• 4 minutes Ten Years of Plunging Solar Prices
  • 7 minutes Hydrogen Capable Natural Gas Turbines
  • 10 minutes World looks on in horror as Trump flails over pandemic despite claims US leads way
  • 13 minutes Large gas belt discovered in China
  • 34 mins The Downside of Political Correctness
  • 8 hours Rioting and Protesting
  • 1 min In the Event of WW3, Oil and/or Renewables?
  • 13 mins Main Stream Media falls into depressed mood today after hearing of the record May jobs report UP 2.5 MILLION JOBS !
  • 2 hours George Floyd’s History
  • 24 mins Trump waves a Bible
  • 13 hours US and Australia Sign SPR Lease Agreement
  • 1 day Healing, Not Hatred
  • 7 hours Let's try to link the recent events back to the situation with oil production and pricing
  • 4 hours China To Boost Oil & Gas Exploration, As EU Prepares To Commit Suicide
  • 2 hours Coronavirus hype biggest political hoax in history
  • 13 hours China’s Oil Thirst Draws an Armada of Tankers
  • 58 mins Model 3 cheaper to buy than BMW 3 series.
  • 24 hours Trumps Oil Industry....
  • 1 day Let’s Try This....
Damir Kaletovic

Damir Kaletovic

Damir Kaletovic is an award-winning investigative journalist, documentary filmmaker and expert on Southeastern Europe whose work appears on behalf of Oilprice.com and several other news…

More Info

Tesla Stock Slips On Model 3 Cancellations

Tesla (TLSA) stock price fell about 2.5 percent, after a Needham analyst, Rajvindra Gill, downgraded it with his concerns about an increasing rate of Model 3 cancellations, profitability concerns, and a flurry of electric-vehicle competition from traditional automakers.

These are not the only problems that Gill cited in his note to clients. Tesla is currently dealing with a significant number refunds that are outpacing deposits as cancellations accelerate because of the expiration of the $7,500 credit and unavailability of the $35,000 base model.

"In August '17, TSLA cited a refund rate of 12%. Almost a year later, we believe it has doubled and outpaced deposits. Model 3 wait times are currently 4-12 months and with base model not available until mid-2019, consumers could wait until 2020," Gill said.

“The notion that Model 3 cancellations are outpacing orders is unequivocally wrong,”, said Tesla spokesperson when asked for comment.

Even though various experts have said the car could be profitable, Needham doesn't think so. The firm cut its gross margin estimate for Tesla's total profit by the end of the year to 16.3%, well below the Wall Street consensus of 19.9%.

Just like other Wall Street analysts, Gill is also concerned about Tesla's cash burn, believing that Tesla’s capital structure is “unsustainable.” Tesla is still relentlessly claiming that it will be profitable in the second half of this year and will not need to raise additional capital, but analysts from Goldman Sachs and UBS have a different opinion. They are convinced that Tesla will probably have to raise another round of capital in order to pay off debt that is coming due and keep up production.

"We are downgrading Tesla to underperform from hold as we believe the stock is still overvalued despite falling 16% from its June 2017 peak (the S&P 500 is up 15% over the same 56-week period)," Gill said.

According to regulatory filing, Tesla burned through $1.1 billion cash in the first quarter of 2018, which is still a slower burn than in previous quarters, which amounted $1.4 billion. The company’s share price is down 8% since last month.

By Damir Kaletovic for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News