It seems it’s not all glitter and unicorns in Tesla land. According to a recent report by Bloomberg, Tesla is spending an utterly insane amount of money – approximately $8,000 per minute, or close to a staggering half a million dollars an hour. “Whether they can last another 10 months or a year, he needs money, and quickly,” Bloomberg‘s Kevin Tynan explains, saying that Tesla will need to raise at least $2 billion by somewhere mid-next year to keep the entire company afloat.
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While the hype is real, the sales and production numbers don’t really go hand-in-hand with it. Yes, the Tesla Model S is still selling like crazy and the Model 3 pre-orders are insane, but the company is still miles away – sales numbers wise – from established car makers like Volkswagen, Toyota, Mercedes-Benz, Audi, Chevy and, BMW. For example, in total, Tesla Motors expects to deliver about 100,000 Model S and X vehicles in 2017, which would be a 31% increase over 2016. Meanwhile, BMW sold 281,839 vehicles in U.S. in the first ten months of 2017. Globally, BMW sold 1,836,464 in the same ten-month period.
While the production issues can be attached to the relative youth of the company, the sheer expenditure amount per year is headed to a level which would ruin any of the well-established car makers, let alone a young one like Tesla Motors.
According to Bloomberg, if Tesla keeps spending money at this pace, the company is on track to exhaust its current cash pile on Monday, August 6th, 2018 (At 2:17 a.m. New York time, if you really want to be precise.) To be fair, the company did keep things transparent and predicted they will be spending at this pace. But, we all need to ask, whether, at this rate, the company’s increased production, sales, and deliveries can get enough fresh cash to sustain the operation for a longer period of time.
Mind you, Elon Musk did raise quite a lot of money with Tesla Model 3 pre-orders and aims to do the same with the upcoming Tesla Roadster and Tesla semi truck, but will it be enough? Everybody in the automotive world is eager to see Tesla succeed. Their own success will mean that companies like BMW, Mercedes-Benz, Volkswagen and Toyota, all have to ramp up their efforts for all-electric and/or hybrid vehicles, making a big dent into the whole green gas emission problem. But, as it usually goes, it’s not all that clear-cut and the transfer to all-electric vehicles will bring on its own set of problems.
What will happen with the automotive market in the forthcoming years is still unclear, but we are all in a rather exciting time period for automotive enthusiasts, that’s for sure. The German big-three is revealing a boatload of new hybrid and electric models, the Japanese car makers are on an offensive as well, and even the big American car makers are joining in on the fun. A truly epic period is upon us.
I hope Tesla succeeds as long as it’s not at the taxpayers expense. No more of that.
Yup! Fully agree, that’s a great way for the future. Hopefully they succeed and the rest of the car makers follow suit later.
I’d like too see how much it would cost if legacy carmakers had to build their own network of gas stations and launch a new model from scratch every two years.
You mean like they did a century ago when electric went from 25% of the market to zero? You know, like Tesla are doing to the 3 Series.
This line hit my BS-O-meter, “but the company is still miles away – sales numbers wise – from established car makers like Volkswagen, Toyota, Mercedes-Benz, Audi, Chevy and, BMW”. Tesla has two models in production, and a third that just stated, compared to how many different models from the above mentioned companies? Being a BMW site lets focus on BMW, they make the 1, 2, 3, 4, 5, 6, 7-Series, then the i3, i8, Z4, X 1, 2, 3, 4, 5, 6 SUVs, Mini Cooper, and Rolls Royce. Tesla isn’t close in sales numbers probably because they don’t have such a lengthy model lineup…………. Speculate much?
15 BMW vehicle varieties vs 3 Tesla varieties with one of them accounting for less than 1,000 sales(model 3). for a little under half of the sales with 1/5th of the fleet, Tesla isn’t doing so bad. When Model 3 is in full production and completes reserved orders they’ll cry. It’s just bound to happen, NEVER doubt the ambition of Elon Musk, he will prove you wrong. (not you, but naysayers)
Ambition doesn’t build cars. At present we have NO evidence Tesla will ever be a volume manufacturer – just hype & wait list $$$.
There’s no saying they won’t be a volume auto maker, but I’ll check my crystal ball after I pick it up from the repair shop, just in case. 🔮😮
Don’t you have 2 balls?
🙄 yah yah, sadly I thought that joke might occur before I clicked post on my previous reply. Geese say the word ball, and few commenters can keep themselves from going in that direction.
All I was saying is that Tesla is not yet comparable simply due to the difference in size of each company’s product offerings. You wouldn’t compare the entire Volkswagen Group to Aston Martin, so I thought pointing out Tesla’s sales numbers versus the biggest names in the auto industry was BS.
Yes, but their stock values are the same. This is part that does not make sense. Building EV’s does make sense though….
Tesla will have to go a long way before they are as profitable as the big car manufacturers to account for the current stock price.
Please explain why are we always comparing Tesla in the areas that are hand picked to make the brand or their product better? The 0-62mph times, no track times. Charging times, no actual talk about the sources of electricity. There’s so many things we can and need to compare, general sales numbers are one of them. It’s not up to BMW (or any journalist reporting on it) to tip-toe around Tesla, we need to be objective. And the numbers don’t favor them, in any way.
I simply thought comparing auto giants to what is still a start up was very unbalanced. You wouldn’t compare Aston Martin to Toyota, and compare their production volume numbers. I am not trying to compare them in a way that makes them look better. I’ve been honest in my comments about my own Tesla to the point where Tesla fanboys have gone after me. I am not one of those owners, or fans that thinks everything Tesla makes or does is perfect. In fact I’m already thinking of trading it, my i3 has been fantastic to own, my Model X, not so much. I’m already looking into the Jaguar I-Pace.
To me it’s simple. Tesla is a car maker that has volume in mind, period. They might succeed in doing so, but the hype and evaluation and a lot of pinpoint marketing are making them suceptible to critique like this.
The I-Pace seems like a cool car, but maybe a hybrid like a BMW xDrive 40e or a similar Lexus or Volvo might be a better choice. Naturally, if hybrids might be your thing.
What is your caveat with the X actually? Keen on knowing that ;)
Remember what happened to Nokia (world’s biggest cell phone maker), after Apple entered the market with its disruptive new iPhone?
What, you mean the 23 billion-in-revenue company that shaved off its phone division and still makes a ton of money (albeit with some losses in recent years) or what? Mind you, old, well established companies are slow to react, but still have enough cash to plow through most issues. Because company’s evaluation is different from actual revenue, cash reserves or liquid assets they can use to tackle almost any problem out there. The same principle can be applied to, let’s say, BMW here … once the timing is right and the management considers “this” as the right moment, you can expect fully electric car models, hitting the market in abundance from any said car maker, let alone BMW, a company posting almost 10 billion dollars of income / 7 billion dollars profit in 2016 alone.