Autos

'Elon, you've got to grow up': Analyst explains why Tesla chief left her 'very frustrated'

Key Points
  • "I just left the call very frustrated," Rebecca Lindland, executive analyst at Kelley Blue Book told CNBC's "Squawk Box."

  • "Elon, you've got to grow up. You've got to stop looking at shiny objects and you've got to get on track," she added.

  • Excluding expenses for stock-based compensation and other items, Tesla lost $3.35 per share. Revenue rose to $3.41 billion from $2.7 billion a year ago, and outpaced an estimate of $3.22 billion.

Tesla 'has to grow up,' says analyst
VIDEO3:1103:11
Tesla 'has to grow up,' says analyst

"Excuse me, next, next. Boring, bonehead questions are not cool," Tesla CEO Elon Musk told analysts Wednesday after a question about his company's capital requirements.

The automaker had just posted its worst quarterly loss in its history.

Another analyst asked what percentage of Tesla 3 reservation holders have started to configure options for their cars — an important indicator of how much profit Tesla will be able to wring from the vehicles.

"We're going to go to YouTube. These questions are so dry. They're killing me," Musk said, before pivoting to take questions from a Tesla enthusiast and Youtuber named Gali Russell.

After-hours trading implied a loss of more than $2 billion dollars from Tesla's market capitalization by the end of the analyst call.

Tesla's earnings were better than expected, but Elon Musk still has a lot on his plate
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Tesla's earnings were better than expected, but Elon Musk still has a lot on his plate

The call frustrated Wall Street and auto industry analysts, who were seeking clarity on Tesla's high cash burn rate and elusive Model 3 production targets, which will determine the viability and profitability of the celebrated electric carmaker.

"I just left the call very frustrated," Rebecca Lindland, executive analyst at Kelley Blue Book told CNBC's "Squawk Box."

"Elon, you've got to grow up. You've got to stop looking at shiny objects and you've got to get on track," she said.

"You have to take analyst questions, adult analyst questions, not fanboys, not retail analysts."

Excluding expenses for stock-based compensation and other items, Tesla lost $3.35 per share. Revenue rose to $3.41 billion from $2.7 billion a year ago, and outpaced an estimate of $3.22 billion.

'Production hell'

Tesla said it produced 2,270 Model 3s per week in the last week of April. It said net reservations for the Model 3, including configured orders not yet delivered, exceeded 450,000 at the end of the first quarter.

"They're still struggling on the manufacturing side, and that translates directly into cash burn problems," D.R. Barton, chief technical analyst at Money Morning, told CNBC's "The Rundown."

"It is a well-made and engineered car. I think the problem is, it's not engineered for manufacturing simplicity and that's going to continue to plague them through the lifecycle of that car," he said.

SpaceX founder and Tesla CEO Elon Musk.
Joe Skipper | Reuters

Lindland expressed a similar sentiment.

"This is automotive production. This is hard. It's complicated and it's not something that nobody's done before," she added.

The company stood by a previously announced target of building 5,000 Model 3s per week by the end of June, and insisted it can turn a profit in the second half of the year.

Nevertheless, Barton is bearish on the stock.

"I would have to see a complete turnaround in the manufacturing process and the numbers that we're seeing out of the Model 3. If we get to see that, then we would be able to at least take that short off, but I think absent that, we are going to continue to see them struggle," he said.

Capital raise coming?

The company said it ended the quarter with $3.2 billion in cash after spending $655.7 million in quarterly capital expenses.

"Elon Musk famously said they wouldn't need to raise money by the end of the year. I'm on record as saying I believe they definitely will," Barton said.

"I think they're going to put it off until the last possible second. They have a large debt obligation in March of 2019 and I think they'll have to raise well before that. I'm expecting towards the end of this year," he said. "It's going to have to be north of $1 billion dollars, a billion and a half, and if they have to go to the debt markets for that — it's going to be very expensive paper."

Other analysts have said a raise could come as soon as this quarter.

"We think they're going to raise cash this quarter. We think they're waiting until after this earnings print," Gordon Johnson, an analyst with Vertical Group Research, told CNBC's "Closing Bell."

The lack of Model 3 revenue has exacerbated Tesla's cash burn as the company continues to spend on its assembly line and prepares for new investments on multiple projects in the pipeline.

—CNBC's Robert Ferris and Lora Kolodny, and Reuters contributed to this report.