Tesla: a never ending story or a vanishing dream?
Is the dream of Tesla founder Elon Musk vanishing? According to the American website Second Measure already a quarter of potential clients for the Model 3 have reclaimed their deposit for a purchase.
Tesla is practically every week in the news. Last week we commented on the shareholders meeting and some good news communicated, today several sources are questioning the viability of the company again.
Second Measure is an American website analyzing every day billions of pay-card transactions. According to the site, some 23% of the people who in the past paid a 1.000 dollar deposit to reserve a Tesla model 3 are now reclaiming their money.
It can be problematic for the company, not only because there are less confirmed orders for the Model 3, but also because, according to Second Measure, one third of Tesla’s cash consisted of these deposits. If people are now reclaiming them in an accelerated way, that could become a financial problem for a company which is still spending more money than it makes.
Tesla’s claims that the cited figures are incorrect and not corresponding with theirs, but the company is not giving any additional insight on today’s situation.
The smaller and much cheaper Tesla Model 3 has become the permanent nightmare for the Tesla people. In order to make money, Tesla has to produce much more units of this Model 3 than it ever did before and this huge increase in production is not working well.
Only last week Tesla founder Elon Musk announced that with the production figures attainable at the moment for the Model 3, the company wouldn’t be able to produce the promised 35.000 dollar basic car soon and will have to produce far more sophisticated and therefore much more expensive Model 3 versions to make some money with them.
Stock analysts critical
For months now a growing number of stock analysts are saying that the Tesla share on the stock market is grossly overrated. While the share is commonly targeted at 295 dollar, it is currently rated at around 320 dollar.
The trading app Robinhood, usually more popular with younger investors than the traditional brokers, shows that last week 5.000 of these young investors have traded in their Tesla shares.
That’s probably why Musk tried to change the mood at the annual shareholders meeting by promising that production targets for the new Model 3 would finally be met by the end of this month. Stock traders once more reacted positively, but more and more people start asking themselves how long this will last.
Believers vs. non-believers
Some analysts are already saying for months that the Tesla story is no longer a pure economic story. It has become a tale for believers versus non-believers. “Elon Musk is selling a dream and investors are buying into that dream.”
The positive effect of this is that Tesla can get away with anything on the stock market, compared to other companies. The problem is that CEO Elon Musk constantly seems to try how far he can stretch everyone before the whole thing collapses.
Wall Street is becoming more and more hesitant about this. Investors fear that Tesla will still need a lot of new money to stay alive, despite the fact that Musk has promised them that Tesla will finally be profitable soon. To be continued…