Tesla filed its 10-K annual report with the Securities and Exchange Commission last week.
Tesla bulls and bears have been working over the filing, looking for clues about the company’s performance — past, present, and future — that will justify the case that Tesla can make good on its $US26-billion market.
Or the case that Tesla is in for some rough times ahead.
The stock is trading down on Monday, below $US200 per share. It peaked at $US291 back in September 2014.
The 10-K contains a very large number of risk factors that Tesla says it faces. One in particular caught my eye and should serve as a reminder that Tesla is up against a critical risk faced by no one else in the auto industry.
According to the company, “Our plan to expand our network of … Superchargers will require significant cash investments and management resources and may not meet our expectations with respect to additional sales of our electric vehicles.”
Tesla also noted that expanding its dealerships (called “stores” by the company) and service centres will also cost a ton of money.
But think about it: How many car companies are also actively engaged in building the infrastructure needed to fuel those cars? Several potential Tesla competitors, at least on the electric-car front, have announced plans to construct charging networks. But BMW and Volkswagen has a ways to go before they catch up with Tesla, which has built a significant Supercharger network in the US and Europe and is expanding its network in China.
A total of 2,000 Superchargers worldwide, Tesla said recently in its blog.
It’s already difficult and expensive to design and build cars — much less cars that are as innovative as Tesla’s. Add to that the additional cost of creating an entire alternative fueling infrastructure and, if you were a traditional auto industry executive, you’d be shaking in your boots. Imagine that you’re General Motors and you need to create a gasoline-fueling network from scratch — one that stretches from one end of the US to the other, and Europe … and a decent portion of coastal China!!!
You might not want to face the dawn each day.
Just a reminder that while Tesla could be facing some serious challenges on the car side of its business in the next few years, the company’s business is more than just cars.
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