Automotive

Tesla Burns through its Reserves for its Model 3 Production

 Tesla $480,000 per hour over the last 12 months

Tesla was expected to allot a huge amount of money for its Model 3 production, especially because of the anticipated initial seven hundred thousand pre-orders, although the way Tesla is burning money over the last year is still surprising.

Tesla has only so much available cash to spend, unfortunately. If it keeps burning money at the rate that it’s going, running out of cash would be a problem by August of next year. According to analysts, Tesla might lose their resources on Monday August 6 at this rate.

It has been reported that Tesla has burned through $480,000 per hour over the past 12 months, which translates to about $8,000 per minute or $133.33 every second.

“Whether they can last another 10 months or a year, he needs money, and quickly,” said an analyst.

Initial reports assume that if the delays continue, reservation holders may decide to jump ship, a part of the problem for Tesla as it hasn’t been able to fulfill the production progress of the Model 3 as it was expected. Only 260 units had been built, which a lot short of Tesla’s original goal of producing 1,500 per week at the end of third quarter.

Tesla’s options to gain more resources seem to be limited until it scales up with the Model 3’s production. Pre-selling every one of the 1,000 Founders Series Roadsters would assumedly provide it an extra $250 million. However, with a cash flow out around $1 billion per quarter, the money from those sales won’t last long.

Model 3’s “Production Hell”

Tesla fund raising attempt

Tesla CEO Elon Musk named the current Model 3 struggle as “production hell” due to holdups in the assembly of battery modules, regards to a systems integration subcontractor not following through.

Tesla has been estimated to be burning through $480,000 an hour which translates to around $8, 285 of bitcoin’s current worth.

It is noted that if there isn’t any fresh funding to haul in, its reserves will run out in early August next year which is slightly above UBS’s projection that the pace would take about four quarters.

Tesla’s most recent attempt was to demand upfront payments in full for the first 1,000 units of the Roadster sports car that’s about to be released, the $250,000 car is expected to be delivered in 2020

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