Have You Ever Wondered Why Tesla’s Not Flat Broke?
It seems there’s a daily battle about whether or not Tesla will make it over the long haul. Here’s an honest look at how the financial part works.
On paper, Tesla has struggled to report a profit. Many people assume the automaker is on the verge of bankruptcy and it’s only a matter of time before things turn upside down. Though the automaker profits from its vehicles and services, current operating expenses far exceed such profits.
On the other side of the argument, Tesla is essentially a new company, especially when comparing it to legacy automakers. While quarterly reports show a net loss, those who side with the Silicon Valley automaker would assert that this is because all money earned (and then some) must be invested in future products.
The simple truth of it all is … CASH is KING, but you’ll learn all about that in the video.
We all know that most major automakers are moving slowly with electric vehicles due in part to the huge costs associated. Some CEOs have even gone on the record saying that the company will lose (or has lost) money selling EVs. Why manufacture electric vehicles when you can profit from ICE cars?
Tesla sells only EVs. So, if these legacy groups don’t want to build electric cars because it’s expensive and they’ll lose money, think about the costs associated with being an automaker that has only ever made battery-electric cars. It may be years before Tesla can recoup these exorbitant expenses (if ever, depending on who you talk to).
Nonetheless, a profit is a profit. You can only borrow so much before you need to show success via your own merits. Will Tesla eventually fold? Will the cash bucket stop giving? If so, will another major automaker or related company scoop it up?
What do you think?
Hopefully, this informative video gives you a better perspective of the situation as a whole, and perhaps you’ll learn something new.
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Hat tip to SparkEV!