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Can Tesla Ever Break Even?

August 1, 2014

Break even pointThe media resonates with the quintessential EV – Tesla. From the groundbreaking Roadster and family oriented S Sedans to the upcoming Model X SUV and Model 3 for the mass market, a day does not go by without hearing something about Tesla. Now with the not so Americanized $5 billion cylindrical lithium-ion cell Gigafactory beating its drums, Tesla promoted the State-by-State site selection process to an extent exceeding the Grand Balls for suitors seeking the affection of Scarlett O’Hara. And not to mention all the brouhaha surrounding Tesla’s proposed 156 charging stations by end of year 2014.

But how healthy is Tesla, is its temperature moving up or down? This too depends on which side of the EV equation one sits on. On July 31, 2014, C/net’s headlined “Tesla earnings beat (Wall Street) estimates, Gigafactory construction imminent …..”. Great news and a voice of victory!
Then on August 1, Newsday reported “Tesla loss widens as company prepares for new factory ……..”  Bad news and a beat of defeat!

So what gives? Is Tesla’s expectation to meet sales goals better news than its ever growing losses? This depends on what Tesla’s financial wizards, stockholders and to some extent potential customers see and say. And what is the dollars and cents reality of Tesla’s estimates of annular production estimates of 100,000 vehicles by end of 2015, or a current capacity of 200,000 vehicles, or even 300,000 vehicles when the $5 billion battery plant is online by the late 2010s? Another question is Tesla’s understanding of build and sold? Production estimates and capacity are one thing, sales is another!

In closing, this is not meant to belittle Tesla’s role and fortitude in the EV industry. It is a simple question of when the money-well will stop and sprout into a money-tree. Different circumstances yes, but the industry cannot afford another Solyndra.

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