Elon Musk built three companies that aim to tackle some of the world's largest challenges--including space travel and colonizing Mars--but his automotive startup Tesla is not immune from the issue many founders face: cash flow.

The automaker is expected to announce in April whether it's on track to meet its ambitious goal of producing  5,000 Model 3s per week by the end of June, which would pump enough cash into the company that it wouldn't need to raise more capital. While Musk has delayed this goal twice before, it's imperative for Tesla to meet this target or, as the Wall Street Journal reported, it runs the risk of burning through its cash by the end of the year.

Tesla burned through, on average, about $1 billion per quarter last year, and ended 2017 with nearly $3.4 billion in cash, according to the Journal. UBS analyst Colin Langan told the Journal that Tesla will continue burning cash until it reaches its goal of 5,000 cars per week for a quarter, which would generate about $1 billion in capital in the short term. 

If Tesla needs to raise more money, it could face difficulty: Investors may have lost confidence with the company, since it's repeatedly proved unable to meet its production goals. Musk tried to counter these concerns by announcing he won't get paid unless the company reaches certain massive milestones, including a $650 billion market valuation. He also told a crowd at South by Southwest that production delays are keeping him up a night.

A Tesla spokesperson did not immediately respond to a request for comment. 

Published on: Mar 16, 2018