Hell! Musk Running Short Of Cash
Elon Musk – the American who has promised to supply South Australia with a huge wind-powered energy battery farm within 100 days or it will be free – is facing cash problems in his electric car business, according to US reports.
Musk has warned that Tesla will face “manufacturing hell” as it ramps up production of its new mass-market Model 3 sedan. That is being read by some commentators to mean that the business may run low on cash later this year as it embarks on an ambitious plan to build its first model aimed at mainstream consumers.
At a launch event on Friday, Musk said customers had made more than half a million advance reservations for the lower-cost Model 3. He is counting on this model to help turn the cash-losing company into a profitable one and transform it from a niche player to a heavyweight in the automobile industry.
In its most recent quarter Tesla reported sales of US$2.3 billion. But despite a 25pc gross margin on its cars, the company lost $336 million.