Speaking of automakers, Tesla is again making news on Monday. The company, which many were anticipating would release a new product today, has decided to push that release back by a few days. Instead, CEO Elon Musk is shooting for Wednesday.
Separately is Tesla’s collaboration with Panasonic (OTCPK:PCRFY) (OTCPK:PCRFF) on “manufacturing photovoltaic cells and modules from a production site in Buffalo.”
One caveat though, is that the deal is contingent on Tesla closing the deal to acquire SolarCity (NASDAQ:SCTY). If that deal does close, then “Tesla will use the cells and modules in a solar energy system that will work seamlessly with Powerwall and Powerpack, Tesla’s energy storage products.”
As many already know, Tesla has a very divided bull-bear camp. People either think Tesla is the “next big thing” or it’s going to zero. So which is it? While it’s hard to say Tesla is the next Amazon per se, one can certainly envision a world where the company is producing a steady volume of electric vehicles, while also selling Powerpack and solar packages to customers.
My question is, can the company get to that stage and can it do so profitably? At least, can it generate enough cash flow to cover the costs on its own without continually raising more capital?
This particular Panasonic deal is, in management’s mind, a way for the company to cut its costs in relation to its solar business, (under the assumption it acquires SolarCity). If it does, wanting lower costs makes sense; that much is true for any business.
When I picture Tesla, I envision a company that can be revolutionary. However, that revolutionary company doesn’t have an easy walk. It’s got a tightrope that it has to navigate across. Losing its balance is okay. We see that all the time from Tesla, ranging from production delays and vehicle setbacks to controversy over its CEO and Autopilot program.
