Tesla's Factories: Double Trouble

Oct. 30, 2017 4:13 PM ETTesla, Inc. (TSLA)606 Comments
Montana Skeptic profile picture
Montana Skeptic


  • Everyone now agrees with CoverDrive: the losses reported Wednesday will be a new record.
  • Will the analysts and journalists cease being supine and sycophantic, and instead start asking hard questions? TBD.
  • Meanwhile, Edward Niedermeyer drops another blockbuster: the Model 3 mess is even bigger than we thought.
  • The situation in Sparks also is grim: The Gigafactory appears to be experiencing a cross-cultural paralysis.
  • Meanwhile, oh, that cash. It burns, burns, burns.

As I write this, Team Tesla (NASDAQ:NASDAQ:TSLA) is doubtless hard at work on the Q3 Update Letter.

The letter will require some clever wordsmithing indeed to thread the needle on so many troubling questions, to find a positive spin for the negative numbers, and to keep alive the hope in the hearts of the Fremont faithful.

The letter will be released after market close on Wednesday, along with the slimmed down version of the Q3 financial statements. In the past few weeks, the analyst world finally has caught up with CoverDrive in expecting record losses.

Most interesting of all will be the conference call. How much longer will Adam Jonas and Ben Kallo continue to kneel in adoration instead of to question with furrowed brow? After CFO Ahuja and CEO Musk duck and dodge on the main question, will their interlocutors bore back in again with a determined follow-up?

In short, will the analysts and journalists on the conference call finally lose their patience with non-answers and happy talk, and start demanding Tesla come clean with specific information?

Because there most certainly is a great deal of specific information to come clean with. Anton Wahlman has suggested 10 questions that cry out for answers (and a good many more were put forth in his article’s comments).

Here, I touch on two recent reports that suggest huge problems at both the Fremont auto plant and the Nevada battery factory.

Another Niedermeyer Blockbuster

Edward Niedermeyer of The Daily Kanban is out today with another blockbuster story. (I reported on his earlier blockbuster here.)

Relying on a source whom he claims is familiar with the development and deployment of the Model 3 manufacturing equipment, Niedermeyer reports how Tesla did the hokey-pokey with an unnamed automated tooling supplier regarding Body In White (BIW) transfer lines for the

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Montana Skeptic profile picture
I have a J.D. degree from Yale Law School, practiced for 30 years as a trial lawyer in commercial cases, and in the decade that followed managed a $1B+ portfolio for a family office. I have recently retired and am free to write about whatever I want. And so I will.The fellow in my icon is Galileo Galilei, who famously said: Eppur si muove.I say, less famously: Time is the only reliable solvent of folly.

Disclosure: I am/we are short TSLA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am short TSLA via long-dated options.

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