Tesla Motors Inc. (TSLA:NYSE) will release its second quarter 2016 results on August 3, with the company still losing gobs of cash, stock down 12 percent in the last 12 months, the hands-free autopilot suffering three product failure crashes, and the SEC looking into the company regarding accounting violations prior to the autopilot allegedly killing a driver.
Breitbart News already reported that Tesla will miss quarterly deliveries by 20 percent and revenue by $315 million. The company will record negative sequential and annual sales comparison for its flagship Model S and book a substantial earnings loss. Tesla continues to lose about $19,810 on each car it sells, and hemorrhage $51,344 in negative cash flow on each vehicle it builds.
Tesla “jumped the shark” in June by announcing what has been described as a “bailout buyout” of CEO Elon Musk’s other cash-burning, bankruptcy-bound company, Solar City (SCTY:OTC). According to the “New Constructs” blog, Solar City from 2013-2015 burned $6.5 billion in cumulative free cash flow. Over the last 12 months, SCTY’s revenue grew from $164 million to $455 million; but free cash flow burn increased to $3.6 billion. The Solar City acquisition will cost Tesla shareholders $7.6 billion.
Tesla did hold the grand opening on July 29 of its Gigafactory just outside Reno. The building is supposed to be the world’s largest factory, but only 14 percent, or three of the final 16 “blocks” of the of the building, have been completed.
Tesla has admitted that despite knowing about a deadly May 7 crash allegedly caused by the failure of its much-hyped “autopilot,” the company still sold $1.7 billion of stock without public disclosure of the crash. But in another depressing development, the National Highway Traffic Safety Administration (NHTSA) Office of Defects probe released its initial report stating that the Tesla Model S on autopilot was speeding and never braked when the car T-boned a tractor trailer and killed its driver.
Since then, at least two more autopilot-related crashes totaled both cars involved. One of the crashes involved an autopilot that supposedly shut itself off a few seconds before impact, handing control back to a completely unprepared driver. The NHTAA has served Tesla with a nine-page information demand letter, and the U.S Senate is also investigating.
Tesla did disclose eight weeks after the fatal crash that the Securities & Exchange Commission was investigating the company. But it now appears that SEC was already investigating Tesla for potential accounting violations prior to the May 7 accident.
Tesla continues to survive mostly by selling stock, rather than selling cars. Despite the company selling nearly $2 billion of stock in 2014 and another $1.7 billion in June, and being about to issue $7.4 billion in stock to buy Solar City, Musk has indicated that Tesla will soon sell another $3 billion of stock to fund the company’s Model 3.