Tesla cash burn picks up speed

TESLA’S record net loss in the first quarter and fast-burn through millions of dollars is raising questions about the company’s ability to pay all its bills.

CEO Elon Musk conceded that criticism is valid but said during a sometimes-testy conference call with analysts on Wednesday that it’s “quite likely” Tesla will make money and have positive cash flow in the third quarter.

“It’s high time we became profitable,” said Musk, who also promised restructuring this month to achieve profit goals. “The truth is you’re not a real company until you are, frankly. That’s our focus right now.” Wednesday’s results showed Tesla tearing through $US745.3 million ($989 million) in cash in the first quarter, due largely to the slow production ramp-up of the Model 3 mass- market electric sedan. The cash burn could put pressure on the company to borrow more or sell additional shares to raise more cash.

When asked by an analyst on a conference call about allimportant reservations for the Model 3, Musk cut him off, calling questions dry and “not cool.” He then allowed multiple questions from a person via YouTube.

Tesla began the quarter with $US3.96 billion in cash and equivalents, but that fell to $US3.22 billion by quarter’s end.

The company said in April that it won’t need more capital this year as it generates added cash as production and sales of the Model 3 grow.

But Model 3 production still isn’t near the level of 5000 per week that Musk promised last year.