Tesla has just posted its first-quarter earnings, and shareholders aren’t impressed, weighing on the company’s stock price as markets opened.
Though Tesla boss Elon Musk had prepared Wall Street for a Q1 loss, analysts were still surprised at how much the company had missed its mark. As one of the worst quarters in the previous two years, Tesla reported a loss of $702.1 million.
Vehicle sales declined 41% to $3.72 billion compared to last quarter. Tesla blamed logistics in its overseas deliveries for the deficiency, and the loss of federal subsidies for cutting demand in the US.
Evercore ISI Group recently devalued Tesla to an underperform ranking and Head of Global Automotive Research Study, Arndt Ellinghorst, informed CNBC’s “Street Signs” that the company’s most current update confirmed his view about the danger of cash burn and liquidity at Tesla.
Ellinghorst explained that both the Model 3 and Model Y would attract buyers however Musk’s sales promise looked unrealistic. He asserted that pressure from rival German car-makers would make it difficult to go into the cars and truck markets of Europe and China with any real scale.
Tesla stated that due to “unanticipated challenges” it was only able to provide half of the automobiles bought in the quarter by March 31 as it increases deliveries in Europe and China. That weighed on a large number of shipments, and revenue, into the current quarter, it stated.
As Tesla’s cash balance at the end of the quarter shrunk by $1.5 billion since December, to $2.2 billion, Musk stated it might be time for Tesla to raise capital again. The company credited the decline to a $920 million bond payment.
Tesla looks to the future
Earlier in the week, Musk revealed to investors a unique and potentially game-changing system chip his company recently started setting up in its trucks. He claimed it was robust and sufficient to enable Teslas to pilot themselves without human guidance by the end of this year.
Musk predicts that a year from now, more than 1 million Tesla vehicles will be capable of driving themselves while a person rides without interference in the driver’s seat, and that the business will assist clients in making money when they are not utilizing their vehicles by renting them out as “robotaxis“.
Whether or not Tesla’s ‘robootaxis’ will help boost the company’s share rate remains to be seen, but it is clear that Musk and his electric car company are facing an uphill battle to rule in losses in 2019.