American automaker Tesla unveiled the Roadster and the Semi Truck on Thursday at the SpaceX headquarters. With these new vehicle additions, analysts are skeptical of Tesla’s ability to finance and fund them while trying to maintain high production.
Due to anticipated costs to produce the new Roadster and the Semi Truck, Tesla will ask creditors and shareholders for additional capital, according to Reuters.
The company’s founder, Elon Musk, did not disclose or offer any insight into how these vehicles would be financed.
“Musk did not offer details about how the Tesla would generate additional funds to deliver the semi truck and the roadster, and overcome production problems that have hobbled production of the company’s high-volume sedan, the Model 3.”
During the presentation, Musk promised that the roadster will be the fastest production car available. Per the press release, the first 1,000 cars will cost $250,000 each. In addition, that cost has to be paid full up front with later models starting a lower price of $200,000.
If the company is successful in gathering potential buyers, it could generate $250 million in cash, and kick-start production in 2020.
Tesla’s third quarter results include a total of $1 billion spent on its auto business alone. Furthermore, expenses are estimated to be $1 billion in this quarter. As of September, the company had $3.5 billion available in cash. This spending spree naturally puts financial pressure on the automaker.
Tesla Semi Truck— Marques Brownlee (@MKBHD) November 17, 2017
0-60 in 5 seconds
0-60 in 20s with an 80,000lb load
Up to 500 mile range
Comes in space gray
$5000 for a reservation
Production in 2019 pic.twitter.com/d7E0iv5z3U
Analysts have concerns that the Semi Truck might be hipped up and a distraction for Tesla. With no annual profit, it is clear the company faces challenges down the road.
A report from The Verge confirmed the company’s success primarily depends on its Model 3. Based on estimates, the production rate for this model is underperforming.
“When Musk launched the Model 3 in July, the company was anticipating a production rate of 20,000 cars a month by the end of December. In the last quarter, though, Tesla produced only 260 model 3’s.”
So, what were the goals behind the release of Semi Truck and the Roadster? There are two possible explanations. Corroborated in the above report, one was to distract Wall Street analysts from the Model 3’s production problems. The other was to recapture the enthusiasm and excitement that Tesla has been known for through the years.
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