With every conference call, investors naturally want news about upcoming products – and we do too, Tesla didn’t disappoint – discussing the upcoming Model Y, a compact SUV. (Names used less than five times are not included for privacy reasons.) No national list exists in Canada, but while provincial lists show some scattered usage of the name, no trend similar to the USA has emerged, yet.
When it was rolled out Musk said: “All Tesla vehicles exiting the factory have hardware necessary for Level 5 autonomy”. The tactics worked, as bond buyers proved willing to overlook the company’s negative cash flow and its repeated trips to capital markets to bolster its balance sheet. Scaling up Model 3 production, in contrast, means dramatically increasing Tesla’s monthly raw materials supply, battery production, and manufacturing speed.
Tesla shares are up 67 percent this year, pushing the company’s market value to about $60 billion, above that of top USA automakers General Motors Co and Ford Motor Co, even though Tesla has yet to make an annual profit. You can call it a view of the future or blind optimism, but we call it a shared mission. This Californian organization had expended more than two billion dollars in real money to this point of 2017 in front of their dispatch.
Last week’s trip onto the earnings stage was no different for Tesla’s CEO.
That news comes to us from Electrek, which has been reporting that Tesla’s less focused on the battery naming scheme for the more mainstream Model 3 and more on its actual range instead in order to appeal to a wider audience. On the other hand, If Tesla grows its asset base faster than its capital base, it risks running out of cash.
Heading into last week’s earnings report, about $9.03 billion worth of TSLA stock was sold short – more than any other company on Wall Street.
A spokesperson for Tesla said the bonds will have to be repaid to investors in eight years, but the interest rate on offer has not yet been agreed upon.
Don’t confuse the term “junk bond” with the quality of the company and magnitude of the opportunity in front of Tesla. Before any of those vehicles arrive, however, Tesla will be concentrating on getting 500,000 Model 3 saloons to eager customers. That’s actually better than the Model S provided on a slightly larger battery; the Model S with an 85KWh battery had a range of 253 to 272 miles, depending on the variant you purchased, according to the EPA’s figures.
Gene Munster is a managing partner and co-founder at Loup Ventures.