Re: Expansionary cost, versus steady state cost
They are investing on a factory capable of a larger number of cars than whey they currently make.?
There's two elements to Tesla's cost. The first is that the batteries are too expensive at the moment. This is what the gigafactory is about, building batteries in such high volume that the cost comes down. And that's why they have been so keen to sell the Powerwall - the original motivation was simply finding additional battery demand to support the gigafactory, and to thus help lower costs for the automotive application. I think that Tesla are now considering that power applications might be a better business model, due to far more possible sales in the domestic PV market.
The second element of Tesla's costs is volume related, and that bit is vehicle volumes. By industry standards, knocking out 12k vehicles a quarter is purely a cottage industry. Tesla can't survive on that. Growth is a problem because despite the vast subsidies that Tesla have had, and that buyers get (both explicit cash and avoided taxes), the vehicles are simply too expensive. If Tesla can't grow volume to reduce costs, then (a) they'll go bust because they'll never recoup the investments they've made, and (b) even if the assets are bought out of chapter 11 as a standalone business it will only become a niche maker with the sort of scale of Aston Martin or Maserati - but without the brand cachet and history.
I think Tesla is a grand venture; the product is impressive and innovative. As an ownership proposition it exploits a time limited opportunity where running costs are low purely because there's so few EVs on the road. If the owners had to pay taxes equivalent in value to those other vehicle owners do, the case for ownership becomes far less compelling. And as a commercial venture, Tesla is like many US tech stocks - wildly over-valued, paying no dividend and making no cash, hoping to sell out to Wall Street or another corporate buyer before the cash runs out. I'd guess a "merger" of Tesla automotive into a large automotive making group is an inevitability, with the main question being how quickly that occurs, and which set of shareholders do best out of the deal.
I suspect we'd all like Tesla to be the bold, pioneering upstart, that stuck it to the fuddy-duddies of the established motor makers. But at the moment their business is simply making subsidised green bling chariots for the very wealthy, and I can't see that ever morphing into the electric equivalent of Ford or Toyota.