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TSLA running out of cash? CNBC article

Hope he is wrong

I don't really understand this stuff but his assertions don't make sense to me. It's not like those deposits are being returned. Is he saying that they weren't discounted from revenue projections? As if the other analysts assumed $100K in new cash flowing into the company for every Signature delivered? Even if that were the case, which I doubt, the only sigs to be delivered this year are North American, right? So that's 1200 $40K deposits, not 2000.

Need to ignore this. It's just another John Peterson republished Tesla bashing article.

At the same time Tesla will be receiving the deposits on new sales as it delivers to current res holders.

Additionally, Tesla will be selling the EV credits to other manufacturers.

2010 they generated 13.8M selling credits to Honda. My guess is that is around $7k a car.

Don't let the facts get in the way of a good story. :-)

David M.---thank You- exactly my opinion...just another basher who tries to make everyone nervous.
Everything is fine at Tesla and we looking out for next monday!!

Anything with "NBC" in it needs to be taken with a grain of salt.

I'm not taking sides here. Just trying to explain his claim.

Tesla has used the previous deposits as working capital. Even if Tesla will have 25% gross margin on the first 1000-2000 cars (it won't, those margins kick in with higher volume and more streamlined production), on a signature we have: $100k revenue, $25k gross margin; but Tesla only receives this quarter or next the difference of $60k. So the net short term cash position declines by $15k = $75k cost of sales - $60k received from customer. So by delivering those 1200 sigs, Tesla decreases cash by at least $18M. Should there be some recalls / delays / manufacturing problems, the present cash cushion may not be adequate.

Now, my opinion. While his observation is technically correct (analysts made a mistake), he forgets to add the new reservations (we are at about 3k this quarter), which from July to December should add about $30M. We should add also the prepaid service that many will take (Tesla does not have to spend more than $1 for each in the short term - just the paper and the post stamp ;) ). If they manage to sell ZEV credits, Model S has more credits / car than the Roadster, as it has longer range and can carry 5 adults. It may not be correct (it sounds a bit too much anyway), but I have seen estimates up to $35k per Model S.

There is one more subtle argument here, that very few have noticed. Tesla has contracts with suppliers so that they pay with 45 days delay. But making a car, cashing the sale and delivering it takes much less time than that, at least when the line will get up to some reasonable speed. So the more cars they produce, the more short term cash they have, in complete opposition to dinosaur manufacturers that have to fill thousands of parking lots (dealerships) and wait sometimes for months to get payed for their investment.

The last thing I would like to note. The delays we have seen are a consequence of two things. Suppliers not getting their s*** together and Tesla's obsession with quality. The latter diminishes the probability of recalls to almost negligible quantities. In that very unlikely case, do you think Elon who used his last $ to save both Tesla and SpaceX in the middle of the strongest financial storm any of us saw in our lives, would shy away from $100M-$200M (borrowed for example against his equity in SpaceX which is thriving) direct investment in Tesla? Now that this baby is so close to learning to fly? I say no f****** way!!!

+1 Very good analysis.

Petesonn's past articles have not demonstrated as much expertise or knowledge as they have bias for the ICE and an endemic fear of change.

Well, if I get me my car now, they will have an the rest of my payment in cash ASAP! (no financing to wait for) ;-)

All I know is that once you get the car, all the "John Peterson's" of the world will disappear from your thoughts. Now that the car is real, in my garage and beyond anything that has ever come before, I KNOW there is really no stopping this thing. JP and big oil can kiss my lily white #$%.......

But seriously, I don't think the reporter is taking into account that the Model S is the iPhone 5 of vehicles! It won't be long before everyone HAS to have one, and more serious investment firms start poring billions into them, just so they can get in before their stock is at $250.00 a share!

Remember, NO serious advertising has been done for this vehical! Compair that to ANY other product on this planet, to achieve what Tesla has done mostly via word of mouth / free press, and all others would have had to spend at least $50 million in hardcore advertising just to achieve what Tesla has done at this point for almost nothing.

As I have already said here many times, I still have to explain what the Model S is to almost 98% of most people that want to know why my cap says T E S L A, and what that means. When I explain it, few believe me, ALL want to see it when I get it, and 50% of them could afford to buy three of them in CASH right now!

This forum is really starting the suck. Just lost a nice post that I don't feel like retyping.

In short . . . . .

I think Terslas margins of a Sig are more like 40-50%.
I think the margins for the base are 25% as Elon said.
They go up the more options you throw in except battery size.

That is when the factory is running at full speed.

@Nicu - Well stated explanation. If Tesla only had to spend cash on cars there wouldn't be much of an issue. However, there are so many new Tesla stores and service centers underway, I can only imagine how much cash is needed to keep those projects moving. Not to mention the cost associated with the new SuperCharger network. Staffing up, training new personnel, etc.

The next 60 days will be very interesting. After that, ramp up should be nearly complete and cash should be flowing in very nicely. But until then? Worst case scenario, some additional funding might be necessary in the short term.

Musk is now quoted side stepping the 5000 cars for this year production target. Stock down.

Actually John P. is the one with the mathematical error. I paid a $5K deposit for my signature model S not $40K and I suspect that lots of other people are in the same boat. There was no signature series originally so every reservation holder was charged $5K. When the sigs were announced every reservation holder was grandfathered. Only later orders for the sigs were charged a $40K deposit.

Tesla is a public company. Given the very positive PR and delivery of the first model S cars, it should be no problem doing a secondary offering of stock to raise more cash if required.

@vouteb | SEPTEMBER 21, 2012: Musk is now quoted side stepping the 5000 cars for this year production target. Stock down.

Where was this quote from?

@TikiMan - Please don't compare a Model S to an IPhone5, this is an insult to the Model S. The new IPhone is an evolutionary product at best which offers nothing truly new or features which a competitor isn't offering. The Model S on the other hand has plenty of those unique features.
If Apple keeps making products like this and IOS6 for that matter it will be the start of steady decline in stockvalue. If Tesla will keep making products like the Model S it will see a steady rise in value.

David M +1
If it is John Peterson generated-- It is not worth the time to read it.

@ Alex K
Here it is

@ ArieK
The iPhone was revolutionary in 2007 - so much that competitors thought Apple is lying about its functions and battery life. The largest industry by sales numbers has completely changed and the mighty dinosaurs form 5 years ago are gone or on the border of the abyss. At the 6th iteration, Model S could become the equivalent of the iPhone 5, but it has to completely change the industry so GM, Ford, Mercedes, Audi etc. should be forgotten jokes by then.

OK, my caveats that E-W Superchargers are still well in the future is apparently wrong. "Anywhere in the country ... concerns about range will vanish". Over 100 stations. (How quickly they can be "landed" isn't yet revealed, but I guess he has firm assurances from the aliens!)

Alex K;
He was actually sidestepping making ANY near-term statements not previously vetted for public disclosure, lest the SEC come after his family jewels with dull, rusty, scissors (but lots of muscles).

I'm glad the stock dropped a little today. Gave me a better price to buy in :)


I am not comparing a phone to a car, I am mearly saying once everyone knows what it can do, everyone will want to have it.

BTW... Last I checked, the new iPhone 5 is selling better than everything on this planet, and then some. If Tesla has that kind of success, they will soon trump OPEC! So, don't knock it, I highly doubt Elon would.

Petersen wrote that as a 'Contributor'. He's involved with a lead-acid venture. Doing his best to sink Tesla, it would seem!

John Petersen is a curious case, but it is a fact that he hates Tesla/TSLA and is willing to go very far (I did not say outright lie) to spread his gospel. Vested interests (shorting, lead technology) or whatever: he can never be trusted (and is practically always wrong), but it can sometimes be informative to try to understand where his arguments/manipulations/truth bending fail. Oh and btw: since he is actually being read, it does happen that his Gothic Tesla tales will cause TSLA to drop temporarily. Useful guy, actually ;-)

Don't quite buy that elementary accounting error theory or "exposé". Treatment of deposits is that they are cash (debit) offset by liability (credit) (future commitment to deliver). On delivery the entry is a negation of the liability (debit entry) offset by sales revenue (credit entry), with no change in cash. Bookkeeping 102.

But it's 3 a.m. and I haven't worked thru the detail. Some other time, maybe.

tomas.hutters wrote: "John Petersen is a curious case, but it is a fact that he hates Tesla/TSLA and is willing to go very far (I did not say outright lie) to spread his gospel."

The interesting question is why he writes article after article (I think hundreds by this point) that are anti-Tesla. He professes to be a lawyer. It would be interesting to learn whether he has clients who are encouraging (paying for?) his many, many negative articles and just who those clients might be. What we need here is a good old crowd-sourced investigation. :)


He probably bought a Roadster drove it out to his barn in the country and left it sit for half a year unplugged with no charge then was upset that the battery went bad and wasn't covered under warranty..... or has a friend who did just that.

When articles say, "At the time of publication, John Petersen held no positions in any of the stocks mentioned. "
That means he has no financial interest. He obviously has clear personal interest of some kind.