When this bubble pops, it’s gonna be a doozy. The problem with Tesla is that they show no signs of ever learning how build cars profitably. Look at their annual losses since they went public. Did they improve over the previous year? Actually, no.
In 2018, Tesla received $419 million in EV credits. But in 2019, they raked in $594 million. That means without subsidies, Tesla would’ve lost even more money in 2019. Tesla did worse than last year.
Since this stock has become a speculative bubble, the actual financial results don’t seem to matter much in the short-term. Eventually though, the reality will start to settle in on the investors that Tesla won’t ever be the high-margin business they were hoping for.
And this was the final year for the government tax credits in the US and some other notable countries like Norway. All the stars aligned for Tesla in 2019 and they still lost a billion dollars without that increase in EV credits. If they couldn’t do it in 2019, it’s never going to happen.
What are they going to do next year now that they’ve taken a sizable chunk of 2020 volume early in 2019? On top of that, there are better EVs from real auto manufacturers starting to emerge from all directions and they have an increasingly obsolete product line. The Model Y is going to cannibalize the Model 3. That certainly won’t help. Despite Musk’s promises, 2020 is most likely going to have less sales not more. That means larger losses.
It seems like the worse that Tesla’s situation gets, the bolder the promises from Musk. The question is, does anyone believe him anymore?
Since this stock has become a speculative bubble, the actual financial results don’t seem to matter much in the short-term. Eventually though, the reality will start to settle in on the investors that Tesla won’t ever be the high-margin business they were hoping for.
And this was the final year for the government tax credits in the US and some other notable countries like Norway. All the stars aligned for Tesla in 2019 and they still lost a billion dollars without that increase in EV credits. If they couldn’t do it in 2019, it’s never going to happen.
What are they going to do next year now that they’ve taken a sizable chunk of 2020 volume early in 2019? On top of that, there are better EVs from real auto manufacturers starting to emerge from all directions and they have an increasingly obsolete product line. The Model Y is going to cannibalize the Model 3. That certainly won’t help. Despite Musk’s promises, 2020 is most likely going to have less sales not more. That means larger losses.
It seems like the worse that Tesla’s situation gets, the bolder the promises from Musk. The question is, does anyone believe him anymore?
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