Is Tesla really going bankwupt? According to John Thompson of Vilas Capital Management, Tesla will be bankrupt within the next four months. Of course Thompson would say that who manages $25 million and his short position on Tesla represents the fund’s biggest position. I guess he has a long term view because he has been betting big against Tesla for years. Thompson is so confident he’s betting against Tesla with $500,000 of his own money. Is Thompson right about Tesla, for a closer look, lets go under the hood of Tesla?
**<center>Money</center>**
The company nearly went bankrupt once before, in 2008 and there's a distinct possibility that it could face insolvency again. Since 2016, the company has been spending an average $8,000 per minute while failing to turn a profit. If this keeps up, the company will be insolvent by Aug. 6, 2018. Tesla burned through over $2 billion last year and is on track to spend that much or more in 2018 with about $3 billion in cash left on the balance sheet. In addition, Tesla bought Solar City, the solar-panel company in late 2016. The $2 billion purchase came with a $2.9 billion debt load and a chunk of that is soon coming due. And Tesla itself faces deadlines to pay more than $1 billion in bonds due over the next year ($230 million due in November and $920 million next March).
**<center>Over Promise, Under Delivery</center>**
In 2012, the Tesla Model S was six months late. In 2016, the Model X was two years late. And now, most Model 3 owners will receive their cars a year late. As a result, a number of reservation holders are requesting their $1,000 deposits back.
Since 2015, Tesla has been building over 50,000 cars / year. That number increases to 500,000 cars / year with the Model 3, it hopes to be selling 500,000 cars a year. However, according to Deutsche Bank, even though there is 185 years’ worth of lithium available in the ground, mines are struggling to keep up with current demand.
**<center>Lawsuits</center>**
A former Tesla employee claims the company knowingly sold defective cars, often referred to as “lemons,” and that he was demoted and eventually fired after reporting the practice to his superiors. He made these allegations in a lawsuit filed in late January in New Jersey Superior Court under the Conscientious Employee Protection Act (CEPA).
<center>[Source](https://www.theverge.com/2018/2/21/17036426/tesla-lemon-cars-whistleblower-lawsuit)</center>
Most recent issue is only one month old. The family of a man who died when his Tesla Model X vehicle crashed into a highway median last month has hired a San Francisco-based law firm in the wake of the accident that has turned into a back-and-forth blame game between the family and the electric car maker. The firm believes Tesla’s Autopilot feature is defective and likely caused [Walter] Huang’s death.
According to Tesla, Autopilot requires drivers to be alert and keep hands on the wheel, and if the system detects hands off it provides visual and sound alerts, which happened several times on Huang’s drive that day, the company said.
**<center>Tesla Vs. The Competition</center>**
Tesla was the early leader in the EV market, but it is no longer the only care company that offers sexy electric cars.
Tesla Model 3
http://blog.caranddriver.com/wp-content/uploads/2016/04/2018-Tesla-Model-3-PLACEMENT.jpg
Tesla Roadster
Tesla’s latest car, the next-generation Roadster, almost seems too good to be true. Slated to arrive in 2020, the Roadster will go 620 miles on a charge, go from zero to 60 in 1.9 seconds, and will cost around $250,000.
http://s1.dmcdn.net/oLlI8/1280x720-jfc.jpg
Tesla Model X
Tesla has been selling an all-electric luxury SUV, the Model X, since 2015. The vehicle has done relatively well in the market, helping Tesla to deliver a record 100,000 vehicles in total for 2017.
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Jaguar’s I-Pace
Matches up well with the base version of Tesla’s SUV, the Model X 75D. It has similar range and acceleration, smaller, but the $10,000 less than the Model X 75D and $5,000 less than the entry-level Model S.
Porsche’s Mission E Cross Turismo - part Panamera, part crossover.
https://cnet1.cbsistatic.com/img/mjJc64BGQ-hlGpUgilWOD_OoNU8=/1600x900/2018/03/06/177611f1-db3f-4fbc-ba48-cc0387473346/porsche-mission-e-concept-4.jpg
Audi’s E-Tron Quattro all-electric SUV
<center>https://images.hgmsites.net/med/audi-e-tron-quattro-concept-2015-frankfurt-auto-show_100539537_m.jpg</center>
Mercedes-Benz all-electric EQC
https://www.mercedes-benz.com/wp-content/uploads/sites/3/2016/09/3-mercedes-benz-concept-eq-electric-mobility-3400x1440.jpg
BMW X2
https://i.ytimg.com/vi/sYuhVLZ-QCE/maxresdefault.jpg
**<center>Macro Trend</center>**
Although self-driving cars are a least a few years from being road-ready, they are greatest threat to traditional car sales and will fundamentally transform our relationship with cars. Along with ridesharing, like Uber and Lyft, self-driving cars essentially turn cars from a product into a service and make owning a car unnecessary. Millennials are the biggest generation ever and they just don’t value cars or the status of cars like our mother and father did. For the first time since the financial crisis in 2009, US car sales slipped. Americans bought 17.2 million new cars in 2017 vs 17.5 million in 2016.
**<center>Conclusion</center>**
Elon Musk has established himself as the second coming to Steve Jobs. Autopilot is still one of the most recognizable advanced driver assistance systems on the market. All three of the Tesla’s models are like the Iphones with his cult like following. So is John Thompson of Vilas Capital Management correct in his timeline for Tesla’s bankrupt or are you siding with the guy who says he’s going to put orbit Mars in the future?
