Shares of Tesla fell as much as 8 percent on Friday as the electric automaker is planning to shutter stores and reduce its workforce in an effort to curb costs. Additionally, CEO Elon Musk said Tesla would not be able to produce a profit in the first quarter of 2019.
ETFs to watch with the heaviest weightings in Tesla were affected, such as the VanEck Vectors Global Alt Energy ETF (NYSEArca: GEX)–down 0.23 percent, ARK Industrial Innovation ETF (NYSEArca: ARKQ)–down 0.53 percent and the First Trust NASDAQ Cln Edge GrnEngyETF (NASDAQ: QCLN)–down 0.48 percent.
Despite the negative outlook for profitability in the first quarter, Musk was more optimistic about the company churning a profit in the second quarter.
“Given that there is a lot happening in Q1, and we are taking a lot of one time charges, and there are a lot of challenges getting cars to China and Europe, we do not expect to be profitable in Q1,” Musk said during a call with reporters on Thursday evening. “We do think that profitability in Q2 is likely.”
With the phasing out of its physical dealerships, the automaker is looking to use online sales as its primary driver.
$920M Bond Payment Due
Tesla has a $920 million payment in bonds to make as pressures mount for Musk amid its declining cash reserves. In its 15-year history, Tesla has only been profitable for just three quarters.