Tesla is losing more than $4,000 on every Model S electric sedan it sells, and is burning cash, despite a bull market for luxury vehicles. Bobbi Rebell reports.
Tesla shareholders are not happy. The stock hitting the skids as the financial reality of CEO Elon Musk's ambitious plans begin to hit home. The Silicon Valley automaker is losing more than $4,000 on every Model S sedan it sells. It burned almost $360 million in cash last quarter in a bull market for luxury vehicles. Now CEO Musk says, he is considering options to raise more capital, and has not ruled out selling more stock. Reuters' Joe White. (SOUNDBITE) JOSEPH WHITE, TRANSPORTATION EDITOR, REUTERS (ENGLISH) SAYING: "It's crunch time for Tesla. They have, I would say, the rest of this year and into the first quarter of next year to demonstrate that they can make money on their current product line, including the new Model X SUV, that is supposed to come out later this year and start putting money in the bank to finance their growth. That is the real point, and that is the turning point that they are at right now. Tesla is also spending more money on research and development, while also selling those Model S cars for less money. They start at $70,000, though that does come down with federal and state electric vehicle tax breaks. Prices can climb as high as $106,000 or more, depending on options. The strong dollar also hit overseas sales. The bright spot - the company says, capital spending will drop next year because there won't a major vehicle launch. But Tesla is gearing up for the 2017 launch of its Model 3 line, which will start at an affordable $35,000.