All a $366 billion loss in previous

Published by admin on

            All the businesses need to go through the bright side and
the down side in making profit that means not all the businesses can make
profit all the time. Just like Tesla, after making profit for years, recently
the company is facing the financial issue, especially after it reported a $671
billion loss in quarter three, and compare to a $366 billion loss in previous
quarters. “In the few quarter ahead, Tesla needed outside capital to survive,
and it may reach to the billions” said by senior analyst Clement
Thibault when he was interviewed by The Verge. Even though there is a the
growing sale of the model X and model S, the boasts of growth don’t make up for
the amount of money the company has spent through to get Model 3 launched by
its end-of-year target. The issue was caused by production problem on Model 3s
that delay the order from customers, and some of them ask back for the booking
money when the Tesla failed its promise. The CEO of the Tesla Inc. said it was
due to the systems integration subcontractor unfortunately dropped the ball in
the Gigafactory, and they did not realize the degree to which the ball was
dropped until quite recently, and this is a very complex manufacturing area.
The company announced that it had produced only 260 Model 3s in which it was
predict to product 1,500 Model 3s at the end of September 2017.

            However, none of this issue can prevent Tesla to
continue, for the company has found many solutions to deal with this financial
issue. First of all, The CEO of tesla claims that the company has tried to
rewrite and redo all of the software from scratch and many of the mechanical
and electrical elements of zone in only four week, in which it should be
finished in many years. Besides solving the production problem, the company has
found the solution that help the company go through this rough time by raising
fund. It can be done by selling its additional share to investors while Tesla
stock has surged and swooned, and during the first half of 2017, shares gained
65% which means that the company can raise more by selling share today than it
could few months ago. Moreover, the company is planning to raise $1.5 billion
through issued bonds with high yield in the financial market instead of selling
its equity. With providing higher yield of the bonds, the demand for it will be
robust as the financial market is in the current low-interest-rate environment.
Beside these, the company can claw back some of the money from subcontractor
for mistake they had done, even though the money is not big amount that enough
to add up loss resulting from the problem.

Categories: Environment


I'm Iren!

Would you like to get a custom essay? How about receiving a customized one?

Check it out