Tesla Emblem On Model S
Ever since Tesla CEO Elon Musk revealed "Master Plan Part Deux," analysts have been changing their outlook on the automaker, in part due to the spending required to achieve the goals of Part Deux.
According to a report put out by Automotive News, achieving the goals of Part Deux could cost the automaker upwards of $2 billion dollars to kick off the plan, so say the "experts" and analysts who closely follow Tesla.
We should not that since these estimates were given, Tesla CEO Elon Musk has done the analysts "one better" by putting the cost of the second master plan over its life at "tens of billions". We assume the following cost estimates are more 'short term' in nature however, than life of the plan.
Automotive News states:
"Elon Musk's latest "master plan" for Tesla Motors Inc. to develop an electric commercial truck, a public bus, a pickup and systems to enable fully autonomous driving, could cost $2 billion to $3 billion or more, experts and analysts said..."
Automotive News quotes several analysts. Here are a few choice excerpts.
Barclays Capital analyst Brian Johnson:
"It's beyond us how much fundraising Tesla will need to carry out this master plan."
"... dug a $4.2 billion hole on the financial side that has necessitated a series of fund raises totaling $6.2 billion."
Standard & Poors:
"...cut its rating on Tesla to "sell" from "hold" saying "while we think Tesla's new master plan may build a long-term technological monument, we think it will create a short-term cash flow sink hole."
Tesla generally has not had an issue with raising the required capital, and profit never seems to be a main driver to the company (or share value), but shareholders don't often like to see massive spending plans forecasted for the near future either.
Time will tell if Tesla can successfully pull off Master Plan Part Deux. Part One is nearly complete, despite an even greater amount of widespread doubt when it was penned 10 years ago.
Source: Automotive News