Tesla’s cash crunch, explained

Enlarge (credit: David Paul Morris / Bloomberg / Getty)

Tesla is 15 years old, but it's still fundamentally a startup. And being a startup in the capital-intensive car business means raising billions of dollars to spend on manufacturing infrastructure. In recent months, as Tesla races toward volume production of its mass-market Model 3 sedan, some analysts have warned that Tesla could be months away from running out of cash.

The company burned through more than $1 billion in the first quarter of 2018, ending the quarter with less than $2.7 billion in the bank. Tesla likely has even less than that today-we'll find out how much less when Tesla announces its second quarter financial results next week.

Adding to the pressure is Tesla's massive debt. Tesla has more than $10 billion in total debt, and more than $1 billion of that could come due in the next eight months.

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