It seems it’s not all glitter and unicorns in Tesla land. According to a recent report by Bloomberg, Tesla is spending an utterly insane amount of money – approximately $8,000 per minute, or close to a staggering half a million dollars an hour. “Whether they can last another 10 months or a year, he needs money, and quickly,” Bloomberg‘s Kevin Tynan explains, saying that Tesla will need to raise at least $2 billion by somewhere mid-next year to keep the entire company afloat.
Continue Reading Below
While the hype is real, the sales and production numbers don’t really go hand-in-hand with it. Yes, the Tesla Model S is still selling like crazy and the Model 3 pre-orders are insane, but the company is still miles away – sales numbers wise – from established car makers like Volkswagen, Toyota, Mercedes-Benz, Audi, Chevy and, BMW. For example, in total, Tesla Motors expects to deliver about 100,000 Model S and X vehicles in 2017, which would be a 31% increase over 2016. Meanwhile, BMW sold 281,839 vehicles in U.S. in the first ten months of 2017. Globally, BMW sold 1,836,464 in the same ten-month period.
While the production issues can be attached to the relative youth of the company, the sheer expenditure amount per year is headed to a level which would ruin any of the well-established car makers, let alone a young one like Tesla Motors.
According to Bloomberg, if Tesla keeps spending money at this pace, the company is on track to exhaust its current cash pile on Monday, August 6th, 2018 (At 2:17 a.m. New York time, if you really want to be precise.) To be fair, the company did keep things transparent and predicted they will be spending at this pace. But, we all need to ask, whether, at this rate, the company’s increased production, sales, and deliveries can get enough fresh cash to sustain the operation for a longer period of time.
Mind you, Elon Musk did raise quite a lot of money with Tesla Model 3 pre-orders and aims to do the same with the upcoming Tesla Roadster and Tesla semi truck, but will it be enough? Everybody in the automotive world is eager to see Tesla succeed. Their own success will mean that companies like BMW, Mercedes-Benz, Volkswagen and Toyota, all have to ramp up their efforts for all-electric and/or hybrid vehicles, making a big dent into the whole green gas emission problem. But, as it usually goes, it’s not all that clear-cut and the transfer to all-electric vehicles will bring on its own set of problems.
What will happen with the automotive market in the forthcoming years is still unclear, but we are all in a rather exciting time period for automotive enthusiasts, that’s for sure. The German big-three is revealing a boatload of new hybrid and electric models, the Japanese car makers are on an offensive as well, and even the big American car makers are joining in on the fun. A truly epic period is upon us.