Tesla shares fell 8 percent on Tuesday and another 8 percent on Wednesday, and although they regained ground Thursday, they lost nearly a quarter of their value in less than three weeks.
Reflecting on Tesla's ability to pay off his debts, his bonds have also collapsed. Those due in 2025 were traded at around 88 cents on Thursday.
A Tesla representative declined to comment on the company's finances.
But the company's recent problems go beyond its balance sheet. Federal researchers are watching a burning crash that killed a Tesla driver in California last week, including the possibility of autopilot being in use. (Autopilot was used in an accident in Florida in 201
And on Thursday, Tesla said it recalled 123,000 model S cars made before April 2016 to replace screws that hold a power steering motor in place. The screws can corrode and break so that drivers can only drive with manual steering. The company said that no accidents or injuries had been reported in connection with the problem.
Tesla's reversal of wealth is a shock to the company and its CEO, who has made a name for himself not only as a visionary but also as a service provider. maneuver a car brand, blow up a battery system that would be the largest building in the world, and launch rockets through its SpaceX project.
Tesla has been enthusiastically received by its clients and a number of investors for years, even though it has made little profit in its 15 years since its inception. Corporate events that showcase new models tend to have the feeling of a religious revival, with hundreds or thousands of owners cheering wildly on every new statement from Mr. Musk. The anticipation of the Model 3 prompted nearly 400,000 potential customers to make deposits of $ 1,000 each.
In November, Mr. Musk introduced a battery-powered semi-trailer and a two-seat roadster to a screaming crowd of several hundred guests. He vowed to start producing the truck in late 2019, despite the fact that the company does not have a factory to build, and is still trying to remedy the errors in the Model 3 assembly process at its Fremont, California facility.
"There's a lot of Tesla that's just presentation and not substance, and Elon is a master at messaging," said Karl Brauer, a senior analyst at Kelley Blue Book. "The problem is that reality is starting to pile up, and that's a reality of accidents the cars had, quality issues, and massive errors in the production numbers of Model 3. They add all that and there's a real question about it, whether this company can deliver what it promises. "
There is no doubt that Tesla has made some breakthroughs that have made the established automakers catch up. It has proven that there is a viable market for electric cars and that they can dominate premium prices. It has developed methods for modernizing cars through software updates that are transmitted by radio, as iPhones can download new operating systems.
And it was autopilot that launched a race to develop advanced driver assistance systems that can guide cars in certain circumstances and actively prevent collisions – though Tesla's technology has apparently been surpassed by other companies' self-propelled systems, including GM is and the Google offshoot Waymo.
Along the way, Mr. Musk has also raised controversy, including moving to Tesla in 2016 to take over SolarCity, a solar module manufacturer run by his cousin. A group of investors filed a lawsuit alleging that Mr. Musk was in conflict of interest because he was the chairman of SolarCity and this week cleared a judge's way in the case.
In January, Tesla issued a new compensation plan to Mr. Musk that is fully tied to the company's market value and other performance goals. If he achieves all of his goals, he could be rewarded with shares worth more than $ 50 billion.
But the company has repeatedly failed to meet its own goals and deadlines, especially with the Model 3. Originally, Musk had predicted that Model 3 would arrive in 2017 and the car would increase the company's sales by 2018 to 500,000 Push cars a year. Later, he lowered his forecast to 100,000 Model 3 in 2017. When he returned again, he said in August that the company wanted to retire $ 20,000 by December, adding that "people should not have any concerns" about Tesla's ability to to increase its performance of the Model 3.
But in the fourth quarter of last year, Tesla made only 2,425 model 3s. In his latest plan, he hopes to increase production to 2,500 model 3 per week. The company is expected to release Q1 production figures in early April.
The Model 3 is crucial. The company must replenish its Model 3 business to generate revenue, compensate investors and finance the development of future vehicles, including its electric truck.
Moody & # 39; s concluded that Tesla was likely to have raised more than $ 2 billion from investors, able to fund its operations, continue capital investment, and settle debts and other financial obligations that are due soon. According to Moody's, Tesla has $ 200 million in convertible bonds due later this year and $ 900 million in early 2019.
"By the end of the year, liquidity will be tight," said Bruce Clark, senior vice president at Moody's, said in an interview. "They need to restore their credibility in the capital markets."
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