LA Times: ‘A Crucial Tesla Financial Report Is Coming’

Brilliant, brash and volatile, Elon Musk faces new challenge
Robyn Beck/AFP

The Los Angeles Times published an article recently outlining Tesla’s current financial situation ahead of the company’s next financial report in November.

The LA Times published an article recently titled “A crucial Tesla financial report is coming. Let’s go under the tent to see how Elon Musk can boost cash flow,” which aims to analyze Elon Musk’s electric-car manufacturer Tesla ahead of their November financial report.

 

 

The article explains New claims that Tesla has been taking payment for cars and delaying shipments for significant amounts of time, in order to boost the companies cash flow reports:

Raghunath Bansal, a psychiatrist from Fairfield, Calif., ordered a Model 3 online in July and didn’t hear back from Tesla for more than a week. He then went online again and changed his payment method from a bank loan to cash. “I got a call back the next day,” he said.

Bansal transferred $68,000 to Tesla from his bank account. Then began weeks of delivery dates set and later canceled, to the point where Bansal wondered whether he’d ever get his car. He finally received his Model 3 on Oct. 11.

“It’s an amazing car,” he said. “But the delivery process and the disorganization at the delivery center was even more amazing.”

Whatever the reasons for the delays, Tesla had Bansal’s $68,000 for most of the third quarter, in effect an interest-free loan. That boosted cash on hand and increased cash flow for the third quarter. And Bansal’s not alone. Tesla owner forums and social media are filled with customers — several of whom spoke with The Times — who paid full price for their cars, in cash, but experienced weeks-long delays in delivery into October. Tesla’s third quarter ended Sept. 30.

Anandhi Bharadwaj, an information systems professor in Atlanta, was persuaded to wire $60,000 to Tesla in August but said she didn’t receive the title until October. Michaela Bobeva, a dentist in Bellevue, Wash., said she paid $62,000 for a Model 3, two-thirds of it with a bank loan, in September. She rejected the car over what she said was a bad paint job. But Tesla sent her license plates and registration, and Bobeva said she is being billed for loan payments — despite not having the car.

Tesla also collects $2,500 nonrefundable deposits on all car orders. The company notes that most of its customers don’t have to pay full price until their car is ready for pickup.

The company has also been selling products that do not yet exist to customers in attempts to increase cash flow:

Since October 2016, anyone who bought a Tesla was offered a $3,000 option on a product that doesn’t yet exist. It’s called Full Self-Driving — driverless technology that would eventually allow a car to travel on its own from Point A to Point B with no human action required other than entering the destination. That’s a great leap beyond the company’s Autopilot feature, which requires strict driver attention. When ready, the upgrade would be delivered via over-the-air software. But two years later it still doesn’t exist.

Last Thursday, Tesla dropped the Full-Self Driving option from its website. “Was causing too much confusion,” Musk said in a tweet. Driverless car development will continue, the company said. Tesla hasn’t said how many buyers chose the $3,000 option, and it hasn’t announced a policy for refunding the money. Any refunds would reduce cash in the future.

A Tesla spokeswoman noted that while the option no longer appears on the company website, customers can place a special order. The price for future Full Self-Driving remains $3,000.

 

The mainstream media is starting to apply the same scrutiny to Tesla that it applies to car companies not owned by Elon Musk. That scrutiny does not bode well for the embattled company. Read the full article in the LA Times here.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan_ or email him at lnolan@breitbart.com

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