Let's talk Money: What happened with Tesla (TSLA) & Why I am considering cancelling/selling my reservation
Let's talk Money: What happened with Tesla (TSLA) & Why I am considering cancelling/selling my reservation
Image Source: Tesla
Today, Tesla (NASDAQ: TSLA) stock plummeted more than 7.50% in today's trading, as much as 9.70%, and has reached a 1-year low - along with the most 1-day fall in almost 2 years. The month of March has definitely been a brutal month for Tesla and now with this fetal car accident, potentially due to the autopilot would definitely not going to help the company.
I have personally decided to sell or get my $1,000 deposit back prior to this accident, but this is giving me yet another reason that my decision might be right.
Delivery Date Kept Delaying
The company's Tesla Model 3 production target has fall short from their original estimate of 2,500 cars/week, but they are only producing 800 cars/week now. They have improved their production figures, but they are still significantly short compare to their original production estimate - without mentioning their original "original" promise of 5,000 cars/week back in last year on Model 3 deliveries. I was supposed to get my car sometime later this year, but it got pushed to almost mid-2019 now (see below). With deliveries kept delaying, the next concern/problem comes: cash flow.
Mounting Liquidity Issues or Concerns
With the $1,000 deposit that they have received from each Tesla 3 buyers, myself included, they have received nearly $1 billion worth of deposits. However, with the deliveries kept delaying due to the production, along with the heavy cash burning. IF the situation does not improve in the short period of time, the company is going to face significant liquidity issues in the next couple of quarters.
With that in mind, Moody's has already downgraded the company's debt to junk bond status and is warning more downgrades might be coming, depended on the company's upcoming financial reporting. S&P is also concerned doing the same thing. On top of it, there are also a short-term debt due date coming up, with around $230M due in November 2018, and another $920M due March 2019. Something needs to be corrected and it needs to happen fast.
If the company were to go out of business, how good would the warranty be? Technically nothing...
Federal Tax Credit on Vehicle
According to CNN Money, Tesla is expecting that it will hit the threshold of 200,000 U.S. sales on EVs sometime in 2018, that is the $7,500 federal tax credit for plug-in car buyers in the U.S. For all the automakers, the full $7,500 tax credit will be reduced to $3,750 when the 200,000 threshold is met, and then 6 months later, it will then drop to $1,875. For me, that was one of the top reason why I have decided to put a $1,000 deposit in the first place. IF I can still get the $7,500 tax credit, I am pretty much putting $1,000 down, trying to get $7,500 savings in tax in return - great deal! If and only if I get it. Very not likely.
New Car doesn't align with our Family Financial Plan
To be honest, even without all the reasons that I have listed above, at the end of the day, I think I would still sell my current reservation tickets to someone else. As I have mentioned in my previous post about getting out of mortgage and debt within 4-5 years, adding a new car when we don't even need one just doesn't fit in the equation. Yeah it is true that it is an EV AND a really nice car after all, but I believe believe being a head of household and a leader at home, it is also my responsibility to stick to the plan and be responsible in every single financial decisions that I make. We can get an old hybrid car that can satisfy both financial and environmental part of buying a Tesla Model 3.
"Children do what FEELS good. Adults devise a plan and follow it."
Dave Ramsey
At the end, I will see if some of my friends who may be interested taking over my reservations, if not, I will just out my $1,000 deposit and put it to...... short the market maybe?
Question: What do you think?? Am I missing anything here? Am I not concerning everything?? What do you think about my decision to get my reservation deposit back?
Cheers!
Stephen @stepbie
(Joshua 24:15)
Thank you for tuning in today and we just want to let you know that your upvote, comment & resteem mean a lot to us. Look forward to encourage and be encouraged here!
same story as Ford, the first company who pioneered the product isn't necessarily the company that will ultimately dominate.
Yeah - for some reason I still have faith in Elon, he has done it before and he seems to have some type of magic to make things happen too. Especially now that he has this all-or-nothing 10-year compensation deal, $50B compensation? I am sure he will make things happen, just that (1) the junk bond situation worries me a little bit, and (2) even if they were to do secondary offering, they may want to do that sooner rather than later... but we will see how the board market thinks about Tesla moving forward. Who knows.
A car IMHO is considered a liability unless it is used for business and generates cash. So the lower the amount paid for it the lesser the liability. It doesn't appreciate in value too so no ROI's to consider. If you don't need an additional one I would suggest refund your $1,000 soonest. May I suggest investing it instead in Steem Power as this will have 2 distinct advantage for you. First, at the bargain price that Steem is now, about $2, you can power up with 500 SP. This can translate to an upvote value of about 0.08 at 100% VP or voting power. So when you upvote your posts you get that much in Rewards. That makes it an asset. Second, Steem prices are just about to explode and being in before it does can give you substantial capital appreciation as well in the medium to long term.
Just my take on the matter. Enjoyed reading your post.
Nice hearing from you brother! For the ROI, I agree with you majority of the part. In terms of ROI, you can do the calculation based on the initial cash outflow with cash inflow, or you can calculate that based on the initial cash outflow vs. the cash/cost saved. With Tesla, there are actually quite an amount of cash saved i.e. insurance, gas (mainly)... However, one thing that freaks me out is still the maintenance, and whether or not Tesla as a company will still be around taking care of the vehicle when there are major maintenance work needed - that would directly impact the useful life of the vehicle. The longer the life of the vehicle, the higher the ROI or IRR will be.
In regards to the Steem, THAT'S EXACTLY WHAT I WAS THINKING as I was writing the post! Do you know if there is a written instruction as to how to do that? Need some tutorial here :)
Hi @stepbie! :)
Each country has its own Bitcoin Wallet PROVIDER for fiat-crypto-fiat :) #Coinbase.com is the most popular and trusted in the USA. Just sign up here: https://www.coinbase.com/join/5577e9a8d59c2a5eb6000094 and BUY Bitcoin then follow the steps here for buying Steem Power:
https://steemit.com/steempower/@pinay/how-to-buy-steem-power-with-dogecoin just select SEND Bitcoin (from BlockTrades.us) instead of Dogecoin.
We can buy Steem Power direct (instead of Steem for 'Power Up') from @BlockTrades without signing up (it is only an option to sign up if we want them to keep records of our transactions) :)
I always throw small amount first just in case I make a blunder. You can try 10 'Steem Power' first then buy more if it is successful. :)
great! I will take a look at it. I am already doing crypto and just want to see how I can between say from ETH to Steem. Thanks for the post and response, I will give it a try!
Same process, just select Send Ether instead of Bitcoin/Dogecoin :)
Salamat mam.
Am not so savvy myself about the details on how to invest in Steem by direct buying but if I may refer you to @pinay who has posted several articles on this. Another resource person for this is our good friend @bycoleman who has personally purchased Steem with his own funds but may be too busy with his other projects right now like working on new bots to improve our platform. @pinay is very accomodating and eager to help and has time. You can review her blog. Hope this helps.
oh great! Thank you very much for your recommendation!
Good thoughts
Thank you so much for dropping by!
Nice article
Upvoted and resteemed
Thank you @netaterra!