Anyone got shares in this company?
Don’t you think the start-up costs were anticipated? Until they get up to volume production costs will be high. Saudis should have the funds to cover this.
The question is will they be profitable once they reach volume production? That is the risk. No one knows.
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Start up costs are capital and, apart from depreciation, are nothing to do with production costs.
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Been down THAT road. When preparing a funding request, I always indicated the approximate time frame to when additional funding might NOT be likely needed. If the funder did not find that reasonable, then necessary to look elsewhere.
My accounting classes did not mention that.
adding I guess you mean material and labor costs. That is fair. But in the general scheme of things that is a myopic way of seeing the survival of a corporation. That is my problem with the statement.
MSB just needs to require all government vehicles be made by Lucid.
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Perfectly stated, Divitias.
A new corporation is no different than the capital expansion program for a new model or a new plant.
There is a changeover between CAPEX and OPEX.
When and HOW that happens is always a very vigorous discussion between the tech services team (CAPEX) and the Product/Plant/Facility Management (OPEX).
ETA:
Lucid models are suffering absolutely CRUSHING depreciation between the lack of service centers, questions about long term durability (speculative), viability as a company and pricing pressure from the big T.
Service centers are sporadic and very sparse. (E.g. Denver area has none. There is one in south Florida, requiring many to commit to 5-8 hour round trips for service…)
Durability - as these are new models, there simply isn’t data on how well they will do while in service
Long term viability - see the OP and LCID loss per model sold.
Competition lowered prices and are releasing new models (Mercedes, etc.)
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Your laying out the interaction makes perfect sense but that is not what he said. He said nothing to do with production costs. When the line items are subtracted from the revenue that is hardly true. No one does their books that way as “nothing to do…”. Income statements, cashflow, and balance sheet do not truly separate the data as nothing to do with production costs.
Insert long winded response about prototypes, first models, discounts, sales forecasts, allocations, pipeline and… blah blah blah blah…
Some of us do this for a living.
Start-up costs are capital with huge expectations.
The CIM does not separate where the money is going towards production costs and results. Instead, it maps out just that. There are no people with money who will hand it over without everything mapped out in a CIM.