Let's spend just a little time and investigate how likely it is that Tesla will run out of cash and close. Let's start by looking at the last five years of losses broken into cash shortfall and capital depreciation writedowns.
Depreciation is not something that a company has to pay. It's a multi-year expense write-off of money spent. Depreciation lowers taxes and improves the cash flow.
What Tesla needs to do in order to stay in business forever is to make at least enough money to cover its cash flow. So let's dig into the cash flow a bit.
Elon says he expects a 25% gross profit margin on Model 3 sales. And the current average M3 sale is running about $50k.
I'll use more conservative numbers, 20% GPM and an average selling price of $40k. At $40k and a 20% GPM there would be an earning of $8,000 per M3 produced and sold.
Average annual operating expenses losses were $108,784,000. $2,092,000 loss per week.
At 20% GPM on a $40k M3 earnings per car would be $8,000.
$2,092,000 / $8,000 = 262. Tesla needs to produce 262 M3s per week in order to cover their five year average annual operating losses.
Tesla's highest Opex loss year was 2015 at $466,070,000. $8,962,885 per week.
$8,962,885 / $8,000 = 1,120.
Just over one thousand M3s per week to cover their worst year's losses.
Tesla had multiple weeks of >2,000 M3 production prior to shutting down in order to speed up production.