• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 2 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 day "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 6 days America should go after China but it should be done in a wise way.
  • 1 day How Far Have We Really Gotten With Alternative Energy
  • 13 hours Even Shell Agrees with Climate Change!
  • 2 days World could get rid of Putin and Russia but nobody is bold enough
  • 2 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 5 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 12 days Does Toyota Know Something That We Don’t?

Breaking News:

OPEC Lifts Production in February

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.

ADVERTISEMENT

By Damir Kaletovic for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News