SAN FRANCISCO (Reuters) – Investors are used to the bold promises of Tesla Inc. ( TSLA.O ) Elon Musk, but his claim that the electric vehicle maker does not need more resources this year many scratched their heads. How can the Chief Executive Officer achieve his many goals without fresh funds?
The Californian Tesla is about to embark on a pivotal phase in its 15-year history. Production setbacks with its new Model 3 – the much-anticipated sedan that Tesla had praised – would push electric vehicles into the mainstream – have eclipsed Musk's promises and verdict. A number of new projects in the pipeline, from a semi-trailer to an SUV, are now considered expensive, time-consuming distractions to some analysts, even as competing automakers launch their own electrical offerings.
A capital increase would alarm investors, as the company continues to burn money. Tesla reports first quarter results on May 2.
Musk's bullish prediction is a complex accounting exercise based on several best-case scenarios. These include: By the end of the second quarter, 5,000 Model 3 sedans will be built each week; Cut or postpone high spending, which generated $ 3.4 billion in investment in 2017; and improve gross margins.
The lack of information on Tesla's many capital-intensive projects – from the Model Y switch this year to the partially built Gigafactory in Nevada, to the semi-truck and roadster scheduled to start production in 2019 and 2020 – complicates the task .
"There are many moving parts there," said Andrew Walker of Rangeley Capital, who holds a small short position in Tesla on Wednesday. "It's just so many questions and such a black box, it's very difficult to determine the future." Shorts bet that a stock price will fall.
Tesla shares rose 1% on Thursday afternoon to $ 283.67. Their shares have fallen by more than 9 percent so far this year.
UBS analyst Colin Langan estimates that Tesla – which closed in 2017 with $ 3.37 billion in cash – could fall below a $ 1 billion cushion at the end of June, on the basis of an estimated negative free cash flow of 1, $ 6 billion in the first half of the year year. Some, like Bernstein, gave this estimate at $ 1.8 billion higher.