It’s always a good idea to aim high. However, Tesla’s insatiable ambitions have creditors and shareholders increasingly uncomfortable.
Already having problems with the production of with their sedan, Model 3, Elon Musk has unveiled plans to develop a Semi truck to be in production by 2020. In terms of costs, the first 1000 will cost $250000, dropping to about $200000 after.
There were no details given as to how tackle the production problems for the Model 3, or the funding needed for the new Semi truck. According to Philippe Houchois, analyst at Jefferies, Tesla will need to raise anywhere between $2.5 to $3.0 billion in order to remove production bottlenecks and keep it running smoothly.
“In essence, all last night’s event did was add to Elon Musk’s shopping list of things he needs to spend money on at a time when the company is having difficulty making its base vehicle (Model 3), said Cowen analyst Jeffery Osborne (Reuters)
In addition, Tesla has pushed back its target for production of the Model 3 by three months – the repercussions of which will be reflected in its market value in coming days. While the announcement of the Semi truck had shares up by 1.4% midday today, overall they have fallen a whopping 20% from their record highs mid September.
Some analysts have gone far enough to say that the Semi truck is an ‘expensive distraction’ for Tesla, and they should focus on getting out of their self described ‘manufacturing hell’ for Model 3 production.
Elon Musk and Tesla may be able to pull this off – but is this a classic case of Icarus flying too close to the sun? Find out more at Reuters.
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