Tesla Model 3 - Make or Break ??

Break even for me is 15 years. Why bother? Then there's all the maintenance and cleaning. It just a huge hassle. I guess California doesn't want anyone but rich people building houses. Smart!

 

he doesnt get the 7500 credit, that goes straight to the consumer to encourage the purchase - and it applies to any and all electric vehicles...

 

we have recently been costing this out for the new addition going up at my parent's house. and when you apply the government subsidy (tax break), the breakeven vs a generac installation is about 7 years. however, if no new roof is going on, and no generac is included in the calc, then the breakeven doubles.

so i agree, 15 years is kind of stupid at the moment.

and that is why the only way it gets traction is if its mandated.

and that is why i brought it up in this thread - if it is mandated, and wealthy people also have to install them, then tesla stands to gain a lot.

 

TESLA DON'T BURN FUEL, IT BURNS CASH

Good article here. Tesla ended 2017 with $3.4 billion in cash on hand and $9.4 billion in outstanding debt, a testament to Musk’s borrowing prowess. Many analysts believe that Tesla will need to raise money again—and soon.

http://www.bloomberg.com/graphics/2018-tesla-burns-cash/

 

13 pages and over 300 posts... and no pictures of the Tesla Model 3?

I can't get past the front end, needs lipstick maybe.
.
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Good bye Tesla..........looks like another 6 day delay......
Ford /Tesla......TEAM UP BEFORE BOTH STOCKS ARE ZERO.....
Coming soon....

 

Ok, that doesn’t matter. It’s still a $7500 benefit to Tesla.

 

you apparently dont know how the system works

 

This was expected. To increase the production rate you need to improve the systems. Its not like there is a little knob they can just turn to go from 2500/wk to 5000/wk. There is only so much you can do while the line is running, you need to stop the line at some point to make major improvements.

 

It makes his cars cheaper and in your words “encourage the purchase”. I’d say that’s a benefit to him. If you are arguing otherwise I don’t think you understand how money works.

 

of course it benefits him. i did not deny that.
but you are implying that this subsidy is somehow unique to tesla - it isnt. it applies to all manufacturers of EV's. so dont be angry with musk for taking advantage of that opportunity.

 

I made no such implication. I’m not angry at Musk. If I had political friends who could take tax payer dollars and give them to me I’d probably do it too.

 

George Soros' bet on Tesla could see other investors follow suit

May 17, 2018


NEW YORK (Reuters) - If Tesla Inc (TSLA.O) Chief Executive Elon Musk needs to raise even more money, there may be a way.

On Tuesday billionaire investor George Soros disclosed a $35 million stake in Tesla convertible senior notes during the first three months of the year.

Convertible notes give investors the right to trade their debt for equity at a conversion rate and are more appealing to the risk-averse, allowing them to benefit from Tesla’s stock price rising while guarding against the risk that it might not.

Tesla’s stock price hit a high of $386 last year but has since slipped to close at $286.48 on Wednesday.

While Musk has said the electric car maker would not have to raise more cash this year, Wall Street disagrees, with analysts saying the company would need to borrow if it continues to fail to meet its own production targets for building new, lower-cost Model 3 electric sedans.

Investors who evaluated Tesla’s junk-bond offering last year now say a convertible offering appears a more likely option than returning to the high-yield market.

“It’s a wonderful trade,” said Ross Gerber, chief executive of Gerber Kawasaki Wealth and Investment Management, who earlier this year bought Tesla convertible bonds due in 2022 and said he is interested in buying more notes.

Tesla investors fretted in late March about the company’s ability to produce the Model 3. A crash involving Tesla’s autopilot technology and its falling bond price also took a toll.

“The company is burning cash at such a rate that a capital raise is nearly inevitable at some time in the next three quarters,” Henry Peabody, co-portfolio manager for Eaton Vance Multisector Income Fund, who said Tesla would likely use a convertible bond to raise funds.

Tesla could not be reached for comment.

“Given how volatile the stock is, there are a lot of convertible players out there that would clearly like this type of paper,” said a portfolio manager at a firm among Tesla’s top-10 bondholders. The investor, who declined to be named because they were not authorized to speak for the company, said they could be interested in such bonds.

RISK AND REWARD
If Tesla’s stock price stays around current levels, convertible investors, such as Soros, can reclaim the notes’ face value when they come due, a profitable trade if Soros bought them at a discount when the bonds were under pressure.

Soros Fund Management LLC took a $35 million stake in the Tesla convertible bonds due in March 2019 88160RAB7=, according to a filing with the U.S. Securities and Exchange Commission. Soros’ spokesman did not respond to questions.


In the case of the Soros’ Tesla notes that rate was initially set at a conversion price of $359.87, higher than the $286.48 per share the stock trades at today.

If Tesla’s stock rallies past its conversion rate, Soros could swap his Tesla notes into more than 97,000 shares of Tesla common stock, according to the bond’s prospectus and Soros’
filing. That could make for an even more lucrative trade.

Either way, convertible noteholders pocket interest totaling 0.25 percent per year in the meantime.

Hedge funds also like convertible bonds because they can use them to amplify or mitigate the risk of a short, or bet against, a company’s stock.

By contrast, with a junk bond, an investor’s best-case scenario is full repayment. Stockholders enjoy fewer protections if the company’s finances deteriorate.

Some wary investors said a convertible is a better option for Tesla than a junk bond, but not by much.

After raising $1.8 billion in its first junk bond issuance in August 2017, the 12.6 percent price decline of that bond 88160RAE1=RRPS since it was issued means markets will demand a higher premium on future debt.

Thomas Graff, head of fixed income at Brown Advisory Inc, said a convertible would probably succeed although he would probably not participate.

“A convertible would make a lot more sense given where they are,” said Graff.

Reporting by Kate Duguid and Trevor Hunnicutt; Additional reporting by Alexandria Sage in San Francisco; editing by Clive McKeef


https://uk.reuters.com/article/us-tesla-bonds-analysis/george-soros-bet-on-tesla-could-see-other-investors-follow-suit-idUKKCN1IH35L

 

Tesla May Need $10 Billion in Funding by 2020, Goldman Says

‎May‎ ‎17‎, ‎2018‎

Elon Musk may need to tap capital markets for more than $10 billion by 2020 to fund Tesla Inc.’s auto-making operations, new products and expected expansion into China, according to Goldman Sachs Group Inc.

While Tesla has options to issue new bonds, convertible notes or equity, each choice would have downsides for investors, Goldman analyst David Tamberrino said in a research note Thursday.

We see several options available to the company to refinance maturing debt and raise incremental funds, which should allow Tesla to fund its growth targets,” Tamberrino wrote. “However, issuing incremental debt (including priming current creditors with secured debt) may weigh on the credit profile of the company while issuing additional equity or convertibles at lower premiums would dilute current shareholders.”

A Tesla spokesman declined to comment.

Cost Cutting
Musk, who co-founded the electric-car maker and serves as chairman and chief executive officer, is cutting costs to avoid raising capital this year. He insists he won’t have to and cut off analysts who asked probing questions on a conference call this month. The company has struggled to meet production targets with what was intended to be its first mass-produced vehicle, the Model 3, and burned through more than $1 billion in the first quarter.

Goldman joins a growing chorus of investors and analysts who see additional financing as not only wise, but vital. Moody’s Investors Service, which downgraded Tesla’s credit rating further into junk in March, expects Tesla will need to raise about $2 billion to offset cash burn this year and account for debt maturities through early 2019. CreditSights has a similar expectation, though that could be less if the company follows through on its production targets or borrows through its bank credit line.

‘Mathematically Correct’
“Tesla’s view that it doesn’t require a debt or equity raise this year is mathematically correct, but highly imprudent from a credit and risk perspective if followed,” Bloomberg Intelligence analyst Joel Levington said in a report last month.

Musk said in July 2016 that Tesla’s ambitions could cost tens of billions of dollars. He added that he didn’t plan on spending billions more right away after a tour of the company’s battery factory in Nevada, which was under construction at the time.



The company set up a unit in China this month, taking a step closer to producing electric vehicles and batteries in the country for the first time.

The shares gained 0.6 percent to $288.07 as of 11:25 a.m. Thursday in New York, and are down about 7.4 percent this year, giving the Palo Alto, California-based company a market value of nearly $49 billion. Its 5.3 percent bonds due 2025 were last quoted at 87.25 cents on the dollar, according to Trace bond-price data.

Goldman’s Tamberrino recommends selling Tesla shares, and sees them slumping 32 percent to $195 over the next six months. The stock has 10 buy ratings, 11 holds and 9 sells, according to data compiled by Bloomberg.


https://www.bloomberg.com/news/articles/2018-05-17/tesla-may-require-10-billion-in-funding-by-2020-goldman-says

 

Tesla’s $35,000 Model 3 Could Now Cost You $78,000

‎May‎ ‎21‎, ‎2018‎

Latest configuration will offer two motors, all-wheel drive
Original idea of $35,000 version ‘kind of laughable’: analyst


Elon Musk’s Model 3, once touted as Tesla’s $35,000 car for the masses, can now set a buyer back almost $80,000.

Musk unveiled specifications for a faster and more powerful version of the Model 3 in a series of tweets over the weekend. It will cost $78,000, more than double the $35,000 base-model starting price discussed into the run-up before the electric car’s deliveries started last year. And that doesn’t include the Autopilot driver-assist feature.


The increasingly expensive configurations for the Model 3 are planned steps, if somewhat counterintuitive ones, toward Musk’s vision of Tesla Inc. as a mass-production player with vehicles affordable to a broader swath of buyers. The $78,000 sticker puts the electric sedan beyond reach of many consumers, and, by Musk’s own estimations, brings it closer to the realm of luxury cars.


“A Model 3 with a $35,000 price will be the rarest of the rare,” said Kevin Tynan, a Bloomberg Intelligence analyst. “Perhaps the second most collectible Tesla ever, behind the one floating around in space.”


Musk’s latest tweets build the hype around a car that’s faced repeated production delays and manufacturing bottlenecks, which the company is just starting to clear. Tesla delivered 8,180 of the sedans in the first quarter, making it the best-selling electric car in America, and almost a half-million people have put down $1,000 deposits for Model 3s.

Original Vision
When Model 3 deliveries started in July, Tesla described the $35,000 price for a Model 3 with a standard battery with a 220-mile range before options or incentives. But its focus was on fulfilling orders for customers who wanted longer-range battery packs with faster charging, pushing the price up to about $44,000.

Tesla said in February a dual motor version would come at midyear and a standard battery pack would be available in late 2018. In a letter to shareholders earlier this month, Musk said that the company would begin offering new options such as all-wheel drive -- and a base model with a standard-sized battery pack -- once his factory in Fremont, California, reaches a production rate of 5,000 cars a week.

Only the expensive performance model was mentioned in Musk’s tweets this weekend. The company’s current business model and financial position -- it’s operating at a loss and has negative operating cash flow -- mean “that this is not the time for a $35,000 Model 3,” Tynan said in emailed comments.

Newest Model 3
The new dual-motor, all-wheel-drive performance version of the Model 3 will have a top speed of 155 miles per hour, a 310-mile range and acceleration from standstill to 60 mph in 3.5 seconds, Musk wrote.

The latest performance Model 3 will cost “about same as BMW M3, but 15% quicker & with better handling,” Musk tweeted. The car “will beat anything in its class on the track,” he said. It will also be available with black and white interiors. According to BMW’s website, a BMW M3 sedan has a starting manufacturer’s suggested retail price of about $66,500.

The pricey version of the Model 3 is in keeping with Musk’s earlier practices with the Model S luxury sedan and Model X sport utility vehicle -- adding options and higher specifications to help generate cash that can be used to eventually build vehicles for mainstream buyers.

Shipping a minimum-cost Model 3 right away “would cause Tesla to lose money and die,” Musk said on Twitter. The company needs three to six months after achieving production of 5,000 units a week before it can ship a $35,000 Model 3 and survive, he said.

Burning Cash
last week. Mounting liquidity pressures and challenges with Model 3 production prompted Moody’s Investors Service to cut the carmaker’s credit rating further into junk status in March, adding fuel to a sell off of the company’s bonds to all-time lows.

For every additional thousand dollars that ends up being added to the price of Model 3, the size of the U.S. auto market that buys cars that are that expensive shrinks by 1 percent to 2 percent, according to Kelley Blue Book. That’s a trade off the company is willing to make.

The profit is in the higher trims, Ivan Drury, senior manager of industry analysis at Edmunds.com, said by phone. “The idea that it’s supposed to be a car for everyone is kind of laughable,” Drury said. “Anyone who wanted a base model may have to wait years out.”



https://www.bloomberg.com/news/articles/2018-05-20/at-78-000-tesla-moves-mass-market-model-3-beyond-the-masses

 

The title of that article is asinine. "BMW's new $35k 3-series could cost you $80k!!!"

 

Yep, dumb article. The F 250 starts at $31k and tops out at $83k. One example out of hundreds.

 

The higher performance Model 3 will not compete with the M3. Sure performance figures are close/better, but they are failing to understand people buy the M3 for both and the luxury appointments/features. The Model 3 interior is garbage and that's not an opinion. Tesla has been struggling to get buyers that go for the Germany luxury cruisers because their materials and interior design don't compare. Performance stats will only do so much to lure in more customers.