Watching Tesla and CEO Elon Musk for the past six months, one might think that the company is on the ropes and that Musk's days are numbered.
There was a profit break in the first quarter. The Twitter feud. The mini sub-Fracas. The open letter asked Musk to cool it down.
Meanwhile, Tesla's business romped on. The automaker will report second-quarter results in a few weeks, and while analysts' "profits" are expected to be extremely negative again and Tesla's cash-burn is expected to be stunning, sales should continue a trend.
Tesla has added $ 200 million to the topline every quarter for several years now. In just one of the last quarters ̵
The car revenues that have forgotten about the company's solar and energy storage businesses have come through the expensive Model S sedan and the X SUV model, both of which sell for about $ 100,000 on average. Last year, Tesla delivered about 100,000 copies of these vehicles and should repeat that in 2018.
This brings us to Model 3, Tesla's less expensive and much damaged vehicle. After launching in July 2017, Model 3 has coped with a frail birth and routinely failed to meet production targets. Tesla celebrated a running rate of 5,000 Model 3 per week at the end of June, a pace that may not be sustainable.
But in the disputes over Tesla's suffering as a manufacturing company, the simple fact is lost that if 5,000 a week were hard to bear, 2,000 a week could be a lot easier. And the Model 3 Tesla is now building is not the el-cheapo $ 35,000 versions; It's the expensive upscale lines, with the most expensive benchmarks of nearly $ 80,000.
Over a six-month period, this translates into $ 2.4 billion in revenue – or, in my calculations, more than ten times in two quarters, less than two years at Tesla's historic growth rate.
This is a tsunami of cash on the way for Tesla, and I was conservative in my estimates. Very conservative.
There is no guarantee that the increase in sales leads to profit. Tesla may need to raise funds by 2018 or 2019. But the intensified cash flow will be a problem for the Tesla bears. A big problem.
Here is the reason: