Tesla Motors TSLA +0.26% is burning through cash as it makes increasingly hefty investments in its future. And a report claims it loses a large chunk of money per vehicle sold.
A Reuters report asserts that Tesla is “losing” more than $4,000 per Model S sold. Apparently, the figure is arrived at this way: Tesla “delivered 11,532 cars in the second period and said it had an operating loss of about $47 million, for an operating loss per car of about $4,000.” (See: Autoblog rebuttal to Reuters report here. And Clean Technica took issue with the report also. )
Tesla reported last week that its second-quarter loss just about tripled compared to a year earlier as the company spends heavily on future projects. Tesla’s CTO JB Straubel said during the 2014 fourth quarter earnings conference call in February that “we are going to spend staggering amounts of money on CapEx.” Tesla is building a battery Gigafactory, preparing to launch the Model X, its first crossover utility vehicle, in September, and the Model 3, its first mass-market electric car, in 2017. The company expects to be delivering 500,000 cars per years by 2020.
“It burned $359 million in cash last quarter in a bull market for luxury vehicles,” the report said. Cash and cash equivalents were $1.15 billion at the end of the quarter, down $359 million sequentially, while capital expenditures were $405 million in the quarter, according to Tesla’s Second Quarter 2015 Shareholder Letter (PDF) released last week with its second quarter earnings. Last year at this time the company had $2.67 billion in cash (PDF).
In May, a similar report circulated claiming that Tesla would exhaust its remaining cash in about three quarters without a capital infusion. That report was based on a research note from Morgan Stanley. “Cash burn was eye watering, raising the stakes for an on-time and good quality Model X launch,” a Morgan Stanley MS +2.63% analyst wrote at the time.