Why Tesla (NASDAQ:TSLA) is Tanking

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Tesla (NASDAQ:TSLA) customers may already be jumping ship. And who could blame them? Tesla (NASDAQ:TSLA) can't seem to get their cars delivered on time. There's a lot of completion coming for Tesla (NASDAQ:TSLA). Its first-mover advantage in the electric vehicle (EV) market is waining. To start, Porsche is launching an EV that's just as fast with similar driving range next year, then Jaguar will take on Tesla's SUV with its own I-Pace EV.

Part of the problem is that Tesla (NASDAQ:TSLA) customers are tired of waiting. It appears that many consumers are unfamiliar with the wave of new EVs coming to market next year; thinking Tesla (NASDAQ: TSLA) is their only and best choice. The empty promises from CEO Elon Musk will likely catch up to Tesla (NASDAQ:TSLA) next year, if not sooner.

Musk is sticking to his guns. On the first-quarter conference call, he said, "I'm feeling quite confident about hitting positive cash flow in Q3. This is not a certainty. It does appear quite likely in my view. We are going to conduct a reorganization, restructuring of the company this month and make sure we are well set up to achieve that goal."

This comes after Musk has promised to be able to produce 5,000 Model 3s in a week later this year. He's doing less than half that now. Customers that keep getting delay notices will soon get informed of the alternatives as competition comes to market for Musk. This competition is making new cars while Musk is still trying to perfect production on a car that's now years old.

Employees See the Writing On the Wall

Glassdoor.com ratings for Tesla (NASDAQ:TSLA) are falling. The shortfalls in car deliveries and worries over cash-flow seem to be weighing on employees as well. The rating for Tesla (NASDAQ:TSLA)'s business outlook was 66% a year ago. Today it's 57%.

Employees are also realizing that Musk might be coming unhinged. The CEO rating for Tesla (NASDAQ:TSLA) at Glassdoor.com is down from 91% last year to 85% currently. And only 58% of employees are recommending Tesla (NASDAQ:TSLA) as a good place to work, compared to 67% twelve months ago.

The problem is; basically, Musk has gotten ahead of himself, trying to go all in on advanced robotics. He bottlenecked production and has allowed other carmakers to catch up. He's lost his advantage.

Production Can't Catch Up

Musk has long been proud of Tesla (NASDAQ:TSLA)'s robotics. The idea was that using robots on the assembly line would speed things up. The opposite has happened. The "excessive" automation has been a mistake, as Musk admits.

Musk has spent millions on networked robots and conveyor belts only to tear them down. Making cars on a large scale is hard. Musk is finding out what it took General Motors (NYSE:GM) decades to figure out. General Motors (NYSE:GM) also spent billions on robotics only to realize that humans are underrated. Trying to further improve on the methods of conventional automaker methods is proving fruitless for Tesla (NASDAQ:TSLA). The company has brought in too many robots too fast, and now it's too late do it the right way, i.e. introducing automation incrementally.

The current numbers don't add up, and won't. The subpar first-quarter results only further show that Musk won't hit his promise of being profitable in the second half of the year. It's misstepped on production and won't get that time back. Customers are realizing this, as are employees, investors may soon be to follow. 

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Disclosure:

I have received no additional compensation other than the Ethereum that Hade Technologies pays to produce Exclusive content

Comments (10)

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  • Scott
  • ,  Contributor
  • 17 May 2018, 01:05 pm

Tesla is ready to declare BK and the stock price still rises after this telling report from GS which portrays no future for the cash incinerator.

   0   Reply (0)   Follow(12)  

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    • DoubleD
    • ,  Contributor
    • 17 May 2018, 01:05 pm

    Goldman Sachs estimates that Tesla will need $10B in fresh capital by 2020 to fund operations.

       0   Reply (1)   Follow(12)  

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      • Jesse
      • ,User
      • 17 May 2018, 01:05 pm

      If you want to make money just do the OPPOSITE of what Goldman is advising clients

         0  

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        • John R
        • ,  Contributor
        • 17 May 2018, 01:05 pm

        Never has a company received so many billions of dollars and yet achieved so little with it. What a waste of money.\n

           0   Reply (0)   Follow(12)  

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          TSLA has the lowest production per employee any large auto manufacturer by a huge deficit, in spite of all the money they wasted on excessive automation.

             0   Reply (0)   Follow(12)  

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            5k/week is industry standard for ONE line, 2 shifts, 5 days a week. No big deal.

               0   Reply (0)   Follow(12)  

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              • Scott
              • ,  Contributor
              • 16 May 2018, 11:05 am

              The Big 3 can put out 80-90 jobs an hour for high volume vehicles. (That’s 9,600 a week if you’re working 3-crew at 80 jph.)

                 0   Reply (0)   Follow(12)  

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                • John R
                • ,  Contributor
                • 16 May 2018, 10:05 am

                Tesla already took plenty market share from luxury brands like BMW and Mercedes.

                   0   Reply (0)   Follow(12)  

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                  • Jesse
                  • ,  Contributor
                  • 16 May 2018, 09:05 am

                  Tesla model S already outselling the Chevy Bolt

                     0   Reply (0)   Follow(12)  

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                    Insightful, thanks :)

                       0   Reply (0)   Follow(12)  

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