Is Ineos in financial woes?

[Gaffer]

That is a bit on the misleading side though as costs of development were still ongoing and they had not ramped up product yet.

Lynn Calder stated earlier this year that IA is now running cash positive. So, whilst development losses will still be baked in, it does suggest that they daily running is positive.

Thanks. I was wondering about the cash flow. I hope that the non-cash expenses are distorting its current financial condition.

 

[LeeroyJ]

Ineos is in a unique position in the car industry that I think could end up being its salvation: basically, Ineos could stop almost all future development and just keep the Grenadier and Quartermaster as they are today with only minor tweaks to improve issues and stay compliant with evolving regulations.

Most car companies couldn't do that and survive. Imagine Toyota deciding that the current version of the Camery is the last "evolution" of the model and they were just going to keep building that for as long as customers were willing. The typical life cycle for a new car model in the USA involves a completely new design ("redesign") every 5 to 7 years and a mid-cycle "facelift" or refresh with minor updates about 3 years into the model's run. In order to support that cycle car manufacturers have to devote huge resources in designing and testing to develop the new models, a process that typically starts 5+ years in advance. There is also often huge costs associated with re-tooling the production lines to accommodate these new models.

So if Ineos just keeps making what they make now, with very little to no development, all those additional design and development costs disappear and the longer this goes on, the more profit per unit Ineos would enjoy.

I suspect consumer demand would support this. But the big unknowns are the move to electric vehicles (and accompanying legislation) and the potential for an unexpected competitor. Right now there really isn't a direct competitor.