Tesla to raise more capital after big cash setback

A massive debt repayment, a record drop in deliveries all contributed to a poor first quarter for Tesla. tesla

SAN FRANCISCO: Elon Musk’s declarations that Tesla Inc. was done losing money and needing to raise more cash turned out to be premature.

“There is merit to the idea of raising capital at this point,” Musk said on an earnings call on Wednesday. “It is very important as the company scales to make sure we are on a solid foundation and that we have the appropriate financial discipline across the company and that we are spending money very efficiently. At this point, I think we are doing that.”

“US$2.2 billion in cash is a lot of money, but not when you’re making the kinds of investments Tesla is making,” Rebecca Lindland, a longtime auto-industry analyst and founder of the car-review website RebeccaDrives.com, said on Bloomberg Television. “I’m definitely concerned about some of their projections.”

The halving of a federal tax incentive for Tesla purchases starting in January dragged on US demand in the quarter, and Tesla struggled to offset that drop by starting deliveries of the Model 3 in Europe and China. Tesla finished the quarter with US$768 million in customer deposits, a dip from US$793 million at the end of last year, despite the unveiling of the Model Y in March. When asked about the state of orders for the vehicle the company expects to produce next year, Musk declined to comment on the “granularity of deposits.”

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