Cash may dry up by August.
American EV automaker Tesla may be stealing headlines of the moment with its Semi hauler and Roadster… er, roadster, but we’ve harboured the suspicion that these launches are just a diversion, moving focus away from real issues. And while they’ve been nothing more than suspicions for some time, it appears that data has emerged that suggests that there’s more credibility to our skepticism than we thought.
Reports are emerging that the EV maverick marque is burning through an astonishing US$8,000 a minute, which works out to about US$500,000 an hour (or $10,000/minute, and $600,000/hour). At this rate, it’s expected that Tesla’s existing cash reserves will be consumed in its entirety on Monday, the 6th of August, 2018.
The cash consumption is due largely to the issues surrounding the production of the Model 3 saloon, with the mammoth demand surrounding the model putting the company in “production hell.” Bottlenecks are frequent in their push to get as many as 5,000 units out the door every week, with each hiccup demanding more cash to settle.
That said, as Model 3 production pace increases, there’ll be more money for the automaker to lean back on, and the demand will decrease further. On top of that, the booking fees for the Tesla Semi and the Tesla Roadster will bring in even more capital for Tesla to use, with the full-upfront-payment of US$250,000 ($329,000) demanded for one of 1,000 Tesla Roadster ‘Founders Series’ will bring back a further $328-million for the company to utilise to get it through to delivery.
Analysts who spoke to Bloomberg suggest that unless the company reigns in its spending, they’re going to burn through their cash reserves far sooner than their targets suggest, and struggle in delivering on their latest products. While the Tesla Roadster has people enamoured, there’s been less success surrounding the Tesla Semi, with the suggestion from truckers being that its stellar performance means little without truly usable range, which leads us to believe that reception of the Semi may not be all the company is hoping for.
The future of Tesla is most certainly shaky at this point, though we do hope that this trailblazing firm will love to fight past that August 6th deadline. Fingers crossed.
For more information on Tesla, check out our Showroom.
