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Tesla Just Said What!


Tesla announced new versions of the Model S and Model X with more battery power for an extended range.

In the press release, there was an extremely surprising and telling statement about the Model 3.

Looking at Tesla's balance sheet, they have few options to continue funding development of the Model 3, the Gigafactory and absorb the massive cash flow losses of SolarCity.

[Image from Trendhunter]

In this article, I will be looking at a press release that Tesla (NASDAQ:TSLA) issued today, specifically the last paragraph, which is very telling about the future of the Tesla and the Model 3. When I read this press release, I was astonished at what the last paragraph said.

"While the P100D Ludicrous is obviously an expensive vehicle, we want to emphasize that every sale helps pay for the smaller and much more affordable Tesla Model 3 that is in development. Without customers willing to buy the expensive Model S and X, we would be unable to fund the smaller, more affordable Model 3 development."

[Tesla Press Release]

Simply put, without sales of expensive Model S and Model X vehicles, Tesla could not fund the development of the "affordable" Model 3. I take this as a very bad sign for Tesla because it gives a big clue as to the health of Tesla's balance sheet.

Balance Sheet

Tesla is boxed into a corner in terms of their balance...