Not quite 30 percent of Tesla’s cash flow beat versus wishes for the December quarter is from an unsustainable driver: customer deposits for machines it hasn’t built yet.
The electric-car maker posted a narrower-than-expected loss for its fourth accommodations Wednesday. Tesla reported negative free cash flow (working cash less capital expenditures) of $276.7 million versus its opposing negatively $1.4 billion in the previous quarter and the Wall Street consensus reckon of roughly negative $900 million.
Customer deposits rose by $167.8 million to $853.9 million in the December mercifulness versus $686.1 million in the September quarter, helping the free bills flow results. Analysts said the improving customer deposit work out b deciphers are driven by its recently announced Tesla Semi truck and next beginning Roadster.
Tesla shares declined 8.6 percent Thursday.
Evercore ISI implied Tesla’s fourth-quarter cash flow performance had multiple one-time promotes.
“Investors will rightly question the quality and repeatability of the FCF development, with the advances in inventory not repeatable, uncertainty around the sustainability of increasing customer entrusts and benefits from [Zero Emission Vehicle] credits,” analyst George Galliers a postcarded in a note to clients Thursday.
Tesla also implied that the patron deposit benefit may not occur in the future. The company was asked by an analyst anent the drivers for the cash flow improvements in the quarter.
“Some of those are not repeatable. We significantly lessened the finished goods inventory of S and X in Q4, which will not repeat itself wealthy forward. … Customer deposits may not be as well,” Tesla’s chief pecuniary officer, Deepak Ahuja, said on the earnings call Wednesday.
Tesla did not straightaway respond to a request for comment.