Tesla Could Run Out Of Cash By The End Of The Year

Amid a flurry of reports about lagging production, Tesla CEO Elon Musk recently joked the company was going bankrupt. That obviously didn’t happen but Bloomberg reports the company is burning through cash at an alarming rate.

Despite recently having the “most productive quarter” in history, Tesla still hasn’t been able to hit targets for Model 3 production. Investors are also getting anxious and that has been reflected in the company’s stock price which has plummeted around 24% from September.

Earlier this month, Tesla claimed they have achieved the “fastest growth of any automotive company in the modern era” but it is reportedly coming at a huge cost. Bloomberg ran the numbers and determined the automaker burns through more than $6,500 every minute. If that number is correct, the company goes through $390,000 every hour and $9,360,000 every day.

That’s a massive number and the publication notes Tesla’s free cash flow has been negative for five consecutive quarters. The company has a tendency for its free cash flow to be negative but the rate of cash burn significantly increased in recent quarters.

Tesla also has ambitious plans for the future as the company has already shown an electric semi, a new roadster and a teaser image of the Model Y. Developing all these models comes at a cost and it doesn’t help that Tesla is also rushing to ramp up production of existing models. As Bloomberg notes, Tesla now employs approximately 40,000 people and the company’s rate of revenue per employee is significantly lower than Ford or General Motors.

The massive outflow of cash means Tesla could run out of money before the end of the year. One analyst estimates the company will need to raise $2 billion this year alone. That same analyst, Bruce Clark of Moody’s Investors Service, also noted Tesla has $1.2 billion worth of debt that is due by 2019.

  • Dr Strangefingger

    Musk badmouths Tesla critics and analysts again in 3, 2, 1…

    • Matthew Daraei

      Your words will break S3XY’s heart.

  • Six_Tymes

    TIME FOR A BUY OUT. HELLO CAR COMPANIES

    • LWOAP

      Some Chinese company is going to scoop up the remains.

  • Michael_66589

    Tesla is worst thing which happened in automotive history since 1973 oil crisis.

    • Status

      You forgot Scion.

      • Adilos Nave

        Geo was pretty terrible too. Saturn maybe?

        • Lloyd Anthony D Peters

          Current Mitsubishi. /Thread. Lol

      • LWOAP

        I’d take a Scion over a Tesla tbh.

    • TheBelltower

      It’s the worst thing to happen to the legacy auto industry. Tesla isn’t going anywhere.

      • LWOAP

        Don’t be so sure about that. Every automaker folds eventually. Tesla is no different.

        • TheBelltower

          True. Though Tesla isn’t going anywhere anytime soon.

        • Auf Wiedersehen

          Really? Are ya sure about that? I mean really? EVERY Automaker? I could think of a few who are still around after, ah 50-100 years…..can you?

  • Jay D

    A few tweets from Musk and market will be reassured everything is going to be fine.

    • LWOAP

      Yep.

  • LWOAP
    • Six_Tymes

      lol

  • Kash

    This is what, the 3rd time that’s been said?

    • Six_Tymes

      is that true? or are you making that up?

      • Kash

        I’m pretty sure it’s been said a couple times before. I’m just too lazy to check. The reason being is because most of these statements are intended to be clickbait and they assume Tesla will continue their spending habits while not drawing in anymore money. Basically they’re saying their cash reserves won’t hold out at their current levels, but if Tesla gets an influx of cash, like they always do, then all will be fine. tl;dr: clickbait title worthy of multiple headlines for years to come.

        • Richard Alexander

          Kash is correct. Tesla has had cash issues for several quarters and the market has previously ignored it. The reason…Quantitative Easing and ZIRP have propped up many POS companies that will never earn a profit. What is different this time is that the credit market is tightening up as the Fed unwinds its balance sheet and the US government comes to market to fund vast new deficits. Return on capital is going to start to matter.

        • Six Thousand Times

          Another lazy guy here: I think that’s correct.

    • Auf Wiedersehen

      The media thinks if they keep saying it, it will be true. I mean, they thought Beetle Juice was a true story.

  • Richard Alexander

    Yeah but early adopters….

  • S3XY

    Next is Plaid.

  • S3XY

    Oh look it’s the 2018 version of Tesla is running out of cash.

    2010, 2012, 2013, 2014, 2015, 2016, 2017. Every year “Tesla is suppose to run out”, But that hasn’t happened.

    Bookmarked for next year.

  • Daniela Wolf

    In europe this company wouldn’t have survived the first year…..

  • Daniela Wolf

    Debts are not a problem;

    US Americans are funny – > 20 trillion $ – no problem.^^

    • Auf Wiedersehen

      I wouldn’t throw stones my friend. Ever heard of Greece, or Spain?

      European Europeans are smug and have ALL the answers, right? Self righteousness is the answer right?

      • Daniela Wolf

        Iam not talking about these “countries”; these countries only exist because we rescued them.
        Btw. maybe u can understand now why i don’t trust Tesla – debts making brands and countries are getting criticized by me.

  • Fearmongering from people that have never done anything productive in their life. Obviously a pioneer company of this size needs incredible amount of money before it would become profitable. Why everyone is so focused on profitability though, when Tesla is the only company with existing charging infrastructure (guess how much that cost), and with the most modern and largest battery factory (guess how much that cost). Tesla is way ahead the competition, all they need to do is ramp up numbers. They have done the most important investments already (development of their affordable model, gigafactory, infrastructure).

  • Rzrlf

    waiting for the old fart afraid of change who calls it “Toastla” to says its “toast”.

  • Ron

    Bob Lutz may be right about Tesla. The question is who will buy them? My guess is China.

  • LWOAP

    I highly doubt that.

    • Auf Wiedersehen

      Kushner will find a Russian oligarch to take it over.

  • LWOAP

    Yes I would. They’re cheaper than a Tesla and better looking (debatable). Plus, room for mods. Can’t do that with a Tesla.

    • Auf Wiedersehen

      Modding a Scion? What are you 14?

  • Auf Wiedersehen

    Not to be nit picking but that garage door is never gonna close based on the door height, the height of the garage door opener mechanism and the length of the arm attaching the door to the mechanism track.

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