According to data compiled by Bloomberg, it was shown that Tesla Inc. (NASDAQ: TSLA) is burning through nearly $8,000 a minute or up nearly up to half a million an hour. The data also shows that Tesla is on track to exhaust its cash pile by August. Even with the ridiculous spending habits, is it enough for Tesla to actually deliver its vehicles on time?
After Elon Musk, CEO of Tesla, had showcased the electric semi and the Roadster, investors may be wondering how he will plan to fund operations, including ongoing ones such as the Model 3 productions.
The new Tesla Roadster will be priced at approximately $250,000, but only 1,000 units will be produced. This only generates $250 million for the company, which definitely will not be enough at the rate Tesla is spending its funds.
But in order to combat that, Musk’s plan was to ask customers upfront for a deposit years prior to when they may receive the vehicle. The Roadster’s deposit is $50,000 and the electric semi is $5,000.
Investors had voiced their concerns about the electric semi and how Tesla is asking for an upfront payment, but it had not disclosed any of the specific details of the truck that are crucial. This continues to add onto Tesla’s poor customer communication.
Tesla’s plan for the new models is the same as the Model 3 reservation fee, although the Model 3’s fee is only $1,000. Investors expressed their concerns towards Tesla about the production rates of the Model 3. Many customers had paid the deposit, but Tesla had not given them any guidance when the vehicles will be delivered, and even now, Tesla still faces the “bottleneck issues.”
Tesla is also blowing through nearly $1 billion a quarter due to Model 3 productions, said Bloomberg. Considering the vehicle is priced at $35,000, the return back should not be expected for a while.
Even though Tesla will receive upfront payments from customers to fix the monetary issues and bolster production, it may not be enough. Tesla will need to get its operations running efficiently and consistently before it can expect to generate a steady cash flow. The options are very limited for the company due to its operation expenses.