Tesla's decline in Europe
Tesla's decline in Europe
Difference in registration between January 2024 and January 2025.
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96 comments
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What numbers would cause them to go bankrupt? I can't imagine any business surviving such significant losses for very long.
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Tesla has something like 40b in cash, and makes more profit on their vehicles than everyone, even at these lower prices, except for companies like Porsche.
You could probably halve their total sales and they'd still be fine financially.
The stock would be another story though.
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40b doesn't sound like a lot for such a big company, though. That money will burn through quickly, unless they start mass firing their workforce.
There must be a breaking point. No large company can just exist without sales keeping them afloat.
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It's less the 40b and more how profitable the vehicles are.
They have a lot of room for reduced sales, they could cut an entire shift and be okay profitability wise. The 40b allows them, If they wanted to still try and grow with the reduced sales. That could last for many years if needed in that case, but if shit hit the fan and they decided to grow less and optimize for further reduced costs the could probably keep the 40b much longer.
Edit: And they sell more than cars to generate more profit. Energy business is growing and less (bit not zero) impact from his craziness as commercial stuff cares less.
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OK, so same question as before: how bad do their sales need to be for them to tank? I mean, we're seeing over 70% drop in some countries. Could they possibly sustain that for six months? A year?
If the general public had a target, I'm sure we'd get there!
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They still sold 330,000 cars even with all the drops and model y changeover on a quarter that's always the weakest in the year.
It would have to get much much much worse to make them not profitable on the cars, and not be able to sustain the difference from their energy business.
Maybe sales under 1 million for the whole year for something like no profit? But maybe not even then?
Edit: in 2017 The model 3 ramp was profitable at 5k a week in Fremont, and the car is cheaper to make today.
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I guess we still have a lot of work to do then 🤭
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I'd like to see the stock devalue to normal levels, taking most of Elon's wealth with it, the board deciding that Musk is a major detriment to the company and fire him as CEO and then get back to their core business of making cars without the regular injections of Musk insanity.
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The thing about business though is you need to be able to derisk your business from a single failure point.
Tesla has a lot of battery cell supply and now production, and they use that supply chain to build commercial batteries. That's taking 1 thing you're good at (batteries) and then branching out to help build a new revenue business. Now their energy business is beginning to boom after years of being somewhat sidelined for cars, but now that cars are about to suffer heavily, the commercial battery business helps protect them.
FSD and Optimus are the same but aren't paying off yet. Let's say tesla never actually achieves FSD. They still end up with a very advanced level 2 system, that they could maybe pivot into a level 3 on highway only system. Or maybe it will only ever be a level 2 system.
But they've spent all these billions building the training network infrastructure (hardware and software), as well as seeing if they can maybe build specialized training compute to internally compete with NVidia (v2 of dojo might he competitive but we don't know yet)
But it's a shit load of money going into this, so how do you derisk it? You find another product to use the technology. Enter Optimus. It uses the same FSD computer. The same vision based neural network that billions of dollars has been spent training, in a less human saftey risk than cars (e.g a robot carrying a box is less risk than a car going 75mph and malfunctioning into a multi car accident) and aside from the hardware needing to be cost effective, should be a easier problem to solve with technology today. It also leverages Teslas' manufacturing capabilities.
So the "should just go back to cars" kind of mindset removes these kind of de risking side ventures.
I absolutely agree they should get back on the plan of more vehicles and less focus on robotaxi cars until FSD is actually real, but it's these side things that keep a business healthy and protected from something like 25% auto tarrifs.
Further, they have so much cash on hand even with these expensive ventures and are very profitable so using the cash to expand like this is prudent.
Edit: just another non Tesla example... Stellantis is partnering with Archer Aviation to help manufacture their eVTOL planes. They're using their manufacturing expertise to do something else which will help derisk them.
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If he remained a major shareholder, I'd never buy one. And I'm in the market.
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What numbers would cause them to go bankrupt?
They'll shrink in size but will always be a big player in the EV market.
The main question is: how big a decline will be required for the board to boot Musk out?
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but will always be a big player in the EV market.
Not for long if their sales continue to tank, because that revenue will be going to other manufacturers, who will become bigger than tesla, eventually.
And I don't simply want Musk out. He'd still be rich because of Tesla. I want the company to fold completely. I want his fortunes to be zero, and his influence to be less than zero.
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If you want that to happen, then you'll need to start work on SpaceX after Tesla is gone.
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One thing at a time 🤭
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I'd rather the stock gets hammered, he loses his wealth and has to sell his stock to cover himself, he gets fired as CEO and then the company goes on and does well after he is nothing to do with it.
I'd quite like the company to do well. I just want it to be without him.
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If they shrink in size, and the EV market becomes "all cars" then they'll be insignificant.
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Tesla's stock price has little to do with Tesla going bankrupt. This is about Musk himself. He's heavily invested in Tesla and as Tesla's stock goes down his net worth and power goes down.
What it does make difficult for Tesla is to raise money through investment.
Tesla's problem with all of this is brand damage. Best thing Tesla could do now to recover the brand is remove Musk as CEO. However, as the largest investor he's almost self-appointed.
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It is less about portability on sales and more about the ability to drive R&D.
The technology will continue to improve. If they fall behind, that will be what really tanks sales.
They have a lot of cash but they need to keep feeding the R&D on batteries, charging, software, and cost reduction tech.
Their biggest protection is tariffs since fairly large markets are locking out all their real competition. As long as those are in place, they will be able to soak up much of the EV demand.
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96 comments