- Aug 14, 2012
Elon Musk: Tesla Motors could be headed to automotive 'graveyard' if Model S production challenge not met
Sounds like Musk is saying that if Tesla can't ramp up production to meet certain internal targets (we'd guess something around the previously mentioned 5,000 units by the end of 2012), then the company could fold. As GigaOM put it, getting to 5,000 in the next four-and-a-half months, is "like the Monster Truck version of ramp ups: totally extreme." Combine this drive with the pressure to not make any mistakes, and you've got the ingredients for another Musk quote. From the Summit, he said, "It'll definitely be a very tough road over the next 6 months. We can't afford to make a lot of mistakes."
The challenge that Tesla faces over the next few months is scaling production enough to achieve a certain gross margin on our product so we can be cash flow positive. That's extremely important. If we're unable to do that, we'll enter the grave yard with all the other car company startups of the last 90 years.
Six months, four and a half months, a few months, what's the difference? The real question is whether Tesla can achieve the goals that Musk himself says are vital to keep the company out of the automotive graveyard.