The mood on this site is funny you never worked on software project that delivered late? Did it mean that your company with multi-billion market cap was immediately doomed? The challenge they face now is big but on this road they already faced many challenges.
Car companies and software companies have completely different capital requirements and cash-flow constraints.
Tesla is not a small software startup. They are a 40-60 billion industrial manufacturing company that is burning through its already-dwindled cash reserves while struggling with manufacturing bottlenecks. Coincidentally, said manufacturing is Tesla's sole method of generating revenue. They already have massive amounts of outstanding debt. Even before Moody's downgrade, it was not going to be easy to finance.
In general, comparing a massive company's notable operational issues to "software project delivered late" is nonsensical. If your software company's sole source of revenue is selling packaged units of your software and your company is continuously showing that it's unable to deliver those units of software in time, creating massive cash shortages - then yes, the market cap of your software company is going to suffer.
Tesla is not valued as car company by the market. 30% of Tesla float is shorted and yet it still has a market cap on par with Ford. I've read a ton of similar arguments about Amazon how it's burning through cash for years how Walmart will crush etc.
Except of course for the fact that Amazon isn't burning through cash. Amazon has had many profitable years and it's revenue has grown exponentially thanks to agressive reinvestment.
Technology is not the only space where Tesla is innovating. Tesla has also very innovative financing and they are really starting to stretching it.
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. They 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 30-50 percent. Currently Tesla is producing 20% of it's target. Their production curve is not growing steeply enough. In fact it's slowing down.
ps. High flying arguments that don't look into details of each case, like "Never bet against Musk" or others have solved technical difficulties too, are not really useful for investor.
Tesla is not going to financially recover if Model 3 fails to deliver within a year. Musk is taking huge risks and so far it has paid out. That's a thing to admire in him.
But the risk taking means that there is no fallback. Model 3 will either make or break Tesla. They have to deliver Model 3 in large volumes or it's game over. They have no time or money to try again or fall back into the small volume luxury car business where they have time to develop the technology.
"Tesla is not going to financially recover if Model 3 fails to deliver within a year" again define deliver if they are at 50% of the planned rate by the end of the year but on a good trajectory to reach 100% within 4 month or whatever else situation might be it's a scale.
They are not in the planned trajectory. They are in a trajectory of constantly revising their plans downward while hemorrhaging several billions per year.
Over 1058 per week is not half of the 2500 per week is not the 5000 per week is not 10,000 per week that was the plan.
The issue is that their spending grows much faster than their plans for delivery and they will end up diluting their stock.
More serious answer: I think its fair to say the concern isn't the miss of an individual deadline or even multiple deadlines. Its the attitude and the process and the communication that surround those misses. There is no seemingly justifiable cause for continued misses beyond Tesla not having the internal knowledge or controls to make this happen. That, the process concern, is more of what you are seeing than a concern over a late project. When the response to missing a project deadline seems rooted in CEO ego I get concerned.
"There is no seemingly justifiable cause for continued misses beyond Tesla not having the internal knowledge or controls to make this happen". Thats again a fairly strong statement setting a bar high enough that very few if any software companies can clear.
It depends on whether you see Tesla as a software company or a car company. Car companies seem to launch and deliver new models of cars profitably and on schedule with regularity.
I see Tesla as a tech company and looking at the market cap it looks like the market is valuing it as a tech company it's market cap is about that of Ford and that's with over 30% of Tesla's stock float being shorted.
