FREMONT, Calif. — At the Tesla Factory one day last week, the robotic city of Elon Musk’s dreams was a tangle of red machines and car skeletons and industrial presses, firing welding sparks and pounding steel.
But the “controlled chaos” was a bit more relaxed than usual, insisted one Tesla official. The factory still was running through the night as part of a weeks-long sprint, but workers were finding a rhythm. One engineer said he even got a recent Sunday off.
Normal for the youngest, most erratic U.S. automaker always has looked like insanity anywhere else.
The Silicon Valley giant on Wednesday will report earnings that analysts expect could include $900 million of losses in the second quarter, a time of factory disasters and internal paranoia that Musk, Tesla’s billionaire chief, has described as “the most excruciating, hellish several months I’ve maybe ever had.”
But as investors scrutinize how quickly cash is burning at Tesla, the ambitious $50 billion automaker that has not made a profit in 15 years, another risk also is becoming more apparent — whether the company’s frenetic pace is leading to widespread burnout for Tesla employees. And, perhaps, even Musk himself.
The famously unpredictable company still has legions of fans and plenty of reasons to stay upbeat. Its newest car, the Model 3, has debuted to massive fanfare and raves from reviewers calling it a “modern marvel,” “highway assassin” and “pure jungle cat.”
The company in early July celebrated a long-delayed production milestone, building 5,000 of the cars a week. Sustained production could pleasantly surprise investors and, as Musk likes to say, prove the haters wrong.
Such quarterly earnings announcements are for most companies typically clinical affairs, but Tesla’s are known for their fireworks. During the last call, in May, Musk berated analysts for asking questions he called “boring,” “bonehead,” “so dry” and “not cool.”
Tesla’s stock this week is down 20 percent from its June peak.
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Gene Munster, an analyst with Loup Ventures who said Musk’s recent fights on Twitter had raised questions about his “maturity,” wrote in a note to investors Monday that he expected “a more measured Elon Musk” on the upcoming earnings call.
A repeat of Musk’s last performance, he added, would mean “a material loss of investor confidence.”
The company, which said last quarter that it had about $3 billion of cash on hand, will have to pay off or refinance more than $1 billion in bond payments coming due over the next year.
And over the past month, investors have raced to cash in on Tesla’s potential doom, with surges in trading of credit default swaps — financial instruments that will pay out if Tesla fails to pay its debts.
Musk has pledged that Tesla will be profitable in the second half of the year if it can keep producing 5,000 Model 3 sedans a week. The carmaker hit that goal during a week-long manufacturing sprint in late June and is expected to tell shareholders Wednesday whether it kept the pace in recent weeks — a critical point that could in the long term decide whether Tesla lives or dies.