What In The World Is Tesla Doing? Bizarre Manufacturing Processes Produce Massive Cash Burn

    About a month ago, CNBC published an article noting Tesla’s use of reworked parts in its factories. That report was lacking in substance and somewhat misleading, but the reporter, Lora Kolodny, published a new report this afternoon with much more detail, including pictures. She nailed it. That Tesla has racks of castings and door frames sitting outdoors at a local facility owned by a nonaffiliated machining company is startling.

    My first reaction was: what are they doing? My second: that’s not how you make cars! The pictures Kolodny took get at the heart of Tesla’s problems. Tesla has not yet replied to a request for comment, but, clearly, TSLA’s processes are totally at odds with the best practices of major players like Volkswagen, Toyota and General Motors.

    After reading Elon Musk’s early morning tweet predicting profitability and positive cash flow in Q3 and Q4 2018, I was befuddled and rechecked my numbers. I still believe, as I noted in this Forbes article, that Tesla will need to raise at least $2 billion to fulfill its obligations into 2019—the Jefferies report quoted in the Economist article to which Musk was responding mooted a figure of $2.5 billion to $3.0 billion—and now there is photographic evidence of Tesla’s cash burn.

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    Article source: https://www.forbes.com/sites/jimcollins/2018/04/13/what-in-the-world-is-tesla-doing-bizarre-manufacturing-processes-produce-massive-cash-burn/

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