Tesla Is Facing a Crucible

https://www.bloomberg.com/news/articles/2018-03-16/tesla-is-facing-a-crucible

by allenleein • 8 years ago

57 111 8 years ago

xattt• 8 years ago

Worse comes to worst, Tesla is bought out by whatever car company that has the biggest gap in autonomous and electric tech.

timewarrior2• 8 years ago

I think is it more likely that Elon will use his equity from SpaceX to take it private.

TaylorAlexander2• 8 years ago

If Elon had to chose between SpaceX and Tesla he’d choose SpaceX. He’s said as much many times.

jacques_chester5• 8 years ago

Maybe.

A lot of the value in buying a company like Tesla is the patent portfolio. In 2014 Musk announced that these would be "open source", but I can't actually seem to find any legalese with the details.

As for the rest, I imagine the residual value is brand, a lot of which is deeply entangled with Musk himself. As a buyer I'd be asking for a hefty discount because I would expect Musk wouldn't stick around to spruik the goods.

resource0x• 8 years ago

At what price? According to google, market cap of Ford: 44.30B, GM: 53.14B, Tesla: 54.28B.

goshx• 8 years ago

The "worst comes to worst" scenario will not likely be priced at 54.28B

freehunter2• 8 years ago

I imagine if they went bankrupt, those numbers would change.

antonkm• 8 years ago

I find the concept of short selling a bit confusing, even though I've Googled. Can someone explain this in an easy to understand way?

neals• 8 years ago

You borrow stock from somebody. You say "I'll give these back to you next month".

You quickly sell these borrowed stock on the market for $100.

1 month passes. The stock goes down.

You buy the same amount of stock, but now for $50.

You return the stock to the person you borrowed it from.

You have profited $50 per stock.

You can now get a nice cold pint and wait for all this to blow over.

otherme322• 8 years ago

3. 1 month passes. The stock goes up.

You HAVE to buy the same amount of stock, but for $150.

You HAVE to return the stock to the person you borrowed it from.

You lost $50 per stock.

rootusrootus2• 8 years ago

If we want to be complete, the alternate situation is that the stock went up. Maybe $1000, maybe $1000000, and now we have lost money. Maybe quite a lot of money, the sky's the limit.

Short selling is not for the faint of heart.

URSpider944• 8 years ago

Exactly right. But, if the stock goes up to $150, then you have to buy it back at $150.

The thing about short sales: the most the stock can go down is to zero, but there’s no limit to how high it can rise. So, you have limited upside with unlimited downside.

It’s also a leveraged position, since borrowing the stock is typically free and selling it generates cash. In the example above, you start with $0 and end up with $100 per share in cash and a corresponding $100 per share in debt. In theory, you can short an infinite amount of stock. In practice, you are limited by both margin requirements (debt to equity ratio), and the fact that the market would start moving lower to account for the sudden influx of stock for sale. However, even small moves in price can have a huge influence on the profit or loss of a short sale, since you can turn a small amount of cash into a large short position.

Jack000• 8 years ago

short and long are both "buy low, sell high"

with long you buy, then sell.

with short you sell, then buy.

jacques_chester5• 8 years ago

The mechanics are that you loan shares, sell them at the price you think is too high, buy them at the lower price, then hand those cheaper shares back.

The argument for doing so is that humans err in favour of optimism -- ie, that prices will rise. But you can make money on the market moving either way.

Looking on it as a total outsider with limited knowledge, it seems like a fascinating niche in the financial world. But I imagine it is also even more stressful than betting on the price rise, because you're more often going to be outside the pack.

rootusrootus2• 8 years ago

It is a lot more stressful because if you bet on the rise, the most you can lose is what you paid for the stock. Your loss potential with short selling is unbounded.

otherme322• 8 years ago

Kostolany became rich shorting. He wrote the worst of being a short-seller is that you are earning a lot of money while all your friends are losing it. You have to keep a low profile because everyone looks at you as the cause of their loses.

jfaucett• 8 years ago

The standard thing everyone understands is you buy a stock S1 at time t1 and sell it later at t2 (let this be S2). The difference (S2 - S1) is your profit. You are hoping the stock price goes up. If it drops you lose money.

Time(t) : ---buy(S1)------------------sell(S2)----->

In short selling, the buy's and sells are reversed, so you are hoping the stock price drops.

Time(t) : ---sell(S1)-----------------buy(S2)------>

Notice that if the stock price drops S2 - S1 is positive. Conversely, if the price rises you lost money.

There are other technical details, but this is conceptually an easy and accurate enough way to think about it.

ColinWright2• 8 years ago

"Short selling" is the process of selling something you don't have, promising to deliver later, on the basis that you expect the price to go down. Then, later, when someone requires you to deliver the items you sold them, you buy them at the current market price and deliver them.

If the price has indeed gone down then you win. Problem is, the price may have gone up, and now you have to buy at a higher price, so you lose. The worst part of this is that the loses are unbounded, since the price rise could be arbitrarily large.

In practice it's not a problem, some you win, some you lose, and you are effectively betting on price market movements.

You can now deal with options. So when you promise to sell someone something in the future at price X, they have the option in the future of taking you up on that. If the price of X has gone down then obviously they will go and buy it directly, but if the price has gone up then they come to you and demand that you supply at the agreed price. In return for this option, they pay you when the deal is strike. Thus you are selling them the option of buying at a price.

Similarly you can sell them the option to sell you something at a price. These options are derivatives from the original concepts of buying and selling at given prices.

There's more, but I'll stop, not least because that's pretty much all I know.

squeegee52• 8 years ago

"Short selling" is the process of selling something you don't have, promising to deliver later, on the basis that you expect the price to go down.

Finance 101: You've just described a naked short, which is illegal in the US. You are required to cover the position.

sgroppino• 8 years ago

Basically you are selling something you don't have.

ams61104• 8 years ago

I understand short selling, but the guy in this story says he's been shorting Tesla for years. In that time, the stock as done nothing but go up, AFAIK. How can he afford to still be shorting? As I understand it, a short position is not something you can hold indefinitely... there's a point in time where you need to provide the shares.

achamayou• 8 years ago

As long as you meet the collateral requirements of whoever is lending you the shares, you can be short for as long as you like really.

URSpider944• 8 years ago

Serious investors don’t typically trade in “naked” shorts. They usually cover the downside risk with an “at-the-money” call option (the right to buy shares at the current trading price). If the price goes down by an amount that exceeds the premium of the option, then they make money. If the price goes up, then they only lose the option premium, because they can use the call to re-buy the shares to return.

You can either run this strategy repeatedly, using 3-month options, or buy extremely long-term options and keep it open for as long as the options last.

boznz• 8 years ago

Like a gambler, the next hand is always going to win.

URSpider944• 8 years ago

... also, a short sale doesn’t have a time limit. You can be short as long as you want. However, if prices go up, then the debt in your margin account also goes up, and you might get a “margin call” - either deposit more capital, or close out some leveraged positions.

Margin calls are the nightmare scenarios for short sellers, since they can force you to buy out at the worst possible time.

philipwhiuk2• 8 years ago

You just buy a new short position. Also you can have a short position lasting a minute, an hour, a day, a week, a month.

aaronmdjones• 8 years ago

https://en.wikipedia.org/wiki/Short_(finance)#Profitable_tra...

TaylorAlexander2• 8 years ago

My bullish position on Tesla goes like this:

They had the same production problems on the roadster, the Model S, and the Model X. Each time, the new vehicle was a “make or break” for the company. Each time, there were reports of how these production problems would sink the company. The company never sank. Tesla is now apparently “good” at making the Model S and Model X. I always assumed they would have similar nightmarish production problems with the Model 3, so all of these reports are sort of expected for me. But I also know that Teslas are extremely popular in Silicon Valley, where I live. That to me indicates that those with the means really like the cars. So it stands to reason that once they are good at making an affordable car, they’ll sell like hot cakes.

Musk mentioned recently that two things really stress him out: Artifical Intelligence and what to do about the risks is poses for humanity, and the Model 3 launch. I still have a lot of faith that Elon can make it happen.

And personally I really want Tesla to succeed. I think a lot of other people do too.

jacques_chester5• 8 years ago

The company never sank.

The company refreshed its financing.

This is always possible, until it isn't.

That to me indicates that those with the means really like the cars.

Cashflow is no respecter of brand power.

skybrian• 8 years ago

Brand power can result in more sales, though, which usually does increase cash flow? We don't know yet at what point they'll transition from being supply-limited to demand-limited.

Tesla owners seem to be pretty forgiving of quality issues so far. We'll see how well that holds up.

agumonkey2• 8 years ago

Tesla is the bitcoin of EVs :) or maybe it's the other way around.

I think Musk persona and SpaceX makes many want to bet on high risk but high gains project. I wonder how Tesla stock did after the dual rocket landing.

kakarot2• 8 years ago

Please explain the relationship between Bitcoin and Tesla, other than "high risk but high gains".

sabujp• 8 years ago

after looking at the monroe video on the 3, i'm waiting for the all EV camry that goes 400 mi on a charge

dave1619• 8 years ago

You might be waiting 10 years?

slg4• 8 years ago

I do wonder if Tesla's biggest problem around the Model 3 launch was starting by establishing very aggressive production targets. According to Bloomberg's Model 3 Tracker linked in that article, the Model 3 already is the top selling electric car in the country. It outsold the Chevy Bolt by over 2x in January and February. That should be a huge accomplishment, but it is viewed as a failure because it is a small fraction of what Tesla initially predicted.

robterrell• 8 years ago

Cherry-picking Jan and Feb obscures the fact that the Bolt seems to be extremely competitive. Bolt outsold Tesla Model 3 by 3x in Dec (3,227 versus 1,060). And it's true that January was down for the Bolt, but not by 2x (1,177 versus 1,875).

Tesla's production woes are a serious problem. My i3 lease is up in a couple of months and I can't even consider replacing it with a Model 3, since the end of the reservation line is years out.

Judgmentality• 8 years ago

It's also worth mentioning that the Bolt is a loss leader for GM, so they are actually losing money on those cars. I think it's reasonable to worry that the economics for Tesla, who have far less experience manufacturing cars at scale, could be even worse.

I am bearish on Tesla, but I never thought they would get this far, so obviously I've been wrong before. My suspicion though is if Tesla isn't self-sustaining before the next economic downturn, they're fucked.

Nokinside4• 8 years ago

That should be a huge accomplishment, but it is viewed as a failure because it is a small fraction of what Tesla initially predicted.

It's a failure because Tesla made financial bet that they deliver high volumes of Model 3. It does not matter if Model 3 is good car and customers love it. Tesla must ramp up their production very fast or Tesla runs out of cheap money.

Tesla has no problems with customers love the car with passion. It's the investors who will choke Musk to death later this year if he has to ask more money to continue with struggling production. He will get the money but it will have high interest rate and Tesla stock will come down 20-50 percent.

Currently Tesla is producing 20% of it's target. Their production curve is not growing steeply enough. In fact it's slowing down.

https://www.bloomberg.com/graphics/2018-tesla-tracker/

nopriorarrests4• 8 years ago

Those production targets were established for a reason. Tesla is burning unbelievable amounts of cash [0], and they need to convince investors and bond holders that they will break this trend soon. Showing very agressive production targets for M3 is the only way to do it.

[0] https://arstechnica.com/cars/2018/02/tesla-loses-another-675... "Tesla loses another $675 million in Q4, its biggest quarterly loss yet"

ams61104• 8 years ago

I'm indifferent on whether Tesla succeeds. I do appreciate that they sparked a modern revival of EV technology, and I'd be happy if some day an EV made sense for me. At this time, it does not. Range is still too short and charge times too long.

mjamesaustin• 8 years ago

Do you travel more than 200 miles in a day frequently?

For me, an EV is so much better because I can charge every night and I won't have to go anywhere to fill up my tank ever again.

nickbauman• 8 years ago

Many EV owners who moved back to gas or hybrid cars find the hunt for gas stations and time spent on fill ups infuriating. You can charge an EV from any mains, very quickly on the special mains installed in your own garage.

If you're commuting hundreds of miles per day, my heart goes out to you regardless.

jcadam• 8 years ago

I also see more Teslas than I would expect here in Florida. It's apparently catching on with the retirees-with-money demographic. Along with all the old boomers buying sports cars - porsches, corvettes, etc., it's getting harder to identify and avoid all of the older, dangerous drivers anymore. They used to have the courtesy to identify themselves by driving giant full-size Cadillacs and Buicks :(

toomuchtodo• 8 years ago

I'm in Tampa, and I can't tell you how many times people ask me about my Model S when I'm parked somewhere. I made a flyer, ran off 500 copies, and just hand those to people when they ask instead of spending 15-30 minutes explaining everything. I can tell its moving the needle based on my referral code stats.

nopriorarrests4• 8 years ago

I think you are applying the software startup metric to industrial company. For typical SV startup lack of demand is the single most critical issue (hence the "make something people want" YC motto), nothing comes close. Tesla has plenty of demand.

But being industrial company, Tesla is not solely about making something people want. It's about making it on scale, and showing profit.

So far, each model Tesla made meant more debt on balance sheet, and bigger quarterly losses. Once they break this trend, they are golden. But this moment is not yet, and not even on the horizon, meaning another capital rise this year.

Jdam3• 8 years ago

And personally I really want Tesla to succeed.

That, instead of a sound financial analysis, seems to be the cause of your bullish position. I hope you’re not calling what you’re doing with your money “investing”.

aerovistae2• 8 years ago

How many times have you predicted Tesla's demise over the past 10 years? Just like those people on radio shows believing they've identified the impending end of the world.

dang2• 8 years ago

Would you please read https://news.ycombinator.com/newsguidelines.html and abide by the rules when commenting here?

We don't want snark—it's both a poison and a fertilizer. I'm dismayed to see that you've posted uncivil comments in the past as well.

Nokinside4• 8 years ago

All the previous models and problems with them happened in small production volume luxury car segment. Luxury car customers tolerate more defects and it's economical to repair them quickly with good service.

Model 3 is completely different animal. Learning from history does not help here. Model 3 is 'entry level luxury' similar to Audi A4 and BMW 3 Series.

Tesla is very creative and innovative in every level, not just in their technology. Their financial innovation has finally reached it's limit with Model 3 and it's the breaking point. They can't afford large setbacks or partial delivery and gradual development over the years. They are running out of cheap money.

Tesla is leveraged to the gills and there can't be another year or two until delivery or Musk loses the company and some other car maker or PE firm buys them cheap and finishes the product. I wouldn't be surprised if Tesla is GM or Toyota brand within next five years.

https://www.bloomberg.com/graphics/2018-tesla-tracker/

brian-armstrong2• 8 years ago

I find it amusing that in a forum that gets angry about cults of personality, this comment is on top

wpietri• 8 years ago

So it stands to reason that once they are good at making an affordable car, they’ll sell like hot cakes.

For me, this puts the cart very much before the horse. Once they're good?

Making an expensive car is much, much easier than making an affordable one. The fact that they previously struggled with making an expensive one could just as well be a sign that their process improvement and cost reduction skills just aren't good enough to play in the big leagues.

Their being at 15% of projected output sure doesn't conflict with that; if they learned a lot from S and X, I'd think they'd be doing much better.

simonsarris• 8 years ago

Yeah, my bull case is similar.

People forget just how bad the Model X launch was. It was a complete disaster. They had I think literally three of them ready for launch and then total silence for weeks. Then took months to get any sort of small run volume off the ground.

And because people have totally forgotten about that, people will probably totally forget about just how (comparatively mildly!) bad the Model 3 launch is going. It will stutter for a year, and in three years everyone will want one.

I lived through my dad owning 4 Jaguars, totally inexplicably. One of them he carried around a box of brake fluid because he had to add a little each day. If a car is that special to you, you just mentally set aside production issues. Electric cars are even more special.

Enzo Ferrari probably never said the apocryphal quote: "I don't care if the door gaps are straight. When the driver steps on the gas I want him to shit his pants." But for a big demographic its essentially true.

So Tesla will make it out of this year, and then everyone will forget that the Model 3 ever had problems in the first place, just like with the X.

crowbahr• 8 years ago

And how many times has this happened before?

Musk plays the edge of these things. If it wasn't way too ambitious it doesn't seem like he'd do it.

Someone1234• 8 years ago

That's a pretty terrible article title, the mods should consider changing it from "Tesla Is Facing a Crucible" to e.g. “Tesla’s Make-Or-Break Moment.” which was the much better title of the article this article is based around.

I cannot tell if it was titled this to add an air of mystery or trying to be too clever for its own good, but it is pretty shoddy either way.

freehunter2• 8 years ago

Crucible isn't a super common word, but it's not a super uncommon word either. It means "a severe test where many things combine to influence the end result". It is an entirely correct word to choose for this situation.

userbinator• 8 years ago

I read the entire article and didn't see anything about crucibles.

traek• 8 years ago

crucible

noun cru·ci·ble \ ˈkrü-sə-bəl \

2: A severe test

mcbits2• 8 years ago

Warning: This page will automatically blast audio without asking, potentially ruining whatever you were recording, damaging your ears, waking the baby, annoying the boss, etc.

intopieces2• 8 years ago

ublock origin w/Safari on OS X blocked the video automatically

corruptbytes• 8 years ago

I think that's just a Safari feature. Safari > Preferences > Websites > Auto-Play

"Stop Media with Sound"

I personally have all videos blacklisted, and I white list a few sites.

jonathankoren• 8 years ago

Or you could browse muted.

tom_mellior• 8 years ago

I'm with you on this, autoplay is evil. But I'm curious about the "ruining whatever you were recording" part. Why are you clicking random Internet links if you're in the middle of "recording" something (presumably, audio or video)?

Groxx• 8 years ago

Looking up stuff as needed is relatively common for the more free-form podcasts I've listened to in the past. There are also quite a few vlogs out there, a Tesla segment showing site content wouldn't be too surprising.

I assume there are other formats where this comes up too. Podcast-like stuff seems pretty natural tho.

mcbits2• 8 years ago

I know it's not your intent, but that comes across like one of those "blaming the victim" questions. But as one example, the host of a podcast could be scanning for relevant discussion material during an interview. Or the user could be capturing the audio from a conference call.

fictionfuture• 8 years ago

Tesla is another "solution looking for a problem" type of company. They make nice cars but the electric engine concept has yet to provide a real benefit over combustion. (They say less solution but that's not really true is it?)

Another concept looking for a problem is crypto; as the only problems crypto really solves are the ones faced when doing illegal transactions or hiding money.

matthewmacleod• 8 years ago

They make nice cars but the electric engine concept has yet to provide a real benefit over combustion.

That comment has absolutely no merit whatsoever.

pscsbs• 8 years ago

Benefits of an electric engine vs. ICE:

1. No oil changes. 2. Fewer moving parts, fewer repairs, longer life. 3. Instant acceleration. 4. Zero emissions. 5. Ability to be fully powered by renewable energy.

adrianN• 8 years ago

Any real benefit besides being really fun to drive, mechanically simple, and not putting noxious gases in the air?

URSpider944• 8 years ago

Less pollution from EV’s is real. https://www.ucsusa.org/clean-vehicles/electric-vehicles/life...

Erlich_Bachman• 8 years ago

The medium-term future of the automobile industry is definitely in the electric engines and drivetrains. If you don't see that, you either live in some parallel universe or just don't understand the market at all. You're welcome to prove all of us wrong by shorting Tesla and all other elecric car companies.

username2232• 8 years ago

The Model 3 seems like it was premature. It gets mediocre reviews ( https://www.caranddriver.com/tesla/model-3 ), they have 180,000 orders, and they're fulfilling them at about 3200 a month, i.e. 4.6 years to satisfy the current backlog. For scale, Toyota sold about 32,000 Camrys a month last year just in the US. Heck, BMW sold about 34,000 3-series a month.

Tesla should have stuck to high-end markets. It looks like their foray into mass production will end badly.

ams61104• 8 years ago

And that's where some people were predicting Tesla would stumble. There are dozens of boutique high-end car manufacturers. Ferrari, etc. Price is not really too important for buyers of those cars -- in fact it can be part of the attraction (a Veblen good).

Making "mainstream" cars targeted at middle-class buyers is an entirely different thing. Sales price is a huge factor, and at that volume saving a dollar or two on any given component is something you spend time trying to do. Optimizing the manufacturing process is also critical. Chevy and Ford and Toyota know how to do all that. Tesla doesn't, yet.

Zigurd• 8 years ago

Tesla is facing a test. There are some bad signs that point to deferring profitability longer than expected, such as high defect and rework rates.

On the one hand, despite the challenges, Tesla has built more Series 3s than Chevrolet has built Bolts. On the other hand that's about 15% as many per week as Tesla thought they could do. The reason this isn't a fatal disaster is that nobody else is yet willing to try to beat that. There is no real replacement for a Model 3 available.

Building hundreds of thousands of cars per year is not something that industry newcomers have managed to do for a very long time, nevermind electric aluminum cars. This is a different challenge than competing against high-end BMWs and Mercedes that also have relatively small production runs.

The advantage Tesla has is that they started the learning process early. The competition is still a couple years from profitably selling a direct alternative. But every month Tesla is late is a month of sales runway and revenue gone.

gfodor3• 8 years ago

I have a model 3 and it basically feels like the iPhone of cars. Financial issues could take them down, but you'd have to be a fool to bet against them.

Comparing the model 3 to other electric vehicles reminds me of when people were comparing the iPod to other MP3 players based upon tech specs. At this stage, the electric nature of the car just bolsters the design and UX of it. Comparing it to other EVs because they happen to share the same type of motors is stupid. They should be comparing the Model 3 to high end luxury combustion vehicles because from my vantage point you're getting that kind of driving experience, better even, for half the price. The only place where the electric nature of the car creeps into your life in a negative way is when you consider long trips. And even then, the impact is minimal because of the supercharger network. (You are going to stop regularly on long trips for breaks anyhow, so just charge the car.)

Beyond that, the only way the electric nature of the car impacts your life is beneficial -- no more trips to gas stations and less cost of ownership. At some point you stop even making the comparison because it's just a plain better ownership experience so you don't think about it anymore.

BoorishBears3• 8 years ago

Out of curiosity, what’s a car you had before the Model 3 that you’d compare as the “MP3 player”, and is it a recent car?

I ask because the Model S can’t compare with the S Class or 7 series on comfort and luxury, yet you’re saying the model 3 should be compared

gfodor3• 8 years ago

I've never owned but have been in a relatively recent S class. It's personal but the 3 is basically a pretty pure distilled car. If you hate buttons and like symmetry and simplicity they basically took the car to what feels like the logical extreme. Reminiscent of Apple it's a design that shows they agonized over every button and additional degree of freedom for the user.

There is no dashboard, no key, the whole car is controlled through the center console. The only buttons are entirely flush with the surfaces they are on. They don't even have door release handles on the inside the door pops open when you grab and depress the button flush on the handlebar to exit. Rip the steering wheel out and there is no longer a clear driver's seat just two symmetric front passengers. I find the design refreshing enough and the torque of the engine responsive enough (with no transmission pullback) to say it outweighs other potential creature comforts on a feature level. My last car was a BRZ and I don't miss it too much :)

nawitus• 8 years ago

They should be comparing the Model 3 to high end luxury combustion vehicles because from my vantage point you're getting that kind of driving experience, better even, for half the price.

The Model 3 can't compare to high end luxury combustion vehicles.

vondur• 8 years ago

I’m guessing if it came down to it, Tesla would be sold of for their battery tech and battery manufacturing capabilities.

brian-armstrong2• 8 years ago

Let's say Tesla does go bankrupt. What would happen next? Would GM acquire it? Could they fix the production issues?

Also, would that endanger Musk's other projects? I seem to remember he's pretty leveraged in Tesla, but I assume financially each company is separate?

neonate• 8 years ago

Here's this article in a format that makes no noise:

http://archive.is/wCQls

The WSJ article it refers to is called "Tesla’s Make-Or-Break Moment Is Fast Approaching":

http://archive.is/ucf9q

The CNBC article it refers to is called "Tesla employees say automaker is churning out a high volume of flawed parts requiring costly rework":

https://www.cnbc.com/2018/03/14/tesla-manufacturing-high-vol...

dang2• 8 years ago

Since the CNBC article is by far the most factual, and doesn't seem to have been discussed yet on HN, I'm going to try burying this submission and rolling back the clock on the first post of that one: https://news.ycombinator.com/item?id=16587249.

The Bloomberg article isn't bad, but it's so generic that the discussion is generic as well (Tesla in general, short selling in general). That's the main trouble with articles that don't contain enough factual fiber.

sunstone• 8 years ago

In the run up to model 3 production Musk mentioned that "the production line is the product" because it was needed to be highly automated to make a great car at a low price.

Clearly getting the production line wrinkles ironed out has been a much bigger challenge than Musk expected but that is typical of almost every thing that Musk as done: Envision a way to make things an order of magnitude better. Work like a bugger (while blowing through a dozen deadlines) to make that happen. Eventually, come out the other side smelling like a genius -- because the original vision had merit and was not just a pipe dream. The model 3 fits this mold.

In terms of finance and cash flow, unlike previous near death experiences with Tesla and SpaceX, now Musk could quite easily sell of a chunk of equity in SpaceX to finance what's yet to be done in debugging the production line if the markets won't oblige. But likely the bigger problem right now is time rather than money before things come right. Most of the upfront production line expenses will have already been spent, now it's a learning curve to make it tick along as expected.

Tesla Is Facing a Crucible

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