Tesla Introduces Two New Models: Is the Company Headed for a Crash?

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    Tesla CEO, Elon Musk, has made several surprise announcements in a move to calm antsy investors. Its stock price has been a roller-coaster ride so far in 2017, and the company is experiencing severe manufacturing difficulties and delays with its Model 3 sedan. Consequently, dumping two new models on top of these problems may be a recipe for a crash.

    The controversial car manufacturer introduced a $200,000 Roadster and a tractor-trailer truck called the Semi. Musk claims the Roadster can smoke from 0 to 60 miles per hour in a neck-popping 1.9 seconds. Then, he teased that the company will offer a “special options package” for an even faster performance.

    The alleged specifications for the Semi are equally stunning. The driver is able to stand in the center of the cab, supposedly making the driving safer and less tiring. Tesla expects the Semi to have a range of 500 miles; this is a major consideration for trucking companies. However, a serious consideration is the cost and availability of the mega-charging stations that will be needed across the country for these big-rigs.

    Unfortunately, the excitement of these new models masks the severe production problems that the company is having with its mass market Model 3. Tesla had expected to make 1,500 units of these cars in the last quarter but was only able to produce 222. These delays have created a lot of unhappy customers who have already put down large deposits.

    All of these new plants will require huge amounts of capital. Currently, Tesla is investing $1 billion a quarter to solve the manufacturing problems with the Model 3. Just imagine how much more money the company will need to build production plants for the innovative Roadster and the Semi. Hopeful buyers are now coughing up $50,000 deposits for the Roadster, but this will not be anywhere near the amount of funds that will be needed. The rest will have to come from skeptical investors on Wall Street.

    Elon Musk is a flamboyant salesman who makes a lot of breathtaking promises. But he may have put too much on his plate. He still has to run SpaceX, The Boring Company, deal with Model 3 production delays and now introduce two new models. Sounds a bit much for one human. And let’s not forget that Tesla has just reported losses for the last three quarters, and analysts don’t see any profits on the horizon.

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