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Production Hell, Delivery Hell, What The Hell Is Next For Tesla?

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Bradford Cornell
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Service hell.  Though it might be more hell for owners than for Tesla.  Tesla reported a 3rd quarter profit ather the market closed today and the stock has sky-rocketed again.  The company showed that it can produce the Model 3 in meaningful volume at margins of 20% (as long as the cars are sold for a minimu of $46,000).  The problem is that as all these added cars roll out, they will all have to be serviced.  In fact, the new Model 3s may need more service than the S or X given the race to produce them.

Q3 hedge fund letters, conference, scoops etc

Taking Tesla Private
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As the owner of an S (in fact I have owned three of them), I am dreading service hell.  Recently a light came on in my car saying that my suspension needed service.  My initial call to Tesla went unanswered.  Fortunately, the light went out.  Next time I may not be so lucky.  With limited servicen centers, no third party service outlets, and a lot of new Model 3s on the road, customers may be about to enter service hell.  What it means for the stock price is another question.

Article by Brad Cornell's Economics Blog

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Bradford Cornell is an emeritus Professor of Financial Economics at the Anderson School of Management at UCLA. Prof. Cornell has taught courses on Applied Corporate Finance, Investment Banking, and Corporate Valuation. He is currently developing a new course on Energy, Climate Change and Finance. Professor Cornell received his Masters degree in Statistics and his PhD in Financial Economics from Stanford University. In his academic capacity, Professor Cornell has published more than 125 articles on a wide variety of topics in applied finance, particularly empirical analysis of asset pricing models. He is also the author of Corporate Valuation: Tools for Effective Appraisal and Decision Making, published by Business One Irwin, The Equity Risk Premium and the Long-Run Future of the Stock Market, published by John Wiley and Conceptual Foundations of Investing published by John Wiley. He is a past Director and Vice-President of the Western Finance Association and a past Director of the American Finance Association. As a consultant, Professor Cornell has provided testimony and expert analysis in some of the largest and most widely publicized finance related cases in the United States. Among his clients are AT&T, Berkshire Hathaway, Bristol-Myers, Citigroup, Credit Suisse, General Motors, Goldman Sachs, Merck, Microsoft, Morgan Stanley, PG&E, Price Waterhouse, Verizon, Walt Disney and various agencies of the United States Government. Professor Cornell is also a senior advisor to Rayliant Global Investors and to the Cornell Capital Group. In both capacities, he provides advice on fundamental investment valuation. In his free time Prof. Cornell enjoys cycling and golf.