Tesla CEO Elon Musk has been steadfast in his refusal to raise more money in 2018.
But Tesla’s burn rate means that it will run out of money in just a few quarters if no new funding comes in.
That could actually be Musk’s goal, as it would set the stage for a major investor, probably from China, to buy into the company.
Tesla CEO Elon Musk has said repeatedly in 2018 that Tesla won’t need to raise money, despite the automaker burning through a staggering amount of cash.
At Tesla contentious annual shareholder meeting last week, he fought off an attempt to split his combined CEO/chairman of the board roles and an effort to kick his brother out as a director. Then he declared, again, that Tesla would be profitable in the third or fourth quarter — and that no debt or equity raise was forthcoming.
Tesla has around $3 billion in cash on hand, as well as lines of credit it can tap, but the cost of ramping up production of its troubled Model 3 continues to be expensive. Despite that, you can dice and slice the numbers, throw in zero-emissions-credit sales, tweak the actual pace of production — and come up with some scenarios on which Tesla is slightly profitable and winds up with about a billion in cash by the end of 2018.
Surprise profits have materialized for a quarter in the past, so it’s not unprecedented. And I’ve long maintained that Tesla could fall back on its relatively successful business of selling high-priced, all-electric luxury vehicles and become steadily profitable, given that its holds a monopoly on this market.
Following the shareholder meeting, however, I’ve started to think that there’s a method to Musk’s apparently mad insistence of making Tesla …read more
Source:: Business Insider