Could this be the beginning of the end for the company?
Tesla, one of founder Elon Musk's contributions to the world of technology and engineering, has been viewed by many as an overly-ambitious project that is shrouded in a ceaseless stream of hype. The company's stock prices were once more valuable than legendary car manufacturer Ford, but has consistently been plagued with unsteady financial projections.
Tesla has experienced some manufacturing woes related to their Model 3 car, which has led ratings agency Moody's to forecast that the company must make over $2 billion in profit in order to elevate themselves out of their current financial cul-de-sac.
In an open note to their clients, Moody's notes how "the negative outlook reflects the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity short-fall. Prospects for addressing its liquidity requirements (whether equity, convertible notes, or debt) will be supported if the company can establish credibility for reaching Model 3 production levels — 2,500 per week by the end of March, and 5,000 per week by the end of June."
Moody's believes Tesla is in the midst of a troubling credibility crisis, as the company's key targets are well below their intended goal of selling 10,000 units per week throughout 2018.
Even though the company was able to rake in $3.29 billion last year, analysts believe that sum is not enough to keep Tesla afloat. Moody's estimates that the fledgling electric car maker will need over $500 million to cover production operations over the next couple of quarters, alongside another $2 billion to cover planned capital expenditures. Furthermore, Tesla must be able to rectify $1.2 billion in debt payments into early next year.