What Guillen didn't talk about, though Manager Magazine asked, is what all that building will cost Tesla. He only said that the company would "make sure that the expansion is cost-effective."
Tesla wants to meet its Supercharger charging station target in Germany by the end of 2014. It's trying to build in a few years what traditional car companies have spent decades doing.
This gets to the heart of the short thesis on the automaker's stock. Tesla bears say quarter after quarter that the company is burning through cash too quickly to build the infrastructure it wants, and make the improvements to supply chain that it needs.
Bank of America analyst John Lovallo addressed that directly on the company's Q2 conference call, saying:
"If we think about cash flow for a minute... free cash flow was a use of about $79 million in the quarter, and I think if you make the adjustments you guys were talking about... $11 million for the DOE payment, a $67 million increase in receivables that may not occur. That looks like the use of about a million dollars. Now, you have cap ex ramping up in the back half of the year so how are you thinking about free cash flow generation through the remainder of the year into 2014?"
Tesla CFO Deepak Ahuja could only reply that Tesla "want[s] to be very careful about burning cash...We want to stay as close as we can to a free cash flow position... but that's not something we necessarily want to guide to. We're going to manage it... and spend the cap ex where we need to to ensure we're growing at the right pace."
No comments:
Post a Comment