Why Tesla Motors is Still a Loser Company

According to Ana Kasparian of TYT, Tesla Motors is paying off it’s Government loan 5 years early. Yippee for the American tax-payer! — or maybe not!

Tesla Motors is the darling of American environmentalists, and after the the $465 million Government loan, there’s a lot riding on it’s success, especially for Democrats. Good will and a huge cash injection hasn’t translated into sales figures. The truth is that Tesla is in deep financial trouble. Tesla reported a loss of $89.9 million, or 79 cents a share, for the last quarter figures for 2012, compared with a loss of $81.5 million, or 78 cents a share the year before. It also missed production targets for the fourth-quarter.

In fact, since going public in 2010 because it desperately needed to raise operating capital, Tesla has yet to report a positive quarter for its investors. Which means you would be better off putting your life savings in a Cypriot bank than investing in Tesla. Not only has Tesla consistently failed to deliver on either production or sales projections, it has a negative operating income, negative growth and is saddled by debt and cash flow problems. Tesla was forced to float reserve stock on the market to raise more operating, which has led to an over-valuation of the stock. Not good for share holders because the stocks going south.

So how has Tesla got in a position to pay back it’s loan. Well, it hasn’t. It actually was unable to make it’s scheduled repayment last September and had to renegotiate for more breathing space. Thus far, Tesla has paid back $12.7 million of it $465 million debt, which it now projects it will repay in full by 2017… that is of course assuming it doesn’t go bankrupt before then.

So where is this money coming from?

According to Tesla motors founder and CEO Elon Musk, it will all come from customer deposits and profits.  He estimates a $2 billion annual revenue from the sale of 20,000 Tesla model S cars. Those figures don’t add up, and as those deposits are fully refundable on cancellation should he be counting them as revenue? Never mind, Tesla has about 15,000 reservations for it’s model S and no one would ever cancel a reservation.

Oh, wait a minute they have.

A reservation isn’t an order, all it requires a $5000 fully refundable deposit. So in reality, it’s little more than a registration of interest. If you change your mind you can cancel, get your money back and buy something else. Unsurprisingly there have been a lot of cancellations following a New York Times article that absolutely slated the Tesla S, and also led to yet another public spat between Tesla’s founder and CEO Elon Musk and a motor journalist.

Musk unsuccessfully tried to sue the BBC for malicious falsehood and libel over of a very fair Top Gear review of the Lotus Elise based Tesla Roadster that they accurately reported couldn’t do more than 55 miles on their track without recharging. The judge threw out both the libel and malicious falsehood actions.  Musk’s argument amounted to claiming that Top Gear didn’t drive his car at a sensible speed on their track! Because of course he thought tha Jeremy Clarkson and Ben Collins were going to drive the car around the track like a couple of pensioners.

He made pretty much the same accusation against the New York Times journalist who reviewed the S model and pointed out that it ran out of battery and needing towing. Apparently he was driving it faster than 55 mph, which is another reason why Tesla has pathetic sales figures and is still a loser company.

 

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