Layoffs at Tesla: What Does It Mean? – Info Decision Make
“Still, sizable layoffs and moves to conserve cash typically are not the acts of growth companies that are having just a little trouble achieving their goals.And there is a danger for Tesla if it starts to behave like a normal company: Investors may start to value it as one, and its highflying stock may tumble.
Tesla’s competitors must watching this situation with much curiosity. After all, the incumbent car companies have faced their own dilemma for years. Consider a company such as BMW. Investors have valued the strong profitability it has generated over the years. It cannot simply persuade investors to absorb hugeTesla-like losses for years in pursuit of an electric vehicle future. Somehow, BMW has to invest in the future while still maintaining enough profitability to placate investors. In some ways, Tesla has had a huge advantage over firms such as BMW, because investors have given Musk essentially a license to lose money for years in pursuit of an EV future. Is that changing now, and will it change the competitive dynamic in the industry? We will learn a lot more in the coming months, as we see whether Tesla can ramp up Model 3 production successfully without raising more capital.
Article Prepared by Ollala Corp