Ignoble End to an Upstart?

09 Apr
April 9, 2018

At the grocery store this week, The Brother and I saw a Tesla 3 in the wild for the first time. The Brother wants a Tesla for his next car, and to be honest, they tempt me as well. I wish there was a version of the Chevy Volt’s electric with gasoline backup system that was built into an SUV. Both The Brother and I believe that electric vehicles will phase out the internal combustion vehicles, but that’s going to require time for the infrastructure to be built up.

I’ve also been a fan of Tesla in its history of disrupting the market. Tesla has done a lot to “mainstream” the electric vehicle – much in the same way Apple mainstreamed the smartphone. For me, I’ve enjoyed them working to fight back against the franchise car dealership system.

Which makes this analysis of Tesla’s cash crisis from the Economist disappointing. My read is Tesla is burning through cash because there is a corporate culture of chaos and letting the better get in the way of the good.

Tesla received four hundred thousand $1,000 deposits for the Tesla 3’s. That’s an initial investment of $400 million. I can’t see any of the big car firms not being able to set up a new line for that sort of initial capital.

I’m really hoping Tesla manages to push through, but I have a suspicion that it will revert to a boutique manufacturer of innovative EVs while the big firms bring the electric car revolution to the masses.

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