Tesla Motors Inc shares tumble after analyst calls its cash burn ‘eye watering’

Tesla Motors Inc. would exhaust its remaining cash in about three quarters at the current burn rate, assuming no external sources of capital infusion or warehouse facility draw, Adam Jonas of Morgan Stanley said in the note.

Tesla Motors Inc. fell Thursday after Morgan Stanley said the business\’s \”eye watering\” use of cash puts more pressure on the good production start for that Model X suv.

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Shares of the electric-car maker led by Ceo Elon Musk fell 2.1 percent to US$225.68 at 9:37 a.m. New York time. The shares had gained 3.6 per cent so far this year through Wednesday, outpacing the 1.4 per cent gain through the Russell 1000 Index.

After Wednesday\’s close, Tesla reported an adjusted lack of 36 cents a share, narrower compared to 49-cent loss estimated by analysts. The Palo Alto, California-based company also said its cash fell 21 percent to US$1.51 billion since 2014 because the company invests inside a massive battery factory in Nevada and growth and development of the Model X.

Tesla would exhaust its remaining cash in about three quarters in the current burn rate, assuming no external causes of capital infusion or warehouse facility draw, Adam Jonas of Morgan Stanley said in the note.

Cash burn was eye watering, raising the stakes for an on-time and top quality Model X launch

\”Cash burn was eye watering, raising the stakes for an on-time and good quality Model X launch,\” he wrote.

Tesla said deliveries from the SUV would begin in the third quarter after at least two delays.

\”I drove the most recent prototype today, and it is like, \’Wow,\’\” Musk told analysts Wednesday on the conference call.

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