Tesla Motors Likely To Face Losses Even As Model X Delivery Date Closes In
Electric vehicle manufacturer expected to commence deliveries this fall, but not expect to hit breakeven anytime soon.
Tesla Motors
This is not surprising given that the electric car manufacturer has been burning cash at a rapid pace for its capital expenditures that
In fact, one Morgan Stanley analyst is partly challenging Tesla to ship over 50 Model SUVs just before October to see if Tesla has what it takes to appeal to the customers. Despite the forecast of losses, investors still highly value the company, with a share price average targeted at around $280. So much so that at least one analyst expects the stock price to hit $400 once the sale of Model X proves to be a success in the next year.
Underscoring all the optimism amongst investors are two factors: Tesla Energy and the Model X growth rate. These two goods are seen as the key to future growth, even though they won’ hit the road (or shelves) till later this year, as mentioned earlier, but mass production of these products can’t be expected till around the end of this decade.
Once the sales start to kick off, cash is not expected to hit the company’s coffers until early to mid-2016 at the earliest, assuming sales move in tandem with it. Most investors and big banks who have held on their shares will not mind the small loss forecasted this year, keeping in mind the many big bang for money that is to be made in the coming decades.
However, one thing is clear though: Tesla is going to need cash. It might be a non-issue, but after a marginal
TM stock price ended the day at $247.46, down 0.11% from the previous day.