Electric Records - But Not Good Ones...

Tesla's financial woes have compounded, and the situation is further complicated by reported reliability issues... What implications could this have on the company's future?

UPDATE: Tesla's head of battery engineering, Jon Wagner, recently left the company, and Tesla also unveiled its highly anticipated semi truck and a new roadster.

Tesla, steady on a mission to become the best electric car company ever, recently posted a record-breaking $671 million Q3 loss. This time last year, the company recorded a $22 million net profit. OUCH...

According to the company, ramping up production of the Model 3 caused the staggering profit setback. Tesla now says they’ll produce 5,000 Model 3’s a week by the first quarter of 2018. However, I have my doubts... And also, I feel Tesla’s financial woes can be attributed to other factors and may just be ramping up themselves. 

The Model 3 is supposed to be
affordable for the masses.
But is it truly?

For example, the Model 3 is SUPPOSED to start at $35,000. But this is for the short range battery, good for roughly 220 miles. The long range battery model (good for 310 miles) will likely be the one that’s built most often, and that automatically tacks $9,000 onto the base price, taking it to $44,000. And that’s before you factor in other available options (any paint color other than black cost $1,000) and Tesla’s “production bottlenecks” they’ve admitted to facing. All of a sudden, the Model 3 isn’t sounding quite as accessible to the masses as originally planned...

ON TOP OF ALL THAT, the Model X has been plagued with quality issues, bringing the company’s production procedures further into question. All of this combined with Tesla’s haphazard leadership, firing of 700 employees, and constant fund borrowing makes for a messy situation.

Any Way Forward?

Is there potentially a way out for Tesla? I feel it’s to early to say if this is a sign of worse things to come, such as the brand shutting down. As of now, Tesla still has plans to produce a “Model Y” small SUV in 2019 or 2020. But a good start will be getting the Model 3 produced in sufficient enough numbers, followed by focusing on improving the quality of current products like the Model X. An affordable Tesla sounds like a great idea, but only if it’s executed well. 

In the meantime, someone get Tesla an XL band-aid and a financial advisor... PLEASE.

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