Analysts Think Tesla Motors Will Need More Loans To Survive


For Tesla Motors, 2012 has been a good year. Production of the Tesla Model S is rolling along, and for the first time ever Tesla actually turned a weekly profit. Yet despite all the accolades and benchmarks, Tesla is still a company that owes a lot of money to a lot of people, and some market analysts think the company will need a lot more money to stay afloat.

As of September 30th, Tesla reportedly had just six months of cash left on hand, with debts (primarily from those low-interest government loans) of more than $414 million. Cash flow from the sale of Tesla Model S sedans and battery packs to other automakers has only brought in about $91 million, less than a quarter of the money Tesla owes. For these reasons, some market analysts believe Tesla will need to seek either more government loans, or private investment, in order to stay solvent. Our own Jo Borras recently criticized Tesla for taking money from Model S owners for future replacement batteries. That just screams “We need money!!”

Yet even so, shares of Tesla have risen 30% since November, largely on the news that production of the Tesla Model S is picking up pace. WIth around 400 cars built every week, it will still take Tesla months to work through the 13,000 reservations 20,000 reservations. Even so, Tesla has a tough road ahead, and some analysts are warning investors to stay away.

For what it is worth though, Tesla is perhaps the best-positioned new automaker on the market, and one of the few green automakers to follow through on almost all of its promises. The jury is still out on whether or not Tesla can make it in the long haul…but we’re feeling pretty optimistic.

Source: MarketWatch

About the Author

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or else, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.
  • I was surprised to see Tesla-branded charging stations at the I95 rest area in Delaware last weekend. I’m glad that the infrastructure for eCars is starting to come together.

  • Dave Harmon

    I like naysayers, the more the better. They create opportunity. By the way reservations are now about 20K. Nothing stands still.

  • Nixon

    Based upon the Sept. numbers, Tesla needed more funding. Then in Nov/Dec they got more funding by doing another stock offering and by pushing buyers to finalize orders and put in new orders before the price increases went into effect. Problem solved.

    Now they are producing approx 42 times as many cars in a month than what those old quarterly numbers from last summer were based upon. So why are we rehashing old issues that have already been resolved instead of looking at the current realities moving forward?

    The next quarterly report is due in exactly one month. Let’s hold the insanity until there are actual real numbers to report on.

  • Cprenzl

    Really this article is soo Irrelevant it’s so stupid that it comes on the google finance news. They should add a bullshit filter. Really facts from September. Just do us a favor and delete this. Tesla has no cash problems and haven’t had any since mid november. Tesla make cash if they produce more than 200 cars a week.

  • Dave Harmon

    Raising cash is never a problem if you are successful. As long as orders keep rolling in and cars keep rolling out, finding money won’t be a problem. Obviously, there are many big risks with Tesla, but they are related to continued strong demand for their cars beyond the 20K and no significant problems with the cars— not money.

  • Roseland67

    The term “Some market analysts” is mentioned detrimentally in every paragraph. Please advise who these market analysts are and their current personal position in Tesla.
    It appears this article isn’t at all trying to inform, but more to stimulate conversation and ad revenue.
    If you bought Tsla you made money, if you shorted Tsla, probably not.
    What did the above analysts do?

  • Bobo

    Great article/update.

    Much more balanced than the majority of articles.

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