Tesla is Hemorrhaging Money at an Alarming Rate

TopSpeed

By Robert Moore

Published Nov 24, 2017

We’re talking about $8,000 a minute here

Tesla

Elon Musk may have surprised the world by debuting the next Tesla Roadster side-by-side with the new Tesla Semi, but that’s not the biggest surprise to come out of the Tesla garage. The title of “biggest surprise” would be reserved for the fact that the company is burning through $8,000 per minute, $480,000 per hour, or $1 billion per quarter. And, at the current rate of expenditure, it is predicted that the company will run out of cash as soon as August of next year.

- Company burns through $8,000 per minute, $480,000 an hour, or $1 billion per quarter - Current Cash will be Exhausted by Aug 6, 2017 - Company expects Model 3 to cut back on cash hemorrhage - Despite cash burning, Tesla stocks continue to increase (up to $317.81 as of 11/21/17) - Some Analysts say at least $2 billion fresh capital needed by mid-2018 - Tesla believes it can still produce 5,000 Model 3 sedans by the end of March 2018 - Founders Series Roadster could generate $250 million in down payments - CFO Deepak Ahuja believes capital expenditures to decline with payoff of Model 3 expenses - Model 3 and Semi production will cost billions - Tesla using as much as 70% of revolving debt ever

Tesla believes that paying off various Model 3 expenses and by ramping up Model 3 production, the cash hemorrhaging will come to a stop, but thus far the company hasn’t even come close to smelling a profit and rarely makes Musk’s overly ambitious timelines. At this point, some analysts are saying that Tesla will need at least $2 billion in fresh capital by the middle of 2018, which may or not be a problem. We all know that Elon Musk can sucker talk money out of investors better than anyone, but how long can the company continue to operate without profit and to the tune of $480,000 an hour?

For now, you can assume that folks will surely bite onto those 1,000 examples of the Founders Edition Roadster – each of which require a $250,000 down payment up front. That can bring in $250 million, but that’s a very small piece of the cheddar that the company will need to continue operating through the end of next year. The Model 3 has been bottlenecked for a while now and is falling behind schedule. Meanwhile, Musk is boasting his Semi and Roadster, both of which appear to be far from production ready and completely impossible to build considering the problems with the Model 3.

At some point, one has to wonder when people will quit believing in the word of Musk, and stop handing over money like it grows on trees. Can anyone really justify shelling out $250,000 for a Founders Edition Roadster when there’s no possibility of it being delivered before the end of the decade? And, let’s not talk about the Semi which will start being delivered by 2019 at best. Musk can’t even get the Model 3 production rolling right, and he wants to throw two more models into the mix? Yeah, Right! Sure, the man is ambitious, and it’s not a bad thing, but when a company fails to hit is predetermined goals time and time again, and hemorrhages money non-stop, can you really continue to put faith into it?

Nearly $500,000 per hour the company is spending, doesn’t make a profit and isn’t delivering on time. I don’t know about you, but that sounds like a very raunchy turd in the punchbowl to me. What do you think? Is Musk all smoke and mirrors at this point, or will Tesla be able to pull it together in the next few years, deliver on its word, and turn a profit? Let us know in the comments section below.