Tesla reported better-than-expected first-quarter earnings on Wednesday, losing less than analysts predicted and bringing in more revenue than anticipated.
But 2015 is going to be a big, high-pressure year for the electric car maker and CEO Elon Musk, as the company rolls out a new vehicle, the Model X SUV.
Morgan Stanley lead auto analyst Adam Jonas is among the Tesla bulls on Wall Street, but he knows that there are plenty of challenges for the automaker going forward.
In a research note published Thursday on Tesla’s financials for the quarter, he wrote, “Cash burn was eye watering, raising the stakes for an on-time and good quality Model X launch.”
Tesla burned $US558 million in the quarter, leading Jonas to question whether the company has enough “gross cash” remaining to ride out the rest of 2015.
He indicated that this puts a lot of stress on the Model X launch to happen on schedule in the third quarter — and for there to be no major problems with the car.
On a conference call with analysts after Tesla reported earnings, Musk said that the Model X is a really great vehicle, based on his own experience driving some of the prototypes the company is now testing.
“Wow!” Musk enthused. “It’s by far the best SUV.”
But he also pointed out that the “X wound up being a lot different from the [Model] S” than Tesla had originally anticipated and insisted that the company wanted to make sure that the vehicle’s exotic “falcon wing” doors worked properly and that there were no issues with the rear seats.
Jonas wrote that his team was relieved to hear nothing about Model X delays from Musk or Tesla’s executive team. Morgan Stanley expects Tesla to deliver only 3,100 Model X’s in 2015 after the launch. Tesla is guiding for a total 55,000 deliveries of the Model S and Model X during the year; thus far, it has delivered just over 10,000 cars and says that it will match or exceed that in the second quarter.
“Tesla’s confidence in a 3Q launch, while still leaving plenty of execution risk in [the second half of the year], is comforting,” Jonas wrote.
However, Jonas thinks that Tesla may not quite hit that 55,000-deliveries mark in 2015, citing the risks involved with getting everything right on a new vehicle.