Elon Musk loses $US1b in two minutes as Tesla shares tumble - 5th April 2019

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Elon Musk saw $US1.1 billion ($1.55 billion) wiped from his net worth in the first two minutes of New York trading overnight as Tesla shares sank as much as 11 per cent.

The fall cut his net worth to $US22.3 billion on the Bloomberg Billionaires Index as of 9.32am US time. Tesla ended the day down 8.2 per cent.

The electric car maker had reported a record decline in deliveries during the first quarter, down to 63,000 vehicles in the three months that ended in March, from 90,966 in the fourth quarter.

About $US10 billion of Mr Musk's fortune is derived from Tesla, with approximately $US13 billion coming from his stake in closely held rocket business Space Exploration Technologies Corp, according to calculations by the ranking.

The bigger than expected drop in Tesla deliveries spooked stock and bond investors, raising concern about the electric car maker's ability to make money as Mr Musk headed into another legal tussle with regulators on Thursday.

Four Wall Street brokerages cut their price targets on the stock after deliveries of Tesla's higher-priced luxury cars - Model S and X - more than halved in the first quarter.

The implications of slowing deliveries on cash flow for a company saddled with billions of dollars in debt rattled bond investors, pushing the price of its $US1.8 billion junk bond down by the most in seven months.

RBC analysts called Model S/X deliveries "very disappointing" and estimated the numbers would translate to a more than $US1 billion shortfall in revenue compared to previous estimates.

The company had flagged in February that it expected to post a first-quarter loss as it launched its cheaper $US35,000 version of the Model 3 sedan.

Mr Musk, who is under pressure to deliver Model 3 to new international markets efficiently, has been engaged in a public disagreement with US regulators stemming from his tweets about Tesla's production estimates.

US District Judge Alison Nathan gave Mr Musk and the US Securities and Exchange Commission two weeks to work out their differences over how the billionaire CEO posts Tesla news on social media.

If Mr Musk and the SEC don't resolve the dispute, Justice Nathan could still find Mr Musk in contempt.

"Take a deep breath, put your reasonableness pants on and work this out," she told both sides.

In the quarter, Tesla delivered 50,900 Model 3s, the linchpin of its growth strategy, falling short of analysts' estimate of 58,900, according to IBES data from Refinitiv.

Tesla also pinned the blame for the first-quarter delivery drop to longer transit times, which analysts said could impact cash flow, even though the company claimed it had sufficient cash on hand.

The company said it had delivered only half of the quarter's numbers by March 21, with 10,600 vehicles still in transit at the end of the quarter. By comparison, only 1900 vehicles were in transit at the end of the fourth quarter.

Cowen and Co analysts said that the delivery and transit details suggested "cash was likely dangerously low" after Tesla paid off a $US920 million convertible bond obligation in cash in the beginning of March.

The carmaker reaffirmed its forecast to deliver 360,000 to 400,000 vehicles this year, and said US orders for the new Model 3 outpaced what the company was able to fulfil in the quarter.

Nord LB analyst Frank Schwope called the numbers "more shocking than disappointing" and said there remained doubts whether Tesla could deliver 400,000 cars this year.

(Bloomberg and Reuters)