Tesla's ca$h burn rate

Tesla’s Burning Through Nearly Half a Million Dollars Every Hour

Excerpt:

Over the past 12 months, the electric-car maker has been burning money at a clip of about $8,000 a minute (or $480,000 an hour), Bloomberg data show. At this pace, the company is on track to exhaust its current cash pile on Monday, Aug. 6. (At 2:17 a.m. New York time, if you really want to be precise.)

To be fair, few Tesla watchers expect the cash burn to continue at quite such a breakneck pace, and the company itself says it’s ramping up output of its all-important Model 3, which will bring money in the door. Investors don’t seem concerned. Tesla shares rose almost 3 percent to $317.81 Tuesday, giving it a market capitalization of $53 billion. Ford Motor Co. is worth $48 billion.

Comment: See Electric Cars the Future? Not so Fast!

If electric cars are ever to displace gasoline engines without government putting its thumb on the scale, they must not only keep innovating but outrun fossil fuels where productivity also keeps advancing.

Electric cars have come a long way. They are no longer ugly, impossibly expensive and impractical, thanks to technological advances that have slashed battery storage from $1,000 per kilowatt-hour in 2010 to $273 per kwh last year, according to Bloomberg New Energy Finance.

Nonetheless, that means a 75 kwh battery (about what you need for 250 miles of range) still adds about $20,000 to a car’s cost. So how do the cars sell? Public largess helps a lot.

The federal government offers a tax credit of up to $7,500 each for the first 200,000 electric or plug-in hybrid cars a manufacturer sells. Throw in state tax credits, subsidies for recharging infrastructure, relief from gasoline taxes, preferential lanes and parking spots and government fleet purchases, and taxpayers help pay for every electric car on the road.

What happens when the credits go away? When Hong Kong slashed a tax break worth roughly $55,000 for a Tesla in April, its sales ground to a halt. In Georgia, electric vehicle sales plummeted 80% the month after a $5,000 tax credit was repealed.