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Income Insights

Tesla’s Buckling, But Clean Tech Isn’t

By Roger S. Conrad on Mar. 29, 2018

Shares of Tesla Inc (NSDQ: TSLA) have shed $100 of value since the beginning of March, a roughly 25 percent decline. Unfortunately for CEO Elon Musk and his many followers, there’s plenty of room for more downside.

That the company is further away than ever from turning a profit is hardly news. Excluding special items, Tesla posted a loss of more than $11 a share in 2017. And the consensus forecast of the 31 research houses tracked by Bloomberg Research is a first quarter loss of $3.26 per share will be announced in early May. The company also spent nearly $3.5 billion more cash than it received last year, and will bleed at least $2.5 billion in 2018.

A good part of Tesla’s shortfall is due to routinely missed production targets that have prevented economies of scale. Bloomberg estimates the company is currently making just 975 of its Model 3 vehicles per week, versus management’s target of 2,500 by the end of this month. Then there’s the failing health of the SolarCity business, which has been very difficult to track since Tesla absorbed it last year due to a lack of pro forma disclosure.

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