Tesla’s precarious financial situation is laid bare in analyst report

Tesla and Tesla stock were down sharply in late trading Thursday, after JPMorgan analysts released a report detailing the enormous financial burden that Elon Musk’s social media antics are exacting on the electric car maker. (Both stocks dropped by more than 1 percent, with shares dropping in the close of the trading day to close at $353.37 and $286.90, respectively.)

The report details that in the months since Musk first tweeted he might take Tesla private at $420 per share, “the company has not been able to fulfill all of its commitments.” Moreover, Tesla has built one of the most complex supply chains in the world.

“It continues to struggle to deliver vehicles on time and more often than not under specified deadlines and price estimates,” the report reads. “It continues to face execution challenges related to the Model 3 production ramp and has been facing cash flow challenges and ‘constrained’ availability of parts to develop and produce Model 3 vehicles.” The report doesn’t specify how many missing assembly line parts or unusable parts Tesla has been forced to use. But Tesla has never really been the most “dependable” company out there when it comes to manufacturing.

With more than 10,000 shares changing hands daily on the NASDAQ exchange and daily revenues totaling $27.5 billion, Tesla is definitely in need of investment. But if it is going to do that, the point is clear: If its leader is known for such severe missteps — not to mention, the repeated foul-ups and ridiculous statements he has put forth — Tesla probably shouldn’t do the same thing and get into bed with him.

Even the analysts, who issued the report and are positive on Tesla’s future, believe the company will make no significant investments in two of its most pressing areas until this mess is in hand. “We believe Tesla should seek to leverage its current assets and the timing for any investments will likely remain stretched until the company is in full control of its financials and an IPO is no longer a real possibility,” the analysts write.

Oh, if only Elon Musk’s apology were free.

Read the full report here.

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