Quote:
Originally Posted by XutvJet
The pause with the GA factory is the right move and though a red flag, is one reason why I choose to take the risk and invest in the stock. They haven't walked away from the project, they've only postponed it, likely for 5 or so years. They need to focus on production of their smaller, cheaper models and have them ready for the 2026 model year. It will be an uphill battle for a number of years. I'm a patient investor.
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If it is 5+ years they will not survive without outside investment. The Normal factory can only sustain 150k unit capacity. R1 capacity is currently at 65k, that only leaves 85k capacity for R2 for 5 years. They need to sell R2 by the multiple 100k units per year minimum. Georgia factory was to produce 200k units out of the gate, with 400k capacity soon after. The R2 will not save the company, the Georgia factory will. Scaling/volume is the number one issue for these EV startups.
They lost $40k per R1 in Q4 2023. With profit margin improvements said to be coming for R1 production line by end of 2024. The R2 sure looked as premium as the R1, not much decontenting. The margins will be even tighter at lower price point. Volume is the only answer.
Producing the R2 in Normal just seemed like a decision they were forced into, they tried to spin it as positive.