Is Tesla going to hit the end of the road ?
Shucks!!!
Tesla Posts $702 Million Loss. Is This the End?Written by Alex Koyfman Posted April 24, 2019 at 8:00PM
Dear Reader,
After two profitable quarters, Tesla Motors (NASDAQ: TSLA) is reporting a loss of $700 million for Q1 2019.This $2.90 per share loss is being attributed to a sharp decline in model S and X output, contributing to an overall delivery drop of a ground-shaking 31%.
Though production of the Model 3, the car Elon Musk claimed would take Tesla to the next level by finally attacking the elusive middle-class market, rose by 3% from the previous quarter, deliveries of the flagship models managed to drop to just 12,100 units — less than half of the 25,000 unit per quarter run rate of the last two years.
Wall Street analysts, the same guys who were projecting adjusted profits of $6.75 per share for 2019 back in January, were not shocked considering the delivery figures, but the dismal numbers were even worse than most dared to predict.
Needless to say, this is not what diehard Tesla fans wanted to hear.
A Lot Can Change in 120 DaysAfter the heady days of late 2018, when analyst predictions were being handily beaten, this news puts a cloud over the 15-year-old company's future.
As of today, Tesla's cash and cash equivalents are down to $2.2 billion from $3.7 billion at the close of last year — a substantial bloodletting by any standards.
Despite all of this, Musk managed to stay positive during his conference call with analysts, stating that demand remains “quite solid, quite strong.”
Since bold predictions are the name of the game when it comes to the world's biggest EV maker, I figure I'll throw one into the mix as well.
This is the beginning of the end.
The problem isn't that the idea is bad. The problem is that the forces that are lined up against the California-based car manufacturer are simply too great.
David Versus a Team of GoliathsJust about every major car brand in the world — from American giants such as Ford and Chevy to Japanese powerhouses like Toyota and Nissan to the European luxury brands — is making major inroads in the EV market.
Even Ferrari, a company known for power, prestige, and the world's sexiest exhaust note, has openly stated plans to offer an all-electric super-car.
How can an upstart like Tesla possibly compete with such an onslaught of competition from brands with decades of established customer loyalty?
The answer: It probably can't.
Lacking the conventionally powered fallbacks that all the other brands still rely on as their mainstays, Tesla just might go down in history as the automotive industry's “little engine that couldn't.”
Yeah, I know, all of this sounds downright pessimistic and reactionary on my part.
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