A fatal crash. A downgrade from one of America’s leading credit-rating companies. Missed delivery targets for a much-hyped electric sedan. Cash pouring out but trickling in. More than $1 billion in debt coming due.
Tesla’s problems — which have sent its stock plunging to its lowest point in a year — are legion. But will the Palo Alto electric car maker rise above them, or sink beneath the blows?
“It’s one of the worst pictures in a long time,” said CFRA analyst Efraim Levy. “They’re getting hit with everything all at once.”
Tesla did not immediately respond to a request for comment.
On Tuesday, credit-rating firm Moody’s downgraded Tesla, citing missed production promises for the Model 3 sedan, negative cash flow, and nearly $1.2 billion in convertible bonds coming due by March 2019.
“Tesla’s rating could be lowered further if there are shortfalls from its updated Model 3 production targets,” Moody’s said in a news release.
“The rating will also be pressured if the company is unable to raise sufficient new capital to cover its late-2018 and early-2019 convertible maturities, and to cover the operating cash consumption that will likely continue into 2019.”
While much attention has been on the twice-delayed production of the Model 3 — Tesla’s bid to bring electric vehicles to the masses, with a starting price of $35,000 — the firm led by CEO Elon Musk was hit with another major problem last week, when a Model X SUV burst into flames after a fatal crash on Highway 101 in Mountain View. Federal authorities are probing the crash, and are charged with determining whether Tesla’s controversial “Autopilot” automated-driving system was on at the time of the accident.
By Wednesday’s stock market close, Tesla’s share price had plummeted to $258, its lowest level since last March.
Still, the firm’s “financial shakiness” is nothing new, said Gartner…