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

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Vertical Group's Gordon Johnson Figures Tesla Lost $14K Per Model 3 In Q1
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Each Model 3 sold in the first quarter of this year cost Tesla Inc (NASDAQ: 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.

Related Links:

Tesla's Q1 Earnings Recap: Per-Share Loss Better Than Expected, Model 3 Updates

Tesla Fell Sharply After Musk Cut Off Analysts On Q1 Earnings Conference Call

Photo courtesy of Tesla. 

Latest Ratings for TSLA

DateFirmActionFromTo
Oct 2018MacquarieInitiates Coverage OnOutperform
Oct 2018CitigroupMaintainsSellSell
Oct 2018CitigroupMaintainsSellSell

View More Analyst Ratings for TSLA
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