November 21: Tesla madness

Tony Stark, the fictional super hero industrialist, Ironman. Some say that his character was loosely (very loosely) based on the real life super hero industrialist and lover of all things electric, Elon Musk. I'm sure in his own eyes, Elon sees himself as some modern day superman. I mean, think of it, when was the last time someone started up a car company and actually was successful? Short list and they are usually customs made in very small numbers. Not Elon though, he started with a derivative of the Lotus sports car.........

......and from there went on to produce a high end (read expensive) electric sedan, the S, that outsold the high roller mobiles from Mercedes, BMW, Lexus and Audi. Pretty incredible when you think about it. Then to really get some market share, he came up with a gull winged suv, called the X. The early production of both of these models started off slow and not necessarily by design, but like any new vehicle, there were issues. And issues resolved, our Ironman, decided to dream really big car wise, all the while working on a one way(?) passenger carrying rocket to Mars and a hyperfast tube to convey people between major centres in minutes, compared to hours. Would you say that this might resemble Elon's work plate.........

I sure would.

Now back to his big car dream, a volume model called the Model 3, that would sell in the $30k price range (before adding those necessary options). This made such a big splash, along with the promises of 500,000 cars per year by the end of 2018, that over 400,000 electric dreamers plunked down $1000 deposits. Project funded? If you said, yes, then you sure don't know the car business.

Tesla Model 3

Musk has been amazingly successful so far. Give him tons of credit for building great quality luxury cars. But ramping up production from around 100,000 cars per year to five times that in one year is next to impossible, no matter what one is producing. Our Ironman is finding that out, as the Model 3 is woefully behind schedule. Tesla is burning thru cash and doesn't have the expected money coming in from the 3 sales and won't for several months. Big problem and big problem not resolved. So what does our superhero do now?

First he introduces an incredible electric (of course) semi, scheduled to arrive in 2019! The stats for this behemoth boggle the mind, at least they boggle mine. Zero to sixty in five seconds without a trailer, twenty with one! Those are huge numbers. Also impossible to jack knife. Incredible! And to think his company can develop this, while trying to produce the Model 3 in anything resembling mass production numbers.

Stop the presses! Elon is not done yet. At the same time as rolling out his big truck, he also showed Tesla's new sports car........

......again with unsubstantiated and absolutely out of this world performance figures, like 0 to 60 in 1.9 seconds. All theory, of course, but some folks were already lining up to put down a reported $50k deposit on this proposed $250,000 hot rod. And after these intros, guess what happened. Tesla share prices went up.

Call me a skeptic, folks, but I don't see these things happening. And it wouldn't be the first time Musk's company has missed deadlines. But I'm not talking about something as predictable as that. I'm doubtful that this company can survive long enough to hit any of these targets. Huge expenses, small cash flow and losing vast amounts of money monthly. Doesn't sound like a strong base for a good outcome.

Maybe, like I've heard said, Elon is fishing for a big car company partner, one who knows how to do volume production. Maybe he's just showing them what he can offer them in the short term. I hope this is the case, because if not, I'd be asking for my $1000 or $50,000 deposit back faster than Elon Musk can meet any of his wild goals.

Until next time.......