Tesla Forecast 40% Cash Return on Operating Assets

Financial Analyst Pierre Ferragu, New Street Research, has analyzed the history of Tesla’s cash return on operating assets. Cash return on operating assets. broke-even at some point in 2018 with the ramp of model 3 then went straight up to 20% in 2020. This excludes credits. They don’t care about credits, and this is 100% cash metrics, no possible accounting cheats. The projection is that Tesla is heading in 2-3 years to 40% cash return on operating assets.

SOURCES- Pierre Ferragu, New Street Research
Written by Brian Wang, Nextbigfuture.com (Brian owns shares of Tesla)

2 thoughts on “Tesla Forecast 40% Cash Return on Operating Assets”

  1. It also helps that Tesla has pretty much all brand new equipment and mostly new factories (the california plant is an ex-Toyota facility that was well regarded for its design when new, and it wasn't that old), squat for pension load, limited model lines, and a nearly absurd manufacturing line redesign rate (for otherwise fairly conventional manufacturing processes). It's almost like they are approaching model months, rather than typical automotive model years in terms of vehicle variants. Not having legacy cruft, and not needing to herd and spoonfeed a federation of suppliers also helps.

    Embedding the agile software development methodology to automotive manufacturing creates a lot of churn, but allows swift pivots.

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