Amid a flurry of reports about lagging production, Tesla CEO Elon Musk recently joked the company was going bankrupt. That obviously didn’t happen but Bloomberg reports the company is burning through cash at an alarming rate.
Despite recently having the “most productive quarter” in history, Tesla still hasn’t been able to hit targets for Model 3 production. Investors are also getting anxious and that has been reflected in the company’s stock price which has plummeted around 24% from September.
Earlier this month, Tesla claimed they have achieved the “fastest growth of any automotive company in the modern era” but it is reportedly coming at a huge cost. Bloomberg ran the numbers and determined the automaker burns through more than $6,500 every minute. If that number is correct, the company goes through $390,000 every hour and $9,360,000 every day.
That’s a massive number and the publication notes Tesla’s free cash flow has been negative for five consecutive quarters. The company has a tendency for its free cash flow to be negative but the rate of cash burn significantly increased in recent quarters.
Tesla also has ambitious plans for the future as the company has already shown an electric semi, a new roadster and a teaser image of the Model Y. Developing all these models comes at a cost and it doesn’t help that Tesla is also rushing to ramp up production of existing models. As Bloomberg notes, Tesla now employs approximately 40,000 people and the company’s rate of revenue per employee is significantly lower than Ford or General Motors.
The massive outflow of cash means Tesla could run out of money before the end of the year. One analyst estimates the company will need to raise $2 billion this year alone. That same analyst, Bruce Clark of Moody’s Investors Service, also noted Tesla has $1.2 billion worth of debt that is due by 2019.
