Vertical Group's Gordon Johnson Figures Tesla Lost $14K Per Model 3 In Q1

Each Model 3 sold in the first quarter of this year cost Tesla Inc TSLA nearly $14,000, according to calculations by Vertical Group’s Gordon Johnson.

Johnson initially published a $15,600 loss-per-Model 3 estimate Tuesday morning but adjusted his “cars sold” figure following a conversation with Tesla management.

By his estimates, “Tesla will still lose a lot of money every quarter” even if it posts no start-up costs, begins selling 5,000 Model 3s at a 25-percent gross margin this quarter and drops operating expenses to a steady 25 percent of sales.

When contacted for comment on Johnson's estimate, a Tesla spokesman pointed to the company's first-quarter commentary. In the May 2 report, Tesla said it expects to come close to breaking even on the Model 3 in the second quarter and to become "highly positive" in the third and fourth quarters. 

Tesla lost more than $700 million and burned more than $1 billion in cash last quarter even with an average Model 3 selling price of $54,000 — far beyond the targeted $35,000 price point, Johnson said. 

“What happens when they start selling this thing for $35,000, and if they never do (a much more likely scenario), can they sell 60-65,000 Model 3 cars at a $54,000 price point (unlikely)?” the analyst told Benzinga in an email. 

The analyst said he expects Tesla to continue losing money regardless of its production rate achievements.

Vertical Group maintains a Sell rating on Tesla with a $99 price target. At the time of publication, shares were trading around $302.

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Photo courtesy of Tesla.