Is Tesla in Trouble?
The world and human society is consistently evolving. What life was like twenty years ago will not be the same as to what life is like today. Twenty years ago, people relied on books and newspapers to receive their information. Now, they just throw a Google search or go onto Twitter to discover and learn new information. However, these changes in everyday lifestyle occasionally obscure innovations in other fields that intend to improve the general world. One of these innovations is electric cars. In the past decade, electric cars have generated more demand and enthusiasm due to its environment consciousness, economic advantages compared to petroleum, and technological advancements that also account for better performance and range than the electric cars in the past. The "electric revolution" has largely been inspired and initiated by one company - Tesla.
Tesla has become the epitome of electric cars. Its stunning design and outlasting performance with top-tier software including AutoPilot has influenced many to buy the car as a luxury brand while also manifesting respect for the environment. Its popularity has rocketed the company to a valuation of approximately $50 billion, higher than that of General Motors and Ford. Additionally, Tesla has accomplished this feat from selling only 3 vehicles - the Model S, Model X, and Model 3. Some optimistic projections claim that Tesla's revenue will rapidly increase in the coming years as many consumers will jump at the prospect of buying a Tesla Model 3 due to its relatively cheaper price of $35,000 while still possessing an admirable design and excellent performance. Despite all of its successes, the company has some internal problems, which have been worsening and appear to persist in the future. One that is greatly alarming is Tesla's debt crisis.
In the 10 years Tesla has been a company, it has never managed to make a profit. Currently, it has almost $10 billion in debt, most of it coming from its controversial acquisition of SolarCity. Tesla's very existence depends on whether it can produce enough Model 3 sedans, since currently it has only begun producing the expensive trims. On top of that, its resources seem to be spread too thin, with its Tesla Semi-Truck and Roadster entering production soon. Similar to how the Model 3 has placed Tesla in "production hell" and financial setbacks, Tesla's mysterious Model Y compact SUV will place the company in greater trouble. Tesla Founder and CEO Elon Musk is also busy with his other ambitions, such as the Boring Company and SpaceX, so the question is whether Musk has the resources to pull Tesla out of its debt problem.
Tesla has become the epitome of electric cars. Its stunning design and outlasting performance with top-tier software including AutoPilot has influenced many to buy the car as a luxury brand while also manifesting respect for the environment. Its popularity has rocketed the company to a valuation of approximately $50 billion, higher than that of General Motors and Ford. Additionally, Tesla has accomplished this feat from selling only 3 vehicles - the Model S, Model X, and Model 3. Some optimistic projections claim that Tesla's revenue will rapidly increase in the coming years as many consumers will jump at the prospect of buying a Tesla Model 3 due to its relatively cheaper price of $35,000 while still possessing an admirable design and excellent performance. Despite all of its successes, the company has some internal problems, which have been worsening and appear to persist in the future. One that is greatly alarming is Tesla's debt crisis.
In the 10 years Tesla has been a company, it has never managed to make a profit. Currently, it has almost $10 billion in debt, most of it coming from its controversial acquisition of SolarCity. Tesla's very existence depends on whether it can produce enough Model 3 sedans, since currently it has only begun producing the expensive trims. On top of that, its resources seem to be spread too thin, with its Tesla Semi-Truck and Roadster entering production soon. Similar to how the Model 3 has placed Tesla in "production hell" and financial setbacks, Tesla's mysterious Model Y compact SUV will place the company in greater trouble. Tesla Founder and CEO Elon Musk is also busy with his other ambitions, such as the Boring Company and SpaceX, so the question is whether Musk has the resources to pull Tesla out of its debt problem.
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