You mean, because they have priced them below the price that would clear their ability to produce, and have either inadequate resources or inadequate competence to scale production to meet the quantity demanded at the current price. So, they are failing at either production or pricing or both, and losing money because of it.
[1] https://ycharts.com/companies/TSLA/gross_profit_margin
Moody's downgraded their debt and it has indeed been plummeting, that's not a creation of the media at all. It's actually the opposite of your claim. If this were any other auto company other than Tesla the stock would be nearly worthless, the media has hyped this thing to the stratosphere.
When things are good, hype is great. Not so much when things start to implode.
Maybe Warren Buffet or another investor with the long view would be a solution?
Tesla cannot make enough of them because Tesla cannot make enough of them.
Everyone knows Tesla can sell those cars instantly if their production lines are up to snuff. But the production targets are laughably behind. 5000 cars/week by Dec2017 ?? Yeah right. Its March2018 and they haven't even hit 5000/week yet.
I wouldn't say they are laughably behind. Projects do get delayed. My own projects got delayed by multiple months. The California high speed rail is 3 years delayed ! Its better to do it right than to just hurry things.
Do you have $230 million dollars payment due in half-a-year, and $920 million due in a few months after that?
> Its better to do it right than to just hurry things.
Sure it is. But the CEO has to keep the bills paid, and the bill is about to come due. I think its reasonable for people to feel worried right now.
Elon has managed to scrounge up money out of nowhere before. The Model 3 reservation system raised $300 million nearly instantly for instance. So these aren't unfathomable numbers at all.
But its a risk.
Tesla bet the farm on revolutionizing auto manufacturing while seemingly ignoring much of what other manufacturers have learned over the years.[1] Long-term, elements of that bet could pay pay off. But right now? They're still struggling to scale up Model 3 production. And that's for a car that was literally designed to be less complex to manufacturer, with fewer, simpler parts relative to the Model S and X. It doesn't matter that their manufacturing approach might be more efficient in the future when everything is working perfectly if they can't meet their bills this year.
No other manufacturer has these kinds of prolonged production problems. They meet significantly higher production targets and with fewer quality control issues. If Tesla doesn't show significant progress this year (both on production targets and lowering their burn rate), they're going to be in serious trouble. Most likely, we'll end up seeing Tesla have to hire contract manufacturers like Magna Steyr to build complete cars.
Personally, I'd be fine with that. It'd give Tesla its best chance to entrench itself in the EV market before the traditional automakers step get involved. They, for one, won't have similar problems. I genuinely want Tesla to succeed, but it's become abundantly clear that they don't know how to find a way out of "production hell."
0. https://www.reuters.com/article/us-tesla-results/tesla-puts-...
1. https://www.forbes.com/sites/joannmuller/2016/08/04/tesla-mo...
Infiniti sold something like 60,000 Q50s globally in 2017 by comparison, for a sedan line they've been selling for decades (the G37 & G35 prior).
Nissan only sold 27,000 Leafs in the US + Europe in 2017, after seven years of availability.
They don't have the bugs worked out yet, so production is behind schedule.
Ultimately it's a big engineering problem.
I've learned not to bet against Musk solving difficult engineering problems.