Tesla has several futuristic plans that require cash, however, their current finances are not so satisfactory to make it all happen.
Tesla Motors Inc. is one of the most promising electric car makers that are disrupting the automotive industry at a relatively great pace. The company at this point of time is increasing the number of a project which is relatively more expensive that what it was doing earlier. The company wishes to reign in the electric vehicle industry along with the energy storage but for that they need a stable stream of revenues.
The problem which several analyst and skeptics are dealing with at the moment is that will Tesla be successful in breathing life to its dreams or be stuck due to limitations in funding. The company currently has a single electric car that is responsible to help them sail swiftly. According to a consensus, the company currently sales for a quarter across the globe are similar to one-day sales of General Motors Company in the United States.
So the question is where is Tesla spending all the hard earned money?
Tesla apart from coming up with a new SUV the previous year is also reportedly working towards unveiling “ high volume mass market electric car” which it will call Model 3 in FY17. So in order to have a Model 3 that is relatively cheaper, the company has decided to minimize costs of its batteries that will hinge the launch of the much anticipated Gigafactory plant in Nevada for storage batteries.
Apart from this the company seeks to expand its footprints in regions where it is not currently available, therefore, the company is working towards launching Model S in several international markets. For the same reason, the company is spending vast amounts of money to establish the necessary infrastructure required by the company for their electric cars. This includes servicer stations, supercharger networks etc.
This year the company has also vowed to pledge $1.5 billion in capital expenditure (CAPEX) almost 25 per cent of this budget was carry forward by Ford Motor Company- the second largest automotive firm that generates 200 times more money in terms of revenues when compared to Tesla Motors.
At this point, Tesla has made a vigorous investment in several “growth catalyst” at a time where they are already struggling with finances. This has brought negative criticism for them from several investors and analyst at Wall Street.
Hence, in a nutshell, Tesla needs to figure out what it really wants to do in the years to come. The company has extremely futuristic plans, but these plans require money for implementation which the company currently lacks.
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