Here Is How Tesla Could Now Start Burning Between $4 Billion and $5 Billion In Cash Every Quarter

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To say the past few days have been turbulent at Tesla would constitute a gross understatement. After all, the EV giant is now shedding employees in an indiscriminate fashion, one that has seen entire units axed, including Tesla's entire supercharger team. What's more, Tesla is now apparently rescinding its job offers to interns, who are widely considered the cheapest talent rung.

With Tesla now having one of the oldest product lineups in the industry ex-Cybertruck, and with consumers cooling off on the EV mania as range and residual value concerns take precedence, some believe that Tesla is headed back to its days of relentless cash burn.

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Tesla's Probable Return To Relentless Cash Burns

Tesla's aging product mix (excluding the Cybertruck) is currently one of its biggest hurdles, one that is pushing away marginal demand in an industry where the overall momentum is slowing. Consider the case of Xiaomi's new SU7 EV, which is materially eclipsing the Model 3's sales momentum in China.

As the Model 3 faces increased competition in China and regulatory headwinds at home, with battery sourcing requirements rendering the EV ineligible for the $7,500 tax credit, many analysts now expect Tesla to record another quarter with negative year-over-year growth in deliveries.

This brings us to the crux of the matter. According to an analysis by the X user Zero Sum Bond, Tesla is now facing the specter of a precipitous plunge in demand for new vehicles, akin to what Detroit's "Big Three" faced during the financial crisis of 2008, when new vehicle sales plunged by 18 percent.

Tesla's annual deliveries have already declined by 9 percent in Q1 2024, and signs suggest that this sales-related malaise is set to