Tesla Profit Declines, but Musk Says Cash Position Is Strong

Tesla Profit Declines, but Musk Says Cash Position Is Strong


The company also said it anticipated lower North American vehicle sales in the current quarter compared to the fourth quarter.

Some analysts believe increasing sales may prove tough, now that sales of the Model S luxury sedan and Model X S.U.V. are flattening, and the federal tax credit available to Tesla customers has fallen to $3,750 as of Jan. 1. Last year, customers were eligible for credits of $7,500. And soon it will face competition from other luxury car makers.

“Tesla’s product lineup is starting to get stale, and now thanks to the elimination of the federal tax credit, buying one has never been more expensive,” said Jessica Caldwell, an analyst at Edmunds, an auto-information provider. “While there’s still a cool factor to owning a Tesla, it may not be enough to convince buyers to choose one over brand-new models from Audi, Porsche and Jaguar.”

Tesla’s most affordable car is a midrange variant of the Model 3 that starts at $44,000 before tax incentives. Adding options can push the price up to $70,000 or more — well outside the range of most mainstream buyers.

Tesla originally promised that the Model 3 would start at $35,000, but Mr. Musk has said the automaker would lose money if it sold the car at that price now. Earlier this month, he said the company would cut 3,000 jobs — about 7 percent of its full-time work force — to reduce costs.

Tesla is investing heavily to add showrooms, service centers and charging stations, expand into additional markets and develop new models. These include an electric pickup truck, a semi truck and a small sport-utility vehicle, the Model Y, which Tesla has said it will unveil this year.

Mr. Musk has repeatedly said Tesla won’t issue more bonds or sell additional stock to finance its ambitious plans, but many analysts are skeptical. The company is already carrying nearly $10 billion in debt. Issuing new bonds would increase its debt load. Selling additional stock could worry investors.



Source link

About The Author

We are independent. we bring you the Real news from around the world.

Related posts

Leave a Reply