> Their burn rate varies dramatically as they start shipping new models of cars
Sure, you have to build new tools, buy material, hire factory workers--all before you've sold your first vehicle. This is a known cash curve. The purpose of calculating a runway is to understand "we have to start selling lots of cars within 7 months, or else sell more debt or stock."
Well that depends on how fast you think they're selling cars right now or in the near future. And how much money they make on each model. Just guess, basically.
What if I guess they aren't making enough profit or selling enough cars to make the runway calculations moot?
I mean, people basically said the same about Groupon. "Once they become profitable the losses won't matter." Except Groupon hardly turned out to be the juggernaut that rewrote how commerce is done.
Rather, they’re moot once Tesla has exhausted diluting equity and issuing in the bond markets.
Cash on hand is important, but not the end all be all. See MoviePass and how they were extended additional funds ($5MM) even with no business plan and road to profitability.
Sure, you have to build new tools, buy material, hire factory workers--all before you've sold your first vehicle. This is a known cash curve. The purpose of calculating a runway is to understand "we have to start selling lots of cars within 7 months, or else sell more debt or stock."
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