Tesla borrows $30 billion as profits evaporate
Tesla takes on $30B in credit as it approaches unprofitability
Tesla has opened $30 billion in credit lines from Citi and Wells Fargo, a regulatory filing shows, replacing a $5 billion facility. The move comes as profits have thinned to hundreds of millions, capital expenditures are set to hit $25 billion in 2026, and the company turned cash-flow negative last quarter for the first time since early 2024. Despite holding $43 billion in cash, Tesla is borrowing to fund operations and long-promised products.
Most worryingly, last quarter, Tesla was cash flow negative for the first time since Q1 2024, when it experienced a massive drop in sales.
- rgmerk
Look, I get that Elon wants to chase AI, but why not do relatively simple, low-cost things like build a proper 7-seat SUV that uses the Cybertruck platform - or even a properly stretched Model Y platform (rather than the six-seater L)? Or how about a delivery van on a stretched Y platform?
Tesla's product line is narrow and aging rapidly.
- speedgoose
Sorry TSLA holders, it's partly my fault as I got my 5 years old Model Y checked by a third party garage for everything that should be fixed by Tesla before the end of the main warranty period.
- kasperni
It's okay, we're an AI company now.
- boyka
Invest the $30B into AI build-out with a company called SpaceX, nice. SpaceX invests some more Cybertrucks, nice.
- dcj4
Curious of them to report on a topic they obviously have absolutely no clue about with such strong opinions.
- LaSombra
A friend of mine who's all in on Musk told me a few months ago that Tesla's business hasn't been cars for a while. It's all Optimus and Cybertaxi, where demand will be infinite and we'll all be paid by our governments to stop working since Optimus will do everything and Cybertaxi will take us anywhere. Not today, of course, but in the future. Future being explained in the exact same elastic terms as Musk does.
The fact that he was serious and thinks that Musk is the only tech CEO not in this for his own benefit and enrichment is what makes me believe that this is more of a cult than anything else.
- landdate
I drive a shitbox but if I was gonna buy a new car and I had the money to buy one it would probably be tesla considering their realistically the only American car companies that make their cars in the US. Rooting for them to do well, because I live in the midwest and have seen what happens when these trash can companies overshore manufacturing.
Seeing it happen now too with college jobs is funny, because all those same people making fun of your community for complaining about lack of jobs after the factory they built their city around leaves, now are complainjng abiut the same thing. H1B yourself. Love those Indians. Anyway, everyone loses no class solidarity, the poors fighting amongst themselves like animals.
- harrouet
Beyond the long track record of unmet Musk's announcements, Tesla is strategically in a very difficult situation: it went from being the sole option for an electric car, to being a small mid-market player with quality issues.
- chinese companies are now exporting with 25% discount for similar quality
- premium brands occupy the $80'000+ car segment with better comfort and quality
- Tesla sells as many as Renault, a local European player, except the later built a strong alliance network to get scale economics.
I won't even mention the failure of the Cybertruck, which cannot even be exported to Europe due to its dangerous design.
In short: they'd rather merge now with a traditional car company while they have a high valuation, much like US West did with QWest at the end of the Internet bubble. Or else...