Guest post by David Middleton
What do Tesla and OPEC have in common? The more they produce, the more they lose.
63,000 people have canceled their Tesla Model 3 orders
Aug. 3, 2017
About 63,000 people have canceled their Tesla Model 3 orders in the past year, Tesla CEO Elon Musk said during the electric-car company’s quarterly earnings call on Wednesday.
Musk took the cancellations in stride, saying that Tesla could drive up the Model 3’s reservation numbers with little effort but that doing so wouldn’t serve the company or its growing legion of potential customers.
“It’s like if you’re a restaurant and you’re serving hamburgers and there’s like an hour-and-a-half wait for hamburgers — do you really want to encourage more people to order more hamburgers?” Musk said. People who put down a deposit for a Model 3 at this point most likely won’t see their cars until the end of 2018, according to most estimates.
“It’s like if you’re a restaurant and you’re serving hamburgers and there’s like an hour-and-a-half wait for hamburgers — do you really want to encourage more people to order more hamburgers?”
Well… Yes. If you want to actually stay in business… You do want to encourage people to order more hamburgers. A real business will make more money if it sells more hamburgers.
Tesla’s 2016 net loss would have been much deeper had they not cashed in on $122 million in Zero Emission Vehicle (ZEV) credits (corporate welfare).
Tesla’s Federal tax credits will begin to phase out after they deliver they 200,000th PEV. Based on current forecasts, that will occur in Q3 2018.
When other automakers sell enough EV’s in California, the ZEV welfare checks will go away. Within 1 year of Model 3 full production, the Federal tax credit will start to phase out. Tesla has yet to even come close to generating a annual profit, despite massive corporate welfare. The question is: Will the government allow Tesla to go broke? Or will they get a bailout?
Featured image source: