Tesla burns through $700 million, but says production is now on track
Posted May 2, 2018 3:44 p.m. EDT
Updated May 2, 2018 6:00 p.m. EDT
NEW YORK (CNNMoney) — Tesla burned through $700 million in cash last quarter, but its production woes appear to be easing.
The electric carmaker posted its latest earnings results Wednesday, and the filings show Tesla's money stockpile shrank from $3.4 billion to $2.7 billion the first three months of the year.
Investors expected Tesla to eat through significant cash as the company doubled down on solving a string of manufacturing issues that have plagued the Model 3. That's Tesla's first mass market car with a starting sticker price of $35,000, and it's success is considered key to the company's business model.
Tesla said it hit a production rate of 2,270 Model 3's per week in April, and it was able to churn out 2,000 or more cars for three straight weeks - finally reaching a milestone it hoped to hit last year.
CEO Elon Musk made a renewed commitment earlier this year to getting production back on track. He said recently that he occasionally sleeps on the factory floor.
"It looks like Elon's all-nighters at the factory are paying off, because Tesla seems to be finally getting some momentum," Jessica Caldwell, executive director of industry analysis at Edmunds, said in a statement Wednesday.
Musk said during a conference call with investors that Tesla should start making 3,000 per week in the next three months.
But if more manufacturing hangups are in store for Tesla, the company could be headed for a cash crunch.
The company is facing $1 billion worth of bond payments that will come due over the next year, including $230 million due in November and $920 million next March.
In March, Moody's downgraded its debt deeper into junk bond status and warned more downgrades could be coming. Standard & Poor's also has warned of the possibility of a downgrade.
Bloomberg has been tracking production by continuously monitoring the issuance of vehicle identification numbers issued by the NTSB. At the end of last quarter, it estimated Tesla was making about 1,000 a week, a big jump from the fourth quarter but less than half the 2,500 a week target that Tesla hoped to hit by the end of 2017.
Correction: An earlier version of this article misstated the amount of Tesla's cash burn last quarter.
--CNN's Chris Isidore contributed to this report.