is they are actually an economically workable product. However, electric cars rely on power plants that can't meet the demand for the additional load placed and the power grid itself doesn't have enough capacity to handle the additional megawatts. In fact, EVs are powered by power plants that mostly use fossil fuels as the primary source.

So EVs are presently not a workable product that the free market will support and I don;t see them becoming workable in the near future.

 

The difference between the coal and oil industries and Tesla is they are actually an economically workable product. However, electric cars rely on power plants that can't meet the demand for the additional load placed and the power grid itself doesn't have enough capacity to handle the additional megawatts. In fact, EVs are powered by power plants that mostly use fossil fuels as the primary source.

So EVs are presently not a workable product that the free market will support and I don;t see them becoming workable in the near future.

But oil and coal wern't either back in the day. Coal was pretty much a local thing, either you had it near by or you made do with other things. Oil was just a menace that bubbled to the surface in some places. It took investment and much of that came from government to get the ball rolling. EVs will never become viable without some type of support to keep the innovation coming and alive.

 

I absolutely love the idea of an electric car. I wish I had one and the support equipment required.

One would have to capture your own energy though. The advantage to electrical propulsion wins hands down as far as vehicle operation. But our energy stream for personal propulsion is liquid.

It's a huge stream. You just can't swap it into something else without time. So the car needs a solar station. And in the beginning......and bank of batteries to place and trade with others. A cheap solar network will form on it's own. Because charging from grid is forbidden. This is the only way to form a new cheap fuel chain. It will not be cheap at first. This is the reason someone will find a cheaper way to do it.

It would be hurting this planet(all of us) if you charged from the grid. CHOP.

Using taxpayer money will delay the new change ten times, not years , times......and it will still be expensive.

I'm all for it. I'm also for built in residential solar and heating too. It's great...it's easy to take advantage of it now when building. We just need to get used to it. Flushing a solar exchanger or replacing batteries or panels.....would be like tilling the garden or trimming the shrubs.

 

It all comes down to those pesky laws of thermodynamics (energy and entropy) and also the economic cost-to-benefit ratio.

Yes, there are oodles of alternative energy sources, but their practical use is limited by the cost of capturing them and distribution. Round the clock availability is another concern and the ability to meet "on demand" needs can be an obstacle. In terms of cost per KWH, wind power is competitive with a natural gas fired power plant, but it is not always available.

Hawaii has a geothermal plant powered by a volcano and Iceland is also the largest producer of geothermal energy. However, there aren't many volcanoes that are conveniently nearby and no one would want an active or dormant volcano anywhere near their city (look at what happened to Leilani Estates in Southern Hawaii), so geothermal energy remains a minor source.

Despite a promising future for alternative energy, right now pumping gallons of gas into an on-board tank is still the most convenient way to power automobiles, trucks, and buses.

 

If they could only design a car like this 1912 Baker Electric that is powered by its solar cell panel. I doubt many Americans would want to live with that kind of (imagined) performance. Glad I have not invested in Tesla Motors.

 

It all comes down to those pesky laws of thermodynamics (energy and entropy) and also the economic cost-to-benefit ratio.

Yes, there are oodles of alternative energy sources, but their practical use is limited by the cost of capturing them and distribution. Round the clock availability is another concern and the ability to meet "on demand" needs can be an obstacle. In terms of cost per KWH, wind power is competitive with a natural gas fired power plant, but it is not always available.

Hawaii has a geothermal plant powered by a volcano and Iceland is also the largest producer of geothermal energy. However, there aren't many volcanoes that are conveniently nearby and no one would want an active or dormant volcano anywhere near their city (look at what happened to Leilani Estates in Southern Hawaii), so geothermal energy remains a minor source.

Despite a promising future for alternative energy, right now pumping gallons of gas into an on-board tank is still the most convenient way to power automobiles, trucks, and buses.

A part of the problem with alternative energy sources is there are times when they actually over produce power causing base-line production sources to be wasted because of lack of storage. Potential Hydroelectric power at the dams is being sent to the spillway in deference to Solar and Wind. Because of subsidies for wind and solar there is an incentive to "sell" electricity at a negative price. You would think the people at downhill dams like Lake Mojave and Lake Havasu would have a problem with Hoover pumping water uphill.

https://www.nytimes.com/interactive...-environment/hoover-dam-renewable-energy.html

https://en.wikipedia.org/wiki/Cruachan_Power_Station

 

If they could only design a car like this 1912 Baker Electric that is powered by its solar cell panel. I doubt many Americans would want to live with that kind of (imagined) performance. Glad I have not invested in Tesla Motors.

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What kind of solar panel was that? I didn't know that in 1912 there were solar PV panels that could power a motor large enough to run a car.

 

I am pretty sure that car was fitted in the 1950's by International Rectifier to promote their solar cells.

They made both selenium and silicon cells bach then.

 

Some Tesla cars have already been in the drain.

 

The whole country will turn upside down very soon. You should consider relocating.

 

The whole country will turn upside down very soon. You should consider relocating.

Heck, a few more decades of burning fossil fuels and the oceans will rise sufficiently that half the coastal inhabitants will have to move.

 

Heck, a few more decades of burning fossil fuels and the oceans will rise sufficiently that half the coastal inhabitants will have to move.

Maybe that will finally flush the human waste off the streets in San Francisco so think positive.

 

When the Russians start bombing, that will be your smallest problem.