It’s the question that puzzles pundits and makes short-sellers see red: Why isn’t Tesla broke yet? The company has posted losses almost every quarter since its founding, but not only does it remain in business, it steadily rolls out new products and opens up new markets, as Tesla fanboys cheer and the stock (over the long term) has soared.
Many have sought an answer to this consequential question – the latest is the Youtube channel The Rest of Us, in a charmingly childlike animated video that explains Tesla’s unique financial model in the simplest of terms.
Above: Exploring the financials at Tesla (Youtube: The Rest of Us)
In short, Tesla isn’t broke because it isn’t running out of cash. Theoretically, losses can continue indefinitely, as long as the kitty is regularly replenished. But where does the cash come from? Some comes from the sale of vehicles – Tesla earns a healthy margin on each car it sells (despite the disingenuous claims of some naysayers), and it sometimes even gets cash in the form of deposits before it even builds a vehicle (a clever financial feat that’s the envy of other automakers).
However, even as Tesla rakes in piles of money from product sales, it shovels out much more. Whence cometh the cash to top up Tesla’s reserves? Some is borrowed (debt financing), but more comes from the stock market (equity financing). Why do investors keep buying shares in a company that perennially loses money? Because savvy investors don’t base their decisions on what a company is doing today, but on its prospects for the future. Tesla is focused on the future like no other automaker, and has steadily invested huge sums to prepare for a future in which it sees huge opportunities.
Many articles about Tesla and other high-flying tech companies use terms such as “burn rate,” which can give the false impression that the cash that’s coming in just disappears, frittered away, heedlessly tossed to the winds, flushed down the…you get the idea.
Back in 2016, Vincent Paver, writing in Medium, made some good points as he explained that, far from throwing its cash in the fireplace, Tesla has invested much of it in capital goods – handy things like factories, machine tools, robots and charging facilities. Paver points out that, at the time of writing, Tesla had “burned” $1.6 billion over the last 12 months, but the book value of its equipment had increased by $2.8 billion over the same period. Other expenditures, such as vehicle development costs and employee training, may not result in tangible bricks-and-mortar assets, but they are also investments, as they allow Tesla to create new products that it can sell for more lovely cash.
Paver concludes that what we have here is not a company that is recklessly flinging away money, but one that is “in a capital-intensive business, and is [investing] substantial but appropriate sums of money on equipment and capacity expansion, tied directly to strong end user demand.”
And there you have the real key to why the callow California carmaker hasn’t gone belly-up, and won’t if current trends continue. The demand for Tesla’s products is strong – the backlog of Model 3 orders remains huge, and Models S and X continue to sell at a steady pace. Yes, not being able to produce vehicles fast enough to meet demand is a problem, but the reverse would be much worse. If Tesla’s waiting list disappears, and sales figures start going down, then it will truly be time to worry about the company’s cash flow.
Paver calls Tesla “a rare example of a public company aggressively chasing a market opportunity many multiples greater than its current scale.” Elon Musk’s new compensation plan, which was recently approved by shareholders, envisions the automaker growing to a market cap of $650 billion, which would make Tesla one of the five largest companies in the US. If and when that happens, rest assured that plenty more cash will be burned along the way.
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Note: Article originally published on evannex.com by Charles Morris
Elon Musk
SpaceX just filed for the IPO everyone was waiting for
SpaceX filed its public S-1, revealing $18.7 billion in revenue and billions in losses.
SpaceX publicly filed its S-1 registration statement with the Securities and Exchange Commission on May 20, 2026, making its financial details available to the public for the first time ahead of what could be the largest IPO in history.
An S-1 is the formal document a company must submit to the SEC before going public. It includes audited financials, risk factors, business descriptions, and how the company plans to use the money it raises. Companies are required to file one before selling shares to the public, and it must be published at least 15 days before the investor roadshow begins. SpaceX had already submitted a confidential draft to the SEC in April, which allowed regulators to review the filing privately before it went public.
The S-1 reveals that SpaceX generated $18.7 billion in consolidated revenue in 2025, driven largely by its Starlink satellite internet division, which posted $11.4 billion in revenue, growing nearly 50% year over year. Despite that growth, the company lost about $4.9 billion in 2025 and has burned through more than $37 billion since its founding.
SpaceX just forced Verizon, AT&T and T-Mobile to team up for the first time in history
A significant portion of those losses trace back to xAI, Elon Musk’s artificial intelligence company, which was recently merged into SpaceX. SpaceX directed roughly 60% of its capital spending in 2025 to its AI division, totaling around $20 billion, yet that division lost billions and grew revenue by only about 22%.
SpaceX plans to list its Class A common stock on Nasdaq under the ticker SPCX, with Goldman Sachs, Morgan Stanley, and Bank of America leading the offering. The dual-class share structure means going public will not meaningfully reduce Musk’s control, as Class B shares he holds carry 10 votes per share compared to one vote for public Class A shares.
The company is targeting a raise of around $75 billion at a valuation of roughly $1.75 trillion, which would make it the largest IPO ever. The investor roadshow is reportedly planned for June 5.
Elon Musk
Tesla ditches India after years of broken promises
Tesla has ditched its plans to build a factory in India after years of failed negotiations.
Tesla’s long-running effort to establish a manufacturing presence in India is officially over. India’s Minister of Heavy Industries H.D. Kumaraswamy confirmed on May 19, 2026 that Tesla has informed authorities it will not proceed with a manufacturing facility in the country.
Tesla first signaled serious interest in India around 2021, when it began hiring local staff and lobbying the Indian government for lower import tariffs. The ask was straightforward: reduce duties enough for Tesla to test the market with imported vehicles before committing capital to a local factory. India’s position was equally firm, with an ask of Tesla to commit to manufacturing first, then receive tariff relief. Neither side moved, and the talks quietly collapsed.
Tesla to open first India experience center in Mumbai on July 15
India had offered a policy that would reduce import duties from 110% down to 15% on EVs priced above $35,000, provided companies committed at least $500 million toward local manufacturing investment within three years. Tesla declined to participate. The tariff standoff was only part of the problem. Analysts pointed to significant gaps in India’s local supply chain, inadequate industrial infrastructure, and a mismatch between Tesla’s premium pricing and the purchasing power of India’s automotive market as additional factors that made the investment difficult to justify.
First signs of an unraveling relationship came in April 2024, when Musk abruptly cancelled a planned trip to India where he was set to meet Prime Minister Modi and announce Tesla’s market entry. By July 2024, Fortune reported that Tesla executives had stopped contacting Indian government officials entirely. The government at that point understood Tesla had capital constraints and no plans to invest.
The more fundamental issue is that Tesla’s existing factories are currently operating at approximately 60% capacity, making a commitment to building new manufacturing capacity in a new market difficult to defend to investors. Tesla will continue selling imported Model Y vehicles through its existing showrooms in Mumbai, Delhi, Gurugram, and Bengaluru, but local production is no longer part of the plan.
Elon Musk
SpaceX just forced Verizon, AT&T and T-Mobile to team up for the first time in history
AT&T, T-Mobile, and Verizon just joined forces for one reason: Starlink is winning.
America’s three largest wireless carriers, AT&T, T-Mobile, and Verizon, announced on On May 14, 2026 that they had agreed in principle to form a joint venture aimed at pooling their spectrum resources to expand satellite-based direct-to-device (D2D) connectivity across the United States in what can be seen as a direct response to SpaceX’s Starlink initiative. D2D, in plain terms, is technology that lets a standard smartphone connect directly to a satellite in orbit, the same way it connects to a cell tower, with no extra hardware required.
The alliance is widely seen as a means to slow Starlink’s rapid expansion in the satellite internet and mobile markets. SpaceX’s Starlink Mobile service launched commercially in July 2025 through a partnership with T-Mobile, starting with messaging before expanding to broadband data. SpaceX secured access to valuable wireless spectrum through its $17 billion deal with EchoStar, paving the way for significantly faster satellite-to-phone speeds.
SpaceX was not shy about its reaction. SpaceX president and COO Gwynne Shotwell responded on X: “Weeeelllll, I guess Starlink Mobile is doing something right! It’s David and Goliath (X3) all over again — I’m bettin’ on David.” SpaceX’s VP of Satellite Policy David Goldman went further, flagging potential antitrust concerns and asking whether the DOJ would even allow three dominant competitors to coordinate in a market where a new rival is actively entering.
Weeeelllll, I guess @Starlink Mobile is doing something right! It’s David and Goliath (X3) all over again — I’m bettin’ on David 🙂 https://t.co/5GzS752mxL
— Gwynne Shotwell (@Gwynne_Shotwell) May 14, 2026
Financial analysts at LightShed Partners were blunt, saying the announcement showed the three carriers are “nervous,” and pointed to the timing: “You announce an agreement in principle when the point is the announcement, not the deal. The timing, weeks ahead of the SpaceX roadshow, was the point.”
As Teslarati reported, SpaceX’s next generation Starlink V2 satellites will deliver up to 100 times the data density of the current system, with custom silicon and phased array antennas enabling around 20 times the throughput of the first generation. The carriers’ JV, which has no definitive agreement, no financial structure, and no deployment timeline yet, will need to move quickly to matter.
Elon Musk’s SpaceX is targeting a Nasdaq listing as early as June 12, aiming for what would be the largest IPO in history. With Starlink now serving over 9 million subscribers across 155 countries, holding 59 carrier partnerships globally, and now powering Air Force One, the carriers’ joint venture announcement landed at exactly the wrong time to look like anything other than a defensive move.
SpaceX just filed for the IPO everyone was waiting for
Tesla scales back driver monitoring with latest Full Self-Driving release
