Tesla’s situation worries Elon Musk: bankruptcy in sight?

News hardware Tesla’s situation worries Elon Musk: bankruptcy in sight?

Is Tesla on the verge of bankruptcy? In any case, Elon Musk is hardly optimistic about the financial profitability of his company. During a meeting with members of the Tesla Owners of Silicon Valley club, the businessman returned to the economic situation of the group, which is currently in deficit to the tune of several billion dollars. In question: supply difficulties, in a context still marked by the consequences of the pandemic.

Slow production in a complex economic context

We cannot say that Elon Musk plays the language of wood vis-a-vis its shareholders. He who does not have his tongue in his pocket anyway has indeed mentioned the big financial difficulties of Tesla in front of the investors of the club Tesla Owners of Silicon Valleywhom he met recently.

The last two years have been an absolute nightmare of supply chain disruptions “, he recalled, referring to the difficulties encountered by all car manufacturers (but not only: JV readers are well aware of the shortage phenomenon that affects manufacturers of graphics cards and next-gen consoles) during the pandemic. Due to a lack of supply, the production of Tesla cars is therefore slowed down… And the profits with.

Elon Musk’s words may sound strong, but the reality is indeed alarming: in the second quarter of 2022, the company saw its profits plummet by $2.5 billion. ” Our main concern is how to make the factories work so we can pay people and not go bankrupt “said Elon Musk.

Elon Musk’s company in (big) financial difficulty

The situation was however in good shape for Tesla. Since 2018, the company was officially profitable, and in the fourth quarter of 2021, it recorded profits of $3.7 billionan absolute record.

But this comfortable financial situation is not enough to absorb the loss represented by this drop in income, while the group has invested and spent a lot to accelerate its growth — especially in bitcoin, which also caused Tesla to lose money.

Result: bankruptcy is indeed a possibility. To get out of this crisis, Tesla should soon reduce its payroll by 10%. In the process, spending should also be frozen, or at least slowed down. In any case, the situation is not without precedent: at the end of 2021, Elon Musk also claimed that SpaceX was on the verge of bankruptcy. Does the high-profile CEO simply like shocking statements, or is there indeed a flaw in the matrix of his industrial empire?

Leave a Comment