Canaccord Genuity Tesla CEO Elon Musk's take-private saga was a distraction that increased the risk to the company's profitability at a critical time.
The Tesla share has fallen more than 6 percent since August 7, before Musk tweeted that he had "secured funding" to take the company privately. On the first trading day, after changing his mind, Tesla shares fell 1
Tesla lost 1.9% on Tuesday morning.
Canaccord lowered expectations for Model 3 production to 48,000 tonnes in the coming quarter, down 52,000, from Tesla's own forecast.
"Although Tesla has managed to curb cash outflow in the last quarter, it still burns at a rate that requires the Model 3's success to achieve profitability," said Dorsheimer
. Tesla had at the end of the second Quarterly $ 2.2 billion in cash, Canaccord noted. At its current burn rate, the company has only enough money to "get another six to nine months," Dorsheimer said.
"Tesla will have to ensure profitability by the end of the year to maintain solvency," added Dorsheimer
Those who profit before the end of time will not be able to free Tesla from all its problems. Canaccord's "biggest concern" over Tesla is that this "series of self-inflicted problems could open the door for new entrants with more financial support," Dorsheimer said, devaluing his current advantage as a leader in electric vehicles.
The analyst also commented on Tesla's need for strong, experienced leadership. "The drama associated with the 'private fiasco' is a great example of how even a large company needs different leaders throughout its life cycle," said Dorsheimer.
"Musk's recent behavior, including managing the potential, Private Deal, also highlights the need for strong and experienced leadership to minimize distractions during an extremely important time for the company," added Dorsheimer.