Despite confirming that his company will not need another capital infusion any time soon, Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk certainly has his work cut out for him to make such an assertion a reality. After all, with a series of convertible debentures which are likely to need refinancing, a cash burn level which has approximately $3 billion over the past year, and the need for additional debt to accomplish everything the rock star CEO says he wants to accomplish, cash is certainly going to be king over the next one to two quarters.
While many investors and analysts remain focused on how well (or rather how quickly) Tesla is able to churn out Model 3’s, the bigger question may be: how much is Tesla earning on each car, and what is the quality of the cars which are being sent out?
Quality issues have become top of mind recently due to the death of a man driving a Tesla in autonomous mode, and any time quantity is expected to supersede quality as a necessary evil for survival, investors ought to be concerned.
Fortunately for Musk, the market appears to still view this man as a god who can do no wrong and will change the world; while Musk may have already done more to change the world than CEOs before him, the reality remains that GM and other major car companies are becoming very competitive with EV options for consumers, putting even more pressure on Tesla to succeed, and making this one company I would stay far, far away from.
Invest wisely, my friends.
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