Tesla (TSLA  ) has just reported one of its worst fiscal performances in its history, with cash on hand plummeting by more than 40% to a meager $2.2 billion.

This has amounted to a $702 million loss last quarter, primarily as a direct result in a lower amount of Model 3 deliveries due to delayed scheduling. The company delivered 63,000 vehicles last quarter, down from the 90,000 it had previously achieved in the fourth quarter of last year. Even though Tesla attributed this drop to shifting geographical focus from the US to Europe and China, it still does not expect to until Q3 of this year.

As a solution to this financial crisis, Elon Musk has finally admitted that the company may need to start raising more capital, echoing the sentiments of concerned investors who have been pushing further investment for a long time now.

"Tesla today is a far more efficiently operating organization than it was a year ago," Musk told analysts on a quarterly call. "We've made dramatic improvements across the board. And so I think there's merit to the idea of raising capital at this point."

Musk has said Tesla's spending habits from now onwards will mirror a "spartan diet," adopting a more frugal stance with respect to new investments and production. Musk also expressed doubts for a timely release of Model Y next year, whilst revealing plans to introduce a new insurance plan for Tesla customers. All of these activities will require raising more capital, so as to provide a significant cash cushion if the insurance product fails or the model is rolled out particularly late.

"I've said for a long time, just do [raise capital] and take any tail risk off the table, plus do it while your stock is in favor at a $45 billion market cap," said David Whiston, an analyst for Morningstar Research Services. "Removing any balance sheet concerns would probably help the stock rise."

It is interesting to note that Musk's initial vision was to build 500,000 cars by 2020. At this rate, without sufficient funding and discipline, it is dubious whether he will even reach 75% of this target.