Tesla Inc (NASDAQ:TSLA) Seem To Be Running Into More Troubles Than Progress


Tesla Inc (NASDAQ:TSLA) has announced that it is moving to 24-hour operations at its assembly plant located in Fremont, California. The company has also indicated that in order to facilitate its operations and fast track quick production, it will be hiring 400 people weekly for the next few weeks. The move is an effort by the company to timely deliver cars to customers on its waiting list.

Many have interpreted this move as a sign of desperation and a frantic attempt save its name. With the launch of the Model 3 which performed dismally, the hiring of new staff may only make matters worse for the company. However, Elon Musk, the company’s CEO has indicated that the hiring spree is a clear show of the company’s sign of confidence in its operations as well as the ability to increase its production by the end of June so as to meet the growing demand for Model 3, the company’s entry-level electric car.

Additionally, the company is like to get worse very fast financially. It is expected that the company may report lower-than-expected results in its first quarter report expected to be announced on Wednesday. This is due to the company’s lower-than-expected production of the Model 3 cars. Tesla’s second quarter results will be under immense pressure after the CEO admitted that the company depended heavily on automation. The company will face huge labor costs in addition to being forced to write down millions of dollars spent on automated machinery which the company is currently getting rid of from its factory.

The billionaire boss has now admitted that the company underrated the power and potential of human resource. However, many have argued that employing more people may not necessarily increase efficiency for the company. Tesla tripled its workforce between 2014 and 2017, but it has had stagnated revenue per headcount since it is unable to produce many cars. The company’s revenues per headcount have fallen far below that of Ford Motor and General Motors Company (NYSE:GM).

Musk took to Twitter and projected that the company will be profitable and that it would have positive cash flow for the second quarter. He noted that the company may not need to raise additional capital from its investors.

This report is for information purposes only, and is neither a solicitation or recommendation to buy nor an offer to sell securities. Financials Trend is not-a-registered-investment-advisor. Financials Trend is not a broker-dealer. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect our current judgment and are subject to change without notice. Financials Trend accepts no liability for any losses arising from an investor's reliance on the use of this material. Financials Trend sometimes gets compensated up to one hundred and fifty thousand dollars per month for featuring particular stocks. See site disclaimer for complete compensation. Financials Trend and its affiliates or officers currently hold no shares of these stocks. Financials Trend and its affiliates or officers will purchase and sell shares of common stock of these stocks, in the open market at any time without notice. Financials Trend will not update its purchases and sales of these stocks in any future postings on Financials Trend's websites. Certain information included herein is forward-looking within the context of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning manufacturing, marketing, growth, and expansion. The words "may", "would," "will," "expect," "estimate," "anticipate," "believe," "intend," " project," and similar expressions and variations thereof are intended to identify for ward-looking statements. Such forward- looking information involves important risks and uncertainties that could affect actual results and cause them to differ materially from expectations expressed herein. *Financials Trend does not set price targets on securities. Never invest into a stock discussed on this web site or in this email alert unless you can afford to lose your entire investment.