ATN: Ars Technica on “Elon Musk says don’t worry about Tesla’s burn rate—he might be right”

Long-time ATN readers will recognize Ars Techica as one of the 'go-to' sources for early posts. Here, in the wake of an Elon Musk investors' call that was as uncomfortable in its way as SHS press conferences are in theirs, ATN is revisiting Ars Technica for perspective on Tesla.

The final paragraph of the piece linked below reads in part, "Tesla will only face an existential threat if investors start to lose confidence in the company's long-term prospects. If that were happening, we'd see signs of it in a plunging stock price. Tesla's market capitalization is down about 20 percent from its 2017 highs, but the stock is still higher than at any point prior to 2017..." 

Avoiding an 'existential threat' is clearly a necessary achievement. What of the more prosaic questions regarding Tesla's business outlook? The Ars Technica take is well worth a read.

A lot of people are worried about how quickly Tesla is burning through cash. In a Monday story, Bloomberg extrapolated Tesla's recent cash burn rate—$3.48 billion over the last 12 months, or $6,500 per minute—to estimate that Tesla might run out of cash before the end of 2018.

Tesla has had to raise billions of dollars to fund the development and manufacturing of its cars, batteries, and other technology. At the end of 2017, Tesla had $9.4 billion in outstanding debt, requiring hundreds of millions of dollars in annual interest payments. With no profits in sight, pessimists worry that Tesla will find it difficult to raise still more money—money it may need to complete its production ramp-up of the Model 3.

Tesla CEO Elon Musk insists that there's nothing to worry about. "Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money," he tweeted last month...

Read the Ars Technica analysis here: