Financial performance deteriorates – structural unprofitability likely. Most cash raised recently is already burnt – next equity sale looms.
Here we are, seven months later, and Tesla’s (NASDAQ:TSLA) financial performance deteriorates at an alarming rate. Bearish macro scenarios, always just around the corner since 2011, refuse to play out and Queen TINA and King FOMO remain enthroned. The much anticipated interest rate assault by central banks is further delayed. And once it arrives, it will do so in rather piecemeal fashion, unlike the infamous macro-scaremongers suspect. No surprise then that the Panglossian valuation of Tesla abides, while journalists and analysts alike continue falling for every new-fangled non-profit idea emerging from Palo Alto.
And then, as long as 1) wealthy consumers in western nations but also China are eager to seek indulgence by way of green-washing and, 2) are in search of a Steve Jobs replacement persona onto which they can project their hopes for a gleaming future and, 3) are disillusioned with the establishment and its leaders, the company will likely succeed to raise cash again. Some say it might already be too big to fail.
The Tesla narrative is based on an illusion, a contradictio in adjecto – the promise that humankind can shop and consume itself into a sustainable future. However, even a million Teslas on the world’s roads will not impact the environment for better or worse. It is a systemic issue. The Financial Times agrees. Sustainability and promoting the purchase of raw-material consuming heavyweight products are mutually exclusive. There is no right life in the wrong, to paraphrase Theodor Adorno.
At the time of writing, the company’s precarious financial position shows that it remains a bottomless pit. Let’s go in.